Document:

exv10w2

Exhibit
10.2

REGISTRATION RIGHTS AGREEMENT

               This Registration Rights Agreement (this “Agreement”) is made and entered into as of September
___, 2009, by and among Solar Power, Inc., a California corporation (the “Company”), and the
several purchasers signatory hereto (each a “Purchaser” and collectively, the “Purchasers”).

               This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof between the Company and each Purchaser (the “Purchase Agreement”).

               NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the Company and each of the Purchasers agree as follows:

          1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the following meanings:

               “Advice” has the meaning set forth in Section 6(d).

               “Affiliate” means, with respect to any person, any other person which directly or indirectly
controls, is controlled by, or is under common control with, such person.

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

               “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City
are open for the general transaction of business.

               “Closing” has the meaning set forth in the Purchase Agreement.

               “Closing Date” has the meaning set forth in the Purchase Agreement.

               “Commission” means the Securities and Exchange Commission.

               “Common Stock” means the common stock of the Company, par value $0.0001 per share, and any
securities into which such common stock may hereinafter be reclassified.

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

               “Effective Date” means the date that the Registration Statement filed pursuant to Section
2(a) is first declared effective by the Commission.

               “Effectiveness Deadline” means, with respect to the Initial Registration Statement or the New
Registration Statement, the ninetieth (90th) calendar day following the Closing Date
(or, in the event the Commission reviews and has written comments to the Initial Registration
Statement or the New Registration Statement, the one hundred twentieth (120th) calendar
day following the Closing Date); provided, however, that if the Company is notified by the
Commission that the Initial Registration Statement or the New Registration Statement will not be
reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to
such Registration Statement shall be the fifth (5th) Trading Day following the date on
which the Company is so notified if such date precedes the dates otherwise required above;
provided, further, that if the Effectiveness Deadline falls on a Saturday, Sunday

 

 

or other day that the Commission is closed for business, the Effectiveness Deadline shall be
extended to the next Business Day on which the Commission is open for business.

               “Effectiveness Period” has the meaning set forth in Section 2(b).

               “Event” has the meaning set forth in Section 2(c).

               “Event Date” has the meaning set forth in Section 2(c).

               “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

               “Filing Deadline” means, with respect to the Initial Registration Statement required to be
filed pursuant to Section 2(a), the thirtieth (30th) calendar day following the
Closing Date, provided, however, that if the Filing Deadline falls on a Saturday, Sunday or other
day that the Commission is closed for business, the Filing Deadline shall be extended to the next
business day on which the Commission is open for business.

               “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of
Registrable Securities.

               “Indemnified Party” has the meaning set forth in Section 5(c).

               “Indemnifying Party” has the meaning set forth in Section 5(c).

               “Initial Registration Statement” means the initial Registration Statement filed pursuant to
Section 2(a) of this Agreement.

               “Liquidated Damages” has the meaning set forth in Section 2(c).

               “Losses” has the meaning set forth in Section 5(a).

               “New Registration Statement” has the meaning set forth in Section 2(a).

               “Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

               “Placement Agent” means Deutsche Bank Securities Inc. and any permitted assigns.

               “Principal Market” means the Trading Market on which the Common Stock is primarily listed on
and quoted for trading, which, as of the Closing Date, shall be the OTC Bulletin Board.

               “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

               “Prospectus” means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a prospectus filed
as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a Registration Statement,
and all other

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amendments and supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

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

               “Purchaser” or “Purchasers” has the meaning set forth in the Preamble.

               “Registrable Securities” means all of (i) the Shares, and (ii) any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization or similar event
with respect to the foregoing, provided, that the Holder has completed and delivered to the Company
a Selling Stockholder Questionnaire; and provided, further, that with respect to a particular
Holder, such Holder’s Shares shall cease to be Registrable Securities upon the earliest to occur of
the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act
(in which case, only such security sold by the Holder shall cease to be a Registrable Security); or
(B) becoming eligible for resale by the Holder under Rule 144 without the requirement for the
Company to be in compliance with the current public information required thereunder and without
volume or manner-of-sale restrictions, pursuant to a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent.

               “Registration Statements” means any one or more registration statements of the Company filed
under the Securities Act that covers the resale of any of the Registrable Securities pursuant to
the provisions of this Agreement (including without limitation the Initial Registration Statement,
the New Registration Statement and any Remainder Registration Statements), amendments and
supplements to such Registration Statements, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by reference in such
Registration Statements.

               “Remainder Registration Statement” has the meaning set forth in Section 2(a).

               “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

               “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

               “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

               “SEC Guidance” means (i) any publicly-available written or oral guidance, comments,
requirements or requests of the Commission staff and (ii) the Securities Act.

               “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

               “Selling Stockholder Questionnaire” means a questionnaire in the form attached as Annex
B hereto, or such other form of questionnaire as may reasonably be adopted by the Company from
time to time.

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               “Shares” means the shares of Common Stock issued or issuable to the Purchasers pursuant to the
Purchase Agreement.

               “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its
Principal Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on
a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in
the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter
market as reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event that the Common Stock
is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a
Business Day.

               “Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex (formerly the
American Stock Exchange), the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on
the date in question.

          2. Registration.

               (a) On or prior to the Filing Deadline, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of all of the Registrable Securities not already
covered by an existing and effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the
Registrable Securities, by such other means of distribution of Registrable Securities as the
Holders may reasonably specify (the “Initial Registration Statement”). The Initial Registration
Statement shall be on Form S-1 and shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration Statement) the “Plan of
Distribution” section attached hereto as Annex A (which may be modified to respond to
comments, if any, provided by the Commission). Notwithstanding the registration obligations set
forth in this Section 2, in the event the Commission informs the Company that all of the
Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale
as a secondary offering on a single registration statement, the Company agrees to promptly (i)
inform each of the holders thereof and use its commercially reasonable efforts to file amendments
to the Initial Registration Statement as required by the Commission and/or (ii) withdraw the
Initial Registration Statement and file a new registration statement (a “New Registration
Statement”), in either case covering the maximum number of Registrable Securities permitted to be
registered by the Commission, on Form S-1 or such other form available to register for resale the
Registrable Securities as a secondary offering; provided, however, that prior to filing such
amendment or New Registration Statement, the Company shall be obligated to use its commercially
reasonable efforts to advocate with the Commission for the registration of all of the Registrable
Securities in accordance with the SEC Guidance, including without limitation, the Manual of
Publicly Available Telephone Interpretations D.29. Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages in Section 2(c), if any SEC
Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered
on a particular Registration Statement as a secondary offering (and notwithstanding that the
Company used diligent efforts to advocate with the Commission for the registration of all or a
greater number of Registrable Securities), unless otherwise directed in writing by a Holder as to
its Registrable Securities, the number of Registrable Securities to be registered on such
Registration Statement will first be reduced by Registrable Securities not acquired pursuant to the
Purchase Agreement (whether pursuant to registration rights or otherwise), and second by
Registrable Securities represented by Shares (applied, in the case that some Shares may be
registered, to the Holders on a pro rata basis based on the total number of unregistered Shares
held by such Holders, subject to a

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determination by the Commission that certain Holders must be reduced first based on the number
of Shares held by such Holders). In the event the Company amends the Initial Registration
Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii)
above, the Company will use its commercially reasonable efforts to file with the Commission, as
promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of
securities in general, one or more registration statements on Form S-1 or such other form available
to register for resale those Registrable Securities that were not registered for resale on the
Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”).

