8K

0001393905-15-000085.txt : 20150227 0001393905-15-000085.hdr.sgml : 20150227 20150227164203 ACCESSION NUMBER: 0001393905-15-000085 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20150224 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150227 DATE AS OF CHANGE: 20150227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Blue Earth, Inc. CENTRAL INDEX KEY: 0001422109 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 980531496 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36607 FILM NUMBER: 15659874 BUSINESS ADDRESS: STREET 1: 2298 HORIZON RIDGE PARKWAY STREET 2: SUITE 205 CITY: HENDERSON STATE: NV ZIP: 89502 BUSINESS PHONE: 702-263-1808 MAIL ADDRESS: STREET 1: 2298 HORIZON RIDGE PARKWAY STREET 2: SUITE 205 CITY: HENDERSON STATE: NV ZIP: 89502 FORMER COMPANY: FORMER CONFORMED NAME: Genesis Fluid Solutions Holdings, Inc. DATE OF NAME CHANGE: 20091106 FORMER COMPANY: FORMER CONFORMED NAME: CHERRY TANKERS INC. DATE OF NAME CHANGE: 20081113 FORMER COMPANY: FORMER CONFORMED NAME: CHERRY TANKERS, INC. DATE OF NAME CHANGE: 20081112 8-K 1 bblu_8k.htm CURRENT REPORT 8K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) February 24, 2015

BLUE EARTH, INC.

(Exact Name of Registrant as Specified in Its Charter)

NEVADA

(State or Other Jurisdiction of Incorporation)


333-148346	98-0531496
(Commission File Number)	(IRS Employer Identification No.)

2298 Horizon Ridge Parkway, Suite 205

Henderson, NV 89052

(Address of Principal Executive Offices) (Zip Code)

(702) 263-1808

(Registrant's Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 24, 2015, Blue Earth, Inc. (the “Company”), each of the Company’s wholly-owned subsidiaries, Blue Earth Tech ,Inc., Blue Earth Generator, Inc., Blue Earth Solar, Inc. Blue Earth Energy Management Services, Inc., Blue Earth Finance, Inc., Blue Earth Energy Partners, LLC, Blue Earth Power Performance Solutions Inc., Blue Earth Energy Power Solutions, Inc., Blue Earth CHP, Inc., Maili PV 01, LLC (“Maili”), Sumter Heat & Power, LLC (“Sumter”), and ecoLegacy Gas & Power, LLC (collectively, the “Subsidiaries”) and TCA Global Credit Master Fund, LP (the “Lender”) entered into a Second Amendment to Credit Agreement, originally entered into as of January 31, 2013, but effective February 22, 2013 (the “Amended Credit Agreement”), dated as of February 24, 2015. Under the terms of the Amended Credit Agreement, the Lender has committed to lend a total of $4,000,000 to the Company. The Company previously borrowed an aggregate of $3 million, all of which was repaid.

On February 24, 2015, the Company borrowed $3 million (the Loan”) under a Replacement, Amended and Restated Promissory Note (the “Note”). The proceeds from the Loan will be used by the Company to fund, in part, (i) completion of the solar facility being built by Maili for Sun Financial, LLC, and (ii) completion of the combined heat and power (CHP) plant being built by Sumter for Pilgrim’s Pride Chicken. The Loan is secured by (i) all of the capital stock of Sumter and all income associated therewith; (ii) the Company’s interest under a Membership Interest Purchase Agreement for the sale of the capital stock of Maili to Sun Financial, LLC; and (iii) 400,000 shares of newly issued Series D Convertible Preferred Stock solely convertible in the event of a default in payment. A copy of the Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of Series D Convertible Preferred Stock is filed as an exhibit to this Form 8-K.

The Note accrues interest at the rate of twelve (12%) percent per annum, with interest commencing on April 1, 2015 and monthly thereafter through and including July 1, 2015. A principal payment of $1 million is due on the earlier of July 1, 2015 or the closing of the sale of the Maili facility. The remaining loan shall be amortized with payments commencing on August 1, 2015 and monthly thereafter. The Loan may be prepaid at any time by the Company.

TCA Fund Management Group as the Investment Manager for TCA Global Credit Master Fund acts as an advisor to many small companies from its offices in the United States, United Kingdom and Australia. TCA Fund is a short duration, absolute return fund specializing in senior secured lending to small, mainly listed companies in the U.S., Canada, Western Europe and Australia. In connection with the Amended Credit Agreement, the Company entered into an Advisory Agreement pursuant to which the Company agreed to pay an Advisory Fee of $300,000, payable in three equal installments of $100,000 between August 24, 2015 and February 24, 2016.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

See discussion in Item 1.01.

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.

See discussion in Item 1.01. The issuance of the Series D Preferred Stock was in reliance of the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933 based on representations made by the Lender in the Amended Credit Agreement. The transaction did not involve an underwriter or placement agent or sales commission.

ITEM 5.03 AMENDMENT TO ARTICLES OF INCORPORATION AND BY-LAWS; CHANGE IN FISCAL YEAR

See discussion in Item 1.01. The Company’s Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of Series D Convertible Preferred Stock is attached hereto as Exhibit 3.1.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.


Exhibit Number	Description

3.1	Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of Series D Convertible Preferred Stock.

10.1	Second Amendment to Credit Agreement, dated as of February 24, 2015 by and among the Company, the Lender and the Subsidiaries.

10.2	Replacement, Amended and Restated Promissory Note, issued by the Company and the Subsidiaries to the Lender, issued as of February 24, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: February 27, 2015	BLUE EARTH, INC.


	By: /s/ Johnny R. Thomas
	Name: Dr. Johnny R. Thomas
	Title: Chief Executive Officer

EX-3.1 2 bblu_31.htm CERTIFICATE OF DESIGNATION ex-3.1

EXHIBIT 3.1

CERTIFICATE OF DESIGNATION

OF THE RIGHTS, PREFERENCES,

PRIVILEGES AND RESTRICTIONS OF

SERIES D CONVERTIBLE PREFERRED STOCK

BLUE EARTH, INC.

(Pursuant to NRS 78.1955)

Blue Earth, Inc. (the “Corporation”), a corporation organized and existing under the Nevada Revised Statutes (the “NRS”), by the undersigned Johnny R. Thomas, Chief Executive Officer and John C. Francis, Secretary, respectively, do hereby certify that the following resolutions were adopted by the Board of Directors of the Corporation (the “Board of Directors”) on February 14, 2015, pursuant to authority of the Board of Directors as required by Section 78.1955 of the NRS:

WHEREAS, the Corporation and TCA Global Credit Master Fund, LP (“TCA”) have entered into a Credit Agreement dated as of January 31, 2013, but made effective as of February 22, 2013, as amended by that certain First Amendment to Credit Agreement dated as of September 11, 2013, as further amended by Second Amendment to Credit Agreement dated as of February 24, 2015 (collectively, as further amended, supplemented, renewed or modified from time to time, the “Credit Agreement”); and

WHEREAS, the Corporation’s “Obligations” (as defined in the Credit Agreement) are secured by, among other things, the Series D Preferred Stock (as defined below); and

WHEREAS, the designations, preferences, and the relative, participating, optional, or other rights, and the qualifications, limitations, and restrictions of the Series D Preferred Stock were provided for in a resolution adopted by the Board of Directors of the Corporation on February 14, 2015, pursuant to authority granted to and expressly vested in it by the provisions of the Articles of Incorporation of the Corporation. In accordance with the provisions of Article Third of the Articles of Incorporation of the Corporation filed on November 6, 2010, which created and authorized twenty-five million (25,000,000) shares of preferred stock of the Corporation, par value $.001 per share (the “Preferred Stock”), of which 300,000 shares have been authorized as Series A Convertible Preferred Stock; 300,000 shares have been authorized as Series B Convertible Preferred Stock, and 910,000 shares have been authorized as Series C Convertible Preferred Stock, all of which have been converted into Common Stock, so that all 25,000,000 shares of Preferred Stock have the status of authorized but unissued shares and are available for issuance. In that regard, the Board of Directors hereby establishes a new series of Preferred Stock, the Series D Preferred Stock, to consist of 400,000 shares, and hereby fixes the powers, designation, preferences, relative, participating, optional and other rights of such series of Series D Preferred Stock, and the qualifications, limitations and restrictions thereof, in addition to those set forth in said Article Third, as follows:

“Series D Preferred Stock.”

Number Authorized and Designation. Of the 25,000,000 shares of Preferred Stock authorized under Article Third of the Articles of Incorporation of the Corporation, the Corporation shall have the authority to issue 400,000 shares designated as Series D Preferred Stock, $10.00 Face Value, $.001 par value per share (“Series D Preferred Stock”), upon the terms, conditions, rights, preferences and limitations set forth herein.

Rights, Preferences and Limitations. The relative rights, preferences and limitations of Series D Preferred Stock are as follows:

(a)

Rank. The Series D Preferred Stock shall rank (i) senior to all of the Common Stock, par value $.001 per share, of the Corporation (“Common Stock”); (ii) senior to any class or series of capital stock of the Corporation currently outstanding or that specifically provides that it ranks junior to any Series D Preferred Stock (collectively, with the Common Stock, “Junior Securities”); and (iii) junior to any class or series of capital stock of the Corporation which specifically provides that it will rank senior in preference or priority to the Series D Preferred Stock (“Senior Securities”); in each case as to distributions of the Corporation’s collateral specifically identified in the Credit Agreement (the “Secured Assets”) upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (all such distributions being referred to as “Distributions”).

(b)

Dividends. The holders of record of Series D Preferred Stock shall not be entitled to receive any dividends or distributions.

(c)

Conversion.

