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EXHIBIT 10.11  

 
  ASCENT SOLAR TECHNOLOGIES, INC.
  2005 STOCK OPTION PLAN    
    

        1.     Purposes of the Plan. The purposes of this 2005 Stock Option Plan are: 

	•
	to
attract and retain the best available personnel;

	•
	to
provide additional incentive to Employees, Directors and Consultants; and

	•
	to
promote the success of the Company's business. 

        Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. 

        2.     Definitions. As used herein, the following definitions shall apply: 

        (a)   "Administrator" means the Board or any of its Committees as shall be administering the Plan, in accordance with
Section 4 of the Plan. 

        (b)   "Applicable Laws" means the requirements relating to the administration of stock option plans under U. S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or
jurisdiction where Options are, or will be, granted under the Plan. 

        (c)   "Board" means the Board of Directors of the Company. 

        (d)   "Code" means the Internal Revenue Code of 1986, as amended. 

        (e)   "Committee" means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan. 

        (f)    "Common Stock" means the common stock of the Company. 

        (g)   "Company" means Ascent Solar Technologies, Inc., a Delaware corporation. 

        (h)   "Consultant" means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services
to such entity. 

        (i)    "Director" means a member of the Board. 

        (j)    "Disability" means total and permanent disability as defined in Section 22(e)(3) of the Code. 

        (k)   "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed one hundred eighty (180) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the one hundred eighty-first
(181st) day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company. 

        (l)    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

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        (m)  "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: 

        (i)    If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading
day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

        (ii)   If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be
the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or 

        (iii)  In
the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. 

        (n)   "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder. 

        (o)   "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option. 

        (p)   "Notice of Grant" means a written or electronic notice evidencing certain terms and conditions of an individual Option
grant. The Notice of Grant is part of the Option Agreement. 

        (q)   "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder. 

        (r)   "Option" means a stock option granted pursuant to the Plan. 

        (s)   "Option Agreement" means an agreement between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 

        (t)    "Option Exchange Program" means a program whereby outstanding Options are surrendered in exchange for Options with a
lower exercise price. 

        (u)   "Optioned Stock" means the Common Stock subject to an Option. 

        (v)   "Optionee" means the holder of an outstanding Option granted under the Plan. 

        (w)  "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code. 

        (x)   "Plan" means this 2005 Stock Option Plan. 

        (y)   "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 

        (z)   "Section 16(b)" means Section 16(b) of the Exchange Act. 

        (aa) "Service Provider" means an Employee, Director or Consultant. 

        (bb) "Share" means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan. 

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        (cc) "Subsidiary" means a "subsidiary corporation", whether now or hereafter existing, as defined in Section 424(f) of
the Code. 

        3.     Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of
Shares which may be optioned and sold under the Plan is three hundred thousand (300,000) Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. 

        If
an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided,  however, that Shares that have actually
been issued under the Plan shall not be returned to the Plan and shall not become available for future
distribution under the Plan. 

        4.     Administration of the Plan. 

        (a)   Procedure. 

        (i)    Multiple Administrative Bodies. The Plan may be administered by different Committees with respect to different groups of
Service Providers. 

        (ii)   Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Options granted
hereunder as "performance-based compensation" within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more "outside directors" within the
meaning of Section 162(m) of the Code. 

        (iii)  Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under
Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. 

        (iv)  Other Administration. Other than as provided above, the Plan shall be administered by (A) the Board or
(B) a Committee, which committee shall be constituted to satisfy Applicable Laws. 

        (b)   Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the
specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: 

        (i)    to
determine the Fair Market Value; 

        (ii)   to
select the Service Providers to whom Options may be granted hereunder; 

        (iii)  to
determine the number of shares of Common Stock to be covered by each Option granted hereunder; 

        (iv)  to
approve forms of agreement for use under the Plan; 

        (v)   to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Option granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Options may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 

        (vi)  to
reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined
since the date the Option was granted; 

        (vii) to
institute an Option Exchange Program; 

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        (viii) to
construe and interpret the terms of the Plan and awards granted pursuant to the Plan; 

        (ix)  to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws; 

        (x)   to
modify or amend each Option (subject to Section 14(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the Plan; 

        (xi)  to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option previously granted by the Administrator; 

        (xii) to
make all other determinations deemed necessary or advisable for administering the Plan. 

        (c)   Effect of Administrator's Decision. The Administrator's decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options. 

        5.     Eligibility. Nonstatutory Stock Options may be granted to Service Providers. Incentive Stock Options may be granted only
to Employees. 

        6.     Limitations. 

        (a)   Each
Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to
the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans
of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 

        (b)   Neither
the Plan nor any Option shall confer upon an Optionee any right with respect to continuing the Optionee's relationship as a Service Provider with the Company,
nor shall they interfere in any way with the Optionee's right or the Company's right to terminate such relationship at any time, with or without cause. 

        7.     Term of Plan. Subject to Section 18 of the Plan, the Plan shall become effective upon its adoption by the Board. It
shall continue in effect for a term of ten (10) years unless terminated earlier under Section 14 of the Plan. 

        8.     Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be
no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option, the term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Option Agreement. Moreover, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns stock representing more than
ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the
date of grant or such shorter term as may be provided in the Option Agreement. 

        9.     Option Exercise Price and Consideration. 

        (a)   Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be
determined by the Administrator, subject to the following: 

        (i)    In
the case of an Incentive Stock Option 

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        (A)  granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 

        (B)  granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant. 

        (ii)   In
the case of a Nonstatutory Stock Option 

        (A)  granted
to a Service Provider who, at the time the Nonstatutory Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. 

        (B)  intended
to qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant. 

        (C)  Granted
to any other Service Provider, the per Share exercise price shall be no less than eighty-five percent (85%) of the Fair Market Value per Share on the
date of grant. 

        (iii)  Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant pursuant to a merger or other corporate transaction. 

        (b)   Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator shall fix the period within which
the Option may be exercised and shall determine any conditions which must be satisfied before the Option may be exercised. 

        (c)   Form of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration may consist
entirely of: 

        (i)    cash;

        (ii)   check;

        (iii)  other
Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; 

        (iv)  consideration
received by the Company under a cashless exercise program, if implemented by the Company in connection with the Plan; 

        (v)   a
reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee's participation in any Company-sponsored
deferred compensation program or arrangement; 

        (vi)  any
combination of the foregoing methods of payment; or 

        (vii) such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 

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        10.   Exercise of Option. 

        (a)   Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms
of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. Unless otherwise stated in the Option Agreement, Options shall become
exercisable at a rate of twenty-five percent (25%) per year over four (4) years from the date the Options are granted, with twenty-five percent (25%) of the Shares under
the Option vesting on each of the first, second, third and fourth anniversaries of the date of grant. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be
suspended during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. 

        An
Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of
the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be
issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan. 

        Exercising
an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised. 

        (b)   Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, other than upon the
Optionee's death or Disability, the Optionee may exercise his or her Option within ninety (90) days of termination, or such longer period of time as specified in the Option Agreement, to the
extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his
or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

        (c)   Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the
Optionee may exercise his or her Option within one (1) year of termination, or such longer period of time as may be specified in the Option Agreement, to the extent the Option is vested on the
date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). If, on the date of termination, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

        (d)   Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within one (1) year
following Optionee's death, or such longer period of time as may be specified in the Option Agreement, to the extent that the Option is vested on the date of death (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee's designated beneficiary, provided such beneficiary has been designated prior to Optionee's death in a form
acceptable to the Administrator. If no such beneficiary has been designated by the 

6

 

Optionee,
then such Option may be exercised by the personal representative of the Optionee's estate or by the person(s) to whom the Option is transferred pursuant to the Optionee's will or in
accordance with the laws of descent and distribution. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

        (e)   Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option
previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 

        11.   Limited Transferability of Options. Unless determined otherwise by the Administrator, Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only by the
Optionee. If the Administrator in its sole discretion makes an Option transferable, such Option may only be transferred (i) by will, (ii) by the laws of descent and distribution, or
(iii) as permitted by Rule 701 of the Securities Act of 1933, as amended. 

        12.   Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale. 

        (a)   Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company;  provided, however, that conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock subject to an Option. 

        (b)   Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator
shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be
exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares,  provided the
proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of such proposed action. 

        (c)   Merger or Asset Sale. In the event of a merger of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding Option may, at the discretion of the Administrator or the successor corporation, be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, any Option
or portions of Options outstanding as of the date of such event that are not yet fully vested shall immediately become exercisable in full. In such event, the Administrator or the successor
corporation, 

7

 

as
the case may be, shall promptly notify the Optionee in writing or electronically of the qualifying merger or asset sale and of the exercisability of the Option; the Option and any portion thereof,
whether vested or unvested, shall be exercisable by the Optionee for a period of fifteen (15) calendar days from the date of such notice, and the Option shall terminate upon the expiration of
such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for
each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. 

        13.   Date of Grant. The date of grant of an Option shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each Optionee within a reasonable time after the
date of such grant. 

        14.   Amendment and Termination of the Plan. 

        (a)   Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. 

        (b)   Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and
desirable to comply with Applicable Laws. 

        (c)   Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the
rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the
Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 

        15.   Conditions Upon Issuance of Shares. 

        (a)   Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and
the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

        (b)   Investment Representations. As a condition to the exercise of an Option, the Company may require the person exercising
such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in
the opinion of counsel for the Company, such a representation is required. 

        16.   Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 

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        17.   Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such
number of Shares as shall be sufficient to satisfy the requirements of the Plan. 

        18.   Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve
(12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under Applicable Laws. 

        19.   Information to Optionees. The Company shall provide, or make available, to each Optionee and to each individual who
acquires Shares pursuant to the Plan, not less frequently than annually during the period such participant has one or more Options outstanding, and, in the case of an individual who acquires Shares
pursuant to the Plan, during the period such individual owns such Shares, copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent information. 

