Exhibit 10.24

STOCKHOLDERS AGREEMENT

DATED AS OF OCTOBER 6, 2014

AMONG

Vivint Solar, INC.

AND

THE OTHER PARTIES HERETO

 

 

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Table of Contents

 

 

 

Page

 

 

 

ARTICLE I. INTRODUCTORY MATTERS

 

1

 

 

 

 

 

1.1

 

Defined Terms

 

1

1.2

 

Construction

 

5

 

 

 

 

 

ARTICLE II. CORPORATE GOVERNANCE MATTERS

 

5

 

 

 

 

 

2.1

 

Election of Directors

 

5

2.2

 

Committees

 

7

2.3

 

Agreement to Vote

 

7

2.4

 

Consent Rights

 

8

 

 

 

 

 

ARTICLE III. INFORMATION; VCOC

 

9

 

 

 

 

 

3.1

 

Books and Records; Access

 

9

3.2

 

Consent to Sharing of Information

 

10

3.3

 

VCOC

 

10

 

 

 

 

 

ARTICLE IV. GENERAL PROVISIONS

 

12

 

 

 

 

 

4.1

 

Termination

 

12

4.2

 

Notices

 

12

4.3

 

Amendment; Waiver

 

13

4.4

 

Further Assurances

 

14

4.5

 

Assignment

 

14

4.6

 

Third Parties

 

14

4.7

 

Governing Law

 

14

4.8

 

Jurisdiction; Waiver of Jury Trial

 

14

4.9

 

Specific Performance

 

14

4.10

 

Entire Agreement

 

15

4.11

 

Severability

 

15

4.12

 

Table of Contents, Headings and Captions

 

15

4.13

 

Grant of Consent

 

15

4.14

 

Counterparts

 

15

4.15

 

Effectiveness

 

15

4.16

 

No Recourse

 

15

 

 

 

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STOCKHOLDERS AGREEMENT

This Stockholders Agreement is entered into as of October 6, 2014 by and among
Vivint Solar, Inc., a Delaware corporation (the “Company”), 313 Acquisition LLC,
a Delaware limited liability company (“313 Acquisition”), and each of the other
parties identified on the signature pages hereto (together with 313 Acquisition,
the “Investor Parties”).

RECITALS:

WHEREAS, the Company is currently contemplating an underwritten initial public
offering (“IPO”) of shares of its Common Stock (as defined below);

WHEREAS, as of the date of this Agreement, the Investor Parties, indirectly
through 313 Acquisition, collectively own greater than a majority of the
outstanding Common Stock (as defined below) of the Company;

WHEREAS, in connection with such ownership the Investor Parties and other
members entered into the Amended and Restated Limited Liability Company
Agreement, dated as of November 16, 2012 (as amended, modified or supplemented
from time to time, the “LLC Agreement”), setting forth certain rights related to
corporate governance and other matters of 313 Acquisition; and

WHEREAS, in connection with, and effective upon, the date of completion of the
IPO (the “Closing Date”), the parties hereto wish to set forth certain
understandings between such parties, including with respect to certain
governance matters.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I.
INTRODUCTORY MATTERS

Defined Terms

.  In addition to the terms defined elsewhere herein, the following terms have
the following meanings when used herein with initial capital letters:

“313 Acquisition” has the meaning set forth in the Preamble.

“Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act, as in effect on the date hereof.

“Agreement” means this Stockholders Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof.

“beneficially own” has the meaning set forth in Rule 13d-3 promulgated under the
Exchange Act.

“Blackstone Designee” has the meaning set forth in Section 2.1(b).

 

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“Blackstone Entities” means the entities comprising the Blackstone Parties and
their Affiliates and their respective successors and Permitted Assigns.

“Blackstone Parties” means the entities listed on the signature pages hereto
under the heading “Blackstone Parties” and any other Blackstone Entities that
may from time to time become parties hereto.

“Board” means the board of directors of the Company.

“Business Day” means a day other than a Saturday, Sunday, federal or New York
State holiday or other day on which commercial banks in New York City are
authorized or required by law to close.

“Change of Control” means: (i) the sale of all or substantially all of the
assets of the Company to any Person (or group of Persons acting in concert),
other than to (x) the Blackstone Entities or (y) any employee benefit plan (or
trust forming a part thereof) maintained by 313 Acquisition, the Company or its
Affiliates or other Person of which a majority of its voting power or other
equity securities is owned, directly or indirectly, by 313 Acquisition or the
Company; (ii) a merger, recapitalization or other sale by 313 Acquisition, the
Company, the Blackstone Entities or any of their respective Affiliates, to a
Person (or group of Persons acting in concert) of shares of Common Stock or
other equity interests of the Company that results in more than 50% of the
shares of Common Stock or other equity interests of the Company (or any
resulting company after a merger) being held by a Person (or group of Persons
acting in concert) that does not include (x) the Blackstone Entities or (y) an
employee benefit plan (or trust forming a part thereof) maintained by 313
Acquisition, the Company or its Affiliates or other Person of which a majority
of its voting power or other equity securities is owned, directly or indirectly,
by 313 Acquisition or the Company; or (iii) any other event that results in the
Blackstone Entities ceasing to have the ability to designate a majority of the
Total Number of Directors.

