Exhibit 10.2
THIRD AMENDED AND RESTATED MORTGAGE NOTE
     WHEREAS, the undersigned, LIME ENERGY CO., a Delaware corporation (formerly
known as Electric City Corp.) (“Borrower”), executed and delivered to the order
AMERICAN CHARTERED BANK, an Illinois state banking association (“Bank”), that
certain Second Amended and Restated Mortgage Note, dated December 28, 2006, in
the original principal amount of $526,000.00 (the “Prior Note”); and
     WHEREAS, Borrower has requested, and Bank has agreed, to amend and restate
the Prior Note in its entirety to extend the Maturity Date on the terms and
conditions set forth herein.
     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Prior Note is hereby amended and restated in its entirety as
follows:
MORTGAGE NOTE

$490,000.00   December 17, 2007     Chicago, Illinois

     FOR VALUE RECEIVED, the undersigned, LIME ENERGY CO., a Delaware
corporation (“Borrower”), hereby promises to pay to the order of AMERICAN
CHARTERED BANK, an Illinois state banking association (“Bank”), in immediately
available funds, on February 1, 2010, or such earlier maturity date as provided
for herein, the principal sum of $490,000.00 (the “Loan”), as follows:
ARTICLE I
     1.1 Repayment of Principal and Interest. Borrower shall make equal
consecutive monthly principal installments of $3,000.00, plus monthly payments
of all accrued and unpaid interest. The monthly principal and interest payments
shall be due on the first day of each month (commencing January 1, 2008) until
February 1, 2010 (“Maturity Date”). A final payment of all outstanding principal
and all accrued and unpaid interest shall be due and payable on February 1,
2010, unless such maturity date is accelerated in accordance with the terms
hereof.
     1.2 Interest Rate. The outstanding principal balance of this Note shall
bear interest a per annum rate equal to the “Prime Rate” (as hereinafter
defined) plus .50% (“Mortgage Interest Rate”). Interest on the outstanding
principal amount hereunder shall be computed on the basis of the actual number
of days elapsed on the basis of a year of 360 days at the Mortgage Interest Rate
from time to time in effect.
     As used herein, the term “Prime Rate” shall mean the rate which, at any
time and from time to time, shall be the rate of interest then most recently
announced by the Bank as its prime rate, which is not intended to be the Bank’s
lowest or most favorable rate of interest at any one time. The effective date of
any change in the Prime Rate shall be the date the rate is changed by the Bank.

 

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The Bank shall not be obligated to give notice of any change in the Prime Rate.
Interest on the unpaid principal balance of the Loan shall be payable, in
arrears, beginning on January 1, 2006, and continuing of the last day of each
month thereafter, and on the Maturity Date.
     1.3 Prepayment. Borrower shall be permitted to make prepayment of the
indebtedness evidenced by this Note, in whole or in part, from time to time as
the Borrower may desire without penalty or premium.
ARTICLE II
     2.1 Security for Payment; Loan Documents. This Note is secured by that
certain Mortgage, Assignment of Leases and Rents and Security Agreement, dated
as of May 29, 2002, securing the property commonly known as 1280 Landmeier Road,
Elk Grove Village, Illinois, as amended by that certain Amended and Restated
Mortgage, Assignment of Leases and Rents, and Security Agreement dated
September 30, 2003 and recorded as Document #0410732101, that certain Second
Amended and Restated Mortgage, Assignment of Leases and Rents, and Security
Agreement dated December 31, 2004 and recorded as Document #0501002435, that
certain Third Modification to Mortgage recorded on January 10, 2006 as Document
#0601043120, and that certain Fourth Modification to Mortgage recorded on
January 11, 2007 as Document #0701142149 (collectively, the “Mortgage”), and the
other Loan Documents (as defined in the Mortgage). Reference is hereby made to
the Mortgage and the other Loan Documents, which are incorporated herein by this
reference as fully and with the same effect as if set forth herein at length.
     2.2 Event of Default. Borrower, without notice or demand of any kind, shall
be in default hereunder if:
          (a) any amount payable on this Note or on any other liability or
obligation of the Borrower to the Bank, howsoever created, arising or evidenced,
and howsoever owned, held or acquired, whether now or hereafter existing,
whether now due or to become due, whether direct or indirect, or absolute or
contingent, and whether several, joint or joint and several, including, without
limitation any guaranty executed by the Borrower for the benefit of the Bank
(all of which liabilities and obligations, including this Note, are hereinafter
called the “Obligations”) is not paid when due; or
          (b) Borrower shall otherwise fail to perform any of the promises to be
performed by the Borrower hereunder or under any other security agreement or
other agreement with the Bank, including, but not limited to the obligations set
forth in Article IV herein and such failure shall continue beyond any grace
period applicable thereto; or
          (c) the Borrower or any other party liable with respect to the
Obligations, or any guarantor or accommodation endorser or third party pledgor,
shall make any assignment for the benefit of creditors, or there shall be
commenced any bankruptcy, receivership, insolvency, reorganization, dissolution
or liquidation proceedings by or against, or the entry of any judgment, levy,
attachment, garnishment or other process, or the filing of any lien against the
Borrower or any guarantor, or any other party liable with respect to the
Obligations, or accommodation endorser or third party pledgor for any of the
Obligations, or against any of the Collateral (as defined below) or any of the
collateral under a separate security agreement signed by any one of them; or