               (b) The Company shall use its commercially reasonable efforts to cause each Registration
Statement to be declared effective by the Commission as soon as practicable and, with respect to
the Initial Registration Statement or the New Registration Statement, as applicable, no later than
the Effectiveness Deadline (including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act), and shall use its
commercially reasonable efforts to keep each Registration Statement continuously effective under
the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered
by such Registration Statement have been publicly sold by the Holders or (ii) the date that all
Registrable Securities covered by such Registration Statement may be sold by non-affiliates without
volume or manner-of-sale restrictions pursuant to Rule 144, without the requirement for the Company
to be in compliance with the current public information requirement under Rule 144 as determined by
counsel to the Company pursuant to a written opinion letter to such effect, addressed and
reasonably acceptable to the Company’s transfer agent (the “Effectiveness Period”). The Company
shall telephonically request effectiveness of a Registration Statement as of 5:00 P.M. New York
City time on a Trading Day. The Company shall promptly notify the Holders via facsimile or
electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement on
the same Trading Day that the Company telephonically confirms effectiveness with the Commission,
which date of confirmation shall initially be the date requested for effectiveness of such
Registration Statement. The Company shall, by 9:30 A.M. New York City time on the first Trading Day
after the Effective Date, file a final Prospectus with the Commission, as required by Rule 424(b).
Failure to so notify the Holders on or before the second Trading Day after such notification or
effectiveness or failure to file a final Prospectus as aforesaid shall be deemed an Event under
Section 2(c).

               (c) If: (i) the Initial Registration Statement is not filed with the Commission on or prior to
the Filing Deadline, (ii) the Initial Registration Statement or the New Registration Statement, as
applicable, is not declared effective by the Commission (or otherwise does not become effective)
for any reason on or prior to the Effectiveness Deadline or (iii) after its Effective Date, (A)
such Registration Statement ceases for any reason (including without limitation by reason of a stop
order, or the Company’s failure to update the Registration Statement), to remain continuously
effective as to all Registrable Securities included in such Registration Statement or (B) the
Holders are not permitted to utilize the Prospectus therein to resell such Registrable Securities
for any reason for more than an aggregate of twenty (20) consecutive calendar days or forty (40)
calendar days (which need not be consecutive days) during any twelve (12) month period, or (iv) the
Company fails to satisfy the current public information requirement pursuant to Rule 144(c)(1) as a
result of which the Holders who are not affiliates are unable to sell Registrable Securities
without restriction under Rule 144 (or any successor thereto), (any such failure or breach in
clauses (i) through (iv) above being referred to as an “Event,” and, for purposes of clauses (i),
(ii) or (iv), the date on which such Event occurs, or for purposes of clause (iii), the date on
which such twenty (20) or forty (40) calendar day period is exceeded, being referred to as an
“Event Date”), then in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if
the applicable Event shall not have been cured by such date) until the earlier of (1) the
applicable Event is cured or (2) the Registrable Securities are eligible for resale pursuant to
Rule 144 without manner of sale or volume

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restrictions, the Company shall pay to each Holder an amount in cash, as partial liquidated
damages and not as a penalty (“Liquidated Damages”), equal to two percent (2.0%) of the aggregate
purchase price paid by such Holder pursuant to the Purchase Agreement for any unregistered
Registrable Securities then held by such Holder. The parties agree that (1) notwithstanding
anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be
payable with respect to any period after the expiration of the Effectiveness Period (except in
respect of an Event described in Section 2(c)(iv) herein), (it being understood that this
sentence shall not relieve the Company of any Liquidated Damages accruing prior to the
Effectiveness Deadline) and in no event shall, the aggregate amount of Liquidated Damages
(excluding Liquidated Damages payable in respect of an Event described in Section 2(c)(iv)
herein) payable to a Holder exceed, in the aggregate, ten percent (10%) of the aggregate purchase
price paid by such Holder pursuant to the Purchase Agreement and (2) in no event shall the Company
be liable in any thirty (30) day period for Liquidated Damages under this Agreement in excess of
two percent (2.0%) of the aggregate purchase price paid by the Holders pursuant to the Purchase
Agreement. If the Company fails to pay any Liquidated Damages pursuant to this Section
2(c) in full within five (5) Business Days after the date payable, the Company will pay
interest thereon at a rate of two percent (2.0%) per month (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the date such Liquidated
Damages are due until such amounts, plus all such interest thereon, are paid in full. The
Liquidated Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of an Event, except in the case of the first Event Date. The
Company shall not be liable for Liquidated Damages under this Agreement as to any Registrable
Securities which are not permitted by the Commission to be included in a Registration Statement due
solely to SEC Guidance from the time that it is determined that such Registrable Securities are not
permitted to be registered. `The Effectiveness Deadline for a Registration Statement shall be
extended without default or Liquidated Damages hereunder in the event that the Company’s failure to
obtain the effectiveness of the Registration Statement on a timely basis results from the failure
of a Purchaser to timely provide the Company with information requested by the Company and
necessary to complete the Registration Statement in accordance with the requirements of the
Securities Act (in which the Effectiveness Deadline would be extended with respect to Registrable
Securities held by such Purchaser).

               (d) Each Holder agrees to furnish to the Company a completed Selling Stockholder Questionnaire
not more than five (5) Trading Days following the date of this Agreement. At least ten (10) Trading
Days prior to the first anticipated filing date of a Registration Statement for any registration
under this Agreement, the Company will notify each Holder of the information the Company requires
from that Holder other than the information contained in the Selling Stockholder Questionnaire, if
any, which shall be completed and delivered to the Company promptly upon request and, in any event,
within three (3) Trading Days prior to the applicable anticipated filing date. Each Holder further
agrees that it shall not be entitled to be named as a selling securityholder in the Registration
Statement or use the Prospectus for offers and resales of Registrable Securities at any time,
unless such Holder has returned to the Company a completed and signed Selling Stockholder
Questionnaire and a response to any requests for further information as described in the previous
sentence. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a
request for further information, in either case, after its respective deadline, the Company shall
use its commercially reasonable efforts to take such actions as are required to name such Holder as
a selling security holder in the Registration Statement or any pre-effective or post-effective
amendment thereto and to include (to the extent not theretofore included) in the Registration
Statement the Registrable Securities identified in such late Selling Stockholder Questionnaire or
request for further information. Each Holder acknowledges and agrees that the information in the
Selling Stockholder Questionnaire or request for further information as described in this
Section 2(d) will be used by the Company in the preparation of the Registration Statement
and hereby consents to the inclusion of such information in the Registration Statement.

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          3. Registration Procedures

               In connection with the Company’s registration obligations hereunder, the Company shall:

               (a) Not less than five (5) Trading Days prior to the filing of each Registration Statement and
not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or
supplement thereto (except for Annual Reports on Form 10-K, and Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K and any similar or successor reports), (i) furnish to the Holder copies
of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be
filed, which documents will be subject to the review of such Holder (it being acknowledged and
agreed that if a Holder does not object to or comment on the aforementioned documents within such
five (5) Trading Day or one (1) Trading Day period, as the case may be, then the Holder shall be
deemed to have consented to and approved the use of such documents) and (ii) use commercially
reasonable efforts to cause its officers and directors, counsel and independent registered public
accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file any Registration Statement or amendment or supplement
thereto in a form to which a Holder reasonably objects in good faith, provided that, the Company is
notified of such objection in writing within the five (5) Trading Day or one (1) Trading Day period
described above, as applicable.

