Document:

EXHIBIT 10.51

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Security

Agreement”) is made on the 29th day of May, 2002, by and between Great Lakes

Controlled Energy Corporation, a Delaware corporation (“Debtor”), and American

Chartered Bank, an Illinois banking association (“Secured Party”).

 

R E C I T A L S

 

WHEREAS, pursuant to that certain Loan

Agreement dated of even date herewith, by and among Debtor, Switchboard

Apparatus, Inc., a Delaware corporation (“Switchboard”), Electric City Corp., a

Delaware corporation (collectively with Debtor and Switchboard, the

“Borrowers”), and Secured Party, as amended from time to time (the “Loan

Agreement”), Secured Party has agreed to make available to Borrowers, among

other things, a revolving line of credit (the “Revolving Credit”) in the

maximum principal amount of $2,000,000.00, a term loan (the “Term Loan”) in the

original principal amount of $400,000.00,

and a mortgage loan (the “Mortgage Loan”) in the original principal amount of

$735,000.00, each on those terms and conditions set forth in the Loan Agreement

and for the purposes set forth therein (the Revolving Credit, the Term Loan and

the Mortgage Loan are hereinafter collectively referred to as the

“Loans”).  Capitalized terms not defined

herein shall have the meanings ascribed to such terms in the Loan Agreement.

 

WHEREAS, as evidence of the indebtedness

under the Revolving Credit, Borrowers have executed and delivered to Secured

Party that certain Revolving Note dated of even date herewith, as amended from

time to time (the “Revolving Note”), as evidence of the indebtedness under the

Term Loan, Borrowers have executed and delivered to Secured Party the Term Note

dated of even date herewith, as amended from time to time (the “Term Note”), as

evidence of the indebtedness under the Mortgage Loan, Borrowers have executed

and delivered to Secured Party the Mortgage Note dated of even date herewith,

as amended from time to time (the “Mortgage Note”) (the Revolving Note, the

Term Note and the Mortgage Note are hereinafter collectively referred to as the

“Notes”).

 

WHEREAS,

subject to the terms of the Loan Agreement and the other Loan Documents, the

Loan Agreement requires that Debtor grant to Secured Party a lien on and

security interest in all of Debtor’s property and all replacements thereof,

additions thereto, and substitutions therefor, as security for the payment of

the Notes and performance of the Borrowers’ obligations under the Loan

Agreement, and all other documents evidencing, securing or otherwise in connection

with the Loans (collectively, “Loan Documents”).

 

NOW,

THEREFORE, Debtor, to secure (i) further the payment of the Liabilities; and

(ii) the performance of the covenants and agreements by Debtor contained herein

or in the Loan Documents, and for other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, hereby grants to

Secured Party a lien on and security interest in, and

 

 

collaterally assigns,

transfers, conveys, confirms, pledges and sets over unto Secured Party and its

successors and assigns, all of Debtor’s tangible and intangible assets and

properties, wherever located, whether now or hereafter existing and whether now

or hereafter acquired or owned, licensed, leased, bailed or consigned by Debtor

including, without limitation, all of Debtor’s (a) accounts, chattel paper,

contract rights, electronic chattel paper, leases, leasehold interests,

instruments, documents, letter of credit rights, all proceeds of letters of

credit, health care insurance receivables, supporting obligations, lottery

winnings, notes secured by real estate, patents, copyrights, trademarks, trade

names, deposit accounts, beneficial interests and general intangibles,

including payment intangibles, (b) certificated securities or uncertificated

securities, (c) goods, including, without limitation, all of Debtor’s consumer

goods, equipment, fixtures, inventory and embedded software contained therein,

(d) documents and instruments, (e) monies, reserves, deposits, and interest or

dividends thereon, cash and cash equivalents, (f) all books, records and

computer records in any way relating to the foregoing, software, computer

programs, (g) property now or at any time or times hereafter in the possession

or under the control of Secured Party or its bailee, (h) liens, guaranties and

other rights and privileges pertaining to any of the foregoing, (i) all

accessions to the foregoing and all substitutions, renewals, improvements and

replacements of and additions to the foregoing, (j) all of the capital stock of

Debtor, (k) all commercial tort claims, and (l) all proceeds and products of

any of the foregoing, including, without limitation, proceeds of insurance

policies of the foregoing (all of the property described in this paragraph

being hereinafter referred to as the “Personal Property Collateral”) (Any terms

not defined herein which are defined in the Illinois Uniform Commercial Code,

810 ILCS 5/1-101 et seq., as amended from time to time (the “UCC”), shall have

the meaning assigned to such term in the UCC).

 

It is hereby

understood and agreed by Debtor as follows:

 

1.             Recitals.  The recitals are hereby incorporated and

made a part of this Security Agreement.

 

2.             Representations,

Warranties and Covenants.  The

Debtor hereby represents and warrants to, and covenants with, Secured Party, as

follows:

 

(a)           Except for liens in

favor of Secured Party or as otherwise permitted by the Loan Agreement, Debtor

is or will be the owner of all the Personal Property Collateral free from any

lien, security interest or encumbrance and Debtor will defend the Personal

Property Collateral against any and all claims and demands of all persons,

other than Secured Party, at any time claiming the same or any interest

therein;

 

(b)           The Debtor has the

authority to enter into this Security Agreement and the person signing on

Debtor’s behalf has been duly authorized to execute this Security Agreement;

 

(c)           Debtor’s state issued

organizational identification number is set forth on Schedule 2(c).  The exact legal name of Debtor is as set

forth on Schedule 2(c).  Except

as provided for Schedule 2(c), Debtor currently does not

 

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conduct, nor has it in the last five years

conducted, business under any other name or trade name;

 

(d)           No less than 30 days

prior to the effective date thereof, Debtor will notify Secured Party in

writing of any change in Debtor’s name, type of organization, organizational

identification number, or jurisdiction of organization or the use of any assumed

name by Debtor.  Debtor shall, as a

condition to making effective any of the foregoing, execute and deliver to

Secured Party any and all financing statements and other documents requested by

Secured Party in connection with any of the foregoing and as a condition to

making effective any of the foregoing.

 

(e)           Except for any existing

lien in favor of Secured Party, no other financing statement covering any of

the Personal Property Collateral is on file in any public office;

 

(f)            Except as set forth in

Schedule 2(f), no Personal Property Collateral is now, nor shall any

Personal Property Collateral at any time or times hereafter be stored with a

bailee, warehouseman or similar party without Secured Party’s prior written

consent, and in such event, Debtor will concurrently therewith, upon the demand

of Secured Party cause the warehouseman, bailee or similar party within 15

business days of the date thereof, to acknowledge in writing Secured Party’s

security interest and to cause its records to reflect such security interest in

form and substance reasonably satisfactory to Secured Party, and to cause such

bailee, warehouseman or similar party to issue and deliver non-negotiable

warehouse receipts or non-negotiable bills of lading in Debtor’s name in form

and substance reasonably satisfactory to Secured Party.

