Document:

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                                  EXHIBIT 10.2

                              REVOLVING CREDIT NOTE

$2,000,000.00                                                      June 28, 2000
                                                               Chicago, Illinois

         On or before June 28, 2001, Electric City Corp., a Delaware
corporation, (the "Undersigned"), whose address is1280 Landmeier Road, Elk
Grove Village, Illinois 60007, for value received, promises to pay to the
order of LaSalle Bank National Association, a national banking association
(hereinafter, together with any holder hereof, called "Lender"), whose
address is 135 South LaSalle Street, Chicago, Illinois 60603 the principal
sum of TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) or if less, the
aggregate unpaid principal amount of all Revolving Loans made by the Lender
to the Undersigned (including, without limitation, all fees related thereto)
pursuant to that certain Loan Agreement, dated as of June 28, 2000 between
the Undersigned and the Lender (the "Loan Agreement"). This Note is executed
pursuant to the Loan Agreement and any and all amendments thereto, in which
the terms and conditions of the Revolving Loans are set forth. Terms not
otherwise defined herein shall have the meanings assigned thereto in the Loan
Agreement.

         The undersigned further promises to pay interest on the unpaid
principal amount hereof from time to time outstanding at such interest rates
and at such times as are provided in the Loan Agreement. Interest shall be
computed on the basis of a year consisting of 360 days and shall be paid for
the actual number of days elapsed, unless otherwise specified herein.

         Principal and interest shall be paid to the Lender at its address
set forth above or at such other place as the holder of this Note shall
designate in writing to the Undersigned.

         This Note is secured by, among other things, that certain Security
Agreement dated as of June 28, 2000 by and between the Undersigned and the
Lender (the "Security Agreement"); and that certain Mortgage by and between
the Undersigned and the Lender (the "Mortgage"; with the Loan Agreement, the
Security Agreement and the Mortgage, together with all other documents
executed in connection with the Loan Agreement hereinafter collectively
referred to as the "Ancillary Agreements"). The undersigned hereby
acknowledges and agrees that a default hereunder shall be deemed a default
under the Ancillary Agreements, including that certain Equipment Term Note in
the original principal amount of $500,000.00 to be given by the Undersigned
to the Lender following the consummation of the Switchboard Acquisition, and
that certain Term (Mortgage) Note in the original principal amount of
$500,000.00 to be given by the Undersigned to the Lender following the
consummation of the Switchboard Acquisition.

         The Undersigned, without notice or demand of any kind, shall be in
default hereunder upon the occurrence and during the continuance of any Event
of Default set forth in the Loan Agreement, and without demand or notice of
any kind, the entire unpaid amount of all Liabilities shall become

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immediately due and payable at the option of Lender, and the Lender may take
any action or avail itself of any remedy set forth in the Loan Agreement.

         UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, THE UNDERSIGNED WAIVES THE BENEFIT OF ANY LAW, TO THE EXTENT
PERMITTED BY LAW, THAT WOULD OTHERWISE RESTRICT OR LIMIT LENDER IN THE
EXERCISE OF ITS RIGHT, WHICH IS HEREBY ACKNOWLEDGED, TO APPROPRIATE WITHOUT
NOTICE AND REGARDLESS OF THE COLLATERAL, AT ANY TIME HEREAFTER, ANY
INDEBTEDNESS MATURED OR UNMATURED, OWING FROM LENDER TO THE UNDERSIGNED. UPON
THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE LENDER
MAY, WITHOUT DEMAND OR NOTICE OF ANY KIND, APPROPRIATE AND APPLY TOWARD THE
PAYMENT OF SUCH OF THE OBLIGATIONS, AND IN SUCH ORDER OF APPLICATION, AS THE
LENDER MAY, FROM TIME TO TIME ELECT, ANY AND ALL SUCH BALANCES, CREDITS,
DEPOSITS, ACCOUNTS, MONEYS, CASH EQUIVALENTS AND OTHER ASSETS, OF OR IN THE
NAME OF THE UNDERSIGNED THEN OR THEREAFTER WITH THE LENDER.

         UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT THE UNDERSIGNED RATIFIES AND CONFIRMS WHATEVER LENDER MAY DO WITH
RESPECT TO THE COLLATERAL AND AGREES THAT LENDER SHALL NOT BE LIABLE FOR ANY
ERROR OF JUDGMENT OR MISTAKES OF FACT OR LAW MADE IN GOOD FAITH. THE LENDER
AND THE UNDERSIGNED KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
IRREVOCABLY, THE RIGHT EITHER OR ANY MAY HAVE TO TRIAL BY JURY WITH RESPECT
TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE, THE LOAN AGREEMENT OR ANY OF THE OTHER
LIABILITIES, OR THE COLLATERAL, OR ANY AGREEMENT, EXECUTED OR CONTEMPLATED TO
BE EXECUTED IN CONJUNCTION WITH THE LOAN AGREEMENT OR HEREWITH OR ANY COURSE
OF CONDUCT OR COURSE OF DEALING, IN WHICH THE LENDER AND THE UNDERSIGNED ARE
ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER
GRANTING ANY FINANCIAL ACCOMMODATION TO THE UNDERSIGNED.

