AMENDMENT TO SUBORDINATED SECURED CONVERTIBLE PROMISSORY NOTE
Exhibit 99.1
AMENDMENT TO
SUBORDINATED SECURED CONVERTIBLE PROMISSORY NOTE
This Amendment to Subordinated Secured Convertible Promissory Note (the “Amendment”) is entered into as of March 31, 2015 by and between Lime Energy Co., a Delaware corporation (the “Company”), and Bison Capital Partners IV, L.P. (the “Holder”), and amends that certain Subordinated Secured Convertible Promissory Note, dated as of March 24, 2015, by the Company in favor of the Holder (the “Note”). The Note is subject to the provisions of that certain Note Purchase Agreement, dated as of March 24, 2015, by and among the Company and the Holder (the “Purchase Agreement”). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Note and the Purchase Agreement.
RECITAL
WHEREAS, Section 24 of the Note provides that the Note may be amended with the written consent of the Company and the Person holding a majority of the aggregate principal amount of the Notes outstanding.
WHEREAS, the Holder holds the Note representing the entire aggregate principal amount of the Notes outstanding.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged and agreed, the parties hereby agree to amend the Note, effective as of the date hereof, as follows:
1. Amendment.
a. The first sentence of Section 2(a) of the Note shall be amended and restated in full as follows:
“(a) Regular interest (“Interest”) shall accrue on the principal amount of this Note at a per annum rate equal to either (i) ten and one half percent (10.5%) (the “Scheduled Cash Interest Rate”) or (ii) twelve and one half percent (12.5%) (the “Scheduled Accrued Interest Rate”).”
b. Section 2 of the Note shall be amended to redesignate subsections 2(c) and 2(d) as subsections 2(d) and 2(e), respectively, and to include a new subsection Section 2(c), as follows:
“(c) If Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on the last day of any one of the fiscal
quarters listed in the table below is less than the corresponding amount listed in the table below (a “Consolidated EBITDA Shortfall”), then an additional 8.5106383 percent of the original principal amount of this Note (the “Additional Interest Amount”) will accrue as additional Interest on the Note, be added to the outstanding principal amount under this Note at the next Interest Payment Date following the applicable period end date for which the Consolidated EBITDA Shortfall occurred, and, from and after the date added to the outstanding principal, accrue interest in the same manner as the outstanding principal under this Note. The Additional Interest Amount will accrue in the same fashion for each Consolidate EBITDA Shortfall. For example, if Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on June 30, 2015 is less than $2,900,000, Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on September 30, 2015 is less than $4,150,000 and Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on December 31, 2015 is at least $5,763,000, then an Additional Interest Amount equal to $1,000,000 (8.5106383 percent times the $11,750,000 original principal amount of the Note) for the Q2 2015 Consolidated EBITDA Shortfall would accrue and be added to principal at the first Interest Payment Date following June 30, 2015, and a second Additional Interest Amount equal to $1,000,000 for the Q3 2015 Consolidated EBITDA Shortfall would accrue and be added to principal at the first Interest Payment Date following September 30, 2015, and no further Additional Interest Amount would accrue.
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Fiscal Quarter |
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Minimum |
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Q2 2015 |
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$ |
2,900,000 |
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Q3 2015 |
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$ |
4,150,000 |
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Q4 2015 |
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$ |
5,763,000 |
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c. Section 8(r) of the Note shall be amended and restated in full as follows:
“(r) permit Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on the last day of such fiscal quarter to fall below the levels set forth below:
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Fiscal Quarter |
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Minimum |
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Q1 2016 |
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$ |
6,276,000 |
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Q2 2016 |
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$ |
6,738,000 |
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Q3 2016 |
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$ |
7,416,000 |
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Q4 2016 |
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$ |
8,000,000 |
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Q1 2017 |
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$ |
8,276,000 |
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Q2 2017 |
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$ |
8,738,000 |
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Q3 2017 |
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$ |
9,416,000 |
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Q4 2017 |
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$ |
10,000,000 |
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Q1 2018 |
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$ |
10,000,000 |
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Q2 2018 |
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$ |
10,000,000 |
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Q3 2018 |
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$ |
10,000,000 |
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Q4 2018 |
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$ |
10,000,000 |
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Q1 2019 |
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$ |
10,000,000 |
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Q2 2019 |
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$ |
10,000,000 |
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Q3 2019 |
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$ |
10,000,000 |
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Q4 2019 |
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$ |
10,000,000 |
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Q1 2020 |
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$ |
10,000,000 |
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”
d. Subsection 4(a) of the Note shall be amended to add “and Subsection 2(c)” after “Subsection 2(b)” and to append the following sentence: “Notwithstanding the foregoing, the amount that Holder may convert under this Note shall in no event exceed the original principal amount of this Note.”.