               (b) (i) Prepare and file with the Commission such amendments (including post-effective
amendments) and supplements, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously effective as to the
applicable Registrable Securities for its Effectiveness Period; (ii) cause the related Prospectus
to be amended or supplemented by any required Prospectus supplement (subject to the terms of this
Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably practicable to any comments received from the Commission with respect to
each Registration Statement or any amendment thereto and, as promptly as reasonably possible,
provide the Holders true and complete copies of all correspondence from and to the Commission
relating to such Registration Statement that pertains to the Holders as “Selling Stockholders” but
not any comments that would result in the disclosure to the Holders of material and non-public
information concerning the Company; and (iv) comply with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable Securities covered by a
Registration Statement until such time as all of such Registrable Securities shall have been
disposed of (subject to the terms of this Agreement) in accordance with the intended methods of
disposition by the Holders thereof as set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented; provided, however, that each Purchaser shall be responsible for
the delivery of the Prospectus to the Persons to whom such Purchaser sells any of the Shares
(including in accordance with Rule 172 under the Securities Act), and each Purchaser agrees to
dispose of Registrable Securities in compliance with the “Plan of Distribution” described in the
Registration Statement and otherwise in compliance with applicable federal and state securities
laws. In the case of amendments and supplements to a Registration Statement which are required to
be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of
the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Exchange Act, the Company shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with the Commission on the
same day on which the Exchange Act report which created the requirement for the Company to amend or
supplement such Registration Statement was filed.

               (c) Notify the Holders (which notice shall, pursuant to clauses (iii) through (vi) hereof, be
accompanied by an instruction to suspend the use of the Prospectus until the requisite changes

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have been made) as promptly as reasonably practicable (and, in the case of (i)(A) below, not
less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm
such notice in writing no later than one (1) Trading Day following the day: (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is
proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review”
of such Registration Statement and whenever the Commission comments in writing on any Registration
Statement (in which case the Company shall provide to each of the Holders true and complete copies
of all comments that pertain to the Holders as a “Selling Stockholder” or to the “Plan of
Distribution” and all written responses thereto, but not information that the Company believes
would constitute material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has become effective; (ii) of any request
by the Commission or any other Federal or state governmental authority for amendments or
supplements to a Registration Statement or Prospectus or for additional information that pertains
to the Holders as “Selling Stockholders” or the “Plan of Distribution”; (iii) of the issuance by
the Commission or any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for inclusion therein or
any statement made in such Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or that requires any
revisions to such Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus, form of prospectus or
supplement thereto, in light of the circumstances under which they were made), not misleading and
(vi) of the occurrence or existence of any pending corporate development with respect to the
Company that the Company believes may be material and that, in the determination of the Company,
makes it not in the best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that, any and all such information shall remain confidential to
each Holder until such information otherwise becomes public, unless disclosure by a Holder is
required by law; and provided, further, that notwithstanding each Holder’s agreement to keep such
information confidential, each such Holder makes no acknowledgement that any such information is
material, non-public information.

               (d) Use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, as soon as practicable.

               (e) If requested by a Holder, furnish to such Holder, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission; provided, that the Company shall
have no obligation to provide any document pursuant to this clause that is available on the
Commission’s EDGAR system.

               (f) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable
efforts to register or qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within

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the United States as any Holder reasonably requests in writing, to keep each registration or
qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and
all other acts or things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided, that the Company shall
not be required to qualify generally to do business in any jurisdiction where it is not then so
qualified, subject the Company to any material tax in any such jurisdiction where it is not then so
subject or file a general consent to service of process in any such jurisdiction.

               (g) If requested by a Holder, cooperate with such Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statement, which certificates shall be free, to the extent permitted
by the Purchase Agreement and under law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such Holders may
reasonably request.

               (h) Following the occurrence of any event contemplated by Section 3(c), as promptly as
reasonably practicable (taking into account the Company’s good faith assessment of any adverse
consequences to the Company and its stockholders of the premature disclosure of such event),
prepare a supplement or amendment, including a post-effective amendment, to the affected
Registration Statements or a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other required document so that, as
thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus, form of prospectus or supplement
thereto, in light of the circumstances under which they were made), not misleading. If the Company
notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(c) above to
suspend the use of any Prospectus until the requisite changes to such Prospectus have been made,
then the Holders shall suspend use of such Prospectus. The Company will use its commercially
reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under this Section 3(h)
to suspend the availability of a Registration statement and Prospectus, subject to the payment of
partial Liquidated Damages otherwise required pursuant to Section 2(c), for a period not to
exceed forty (40) calendar days (which need not be consecutive days) in any twelve (12) month
period.

               (i) The Company may require each selling Holder to furnish to the Company a certified
statement as to (i) the number of shares of Common Stock beneficially owned by such Holder and any
Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“FINRA”) affiliations, (iii)
any natural persons who have the power to vote or dispose of the common stock and (iv) any other
information as may be requested by the Commission, FINRA or any state securities commission. During
any periods that the Company is unable to meet its obligations hereunder with respect to the
registration of Registrable Securities because any Holder fails to furnish such information within
three (3) Trading Days of the Company’s request, any Liquidated Damages that are accruing at such
time as to such Holder only shall be tolled and any Event that may otherwise occur solely because
of such delay shall be suspended as to such Holder only, until such information is delivered to the
Company.

               (j) The Company shall cooperate with any registered broker through which a Holder proposes to
resell its Registrable Securities in effecting a filing with FINRA pursuant to FINRA Rule 5110 as
requested by any such Holder and the Company shall pay the filing fee required for the first such
filing within two (2) Business Days of the request therefor.

          4. Registration Expenses. All fees and expenses incident to the Company’s performance
of or compliance with its obligations under this Agreement (excluding any underwriting discounts
and selling commissions and all legal fees and expenses of legal counsel for any Holder) shall be
borne by the

9

 

Company whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with any Trading Market on which the Common Stock
is then listed for trading, (B) with respect to compliance with applicable state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for the Company in
connection with Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment under the laws of
such jurisdictions as requested by the Holders) and (C) if not previously paid by the Company in
connection with Section 3(j) above, with respect to any filing that may be required to be
made by any broker through which a Holder intends to make sales of Registrable Securities with
FINRA pursuant to the FINRA Rule 5110, so long as the broker is receiving no more than a customary
brokerage commission in connection with such sale, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority
of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder. In no event shall the Company be responsible for any underwriting,
broker or similar fees or commissions of any Holder or, except to the extent provided for in the
Transaction Documents, any legal fees or other costs of the Holders.

          5. Indemnification.

               (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify, defend and hold harmless each Holder, the officers,
directors, agents, partners, members, managers, stockholders, Affiliates and employees of each of
them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers,
stockholders, agents and employees of each such controlling Person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and investigation and reasonable
attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based
upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in
any preliminary prospectus, or arising out of or relating to any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, or (ii) any violation or alleged
violation by the Company of the Securities Act, Exchange Act or any state securities law or any
rule or regulation thereunder, in connection with the performance of its obligations under this
Agreement, except to the extent, but only to the extent, that (A) such untrue statements, alleged
untrue statements, omissions or alleged omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in
any amendment or supplement thereto (it being understood that each Holder has approved Annex
A hereto for this purpose) or (B) in the case of an occurrence of an event of the type

10

 

specified in Section 3(c)(iii)-(vi), related to the use by a Holder of an
outdated or defective Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice
contemplated and defined in Section 6(d) below, to the extent that following the receipt of
the Advice the misstatement or omission giving rise to such Loss would have been corrected or (C)
to the extent that any such Losses arise out of the Purchaser’s (or any other indemnified Person’s)
failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented),
if required, pursuant to Rule 172 under the Securities Act (or any successor rule) to the Persons
asserting an untrue statement or alleged untrue statement or alleged untrue statement or omission
or alleged omission at or prior to the written confirmation of the sale of Registrable Securities
to such Person if such statement or omission was corrected in such Prospectus or supplement. The
Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this Agreement of which the
Company is aware. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of an Indemnified Party (as defined in Section 5(c)) and
shall survive the transfer of the Registrable Securities by the Holders.