 

“Closing Date” has the meaning set forth in the Recitals.

“Common Stock” means the shares of common stock, par value $0.01 per share, of
the Company, and any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.

“Company” has the meaning set forth in the Preamble.

“Control” (including its correlative meanings, “Controlled by” and “under common
Control with”) means possession, directly or indirectly, of the power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise) of a Person.

“Controlled Company” means a company that is a “controlled company” within the
meaning of such term under the New York Stock Exchange rules or the rules of
such other stock exchange or securities market on which shares of Common Stock
are then listed or quoted.

“Director” means any member of the Board.

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“Dunn” means Alex Dunn and his Affiliates.

“Employee Stockholders Agreement” means the agreement entered into by and
between the Company and 313 Acquisition pursuant to which certain employee
stockholders of the Company are required to vote their shares of Common Stock as
directed by 313 Acquisition.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, as the same may be amended from
time to time.

“Fair Market Value” means, with respect to property (other than cash), the fair
market value of such property as determined in good faith by the Board.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Hedging Obligation” means, with respect to any Person, any liability of such
Person under any interest rate, currency or commodity swap agreement, cap
agreement or collar agreement, and any other agreement or arrangement designed
to protect a Person against fluctuations in interest rates, currency exchange
rates or commodity prices.

 

“Indebtedness” of a Person means, at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments
(excluding contingent obligations under surety bonds), (iii) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising and paid in the ordinary course of business, (iv)
the capitalized amount of all capital leases of such Person, (v) all
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid under a letter of credit, bankers acceptance, surety
bond or similar instrument, (vi) all equity securities of such Person subject to
repurchase or redemption otherwise than at the sole option of such Person, (vii)
all obligations of a type described in clauses (i) through (vi) and clauses
(viii) and (ix) of this definition secured by a Lien on any asset of such
Person, whether or not such obligation is otherwise an obligation of such
Person, (viii) all Hedging Obligations of such Person, and (ix) all Indebtedness
of others guaranteed by such Person.  Any obligation constituting Indebtedness
solely by virtue of the preceding clause (vii) shall be valued at the lower of
the Fair Market Value of the corresponding asset and the aggregate unpaid amount
of such obligation.

 

“Investor Parties” has the meaning set forth in the Preamble.

“IPO” has the meaning set forth in the Recitals.

“Law” means any statute, law, regulation, ordinance, rule, injunction, order,
decree, governmental approval, directive, requirement, or other governmental
restriction or any similar form of decision of, or determination by, or any
interpretation or administration of any of the foregoing by, any Governmental
Authority.

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“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset.

 

“LLC Agreement” has the meaning set forth in the Recitals.

“Pedersen” means Todd Pedersen and his Affiliates.

“Pedersen Designee” has the meaning set forth in Section 2.1(c).

“Permitted Assigns” means, with respect to a Blackstone Entity, a Transferee of
shares of Common Stock or a Permitted Transferee (as defined in the LLC
Agreement) that agrees to become party to, and to be bound to the same extent as
its Transferor by the terms of, this Agreement.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or other form of business organization, whether or
not regarded as a legal entity under applicable Law, or any Governmental
Authority or any department, agency or political subdivision thereof.

“Plan Asset Regulation” has the meaning set forth in Section 3.3.

“Pre-IPO Owners” means the Blackstone Parties, the Summit Parties, Pedersen,
Dunn and their respective Affiliates.

“Sponsor Groups” means the Blackstone Entities, the Summit Entities and
Pedersen.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which:
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, representatives or trustees thereof is at the time owned
or Controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof; or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the total voting power of stock (or equivalent ownership interest) of the
limited liability company, partnership, association or other business entity is
at the time owned or Controlled, directly or indirectly, by that Person or one
or more Subsidiaries of that Person or a combination thereof.  For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or Control the managing member, managing director or
other governing body or general partner of such limited liability company,
partnership, association or other business entity.

“Summit Designee” has the meaning set forth in Section 2.1(c).

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“Summit Entities” means the entities comprising the Summit Parties and their
Affiliates.

“Summit Parties” means the entities listed on the signature pages hereto under
the heading “Summit Parties” and any other Summit Entities that may from time to
time become parties hereto.

“Tax Equity Financing” means a tax equity financing entered into solely in
connection with the acquisition or refinancing by the Company or any of its
Subsidiaries of energy generating, transmission or distribution assets (and any
assets related thereto).

“Total Number of Directors” means the total number of directors comprising the
Board.

“Transfer” (including its correlative meanings, “Transferor”, “Transferee” and
“Transferred”) shall mean, with respect to any security, directly or indirectly,
to sell, contract to sell, give, assign, hypothecate, pledge, encumber, grant a
security interest in, offer, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase,
lend or otherwise transfer or dispose of any economic, voting or other rights in
or to such security.  When used as a noun, “Transfer” shall have such
correlative meaning as the context may require.