e. Subsection 5(a)(2) of the Note shall be amended to add “and Subsection 2(c)” after “Subsection 2(b)”.
2. Terms of Note. Except as expressly modified hereby, all terms, conditions and provisions of the Note shall continue in full force and effect. In the event of any inconsistency or conflict between the Note and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control. This Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware (without reference to the conflicts of law provisions thereof).
3. Representations and Warranties of the Company. The Company makes the following representations and warranties to Holders as of the date hereof:
a. Due Authorization; No Conflict.
i. The execution, delivery, and performance by the Company of this Amendment has been duly authorized by all necessary action on the part of the Company.
ii. The execution, delivery, and performance by the Company of this Amendment will not (i) violate any provision of federal, state, or local law or regulation applicable to the Company, except where such violation contemplated in this clause (i) would not reasonably be expected to have a material adverse effect on the Company, (ii) violate the Governing Documents of the Company, or any order, judgment, or decree of any court or other Governmental Authority binding on the Company, (iii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any other Contractual Obligation of the Company, except where such conflict, breach or default contemplated in this clause (iii) would not reasonably be expected to have a material adverse effect on the Company, (iv) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of the Company, (v) require any approval of the Company’s stockholders or any approval or consent of any Person under any other Contractual Obligation of the Company, except where the failure to obtain approval contemplated by this clause (v) would not reasonably be expected to have a material adverse effect on the Company.
iii. The execution, delivery, and performance by the Company of this Amendment will not require any registration or filing with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority or other Person, except where the failure to obtain, perform or provide such registration, filing, consent, approval, notice or other action would not reasonably be expected to have a material adverse effect on the Company.
iv. This Amendment, when executed and delivered by the Company, will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
v. Any Taxes, fees and other governmental charges in connection with the execution and delivery of this Amendment will be paid.
vi. After giving effect to this Amendment, the security interests granted in favor of Holder pursuant to the Security Documents are validly created, perfected Liens and subject only to Permitted Liens.
b. Fraudulent Transfer.
i. The Company is, and after giving effect to the Amendment will be, solvent.
ii. No transfer of Property is being made by the Company and no obligation is being incurred by the Company in connection with this Amendment with the intent to hinder, delay, or defraud either present or future creditors of the Company.
c. Material Adverse Change. Since December 31, 2013, there has been no development or event that has had or would reasonably be expected to result in a Material Adverse Change.
4. Representations and Warranties of the Holder. The Holder makes the following representations and warranties to the Company as of the date hereof:
a. Authorization; No Contravention. The execution, delivery and performance by it of this Amendment: (a) is within its power and authority and has been duly authorized by all necessary action; (b) does not contravene the terms of its Governing Documents; and (c) will not violate, conflict with or result in any breach or contravention of any of its Contractual Obligations, or any order or decree relating to it except where such violation would not reasonably be expected to prohibit or place limitations on this Amendment.
b. Binding Effect. This Amendment has been duly executed and delivered by it and this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
c. Governmental Authorization; Third Party Consent. No approval, consent, compliance, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required on the part of the Holder in connection with the execution, delivery or performance by it or enforcement against it of this Amendment.
5. Entire Agreement. This Amendment and the Transaction Documents constitute the entire and exclusive agreement between the parties with respect to this subject matter.