               (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising
out of or are based solely upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto,
in light of the circumstances under which they were made) not misleading (i) to the extent that
such untrue statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein or (ii) to the extent
that such information relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and approved in writing by such Holder expressly for use in
a Registration Statement (it being understood that the Holder has approved Annex A hereto
for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (iii) in the case of an occurrence of an event of the type specified in Section
3(c)(iii)-(vi), to the extent related to the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice contemplated in
Section 6(d). In no event shall the liability of any selling Holder hereunder be greater
in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.

               (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all reasonable fees and expenses incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent
that it shall be finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have materially and adversely
prejudiced the Indemnifying Party.

11

 

               An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if
the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have
the right to assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party); provided, that the Indemnifying Party shall not be liable for the fees and
expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The
Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without
its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. No
Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.

               Subject to the terms of this Agreement, all fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this Section 5) shall
be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice
thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse
the Indemnifying Party for that portion of such fees and expenses applicable to such actions for
which such Indemnified Party is finally judicially determined to not be entitled to indemnification
hereunder). The failure to deliver written notice to the Indemnifying Party within a reasonable
time of the commencement of any such action shall not relieve such Indemnifying Party of any
liability to the Indemnified Party under this Section 5, except to the extent that the
Indemnifying Party is materially and adversely prejudiced in its ability to defend such action.

               (d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such
Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or omissions that resulted
in such Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of any Losses shall be
deemed to include, subject to the limitations set forth in this Agreement, any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 5 was available to such party in accordance
with its terms.

               The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation
or by any other method of allocation that does not

12

 

take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), (A) no Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by which the net
proceeds actually received by such Holder from the sale of the Registrable Securities subject to
the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged omission and (B) no
contribution will be made under circumstances where the maker of such contribution would not have
been required to indemnify the Indemnified Party under the fault standards set forth in this
Section 5. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section 5 are in addition to
any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in
diminution or limitation of the indemnification provisions under the Purchase Agreement.

          6. Miscellaneous.

               (a) Remedies. In the event of a breach by the Company or by a Holder of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.

               (b) No Piggyback on Registrations; Prohibition on Filing Other Registration
Statements. Except and to the extent specified in the Disclosure Schedules to the Purchase
Agreement, neither the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in a Registration Statement other
than the Registrable Securities and the Company shall not prior to the Effective Date enter into
any agreement providing any such right to any of its security holders. The Company shall not file
with the Commission a registration statement relating to an offering for its own account under the
Securities Act of any of its equity securities other than a registration statement on Form S-8 or,
in connection with an acquisition, on Form S-4 until the earlier of (i) the date that is thirty
(30) days after the Initial Registration Statement or New Registration Statement, as the case may
be, is declared effective or (ii) the date that all Registrable Securities are eligible for resale
by non-affiliates without volume or manner of sale restrictions under Rule 144 and without the
requirement for the company to be in compliance with the current public information requirements
under Rule 144. For the avoidance of doubt, the Company shall not be prohibited from preparing and
filing with the Commission a registration statement relating to an offering of Common Stock by
existing stockholders of the Company under the Securities Act pursuant to the terms of registration
rights held by such stockholder or from filing amendments to registration statements filed prior to
the date of this Agreement.

               (c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption
therefrom is available) in connection with sales of Registrable Securities pursuant to the
Registration Statement and shall sell the Registrable Securities only in accordance with a method
of distribution described in the Registration Statement

13

 

               (d) Discontinued Disposition. By its acquisition of Registrable Securities, each
Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c)(iii)-(vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in
writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have
been supplemented or amended) may be resumed. The Company will use its commercially reasonable
efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The
Company agrees and acknowledges that any periods during which the Holder is required to discontinue
the disposition of the Registrable Securities hereunder shall be subject to the provisions of
Section 2(c).

               (e) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has
entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the
date hereof, enter into any agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.

               (f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, or waived unless the
same shall be in writing and signed by the Company and Holders holding no less than a majority of
the then outstanding Registrable Securities, provided that any party may give a waiver as to
itself. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by Holders of all of the
Registrable Securities to which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.

               (g) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

               (h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. 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 Company may not assign its rights (except by merger or in
connection with another entity acquiring all or substantially all of the Company’s assets) or
obligations hereunder without the prior written consent of all the Holders of the then outstanding
Registrable Securities. Each Holder may assign its respective rights hereunder in the manner and
to the Persons as permitted under the Purchase Agreement; provided in each case that (i) the Holder
agrees in writing with the transferee or assignee to assign such rights and related obligations
under this Agreement, and for the transferee or assignee to assume such obligations, and a copy of
such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the
Company is, within a reasonable time after such transfer or assignment, furnished with written
notice of the name and address of such transferee or assignee and the securities with respect to
which such registration rights are being transferred or assigned, (iii) at or before the time the
Company received the written notice contemplated by clause (ii) of this sentence, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions contained herein
and (iv) the transferee is an “accredited investor,” as that term is defined in Rule 501 of
Regulation D.

               (i) Execution and Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not

14

 

sign the same counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

               (j) Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be determined in accordance with the provisions of the
Purchase Agreement.

               (k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any other remedies provided by law.

               (l) Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their good faith reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

               (m) Headings. The headings in this Agreement are for convenience only and shall not
limit or otherwise affect the meaning hereof.

               (n) Independent Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of any other
Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase the
Securities pursuant to the Transaction Documents has been made independently of any other
Purchaser. Nothing contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create
a presumption that the Purchasers are in any way acting in concert with respect to such obligations
or the transactions contemplated by this Agreement. Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder
and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction Documents. Each
Purchaser shall be entitled to protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any Proceeding for such purpose. The Company acknowledges that
each of the Purchasers has been provided with the same Registration Rights Agreement for the
purpose of closing a transaction with multiple Purchasers and not because it was required or
requested to do so by any Purchaser.

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15

 

               IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 
	 	SOLAR POWER, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

               IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 
	 	 	NAME OF INVESTING ENTITY
	 
	 	 	 	 
	 	 	   
	 
	 	 	 	 
	 	 	AUTHORIZED SIGNATORY
	 
	 	 	 	 
	 
	 	By:	 	 
	 
	 	 
 
	 
	 	Name:	 	 
 
	 
	 	Title:	 	 
	 
	 	 	 	 
	 	 	ADDRESS FOR NOTICE
	 
	 	 	 	 
	 
	 	c/o:	 	 
	 
	 	 
 
	 
	 	 	 	 
 
	 
	 	Street:	 	 
	 
	 	 
 
	 
	 	 	 	 
 
	 
	 	City/State/Zip:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	Attention:	 	 
	 
	 	 
 
	 
	 	 	 	 
 
	 
	 	Tel:	 	 
	 
	 	 
 
	 
	 	 	 	 
 
	 
	 	Fax:	 	 
	 
	 	 
 
	 
	 	 	 	 
 
	 
	 	Email:	 	 
	 
	 	 
 
	 
	 	 	 	 
 

 

 

ANNEX A

PLAN OF DISTRIBUTION

          We are registering the shares of Common Stock issued to the selling stockholders issued to the
selling stockholders to permit the resale of these shares of Common Stock by the holders of the
shares of Common Stock from time to time after the date of this prospectus. We will not receive
any of the proceeds from the sale by the selling stockholders of the shares of Common Stock. We
will bear all fees and expenses incident to our obligation to register the shares of Common Stock.

