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SolyndraCROreport

SolyndraCROreport

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Published by: melaniel_co on Mar 27, 2012
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10/29/2012

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The DOE and Solyndra’s investors, lead by Argonaut and Madrone, agreed to restructure

the company’s existing indebtedness whereby the DOE would subordinate its recovery rights

upon liquidation (for a portion of its loan) to a new $75 million loan (the Tranche A Debt) from

existing investors that agreed to participate. The funds were to be used in the implementation of

the Consolidation Plan. See Exhibit #11 for a summary of key terms relating to the Tranche A

Debt.

All of the existing Convertible Note holders and preferred stockholders were offered the

right to participate as lenders in the Tranche A Debt.291

Approximately 23 of Solyndra’s existing

288

Principal amount for Tranche A and Tranche B represent the commitments of the credit parties and not the actual

amounts drawn.

289

Tranche C was not funded pursuant to the February 2011 Restructuring. It was established as a result of near-
term anticipated future capital requirements and allows for funding of an additional $75 million.

290

Tranche E was composed of $175 million in outstanding principal obligations under the Convertible Notes, plus
accrued interest of $11 million through the date of the Restructuring.

291

On February 16, 2011, Solyndra, Inc. sent a Tranche A – Rights Offering Information letter to the holders of the
existing Convertible Notes and preferred stock. The rights offering expired on March 16, 2011 and participants
were required to be accredited investors under applicable federal securities laws. See Appendix W.146.

129

investors accepted the offer and became lenders in the restructured Tranche A Debt. A summary

of the top participating lenders is provided below in Table #19:

Table #19

Summary of Top Lenders in Tranche A Debt

Lender Name

Amount

% Owned

Argonaut Ventures I, LLC

$35,311,321

47.08%

Madrone Partners, L.P.

24,235,608

32.31%

Rockport Capital Partners III, LP

6,000,000

8.00%

Masdar Clean Tech Fund, LP

2,000,000

2.67%

Beltest Shipping Company Limited

1,631,840

2.18%

Other Remaining Lenders

5,821,231

7.76%

TOTAL

$75,000,000

100.00%

Pursuant to the Restructuring, the participants in the Tranche A Debt received warrants

(“Tranche A Warrants”) to purchase shares of common stock of Solyndra, Inc. that would

represent approximately 99.99% of the fully diluted equity ownership of Solyndra, Inc.292

As

consideration for the Lead Investors underwriting of the Tranche A Debt and placing significant

funds in escrow since January 2011, each of the participating lenders entered into a letter

agreement with the Lead Investors on April 6, 2011 that would transfer all Tranche A Warrants

to the Lead Investors upon a bankruptcy filing or liquidating event.293

Solyndra, Inc. was not a

party to the side letter regarding the potential transfer of warrants. The side letter was executed,

among other things, to preserve the substantial net operating loss (“NOL”) attributes of Solyndra,

Inc.

A separate side letter was executed between the DOE and the Lead Investors regarding

the NOL on February 23, 2011. The parties agreed that the Lead Investors would not take any

actions that would permit the NOL to be transferred or used for any purpose other than to offset

the income tax liability of Solyndra, Inc. unless a bankruptcy or insolvency proceeding was filed

and or the DOE restructured debt was paid in full. The obligations by the Lead Lenders under

292

See Appendix W.147, Restructuring and Warrant Issuance Agreement dated February 23, 2011.

293

See Appendix W.149, Side Letter Agreement Regarding Solyndra, Inc. Warrants between Lead Investors and
the other participating lenders dated April 6, 2011.

130

this agreement regarding the NOL ceased 60 days after the bankruptcy filing in September

2011.294

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