EXHIBIT 99.5
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Amended and Restated Investor Rights Agreement, dated as of March
19, 2004 (as it may be amended, restated or modified and in effect from time to
time, this "Agreement"), is made by and among Electric City Corp., a Delaware
corporation (the "Company"), and each of the parties set forth on Schedule I
attached hereto from time to time (collectively, the "Investors" and, together
with the Company, the "Parties") and shall become effective on the Closing Date
(as defined in the Redemption and Exchange Agreement (as defined below)).
WITNESSETH
WHEREAS, each of the Investors (other than CIT Capital Securities Inc.)
is a holder of certain shares of the Company's outstanding Series A Convertible
Preferred Stock ("Series A Preferred"), Series C Convertible Preferred Stock
("Series C Preferred") and/or Series D Convertible Preferred Stock ("Series D
Preferred" and, together with the Series A Preferred and the Series C Preferred,
the "Existing Preferred Stock"), and of shares of the Company's Common Stock;
and
WHEREAS, each of the Investors is a holder of Common Stock Warrants (as
herein defined); and certain of the Investors are also holders of certain
warrants to purchase additional shares of Series D Preferred Stock; and
WHEREAS, the Parties have previously entered into that certain Investor
Rights Agreement dated as of July 31, 2001, as amended (the "Prior Agreement");
WHEREAS, the Company and each of the Investors (other than CIT Capital
Securities Inc.) have entered into that certain Redemption and Exchange
Agreement, dated as of the date hereof (as it may be amended, restated or
modified and in effect from time to time, the "Redemption and Exchange
Agreement"), whereby the Company will redeem for cash and/or exchange for shares
of the Company's newly created Series E Convertible Preferred Stock, par value
$0.01 per share (the "Series E Preferred Stock"), all of the outstanding shares
of Existing Preferred Stock held by the Investors, and certain Investors will
also exchange certain warrants to purchase shares of the Series D Preferred for
warrants to purchase shares of Series E Preferred Stock, all as more fully
described in the Redemption and Exchange Agreement; and
WHEREAS, it is a condition to the obligations of such Investors to
exchange such securities pursuant to the Redemption and Exchange Agreement that
the parties hereto enter into this Agreement; and
WHEREAS, the Parties desire that this Agreement supersede and replace
the Prior Agreement in its entirety;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. All terms capitalized but not defined herein
shall have the meaning attributable to such terms in the Redemption and Exchange
Agreement, except where the context otherwise requires. The following additional
terms when used in this Agreement, including its preamble and recitals, shall,
except where the context otherwise requires, have the following respective
meanings, such meanings to be equally applicable to the singular and plural
forms thereof:
"Additional Securities Purchase Agreement" means the
Securities Purchase Agreement dated as of November 29, 2001 between the
Company and Leaf Mountain, as amended and in effect from time to time.
"Agreement" shall have the meaning set forth in the preamble
of this Agreement.
"Closing Date" shall have the meaning given to it in the
Redemption and Exchange Agreement.
"Commission" means the United States Securities and Exchange
Commission or other governmental authority at the time administering
the Securities Act.
"Common Stock" means and includes the Company's authorized
common stock, par value $0.0001 per share.
"Common Stock Warrants" means, collectively, the warrants to
purchase Common Stock which are listed on Schedule II to this
Agreement, and any warrants which may hereafter be issued by the
Company pursuant to transfer, partial exercise or subdivision of such
warrants as provided therein.
"Company" shall have the meaning set forth in the preamble of
this Agreement.
"Eligible Securities" means (i) the shares of Common Stock
issued or issuable upon the conversion of the Series E Preferred Stock
issued or issuable pursuant to the Redemption and Exchange Agreement;
(ii) the shares of Common Stock issued or issuable upon exercise of the
Series E Preferred Stock Warrants and conversion of the Series E
Preferred Stock issued or issuable pursuant to such exercise; (iii) the
shares of Common Stock issued or issuable pursuant to conversion of any
shares of Series E Preferred Stock issued as dividends in respect of
outstanding shares of Series E Preferred Stock; (iv) the shares of
Common Stock issued or issuable upon exercise of the Common Stock
Warrants; (v) the shares of Common Stock issued pursuant to the
Securities Purchase Agreement, the Additional Securities Purchase
Agreement, the Series C Securities Purchase Agreement and the Series D
Securities Purchase Agreement; (vi) the shares of Common Stock issued
prior to the Closing Date pursuant to conversion of shares of Series A
Preferred; and (vii) any other shares of Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with
respect to or in exchange for or in replacement of, the shares
described in clauses (i), (ii), (iii), (iv), (v), (vi) and this clause
(vii); provided, however, that the foregoing definition shall exclude
in all cases any Eligible Securities sold by a Holder in a transaction
in which its rights under this Agreement are not also assigned; and
provided further that any Eligible Securities sold
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pursuant to Rule 144 or sold in a registered public offering that has
been declared effective shall no longer be Eligible Securities
hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any similar or successor federal statute, and the rules
and regulations of the Commission thereunder, all as the same may be in
effect at the time.
"Existing Preferred Stock" shall have the meaning set forth in
the first WHEREAS clause of this Agreement.
"Fully-Exercising Investor" shall have the meaning set forth
in Section 3.1 hereof.