 

(g)           Debtor will at all

times keep accurate and complete records of the Personal Property Collateral;

and

 

(h)           Debtor will promptly

inform Secured Party of any default in payment or performance by Debtor or other

persons or of claims made by any other person in regard to the Personal

Property Collateral

 

3.             Use and Possession

of Personal Property Collateral. 

Debtor may retain possession of the Personal Property Collateral and, at

its expense, keep and use the same in a manner consistent with applicable law

until Secured Party exercises its rights hereunder.

 

4.             Transfers;

Location of Personal Property Collateral. 

Except as otherwise permitted by the Loan Agreement, Debtor agrees that

it will not sell or attempt to sell or assign, lease, mortgage, encumber or

otherwise transfer the Personal Property Collateral or any interest therein

other than (a) the lien and security interest granted to Secured Party

hereunder, (b) sales in the ordinary course of business, and (c) dispositions

of items which are no longer used or usable in the operation of Debtor’s

business.

 

5.             Maintaining

Personal Property Collateral. 

Debtor will maintain, preserve and keep the Personal Property Collateral

which is used by or useful to Debtor in its business, and

 

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every part thereof, in good repair and

condition, reasonable wear and tear excepted, and from time to time will

promptly make needful and proper repairs, replacements, renewals, additions,

and betterments which may be required by reason of use, wear, obsolescence,

damage or destruction, however caused, to the ends that the value of the

Personal Property Collateral shall be preserved and that the efficiency of the

operation of the Personal Property Collateral shall not be impaired.

 

6.             Proceeds of Sale,

Loss, Destruction or Condemnation of Personal Property Collateral.  Except for dispositions of Personal Property

Collateral not prohibited under this Security Agreement or the other Loan

Documents, to the extent the Personal Property Collateral is sold, lost,

destroyed or taken by condemnation, Debtor shall immediately pay to Secured

Party, as and when received by Debtor, a sum equal to the net cash proceeds

(including insurance payments) received by Debtor from such sale, loss,

destruction or condemnation for application to any Liabilities, and thereafter

any excess will be transferred to Debtor’s operating account at Secured Party.

Notwithstanding the foregoing, with Secured Party’s prior consent, which

consent shall not be unreasonably withheld, such proceeds shall not be applied

in repayment of any Liabilities so long as (i) such proceeds are used to repair

or replace such sold, lost, destroyed or condemned Personal Property Collateral

with Personal Property Collateral of comparable value and usefulness in the

operation of Debtor’s business within six months following such disposition;

(ii) no Event of Default has occurred and is then continuing; (iii) Debtor has

delivered notice to Secured Party of the occurrence of the sale, loss,

destruction or condemnation, the projected effect on Debtor’s business and

Debtor’s proposed use of the proceeds within 30 days of such disposition; (iv)

such loss, sale, destruction or condemnation has not resulted in a material

adverse effect, as determined in Secured Party’s sole discretion; and (v) the

use of the proceeds would not result in an Event of Default under this Security

Agreement or the other Loan Documents.

 

7.             Inspection of

Personal Property Collateral. 

Debtor will, upon prior notice from Secured Party, permit Secured Party,

its agents and representatives, to inspect the Personal Property Collateral at

any reasonable time from time to time during the term of this Security

Agreement.

 

8.             Defense of

Personal Property Collateral. 

Debtor, at its sole cost and expense, will protect and defend the

Personal Property Collateral or any part thereof against all claims therein or

thereto, or any interest therein, and will keep the Personal Property Collateral

free from any other lien, security interest or encumbrance except as permitted

hereby or in the Loan Agreement, or unless Debtor is contesting such lien and

has delivered a bond or other security to Secured Party which is satisfactory

to Secured Party.  Debtor will pay all

other claims and charges which, in the reasonable opinion of Secured Party,

could prejudice, imperil or otherwise adversely affect the Personal Property

Collateral or its security interest therein.

 

9.             Payment of Taxes.  So long as any part of the indebtedness

hereby secured shall remain unpaid, Debtor will pay all personal property taxes

and other governmental charges levied or assessed against the Personal Property

Collateral or any part thereof, or for its use or operation, or upon this

Security Agreement, before the same become delinquent, and on demand will

promptly furnish Secured Party with receipts showing such payment.  Debtor will not permit the Personal Property

Collateral, or any part thereof, to be levied upon or sold for any tax or

 

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assessment whatsoever, nor will it permit to

be done to, in, upon or about the Personal Property Collateral, anything that

may in any way impair the value thereof, or the security intended to be

afforded by this Security Agreement.

 

10.           After Acquired

Property.  All after acquired

property covered hereby and all additions or replacements to the Personal

Property Collateral acquired by Debtor shall immediately be and become, without

any other act, conveyance or mortgage on the part of Debtor, subject to the

security interest and lien of this Security Agreement, which shall be prior to

any other security interest or lien on such addition or replacement.

 

11.           Special Collateral.  Within five days upon Debtor’s receipt of

that portion of the Personal Property Collateral consisting of Special Personal

Property Collateral (as defined below), the Debtor shall mark the same to show

that such Special Personal Property Collateral is subject to a security

interest in favor of Secured Party and shall deliver the original thereof to

Secured Party, together with appropriate endorsement and/or other specific

evidence of assignment thereof to Secured Party, in form and substance

reasonably acceptable to Secured Party. 

Debtor shall not create any chattel paper or other Special Personal

Property Collateral without placing a legend thereon in form and substance

reasonably satisfactory to Secured Party indicating that Secured Party has a

lien on and security interest in such Special Personal Property

Collateral.  The term “Special Personal

Property Collateral” means any of Debtor’s assets which are evidenced by or

consists of any chattel paper, letters of credit, Instrument, certificate or

document, including, without limitation, promissory notes, documents of title,

securities and warehouse receipts.

 

12.           Deposit Accounts,

Investment Property, Letter of Credit Rights or Electronic Chattel Paper.  In the event Debtor is or becomes the owner

of or acquires any rights in any deposit account, investment property, letter

of credit right or electronic chattel paper, Debtor shall give Secured Party

immediate notice thereof and Debtor shall take or cause to be taken all actions

necessary or desirable to perfect the security interest granted hereunder by

control, in accordance with the provisions of Section 9-104, 9-105, 9-106 or

9-107 of the UCC.  For greater

certainty, and not in limitation of the foregoing, Debtor shall cause any financial

intermediary which is the intermediary, person or entity which maintains such

deposit account, investment property or electronic chattel paper to execute and

deliver to Secured Party a control agreement, in form and substance acceptable

to Secured Party in its sole discretion, granting Secured Party exclusive

control over such deposit account, investment property or electronic chattel

paper and all proceeds thereof. For greater certainty, and not in limitation of

the foregoing, Debtor shall deliver the original of any letter of credit in

which Debtor has any letter of credit rights to Secured Party and shall cause

the issuer of any letter of credit rights to enter into a control agreement

with respect to such letter of credit rights and the proceeds thereof, granting

Secured Party exclusive control over such letter of credit rights and the

proceeds thereof, including the exclusive right to receive payments under such

letter of credit.