(i)

Conversion Rights. The holder of the Series D Preferred Stock (the “Holder”) may convert such shares of Series D Preferred Stock, in whole or in part, at any time after the issuance thereof, or from time-to-time thereafter, only upon the occurrence of one of the following events (in each case a “Monetary Default”): (A) in the event of a monetary default by any “Borrowers” (as defined in the Credit Agreement) under the terms of the Credit Agreement or any other “Loan Documents” (as defined in the Credit Agreement) not cured within an applicable cure period, if any; or (B) in the event of a non-monetary default by any Borrowers under the terms of the Credit Agreement or any other Loan Documents not cured within an applicable cure period, if any, and subsequent acceleration of the Obligations by TCA as a result of such uncured non-monetary default, and upon written notice to the Corporation, and subject to the terms set forth below. Each share of Series D Preferred Stock shall be converted into shares of the Corporation’s authorized but unissued Common Stock (the “Conversion Shares”) calculated by the following formula: (x) the amount of any payment or sums due underlying the Monetary Default; divided by (y) the average closing price of the Common Stock as reported on any national securities exchange on which the Common Stock is so listed or admitted to trade for the ten (10) business days immediately prior to the date a “Conversion Notice” (as hereinafter defined) is provided to the Corporation (the “Conversion Price”).

(ii)

No Fractional Shares. No fractional shares of Common Stock shall be issued upon the conversion of the Series D Preferred Stock. If the number of Conversion Shares to be issued to the holders of the Series D Preferred Stock is not a whole number, then the number of the shares shall be rounded up to the nearest whole number.

(iii)

Mechanics of Conversion. Before the Holder shall be entitled to convert the Series D Preferred Stock, or any portion thereof, into shares of Common Stock: (A) a Monetary Default shall have occurred and be continuing and remain uncured; and (B) the Holder shall provide a conversion notice (the “Conversion Notice”) to the Corporation, which Conversion Notice shall specify the “Cure Amount” (as hereinafter defined), the applicable Conversion Price, the number of Conversion Shares to be issued in connection with such conversion, and the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The calculations and entries set forth in the Conversion Notice shall control in the absence of manifest or mathematical error. To effect conversions of Series D Preferred Stock, the Holder shall not be required to surrender the certificate(s) representing the Series D Preferred Stock to the Corporation unless all of the shares of Series D Preferred Stock represented thereby are so converted, in which case the Holder shall surrender to the Corporation or its transfer agent, the certificate or certificates representing the shares of Series D Preferred Stock to be converted, or if the Holder notifies the Corporation or its transfer agent that such certificate or certificates have been lost, stolen or destroyed, upon the execution and delivery of an agreement reasonably satisfactory to the Corporation in customary form to indemnify the Corporation from any losses incurred by it in connection therewith. Partial conversions hereunder where the certificate(s) representing the shares of Series D Preferred Stock are not surrendered shall have the effect of reducing the number of shares represented by such certificate(s) by the number of shares of Series D Preferred Stock converted in each applicable conversion, as set forth in each Conversion Notice. The Holder and the Corporation shall maintain records showing the amount of shares of Series D Preferred Stock converted upon each conversion, and the number of shares of Series D Preferred Stock remaining to be converted. The Corporation shall, as soon as practicable after receipt of a Conversion Notice, and in any case within five (5) business days of the Corporation’s receipt of the Conversion Notice (“Share Delivery Date”), issue and deliver at such office to the Holder, or to the nominee or nominees of such Holder, as set forth in the Conversion Notice, a certificate or certificates representing the Conversion Shares to which such Holder shall be entitled as aforesaid; provided that such Holder or nominee(s), as the case may be, shall be deemed to be the owner of record of such Common Stock as of the date that the Conversion Notice is delivered to the Corporation.

(iv)

Failure to Deliver Certificates. If in the case of any Conversion Notice, the certificate or certificates representing the Conversion Shares issuable upon such conversion are not delivered to or as directed by the Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Corporation shall promptly return to the holder any original certificates representing Series D Preferred Stock delivered to the Corporation and the Holder shall promptly return to the Corporation the Common Stock certificates unsuccessfully tendered for conversion to the Corporation, to the extent later received by the Holder.

(v)

Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of the Series D Preferred Stock, or any portion thereof, in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity, or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other person or entity of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder. In the event Holder shall elect to convert the Series D Preferred Stock, or any portion thereof, the Corporation may not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Series D Preferred Stock by Holder shall have been sought and obtained, and the Corporation posts a surety bond for the benefit of Holder in the amount of 150% of the aggregate value into which such Series D Preferred Stock are to be converted as provided above, which bond shall remain in effect until the completion of litigation or other proceeding of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains final adjudication. In the absence of such injunction, the Corporation shall issue Conversion Shares upon a properly noticed conversion. If the Corporation fails to deliver to Holder the certificate or certificates representing the Conversion Shares by the Share Delivery Date, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, $500.00 per trading day (increasing to $1,000.00 per trading day on the tenth (10^th) trading day after such damages begin to accrue) for each trading day after the Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

(vi)

Issue Taxes. The Corporation shall pay all issue taxes, if any, and all other costs and expenses incurred in respect of the issue of any Conversion Shares on conversion.

(vii)

Valid Issuance. All shares of Common Stock which may be issued in connection with the conversion provisions set forth herein will, upon issuance by the Corporation, be validly issued, fully paid, and non-assessable, free from preemptive rights and free from all taxes, liens or charges with respect thereto created or imposed by the Corporation.

(viii)

Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series D Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series D Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series D Preferred Stock, the Corporation will call and hold a special meeting of the shareholders within twenty (20) business days of such occurrence, for the sole purpose of increasing the number of shares authorized to an amount sufficient to allow a full conversion by the Holder of the Series D Preferred Stock. The Corporation’s management shall recommend to the shareholders to vote in favor of increasing the number of shares of Common Stock authorized.

(ix)

Make-Whole Adjustments. As previously stated, the Series D Preferred Stock is being issued to TCA as additional security for the Obligations. In this regard, it is the intention of the Corporation and the Holder that upon the occurrence and during the continuance of a Monetary Default, the Holder shall, subject to the terms of the “Series D Lock Up Agreement” (as hereinafter defined), sell the shares of Common Stock received upon such conversion, and such sale, and the net proceeds realized therefrom, shall be sufficient to allow the Holder to realize net proceeds thereof (net of all commissions and other selling expenses related thereto) equal to the amount of the payment or other sums due and payable and arising from the Monetary Default, as applicable (the “Cure Amount”). In this regard, if, upon liquidation by the Holder of Conversion Shares issued pursuant to a Conversion Notice, the Holder realizes a net amount (net of all commissions and other selling expenses related thereto) from such liquidation (such net realized amount, the “Realized Amount”) that is less than the Cure Amount specified in the relevant Conversion Notice for the applicable Monetary Default, then the deficiency (the “Deficiency”), as evidenced by a reconciliation statement from the Holder (a “Sale Reconciliation”) showing the Realized Amount from the sale of the Conversion Shares, shall become due and payable with the next scheduled monthly payment, if there is a next scheduled monthly payment due. If there is no next scheduled monthly payment due, or if there is a Monetary Default again on such next scheduled monthly payment, then any such Deficiency shall be remedied by having the applicable and issued Conversion Notice relating to such Monetary Default deemed automatically revised to require (and the terms of the Series D Preferred Stock shall be deemed to require) the Corporation to issue to the Holder additional shares of Common Stock equal

to: (A) the Deficiency; divided by (B) the average closing price of the Common Stock during the five (5) business days immediately prior to the date upon which the Holder delivers notice (the “Make-Whole Notice”) to the Corporation that such additional shares are required to be issued hereunder (such number of additional shares to be issued, the “Make-Whole Shares”). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares required, the Corporation shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make-Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth in Section 2(c)(iii) above. Subsections 2(c)(iv), 2(c)(v), 2(c)(vi) and 2(c)(vii) above shall be applicable to the issuance of the Make-Whole Shares. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Corporation’s Common Stock. Following the sale of the Make-Whole Shares by the Holder: (i) in the event that the Holder receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Cure Amount specified in the relevant Conversion Notice, the Holder shall deliver an additional Make-Whole Notice to the Corporation following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices and Make-Whole Shares shall continue until the Cure Amount has been fully satisfied; (ii) in the event that the Holder received net proceeds from the sale of Make-Whole Shares in excess of the Cure Amount specified in the relevant Conversion Notice, such excess amount shall be applied to the next scheduled monthly payment, or if there is no next scheduled monthly payment, then to satisfy any and all other Obligations in accordance with the Credit Agreement and other Loan Documents.

(x)

Cure of Default. Once the Holder receives net proceeds (either from the sale of Conversion Shares or additional Make-Whole Shares) equal to the Cure Amount, the applicable Monetary Default shall be deemed cured. In addition, the Holder hereby agrees that once all Obligations under the Credit Agreement and all other Loan Documents shall have been indefeasibly paid and satisfied in full, any shares of Series D Preferred Stock, or any shares of Common Stock received by the Holder from conversions thereof and not yet sold, shall be returned to the Corporation.

(xi)

Lock Up Agreement. Notwithstanding anything contained in this Certificate of Designations to the contrary, shares of Common Stock received by the Holder upon conversion rights hereunder shall at all times be subject to the terms and provisions of the Lock Up/Leak Out Agreement between the Corporation and TCA entered into with respect to the Series D Preferred Stock (the “Series D Lock Up Agreement”).

(d)

Voting Rights. Except as provided by law or by the other provisions of this Certificate of Designation, the holders of shares of Series D Preferred Stock shall not be entitled to vote on any matter, except as expressly required by the NRS, or unless the Series D Preferred Stock has been converted, in which case the Holder shall be entitled to vote the shares of Common Stock it received in conversion thereof, in the same manner as other holders of Common Stock. In the event the Holder of Series D Preferred Stock is entitled to vote, the Holder shall be entitled to vote on an as converted basis solely in the event of a Monetary Default, together with the holders of Common Stock.