9

  

 
 

ASCENT SOLAR TECHNOLOGIES, INC.
  2005 STOCK OPTION PLAN
  STOCK OPTION AGREEMENT    
    

        Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 

I. NOTICE OF STOCK OPTION GRANT  

 «NAME»  

        The undersigned Optionee has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows: 

	Date of Grant:	 	 
	 	 	

	Vesting Commencement Date: (same as Date of Grant, if left blank)	 	 
	 	 	

	Exercise Price per Share:	 	 
	 	 	

	Total Number of Shares Granted:	 	 
	 	 	

	Type of Option:	 	
	 	Incentive Stock Option
	 	 	
	 	Nonstatutory Stock Option
	Expiration Date:	 	 	 	 
	(10 years from Date of Grant, if left blank)	 	 	 	 
	 	 	

 Vesting Schedule:  

        Twenty-five percent (25%) of the Shares subject to the Option shall vest on each of the first, second, third and fourth anniversaries of the Vesting
Commencement Date, subject to Optionee continuing as a Service Provider on such dates. 

 Termination Period:  

        This Option shall be exercisable for ninety (90) days after Optionee ceases to be a Service Provider. Upon Optionee's death or disability, this Option may
be exercised for such longer period as provided in the Plan. In no event may Optionee exercise this Option after the Term/Expiration Date as provided above. 

II. AGREEMENT  

        1.     Grant of Option. The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant (the
"Optionee"), an option (the "Option") to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the "Exercise Price"), and
subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 14(c) of the Plan, in the event of a conflict between the terms and conditions of
the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail. 

        If
designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock Option ("NSO"). 

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        2.     Exercise of Option. 

        (a)   Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in
the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement. 

        (b)   Method of Exercise. This Option shall be exercisable by delivery of an exercise notice in the form attached as  Exhibit A (the "Exercise Notice") which shall state
the election to exercise the Option, the number of Shares with respect to which the Option is
being exercised, and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price. 

        No
Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares. 

        3.     Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at
the election of the Optionee: 

        (a)   cash
or check; 

        (b)   consideration
received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; 

        (c)   surrender
of other Shares which, (i) in the case of Shares acquired from the Company, either directly or indirectly, have been owned by the Optionee for more than
six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares; or 

        (d)   any
other form or manner endorsed in the Plan. 

        4.     Restrictions on Exercise. This Option may not be exercised until such time as the Plan has been approved by the
shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law. 

        5.     Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by
the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee. 

        6.     Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised
during such term only in accordance with the Plan and the terms of this Option. 

        7.     Tax Obligations. 

        (a)   Taxes. Optionee acknowledges and agrees that Optionee is solely responsible for the satisfaction of all federal, state,
local and foreign income and other tax arising from or applicable to the Option exercise and the acquisition or sale of the Optioned Stock. Optionee agrees that Optionee shall indemnify the Company
for any liability, including attorneys' fees and expenses, accrued by the Company as a result of the Optionee's failure to satisfy those taxes. 

        (b)   Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee herein is an ISO, and if Optionee
sells or otherwise disposes of any of the Shares acquired pursuant to the ISO 

11

 

on
or before the later of (1) the date two (2) years after the Date of Grant, or (2) the date one year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. 

        8.     Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof, and may not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal
substantive laws but not the choice of law rules of Colorado. 

        9.     No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP
AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 

        Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the
terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel and other advisors prior to executing this Option
and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising
under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 

	OPTIONEE:	 	ASCENT SOLAR TECHNOLOGIES, INC.
	

 Signature	
 	

 By
	

 Print Name	
 	

 Name
	

	
 	

 Title
	

 Residence Address	
 	

 

12

  

 
 

EXHIBIT A    
    

 
 

EXERCISE NOTICE AND AGREEMENT    
    

Ascent
Solar Technologies, Inc.

8120 Shaffer Parkway

Littleton, CO 80127 

Attention:
Stock Option Plan Administrator 

        Re:
Exercise of Stock Option Pursuant to 2005 Stock Option Plan 

	Name of Optionee:	 	 
	 	 	

	Optionee's Address:	 	 
	 	 	

	Optionee's Social Security Number:	 	 
	 	 	

	Date of Option Agreement:	 	 
	 	 	

	Exercise Date:	 	 
	 	 	

	The Shares Purchased are Incentive Stock Options: (circle one)	 	Yes / No
	Number of Shares Purchased Pursuant to this Notice:	 	 
	 	 	

	Exercise Price per Share:	 	$
	 	 	

	Aggregate Exercise Price:	 	$
	 	 	

	Amount of Payment Enclosed:	 	$
	 	 	

        1.     Exercise of Option. Pursuant to the 2005 Stock Option Plan (the "Plan") of Ascent Solar Technologies, Inc., a
Delaware corporation (the "Company") and the Stock Option Agreement ("Option Agreement") entered into as of the date set forth above between the undersigned Optionee and the Company, Optionee hereby
elects, effective as of the date of this notice, to exercise Optionee's option to purchase the number of shares of common stock (the "Shares") of the Company indicated above. 

        2.     Payment. Enclosed is Optionee's payment in the amount indicated above, which is the full exercise price for the Shares. 

        3.     Deemed Date of Exercise. The date of exercise shall be deemed to be the first date after which this Notice is filed with
Company upon which Shares become eligible for issuance to Optionee under applicable state and federal laws and regulatory requirements. 

        4.     Compliance with Laws. Optionee understands and acknowledges that the purchase and sale of the Shares may be subject to
approval under the state and federal securities laws and other laws and, notwithstanding any other provision of the Option Agreement to the contrary, the exercise of any rights to purchase Shares is
expressly conditioned upon approval (if necessary) and compliance with all such laws. 

        5.     Representations of Optionee. Optionee represents and warrants to the Company, as follows: 

        (a)   Optionee
has received, read, and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 

        (b)   The
Options exercised herewith are exercisable only according to the schedule in the Option Agreement. 

EXHIBIT A-1

 

        (c)   Optionee
is aware of the business affairs and financial condition of the Company and has acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Shares. 

        6.     Refusal to Transfer. The Company shall not be required (a) to transfer on its books any Shares that have been sold
or otherwise transferred in violation of any of the provisions of this Agreement, the Option Agreement, or the Plan or (b) to treat as owner of such Shares or to accord the right to vote or
receive dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. 

        7.     Tax Consultation. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's
purchase or disposition of the Shares. Optionee represents that Optionee is not relying on the Company for any tax advice. 

        8.     Entire Agreement. The Plan and the Option Agreement are incorporated herein by reference. This Agreement, the Plan, and
the Option Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter
hereof. 

	Submitted by:

"OPTIONEE":	 	Accepted by:

"COMPANY"
	 	 	Ascent Solar Technologies, Inc.,

a Delaware corporation
	

 Signature	
 	

 By
	

 Print Name	
 	

 Name
	

 	
 	

 Title

EXHIBIT A-2

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ASCENT SOLAR TECHNOLOGIES, INC. 2005 STOCK OPTION PLAN

ASCENT SOLAR TECHNOLOGIES, INC. 2005 STOCK OPTION PLAN STOCK OPTION AGREEMENT

EXHIBIT A

EXERCISE NOTICE AND AGREEMENTQuickLinks
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EXHIBIT 10.12  

 
 

ASCENT SOLAR TECHNOLOGIES, INC.
  
    BRIDGE UNIT PURCHASE AND INVESTOR SUBSCRIPTION AGREEMENT    
    

        THIS BRIDGE UNIT PURCHASE AND INVESTOR SUBSCRIPTION AGREEMENT (the "Subscription Agreement") is dated as of December 19, 2005 between Ascent Solar
Technologies, Inc., a Delaware corporation, (the "Company") and the person whose signature appears below as an Investor (the "Investor" and, together with persons so executing similar
agreements, the "Investors"). 

        The
Company has authorized the issuance and sale (the "Placement") of up to 56 Units, but not fewer than 20 Units (the "Minimum Units"), each Unit consisting of one Note of
$25,000 in principal amount substantially in the form attached hereto as Exhibit A (each a "Note" and, collectively, the "Notes"); and one Right substantially in the form attached hereto as
Exhibit B (each a "Right" and, collectively, the "Rights") to receive securities valued at $25,000 if a Public Offering (defined below) is consummated and otherwise to receive securities as
described below. The Notes and the Rights are herein referred to, collectively, as the "Securities". The Investor desires to purchase the number of Units set forth on the signature page hereof, and
the Company desires to issue and sell such Units to the Investor, on the terms and conditions set forth herein. 

        The
parties therefore agree as follows: 

        1.     Subscription. The Investor, by execution of this Subscription Agreement, subscribes for and agrees to purchase from the
Company, the number of Units set forth on the signature page hereof for a purchase price of $25,000 per Unit; and the Company, by acceptance of this Subscription Agreement, agrees to issue and sell
that number of Units to the Investor, in each case subject to the terms and conditions of this Subscription Agreement. 

        2.     Principal Terms. The principal terms of the Placement are set forth below: 

	

Purchase Price:	
 	

$25,000 per Unit. A minimum purchase of 2 Units is required unless waived by the Company.
	

Purchaser Qualification:	
 	

Accredited Investors only. The Placement Agent and/or the Company may decline to accept any subscription.
	

Note Terms:	
 	
Interest: 10% per annum, based on a 365-day year, payable at maturity.
	

 	
 	
Prepayment: At any time, in whole or in part, without penalty.
	

 	
 	
Maturity Date: One year from the first Closing (defined below), except that in the event of the closing of an offering by the Company, registered under the Securities Act of 1933, of its
equity securities for a gross purchase price of not less than $5,000,000 (a "Public Offering"), the principal and accrued and unpaid interest will become immediately due and payable.
	