“VCOC Investor” has the meaning set forth in Section 3.3.

Construction

.  The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party.  Unless the context otherwise
requires: (a) “or” is disjunctive but not exclusive, (b) words in the singular
include the plural, and in the plural include the singular, and (c) the words
“hereof”, “herein”, and “hereunder” and words of similar import when used in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section references are to this Agreement unless
otherwise specified.

ARTICLE II.
CORPORATE GOVERNANCE MATTERS

Election of Directors

.

(a)Following the Closing Date, the Blackstone Entities shall have the right, but
not the obligation, to nominate to the Board a number of designees equal to at
least: (i) a majority of the Total Number of Directors, so long as the Pre-IPO
Owners collectively beneficially own 50% or more of the outstanding shares of
Common Stock; (ii) 40% of the Total Number of Directors, in the event that the
Pre-IPO Owners collectively beneficially own 40% or more, but less than 50%, of
the outstanding shares of Common Stock; (iii) 30% of the Total Number of
Directors, in the event that the Pre-IPO Owners collectively beneficially own
30% or more, but less than 40%, of the outstanding shares of Common Stock; (iv)
20% of the Total Number of Directors, in the event that the Pre-IPO Owners
collectively beneficially own 20% or more, but less than 30%, of the outstanding
shares of Common Stock; and (v) 10% of the Total

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Number of Directors, in the event that the Pre-IPO Owners collectively
beneficially own 5% or more, but less than 20%, of the outstanding shares of
Common Stock. For purposes of calculating the number of directors that the
Blackstone Entities are entitled to designate pursuant to the immediately
preceding sentence, any fractional amounts shall automatically be rounded up to
the nearest whole number (e.g., one and one quarter (1 ¼) Directors shall equate
to two (2) Directors) and any such calculations shall be made after taking into
account any increase in the Total Number of Directors.  At the request of the
Blackstone Entities, for so long as the Board is classified, the Blackstone
Entities shall be entitled to nominate that number of Directors to each class,
such that the number of Directors nominated by the Blackstone Entities in each
class shall be as nearly equal as possible.

(b)In the event that the Blackstone Entities have nominated less than the total
number of designees that the Blackstone Entities are then entitled to nominate
pursuant to Section 2.1(a), the Blackstone Entities shall have the right, at any
time, to nominate such additional designees to which it is entitled, in which
case the Company, 313 Acquisition and the Directors shall take all necessary
corporate action, to the fullest extent permitted by applicable Law (including
with respect to any fiduciary duties under Delaware law), to (x) enable the
Blackstone Entities to nominate and effect the election or appointment of such
additional individuals, whether by increasing the size of the Board or
otherwise, and (y) to designate such additional individuals nominated by the
Blackstone Entities to fill such newly-created vacancies or to fill any other
existing vacancies.  Each such person whom the Blackstone Entities shall
actually nominate pursuant to this Section 2.1 and who is thereafter elected to
the Board to serve as a Director shall be referred to herein as a “Blackstone
Designee”.

(c)Following the Closing Date, (i) the Summit Entities shall have the right, but
not the obligation, to nominate to the Board at least one individual so
designated for election as a Director (each such person who is thereafter
elected to the Board to serve as a Director, a “Summit Designee”) and (ii)
Pedersen shall have the right, but not the obligation, to nominate to the Board
at least one individual so designated for election as a Director (each such
person who is thereafter elected to the Board to serve as a Director, a
“Pedersen Designee”), in each case, so long as (i) the Pre-IPO Owners
collectively beneficially own 50% or more of the outstanding shares of Common
Stock as of the record date for such meeting and (i) the Summit Entities or
Pedersen, as applicable, hold shares of Common Stock or continue to hold
membership interests in 313 Acquisition.

(d)In the event that a vacancy is created at any time by the death, retirement
or resignation of any Blackstone Designee, Summit Designee or Pedersen Designee,
the remaining Directors and the Company shall, to the fullest extent permitted
by applicable Law (including with respect to any fiduciary duties under Delaware
law), cause the vacancy created thereby to be filled by a new designee of the
Blackstone Entities, the Summit Entities or Pedersen, as applicable, as soon as
possible, and the Company hereby agrees to take, to the fullest extent permitted
by applicable Law (including with respect to any fiduciary duties under Delaware
law), at any time and from time to time, all actions necessary to accomplish the
same.

(e)The Company agrees, to the fullest extent permitted by applicable Law
(including with respect to any fiduciary duties under Delaware law), to include
in the slate of nominees recommended by the Board for election at any meeting of
stockholders called for the

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purpose of electing Directors the persons designated pursuant to this Section
2.1 (to the extent that Directors of such nominee’s class are to be elected at
such meeting for so long as the Board is classified) and to nominate and
recommend each such individual to be elected as a Director as provided herein,
and to solicit proxies or consents in favor thereof. The Company is entitled to
identify such individual as a Blackstone Designee, a Summit Designee or a
Pedersen Designee, as applicable, pursuant to this Agreement.

