Document:

Exhibit 12 (10.9) - Subordination Agreement

    
      

      

    

    Exhibit
      10.9

     

    SUBORDINATION
      AGREEMENT

     

    This
      Subordination Agreement (the “Agreement”)
      is
      made and entered into as of August 31, 2006, by and among Steve Kircher, (the
      “Subordinated
      Creditor”),
      Welund Fund, Inc., a Nevada Corporation (the “Senior
      Creditor”)
      and
      Solar Power, Inc., a California corporation, (the “Borrower”).

     

    RECITALS

     

    Borrower
      has entered into that certain loan of even date herewith with Senior Creditor
      pursuant to which Senior Creditor has agreed to lend to Borrower the principal
      amount of $150,000, as evidenced by the Unsecured Promissory Note of even date
      herewith. As a condition to extending to Borrower the credit, Senior Creditor
      requires the execution of this Agreement by Subordinated Creditor in order
      to
      subordinate the indebtedness of Borrower under four demand promissory notes
      in
      the aggregate of $300,000 plus accrued interest owed to Subordinated Creditor
      and any future loans or credits given to Borrower by the Subordinated Creditor.
      Subordinated Creditor is willing to enter into this Agreement because he is
      the
      majority shareholder of Borrower and will benefit as such from the use of the
      funds provided by Senior Creditor. 

     

    AGREEMENT

    

    For
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      expressly acknowledged, Subordinated Creditor hereby agrees with Senior Creditor
      as follows:

     

    1.    Incorporation
      of Recitals.
      The
      above stated recitals are incorporated herein and made a part hereof by this
      reference.

     

    2.    Certain
      Definitions.
      All
      capitalized terms used but not defined herein shall have the meanings given
      them
      in the other loan documents. The following terms shall have the following
      meanings for the purposes of this Agreement:

     

    “Senior
      Indebtedness”
shall
      mean all indebtedness, obligations and liabilities of Borrower (including,
      without limitation, principal, interest, fees, costs, expenses and reasonable
      attorneys’ fees), now or hereafter owed by Borrower to Senior Creditor,
      including, without limitation, the principal of, interest on and all other
      amounts owing to Senior Creditor, and any renewals, replacements, substitutions,
      amendments, modifications, refinancings, refundings or additional fundings
      thereof.

     

    “Subordinated
      Indebtedness”
shall
      mean all indebtedness, obligations and liabilities of Borrower (including,
      without limitation, principal, interest, fees, costs, expenses, additional
      advances and reasonable attorneys’ fees), now or hereafter owed by Borrower to
      Subordinated Creditor, including, without limitation, the principal of, interest
      on and all other amounts owing to Subordinated Creditor and any renewals,
      replacements, substitutions, amendments, modifications, refinancings, refundings
      or additional fundings thereof.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    3.    Subordination.
      Subordinated Creditor agrees that payment of the Subordinated Indebtedness
      is
      expressly subordinated to the prior payment in full of all Senior Indebtedness.
      Unless and until the Senior Indebtedness shall have been fully paid and
      satisfied and all financing have been terminated, Subordinated Creditor will
      not, without the prior written consent of Senior Creditor (i) accelerate, ask,
      demand, sue for, take or receive from or on behalf of Borrower, by set-off
      or in
      any other manner, the whole or any part of any monies which may now or hereafter
      be owing to Subordinate Creditor on the Subordinated Indebtedness, (ii) initiate
      or participate with others in any suit, action or proceeding against Borrower
      to
      collect the whole or any part of the Subordinated Indebtedness, or (iii) ask,
      demand, take or receive any security for any of the Subordinated Indebtedness.
      This subordination provision shall apply with respect to all of the Senior
      Indebtedness, regardless of the amount of the Senior Indebtedness or how or
      in
      what manner the Senior Indebtedness is incurred, or whether the Senior
      Indebtedness has already been incurred or may be incurred in the future by
      future advances or other financial accommodations made or extended by Senior
      Creditor, or whether such future advances or other financial accommodations
      are
      made at the discretion of Senior Creditor or pursuant to commitment or
      otherwise. If Subordinate Creditor, in violation of this Agreement, shall
      commence, prosecute or participate in any suit, action or proceeding against
      Borrower or shall attempt to enforce, foreclose or realize upon any security
      for
      the Subordinated Indebtedness, Borrower or Senior Creditor may interpose as
      a
      defense or plea the making of this Agreement and Senior Creditor or any Lender
      individually may intervene and interpose such defense in its name or in the
      name
      of Borrower, and Borrower or Senior Creditor may by virtue of this Agreement
      restrain the enforcement thereof in the name of Borrower or Senior
      Creditor

     

    4.    Enforcement.
      Subordinated Creditor, prior to the payment in full of the Senior Indebtedness
      and the termination of all financing arrangements between Borrower and Senior
      Creditor, shall not have any right to enforce payment of any of the Subordinated
      Indebtedness or to otherwise take any action against Borrower or its property
      without Senior Creditor’s prior written consent.