 

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          (d) there be any deterioration or impairment of any of the Collateral
hereunder or any of the collateral under any security agreement executed by the
Borrower or any other party liable with respect to the Obligations, or any
guarantor or accommodation endorser or third party pledgor for any of the
Obligations, or any decline or depreciation in the value or market price thereof
(whether actual or reasonably anticipated), which causes said Collateral or
collateral in the sole opinion of the Bank acting in good faith, to become
unsatisfactory as to value or character, or which causes the Bank to reasonably
believe that it is insecure and that the likelihood for repayment of the
Obligations is or will soon be impaired, time being of the essence; or
          (e) if this Note is secured by an additional or separate security
agreement, then, the occurrence of any default thereunder; or
          (f) there is a discontinuance by any guarantor of any guaranty of
Obligations hereunder; or the determination by the Bank that a material adverse
change has occurred in the financial condition of the Borrower from the
condition set forth in the most recent financial statement of the Borrower
furnished to the Bank, or from the financial condition of the Borrower most
recently disclosed to the Bank in any manner; or
          (g) any oral or written warranty, representation, certificate or
statement of the Borrower to the Bank is untrue in any material respect; or
          (h) the failure to do any act necessary to preserve and maintain the
value and collectability of the Collateral; or
          (i) failure of the Borrower after request by the Bank to furnish
financial information or to permit inspection by the Bank of the Borrower’s
books and records; or
          (j) any guarantor of this Note or of any of the other Obligations
shall contest the validity of such guaranty.
     2.3 Acceleration of Maturity. At any time after the occurrence of any Event
of Default which is continuing, Bank has the option, without demand or notice,
to declare the unpaid principal of this Note, together with all accrued interest
and other sums evidenced by or secured by the Mortgage or any other of the Loan
Documents, at once due and payable to the extent permitted by law; to foreclose
the Mortgage and the liens or security interests securing the payment of this
Note; and to exercise any and all other rights and remedies available at law or
in equity or under the Mortgage or any of the other Loan Documents.
     2.4 Remedies. No delay on the part of the Bank in exercising any right
under this Note, the Loan Documents or other undertaking securing or affecting
this Note, shall operate as a waiver of such right or any other right under this
Note, nor shall any omission in exercising any right on the part of the Bank
under this Note operate as a waiver of any other right.
     2.5 Default Interest Rate. While any Event of Default exists, interest on
the unpaid principal balance of the Loan from time to time will accrue at an
annual rate (“Default Rate”) equal to the Mortgage Interest Rate plus 3.0%, and
Borrower shall pay such interest upon demand, or if no such demand is made, then
at the times installments of interest and/or principal are due as provided
herein.

