exv10w5



 






Exhibit 10.5




SUBSIDIARY GUARANTY




	 	 	 
	New York, New York

	 	February 28, 2005






          FOR VALUE RECEIVED, and in consideration of note purchases from, loans made or to be made or
credit otherwise extended or to be extended by Laurus Master Fund, Ltd. (“Laurus”) to or for the
account of Electric City Corp., a Delaware corporation (“Debtor”), from time to time and at any
time and for other good and valuable consideration and to induce Laurus, in its discretion, to
purchase such notes, make such loans or other extensions of credit and to make or grant such
renewals, extensions, releases of collateral or relinquishments of legal rights as Laurus may deem
advisable, each of the undersigned (and each of them if more than one, the liability under this
Guaranty being joint and several) (jointly and severally referred to as “Guarantors “ or “the
undersigned”) unconditionally guaranties to Laurus, its successors, endorsees and assigns the
prompt payment when due (whether by acceleration or otherwise) of all present and future
obligations and liabilities of any and all kinds of Debtor to Laurus and of all instruments of any
nature evidencing or relating to any such obligations and liabilities upon which Debtor or one or
more parties and Debtor is or may become liable to Laurus, whether incurred by Debtor as maker,
endorser, drawer, acceptor, guarantor , accommodation party or otherwise, and whether due or to
become due, secured or unsecured, absolute or contingent, joint or several, and however or whenever
acquired by Laurus, whether arising under, out of, or in connection with (i) that certain
Securities Purchase Agreement dated as of September 11, 2003 by and between the Debtor and Laurus
(as amended, modified or supplemented and in effect from time to time, the “Securities Purchase
Agreement”), (ii) each Related Agreement referred to in the Securities Purchase Agreement, (iii)
that certain Security Agreement dated as of September 11, 2003 by and between the Debtor and Laurus
(as amended, modified or supplemented and in effect from time to time the “Security Agreement”) and
(iv) each Ancillary Agreement referred to in the Security Agreement (the Securities Purchase
Agreement and each Related Agreement and the Security Agreement and each Ancillary Agreement, as
each may be amended, modified, restated or supplemented from time to time, are collectively
referred to herein as the “Documents”), or any documents, instruments or agreements relating to or
executed in connection with the Documents or any documents, instruments or agreements referred to
therein or otherwise, or any other indebtedness, obligations or liabilities of the Debtor to
Laurus, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated,
absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note,
agreement, guaranty, instrument or otherwise (all of which are herein collectively referred to as
the “Obligations”), and irrespective of the genuineness, validity, regularity or enforceability of
such Obligations, or of any instrument evidencing any of the Obligations or of any collateral
therefor or of the existence or extent of such collateral, and irrespective of the allowability,
allowance or disallowance of any or all of the Obligations in any case commenced by or against
Debtor under Title 11, United States Code, including, without limitation, obligations or
indebtedness of Debtor for post-petition interest, fees, costs and charges that would have accrued
or been added to the Obligations but for the commencement of such case. Terms not otherwise
defined herein shall have the meaning assigned such terms in the Securities Purchase Agreement and
the Security



 









 





Agreement, as applicable. In furtherance of the foregoing, the undersigned hereby
agree as follows:



          1. No Impairment. Laurus may at any time and from time to time, either before or
after the maturity thereof, without notice to or further consent of the undersigned, extend the
time of payment of, exchange or surrender any collateral for, renew or extend any of the
Obligations or increase or decrease the interest rate thereon, or any other agreement with Debtor
or with any other party to or person liable on any of the Obligations, or interested therein, for
the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or
for any modification of the terms thereof or of any agreement between Laurus and Debtor or any such
other party or person, or make any election of rights Laurus may deem desirable under the United
States Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization,
moratorium or insolvency law relating to or affecting the enforcement of creditors’ rights
generally (any of the foregoing, an “Insolvency Law”) without in any way impairing or affecting
this Guaranty. This Guaranty shall be effective regardless of the subsequent incorporation, merger
or consolidation of Debtor, or any change in the composition, nature, personnel or location of
Debtor and shall extend to any successor entity to Debtor, including a debtor in possession or the
like under any Insolvency Law.