 	
 	
Conversion: If no Public Offering has occurred by the Maturity Date, the Investors shall thereafter have the right to convert the principal and unpaid interest of the Notes into shares of
Common Stock at a conversion price of $3.00 per share (appropriately adjusted for restructuring or dilutive changes), except that no fractional shares will be issued.
	 	 	 

 

	

Rights Terms:	
 	
Exchange: If a Public Offering occurs on or before the Maturity Date, each Right will be automatically exchanged for that number of shares, units or other securities sold in the Public
Offering that have a value (based on the initial public offering price in the Public Offering) of $25,000, except that no fractional securities will be issued.
	

 	
 	

If a Public Offering does not occur on or before the Maturity Date, then at any time after the Maturity Date and during the Term (defined below) of the Rights, each Right shall be exchangeable for 8,333 shares of the Company's common stock; provided,
however, that if, at any time during the Term of the Rights, the Company shall, other than as a result of a Public Offering, have a class of equity securities traded on any exchange or quotation system, each Right shall be exchangeable for $25,000 of
such equity securities, based on the average closing price of such security for the 30 trading days (or such shorter period in which such securities have been trading) immediately preceding the exchange date, except that no fractional securities will
be issued.
	

 	
 	

The number and kind of securities for which the Rights are exchangeable are subject to adjustment as a result of certain restructurings or, in certain events, to prevent dilution.
	

 	
 	
Term: Any Rights then remaining unexchanged will expire two years from the date of the first Closing.
	

Closing:	
 	

There may be one or more closings (each a "Closing") of the Units. The first Closing will be on the second business day following acceptance by the Company of subscriptions for not fewer than the Minimum Units and receipt by Hagen O'Connell LLP, 121
SW Morrison Street, Suite 1500, Portland, Oregon 97204 (Attn: Joseph T. Hagen) as Escrow Agent of the purchase price therefor. If the above conditions have not been met on or before December 31, 2005, unless extended by agreement between the
Placement Agent and the Company for up to an additional 30 days, the Escrow Agent shall promptly return all of the funds on deposit with it to the subscribers and all accepted subscriptions shall become void. After the first Closing, additional
Units may be sold at other Closings from time to time, provided that no more than 56 total Units will be sold without the consent of the holders of a majority of the Units then outstanding.
	 	 	 

2

 

	

SEC Reporting:	
 	

If a Public Offering has occurred, or if the Company has otherwise become subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and thereafter as long as any of the Notes and/or Rights are outstanding, the Company
will maintain the listing of its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (Exchange Act), and will file all reports required by the Exchange Act in a timely manner.
	

Registration Rights:	
 	

Concurrently with the registration of the securities to be offered in the Public Offering, the Company shall register the securities for which the Rights are exchangeable for resale by the holders thereof. After effectiveness, the Company shall use
its reasonable best efforts to cause such registration statement (or any successor registration statement on which such securities may be registered) to remain current and to make available to such holders a form of prospectus usable in connection
with the resale of such securities at all times at which such securities remain restricted and are not eligible for resale by non-affiliates without registration under federal securities laws.
	

 	
 	

Notwithstanding the effectiveness of any registration statement, each holder of securities issuable on exchange of Rights, agrees that, for a period of one year from the effective date of the registration statement relating to the Public Offering, it
will not, directly or indirectly sell, offer to sell any such securities without the prior written consent of Paulson Investment Company, Inc. as further described in Annex B.
	

 	
 	

If at any time after the first anniversary of the effectiveness of the registration statement required to be filed to comply with the Company's registration obligations described above, the registration statement is not usable in connection with any
sale of securities registered thereby, the Company will pay for each month, or prorated portion thereof, during which such condition continues, an assessment to the holders of the affected securities equal to one percent of the value of the
securities. The foregoing assessment shall not apply under certain conditions described in Annex B.
	

 	
 	

As a condition of the exercise of any registration right and/or any right to payment of an assessment, each holder of registrable securities shall cooperate with the Company in connection with the preparation and filing of any registration statement
or any amendment or supplement thereto or any prospectus including, but not limited to, the prompt furnishing of all information reasonably required by the Company with respect to the identity of such holder and such holder's proposed plan of
distribution.
	 	 	 

3

 

	

 	
 	

The registration rights are further described in Annex B.
	

Placement Agent:	
 	

Paulson Investment Company, Inc., acting as placement agent, will use its reasonable best efforts to place the Units, will earn a commission equal to 10% of the gross proceeds from Unit sales and will be reimbursed for its reasonable
out-of-pocket expenses, including, but not limited to, accountable travel and entertainment and counsel fees.
	

Jurisdiction/Choice of Law:	
 	

All transaction documents shall be governed by and construed under the laws of the state of Oregon as applied to agreements entered into and to be performed entirely within the state of Oregon, without giving effect to principles of conflicts of law.
The parties irrevocably consent to the jurisdiction and venue of the state and federal courts located in Multnomah County, Oregon in connection with any action relating to this transaction.
	

Legal Opinion:	
 	

At or prior to any Closing, the Investors shall receive a legal opinion from Company counsel in form and substance satisfactory to each of them as to the validity and enforceability of the Notes, the Rights, and other customary matters, including
without limitation the application to and treatment of the transaction of and under the usury laws of Oregon.

        3.     Scope of Subscription Agreement; Resolution of Inconsistencies. The principal terms described in this Subscription
Agreement are amplified, and additional terms are contained in, Annex A and Annex B, each attached hereto and incorporated herein by reference and each intended to be a binding part of
this Subscription Agreement. In the event of a discrepancy between the terms set forth in this Subscription Agreement and any provision of Annex A or Annex B, the terms set forth in this
Subscription Agreement shall govern and the provisions of Annex A and Annex B shall be deemed modified to the extent necessary to cause them to be consistent with the terms set forth
herein. 

4

   
        IN WITNESS WHEREOF, this Subscription Agreement is hereby duly executed by each party hereto as of the date first written above. 

INVESTOR  

	

Number of Units Subscribed for:	

 
	

 	

	

Print Name of Investor:	

 
	

 	

	

Exact Name to Appear on Certificates:	

 
	

 	

	

Street Address:	

 
	

 	

	

 	

 
	

 	

	

Telephone:	

(              )

	

Facsimile:	

(              )

	

SS# / Tax ID No.:	

 
	

 	

	

Signed:	

 
	

 	

	

Print Name and Title:	

 
	

 	

	

 	

 
	

 	

Accepted:  

ASCENT SOLAR TECHNOLOGIES, INC.  

	

By:	

 	
 	

 
	 	
	 	 
	Name: Matthew Foster	 	 
	Title: President	 	 

5

  

 
 

ASCENT SOLAR TECHNOLOGIES, INC.
  
    BRIDGE UNIT PURCHASE AND INVESTOR SUBSCRIPTION AGREEMENT
  
    ANNEX A    
    

        This Annex A sets forth additional terms applicable to the Bridge Unit Purchase and Investor Subscription Agreement (the "Subscription Agreement") (the
Subscription Agreement, together with the annexes, exhibits and attachments thereto are herein referred to as the "Agreement"). Capitalized terms used herein and not herein defined have the meanings
ascribed to them in the Subscription Agreement. 

 
 

ARTICLE 1
  
    SUBSCRIPTION    
    

        To solicit the Company's acceptance of the Investor's subscription, the Investor should provide an executed copy of the Subscription Agreement together with a
certified or bank cashier's check in the amount of the purchase price, or concurrently with a wire transfer of the purchase price, in either case as provided in the Instructions attached to the
Subscription Agreement as Exhibit C. Funds so received will be deposited in escrow under the terms of the Escrow Agreement attached to the Subscription Agreement as Exhibit D (the
"Escrow Agreement"). 

 
 

ARTICLE 2
  
    CLOSING AND DELIVERY    
    

        Section 2.1    Closing.    There may be one or more Closings (each a "Closing") of the Units. The first Closing
of the purchase and sale of the Units under the Agreement shall take place on the second business day following acceptance by the Company of subscriptions for not less than the Minimum
Units and the satisfaction of the other conditions described herein and in the Escrow Agreement. Subsequent subscriptions will close promptly following acceptance by the Company of such subscriptions
at one or more additional closings. The Company may reject any subscription for any reason or no reason in its sole discretion. 

        Section 2.2    Delivery of Certificates for Securities.    Subject to the terms and conditions hereof, at or
promptly after the Closing, the Company will deliver the Securities deliverable to the Investor against payment of the purchase price therefor. Certificates for the Securities will be issued in the
name and delivered by deposit thereof in overnight mail to the address of Investor set forth on the signature page of the Agreement unless another name or method of delivery is agreed. It is
understood that such certificates and any certificates issued upon exercise or conversion thereof may bear one or more legends in substantially the following form: 

	(1)
	"THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THE SECURITIES NOR THE SECURITIES FOR WHICH THEY MAY BE EXCHANGEABLE MAY BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (i) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER SUCH ACT, OR (ii) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

	(2)
	Any
other legend reflecting a restriction on transfer imposed or required by contract or applicable federal or state securities laws. 

        Section 2.3    Power of Attorney.    Investor hereby appoints Paulson Investment Company, Inc. and each
of its representatives as Investor's true and lawful attorneys-in-fact with the power to act alone for 

6

 

and
on behalf of the Investor to provide instruction or notification to, or correspond with, the Escrow Agent as contemplated in the Agreement, including without limitation any instruction to
withhold, transfer or release Subscription Proceeds (defined in the Escrow Agreement) deposited by or on behalf of Investor. 

 
 

ARTICLE 3
  
    REPRESENTATIONS AND WARRANTIES    
    

        Section 3.1    Representations and Warranties of the Company.    The Company hereby represents and warrants to
the Investor that, as of the Closing and except as set forth in any Company filing with the Securities and Exchange Commission during the Company's current or most recently completed fiscal year or in
written disclosure materials provided by the Company to the Investor in connection with the Placement (collectively the "Disclosure Materials"): 

        (1)    Organization and Standing of the Company.    The Company is a corporation or other business entity duly
organized, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite corporate power and authority to carry on its business as now being conducted.
The Company is duly qualified to do business and is in good standing in each jurisdiction in which the failure to be so qualified would have a material adverse effect on the business, financial
condition or prospects of the Company. 