          The selling stockholders may sell all or a portion of the shares of Common Stock beneficially
owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of Common Stock are sold through underwriters or
broker-dealers, the selling stockholders will be responsible for underwriting discounts or
commissions or agent’s commissions. The shares of Common Stock may be sold on any national
securities exchange or quotation service on which the securities may be listed or quoted at the
time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges
or systems or in the over-the-counter market and in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected in transactions, which may involve crosses or
block transactions. The selling stockholders may use any one or more of the following methods when
selling shares:

	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	settlement of short sales entered into after the effective date of the registration
statement of which this prospectus is a part;
	 
	 	•	 	broker-dealers may agree with the selling stockholders to sell a specified number of
such shares at a stipulated price per share;
	 
	 	•	 	through the writing or settlement of options or other hedging transactions, whether
such options are listed on an options exchange or otherwise;
	 
	 	•	 	a combination of any such methods of sale; and
	 
	 	•	 	any other method permitted pursuant to applicable law.

          The selling stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or
Section 4(1) under the Securities Act, if available, rather than under this prospectus, provided
that they meet the criteria and conform to the requirements of those provisions.

 

 

          Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to
participate in sales. If the selling stockholders effect such transactions by selling shares of
Common Stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or
commissions from the selling stockholders or commissions from purchasers of the shares of Common
Stock for whom they may act as agent or to whom they may sell as principal. Such commissions will
be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction will not be in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in
compliance with FINRA IM-2440.

          In connection with sales of the shares of Common Stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the shares of Common Stock in the course of hedging in positions
they assume. The selling stockholders may also sell shares of Common Stock short and if such short
sale shall take place after the date that this Registration Statement is declared effective by the
Commission, the selling stockholders may deliver shares of Common Stock covered by this prospectus
to close out short positions and to return borrowed shares in connection with such short sales.
The selling stockholders may also loan or pledge shares of Common Stock to broker-dealers that in
turn may sell such shares, to the extent permitted by applicable law. The selling stockholders may
also enter into option or other transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the selling
stockholders have been advised that they may not use shares registered on this registration
statement to cover short sales of our common stock made prior to the date the registration
statement, of which this prospectus forms a part, has been declared effective by the SEC.

          The selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the shares of Common Stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may
transfer and donate the shares of Common Stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.

          The selling stockholders and any broker-dealer or agents participating in the distribution of
the shares of Common Stock may be deemed to be “underwriters” within the meaning of Section 2(11)
of the Securities Act in connection with such sales. In such event, any commissions paid, or any
discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale
of the shares purchased by them may be deemed to be underwriting commissions or discounts under the
Securities Act. Selling Stockholders who are “underwriters” within the meaning of Section 2(11) of
the Securities Act will be subject to the applicable prospectus delivery requirements of the
Securities Act including Rule 172 thereunder and may be subject to certain statutory liabilities
of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under
the Securities Exchange Act of 1934, as amended, or the Exchange Act.

          Each selling stockholder has informed the Company that it is not a registered broker-dealer
and does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. Upon the Company being notified in writing by a selling
stockholder that any material arrangement has been entered into with a broker-dealer for the sale
of common stock through a block trade,

 

 

special offering, exchange distribution or secondary distribution or a purchase by a broker or
dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under
the Securities Act, disclosing (i) the name of each such selling stockholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such
the shares of Common Stock were sold, (iv) the commissions paid or discounts or concessions allowed
to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in this prospectus,
and (vi) other facts material to the transaction. In no event shall any broker-dealer receive
fees, commissions and markups, which, in the aggregate, would exceed eight percent (8.0%).

          Under the securities laws of some states, the shares of Common Stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the
shares of Common Stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied
with.

          There can be no assurance that any selling stockholder will sell any or all of the shares of
Common Stock registered pursuant to the registration statement, of which this prospectus forms a
part.

          Each selling stockholder and any other person participating in such distribution will be
subject to applicable provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of Common Stock by the selling
stockholder and any other participating person. To the extent applicable, Regulation M may also
restrict the ability of any person engaged in the distribution of the shares of Common Stock to
engage in market-making activities with respect to the shares of Common Stock. All of the
foregoing may affect the marketability of the shares of Common Stock and the ability of any person
or entity to engage in market-making activities with respect to the shares of Common Stock.

          We will pay all expenses of the registration of the shares of Common Stock pursuant to the
registration rights agreement, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however,
that each selling stockholder will pay all underwriting discounts and selling commissions, if any
and any related legal expenses incurred by it. We will indemnify the selling stockholders against
certain liabilities, including some liabilities under the Securities Act, in accordance with the
registration rights agreement, or the selling stockholders will be entitled to contribution. We
may be indemnified by the selling stockholders against civil liabilities, including liabilities
under the Securities Act, that may arise from any written information furnished to us by the
selling stockholders specifically for use in this prospectus, in accordance with the related
registration rights agreements, or we may be entitled to contribution.

 

 

ANNEX B

SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE

     The undersigned holder of shares of the common stock, par value $0.0001 per share of Solar
Power, Inc. (the “Company”) issued pursuant to a certain Securities Purchase Agreement by and among
the Company and the Purchasers named therein, dated as of September ___, 2009 (the “Agreement”),
understands that the Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-1 (the “Resale Registration Statement”) for the registration and
the resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the
Registrable Securities in accordance with the terms of the Agreement. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

     In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale
Registration Statement, a holder of Registrable Securities generally will be required to be named
as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the
“Prospectus”), deliver the Prospectus to purchasers of Registrable Securities (including pursuant
to Rule 172 under the Securities Act) and be bound by the provisions of the Agreement (including
certain indemnification provisions, as described below). Holders must complete and deliver this
Notice and Questionnaire in order to be named as selling stockholders in the Prospectus. Holders
of Registrable Securities who do not complete, execute and return this Notice and Questionnaire
within three (3) Trading Days following the date of the Agreement (1) will not be named as selling
stockholders in the Resale Registration Statement or the Prospectus and (2) may not use the
Prospectus for resales of Registrable Securities.

     Certain legal consequences arise from being named as a selling stockholder in the Resale
Registration Statement and the Prospectus. Holders of Registrable Securities are advised to
consult their own securities law counsel regarding the consequences of being named or not named as
a selling stockholder in the Resale Registration Statement and the Prospectus.

NOTICE

     The undersigned holder (the “Selling Stockholder”) of Registrable Securities hereby gives
notice to the Company of its intention to sell or otherwise dispose of Registrable Securities owned
by it and listed below in Item (3), unless otherwise specified in Item (3), pursuant to the Resale
Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire,
understands and agrees that it will be bound by the terms and conditions of this Notice and
Questionnaire and the Agreement.

     The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate and complete:

QUESTIONNAIRE

1. Name.

	 	(a)	 	Full Legal Name of Selling Stockholder:
	 
	 	 	 	 

 

 

	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
	 
	 	 	 	 

	 
	 	(c)	 	Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
	 
	 	 	 	 

2. Address for Notices to Selling Stockholder:

	 	 	 
	  
	 
	 	 
	  
	 
	 	 
	  
	Telephone:
	 	 
 
	 
 
	Fax:
	 	 
	 
 
	Contact Person:
	 	 
	 
 
	E-mail address of Contact Person:
	 	 
	 
	 	 
 

3. Beneficial Ownership of Registrable Securities Issuable Pursuant to the Purchase Agreement:

	 	(a)	 	Type and Number of Registrable Securities beneficially owned and issued
pursuant to the Agreement:
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	(b)	 	Number of shares of Common Stock to be registered pursuant to this Notice for
resale:
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

4. Broker-Dealer Status:

	 	(a)	 	Are you a broker-dealer?