"Holder" means a registered holder of record of outstanding
Eligible Securities or securities convertible into or exercisable for,
directly or indirectly, Eligible Securities.
"Investors" shall have the meaning set forth in the preamble
hereto.
"Leaf Mountain" means Leaf Mountain Company, LLC, an Illinois
limited liability company.
"Notice" shall have the meaning set forth in Section 3.1
hereof.
"Parties" shall have the meaning set forth in the preamble
hereto.
"Person" means and includes an individual, a corporation, a
limited liability company, an association, a partnership, a trust or
estate, a government or any department or agency thereof.
"Piggyback Request" shall have the meaning set forth in
Section 2.2(a) hereof.
"Qualified Primary Offering" means a firmly underwritten
primary registered public offering of the Common Stock by the Company
that raises at least $35 million in gross proceeds at a price of at
least $5.00 per share (as adjusted for stock splits, stock
combinations, recapitalizations and the like).
"Redemption and Exchange Agreement" shall have the meaning set
forth in the fourth WHEREAS clause of this Agreement.
"Registration Request" shall have the meaning set forth in
Section 2.1 hereof.
"Requesting Holder" shall have the meaning set forth in
Section 2.1 hereof.
"Rule 144" means Rule 144 promulgated by the Commission under
the Securities Act, as in effect from time to time.
"Securities Act" means the Securities Act of 1933, as amended,
and any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same may be in
effect at the time.
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"Securities Purchase Agreement" means that certain Securities
Purchase Agreement, dated as of July 31, 2001, by and among the
Company, certain of the Investors and certain other Persons, as amended
and in effect from time to time.
"Series C Securities Purchase Agreement" means that certain
Securities Purchase Agreement, dated as of May 31, 2002, between the
Company and Xxxxxxx Xxxxxxx, as amended and in effect from time to
time.
"Series D Securities Purchase Agreement" means that certain
Securities Purchase Agreement, dated as of June 27, 2003, by and among
the Company and certain of the Investors, as amended and in effect from
time to time.
"Series E Preferred Stock" shall have the meaning set forth in
the fourth WHEREAS clause of this Agreement.
"Series E Preferred Stock Warrants" means the warrants to
purchase shares of Series E Preferred Stock issued to certain of the
Investors pursuant to the Redemption and Exchange Agreement.
"Shares" shall have the meaning set forth in Section 3.1
hereof.
ARTICLE II
REGISTRATION RIGHTS
2.1 Requested Registration.
(a) At any time after the Closing Date, Holders holding at least a
majority of the shares constituting Eligible Securities may deliver to the
Company a written request that the Company file and use its best efforts to
cause to become effective a registration statement under the Securities Act with
respect to such number of the Eligible Securities owned by the Holders as shall
be specified in such request (a "Registration Request"), including, if specified
in the Registration Request, a "shelf" registration statement on Form S-3 (or if
Form S-3 is not then available, Form S-1 or such other form that the Company is
eligible to use with respect to the Eligible Securities) for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act; provided, however, that the Company shall not be obligated to effect any
such registration pursuant to this Section 2.1 if the aggregate value on the
date of the Registration Request of the Eligible Securities to be registered
thereon is less than $5,000,000. The Company shall not be required to file and
use its best efforts to cause to become effective, pursuant to a Registration
Request under this Section 2.1 more than four (4) registration statements at the
demand of the Holders. The party (or parties) delivering a Registration Request
is hereinafter referred to as the "Requesting Holder."
(b) As soon as practicable following the receipt of a Registration
Request, the Company will use its best efforts to register under the Securities
Act, for public sale in accordance with the method of disposition specified in
such Registration Request, the number of shares of Eligible Securities specified
in such Registration Request (and the number of Eligible Securities specified in
all notices received from Holders within 20 business days after notice of the
Registration Request has been delivered pursuant to Section 2.2 hereof). The
Company shall
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also be entitled to include in any registration statement filed pursuant to a
Registration Request, for sale in accordance with the method of disposition
specified in such Registration Request, such number of shares of Common Stock as
the Company shall desire to sell for its own account or for the account of other
security holders or both. If the method of sale designated is an underwritten
public offering, the managing underwriter or underwriters must be reasonably
acceptable to both the Requesting Holder (or the holders of a majority of the
shares of Eligible Securities held by all parties comprising the Requesting
Holder if more than one party is the Requesting Holder) and the Company, which
acceptance shall not be unreasonably withheld. Notwithstanding the foregoing
provisions of this Section 2.1(b), to the extent that, in the opinion of the
underwriter or underwriters (if the method of disposition shall be an
underwritten public offering), marketing considerations require the reduction of
the number of shares of Common Stock covered by any such registration, the
number of shares of Common Stock to be registered and sold pursuant to such
registration shall be reduced as follows:
(i) first, the number of shares of Common Stock
to be registered on behalf of the Company shall be reduced (to
zero, if necessary); and
(ii) second, the number of shares of Common Stock
to be registered on behalf of Persons other than the Holders
and their Affiliates, if any, shall be reduced (to zero, if
necessary) pro rata according to the number of shares of
restricted Common Stock held by each; and
(iii) third, the number of shares of Eligible
Securities to be registered on behalf of the Holders and their
Affiliates shall be reduced pro rata according to the number
of shares of Eligible Securities held by each.
