CONSENT AND AMENDMENT OF SECURITIES PURCHASE AGREEMENT,
STOCK TRADING AGREEMENT, STOCKHOLDERS AGREEMENT
AND INVESTOR RIGHTS AGREEMENT
This Consent and Amendment of Securities Purchase Agreement,
Stock Trading Agreement, Stockholders Agreement and Investor Rights
Agreement (this "Consent") is dated as of the 29th day of November,
2001, and is made by and among Newcourt Capital USA Inc., a
Delaware corporation, EP Power Finance, L.L.C., a Delaware limited
liability company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Equity Funding, Inc.,
a Delaware corporation, Originators Investment Plan, L.P, a
Delaware limited partnership, Duke Capital Partners, LLC, a
Delaware limited liability company (collectively, the
"Purchasers"), Newcourt Capital Securities, Inc., a Delaware
corporation (the "Placement Agent"), each of the members of
management (each, an "Officer") of Electric City Corp., a Delaware
corporation (the "Company") whose name is set forth on the
signature pages hereto, and Leaf Mountain Company, LLC ("Leaf
Mountain") and shall become effective upon the Closing under the
Additonal Securities Purchase Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Purchasers and the Company entered into that
certain Securities Purchase Agreement, dated as of July 31, 2001
(as it may be amended from time to time, the "Securities Purchase
Agreement"), whereby the Company sold and the Purchasers bought
shares of the Company's Series A Convertible Preferred Stock, par
value $0.01 per share (the "Series A Preferred Stock"), together
with warrants to purchase Series A Preferred Stock, shares of
Common Stock and warrants to purchase Common Stock; and
WHEREAS, Leaf Mountain and the Company have entered into that
certain Securities Purchase Agreement dated as of November 29, 2001
(as it may be amended from time to time, the "Additional Securities
Purchase Agreement"), whereby the Company has agreed to sell and
Leaf Mountain has agreed to purchase from the Company shares of the
Series A Preferred Stock, together with warrants to purchase Series
A Preferred Stock, shares of Common Stock and warrants to purchase
Common Stock; and
WHEREAS, the Purchasers, the Placement Agent, the Officers and
the Company are parties to that certain Stock Trading Agreement
dated as of July 31, 2001(as it may be amended from time to time,
the "Stock Trading Agreement"); and
WHEREAS, the Purchasers and the Company are parties to that
certain Investor Rights Agreement dated as of July 31, 2001 (as it
may be amended from time to time, the "Investor Rights Agreement");
and
WHEREAS, the Purchasers and the Company are parties to that
certain Stockholders Agreement dated as of July 31, 2001 (as it may
be amended from time to time, the "Stockholders Agreement"); and
WHEREAS, it is a condition precedent to the obligation of Leaf
Mountain to purchase such securities pursuant to the Additional
Securities Purchase Agreement that the parties hereto enter into
this Consent and the Purchasers, the Placement Agent and the
Officers desire to induce Leaf Mountain to purchase such securities
from the Company and accordingly are willing to enter into this
Consent;
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, the parties hereto hereby agree as
follows:
1. Consent. Each of the Purchasers hereby consents to the
Additional Securities Purchase Agreement and the Joinder Agreement
referred to therein and to the consummation of the transactions
contemplated by such agreements.
2. Amendment of Securities Purchase Agreement. The
Purchasers, the Placement Agent, the Officers and the Company
hereby agree that, effective upon closing under the Additional
Securities Purchase Agreement and the execution of the Joinder
Agreement by the Company and Leaf Mountain, the Securities Purchase
Agreement shall be amended such that (a) the term "Additional
Purchaser" wherever used therein refers to Leaf Mountain Company,
LLC, an Illinois limited liability company, and (b) Schedule 2.3
thereto shall be restated in the form attached hereto as "Restated
Schedule 2.3."
3. Amendment of Stock Trading Agreement. The Purchasers, the
Placement Agent, the Officers and the Company hereby agree that,
effective upon closing under the Additional Securities Purchase
Agreement and the execution of the Joinder Agreement by the Company
and Leaf Mountain, the Stock Trading Agreement shall be amended as
follows:
(a) The following additional definition shall be added:
"Leaf Mountain" shall mean Leaf Mountain Company, LLC, an
Illinois limited liability company.
(b) The definitions of Additional Purchase Agreement and
Covered Stock shall be amended and restated in their respective
entireties as follows:
"Additional Purchase Agreement" means the Securities
Purchase Agreement dated as of November 29, 2001 between the
Company and Leaf Mountain providing for the issuance and sale
of Series A Preferred Stock and Series A Preferred Stock
Warrants and Common Stock and warrants to purchase shares of
Common Stock to Leaf Mountain.
