SECURED PROMISSORY NOTE
SECURED
PROMISSORY NOTE
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Sacramento,
California
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$__________
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September
___2006
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This
Secured Promissory Note (this "Note") is made and delivered pursuant to that
certain Credit Facility Agreement dated as of September __, 2006 between
Solar
Power, Inc., a California corporation (“Borrower”) and Welund Fund, Inc., a
Nevada corporation (“Lender” or “Holder”), as such may be amended from time to
time (the "Credit Agreement"). Unless otherwise defined herein, all capitalized
terms used in this Note shall have the same meanings that are given to such
terms in the Credit Agreement, the terms of which are incorporated into this
Note by reference.
1. Obligation.
The
Borrower hereby promises to pay to the order of Lender or Holder on or before
the Maturity Date, at Lender's principal place of business, or at such other
place as Holder may direct, the principal sum of TWO MILLION Dollars
($2,000,000.00) or so much thereof as may be advanced and outstanding, together
with all interest accrued on unpaid principal, to be computed on each Advance
from the date of its disbursement to Borrower, at a rate equal to eight percent
(8%) simple interest per annum, as provided in the Credit Agreement. The
outstanding principal amount of this Note, together with accrued interest
thereon, shall be due and payable in full on the Maturity Date. The outstanding
unpaid principal balance of this Note at any time shall be the total principal
amounts advanced hereunder by Holder less the amounts of payments of principal
made hereon by Borrower, which balance may be endorsed hereon from time to
time
by Holder in accordance with Section 2.
2. Recording
Advances and Payments.
Holder
is authorized to record on Schedule A hereto, and on any continuation(s)
of such
Schedule that may be attached to this Note: (a) the date and principal amount
of
each Advance by Lender under the Credit Agreement; and (b) the date and amount
of each payment or prepayment of principal and/or accrued interest of any
Advance; which recordation will constitute prima facie evidence of the accuracy
of the information so endorsed on Schedule A; provided however, that any
failure
to record such information on such Schedule or continuation thereof will
not in
any manner affect the obligations of Borrower to make payments of principal
and
interest in accordance with the terms of this Note. Holder will promptly
provide
Borrower with a copy of each recordation made by Holder on Schedule A attached
hereto.
3. Prepayment.
Prepayment of unpaid principal and/or interest due under this Note may be
made
at any time without penalty as specified in the Credit Agreement. Unless
otherwise agreed in writing by Holder, all payments will be made in lawful
tender of the United States and will be applied (a) first, to the payment
of
accrued interest, and (b) second, (to the extent that the amount of such
prepayment exceeds the amount of all such accrued interest), to the payment
of
principal.
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4. Default,
Acceleration of Obligation.
Borrower will be deemed to be in default under this Note and the outstanding
unpaid principal balance of this Note, together with all interest accrued
thereon, will immediately become due and payable in full, without the need
for
any further action on the part of Holder, upon the occurrence of any Event
of
Default (as defined in the Credit Agreement) not otherwise remedied pursuant
to
the terms of the Credit Agreement.
5. Remedies
on Default; Acceleration.
Upon
any Event of Default, Holder will have, in addition to its rights and remedies
under this Note and the Credit Agreement, full recourse against any real,
personal, tangible or intangible assets of Borrower, and may pursue any legal
or
equitable remedies that are available to Holder, and may declare the entire
unpaid principal amount of this Note and all unpaid accrued interest under
this
Note to be immediately due and payable in full.
6. Waiver
and Amendment.
Any
provision of this Note may be amended or modified only by a writing signed
by
both Borrower and Holder. Except as provided below with respect to waivers
by
Borrower, no waiver or consent with respect to this Note will be binding
or
effective unless it is set forth in writing and signed by the party against
whom
such waiver is asserted. No course of dealing between Borrower and Holder
will
operate as a waiver or modification of any party's rights or obligations
under
this Note. No delay or failure on the part of either party in exercising
any
right or remedy under this Note will operate as a waiver of such right or
any
other right. A waiver given on one occasion will not be construed as a bar
to,
or as a waiver of, any right or remedy on any future occasion.
7. Waiver
of Borrower.
Borrower
hereby waives presentment, notice of non-payment, notice of dishonor, protest,
demand and diligence. This Note may be amended only by a writing executed
by
Borrower and Holder.
8. Governing
Law.
This
Note will be governed by and construed in accordance with the internal laws
of
the State of California as applied to agreements between residents thereof
to be
performed entirely within such State, without reference to that body of law
relating to conflict of laws or choice of law.
9. Severability;
Headings.
The
invalidity or unenforceability of any term or provision of this Note will
not
affect the validity or enforceability of any other term or provision hereof.
The
headings in this Note are for convenience of reference only and will not
alter
or otherwise affect the meaning of this Note.
10.
Jurisdiction;
Venue.
Borrower, by its execution of this Note, hereby irrevocably submits to the
in
personal jurisdiction of the state courts of the State of California and
of the
United States District Court for the Northern District of California that
are
located in Sacramento, California, for the purpose of any suit, action or
other
proceeding arising out of or based upon this Note.
11.
Assignment.
This
Note is not assignable by Holder without the written consent of Borrower.
This
Note may not be assigned or delegated by Borrower, whether by voluntary
assignment or transfer, operation of law, merger or otherwise.
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12.
Credit
Agreement.
This
Note incorporates by reference all the provisions of the Credit Agreement,
including but not limited to all provisions contained therein with respect
to
Events of Default, waivers, remedies and covenants, and the description of
the
benefits, rights and obligations of each of Borrower and Holder under the
Credit
Agreement.
IN
WITNESS WHEREOF, the Borrower has executed and delivered this Note effective
as
of the date first above written.
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SOLAR
POWER, INC.
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/s/
Xxxxx
Xxxxxxxx
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Xxxxx
Xxxxxxxx, Chief Financial Officer
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SCHEDULE
A
LOANS
AND
PAYMENTS OF PRINCIPAL
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Date
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Amount
of Loan
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Amount
of Principal Repaid
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Notation
Made By
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4