2.2Committees

(a)Until such time as the Company ceases to be a Controlled Company, (i) the
Blackstone Entities shall have the right (but not the obligation) to designate a
majority of the members of each committee of the Board except to the extent that
a designee of the Blackstone Entities is not permitted to serve on a committee
under applicable Law or listing standards and (ii) any additional members of any
committee shall be determined by the Board.

(b)Following such time as the Company ceases to be a Controlled Company, the
composition of each committee of the Board shall be determined by the Board,
subject to compliance with applicable Law or listing standards; provided that
the Blackstone Entities shall have the right (but not the obligation) to
designate to each such committee of the Board at least one member or such
greater number of members that is as nearly proportionate to the representation
of the Blackstone Entities on the Board as possible except to the extent that a
designee of the Blackstone Entities is not permitted to serve on a committee
under applicable Law or listing standards.

Agreement to Vote

.  

(a)At such time as the Investor Parties hold of record shares of Common Stock,
each Investor Party agrees to vote, in person or by proxy, or to act by written
consent (if applicable) with respect to, all shares of Common Stock or other
equity securities of the Company having the right to vote for the election of
Directors to cause the election of the designees of each Sponsor Group for so
long as such Sponsor Group has the right to nominate a Director pursuant to
Section 2.1 and, at all times, whether or not such an Investor Party holds of
record shares of Common Stock, to take all other actions within such Person’s
power to ensure that the composition of the Board and each committee is as set
forth in Sections 2.1 and 2.2.

(b)For so long as 313 Acquisition holds of record shares of Common Stock, 313
Acquisition agrees (i) to vote, in person or by proxy, or to act by written
consent (if applicable) with respect to, all shares of Common Stock or other
equity securities of the Company having the right to vote for the election of
Directors to cause the election of the designees of each Sponsor Group for so
long as such Sponsor Group has the right to nominate a Director pursuant to
Section 2.1, (ii) to take all other actions within such its power to ensure that
the composition of the Board and each committee is as set forth in Sections 2.1
and 2.2, and (iii) to take all action within its power to otherwise give effect
to the rights of each of the Investor Parties as set forth herein as if such
Investor Party were a holder of record of shares of Common Stock, so long as
such Investor Party continues to own a membership interest in 313 Acquisition.

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Consent Rights

.   For so long as the Pre-IPO Owners collectively beneficially own at least 30%
of the then outstanding shares of Common Stock and the Blackstone Parties are
entitled to designate at least one Director pursuant to Section 2.1(a), the
following actions shall require the prior consent of the Blackstone Parties
delivered in accordance with Section 4.13, which consent may be withheld for any
reason or no reason, in addition to the Board’s approval (or, as applicable, the
approval of the requisite governing body of any Subsidiary of the Company, the
approval of the board of managers of 313 Acquisition or any requisite statutory
vote):

(a)changing the size or the composition of the Board or any committee of the
Board, except as expressly provided for in this Agreement or in the Company’s
certificate of incorporation then in effect;  

(b)entering into, or agreeing or otherwise committing to enter into, any
business or operations other than those businesses and operations of the same or
similar nature to those which are being conducted by the Company or its
Subsidiaries as of the date of this Agreement, or any other change, through any
acquisition, disposition of assets or otherwise, in the nature of the business
or operations of the Company or any of its Subsidiaries as of the date of this
Agreement;

(c)voluntarily initiating any liquidation, dissolution or winding up of the
Company or any of its Subsidiaries, permitting the commencement of a proceeding
for bankruptcy, insolvency, receivership or similar action with respect to the
Company or any of its Subsidiaries, the decision not to oppose any similar
proceeding commenced by a third party or the adoption of any plan or proposal
with respect to any of the foregoing or any reorganization or recapitalization
of the Company or any of its Subsidiaries;

(d)any Change of Control, except as expressly provided for by the LLC Agreement;

(e)entering into any agreement providing for the acquisition or divestiture of
assets or Persons, in each such case involving consideration payable or
receivable by the Company or any of its Subsidiaries in excess of $100 million
in the aggregate in any single transaction or series of related transactions
during any twelve-month period;

(f)any incurrence by the Company or any of its Subsidiaries of Indebtedness or
entry into Tax Equity Financing in excess of $200 million in the aggregate in
any single transaction or series of related transactions;

(g)any issuance or series of related issuances of equity securities by the
Company or any of its Subsidiaries for an aggregate consideration in excess of
$100 million;

(h)entering into any joint venture or similar business alliance involving
investment, contribution or disposition by the Company or its Subsidiaries of
assets (including stock of Subsidiaries) having an aggregate Fair Market Value
in excess of $100 million, other than transactions solely between and among the
Company and its wholly owned Subsidiaries;

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(i)any amendment, modification or waiver of this Agreement or the Employee
Stockholders Agreement; and

(j)any amendment, modification or waiver of the Company’s certificate of
incorporation, bylaws or any other governing document of the Company following
the Closing Date.

