Exhibit 10.1

 

CREDIT AND SECURITY AGREEMENT

 

This CREDIT AND SECURITY AGREEMENT (the “Agreement”), dated as of September 16,
2013, is entered into between ECOtality, Inc., a Nevada corporation
(“ECOtality”), and Electric Transportation Engineering Corporation, an Arizona
corporation (together with ECOtality, “Borrowers” and each, individually, a
“Borrower”), and ECOtality Stores Inc., a Nevada corporation (“Stores”), ETEC
North, LLC, a Delaware limited liability company (“North”), The Clarity Group,
Inc., a Arizona corporation (“Clarity”), G.H.V. Refrigeration, Inc., a
California corporation (“GHV”, together with Stores, North, and Clarity, the
“Guarantors”, and together with Borrowers, each a “Credit Party” and
collectively, the “Credit Parties”) and Nissan North America, Inc., a California
corporation (“Lender”).

 

WHEREAS, On September 16, 2013 (the “Petition Date”), each Credit Party filed a
voluntary petition for relief under Chapter 11 of Title 11 of the United States
Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the
District of Arizona (the “Bankruptcy Court”) and is continuing to operate its
business as a debtor in possession under sections 1107 and 1108 of the
Bankruptcy Code.

 

WHEREAS, Borrowers have requested that Lender make available to Borrowers a
delayed draw term loan in an amount of up to One Million Two Hundred Fifty
Thousand Dollars ($1,250,000) (the “Term Loan”), the proceeds of which shall be
used by Borrowers to (i) fund Borrowers’ operations until the Sale (as defined
below), (ii) to fund $27,000 for the operations of the Operating Subsidiaries
and (iii) to pay certain administrative costs necessary to maintain the
corporate existence of the Guarantors’ operations, in each case in accordance
with the Budget (as defined below).

 

WHEREAS, Lender is willing to make the Term Loan available to Borrowers upon the
terms and subject to the conditions set forth herein, but will not provide any
additional funding or credit of any type other than such Term Loan; and

 

WHEREAS, Lender has agreed to permit Borrowers to transfer the Operating
Subsidiary Funds (as defined below) to Stores and Portable Energy de Mexico,
S.A. de C.V. (“Portable”, together with Stores, the “Operating Subsidiaries”) to
fund operations of the Operating Subsidiaries, and the Administrative Funds (as
defined below) to the Guarantors (other than the Operating Subsidiaries) in
order to fund the administrative costs necessary to maintain the corporate
existence of the Guarantors’ operations and, as such, Guarantors agree and
acknowledge that each Guarantor will derive material financial benefit for the
making of the Term Loan.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which hereby are
acknowledged, Credit Parties and Lender hereby agree as follows:

 

I.             DEFINITIONS

 

1.1     Certain Defined Terms. The following terms have the following meanings:

 

“Affiliate” means, as to any Person, any other Person (a) that, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person, (b) who is a director or officer (i) of
such Person, (ii) of any Subsidiary of such Person, or (iii) of any Person
described in clause (a) above with respect to such Person, or (c) which,
directly or indirectly through one or more intermediaries, is the beneficial or
record owner (as defined in Rule 13d-3 of the Securities Exchange Act of 1934,
as amended, as the same is in effect on the date hereof) of five percent (5%) or
more of any class of the outstanding voting stock, securities or other equity or
ownership interests of such Person. For purposes of this definition, the term
“control” (and the correlative terms, “controlled by” and “under common control
with”) shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies, whether through ownership
of securities or other interests, by contract or otherwise. “Affiliate” shall
include any Subsidiary.

 

 

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“Bankruptcy Cases” means each Credit Party’s bankruptcy case filed in the
Bankruptcy Court, as jointly administered under In re: _____, filed as Case No.
_______.

 

“Budget” means the budget attached hereto as Exhibit A, depicting on a weekly
basis cash revenue, receipts, expenses, disbursements and other information for
the four (4) week period following the Closing Date.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized by law to close.

 

“Closing Date” means the date on which the conditions precedent set forth in
Section 3.1 have been satisfied or waived by Lender in its sole discretion.

 

“Default” means any event, fact, circumstance or condition that, with the giving
of applicable notice or passage of time or both, would constitute or be or
result in an Event of Default.

 

“Environmental Laws” means, collectively and each individually, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendment and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the Clean Air
Act, the Clean Water Act, any other “Superfund” or “Superlien” law and all other
federal, state and local and foreign environmental, land use, zoning, health,
chemical use, safety and sanitation laws, statutes, ordinances and codes
relating to the protection of the environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Materials, in each case, as amended, and the rules,
regulations, policies, guidelines, interpretations, decisions, orders and
directives of Governmental Authorities with respect thereto.

 

“Environmental Permits” means any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization required
under any Environmental Law.

 

“Financing Orders” means the Interim Financing Order and, when applicable, the
Final Financing Order.

 

“Final Financing Order” means the order of the Bankruptcy Court in the
Bankruptcy Cases, in form and substance satisfactory to Lender in its sole
discretion, approving on a final, non-interim basis the transactions
contemplated by this Agreement and the other Loan Documents, and the Liens
granted thereunder and the other transactions contemplated thereunder.

 

“GAAP” means generally accepted accounting principles in the United States of
America in effect from time to time as applied by nationally recognized
accounting firms.

 

“Governmental Authority” shall mean any federal, state, municipal, national,
local or other governmental department, court, commission, board, bureau, agency
or instrumentality or political subdivision thereof, or any entity or officer
exercising executive, legislative or judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case, whether
of the United States or a state, territory or possession thereof, a foreign
sovereign entity or country or jurisdiction or the District of Columbia.

 

 
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“Government Funded Property” means any property of Borrowers purchased or
acquired with funds that were reimbursed with federal funds under assistance
agreements (Assistance Agreements), including assistance agreements DE-EE0002194
and DE-EE0005501, by and between any of the Borrowers and the United States
Department of Energy. For purposes of clarity, Government Funded Property
includes real property, equipment, supplies and other tangible personal property
acquired for the projects that was paid for, in whole or in part, with federal
funding received under the Assistance Agreements. Such property includes
property that were, in connection with the Assistance Agreements, either: (1)
acquired with non-federal funds and counted as cost-share: or (2) contributed as
cost-share. This definition also applies going forward with respect to property
acquired or contributed for the projects by the Borrowers after the Petition
Date.

 

“Hazardous Materials” means petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; explosives, flammable
materials; radioactive materials; polychlorinated biphenyls and compounds
containing them; lead and lead-based paint; asbestos or asbestos-containing
materials; underground or above-ground storage tanks, whether empty or
containing any substance; any substance the presence is prohibited by any
Environmental Laws; toxic mold, any substance that requires special handling;
and any other material or substance now or in the future defined as a “hazardous
substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic
pollutant,” “contaminant,” “pollutant” or other words of similar import within
the meaning of any Environmental Law.

 

“Indebtedness” of any Person means, without duplication, (a) all items which, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liability side of the balance sheet of such Person as of the date
as of which Indebtedness is to be determined, including any lease which, in
accordance with GAAP would constitute Indebtedness, (b) all indebtedness secured
by any mortgage, pledge, security, Lien or conditional sale or other title
retention agreement to which any property or asset owned or held by such Person
is subject, whether or not the indebtedness secured thereby shall have been
assumed, (c) all indebtedness of others which such Person has directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business), discounted or sold with recourse or agreed
(contingently or otherwise) to purchase or repurchase or otherwise acquire, or
in respect of which such Person has agreed to supply or advance funds (whether
by way of loan, stock, equity or other ownership interest purchase, capital
contribution or otherwise) or otherwise to become directly or indirectly liable.

 

“Interim Financing Order” means the order of the Bankruptcy Court in the
Bankruptcy Cases, in form and substance satisfactory to Lender in its sole
discretion, approving on an interim basis the transactions contemplated by this
Agreement and the other Loan Documents.

 

“Investment” means any investment in any Person, whether by means of acquiring
(whether for cash, property, services, securities or otherwise), making or
holding Indebtedness, securities, capital contributions, loans, time deposits,
advances, guarantees or otherwise.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, restriction,
lien or charge of any kind (including any agreement to grant any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof), or any other arrangement pursuant to which title to the
property is retained by or vested in some other Person for security purposes.

 

“Loan Documents” means, collectively and each individually, this Agreement, the
Note and all other agreements, documents, instruments and certificates
heretofore or hereafter executed or delivered to Lender in connection with any
of the foregoing or the Term Loan, as the same may be amended, modified or
supplemented from time to time.

 

 
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“Material Adverse Effect” means a material adverse change in, or a material
adverse effect upon, any of (i) the condition (financial or otherwise),
operations, business, properties or prospects of any Credit Party, (ii) the
rights and remedies of Lender under any Loan Document or any Lien in favor of
Lender, (iii) the ability of any Credit Party to perform any of its obligations
under any Loan Document, or (iv) the ability of the Borrowers to consummate the
Sale on or prior to October 28, 2013.

 

“Note” means that certain Term Loan Promissory Note, dated as of the Closing
Date, delivered by Borrowers to Lender in the principal amount of $1,250,000.

 

“Obligations” means all present and future obligations under this Agreement,
Indebtedness and liabilities of any Credit Party to Lender at any time and from
time to time of every kind, nature and description, direct or indirect, secured
or unsecured, joint and several, absolute or contingent, due or to become due,
matured or unmatured, now existing or hereafter arising, contractual or
tortious, liquidated or unliquidated, including, without limitation, all
applicable fees, charges and expenses and/or all amounts paid or advanced by
Lender on behalf of or for the benefit of any Credit Party for any reason at any
time except for obligations incurred outside this Agreement prior to the
Petition Date.

 

“Permit” means collectively, all licenses, leases, permits, powers, approvals,
notifications, certifications, franchises, registrations, authorizations,
exemptions, qualifications, easements, rights of way, Liens and other rights,
privileges and approvals, including but not limited to (i) Environmental
Permits, and (ii) any and all other licenses, leases, permits, powers,
approvals, notifications, certifications, franchises, registrations,
authorizations, exemptions, qualifications, easements, rights of way, Liens and
other rights, privileges and approvals required under any applicable law.

 

“Person” means an individual, a partnership, a corporation, a limited liability
company, a business trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a Governmental Authority or any other entity of
whatever nature.

 

“Reorganization Milestones” means (a) entry by the Bankruptcy Court of the Sale
Procedures Order on or before September 20, 2013, (b) entry by the Bankruptcy
Court of the Sale Approval Order on or before October 11, 2013, and (c) closing
of the Sale on or before October 28, 2013.

 

“Restricted Distribution” means as to any Person (a) any dividend or other
distribution (whether in cash, securities or other property) on any equity
interest in such Person; (b) any payment by such Person on account of (i) the
purchase, redemption, retirement, defeasance, surrender, cancellation,
termination or acquisition of any equity interests in such Person or any claim
respecting the purchase or sale of any equity interest in such Person, or (ii)
any option, warrant or other right to acquire any equity interests in such
Person; (c) any management fees or payment of any kind to any Affiliate or any
Person holding an equity interest in any Credit Party or a Subsidiary of any
Credit Party, an Affiliate of any Credit Party or an Affiliate of any Subsidiary
of any Credit Party (excluding any salaries or other compensation made to the
Credit Parties’ directors, officers and employees pursuant to the Budget); (d)
any lease or rental payments to an Affiliate or Subsidiary of Borrowers; or (e)
repayments of or debt service on loans or other indebtedness held by any
Affiliate or any Person holding an equity interest in any Credit Party or a
Subsidiary of any Credit Party, an Affiliate of any Credit Party or an Affiliate
of any Subsidiary of any Credit Party.

 

“Sale” means the sale of substantially all of the Credit Parties’ assets and any
interest of the Department of Energy in those assets (or subject to the
Department of Energy grant, as such grant may be amended, to Borrowers if it is
assumed, assigned and novated in favor of a purchaser) pursuant to the Sale
Documents approved by the Bankruptcy Court in the Sale Approval Order pursuant
to Section 363 of the Bankruptcy Code.

 

 
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“Sale Documents” means, collectively, the [Purchase Agreement] and any and all
other agreements, documents and certificates executed and delivered in
connection therewith.

 

“Sale Motion” means a motion, in form and substance satisfactory to Lender,
filed in the Bankruptcy Cases seeking entry of the Sale Procedures Order and the
Sale Approval Order.

 

“Sale Approval Order” means an order entered by the Bankruptcy Court in the
Bankruptcy Cases, in a form and substance satisfactory to Lender, approving the
Sale pursuant to the Sale Documents, including the sale of assets in which the
Department of Energy may have or assert an interest (or subject to the
Department of Energy grant, as such grant may be amended, to Borrowers if the
grant is assumed, assigned and novated in favor of the purchaser) and the
assumption and assignment of executory contracts and unexpired leases.

 

“Sale Procedures Order” means an order entered by the Bankruptcy Court in the
Bankruptcy Cases, in form and substance satisfactory to Lender, approving the
procedures for the Sale and the form of the primary Sale Documents.

 

“Subsidiary” means, as to any Credit Party, any Person in which more than 50% of
all equity, membership, partnership or other ownership interests is owned
directly or indirectly by any Credit Party or one or more of its Subsidiaries.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York
from time to time.

 

1.2     UCC Terms. All capitalized terms used which are not specifically defined
herein shall, to the extent applicable, have meanings provided in Article 9 of
the UCC in effect on the date hereof.

 

II.             ADVANCES, PAYMENT, INTEREST AND COLLATERAL

 

2.1     Term Loan. Subject to the provisions of this Agreement (including
satisfaction of the requirements set forth in Article III), Lender agrees to
loan to Borrowers the following amounts (each an “Advance”) by 10:00 a.m.
(Pacific time) on the following dates (each an “Advance Date”):

 

Advance Date

Advance

Closing Date

$500,000

September 25, 2013

$250,000

September 30, 2013

$250,000

October 7, 2013

$250,000

 

 

2.2     Maturity. All amounts outstanding and other Obligations shall be due and
payable in full on the date (the “Maturity Date”) that is the earlier of (i) any
date on which Lender accelerates the maturity of the Term Loan pursuant to
Section 8.1 herein, (ii) the date upon which the Interim Financing Order expires
if the Final Financing Order has not been entered prior to such date, (iii) the
closing of the Sale, and (iv) October 28, 2013.

 

2.3     Interest; Default Rate. Interest shall accrue on the outstanding
principal balance of the Term Loan at a per annum rate equal to five percent
(5.0%) (the “Interest Rate”). All interest shall be due and payable on the
Maturity Date. Upon the occurrence and during the continuation of an Event of
Default, the Interest Rate in effect at such time with respect to the
Obligations shall be increased by two percent (2.0%) per annum. All interest and
fees hereunder shall be computed on the basis of a year of 365/366 days and for
the actual number of days elapsed in each calculation period. In no event shall
the interest and other charges paid or agreed to be paid to Lender hereunder
exceed the maximum rate permissible under applicable law.

 

 
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2.4     Promise to Pay; Manner of Payment. Borrowers and, pursuant to the
Guarantee (as defined below), the Guarantors absolutely and unconditionally
promise to pay principal, interest and all other amounts payable hereunder, or
under any other Loan Document, without any right of rescission and without any
deduction whatsoever, including any deduction for any setoff, counterclaim or
recoupment. All payments made by any Credit Party shall be made by wire transfer
on the date when due, without offset or counterclaim, in United States Dollars,
in immediately available funds to such account as may be indicated in writing by
Lender to the Credit Parties from time to time. The Term Loan and any Advances
may be prepaid in full or in part without penalty or premium. Any amounts paid
or prepaid under the Term Loan may not be reborrowed.

 

2.5     Security Interest

 

(a)     To secure the prompt payment and performance in full when due, whether
by lapse of time, acceleration, or otherwise, of the Obligations, each Credit
Party hereby grants to Lender a continuing security interest in, a Lien upon,
and a right to set off against, and pledges to Lender any and all right, title
and interest in and to all assets of each Credit Party including but not limited
to the following, whether now owned or existing, or hereafter acquired or
arising and including any leasehold interest therein (collectively, and each
individually, the “Collateral”), which security interest is intended to be a
first priority security interest: (i) all goods, Accounts, Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles, documents, instruments (including any
promissory notes), chattel paper (whether tangible or electronic), cash, deposit
accounts, securities accounts, fixtures, letter of credit rights (whether or not
the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now
owned or hereafter acquired, wherever located; (ii) all of each Credit Party’s
books and records relating to any of the foregoing; and (iii) any and all
claims, rights and interests in any of the above and all substitutions for,
additions, attachments, accessories, accessions and improvements to and
replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.

 

(b)     Upon the execution and delivery of this Agreement, upon the entry of the
Initial Financing Order, and upon the proper filing of any necessary financing
statements, without any further action, Lender will have a good, valid and
perfected first priority Lien and security interest in the Collateral, subject
to no transfer or other restrictions or Liens of any kind in favor of any other
Person except for Permitted Liens and the interests held by the Department of
Energy in certain of the Credit Parties’ assets. No financing statement relating
to any of the Collateral is on file in any public office except those (i) on
behalf of Lender, and/or (ii) in connection with Permitted Liens.

 

(c)     Notwithstanding the foregoing provisions of this Section 2.5, such grant
of a security interest shall not extend to, and the Collateral shall not include
the Government Funded Property, except on the following terms and conditions.
The Credit Parties grant a first priority lien in their interest in the proceeds
of any sale of Government Funded Property. The Credit Parties grant a first
priority lien in Debtors’ interest in the Government Funded Property which shall
attach and become enforceable only if and when the Department of Energy approves
of said lien at the time that (i) there are no third party qualified bids after
the expiration of the bid deadline at any 363 sale or foreclosure sale; and (ii)
Lender exercises its statutory right to credit bid in the amount or a portion of
the Loan at any 363 sale or foreclosure sale. Notwithstanding the existence of
any lien on Government Funded Property, any interests of the Department of
Energy under federal law, including without limitation any rights under 10
C.F.R. § 600.321, remain on the Government Funded Property.

 

 
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(d)     Notwithstanding anything herein to the contrary, no Credit Party shall
be required to pledge more than sixty-five percent (65%) of the voting capital
stock or other equity interest in any of such Credit Party’s Subsidiaries not
organized under the laws of any jurisdiction within the United States.

 

2.6     Collateral Administration

 

(a)     All of the Credit Parties’ (i) vehicle chargers and vehicle charging
network shall suffer no more than forty-eight (48) hours of inoperability in the
aggregate prior to the Maturity Date, and (ii) vehicle chargers shall be able to
charge customers regardless of their connection to the vehicle charging network,
in each case except for chargers which are inoperational due to field service
issues, the acts of third parties outside the control of the Borrowers or an act
of God such as a natural disaster, lightning or flooding.

 

(b)     If requested by Lender, each Credit Party shall execute and deliver to
Lender formal written assignments of all of such Credit Party’s Accounts weekly
or daily as Lender may request.

 

2.7     Power of Attorney. Lender is hereby irrevocably made, constituted and
appointed the true and lawful attorney for each Credit Party (without requiring
Lender to act as such) with full power of substitution to do the following: (i)
endorse the name of any Credit Party upon any and all checks, drafts, money
orders, and other instruments for the payment of money that are payable to any
Credit Party and constitute collections on its Accounts; (ii) execute in the
name of any Credit Party any financing statements, schedules, assignments,
instruments, documents, and statements that Lender deems necessary or desirable;
and (iii) do such other and further acts and deeds in the name of any Credit
Party that Lender may deem necessary or desirable to enforce any Account or
other Collateral or to perfect Lender’s security interest or lien in any
Collateral.

 

2.8      Use of Proceeds. The proceeds of the Term Loan may be used by Borrowers
as set forth in the Budget as follows: (i) to fund Borrowers’ working capital
requirements, operating expenses, costs of administration of the Bankruptcy
Cases (including professional fees), (ii) to fund the payment of interest
accrued on the Term Loan, (iii) to pay compensation to, or reimburse or advance
ordinary course expenses incurred or to be incurred by, the executives and
employees of Borrower, (iv) to provide to the Operating Subsidiaries no more
than $27,000 in excess of the receivables and cash owned by the Operating
Subsidiaries but included in the Budget (the “Operating Subsidiary Funds”), and
(v) to provide an aggregate amount of no more than $5,000 to the Guarantors
(other than the Operating Subsidiaries), which shall be used solely for costs
and expenses directly related to pay the administrative costs necessary to
maintain the corporate existence of such Guarantors’ business operations (the
“Administrative Funds”).

 

III.           CONDITIONS PRECEDENT

 

3.1     Conditions to Closing

 

The obligations of Lender to consummate the transactions contemplated herein and
to make the Advance under the Term Loan on the Closing Date (the “Closing Date
Advance”) are subject to the satisfaction, in the sole judgment of Lender, of
the following:

 

 
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(a)     the Interim Financing Order shall be in effect and shall not have been
reversed, modified, amended or stayed, and no motion seeking a reversal,
modification, amendment or stay shall have been filed by any Person that, in
Lender’s sole discretion, could result in a Material Adverse Effect;

 

(b)      the Sale Procedures Order shall have been entered by the Bankruptcy
Court and shall not have been reversed, modified, amended or stayed, and no
motion seeking a reversal, modification, amendment or stay shall have been filed
by any Person that, in Lender’s sole discretion, could result in a Material
Adverse Effect;

 

(c)      the Reorganization Milestones shall have been achieved or are
achievable;

 

(d)      each Credit Party shall have delivered to Lender, all in form and
substance satisfactory to Lender, the Loan Documents, each duly executed by an
authorized officer of each Credit Party and the other parties thereto;

 

(e)     Lender shall have received (i) each Credit Party’s formation and
organization documents in form and substance acceptable to Lender, and (ii)
certificates of the corporate secretary of each Credit Party dated the Closing
Date as to the incumbency and signature of the Persons executing the Loan
Documents, in form and substance acceptable to Lender;

 

(f)     Lender shall have received such other documents, certificates, and
information as Lender may request, all in form and substance reasonably
satisfactory to Lender and its counsel; and

 

(g)     no Default or Event of Default shall exist on the Closing Date, after
giving effect to all of the extensions of credit to be made to Borrowers on the
Closing Date.

 

3.2     Conditions to Each Advance

 

The obligations of Lender to make any Advance (including the Closing Date
Advance) are subject to the satisfaction, in the sole judgment of Lender, of the
following additional conditions precedent:

 

(a)     each of the representations and warranties made by any Credit Party in
or pursuant to this Agreement shall be accurate in all material respects, before
and after giving effect to such Advance;

 

(b)      no Default or Event of Default shall have occurred or be continuing or
would exist immediately after giving effect to the Advance;

 

(c)     the Interim Financing Order or, after entry of the Final Financing
Order, the Final Financing Order shall be in effect and shall not have been
reversed, modified, amended or stayed, and no motion seeking a reversal,
modification, amendment or stay shall have been filed by any Person that, in
Lender’s sole discretion, could result in a Material Adverse Effect;

 

(d)      the Sale Procedures Order remains in effect,

 

(e)     the Reorganization Milestones have been achieved or remain achievable;
and

 

(f)     all of the Loan Documents shall be and remain in full force and effect.

 

 
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IV.           REPRESENTATIONS AND WARRANTIES

 

Each Credit Party represents and warrants as of the date hereof, as of the
Closing Date and as of the date of each Advance as follows:

 

4.1     Organization and Authority. Each Credit Party is duly organized, validly
existing and in good standing under the laws of its state of formation. Upon the
entry of the Financing Orders, each Credit Party (i) has all requisite corporate
or entity power and authority to own its properties and assets and to carry on
its business as now being conducted and as contemplated in the Loan Documents,
(ii) is duly qualified to do business in every jurisdiction in which failure so
to qualify would reasonably be likely to have a Material Adverse Effect, and
(iii) has all requisite power and authority (A) to execute, deliver and perform
the Loan Documents to which it is a party, (B) to borrow hereunder, (C) to
consummate the transactions contemplated under the Loan Documents, and (D) to
grant the Liens with regard to the Collateral.

 

4.2     Loan Documents. Upon the entry of the Financing Orders, the execution,
delivery and performance by each Credit Party of the Loan Documents, and the
consummation of the transactions contemplated thereby, (i) have been duly
authorized by all requisite action of each Credit Party and have been duly
executed and delivered by or on behalf of Borrower; (ii) do not violate any
provisions of (A) applicable law, statute, rule, regulation, ordinance or
tariff, (B) any order of any Governmental Authority binding on any Credit Party
or any of its properties, or (C) the certificate of incorporation or bylaws (or
any other equivalent governing agreement or document) of any Credit Party, or
any agreement between any Credit Party and its stockholders, members, partners
or equity owners or among any such stockholders, members, partners or equity
owners; (iii) are not in conflict with, and do not result in a breach or default
of or constitute an event of default, or an event, fact, condition or
circumstance which, with notice or passage of time, or both, would constitute or
result in a conflict, breach, default or event of default under, any indenture,
agreement or other instrument to which any Credit Party is a party, or by which
the properties or assets of any Credit Party are bound; (iv) except as set forth
therein, will not result in the creation or imposition of any Lien of any nature
upon any of the properties or assets of any Credit Party, and (v) do not require
the consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority or any other Person. Upon entry
of the Financing Orders, when executed and delivered, each of the Loan Documents
will constitute the legal, valid and binding obligation of each Credit Party,
enforceable against each Credit Party in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law affecting the enforceability of creditors’ rights generally
and to the effect of general principles of equity which may limit the
availability of equitable remedies (whether in a proceeding at law or in
equity).

 

4.3     Subsidiaries. No Subsidiary or Affiliate of any Credit Party (other than
a Borrower) will receive any proceeds of the Term Loan except for (i) the
Operating Subsidiary Funds and (ii) the Administrative Funds.

 

4.4     Properties. Each Credit Party is the sole owner and has good, valid and
marketable title to, or a valid leasehold interest in, all of the Collateral,
subject to no transfer restrictions or Liens of any kind except for Liens set
forth on Schedule 4.4 (“Permitted Liens”).

 

4.5     Other Agreements. Except as set forth on Schedule 4.5, no Credit Party
is a party to any judgment, order or decree or any agreement, document or
instrument, or subject to any restriction, which would affect its ability to
execute and deliver, or perform under, any Loan Document or to pay the
Obligations.

 

4.6     Litigation. Except as set forth on Schedule 4.6, there is no action,
suit, proceeding or investigation pending or, to its knowledge, threatened
against any Credit Party that questions or could prevent the validity of any of
the Loan Documents or the right of any Credit Party to enter into any Loan
Document or to consummate the transactions contemplated thereby.

 

 
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4.7     Environmental Matters. Other than exceptions to any of the following
that could not, individually or in the aggregate, be expected to have a Material
Adverse Effect:

 

(a)     Each Credit Party and its Subsidiaries: (i) are, and within the period
of all applicable statutes of limitation have been, in compliance with all
applicable Environmental Laws and Environmental Permits; and (ii) reasonably
believes that compliance with all applicable Environmental Laws and
Environmental Permits that are or are expected to become applicable to or
required by any of them will be timely attained and maintained, without material
expense.

 

(b)     Hazardous Materials are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by any Credit Party or at any
other location which (i) could reasonably be expected to give rise to liability
of any Credit Party under any applicable Environmental Law or otherwise result
in costs to any Credit Party, or (ii) impair the fair saleable value of any real
property owned or leased by any Credit Party.

 

(c)     There is no judicial, administrative, or arbitral proceeding (including
any notice of violation or alleged violation) under or relating to any
Environmental Law or Environmental Permit to which any Credit Party is named as
a party that is pending or, to the knowledge of any Credit Party, threatened.

 

(d)     No Credit Party has received any written request for information, or
been notified that it is a potentially responsible party under or relating to
the federal Comprehensive Environmental Response, Compensation, and Liability
Act or any similar Environmental Law, or with respect to any Hazardous
Materials.

 

(e)     No Credit Party has entered into or agreed to any consent decree, order,
or settlement or other agreement, or is subject to any judgment, decree, or
order or other agreement, in any judicial, administrative, arbitral, or other
forum for dispute resolution, relating to compliance with or liability under any
Environmental Law.

 

4.8     Potential Tax Liability; Tax Returns

 

(a)     No Credit Party (i) has received any oral or written communication from
the Internal Revenue Service with respect to any investigation or assessment
relating to such Credit Party directly, or relating to any tax return which was
filed on behalf of such Credit Party, (ii) is aware of any year which remains
open pending tax examination or audit by the IRS, or (iii) is aware of any
information that could give rise to an IRS tax liability or assessment.

 

(b)     Except as set forth on Schedule 4.8(b), each Credit Party (i) has filed
all federal, state, foreign (if applicable) and local tax returns and other
reports which are required by law to be filed by any Credit Party, (ii) has paid
all taxes, assessments, fees and other governmental charges, including, without
limitation, payroll and other employment related taxes, in each case that are
due and payable, except only for items that such Credit Party is currently
contesting in good faith with adequate reserves under GAAP.

 

4.9     Financial Statements and Reports. All financial statements and financial
information relating to any Credit Party that have been or may hereafter be
delivered to Lender by any Credit Party are accurate and complete in all
material respects and have been prepared in accordance with GAAP consistently
applied with prior periods (except that interim statements do not contain
footnotes or year-end adjustments).

 

 
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4.10     Compliance with Law. Except as set forth on Schedule 4.10, each Credit
Party (i) is in compliance with all laws, statutes, rules, regulations,
ordinances and tariffs of any Governmental Authority applicable to each Credit
Party and/or any Credit Party’s business, assets or operations, and (ii) is not
in violation of any order of any Governmental Authority or other board or
tribunal, except where noncompliance or violation could not reasonably be
expected to have a Material Adverse Effect.

 

4.12     Disclosure. No Loan Document nor any other agreement, document,
certificate, or statement furnished to Lender by or on behalf of any Credit
Party in connection with the transactions contemplated by the Loan Documents,
nor any representation or warranty made by any Credit Party in any Loan
Document, contains any untrue statement of material fact or omits to state any
fact necessary to make the statements therein not materially misleading.

 

4.13     Existing Indebtedness. No Credit Party has any outstanding Indebtedness
other than Indebtedness set forth on Schedule 4.13 (“Permitted Indebtedness”).

 

4.14     Insurance. Each Credit Party has in full force and effect such
insurance policies as are customary in its industry.

 

4.15     Bankruptcy Matters.

 

(a)       The Bankruptcy Cases were commenced on the Petition Date in accordance
with applicable law and proper notice thereof.

 

(b)      Proper notice for the motion seeking approval of this Agreement, the
other Loan Documents, and the Financing Orders has been given.

 

(c)      The Liens securing the Obligations are valid and enforceable,
perfected, first-priority Liens on all of the Collateral in favor of Lender.

 

(d)     Upon and after entry of the Financing Orders, the Obligations will
constitute allowed administrative expense claims in the Bankruptcy Cases, having
priority over all administrative expense claims and unsecured claims against
each Credit Party now existing or hereafter arising, of any kind whatsoever,
including, without limitation, all administrative expense claims of the kind
specified in Sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c), 507(a),
507(b), 546(c) 726 (to the extent permitted by Law), 1113, 1114, or any other
provision of the Bankruptcy Code or otherwise, as provided under Section
364(c)(1) of the Bankruptcy Code.

 

(e)     Notwithstanding the provisions of Section 362 of the Bankruptcy Code, on
the Maturity Date, Lender shall be entitled to immediate payment of all
Obligations and to enforce the remedies provided for hereunder or under
applicable law, without further application to or order by the Bankruptcy Court.

 

(f)     Proper notice for (i) the Sale Procedures Motion and (ii) the hearing
for the approval of Sale Procedures Motion has been given. The Credit Parties
have given on a timely basis all notices required to be given to all parties
specified in the Sale Procedure Motion.

 

 
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V.            AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that, until full performance and
satisfaction, and indefeasible payment in full in cash, of all the Obligations
and termination of this Agreement:

 

5.1     Budget Comparison; Information. Each Credit Party shall furnish to
Lender (i) on the second Business Day of each week after the Closing Date (A) a
reconciliation of budgeted amounts set forth in the Budget and actual amounts
spent, used or transferred during the Bankruptcy Cases, and (B) a written
narrative explanation if actual aggregate disbursements under the Budget during
any consecutive two-week period exceed the budgeted disbursements for such
two-week period by more than ten percent (10%), and (ii) as soon as available
such information, documents, statements, reports and other materials as Lender
may request from a credit or security perspective or otherwise from time to
time.

 

5.2     Notice of an Event of Default. Each Credit Party shall promptly notify
Lender in writing of any Default or Event of Default, which notice shall specify
the nature and status thereof.

 

5.3     Payment of Obligations. Each Credit Party shall make full and timely
indefeasible payment in cash of the principal of and interest on the Term Loan
and all other Obligations.

 

5.4     Conduct of Business; Technical Assistance. Each Credit Party shall
engage principally in the same or similar lines of business substantially as
heretofore conducted, and maintain operations, including operation of all
vehicle charging stations and the charging network, in all jurisdictions in
which such operations are currently located in accordance with the terms of
Section 2.6 (a) of this Agreement. Each Credit Party shall provide to Lender all
documents, manuals, drawings, schematics, data, engineering or technical
information, and any other material or work product, in tangible or electronic
format, that Lender may request with respect to manufacture or operation of any
Credit Party’s vehicle charging stations, charging network, parts, components or
any other assets owned or used by any Credit Party in its business, and shall
provide Lender with access to all persons involved in the preparation of, or
with knowledge regarding, any of the foregoing, in each case as Lender may
request.

 

5.5     Compliance with Legal and Other Obligations. Except as set forth on
Schedule 5.5, each Credit Party shall (i) comply with all laws, statutes, rules,
regulations, ordinances and tariffs of all Governmental Authorities applicable
to it or its business, assets or operations unless failure to comply therewith
could not reasonably be likely to have a Material Adverse Effect; (ii) perform
in accordance with its terms each contract, agreement or other arrangement to
which it is a party or by which it or any of the Collateral is bound, except
where the failure to comply, pay or perform could not reasonably be expected to
have a Material Adverse Effect, and (iii) maintain and comply with all Permits
necessary to conduct its business and comply with any new or additional
requirements that may be imposed on it or its business.

 

5.6     Insurance. Each Credit Party shall (i) keep all of its insurable
properties and assets adequately insured in all material respects against
losses, damages and hazards as are customarily insured against by businesses
engaging in similar activities or owning similar assets or properties and at
least the minimum amount required by applicable law, and (ii) maintain general
public liability insurance at all times against liability on account of damage
to persons and property having such limits, deductibles, exclusions and
co-insurance and other provisions as are customary for a business engaged in
activities similar to those of Borrower; all of the foregoing insurance policies
to (A) be satisfactory in form and substance to Lender in its reasonable
discretion, and (B) name Lender as loss payee and/or additional insured
thereunder, as applicable.

 

5.7     Further Assurances. At each Credit Party’s cost and expense, each Credit
Party shall take such further actions, obtain such consents and approvals and
duly execute and deliver such further agreements, assignments, instructions or
documents as Lender may request with respect to the purposes, terms and
conditions of the Loan Documents and the consummation of the transactions
contemplated thereby.

 

 
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5.8     Collateral Documents; Security Interest in Collateral. Each Credit Party
shall (i) execute, obtain, deliver, file, register and/or record any and all
financing statements, continuation statements, instruments and other documents,
or cause the execution, filing, registration, recording or delivery of any and
all of the foregoing, that are necessary or required under law or otherwise or
reasonably requested by Lender to be executed, filed, registered, obtained,
delivered or recorded to create, maintain, perfect, preserve, validate or
otherwise protect the pledge of the Collateral to Lender and Lender’s perfected
first priority Lien on the Collateral (other than Permitted Liens) (and each
Credit Party irrevocably grants Lender the right, at Lender’s option, to file
any or all of the foregoing), and (ii) defend the Collateral and Lender’s
perfected first priority Lien thereon against all claims and demands of all
Persons (other than holders of Permitted Liens) at any time claiming the same or
any interest therein adverse to Lender, and pay, upon demand on or after the
Maturity Date, all reasonable out-of-pocket, third-party costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses) in
connection with such defense, which shall be added to the Obligations.

 

5.9     Taxes and Other Charges. All payments and reimbursements to Lender made
under any Loan Document shall be free and clear of and without deduction for all
taxes, levies, imposts, deductions, assessments, charges or withholdings, and
all liabilities with respect thereto of any nature whatsoever, excluding taxes
to the extent imposed on Lender’s net income. If any Credit Party shall be
required by law to deduct any such amounts from or in respect of any sum payable
under any Loan Document to Lender, then the sum payable to Lender shall be
increased as may be necessary so that, after making all required deductions,
Lender receives an amount equal to the sum it would have received had no such
deductions been made. Notwithstanding any other provision of any Loan Document,
if at any time (i) any change in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (ii) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (iii) compliance by Lender with any request or directive (whether or
not having the force of law) from any Governmental Authority: (A) subjects
Lender to any tax, levy, impost, deduction, assessment, charge or withholding of
any kind whatsoever with respect to any Loan Document, or changes the basis of
taxation of payments to Lender of any amount payable thereunder (except for net
income taxes, or franchise taxes imposed in lieu of net income taxes, imposed
generally by federal, state or local taxing authorities with respect to interest
or commitment fees or other fees payable hereunder or changes in the rate of tax
on the overall net income of Lender), or (B) imposes on Lender any other
condition or increased cost in connection with the transactions contemplated
thereby or participations therein; and the result of any of the foregoing is to
increase the cost to Lender of making or continuing any Loan hereunder or to
reduce any amount receivable hereunder, then, in any such case, such Credit
Party shall promptly pay to Lender any additional amounts necessary to
compensate Lender, on an after-tax basis, for such additional cost or reduced
amount as determined by Lender in its reasonable discretion.

 

5.10     Environmental Laws. Each Credit Party shall comply in all material
respects with all applicable Environmental Laws and Environmental Permits, and
obtain, maintain and comply in all material respects with and maintain any and
all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.

 

5.11     Inspection. Each Credit Party will permit representatives of Lender,
upon one (1) day’s notice, to be present on such Credit Party’s premises and
inspect any of such Credit Party’s operations and assets, to examine and make
abstracts or copies from any of such Credit Party’s books and records, to
conduct a collateral audit and analysis of such Credit Party’s operations and
the Collateral, to verify the amount and age of any Accounts, to verify the
identity and credit of the any Account Debtors, to review the billing practices
of any Credit Party and to discuss such Credit Party’s affairs, finances and
accounts with such Credit Party’s officers, employees and independent public
accountants until all Obligations have been paid in full in cash and this
Agreement has terminated.

 

 
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5.12     Reorganization Matters. Each Credit Party shall timely comply with the
Reorganization Milestones, it being expressly understood that time is of the
essence. Promptly after the sending, receiving or filing thereof, copies of all
reports, motions, affidavits, statements and other documents that any Credit
Party sends, receives or files in connection with the Bankruptcy Cases,
including all correspondence with the Bankruptcy Court, shall be delivered to
Lender.

 

VI.          NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, until full performance and
satisfaction, and indefeasible payment in full in cash, of all of the
Obligations and termination of this Agreement:

 

6.1     Permitted Indebtedness. No Credit Party shall create, incur, assume or
suffer to exist any Indebtedness other than Permitted Indebtedness.

 

6.2     Permitted Liens. No Credit Party shall create, incur, assume or suffer
to exist any Lien upon, in or against, or pledge of, any of the Collateral,
except (i) Liens granted in the Loan Documents or otherwise arising in favor of
Lender, and (ii) Permitted Liens.

 

6.3     Investments. No Credit Party, directly or indirectly, shall make any
Investment except for such Investments in existence as of the date hereof on the
terms and conditions in effect as of the date hereof.

 

6.4     Restricted Distributions. No Credit Party shall make any Restricted
Distribution and Borrowers shall not distribute or transfer any funds to any
Guarantor, Portable or any Subsidiary or Affiliate of Borrowers other than (i)
the Operating Subsidiary Funds, (ii) the Administrative Funds, and (iii) other
Restricted Distributions among the Borrowers in accordance with the Budget.

 

6.5     Transactions with Affiliates. After the date hereof, no Credit Party
shall enter into or consummate any transaction of any kind with any of its
Affiliates except as set forth in Section 2.8 of this Agreement and the Budget.

 

6.6     Material Changes. No Credit Party shall (i) amend, modify, restate or
change its certificate of incorporation or formation or bylaws or similar
charter documents, (ii) change its name or change its jurisdiction of
organization; or (iii) amend, alter or suspend or terminate or make provisional
in any material way, any Permit.

 

6.7     Truth of Statements. No Credit Party shall furnish to Lender any
certificate or other document that contains any untrue statement of a material
fact or that omits to state a material fact necessary to make it not misleading
in light of the circumstances under which it was furnished.

 

6.8     Transfer of Assets. Except pursuant to the Sale Order or in the ordinary
course of business, no Credit Party shall sell, lease, transfer, assign or
otherwise dispose of any interest in any properties or assets, or agree to do
any of the foregoing at any future time.

 

6.9      Bankruptcy Actions. No Credit Party shall enter into any agreement to
return any of its inventory or other Collateral to any of its creditors. No
Credit Party shall make (i) payments on account of claims or expenses arising
under Section 503(b)(9) of the Bankruptcy Code, (ii) payments in respect of a
reclamation program, or (iii) payments in accordance with the Budget under any
management incentive plan or on account of claims or expenses arising under
Section 503(c) of the Bankruptcy Code. No Credit Party shall obtain, or seek to
obtain, any stay on the exercise of the remedies of Lender hereunder under any
Loan Document or the Financing Order.

 

 
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VII.         EVENTS OF DEFAULT

 

The occurrence of any one or more of the following shall constitute an “Event of
Default”:

 

(a)     Borrowers shall fail to pay any amount on the Term Loan, on any other
Obligation or provided for in any Loan Document when due (whether on any payment
date or at maturity), or any Guarantor shall fail to pay any amount due pursuant
to the Guarantee, on any other Obligation or provided for in any Loan Document
when due (whether on any payment date or at maturity);

 

(b)     any representation, statement or warranty made or deemed made by any
Credit Party in any Loan Document or in any other certificate, document, report
or opinion delivered in conjunction with any Loan Document, shall not be true
and correct in all material respects or shall have been false or misleading in
any material respect on the date when made or deemed to have been made;

 

(c)     any Credit Party shall be in violation, breach or default of, or shall
fail to perform, observe or comply with any covenant, obligation or agreement
set forth in, any Loan Document and, except for negative covenants set forth in
Article VI, such violation, breach, default or failure is not cured within three
(3) Business Days;

 

(d)     (i) any of the Loan Documents ceases to be in full force and effect, or
(ii) any Lien created thereunder ceases to constitute a valid perfected first
priority Lien on the Collateral in accordance with the terms thereof, or Lender
ceases to have a valid perfected first priority security interest in any of the
Collateral;

 

(e)     any default (other than as a result of the filing of the Bankruptcy
Cases) occurs (i) in the payment of any amount with respect to any Indebtedness
(other than the Obligations) of any Credit Party in excess of $100,000, (ii) in
the performance, observance or fulfillment of any provision contained in any
agreement, contract, document or instrument to which a Credit Party is a party
or to which any of its properties or assets are subject or bound under or
pursuant to which any Indebtedness in excess of $100,000 was issued, created,
assumed, guaranteed or secured, or (iii) in the performance, observance or
fulfillment of any provision contained in any agreement, contract, document or
instrument between any Credit Party and Lender or any Affiliate of Lender (other
than the Loan Documents);

 

(f)     if (i) any Bankruptcy Case is converted to a case under Chapter 7 of the
Bankruptcy Code, or (ii) any Bankruptcy Case is dismissed;

 

(g)     if a Chapter 11 trustee or an examiner with enlarged powers relating to
the operations of any Credit Party’s business (beyond those set forth under
Sections 1106(a)(3) and (4) of the Bankruptcy Code) is appointed pursuant to
Section 1104 of the Bankruptcy Code in the Bankruptcy Case;

 

(h)     if any super-priority administrative expense claim or any Lien that is
pari passu with or senior to those of Lender is granted to any Person, or the
authorization to use cash collateral without the consent of Lender is granted to
any Person other than Lender;

 

(i)     if any Person other than Lender is granted relief from the automatic
stay provided for in any Bankruptcy Case, or such automatic stay is otherwise
modified, to permit enforcement of rights by such Person with respect to any
asset of Borrower that has a value in excess of $25,000;

 

 
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(j)     if any Credit Party’s shareholders, directors, members or managers shall
authorize the liquidation of such Credit Party’s business or assets pursuant to
one or more Section 363 sales or otherwise, or shall file any motion under
Section 363 of the Bankruptcy Code, other than pursuant to the Sale Documents;

 

(k)     if any Credit Party shall fail to comply with or perform any of the
terms, conditions, covenants or other obligations under the Financing Order;

 

(l)     the failure of the Closing Date to occur within three (3) Business Days
after entry of the Interim Financing Order;

 

(m)     if any Credit Party fails to achieve any Reorganization Milestone as and
when required;

 

(n)     any assumption or rejection of any executory contract without the prior
written consent of Lender;

 

(o)     the amendment, modification, reversal, revocation, issuance of a stay or
order to vacate or supplement the Financing Orders, the Sale Procedures Order,
the Sale Approval Order or any other order of the Bankruptcy Court affecting
this Agreement, any other Loan Document, the Sale or the transactions
contemplated hereby or thereby without the prior written consent of Lender;

 

(p)     if any Credit Party exceeds, on a rolling two (2) week basis, the Budget
by an amount exceeding ten percent (10%) on an aggregate basis without the prior
written consent of Lender;

 

then, and in any such event, notwithstanding any other provision of any Loan
Document, Lender may, without notice or demand, do any of the following: (i)
terminate its obligations to make Advances hereunder, whereupon the same shall
immediately terminate and (ii) elect the Term Loan and/or the Note, all interest
thereon and all other Obligations to be due and payable immediately, in each
case without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Credit Parties.

 

VIII.        RIGHTS AND REMEDIES AFTER DEFAULT

 

8.1     Rights and Remedies

 

(a)     In addition to the acceleration provisions set forth in Article VII
above, upon the occurrence and continuation of an Event of Default, Lender
(without any further order of, action by or notice to the Bankruptcy Court)
shall have the right to exercise any and all rights, options and remedies
provided for in the Loan Documents, under the UCC or at law or in equity,
including, without limitation, the right to (i) apply any property of any Credit
Party held by Lender to reduce the Obligations, (ii) foreclose the Liens created
under the Loan Documents, (iii) realize upon, take possession of and/or sell any
Collateral with or without judicial process, (iv) exercise all rights and powers
with respect to the Collateral as any Credit Party might exercise, (v) collect
and send notices regarding the Collateral, with or without judicial process,
(vi) by its own means or with judicial assistance, enter any premises at which
Collateral are located, or render any of the foregoing unusable or dispose of
the Collateral on such premises without any liability for rent, storage,
utilities, or other sums, and no Credit Party shall resist or interfere with
such action, (vii) at each Credit Party’s expense, require that all or any part
of the Collateral be assembled and made available to Lender at any place
designated by Lender, and/or (viii) relinquish or abandon any Collateral or
securities pledged or any Lien thereon. Notwithstanding any provision of any
Loan Document, Lender, in its sole discretion, shall have the right, at any time
that any Credit Party fails to do so, and from time to time, without prior
notice, to: (i) obtain insurance covering any of the Collateral to the extent
required hereunder; (ii) pay for the performance of any of Obligations; (iii)
discharge taxes or Liens on any of the Collateral; and (iv) pay for the
maintenance and preservation of the Collateral. Such expenses and advances shall
be added to the Obligations until reimbursed to Lender and shall be secured by
the Collateral, and such payments by Lender shall not be construed as a waiver
by Lender of any Event of Default or any other rights or remedies of Lender.

 

 
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(b)     Each Credit Party agrees that notice received by it at least ten (10)
calendar days before the time of any intended public sale, or the time after
which any private sale or other disposition of Collateral is to be made, shall
be deemed to be reasonable notice of such sale or other disposition. If
permitted by applicable law, any perishable Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Lender without prior notice to any Credit Party. At any sale or
disposition of Collateral, Lender may (to the extent permitted by applicable
law) purchase all or any part thereof free from any right of redemption by any
Credit Party which right is hereby waived and released. Each Credit Party
covenants and agrees not to, and not to permit or cause any of its Subsidiaries
to, interfere with or impose any obstacle to Lender’s exercise of its rights and
remedies with respect to the Collateral including but not limited to the
Lender’s right to credit bid at any sale of the Collateral whether inside or
outside the Bankruptcy Cases. Lender, in dealing with or disposing of the
Collateral or any part thereof, shall not be required to give priority or
preference to any item of Collateral or otherwise to marshal assets or to take
possession or sell any Collateral with judicial process.

 

8.2     Application of Proceeds. In addition to any other rights, options and
remedies Lender has under the Loan Documents, the UCC, at law or in equity, all
dividends, interest, rents, issues, profits, fees, revenues, income and other
proceeds collected or received from collecting, holding, managing, renting,
selling, or otherwise disposing of all or any part of the Collateral or any
proceeds thereof upon exercise of its remedies hereunder shall be applied in the
following order of priority: (i) to the payment of all costs and expenses of
such collection, storage, lease, holding, operation, management, sale,
disposition or delivery and of conducting the Credit Parties’ business and of
maintenance, repairs, replacements, alterations, additions and improvements of
or to the Collateral, and to the payment of all sums which Lender may be
required or may elect to pay, if any, in its reasonable discretion, for taxes,
assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments that Lender may be required or authorized to
make under any provision of this Agreement (including, without limitation, in
each such case, reasonable, out-of-pocket search, audit, recording, professional
and filing fees and expenses and reasonable attorneys’ fees and all expenses,
liabilities and advances made or incurred in connection therewith); (ii) to the
payment of all Obligations as provided herein; and (iii) any surplus then
remaining to the Credit Parties, unless otherwise provided by law or directed by
a court of competent jurisdiction, provided that each Credit Party shall be
liable for any deficiency if such proceeds are insufficient to satisfy the
Obligations or any of the other items referred to in this section. Lender shall
have the right in its sole discretion to determine which rights, Liens and/or
remedies Lender may at any time pursue, relinquish, subordinate or modify, and
such determination will not in any way modify or affect any of Lender’s rights,
Liens or remedies under any Loan Document, applicable law or equity. The
enumeration of any rights and remedies in any Loan Document is not intended to
be exhaustive, and all rights and remedies of Lender described in any Loan
Document are cumulative and are not alternative to or exclusive of any other
rights or remedies which Lender otherwise may have. The partial or complete
exercise of any right or remedy shall not preclude any other further exercise of
such or any other right or remedy.

 

IX.          WAIVERS AND JUDICIAL PROCEEDINGS

 

9.1     Waivers. Each Credit Party hereby waives setoff, counterclaim, demand,
presentment, protest, all defenses with respect to any and all instruments and
all notices and demands of any description, and the pleading of any statute of
limitations as a defense to any demand under any Loan Document. Each Credit
Party hereby waives any and all defenses and counterclaims it may have or could
interpose in any action or procedure brought by Lender to obtain an order of
court recognizing the assignment of, or Lien of Lender in and to, any
Collateral. With respect to any action hereunder, Lender conclusively may rely
upon, and shall incur no liability to any Credit Party in acting upon, any
request or other communication that Lender reasonably believes to have been
given or made by a person authorized on Borrower’s behalf. In each such case,
each Credit Party hereby waives the right to dispute Lender’s action based upon
such request or other communication.

 

 
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9.2     Delay; No Waiver of Defaults. Any single or partial exercise of any
provision or right in any Loan Document, or delay, failure or omission on
Lender’s part in enforcing any such provision shall not affect the liability of
any Credit Party or operate as a waiver of such provision or affect the
liability of any Credit Party or preclude any other or further exercise of such
provision. No waiver by any party to any Loan Document of any one or more
defaults by any other party in the performance of any of the provisions of any
Loan Document shall operate or be construed as a waiver of any future default,
whether of a like or different nature, and each such waiver shall be limited
solely to the express terms and provisions of such waiver.

 

9.3     Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING UNDER THE LOAN
DOCUMENTS OR IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES WITH RESPECT TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE. EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES
TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY.

 

X.            MISCELLANEOUS

 

10.1     Governing Law; Jurisdiction; Service of Process; Venue. The Loan
Documents shall be governed by and construed in accordance with the internal
laws of the State of New York without giving effect to its choice of law
provisions. Any judicial proceeding against any Credit Party with respect to the
Obligations, any Loan Document or any related agreement may be brought in the
Bankruptcy Court or, if the Bankruptcy Cases are no longer pending, any federal
or state court of competent jurisdiction located in New York, New York. By
execution and delivery of each Loan Document to which it is a party, each Credit
Party and Lender (i) accept the non-exclusive jurisdiction of the aforesaid
courts and irrevocably agrees to be bound by any judgment rendered thereby, (ii)
waive personal service of process, (iii) agree that service of process upon them
may be made by certified or registered mail, return receipt requested, (iv)
waive any objection to jurisdiction and venue of any action instituted hereunder
and agrees not to assert any defense based on lack of jurisdiction, venue or
convenience, and (v) agree that this loan was made in New York, that Lender has
accepted in New York the Loan Documents executed by the Credit Parties and has
disbursed Advances under the Loan Documents in New York. Nothing shall affect
the right of any Credit Party or Lender to serve process in any manner permitted
by law or shall limit the right of Lender to bring proceedings against the other
party or parties in the courts of any other jurisdiction having jurisdiction.
All parties acknowledge that they participated in the negotiation and drafting
of this Agreement and that, accordingly, no party shall move or petition a court
construing this Agreement to construe it more stringently against one party than
against any other.

 

 
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10.2     Successors and Assigns; Participations; New Lenders. The Loan Documents
shall inure to the benefit of Lender, Transferees (as defined below) and all
future holders of the Term Loan, the Note, the Obligations and/or any of the
Collateral, and each of their respective successors and assigns. Each Loan
Document shall be binding upon the Persons’ other than Lender that are parties
thereto and their respective successors and assigns, and no such Person may
assign, delegate or transfer any Loan Document or any of its rights or
obligations thereunder without the prior written consent of Lender. No rights
are intended to be created under any Loan Document for the benefit of any third
party donee, creditor or incidental beneficiary of any Credit Party. Nothing
contained in any Loan Document shall be construed as a delegation to Lender of
any other Person’s duty of performance. EACH CREDIT PARTY ACKNOWLEDGES AND
AGREES THAT LENDER AT ANY TIME AND FROM TIME TO TIME MAY (I) DIVIDE AND RESTATE
THE NOTE, AND/OR (II) SELL, ASSIGN OR GRANT PARTICIPATING INTERESTS IN OR
TRANSFER ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS IN CONNECTION WITH THE
TERM LOAN OR UNDER ANY LOAN DOCUMENT, THE NOTE, THE OBLIGATIONS AND/OR THE
COLLATERAL TO OTHER PERSONS (EACH SUCH TRANSFEREE, ASSIGNEE OR PURCHASER, A
“TRANSFEREE”). Each Transferee shall have all of the rights and benefits with
respect to the Term Loan, Obligations, the Note, Collateral and/or Loan
Documents held by it as fully as if the original holder thereof, and either
Lender or any Transferee may be designated as the sole agent to manage the
transactions and obligations contemplated therein. Notwithstanding any other
provision of any Loan Document, Lender may disclose to any Transferee all
information, reports, financial statements, certificates and documents obtained
under any provision of any Loan Document.

 

10.3     Application of Payments. To the extent that any payment made or
received with respect to the Obligations is subsequently invalidated, determined
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other Person under the
Bankruptcy Code, common law, equitable cause or any other law, then the
Obligations intended to be satisfied by such payment shall be revived and shall
continue as if such payment had not been received by Lender. Any payments with
respect to the Obligations received as a result of the foregoing provision shall
be credited and applied in such manner and order as Lender shall decide in its
sole discretion.

 

10.4     Indemnity. Each Credit Party shall indemnify Lender, its Affiliates and
its and their respective shareholders, subsidiaries, managers, members,
officers, directors, employees, Affiliates, agents, representatives, successors,
assigns, accountants, attorneys and advisors (collectively, the “Indemnified
Persons”) from and against any and all liabilities, claims, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
of any kind or nature whatsoever (including, without limitation, reasonable
attorneys’ fees and expenses) which may be imposed on, incurred by or asserted
against any Indemnified Person with respect to any breach of any representation
or warranty contained herein or in any Loan Document, or arising out of, or in
any litigation, proceeding or investigation instituted or conducted by any
Person with respect to any aspect of, or any transaction contemplated by or
referred to in, or any matter related to, any Loan Document or any agreement,
document or transaction contemplated thereby, whether or not such Indemnified
Person is a party thereto other than from the Indemnified Parties’ gross and
willful misconduct (as determined by a court of competent jurisdiction in a
final, non-appealable order). Any Indemnified Person may, in its reasonable
discretion, take such actions as it deems necessary and appropriate to
investigate, defend or settle any event or take other remedial or corrective
actions with respect thereto as may be necessary for the protection of such
Indemnified Person or the Collateral. The provisions of this Section 10.4 shall
survive the repayment of the Obligations and the termination of this Agreement.

 

10.5     Notice. Any notice or request under any Loan Document shall be given to
any party to this Agreement at such party’s address set forth beneath its
signature on the signature page to this Agreement, or at such other address as
such party may hereafter specify in a notice given in the manner required under
this Section 10.5. Any notice or request hereunder shall be given only by, and
shall be deemed to have been received upon: (i) registered or certified mail,
return receipt requested, on the date on which received as indicated in such
return receipt, (ii) delivery by a nationally recognized overnight courier, one
(1) Business Day after deposit with such courier, or (iii) facsimile
transmission, in each case upon telephone or further electronic communication
from the recipient acknowledging receipt (whether automatic or manual from
recipient), as applicable.

 

 
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10.6     Severability; Captions; Counterparts; Facsimile Signatures. If any
provision of any Loan Document is adjudicated to be invalid under applicable
laws or regulations, such provision shall be inapplicable to the extent of such
invalidity without affecting the validity or enforceability of the remainder of
the Loan Documents which shall be given effect so far as possible. The captions
in the Loan Documents are intended for convenience and reference only and shall
not affect the meaning or interpretation of the Loan Documents. The Loan
Documents may be executed in one or more counterparts (which taken together, as
applicable, shall constitute one and the same instrument) and by facsimile
transmission, which facsimile signatures shall be considered original executed
counterparts. Each party to this Agreement agrees that it will be bound by its
own facsimile signature and that it accepts the facsimile signature of each
other party.

 

10.7     Expenses. Upon demand on or after the Maturity Date, each Credit Party
shall pay all reasonable, out-of-pocket, third-party costs and expenses incurred
by Lender and/or its Affiliates, including, without limitation, documentation
and diligence fees and expenses, all search, audit, appraisal, recording,
professional and filing fees and expenses and all other out-of-pocket charges
and expenses (including, without limitation, UCC and judgment and tax lien
searches and UCC filings and fees for post-Closing UCC and judgment and tax lien
searches and wire transfer fees and audit expenses), and reasonable attorneys’
fees and expenses, (i) in any effort to enforce, protect or collect payment of
any Obligation or to enforce any Loan Document or any related agreement,
document or instrument, (ii) in connection with the Bankruptcy Cases or entering
into, negotiating, preparing, reviewing and executing the Loan Documents and/or
any related agreements, documents or instruments, (iii) in connection with
instituting, maintaining, preserving, enforcing and/or foreclosing on Lender’s
Liens in any of the Collateral, whether through judicial proceedings or
otherwise, (iv) in defending or prosecuting any actions, claims or proceedings
arising out of or relating to Lender’s transactions with Borrower, (v) in
seeking, obtaining or receiving any advice with respect to its rights and
obligations under any Loan Document and any related agreement, document or
instrument, and/or (vi) in connection with any modification, restatement,
supplement, amendment, waiver or extension of any Loan Document and/or any
related agreement, document or instrument. All of the foregoing shall be part of
the Obligations. Without limiting the foregoing, each Credit Party shall pay all
taxes (other than taxes based upon or measured by Lender’s income or revenues or
any personal property tax), if any, in connection with the issuance of the Note
and the filing and/or recording of any documents and/or financing statements.

 

10.8     Entire Agreement. This Agreement and the other Loan Documents to which
Credit Parties are parties constitute the entire agreement between Credit
Parties and Lender with respect to the subject matter hereof and thereof, and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof or thereof. Any promises, representations, warranties or
guarantees not herein contained and hereinafter made shall have no force and
effect unless in writing signed by each Credit Party and Lender. No provision of
this Agreement may be changed, modified, amended, restated, waived,
supplemented, discharged, canceled or terminated orally or by any course of
dealing or in any other manner other than by an agreement in writing signed by
Lender and each Credit Party. Each party hereto acknowledges that it has been
advised by counsel in connection with the negotiation and execution of this
Agreement and is not relying upon oral representations or statements
inconsistent with the terms and provisions hereof.

 

 
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10.9     Release of Lender. Notwithstanding any other provision of any Loan
Document, each Credit Party voluntarily, knowingly, unconditionally and
irrevocably, with specific and express intent, for and on behalf of itself, its
managers, members, directors, officers, employees, stockholders, Affiliates,
agents, representatives, accountants, attorneys, successors and assigns and
their respective Affiliates (collectively, the “Releasing Parties”), hereby
fully and completely releases and forever discharges the Indemnified Parties and
any other Person or insurer which may be responsible or liable for the acts or
omissions of any of the Indemnified Parties, or who may be liable for the injury
or damage resulting therefrom (collectively, with the Indemnified Parties, the
“Released Parties”), of and from any and all actions, causes of action, damages,
claims, obligations, liabilities, costs, expenses and demands of any kind
whatsoever, at law or in equity, matured or unmatured, know or unknown, vested
or contingent, that any of the Releasing Parties has against any of the Released
Parties as of the Closing Date other than from the Indemnified Parties’ gross
and willful misconduct (as determined by a court of competent jurisdiction in a
final, non-appealable order). Each Credit Party acknowledges that the foregoing
release is a material inducement to Lender’s decision to extend to Borrowers the
financial accommodations hereunder and has been relied upon by Lender in
agreeing to make the Advances.

 

10.10   Survival. All obligations, covenants, agreements, representations,
warranties, waivers and indemnities made by any Credit Party in any Loan
Document shall survive the execution and delivery of the Loan Documents, the
making of the Advances and any termination of this Agreement until all
Obligations are fully performed and indefeasibly paid in full in cash.

 

XI.           GUARANTEE

 

11.1     Guarantee. Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to Lender and its successors,
endorsees, transferees and assigns, the prompt and complete payment and
performance by Borrowers when due (whether at the stated maturity, by
acceleration or otherwise) of all Obligations. The guarantee set forth in this
Article 11 (the “Guarantee”) shall remain in full force and effect until all
Obligations shall have been satisfied by payment in full in cash and this
Agreement shall have terminated. No payment made by Borrower, any Guarantor, any
other guarantor or any other Person, or received or collected by Lender by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations, shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any such
payment, remain liable for the Obligations until the Obligations shall have been
satisfied by payment in full in cash and this Agreement shall have terminated.

 

11.2      No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by Lender, no
Guarantor shall be entitled to be subrogated to any of the rights of Lender
against any other Credit Party or any collateral security or guarantee or right
of offset held by Lender for the payment of the Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from any
other Credit Party in respect of payments made by such Guarantor hereunder.

 

11.3      Payments To Be Held In Trust. If any amount is paid to any Guarantor
on account of subrogation rights or otherwise in violation of this Agreement,
such amount shall be held by such Guarantor in trust for Lender, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to Lender in the exact form received by such Guarantor
(duly indorsed by such Guarantor to Lender, if required), to be applied against
the Obligations, whether matured or unmatured, in such order as Lender may
determine.

 

 
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11.4      Amendments, Etc. with respect to Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that the Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by Lender, and this
Agreement and the other Loan Documents and any other documents executed and
delivered in connection herewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Lender may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Lender shall not have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations.

 

11.5     Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by Lender upon this Guarantee or acceptance
of this Guarantee. The Obligations shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Guarantee, and all dealings between any Borrower and any
Guarantor, on the one hand, and Lender, on the other hand, shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon any Borrower or any Guarantor with respect
to the Obligations. Each Guarantor further waives any right of Guarantor to
require that an action be brought against Borrowers prior to being brought
against such Guarantor, as the same may be amended from time to time. Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment (and not a guarantee
of collection only) until all amounts owing to Lender by Borrowers on account of
the Obligations are paid in full in case and this Agreement shall have
terminated, without regard to (i) the validity or enforceability of any of the
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by Lender,
(ii) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by Borrowers
or any other Person against Lender, or (iii) any other circumstance whatsoever
(with or without notice to or knowledge of Borrowers or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of Borrowers for the Obligations, or of such Guarantor under this
Guarantee, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, Lender may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto.

 

11.6      Reinstatement. The Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
Lender.

 

[signature page follows]

 

 

 
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IN WITNESS WHEREOF, each of the parties has duly executed this Credit and
Security Agreement as of the date first written above.

 

BORROWER  

ECOTALITY, INC.

  By: Name: Title:          

ELECTRIC TRANSPORTATION ENGINEERING CORPORATION

            By:       Name:       Title:              

GUARANTORS

           

ECOTALITY STORES, INC.

            By:       Name:       Title:              

ETEC NORTH, LLC

            By:       Name:       Title:              

THE CLARITY GROUP, INC.

            By:       Name:       Title:              

G.H.V. REFRIGERATION, INC.

            By:       Name:       Title:    

 

 

 
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  LENDER            

NISSAN NORTH AMERICA, INC.

             By:     Name:        Title:    

 

 

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