(c) Notwithstanding anything to the contrary contained herein, the
exercise by any Holder of any right hereunder with respect to shares of Eligible
Securities shall not affect or diminish any other rights of such Holder
hereunder with respect to any other securities of the Company held by such
Holder.
(d) In addition to any rights Leaf Mountain may have under clause
(a) above, while it is the holders of not less than an aggregate of 750,000
shares of the Common Stock (calculated assuming the exercise of all rights,
options, warrants to purchase Common Stock or securities convertible or
exchangeable for shares of Common Stock), may deliver to the Company, on a
single occasion, a Registration Request that the Company file and use its best
efforts to cause to become effective, a registration statement under the
Securities Act with respect to Eligible Securities comprising not less than
750,000 shares of Common Stock, on the terms and subject to the other conditions
applicable to any Registration Request under this Section. Within forty-eight
(48) hours of receipt of such Registration Request, the Company shall provide
written notice to all of holders of Series E Preferred Stock of such
Registration Request.
2.2 Piggyback Registration.
(a) If the Company at any time after the Closing Date proposes to
register Common Stock under the Securities Act for sale to the public (including
registrations pursuant to Section 2.1 hereof), whether for its own account or
for the account of other security holders or both
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(except registration statements on Form X-0, X-0 or another form not available
for registering the Eligible Securities for sale to the public), each such time
it will give written notice to all Holders of its intention to do so. Upon the
written request of any Holder (a "Piggyback Request"), given within 20 business
days after receipt of any such notice, to register any of its Eligible
Securities, the Company shall, subject to Section 2.2(b) below, cause the
Eligible Securities as to which registration shall have been so requested to be
covered by the registration statement proposed to be filed by the Company.
(b) In the event that any registration statement described in this
Section 2.2 shall relate, in whole or in part, to an underwritten public
offering of shares of Common Stock, the Eligible Securities to be registered
must be sold through the same underwriters as have been selected by the Company
(or agreed to pursuant to Section 2.1 hereof, if applicable). Otherwise, the
method of distribution of the Eligible Securities to be sold by any Holder
making a Piggyback Request shall be as specified therein. Except with respect to
all Holders (and their respective Affiliates) in the case of a registration
statement filed pursuant to a Registration Request under Section 2.1 hereof, the
number of shares of Common Stock to be included in such registration statement
on account of any Person may be reduced if and to the extent that the
underwriter or underwriters shall be of the opinion that such inclusion would
materially adversely affect the marketing of the total number of shares of
Common Stock proposed to be sold, and the number of shares to be registered and
sold by each Person (other than the Company) shall be reduced pro rata according
to the relative number of fully diluted shares of Common Stock owned by such
Person. Notwithstanding the foregoing provisions of this Section 2.2, the
Company may withdraw any registration statement referred to in this Section 2.2
(other than a registration statement filed pursuant to a Registration Request
under Section 2.1) without thereby incurring any liability for such withdrawal
to any requesting Holder.
2.3 Registration Procedures. If and whenever the Company is
required by the provisions of Sections 2.1 or 2.2 to effect the registration of
any Eligible Securities under the Securities Act, the Company shall:
(a) prepare and file with the Commission a registration statement
with respect to such securities that will permit the public sale thereof in
accordance with the method of distribution specified in the applicable
Registration Request, and the Company shall use its best efforts (i) to cause
such registration statement to be filed within 60 days of receipt of the
Registration Request, (ii) to cause such registration statement to be declared
effective as promptly as practicable and (iii) to maintain the effectiveness of
such registration statement for a period of not less than 90 days or, in the
case of a registration statement pursuant to a Registration Request under
Section 2.1, until such times as all securities registered thereunder have been
sold;
(b) promptly prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to effect and maintain the
effectiveness of such registration statement for the period specified in Section
2.3(a) and as to comply with the provisions of the Securities Act with respect
to the disposition of all Eligible Securities covered by such registration
statement in accordance with the intended method of disposition set forth in
such registration statement for such period, including such amendments or
supplements as are necessary to cure any untrue statement or omission referred
to in Section 2.3(e)(vi);
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(c) provide to the managing underwriter or underwriters and not
more than one counsel for all underwriters, and provide to the Holders of
Eligible Securities to be included in such registration statement and not more
than one counsel for all such Holders, the opportunity to participate in the
preparation of (i) such registration statement, (ii) each prospectus relating
thereto and included therein or filed with the Commission, and (iii) each
amendment or supplement thereto;
(d) make available for inspection by the parties referred to in
Section 2.3(c) such financial and other information and books and records of the
Company, and cause the officers, directors and employees of the Company, and
counsel and independent certified public accountants of the Company, to respond
to such inquiries, as shall be reasonably necessary, in the judgment of
respective counsel to such Holders and such underwriter or underwriters, to
conduct a reasonable investigation within the meaning of the Securities Act;
provided, however, that each such Person shall be required to retain in
confidence and not to disclose to any other Person any information or records
reasonably designated by the Company in writing as being confidential until such
time as such information becomes a matter of public record (whether by virtue of
its inclusion in such registration statement or otherwise), unless (i) such
Person shall be required to disclose such information pursuant to the subpoena
or order of any court or other governmental agency or body having jurisdiction
over the matter or (ii) such information is required to be set forth in such
registration statement or the prospectus included therein or in an amendment to
such registration statement or an amendment or supplement to such prospectus in
order that such registration statement, prospectus, amendment or supplement, as
the case may be, shall not contain an untrue statement of a material fact or