ARTICLE III.
INFORMATION; VCOC

Books and Records; Access

.  The Company shall, and shall cause its Subsidiaries to, keep proper books,
records and accounts, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company and each of
its Subsidiaries in accordance with generally accepted accounting
principles.  For so long as the Blackstone Entities beneficially own 5% or more
of the outstanding shares of Common Stock, the Company shall, and shall cause
its Subsidiaries to, permit the Blackstone Entities and their respective
designated representatives, at reasonable times and upon reasonable prior notice
to the Company, to review the books and records of the Company or any of such
Subsidiaries and to discuss the affairs, finances and condition of the Company
or any of such Subsidiaries with the officers of the Company or any such
Subsidiary.   For so long as the Blackstone Entities beneficially own 5% or more
of the outstanding shares of Common Stock, the Company shall, and shall cause
its Subsidiaries to, provide the Blackstone Entities, in addition to other
information that might be reasonably requested by the Blackstone Entities from
time to time, (i) direct access to the Company's auditors and officers, (ii) the
ability to link the Blackstone Entities’ systems into the Company’s general
ledger and other systems in order to enable the Blackstone Entities to retrieve
data on a “real-time” basis, (iii) quarter-end reports, in a format to be
prescribed by the Blackstone Entities, to be provided within 30 days after the
end of each quarter, (iv) copies of all materials provided to the Company’s
board of directors (or equivalent governing body) at the same time as provided
to the directors (or their equivalent) of the Company, (v) access to appropriate
officers and directors of the Company at such times as may be requested by the
Blackstone Entities, as the case may be, for consultation with each of the
Blackstone Entities with respect to matters relating to the business and affairs
of the Company and its Subsidiaries, (vi) information in advance with respect to
any significant corporate actions, including, without limitation, extraordinary
dividends, mergers, acquisitions or dispositions of assets, issuances of
significant amounts of debt or equity and material amendments to the certificate
of incorporation or bylaws of the Company or any of its Subsidiaries, and to
provide the Blackstone Entities, with the right to consult with the Company and
its Subsidiaries with respect to such actions, (vii) flash data, in a format to
be prescribed by the Blackstone Entities, to be provided within ten days after
the end of each quarter and (viii) to the extent otherwise prepared by the
Company, operating and capital expenditure budgets and periodic information
packages relating to the operations and cash flows of the Company and its
Subsidiaries  (all such information so furnished pursuant to this Section 3.1,
the “Information”).  The Company agrees to consider, in good faith, the
recommendations of the Blackstone Entities in connection with the matters on
which the Company is consulted as described above.  Subject to Sections 3.2 and
3.3, any Blackstone Entity (and any party receiving Information from a
Blackstone Entity) who shall receive Information shall maintain the
confidentiality of such Information, and the Company shall not be required to
disclose any privileged Information of the Company so long as the

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Company has used its commercially reasonable efforts to enter into an
arrangement pursuant to which it may provide such information to the Blackstone
Entities without the loss of any such privilege.

Consent to Sharing of Information

.  Individuals associated with the Blackstone Entities may from time to time
serve on the boards of directors of the Company and its Subsidiaries.  The
Company, on its behalf and on behalf of its Subsidiaries, recognizes that such
individuals (i) will from time to time receive non-public information concerning
the Company and its Subsidiaries and (ii) may (subject to the obligation to
maintain the confidentiality of such information in accordance with Section 3.1)
share such information with other individuals associated with the Blackstone
Entities.  Such sharing will be for the dual purpose of facilitating support to
such individuals in their capacity as directors and enabling the Blackstone
Entities, as equityholders, to better evaluate the Company’s performance and
prospects. The Company, on behalf of itself and its Subsidiaries, hereby
irrevocably consents to such sharing.

 

VCOC

.  With respect to each Blackstone Entity or Summit Entity that is intended to
qualify its direct or indirect investment in the Company as a “venture capital
investment” as defined in the Department of Labor regulations codified at 29 CFR
Section 2510.3-101 (the “Plan Asset Regulation”) (each, a “VCOC Investor”), for
so long as the VCOC Investor, directly or through one or more subsidiaries,
continues to hold any shares of Common Stock (or other securities of the Company
into which such shares of Common Stock may be converted or for which such shares
of Common Stock may be exchanged), without limitation or prejudice of any the
rights provided to the Blackstone Entities or the Summit Entities hereunder, the
Company shall, with respect to each such VCOC Investor:

(a)provide each VCOC Investor or its designated representative with:

(i)upon reasonable notice and at mutually convenient times, the right to visit
and inspect any of the offices and properties of the Company and its
Subsidiaries and inspect and copy the books and records of the Company and its
Subsidiaries;

(ii)as soon as available and in any event within 45 days after the end of each
of the first three quarters of each fiscal year of the Company, consolidated
balance sheets of the Company and its Subsidiaries as of the end of such period,
and consolidated statements of income and cash flows of the Company and its
Subsidiaries for the period then ended prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis, except as otherwise noted therein, and subject to the absence of
footnotes and to year-end adjustments;