 

13.           Liens and

Encumbrances.  Except for liens in

favor of Secured Party or otherwise permitted by the Loan Agreement, Debtor

shall not, without the prior written consent of Secured Party, create, incur or

permit to exist any mortgage, pledge, title retention, lien, encumbrance,

lease, easement, or security interest with respect to the Personal Property

Collateral (“Liens”).

 

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14.           Authorization.  Debtor hereby irrevocably authorizes Secured

Party at any time and from time to time to file in any Uniform Commercial Code

jurisdiction any initial financing statements and amendments thereto and to

indicate therein (a) that the Personal Property Collateral (i) consists of all

of the assets of Debtor or words of similar effect, regardless of whether any

particular asset comprised in the Personal Property Collateral falls within the

scope of the Uniform Commercial Code of any applicable jurisdiction, or (ii)

consists of a portion of the assets of Debtor with such detail as Secured Party

may deem appropriate, and (b) any other information required, in Secured

Party’s discretion, by the  Uniform

Commercial Code in any relevant jurisdiction for the sufficiency or filing

office acceptance of any financing statements or amendment, including (i)

whether Debtor is an organization, the type of organization and any

organization identification number issued to such Debtor and, (ii) in the case

of a financing statement filed as a fixture filing or indicating Personal

Property Collateral as as-extracted collateral or timber to be cut, a

sufficient description of real property to which the Personal Property

Collateral relates.  Debtor agrees to

furnish any information reasonably requested by Secured Party to facilitate the

objectives of this paragraph.  To the

extent applicable, Debtor also ratifies its authorization for Secured Party to

have filed in any applicable Uniform Commercial Code jurisdiction any like

initial financing statements or amendments thereto if filed prior to the date

hereof.

 

15.           Verification of

Accounts.  Secured Party’s nominee,

together with any of Secured Party’s officers, employees or agents shall have

the right, at any time or times hereafter, in the name of a nominee of Secured

Party, to verify the validity, amount or any other matter relating to any

accounts by mail, telephone, facsimile or otherwise.  All reasonable costs, fees and expenses relating thereto incurred

by Secured Party (or for which Secured Party becomes obligated), including the

reasonable costs of retaining Secured Party’s nominee shall be paid by Debtor

upon the written demand of Secured Party.

 

16.           Notice to Account

Debtors.  Upon an Event of Default,

Secured Party shall have the right, in its sole and absolute discretion,

without notice thereof to Debtor: (a) to notify any or all account debtors

that the accounts and Special Personal Property Collateral have been assigned

to Secured Party and that Secured Party has a security interest therein;

(b) after an Event of Default has occurred and is then continuing, to

direct such account debtors to make all payments due from them to Debtor upon

the accounts and Special Personal Property Collateral directly to Secured

Party; (c) to enforce payment of and collect, by legal proceedings or

otherwise, the accounts and Special Personal Property Collateral in the name of

Secured Party and Debtor; and (d) to take control, in any manner, of any

item of payment or proceeds.

 

17.           Action by Secured

Party.  Secured Party may, but need

not, make any payment or perform any act herein required of Debtor in any form

and manner deemed expedient by it, and may, but need not, purchase, discharge,

compromise or settle any tax lien or other lien, security interest, or other

encumbrance at any time levied or placed on the Personal Property

Collateral.  All monies paid for any of

the purposes herein authorized and expenses paid or incurred in connection

therewith, including reasonable attorneys’ fees, and any other monies advanced

by Secured Party to protect the Personal Property Collateral and the security

interest and lien hereof, shall be additional indebtedness secured hereby and

shall become immediately due and payable without notice and with interest

thereon at the default rate set forth in the Revolving Note. 

 

6

 

Inaction of Secured Party shall never be

considered a waiver of any right accruing to it on account of any default on

the part of Debtor.

 

18.           Insurance and

Protection of Personal Property Collateral.  Debtor will insure and keep insured, with insurance companies

reasonably satisfactory to Secured Party, the Personal Property Collateral

which is of a character usually insured by entities similarly situated and as

may otherwise be required by Secured Party; and will insure such other hazards

and risks (including employers’ and public liability risks) with insurance companies

acceptable to Secured Party to the extent usually insured by entities similarly

situated in conducting similar businesses and as may otherwise be required by

Secured Party.  All such insurance shall

be in such amounts, with such deductibles, under such policies and terms and

issued by such insurers, as are reasonably acceptable to Secured Party.  Debtor will cause Secured Party 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

Secured Party and, at the request of Secured Party, collaterally assign such

insurance to Secured Party as additional security for the Liabilities.  Debtor will deliver to Secured Party, upon

the signing of this Security Agreement and, at the request of Secured Party

from time to time hereafter, a certificate evidencing Debtor’s compliance with

its obligations hereunder and, at Secured Party’s request, a certificate

setting forth in summary form the nature and extent of the insurance maintained

pursuant to this Section 18.

 

19.           Illinois Collateral

Protection Act.  Unless Debtor

provides Secured Party with evidence of the insurance coverage required by this

Security Agreement, Secured may purchase insurance at Debtor’s expense to

protect Secured Party’s interest in the Personal Property Collateral.  This insurance may, but need not, protect

Debtor’s interests.  The coverage that

Secured Party purchases may not pay any claim that Debtor makes or any claim

that is made against Debtor in connection with the Personal Property

Collateral.  Debtor may later cancel any

insurance purchased by Secured Party, but only after providing Secured Party with

evidence that Debtor has obtained insurance as required by this Security

Agreement.  If Secured Party purchases

insurance for the Personal Property Collateral, Debtor will be responsible for

the costs of that insurance, including interest and any other charges Secured

Party may impose in connection with the placement of the insurance, until the

effective date of the cancellation or expiration of the insurance.  The costs of the insurance may be added to

Debtor’s total outstanding balance or obligation.  The costs of the insurance may be more than the cost of insurance

Debtor may be able to obtain on its own.

 

20.           Event of Default.  The occurrence of any Event of Default

specified in the Loan Agreement which is incorporated by this reference as

fully and with the same effect as if set forth herein shall constitute an

“Event of Default” hereunder.