omit to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and such information has not been
so set forth after the request by a Holder to such effect;
(e) immediately notify the Persons referred to in Section 2.3(c)
and (if requested by any such Person) confirm such advice in writing, (i) when
such registration statement or any prospectus included therein or any amendment
or supplement thereto has been filed and, with respect to such registration
statement or any such amendment, when the same has become effective; (ii) of any
written or material comments by the Commission with respect thereto or any
request by the Commission for amendments or supplements to such registration
statement or prospectus or for additional information; (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for that purpose;
(iv) if at any time the representations and warranties of the Company
contemplated by Section 2.3(1)(i) cease to be true and correct in all material
respects; (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Eligible Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; or (vi) at any time when a prospectus is required to be delivered under
the Securities Act, of the occurrence or failure to occur of any event, or any
other change in law, fact or circumstance, as a result of which such
registration statement, prospectus or any amendment or supplement thereto, or
any document incorporated by reference in any of the foregoing, contains an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing;
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(f) take reasonable efforts to prevent or obtain the withdrawal at
the earliest practicable date of any order suspending the effectiveness of such
registration statement or any post-effective amendment thereto;
(g) if requested by the managing underwriter or underwriters or
the Holders of at least a majority of the Eligible Securities being sold in
connection with an underwritten public offering, promptly incorporate in a
prospectus supplement or post-effective amendment such information as such
managing underwriter or underwriters or such Holders reasonably specify should
be included therein relating to the terms of the sale of such Eligible
Securities, including, without limitation, information with respect to the
number of Eligible Securities being sold to such underwriters, the names and
descriptions of such Holders, the purchase price being paid therefore by such
underwriters and any other terms of the underwritten (or best efforts
underwritten) offering of the Eligible Securities to be sold in such offering,
and make all required filings of such prospectus supplement or post-effective
amendment promptly after notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(h) furnish to each Holder of Eligible Securities included in such
registration and each underwriter and counsel for Holder, if any, thereof a copy
of such executed registration statement, each such amendment and supplement
thereto (in each case including all exhibits thereto, whether or not such
exhibits are incorporated by reference therein) and such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and any summary prospectus) and each amendment or supplement thereto,
in conformity with the requirements of the Securities Act, as such Holder and
the managing underwriter, if any, may reasonably request in order to facilitate
the disposition of such Eligible Securities by such Holder or by the
participating underwriters;
(i) use its best efforts to (i) register or qualify the Eligible
Securities to be included in such registration statement under such other
securities laws or blue sky laws of such jurisdictions as any Holder of such
Eligible Securities and each managing underwriter, if any, thereof shall
reasonably request, (ii) keep such registrations or qualifications in effect for
so long as is necessary to effect the disposition of such Eligible Securities in
the manner contemplated by the registration statement, the prospectus included
therein and any amendment or supplement thereto and (iii) take any and all such
actions as may be reasonably necessary or advisable to enable such Holder and
any participating underwriter or underwriters to consummate the disposition in
such jurisdictions of such Eligible Securities;
(j) cooperate with the Holders of the Eligible Securities included
in such registration and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Eligible Securities
to be sold, which certificates shall be printed, lithographed or engraved, or
produced by any combination of such methods, and which shall not bear any
restrictive legends; and, in the case of an underwritten public offering, enable
such Eligible Securities to be registered in such names as the underwriter or
underwriters may request at least two (2) business days prior to any sale of
such Eligible Securities;
(k) provide not later than the effective date of the registration
statement a transfer agent and registrar for such Eligible Securities and a
CUSIP number for all Eligible Securities;
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(l) enter into an underwriting agreement, engagement letter,
agency agreement, "best efforts" underwriting agreement or similar agreement, as
appropriate, and take such other actions in connection therewith as the Holders
of at least a majority of the Eligible Securities to be included in such
registration shall reasonably request in order to expedite or facilitate the
disposition of such Eligible Securities, and in connection therewith, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten public offering, (i) make such representations
and warranties to the Holders of such Eligible Securities included in such
registration and the underwriters, if any, in form, substance and scope as are
customarily made in an underwritten public offering; (ii) obtain an opinion of
counsel to the Company in customary form and covering such matters as are
customarily covered by such an opinion as the Holders of at least a majority of
such Eligible Securities and the underwriters, if any, may reasonably request,
addressed to each participating Holder and the underwriters, if any, and dated
the effective date of such registration statement (or, if such registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement); (iii) obtain a "cold comfort" letter from the
independent certified public accountants of the Company addressed to the Holders
of the Eligible Securities included in such registration and the underwriters,
if any, dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, also dated the date of
the closing under the underwriting agreement), such letter to be in customary
form and covering such matters as are customarily covered by such letters; (iv)
deliver such documents and certificates as may be reasonably requested by the
Holders of at least a majority of the Eligible Securities included in such
registration and the underwriters, if any, to evidence compliance with clause
(i) of this Section 2.3(1) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company; and (v)
undertake such obligations relating to expense reimbursement, indemnification
and contribution as are provided in Sections 2.4, 2.5 and 2.6 hereof;
(m) cause all such Eligible Securities registered hereunder to be