         The Undersigned waives any and all presentment, demand, notice of
dishonor, protest, and all other notices and demands in connection with the
enforcement of Lender's rights hereunder and under the Loan Agreement, and
hereby consents to, and waives notice of release, with or without
consideration, of the Undersigned or of any Collateral.

         The Lender may at any time transfer this Note and Lender's rights in
the Loan Agreement and in any or all of the Collateral, and Lender thereafter
shall be relieved from all liability with respect to such Collateral.

         TO INDUCE THE LENDER TO MAKE THE LOAN EVIDENCED BY THIS NOTE, THE
UNDERSIGNED IRREVOCABLY AGREES THAT, ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY
AS A RESULT OR IN CONSEQUENCE OF THIS NOTE, THE LOAN AGREEMENT OR ANY OTHER
AGREEMENT WITH THE LENDER, OR THE COLLATERAL, SHALL BE INSTITUTED AND LITIGATED
ONLY IN COURTS HAVING SITUS IN THE CITY OF CHICAGO, ILLINOIS, AND THE
UNDERSIGNED HEREBY

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CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
COURT LOCATED AND HAVING ITS SITUS IN SAID CITY, AND WAIVES ANY OBJECTION
BASED ON FORUM NONCONVENIENS.

         The Revolving Loan evidenced hereby has been made and this Note has
been delivered at the Lender's main office. This Note shall be governed and
construed in accordance with the laws of the State of Illinois, in which
state it shall be performed, and shall be binding upon the Undersigned and
its successors and assigns. If this Note contains any blanks when executed by
the Undersigned, the Lender is hereby authorized, without notice to the
Undersigned, to complete any such blanks according to the terms upon which
the Revolving Loan or Revolving Loans were granted. Wherever possible, each
provision of this Note shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Note shall be
prohibited by or be invalid under such law, such provision shall be
severable, and be ineffective to the extent of such prohibition or
invalidity, without invalidating the remaining provisions of this Note. If
more than one party shall execute this Note, the term "Undersigned" as used
herein shall mean all parties signing this Note, and each one of them, and
all such parties, their respective heirs, executors, administrators,
successors and assigns, shall be, jointly and severally, obligated hereunder.

         As used herein, all provisions shall include the masculine,
feminine, neuter, singular and plural thereof, wherever the context and facts
require such construction and in particular the word "Undersigned" shall be
so construed.

                  IN WITNESS WHEREOF, the Undersigned has executed this
Revolving Credit Note on the date above set forth.

                                      ELECTRIC CITY CORP.

                                      By:  /s/ Jeffrey Mistarz
                                           ----------------------------
                                      Its: Chief Financial Officer
                                           ----------------------------

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                                  EXHIBIT 10.3

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT (the "Agreement") is made as of the 28th day
of June, 2000 by and between ELECTRIC CITY CORP., a Delaware corporation,
having an address at 1280 Landmeier Road, Elk Grove Village, Illinois 60007
("Debtor") and LASALLE BANK NATIONAL ASSOCIATION, a national banking
association, having an address at 135 South LaSalle Street, Chicago, Illinois
60603 ("Secured Party").

                                R E C I T A L S:

         1.       Pursuant to a Loan Agreement dated as of June 28, 2000 by
and between Debtor and Lender (the "Loan Agreement"), Secured Party has
agreed to make a loan (the "Loan") to Debtor up to the aggregate principal
amount of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00).

         2.       The Loan is evidenced by that certain Revolving Credit Note
of even date herewith made by Debtor to Secured Party in the amount of
$2,000,000.00 (the "Revolving Note"), that certain Equipment Term Note to be
made by Debtor to Secured Party in the amount of $500,000.00 (the "Equipment
Term Note") following the consummation of the Switchboard Acquisition, and
that certain Term Note to be made by Debtor to Secured Party in the amount of
$500,000 (the "Term Note") following the consummation of the Switchboard
Acquisition, which Term Note is secured by that certain Mortgage to be given
by Debtor to Secured Party (the "Mortgage") following the consummation of the
Switchboard Acquisition.

         3.       Pursuant to the Loan Agreement, Debtor has agreed to grant
to Secured Party a security interest in all the property, whether presently
owned by Debtor, or hereafter acquired, which property is more particularly
described on Exhibit A attached hereto and made a part hereof (the
"Collateral").

         4.       The Collateral is or will be located at the locations of
Borrower (the "Premises") described in Exhibit B attached hereto.