(i)

The Corporation shall not amend, alter, change or repeal the preferences, privileges, special rights or other powers of the Series D Preferred Stock so as to adversely affect the Series D Preferred Stock, without the written consent or affirmative vote of the Holders of at least a two-thirds (66 2/3%) interest of the then outstanding aggregate number of shares of such affected Series D Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class.

(ii)

So long as shares of Series D Preferred Stock are outstanding and any Obligations remain outstanding under the Credit Agreement and other Loan Documents, the Corporation shall not, without first obtaining the approval (by vote or written consent, as provided by law) of TCA: (i) dissolve the Corporation or effectuate a liquidation; (ii) alter, amend, or repeal the Certificate of Incorporation of the Corporation; (iii) agree to any provision in any agreement that would impose any restriction on the Corporation’s ability to honor the exercise of any rights of the Holders of the Series D Preferred Stock; or (iv) do any act or thing not authorized or contemplated by this Certificate which would result in taxation of the Holders of shares of the Series D Preferred Stock under Section 305 of the Internal Revenue Code of 1986, as amended (or any comparable provision of the Internal Revenue Code as hereafter from time to time amended).

(iii)

In the event that TCA agrees to allow the Corporation to alter or change the rights, preferences or privileges of the shares of Series D Preferred Stock pursuant to the terms hereof, then the Corporation will deliver written notice of such approved change to the holders of the Series D Preferred Stock that did not agree to such alterations or change (the “Dissenting Holders”) and the Dissenting Holders shall have the right for a period of thirty (30) days following such delivery to convert their Series D Preferred Stock pursuant to the terms hereof as such terms existed prior to such alteration or change, or to continue to hold such Series D Preferred Stock as so modified. No such change shall be effective to the extent that, by its terms, such change applies to less than all of the shares of Series D Preferred Stock then outstanding.

(e)

Preemptive Rights. Holders of Series D Preferred Stock, including, but not limited to, TCA, shall have no preemptive rights.

(f)

Liquidation Rights. Subject to the terms of the Credit Agreement, upon liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, TCA shall be entitled to receive, in preference to any distributions or liquidation of any of the Secured Assets to the holders of Senior Securities and the Junior Securities, including, without limitation, the Common Stock, an amount in cash or property arising from the Secured Assets equal to the amount of the outstanding Obligations owed by the Borrowers pursuant to the terms of the Credit Agreement and other Loan Documents. Notwithstanding anything to contrary in this paragraph, TCA shall have no rights to any other assets of the Corporation upon a liquidation, dissolution, or winding up of the Corporation, other than the “Collateral” (as defined in the Credit Agreement).

(g)

Reservation of Shares; Compliance. The Corporation shall at all times reserve out of its authorized but unissued shares of Common Stock such number of shares of Common Stock as shall from time to time be sufficient to permit the conversion of all of the Series D Preferred Stock necessary to repay the outstanding debt of the Corporation under the Credit Agreement, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding Series D Preferred Stock, the Corporation shall immediately take any and all such action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. The Corporation shall comply with all federal and state laws, rules and regulations and applicable rules and regulations of the exchange on which shares of the Common Stock are then listed. If any shares of Common Stock to be reserved for the purpose of conversion of shares of Series D Preferred Stock require registration with or approval of any person under any federal or state law or the rules and regulations of the exchange on which shares of the Common Stock are then listed before such shares may be validly issued or delivered upon conversion, then the Corporation will, as expeditiously as possible, use its reasonable best efforts to secure such registration or approval, as the case may be. So long as any shares of Common Stock into which the shares of Series D Preferred Stock are then convertible is then listed on an exchange, the Corporation will list and keep listed on such exchange, upon official notice of issuance, all shares of such Common Stock issuable upon conversion. Notwithstanding the foregoing, under no circumstances shall the Corporation effect a conversion of Series D Preferred Stock into Common Stock or issue Common Stock as payment of the Obligations under the Credit Agreement, (i) in the aggregate equal to twenty percent (20%) or more of the Common Stock or voting power outstanding prior to the initial issuance of the Series D Preferred Stock without first obtaining stockholder approval; or (ii) in excess of any of the restrictions contained in the Series D Lock Up Agreement.

(h)

Rights Upon Conversion. Subject to the make-whole rights set forth above, all Series D Preferred Stock which shall have been converted into shares of Common Stock as herein provided shall no longer be deemed to be outstanding and all rights with respect to such Series D Preferred Stock, including the rights, if any, to receive notices and to vote, shall forthwith cease and terminate, except only the right of the holder thereof to receive shares of Common Stock in exchange therefore and payment of any accrued and unpaid dividends thereon.

(i)

Cumulative Remedies. Nothing contained in this Certificate of designations shall prohibit, prevent, or otherwise preclude TCA from enforcing the Loan documents and its rights and remedies thereunder, through any and all other rights and remedies available to TCA under the Credit Agreement and all other Loan Documents, it being acknowledged by the Corporation that the rights to convert the Series D Preferred Stock and to sell shares of Common Stock upon a Monetary Default are in addition to all other rights and remedies available to TCA under the Credit Agreement and other Loan Documents.

(j)

Miscellaneous.

(i)

Transfer of Preferred Shares. Except as expressly permitted under the Credit Agreement and other Loan Documents, a Holder shall not permitted to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Series D Preferred Stock to any person or entity; provided, the Holder may sell any Common Stock issuable upon a conversion of the Series D Preferred Stock so long as such transaction is the subject of an effective registration statement under the Securities Act or is exempt from registration thereunder. Upon any permitted sale, transfer or assignment, the Corporation shall, promptly following the return of the certificate or certificates representing the Preferred Stock that is the subject of such sale or transfer, issue and deliver to such transferee a new certificate in the name of such transferee.

(ii)

Notices. Any notice, demand or request required or permitted to be given by the Corporation or a Holder shall be in writing and shall be addressed and deemed delivered in accordance with the notice provisions of the Credit Agreement.

(iii)

Remedies. The remedies provided to a Holder in this Certificate shall be cumulative and in addition to all other remedies available to such Holder under this Certificate, at law, or in equity (including without limitation a decree of specific performance and/or other injunctive relief). No remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing contained herein shall limit such Holder’s right to pursue actual damages for any failure by the Corporation to comply with the terms of this Certificate. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder hereof and shall not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the performance thereof). The Corporation acknowledges that a material breach by it of its obligations hereunder may cause irreparable harm to the Holders and that the remedy at law for any such breach may be inadequate. The Corporation agrees, in the event of any such breach or threatened breach, each Holder shall be entitled, in addition to all other available remedies, to seek an injunction retraining any breach, without the necessity of showing economic loss and without any bond or other security or indemnity being required.

(iv)

Failure of Delay not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof or of any other right, power or privilege.

(v)

Redemption.

The Series D Preferred Stock shall be redeemed for no further consideration upon the termination of the Credit Agreement and the indefeasible repayment by the Corporation of any and all Obligations thereunder and under all other Loan Documents.

(vi)

Amendment. Any provision in this Certificate of Designation (including, but not limited to, any notice requirements) may be waived, in whole or in part, amended or otherwise modified by the prior vote or written consent of holders representing at least 66-2/3% of the then-outstanding shares of Series D Preferred Stock, voting together as a separate class.

The Certificate of Designation herein certified has been duly adopted in accordance with the provisions of NRS 78.1955 of the State of Nevada.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation of Series D Preferred Stock to be duly executed by its Chief Executive Officer and attested to by its Secretary this 18^th day of February, 2015.

/s/ Johnny R. Thomas

Johnny R. Thomas, Chief Executive Officer

/s/ John C. Francis

John C. Francis, Secretary

EX-10.1 3 bblu_101.htm SECOND AMENDMENT TO CREDIT AGREEMENT ex-10.1

EXHIBIT 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) is dated effective as of the 24^thday of February, 2015, by and among BLUE EARTH, INC., a Nevada corporation (the “Issuing Borrower”), BLUE EARTH TECH, INC., a Nevada corporation, BLUE EARTH GENERATOR, INC. (f/k/a Blue Earth Energy Management, Inc.), a Nevada corporation, BLUE EARTH FINANCE, INC., a Nevada corporation, BLUE EARTH ENERGY MANAGEMENT SERVICES, INC. (f/k/a Castrovilla, Inc.), a California corporation, BLUE EARTH SOLAR, INC. (f/k/a Xnergy), a California corporation, ECOLEGACY GAS & POWER, LLC, a California limited liability company, BLUE EARTH POWER PERFORMANCE SOLUTIONS, INC. (f/k/a Intelligent Power, Inc.), an Oregon corporation, BLUE EARTH ENERGY POWER SOLUTIONS, LLC (f/k/a Millennium Power Solutions, LLC), an Oregon limited liability company, BLUE EARTH CHP, INC. (f/k/a IPS Power Engineering, Inc.), a Utah corporation, MAILI PV 01, LLC, a Hawaii limited liability company (“Maili”), and SUMTER HEAT & POWER, LLC, a Nevada limited liability company (“Sumter”)(each of the foregoing, including the Issuing Borrower, Maili, and Sumter, hereinafter sometimes individually referred to as a “Borrower” and all such entities, including the Issuing Borrower and Maili, sometimes hereinafter collectively referred to as “Borrowers”) and TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership (the “Lender”).