        (2)    Authorization.    The Company's execution and delivery of the Agreement and its performance of its obligations
thereunder has been duly and validly authorized by all required corporate action. The Agreement has been validly executed and is a legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws relating to creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The execution, delivery and performance of the Agreement by the Company did not require the
consent or approval of any other person, entity or governmental agency that has not been obtained. 

        (3)    Capitalization.    

        (a)   The
Company's capital structure is accurately and completely described in the Disclosure Materials. All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable and free of preemptive rights. 

        (b)   Except
as described in the Disclosure Materials, there are no outstanding subscriptions, options, warrants, calls, contracts, demands, commitments, convertible
securities, or other agreements or arrangements of any character or nature whatever under which the Company is or may be obligated to issue or purchase shares of its capital stock. 

        (c)   The
Notes and the Rights, when issued and sold as provided herein, will constitute valid obligations of the Company, enforceable in accordance with their terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws relating to creditors' rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Any capital stock issuable upon exchange of Rights and/or conversion of Notes will, when so issued, against payment therefor if such
payment is required, be duly and validly issued, fully paid, nonassessable and free of preemptive rights. 

        (4)    No Material Defaults.    The Company is not in default, nor has any event occurred that, with the passage of
time, will cause the Company to be in default under the provisions of any material agreement to which it is a party. 

        (5)    Litigation.    There are no legal actions, suits, arbitrations, or other legal or administrative proceedings
pending or, to the Company's knowledge, threatened against the Company that, if 

7

 

determined
in a manner adverse to the Company, would have a material adverse effect on the Company or its properties, assets, business or prospects, nor is the Company aware of any facts that might
constitute the basis for any such claim. 

        (6)    Compliance With the Law and Other Instruments.    To the Company's best knowledge, the business operations of
the Company have been and are being conducted in accordance with all applicable and material laws, rules, and regulations. The Company is not in material violation of, or in default under, any term or
provision of the charter documents, or of any lien, mortgage, lease, agreement, instrument, order, judgment, or decree, or subject to any restriction, contained in any of the foregoing, of any kind or
character which materially adversely affects in any way the business, properties, assets, or prospects of the Company, or which would prohibit the Company from entering into the Agreement or prevent
consummation of the issuance of securities contemplated by the Agreement. The Company has made all material filings with governmental authorities that it is required to make on a timely basis. 

        (7)    Title to Properties and Assets.    Except as described in the Disclosure Materials, the Company has good and
marketable title to all of its material properties and assets subject to no mortgage, pledge, lien, charge, security interest, encumbrance, or restriction except those which do not materially
adversely affect the value or use thereof. 

        (8)    Records.    The books of account, minute books, stock certificate books, and stock transfer ledgers of the
Company are complete and correct, and such books do not omit any transaction or other information required to be set forth therein. 

        (9)    Brokers or Finders.    All negotiations on the part of the Company relative to the Agreement and the
transactions contemplated thereby have been carried on by the Company without the intervention of any person or as the result of any act of the Company in such manner as to give rise to any valid
claim for a brokerage commission, finder's fee, or other like payment, except that the Company has retained Paulson Investment Company, Inc. as its agent in connection with the placement of the
Units. 

        (10)    Taxes.    The Company has filed all federal, state, county and local income, franchise, excise, real and
personal property and other tax returns and reports (including, but not limited to, those relating to social security, withholding, unemployment insurance, and occupation (sales) and use taxes)
required to have been filed by the Company up to the date hereof. All of the foregoing returns are true and correct in all material respects and the Company has paid all taxes, interest and penalties
shown on such returns or reports as being due. The Company has no liability for any taxes, interest or penalties of any nature whatsoever, except for those taxes that are not yet due or that are being
contested in good faith by the Company by appropriate proceedings and that are properly accrued on the books of the Company. 

        (11)    Disclosure.    The information contained in the Disclosure Materials was true and correct in all material
respects as of the date thereof and did not omit any information required to make such information not misleading. Since the date of such information, to the Company's best knowledge, no event has
occurred that has caused such information, taken as a whole, not to present a fair and accurate description of the Company's business, financial condition and prospects in all material respects. 

        (12)    No Subsidiaries.    The Company has no subsidiaries as of the date hereof. 

        Section 3.2    Representations and Warranties of the Investor.    The Investor represents and warrants to the
Company as follows: 

        (1)    Accredited Investor Status.    The Investor is an "accredited investor" within the meaning of Securities and
Exchange Commission Rule 501 of Regulation D, as presently in effect by virtue of the 

8

 

applicability
to the Investor of one or more of the categories set forth in the Accredited Investor definition attached hereto as Exhibit E. 

        (2)    Purchase Entirely for Own Account.    The Securities to be received by the Investor will be acquired for
investment for the Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing the Agreement, the Investor further represents that it does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Securities. 

        (3)    Disclosure of Information.    The Investor has reviewed the Disclosure Materials and all other information it
considers necessary or appropriate for deciding whether to purchase the Units. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Units and the business, properties, prospects and financial condition of the Company and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable effort or expense) and/or conduct its own independent investigation necessary to verify the accuracy of any information
furnished to the Investor or to which the Investor had access. 

        (4)    Investment Experience.    The Investor (i) is experienced in evaluating and investing in private
placement transactions in securities of companies similar to the Company and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of
the investment in the Units and (ii) acknowledges that it can bear the economic risk of its investment in the Units, including the loss of the entire investment. 

        (5)    Restricted Securities.    The Investor understands that the Securities are being sold pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"). The Investor also understands that the Securities and, with certain limited exceptions,
any securities issuable on exercise or conversion thereof may not be resold by the Investor without registration under the Securities Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the Securities or an available exemption from registration under the Securities Act, the Securities may be restricted from resale in a transaction to which
United States securities laws apply for an indefinite period of time. 

        (6)    Illiquid Investment.    The Investor understands that no market for the Securities exists and no such market
may ever exist. 

        (7)    Residence.    The Investor resides, or its office primarily responsible for the purchase of the Securities is
located, at the address listed on the signature page of the Agreement. 

        (8)    Brokers or Finders.    All negotiations on the part of the Investor relative to the Agreement and the
transactions contemplated hereby have been carried on by the Investor without the intervention of any person or as the result of any act of the Investor in such manner as to give rise to any valid
claim for a brokerage commission, finder's fee, or other like payment. 

        (9)    Reliance.    The Investor understands that the Agreement is made with the Investor in reliance upon the
Investor's representations to the Company, as set forth above. 

9

 

 
 

ARTICLE 4
  
    CONDITIONS TO CLOSING    
    

        (1)    Conditions to Company's Obligations.    Unless waived in writing by the Company, all of the obligations of the
Company under the Agreement are subject to the fulfillment, prior to or at the Closing of each of the following conditions: 

        (a)   Satisfaction of Minimum Offering.    Not fewer than the Minimum Units shall either have been sold or shall be
subject to subscriptions for which the full purchase price shall have been deposited in escrow and that shall have been accepted by the Company. 

        (b)   Representations and Warranties True.    The representations and warranties of each Investor in the Agreement
and similar agreements executed by other Investors shall be true and correct in all material respects as of the Closing. 

        (c)   Compliance with Agreements.    Each Investor in the Agreement and similar agreements executed by other
Investors shall have performed and complied with all agreements required by the Agreement to be performed and complied with by it prior to or at the Closing. 

        (2)    Conditions to the Investor's Obligations.    Except as may be waived in writing by the Investor, all of the
obligations of the Investor under the Agreement are subject to the fulfillment, prior to or at the Closing of each of the following conditions: 

        (a)   Satisfaction of Minimum Offering.    Not fewer than the Minimum Units shall have been sold or shall be subject
to subscriptions for which the full purchase price shall have been deposited in escrow and that shall have been accepted by the Company. 

        (b)   Representations and Warranties True.    The representations and warranties of the Company in the Agreement
shall be true and correct in all material respects as of the Closing. 

        (3)    Compliance with Agreements.    The Company shall have performed and complied with all agreements required by
the Agreement to be performed and complied with by it prior to or at the Closing. 

 
 

ARTICLE 5
  
    NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES:    
    

        The representations and warranties of the Company and the Investor herein shall survive the Closing until the expiration of all applicable statutes of limitation. 

 
 

ARTICLE 6
  
    MISCELLANEOUS    
    

        Section 6.1    Amendment.    The Agreement may be amended only by a written document executed by the parties
hereto. 

        Section 6.2    Counterparts and Facsimile Signatures.    The Agreement may be executed in any number of
counterparts and signature pages may be delivered by facsimile or electronic transmission; each such counterpart or signature page shall be deemed to be an original. 

        Section 6.3    Assignment.    Neither the Agreement nor any right created hereby shall be assignable without
the prior written consent of the non-assigning party, except that the Agreement may be assigned (i) by the Investor to (a) an entity that wholly owns, is wholly owned by or
is wholly under common ownership with the Investor or any permitted assignee of the Investor; (b) a trust for the benefit of the Investor or his or her immediate family members; or
(c) by will or the laws of descent 

10

 

and
distribution; or (ii) by the Company to the successor in interest to all or substantially all of its business. Any attempt to assign any right under the Agreement in violation of this
Section 6.3 shall be void. Nothing in the Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their respective permitted successors,
permitted assigns, heirs, executors, administrators, or personal representatives, any rights or remedies under or by reason of the Agreement. 