     

    5.    Subordinated
      Indebtedness Owed Only to Subordinated Creditor.
      Subordinated Creditor warrants and represents to Senior Creditor that
      Subordinated Creditor has not previously assigned any interest in the
      Subordinated Indebtedness to any party, that no party owns an interest in the
      Subordinated Indebtedness other than Subordinated Creditor (whether as joint
      holder of the Subordinated Indebtedness, participants or otherwise), that the
      entire Subordinated Indebtedness is owing to Subordinated Creditor, and
      Subordinated Creditor covenants that the Subordinated Indebtedness shall
      continue to be owing only to Subordinated Creditor, unless assigned, transferred
      or disposed of in accordance with the terms of this Agreement as provided in
      Section 9 hereof.

     

    6.    Priority
      on Distribution.
      In the
      event of any distribution, division or application, partial or complete,
      voluntary or involuntary, by operation of law or otherwise, of all or any part
      of the assets of Borrower or the proceeds thereof to the creditors of Borrower
      or of any readjustment of the obligations and indebtedness of Borrower, whether
      by reason of liquidation, bankruptcy, arrangement, receivership, assignment
      for
      the benefit of creditors or any other action or proceeding involving the
      readjustment of all or any of Borrower’s indebtedness, or the application of the
      assets of Borrower to the payment or liquidation thereof, or the dissolution
      or
      winding up of Borrower’s business, or of the sale of all or substantially all of
      Borrower’s assets, then, and in any such event, Senior Creditor shall be
      entitled to receive payment in full of all Senior Indebtedness prior to the
      payment of all or any part of the Subordinated Indebtedness.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    7.    Payments
      Received by Subordinated Creditor.
      Should
      any payment or distribution be received by Subordinated Creditor upon or with
      respect to the Subordinated Indebtedness prior to the satisfaction of all Senior
      Indebtedness and the termination of all financing arrangements between Borrower
      and Senior Creditor, Subordinated Creditor shall receive and hold the same
      in
      trust, as trustee, for the benefit of Senior Creditor and shall forthwith
      deliver the same to Senior Creditor in precisely the same form received (except
      for the endorsement or assignment of Subordinated Creditor where necessary)
      for
      application on the Senior Indebtedness, due or not due, and until so delivered,
      the same shall be held in trust by Subordinated Creditor as the property of
      Senior Creditor

     

    8.    Subrogation.
      After
      all of the Senior Indebtedness has been paid in full and until the Subordinated
      Indebtedness has been paid in full, Subordinated Creditor shall be subrogated
      to
      the rights of Senior Creditor to receive payments and distributions of assets
      with respect to the Senior Indebtedness, to the extent that distributions
      otherwise payable to Subordinated Creditor have been applied to the payment
      of
      Senior Indebtedness in accordance with the provisions of this Agreement. As
      between Borrower and Subordinated Creditor, a distribution applied to the
      payment of the Senior Indebtedness in accordance with the provisions of this
      Agreement which otherwise would have been made to Subordinated Creditor shall
      not be deemed a payment by Borrower on the Subordinated Indebtedness, it being
      understood that the subordination provisions of this Agreement are and are
      intended solely for the purpose of defining the relative rights of Subordinated
      Creditor, on the one hand, and Senior Creditor, on the other hand, and nothing
      contained in this Agreement shall impair the obligations of Borrower, which
      are
      absolute and unconditional, to pay to Subordinated Creditor the Subordinated
      Indebtedness as and when the same shall become due and payable in accordance
      with its terms, except as such obligation is modified by the rights confirmed
      hereunder in favor of Senior Creditor, or affect the relative rights of
      Subordinated Creditor and the creditors of Borrower other than Senior
      Creditor.

     

    9.    Assignment
      of Subordinated Indebtedness.
      Subordinated Creditor agrees that until the Senior Indebtedness has been paid
      in
      full and satisfied and all financing arrangements between Borrower and Senior
      Creditor have been terminated in writing, Subordinated Creditor will not assign,
      transfer or otherwise dispose of the Subordinated Indebtedness or any portion
      thereof unless such assignment, transfer or other disposition is made expressly
      subject to this Agreement.

