Document:

Prepared by MerrillDirect

Exhibit 10.6

 

FIRST
AMENDMENT TO CONVERTIBLE SENIOR SUBORDINATED PROMISSORY NOTE AND WARRANT
PURCHASE AGREEMENT

            
This First Amendment to Convertible Senior Subordinated Promissory Note and
Warrant Purchase Agreement (the “Amendment”) is made as of July 31, 2001
by and between Electric City Corp., a Delaware corporation (the “Company”),
and Newcourt Capital USA, Inc., a Delaware corporation (“Lender”).

WITNESSETH

            
WHEREAS, the Company and Lender have entered into that certain Convertible
Senior Subordinated Promissory Note and Warrant Purchase Agreement dated as of
April 18, 2001 (the “Agreement”); and

            
WHEREAS, the parties desire to modify the Agreement in certain respects to
increase the aggregate principal amount available for borrowings thereunder to
$3,200,000, and to clarify certain of their obligations thereunder and have
agreed to enter into the following Amendment to the Agreement.

AGREEMENT

            
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

A.        
Definitions.  Capitalized terms used in this
Amendment but not otherwise defined shall have the meanings specified in the
Agreement, unless the context requires otherwise.

B.        
Certain
Amendments. The
Agreement is hereby amended, supplemented or modified, as the case may be, as
indicated below:

(a)        
The definition of “Availability Period” is amended in its entirety and
shall mean “the
period from and after the Closing Date through the earliest to occur of (i) the
closing of a Qualified Transaction and (ii) August 15, 2001.”

(b)        The
definition of “Qualifying Transaction” is amended in its entirety and
shall mean “the issuance and sale by the Company, on or prior to October 16,
2001, of shares of Series A Preferred Stock for an aggregate purchase price of
not less than $8 million, including the outstanding principal amount of the
Notes and accrued but unpaid interest thereon, if the aggregate purchase price
of all such sales of Series A Preferred Stock together with the outstanding
principal amount of the Notes, and accrued but unpaid interest thereon, would
equal or exceed $8 million.”

(c)        
The definition of “Securities Purchase Agreement” is amended in its
entirety and shall mean “the securities purchase agreement in substantially the
form attached hereto as Exhibit “D-1,” together with the exhibits thereto, as
amended from time to time,” which Exhibit “D-1” and exhibits thereto hereby
replace the prior Exhibit “D” and exhibits thereto in their entirety.

(d)        The
definition of “Subsidiary” is amended by deleting the last sentence of
such definition in its entirety.

(e)        
The first sentence of Section 2.1 shall be amended to read, “The aggregate
principal amount of Loans to be made by Lender under this Agreement shall not
exceed $3,200,000 (Three Million Two Hundred Thousand U.S. Dollars) (such
amount being hereinafter referred to as the “Commitment”).”

(f)        
The definition of “Notes” is hereby supplemented to attach the form of
Convertible Senior Subordinated Promissory Note in the form attached hereto as
Exhibit A-1, which form of note shall be issued by the Company in respect of
any Additional Loans advanced on or after the date of this Amendment.

(g)        Section
2.5 is hereby deleted in its entirety.  Concurrently with the execution
and delivery of this Amendment, Lender shall surrender the Bridge Warrant to
the Company for cancellation.  Following such surrender, the Company shall
issue the Placement Agent Warrant (as defined in the Securities Purchase
Agreement) to Newcourt Capital Securities, Inc.

C.        
Registration
Rights Agreement. 
The definition of “Warrants” in the Registration Rights Agreement
between the Company and Lender is amended in its entirety and shall mean “the
Placement Agent Warrants (as defined in the Securities Purchase
Agreement).”  Each of Lender and Newcourt Capital Securities, Inc. shall
be deemed for all intents and purposes a “Holder” under the Registration Rights
Agreement and shall be entitled to all rights and benefits of a “Holder”
thereunder.  Upon the Closing (as defined) under the Securities Purchase
Agreement, the parties hereto agree that the Registration Rights Agreement
shall be terminated automatically and of no further force and effect.

D.        
No Further
Modification. 
Except as expressly provided in this Amendment, the Agreement and the
Registration Rights Agreement remain unmodified and in full force and effect in
accordance with their respective terms.

E.         
Counterparts;
Governing Law. 
This Amendment may be executed in one or more counterparts, each of which shall
be deemed an original, and all of which, taken together, shall constitute one
and the same instrument; and this Amendment shall be governed by the laws of
the State of New York.

[Signatures on Following Page]

            
IN WITNESS WHEREOF,
the Company and Lender have executed this Amendment as of the day and year
first above written.