(iii)as soon as available and in any event within 120 days after the end of each
fiscal year of the Company, a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such year, and consolidated statements of income
and cash flows of the Company and its Subsidiaries for the year then ended
prepared in conformity with generally accepted accounting principles in the

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United States applied on a consistent basis, except as otherwise noted therein,
together with an auditor’s report thereon of a firm of established national
reputation;

(iv)to the extent the Company is required by law or pursuant to the terms of any
outstanding indebtedness of the Company to prepare such reports, any annual
reports, quarterly reports and other periodic reports pursuant to Section 13 or
15(d) of the Exchange Act, actually prepared by the Company as soon as
available; and

(v)upon written request by the VCOC Investor, copies of all materials provided
to the Board, subject to appropriate protections with respect to confidentiality
and preservation of attorney-client privilege;

provided, that, in each case, if the Company makes the information described in
clauses (ii), (iii) and (iv) of this clause (a) available through public filings
on the EDGAR System or any successor or replacement system of the U.S.
Securities and Exchange Commission, the delivery of such information shall be
deemed satisfied;

(b)make appropriate officers and/or Directors of the Company available, and
cause the officers and directors of its Subsidiaries to be made available,
periodically and at such times as reasonably requested by each VCOC Investor,
upon reasonable notice and at mutually convenient times, for consultation with
such VCOC Investor or its designated representative with respect to matters
relating to the business and affairs of the Company and its Subsidiaries;

(c)to the extent that the VCOC Investor requests to receive such information and
rights, and to the extent consistent with applicable Law or listing standards
(and with respect to events which require public disclosure, only following the
Company’s public disclosure thereof through applicable securities law filings or
otherwise), inform each VCOC Investor or its designated representative in
advance with respect to any significant corporate actions, and to provide (or
cause to be provided) each VCOC Investor or its designated representative with
the right to consult with the Company and its Subsidiaries with respect to such
actions should the VCOC Investor elect to do so, provided however, that this
right to consult must be exercised within five (5) days after the Company
informs the VCOC Investor of the proposed corporate action and provided further
that the Company shall be under no obligation to provide the VCOC Investor with
any material non-public information with respect to such corporate action; and

(d)provide each VCOC Investor or its designated representative with such other
rights of consultation which the VCOC Investor’s counsel may determine in
writing to be reasonably necessary under applicable legal authorities
promulgated after the date hereof to qualify its investment in the Company as a
“venture capital investment” for purposes of the Plan Asset Regulation, provided
that the parties agree that any such rights of consultation shall be of a nature
consistent with those granted above and nothing in this Agreement shall be
deemed to require the Company to grant to the VCOC Investor any additional
rights with respect to the governance or management of the Company.

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The Company agrees to consider, in good faith, the recommendations of each VCOC
Investor or its designated representative in connection with the matters on
which it is consulted as described above in this Section 3.3, recognizing that
the ultimate discretion with respect to all such matters shall be retained by
the Company.

In the event a VCOC Investor or any of its Affiliates Transfers all or any
portion of their investment in the Company to an Affiliated entity that is
intended to qualify as a “venture capital operating company” (as defined in the
Plan Asset Regulation), such Transferee shall be afforded the same rights with
respect to the Company afforded to the VCOC Investor hereunder and shall be
treated, for such purposes, as a third party beneficiary hereunder.

In the event that the Company ceases to qualify as an “operating company” (as
defined in the first sentence of 2510.3-101(c)(1) of the Plan Asset Regulation),
or the investment in the Company by a VCOC Investor does not qualify as a
“venture capital investment” as defined in the Plan Asset Regulation, then the
Company and each Blackstone Entity and Summit Entity will cooperate in good
faith to take all reasonable actions necessary, subject to applicable Law, to
preserve the VCOC status of each VCOC Investor or the qualification of the
investment as a “venture capital investment,” it being understood that such
reasonable actions shall not require a VCOC Investor to purchase or sell any
investments.

ARTICLE IV.
GENERAL PROVISIONS

Termination

.  Except for Section 3.3, this Agreement shall terminate on the earlier to
occur of (i) such time as the Blackstone Entities are no longer entitled to
nominate a Director pursuant to Section 2.1(a) and (ii) the delivery of a
written notice by the Blackstone Entities to the Company requesting that this
Agreement terminate.  The VCOC Investors shall advise the Company when they
collectively first cease to beneficially own any of the Company’s Common Stock
or other securities of the Company into which such shares of Common Stock may be
converted or for which such shares of Common Stock may be exchanged, whereupon
Section 3.3 hereof shall terminate.