 

Upon the

occurrence of an Event of Default, any sums secured hereby may, pursuant to the

terms of the Loan Agreement, become immediately due and payable, without further

notice to Debtor, together with interest thereon from the date of the first of

any such Event of Default, at the default rate set forth in the Revolving

Note.  After the indebtedness secured by

this Security Agreement shall have become due and payable, whether by lapse of

time or by

 

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acceleration, or otherwise,

then and in any such event, Secured Party shall have the remedies for such

default of a “secured party” under the UCC or otherwise available to it under

applicable law including, without limitation, the right to take immediate and

exclusive possession and control of the Personal Property Collateral or any

part thereof.  Secured Party shall be

entitled to hold, maintain and preserve and prepare the Personal Property

Collateral for sale, until disposed of or may propose to retain the Personal

Property Collateral pursuant to applicable law.  Secured Party may require Debtor to assemble the Personal Property

Collateral and make it available to Secured Party at a place to be designated

by Secured Party which is reasonably convenient to Debtor and Secured

Party.  Unless the Personal Property

Collateral threatens to decline speedily in value or is of a type customarily

sold on a recognized market, Secured Party will give Debtor reasonable notice

of the time and place of any public sale thereof or of the time after which any

private sale or any other intended disposition thereof is to be made.  The requirements of reasonable notice shall

be met if such notice is given to Debtor at least 10 days before the time of

the sale or disposition.

 

21.           Fees and Expenses.  In case of any suit or foreclosure at law or

in equity by any person whomsoever relating to or affecting the Personal

Property Collateral, or any part thereof, or the title thereto, wherein Secured

Party shall be a party, the reasonable and necessary costs, charges and

attorneys’ and paralegals’ fees and expenses of Secured Party therein shall be

allowed to Secured Party, and shall be additional indebtedness secured hereby

and shall be paid out of the proceeds of sale of the Personal Property

Collateral if not otherwise paid by Debtor.

 

22.           Successors and

Assigns.  The terms used to

designate any of the parties herein shall be deemed to include their respective

successors and assigns, and the term “Secured Party” shall also include any

lawful owner, holder or pledgee of the Revolving Note or the indebtedness

secured hereby.  All representations,

warranties, covenants, powers and rights herein contained shall be binding

upon, and shall inure to the benefit of, Debtor and Secured Party and their

respective legal representatives, successors and assigns.

 

23.           Waiver.  No waiver of any default shall operate as a

waiver of any other default or of the same default on a future occasion.  All rights and remedies of Secured Party

hereunder shall be cumulative and shall be in addition to any other right and

remedy given hereunder or now or hereafter existing at law or in equity or by

statute.

 

24.           Further Assurances.  Debtor will join with Secured Party in

executing such documents, instruments, financing statements, continuation

statements, partial releases and termination statements as Secured Party may

deem necessary or appropriate to perfect Secured Party in the Personal Property

Collateral, pursuant to the Uniform Commercial Code as from time to time in

effect in the State of Illinois.  A

photographic, carbon or other reproduction of this Security Agreement shall be

sufficient as a financing statement.  At

the request of Secured Party, Debtor will also pay for filings and searches in

connection with third party subordinations and may, from time to time, execute

additional or supplemental agreements to confirm Secured Party’s security

interest upon items or types of Personal Property Collateral in connection with

said business now existing or hereafter acquired, or the validity or priority

thereof.

 

25.           Severability.  Any provision of this Security Agreement

which is prohibited or unenforceable in any jurisdiction shall as to such

jurisdiction be ineffective to the extent of such

 

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prohibition or unenforceability without

invalidating the remaining provisions hereof or affecting the validity or

enforceability of such provision in any other jurisdiction.

 

26.           Governing Law.  This Security Agreement shall be governed by

and construed in accordance with the laws of the State of Illinois.

 

27.           Counterparts.  This Security Agreement may be executed in

any number of counterparts and by facsimile, and all such counterparts taken

together shall be deemed to constitute one instrument.

 

28.           Beneficiaries.  It is expressly intended, understood and

agreed that this Security Agreement and the Notes are made and entered into for

the sole protection and benefits of Debtor and Secured Party, and their

respective successors and assigns and no other person or persons shall have any

right at any time to action hereon or rights to the proceeds of the Loans; that

such proceeds do not constitute a trust fund for the benefit of any third

party; that no third party shall under any circumstances be entitled to any

equitable lien on any such undisbursed loan proceeds at any time and that

Secured Party shall have a lien upon and right to direct application of any

such undisbursed loan proceeds as provided herein and in the Notes.

 

29.           Termination.  This Security Agreement is made for

collateral purposes only and the duties and obligations of Debtor under this

Security Agreement shall terminate when the Liabilities are repaid in full and

satisfied.

 

30.           Waiver of Jury Trial.  DEBTOR

WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY ACTION OR PROCEEDING TO ENFORCE OR

DEFEND ANY RIGHTS (I) UNDER THIS SECURITY AGREEMENT OR THE LOAN AGREEMENT OR

ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT WHICH MAY BE DELIVERED IN THE

FUTURE IN CONNECTION WITH THE REVOLVING CREDIT OR (II) ARISING FROM THE

TRANSACTIONS CONTEMPLATED BY THE LOAN AGREEMENT OR THIS SECURITY AGREEMENT, AND

AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT

BEFORE A JURY.

 

31.           Jurisdiction and

Venue.  DEBTOR IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY WAY,

MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THE LOAN AGREEMENT,

THIS SECURITY AGREEMENT OR THE LOANS SHALL BE LITIGATED ONLY IN COURTS HAVING

SITUS WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS.  DEBTOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY

LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE.  DEBTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE

TO TRANSFER OR CHANGE VENUE OF ANY SUCH ACTION OR PROCEEDING.

 

32.           Notices.  Any notice, demand, request or other

communication which any party hereto may be required or may desire to give

hereunder shall be deemed to have been given if made in accordance with the

terms of the Loan Agreement.

 

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IN WITNESS

WHEREOF, Debtor has executed this Security Agreement as of the date first set

forth above.

 

	

   

  	

  DEBTOR:

  
	

   

  	

   

  
	

   

  	

  GREAT LAKES CONTROLLED

  ENERGY CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Jeffrey Mistarz

  	

   

  
	

   

  	

  Its:

  	

    Vice President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SECURED PARTY:

  
	

   

  	

   

  	

   

  
	

   

  	

  AMERICAN CHARTERED BANK

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ William Provan

  	

   

  
	

   

  	

  Its:

  	

    Senior Vice President

  	

   

  

 

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SCHEDULE 2(c)

 

	

  Debtor’s

  Organizational ID Number:

  	

  32-41-358

  
	

   

  	

   

  
	

  Exact Legal

  Name of Debtor:

  	

  Great Lake

  Controlled Energy Corporation

  

 

 

SCHEDULE 2(f)

 

Personal Property Collateral Stored With

Bailee, Warehouseman or Similar Party

 

 

NONEEXHIBIT

10.52

 

STOCK PLEDGE AGREEMENT

 

THIS STOCK PLEDGE AGREEMENT

(“Pledge Agreement”) is made and entered into this 29th day of May, 2002, by

and between Electric City Corp., a Delaware corporation (“Pledgor”), and

American Chartered Bank, an Illinois banking association (“Bank”).