Yes o                                     No o

	 	(b)	 	If “yes” to Section 4(a), did you receive your Registrable Securities as compensation
for investment banking services to the Company?

Yes o                                     No o

 

 

	Note: If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

	 	(c)	 	Are you an affiliate of a broker-dealer?

Yes o                                    No o

	 	Note: If yes, provide a narrative explanation below:
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	(c)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?

Yes o                                    No o

	 	Note: If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling Stockholder.

	 	Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.
	 
	 	Type and amount of other securities beneficially owned:
	 
	 	 

	 
	 	 

6. Relationships with the Company:

	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.
	 
	 	State any exceptions here:
	 
	 	 

	 
	 	 

 

 

7. Plan of Distribution:

	 	 	 	The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the
Registration Rights Agreement, and hereby confirms that, except as set forth below, the
information contained therein regarding the undersigned and its plan of distribution is
correct and complete.
	 
	 	 	 	State any exceptions here:
	 
	 	 	 	 

	 
	 	 	 	 

***********

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof and prior to the effective
date of any applicable Resale Registration Statement. All notices hereunder and pursuant to the
Agreement shall be made in writing, by hand delivery, confirmed or facsimile transmission,
first-class mail or air courier guaranteeing overnight delivery at the address set forth below. In
the absence of any such notification, the Company shall be entitled to continue to rely on the
accuracy of the information in this Notice and Questionnaire.

By signing below, the undersigned consents to the disclosure of the information contained herein in
its answers to Items (1) through (7) above and the inclusion of such information in the Resale
Registration Statement and the Prospectus. The undersigned understands that such information will
be relied upon by the Company in connection with the preparation or amendment of any such
Registration Statement and the Prospectus.

By signing below, the undersigned acknowledges that it understands its obligation to comply, and
agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations
thereunder, particularly Regulation M in connection with any offering of Registrable Securities
pursuant to the Resale Registration Statement. The undersigned also acknowledges that it
understands that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and any amendments or
supplements thereto filed with the Commission pursuant to the Securities Act.

The undersigned hereby acknowledges and is advised of the following Interpretation A.65 of the July
1997 SEC Manual of Publicly Available Telephone Interpretations regarding short selling:

“An Issuer filed a Form S-3 registration statement for a secondary offering of common stock which
is not yet effective. One of the selling stockholders wanted to do a short sale of common stock
“against the box” and cover the short sale with registered shares after the effective date. The
issuer was advised that the short sale could not be made before the registration statement become
effective, because the shares underlying the short sale are deemed to be sold at the time such sale
is made. There would, therefore, be a violation of Section 5 if the shares were effectively sold
prior to the effective date.”

By returning this Questionnaire, the undersigned will be deemed to be aware of the foregoing
interpretation.

I confirm that, to the best of my knowledge and belief, the foregoing statements (including without
limitation the answers to this Questionnaire) are correct.

 

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be
executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	     Beneficial Owner:	 	 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	By:	 	 
	 
	 	 	 	 	 	 	 	 
 Name:
	 
	 	 	 	 	 	 	 	Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:

Jeff Lassiter

Deutsche Bank Securities Inc.
101 California Street
48th Floor
San Francisco, CA 94111
Tel: (415) 617-3050

Fax: (415) 617-3014
Email: jeffrey.lassiter@db.comexv10w1

EXHIBIT 10.1

SEPARATION AGREEMENT AND RELEASE

     THIS SEPARATION AGREEMENT AND RELEASE (“Agreement”), by and between Walter Turek
(“Employee” or “you”) and PAYCHEX, INC. (the “Company”) and its parents,
subsidiaries, divisions, affiliates, and/or related business entities, and with respect to each of
them, their predecessors, successors and assigns, employee benefit plans or funds, and with respect
to each such entity, all of its or their past and/or present shareholders, directors, officers,
attorneys, fiduciaries, agents, trustees, administrators, employees and assigns, whether acting on
behalf of the Company or in their individual capacities (collectively the “Company
Entities”) is made on August 18, 2009.

     1. SEPARATION DATE.

          a. You acknowledge that your retirement date, which shall be your last day of employment with
the Company, will be May 31, 2009 (the “Separation Date”). From the date hereof through
the Separation Date (the “Notice Period”), you shall continue to be an at-will employee of
the Company and conditioned on your continued satisfactory performance, the Company will, during
the Notice Period, continue to pay you your regular base salary and continue to provide you with
those benefits that you were eligible to receive prior to the date hereof; provided that (i) you
comply with your obligations as an employee of the Company, including, but not limited to, your
duty of undivided loyalty and those duties enumerated herein and (ii) you do not engage in any
conduct that is determined by the Company to have been detrimental. During the Notice Period the
Company may, at its sole discretion, choose to discontinue or otherwise limit your access to
confidential information and/or elect to: (i) require you to continue to perform your regular
and/or alternative duties; (ii) require you to discontinue your duties, in whole or in part; and/or
(iii) require you to aid and assist in the transition process associated with your departure.

          b. After the Separation Date, you shall not represent yourself as being an employee, officer,
agent or representative of the Company for any purpose and you shall have no authority or power to
act on behalf of the Company or to hold yourself out as an officer or agent of the Company. The
Separation Date shall be the termination date of your employment for purposes of participation in
and coverage under all benefit/pension plans and programs sponsored by or through the Company
Entities. You agree to submit all requests for reimbursable business expenses incurred prior to
the Separation Date for reimbursement no later than one week following the Separation Date (all
such reimbursement requests shall otherwise be in accordance with Company’s usual guidelines and
practices).

          c. The Company will compensate you for accrued but unused paid time off benefits (totaling
$48,350.40, representing your 240 unused paid time off hours), less applicable tax withholdings and
ordinary payroll deductions, through the Separation Date, and Employee will receive such payment
within thirty (30) days of the Separation Date.

          d. Except as otherwise expressly provided for herein, you affirm that you have been paid
and/or have received all compensation, bonuses, severance and/or benefits to which you may have
been entitled during the period of employment with the Company Entities, including any payments or
benefits you may have been entitled to and you shall not be entitled to

1

 

any other compensation, severance, equity or option payments, incentives, bonuses, awards or
any other form of payment or benefits from any of the Company Entities, either with respect to
prior years or service or your employment in 2009. Notwithstanding the foregoing, you shall remain
entitled to (i) any bonus for which you may eligible and that is otherwise earned by you for fiscal
2009, subject to the terms of the bonus plan and the discretion of the Governance and Compensation
Committee; (ii) your restricted stock and option awards to the extent vested as of the Separation
Date (or any earlier termination date) and (iii) your accrued and vested balance in the Company’s
non-qualified and unfunded deferred compensation plan (the “Deferral Plan”). Your rights with
respect to the exercise of any vested stock options shall be governed by the terms of the
applicable option grant and plan. Amounts payable to you under the Deferral Plan shall be paid to
you in accordance with your prior election and otherwise subject to the terms of such plan.
Furthermore, for purposes of the Paychex, Inc. 401(k) Retirement Plan (referred to as the “Plan”),
Employee will be considered a terminated employee as of June 1, 2009. As such, contributions,
vesting, matches and other service based benefits, rights and features accorded to employees will
terminate as of end of business on May 31, 2009. All the terms and conditions of the Plan will be
governed by the controlling plan documents. The Plan has not been modified in any way by this
Agreement. Nothing in the Agreement is intended to waive or release Employee’s ability to receive
benefits in accordance with the Plan.