Notices

.  Any notice, designation, request, request for consent or consent provided for
in this Agreement shall be in writing and shall be either personally delivered,
or mailed first class mail (postage prepaid) or sent by reputable overnight
courier service (charges prepaid) to the Company at the address set forth below
and to any other recipient at the address indicated on the Company’s records, or
at such address or to the attention of such other Person as the recipient party
has specified by prior written notice to the sending party.  Notices and other
such documents will be deemed to have been given or made hereunder when sent by
facsimile (receipt confirmed) delivered personally, five (5) days after deposit
in the U.S. mail and one (1) day after deposit with a reputable overnight
courier service.  

The Company’s address is:

Vivint Solar, Inc.
4931 North 300 West

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Provo, Utah 84604
Attention:Shawn J. Lindquist, Chief Legal Officer

with a copy (not constituting notice) to:

Wilson Sonsini Goodrich & Rosati P.C.
650 Page Mill Road
Palo Alto, California 94304
Attention: Larry W. Sonsini

 

Pedersen’s address is:

313 Acquisition LLC
4931 North 300 West

Provo, Utah 84604
Attention:Todd Pedersen

The Blackstone Entities’ address is:

The Blackstone Group L.P.
345 Park Avenue
New York, NY 10154
Attention:Peter Wallace

The Summit Entities’ address is:

Summit Partners
222 Berkeley Street, 18th floor
Boston, MA 02116
Attention:Joseph Trustey

in the case of each of the Sponsor Groups, with a copy (not constituting notice)
to:

Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Attention:Peter Martelli

Edgar J. Lewandowski

Amendment; Waiver

.  Subject to Section 2.4, this Agreement may be amended, supplemented or
otherwise modified only by a written instrument executed by the Company and the
other parties hereto.  Neither the failure nor delay on the part of any party
hereto to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any

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other occurrence.  No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.

Further Assurances

.  The parties hereto will sign such further documents, cause such meetings to
be held, resolutions passed, exercise their votes and do and perform and cause
to be done such further acts and things necessary, proper or advisable in order
to give full effect to this Agreement and every provision hereof.  To the
fullest extent permitted by law, the Company shall not directly or indirectly
take any action that is intended to, or would reasonably be expected to result
in, any Blackstone Entity being deprived of the rights contemplated by this
Agreement.

Assignment

.  This Agreement will inure to the benefit of and be binding on the parties
hereto and their respective successors and permitted assigns. This Agreement may
not be assigned without the express prior written consent of the other parties
hereto, and any attempted assignment, without such consents, will be null and
void; provided, however, that each Blackstone Entity shall be entitled to
assign, in whole or in part, to any of its Permitted Assigns without such prior
written consent any of its rights hereunder.

Third Parties

.  Except as expressly provided for with respect to any Blackstone Entity, this
Agreement does not create any rights, claims or benefits inuring to any person
that is not a party hereto nor create or establish any third party beneficiary
hereto.

Governing Law

.  This Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to principles of conflicts of laws
thereof.

Jurisdiction; Waiver of Jury Trial

.  In any judicial proceeding involving any dispute, controversy or claim
arising out of or relating to this Agreement, each of the parties
unconditionally accepts the jurisdiction and venue of the Court of Chancery of
the State of Delaware or, if the Court of Chancery does not have subject matter
jurisdiction over the matter, the Superior Court of the State of Delaware
(Complex Commercial Division), or, if jurisdiction over the matter is vested
exclusively in federal courts, the United States District Court for the District
of Delaware, and the appellate courts to which orders and judgments thereof may
be appealed.  In any such judicial proceeding, the parties agree that in
addition to any method for the service of process permitted or required by such
courts, to the fullest extent permitted by law, service of process may be made
by delivery provided pursuant to the directions in Section 4.2.  EACH OF THE
PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY OR CLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

Specific Performance

.  Each party hereto acknowledges and agrees that in the event of any breach of
this Agreement by any of them, the other parties hereto would be irreparably
harmed and could not be made whole by monetary damages.  Each party accordingly
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate and agrees that the parties, in addition to any other
remedy to which they may be

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entitled at law or in equity, shall be entitled to specific performance of this
Agreement without the posting of bond.

Entire Agreement

.  This Agreement sets forth the entire understanding of the parties hereto with
respect to the subject matter hereof.  There are no agreements, representations,
warranties, covenants or understandings with respect to the subject matter
hereof or thereof other than those expressly set forth herein and therein.  This
Agreement supersedes all other prior agreements and understandings between the
parties with respect to such subject matter.

Severability

.  If any provision of this Agreement, or the application of such provision to
any Person or circumstance or in any jurisdiction, shall be held to be invalid
or unenforceable to any extent, (i) the remainder of this Agreement shall not be
affected thereby, and each other provision hereof shall be valid and enforceable
to the fullest extent permitted by law, (ii) as to such Person or circumstance
or in such jurisdiction such provision shall be reformed to be valid and
enforceable to the fullest extent permitted by law and (iii) the application of
such provision to other Persons or circumstances or in other jurisdictions shall
not be affected thereby.

Table of Contents, Headings and Captions

.  The table of contents, headings, subheadings and captions contained in this
Agreement are included for convenience of reference only, and in no way define,
limit or describe the scope of this Agreement or the intent of any provision
hereof.

