INVESTORS' RIGHTS AGREEMENT
Featured Registration Rights Agreements
This SEVENTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the "Agreement") is made and entered into as of July17, 2009, by and among Solyndra, Inc., a Delaware corporation (the "Company"), the investors listed onScheduleAhereto (the "Series A Investors"), the investors listed onSchedule Bhereto (the "Series B Investors"), the investors listed onSchedule Chereto, (the "Series C-1 Investors"), the investors listed onSchedule Dhereto (the "Series C-2 Investors"), the investors listed onSchedule Ehereto (the "Series D Investors"), the parties listed onSchedule Fhereto, (the "Bridge Investors"), the parties listed onSchedule Ghereto (the "Series E Investors," and together with the Series A Investors, the Series B Investors, the Series C-1 Investors, the Series C-2 Investors, the Series D Investors, and the Bridge Investors, the "Prior Investors"), the parties listed onSchedule Hhereto, (the "Series F Investors" and together with the Prior Investors, the "Investors") and the beneficial holders of the Company's common stock ("Common Stock") listed onScheduleIhereto (each of which is herein referred to as a "Common Holder").
WHEREAS, the Company and certain of the Prior Investors have previously entered into an Investors' Rights Agreement, dated as of February10, 2006 (the "Original Rights Agreement") in connection with the Series A Investors' purchase of shares of the Company's Series A-1 and Series A-2 Preferred Stock (the "Series A Stock"), pursuant to the terms and conditions of a Series A-1 and Series A-2 Preferred Stock Purchase Agreement among the Company and the Series A Investors, dated as of February10, 2006 (the "Series A Agreement");
WHEREAS, the Company and certain of the Prior Investors have previously entered into that certain First Amended and Restated Investors' Rights Agreement, dated as of October13, 2006 (the "First Amended Rights Agreement"), which amended and restated the Original Rights Agreement in connection with the Series B Investors' purchase of shares of the Company's Series B Preferred Stock (the "Series B Stock"), pursuant to the terms and conditions of that certain Series B Preferred Stock Purchase Agreement by and among the Company and the Series B Investors, dated as of October13, 2006 (the "Series B Agreement");
WHEREAS, the Company and certain of the Prior Investors have previously entered into that certain Second Amended and Restated Investors' Rights Agreement, dated as of July9, 2007 (the "Second Amended Rights Agreement"), which amended and restated the First Amended Rights Agreement in connection with the Series C-1 Investors' purchase of shares of the Company's Series C-1 Preferred Stock (the "Series C-1 Stock"), pursuant to the terms and conditions of that certain Series C-1 Preferred Stock Purchase Agreement by and among the Company and the Series C-1 Investors, dated as of July9, 2007 (the "Series C-1 Agreement");
WHEREAS, the Company and certain of the Prior Investors have previously entered into that certain Third Amended and Restated Investors' Rights Agreement, dated as of December6, 2007 (the "Third Amended Rights Agreement"), which amended and restated the Second Amended Rights Agreement in connection with the Series C-2 Investors' purchase of shares of the Company's Series C-2 Preferred Stock (the "Series C-2 Stock"), pursuant to the terms and conditions of that certain Series C-2 Preferred Stock Purchase Agreement by and among the Company and the Series C-2 Investors, dated as of December6, 2007 (the "Series C-2 Agreement");
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WHEREAS, the Company and certain of the Prior Investors have previously entered into that certain Fourth Amended and Restated Investors' Rights Agreement, dated as of March25, 2008 (the "Fourth Amended Rights Agreement"), which amended and restated the Third Amended Rights Agreement in connection with the Series D Investors' agreement to purchase shares of the Company's Series D-1 Preferred Stock (the "Series D-1 Stock"), Series D-2 Preferred Stock (the "Series D-2 Stock") and/or
SeriesD-3 Preferred Stock (the "Series D-3 Stock" and together with the Series D-1 Stock and the Series D-2 Stock, the "Series D Stock") from time-to-time upon request from the Company pursuant to the terms and conditions of that certain Equity Purchase Agreement by and among the Company and the Series D Investors, dated as of March25, 2008, as amended from time to time (the "SeriesD Agreement");
WHEREAS, the Company and certain of the Prior Investors have previously entered into that certain Fifth Amended and Restated Investors' Rights Agreement, dated as of July25, 2008 (the "Fifth Amended Rights Agreement"), which amended and restated the Fourth Amended Rights Agreement in connection with the Bridge Investors' agreement to purchase certain convertible promissory notes (the "Notes") and warrants from the Company pursuant to the terms and conditions of that certain Note and Warrant Purchase Agreement dated as of July25, 2008 (as the same may be amended from time to time, the "Bridge Agreement");