     

    10.
   Term.
      This
      Agreement shall constitute a continuing agreement between Subordinated Creditor
      and Senior Creditor, and Senior Creditor may continue, without notice to
      Subordinated Creditor, to lend monies, extend credit and make other
      accommodations to or for the account of Borrower. This Agreement shall be
      irrevocable by Subordinated Creditor until all of the Senior Indebtedness shall
      have been paid and fully satisfied and all financing arrangements between
      Borrower and Senior Creditor have been terminated in writing, or until the
      Subordinated Indebtedness shall have been paid and fully satisfied, whichever
      first occurs.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    11.    Additional
      Agreements Between Senior Creditor and Borrower.
      Senior
      Creditor, at any time and from time to time, may enter into such agreement
      or
      agreements with Borrower as Senior Creditor may deem proper, extending the
      time
      of payment of or renewing or otherwise altering the terms of all or any of
      the
      Senior Indebtedness or affecting the security underlying any or all of the
      Senior Indebtedness, and may exchange, sell, release, surrender or otherwise
      deal with any such security without in any way impairing or affecting this
      Agreement.

     

    12.    Waivers
      of Subordinated Creditor.
      All of
      the Senior Indebtedness shall be deemed to have been made or incurred in
      reliance upon this Agreement, and Subordinated Creditor expressly waives all
      notice of the acceptance by Senior Creditor of the subordination and other
      provisions of this Agreement, notice of the incurring of Senior Indebtedness
      from time to time and all other notices not specifically required pursuant
      to
      the terms of this Agreement or by law, and Subordinated Creditor expressly
      waives reliance by Senior Creditor upon the subordination and other agreements
      as herein provided.

     

    
      	 	
              13.

            	
              Miscellaneous.

            

    

     

    (a)    Amendments
      and Waivers.
      Any
      term of this Agreement may be amended with the written consent of the parties
      or
      their respective successors and assigns. Any amendment or waiver effected in
      accordance with this Section 13(a) shall be binding upon the parties and
      their respective successors and assigns.

     

    (b)    Successors
      and Assigns.
       The
      terms
      and conditions of this Agreement shall inure to the benefit of and be binding
      upon the parties and their successors and assigns. Nothing in this Agreement,
      express or implied, is intended to confer upon any party other than the parties
      hereto or their respective successors and assigns any rights, remedies,
      obligations, or liabilities under or by reason of this Agreement, except as
      expressly provided in this Agreement. The term “Borrower” as used herein shall
      also refer to the successors and assigns of Borrower, including, without
      limitation, a receiver, trustee, custodian or debtor-in-possession.

     

    (c)    Governing
      Law.
      This
      Agreement and all acts and transactions pursuant hereto and the rights and
      obligations of the parties hereto shall be governed, construed and interpreted
      in accordance with the laws of the State of California, without giving effect
      to
      principles of conflicts of law.

     

    (d)    Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall constitute one
      instrument.

     

    (e)    Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    (f)
    Notices.
      Any
      notice required or permitted by this Agreement shall be in writing and shall
      be
      deemed sufficient upon receipt, when delivered personally or by a
      nationally-recognized delivery service (such as Federal Express or UPS) or
      confirmed facsimile, or forty-eight (48) hours after being deposited in the
      U.S.
      mail as certified or registered mail with postage prepaid, if such notice is
      addressed to the party to be notified at such party’s address or facsimile
      number as
      set
      forth below or as subsequently modified by written notice.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (g)    Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable under
      applicable law, the parties agree to renegotiate such provision in good faith.
      In the event that the parties cannot reach a mutually agreeable and enforceable
      replacement for such provision, then (i) such provision shall be excluded
      from this Agreement, (ii) the balance of the Agreement shall be interpreted
      as if such provision were so excluded and (iii) the balance of the
      Agreement shall be enforceable in accordance with its terms.

     

    (h)    Entire
      Agreement.
      This
      Agreement and the documents referred to herein are the product of both of the
      parties hereto, constitute the
      entire agreement between such parties pertaining to the subject matter hereof
      and thereof, and merge all prior negotiations and drafts of the parties with
      regard to the transactions contemplated herein and therein. Any and all other
      written or oral agreements existing between the parties hereto regarding such
      transactions are expressly canceled.

     

    (i)
    Advice
      of Legal Counsel.
      Each
      party acknowledges and represents that, in executing this Agreement, it has
      had
      the opportunity to seek advice as to its legal rights from legal counsel and
      that the person signing on its behalf has read and understood all of the terms
      and provisions of this Agreement. This Agreement shall not be construed against
      any party by reason of the drafting or preparation thereof.

     

    

     

    [Signature
      Page Follows]

    

    

    

    

    

    

    

    

    

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    This
      Agreement has been duly executed under seal by the parties hereto as of the
      day
      and year first above written.

     

    
      	 	
              SUBORDINATED
                CREDITOR:

            
	 	 
	 	 
	 	 
	 	
              /s/
                Stephen
                Kircher                                                
                

            
	 	
              Stephen
                Kircher

            
	 	 
	 	 
	 	 
	 	
              SENIOR
                CREDITOR:

            
	 	 
	 	
              Welund
                Fund Inc. 