     2. CONSIDERATION. In consideration of and exchange for your release and waiver of all
claims against the Company Entities and your compliance with all other terms and conditions of this
Agreement and conditioned on your satisfactory completion of service during the Notice Period, the
Company agrees to provide you with the following “Consideration”:

          a. The Company shall pay you two-hundred ten thousand four-hundred seventy dollars
($210,470.00) (less applicable taxes and withholdings), payable in bi-weekly installments over six
(6) months in accordance with the Company’s payroll policy (the “Payment”). The Payment
will be payable, minus applicable tax withholdings, beginning not later than ten (10) business days
following the Effective Date of the annexed General Release following your Separation Date.
Notwithstanding anything herein to the contrary, the Company may withhold any further payments to
you hereunder in the event the Company determines that you have breached the material terms of the
General Release or have violated any of your other continuing obligations hereunder, including the
post termination obligations set forth in section 7 and the cooperation provisions set forth in
section 9. The Payment shall not constitute compensation for any purpose under any retirement plan
maintained by the Company Entities. In the event of your death or incapacity, the Payment shall be
made to your estate or personal representative, as applicable, subject to the delivery and
effectiveness of the General Release signed by your estate or personal representative, as
applicable.

          b. If you timely elect COBRA coverage for yourself and/or your eligible dependents, the
Company will pay the premiums for such coverage for six (6) months following the Effective Date of
the annexed General Release following your Separation Date (or until you secure health coverage
through employment with another entity or you are no longer eligible for COBRA coverage, if
earlier). In addition, following the six (6) months coverage period, you may be eligible to elect
to continue health coverage on a self-pay basis in accordance with your rights and obligations
under COBRA. Information regarding your rights under COBRA will be provided to you under separate
cover.

2

 

          c. You acknowledge and agree that the Consideration provided to you under this Agreement
exceeds any payment, benefit, or other thing of value to which you might otherwise be entitled
under any policy, plan or procedure of the Company and/or any agreement between you and the
Company.

     3. GENERAL RELEASE OF ALL CLAIMS.

          a. No later than twenty-one (21) days from the date hereof, you agree to execute and not
revoke the General Release attached as Annex A.

          b. In order to be entitled to the payments and benefits set forth in section 2 hereof, you
must re-execute and not revoke the General Release attached as Annex A on or after the
Separation Date. You will again have the opportunity to consider for twenty-one (21) days whether
to re-execute this Agreement. If the General Release is not re-executed on or within twenty-one
(21) days after the Separation Date, the Company shall have no further obligations under this
Agreement and all further payment obligations shall terminate. This in no way affects your prior
General Release. By your re-execution of the General Release, the release set forth therein shall
be deemed to cover any claims which you have, may have had, or thereafter may have existing or
occurring at any time on or before the date on which you re-execute the General Release.

     4. RESIGNATIONS. Effective as of the Separation Date (or earlier if your employment
is terminated), you agree to resign from all board seats and any other positions that you hold in
connection with your employment by or service in connection with any of the Company Entities and to
execute the omnibus resignation letter attached as Annex B and any implementing
documentation that the Company may request in connection with such resignations.

     5. RESPONSE TO LEGAL PROCESS. Nothing in this Agreement shall preclude you from
providing truthful information to a government agency, or in response to a valid subpoena, or as
otherwise required by law.

     6. NON-ADMISSION OF WRONGDOING. This Agreement is not intended, and shall not be
construed, as an admission that any of the Company Entities have violated any law (statutory or
decisional), ordinance or regulation, breached any contract or policy, or committed any wrong
whatsoever against you.

     7. POST TERMINATION OBLIGATIONS.

          a. Your Existing Confidential Information and Non-Solicitation Agreement-You
acknowledge that by virtue of your long standing employment by the Company as Senior Vice
President, Sales and Marketing, you have had unfettered access to a range of sensitive and
confidential information regarding the business operations, strategies, customers, prospects,
employees and finances of the Company and its affiliates. You acknowledge that you are bound by
the terms of the PAYCHEX “Employee Confidential Information and Non-Solicitation Agreement,” as
signed by you on June 18th, 1992 (a copy of which is attached as Exhibit A, the
“Confidentiality Agreement”), through the Separation Date and for eighteen (18) months
thereafter, and that the provisions of the Confidentiality Agreement shall continue in full force

3

 

and effect following the Separation Date. In particular, and in consideration of the terms of
this Agreement and your prior employment with the Company, you agree that the non-solicitation
provisions of Section (4) of the Confidentiality Agreement shall apply, without limitation, to (i)
customers or prospects of the Company who were solicited or serviced directly by you or where you
supervised, directly or indirectly, in whole or in part, the solicitation or servicing related to
such customers or prospects and (ii) to any former customer of the Company or its affiliates who
was such within one (1) year prior to your termination of employment and who were solicited or
serviced directly by you or where you supervised, directly or indirectly, in whole or in part, the
solicitation or servicing related to such customers. You agree further that during the eighteen
(18) month period following your termination of employment you shall not induce or otherwise
recommend to any third party, including, but not limited to, referral resources, retailers,
vendors, suppliers, customers (or any other provider or recipient of goods or services to or from
the Company Entities), that they terminate or diminish their business relationship with the Company
or its affiliates or undertake any other action that would, directly or indirectly, be materially
detrimental to the Company or its affiliates’ relationships with these entities or that could
otherwise interfere with the Company or its affiliates’ business.

          b. Non-Competition. You agree that through the Separation Date and for a period of
six (6) months thereafter, you will not directly or indirectly engage in, have any equity interest
in (except to the extent you own less than two percent (2%) of the outstanding shares of a publicly
traded company), or manage or operate any person, firm, corporation, partnership or business
(whether as a director, officer, employee, agent, representative, partner, security holder,
consultant or otherwise) that engages in any business or activity which competes with any business
that, as of the Separation Date, the Company Entities are engaged in, or have taken affirmative
steps to engage in, anywhere in the world in which the Company does business. You agree that
during this non-compete period, you will notify the Company’s Chief Legal Officer in writing
regarding the nature and scope of any proposed employment opportunity you may be considering and
before entering into such employment will apprise any prospective employer in writing of your
post-termination obligations under this Agreement.

          c. Non-Disparagement. The parties agree that they will not disparage or defame or
encourage or induce others to disparage or defame Employee, the Company, or any of the Company
Entities, including comments that would adversely affect or damage in any manner (or otherwise
portray in a false or negative light) the conduct of the business of, or business reputation of,
any of the Company Entities or any of their officers, executives or personnel.

          d. Damages. The parties acknowledge that the damages resulting from your breach of
the provisions of Section (7)(a) above and your breach of the provisions of Sections (4) and (5)
of the Confidentiality Agreement are impossible to calculate in advance with any specificity and
that the parties have agreed to the following liquidated damages formula as a reasonable estimate
of damages to be incurred by the Company as a result of such a breach: (I) in the event of your
breach of Section (7)(a) of this Agreement and Section (4) of the Confidentiality Agreement, an
amount equal to 150% of the annualized revenues of the solicited customer (measured by the average
of the last three (3) months’ fees payable by such customer to the Company before termination of
its relationship with the Company); (II) in the event of your breach of Section (5) of the
Confidentiality Agreement with respect to any sales representative of the Company or its
affiliates, an agreed upon sum equal to 150% of the greater

4

 

of (i) the annualized sales revenue attributed by the Company to such sales representative for
the year in which his/her employment terminated or (ii) the annual sales revenue attributed by the
Company to such sales representative for the immediately preceding full fiscal year; and (III) in
the event of your breach of Section (5) of the Confidentiality Agreement with respect to any other
employee of the Company or its affiliates, an agreed upon sum equal to 100% of annual compensation
including but not limited to salary, commission and bonus, as applicable, measured by the twelve
month period immediately preceding the employee’s termination of employment with the Company.

          e. Additional Remedies. Nothing in this Agreement shall affect the right of the
Company to enforce any other remedies that might be available to it with respect to your violation
of any non-competition, non-solicitation, or confidentiality obligation, or with respect to your
engagement in any post-termination detrimental conduct, including, without limitation, any
provision under any equity plan or award agreement, or under any deferred compensation plan
providing for the forfeiture of any equity award or amounts deferred or the repayment of any gain
realized in connection with the exercise of any previously granted options.