RECITALS

WHEREAS, the Borrowers (excluding Maili and Sumter) and the Lender executed that certain Credit Agreement dated as of January 31, 2013, but made effective as of February 22, 2013, as amended by that certain First Amendment to Credit Agreement dated as of September 11, 2013 (collectively, as further amended, supplemented, renewed or modified from time to time, the “Credit Agreement”); and

WHEREAS, pursuant to the Credit Agreement, the Borrowers (except Maili and Sumter) executed and delivered to Lender that certain Replacement Revolving Note dated as of September 11, 2013, in the original face amount of Four Million Dollars ($4,000,000) (the “Existing Revolving Note”); and

WHEREAS, in connection with the Credit Agreement and the Existing Revolving Note, the Borrowers (except Maili and Sumter) executed and delivered to the Lender various ancillary documents referred to in the Credit Agreement as the “Loan Documents”; and

WHEREAS, the Borrowers’ obligations under the Credit Agreement and the Existing Revolving Note are secured by the following, all of which are included within the Loan Documents: (i) a Security Agreement dated as of January 31, 2013, but made effective as of February 22, 2013, from the Borrowers (excluding Maili) in favor of the Lender (the “Security Agreement”), pursuant to which the Lender has a continuing, perfected, first-priority security interest encumbering all of the “Collateral” (as such term is defined in the Security Agreement) of each of the Borrowers (excluding Maili and Sumter); (ii) a Validity Guaranty dated as of January 31, 2013, but made effective as of February 22, 2013, from Johnny R. Thomas in favor of Lender

(the “Validity Guaranty”); and (iii) various UCC-1 Financing Statements naming the Borrowers (excluding Maili and Sumter), as debtors, and Lender, as secured party, filed with various jurisdictions, respectively and as applicable, where the Borrowers are organized or incorporated (the “UCC-1’s ”), among other Loan Documents; and

WHEREAS, as of the date of this Amendment: (i) the Credit Agreement has a Revolving Loan Commitment available of $4,000,000; and (ii) the amount of all Obligations outstanding under the Credit Agreement and all other Loan Documents is zero; and

WHEREAS, the Borrowers desire, and Lender is amenable to making, an additional Revolving Loan to Borrowers in the amount of Three Million Dollars ($3,000,000)(the “Additional Advance”); and

WHEREAS, the parties desire to provide for the repayment of the Additional Advance and all other Obligations of the Borrowers under the Credit Agreement and all other Loan Documents, by aggregating all of such Obligations, and replacing, amending and restating the Existing Revolving Note in its entirety into a newly issued promissory note in the form attached hereto as Exhibit “A” (the “Amended and Restated Note”), which Amended and Restated Note shall be for the aggregate amount of the Additional Advance and all such Obligations, and the parties desire to enter into certain other agreements as more specifically set forth herein; and

WHEREAS, except with respect to the Issuing Borrower, Maili and Sumter, the remaining Borrowers referenced in the Preamble hereof (the “Unsecured Subsidiaries”) are a party to this Amendment solely for the purpose of properly amending the terms of the Credit Agreement, and for the avoidance of doubt, the Borrowers and Lender desire to confirm and agree that none of the assets of the Unsecured Subsidiaries are Collateral under the Credit Agreement or the Security Agreement as of the date hereof; and

WHEREAS, Maili and Sumter, each a wholly-owned Subsidiary of the Issuing Borrower, are each to be joined into the Credit Agreement and all other Loan Documents as a “Borrower,” “Debtor,” and a “Credit Party” thereunder, as applicable, and in that regard, each of Maili and Sumter desire to consent to and agree to become a Borrower, Debtor, and Credit Party under the Credit Agreement and all other Loan Documents, and to be bound by each and every term, provision, covenant, representation, warranty and condition in the Credit Agreement and all other Loan Documents, all as more specifically set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereinafter expressed and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, each intending to be legally bound, agree as follows:

1. Recitals. The recitations set forth in the preamble of this Amendment are true and correct and incorporated herein by this reference.

2. Capitalized Terms. All capitalized terms used in this Amendment shall have the same meaning ascribed to them in the Credit Agreement, except as otherwise specifically set forth herein. In addition, the other definitional and interpretation provisions of Sections 1.2, 1.3 and 1.4 of the Credit Agreement shall be deemed to apply to all terms and provisions of this Amendment, unless the express context otherwise requires. The parties hereby agree that the terms “Collateral” (as used and defined in the Credit Agreement and the Security Agreement) and “Included Projects” shall have the meaning given to such terms on the amended and restated Exhibit B-1 attached hereto, which shall replace in all respects the Exhibit B previously attached to the Credit Agreement. In addition, the term “Excluded Projects” shall have the meaning given to such term on Exhibit B-2 attached hereto. For the avoidance of doubt, the Excluded Projects shall not serve as Collateral for the Additional Advance.

3. Conflicts. In the event of any conflict or ambiguity by and between the terms and provisions of this Amendment and the terms and provisions of the Credit Agreement, the terms and provisions of this Amendment shall control, but only to the extent of any such conflict or ambiguity.

4. Maili and Sumter as Additional Borrowers.

(a) Consent and Agreement. Each of Maili and Sumter do hereby consent and agree that effective as of the date of this Amendment, Maili and Sumter each is and shall be a “Borrower,” “Debtor,” and “Credit Party” under the Credit Agreement and all other Loan Documents, as applicable, and each of Maili and Sumter do hereby agree to be bound by each and every term, provision, covenant, representation, warranty and condition made by a Borrower, Debtor, or Credit Party under the Credit Agreement and all other Loan Documents, as if each of the Loan Documents was specifically executed by Maili and Sumter, and as if each and every one of such terms, provisions, covenants, representations, warranties and conditions was set forth and re-made in their entirety in this Amendment by Maili and Sumter. In furtherance of the foregoing, each of Maili and Sumter hereby acknowledges, represents, warrants and confirms to Lender that the Credit Agreement and each of the Loan Documents are valid and binding obligations of Maili and Sumter, respectively and as applicable, enforceable against Maili and Sumter in accordance with their respective terms.

(b) Security Agreement. Each of Maili and Sumter hereby expressly agrees that effective as of the date of this Amendment, Maili and Sumter each is and shall be a Debtor under the Security Agreement, and each of Maili and Sumter does hereby agree to be bound by each and every term, provision, covenant, representation, warranty and condition made by a Debtor under the Security Agreement, as if the Security Agreement was specifically executed by Maili and Sumter, and as if each and every one of such terms, provisions, covenants, representations, warranties and conditions was set forth and re-made in their entirety in this Amendment by Maili and Sumter. In furtherance of the foregoing, each of Maili and Sumter hereby agrees and acknowledges that the term “Collateral” (as defined in the Security Agreement), shall have the meaning given to such term on the amended and restated Exhibit B-1 attached hereto. Notwithstanding anything to the contrary contained in the Security Agreement, it is hereby acknowledged and agreed that as of the date hereof, Lender has no security interest or Lien on any of the assets or equity interests of the Unsecured Subsidiaries.

(c) Execution of Additional Documents. Each of Maili and Sumter hereby agrees to execute and deliver to Lender any and all other documents or instruments required to be executed by Lender to evidence Maili’s and Sumter’s joinder as a Borrower, Debtor and Credit Party under the Credit Agreement and all other Loan Documents, and to provide to Lender any organizational and authority documents required or requested by Lender.

(d) Additional Confirmations - Maili. Maili does hereby represent, warrant and covenant to and for the benefit of Lender as follows: (i) that there are no Liens or security interests of any nature or kind granted by Maili or encumbering or affecting any of the Collateral of Maili in favor of any other Person; (ii) that Maili owns and has good title to, or has valid leasehold interests in, all property and assets comprising or otherwise used or needed to construct and operate the “Solar Facility” (as such term is defined in the Membership Interest Purchase Agreement dated October 27, 2014 by and between Sun Financial, LLC (“Sun Financial”), as buyer, and Issuing Borrower, as seller (the “Purchase Agreement”)); and (iii) that the Solar Facility is being developed and constructed only by and through Maili, and no part of the Solar Facility, or the assets or property to construct same, or the revenues to be generated therefrom, are owned by any other Person other than Maili or shall be assigned or transferred to any other Person (except for the sale thereof under the Purchase Agreement).

(e) Additional Confirmations - Sumter. Sumter does hereby represent, warrant and covenant to and for the benefit of Lender as follows: (i) that there are no Liens or security interests of any nature or kind granted by Sumter or encumbering or affecting any of the Collateral of Sumter in favor of any other Person; (ii) that Sumter owns and has good title to, or has valid leasehold interests in, all property and assets comprising or otherwise used or needed to construct and operate the “CHP Plant” (as hereinafter defined); and (iii) that the CHP Plant is being developed, constructed, and operated only by and through Sumter, and no part of the CHP Plant, or the assets or property to construct and operate same, or the revenues generated therefrom, are owned by any other Person other than Sumter or shall be assigned or transferred to any other Person. For purposes of this Amendment, the term “CHP Plant” shall mean that certain CHP Plant being developed and constructed and to be operated by Sumter on the site of the Pilgrim’s Pride Chicken processing plant in Sumter, South Carolina.

5. Outstanding Balance. The Borrowers acknowledge that the aggregate amount of all Obligations due and owing under the Credit Agreement and other Loan Documents, including the Additional Advance, as of the date of this Amendment, is $3,000,000 (the “Outstanding Balance”). The Outstanding Balance shall be deemed and is agreed upon as the aggregate amount of all Obligations due and owing under the Credit Agreement and all other Loan Documents as of the date hereof, and shall be deemed and is agreed upon as the outstanding principal balance of the Amended and Restated Note. The entire Outstanding Balance shall be and remain secured by the Security Agreement, Validity Guaranty, UCC-1’s, the Assignment of Purchase Agreement, and all other Loan Documents, as applicable, and which Outstanding Balance shall be due and payable in accordance with the terms of the Credit Agreement, as amended hereby, the Amended and Restated Note, and all other Loan Documents, and the Borrowers acknowledge and agree that the Outstanding Balance shall accrue interest and otherwise shall be payable in accordance with the terms of the Amended and Restated Note.

6. Amendments to Credit Agreement. Notwithstanding anything contained in the Credit Agreement or any other Loan Documents to the contrary, all payment terms under the Credit Agreement specifically relating to the use of the Lock Box Account as a mechanism for collecting payments under the Credit Agreement are hereby terminated, it being acknowledged and agreed by Borrowers and Lender that payments shall, from and after the date hereof, be made through the means outlined in the Amended and Restated Note.