WHEREAS, the Company and certain of the Prior Investors have previously entered into that certain Sixth Amended and Restated Investors' Rights Agreement, dated as of November24, 2008 (the "Sixth Amended Rights Agreement"), which amended and restated the Fifth Amended Rights Agreement in connection with (i)the Series E Investors' agreement to purchase shares of the Company's Series E Preferred Stock (the "Series E Stock") and warrants to purchase Common Stock pursuant to the terms of that certain Series E Preferred Stock Purchase Agreement by and among the Company and the Series E Investors, dated as of November24, 2008 (the "Series E Agreement"), (ii)the Series D Investors agreement to exchange shares of Series D Stock for Series E Stock and warrants to purchase Common Stock pursuant to the terms of that certain Stock Exchange Agreement, dated as of November24, 2008 (the "Stock Exchange Agreement") and (iii)the Bridge Investors agreement to convert the Notes into shares of Series E Stock and warrants to purchase Common Stock pursuant to the Series E Agreement;
WHEREAS, concurrently with the execution of this Agreement, the Series F Investors and the Company are executing a SeriesFPreferred Stock Purchase Agreement (as may be amended from time to time, the "Series F Agreement"), pursuant to which the Series F Investors are agreeing to purchase shares of the Company's Series F Preferred Stock (the "Series F Stock") and warrants to purchase Common Stock;
WHEREAS, concurrently with the execution of this Agreement, the Company and Argonaut Ventures I, L.L.C. ("Argonaut") are entering into that certain Loan and Security Agreement of even date herewith (the "Loan and Security Agreement") pursuant to which, among other things, (i)Argonaut has agreed to extend to the Company a $50,000,000 revolving line of credit, (ii)the Company has issued to Argonaut a warrant to purchase shares of its Common Stock (the "Lender Common Warrant"), and (iii)the Company has issued to Argonaut a warrant to purchase shares of Series F Stock (the "Lender Series F Warrant");
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WHEREAS, the Series A Agreement, the Series B Agreement, the Series C-1 Agreement, the Series C-2 Agreement, the SeriesD Agreement, the Series E Agreement, and the Series F Agreement each provide that the Investors who are parties thereto shall be granted certain information and registration rights and rights of first refusal and shall be granted certain rights pursuant to covenants to be made by the Company, all as more fully set forth herein;
WHEREAS, under the terms of the Sixth Amended Rights Agreement, each Prior Investor, each Holder (as defined therein) and each permitted successor or assignee thereof shall be bound by and subject to the terms of any amendment thereto approved by the written consent of the Company and the holders of a majority of the Registrable Securities (as that term is defined in the Sixth Amended Rights Agreement);
WHEREAS, the Prior Investors executing this Agreement hold at least a majority of the outstanding Registrable Securities (as defined in the Sixth Amended Rights Agreement); and
WHEREAS, in connection with the Series F Agreement and the Loan and Security Agreement, the Company, certain of the Prior Investors and the Series F Investors desire to enter into this Agreement, which amends and restates, in its entirety, the Sixth Amended Rights Agreement, for the purpose of consolidating the information and registration rights, rights of first refusal and certain rights pursuant to covenants made by the Company to the Series A Investors, the Series B Investors, Series C-1 Investors, the SeriesC-2Investors, the Series D Investors, and the Series E Investors into the same agreement that contains such rights of the Series F Investors with respect to the shares of Series F Stock issued pursuant to the Series F Agreement, if any, and the shares of Common Stock issuable upon exercise of the warrants issued pursuant to the Series F Agreement, if any, and Argonaut with respect to the shares issued pursuant to the Lender Common Warrant and the Lender Series F Warrant, if exercised, and the Series F Investors and Argonaut likewise desire to enter into this Agreement setting forth such rights of the Series F Investors and Argonaut.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and for other good and valuable consideration, the parties hereto agree as follows
1.Registration Rights. The Company covenants and agrees as follows:
1.1Definitions. For purposes of this Agreement:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Allocation Agreement" means that certain Allocation Agreement dated the same date as this Agreement between the Company and Argonaut.
(c) The term "FormS-3" means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.
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(d) The term "Holder" means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section1.11 hereof;provided,however, that the Common Holders shall not be deemed to be Holders for purposes of Sections1.2, 1.4, 1.12, 2.1, 2.2, 2.4 and 3.7.
(e) The term "Initial Offering" means the Company's first firm commitment underwritten public offering of its Common Stock under the Act.
(f) The term "1934 Act" means the Securities Exchange Act of 1934, as amended.
(g) The term "Preferred Stock" shall mean the Series A Stock, the Series B Stock, the Series C-1 Stock, the SeriesC-2Stock, the Series D Stock, the Series E Stock and the Series F Stock.
(h) The term "Qualified IPO" has the meaning given to such term in the Company's Eighth Amended and Restated Certificate of Incorporation (as may be amended from time to time).
(i) The terms "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.