All previous discussions and agreements with respect to the subject matter of this Amendment are superseded by this Amendment. This Amendment may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Subordinated Secured Convertible Promissory Note as of the date first above written.
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COMPANY: | |
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By: |
/s/ C. Xxxx Xxxxxxx |
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Name: |
C. Xxxx Xxxxxxx |
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Title: |
President |
Signature Page to
Amendment to Subordinated Secured Convertible Promissory Note
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Subordinated Secured Convertible Promissory Note as of the date first above written.
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HOLDER: | |||
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BISON CAPITAL PARTNERS IV, L.P. | |||
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Bison Capital Partners IV GP, L.P. | ||
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General Partner | ||
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By: |
Bison Capital Partners GP, LLC | |
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Its: |
General Partner | |
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By: |
/s/ Xxxxxxx Xxxxxxxxx | ||
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Name: |
Xxxxxxx Xxxxxxxxxx | ||
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Member | ||
Signature Page to
Amendment to Subordinated Secured Convertible Promissory Note
ACKNOWLEDGEMENT
By executing this Acknowledgment, each Guarantor hereby (i) consents to the execution, delivery and performance by Company of this Amendment, and to each of the transactions contemplated by the Amendment, (ii) agrees that nothing contained in the Amendment shall diminish, alter, amend, except to the extent expressly stated in the Amendment, or otherwise affect its respective obligations under the Guarantee Agreement to which it is party, (iii) ratifies and confirms that the Guarantee Agreement to which it is a party shall continue in full force and effect and agrees that it shall continue to be liable under such Guarantee Agreement in accordance with the terms thereof, (iv) represents and warrants that it has no defense, counterclaim or offset right whatsoever with respect to its obligations under the Guarantee Agreement to which it is a party, (v) represents and warrants that its execution and delivery of this Acknowledgement has been duly authorized by all necessary action on the part of such Guarantor, and (vi) represents and warrants that its consents and agreements above are not necessary for the continued validity and enforceability of the Guarantee Agreement to which it is a party.
GUARANTORS:
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Lime Energy Services Co. |
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Landmark Electrical and Mechanical Services, LLC | ||||||
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By: |
/s/ C. Xxxx Xxxxxxx |
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By: |
/s/ C. Xxxx Xxxxxxx | ||||
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Name: |
C. Xxxx Xxxxxxx |
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Name: |
C. Xxxx Xxxxxxx | ||||
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Title: |
President |
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Title: |
President | ||||
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ADVB Acquisition Corp. |
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EnerPath International Holding Company | ||||||
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By: |
/s/ C. Xxxx Xxxxxxx |
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By: |
/s/ C. Xxxx Xxxxxxx | ||||
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Name: |
C. Xxxx Xxxxxxx |
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Name: |
C. Xxxx Xxxxxxx | ||||
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Title: |
President |
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Title: |
President | ||||
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Landmark Services Company |
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EnerPath Services, Inc. | ||||||
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By: |
/s/ C. Xxxx Xxxxxxx |
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By: |
/s/ C. Xxxx Xxxxxxx | ||||
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Name: |
C. Xxxx Xxxxxxx |
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Name: |
C. Xxxx Xxxxxxx | ||||
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Title: |
President |
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Title: |
President | ||||
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Lime Energy Asset Development, LLC |
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EnerPath, Inc.. | ||||||
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By: |
/s/ C. Xxxx Xxxxxxx |
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By: |
/s/ C. Xxxx Xxxxxxx | ||||
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Name: |
C. Xxxx Xxxxxxx |
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Name: |
C. Xxxx Xxxxxxx | ||||
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Title: |
President |
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Title: |
President | ||||
Signature Page to
Guarantor Acknowledgment
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Lime Finance, Inc. |
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By: |
/s/ C. Xxxx Xxxxxxx |
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Name: |
C. Xxxx Xxxxxxx |
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Title: |
President |
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Signature Page to
Guarantor Acknowledgment
