Exhibit 2
JOINDER AND SECOND AMENDMENT TO INVESTOR RIGHTS AGREEMENT
This Joinder and Second Amendment to Investor Rights Agreement (this
"Agreement") is dated as of June 27, 2003 and is by and among Electric City
Corp., a Delaware corporation (the "Company"), Newcourt Capital USA Inc., a
Delaware corporation, Newcourt Capital Securities, 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, Leaf Mountain Company, LLC, an Illinois
limited liability company, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual, Cinergy Ventures
II, LLC, a Delaware limited liability company("Cinergy"), SF Capital Partners, a
British Virgin Islands company ("SFCP"), ▇▇▇▇ ▇▇▇▇▇▇ Hurvis Revocable Trust
("Hurvis Trust") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, the parties hereto other than Cinergy, SFCP, ▇▇▇▇▇▇▇ and
Hurvis are parties to that certain Investor Rights Agreement dated as of July
31, 2001, as amended (as in effect on the date hereof, the "Existing
Agreement"); and
WHEREAS, Cinergy, SFCP, ▇▇▇▇▇▇▇ and Hurvis, along with ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and the Company, are parties to that certain Securities Purchase
Agreement, dated as of June 27, 2003 (as it may be amended from time to time,
the "Series D Securities Purchase Agreement"), whereby the Company has agreed to
sell and Cinergy, SFCP, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ (collectively, the
"Series D Investors") have agreed to purchase shares of the Company's Series D
Preferred Stock (as herein defined) together with shares of the Company's Common
Stock (as defined in the Existing Agreement) and warrants to purchase additional
shares of Series D Preferred Stock and warrants to purchase additional shares of
Common Stock; and
WHEREAS, it is a condition precedent to the obligation of each of the
Series D Investors to purchase such shares of Series D Preferred Stock and
Common Stock and such warrants that the parties hereto enter into this Agreement
and the Company and the other parties hereto are agreeable to the same; and
WHEREAS, on the date hereof, the Series D Investors will also be
acquiring certain shares of Series A Preferred Stock, Common Stock and warrants
to purchase shares of Common Stock from EP Power Finance L.L.C. and Duke Capital
Partners, LLC and accordingly shall become Series A Investors hereunder and the
Parties desire to evidence the same by execution and delivery of this Agreement;
NOW, THEREFORE, the Parties agree as follows:
1. Definitions. All terms capitalized but not defined herein shall have
the meaning attributable to such terms in the Existing Agreement, except where
the context otherwise requires.
2. Amendment of Existing Agreement. The Existing Agreement is hereby
amended as follows:
A. The following new defined terms are added to the definitions in
Section 1.1:
"Series D Investors" means, collectively, each of the
following in his or its capacity as a holder of Series D Preferred
Stock, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual, Cinergy Ventures II, LLC, a
Delaware limited liability company, SF Capital Partners, a British
Virgin Islands company, ▇▇▇▇ ▇▇▇▇▇▇ Hurvis Revocable Trust, an Illinois
trust, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual. "Series D Investor" means
any of such entities in such capacity.
"Series D Preferred Stock" means shares of the Company's
Series D Convertible Preferred Stock, par value $0.01 per share, issued
pursuant to the Series D Securities Purchase Agreement, or issued
pursuant to the Series D Preferred Stock Warrants, or issued as
dividends upon shares of the Series D Preferred Stock issued pursuant
to the Series D Securities Purchase Agreement or the Series D Preferred
Stock Warrants.
"Series D Preferred Stock Warrants" means the warrants issued
to the Series D Investors to purchase 37,500 shares of Series D
Preferred Stock as evidenced by those certain warrant certificates
dated June __, 2003 issued by the Company to the Series D Investors, as
they may be amended from time to time, as they may be amended from time
to time with the consent of the Investors.
"Series D Securities Purchase Agreement" means that certain
Securities Purchase Agreement dated as of June __, 2003 by and among
the Series D Investors and the Company, as it may be amended from time
to time with the consent of the Investors.