"Covered Stock" means for Leaf Mountain:
(a) during the period ending on November 30, 2002, 75% of
total holdings of Common Stock (calculated assuming the
exercise of all rights, options and warrants to purchase
Common Stock or securities convertible or exchangeable for
shares of Common Stock, and the conversion or exchange of all
securities convertible or exchangeable for Common Stock)
purchased under the Additional Purchase Agreement (as adjusted
for stock splits, stock combinations and the like); and
(b) during the period commencing on December 1, 2002, if
the Company has either
(i) closed on the issuance of at least 100,000
additional shares of Series A Preferred Stock for a gross
sales price of not less than $1,000,000 on or before
November 30, 2002, or
(ii) satisfied each of the following requirements:
(A) reported positive consolidated EBITDA (as defined
below) for at least three (3) consecutive months, (B)
continued reporting positive EBITDA for each month during
the period commencing with the first month described in
clause (A) preceding through the end of the month of
November, 2002, and (3) had cash balances of not less
than $3,000,000 on November 30, 2002,
the percentage applicable under clause (a) above. But if the
Company has not met the requirement in clause (b)(i) or all of
the requirements in clause (b)(ii), then during the period
commencing on December 1, 2002 "Covered Stock" means 50% of
Leaf Mountain's total holdings of Common Stock (calculated
assuming the exercise of all rights, options and warrants to
purchase Common Stock or securities convertible or
exchangeable for shares of Common Stock, and the conversion or
exchange of all securities convertible or exchangeable for
Common Stock) purchased under the Additional Purchase
Agreement (as adjusted for stock splits, stock combinations
and the like).
For purposes of this definition of Covered Stock, the term
"EBITDA" means for any period, an amount equal to the
Company's net income (determined in accordance with generally
accepted accounting principles in the United States of
America, applied consistently with past periods) for such
period plus, to the extend deducted in determining such net
income for such period, the following: (1) taxes, (2) interest
expense, (3) depreciation and (4) amortization.
(c) Clause (a) of Section 2.1shall be amended and restated in
its entirety as follows:
(a) During the term of this Agreement, no Party may sell
any of its Common Stock into the public market before the
completion of a Qualified Primary Offering; provided, however,
that if a Qualified Primary Offering is not completed within
eighteen (18) months after the Effective Date, each Party may
sell its Common Stock into the public market, severally and
not jointly, subject to the following conditions:
(d) Clause (iii) of Section 2.1(a) shall be amended and
restated in its entirety as follows:
(3) the number of shares of Common Stock sold by such
Party on any trading day may not exceed five
percent of the Average Daily Trading Volume,
provided that, with respect to the Uncovered Stock
held by Leaf Mountain (but not by any successor to,
or transferee of, Leaf Mountain), the number of
shares sold on any trading day may not exceed the
greater of 10,000 shares or ten percent of the
Average Daily Trading Volume;
(e) Section 2.6 shall be amended and restated in its entirety
as follows:
2.6 Uncovered Stock. During the term of this Agreement,
Leaf Mountain may not sell shares of its Uncovered Stock into
the public market before the completion of a Qualified Primary
Offering; provided, however, that if a Qualified Primary
Offering is not completed within twelve (12) months after the
Effective Date, Leaf Mountain (but not any successor to, or
transferee of Leaf Mountain) may sell its shares of Uncovered
Stock into the public market, but subject to the provisions of
Section 2.1(a)(iii) herein, under this Agreement.
4. Amendment of Stockholders Agreement. The Purchasers, the
Placement Agent, the Officers and the Company hereby agree that,
effective upon closing under the Additional Securities Purchase
Agreement and the execution of the Joinder Agreement by the Company
and Leaf Mountain, the Stockholders Agreement shall be amended as
follows:
(a) The following additional definition shall be added:
"Leaf Mountain" shall mean Leaf Mountain Company, LLC, an
Illinois limited liability company.
(b) The definition of Additional Purchase Agreement shall be
amended and restated in its entirety as follows:
"Additional Purchase Agreement" means the Securities
Purchase Agreement dated as of November 29, 2001 between the
Company and Leaf Mountain providing for the issuance and sale
of Series A Preferred Stock and Series A Preferred Stock
Warrants and Common Stock and warrants to purchase shares of
Common Stock to Leaf Mountain.