                              A G R E E M E N T S:

         NOW, THEREFORE, with reference to the above recitals, and in
reliance thereon, and in consideration of the terms and conditions contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                  1.       CREATION OF SECURITY INTEREST. Debtor hereby grants
to Secured Party a security interest in, and does hereby collaterally assign,
pledge, mortgage, convey and set over unto the Secured Party, the Collateral and
all of Debtor's present and hereafter acquired right, title and interest in and
to the Collateral, for the purpose of securing payment of all indebtedness,
obligations and liabilities of Debtor to Secured Party arising under or in
connection with the Loan Agreement, the Revolving Note, the Equipment Term Note,
the Term Note, the Mortgage and the other Ancillary

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Agreements (as defined in the Loan Agreement) and performance of all
agreements, covenants, terms and conditions contained in the foregoing
documents and instruments. 1.

                  2.       WARRANTIES, REPRESENTATIONS AND COVENANTS OF
DEBTOR. Debtor hereby warrants, represents and covenants to Secured Party as
follows:

                  (1)      Debtor is and will be the sole owner of the
         Collateral, free from any lien, security interest, encumbrance or
         adverse claim of any kind other than the Ford Lien, the CIB Lien, the
         Marino Lien and the other Permitted Encumbrances. Debtor will not
         permit any financing statement to be filed with respect to the
         Collateral or any portion thereof except in favor of Secured Party or
         in connection with the Ford Lien, the CIB Lien and the Marino Lien.
         Debtor will notify Secured Party of, and will defend the Collateral
         against, all claims and demands of all persons at any time claiming the
         same or any interest therein, except in connection with the Ford Lien,
         the CIB Lien and the Marino Lien.

                  (2)      The Collateral will not be used and was not purchased
         for personal, family or household purposes.

                  (3)      Subject to the terms of subparagraph 2(e) hereof, the
         Collateral will be kept on the Premises, and Debtor will not remove the
         Collateral from the Premises without the prior written consent of
         Secured Party.

                  (4)      At the request of Secured Party, Debtor has or will
         join Secured Party in executing one or more financing statements
         identifying the Collateral and evidencing the security interest of
         Secured Party in the Collateral pursuant to the requirements of the
         Uniform Commercial Code and in form satisfactory to Secured Party.
         Debtor will pay the cost of filing the same in all public offices
         wherever filing is deemed necessary or desirable by Secured Party.

                  (5)      Except as otherwise expressly permitted under the
         Loan Agreement, without the prior written consent of Secured Party,
         which consent shall not be unreasonably withheld, Debtor will not sell,
         exchange, dispose of, lease, offer to sell or otherwise transfer or
         otherwise deal with the Collateral or any portion or interest therein,
         unless simultaneously therewith, new items of Collateral, which items
         may be similar to those proposed to be disposed of and which shall be
         of equal or greater value, are substituted therefor. Upon the request
         of Second Party, Debtor shall file with Secured Party a certificate
         signed by Debtor describing such portion of the Collateral as is being
         so disposed of and stating that the same has become obsolete, worn out,
         damaged, destroyed, sold, transferred or exchanged, and that such
         portion of the Collateral will be replaced immediately upon the removal
         thereof. Such certificate likewise shall certify as to the reasonable
         and equivalent value of the property so acquired or to be acquired in
         replacement or substitution. All after-acquired property of the Debtor
         located on the Premises and all additions or replacements acquired
         pursuant to the provisions of this Section shall immediately be and
         become, without any other act on the part of Debtor, subject to the
         security interest and lien of this Agreement, which security interest
         shall be prior to any other security interest or lien on such property
         other than the Ford Lien and the CIB Lien. Unless expressly recited or
         provided to the contrary in this Agreement, the Mortgage or in the
         other Ancillary Agreements, Debtor may not hereafter acquire any
         property subject to prior security interests. If the Collateral or any
         part thereof is sold,

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         transferred, exchanged, or otherwise disposed of, the security
         interest of Secured Party shall extend to the proceeds of
         such sale, transfer, exchange or other disposition.

                  (6)      Debtor shall cause the Collateral at all times to be
         kept insured at its own expense under one or more policies with such
         companies, for such periods and amounts, against such risks and
         liabilities, and in such form as set forth in the Loan Agreement, with
         Secured Party named as an additional insured and loss payee and
         mortgagee clauses attached to all policies in favor of and in form
         satisfactory to Secured Party. Such insurance policies shall provide
         for at least thirty (30) days' prior written notice to Secured Party of
         any cancellation, termination, lapse or alteration in a manner adverse
         to Secured Party, which shall include, but not be limited to, decreases
         in the amount of coverage limits under such policies of insurance,
         increases in deductibles required to be paid under such policies of
         insurance, and elimination or reduction of specific types of coverage
         provided under such policies of insurance, and original certificates
         evidencing such policies shall be delivered to and held by Secured
         Party, together with evidence of payment of premiums thereon. Debtor
         will promptly notify Secured Party of any loss or damage to the
         Collateral and will not adjust or settle such or any loss without the
         written consent of Secured Party, except as otherwise provided in the
         Loan Agreement. Upon the occurrence and during the continuance of an
         Event of Default, and in the event of foreclosure or sale under this
         Agreement, all right, title and interest of Debtor in and to any
         insurance policies then in force shall pass to the purchaser at any
         sale, and Secured Party is hereby appointed attorney-in-fact for Debtor
         to assign and transfer said policies.