 

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     2.6 Costs. Borrower shall pay all costs and expenses of Bank, including
reasonable attorneys’ fees and costs incurred by the Bank in enforcing this
Note.
ARTICLE III
     3.1 Notices. Any notice, demand, request or other communication which any
party may be required or may desire to give will be deemed to have been given if
made in accordance with the terms of the Mortgage.
     3.2 Governing Law. The validity, enforcement and interpretation of this
Note shall for all purposes be governed by and construed in accordance with the
laws of the State of Illinois, without regard to its conflicts of law
principles, and applicable United States federal law, and is intended to be
performed in accordance with, and only to the extent permitted by, such laws.
Borrower hereby irrevocably submit generally and unconditionally for Borrower
and in respect of Borrower’s property to the jurisdiction of any local court, or
any United States federal court, sitting in Cook County, State of Illinois, over
any suit, action or proceeding arising out of or relating to this Note or the
Loan. Borrower hereby irrevocably waive, to the fullest extent permitted by law,
any objection that Borrower may now or hereafter have to the laying of venue in
any such court and any claim that any such court is an inconvenient forum.
Nothing herein shall affect the right of Bank to serve process in any manner
permitted by law or limit the right of Bank to bring proceedings against
Borrower in any other court or jurisdiction.
     3.3 Waivers. Borrower and each Obligor waive any and all presentment,
demand, notice of dishonor, protest, and all other notices and demands in
connection with the enforcement of the Bank’s rights hereunder. No default shall
be waived by the Bank except in writing. No delay on the part of the Bank in the
exercise of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise by the Bank of any right of remedy shall operate as a waiver
thereof, and no single or partial exercise by the Bank of any right or remedy
shall preclude other or further exercise thereof, or the exercise of any other
right or remedy. This Note: (i) is valid, binding and enforceable in accordance
with its provisions, and no conditions exist to the legal effectiveness of this
Note; (ii) contains the entire agreement between the Borrower and the Bank;
(iii) taken with the Mortgage and the other Loan Documents, is the final
expression of their intentions; and (iv) supersedes all negotiations,
representations, warranties, commitments, offers, contracts (of any kind or
nature, whether oral or written) prior to or contemporaneous with the execution
hereof. Other than as set forth in the Mortgage and the other Loan Documents, no
prior or contemporaneous representations, warranties, understanding, offers or
agreements of any kind or nature, whether oral or written, have been made by the
Bank or relied upon by the Borrower in connection with the execution hereof. No
modification, discharge, termination or waiver of any of the provisions hereof
shall be binding upon the Bank, except as expressly set forth in a writing duly
signed and delivered on behalf of the Bank.
     3.4 Construction. The validity and construction of this Note and all
matters pertaining thereto are to be determined and construed according to the
laws of the State of Illinois, without regard to its conflicts of law
principles. The captions and headings of this Note are for convenience only
shall be disregarded in construing it.

 

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     3.5 Business Loan. Borrower hereby represents that: (a) the proceeds of the
Loan will be used for the purposes specified in 815 ILCS 205/4(1)(a) or (c) of
the Illinois Compiled Statutes, as amended; (b) the Loan constitutes a “business
loan” within the purview of those Sections; and (c) the proceeds of the Loan
will not be used for the purchase of registered equity securities within the
purview of Regulation “U” issued by the Board of Governors of the Federal
Reserve System.
     3.6 Severability. In the event any provision (or any part of any provision)
contained in this Note shall for any reason be finally held by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision (or remaining part of the affected provision) of this Note; but this
Note shall be construed as if such invalid, illegal or unenforceable provision
(or part thereof) had never been contained herein, but only to the extent it is
invalid, illegal or unenforceable.
     3.7 Usury. Notwithstanding any provisions of this Note or any instrument
securing payment of the indebtedness evidenced by this Note to the contrary, it
is the intent of Bank that Bank shall never be entitled to receive, collect or
apply, as interest on principal of the indebtedness, any amount in excess of the
maximum rate of interest permitted to be charged by applicable law; and if under
any circumstance whatsoever, fulfillment of any provision of this Note, at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by applicable law, then the obligation to be
fulfilled shall be reduced to the limit of such validity; and in the event Bank
ever receives, collects or applies as interest any such excess, such amount
which would be excess interest will be deemed a permitted partial prepayment of
principal without penalty or premium and treated as such; and if the principal
amount secured hereby is paid in full, any remaining excess funds shall
forthwith be paid to Borrower. In determining whether or not interest of any
kind payable hereunder, under any specific contingency, exceeds the highest
lawful rate, Borrower and Bank will, to the maximum extent permitted under
applicable law, (1) characterize any non-principal payment as an expense, fee or
premium rather than as interest and (2) amortize, prorate and allocate such
payment so that the interest on account of such indebtedness does not exceed the
maximum amount permitted by applicable law. Bank shall not be subject to any
penalties provided by any laws for contracting for, charging or receiving
interest in excess of the maximum lawful rate.
     3.8 Successors and Permitted Assigns. This Note shall inure to and bind
(i) Borrower and Borrower’s successors and permitted assigns, and (ii) Bank and
Bank’s successors and assigns. Without limitation of the foregoing, Borrower
expressly acknowledge that, after the closing of the Loan, Bank may assign and
transfer all rights and interests of the Bank hereunder to an assignee to be
identified by Bank, and acknowledge and agree that, upon execution and delivery
of the assignment in relation thereto, such assignee shall hold all of the
rights and interests of Bank hereunder.
     3.9 Time of Essence. Time shall be of the essence as to each and every
provision of this Note.