listed on each securities exchange or over-the-counter market on which similar
securities issued by the Company are then listed, and, if not so listed, to be
listed on the NASD automated quotation system and, if listed on the NASD
automated quotation system, use its commercially reasonable efforts to secure
designation of all such Eligible Securities covered by the registration
statement as a NASDAQ "national market system security" within the meaning of
Rule 11Aa2-1 of the Commission or, failing that, to secure NASDAQ authorization
for such Eligible Securities and, without limiting the generality of the
foregoing, to use its commercially reasonable efforts to arrange for at least
two market makers to register as such with respect to such Eligible Securities
with the NASD;
(n) make available on a reasonable basis senior management
personnel of the Company to participate in, and cause them to cooperate with the
selling Holders of Eligible Securities or the managing underwriter in any
underwritten offering in connection with "road show" and other customary
marketing activities, including "one-on-one" meetings with prospective
purchasers of the Eligible Securities to be sold in the underwritten offering
and otherwise to facilitate, cooperate with, and participate in each proposed
offering contemplated herein and customary selling efforts related thereto, in
each case to the same extent as if the Company were engaged in a primary
registered offering of its capital stock; and
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(o) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
Notwithstanding the provisions of Section 2.3(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become effective, shall be suspended, without incurring any
liability to any Holder, for a period not to exceed 90 days if there exists at
the time material non-public information relating to the Company that, in the
reasonable opinion of the Company, should not be disclosed, provided that any
such suspension shall occur no more than once in any 12-month period. In such an
event, the Company shall promptly inform all Holders of the Company's decision
to defer filing of a registration statement and shall notify all Holders
promptly (but in any event not later than upon the expiration of the 90-day
period specified in the immediately preceding sentence) of the recommencement of
the Company's best efforts to file the registration statement and to cause the
registration statement to become effective. If the Company shall so postpone the
filing of a registration statement, (i) the Company shall use its reasonable
best efforts to limit the delay to as short a period as is practicable and (ii)
the Holders shall have the right to withdraw the request for registration by
giving written notice to the Company at any time. In the event of such
withdrawal, such request shall not be counted for purposes of the number of
requests for registration to which the Holders are entitled pursuant to Section
2.1(a).
In connection with each registration of Eligible Securities hereunder,
each Holder thereof will furnish to the Company in writing such information with
respect to it and its Affiliates and the proposed distribution by it and its
Affiliates as shall be reasonably necessary in order to assure compliance with
applicable federal and state securities laws. Each such Holder also agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to the Company or of the
occurrence of any other event, in either case as a result of which any
prospectus relating to such registration contains an untrue statement of a
material fact regarding such Holder or the distribution of such Eligible
Securities or omits to state any material fact regarding such Holder or the
distribution of such Eligible Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to the Company any
additional information required to correct and update such previously furnished
information or required so that such prospectus shall not contain, with respect
to such Holder or the distribution of such Eligible Securities, an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
light of the circumstances then existing. Each Holder further agrees that upon
receipt of any notice referred to in the immediately preceding sentence, or upon
receipt of any notice from the Company pursuant to Section 2.3(e)(vi) hereof,
such Holder and its Affiliates shall forthwith discontinue the disposition of
Eligible Securities pursuant to the registration statement applicable to such
Eligible Securities until such Holder shall have received copies of an amended
or supplemented registration statement or prospectus, and if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's (and its
Affiliates') possession of the prospectus covering such Eligible Securities at
the time of receipt of such notice.
2.4 Expense. The Company shall pay all expenses incurred in
complying with Sections 2.1 and 2.2, including without limitation all
registration and filing fees, printing
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expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses of one counsel for the selling Holders, fees
and expenses (including counsel fees) incurred in connection with complying with
state securities or "blue sky" laws (other than those that by law must be paid
by the selling security holders), transfer taxes, fees of transfer agents and
registrars and stock exchange listing fees, but excluding all fees and expenses
of counsel for the underwriters, if any, and all underwriting discounts and
selling commissions applicable to the sale of Eligible Securities. All expenses
of participating sellers other than those assumed by the Company in this
Agreement shall be borne by such sellers in proportion to the number of shares
of Eligible Securities sold by each seller or as they may otherwise agree.
2.5 Indemnification.
(a) In the event of a registration of Eligible Securities under
the Securities Act pursuant to Sections 2.1 or 2.2, the Company shall indemnify
and hold harmless, to the fullest extent permitted by law, each selling Holder,
its Affiliates, each of their respective officers, directors, employees and
agents, each underwriter of such Eligible Securities and each other Person, if
any, who controls such selling Holder or underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such selling Holder, Affiliate, their respective officer,
director, employee, agent, underwriter or controlling Person may become subject
under the Securities Act or otherwise or in any action in respect thereof, and
will reimburse each such Person for any legal or other expenses reasonably
incurred by he, she or it in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
Eligible Securities were registered under the Securities Act pursuant to
Sections 2.1 or 2.2, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company shall not be liable to any such selling
Holder, Affiliate, officer, director, employee, agent, underwriter or
controlling Person in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in conformity with
information furnished by such selling Holder, Affiliate officer, director,
employee, agent, underwriter or controlling Person in writing specifically for
use in such registration statement or prospectus.