7. Advisory Fees. The Borrowers hereby acknowledge that they have obligations to the Lender for advisory services provided by the Lender to the Borrowers prior to the date hereof in the amount of $300,000.00 (the “Advisory Fee”). In this regard, the Borrowers shall redeem the Advisory Fee obligations in three (3) equal installments, each in the amount of $100,000, each of such redemption installments to be paid by Borrowers in Dollars by wire transfer to an account designated by Lender, the first installment due on August 24, 2015, the second installment due on November 24, 2015, and the third installment due on February 24, 2016, without further claim, notice or demand from the Lender. The obligation to redeem the Advisory Fee obligations contemplated by this Section 7 shall be an Obligation hereunder, secured by all Loan Documents, and failure by the Borrowers to timely make any of such redemption payments when due as hereby provided shall be an immediate Event of Default hereunder and under the other Loan Documents. The Advisory Fees contemplated by this Section 7 have been fully earned by Lender prior to the date hereof. The Borrowers agree and acknowledge that notwithstanding the termination of the Credit Agreement, or the payment in full of all of the Revolving Loans or other obligations thereunder or under any other Loan Documents, the Borrowers’ obligations and liability under the Credit Agreement and the other Loan Documents, and the Lender’s Lien and security interest on all Collateral, shall remain valid and effective and shall not be released or terminated, until the Borrowers have fully redeemed all Advisory Fee obligations in accordance with the terms hereof, together with all other Obligations. All of the Borrowers’ obligations under Section 7 shall survive termination of the Credit Agreement.

8. Amended and Restated Note. Subject to the terms and conditions of this Amendment, the Borrowers shall and do hereby agree to issue to the Lender, simultaneously with the execution of this Amendment, the Amended and Restated Note. The Amended and Restated Note is being executed and delivered simultaneously herewith in substitution for and to supersede the Existing Revolving Note in its entirety. It is the intention of the Borrowers and Lender that while the Amended and Restated Note replaces and supersedes the Existing Revolving Note, in its entirety, it is not in payment or satisfaction of the Existing Revolving Note, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Nothing contained in this Amendment or in the Amended and Restated Note shall be deemed to extinguish the indebtedness and obligations evidenced by the Existing Revolving Note or constitute a novation of the indebtedness evidenced by the Existing Revolving Note.

9. Representations and Warranties. Each of the Borrowers (including Maili and Sumter as Borrowers) hereby confirms and affirms that all representations and warranties made by the Borrowers under the Credit Agreement and all other Loan Documents (specifically including under Section 7 of the Credit Agreement) are true, correct and complete as of the date such representations and warranties were originally made under the Credit Agreement, and hereby confirm and affirm that all such representations and warranties remain true, correct and complete

as of the date of this Amendment, and by this reference, each of the Borrowers does hereby re-make each and every one of such representations and warranties herein as of the date of this Amendment, as if each and every one of such representations and warranties was set forth and re-made in its entirety in this Amendment by each of the Borrowers, as same may be qualified by revised disclosure schedules attached to this Amendment, if any (if no revised disclosures are attached to this Amendment, then no such revised disclosure schedules shall be deemed to exist or to qualify any of the representations and warranties hereby re-made), except that the representation made by Borrowers under Section 7.10 of the Credit Agreement shall be hereby re-made with respect to SEC Documents, as such term is amended hereby. In addition, Borrowers hereby confirm that Blue Earth Energy Management Services, Inc., a Nevada corporation, Blue Earth Energy Partners, LLC, a Nevada limited liability company, and HVAC Controls & Specialties, Inc., an Idaho corporation, all entities that were, prior to the date hereof, Borrowers under the Credit Agreement and other Loan Documents, are all now either dissolved entities or entities that were sold or transferred, such that such entities are no longer Subsidiaries of the Issuing Borrower, or if not sold or transferred, that have no assets, property or any operations of any nature or kind as of the date hereof.

10. Affirmation. The Borrowers hereby affirm all of their respective Obligations to the Lender under all of the Loan Documents and agree and affirm as follows: (i) that as of the date hereof, the Borrowers have performed, satisfied and complied in all material respects with all the covenants, agreements and conditions under each of the Loan Documents to be performed, satisfied or complied with by the Borrowers; (ii) that the Borrowers shall continue to perform each and every covenant, agreement and condition set forth in each of the Loan Documents and this Amendment, and continue to be bound by each and all of the terms and provisions thereof and hereof; (iii) that as of the date hereof, no default or Event of Default has occurred or is continuing under the Credit Agreement or any other Loan Documents, and no event has occurred that, with the passage of time, the giving of notice, or both, would constitute a default or an Event of Default under the Credit Agreement or any other Loan Documents; and (iv) that as of the date hereof, no event, fact, or other set of circumstances has occurred which could reasonably be expected to have, cause, or result in a Material Adverse Effect. Lender hereby agrees that except for the Collateral described on Exhibit B-1, the Unsecured Subsidiaries shall be entitled to encumber any of their respective assets at any time following the date hereof.

11. Ratification. The Borrowers hereby acknowledge, represent, warrant and confirm to Lender that: (i) each of the Loan Documents executed by the Borrowers are valid and binding obligations of the Borrowers, enforceable against the Borrowers in accordance with their respective terms; (ii) the Amended and Restated Note, and all other Obligations of the Borrowers under the Amended and Restated Note, the Credit Agreement, all other Loan Documents and this Amendment, shall be and continue to be and remain secured by and under the Loan Documents, including the Security Agreement (as hereby amended), Validity Guaranty, the UCC-1’s, as well as the “Assignment of Purchase Agreement” (as hereinafter defined); (iii) there are no defenses, setoffs, counterclaims, cross-actions or equities in favor of the Borrowers, to or against the enforcement of any of the Loan Documents, and to the extent any of the Borrowers have any defenses, setoffs, counterclaims, cross-actions or equities against Lender and/or against the enforceability of any of the Loan Documents, the Borrowers acknowledge and agree that same are hereby fully and unconditionally waived by the Borrowers; and (iv) no oral representations, statements, or inducements have been made by Lender, or any agent or representative of Lender, with respect to the Credit Agreement, this Amendment or any other Loan Documents.

12. Additional Confirmations. The Borrowers hereby represent, warrant and covenant as follows: (i) that the Lender’s Liens and security interests in all of the “Collateral” (as such term is defined in the Security Agreement, as hereby amended), are and remain valid, perfected, first-priority security interests in such Collateral, and the Borrowers have not granted any other Liens or security interests of any nature or kind in favor of any other Person affecting any of such Collateral.

13. Lender’s Conduct. As of the date of this Amendment, the Borrowers hereby acknowledge and admit that: (i) the Lender has acted in good faith and has fulfilled and fully performed all of its obligations under or in connection with the Credit Agreement or any other Loan Documents; and (ii) that there are no other promises, obligations, understandings or agreements with respect to the Credit Agreement or the Loan Documents, except as expressly set forth herein, or in the Credit Agreement and other Loan Documents.

14. Redefined Terms. The term “Loan Documents,” as defined in the Credit Agreement and as used in this Amendment, shall be deemed to refer to and include this Amendment and all other documents or instruments executed in connection with this Amendment, including the “Assignment of Purchase Agreement” to be executed in connection with this Amendment and the Pledge Agreement. The term “SEC Documents,” as defined in the Credit Agreement, shall be deemed to refer to and include all filings made by the Borrowers with or under the Exchange Act, the Principal Trading Market, or any other Governmental Authority between the date of the First Amendment to Credit Agreement and the date of this Amendment.

15. Representations and Warranties of the Borrowers. The Borrowers hereby make the following representations and warranties to the Lender:

(a) Authority and Approval of Agreement; Binding Effect. The execution and delivery by the Borrowers of this Amendment, and all other documents executed and delivered in connection herewith, and the performance by Borrowers of all of their respective Obligations hereunder and thereunder, have been duly and validly authorized and approved by the Borrowers and their board of directors, members, managers, or other Persons, as applicable, pursuant to all applicable laws and no other corporate action or consents on the part of the Borrowers, their board of directors, stockholders, members, managers, or any other Person is necessary or required by the Borrowers to execute this Amendment, and the documents executed and delivered in connection herewith, to consummate the transactions contemplated herein and therein, or perform all of the Borrowers’ respective Obligations hereunder and thereunder. This Amendment, and each of the documents executed and delivered in connection herewith, have been duly and validly executed by the Borrowers (and the officer or other Person executing this Amendment and all such other documents for each of the Borrowers is duly authorized to act and execute same on behalf of the Borrowers) and constitute the valid and legally binding agreements of the Borrowers, enforceable against the Borrowers in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

16. Indemnification. Each of the Borrowers, jointly and severally, hereby indemnifies and holds the Lender Indemnitees, and each of them, and their respective successors and assigns, harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, Proceedings, suits, claims, costs, expenses and distributions of any kind or nature payable by any of the Lender Indemnitees to any Person, including reasonable attorneys’ and paralegals’ fees and expenses, court costs, settlement amounts, costs of investigation and interest thereon from the time such amounts are due at the highest non-usurious rate of interest permitted by applicable law, through all negotiations, mediations, arbitrations, trial and appellate levels, as a result of, or arising out of, or relating to any matters relating to this Amendment or the Amended and Restated Note, including the assertion of a claim or ruling by a Governmental Authority that documentary stamp tax, intangible tax or any penalties or interest associated therewith must be paid by reason of the execution and delivery of this Amendment or the Amended and Restated Note or the other Loan Documents. The foregoing indemnification obligations shall survive the termination of the Credit Agreement or any of the Loan Documents and repayment of the Obligations.