          2. Guaranty Absolute. Subject to Section 5(c) hereof, each of the undersigned jointly
and severally guarantees that the Obligations will be paid strictly in accordance with the terms of
the Documents and/or any other document, instrument or agreement creating or evidencing the
Obligations, regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Debtor with respect thereto. Guarantors
hereby knowingly accept the full range of risk encompassed within a contract of “continuing
guaranty” which risk includes the possibility that Debtor will contract additional indebtedness for
which Guarantors may be liable hereunder after Debtor’s financial condition or ability to pay its
lawful debts when they fall due has deteriorated, whether or not Debtor has properly authorized
incurring such additional indebtedness. The undersigned acknowledge that (i) no oral
representations, including any representations to extend credit or provide other financial
accommodations to Debtor, have been made by Laurus to induce the undersigned to enter into this
Guaranty and (ii) any extension of credit to the Debtor shall be governed solely by the provisions
of the Documents. The liability of each of the undersigned under this Guaranty shall be absolute
and unconditional, in accordance with its terms, and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by,
any circumstance or occurrence whatsoever, including, without limitation: (a) any waiver,
indulgence, renewal, extension, amendment or modification of or addition, consent or supplement to
or deletion from or any other action or inaction under or in respect of the Documents or any other
instruments or agreements relating to the Obligations or any assignment or transfer of any thereof,
(b) any lack of validity or enforceability of any Document or other documents, instruments or
agreements relating to the Obligations or any assignment or transfer of any thereof, (c) any
furnishing of any additional security to Laurus or its assignees or any acceptance thereof or any
release of any security by Laurus or its assignees, (d) any limitation on any party’s liability or
obligation under the Documents or any other documents, instruments or agreements relating to the
Obligations or any assignment or transfer of any thereof or any invalidity or unenforceability, in
whole or in part, of any such document,



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instrument or agreement or any term thereof, (e) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other
like proceeding relating to Debtor, or any action taken with respect to this Guaranty by any
trustee or receiver, or by any court, in any such proceeding, whether or not the undersigned shall
have notice or knowledge of any of the foregoing, (f) any exchange, release or nonperfection of any
collateral, or any release, or amendment or waiver of or consent to departure from any guaranty or
security, for all or any of the Obligations or (g) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the undersigned. Any amounts due from the
undersigned to Laurus shall bear interest until such amounts are paid in full at the highest rate
then applicable to the Obligations. Obligations include post-petition interest whether or not
allowed or allowable.



          3. Waivers.




               (a) This Guaranty is a guaranty of payment and not of collection. Laurus shall be
under no obligation to institute suit, exercise rights or remedies or take any other action
against Debtor or any other person or entity liable with respect to any of the Obligations
or resort to any collateral security held by it to secure any of the Obligations as a
condition precedent to the undersigned being obligated to perform as agreed herein and each
of the Guarantors hereby waives any and all rights which it may have by statute or otherwise
which would require Laurus to do any of the foregoing. Each of the Guarantors further
consents and agrees that Laurus shall be under no obligation to marshal any assets in favor
of Guarantors, or against or in payment of any or all of the Obligations. The undersigned
hereby waives all suretyship defenses and any rights to interpose any defense, counterclaim
or offset of any nature and description which the undersigned may have or which may exist
between and among Laurus, Debtor and/or the undersigned with respect to the undersigned’s
obligations under this Guaranty, or which Debtor may assert on the underlying debt,
including but not limited to failure of consideration, breach of warranty, fraud, payment
(other than cash payment in full of the Obligations), statute of frauds, bankruptcy,
infancy, statute of limitations, accord and satisfaction, and usury.




               (b) Each of the undersigned further waives (i) notice of the acceptance of this
Guaranty, of the making of any such loans or extensions of credit, and of all notices and
demands of any kind to which the undersigned may be entitled, including, without limitation,
notice of adverse change in Debtor’s financial condition or of any other fact which might
materially increase the risk of the undersigned and (ii) presentment to or demand of payment
from anyone whomsoever liable upon any of the Obligations, protest, notices of presentment,
non-payment or protest and notice of any sale of collateral security or any default of any
sort.