B. The definition of Common Stock Warrants is amended and restated in
its entirety as follows:
"Common Stock Warrants" means (a) the warrants issued to the
Series A Investors pursuant to the Securities Purchase Agreement and
the Additional Purchase Agreement, as each may be amended from time to
time, (b) the warrants to purchase up to 281,250 shares of Common Stock
issued to the Series C Investor pursuant to the Series C Securities
Purchase Agreement, as amended from time to time, and (c) the warrants
to purchase up to 22,562 shares of Common Stock issued to the Series D
Investors pursuant to the Series D Securities Purchase Agreement, as
amended from time to time
C. The definition of Eligible Securities is amended and restated in its
entirety as follows:
"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; (ii) the shares of Common Stock issued
or issuable upon the conversion of the Series C Preferred Stock issued
or issuable pursuant to the Series C Securities Purchase Agreement;
(iii) the shares of Common Stock issued or issuable upon the conversion
of the Series D Preferred Stock issued or issuable pursuant to the
Series D Securities Purchase Agreement or issued or issuable upon
exercise of the Series D Preferred Stock Warrants and conversion of the
Series D Preferred Stock issued or issuable pursuant to such exercise
(iv) the shares of Common Stock issued pursuant to Securities Purchase
Agreement; (v) the shares of Common Stock issued pursuant to the Series
C Securities Purchase Agreement; (vi) the shares of Common Stock issued
pursuant to the Series D Securities Purchase Agreement, (vii) the
shares of Common Stock issued or issuable upon exercise of the Common
Stock Warrants or upon exercise of the Placement Agent Warrants; and
(viii) 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), (vii) and this clause (viii); 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.
D. The definition of Investors is amended and restated in its entirety
as follows:
"Investors" means the Series A Investors, the Placement Agent,
the Series C Investor and the Series D Investors, collectively, and
"Investor" means any of them.
E. The definition of Parties is amended and restated in its entirety as
follows:
"Parties" means the Series A Investors, the Placement Agent,
the Series C Investor, the Series D Investors and the Company,
collectively, and "Party" means any of them.
F. The definition of Series A Investors is amended and restated in its
entirety as follows:
"Series A Investors" means, collectively, each of the
following in his or its capacity as a holder of Series A Preferred
Stock, 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, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, an individual, Cinergy Ventures II, LLC, a Delaware limited
liability company, SF Capital Partners, a British Virgin Islands
company, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual, and ▇▇▇▇ ▇▇▇▇▇▇ Hurvis
Revocable Trust, an Illinois trust. "Series A Investor" means any of
such entities in such capacity.
G. The definition of Series C Investor is amended and restated in its
entirety as follows:
"Series C Investor" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, in his capacity
as the holder of the Series C Preferred Stock.
G. Clause (d) of Section 3.1 is amended and restated in its entirety as
follows:
(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
therefore) 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 the Series A Preferred Stock or the Series C Preferred
Stock or the Series D Preferred Stock or the exercise of the Common
Stock Warrants or the Placement Agent Warrants, (iv) to any Series D
Preferred Stock issued upon the exercise of Series D Preferred Stock
Warrants, (v) to the issuance of securities pursuant to options,
warrants, notes or other rights to acquire securities of the Company
which were outstanding on July 31, 2001, (vi) to a Qualified Primary
Offering, (vii) to the issuance of Series A Preferred Stock and Series
A Preferred Stock Warrants pursuant to the Additional Purchase
Agreement in compliance with Section 2.3 of the Securities Purchase
Agreement, or (viii) to stock splits, stock dividends or like
transactions.
G. Clause (ii) of Section 4.2 is amended and restated in its entirety
as follows:
(ii) If to an Investor: at the address set forth in the
Securities Purchase Agreement, the Additional Purchase Agreement, the
Series C Securities Purchase Agreement or the Series D Purchase
Agreement, as applicable.