17. Release. As a material inducement for Lender to enter into this Amendment, each of the Borrowers does hereby release, waive, discharge, covenant not to sue, acquit, satisfy and forever discharges each of the Lender Indemnitees and their respective successors and assigns, from any and all liabilities, obligations, losses, damages, penalties, actions, judgments, Proceedings, suits, claims, costs, expenses and distributions of any kind or nature whatsoever in law or in equity which any Borrower ever had, now has, or which any successor or assign of any Borrower hereafter can, shall or may have against any of the Lender Indemnitees, for, upon or by reason of any matter, cause or thing whatsoever related to the Credit Agreement, this Amendment or any other Loan Documents, through the date hereof. The Borrowers further expressly agree that the foregoing release and waiver agreement is intended to be as broad and inclusive as permitted by the laws governing the Credit Agreement. In addition to, and without limiting the generality of foregoing, the Borrowers further covenant with and warrant unto the Lender and each of the other Lender Indemnitees, that as of the date hereof, there exists no claims, counterclaims, defenses, objections, offsets or other claims against Lender or any other Lender Indemnitee, or the obligation of the Borrowers to comply with the terms and provisions of the Credit Agreement, this Amendment and all other Loan Documents. The foregoing release shall survive the termination of the Credit Agreement or any of the Loan Documents and repayment of the Obligations.

18. Effect on Agreement and Loan Documents. Except as expressly amended by this Amendment, all of the terms and provisions of the Credit Agreement and the Loan Documents shall remain and continue in full force and effect after the execution of this Amendment, are hereby ratified and confirmed, and incorporated herein by this reference.

19. Waiver. This Amendment shall not be deemed or construed in any manner as a waiver by the Lender of any claims, Proceedings, defaults, Events of Default, breaches or misrepresentations by the Borrowers under the Credit Agreement, any other Loan Documents, or any of Lender’s rights or remedies in connection therewith.

20. Execution. This Amendment may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Amendment. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.

21. Fees and Expenses.

(a) Document Review and Legal Fees. The Borrowers agree to pay to the Lender or its counsel a legal fee equal to Ten Thousand and No/100 Dollars ($10,000.00) for the preparation, negotiation and execution of this Amendment and all other documents in connection herewith, together with costs of $850.00 associated with this transaction, all of which shall be due and payable by the Borrowers upon execution of this Amendment and withheld from the proceeds of the Additional Advance.

(b) Transaction Fees. The Borrowers agree to pay to Lender a transaction advisory fee equal to two percent (2%) of the amount of the Additional Advance made hereby, which fee shall be due and payable by the Borrowers upon execution of this Amendment and withheld from the proceeds of the Additional Advance.

22. Additional Agreements.

(a) Addition of Collateral. Borrowers and Lender agree that, effective as of the date of this Amendment, the Solar Facility project described in, and which is the subject of, the Purchase Agreement, and all Receipts associated therewith, and all other Collateral of Maili (as defined in Exhibit B-1 hereto), plus the CHP Plant, and all Receipts associated therewith, and all other Collateral of Sumter (as defined in Exhibit B-1 hereto), shall be and are deemed to be Included Projects under the Credit Agreement, and part of the Collateral for all Obligations. In this regard, promptly after the full execution of this Amendment by Borrowers and Lender, the Lender shall have the right to file a UCC-3 Amendment form for each of the UCC-1’s to reflect the foregoing change in Collateral (or, if applicable or as Lender may elect, new UCC-1’s to reflect the foregoing additional Collateral).

(b) Extension of Maturity Date. The Borrowers and Lender hereby agree and acknowledge that the Revolving Loan Maturity Date has been extended to the earlier of: (i) July 1, 2016; (ii) upon prepayment of all outstanding Obligations; or (iii) the occurrence of an Event of Default and acceleration of all Obligations pursuant to the Credit Agreement and other Loan Documents, unless the date in clause (i) shall be extended by Lender pursuant to any modification, extension or renewal executed by Borrowers and accepted by Lender in its sole and absolute discretion.

(c) Additional Security. To secure the payment and performance by Borrowers of the Obligations under the Credit Agreement and all other Loan Documents, the Issuing Borrower shall grant, under and pursuant to the “Pledge Agreement” executed by the Issuing Borrower dated as of the date hereof, to Lender, its successors and assigns, a continuing, first-priority security interest in, and assignment, transference, mortgage, conveyance, pledge, hypothecation and set over to Lender, its successors and assigns, all of the Issuing Borrower’s right, title and interest in and to all of the membership interests, as applicable, of each of Maili and Sumter. At any time upon Lender’s request, the Issuing Borrower shall execute and deliver to Lender any other documents, instruments or certificates requested by Lender for the purpose of properly documenting and perfecting the security interests of Lender in and to the membership interests of Maili and Sumter granted hereunder, including any additional pledge agreements and financing statements. The Pledge Agreement executed by the Issuing Borrower shall terminate following the full payment and performance of all of the Obligations hereunder and under any Loan Document and upon Lender’s express written acknowledgement of such full payment and performance being received by the Borrower.

(d) Issuance of Preferred Stock. To secure the payment and performance by Borrowers of the Obligations under the Credit Agreement and all other Loan Documents, the Issuing Borrower shall issue 400,000 shares of its Series D Convertible Preferred Stock (the “Series D Stock”), which Series D Stock shall be issued by the Issuing Borrower upon the execution by Borrowers of this Amendment in accordance with the terms of the subscription agreement executed by Lender as of the date hereof, and which Series D Stock shall be subject to the terms and provisions of the Certificate of Designation of the Rights, Preferences, Privileges, and Restrictions for such Series D Stock dated as of February 24, 2015 (the “Certificate of Designations”), and that certain Lock Up/Leak Out Agreement between Lender and the Issuing Borrower entered as of the date hereof (the “Lock Up Agreement”). The Certificate of Designations shall not be modified or amended in any respect without first obtaining Lender’s written consent, which consent may be given, withheld, or conditioned by Lender in its sole and absolute discretion.

(e) Payment Directions. The Borrowers and Lender agree that, in connection with the Additional Advance, Sun Financial is executing an instrument pursuant to which Sun Financial agrees that all sums due and owing to Issuing Borrower under the Purchase Agreement are to be remitted to the trust account of David Kahan, P.A. (“DKPA”), counsel for Lender. In this regard, DKPA joins in this Amendment for the purpose of acknowledging that, upon receipt of any such funds from Sun Financial, DKPA shall first disburse One Million ($1,000,000) of such sums to Lender, to be applied by Lender to the Obligations then outstanding, and thereafter, any remaining funds held by DKPA from the sums received from Sun Financial under the Purchase Agreement shall be remitted to Issuing Borrower.

[Signatures on the following page]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written.

BORROWERS:


BLUE EARTH, INC., a Nevada corporation By: /s/ Johnny R. Thomas Name: Johnny R. Thomas Title: CEO		BLUE EARTH TECH, INC., a Nevada corporation By: /s/ Johnny R. Thomas Name: Johnny R. Thomas Title: President

BLUE EARTH GENERATOR, INC., a Nevada corporation (f/k/a Blue Earth Energy Management, Inc.) By: /s/ John Brogan Name: John Brogan Title: President		BLUE EARTH ENERGY MANAGEMENT SERVICES, INC., a California corporation (f/k/a Castrovilla, Inc.) By: /s/ John Pink Name: John Pink Title: President

BLUE EARTH FINANCE, INC., a Nevada corporation By: /s/ Johnny R. Thomas Name: Johnny R. Thomas Title: President		BLUE EARTH SOLAR, INC. (f/k/a Xnergy), a California corporation By: /s/ Ruben Fontes Name: Ruben Fontes Title: President

ECOLEGACY GAS & POWER, LLC, a California limited liability company By: /s/ Ruben Fontes Name: Ruben Fontes Title: President		BLUE EARTH POWER PERFORMANCE SOLUTIONS, INC., an Oregon corporation (f/k/a Intelligent Power, Inc.) By: /s/ Pete Johnson Name: Pete Johnson Title: President

BLUE EARTH ENERGY POWER SOLUTIONS, LLC, an Oregon limited liability company (f/k/a Millennium Power Solutions, LLC) By: /s/ Ruben Fontes Name: Ruben Fontes Title: President		SUMTER HEAT & POWER, LLC , a Nevada limited liability company By: /s/ Robert Potts Name: Robert Potts Title: President

BLUE EARTH CHP, INC., a Utah corporation

(f/k/a IPS Power Engineering, Inc.)

By: /s/ Robert Potts

Name: Robert Potts

Title: President

MAILI PV 01, LLC, a Hawaii limited

liability company

By: /s/ Johnny R. Thomas

Name: Johnny R. Thomas

Title: President

LENDER:

TCA GLOBAL CREDIT MASTER FUND, LP

By: TCA Global Credit Fund GP, Ltd.
Its: General Partner

By: /s/ Robert Press
Robert Press, Director

David Kahan, P.A. joins in this Amendment solely for purposes of agreeing to the provisions in Section 22(d) above.

DAVID KAHAN, P.A.