 

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     3.10 Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER
AND BANK HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE
OF ACTION, CLAIM, DEMAND OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS
NOTE, OR IN ANY WAY CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE DEALING OF
BORROWER AND BANK WITH RESPECT TO THIS NOTE, OR THE TRANSACTIONS RELATED HERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER
AND BANK HEREBY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT BANK OR
BORROWER MAY FILE AN EXECUTED COPY OF THIS NOTE WITH ANY COURT OR OTHER TRIBUNAL
AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWER AND BANK TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES
A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER, AND
BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY, THAT THEY HAVE
BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL SELECTED BY BORROWER OF ITS OWN FREE WILL, AND THAT
THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
ARTICLE IV
     4.1 Security. As security for the payment of this Note and any and all
other liabilities and Obligations of the Borrower to the Bank, the Borrower does
hereby pledge, assign, transfer and deliver to the Bank and does hereby grant to
the Bank a continuing security interest in and to any property of the Borrower
of any kind or description, tangible or intangible, now or hereafter assigned,
transferred or delivered to or left in or coming into the possession, control or
custody of, or in transit to, the Bank or any agent or bailee for the Bank, by
or for the account of the Borrower, whether expressly as collateral security or
for any other purpose, including, without limitation, all property left with the
Bank whether held in a general or special account or for safekeeping or
otherwise, all dividends, interest, or other rights in connection with any
securities included in said property left with the bank whether held in a
general or special account or for safekeeping or otherwise, all dividends,
interest, or other rights in connection with any securities included in said
property coming into the possession of the Bank in any way and any property
covered by a security agreement signed or assigned by the Borrower in favor of
the Bank, including, but not limited to the cash, accounts, inventory,
negotiable instruments, documents of title, chattel paper, certificates of
deposit, securities, deposit accounts, other cash equivalents and all other
property of whatever description of the Borrower, whether now existing or
hereafter acquired, and now or hereafter in the possession or control of or
assigned to the Bank, and the products and proceeds therefrom, including the
proceeds of insurance thereon; and the additional property of the Borrower,
whether now existing or hereafter arising or acquired, together with any
substitutions therefore, accessions thereto, or products and proceeds therefrom,
including the proceeds of insurance thereon, but

 

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excluding in all events any personal property of the Borrower.
     All of the aforesaid property and the products and proceeds therefrom,
including the proceeds of insurance thereon are herein collectively called the
“Collateral.” The terms used herein to identify the Collateral shall have the
respective meanings assigned to such terms in the Illinois Uniform Commercial
Code, as in effect from time to time. The cancellation or surrender of this
Note, upon payment or otherwise, shall not affect the right of the Bank to
retain the Collateral for any other of the Obligations.
ARTICLE V
     Borrower shall maintain all of its operating, cash management, depository,
payment, lock box, remittance and investment accounts with Bank, other than
certain certificates of deposit, and shall collectively maintain balances in
such accounts as are necessary to compensate Bank for any service charges on
such accounts. Borrower shall deposit into such accounts all amounts necessary
to pay any service charges payable to Bank immediately following notice from
Bank of the amount by which such service charges exceed the balance in such
accounts.
     IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered as of the date first stated above.

                  LIME ENERGY CO., a Delaware corporation
 
           
 
  By:
Its:   /s/ Jeffrey Mistarz
 
Chief Financial Officer