        Section 6.4    Entire Agreement.    Except as provided to the contrary herein, the Agreement and the other
agreements, instruments and documents contemplated hereby contain the full and entire understanding and agreement between the parties with regard to the subject hereof and supersede all prior
agreements and understandings of the parties with regard to such matters. In the event of a discrepancy between the terms set forth in the Subscription Agreement and any provision in the annexes,
exhibits or attachments thereto, the terms set forth in the Subscription Agreement shall govern and the inconsistent provisions in the annex, exhibit or attachment shall be deemed modified to the
extent necessary to cause them to be consistent with the Subscription Agreement. Neither party shall be liable or bound to the other in any manner by any representations, warranties, covenants or
agreements except as specifically set forth herein or therein. 

        Section 6.5    Governing Law; Submission to Jurisdiction.    The Agreement shall be governed by and enforced
pursuant to the laws of the State of Oregon. The parties to the Agreement hereby irrevocably submit to the exclusive jurisdiction of any federal or state court located within Multnomah County, Oregon
over any dispute relating to the terms of the Agreement and each party hereby irrevocably agrees that all claims in respect of such dispute or any suit, action or proceeding related thereto may be
heard and determined in such courts. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection that they may now or hereafter have to the laying of venue
of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 

        Section 6.6    Severability.    In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby unless, as a result of the selective enforcement of such
remaining provisions a party hereto would fail to realize a benefit that was a fundamental part of the reason for such party to have entered into the Agreement. 

        Section 6.7    Notices.    Except as otherwise specifically provided herein, all notices and other
communications required or permitted under the Agreement must be in writing and may be given by personal or customary form of electronic delivery or U.S. mail, or confirmed facsimile. If given by
mail, such notice must be sent by registered or certified mail, postage prepaid, mailed to the party at the respective address set forth below, and shall be effective only if and when received by the
party to be notified. For purposes of notice, the addresses of the parties shall, until changed as hereinafter provided, be as follows: 

	(1)
	If
to the Company, to the address set forth in the Disclosure Materials

	(2)
	If
to the Investor, to the address set forth on the signature page of the Agreement. 

or
at such other address or facsimile number as any party may have advised the other by notice. 

        Section 6.8    Attorney Fees.    If any action at law or in equity, including an action for declaratory relief,
is brought to enforce or interpret the provisions of the Agreement, the prevailing party shall be entitled to recover reasonable attorney fees from the other party or parties, which fees shall be in
addition to any other relief which may be awarded. 

11

 

        Section 6.9    No Undertaking to Consummate a Public Offering.    Nothing in the Agreement shall be construed
as an obligation of the Company to consummate a Public Offering. 

        Section 6.10    Indemnification by the Company.    The Company agrees to indemnify and hold the Investor
harmless against any loss, liability, damage or expense (including reasonable attorney fees and costs) which the Investor may suffer, sustain or become subject to as a result of or in connection with
the breach by the Company of any representation, warranty, covenant or agreements of the Company contained in the Agreement 

        Section 6.11    Indemnification by the Investor.    The Investor agrees to indemnify and hold the Company
harmless against any loss, liability, damage or expense (including reasonable attorney fees and costs) which the Company may suffer, sustain or become subject to as a result of or in connection with
the
breach by the Investor of any representation, warranty, covenant or agreements of the Investor contained in the Agreement. 

12

  

 
 

ASCENT SOLAR TECHNOLOGIES, INC.
  
    BRIDGE UNIT PURCHASE AND INVESTOR SUBSCRIPTION AGREEMENT
  
    ANNEX B    
    

        This Annex B sets forth certain registration rights applicable to securities issuable on exchange of Rights, as provided in the Bridge Unit Purchase and
Investor Subscription Agreement (the "Subscription Agreement"). Capitalized terms used herein and not herein defined have the meanings ascribed to them in the Subscription Agreement. 

 
 

ARTICLE 1
  
    DEFINITIONS    
    

        In addition to any other defined terms set forth herein, when used in this Annex B, the following terms shall have the following meanings: 

        (i)    "Securities
Act" means the Securities Act of 1933, as amended. 

        (ii)   "Common
Stock" means the Company's common stock. 

        (iii)  "Holder"
means any person that holds Registrable Securities or securities convertible into or exchangeable for Registrable Securities. 

        (iv)  "register,"
"registered," and "registration" refer to a registration effected by preparing and filing a Registration Statement or Statements under the Securities Act or
any successor rule providing for offering securities on a continuous basis. 

        (v)   "Registrable
Securities" means (i) the securities of the Company issuable on exchange of Rights. 

        (vi)  "Registration
Statement" means a registration statement of the Company under the Securities Act required to be filed under Section 2.1 or maintained under
Section 2.2. 

        (vii) "SEC"
means the United States Securities and Exchange Commission. 

 
 

ARTICLE 2
  
    OBLIGATIONS OF THE COMPANY    
    

        Section 2.1    Mandatory Registration.    Concurrently with the filing of the registration statement related to
the Public Offering, the Company shall prepare and file the Registration Statement covering the Registrable Securities with the SEC. The Company may fulfill its obligation in this Section 2.1
by registering the resale of the Registrable Securities in the registration statement filed in connection with the Public Offering. 

        Section 2.2    Effectiveness and Maintenance of Registration.    Following the filing described in
Section 2.1, the Company shall use its reasonable best efforts to obtain effectiveness of the Registration Statement concurrently with the effectiveness of the registration statement relating
to the Public Offering (the date of such effectiveness being hereinafter referred to as the "Effective Date") and, after the Effective Date, to keep the Registration Statement effective pursuant to
Rule 415 (or any comparable future regulation) until the earlier of (i) the date on which all of the Registrable Securities have been sold and (ii) the date on which all the
Registrable Securities are saleable without registration under the Securities Act (the "Registration Period"). Without limiting the generality of the foregoing, 

13

 

the
Company shall, subject to the provisions of Section 3.1 and for as long as the Public Offering continues to be pursued: 

        (a)   prepare and file with the SEC a form of prospectus and all amendments and supplements thereto required for use in
connection with the resale of the Registrable Securities; 

        (b)   prepare and file with the SEC such amendments and supplements to the Registration Statement as may be necessary to keep
the Registration Statement effective at all times during the Registration Period; 

        (c)   promptly upon its availability, furnish the Holders one copy of the Registration Statement, the prospectus and any
amendments or supplements thereto; 

        (d)   promptly notify each Holder of the effectiveness of the Registration Statement or any post-effective
amendment and the filing of any prospectus or any supplement to the Registration Statement or a prospectus; 

        (e)   promptly respond to any and all comments received from the SEC; 

        (f)    promptly file an acceleration request following the resolution or clearance of all SEC comments or, if applicable,
following notification by the SEC that the Registration Statement or any amendment thereto will not be subject to review; 

        (g)   use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of the
Registration Statement and, if such an order is issued, to obtain the withdrawal of such order at the earliest possible moment and to notify each Holder who holds Registrable Securities being sold
(or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof; 

        (h)   permit a single firm or counsel designated by the Holders to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects; 

        (i)    take such action as may be required to cause the Registrable Securities to be tradable, upon resale pursuant to the
Registration Statement, on any securities exchange or quotation system on which the Common Stock is then tradable; and 

        (j)    at the request of the holders of a majority-in-interest of the Registrable Securities, prepare
and file with the SEC such amendments and supplements to the Registration Statement and any prospectus as may be necessary in order to change the plan of distribution set forth in such Registration
Statement. 

        The
Company shall be deemed to have complied with its obligation to maintain an effective Registration Statement under this Section 2.2 if, at all times during the Registration
Period, there is effective a registration statement (with an available current prospectus) registering the resale of the Registrable Securities,and any such effective registration statement shall fall
within the definition of "Registration Statement." 

        Section 2.3    Changes Requiring Amendment or Supplement.    As promptly as practicable after becoming aware of
such event or condition, the Company shall notify each Holder of the happening of any event or the existence of any condition as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not
misleading, and use its best efforts promptly to prepare a supplement or amendment to the Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such
supplement or amendment to each Holder as such Holder may reasonably request; provided that, for not more than thirty (30) consecutive trading days (or a total of not more than sixty 

14

 

(60) trading
days in any twelve (12) month period), the Company may delay the disclosure of material non-public information concerning the Company the disclosure of which at
the time is not, in the good faith opinion of the Company, in the best interests of the Company (an "Allowed Delay"); provided, further, that the Company shall promptly (i) notify the Holders
in writing of the existence of (but in no event, without the prior written consent of the Holders, shall the Company disclose to such Holders any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay and (ii) advise the Holders in writing to cease all sales under the Registration Statement until the end of the Allowed Delay.
Upon expiration of the Allowed Delay, the Company shall again be bound by the first sentence of this Section 2.3 with respect to the information giving rise thereto. 

        Section 2.4    State Registration or Qualification.    The Company shall use reasonable efforts to
(i) register and qualify the Registrable Securities under the securities or "blue sky" laws of such jurisdictions in the United States as the Holders who hold a majority in interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (a) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify, (b) subject itself to general taxation in any such jurisdiction, (c) file a general consent to service of process in any such
jurisdiction, (d) provide any undertakings that cause the Company undue expense or burden, or (e) make any change in its charter or bylaws, which in each case the Board of Directors of
the Company determines to be contrary to the best interests of the Company and its stockholders. 

        Section 2.5    Assessment if Registration Statement is not Usable.    If at any time that is more than one year
after the Effective Date and prior to the end of the Registration Period, no Registration Statement is effective or the Registration Statement is otherwise not usable in connection with any sale of
the Registrable Securities, the Company will pay, within five business days following the end of each month, for each month or portion thereof during which such condition continues, an assessment to
the holders of the affected securities at the rate of one percent per month (prorated for periods less than one month) of the value of any affected Registrable Securities based on the average closing
price of securities of the same class and series during such month or portion thereof; provided, however, that no penalty shall be payable (i) with respect to any period during an Allowed
Delay; (ii) with respect to a reasonable time for the preparation of any required amendment to the Registration Statement or any supplement to the Prospectus and, in the case of an amendment
to the Registration Statement, for review and clearance thereof by the SEC; or (iii) solely as a result of any provision of the securities laws or regulations of any jurisdiction other than the
United States prohibiting the sale of such securities. Such penalty shall be in lieu of all other remedies of any Holder with respect to such event. 