                  In the event of damage or casualty resulting in a loss payable
         under any of the aforementioned insurance policies, Secured Party is
         authorized, except as otherwise provided in the Loan Agreement (i) to
         adjust and settle any claim under the appropriate policy pursuant to
         which right Secured Party is hereby appointed attorney-in-fact for
         Debtor to make proof of loss, or (ii) to allow Secured Party on behalf
         of and in the name and stead of Debtor to adjust and settle any such
         claim. In either case, except as otherwise provided in the Loan
         Agreement, Secured Party is authorized to collect and receipt for any
         such insurance proceeds paid pursuant to the settlement and such
         authorization is hereby deemed an assignment to Secured Party by Debtor
         of its rights to any such proceeds. Anything in the foregoing to the
         contrary notwithstanding, Debtor is hereby authorized to adjust and
         settle any claim and to collect and receipt for the proceeds thereof so
         long as such claim does not exceed One Hundred Fifty Thousand Dollars
         ($150,000.00), and all such claims so adjusted and settled do not
         exceed the aggregate amount of Two Hundred Fifty Thousand Dollars
         ($250,000.00).

                  (7)      Debtor will keep the Collateral free from any lien,
         security interest or encumbrance other than the Ford Lien, the CIB
         Lien, the Marino Lien and the other Permitted Encumbrances, and in good
         condition and repair, ordinary wear and tear excepted. Upon the
         occurrence and during the continuance of an Event of Default, and at
         the request of Secured Party, Debtor will make necessary or desirable
         repairs, replacements, and renewals to the Collateral which may be
         required by reason of use, wear, obsolescence, damage or destruction,
         however caused, to the end that the efficiency of the business
         conducted on the Premises shall not be impaired. Debtor will not
         misuse, abuse, allow to deteriorate, waste or destroy the Collateral or
         any part thereof, except for ordinary wear and tear in the course of
         its normal and expected use. Debtor will not use the Collateral in
         violation of any statute or governmental rule, regulation or ordinance.

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                  (8)      Except as otherwise provided in the Loan Agreement,
         Debtor will pay prior to delinquency all taxes and assessments assessed
         against the Collateral or imposed on account of its use or operation
         ("Charges") and shall deliver to Secured Party, upon the request of
         Secured Party, a receipt or other evidence satisfactory to Secured
         Party, of the payment thereof.

                  (9)      At Secured Party's request, Debtor will execute any
         document, procure any document and do all other acts which from the
         character or use of the Collateral may be reasonably necessary to
         protect the Collateral against the rights, claims or interests of third
         persons other than the Ford Lien, CIB Lien and Marino Lien and will
         otherwise preserve the Collateral as security hereunder.

                  (10)     Debtor shall furnish promptly to Secured Party such
         information concerning the Collateral as Secured Party may from time to
         time request. Debtor shall permit and hereby authorizes Secured Party
         to examine and inspect the Collateral and any portion thereof wherever
         the same may be located. Upon the occurrence and during the continuance
         of an Event of Default, Debtor shall, at the request of Secured Party,
         assemble the Collateral or such portion thereof as may be designated by
         Secured Party, together with all documents and records pertaining
         thereto, at such place as Secured Party may designate.

                  3.       PRESERVATION OF COLLATERAL BY SECURED PARTY. Should
Debtor fail or refuse to make any payment when due, perform or observe any other
covenant, condition or obligation, or take any other action required by the
terms of this Agreement or the Loan Agreement at the time or in the manner
provided, then Secured Party may, at Secured Party's sole discretion, without
notice to or demand upon Debtor, and without releasing Debtor from any
obligation, covenant or condition hereof, make, perform, observe, take or do the
same in such manner and to such extent as Secured Party may deem necessary to
protect its security interest in or the value of the Collateral. Furthermore,
Secured Party may commence, defend, appeal or otherwise participate in any
action or proceeding purporting to affect its security interest in or the value
of the Collateral. Debtor hereby agrees to reimburse Secured Party on demand for
any payment made, or any expense incurred by, Secured Party pursuant to the
foregoing authorization (including court costs and reasonable attorneys' fees
and disbursements), and agrees further to pay interest thereon from the date of
said payment or expenditure at the rate specified in the Loan Agreement as the
Default Rate.