 

W

I T N E S S E T H:

 

WHEREAS, Pledgor and Bank

have entered into financing arrangements pursuant to that certain Loan

Agreement of even date herewith by and between Pledgor, Switchboard Apparatus,

Inc., a Delaware corporation, Great Lakes Controlled Energy Corporation, a

Delaware corporation, and Bank (collectively, the “Borrowers”) and Bank (said

Loan Agreement, as it may hereafter be amended or otherwise modified from time

to time, being the “Loan Agreement”); and

 

WHEREAS, Pledgor is the

owner of 100% of the issued and outstanding capital stock of  each corporation listed on Schedule A

attached hereto (the “Companies”); and

 

WHEREAS, Bank has required,

as a condition to its advancement of funds to Borrowers as provided in the Loan

Agreement, that Pledgor execute and deliver this Pledge Agreement to Bank;

 

NOW, THEREFORE, in

consideration of the foregoing and other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, Pledgor and Bank agree

as follows:

 

1.             Pledge.  As security for the prompt and complete

payment and performance of Pledgor’s obligations under the Loan Agreement (the

“Obligations”), Pledgor hereby delivers, pledges and grants a security interest

to Bank in the following:

 

a.             All shares of

capital stock of the Companies now and hereafter acquired by Pledgor,

including, without limitation, all of the shares of capital stock listed on Schedule

A attached hereto and made a part hereof, representing 100% of the issued

and outstanding common stock of the Companies, and all certificates

representing such stock (the “Stock”);

 

b.             All dividends,

distributions and other amounts to which Bank is entitled to pursuant to the

provisions of Section 7 hereof; and

 

c.             All “Proceeds”,

as such term is defined in the Uniform Commercial Code as the same may from

time to time be in effect in the State of Illinois (the “Code”).

 

2.             Delivery.  The Stock is hereby delivered to Bank with

an assignment separate from certificate duly executed in blank (“Powers”), in

the form attached hereto as Exhibit A.

 

 

The Stock, Powers and

Proceeds thereof, together with the property and interests in property

described in Section 7 below, are hereinafter collectively referred to

as the “Collateral”.  Pledgor agrees to

execute and deliver a subsequent assignment separate from certificate duly

executed in blank with any shares of capital stock of the Companies issued to

Pledgor in the future.  Upon or at any

time after the existence or occurrence of an Event of Default (as defined in

the Loan Agreement), Pledgor hereby appoints Bank its attorney-in-fact to

arrange at Bank’s option for the transfer of the Collateral on the books of

each of the Companies to the name of Bank or to the name of Bank’s nominee.

 

3.             Voting Rights.  During the term of this Pledge Agreement,

and so long as there shall not occur or exist an Event of Default, Pledgor

shall have the right to exercise all voting powers pertaining to the

Collateral; provided, however, that no vote shall be cast, or consent, waiver

of ratification given, or any action taken, that would impair the value of the

Collateral or be inconsistent with or violate any provision of this Pledge

Agreement or the Loan Agreement.  Upon

the existence or occurrence of an Event of Default, Bank shall thereafter be

entitled to exercise all voting powers pertaining to the Collateral.

 

4.             Representations.  Pledgor represents, warrants and agrees as

follows:

 

a.             The Stock

constitutes 100% of the issued and outstanding capital stock of each of the

Companies;

 

b.             Pledgor owns

all of the Collateral free and clear of any liens, encumbrances, charges or

security interests of any nature whatsoever, other than the security interest

granted hereunder and the Loan Agreement;

 

c.             Pledgor has

full power and authority to enter into this Pledge Agreement;

 

d.             Pledgor has the

right to vote, pledge and grant a security interest in or otherwise transfer

such Collateral free of any restrictions, liens, claims and encumbrances;

 

e.             None of the

Collateral is subject to any option to purchase or similar rights of any

Person.  Pledgor is not and will not

become party to or otherwise bound by any agreement, other than this Pledge

Agreement, which restricts in any manner the rights of any present or future

holder of any of the Collateral with respect thereto; and

 

f.              The Powers are

duly executed and give the legal holder thereof the authority they purport to

confer.

 

5.             Limitation on Liens and

Depositions.  Pledgor

agrees that he will not create, permit or suffer to exist, and will defend the

Collateral against and take such other action as is necessary to remove any

lien on the Collateral and will defend the right, title and interest of Bank in

and to any of Pledgor’s right, title and interest in and to the Collateral

against the claims and demands of all other Persons.  Pledgor will not sell, assign, exchange, grant a security

interest in, transfer, encumber, or otherwise dispose of, any of the

Collateral, or attempt or contract to do so.

 

2

 

6.             Subsequent Changes Affecting

Collateral.  Pledgor

represents to Bank that Pledgor has made its own arrangements for keeping

informed of changes or potential changes affecting the Collateral (including,

but not limited to, rights to convert, rights to subscribe, payment of

dividends, reorganization or other exchanges, tender offers and voting rights),

and Pledgor agrees that Bank shall not have any responsibility or liability for

informing Pledgor of any such changes or potential changes or for taking any

action or omitting to take any action with respect thereto.  Bank may, upon or at any time after the

occurrence of an Event of Default, without notice and at its option, transfer

or register the Collateral or any part thereof into its or its nominee’s name

with or without any indication that such Collateral is subject to the security

interest hereunder.

 

7.             Stock Dividends and Other

Distributions.

 

a.             If at any time

during the term of this Pledge Agreement, Pledgor, by reason of its ownership

of the Stock, shall become entitled to receive, or shall receive, any Stock

(including, without limitation, any Stock representing a stock dividend or a

distribution in connection with any reclassification, increase or reduction of

capital, or reorganization), option, warrant, or other rights, whether as an

addition to, in substitution of, or in exchange for any shares of the Stock,

whether by declared dividend, stock split, or other method, Pledgor agrees it

shall accept the same as Bank’s agent and hold the same in trust for Bank and

deliver the same forthwith to Bank in the exact form received, with the

endorsement of Pledgor when requested by Bank and/or assignment separate from

certificate duly executed in blank, to be held by Bank as additional collateral

security for the Obligations.  Any sums

or property paid upon or in respect of the Stock or any other securities

received under this section upon the reorganization, liquidation (whether

complete or partial), or dissolution of the issuer of any of the Stock or any

such other securities shall immediately be paid over to Bank to be held by Bank

as additional collateral security for the Obligations.  All sums of money and property so paid or

distributed in respect of the Stock that are received by Pledgor shall, until

paid or delivered to Bank, be segregated from the other property or funds of

Pledgor and held by Pledgor in trust as additional collateral security of the

Obligations.  Pledgor agrees to give

Bank immediate notice of any such distribution.

 

b.             Unless an Event

of Default shall have occurred and be continuing, Pledgor shall be entitled to

receive all cash dividends declared and paid with respect to any Stock, free of

any security interest in favor of Bank hereunder.  Upon the occurrence and continuance of any Event of Default, Bank

shall be entitled to receive any and all such cash dividends, and Pledgor shall

immediately deliver to Bank any such cash dividends which he receives.  Bank shall hold any such cash dividends as

Collateral pursuant to this Pledge Agreement or, at Bank’s election, may apply

any such cash dividends to the reduction of any Obligations.