               (c) Notwithstanding any payment or payments made by the undersigned hereunder, or any
setoff or application of funds of the undersigned by Laurus, the undersigned shall not be
entitled to be subrogated to any of the rights of Laurus against Debtor or against any
collateral or guarantee or right of offset held by Laurus for the payment of the
Obligations, nor shall the undersigned seek or be entitled to seek any contribution or
reimbursement from Debtor in respect of payments made by the undersigned hereunder, until
all amounts owing to Laurus by Debtor on account of the



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Obligations are indefeasibly paid in
full and Laurus’ obligation to extend credit pursuant to the Documents has been irrevocably
terminated. If, notwithstanding the foregoing, any amount shall be paid to the undersigned
on account of such subrogation rights at any time when all of the Obligations shall not have
been paid in full and Laurus’ obligation to extend credit pursuant to the Documents shall
not have been terminated, such amount shall be held by the undersigned in trust for Laurus,
segregated from other funds of the undersigned, and shall forthwith upon, and in any event
within two (2) business days of, receipt by the undersigned, be turned over to Laurus in the
exact form received by the undersigned (duly endorsed by the undersigned to Laurus, if
required), to be applied against the Obligations, whether matured or unmatured, in such
order as Laurus may determine, subject to the provisions of the Documents. Any and all
present and future debts and obligations of Debtor to any of the undersigned are hereby
waived and postponed in favor of, and subordinated to the full payment and performance of,
all present and future debts and Obligations of Debtor to Laurus.



          4. Security. All sums at any time to the credit of the undersigned and any property
of the undersigned in Laurus’ possession or in the possession of any bank, financial institution or
other entity that directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, Laurus (each such entity, an “Affiliate”) shall be
deemed held by Laurus or such Affiliate, as the case may be, as security for any and all of the
undersigned’s obligations to Laurus and to any Affiliate of Laurus, no matter how or when arising
and whether under this or any other instrument, agreement or otherwise.



          5. Representations and Warranties. Each of the undersigned hereby jointly and
severally represents and warrants (all of which representations and warranties shall survive until
all Obligations are indefeasibly satisfied in full and the Documents have been irrevocably
terminated), that:




               (a) Corporate Status. It is a corporation, partnership or limited liability
company, as the case may be, duly formed, validly existing and in good standing under the
laws of its jurisdiction of formation indicated on the signature page hereof and has full
power, authority and legal right to own its property and assets and to transact the business
in which it is engaged.




               (b) Authority and Execution. It has full power, authority and legal right to
execute and deliver, and to perform its obligations under, this Guaranty and has taken all
necessary corporate, partnership or limited liability company, as the case may be, action to
authorize the execution, delivery and performance of this Guaranty.




               (c) Legal, Valid and Binding Character. This Guaranty constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting the enforcement of creditor’s
rights and general principles of equity that restrict the availability of equitable or legal
remedies.



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               (d) Violations. The execution, delivery and performance of this Guaranty will
not violate any requirement of law applicable to it or any contract, agreement or instrument
to which it is a party or by which it or any of its property is bound or result in the
creation or imposition of any mortgage, lien or other encumbrance other than in favor of
Laurus on any of its property or assets pursuant to the provisions of any of the foregoing,
which, in any of the foregoing cases, could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.




               (e) Consents or Approvals. No consent of any other person or entity
(including, without limitation, any creditor of the undersigned) and no consent, license,
permit, approval or authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required in connection with the
execution, delivery, performance, validity or enforceability of this Guaranty by it, except
to the extent that the failure to obtain any of the foregoing could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse Effect and
except for consents which have been obtained prior to the execution thereof.




               (f) Litigation. No litigation, arbitration, investigation or administrative
proceeding of or before any court, arbitrator or governmental authority, bureau or agency is
currently pending or, to the best of its knowledge, threatened (i) with respect to this
Guaranty or any of the transactions contemplated by this Guaranty or (ii) against or
affecting it, or any of its property or assets, which, in each of the foregoing cases, if
adversely determined, could reasonably be expected to have a Material Adverse Effect.




               (g) Financial Benefit. It has derived or expects to derive a financial or
other advantage from each and every loan, advance or extension of credit made under the
Documents or other Obligation incurred by the Debtor to Laurus.




               (h) Solvency. As of the date of this Guaranty, (a) the fair saleable value of
its assets exceeds its liabilities and (b) it is meeting its current liabilities as they
mature.



          6. Acceleration.




               (a) If any breach of any covenant or condition or other event of default shall occur
and be continuing under any agreement made by Debtor or any of the undersigned to Laurus, or
either Debtor or any of the undersigned should at any time become insolvent, or make a
general assignment, or if a proceeding in or under any Insolvency Law shall be filed or
commenced by, or in respect of, any of the undersigned, or if a notice of any lien, levy,
or assessment is filed of record with respect to any assets of any of the undersigned by the
United States of America or any department, agency, or instrumentality thereof, or if any
taxes or debts owing at any time or times hereafter to any one of them becomes a lien or
encumbrance upon any assets of the undersigned in Laurus’ possession, or otherwise, any and
all Obligations shall for purposes hereof, at Laurus’ option, be deemed due and payable
without notice notwithstanding that any such Obligation is not then due and payable by
Debtor.