                  4.       USE OF COLLATERAL BY DEBTOR. Until the occurrence and
during the continuance of an Event of Default hereunder, Debtor may have
possession of the Collateral and use it in any lawful manner contemplated in the
Loan Agreement and consistent with this Agreement and any policy of insurance
affecting the Collateral.

                  5.       EVENT OF DEFAULT. The occurrence of any of the
following shall constitute a default ("Event of Default") hereunder:

                  (1)      If an Event of Default shall occur under the Loan
         Agreement and be continuing or if Debtor fails to observe or perform
         any term, covenant or condition of the Revolving Note, the Equipment
         Term Note, the Term Note, the Mortgage or any of the other Ancillary
         Agreements and such default is not cured within the time period
         expressly established therefor, if any; or

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                  (2)      If any writ or any distress warrant shall be issued
         against or levied on the Collateral, or any part thereof; or if the
         Debtor shall sell or assign or attempt to sell or assign the
         Collateral, or any interest therein in violation of Section 2(e)
         hereof, which events shall not be corrected or cured by Debtor within
         twenty (20) days after notice thereof by Secured Party; or

                  (3)      If Debtor defaults under this Agreement, which
         default is not corrected or cured by Debtor within twenty (20) days
         after notice thereof by Secured Party; or

                  (4)      If the Collateral or any part thereof is removed or
         transferred, or attempted to be removed or transferred, from the
         Premises, or sold or disposed of, in violation of the terms of Sections
         2(c) and 2(e), and substitute Collateral is not provided within twenty
         (20) days thereafter; or

                  (5)      If any representation or warranty made by Debtor
         herein, or in any other instrument, agreement or written statement in
         any way related hereto, to the Collateral or any portion thereof, or to
         the Loans, shall prove to have been false or incorrect in any material
         respect on or after the date when made.

                  6.       REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence
and during the continuance of an Event of Default, Secured Party may, in
addition to exercising those remedies specified in the Loan Agreement or in any
of the Ancillary Agreements at any time, at its election, without further
notice, and to the extent permitted by law pursue any one or more of the
following remedies concurrently or successively, it being the intent hereof that
none of such remedies shall be to the exclusion of any others:

                  (1)      Foreclose this Agreement and the security interest
         granted hereby, as provided herein, or in any manner permitted by law,
         either personally, through agents or by means of a court-appointed
         receiver, and take possession of all or any of the Collateral, other
         than the Ford Automobiles and the Landmeier Property, and exclude
         therefrom Debtor and all others claiming through or under Debtor, and
         exercise any and all of the rights and remedies conferred upon Secured
         Party by the Loan Agreement, the Revolving Note, the Equipment Term
         Note, the Term Note, the Mortgage and the other Ancillary Agreements or
         by applicable law, either concurrently or in such order as Secured
         Party may determine. Secured Party may sell, lease or otherwise dispose
         of, or cause to be sold, leased or otherwise disposed of in such order
         as Secured Party may determine, as a whole or in such parcels as
         Secured Party may determine, (i) the Collateral described in this
         Agreement, other than the Ford Automobiles and the Landmeier Property,
         (ii) the Premises described in the Mortgage, or both; or exercise any
         of the rights conferred upon Secured Party by this Agreement, the Loan
         Agreement, the Revolving Note, the Equipment Term Note, the Term Note,
         the Mortgage or other Ancillary Agreements without affecting in any way
         the rights or remedies to which Secured Party may be entitled under any
         other Ancillary Agreements;

                  (2)      Make such payments and do such acts as Secured Party
         may deem necessary to protect its security interest in the Collateral,
         including without limitation, paying, purchasing, contesting or
         compromising any encumbrance, charge, claim or lien which is prior to
         or superior to the security interest granted hereunder, except the Ford
         Lien and the CIB Lien, and, in exercising any such powers or authority,
         pay all expenses incurred in

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         connection therewith, and all funds expended by Secured Party in
         protecting its security interest shall be deemed additional
         indebtedness secured by this Agreement;

                  (3)      Require Debtor to assemble the Collateral (other than
         the Ford Automobiles), or any portion thereof, at any place or places
         reasonably designated by Secured Party, and promptly to deliver such
         Collateral (other than the Ford Automobiles) to Secured Party, or an
         agent or representative designated by it;

                  (4)      Publicly or privately sell, lease or otherwise
         dispose of the Collateral, without necessarily having the Collateral at
         the place of sale, lease or disposition, and upon terms and in such
         manner as Secured Party may determine. Secured Party may be a purchaser
         of the Collateral at any public sale. Unless the Collateral is
         perishable or 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, and such notice, if given to the
         Debtor pursuant to the provisions of Section 8 hereof at least twenty
         (20) days prior to the date of any public sale or disposition or the
         date after which any private sale or disposition may occur, shall
         constitute reasonable notice of such sale, lease or other disposition;