Grant of Consent

.  Any vote, consent or approval of, or designation by, or other action of, any
Sponsor Group hereunder shall be deemed to be given with respect to all members
of such Sponsor Group if such vote, consent, approval, designation or action is
given by members of such Sponsor Group having a pecuniary interest in a majority
of the shares of Common Stock over which all members of such Sponsor Group then
have a pecuniary interest and shall be effective if notice of such vote,
consent, approval, designation or action is provided in accordance with Section
4.2 by the respective parties as of the latest date any such notice is so
provided.

Counterparts

.  This Agreement and any amendment hereto may be signed in any number of
separate counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one Agreement (or amendment, as
applicable).

Effectiveness

.  This Agreement shall become effective upon the Closing Date.

No Recourse

.  This Agreement may only be enforced against, and any claims or cause of
action that may be based upon, arise out of or relate to this Agreement, or the
negotiation, execution or performance of this Agreement may only be made against
the entities that are expressly identified as parties hereto and no past,
present or future Affiliate, director, officer, employee, incorporator, member,
manager, partner, stockholder, agent, attorney or representative of any party
hereto shall have any liability for any obligations or liabilities of the

15

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parties to this Agreement or for any claim based on, in respect of, or by reason
of, the transactions contemplated hereby.

 

(Remainder Of Page Intentionally Left Blank)

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.

 

COMPANY

 

VIVINT SOLAR, INC.

 

By:

/s/ Gregory S. Butterfield_______________

Name:Gregory S. Butterfield

Title:Chief Executive Officer and President

Signature Page to Stockholders Agreement

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313 ACQUISITION LLC

 

By:

/s/ Peter Wallace______________________

Name:Peter Wallace

Title:Senior Managing Director

Signature Page to Stockholders Agreement

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BLACKSTONE CAPITAL PARTNERS VI L.P.

 

By:

BLACKSTONE MANAGEMENT ASSOCIATES VI L.L.C., its general partner

 

By:      BMA VI L.L.C., its sole member

 

By: /s/ Peter Wallace_____________________

Name: Peter Wallace

Title:   Senior Managing Director

 

Signature Page to Stockholders Agreement

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Blackstone Family Investment Partnership VI - ESC L.P.

 

By:

BCP VI SIDE-BY-SIDE GP L.L.C., its general partner

 

By: /s/ Peter Wallace_____________________

Name: Peter Wallace

Title:   Senior Managing Director

 

Signature Page to Stockholders Agreement

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Blackstone Family Investment Partnership  VI L.P.

 

By:

BCP VI SIDE-BY-SIDE GP L.L.C., its general partner

 

By: /s/ Peter Wallace_____________________

Name: Peter Wallace

Title:   Senior Managing Director

Signature Page to Stockholders Agreement

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BLACKSTONE VNT CO-INVEST L.P.

 

By:

BLACKSTONE MANAGEMENT ASSOCIATES VI L.L.C., its general partner

 

By:       BMA VI L.L.C., its sole member

 

By: /s/ Peter Wallace_____________________

Name: Peter Wallace

Title:   Senior Managing Director

Signature Page to Stockholders Agreement

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SUMMIT PARTNERS GROWTH EQUITY FUND VIII-A, L.P.

 

By:

Summit Partners GE VIII, L.P., its General Partner

By:

Summit Partners GE VIII, LLC, its Managing Member

By: /s/ Joseph F. Trustey___________________

Name: Joseph F. Trustey

Title: Managing Director

 

Signature Page to Stockholders Agreement

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SUMMIT PARTNERS GROWTH EQUITY FUND VIII-B, L.P.

By:

Summit Partners GE VIII, L.P., its General Partner

By:

Summit Partners GE VIII, LLC, its Managing Member

By: /s/ Joseph F. Trustey___________________

Name: Joseph F. Trustey

Title: Managing Director

 

Signature Page to Stockholders Agreement

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SUMMIT INVESTORS I, LLC

By:

Summit Investors Management, LLC, its Manager

By:

Summit Partners, L.P., its Manager

By:

Summit Master Company, LLC, its General Partner

By: /s/ Joseph F. Trustey___________________

Name: Joseph F. Trustey

Title: Managing Director

 

Signature Page to Stockholders Agreement

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SUMMIT INVESTORS I (UK), L.P.

By:

Summit Investors Management, LLC, its General Partner

By:

Summit Partners, L.P., its Manager

By:

Summit Master Company, LLC, its General Partner

By: /s/ Joseph F. Trustey___________________

Name: Joseph F. Trustey

Title: Managing Director

 

Signature Page to Stockholders Agreement

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ALEX J. DUNN

 

By: /s/ Alex Dunn________________________

Name: Alex Dunn

 

 

Signature Page to Stockholders Agreement

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TODD R. PEDERSEN

 

By: /s/ Todd Pedersen____________________

Name: Todd Pedersen

 

 

 

Signature Page to Stockholders Agreement