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               (b) Each of the undersigned will promptly notify Laurus of any default by such
undersigned in its respective performance or observance of any term or condition of any
agreement or agreements to which the undersigned is a party evidencing obligations in excess
of $100,000 in the aggregate if the effect of such default or defaults is to cause, or
permit the holder of any such obligation under such agreement to cause, such obligation to
become due prior to its stated maturity and, if such an event occurs, Laurus shall have the
right to accelerate such undersigned’s obligations hereunder.



          7. Payments from Guarantors. Laurus, in its sole and absolute discretion, with or
without notice to the undersigned, may apply on account of the Obligations any payment from the
undersigned or any other guarantors, or amounts realized from any security for the Obligations, or
may deposit any and all such amounts realized in a non-interest bearing cash collateral deposit
account to be maintained as security for the Obligations.



          8. Costs. The undersigned shall pay on demand, all costs, fees and expenses
(including expenses for legal services of every kind) relating or incidental to the enforcement or
protection of the rights of Laurus hereunder or under any of the Obligations.



          9. No Termination. This is a continuing irrevocable guaranty and shall remain in full
force and effect and be binding upon the undersigned, and each of the undersigned’s successors and
assigns, until all of the Obligations have been indefeasibly paid in full and Laurus’ obligation to
extend credit pursuant to the Documents has been irrevocably terminated. If any of the present or
future Obligations are guarantied by persons, partnerships or entities in addition to the
undersigned, the death, release or discharge in whole or in part or the bankruptcy, merger,
consolidation, incorporation, liquidation or dissolution of one or more of them shall not discharge
or affect the liabilities of any undersigned under this Guaranty.



          10. Recapture. Anything in this Guaranty to the contrary notwithstanding, if Laurus
receives any payment or payments on account of the liabilities guaranteed hereby, which payment or
payments or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party
under any Insolvency Law, common law or equitable doctrine, then to the extent of any sum not
finally retained by Laurus, the undersigned’s obligations to Laurus shall be reinstated and this
Guaranty shall remain in full force and effect (or be reinstated) until payment shall have been
made to Laurus, which payment shall be due on demand.



          11. Books and Records. The books and records of Laurus showing the account between
Laurus and Debtor shall be admissible in evidence in any action or proceeding, shall be binding
upon the undersigned for the purpose of establishing the items therein set forth and shall
constitute prima facie proof thereof.



          12. No Waiver. No failure on the part of Laurus to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by Laurus of any right, remedy or power hereunder preclude any other or
future exercise of any other legal right, remedy or power. Each and every right, remedy and power
hereby granted to Laurus or allowed it by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by Laurus at any time and from time to time.



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          13. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DESIRES THAT ITS DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH OF THE UNDERSIGNED HERETO WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN LAURUS, AND/OR ANY OF THE UNDERSIGNED ARISING OUT
OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS GUARANTY, ANY DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.



          14. Governing Law; Jurisdiction. THIS GUARANTY CANNOT BE CHANGED OR TERMINATED
ORALLY, AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. EACH OF THE UNDERSIGNED HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY OF THE UNDERSIGNED, ON THE
ONE HAND, AND LAURUS, ON THE OTHER HAND, PERTAINING TO THIS GUARANTY OR ANY OF THE DOCUMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATED TO THIS GUARANTY OR ANY OF THE DOCUMENTS; PROVIDED,
THAT EACH OF THE UNDERSIGNED ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER
PROVIDED, THAT NOTHING IN THIS GUARANTY SHALL BE DEEMED OR OPERATE TO PRECLUDE LAURUS FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF LAURUS. EACH OF THE UNDERSIGNED EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
UNDERSIGNED HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS. EACH OF THE UNDERSIGNED HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES
THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH UNDERSIGNED IN ACCORDANCE WITH SECTION 18 AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH UNDERSIGNED’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.