                  (5)      Notify any account debtor or any other party
         obligated on or with respect to any of the Collateral to make payment
         to Secured Party or its nominee of any amounts due or to become due
         thereunder or with respect thereto and otherwise perform its
         obligations with respect to the Collateral on behalf of and for the
         benefit of Secured Party. Secured Party may enforce collection and
         performance with respect to any of the Collateral by suit or otherwise,
         in its own name or in the name of Debtor or a nominee, and surrender,
         release or exchange all or any part thereof; and compromise, extend or
         renew (whether or not for longer than the original period) or transfer,
         assign or endorse for collection or otherwise, any indebtedness or
         obligation with respect to the Collateral, or evidenced thereby, and
         upon request of Secured Party, Debtor will, at its own expense, notify
         any person obligated on or with respect to any of the Collateral to
         make payment and performance directly to, in the name of, and on behalf
         of Secured Party of any amounts or performance due or to become due
         thereunder or with respect thereto; and

                  (6)      Exercise any remedies of a Secured Party under the
         Uniform Commercial Code or any other applicable law.

                  To effectuate the foregoing upon the occurrence and during the
         continuance of an Event of Default, Debtor hereby agrees that if
         Secured Party demands or attempts to take possession of the Collateral
         (other than the Ford Automobiles) or any portion thereof in exercise of
         its rights and remedies hereunder and under any other Ancillary
         Agreement, Debtor will immediately turn over and deliver possession
         thereof to Secured Party, and Debtor authorizes, to the extent Debtor
         may now or hereafter lawfully grant such authority, Secured Party, its
         employees and agents, and potential bidders or purchasers to enter upon
         any or all of the premises where the Collateral (other than the Ford
         Automobiles) or any portion thereof may at the time be located (or
         believed to be located) and Secured Party may (i) remove the same
         therefrom, (ii) repair, operate, use or manage the Collateral or any
         portion thereof, (iii) maintain, repair or store the Collateral or any
         portion thereof, (iv) view, inspect and prepare for sale, lease or
         disposition the Collateral (other than the Ford

                                     -6-

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         Automobiles) or any portion thereof, (v) sell, lease, dispose of
         or consume the same or bid thereon or (vi) incorporate the Collateral
         or any portion thereof into the Premises.

                  Debtor hereby agrees to indemnify, defend, protect and hold
         harmless Secured Party and its employees, officers and agents from and
         against any and all damages, liabilities, claims and obligations which
         may be incurred, asserted or imposed upon them or any of them as a
         result of or in connection with any use, operation, lease or
         consumption of any of the Collateral or as a result of Secured Party's
         seeking to obtain performance of any of the obligations due with
         respect to the Collateral, except from such damages, liabilities,
         claims or obligations as result from gross negligence or intentional
         misconduct of Secured Party, its employees, officers or agents.

                  The proceeds of any sale under this Section 6 shall be applied
         first to the payment of any sums owing to Secured Party pursuant to the
         provisions of the Revolving Note, the Equipment Term Note, the Term
         Note, the Mortgage, this Agreement, or any of the other Ancillary
         Agreements in such manner as Secured Party may elect, with any funds
         remaining after payment of the foregoing to be paid to Debtor.

                  Secured Party shall have the right to enforce one or more
         remedies hereunder, successively or concurrently, and such action shall
         not operate to estop or prevent Secured Party from pursuing any further
         remedy which it may have, and any repossession or retaking or sale of
         the Collateral pursuant to the terms hereof shall not operate to
         release Debtor until full payment of any deficiency has been made in
         cash.

                  7.       OTHER REMEDIES. The Mortgage and this Agreement shall
be construed together as a single instrument and in any case in which Secured
Party is authorized to proceed in the manner set forth in Section 6 hereof,
Secured Party may, at its sole option and in lieu of proceeding under Section 6
hereof, proceed as to both the Premises (excluding the Landmeier Property) and
the Collateral (excluding the Ford Automobiles) in accordance with Secured
Party's rights and remedies with respect to the Premises (excluding the
Landmeier Property) under the Mortgage. Any receiver appointed in any
proceedings to foreclose said Mortgage, upon taking possession of the Premises
(excluding the Landmeier Property), shall have full power to take immediate
possession of, manage and control the Collateral (excluding the Ford
Automobiles) and use the same in the operation of a business upon the Premises.
Any and all remedies herein expressly conferred upon Secured Party shall be
deemed cumulative with, and not exclusive of, any other remedy conferred hereby
or by law or equity on Secured Party, and the exercise of any one remedy shall
not preclude the exercise of any other. Except as otherwise specifically
required herein or by applicable law, notice of the exercise of any right,
remedy or power granted to Secured Party by this Agreement is not required to be
given.