(c) Section 2.3 shall be amended and restated in its entirety
as follows:
2.3 Board Observation Rights. If a Holder (other than
the Additional Purchaser or its transferees) (a) possesses the
right to designate for nomination to the Board its nominee
pursuant to Section 2.1(a), or (b) no longer possesses a right
to designate for nomination to the Board its nominee pursuant
to Section 2.1(a) because such Holders and its Affiliates hold
less than an aggregate of 200,000 shares of Series A Preferred
Stock (as adjusted for stock splits, stock combinations and
the like), but such Holder and its Affiliates hold at least an
aggregate of 2,000,000 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, and the exchange or
conversion of all securities convertible or exchangeable for
Common Stock), then such Holders shall be entitled to
designate one individual to serve as a Board Observer. While
the Additional Purchaser holds 100,000 or more shares of
Series A Preferred Stock (as adjusted for stock splits, stock
combinations and the like), then the Additional Purchaser
shall be entitled to designate one individual to serve as a
Board Observer. Any such Board Observer designated pursuant to
this Section will be invited to attend all meetings of the
Board and any Board committees as an observer and to receive
copies of all materials and communications provided to the
Board and Board committees when so distributed. The Board
Observers will not be excluded from any portion of Board
meetings, Board committee meetings or Board discussions except
for those portions (x) in which the Company's counsel
communicates with the Board on matters where Board Observer's
attendance would result in loss of the attorney-client
privilege for the Company and (y) in which, in the good faith
judgment of counsel to the Company, participation of the Board
Observers is not appropriate under applicable law.
(d) Section 2.8 shall be amended and restated in its entirety
as follows:
2.8 Agreement of Additional Purchasers Regarding Special
Approval Rights Vote. In connection with any vote, approval
or written consent of the holders of shares of Series A
Preferred Stock pursuant to Section 2.5 of this Agreement
(and/or Section 6(e) of the Certificate of Designations), each
Additional Purchaser (and its Affiliates or their respective
transferees) other than Leaf Mountain shall vote or otherwise
grant its approval or written consent for its shares of Series
A Preferred Stock (prior to the close of voting but after the
votes, approvals or written consents of all of the other
holders of Series A Preferred Stock casting votes, approvals
or written consents have been tallied) in the same proportion
to the aggregate affirmative and negative votes, approvals or
written consents of the other holders of Series A Preferred
Stock with respect to each proposal submitted for vote,
approval or written consent.
5. Amendment of Investor Rights Agreement. The
Purchasers, the Placement Agent, the Officers and the Company
hereby agree that, effective upon closing under the Additional
Securities Purchase Agreement and the execution of the Joinder
Agreement by the Company and Leaf Mountain, the Investor
Rights Agreement shall be amended as follows:
(a) The following additional definition shall be added:
"Leaf Mountain" shall mean Leaf Mountain Company, LLC, an
Illinois limited liability company.
(b) The definitions of Additional Purchase Agreement, Common
Stock Warrants and Eligible Securities shall be amended and
restated in their respective entireties as follows:
"Additional Purchase Agreement" means the Securities
Purchase Agreement dated as of November 29, 2001 between the
Company and Leaf Mountain providing for the issuance and sale
of Series A Preferred Stock and Series A Preferred Stock
Warrants and Common Stock and warrants to purchase shares of
Common Stock to Leaf Mountain.
"Common Stock Warrants" means (i) the warrants issued to
each Investor pursuant to the Securities Purchase Agreement to
purchase 750,000 shares of Common Stock as evidenced by those
certain Warrant Certificates, of even date herewith, between
each Investor and the Company, as each such Warrant
Certificate may be amended from time to time and (ii) the
warrants issued to Leaf Mountain pursuant to the Additional
Purchase Agreement to purchase 421,875 shares of Common Stock
as evidenced by that certain Warrant Certificate between Leaf
Mountain and the Company, dated as of even date herewith, as
such Warrant Certificate may be amended from time to time.
"Eligible Securities" means (i) the shares of Common
Stock issued or issuable upon the conversion of the Series A
Preferred Stock issued or issuable pursuant to the Securities
Purchase Agreement or the Additional Purchase Agreement or
issued or issuable upon exercise of the Series A Preferred
Stock Warrants and conversion of the Series A Preferred Stock
issued or issuable pursuant to such exercise; (ii) the shares
of Common Stock issued or issuable upon exercise of the
Placement Agent Warrants; (iii) the shares of Common Stock
issued pursuant to the Securities Purchase Agreement; (iv) the
shares of Common Stock issued to Leaf Mountain pursuant to the
Additional Purchase Agreement, (v) the shares of Common Stock
issued or issuable upon exercise of the Common Stock Warrants;
and (vi) 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) and this clause (vi); 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 pursuant
to Rule 144 or sold in a registered public offering that has
been declared effective shall no longer be Eligible Securities
hereunder.