	COMPANY:	LENDER:
	 	 
	ELECTRIC CITY CORP., a Delaware corporation	NEWCOURT CAPITAL USA, INC., a Delaware corporation
	 	 
	 	 
	 	 
	By: 	 /s/ John Mitola	By:	/s/ Guy Piazza
	 	

	 	

	Name:	 John Mitola	Name:	Guy Piazza
	 	

	 	

	Title:	CEO	Title:	Vice President
	 	

	 	

	 	 
	 	 
	 	 
	PLACEMENT AGENT:	 
	 	 
	NEWCOURT CAPITAL SECURITIES, INC., a Delaware
  corporation	 
	 	 
	 	 
	 	 
	By:	 /s/ Robert W.  Sexton	 
	 	

	 
	Name:	Robert W. Sexton	 
	 	

	 
	Title:	EVP + Managing DirectorPrepared by MerrillDirect

Exhibit 10.7

 

THIS
NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR STATE SECURITIES
LAWS AND NO TRANSFER OF THIS NOTE OR SUCH SECURITIES MAY BE MADE EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND THE RULES AND
REGULATIONS THEREUNDER AND OF ALL APPLICABLE STATE SECURITIES OR “BLUE SKY”
LAWS, OR (B) PURSUANT TO AN EXEMPTION THEREFROM UNDER THE ACT AND ALL
APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

ELECTRIC
CITY CORP.

CONVERTIBLE
SENIOR SUBORDINATED PROMISSORY NOTE

	$1,200,000	July
  31, 2001
	 	New
  York, New York

             FOR VALUE RECEIVED, the
undersigned, Electric City Corp., a Delaware corporation (the “Company”
or “Payor”), hereby promises to pay to Newcourt Capital USA, Inc., a
Delaware corporation (“CIT” or “Payee”), at 1211 Avenue of the
Americas, 22nd Floor, New York, NY 10036 (or at such other place
within the County of New York as Payee shall hereafter direct by notice in
writing to Payor) and its registered assigns, the principal sum of One Million
Two Hundred Thousand Dollars ($1,200,000), together with interest thereon at
the rate provided for herein from the date hereof, with such principal and
interest payable as herein provided.

1.          Loan, Interest Rate and Payment
Provisions.

             1.1        This
Note is one of a duly authorized issue of Notes issued pursuant to the
Convertible Senior Subordinated Promissory Note and Warrant Purchase Agreement,
dated as of April 18, 2001, as amended by the First Amendment thereto made as
of July 31, 2001 (as it may be further amended from time to time, the “Note
Purchase Agreement”) by and between the Company and CIT.  This Note is transferable and assignable to
one or more purchasers, in accordance with applicable law.  The Company agrees to issue from time to
time replacement Notes in the form hereof to facilitate such transfers and
assignments.  The Company shall keep at
its principal office a register (the “Register”) in which shall be
entered the names and addresses of the registered holder of this Note and
particulars of all transfers of such Note. 
References to the “holder” shall mean the Person listed in the Register
as the payee of this Note.  The
ownership of the Note shall be proven by the Register.

             1.2        The
principal amount of this Note outstanding from time to time shall bear interest
from the date hereof, at a rate of interest equal to 9.75% per annum (the “Note
Rate”).  Interest on this Note shall
be computed on the basis of a 365-day year and paid for the actual number of
days elapsed.  Unless previously paid
pursuant to the terms of Section 3, or converted pursuant to the terms
of Section 4.1 hereof, all unpaid interest and principal on this Note
shall be paid in full on the Maturity Date.

             1.3        Unless
previously converted pursuant to Section 4.1 hereof, if payment of the
principal amount of this Note, together with accrued unpaid interest thereon at
the Note Rate, is not paid in full on the Maturity Date, or if any payment of
interest is not paid when due, then interest shall accrue on such unpaid amount
at the Note Rate plus two percent (2%) from and after such date of default to
the date of the payment in full of such unpaid amount (including from and after
the date of the entry of judgment in favor of Payee in an action to collect
this Note).

             1.4        In
no event shall Payee be entitled to receive interest, at an effective rate in
excess of the maximum rate permitted by law.

             1.5        All
payments made by the Payor on this Note shall be in U.S. Dollars.  All payments made by the Payor on this Note
shall be applied first to the payment of accrued but unpaid interest on this
Note and then to the reduction of the unpaid principal balance of this
Note.  In the event the date for the
payment of any amount payable under this Note falls due on a Saturday, Sunday
or public holiday under the laws of the State of New York, the time for payment
of such amount shall be extended to the next succeeding Business Day and
interest at the Note Rate shall continue to accrue on any principal amount so
effected until the payment thereof on such extended due date.