H. Schedule I is amended and restated in its entirety as follows:
SCHEDULE I - INVESTORS
Newcourt Capital USA Inc.
Newcourt Capital Securities, Inc.
EP Power Finance, L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Equity Funding, Inc.
Originators Investment Plan, ▇.▇.
▇▇▇▇ Capital Partners, LLC
Leaf Mountain Company, LLC
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Cinergy Ventures II, LLC
SF Capital Partners
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ Hurvis Revocable Trust
3. Joinder. Each of the parties to this Agreement hereby agrees that
from and after date hereof each of Cinergy Ventures II, LLC, SF Capital
Partners, ▇▇▇▇▇▇▇ and Hurvis Trust shall be a party to and be bound by the
Investor Rights Agreement, as amended by this Agreement, as an Investor and a
Holder thereunder (as such terms are defined therein).
4. Representations. Each party to this Agreement hereby represents and
warrants to each of the other parties to this Agreement that this Agreement has
been duly executed and delivered by such party and constitutes the valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles. Each of Cinergy
Ventures II, LLC, SF Capital Partners, ▇▇▇▇▇▇▇ and Hurvis Trust hereby
acknowledges that it has received a copy of the Investor Rights Agreement.
5. Miscellaneous.
(a) All terms, covenants, agreements, representations, warranties and
undertakings in this Agreement shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
(b) Changes in or additions to this Agreement may be made or compliance
with any term, covenant, agreement, condition or provision set forth herein may
be omitted or waived, only in accordance with the provisions of the Investor
Rights Agreement, as amended hereby.
(c) This Agreement shall be governed and construed in accordance with
the laws of the State of New York without giving effect to the conflict of laws
principles thereof.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be deemed but one and the same instrument and each of which shall be
deemed an original, and 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 a representation that an
original executed counterpart hereof will be delivered.
(e) The section and paragraph headings herein are for convenience only
and shall not effect the construction hereof.
(f) The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision.
(g) The obligations of each Investor under the Investor Rights
Agreement are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the
obligations of any other Investor under the Investor Rights Agreement. Nothing
contained in this Agreement or the Investor Rights Agreement, and no action
taken by any Investor or other party hereto pursuant hereto or thereto, shall be
deemed to constitute the Investors and such parties as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that such parties are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Investor Rights Agreement as amended hereby.
[Balance of page intentionally left blank; signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Joinder and
Second Amendment to Investor Rights Agreement to be executed as of the day and
year first above written.
COMPANY HOLDERS
ELECTRIC CITY CORP., NEWCOURT CAPITAL USA INC.,
a Delaware corporation a Delaware corporation
By:/s/▇▇▇▇ ▇▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:Chief Executive Officer Title: Vice President
EP POWER FINANCE, L.L.C.,
a Delaware limited liability company
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
EQUITY FUNDING, INC., a Delaware
corporation
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
ORIGINATORS INVESTMENT PLAN, L.P., a Delaware limited partnership
By: MSDW OIP Investors, Inc., its general partner
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DUKE CAPITAL PARTNERS, LLC,
a Delaware limited liability company
By: /s/▇▇▇▇▇▇ Magna
Name: ▇▇▇▇▇▇ Magna
Title: Managing Director
NEWCOURT CAPITAL SECURITIES, INC., a Delaware corporation
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
LEAF MOUNTAIN COMPANY, LLC,
an Illinois limited liability company
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CINERGY VENTURES II, LLC,
a Delaware limited liability company
By: /s/▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
SF CAPITAL PARTNERS LTD, a British Virgin
Islands company
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇ ▇▇▇▇▇▇ HURVIS REVOCABLE
TRUST, an Illinois trust
By: /s/▇▇▇▇ ▇▇▇▇▇▇ Hurvis
Name: ▇▇▇▇ ▇▇▇▇▇▇ Hurvis
Title: Trustee
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