     8. RETURN OF PROPERTY. On or before the Separation Date you shall comply in all
respects with the Confidentiality Agreement and shall immediately return to the Company all
property belonging to the Company and/or the Company Entities, including but not limited to laptop,
cell phone, keys, card access to the building and office floors, internal policies and other
confidential business financial information and documents, such as files and material in your
possession (including any computers, pagers, Blackberry, cellular phones, etc.), and all copies of
computerized databases and related materials regarding the Company Entities.

     9. COOPERATION. You agree that it is an essential term and condition of this
Agreement that you cooperate with the Company Entities and its counsel (i) with respect to all
matters, for which you had responsibility or oversight while employed and (ii) any claims and/or
lawsuits involving the Company Entities of which you may have particular knowledge or in which you
may be a witness, and following your termination of employment, you agree to fully cooperate with,
and make yourself available to respond to inquiries from, representatives of any of the Company
Entities regarding any matters arising during the course of your employment or in connection with
any investigation, administrative proceeding, arbitration, mediation or litigation (each, a
“Proceeding”) relating to any matter arising during the course of your employment or of
which you have knowledge, including without limitation any Proceeding relating to E-Chx, Inc.
and/or Rapid Payroll, Inc.. Such cooperation includes meeting the Company Entities’
representatives and counsel to disclose such facts as you may know, preparing with the Company
Entities’ counsel for any deposition, trial, hearing or other proceeding; attending any deposition,
trial, hearing or other proceeding to provide truthful testimony; and providing other assistance to
the Company Entities and to the Company Entities’ counsel as may, in the judgment of the Company
Entities’ counsel, be necessary. You agree that, in the event you are subpoenaed or otherwise
required by any person or entity (including, but not limited to, any government agency) to give
testimony or produce documents (in a deposition, court proceeding or otherwise) which in any way
relates to your employment by the Company, you will, to the extent not legally prohibited from
doing so, give prompt notice of such request to the Chief Legal Officer of the Company so that the
Company may contest the right of the requesting person or entity to such disclosure before making
such disclosure. Nothing in this

5

 

provision shall require you to violate your obligation to comply with valid legal process.
The Company will not pay any consulting, per diem, or professional fees for cooperation in such
matters; provided, however, the Company shall pay for or directly reimburse you for your reasonable
out-of-pocket expenses incurred pursuant to this section 9 (including but not limited to reasonable
travel expenses), in each case incurred with the prior written approval of the Company.

     10. MATERIAL BREACH. Any breach of the provisions of Paragraphs 4, 7, 8 and/or 9
above, shall be considered a material breach of this Agreement. In the event that you have
committed a material breach of this Agreement, in addition to any remedies available to the Company
under the Confidentiality Agreement, you consent to the entry of injunctive relief against
yourself, in addition to the Company Entities’ right to pursue any and all of their remedies under
the law. You further agree that the Company Entities may obtain injunctive relief without the
posting of a bond. The parties further agree that, in the event the Company Entities prevail in
pursuing their legal remedies against you as a result of your breach of this Agreement or the
Confidentiality Agreement, you shall pay and reimburse the Company Entities for their attorneys’
fees and costs incurred in any such action.

     11. REFERENCES; PUBLIC STATEMENTS. All inquiries relating to your employment with the
Company shall be directed to the Vice President of Organizational Development. You agree to make
no public statements or comments to the media regarding your separation of employment from the
Company.

     12. GOVERNING LAW AND ENFORCEMENT. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York without regard to the principles of conflicts of
law. Additionally, any action concerning this Agreement shall be commenced exclusively in the
state courts of Monroe Country, New York or United States District Court for the Western District
of New York, in Rochester, New York. Both parties consent to the exclusive jurisdiction of such
state and federal courts and waive any claim under the doctrine of forum non conveniens.

     13. ENTIRE AGREEMENT. You understand that, except as otherwise provided herein, this
Agreement constitutes the complete understanding between the Company and you, and, supersedes any
and all agreements, understandings, and discussions, whether written or oral, between you and any
of the Company Entities, except that any indemnification rights you were provided as an officer of
the Company will survive this Agreement. No other promises or agreements, or modifications,
waivers or amendments to this Agreement, shall be binding unless in writing and signed by both the
Company and you after the execution of this Agreement. This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of which counterparts, when
executed together, shall constitute but one and the same Agreement. The parties further agree that
if any part or any provision of this Agreement is determined to be invalid or unenforceable under
applicable law by a court of competent jurisdiction, that part shall be ineffective to the extent
of such invalidity only, without in any way affecting the remaining parts of said provision or the
remaining provisions of the Agreement.

6

 

     14. ACKNOWLEDGMENTS. You acknowledge that you: (a) have carefully read this Agreement
in its entirety; (b) are hereby advised by the Company, in this writing, to consult with an
attorney of your choice before signing this Agreement; (c) fully understand the significance of all
of the terms and conditions of this Agreement and have discussed them with an attorney of your
choice, or have had a reasonable opportunity to do so; and (d) are signing this Agreement
voluntarily and of your own free will and agree to abide by all the terms and conditions contained
herein.

     15. 409A Considerations. The intent of the parties is that payments and benefits
under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the regulations and guidance promulgated thereunder (collectively “Code
Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. In no event whatsoever shall the Company be liable for
any additional tax, interest or penalties that may be imposed on Employee by Code Section 409A or
any damages for failing to comply with Code Section 409A hereunder or otherwise. The reimbursement
payment for costs, expenses or in-kind benefits provided for under Section 2(b) of this Agreement
or otherwise, except as permitted by Code Section 409A, shall (i) be made no later than the end of
the calendar year following the calendar year in which such costs, expenses or in-kind benefits
were incurred or provided; (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during any taxable year shall not affect the amounts of expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year (other than with
regard to a limit related to the period in which an arrangement is in effect (other than with
regard to a limit related to the period in which the arrangement is in effect with regard to an
arrangement subject to Section 105(b) of the Code), and (iii) the reimbursement or in-kind benefit
cannot be liquidated or exchanged for any other benefit.

     IN WITNESS WHEREOF, the parties hereto have approved and executed this Agreement as of the
dates set forth below:

	 	 	 	 	 	 	 	 	 	 
	THE COMPANY	 	 	 	EMPLOYEE	 
	 
	 	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Jonathan J. Judge
	 	 	 	BY:
	 	 /s/ Walter Turek	 
	 

	 	 	 	 	 	 	 	 	 
	 

	 	Name: Jonathan Judge
	 	 	 	 	 	Walter Turek	 
	 

	 	Title: President and Chief
Executive Officer	 	 	 	 	 	 	 

7

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