By: /s/ David Kahan
David Kahan, President

EXHIBIT B-1

COLLATERAL

The term “Collateral” as used and defined in the Credit Agreement and the Security Agreement, shall from and after the date of this Amendment, be revised to mean the following (all capitalized words and phrases used herein and not otherwise specifically defined herein or in the Credit Agreement shall have the respective meanings assigned to such terms in the UCC, as defined in the Credit Agreement):

1. The Series D Stock issued pursuant to this Amendment; and

2. The following with respect to Maili and Sumter (Maili and Sumter being collectively referred to as Debtor for the purposes of the definition of Collateral herein):

(a) all property of, or for the account of, Debtor now or hereafter coming into the possession, control or custody of, or in transit to, Secured Party or any agent or bailee for Secured Party or any parent, affiliate or subsidiary of Secured Party or any participant with Secured Party in the Obligations (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise), including all cash, earnings, dividends, interest, or other rights in connection therewith and the products and proceeds therefrom, including the proceeds of insurance thereon; and

(b) the additional property of Debtor, whether now existing or hereafter arising or acquired, and wherever now or hereafter located, together with all additions and accessions thereto, substitutions, betterments and replacements therefor, products and Proceeds therefrom, and all of Debtor’s books and records and recorded data relating thereto (regardless of the medium of recording or storage), together with all of Debtor's right, title and interest in and to all computer software required to utilize, create, maintain and process any such records or data on electronic media, identified and set forth as follows:

(i) All Accounts and all goods whose sale, lease or other disposition by Debtor has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, Debtor, or rejected or refused by a customer;

(ii) All Inventory, including raw materials, work-in-process and finished goods;

(iii) All goods (other than Inventory), including embedded software, Equipment, vehicles, furniture and Fixtures;

(iv) All Software and computer programs;

(v) All Securities, Investment Property, Financial Assets and Deposit Accounts, and all funds at any time deposited therewith;

(vi) All As-Extracted Collateral, Commodity Accounts, Commodity Contracts, and Farm Products;

(vii)

All Chattel Paper, Electronic Chattel Paper, Instruments, Documents, Letter of Credit Rights, all proceeds of letters of credit, Health-Care-Insurance Receivables, Supporting Obligations, notes secured by real estate, Commercial Tort Claims and General Intangibles, including Payment Intangibles;

(viii)

All real estate property owned by Debtor and the interest of Debtor in fixtures related to such real property;

(ix)

All Proceeds (whether Cash Proceeds or Non-cash Proceeds) of the foregoing property, including all insurance policies and proceeds of insurance payable by reason of loss or damage to the foregoing property, including unearned premiums, and of eminent domain or condemnation awards; and

(x)

The following (the “Included Projects”):

(I) All assets and property of any nature or kind, whether now owned or hereafter acquired, of Maili, including the Solar Facility that is being developed and constructed by Maili, all assets or property to construct same, the revenues to be generated therefrom, and the rights of Maili under the Purchase Agreement; and

(II) All assets and property of any nature or kind, whether now owned or hereafter acquired, of Sumter, including the CHP Plant, all assets or property to construct and operate same, and the revenues generated therefrom.

EXHIBIT B-2

EXCLUDED PROJECTS

The parties hereby agree that the term “Excluded Projects” shall mean:

All CHP or solar projects of the Unsecured Subsidiaries, and all assets, equipment, and work product associated therewith, other than the Collateral as defined in Exhibit B-1 above.

Exhibit B-1 and Exhibit B-2 hereby replace in all respects the Exhibit B previously attached to the Credit Agreement dated as of January 31, 2013 and made effective as of February 22, 2013.

EX-10.2 4 bblu_102.htm REPLACEMENT, AMENDED AND RESTATED PROMISSORY NOTE ex-10.2

EXHIBIT 10.2

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE OF AN EXEMPTION AVAILABLE PURSUANT TO WHICH REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITES STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

REPLACEMENT, AMENDED AND RESTATED PROMISSORY NOTE

Effective Date: as of February 24, 2015

$3,000,000.00

FOR VALUE RECEIVED, BLUE EARTH, INC., a Nevada corporation (the “Issuing Borrower”), BLUE EARTH TECH, INC., a Nevada corporation, BLUE EARTH GENERATOR, INC. (f/k/a Blue Earth Energy Management, Inc.), a Nevada corporation, BLUE EARTH FINANCE, INC., a Nevada corporation, BLUE EARTH ENERGY MANAGEMENT SERVICES, INC. (f/k/a Castrovilla, Inc.), a California corporation, BLUE EARTH SOLAR, INC. (f/k/a Xnergy), a California corporation, ECOLEGACY GAS & POWER, LLC, a California limited liability company, BLUE EARTH POWER PERFORMANCE SOLUTIONS, INC. (f/k/a Intelligent Power, Inc.), an Oregon corporation, BLUE EARTH ENERGY POWER SOLUTIONS, LLC (f/k/a Millennium Power Solutions, LLC), an Oregon limited liability company, BLUE EARTH CHP, INC. (f/k/a IPS Power Engineering, Inc.), a Utah corporation, MAILI PV 01, LLC, a Hawaii limited liability company, and SUMTER HEAT & POWER, LLC, a Nevada limited liability company, whose address is 2298 Horizon Ridge Parkway, Suite 205, Henderson, NV 89052 (each of the foregoing, including the Issuing Borrower, hereinafter sometimes individually referred to as a “Borrower” and all such entities sometimes hereinafter collectively referred to as “Borrowers”), jointly, severally and collectively, hereby promise to pay to the order of TCA Global Credit Master Fund, LP, a Cayman Islands limited

partnership, with an office located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, and its successors or assigns (the “Holder”), the principal amount of Three Million and No/100 United States Dollars (US$3,000,000.00) on or prior to the Revolving Loan Maturity Date (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) per annum (the “Applicable Rate”) commencing as of the effective date hereof, and to pay all other Obligations under the Credit Agreement, all in accordance with the terms hereof and the Credit Agreement. This Promissory Note (this note, and all modifications, extensions, future advances, supplements, and renewals thereof, and any substitutions therefor, hereinafter referred to as the “Note”) shall be payable in accordance with the terms set forth below.

1. Payments.

(a) Interest Only Payments. Commencing on the first (1^st) day of April 2015, and on the first (1^st) day of each consecutive calendar month thereafter through and including July 1, 2015, the Borrowers shall make a payment to Holder of all accrued and unpaid interest due hereunder.

(b) First Principal Payment. On the earlier to occur of: (i) July 1, 2015; or (ii) the closing of the sale contemplated by the “Purchase Agreement” (as defined in the Second Amendment), the Borrowers shall make a principal payment to Holder in the amount of One Million Dollars ($1,000,000).

_(c)_{Principal and Interest Payments}_{. Commencing on the first (1}^st_{) day of August 1,}2015, and on the first (1st) day of each consecutive calendar month thereafter until the Maturity Date, the Borrowers shall make a payment to Holder of principal and interest in an amount necessary and required to fully amortize the then remaining principal amount of this Note in equal monthly payments by the Maturity Date. The amount of such principal and interest payments shall be calculated by Holder pursuant to an amortization schedule to be prepared by Holder and delivered to Borrowers prior to the payment due hereunder on August 1, 2015.

(d) Payment at Maturity. The principal amount of this Note, together with all accrued and unpaid interest, and all other sums and other Obligations due and payable hereunder and/or under any other Loan Documents, shall be due and payable in full to the Holder on the Maturity Date.

(e) Prepayment. The Borrowers, at their option, shall have the right to make full or partial prepayments under this Note without premium or penalty, at any time prior to the Maturity Date.

(f) Payment of Default Interest. Any amount of principal, interest or other sums due on this Note which is not paid when due shall bear interest from the date due until such past due amount is paid in full at the Default Rate.

(g) Late Fee. If all or any portion of the payments of principal, interest or other charges due hereunder are not received by the Holder within five (5) days of the date such payment is due, then the Borrowers shall pay to the Holder a late charge (in addition to any other remedies that Holder may have) equal to five percent (5%) of each such unpaid payment or sum.

Any payments returned to Holder for any reason must be covered by wire transfer of immediately available funds to an account designated by Holder, plus a $100.00 administrative fee charge. Holder shall have no responsibility or liability for payments purportedly made hereunder but not actually received by Holder; and the Borrowers shall not be discharged from the obligation to make such payments due to loss of same in the mails or due to any other excuse or justification ultimately involving facts where such payments were not actually received by Holder.

(h) General Payment Provisions. Interest shall be calculated on the basis of a 360- day year, and shall accrue daily on the outstanding principal amount outstanding from time to time for the actual number of days elapsed, until payment in full of the Obligations has been made. All payments received and actually collected by Holder hereunder shall be applied first to any costs, fees and expenses due or incurred hereunder or under any other Loan Documents, second to accrued and unpaid interest hereunder, and last to reduce the outstanding principal balance of this Note. All payments on this Note shall be made in lawful money of the United States of America by wire transfer to Holder’s account as set forth in Exhibit “A” attached hereto, or such other account as the Holder may designate by written notice to the Borrowers from time to time in accordance with the provisions of this Note (except that the principal payment due under Section 1(b) above may be made directly by Sun Financial to DKPA in accordance with the terms of the Second Amendment).

2. Amended and Restated Note. This Note is being issued in connection with a Credit Agreement by and between the Borrower and the Holder dated as of January 31, 2013, but made effective as of February 22, 2013, as amended by that certain First Amendment to Credit Agreement dated as of September 11, 2013 (the “First Amendment”), as further amended by Second Amendment to the Credit Agreement dated of even date herewith (the “Second Amendment”) (collectively, as further amended, supplemented, renewed or modified from time to time, the “Credit Agreement”). Capitalized terms used herein and not otherwise defined in this Note shall have the same meaning ascribed to such terms as set forth in the Credit Agreement, unless the context otherwise requires. This Note amends, restates, replaces and supersedes, in its entirety, the “Existing Revolving Note” (as such term is defined in the Second Amendment), as well as all other Obligations of the Borrowers as more specifically set forth and outlined in the Second Amendment (the “Original Obligations”). It is the intention of the Borrowers and Holder that while this Note amends, restates, replaces and supersedes the Original Obligations, in their entirety, it is not in payment or satisfaction of the Original Obligations, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Should there be any conflict between any of the terms of the Original Obligations, and the terms of this Note, the terms of this Note shall control. This Note is not a novation.

3. Secured Nature of Note. The indebtedness evidenced by this Note is secured by all of the Loan Documents, and UCC-1 Financing Statements filed of record in connection therewith. All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the Loan Documents which are to be kept and performed by the Borrowers are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, and the Borrowers covenant and agree to keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.

_4._{Defaults and Remedies}_.