(b) Each selling Holder of such Eligible Securities, severally and
not jointly, will indemnify and hold harmless the Company, each underwriter and
each Person, if any, who controls the Company or any underwriter within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each other seller of
securities registered by the registration statement covering such Eligible
Securities and each Person, if any, who controls such seller, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or any such officer, director, underwriter, other seller or controlling Person
may become subject under the Securities Act or otherwise, and shall reimburse
the Company and each such officer, director, underwriter, other seller and
controlling Person for any legal or other expenses reasonably incurred by them
in connection with
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investigating or defending any such loss, claim, damage, liability or action,
insofar as such losses, claims, damages or liabilities (or action in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of material fact or omission or alleged omission of a material fact
required to be stated therein made in reliance upon and in conformity with
information pertaining to such Holder furnished in writing to the Company by
such Holder specifically for use in the registration statement or prospectus
relating to such Eligible Securities. Notwithstanding the immediately preceding
sentence, the aggregate liability of each such Holder hereunder shall not in any
event exceed the net proceeds received by such Holder from the sale of Eligible
Securities covered by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party, if a claim in
respect thereof is to be made against an indemnifying party hereunder, shall
notify such indemnifying party in writing thereof, but the omission so to notify
such indemnifying party shall not relieve such indemnifying party from any
liability that it may have to any indemnified party other than under this
Section 2.5 and, unless the failure to so provide notice materially adversely
affects or prejudices such indemnifying party's defense against any action,
shall not relieve such indemnifying party from any liability that it may have to
any indemnified party under this Section 2.5. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from such indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, such indemnifying party
shall not be liable to such indemnified party under this Section 2.5 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it that are different from or additional to
those available to the indemnifying party or if the interests of the indemnified
party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume and undertake the defense of such action, with
the expenses and fees of such separate counsel and other expenses related to
such defense to be reimbursed by the indemnifying party as incurred.
(d) No indemnifying party shall be liable for any amounts paid in
a settlement effected without the consent of such indemnifying party, which
consent shall not be unreasonably withheld or delayed. No indemnifying party
shall, without the indemnified party's prior written consent, consent to entry
of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the plaintiff to the indemnified party
of a release from all liability in respect of such claim or litigation.
(e) The reimbursements required by this Section 2.5 shall be made
by periodic payment during the course of the investigation or defense, as and
when bills are received and expenses incurred.
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(f) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director, employee, agent, or
controlling Person of such indemnified party and shall survive the transfer of
securities.
2.6 Contribution. If for any reason the indemnity set forth in
Section 2.5 is unavailable or is insufficient to hold harmless an indemnified
party, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by said indemnity
(a) in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and such indemnified party on the other hand
(determined by reference to, among other things, whether the actual or alleged
untrue statement of a material fact or actual or alleged omission to state a
material fact relates to information supplied by the indemnifying party or such
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission) or (b) if the allocation provided by Section 2.6(a) above is not
permitted by applicable law or provides a lesser sum to such indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative fault of the indemnifying party and such
indemnified party but also the relative benefits received by the indemnifying
party on the one hand and such indemnified party on the other hand, as well as
any other relevant equitable considerations.
The Parties agree that it would not be just and equitable if
contribution pursuant to this Section 2.6 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in such paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 2.6, a Holder shall not be required to contribute any
amount in excess of the amount by which the net proceeds of the sale of Eligible
Securities sold by such Holder and distributed to the public exceeds the amount
of any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
that is not guilty of such fraudulent misrepresentation.
2.7 Underwriting Agreement. If Eligible Securities are to be sold
pursuant to a registration statement in an underwritten offering pursuant to
Sections 2.1 or 2.2, the Company and each selling Holder of Eligible Securities
shall enter into a written agreement with the managing underwriter or
underwriters selected in the manner herein provided in such form and containing
such provisions as are reasonably satisfactory to the Company and each such
selling Holder and as are customary in the securities business for such an
arrangement among such underwriter or underwriters, each such selling Holder and
companies of the Company's size and investment stature. No Holder of Eligible
Securities may participate in any underwritten sale of Eligible Securities
pursuant to Sections 2.1 or 2.2 hereof unless such Holder agrees to sell such
Holder's securities in accordance with any underwriting arrangements approved by
the Persons entitled hereunder to specify the method of distribution of the
securities being registered and
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completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements. Notwithstanding anything to the contrary
contained herein, no Holder of Eligible Securities shall be required to make any
representations and warranties to the Company or the underwriters other than
representations or warranties regarding the identity of such Holder, such
Holder's Eligible Securities, such Holder's ability to transfer title to such
Holder's Eligible Securities and such Holder's intended method of distribution
or any other representations required by applicable law.
2.8 Limitations on Subsequent Registration Rights. If, subsequent
to the date hereof, the Company grants to any holders or prospective holders of
the Company's securities the right to require that the Company register any
securities of the Company under the Securities Act, such registration rights
shall be granted subject to the rights of the Holders to include all or part of
their Eligible Securities in any such registration on the terms and conditions
set forth in Section 2.2.