             1.6        Defined
terms used herein shall, unless otherwise defined herein, have the meanings
assigned thereto in the Note Purchase Agreement.  For purposes of this Note, the term “Maturity Date” shall
mean the earliest to occur of:  (i)
September 16, 2001; (ii) the closing of a Qualifying Transaction; and (iii) the
date of acceleration of the indebtedness under this Note pursuant to Section
6.

2.          Replacement of Note.  In case this Note is mutilated, destroyed,
lost or stolen, Payor shall, at its sole expense, execute and deliver a new
Note, in exchange and substitution for this Note.  In the case of destruction, loss or theft, Payee shall furnish to
Payor indemnity reasonably satisfactory to Payor, and in any such case, and in
the case of mutilation, Payee shall also furnish to Payor evidence to its
reasonable satisfaction of the mutilation, destruction, loss or theft of this
Note and of the ownership thereof.  Any
replacement Note so issued shall be in the same outstanding principal amount as
this Note and dated the date to which interest shall have been paid on this
Note or, if no interest shall have yet been paid, dated the date of this Note.

3.          Prepayment.  At the option of Payor, the principal amount
of this Note may be prepaid in whole at any time, or in part from time to time,
without penalty or premium, together with interest thereon accrued through the
date of such prepayment.  Each partial
prepayment of this Note shall first be applied to interest accrued through the
date of prepayment and then to principal.

4.          Conversion.

             4.1        Qualifying
Transaction.  Concurrently with the
closing of a Qualifying Transaction, at the option of Payee, all or any part of
the principal of, and accrued interest on, this Note to the extent then
outstanding and unpaid, may, upon written notice delivered to Payor in the form
attached hereto as Exhibit “A”, be converted into that number of shares
of Series A Preferred Stock and other securities of Payor being sold in such
Qualifying Transaction equal to the amount of principal and interest that Payee
elects to convert divided by the per unit purchase price of the Series A
Preferred Stock and other securities sold in such Qualifying Transaction.  Payor and Payee agree that such conversion
shall be subject to all of the applicable terms and conditions of this Note,
the Note Purchase Agreement and the Securities Purchase Agreement.  Upon conversion of all or any part of the
principal of, and accrued interest on, this Note, Payee shall become a party to
the Securities Purchase Agreement and all documents related to the issuance and
sale of the Series A Preferred Stock and other securities and shall be deemed
to be a purchaser thereunder.

5.          Covenants of Payor.  In addition, Payor covenants and agrees
that, so long as this Note remains outstanding and unpaid, in whole or in part:

             5.1        Payor
will faithfully and in all material respects perform all of its covenants and
agreements under the Transaction Documents.

             5.2        Payor
will not issue any equity or debt securities to any Person or issue or incur
any debt without the prior written consent of Payee; provided, however,
Payor may issue (a) stock options to employees of the Company to purchase
Common Stock not to exceed options to purchase in the aggregate more than
2,000,000 shares of Common Stock; and (b) Common Stock issued pursuant to the
exercise of currently outstanding options and warrants.

             5.3        Payor
will promptly pay and discharge all lawful taxes, assessments and governmental
charges or levies imposed upon it or upon its income and profits, or upon any
of its property, before the same shall become in default, as well as all lawful
claims for labor, materials and supplies that, if unpaid, might become a lien or
charge upon such properties or any part thereof.

             5.4        Payor
will not make any loans or advances to any Persons, other than accounts
receivable arising in the ordinary course of Payor’s business.  Payor will not declare or pay any dividends
or make any distributions on any of its equity securities nor purchase or
otherwise acquire or redeem any of its equity securities.

             5.5        Payor
will, promptly following its obtaining knowledge of the occurrence of an Event
of Default (as defined below) or of any condition or event that, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default, furnish a statement of Payor’s Chief Executive Officer to Payee
setting forth the details of such Event of Default or condition or event and the
action that Payor intends to take with respect thereto.