 
 

ARTICLE 3
  
    OBLIGATIONS OF THE HOLDERS    
    

        In connection with the registration of the Registrable Securities, the Holders shall have the following obligations: 

        Section 3.1    It shall be a condition precedent to the obligations of the Company set forth in ARTICLE 2 with
respect to the Registrable Securities of a particular Holder that such Holder shall, in a timely manner, furnish to the Company, in writing, such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and
shall execute 

15

 

such
documents in connection with such registration as the Company may reasonably request. At least seven days prior to the anticipated filing date of the Registration Statement, the Company shall
notify each Holder of the information the Company requires from each such Holder; such Holder shall promptly respond to the Company with the required information and shall thereafter keep the Company
reasonably informed of any changes to any such information. 

        Section 3.2    Each Holder, by such Holder's acceptance of the Registrable Securities, agrees to cooperate with the
Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement or any amendments or supplements thereto or to any related prospectus, unless
such Holder has notified the Company in writing of such Holder's election to exclude all of such Holder's Registrable Securities from the Registration Statement. 

        Section 3.3    If Holders holding a majority-in-interest of the Registrable Securities determine
to engage the services of an underwriter in connection with the resale of Registrable Securities, each Holder agrees to enter into and perform such Holder's obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such resale and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless such Holder has notified the Company in writing of such Holder's election to exclude
all of such Holder's Registrable Securities from the Registration Statement. 

        Section 3.4    Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event that,
in the opinion of the Company's legal counsel, has caused the Registration Statement to no longer be effective or the prospectus to no longer comply with the requirements of the Securities Act, such
Holder will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement until such Holder's receipt of notice that the Registrable Securities may once again be
resold under the Registration Statement, together with, if required, copies of any amended or supplemented prospectus for use in connection with any such resales. 

        Section 3.5    Notwithstanding the effectiveness of the Registration Statement, no Holder will, directly or indirectly,
sell or offer to sell Registrable Securities in reliance on the Registration Statement for a period of one year after the Effective Date unless such Holder has, theretofore obtained the written
consent of Paulson Investment Company, Inc, which consent may be withheld in any circumstances and for any reason at the sole discretion of Paulson Investment Company, Inc. 

 
 

ARTICLE 4
  
    EXPENSES OF REGISTRATION    
    

        All reasonable expenses, other than underwriting expenses, discounts and commissions or other direct selling expenses relating to any resale of the Registrable
Securities, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualification
fees, printers and accounting fees, the fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel selected by the Holders shall be borne by the
Company provided, however, the fees of counsel to the Holders shall not exceed $2,500. 

16

  

 
 

ARTICLE 5
  
    INDEMNIFICATION    
    

        Section 5.1    Indemnification by the Company.    To the extent permitted by law, the Company will indemnify,
hold harmless and defend (i) each Holder who holds such Registrable Securities, (ii) the directors, officers, partners, employees, agents and each person who controls any Holder within
the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), if any, (iii) any underwriter (as defined in the Securities Act) for the Holder, and
(iv) the directors, officers, partners, employees and each person who controls any such underwriter within the meaning of the Securities Act or the 1934 Act, if any (each, a "Company
Indemnified Person"), against any losses, claims, damages, liabilities or expenses, including, but not limited to, actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof, (collectively "Holder Damages") to which any of them may become subject insofar as such Holder Damages arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement or the omission or alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the
1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations"); provided, however, that no indemnity shall be given with respect to any Holder Damages based on the sale of
Registrable Securities in any jurisdiction within the United States under whose laws registration or qualification was required and not obtained. The Company shall reimburse each Company Indemnified
Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any
claim made against such Company Indemnified Person in respect of any Violation or alleged Violation, it being understood that fees of more than one legal counsel shall be deemed reasonable only if and
to the extent that the assistance of separate counsel is required for conflict of interest reasons. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained
in this Section 5.1: (i) shall not apply to Holder Damages arising out of or based upon information furnished in writing to the Company by any Company Indemnified Person or underwriter
for such Company Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto and not corrected in a
timely manner by such Company Indemnified Person or underwriter; (ii) shall not apply to amounts paid in settlement of any claim
alleging a Violation if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld; (iii) shall not apply to a Holder Damages
resulting from the violation of registration or qualification requirements of any jurisdiction within the United States, unless the Company advised the Company Indemnified Person or any underwriter
that the resale of the Registrable Securities had been duly registered or qualified in such jurisdiction, or of any foreign law, rule or regulation; and (iv) with respect to any untruth or
omission in any prospectus, shall not inure to the benefit of any Company Indemnified Person if the untrue statement or omission of material fact contained in such prospectus was corrected on a timely
basis in a later prospectus or prospectus supplement, such corrected prospectus was timely made available by the Company pursuant to Section 2.2 hereof. 

        Section 5.2    Indemnification by Holders.    Each Holder agrees severally and not jointly to indemnify, hold
harmless and defend the Company, each of its directors, each of its officers who signs 

17

 

the
Registration Statement, each person, if any, who controls the Company within the meaning of the Securities Act or the 1934 Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers or any person who controls such stockholder or underwriter within the meaning of the Securities Act or the 1934 Act (each a
"Holder Indemnified Person" and together with each Company Indemnified Person, an "Indemnified Party"), against any losses, claims, damages, liabilities or expenses, including, but not limited to,
actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, (collectively "Company Damages") to which such
Holder Indemnified Person may become subject, under the Securities Act, the 1934 Act or otherwise, insofar as such Company Damages result from the inclusion by the Company of information in the
Registration Statement, the prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use in
connection with such Registration Statement and not thereafter corrected on a timely basis by notice to the Company; and such Holder will reimburse any legal or other expenses (promptly as such
expenses are incurred and are due and payable) reasonably incurred by them in connection with investigating or defending any claim made against such Holder Indemnified Person based on such information
provided by such Holder, it being understood that fees of more than one legal counsel shall be deemed reasonable only if and to the extent that the assistance of separate counsel is required for
conflict of interest reasons; provided, however, that the indemnity agreement contained in this Section 5.2 shall not apply to amounts paid in settlement of any claim if such settlement is
effected without the prior written consent of such Holder, which consent shall not be unreasonably withheld. 

        Section 5.3    Promptly after receipt by an Indemnified Party of notice of the commencement of any action (including any
governmental action), such Indemnified Party shall, if a Claim in respect thereof is to be made, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or
Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The indemnifying party shall pay for only one separate legal counsel for the Indemnified
Persons or the Indemnified Parties, as applicable, and such legal counsel shall be selected by Holders holding a majority-in-interest of the Registrable Securities included in
the Registration Statement to which the Claim relates (with the approval of a majority-in-interest of the Holders), if the Holders are entitled to indemnification hereunder, or
the Company, if the Company is entitled to indemnification hereunder, as applicable. 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 Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is
actually prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable. 

18

 

 
 

ARTICLE 6
  
    CONTRIBUTION    
    

        If the indemnification provided for in ARTICLE 5 is unavailable to or insufficient to hold harmless an indemnified party under Section 5.1 or
Section 5.2 in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and
the Indemnified Party (or the entity with which such Indemnified Party is affiliated) on the other in connection with the statements or omissions which resulted in such losses, claims, damages or
liabilities, (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. 

 
 

ARTICLE 7
  
    ASSIGNMENT OF REGISTRATION RIGHTS    
    

        The rights under this Annex B shall be assignable by the Holders to any transferee of all or any portion of Registrable Securities if: (i) the Holders
agree in writing with the transferee or assignee to assign such rights, 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 (a) the name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives 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 (v) such transferee shall be an "accredited investor" as
that term defined in Rule 501 of Regulation D promulgated under the Securities Act. 

 
 

ARTICLE 8
  
    AMENDMENT OF REGISTRATION RIGHTS    
    

        Provisions of this Annex B may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or
prospectively), with, but only with, written consent of the Company and Holders who hold a majority interest of the Registrable Securities. Any amendment or waiver effected in accordance with this
ARTICLE 8 shall be binding upon each Holder and the Company. 

 
 

ARTICLE 9
  
    MISCELLANEOUS    
    

        Section 9.1    A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns
of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities. 

        Section 9.2    The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to
each Holder by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for breach of its obligations under this Annex B
will be inadequate and agrees, in the event of a breach or threatened breach by 

19

 

the
Company of any of the provisions under this Annex B, that each Holder shall be entitled, in addition to all other available remedies in law or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Annex B and to enforce specifically the terms and provisions hereof, without the necessity of
showing economic loss and without any bond or other security being required. 

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED, OFFERED FOR SALE, ASSIGNED OR
TRANSFERRED UNLESS (A) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR
(B) EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE AVAILABLE. 

	Certificate No.            	 	$                      

Principal Amount

ASCENT SOLAR TECHNOLOGIES, INC.

CONDITIONALLY CONVERTIBLE NOTE

            ,
2005 

        FOR
VALUE RECEIVED, ASCENT SOLAR TECHNOLOGIES, INC., a Delaware corporation, ("Borrower") promises to pay to the order
of                        ("Lender") the principal amount of
                        Dollars
($                        ), together with interest on the unpaid principal amount at the rate of 10 percent per annum based
on a 365-day year, all upon the terms set
forth below. This Conditionally Convertible Note (the "Note") is issued pursuant to that certain Bridge Unit Purchase and Investor Subscription Agreement, dated as of December 19, 2005, by and
between Lender and Borrower (the "Subscription Agreement"). Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Subscription Agreement. 