                  8.       NOTICES. Except as otherwise provided herein, any
notice required hereunder shall be in writing and shall be deemed to have been
validly served, given or delivered (i) three (3) Business Days after deposit in
the United States mails, with proper postage prepaid, certified or registered
mail, (ii) upon receipt when personally delivered or delivered by reputable
overnight courier or (iii) when sent by confirmed facsimile transmission, in
each case addressed to the party to be notified as follows:

                                 -7-

<PAGE>

                  if to Secured Party:     LaSalle Bank National Association
                                           135 South LaSalle Street
                                           Chicago, Illinois  60603
                                           Attention:        Marc D. Horner
                                           Telefax:          (312) 904-4660

                  with a copy to:          Ross & Hardies
                                           150 North Michigan Avenue, Suite 2500
                                           Chicago, Illinois  60601
                                           Attention:        Scott Hodes, Esq.
                                           Telefax:          (312) 750-8600

                  if to Debtor:            Electric City Corp.
                                           1280 Landmeier Road
                                           Elk Grove Village, Illinois 60007
                                           Attention: Jeffrey R. Mistarz
                                           Telefax:          (847) 437-4969

                  with a copy to:          Katten Muchin Zavis
                                           525 West Monroe Street, Suite 1600
                                           Chicago, Illinois 60661-3693
                                           Attention:  Kenneth W. Miller, Esq.
                                           Telefax: (312) 902-1061

or to such other address as each party may designate for itself by like notice.

                  9.       WAIVER. By exercising or failing to exercise any of
its rights, options or elections hereunder, Secured Party shall not be deemed to
have waived any breach or default on the part of Debtor or to have released
Debtor from any of its obligations hereunder, unless such waiver or release is
in writing and signed by Secured Party. In addition, the waiver by Secured Party
of any breach hereof or default in payment of any amounts due under the Loan
Agreement, the Revolving Note, the Equipment Term Note, the Term Note, the
Mortgage or this Agreement shall not be deemed to constitute a waiver of any
succeeding breach or default.

                  10.      AFFIXED COLLATERAL. The inclusion in this Agreement
of any Collateral which may now be, or hereafter become, affixed or in any
manner attached to the Premises shall be without prejudice to any claim at any
time made by Secured Party that such Collateral is, or has become, a part of the
Premises, or an accession to the Premises.

                  11.      BINDING AGREEMENT. This Agreement and all provisions
hereof shall be binding upon Debtor, its successors, assigns, executors and
administrators, and all other persons or entities claiming under or through
Debtor, and the word "Debtor," when used herein, shall include all such persons
or entities and any others liable for the payment of the indebtedness secured
hereby or any part thereof, whether or not they have executed the Revolving
Note, the Equipment Term Note, the Term Note, or this Agreement. The word
"Secured Party," when used herein, shall include Secured Party's successors,
assigns and legal representatives, including all other holders, from time to
time, of the Revolving Note, the Equipment Term Note and the Term Note.

                                    -8-

<PAGE>

                  12.      GOVERNING LAW; INTERPRETATION. This Security
Agreement shall be governed by the laws of the State of Illinois, in which State
(a) the Loan Agreement, the Revolving Note, the Equipment Term Note, the Term
Note, the Mortgage, and this Agreement were executed and delivered, (b) the
proceeds of the Loan were disbursed by Secured Party and (c) the principal and
interest due under the Revolving Note, the Equipment Term Note and the Term Note
are to be paid. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement. Time is of the essence in this
Agreement.

                  13.      MISCELLANEOUS. Neither this Agreement nor any
provision hereof may be amended, modified, waived, discharged or terminated, nor
may any of the Collateral (excluding the Ford Automobiles and the Landmeier
Property) be released, except by an instrument in writing duly signed by or on
behalf of Secured Party hereunder. The section headings are used herein for
convenience of reference only and shall not define or limit the provisions of
this Agreement. As used in this Agreement, the singular shall include the
plural, and the plural shall include the singular, and masculine, feminine and
neuter pronouns shall be fully interchangeable, where the context so requires.