2.9 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit the Holders to sell securities
of the Company to the public without registration or pursuant to a registration
on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144, at all times so long as
the Company remains subject to the periodic reporting requirements
under Sections 13 or 15(d) of the Exchange Act;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the Exchange Act,
as is necessary to enable the Holders to use Form S-3 for the sale of
its Eligible Securities;
(c) file with the SEC in a timely manner all reports and
other documents as may be required of the Company under the Securities
Act and the Exchange Act; and
(d) furnish to each Holder, so long as such Holder owns
any Eligible Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time after it so qualifies), (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
2.10 Market-Standoff Agreement.
(a) Market-Standoff Period; Agreement. If requested by the Company
and the managing underwriter of Common Stock of the Company, each Holder agrees
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any
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securities of the Company (other than those included in the registration)
without the prior written consent of such underwriter, for such period of time
(not to exceed 180 days) from the effective date of a registration statement
filed under the Securities Act as may be requested by such underwriter and to
execute an agreement reflecting the foregoing as may be requested by such
underwriter at the time of the Company's underwritten public offering; provided
that such agreement shall only apply to the first such registration statement of
the Company including securities to be sold on its behalf to the public after
the date hereof.
(b) Limitations. The obligations described in Section 2.10(a)
shall apply only if all officers and directors of the Company and all
significant equity holders of the Company enter into similar agreements, and
shall not apply to a registration relating solely to employee benefit plans, or
to a registration relating solely to a transaction pursuant to Rule 145 under
the Act. If any Person, including any officer or director of the Company and any
equity holder of the Company, is released from its obligations under Section
2.10(a) or such similar arrangements, all Holders shall be released from such
obligations.
2.11 Subsequent Public Offering. At any time following the Closing,
upon request of Holders holding a majority of the Eligible Securities, the
Company shall use its best efforts to conduct a firmly underwritten primary
registered public offering of its Common Stock as promptly as practical
following the receipt of such notice, if, in the opinion of a major investment
banking firm selected by Holders holding a majority of the Eligible Securities,
the public equity markets would be receptive to such an offering.
ARTICLE III
PARTICIPATION RIGHTS
3.1 Right of First Offer. Subject to the terms and conditions
specified in this Section 3.1, the Company hereby grants to each Investor a
right of first offer with respect to future sales by the Company of its Shares
(as hereinafter defined).
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
each Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by registered or
certified mail ("Notice") to the Investors stating (i) its bona fide
intention to offer such Shares, (ii) the number of such Shares to be
offered and (iii) the price and terms, if any, upon which it proposes
to offer such Shares.
(b) Within 30 calendar days after delivery of the Notice,
each Investor may elect to purchase or obtain, at the price and on the
terms specified in the Notice, up to that portion of such Shares that
equals the proportion that the sum of Common Stock acquired from time
to time pursuant to this Article III and the number of shares of
Eligible Securities held by such Investor (and its Affiliates) bears to
the total number of shares of Common Stock then outstanding (assuming
full conversion and exercise of all convertible or exercisable
securities). The Company shall promptly, in writing, inform each
Investor that elects to purchase all the Shares available to it (each,
a "Fully-
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Exercising Investor") of any other Investor's failure to do likewise.
During the 10-day period commencing after receipt of such information,
each Fully-Exercising Investor (and its Affiliates) shall be entitled
to obtain its initial allocation of the Shares, plus, if desired, that
portion of the Shares for which Investors were entitled to subscribe
but that were not subscribed for by the Investors that is equal to the
proportion that the number of shares of Eligible Securities issued and
held by such Fully-Exercising Investor (and its Affiliates) bears to
the total number of shares of Eligible Securities issued and held by
all such Fully-Exercising Investors (and their Affiliates) desiring to
purchase such unsubscribed Shares.
(c) The Company may, during the 90-day period following
the expiration of the periods provided in Section 3.1(b) hereof, offer
the remaining unsubscribed portion of the Shares to any Person or
Persons at a price not less than, and upon terms no more favorable to
the offeree than those specified in, the Notice. If the Company does
not enter into an agreement for the sale of the Shares within such
period, or if such agreement is not consummated within 90 days of the
execution thereof, the rights provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first reoffered to
the Investors in accordance herewith.
(d) The right of first offer in this Section 3.1 shall
not be applicable (i) to the issuance or sale of Common Stock (or
options therefor) to employees, consultants and directors, pursuant to
plans or agreements approved by the Board of Directors for the purpose
of soliciting or retaining their services, (ii) to the issuance of
securities in connection with a bona fide business acquisition of or by
the Company, whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise, (iii) to Common Stock issued upon
conversion of shares of Series E Preferred Stock or the exercise of the
Common Stock Warrants, or the Series E Preferred Stock issued upon the
exercise of Series E Preferred Stock Warrants, (iv) to the issuance of
securities pursuant to currently outstanding options, warrants, notes
or other rights to acquire securities of the Company, (v) to a
Qualified Primary Offering, (vi) to the issuance of Series E Preferred
Stock as dividends upon outstanding Series E Preferred Stock, or (vii)
to stock splits, stock dividends or like transactions.