        1.    Maturity.    Except as otherwise provided herein, the principal and interest hereunder shall become due and
payable in full on the date one year from the first Closing, except that in the event of the closing of a Public Offering, the principal amount and accrued and unpaid interest will become immediately
due and payable. 

        2.    Prepayment.    Subject to the conversion rights provided for in Section 4, hereof, Borrower may prepay
any or all amounts due under this Bridge Note at any time without penalty. 

        3.    Method of Payment.    Any payment of principal or interest hereunder shall be made by certified or bank
cashier's check unless Holder has provided Borrower with appropriate wire instructions, in which event, the payment shall be made by wire transfer of "same day" funds. For the purpose of any interest
calculation, payment shall be deemed made when the check is sent by overnight delivery or when the wire is sent. Any partial payment shall be applied first to accrued and unpaid interest and
thereafter to a reduction of principal. 

20

  

        4.    Conditional Conversion Rights.    If no Public Offering shall have occurred within one year from the first
Closing, Lender or any permitted assignee of Lender ("Holder") shall have the right, at any time thereafter and until all principal of, and accrued interest on, the Note shall have been paid, to
convert all, but not less than all, of the accrued and unpaid interest on, and all or any part of the principal of, the Note into shares of Borrower's Common Stock at a conversion price of $3.00 per
share, subject to adjustment as provided in Section 5, by providing notice of Holder's election to convert to Borrower; provided, however, that no fractional shares will be issued. Upon receipt
by Borrower of Holder's notice of such election, the Note shall represent the right to receive the Common Stock into which it has been converted and Borrower's right and obligation to repay the Note
shall be extinguished. 

        5.    Anti Dilution Adjustments.    The number and kind of securities or other property into which this Note may
become convertible shall be subject to adjustment as follows: 

	(a)
	If
a split or a reverse split shall have occurred with respect to the Common Stock, the conversion rate shall be appropriately adjusted to cause the Holder to receive, upon
conversion, a number of shares of Common Stock representing the same percentage of the equity of the Company to which the Holder would have been entitled on such conversion if the split had not
occurred.

	(b)
	If
a dividend or other distribution shall be made in favor of the Common Stock, appropriate adjustment shall be made so that, upon conversion of the Note, the Holder shall receive, in
addition to the Common Stock otherwise obtainable on such conversion, the cash, securities or other property that it would have received had the Note been so converted immediately prior to the split,
dividend or distribution.

	(c)
	If
the Common Stock shall, as the result of a merger or otherwise, be converted into the right to receive other securities or property, appropriate adjustment shall be made so that,
upon conversion of the Note, the Holder shall receive, in lieu of Common Stock, the securities and/or property that it would have received as a result of the merger or other such transaction had the
Note been so converted immediately prior to the record date therefor. 

        6.    Default.    In the event of an occurrence of any event of default specified below, the principal of, and all
accrued and unpaid interest on, the Note shall become immediately due and payable without notice, except as specified below: 

	(a)
	Borrower
fails to make any payment hereunder when due, which failure has not been cured within 15 days following such due date.

	(b)
	Any
defined event of default occurs under any contract or instrument pursuant to which Borrower has incurred any liability for borrowed money in excess of $100,000, which event of
default has not been waived within five business days following such occurrence, and which event of default is reasonably likely to materially affect the Company's business.

	(c)
	Borrower
files a petition to take advantage of any insolvency act; makes an assignment for the benefit of its creditors; commences a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself of a whole or any substantial part of its property; files a petition or answer seeking reorganization or arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United States of America or any state.

	(d)
	A
court of competent jurisdiction enters an order, judgment or decree appointing a custodian, receiver, trustee, liquidator or conservator of Borrower or of the whole or any
substantial part of its properties, or approves a petition filed against Borrower seeking reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law
or 

21

 

statute
of the Untied States of America or any state; or if, under the provisions of any other law for the relief or aid of debtors, a court of competent jurisdiction assumes custody or control of
Borrower or of the whole or any substantial part of its properties; or there is commenced against Borrower any proceeding for any of the foregoing relief and such proceeding or petition remains
undismissed for a period of 30 days; or if Borrower by any act indicates its consent to or approval of any such proceeding or petition. 

	(e)
	If
(i) any judgment remaining unpaid, unstayed or undismissed for a period of 60 days is rendered against Borrower which by itself or together with all other such
judgments rendered against Borrower remaining unpaid, unstayed or undismissed for a period of 60 days, is in excess of $100,000, or (ii) there is any attachment or execution against
Borrower's properties remaining unstayed or undismissed for a period of 60 days which by itself or together with all other attachments and executions against Borrower's properties remaining
unstayed or undismissed for a period of 60 days is for an amount in excess of $100,000. 

        7.    Successors and Assigns.    The Note is transferable and assignable by Lender or any subsequent permitted
assignee subject to the requirement that any such assignment or transfer be, in the opinion of Borrower's counsel, in compliance with applicable federal and state securities laws. All covenants,
agreements and undertakings in the Note by or on behalf of any of the parties shall bind and inure to the benefit of the respective successors and assigns of the parties whether so expressed or not. 

        8.    Notices.    Any and all notices, requests, consents and demands required or permitted to be given hereunder
shall be in writing and shall be deemed given and received (i) upon personal delivery, (ii) upon the first business day following the receipt of confirmation of facsimile transmission to
the telefax number as indicated below, or (iii) upon the third business day after deposit in the United States mail, by certified or registered mail, postage prepaid and addressed as follows: 

	To Lender:	 	[to the address and facsimile provided on the signature page of the Agreement]
	

To Borrower:	
 	

Ascent Solar Technologies, Inc.

8120 Shaffer Parkway

Littleton, Colorado 80127-4107

Telefax: (303) 285-5173

Either
party may change by notice the address to which notices to that party are to be addressed. 

        9.    Waiver/Amendment.    Borrower hereby waives presentment for payment, demand, protest and notice of protest for
nonpayment of the Note and consents to any extension or postponement of the time of payment or any other indulgence. The Note may only be amended or modified by written agreement signed by Borrower
and Holder. 

        10.    Expenses.    In the event that Holder brings legal action against Borrower, or Borrower brings legal action
against Holder, to enforce or otherwise determine the meaning or enforceability of the Note or any provision hereof, each party shall bear its own expenses, including attorney fees, directly
attributable to such action. However, in any action for breach of the Note, including nonpayment, the prevailing party in any such dispute shall be entitled to recover all reasonable costs and
attorney fees incurred in connection with such action. 

        11.    Holder is Not a Shareholder.    Holder, solely by virtue of the ownership of the Note, shall not be considered
a shareholder of Borrower for any purpose, nor shall anything in the Note be construed to confer on Holder any rights of a shareholder of Borrower including, without limitation, any right to vote,
give or withhold consent to any corporate action, receive notice of meetings of shareholders or, except on conversion as expressly provided herein, receive dividends. 

22

 

        12.    Choice of Law.    The Note shall be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the State of Oregon. The parties agree that venue for any suit, action, proceeding or litigation arising out of or in relation to this Note will be in any federal or
state court in Multnomah County, Oregon having subject matter jurisdiction, and the parties hereby submit to the jurisdiction of that Court. 

        IN
WITNESS WHEREOF, the Note has been executed and delivered on the date specified on the first page hereof by the duly authorized representative of Borrower. 

	 	 	ASCENT SOLAR TECHNOLOGIES, INC.
	

 	
 	

By:	
 	

 Matthew Foster, President

23

 

THE
RIGHTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THE RIGHTS NOR THE SECURITIES FOR WHICH IT IS EXCHANGEABLE MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF (i) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER SUCH ACT, OR (ii) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. 

 
 

ASCENT SOLAR TECHNOLOGIES, INC.
  
    BRIDGE RIGHT    
    

        This certifies that pursuant to the terms of this certificate, for value received, ASCENT SOLAR TECHNOLOGIES, INC., a Delaware corporation, (the "Company")
hereby grants to                        (the "Holder")
            Rights, each Right exchangeable for securities of the Company as further described below. 

        The
Rights ("Rights") evidenced by this Certificate (this "Certificate") are issued pursuant to that certain Bridge Unit Purchase and Investor Subscription Agreement, dated as of
December 19, 2005, by and between the Company and the Holder (the "Subscription Agreement"). Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the
Subscription Agreement. 

1.    Exchange of Right.

        1.1    Securities for which the Rights are Exchangeable.    Each Right is exchangeable, as a part of the exchange of
all, but not less than all, of the Rights evidenced by this Certificate, as follows: 

        (a)   If
a Public Offering has occurred on or before the Maturity Date (as defined in the Subscription Agreement), then each Right shall be automatically exchanged for
securities substantially identical to the securities sold in the Public Offering having a value, based on the initial public offering price therefor, of $25,000, except that no fractional securities
shall be issued. 

        (b)   If
a Public Offering has not occurred on or before the Maturity Date, then, at any time after the Maturity Date and during the Term (as defined in the Subscription
Agreement) of the Rights, each Right shall be exchangeable for 8,333 shares of common stock of the Company; provided, however, that if, at any time during the Term of the Rights, the Company shall,
other than as a result of a Public Offering, have a class of equity securities traded on any exchange or quotation system, each Right shall be exchangeable for $25,000 of such equity securities, based
on the average closing price of such security for the 30 trading days (or such shorter period in which such securities have been trading) immediately preceding the exchange date, except that no
fractional securities shall be issued. 

        The
securities for which the Rights are at any time exchangeable or for which the Rights have been exchanged are herein referred to as the "Exchange Securities". 

        1.2    Exchange Period.    The Rights are not exchangeable until the earlier of: 

        (a)   the
closing of a Public Offering; and 

        (b)   one
year from the first Closing. 

        The
Rights will expire, and will thereafter not be exchangeable, at 5:00 p.m. (Pacific time) on the second anniversary of the first Closing (the "Expiration Date"). 