(a) Events of Default. The occurrence of any of the following events shall constitute an “Event of Default” hereunder: (i) the Borrowers shall fail to pay any installment of interest, principal or other sums due under this Note or any other Loan Documents when any such payment shall be due and payable; (ii) any of the Borrowers makes an assignment for the benefit of creditors; (iii) any order or decree is rendered by a court which appoints or requires the appointment of a receiver, liquidator or trustee for any of the Borrowers, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (iv) any order or decree is rendered by a court adjudicating any of the Borrowers insolvent, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (v) any of the Borrowers files a petition in bankruptcy under the provisions of any bankruptcy law or any insolvency act; (vi) any of the Borrowers admits, in writing, its inability to pay its debts as they become due; (vii) a proceeding or petition in bankruptcy is filed against any of the Borrowers, and such proceeding or petition is not dismissed within thirty (30) days from the date it is filed; (viii) any of the Borrowers files a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United States or any other foreign country or state; or (ix) any of the Borrowers shall fail to perform, comply with or abide by any of the stipulations, agreements, conditions and/or covenants contained in this Note or any other Loan Documents on the part of the Borrowers to be performed, complied with, or abided by, and such failure is not cured within ten (10) days after written notice of such failure is delivered by Holder to the Borrowers. Notwithstanding the foregoing, for purposes of Sections 4(a) and (b), Borrowers shall be defined to mean solely Blue Earth, Inc., Blue Earth CHP, Inc., Maili PV 01, LLC and Sumter Heat & Power, LLC.

(b) Remedies. Upon the occurrence of one or more Events of Default, the Holder, at its option and without further notice, demand or presentment for payment to the Borrowers or others, may declare the then outstanding principal balance of this Note, together with all other Obligations due under the Note and the other Loan Documents, immediately due and payable, together with all accrued and unpaid interest thereon and thereafter all such sums shall bear interest at the Default Rate, together with all reasonable attorneys’ fees, paralegals’ fees and costs and expenses incurred by the Holder in collecting or enforcing payment thereof (whether such fees, costs or expenses are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise), and all other sums due by the Borrowers hereunder and under the Loan Documents, all without any relief whatsoever

from any valuation or appraisement laws and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to the Holder at law, in equity, or under this Note or the other Loan Documents.

5. Lost or Stolen Note. Upon notice to the Borrowers of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Borrowers in a form reasonably acceptable to the Borrowers and customary for similar circumstances in commercial lender/borrower circumstances, and, in the case of mutilation, upon surrender and cancellation of the Note, the Borrowers shall execute and deliver a new Note of like tenor and date and in substantially the same form as this Note.

6. Cancellation. After all Obligations at any time owed on this Note or any other Loan Documents have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Borrowers for cancellation and shall not be re-issued.

7. Waivers. The Borrowers hereby waive and release all benefit that might accrue to the Borrowers by virtue of any present or future laws exempting any property that may serve as security for this Note, or any other property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy, or sale under execution, exemption from civil process, or extension of time for payment, including, without limitation, any and all homestead exemption rights of the Borrowers, if any; and the Borrowers agree that any property that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued thereon, may be sold upon any such writ in whole or in part in any order or manner desired by Holder. In addition, the Borrowers and all others who are, or may become liable for the payment hereof: (i) severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest of this Note or the other Loan Documents, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note or the other Loan Documents; (ii) expressly consent to all extensions of time, renewals or postponements of time of payment of this Note or the other Loan Documents from time to time prior to or after the maturity of this Note without notice, consent or further consideration to any of the foregoing; (iii) expressly agree that the Holder shall not be required first to institute any suit, or to exhaust its remedies against the Borrowers, or any other Person or party to become liable hereunder or against any collateral that may secure this Note in order to enforce the payment of this Note; and (iv) expressly agree that, notwithstanding the occurrence of any of the foregoing (except the express written release by the Holder of any such Person), the undersigned shall be and remain, directly and primarily liable for all sums due under this Note.

8. Governing Law. All terms and provisions hereof and the rights and obligations of the Borrowers and Holder hereunder shall be governed, construed and interpreted in accordance with the laws of the State of Nevada, without reference to conflict of laws principles.

9. Expenses. The Borrowers agree to pay and reimburse the Holder upon demand for all costs and expenses (including, without limitation, attorneys’ fees and expenses) that the Holder may incur in connection with (i) the exercise or enforcement of any rights or remedies (including, but not limited to, collection) granted hereunder or otherwise available to it (whether at law, in equity or otherwise), or (ii) the failure by the Borrowers to perform or observe any of the provisions hereof. The provisions of this Section 9 shall survive the execution and delivery of this Note, the repayment of any or all of the principal or interest owed pursuant hereto, and the termination of this Note.

10. Waiver of Jury Trail. THE BORROWERS HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF OR BETWEEN ANY PARTY HERETO, AND THE BORROWERS AGREE AND CONSENT TO THE GRANTING TO HOLDER OF RELIEF FROM ANY STAY ORDER WHICH MIGHT BE ENTERED BY ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER IN OBTAINING SUCH RELIEF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS NOTE FROM THE BORROWERS. THE BORROWERS’ REASONABLE RELIANCE UPON SUCH INDUCEMENT IS HEREBY ACKNOWLEDGED.

11. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies of the Holder as provided herein, or the other Loan Documents, shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

12. Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Borrower and the Holder and shall not be construed against any person as the drafter hereof.

13. Failure or Indulgence Not Waiver. Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder or under any Loan Documents, unless such waiver is in writing and signed by Holder, and then only to the extent specifically set forth in the writing. A waiver on one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.

14. Notice. Notice shall be given to each party at the address indicated in the preamble hereto or at such other address as provided to the other party in writing, and such notice shall be deemed properly given in accordance with the notice provisions set forth in the Credit Agreement.

15. Usury Savings Clause. Notwithstanding any provision in this Note or the other Loan Documents, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance of this Note immediately upon receipt of such sums by the Holder hereof, with the same force and effect as though the Borrowers had specifically designated such excess sums to be so applied to the reduction of such outstanding principal balance and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder of this Note may, at any time and from time to time, elect, by notice in writing to the Borrowers, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the outstanding principal balance. It is the intention of the parties that the Borrowers do not intend or expect to pay nor does the Holder intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

16. Binding Effect. This Note shall be binding upon the Borrowers and the successors and assigns of the Borrowers and shall inure to the benefit of Holder and the successors and assigns of Holder.

17. Severability. In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal, or unenforceable, in whole or in part, in any respect, or in the event that any one or more of the provisions of this Note operates or would prospectively operate to invalidate this Note, then and in any of those events, only such provision or provisions shall be deemed null and void and shall not affect any other provision of this Note. The remaining provisions of this Note shall remain operative and in full force and effect and shall in no way be affected, prejudiced, or disturbed thereby.

18. Participations. Holder may from time to time sell or assign, in whole or in part, or grant participations in this Note and/or the obligations evidenced hereby, without any requirement to obtain the Borrowers’ written consent (provided, however, that Holder shall not so sell or assign this Note to any party that Holder knows is a direct or indirect competitor of Borrowers). The holder of any such sale, assignment or participation, if the applicable agreement between Holder and such holder so provides, shall be: (a) entitled to all of the rights, obligations and benefits of Holder (to the extent of such holder’s interest or participation); and (b) deemed to hold and may exercise the rights of setoff or banker’s lien with respect to any and all obligations of such holder to the Borrowers (to the extent of such holder’s interest or participation), in each case as fully as though the Borrowers were directly indebted to such holder. Holder may in its discretion give notice to the Borrowers of such sale, assignment or participation; however, the failure to give such notice shall not affect any of Holder’s or such holder’s rights hereunder.

19. Amendments. The provisions of this Note may be changed only by a written agreement executed by the Borrowers and Holder.

20. Non-U.S. Status. THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW.

21. The liability of all Borrowers hereunder shall be joint and several.

[Signature page follows]

IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed as of the Effective Date set forth above.

_BORROWERS:


BLUE EARTH, INC., a Nevada corporation		BLUE EARTH TECH, INC., a Nevada corporation

By: /s/ Johnny R. Thomas Name: Johnny R. Thomas Title: CEO		By: /s/ Johnny R. Thomas Name: Johnny R. Thomas Title: President

BLUE EARTH GENERATOR, INC., a Nevada corporation (f/k/a Blue Earth Energy Management, Inc.)		BLUE EARTH ENERGY MANAGEMENT SERVICES, INC., a California corporation (f/k/a Castrovilla, Inc.)

By: /s/ John Brogan Name: John Brogan Title: President		By: /s/ John Pink Name: John Pink Title: President

BLUE EARTH FINANCE, INC., a Nevada corporation		BLUE EARTH SOLAR, INC. (f/k/a Xnergy), a California corporation

By: /s/ Johnny R. Thomas Name: Johnny R. Thomas Title: President		By: /s/ Ruben Fontes Name: Ruben Fontes Title: President

ECOLEGACY GAS & POWER, LLC, a California limited liability company		BLUE EARTH POWER PERFORMANCE SOLUTIONS, INC., an Oregon corporation (f/k/a Intelligent Power, Inc.)

By: /s/ Ruben Fontes Name: Ruben Fontes Title: President		By: /s/ Pete Johnson Name: Pete Johnson Title: President

BLUE EARTH ENERGY POWER SOLUTIONS, LLC, an Oregon limited liability company (f/k/a Millennium Power Solutions, LLC)		SUMTER HEAT & POWER, LLC, a Nevada limited liability company

By: /s/ Ruben Fontes Name: Ruben Fontes Title: President		By: /s/ Robert Potts Name: Robert Potts Title: President


BLUE EARTH CHP, INC., a Utah corporation (f/k/a IPS Power Engineering, Inc.)		MAILI PV 01, LLC, a Hawaii limited liability company

By: /s/ Robert Potts Name: Robert Potts Title: President		By: /s/ Johnny R. Thomas Name: Johnny R. Thomas Title: President