          15. Understanding With Respect to Waivers and Consents. Each Guarantor warrants and
agrees that each of the waivers and consents set forth in this Guaranty is made voluntarily



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and
unconditionally after consultation with outside legal counsel and with full knowledge of its
significance and consequences, with the understanding that events giving rise to any defense or
right waived may diminish, destroy or otherwise adversely affect rights which such Guarantor
otherwise may have against the Debtor, Laurus or any other person or entity or against any
collateral. If, notwithstanding the intent of the parties that the terms of this Guaranty shall
control in any and all circumstances, any such waivers or consents are determined to be
unenforceable under applicable law, such waivers and consents shall be effective to the maximum
extent permitted by law.



          16. Severability. To the extent permitted by applicable law, any provision of this
Guaranty 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, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.



          17. Amendments, Waivers. No amendment or waiver of any provision of this Guaranty nor
consent to any departure by the undersigned therefrom shall in any event be effective unless the
same shall be in writing executed by each of the undersigned directly affected by such amendment
and/or waiver and Laurus.



          18. Notice. All notices, requests and demands to or upon the undersigned, shall be in
writing and shall be deemed to have been duly given or made (a) when delivered, if by hand, (b)
three (3) days after being sent, postage prepaid, if by registered or certified mail, (c) when
confirmed electronically, if by facsimile, or (d) when delivered, if by a recognized overnight
delivery service in each event, to the numbers and/or address set forth beneath the signature of
the undersigned.



          19. Successors. Laurus may, from time to time, without notice to the undersigned,
sell, assign, transfer or otherwise dispose of all or any part of the Obligations and/or rights
under this Guaranty. Without limiting the generality of the foregoing, Laurus may assign, or grant
participations to, one or more banks, financial institutions or other entities all or any part of
any of the Obligations. In each such event, Laurus, its Affiliates and each and every immediate
and successive purchaser, assignee, transferee or holder of all or any part of the Obligations
shall have the right to enforce this Guaranty, by legal action or otherwise, for its own benefit as
fully as if such purchaser, assignee, transferee or holder were herein by name specifically given
such right. Laurus shall have an unimpaired right to enforce this Guaranty for its benefit with
respect to that portion of the Obligations which Laurus has not disposed of, sold, assigned, or
otherwise transferred.



          20. Joinder. It is understood and agreed that any person or entity that desires to
become a Guarantor hereunder, or is required to execute a counterpart of this Guaranty after the
date hereof pursuant to the requirements of any Document, shall become a Guarantor hereunder by (x)
executing a Joinder Agreement in form and substance satisfactory to Laurus, (y) delivering
supplements to such exhibits and annexes to such Documents as Laurus shall reasonably request and
(z) taking all actions as specified in this Guaranty as would have been taken by such such
Guarantor had it been an original party to this Guaranty, in each case with all



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documents required
above to be delivered to Laurus and with all documents and actions required above to be taken to
the reasonable satisfaction of Laurus.



          21. Release. Nothing except indefeasible payment in full of the Obligations shall
release any of the undersigned from liability under this Guaranty.



          22. Remedies Not Exclusive. The remedies conferred upon Laurus in this Guaranty are
intended to be in addition to, and not in limitation of any other remedy or remedies available to
Laurus.



          23. Limitation of Obligations under this Guaranty. Each Guarantor and Laurus (by its
acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that this
Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code,
the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the
foregoing intention, each Guarantor and Laurus (by its acceptance of the benefits of this Guaranty)
hereby irrevocably agrees that the Obligations guaranteed by such Guarantor shall be limited to
such amount as will, after giving effect to such maximum amount and all other (contingent or
otherwise) liabilities of such Guarantor that are relevant under such laws and after giving effect
to any rights to contribution pursuant to any agreement providing for an equitable contribution
among such Guarantor and the other Guarantors (including this Guaranty), result in the Obligations
of such Guarantor under this Guaranty in respect of such maximum amount not constituting a
fraudulent transfer or conveyance.



[REMAINDER OF THIS PAGE IS BLANK.

SIGNATURE PAGE IMMEDIATELY FOLLOWS]




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     IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as of the date and year
here above written.


	 	 	 	 	 
	 	GREAT LAKES CONTROLLED ENERGY CORPORATION

 	 
	 	By:  	/s/ Jeffrey Mistarz
 	 
	 	 	Name:  	Jeffrey Mistarz 	 
	 	 	Title:  	Treasurer 	 
	 



	 	 	 	 	 
	 	Address: 630 Bonnie Lane





Telephone: 847-437-7283

Facsimile: 847-437-7390

State of Formation: Delaware

 	 
	 	 	 
	 	 	 
	 	 	 
	 





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