(c) Section 2.1shall be amended by the addition thereto of
the following provision at the end thereof:
(d) In addition to any rights Leaf Mountain may have
under clause (a) above, while it is the holder 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 other holders of Series A Preferred
Stock of such Registration Request.
6. Additional Agreement Re Issuances of Preferred Stock. The
Company agrees with Leaf Mountain that after closing under the
Additional Securities Purchase Agreement and the execution of the
Joinder Agreement by the Company and Leaf Mountain, the Company
will not issue and sell shares of its preferred stock to any Person
on terms more favorable that those which are applicable to Leaf
Mountain unless the Company's board of directors has determined
that in its judgment such subsequent investor provides a
demonstrable synergistic benefit to the business of the Company.
[The balance of this page has been left blank intentionally.
Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this
Consent and Amendment of Securities Purchase Agreement, Stock
Trading Agreement, Stockholders Agreement and Investor Rights
Agreement to be executed as of the day and year first above
written.
MANAGEMENT PURCHASERS
NEWCOURT CAPITAL USA, INC.,
_____/s/ ▇▇▇▇ Mitola____________
▇▇▇▇ ▇▇▇▇▇▇
By:_____/s/_Karen Scowcroft_______
Name: ____Karen Scowcroft________
Title:_______Vice President_________
_____/s/ ▇▇▇▇▇ Kawamura________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
NEWCOURT CAPITAL SECURITIES, INC.,
By:______/s/ ▇▇▇▇▇▇ Sexton_______
_____/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ___________ Name: _____Robert
Sexton_______
▇▇▇▇ ▇▇▇▇▇▇▇ Title:_____Managing
Director_______
EP POWER FINANCE, L.L.C.,
By:_______/s/ ▇▇▇▇ Tarini_________
_____s/s Denis Enberg____________ Name: _____Mark Tarini__________
▇▇▇▇▇ ▇▇▇▇▇▇ (with respect to Title:_______Managing
Director_____
50,000 shares of Common Stock)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
EQUITY FUNDING, INC.
______/s/ ▇▇▇▇▇▇▇ Pokora_________ By:______/s/ ▇▇▇▇▇▇ ▇.
Clayton______
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:______Thomas A. Clayton______
Title: _______Vice
President__________
PLACEMENT AGENT ORIGINATORS INVESTMENT PLAN, L.P.
By: MSDN
NEWCOURT CAPITAL SECURITIES By: MSDW OIP Investors, Inc., its
general partner
INC.
By:_____/s/ ▇▇▇▇▇▇ Sexton_________ By:_____/s/ _Thomas A.
Clayton______
Name:_____Robert Sexton_________ Name:______Thomas A.
Clayton______
Title:______Managing Director______ Title: _______Vice
President_____
DUKE CAPITAL PARTNERS, L.L.C.,
By: _____/s/__Gerald
Stalun___________
Name: _______Gerald Stalun__________
Title: ______Managing
Director_________
LEAF MOUNTAIN COMPANY, LLC
By: ___/s/___John J.
Jiganti___________
Name: ____John J.
Jiganti_____________
Title: ______Manager________________
RESTATED SCHEDULE 2.3
tc \l1 "RESTATED SCHEDULE 2.3
In addition to the terms, conditions and limitations regarding
the Additional Purchase Agreement and the Additional Purchaser set
forth in the Securities Purchase Agreement and the Ancillary
Agreements, the following additional or different terms shall be
reflected in the Additional Purchase Agreement and/or the other
instruments, documents and agreement executed and delivered in
connection therewith:
1. The Additional Purchaser will not have rights to
participate as a lender in the Company's Shared Savings Program
like the Purchasers.
2. The Additional Purchase Agreement shall not contain
covenants contained in Section 4.2 of the Securities Purchase
Agreement (other than the first sentence thereof) and the
Additional Purchaser shall not have rights to participate in any
approvals sought pursuant to Section 4.1 of the Securities Purchase
Agreement.
3. The Placement Agent will not be paid any placement fee
nor will it receive any additional warrants to purchase Common
Stock or Series A Preferred Stock Warrants in respect of the
purchase and sale of securities by the Additional Purchaser or upon
any exercise of any Series A Preferred Stock Warrants or warrants
to purchase shares of Common Stock acquired by the Additional
Purchaser pursuant to the Additional Purchase Agreement.
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