 

c.             Nothing

contained in this Section 7 or elsewhere in this Pledge Agreement shall

be deemed to permit any stock dividends, issuance of additional stock,

reclassification, readjustment, change in the capital structure of the

 

3

 

Company,

or issuance of any warrants, options or other rights by the Company which are

prohibited pursuant to the Loan Agreement.

 

8.             Power of Attorney.  Pledgor does hereby irrevocably constitute

and appoint Bank its true and lawful attorney, with full power of substitution,

for it and in its name, place and stead, to ask, demand, collect, receive, receipt

for, sue for, compound and give acquittance for any and all sums or properties

which may be or become due, payable or distributable on or in respect of the

Collateral or which constitute a part thereof, with full power to settle,

adjust or compromise any claim thereunder or therefor as fully as Pledgor could

himself do, and to endorse or sign the name of Pledgor on all commercial paper

given in payment or in part payment thereof and on all documents of

satisfaction, discharge or receipt required or requested in connection

therewith, and in its discretion, to file any claim or take any other action or

proceeding, either in its own name or in the name of Pledgor, or otherwise,

which Bank may deem necessary or appropriate to collect or otherwise realize upon

any and all of the Collateral, or effect a transfer thereof, or which may be

necessary or appropriate to protect and preserve the right, title and interest

of Bank in and to such Collateral and the security intended to be afforded

hereby.

 

9.             Consent.  Pledgor hereby consents that from time to

time, before or after the occurrence or existence of an Event of Default, with

or without notice to or assent from Pledgor, any other security at any time

held by or available to Bank for any of the Obligations or any security at any

time held by or available to Bank for any obligation of any other person, firm

or corporation secondarily or otherwise liable for any of the Obligations may

be changed, altered, renewed, extended, continued, surrendered, compromised, waived

or released, in whole or in part, as Bank may see fit, and Pledgor shall remain

bound under this Pledge Agreement notwithstanding any such exchange, surrender,

release, alteration, renewal, extension, continuance, compromise, waiver or

inaction, extension of further credit or other dealing.

 

10.           Remedies.

 

a.             Upon the

occurrence or existence of an Event of Default, Bank shall have in addition to

any other rights given by law or hereunder, all of the rights and remedies with

respect to the Collateral of a secured party under the Code.  In addition, with respect to the Collateral,

or any part thereof, which shall then be or shall thereafter come into the

possession or custody of Bank, Bank may in its sole discretion, without notice

except as specified below, sell or cause the same to be sold at any exchange,

broker’s board or at public or private sale, in one or more sales or lots, at

such price as Bank may deem best, and for cash or on credit or for future

delivery, without assumption of any credit risk, and the purchaser of any or

all of the Collateral so sold shall thereafter hold the same, absolutely free

from any claim, encumbrance or right of any kind whatsoever.  Bank may, in its own name, or in the name of

a designee or nominee, buy the Collateral at any public sale and, if permitted

by applicable law, buy the Collateral at any private sale.  Pledgor hereby waives all of its rights of

redemption from any sale or other disposition of the Collateral.  Pledgor will pay to Bank all expenses

(including, without limitation, court costs and reasonable attorneys’ and

paralegals’ fees and expenses) of, or incident to, the enforcement of any of

the provisions hereof.  Neither Bank,

nor a party acting as its attorney,

 

4

shall be liable for any acts

or omissions or for any error of judgment or mistake of fact or law other than

their gross negligence or willful misconduct. 

Bank agrees to return to Pledgor any proceeds of the sale of the

Collateral that exceed the then outstanding balance of the Obligations and the

expenses described above.  Pledgor shall

remain liable for any deficiency following the sale of the Collateral.

 

b.             Unless any of

the Collateral threatens to decline speedily in value or is or becomes of a

type sold on a recognized market, Bank will give Pledgor reasonable notice of

the time and place of any public sale thereof, or of the time after which any

private sale or other intended disposition is to be made.  Any sale of the Collateral conducted in

conformity with reasonable commercial practices of banks, commercial finance

companies, insurance companies or other financial institutions disposing of

property similar to the Collateral shall be deemed to be commercially

reasonable.  Notwithstanding any

provisions to the contrary contained herein any requirements of reasonable

notice shall be met if such notice is received by Pledgor as provided in Section

22, at least 10 days before the time of the sale of disposition.  Any other requirement of notice, demand or

advertisement for sale is, to the extent permitted by law, waived.

 

c.             In view of the

fact that federal and state security laws may impose certain restrictions on

the method by which a sale of the Collateral may be effected after an Event of

Default, Pledgor agrees that, upon the occurrence or existence of an Event of

Default, Bank may, from time to time, attempt to sell all or any part of the

Collateral by means of a private placement restricting the bidder and

prospective purchasers to those who will represent and agree that they are

purchasing for investment only and not for distribution.  In so doing, Bank may solicit offers to buy

the Collateral, or any part of it, for cash, from a limited number of investors

deemed by Bank, in its reasonable judgment, to be respectable parties who might

be interested in purchasing the Collateral, and if Bank solicits such offers

from not less than two such investors, then the acceptance by Bank of the

highest offer obtained therefrom shall be deemed to be a commercially

reasonable method of disposition of such Collateral.

 

11.           Security Interest, etc.  The pledge and security interests herein

created and provided for stand as direct and primary security for all of the

Obligations.  No application of any sums

received by Bank in respect of the Collateral or any disposition thereof to the

reduction of the Obligations or any part thereof shall in any manner entitle

Pledgor to any right, title or interest in or to the Obligations or any

collateral security therefor unless and until all Obligations have been fully

paid and satisfied.  Pledgor

acknowledges and agrees that the pledge and security interests hereby created

are absolute and unconditional and shall not in any manner be affected or

impaired by any acts or omissions whatsoever of Bank or any other holder of any

of the Obligations, and without limiting the generality of the foregoing, the

pledge and security interests hereby created shall not be impaired by any

acceptance by Bank or any other holder of any of the Obligations of any other

security for or guarantors upon any of or by any failure, neglect or omission

on the part of Bank or any other holder of any of the Obligations to realize

upon or protect any of the Obligations or any collateral security therefor.  The pledge and security interests hereby

created shall not in any manner be impaired or affected by (and Bank, without

notice to any Person are hereby authorized to make from time to time) any sale,

pledge,

 

5

 

surrender, compromise,

settlement, release, renewal, extension, indulgence, alteration, substitution,

exchange, change in, modification or disposition of any of the Obligations, or

of any collateral security therefor, or of any guaranty thereof, or of any loan

agreement executed in connection therewith.

 

12.           Waivers and Consents.  Upon the occurrence or existence of any

Event of Default, Bank may enforce this Pledge Agreement independently, and it

shall not be necessary for Bank to marshal assets in favor of Pledgor or any

other Person or to proceed upon or against and/or exhaust any other security or

remedy before proceeding to enforce this Pledge Agreement.  Pledgor expressly waives any right to

require Bank to marshal assets in favor of Pledgor or any other Person or to

proceed against any other Person, and agrees that Bank may proceed against

Pledgor and/or any other Person and/or the Collateral in such order as it shall

determine in its sole and absolute discretion. 