6.          Events of Default.  The occurrence of any of the following
events shall be deemed an event of default hereunder (each an “Event of
Default”):

             6.1        Payor
shall (a) default in the payment when due of principal or interest on this Note
or (b) default in the due observance or performance of any other covenant,
condition or agreement on the part of Payor to be observed or performed
pursuant to the terms of this Note or any other note issued pursuant to the
Note Purchase Agreement, or Payor shall default in the due observance or
performance of any covenant, condition or agreement on the part of Payor to be
observed or performed pursuant to the terms of any Transaction Document to
which Payor is a party and the same shall continue for ten (10) days after such
default; or

             6.2        The
dissolution of Payor or any of its Subsidiaries or any vote in favor thereof by
the board of directors and/or stockholders of Payor or any of its Subsidiaries,
as the case may be; or

             6.3        Payor
or any of its Subsidiaries shall become insolvent, however evidenced, or make
an assignment for the benefit of creditors, or file with a court of competent
jurisdiction an application for appointment of a receiver or similar official
with respect to it or any substantial part of its assets or there shall be
filed by Payor or any of its Subsidiaries a petition seeking relief under any
provision of the Federal Bankruptcy Code or any other federal or state statute
now or hereafter in effect affording relief to debtors, or there shall be filed
against Payor or any of its Subsidiaries any such application or petition; or

             6.4        Payor
or any of its Subsidiaries shall admit in writing its inability to pay its
debts as they mature; or

             6.5        Payor
or any of its Subsidiaries shall sell all or substantially all of its assets or
merge or be consolidated with or into another entity other than, in the case of
any Subsidiary, Payor or another Subsidiary of Payor; or

             6.6        There
occurs and continues any default or event of default under the Designated
Senior Debt or other indebtedness of the Company with a principal amount
greater than $250,000 and the same entitles the holders thereof to accelerate
payment thereof, or there commences and continues any proceeding to foreclose a
security interest or lien in any material property or assets of Payor or any of
its Subsidiaries upon default in the payment or performance of any debt of
Payor or any of its Subsidiaries; or

             6.7        The
entry against Payor or any of its Subsidiaries of a final judgment for the
payment of money of $10,000 or more by a court of competent jurisdiction if
such judgment has not been discharged (or the discharge thereof not duly
provided for) in accordance with its terms within thirty (30) days of the date
of entry thereof, or a stay of execution thereof procured within thirty (30)
days from the date of entry thereof and, within such period (or such longer
period during which execution of such judgment shall have been effectively
stayed) an appeal therefrom shall not have been prosecuted and the execution
thereof caused to be stayed during such appeal; or

             6.8        An attachment or garnishment shall have
been levied against any material assets of Payor or any of its Subsidiaries and
such levy is not vacated, bonded or otherwise terminated within thirty (30)
days after the date of the effectiveness of the levy.

Upon
the occurrence of any Event of Default and at any time thereafter, Payee shall
have the right to declare the principal of, accrued but unpaid interest on, and
all other amounts payable under this Note to be forthwith due and payable,
whereupon all such amounts shall be immediately due and payable to Payee,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived; provided, however, in case of the
occurrence of an Event of Default under Sections 6.3 or 6.4, such
amounts shall become immediately due and payable without any such declaration
by Payee.

7.          Suits for Enforcement and Remedies.  If any one or more Events of Default shall
occur and be continuing, Payee may proceed to (a) protect and enforce
Payee’s rights either by suit in equity or by action at law, or both, whether
for the specific performance of any covenant, condition or agreement contained in
this Note or in any agreement or document referred to herein or in aid of the
exercise of any power granted in this Note or in any agreement or document
referred to herein, (b) enforce the payment of this Note, or
(c) enforce any other legal or equitable right of Payee under this
Note.  No right or remedy herein or in
any other agreement or instrument conferred upon Payee is intended to be
exclusive of any other right or remedy, and each and every such right or remedy
shall be cumulative and shall be in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise.

8.          Subordination.  This Note is subordinated to principal and
accrued interest and fees on Designated Senior Debt to the extent provided in
the Note Purchase Agreement.  The
Company agrees, and each holder by accepting this Note agrees, to such
subordination.

9.          Unconditional Obligation; Fees,
Waivers, etc.

             9.1        The
obligations to make the payments provided for in this Note are absolute and
unconditional and not subject to any defense, set-off, counterclaim,
rescission, recoupment or adjustment whatsoever.

             9.2        If
Payee shall seek to enforce the collection of any amount of principal of and/or
interest on this Note, there shall be immediately due and payable from Payor,
in addition to the then unpaid principal of, and accrued unpaid interest on,
this Note, all costs and expenses incurred by Payee in connection therewith,
including, without limitation, reasonable attorneys’ fees, costs of suit and
disbursements, including reasonable out-of-pocket expenses of Payee or its
attorneys.

             9.3        No
forbearance, indulgence, delay or failure to exercise any right or remedy with
respect to this Note shall operate as a waiver, nor as an acquiescence in any
default, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy.