            
	 	 
	 	
              By:
                /s/ Steven P.
                Strasser                                       
                

            
	 	
              Steven
                P. Strasser, President

            
	 	 
	 	 
	 	
              BORROWER:

            
	 	 
	 	
              Solar
                Power, Inc.

            
	 	 
	 	
              By:
                /s/ Glenn
                Carnahan                                       
                    

            
	 	
              Glenn
                Carnahan, Chief Financial OfficerExhibit 13 (10.10) - Addendum to Subordination Agreement

    
      

      

    

    Exhibit
      10.10

     

    ADDENDUM
      TO SUBORDINATION AGREEMENT

     

    This
      Addendum to Subordination Agreement (the “Addendum”)
      made
      and entered into as of September 6, 2006, is an Addendum to that certain
      Subordination Agreement dated as of August 31, 2006, by and among Steve Kircher,
      (the “Subordinated
      Creditor”),
      Welund Fund, Inc., a Nevada Corporation (the “Senior
      Creditor”)
      and
      Solar Power, Inc., a California corporation, (the “Borrower”).

     

    Recitals

     

    WHEREAS,
      pursuant to the Subordination Agreement, Subordinated Creditor agreed to
      subordinate the Subordinated Indebtedness (as defined in the Subordination
      Agreement) of the Borrower owed to the Subordinated Creditor in favor Senior
      Creditor’s loan to the Borrower in the original principal amount of $150,000,
      the “Senior Indebtedness” as defined in the Subordination Agreement. The
      Borrower has entered into an additional loan transaction with the Senior
      Creditor as evidenced by that certain Unsecured Promissory Note of even date
      herewith in the principal amount of $50,000. As a condition to extending to
      Borrower this additional credit, Senior Creditor requires the execution of
      this
      Addendum by Subordinated Creditor to acknowledge and agree that the definition
      of “Senior Indebtedness” in the Subordination Agreement includes the amount
      owned by Borrower under this additional financing. 

     

    NOW
      THEREFORE,
      in
      consideration of the premises and mutual agreements contained herein and in
      the
      Subordination Agreement, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereby agree as follows:

     

    1.    Miscellaneous.
      For all
      purposes of this Addendum, except as otherwise expressly provided or unless
      the
      context otherwise requires, (a) unless otherwise defined herein, all capitalized
      terms used herein shall have the meanings attributed to them by the
      Subordination Agreement, (b) the capitalized expressly defined in this Addendum
      have the meanings assigned to them in this Addendum and include (i) all genders
      and (ii) the plural as well as the singular, (c) all references to words such
      as
“herein”, “hereof” and the like shall refer to this Addendum as a whole and not
      to any particular article or section within this Addendum, (d) the term
“include” and all variations thereon shall mean “include without limitation”,
      and (e) the term “or” shall include “and/or”.

     

    2.    Acknowledgement
      by Subordinated Creditor. The Subordinated Creditor hereby acknowledges and
      agrees that the definition of “Senior Indebtedness” includes the additional
      financing in the principal amount of $50,000. 

     

    3.    No
      Other
      Changes. Except as expressly modified or amended in this Addendum, all of the
      terms, covenants, provisions, agreements and conditions of the Letter of Intent
      are hereby ratified and confirmed in every respect and shall remain unmodified
      and unchanged and shall continue in full force and effect.

    

    4.    Counterparts.
      This Addendum may be executed in any number of counterparts and by the parties
      hereto in separate counterparts, each of which when so executed and delivered
      shall be deemed to be an original and all of which taken together shall
      constitute one and the same instrument.

    

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    5.    Governing
      Law. This Addendum shall be governed by and construed in accordance with the
      law
      of the State of California. 

    

    This
      Addendum has been duly executed under seal by the parties hereto as of the
      day
      and year first above written.

     

    
      	 	
              SUBORDINATED
                CREDITOR:

            
	 	 
	 	 
	 	 
	 	
              /s/
                Stephen
                Kircher                                                             
                

            
	 	
              Stephen
                Kircher

            
	 	 
	 	 
	 	
              SENIOR
                CREDITOR:

            
	 	 
	 	
              Welund
                Fund Inc. 

            
	 	 
	 	 
	 	
              By:
                /s/ Steven
                P. Strasser                                                        
                

            
	 	
              Steven
                P. Strasser, President

            
	 	 
	 	 
	 	
              BORROWER:

            
	 	 
	 	
              Solar
                Power, Inc.

            
	 	 
	 	 
	 	
              By:
                /s/ Glenn
                Carnahan                                                     
                

            
	 	
              Glenn
                Carnahan,

            
	 	
              Chief
                Financial Officer

            

    

    

    

    

    

    

    

    

    

    
 

     

    2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]