24

 

        1.3    Procedure for Exchanging Rights.    

        (a)   The
Rights will be deemed to have been exchanged upon automatic exchange as described in Section 1.1(a) or otherwise when the Company has received all of the
following items (the "Exchange Date"): 

        (i)    A
completed Exchange Notice, as described in 1.4 below, executed by the Holder; and 

        (ii)   This
Certificate. 

        (b)   Certificates
representing Exchange Securities will be delivered by the Company in accordance with the Exchange Notice within 10 days after the Exchange Date. 

        (c)   The
Exchange Securities will be deemed to have been issued on the Exchange Date, and the person designated in the Exchange Notice as the person in whose name such
Exchange Securities are to be issued will be deemed for all purposes to have become the record holder of such Exchange Securities on the Exchange Date. 

        (d)   The
issuance of certificates for Exchange Securities upon exchange of the Rights will be made without charge to the Holder for any issuance tax in respect thereof or any
other cost incurred by the Company in connection with such exchange and the related issuance of Exchange Securities. 

        (e)   The
holders of Exchange Securities have certain registration rights as set forth in the Subscription Agreement. 

        1.4    Exchange Notice.    The Exchange Notice will state (i) if the Exchange Securities are not to be issued
in the name of the Holder, the name of the person to whom the certificates representing such Exchange Securities; and (ii) the address to which certificates representing Exchange Securities are
to be delivered. 

        1.5    Fractional Shares.    The Company is not required to issue any fraction of a security upon exchange of the
Rights but shall instead pay an amount in cash equal to the fair market value of such fractional security. 

2.    Adjustment in Shares of Capital Stock.    The number and kind of Exchange Securities issuable upon the exchange of the Rights
are subject to adjustment from time to time as provided in this Section 2 

        2.1    Subdivision or Combination of Shares.    If the Company at any time subdivides outstanding shares of any class
of its capital stock for which the Rights are exchangeable, into a greater number of shares of such capital stock (including a stock split effected as a stock dividend) or combines its outstanding
shares of such capital stock into a lesser number of shares, the number of shares of such capital stock issuable upon exchange of the Rights will be adjusted to such number as is obtained by
multiplying the number of shares of such capital stock issuable upon exchange of the Rights immediately prior to such subdivision or combination by a fraction, the numerator of which is the aggregate
number of shares of such capital stock outstanding immediately after giving effect to such subdivision or combination and the denominator of which is the aggregate number of shares of such capital
stock outstanding immediately prior to such subdivision or combination. 

        2.2    Effect of Sale, Merger or Consolidation.    If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another corporation, or sale of all or substantially all of the Company's assets to another corporation, is effected after the date
hereof in such a way that holders of any class or series of capital stock for which the Rights are or become exchangeable will be entitled to receive stock, securities or assets with respect to or in
exchange for such capital stock, then, as a condition of such reorganization, reclassification, 

25

 

consolidation,
merger or sale, lawful and adequate provision will be made whereby the Holder will thereafter have the right to receive, upon the basis and the terms and conditions specified in this
Certificate and in lieu of the shares immediately theretofore issuable and receivable upon the exchange of the Rights, such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares of capital stock equal to the number of shares of such capital stock immediately theretofore issuable and receivable upon the exchange of
the Rights, and in any such case appropriate provision will be made with respect to the rights and interests of the Holder to the end that the provisions of this Certificate (including, without
limitation, provisions for adjustments of the number of shares issuable upon the exchange of the Rights) will thereafter be applicable, as nearly as may be possible, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exchange of the Rights. The Company will not effect any such consolidation, merger or sale unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets assumes, by written instrument executed
and delivered to the Holder at its last address appearing on the books of the Company, the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the
foregoing sentence, the Holder may be entitled to purchase. 

        2.3    Notice to Holder of Adjustment.    Whenever the number of shares issuable upon exchange of the Rights is
adjusted as herein provided, the Company will cause to be mailed to the Holder notice setting forth the adjusted number of shares issuable upon the exchange of the Right and showing in
reasonable detail the computation of the adjustment and the facts upon which such adjustment is based. 

3.    Prior Notice as to Certain Events.    In the event the Company pays any dividend payable in cash or stock upon any class of
its capital stock for which the Rights are then exchangeable or makes any distribution to the holders of such capital stock, then the Company will give prior written notice, by first class mail,
postage prepaid, addressed to the Holder at the address of such holder as shown on the books of Company, of the date on which (i) the books of Company will close or a record taken for such
dividend or distribution. Such notice will also specify the date as of which the holders of the capital stock of record will participate in said dividend or distribution. Such written notice will be
given not less than 20 days prior to the record date thereof. If the Company shall take any such action at a time at which the Rights have not yet become exchangeable, the Rights shall be
exchangeable during the 20 day period prior to the record date for such event in the manner described in Section 1.1(b) 

4.    Reservation of Common Stock.    The Company has duly reserved out of its authorized capital stock in an amount sufficient to
permit the exchange in full of the Rights and, if the Exchange Securities are expected to include instruments convertible into or exercisable for such capital stock, the full conversion or exchange
thereof. The Company will, at all times during the term of the Rights, reserve and keep available for issuance upon the exchange of the Rights and upon exchange or conversion of any Exchange
Securities so exercisable or convertible such number of its authorized but unissued shares of its capital stock as will be sufficient to permit such exchanges and/or conversions. Shares of capital
stock issuable on exchange of the Rights will, upon such issuance, be validly issued, fully paid and nonassessable. 

5.    No Voting Rights; Limitations of Liability.    The Rights do not confer upon the Holder any voting rights or other rights as a
stockholder of the Company, either at law or equity. 

6.    Restrictions on Transfer of Right.  

        (a)   The
Rights and the Holder's rights hereunder may not be transferred, assigned or subjected to a pledge or security interest without the prior written consent of the
Company and unless transferred by surrender of this Certificate with a valid written assignment thereof at the 

26

 

principal
office of the Company. If the Company determines that the proposed assignment is permitted pursuant to the provisions hereof and the requirements of applicable securities law, the Company
will register the assignment of the Rights in accordance with the information contained in the assignment and will, without charge, execute and deliver a new Right or Rights in the name of the
assignee or assignees named in such assignment instrument and the Rights will promptly be cancelled. As a condition to the transfer of the Rights, the Holder shall deliver to the Company an opinion of
counsel, reasonably satisfactory in form and substance to the Company's counsel, to the effect that the proposed transfer will not be in violation of the Act or of any applicable state law. 

7.    Registration Rights.    The Exchange Securities are subject to registration rights as provided in Annex B to the Subscription
Agreement. 

8.    Miscellaneous.

        8.1    Waiver.    No delay or failure of the Holder in exercising any right, power, privilege or remedy under this
Certificate will affect such right, power, privilege or remedy or be deemed to be a waiver of the same or any part thereof, nor will any single or partial exchange thereof or any failure to exchange
the same in any instance preclude any further or future exchange thereof, or the exchange of any other right, power, privilege or remedy. 

Notices.    All
notices, requests and consents hereunder must be in writing. Notices, requests and consents to the Company will be effectively given and delivered when (a) sent by
facsimile to the Company at (303) 285-5173 or (b) mailed by first class mail, postage prepaid, to the Company at its offices at 8120 Shaffer Parkway, Littleton, Colorado
80127-4107. Notices, requests, and consents to the Holder will be effectively given and delivered when sent by facsimile or mailed by first class mail, postage prepaid, to the Holder at
the facsimile number or address of the Holder appearing on the books and records of the Company. Either party by notice to the other may from time to time change the facsimile number or address for
any such notice, request, or consent. 

        8.2    Governing Law; Venue.    The Rights and all rights and obligations hereunder, including matters of
construction, validity, and performance, will be governed by and construed and interpreted in accordance with the laws of the State of Oregon, without regard to the choice or conflicts of laws rules
of such state. The parties agree that venue for any suit, action, proceeding or litigation arising out of or in relation to this Certificate will be in any federal or state court in Multnomah County,
Oregon having subject matter jurisdiction, and hereby submit to the jurisdiction of that court. 

        8.3    Successors.    The Rights and the provisions of this Certificate will inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns; provided, however, that the Rights may not be assigned without the prior written consent of the Company as set forth in
Section 6. 

        IN
WITNESS WHEREOF, this Certificate has been executed and delivered by a duly authorized representative of the Company on the day and year first above written. 

	 	 	ASCENT SOLAR TECHNOLOGIES, INC.
	

 	
 	

By:	
 	

 Matthew Foster, President

27

QuickLinks

ASCENT SOLAR TECHNOLOGIES, INC. BRIDGE UNIT PURCHASE AND INVESTOR SUBSCRIPTION AGREEMENT

ASCENT SOLAR TECHNOLOGIES, INC. BRIDGE UNIT PURCHASE AND INVESTOR SUBSCRIPTION AGREEMENT ANNEX A

ARTICLE 1 SUBSCRIPTION

ARTICLE 2 CLOSING AND DELIVERY

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

ARTICLE 4 CONDITIONS TO CLOSING

ARTICLE 5 NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES

ARTICLE 6 MISCELLANEOUS

ASCENT SOLAR TECHNOLOGIES, INC. BRIDGE UNIT PURCHASE AND INVESTOR SUBSCRIPTION AGREEMENT ANNEX B

ARTICLE 1 DEFINITIONS

ARTICLE 2 OBLIGATIONS OF THE COMPANY

ARTICLE 3 OBLIGATIONS OF THE HOLDERS

ARTICLE 4 EXPENSES OF REGISTRATION

ARTICLE 5 INDEMNIFICATION

ARTICLE 6 CONTRIBUTION

ARTICLE 7 ASSIGNMENT OF REGISTRATION RIGHTS

ARTICLE 8 AMENDMENT OF REGISTRATION RIGHTS

ARTICLE 9 MISCELLANEOUS

ASCENT SOLAR TECHNOLOGIES, INC. BRIDGE RIGHT

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