             9.4        Any
term, covenant, agreement or condition of this Note may, with the consent of
Payor, be amended or compliance therewith may be waived (either generally or in
a particular instance and either retroactively or prospectively), if Payor
shall have obtained the consent in writing of Payee.

             9.5        Payor
hereby expressly waives demand and presentment for payment, notice of
nonpayment, notice of dishonor, protest, notice of protest, bringing of suit,
and diligence in taking any action to collect amounts called for hereunder, and
shall be directly and primarily liable for the payment of all sums owing and to
be owing hereon, regardless of and without any notice, diligence, act or
omission with respect to the collection of any amount called for hereunder or
in connection with any right, lien, interest or property at any and all times which
Payee had or is existing as security for any amount called for hereunder,
except as specifically provided herein.

10.        Miscellaneous.

             10.1      The headings of the various paragraphs of this Note are for
convenience of reference only and shall in no way modify any of the terms or
provisions of this Note.

             10.2      Notices, demands or other communications given or made in
connection with this Note shall be in writing and delivered in accordance with
the provisions of Section 9.3 of the Note Purchase Agreement.

             10.3      This Note and the obligations of Payor and the rights of Payee
shall be governed by and construed in accordance with the internal substantive
laws of the State of New York without giving effect to the choice of laws rules
thereof.

             10.4      PAYOR (A) AGREES THAT
ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE
WILL BE INSTITUTED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK SITTING
IN THE BOROUGH OF MANHATTAN, OR ANY FEDERAL COURT IN THE STATE OF NEW YORK,
(B) WAIVES ANY OBJECTION THAT PAYOR MAY HAVE NOW OR HEREAFTER BASED UPON
FORUM NON CONVENIENS OR TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING,
AND (C) IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE COURTS
LOCATED IN THE STATE OF NEW YORK IN ANY SUCH SUIT, ACTION OR PROCEEDING.  PAYOR FURTHER AGREES TO ACCEPT AND
ACKNOWLEDGE SERVICE OF ANY AND ALL PROCESS THAT MAY BE SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE COURTS OF THE STATE OF NEW YORK, AND AGREES THAT
SERVICE OF PROCESS UPON THE PAYOR, MAILED BY CERTIFIED MAIL TO PAYOR’S ADDRESS,
WILL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON PAYOR, IN ANY
SUIT, ACTION OR PROCEEDING.  FURTHER,
BOTH PAYOR AND PAYEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION TO ENFORCE THIS
NOTE.

             10.5      This Note shall bind the Company and its successors and
assigns.

[SIGNATURE PAGE FOLLOWS]

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed as
of the date first written above.

 

	ELECTRIC CITY CORP.
	a Delaware corporation
	 
	 
	By    
  /s/ John Mitola
	 	

	 
	 	Name:	John Mitola
	 	Title:	Chief Executive Officer
					

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[SIGNATURE
PAGE TO CONVERTIBLE SENIOR SUBORDINATED PROMISSORY NOTE]

 

	CONVERTIBLE SENIOR
  SUBORDINATED
	

	PROMISSORY NOTE
	

	 
	GRID
	

 

	 	 	 	 	 	Principal Amount of
  Note 	 	 	 
	 	 	 	 	 	

	 	 	 
	 	 	 	 	 	and/or Interest Repaid
  or 	 	 	 
	 	 	 	 	 	

	 	 	 
	DATE	Amount of Loan	 	Note Rate	 	Converted and Date	 	Notation  Made By	 
	

	

	 	

	 	

	 	

	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

EXHIBIT A

Form of Conversion
Notice

Dated:
____________________, ____

To:     Electric City Corp. (the “Company”)

             Reference is made to the
Convertible Senior Subordinated Promissory Note and Warrant Purchase Agreement
(as it may be amended from time to time, the “Agreement”) dated April
18, 2001,  as amended.  Terms defined therein are used herein as
therein defined.

             The undersigned, pursuant to the
provisions set forth in the Agreement and the Note, hereby irrevocably elects
and agrees to convert (i) outstanding principal under the Note in the
amount of $_______, and (ii) accrued but unpaid interest thereon in the
amount of $_______, which together are convertible in the aggregate into
_______ units of Series A Preferred Stock and other securities of the Company.

             The undersigned hereby represents
that it is converting such principal and accrued interest under the Note for
its own account for investment purposes and not with the view to any sale or
distribution and that the undersigned will not offer, sell or otherwise dispose
of such securities in violation of applicable securities laws.

	Newcourt Capital USA, Inc.,
	a Delaware corporation
	 
	 
	By:
	 	

	 	Name:  
  John Mitola
	 	

	 	Title:

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