(j) The term "Registrable Securities" means (i)the Common Stock issuable or issued upon conversion of shares of Preferred Stock outstanding (or the Common Stock issuable or issued upon conversion of any Preferred Stock issuable or issued upon conversion or exercise of any securities of the Company), (ii)the Common Stock held (or the Common Stock issuable or issued upon conversion, exercise or exchange of any securities of the Company held) by any Investor, (iii)shares of Common Stock beneficially owned by the Common Holders;provided,however, that such shares of Common Stock beneficially owned by the Common Holders shall not be deemed Registrable Securities for the purposes of Sections1.2, 1.4, 1.12, 2.1, 2.2, 2.4 and 3.7, and (iv)any other shares of Common Stock issued as a dividend or other distribution with respect to, or in exchange for or replacement of, any of the shares of Common Stock referred to in clause (i), clause (ii)or clause (iii), excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which his rights under this Section1 are not assigned.
(k) The number of shares of "Registrable Securities" outstanding shall be determined by the number of Registrable Securities that are either shares of Common Stock that are outstanding or shares of Common Stock that are issuable upon the exercise, conversion or exchange of securities that are outstanding and immediately exercisable, convertible or exchangeable; provided, however, that no shares of Warrant Stock and no shares of Common Stock issuable upon conversion of shares of Series F Stock shall be included in the number of shares of "Registrable Securities" outstanding until such shares of Warrant Stock or Series F Stock, as the case may be, shall have actually been issued upon the exercise of a Warrant or issued pursuant to the Series F Agreement.
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(l) The term "Rule 144" means Rule 144 under the Act.
(m) The term "SEC" means the Securities and Exchange Commission.
(n) The term "Warrants" shall mean (1)those certain Common Stock Purchase Warrants issued to (i)the Series D Investors pursuant to Section1.2 of the Series D Agreement, as such warrants were amended pursuant to the terms of that certain Amendment to Warrants dated November24, 2008 by and among the Company and the holders of such warrants, (ii)the Bridge Investors pursuant to the Bridge Agreement, (iii)the Series E Investors pursuant to the Series E Agreement and the Stock Exchange Agreement, as such warrants were amended pursuant to the terms of that certain Amendment to Warrants dated July17, 2009 by and among the Company and the holders of such warrants, (iv)the Series F Investors pursuant to the Series F Agreement and (v)the Lender Common Warrant, and (2)the Lender Series F Warrant.
(o) The term "Warrant Stock" shall mean shares of Common Stock or Preferred Stock issued, if any, upon exercise of the Warrants and any shares of Common Stock issuable or issued upon conversion of any Preferred Stock issued upon exercise of the Warrants.
1.2Request for Registration.
(a) Subject to the conditions of this Section1.2, if the Company shall receive at any time after the earlier of (i)July9, 2010 and (ii)the effective date of the Initial Offering, a written request from the Holders of a majority of the Registrable Securities then outstanding (for purposes of this Section1.2, the "Initiating Holders") that the Company file a registration statement under the Act covering the registration of at least 25% of the Registrable Securities then outstanding, then the Company shall, within 20 days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section1.2, use its reasonable best efforts to effect, as soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request received by the Company within 20 days of the mailing of the Company's notice pursuant to this Section1.2(a).
(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section1.2 and the Company shall include such information in the written notice referred to in Section1.2(a). In such event the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company (which underwriter or underwriters shall be reasonably acceptable to a majority in interest of the Initiating Holders). Notwithstanding any other provision of this Section1.2, if the underwriter advises the Company that marketing factors require a limitation on the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the
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number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities pro rata based on the number of Registrable Securities held by all such Holders (including the Initiating Holders). In no event shall any Registrable Securities be excluded from such underwriting unless all other securities are first excluded. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.
(c) Notwithstanding the foregoing, the Company shall not be required to effect a registration pursuant to this Section1.2:
(i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act; or
(ii) after the Company has effected two registrations pursuant to this Section1.2, and such registrations have been declared or ordered effective; or
(iii) during the period starting with the date that is 60 days prior to the Company's good faith estimate of the date of the filing, and ending on a date 180 days following the effective date, of a Company-initiated registration subject to Section1.3 below or a request for registration under the Allocation Agreement,providedthat the Company is actively employing in good faith its reasonable best efforts to cause such registration statement to become effective;
(iv) if the Initiating Holders propose to dispose of Registrable Securities that may be registered on FormS-3 pursuant to Section1.4 hereof; or
(v) if the Company shall furnish to the Initiating Holders requesting a registration statement pursuant to this Section1.2 a certificate signed by the Company's Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company (the "Board"), it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the request of the Initiating Holders,providedthat such right shall be exercised by the Company not more than once in any 12 month period, andprovided,further, that the Company shall not register any securities for the account of itself or any other stockholder during such 120 day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered).