Prepared by MerrillDirect







EXHIBIT
10.1


LOAN
AGREEMENT


 


             THIS
LOAN AGREEMENT ("Agreement"), is made and entered into this 22nd day
of March, 2001, by and among AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO, a national banking association ("Bank"), and ELECTRIC CITY
CORP., a Delaware corporation ("ELECTRIC"), and SWITCHBOARD APPARATUS
INC., a Delaware corporation ("SWITCHBOARD") (ELECTRIC and
SWITCHBOARD are individually referred to as a "Borrower" and
collectively as "Borrowers").


R
E C I T A L S


             1.          Borrowers, now and from time to time
hereafter, may request loans, advances, extensions of credit and/or other
financial accommodations from Bank; and


             2.          Bank has agreed to lend monies and/or
make advances, extensions of credit or other financial accommodations to, on
behalf of or for the benefit of Borrowers pursuant to the terms and conditions
set forth in this Agreement. 
Capitalized terms in this Agreement which are not otherwise defined
shall have the meanings set forth in Section 2.


             NOW,  THEREFORE, in consideration of any loan,
advance, extension of credit and/or other financial accommodation at any time
made by Bank to or for the benefit of Borrowers, and of the promises set forth
herein, the parties hereby agree as follows:


             2.          CREDIT FACILITIES.  Subject to and upon the terms and conditions
herein set forth, Bank agrees to make available to Borrowers the following
credit facilities:


                           2.1        Revolving Credit.



                                      
  (1)         Borrowing Capacity.  Bank shall make available to Borrowers, a
secured revolving credit facility (the "Revolving Credit") with a
maximum principal amount at any one time outstanding equal to the lesser of (i)
$2,000,000.00 or (ii) the Borrowing Base (such amount, as increased or reduced
from time to time pursuant to the terms hereof, the "Commitment").  The Revolving Credit shall be subject to all
of the terms hereof, may be availed of by Borrowers from time to time, may be
repaid by Borrowers and may be availed of by Borrowers again.


                                      
  (2)         Revolving Note.  The Revolving Credit shall be evidenced by
the Revolving Note of Borrowers (as amended from time to time, the
"Revolving Note").


                                      
  (3)         Interest Rate.  All Advances under the Revolving Credit
shall bear interest (computed for the actual number of days elapsed on the
basis of a 360 day year) until maturity (whether by lapse of time, acceleration
or otherwise) at the Revolving Credit Interest Rate.





                                      
  (4)         Interest and Principal Payments.  Borrowers shall make monthly payments of all
accrued and unpaid interest under the Revolving Credit.  The monthly interest payments shall be due
on the first day of each month commencing April 1, 2001.  All outstanding principal and all accrued
and unpaid interest under the Revolving Credit shall be due and payable on
March 22, 2002, unless sooner accelerated.


                                      
  (5)         Advances.  Borrowers shall give Bank notice prior to
1:00 p.m. (Chicago time) on the date it requests that any advance be made to it
under the Revolving Credit.  The
proceeds of each advance under the Revolving Credit shall be made available to
Borrowers at the office of Bank.  As a
condition of any advance under the Revolving Credit, Borrowers shall deliver to
Bank such certifications and other materials as may be required by Bank in its
reasonable discretion.


                                      
  (6)         Unused Commitment Fee.  Borrowers shall pay to Bank an unused
commitment fee on the average unused balance of the Revolving Credit at the per
annum rate of  1/2% on the amount by
which $2,000,000 exceeds the average principal amount of the Revolving Credit
outstanding from time to time (computed on a daily basis); provided, however,
that if the average unused balance of the Revolving Credit outstanding from
time to time is less than $1,000,000.00, then no fee shall be payable.  This fee shall be payable on a quarterly basis
and shall be due within 30 days following the end of each calendar quarter
commencing March 31, 2001; provided, however, upon the maturity
date of the Revolving Credit any fees due hereunder shall become immediately
due and payable at maturity.


                                      
  (7)         Prepayment.  Borrowers may repay amounts outstanding
under the Revolving Credit, in whole or in part, at any time without penalty or
premium.  Borrowers shall be required to
prepay the Revolving Credit to the extent the principal amount outstanding
under the Revolving Credit plus the face amount of outstanding Letters of
Credit exceeds the amount permitted to be borrowed (or extended by virtue of
Letters of Credit) pursuant to Section 1.1(a).  Any such mandatory prepayment shall be due upon demand by Bank.


                           2.2        Term Loan.



                                      
  (1)         Principal Amount.  Bank shall provide to Borrowers a secured
term loan in the principal amount of $500,000.00 (the "Term Loan").


                                      
  (2)         Term Note.  The Term Loan shall be evidenced by a Term
Note of Borrowers (as amended from time to time, the "Term Note").


                                      
  (3)         Interest Rate.  The Term Loan shall bear interest (computed
for the actual number of days elapsed on the basis of a 360-day year) until
maturity (whether by lapse of time, acceleration or otherwise) at the Term
Interest Rate.


             

                                        (4)  
       Interest and Principal Payments.  Borrowers shall make equal consecutive
monthly principal installments of $8,333.33 under the Term Loan, 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 April 1, 2001. 
A final payment of all outstanding principal and all accrued and unpaid
interest shall be due and payable on March 22 , 2004.


                                      
  (5)         Prepayment.  Borrowers may repay amounts outstanding
under the Term Loan, in whole or in part, from time to time as Borrowers may
desire.


                           2.3        Conditions to Bank's
Obligations to
Make Initial Advance.  As a
condition to Bank's obligations to make the initial advance of the Revolving
Credit and the Term Loan hereunder, (i)(a) Bank shall have completed and
be satisfied with the results of a field audit, due diligence inquiry and fixed
asset appraisal of each Borrower; (b) all representations and warranties of
each Borrower  in the Loan Documents
shall be true and correct and there shall exist no Event of Default, nor shall
any event or circumstance exist, that with notice or the passage of time, would
constitute an Event of Default; (c) there shall not have been a material
adverse change in the business, operations, financial condition or prospects of
any Borrower as determined by Bank in its sole discretion; (d) Borrowers shall
have paid to Bank the costs and expenses provided for in Section 6.8;
(e) each of the following shall have been delivered to Bank, in form and
substance satisfactory to Bank, in its sole discretion: (i) an opinion of
Borrowers’ counsel; (ii) certified copy of articles of incorporation and bylaws
(or other analogous organizational documents) for each Borrower, (iii)
certified copy of resolutions for Borrowers, authorizing the actions of each
such party; (iv) evidence of insurance complying with Section 4.10 for
the business and properties of Borrowers (v) certified copies of the following
documents in form and substance satisfactory to Bank, in its sole discretion;
(vi) Good Standing Certificates of each Borrower; (vii) any UCC financing
statements, landlord lien waivers and lien waivers of any Borrower’s shipping
organizations, landlords, owners of storage facilities or such other parties as
the Bank may require in its sole discretion; and (viii) such other documents or
materials requested by Bank in its sole discretion.  The acceptance of benefits of each Borrower shall constitute a
representation and warranty by each Borrower to Bank that all of the
applicable  representations and
warranties in Article 3 and the covenants of each Borrower in Article
4, as the case may be, exist as of that time.


                           2.4        Letters of Credit
 .  Upon Borrowers’ written request, subject to
the satisfaction by Borrowers of all conditions to Advances under the Revolving
Credit and subject to the execution and delivery by Borrowers of documentation
customarily required by Bank in connection with the issuance of letters of
credit, Bank shall issue or cause to be issued one or more letters of credit
(each such letter of credit, as from time to time amended or modified,
"Letter of Credit").  Each
Letter of Credit will have a term which expires on or prior to the expiration
of the Revolving Credit.  Borrowers
agree to pay to Bank any reasonable out-of-pocket expenses incurred by Bank in
connection with issuing or causing such Letters of Credit to be issued to
Borrowers, plus all customary issuance and administrative fees and charges
customarily imposed by Bank for the issuance and administration of Letters of
Credit.  All Letters of Credit shall be
denominated in U.S. dollars.







                           1.5        Conditions to Bank's Obligations to
Make Any Advance.  Bank shall not be
required to make any Advance unless on the applicable borrowing date:


                                      
  (1)         There exists no Event of Default hereunder
and no event or circumstance exist, that with notice or the passage of time,
would constitute an Event of Default; and


                                      
  (2)         The representations and warranties
contained in Article 3 hereof are true and correct in all material
respects as of such borrowing date except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct on and as of such
earlier date; and


                                      
  (3)         Each Borrower is in compliance with all
covenants set forth in this Agreement.


                           1.6        Late Charge.  Bank may
upon a delinquent payment, at its
sole option, assess a late charge equal to 5% of the amount of any delinquent
payment to cover the additional expense involved in handling such payment,
which charge shall constitute additional indebtedness, payable in immediately
available funds on demand.


                           1.7        Security.  As security
for the payment of the Revolving
Credit and the Term Loan, Borrowers have concurrently herewith granted to Bank
a first security interest in all of the respective assets of Borrowers including, but not limited to, all
of Borrowers’ accounts receivable, inventory, equipment, trademarks,
copyrights, patents and other intellectual property, general intangibles,
insurance and the proceeds therefrom and any and all other assets and property
of  Borrowers, wherever located, and all
the products and proceeds therefrom, whether now existing or hereafter
acquired.


                           1.8        Lockbox.  All checks,
monies, drafts and proceeds of
Collateral shall, at Bank’s option, be collected through a lock box or be
immediately deposited in kind by Borrowers in a depository account in Bank’s
name.  Upon request of Bank, all
proceeds deposited in such lock box or depository account shall be applied to
the outstanding principal balance of the credit facilities hereunder one
business day after receipt of such payment. Each Borrower shall execute any
agreements or instruments necessary, in Bank’s discretion, to effect the
foregoing.





             3.          DEFINED
TERMS.


                          2.1        Advance
 .  The term “Advance” shall mean any extension
of credit pursuant to the Revolving Credit, including any advance of any loan
or issuance of any Letter of Credit.


                           2.2        
Affiliate.  The term "Affiliate" shall mean
any Person directly or indirectly controlling or controlled by, or under direct
or indirect common control with, another Person.  A Person shall be deemed to control another Person for the
purposes of this definition if such first Person possesses, directly or
indirectly, the power to direct, or cause the direction of, the management and
policies of the second Person, whether through the ownership of voting
securities, common directors, trustees or officers, by contract or otherwise.


                           2.3        Borrowing Base.  The
term "Borrowing Base" shall
mean the sum of (a) (i) 80% of the face amount of Eligible Receivables of
Switchboard, (ii) 70% of the face amount of Eligible Receivables of
Electric, and (iii) 25% of Eligible Inventory of Switchboard and Electric;
provided, however, that the amount of the Borrowing Base
attributable to the Eligible Inventory shall not exceed $800,000.00.  The Borrowing Base shall be computed only as
against and on so much of the Eligible Receivables and Eligible Inventory as
are included in the certifications or other appropriate evidence from time to
time furnished by Borrowers to Bank pursuant hereto.


                           2.4        Cash Flow.  The term
"Cash Flow" shall mean
for any period of Borrowers, the consolidated net income of Borrowers,
determined in accordance with generally accepted accounting principles
consistently applied plus (i) Interest Expense for such period minus (ii)
federal and state income taxes of Borrowers for such period plus (iii) all
depreciation and amortization of capitalized costs for such period less (iv)
expenditures on all items (including, without limitation, leases) the cost of
which are or should be capitalized in accordance with generally accepted
accounting principles plus (v) the portion of capitalized expenditures that is
financed by Borrowers minus (vi) any dividends declared or paid (other than
dividends of preferred or common stock of Borrower or options or warrants to
acquire capital stock of Borrower, during such period.  The adjustments described in (i), (ii) and
(iii) above shall be made only to the extent such amounts were deducted from or
included in the calculation of Borrowers’ net income.


                           2.5        Collateral.  The term
"Collateral" shall mean
all personal property from time to time subject to the security interest
granted to Bank pursuant to the Loan Documents.


                           2.6        Debt Service.  The term
"Debt Service" shall
mean, for any period, the sum of Interest Expense for such period and the
principal portion of Borrowers’ Total Debt payable during such period,
determined in accordance with generally accepted accounting principles.


                           2.7        Eligible Inventory. 
The term "Eligible Inventory"
shall mean the value of the finished goods inventory and raw materials of
Borrowers (excluding work in process), determined at the lower of cost or
market on a first-in, first-out basis which is, at all times:  (a) in first class, good and marketable
condition such that it may be sold or used in the ordinary course of Borrowers’
businesses; (b) of the type and quality ordinarily dealt with in the course of
Borrowers’ businesses; (c) not stored with a bailee, warehouseman or similar
party without Bank's prior written consent or without Bank having received a
landlord lien waiver, UCC financing statements or other waiver from such
bailee, warehouseman or similar party in form and substance satisfactory to
Bank in its sole discretion; (d) owned by Borrowers, subject to a first
priority perfected security interest in favor of Bank and not subject to any
claim, lien, security interest or other encumbrance whatsoever; and (e) not
unacceptable due to age, type, category, quality and/or quantity, as determined
by Bank in its reasonable discretion.







                           2.8        Eligible Receivables.  The
term "Eligible Receivables"
shall mean an Account (as defined in the Uniform Commercial Code from time to
time in effect in the State of Illinois) arising out of the sale of inventory
or the rendering of services in the ordinary course of Borrowers’ businesses
less any discounts, credits, allowances and reserves for returns in accordance
with industry custom and practice and generally accepted accounting principles
consistently applied, which meets the following requirements at all times:  (a) it is evidenced by an invoice rendered
to the account debtor thereunder and is due and payable within 90 days after
the date of the invoice; (b) it is not outstanding for more than 90 days after
the date of the invoice therefor; (c) it is not subject to any assignment,
claim, lien, security interest or encumbrance whatsoever, other than the
perfected security interest of Bank; (d) it is a valid, legally enforceable and
unconditional obligation of the account debtor thereunder, and is not subject
to set off, counterclaim, credit, allowance (other than trade allowances
granted in the ordinary course of business) or adjustment by the account debtor
thereunder and such account debtor has not refused to accept and/or has not
returned or offered to return any of the inventory which is subject of such
Account or, in the case of services rendered, has not contested the adequacy of
services which is the subject of the Account; (e) there are no proceedings or
actions which are then threatened or pending against the account debtor or any
other facts or circumstances, as reasonably determined by Bank, which might
result in any material adverse change in the account debtor's financial
condition or in its ability to pay any account in full; (f) the account debtor
is not a director, officer, employee, agent or Affiliate of any Borrower, (g)
the account debtor is a resident or citizen of and is located within the United
States of America or has established a letter of credit to support the purchase
of inventory or services of any Borrower on terms acceptable to Bank in its
sole discretion; (h) it does not arise out of a contract or order which, by its
terms, forbids or makes void or unenforceable the assignment by any Borrower to
Bank of the Account arising with respect thereto; (i) it is not an Account of
an account debtor, 25% or more of the Accounts of such account debtor have been
outstanding for more than 90 days following the invoice date therefor; (j) it
is not an Account of any foreign account debtor or any governmental agency,
department, bureau or instrumentality thereof, unless Bank approves in writing
of such foreign account debtor or governmental body and, in the case of a
governmental body, Bank (i) receives a written acknowledgment from such
governmental agency of Bank’s security interest, in a form satisfactory to
Bank, in such Account or such documents as provided for in the Federal
Assignment of Claims Act or similar statutes, as applicable or, (ii) waives the
requirement of such acknowledgment or other documents; and (k) it is not an
Account arising from inventory sold on consignment, "sale on
approval" or "sale or return." Any Account which is at any time
an Eligible Receivable, may cease to be an Eligible Receivable if, at any time,
it fails to satisfy any of the requirements of this Paragraph.


                           2.9        Environmental Laws. 
The term “Environmental Laws” shall mean any
applicable United States, state, county or local statutes, laws, regulations,
rules, ordinances, codes, licenses or permits of any governmental authorities
relating to environmental matters including, but not limited to, the Clean Air
Act, the Federal Water Pollution Control Act of 1972, the Resource Conservation
and Recovery Act of 1976, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (and any amendments or extensions thereof), and
the Toxic Substances Control Act.


                           2.10      Event of Default.  The term “
Event of Default” shall have the
meaning assigned to it in Section 5.1.


                           2.11      Interest Expense.  The term "
Interest Expense" shall
mean, for any period, the aggregate amount of interest accrued by each Borrower
during such period in respect of Total Debt (including, without limitation, the
interest portion, determined in accordance with generally accepted accounting
principles, of all lease payments accrued during such period in respect to all
leases which should have been or must be, in accordance with generally accepted
accounting principles, recorded as capital leases) excluding any interest
accrued or paid with respect to Subordinated Debt during such period.


                           2.12      Letters of Credit.  The term “
Letters of Credit” shall have the
meaning assigned to it in Section 1.4.


                           2.13      Liabilities.  The term "
Liabilities" shall mean
all obligations and liabilities of Borrowers to Bank howsoever arising, whether
primary, secondary, direct, contingent, fixed or otherwise, heretofore, now
and/or from time to time hereafter owing, due or payable, however evidenced,
credited, incurred, owing and however arising under this Agreement, the other
Loan Documents or otherwise.


                           2.14      Loan Documents.  The term "
Loan Documents" shall
mean this Agreement, the Notes,
any Security Agreements, any Letters of Credit, and all other documents,
instruments and agreements in connection with the Loans, as the same are
hereafter amended from time to time.


                           2.15      Loans.  The term "Loans"
shall mean the Revolving Credit and
the Term Loan, as the same are hereafter amended from time to time.


                           2.16      Notes.  The term "Notes"
shall mean the Revolving Note and the
Term Note as the same are hereafter amended from time to time.


                           2.17      Payables Report.  The term "
Payables Report" shall
mean a monthly report that includes, as of the last business day of the
preceding calendar month, an aged trial balance of each Borrower's accounts
payable, a listing of the names and, upon request by Bank, the addresses, of
all applicable account creditors and such other information as may be required
by Bank.


             

                           2.18      Person.  The term "Person" shall mean
any individual, trust,
corporation, partnership, limited liability company or other entity.


                           2.19      Receivables Report.  The term
"Receivables Report"
shall mean a monthly report that includes, as of the last business day of the
preceding calendar month of each Borrower, an aged trial balance of Accounts, a
listing of the names and addresses of all applicable account debtors, an
indication as to which Accounts listed therein do not qualify as Eligible
Receivables hereunder and such other information as may be required by Bank.


                           2.20      Revolving Credit Interest Rate. 
The term “Revolving Credit Interest Rate”
shall mean the variable per annum rate equal to the Bank’s Corporate Base Rate
from time to time in effect and after an Event of Default or maturity (whether
by lapse of time, the occurrence of the stated maturity date, acceleration or
otherwise) until paid in full, the variable per annum rate determined by adding
3% to the Bank’s Corporate Base Rate from time to time in effect.


                           2.21      Schedule of Inventory.  The term
"Schedule of Inventory"
shall mean a schedule, in form acceptable to Bank, of inventory owned by each
Borrower and in each Borrower’s possession as of the last business day of the
preceding month, valued at the lower of cost or market value on a first-in,
first-out basis, and including information on all sales or other reductions of
and all additions to inventory, all returns of inventory, all credits issued by
each Borrower, all claims against each Borrower in connection with inventory,
all inventory which is not Eligible Inventory hereunder, and such other information
as may be required by Bank.


                           2.22      Security Agreements.  The term
“Security Agreements” shall mean
those certain security agreements of even date herewith, as amended from time
to time, by and between Bank and each Borrower securing the payment of the
Liabilities by Borrowers, the performance of the covenants and agreements made
by Borrowers in the Loan Documents and the payments, advances or expenditures
made by Bank to Borrowers pursuant to the Loan Documents.


                           2.23      Term Interest Rate.  The term
"Term Interest Rate"
shall mean the variable per annum rate equal to the Bank’s Corporate Base Rate
from time to time in effect and after an Event of Default or maturity (whether
by lapse of time, the occurrence of the stated maturity date, acceleration or
otherwise) until paid in full, the variable per annum rate determined by adding
3% to the Bank’s Corporate Base Rate from time to time in effect.


                           2.24      Total Capital Funds.  The term
“Total Capital Funds” shall mean
the sum of the excess of the total consolidated assets of Borrowers over total
consolidated liabilities of Borrowers. 
For purposes hereof, total assets and total liabilities shall each be
determined in accordance with generally accepted accounting principles
consistently applied.


                           2.25      Total Debt.  The term "Total
Debt" shall mean,
as of any time, the aggregate of all liabilities, reserves and any other items
howsoever arising, whether primary, secondary, direct, contingent, fixed or
otherwise, which would be listed as a liability on the balance sheets of
Borrowers in accordance with generally accepted accounting principles as now in
effect, and in any event including the Liabilities, all indebtedness or
liabilities of any other person which Borrowers may guaranty or otherwise be
responsible or liable for (other than any liability arising out of the
endorsement of commercial paper for deposit or collection in the ordinary
course of business), all indebtedness and liabilities secured by any lien or
any security interest on any property or assets of Borrowers, whether or not
the same would be classified as a liability on a balance sheet, the liabilities
of Borrowers in respect of banker's acceptances and the aggregate over the
remaining unexpired term of all leases which should have been or must be, in
accordance with generally accepted accounting principles, recorded as capital
leases in respect of which Borrowers are liable as lessees.





             4.          REPRESENTATIONS
AND WARRANTIES OF BORROWERS.  As of
the date hereof (and as of the date of each Advance hereunder) Borrowers
represent and warrant to Bank as follows:


                           4.1        Organization;
Ownership of Borrower.  Electric is a corporation duly formed,
validly existing and in good standing under the laws of the State of Delaware and is duly qualified and
licensed to do business and is in good standing as a foreign entity in all
other jurisdictions where the character of its properties or the nature of its
activities makes such qualification necessary. 
Switchboard is a corporation duly formed, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified and
licensed to do business and is in good standing as foreign entities in all
other jurisdictions where the character of its properties or the nature of its
activities make such qualifications necessary. 
No Borrower owns capital stock of any corporation or any interest in any
partnership, joint venture or other entity except as set forth on Schedule 3.1.  There are no options, warrants or other
rights of any individual or entity to acquire any interest or stock in any
Borrower.


                           4.2        Duties and Nature of
Obligations.  Each Borrower is authorized to execute,
deliver and perform all of its duties and obligations under the Loan Documents,
and upon the execution and delivery of the Loan Documents, such documents shall
constitute the legal, valid and binding obligations of such Borrower,
enforceable in accordance with their respective terms, except to the extent the
same are limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by general equitable
principles.  The execution and delivery
of the Loan Documents by each Borrower, and the performance by each Borrower of
the obligations under the Loan Documents do not constitute the breach of any
provision contained in any Borrower's Articles of Incorporation or Bylaws or
any agreement to which any Borrower is now a party or by which its assets are
bound and do not violate any applicable order, decree, restriction, regulation
or law.


                           4.3        Liens and Encumbrances
.  Except as set forth on Schedule 3.3
and other than security interests in favor of Bank, each Borrower is lawfully
possessed and the sole owner of its assets free and clear of any security
interest, lien or encumbrance of any kind or character, legal or equitable.







                           4.4        Licenses.  Each
Borrower has and is current and in good
standing with respect to all approvals, permits, licenses, certificates,
inspections, consents and franchises necessary to conduct its business as
heretofore conducted by each Borrower and to own or lease and operate the
properties now owned or leased by each Borrower.


                           4.5        Taxes.  Each
Borrower has duly filed all United States, state and other
governmental tax returns which are required by law to be filed by it and has
paid all taxes and assessments payable by it, which have become due, except for
tax returns for which Borrowers have secured extensions to file, which have
become due, except for those contested in good faith and adequately disclosed
and fully provided for on the consolidated financial statements of such Person
in accordance with generally accepted accounting principles.  Each Borrower has at all times paid, or has
provided adequate reserves for the payment of, all federal, state and foreign
income taxes applicable for all prior fiscal years and for the current fiscal
year to date.


                           4.6        Litigation. 
There is no litigation or any governmental
proceeding pending, nor to the knowledge of any Borrower threatened, against
any Borrower which, if adversely determined, would result in any adverse change
in the financial condition, business, operations or properties of any Borrower.


                           4.7        Financial Statements
 .  Each balance sheet, profit and loss
statement and statement of cash flows and each interim financing statement
heretofore furnished to Bank, truly and accurately reflects the financial
condition of each Borrower as of the date thereof and the results of operations
of each Borrower for the period covered thereby.  Borrowers have no contingent liabilities which are material to
them other than as indicated on said financial statements and since the date of
such financial statements there has been no material adverse change in the
financial condition, properties, business or operations of any Borrower.


                           4.8        Collateral. 
All of the Collateral is currently located
and maintained at the location(s) set forth on Schedule 3.8 and has been
located at such location(s) for the 4-month period ending as of the date
hereof, or in the case of collateral acquired by any Borrower during the
4-month period ending as of the date hereof, for the entire time such
collateral has been in the possession of such Borrower.


                           4.9        ERISA.  Each
Borrower is in compliance in all material respects with the
Employee Retirement Income Security Act of 1974 ("ERISA") (or other
analogous statutes or laws) to the extent applicable to it and have received no
notice to the contrary from the Pension Benefit Guaranty Corporation
("PBGC") or any other governmental entity or agency; and Borrowers
have no liability to PBGC in respect of unfunded employee benefit plan
liabilities if all employee benefit plans covering any of the officers or
employees of any Borrower were terminated as of the date hereof.


                           4.10      Burdensome Contracts with
Affiliates.  No Borrower is a party to any contract,
agreement, lease or business arrangement with an Affiliate on terms and
conditions which are less favorable to such Borrower than would be usual and
customary in similar contracts, agreements or business arrangements between
Persons not affiliated with each other.







                           4.11      Environmental.  Each
Borrower's business operations and the
ownership, use, maintenance and operation of its businesses and property
(personal and real) have been, at all times, in compliance, in all material
respects, with all Environmental Laws.


                           4.12      Compliance with Law. 
Each Borrower is in material compliance with
all laws, rules and regulations, determinations of any arbitrator, court or any
federal, state or local government or other political subdivision thereof
exercising executive, legislative, judicial, regulatory or administrative
functions.


                           4.13      True and Complete Disclosure
 .  All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of Borrowers in
writing to Bank for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Person in
writing to Bank hereunder will be true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any material fact necessary to make such information
(taken as a whole) not misleading at such time in light of the circumstances
under which such information was provided. 
There is no fact known to any of the Borrowers which could reasonably be
expected to have a material adverse effect which has not been disclosed herein
or in such other documents, certificates and statements furnished to Bank for
use in connection with the transactions contemplated hereby.


             5.          COVENANTS OF BORROWERS.


             Each
Borrower agrees that, so long as any amount remains unpaid on the Notes or any
credit is available to or in use by a Borrower hereunder or any fees or other
amounts payable by any Borrower to Bank hereunder remains unpaid:


                           5.1        No Liens or Encumbrance
s.  Borrowers will not pledge, mortgage or
otherwise encumber, or permit to exist any lien, security interest or charge
upon, any assets or property of any kind or character at any time owned by any
Borrower without the prior written consent of Bank with the exception of those
existing liens listed on Schedule 4.1; provided, however,
that nothing in this Paragraph contained shall operate to prevent any liens,
pledges or deposits in connection with (i) workmen's compensation, taxes,
assessments, statutory obligations or other similar charges, provided in each
case that the obligation or liability arises in the ordinary course of business
and is not overdue, or if overdue, is being contested in good faith by
appropriate proceedings or (ii) purchase money security interests provided that
the aggregate amount of debt underlying such purchase money security interests
does not, at any time, exceed $250,000.


                           5.2        Maintain Licenses
 .  Each Borrower will maintain and keep in full
force and effect all licenses and permits necessary to conduct its business and
will, upon request of Bank, furnish to Bank evidence of renewal of any and all
licenses and permits within 30 days prior to the expiration thereof.







                           5.3        No Other Indebtedness
 .  Borrower will not issue, incur, assume,
create or have outstanding any indebtedness for borrowed money (including,
without limitation, any indebtedness representing the deferred purchase price
of property, any liability in respect of banker's acceptances or letters of
credit, any indebtedness, whether or not assumed, secured by liens on property
acquired by any Borrower at the time of the acquisition thereof or the
liability of any Borrower under any leases which should be capitalized under
generally accepted accounting principles) and no Borrower will guaranty any
indebtedness or similar obligation of any other Person without the prior written
consent of Bank; provided, however, that the foregoing provisions
shall not restrict nor operate to prevent (a) the indebtedness of any Borrower
owing to Bank, (b) trade indebtedness incurred by any Borrower in the ordinary
course of business (c) indebtedness fully subordinated to Bank on terms and
conditions acceptable to Bank in its sole discretion (d) the indebtedness
listed on Schedule 4.3 and (e) indebtedness not to exceed $250,000 in
the aggregate in connection with purchase money obligations of Borrowers.


                           5.4        Payment of Taxes
 .  Each Borrower will duly pay and discharge
all taxes, levies, assessments, fees and governmental charges upon or against
it or against its properties, in each case before the same become delinquent
and before penalties accrue thereon, unless and to the extent that the same are
being contested in good faith and by appropriate proceedings.


                           5.5        Notice of Litigation
 .  Each Borrower will notify Bank within 10
days after (a) becoming aware of any dispute or facts or circumstances that may
result in a dispute which involve an aggregate liability of any Borrower in
excess of $25,000 in excess of
the amount, if any, covered by any insurance policy of such Borrower or which,
if adversely determined, would otherwise result in any material adverse change
in the financial condition, properties, business, operations or prospects of
such Borrower, or (b) receiving any notice of an actual or threatened claim,
litigation or governmental proceeding against any Borrower which involves an aggregate
liability of such Borrower in excess of $25,000 in excess of the amount, if
any, covered by any insurance policy of such Borrower which, if adversely
determined, would otherwise result in any material adverse change in the
financial condition, properties, business or operations of any Borrower.


                           5.6        Use of Proceeds
 .  Proceeds from the Revolving Credit shall be
used to support the working capital and letter of credit needs of the
Borrowers.   Proceeds from the Term Loan
shall be used to retire existing senior indebtedness and finance a portion of
Electric’s acquisition of Switchboard.


                           5.7        Financial Reports
 .  Each Borrower will maintain a standard and
modern system of accounting in accordance with generally accepted accounting
principles consistently applied, shall furnish to Bank and its duly authorized
representatives such information respecting the business and financial
condition of each Borrower as Bank may reasonably request from time to time,
and shall permit Bank from time to time during business hours to examine,
inspect, make extracts from books and records of each Borrower (whether at such
Borrower's place of business or elsewhere) and make such other investigations
as Bank may deem necessary or appropriate. 
Each Borrower will furnish to Bank:







                                      
  (1)         As soon as available, and in any event
within 20 days following the final day of each calendar month, (A) a Borrowing
Base certificate in form and substance reasonably satisfactory to Bank (i)
certifying that each Borrower has complied with all of the terms of this
Agreement and the Loan Documents, that all representations and warranties in
this Agreement and the Loan Documents remain true and correct as of the date
thereof and that Borrowers are in compliance with all covenants in this Agreement,
(ii) certifying that no Event of Default has occurred or is continuing as of
the date thereof and no condition exists that with notice or the passage of
time or both would constitute an Event of Default and (iii) showing, in
reasonable detail satisfactory to Bank, computations supporting the calculation
of the Borrowing Base as of the last day of such calendar month, (B) a
Receivables Report, (C) a Payables Report and (D) a Schedule of Inventory, each
certified to Bank by each Borrower’s President or chief financial officer; and


                                      
  (2)         As soon as available, and in any event
within 90 days after the close of each fiscal year of each Borrower, the
consolidated balance sheet, profit and loss statement and statement of cash
flows of each Borrower for such fiscal year, all as prepared and audited by an
independent certified public accountant selected by Borrowers and reflecting
the unqualified opinion of such auditor and otherwise satisfactory to Bank and
certified to Bank by each Borrower’s President or chief financial officer; and


                                       
(c)         As soon as available, and in any event
within 20 days following the final day of each calendar month, the consolidated
balance sheet, profit and loss statement and statement of cash flows (including
management’s discussion and analysis section) of each Borrower for such month,
all as prepared by Borrowers’ management and certified to Bank by each
Borrower’s President or chief financial officer.


                           5.8        Plant, Properties,
Equipment and
Collateral.  Each Borrower will
maintain, preserve and keep its properties and equipment in good repair,
working order and condition and will from time to time make all needful and
proper repairs, renewals, replacements, additions and betterments thereto so
that at all times the efficiency thereof shall be fully preserved and main­tained
subject to normal wear and tear incurred during the normal course of
business.  All Collateral will be
located and maintained at the locations set forth in Schedule 3.8 and at
no other place or location, except for inventory sold in the ordinary course of
business.  Each Borrower will deliver to
Bank such UCC Financing Statements, mortgages, assignments, filings,
recordations, notices, and other documents as are required by Bank, in its sole
discretion, in connection with the maintenance and perfection of Bank's
security interest in the Collateral.


                           5.9        Notice of Event of
Default.  Promptly after knowledge thereof shall have
come to the attention of any officer or director of any Borrower, and in any
event within 3 days of such knowledge, such Borrower will provide to Bank
written notice of the occurrence of any Event of Default including, without
limitation, notice of any disposition of assets by any Borrower, other than in
the ordinary course of business, or the existence of any condition which would,
with notice or the passage of time or both, constitute an Event of Default.







                           5.10      Insurance.  Each Borrower
will insure and keep insured,
with insurance companies reasonably satisfactory to Bank, all tangible property
owned directly or indirectly by such Borrower which is of a character usually
insured by entities similarly situated and operating like properties and as may
otherwise be required by Bank; and will insure such other hazards and risks
(including employers' and public liability risks) with insurance companies
acceptable to Bank to the extent usually insured by entities similarly situated
in conducting similar businesses and as may otherwise be required by Bank.  Each Borrower will cause Bank to be named as
a lender's loss payee and additional named insured on all such insurance
policies and shall cause all such policies to contain a prohibition against
cancellation, modification or amendment without 30 days prior written notice to
Bank and, at the request of Bank, collaterally assign such insurance to Bank as
additional security for the Liabilities. 
Each Borrower will deliver to Bank, upon the signing of this Agreement
and, at the request of Bank from time to time hereafter, a certificate
evidencing Borrowers’ compliance with its obligations hereunder and/or a
certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section.


                           5.11      Access to Facilities and Equipment
.  Bank shall have the right, from time to time,
upon reasonable notice to any Borrower and during normal business hours, to
inspect, examine and make investigations of such Borrower’s facilities and the
Collateral.


                           5.12      Mergers, Consolidations, Sales
and Sale
and Leaseback Transactions. 
Borrowers will not sell, lease or otherwise dispose of all or a
substantial part of its tangible properties or assets except for sales of
inventory in the ordinary course of business, sell or discount any of its loans
or consolidate or be a party to a merger, business combination or other
reorganization with any other Person, provided, however, that either Borrower
may be a party to a merger, business combination or other reorganization in
which such Borrower is the surviving entity and the amount of borrowed money does
not exceed $1,000,000.  The term
“substantial” as used herein shall mean the aggregate amount of 10% or more, in
any calendar year, of the property and assets of Borrowers.


                           5.13      ERISA.  Each Borrower
(a) will promptly pay and discharge all
obligations and liabilities arising under ERISA of a character which if unpaid
or unperformed might result in the imposition of a lien against any of their
respective properties or assets, (b) shall promptly notify Bank of the
occurrence of any reportable event (as defined in ERISA) which might result in
the termination by the PBGC of any employee benefit plan covering any officers
or employees of any Borrower any benefits of which are, or are required to be,
guaranteed by PBGC (a "Plan") or of receipt of any notice from PBGC
of its intention to terminate or withdraw from any Plan and (c) shall not
terminate any such Plan or withdraw therefrom unless it shall be in compliance
with all of the terms and conditions of this Agreement after giving effect to
any liability to PBGC resulting from such termination or withdrawal.


                           5.14      Burdensome Contracts with
Affiliates.  Borrowers will not enter into any contract,
agreement, lease or business arrangement with an Affiliate on terms and
conditions which are less favorable to any Borrower than would be usual and
customary in similar contracts, agreements or business arrangements between
persons not affiliated with each other.


                           5.15      Environmental.  Each
Borrower’s business, operations and the
ownership, use, maintenance and operation of its businesses and property
(personal and real) will, at all times, be in compliance, in all material
respects, with all Environmental Laws. 
Borrower  will promptly provide
Bank written notice upon obtaining knowledge of any condition or occurrence
relative to any real property owned or leased by any Borrower that may
reasonably give rise to a claim or liability under Environmental Laws, the
effect of which could reasonably materially, adversely impact the business,
operations, use, financial condition or prospects of such Borrower.







                           5.16      Operating Accounts. 
Borrowers will maintain all of their primary
cash concentration, operating and disbursement demand deposit accounts with
Bank and shall maintain balances in such accounts as are necessary to
compensate Bank for any service charges on such accounts.  Borrowers will 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 plus interest at the Revolving Credit Rate.  Borrowers grant Bank the right to debit
Borrowers’ accounts for all monthly payments of principal and interest and
service charges due and payable to Bank.


                           5.17      Restricted Payments. 
Borrowers will not during any fiscal year
(a) directly or indirectly purchase, redeem or otherwise acquire or retire
any interest of any shareholder of any Borrower; or (b) make or declare
any distributions to any shareholder of any Borrower with respect to such
shareholder’s interest in any Borrower.


                           5.18      Value of Assets.  The
fair market value of Borrowers’ assets,
as determined in a manner and based on assumptions reasonably satisfactory to
the Bank, shall be materially greater than the total liabilities of Borrowers,
and such shall remain the case until all Liabilities have been paid in full.


                           5.19      Total Capital Funds. 
Borrowers’ Total Capital Funds shall not, at
the end of any calendar month, be less than $9,300,000.


                           5.20      Debt Service Ratio. 
Borrowers shall not permit the ratio, as
determined at the end of each calendar quarter beginning with the calendar
quarter ending December 31, 2001, of (i) Cash Flow to (ii) Debt Service to be
less than 1.0 to 1.0.


                           5.21      Financial
Covenant Certificate.  As soon as
available, and in any event within 30 days following the end of any period for
which a financial covenant is being measured, the Borrowers shall deliver to
Bank a certificate in form and substance satisfactory to Bank, certified to
Bank by each Borrower's President or chief financial officer and showing a
computation of all financial covenants for the period then ended.







                           5.22      Name Changes.  No less
than 30 days prior to the effective
date thereof, each Borrower will immediately notify Bank in writing of any
change in the name of such Borrower or the use of any assumed name by such
Borrower.  Such Borrower will execute
and deliver to Bank any and all financing statements and other documents
requested by Bank in connection therewith.


             6.          EVENTS OF DEFAULT; REMEDIES


                           6.1        Events of Default
 .  The occurrence of any one of the following
shall constitute an "Event of Default" hereunder:


                                      
  (1)         Default in the payment of any principal
on the Notes when due whether at the stated maturity thereof or at any other
time provided for therein or in this Agreement or in the payment when due of
interest on the Notes or of any fee, charge or other payment payable by
Borrowers under the Notes, this Agreement or any of the Loan Documents when
due;


                                      
  (2)         Default in the observance or
performance of any other provision of this Agreement or the other Loan
Documents that is not cured within 20 days following notice thereof from Bank;


                                      
  (3)         Default shall occur under any other
evidence of indebtedness for money borrowed, issued, assumed or guaranteed by
any Borrower or under any indenture, agreement or other instrument under which
the same may be issued which involves or could involve an aggregate amount in
excess of $25,000, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such indebtedness;


                                      
  (4)         Any judgment or judgments, writ or
writs or warrant or warrants of attachment, or any similar process or processes
in an aggregate amount in excess of $25,000 over the amount covered by
insurance shall be entered or filed against any Borrower or against any of its
respective properties or assets and remains unpaid, unvacated, unbonded or
unstayed for a period of 30 days;


                                      
  (5)         Any representation or warranty made by
any Borrower in this Agreement or the other Loan Documents or any statement or
certificate furnished pursuant hereto or thereto proves misleading in any
material respect;


                                      
  (6)         Any Borrower becomes insolvent or
bankrupt, or bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or laws
for the relief of debtors are instituted against any Borrower and are not
dismissed within 30 days after such institution or a decree or order for the
appointment of a trustee or receiver for any Borrower for the major part of its
properties is entered by a court of competent jurisdiction and the trustee or
receiver appointed pursuant to such decree or order is not discharged within 30
days after such appointment;







                                      
  (7)         Any Borrower shall institute
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings for relief under any bankruptcy law or laws for the relief
of debtors or shall consent to the institution of such proceedings against it by others or to the entry of any
decree or order adjudging any Borrower bankrupt or insolvent or approving as
filed any petition seeking reorganization under any bankruptcy or similar law
or shall apply for or shall consent to the appointment of a receiver or trustee
for any Borrower for the major part of its properties or any Borrower shall
make an assignment for the benefit of creditors or shall admit in writing its
inability to pay its debts as they mature or shall take any corporate action in
contemplation or in furtherance of any of the aforesaid purposes;


                                      
  (8)         Any Borrower will, for any reason, fail
to operate all or substantially all of its business and facilities for a period
of greater than 15 consecutive days;


                                      
  (9)         There is an adverse change in the
business, operations or financial condition of any Borrower, as determined by
Bank in its sole discretion.


                           6.2        Remedies. 
Upon the occurrence of any Event of Default
described in Paragraph 5.1, then all outstanding principal and accrued
and unpaid interest under the Notes
and all fees, charges, costs and expenses payable hereunder and thereunder and
under the other Loan Documents shall, at Bank’s option with respect to the
Events of Default set forth in Sections 5.1 (a), (b), (c), (e) and (i)
and immediately with respect to the Events of Default set forth in Sections
5.1 (d), (f), (g) and (h), become due and payable without presentment,
demand, protest or notice of any kind and the obligation of Bank to extend further
credit pursuant to any of the terms hereof shall immediately terminate.


             7.          MISCELLANEOUS


                           7.1        Changes in Corporate
Base Rate.  Any change in the interest rate on advances
under any of the Loans resulting from a change in the Bank’s corporate base rate
shall be and become effective as of and on the date of the relevant change in
the Bank’s corporate base rate.


                           7.2        Record Keeping
 .  The amount and date of each advance made
under the Loans and the amount and date of each payment of principal and interest
thereon shall be recorded by Bank on its books and records and the amount of
principal and interest shown on the Bank's books and records as owing on the
Loans from time to time shall be prima facie evidence of the amount so owing.  The failure to so record any amount or any
error in so recording any such amount, however, shall not limit or otherwise
affect Borrowers’ obligations hereunder or under the Notes to repay the
principal amount of the Loans
together with all accrued interest thereon.


                           7.3        Application of Payment
.  All payments on the Loans shall be applied
first to accrued and unpaid interest under the respective Loan with the
remainder, if any, to be applied to the payment of the outstanding principal
balance of the respective Loan.







                           7.4        Holidays.  If
any principal of or interest on the Notes
shall fall due on a Saturday, Sunday or another day which is a legal holiday
for banks in the State of Illinois, such principal or interest shall be due on
the next succeeding business day, and interest at the rate the respective Note
bears for the period prior to maturity shall continue to accrue from the stated
due date thereof to and including the next succeeding bank business day on
which the same shall become payable.


                           7.5        No Waiver, Cumulative
Remedies.  No delay or failure on the part of Bank or
on the part of the holder or holders of the Notes to exercise any power or
right shall preclude any other or further exercise thereof, or the exercise of
any other power or right, and the rights and remedies hereunder of Bank and of
the holder or holders of the Notes are cumulative and not exclusive of any
rights or remedies of which any of them would otherwise be entitled.


                           7.6        Amendments, etc
 .  No amendment, modification, termination or
waiver of any provision of this Agreement, the Notes or the other Loan
Documents shall be effective unless the same shall be in writing and signed by
Bank and Borrowers. No notice to or demand on Borrowers in any case shall
entitle Borrowers to any other or further notice or demand in any similar or
other circumstances.


                           7.7        Survival of
Representations and
Warranties.  Until all principal,
interest and fees due to Bank under the Loan Documents have been paid in full
and the credit facilities hereunder are no longer available to Borrowers, the
representations, warranties and covenants set forth herein shall remain in full
force and effect.


                           7.8        Costs and Expenses
 .  Borrowers agree to pay all costs and
expenses of Bank including, without limitation, the attorneys' fees and costs
incurred by Bank in connection with (i) the making of the Loans and the
negotiation, preparation, execution and delivery of the Loan Documents and (ii)
field examinations and appraisals performed by Bank in connection with the
making of the Loans.  Borrowers further
agree to pay, on demand, all costs and expenses (including attorneys' and
paralegals' fees, as well as costs and expenses incurred pursuant to Section
5.2), if any, incurred by Bank or any holder of the Notes in connection with the enforcement of this Agreement, the
Notes or the other Loan Documents or any attorneys’ fees and costs incurred by
Bank in connection with the maintenance of the Loan Documents or any waiver of
or amendment to the Loan Documents.


                           7.9        Taxes.  Any
and all amounts required to be paid by any Borrower hereunder
shall be paid in Dollars in immediately available funds, free and clear of and
without deduction for or on account of any present and future income, stamp,
documentary, excise or other taxes or levies, imposts, deductions, charges,
compulsory loans or withholdings whatsoever imposed, assessed, levied or
collected by any state, province or nation or any political subdivision or
taxing authority or other agency thereof or therein.  Each Borrower hereby agrees to indemnify and hold harmless the
Bank for the full amount of all Taxes (hereinafter defined), which indemnity
shall survive the termination hereof. 
If any Borrower is required by law to deduct or withhold any taxes or
any payments, including all penalties and interest related thereto
(collectively hereinafter referred to as “Taxes”), it will pay such
additional amount as may be necessary in order that the net amount received by
the Bank after the required deduction or withholding (including any required
deduction and withholding on account of any such Taxes) shall equal the amount
the Bank would have received had no such deduction or withholding been
made.  If any Borrower is required or
permitted to pay any Taxes directly to any taxing authority, such Borrower
shall furnish to the Bank the original copy of a receipt evidencing payment
thereof within 30 days after said payment is made.







                           7.10      Notices.  All
communications provided for herein shall be in writing and
shall be deemed to have been given or made when delivered personally, three
days after deposited in the United States mail (certified mail, postage
prepaid) or one day after deposited with a nationally recognized overnight
courier (delivery prepaid), or upon receipt of a confirmation of a facsimile transmission,
addressed as follows: (a) if to Borrowers, to Jeffrey R. Mistarz, Electric City
Corp., 1280 Landmeier Road, Elk Grove Village, Illinois 60007; (b) if to
Bank, to American National Bank and Trust Company of Chicago, 120 South LaSalle
Street, Chicago, Illinois 60603, Attn: Mr. Peter B. Harrison, with a copy to
Horwood Marcus & Berk Chartered, 180 N. LaSalle Street, Suite 3700,
Chicago, Illinois 60601, telecopy no. (312) 606-3232, Attn: Jeffrey A.
Hechtman, Esq.


                           7.11      Binding Nature, Governing Law, Etc
 .  This Agreement, the Notes and the other Loan
Documents shall be binding upon Borrowers and their successors and assigns and
shall inure to the benefit of Bank and its successors and assigns, including
any subsequent holder of the Notes. 
This Agreement, the Notes and
the other Loan Documents and the rights and duties of the parties hereto and
thereto shall be governed by and construed in accordance with the laws of the
State of Illinois.  This Agreement, the
Notes and the other Loan
Documents constitute the entire understanding of the parties with respect to
the subject matter hereof and any prior agreements, whether written or oral,
with respect thereto are superseded hereby. 
Borrowers may not assign their respective rights hereunder or thereunder
without the prior written consent of Bank.


                           7.12      General.  Article and
paragraph headings used in this Agreement are for
convenience of reference only and are not to be part of this Agreement for any
other purpose.  Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall as to
such jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts and by facsimile, and all such counterparts taken
together shall be deemed to constitute one instrument.


                           7.13      Field Audits and Financial
Examinations.  Bank shall have the right, at Borrowers’
sole cost and expense, to conduct field audits and financial examinations of
Borrowers from time to time; provided, however , that as long as
no Event of Default has occurred or is continuing and no event has occurred
that with notice or the passage of time or both would constitute an Event of
Default, Bank shall not perform more than 2 field audits or financial examinations of Borrowers during any
calendar year.







                           7.14      Loan Documents.  All
documents required pursuant to the
credit facilities to be extended by Bank to Borrowers hereunder including,
without limitation, the Notes and the other Loan Documents, shall be acceptable
to Bank and its counsel in both form and substance and unless otherwise agreed
to by Bank shall be prepared by counsel for Bank.


                           7.15     Jury
Trial, Venue, Jurisdiction. 
BORROWERS WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS (I) UNDER THIS AGREEMENT, THE NOTES OR ANY OF
THE OTHER LOAN DOCUMENTS OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
WHICH MAY BE DELIVERED IN THE FUTURE IN CONNECTION WITH THE LOANS OR (II)
ARISING FROM THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE NOTES, THE OTHER
LOAN DOCUMENTS OR ANY BANKING RELATIONSHIP BETWEEN BORROWERS AND BANK IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.  BORROWERS  IRREVOCABLY AGREE THAT ALL ACTIONS OR
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT ARISING OUT OF OR FROM OR RELATED TO
THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED
ONLY IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS.  BORROWERS HEREBY CONSENT AND SUBMIT TO THE
EXCLUSIVE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID
CITY AND STATE.  BORROWERS HEREBY WAIVE
ANY RIGHT EACH MAY HAVE TO TRANSFER OR CHANGE VENUE OF ANY SUCH ACTION OR
PROCEEDING.


 










             IN
WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
specified at the beginning hereof.


	 
  	
  BORROWERS:
  
	 
  	 
  
	 
  	
  ELECTRIC CITY CORP.
  
	 
  	 
  
	 
  	
  By:      /s/ Jeffrey Mistarz    


  

  
	 
  	
       Its:  
  Chief Financial Officer & Treasurer


  

  
	 
  	 
  
	 
  	
  SWITCHBOARD APPARATUS, INC.
  
	 
  	 
  
	 
  	
  By:      /s/ Jeffrey Mistarz


  

  
	 
  	
       Its:   
  Treasurer


  

  



 


             Accepted
and agreed to at Chicago, Illinois as of the day and year first above written.


 


	 
  	
  BANK:
  
	 
  	 
  
	 
  	
  AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
  
	 
  	 
  
	 
  	
  By:      /s/ Peter B. Harrison, Jr.


  

  
	 
  	
       Its:   
  Vice President


  

  



 










Schedule 3.1

Legal and Beneficial Owners of Issued and Outstanding Capital Stock of
Borrowers


All of the authorized and issued shares of
Switchboard Apparatus, Inc. (a Delaware Corporation) are owned by Electric City
Corp.


 


Schedule 3.3

Liens and Encumbrances


1.  Lien
on the real property located at 1280 Landmeier Road, Elk Grove Village, IL  60007-2410 by CIB Bank



2.  Lien on a 1999 Mercury Sable by Ford Motor
Credit



3.  Lien on personal property of Electric City
Corp. by LaSalle Bank N.A.



4.  Lien on personal property of Switchboard
Apparatus, Inc. by Oxford Bank & Trust



 


Schedule 3.8

Collateral/Locations


 


1.  Personal property located at:



     a.          1280 Landmeier Road, Elk Grove
Village, IL  60007-2410, and



     b.          2820 South 19th Avenue,
Broadview, IL  60155-4732






 


Schedule 4.1


Existing
Liens


 


1.  Lien on the real property located at 1280
Landmeier Road, Elk Grove Village, IL 
60007-2410 by CIB Bank



2.  Lien on all of the assets of the Company by
Joseph Marino as security for the note dated May 30, 2000



3.  Lien on a 1999 Mercury Sable by Ford Motor
Credit



 


Schedule 4.3


Post
Closing Indebtedness



 


1.  Mortgage with CIB Bank for the property
located at 1280 Landmeier Road, Elk Grove Village, IL



2.  Auto loan with Ford Motor Credit for 1999
Mercury Sable



3.  Subordinated Note with Joseph Marino dated May
30, 2000



4.  Borrowings between Electric City Corp. and
Switchboard Apparatus, Inc.



5.  The Convertible Senior Subordinated Promissory
Note between the Company and Newcourt Capital USA.