Bank may file a separate action or separate actions against Pledgor,

whether brought or prosecuted with respect to any other security or against any

other Person, or whether any other Person is joined in any such action or

actions.  Pledgor agrees that Bank, and

any affiliate of Bank, and Pledgor, and any affiliate of Pledgor, may deal with

each other in connection with the Obligations or otherwise, or alter any

contracts or agreements now or hereafter existing between any of them, in any

manner whatsoever, all without in any way altering or affecting the liens

created or granted under this Pledge Agreement.  Pledgor expressly waives the benefit of any statute(s) of

limitations affecting its liability hereunder or the enforcement of the

Obligations or any liens created or granted herein.  Bank’s rights hereunder shall be reinstated and revived, and the

enforceability of this Pledge Agreement shall continue, with respect to any

amount at any time paid on account of the Obligations which thereafter shall be

required to be restored or returned by Bank (whether as a “voidable

preference”, “fraudulent conveyance” or otherwise) upon the bankruptcy,

insolvency or reorganization of Pledgor, or otherwise, all as though such

amount had not been paid. The liens created or granted herein and the enforceability

of this Pledge Agreement at all times shall remain effective to secure the full

amount of all the Obligations even though the Obligations, including any part

thereof or any other security or guaranty therefor, may be or hereafter may

become invalid or otherwise unenforceable as against Pledgor and whether or not

Pledgor shall have any personal liability with respect thereto.  Pledgor expressly waives any and all

defenses now or hereafter arising or asserted by reason of (a) any disability

or other defense of Pledgor with respect to the Obligations, (b) the

unenforceability or invalidity of any security or guaranty for the Obligations

or the lack of perfection or continuing perfection or failure of priority of

any security for the Obligations, (c) any failure of Bank to marshal assets in

favor of Pledgor or any other Person, (d) any failure of Bank to give notice of

sale or other disposition of Collateral to any Person (except Pledgor) or any

defect in any notice that may be given to any Person (except Pledgor) in

connection with any sale or disposition of Collateral, (e) any failure of Bank

to comply with applicable laws in connection with the sale or other disposition

of any Collateral or other security for any Obligation, including, without

limitation, any failure of Bank to conduct a commercially reasonable sale or

other disposition of any Collateral or other security for any Obligation, (f)

any act or omission of Bank or others that directly or indirectly results in or

aids the discharge or release of any portion of the Obligations or any other

security or guaranty therefor by operation of law or otherwise, except any act

of gross negligence which Bank is determined by the judgment of a court of

competent jurisdiction (sustained on appeal, if any) to have committed, (g) any

failure of Bank to file or enforce a claim in any bankruptcy or other

proceeding with respect to any Person, (h) the election by Bank, in any

bankruptcy proceeding of any Person, of the application or non-application of

Section 1111(b)(2) of the United States Bankruptcy Code,

 

6

 

(i) any extension of credit

or the grant of any “lien” under Section 364 of the United States Bankruptcy

Code, (j) any use of cash collateral under Section 363 of the United States

Bankruptcy Code, (k) any agreement or stipulation with respect to the provision

of adequate protection in any bankruptcy proceeding of any Person, (l) the

avoidance of any Lien in favor of Bank for any reason, (m) any bankruptcy, insolvency,

reorganization, arrangement, readjustment of debt, liquidation or dissolution

proceeding commenced by or against any Person, including any discharge of, or

bar or stay against collecting, all or any of the Obligations (or any interest

thereon) in or as a result of any such proceeding, or (n) any action taken by

Bank that is authorized by this Section 12 or any other provision of

this Pledge Agreement.  Pledgor

expressly waives all setoffs and counterclaims and all presentments, demands

for payment or performance, notices of nonpayment or nonperformance, protests,

notices or protest, notices of dishonor and all other notices or demands of any

kind or nature whatsoever with respect to the Obligations, and all notices of

acceptance of this Pledge Agreement or of the existence, creation or incurring

of new or additional Obligations.

 

13.           Waiver of Rights of

Subrogation. 

Notwithstanding anything to the contrary elsewhere contained herein or

in the Loan Agreement, Pledgor hereby expressly waives with respect to Pledgor

and its successors and assigns (including any surety) and any other Person, any

and all rights at law or in equity to subrogation, to reimbursement, to

exoneration, to contribution, to setoff or to any other rights that could

accrue to a surety against a principal, to a guarantor against a maker or

obligor, to an accommodation party against the party accommodated, or to a

holder or transferee against a maker, and which Pledgor may have or hereafter

acquire against any Person in connection with or as a result of Pledgor’s

execution, delivery and/or performance of this Pledge Agreement, or any other

documents to which Pledgor is a party. 

Pledgor expressly waives any “claim” (as such term is defined in the

United States Bankruptcy Code) of any kind against the Companies.  Pledgor agrees that it shall not have or

assert any such rights against any Person (including any surety), either

directly or as an attempted setoff to any action commenced against Pledgor by

Bank or any other Person.  Pledgor

hereby acknowledges and agrees that this waiver is intended to benefit Bank and

shall not limit or otherwise affect Pledgor’s liability hereunder or the

enforceability hereof.

 

14.           Understandings With Respect

To Waivers And Consents. 

Pledgor warrants and agrees that each of the waivers and consents set

forth herein are made after consultation with legal counsel and with full

knowledge of their 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 Pledgor otherwise may have against Bank

or others or against the Collateral, and that, under the circumstances, the

waivers and consents herein given are reasonable and not contrary to public policy

or law.  Such waivers and consents shall

be effective to the maximum extent permitted by law.

 

15.           Term.  This Pledge Agreement shall remain in full

force and effect throughout the term of the Loan Agreement and until all of the

Obligations have been fully paid and satisfied and the Loan Agreement has been

terminated.  Upon the termination of

this Pledge Agreement as provided above (other than as a result of the sale of

the Collateral), Bank will release the security interest and lien created

hereunder and will deliver the Collateral to Pledgor.

 

7

 

16.           Definitions.  All capitalized terms not otherwise defined

herein shall have the respective meanings ascribed to them in the Loan

Agreement.  The singular shall include

the plural and vice versa and any gender shall include any other gender as the

text shall indicate.

 

17.           Amendments, etc.  No amendment, modification, termination or

waiver of any provision of this Pledge Agreement or the Loan Agreement shall in

any event be effective unless the same shall be in writing and signed by Bank

and Pledgor.  No notice to or demand on

Pledgor in any case shall entitle Pledgor to any other or further notice or

demand in similar or other circumstances.

 

18.           Costs and Expenses.  Pledgor agrees to pay all costs and expenses

(including attorneys’ and paralegals’ fees), if any, incurred by Bank or any

holder of the Loan Agreement in connection with the enforcement of this Pledge

Agreement or the Loan Agreement.