             [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                                   -9-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                                     DEBTOR:

                                     ELECTRIC CITY CORP.,
                                     a Delaware corporation

                                     By:    /s/ Jeffrey Mistarz
                                            -------------------------------
                                     Name:  Jeffrey Mistarz
                                            -------------------------------
                                     Title: Chief Financial Officer
                                            -------------------------------

                                     SECURED PARTY:

                                     LASALLE BANK NATIONAL ASSOCIATION,
                                     a national banking association

                                     By:    /s/ Marc Horner
                                            -------------------------------
                                     Name:  Marc Horner
                                            -------------------------------
                                     Title: Assistant Vice President
                                            -------------------------------

                                   -10-

<PAGE>

                                    EXHIBIT A

DEBTOR:            Electric City Corp., a Delaware Corporation

SECURED PARTY: LaSalle Bank National Association, a national banking association

                            DESCRIPTION OF COLLATERAL

         All of the following property now or at any time hereafter owned by
Debtor or in which the Debtor may now or at anytime hereafter have any interest
or rights, together with all of Debtor's right, title and interest therein:

         5.       all machinery, furniture, furnishings, equipment, computer
software and hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications, elevator, kitchen, medical,
dental or rehabilitation fixtures), cleaning apparatus, carpeting, telephones,
cash registers, computers, lamps, and medical equipment, supplies, and other
property of every kind and nature, whether tangible or intangible, whatsoever
owned by Debtor, or in which Debtor has or shall have an interest, now or
hereafter located upon the Premises and the improvements thereon (the
"Improvements"), or appurtenant thereto, and usable in connection with the
present or future operation and occupancy of the Premises and the Improvements
(hereinafter collectively called the "Equipment"), including any leases of any
of the foregoing, any deposits existing at any time in connection with any of
the foregoing, and the proceeds of any sale or transfer of the foregoing, and
the right, title and interest of Debtor in and to any of the Equipment that may
be subject to any "security interests" as defined in the Uniform Commercial
Code, as adopted and enacted by the state where the Premises are located (the
"Uniform Commercial Code"), superior in lien to the lien of the Mortgage;

         6.       all awards or payments, including interest thereon, that may
heretofore and hereafter be made with respect to the Premises and the
Improvements, whether from the exercise of the right of eminent domain or
condemnation (including, without limitation, any transfer made in lieu of or in
anticipation of the exercise of said rights), or for a change of grade, or for
any other injury to or decrease in the value of the Premises and Improvements;

         7.       all operating leases (alternatively hereinafter referred to
singularly as the "Operating Lease" or collectively as the "Operating Leases" as
the context may require), all guarantees of the Operating Leases, all patient
admissions and resident care agreements ("Patient Occupancy Agreements" or
"Occupancy Agreements") and any and all other commercial leases, and other
agreements or arrangements heretofore or hereafter entered into affecting the
use, enjoyment or occupancy of, or the conduct of any activity upon or in, the
Premises and the Improvements, including any extensions, renewals, modifications
or amendments thereof (all of the foregoing collectively called the "Leases")
and all rents, rent equivalents, moneys payable as damages or in lieu of rent or
rent equivalents, royalties (including, without limitation, all oil and gas or
other mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Debtor or its agents or employees from the Leases and
any and all other sources arising from or attributable to the Premises and the
Improvements (the "Rents"), together

<PAGE>

with all proceeds from the sale or other disposition of the Leases and the
Mortgaged Premises and the right to receive and apply the Rents to the
payment of the indebtedness secured hereby;

         8.       all proceeds of and any unearned premiums on any insurance
policies covering the Premises, including, without limitation, the right to
receive and apply, except as otherwise provided in the Loan Agreement, the
proceeds of insurance, judgments, or settlements made in lieu thereof, for
damage to the Premises;

         9.       the right, in the name and on behalf of Debtor, to appear in
and defend any action or proceeding brought with respect to the Premises and to
commence any action or proceeding to protect the interest of Secured Party in
the Premises;

         10.      all accounts located on the Premises, including rights to
payment for goods sold or leased or to be sold or leased or for services
rendered or to be rendered), escrows, documents, instruments, chattel paper,
claims, deposits and general intangibles, as the foregoing terms are defined in
the Uniform Commercial Code, and all franchises, trade names, trademarks,
symbols, service marks, books, records, plans, specifications, designs,
drawings, permits, licenses, contract rights (including, without limitation, any
contract with any architect or engineer or with any other provider of goods or
services for or in connection with any construction, repair, or other work upon
the Premises), approvals, actions, refunds of real estate taxes and assessments
and any other governmental impositions related to the Premises, approvals,
actions and causes of action that now or hereafter relate to, are derived from
or are used in connection with the Premises or the use, operation, maintenance,
occupancy or enjoyment thereof or the conduct of any business or activities
thereon (hereinafter collectively called the "Intangibles"); and

         11.      all proceeds, products, offspring, rents and profits from any
of the foregoing, including, without limitation, those from sale, exchange,
transfer, collection, loss, damage, disposition, substitution or replacement of
any of the foregoing.

<PAGE>

                                    EXHIBIT B

                             LOCATIONS OF COLLATERAL

Personal property located at:

         1280 Landmeier Road
         Elk Grove Village, IL 60007

Real property secured by Mortgage and other personal property to be located at:

         2820 South 19th Avenue
         Broadview, IL 60155

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