ARTICLE IV
MISCELLANEOUS
4.1 Assignment; Third Party Beneficiaries. All covenants and
agreements contained in this Agreement by or on behalf of any of the signatories
shall bind and inure to the benefit of the respective successors and assigns of
the signatories, whether so expressed or not. If any transferee of any Holder of
Eligible Securities shall acquire Eligible Securities in any manner (other than
by way of a registered public offering), whether by operation of law or
otherwise, such Eligible Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Eligible Securities such
transferee shall be entitled to receive the benefits of a Holder and be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement. The benefits to which any such permitted
transferee shall be entitled shall include, without limitation, the rights to
register Eligible Securities under Sections 2.1 or 2.2 hereof; provided,
however, that any such transferee shall not be entitled to
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deliver to the Company a Registration Request pursuant to Section 2.1 hereof
unless such permitted transferee acquired from its transferor at least 1,000,000
Eligible Securities; provided, however, that the transfer of registration rights
held pursuant to this Agreement to an Affiliate, shareholder, equity holder or
officer of any Investor or its Affiliates shall be without restriction as to
minimum shareholding.
4.2 Notices. All notices, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered by hand, (b) sent by telecopier (with receipt confirmed),
provided that a copy is mailed by registered or certified mail, return receipt
requested or (c) when received by the addressee, if sent by Express Mail,
Federal Express or other express delivery service (receipt requested), in each
case to the appropriate addresses and telecopier numbers set forth below (or to
such other addresses and telecopier numbers as a party may designate as to
itself by notice to the other parties):
(i) If to the Company:
0000 Xxxxxxxxx Xxxx
Xxx Xxxxx Xxxxxxx, XX 00000-0000
Fax No. 000-000-0000
Attention: General Counsel.
(ii) If to an Investor: at the address set forth in the
Redemption and Exchange Agreement.
(iii) If to a Holder other than an Investor, at the most
recent address for such Holder maintained in the
books and records of the Company.
4.3 Governing Law. Except as to matters governed by the General
Corporation Law of the State of Delaware and decisions thereunder of the
Delaware courts applicable to Delaware corporations, which shall be governed by
such laws and decisions, this Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Illinois.
4.4 Amendments. This Agreement may not be amended or modified, and
no provision hereof may be waived, except in writing, and any such writing shall
only be effective with respect to a Party who has executed such writing. The
failure of any of the Parties to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver of that term or
deprive such Party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
4.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart for each of the parties hereto. Delivery by facsimile by any of the
parties hereto of an executed counterpart of this Agreement shall be effective
as an original executed counterpart hereof and shall be deemed an original
executed counterpart hereof and a representation that an original executed
counterpart hereof will be delivered.
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4.6 Remedies. The Parties acknowledge that there may be no
adequate remedy at law if any Party fails to perform any of its obligations
hereunder and that each Party may be irreparably harmed by any such failure, and
accordingly agree that each Party, in addition to any other remedy that it may
be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other Party under this Agreement in
accordance with the terms and conditions of this Agreement in any court of the
United States or any state thereof having jurisdiction.
4.7 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
4.8 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Investors and Holders shall be enforceable to the fullest extent permitted by
law.
4.9 Entire Agreement. Effective as of the date hereof, this
Agreement amends and restates in its entirety the Prior Agreement. This
Agreement is intended by the Parties as a final expression of their agreement
and a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings other than those set forth or
referred to herein or therein. This Agreement supersedes all prior agreements
and understandings between the Parties with respect to such subject matter.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the Parties have executed this Amended and Restated
Investor Rights Agreement as of the day and year first above written.
COMPANY INVESTORS
ELECTRIC CITY CORP., NEWCOURT CAPITAL USA INC.,
a Delaware corporation a Delaware corporation
By: _____________________________ By: __________________________________
Name: Xxxx Xxxxxx Name: ________________________________
Title: Chief Executive Officer Title: _______________________________
CIT CAPITAL SECURITIES, INC. a
Delaware corporation
By: __________________________________
Name: ________________________________
Title: _______________________________
XXXXXX XXXXXXX XXXX XXXXXX
EQUITY FUNDING, INC., a Delaware
corporation
By: __________________________________
Name: ________________________________
Title: _______________________________
ORIGINATORS INVESTMENT PLAN,
L.P., a Delaware limited partnership
By: MSDW OIP Investors, Inc., its
general partner
By: __________________________________
Name: ________________________________
Title: _______________________________
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CINERGY VENTURES II, LLC,
a Delaware limited liability company
By: __________________________________
Name: ________________________________
Title: _______________________________
LEAF MOUNTAIN COMPANY, LLC, an
Illinois limited liability company
By: __________________________________
Name: ________________________________
Title: _______________________________
SF CAPITAL PARTNERS LTD., a British
Virgin Islands company
By: __________________________________
Name: ________________________________
Title: _______________________________
AUGUSTINE FUND LP, an Illinois limited
partnership
By: __________________________________
Name: ________________________________
Title: _______________________________
TECHNOLOGY TRANSFORMATION
VENTURE FUND, LP, a Delaware limited
partnership
By: __________________________________
Name: ________________________________
Title: _______________________________
______________________________________
XXXXXXX X. XXXXXXX, an individual
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______________________________________
XXXXX X. XXXXXXX, an individual
______________________________________
XXXX XXXXXXX, an individual
XXXX XXXXXX HURVIS REVOCABLE
TRUST, an Illinois trust
By: __________________________________
Name: ________________________________
Title: _______________________________
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