 

19.           Further Assurances.  Pledgor agrees that it will cooperate with

Bank and will execute and deliver, or cause to be executed and delivered, all

such other assignments separate from certificates, proxies, instruments and

documents, and will take all such other action, including, without limitation,

the filing of financing statements, as Bank may reasonably request from time to

time in order to carry out the provisions and purposes hereof.

 

20.           No Obligation.  Bank shall be under no obligation to take

any steps necessary to preserve rights in the Collateral against any other

parties but may do so at its option, and all expenses incurred in connection

therewith shall be for the sole account of Pledgor.

 

21.           Successors and Assigns.  This Pledge Agreement shall be binding upon

and inure to the benefit of Pledgor, Bank and their respective heirs, legal

representatives, successors and assigns. 

Pledgor’s assigns shall include, without limitation, a receiver, trustee

or debtor in possession of or for Pledgor. 

Without limiting the generality of the foregoing, Bank may assign or

otherwise transfer its rights to receive payment or performance of the

Obligations to any other Person, and such other Person shall thereupon become

vested with all of the rights in respect thereof granted to Bank herein or

otherwise.  Pledgor hereby releases Bank

from any liability for any act or omission relating to the Collateral or this

Pledge Agreement except the gross negligence or willful misconduct of Bank.

 

22.           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: if to Pledgor, to Electric City

Corp., 1280 Landmeier Road, Elk Grove Village, Illinois 60007, telecopy no.

(847) 437-4969, Attn: Jeffrey R. Mistarz, with a copy to Schwartz Cooper

Greenberger & Krauss Chartered, 180 North LaSalle Street, Suite 2700,

Chicago, Illinois 60601, telecopy no. (312) 782-8416, Attn: Andrew H. Connor,

and (b) if to Bank, to American Chartered Bank, 1199 East Higgins Road,

Schaumburg, Illinois 60173, telecopy no. (847) 517-2848, Attn: William D.

Provan, with a copy to Horwood Marcus & Berk Chartered, 180 North LaSalle

Street, Suite 3700, Chicago, Illinois 60601, telecopy no. (312) 606-3232, Attn:  Jeffrey A. Hechtman, Esq.

 

8

 

23.           Binding Nature, Governing

Law, Etc.  This

Pledge Agreement and the Loan Agreement shall be binding upon Pledgor and its

heirs, legal representatives and assigns and shall inure to the benefit of Bank

and its successors and assigns, including any subsequent holder of the

Notes.  This Pledge Agreement and the

Loan Agreement 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 Pledge Agreement and the

Loan Agreement and the Notes 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.  Pledgor may not assign its rights hereunder or thereunder without

the prior written consent of Bank.

 

24.           General.  Article and paragraph headings used in this

Pledge Agreement are for convenience of reference only and are not to be part of

this Pledge Agreement for any other purpose. 

Any provision of this Pledge 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 Pledge Agreement may be executed in any number of counterparts and

by different parties hereto on separate counterparts, and all such counterparts

taken together shall be deemed to constitute one instrument.

 

25.           Jury Trial, Venue,

Jurisdiction.  PLEDGOR

WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY ACTION OR PROCEEDING TO ENFORCE OR

DEFEND ANY RIGHTS (I) UNDER THIS PLEDGE AGREEMENT, THE LOAN AGREEMENT OR ANY

AMENDMENT, INSTRUMENT, DOCUMENT OR PLEDGE AGREEMENT WHICH MAY BE DELIVERED IN

THE FUTURE IN CONNECTION WITH THE OBLIGATIONS, OR (II) ARISING FROM THE

TRANSACTIONS CONTEMPLATED BY THIS PLEDGE AGREEMENT, THE LOAN AGREEMENT AND ANY

BANKING RELATIONSHIP BETWEEN PLEDGOR AND BANK IN CONNECTION WITH THIS PLEDGE

AGREEMENT AND THE LOAN AGREEMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING

SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  PLEDGOR IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY

WAY, MANNER OR RESPECT ARISING OUT OF OR FROM OR RELATED TO THIS PLEDGE

AGREEMENT OR THE LOAN AGREEMENT SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS

WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS. 

PLEDGOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL,

STATE OR FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE.  PLEDGOR HEREBY WAIVES ANY RIGHT IT MAY HAVE

TO TRANSFER OR CHANGE VENUE OF ANY SUCH ACTION OR PROCEEDING.

 

9

 

IN WITNESS WHEREOF, Pledgor

has executed and delivered this Pledge Agreement as of the date first written

above.

 

	

   

  	

  PLEDGOR:

  
	

   

  	

   

  	

   

  
	

   

  	

  ELECTRIC CITY CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Jeffrey Mistarz

  	

   

  
	

   

  	

  Its:

  	

    Chief Financial Officer & Treasurer

  	

   

  
					

 

	

  Agreed to and Accepted by:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  American Chartered Bank

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

    /s/ William Provan

  	

   

  	

   

  	

   

  
	

  Its:

  	

    Senior Vice President

  	

   

  	

   

  	

   

  

 

10

 

SCHEDULE A

 

1,000 shares of common stock of Switchboard

Apparatus, Inc., a Delaware corporation, $0.01 par value, issued to Electric

City Corp., a Delaware corporation, evidenced by share certificate no. 1.

 

1,000 shares of common stock of Great Lakes

Controlled Energy Corporation, a Delaware corporation, $0.01 par value, issued

to Electric City Corp., a Delaware corporation, evidenced by share certificate

no. 1.

 

 

EXHIBIT A

 

ASSIGNMENT SEPARATE FROM

CERTIFICATE

 

ASSIGNMENT OF STOCK

 

 

FOR VALUE RECEIVED, Electric City

Corp., a Delaware corporation (“Assignor”), does hereby assign and transfer

to                     ,                             (       ) shares of Common Stock of Switchboard

Apparatus, Inc., a Delaware corporation (the “Corporation”), standing in the

name of Assignor on the books of the Corporation represented by Certificate No.

1, and does hereby irrevocably constitute and appoint any party to transfer

said stock on the books of the Corporation with full power of substitution in

the premises.

 

Dated:                              

 

	

   

  	

  ELECTRIC CITY CORP., a

  Delaware corporation

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Its:

  	

   

  

 

 

ASSIGNMENT SEPARATE FROM

CERTIFICATE

 

ASSIGNMENT OF STOCK

 

 

FOR VALUE RECEIVED, Electric City

Corp., a Delaware corporation (“Assignor”), does hereby assign and transfer

to                      ,                              (         ) shares of Common Stock of Great Lakes Controlled Energy

Corporation, a Delaware corporation (the “Corporation”), standing in the name

of Assignor on the books of the Corporation represented by Certificate No. 1,

and does hereby irrevocably constitute and appoint any party to transfer said

stock on the books of the Corporation with full power of substitution in the

premises.

 

 

Dated:                              

 

	

   

  	

  ELECTRIC CITY CORP., a

  Delaware corporation

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Its:

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