Document:

exv10w1

Exhibit 10.1

FORM OF ESCROW AGREEMENT 

     THIS ESCROW AGREEMENT (this “Agreement”) made and entered into as of this   day of ______, 2010 by and among Newport Coast Securities, Inc., a California
corporation (the “Dealer Manager”), Green Realty Trust, Inc., a Maryland corporation (the
“Company”), and UMB Bank, N.A., as escrow agent, a national banking association organized
and existing under the laws of the United States of America (the “Escrow Agent”).

RECITALS

     WHEREAS, the Company has filed with the Securities and Exchange Commission a registration
statement on Form S-11 (File No. 333-147514), containing a preliminary prospectus for the
registration of the Shares under the Securities Act of 1933, as amended (the “Securities
Act”), and the regulations thereunder (the “Regulations”). The registration statement
and any amendments thereto, and any registration statement related thereto filed under Rule 462(b)
of the Securities Act are herein called the “Registration Statement.” Any prospectus
relating to such Registration Statement and any amendments thereto are herein called the
“Prospectus.”

     WHEREAS, the Company proposes to offer and sell, on a best efforts basis through the Dealer
Manager and a group of selected dealers (each a “Selected Dealer”, collectively the
“Selected Dealers”) and directly to a group of selected investment advisors (each a
“Selected Investment Advisor”, collectively the “Select Investment Advisors”) up to
165,789,474 shares of its shares of common stock (the “Shares”), on a best-efforts basis
(the “Offering”) to investors pursuant to the Company’s Prospectus.

     WHEREAS, the Company has agreed that the subscription price paid by subscribers for shares
will be promptly refunded to such subscribers if at least $2,000,000 Shares of gross offering
proceeds (the “Minimum Offering”) has not been raised within six months from the date the
Registration Statement becomes effective with the Securities and Exchange Commission, or if the
Company elects to extend the date to a period no longer than one year (the “Closing
Date,”).

     WHEREAS, the Dealer Manager and the Company, in compliance with the terms of the proposed
offering described in the Registration Statement and Rule 15c2-4 under the Securities and Exchange
Act of 1934, as amended (the “Exchange Act”), desire to establish an escrow account (the
“Escrow Account”), as further described herein in which funds received from subscribers
will, except as otherwise specified herein, be deposited into an interest-bearing account entitled
“Green Realty Trust Incorporated Subscription Account” and the Company desires that UMB Bank, N.A.
act as escrow agent to the Escrow Account and Escrow Agent is willing to act in such capacity.

     WHEREAS, deposits received from residents of the State of Pennsylvania (the “Pennsylvania
Subscribers”) will remain in the Escrow Account until the conditions of Sections 3 and 4
hereof, respectively, have been met.

 

 

     WHEREAS, in order to subscribe for Shares during the Escrow Period (as defined below), a
subscriber must deliver an executed order form along with the full amount of its subscription: (i)
by check made payable to the order of UMB Bank, N.A., as Escrow Agent
for Green Realty Trust, Inc.,
in U.S. dollars or (ii) by wire transfer of immediately available funds or Automated ClearingHouse
(ACH) in U.S. dollars, made payable as provided in Exhibit B.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the parties, the parties covenant
and agree as follows:

1. Establishment of Escrow Account; Escrow Period. On or prior to the commencement of the
offering of Shares pursuant to the Prospectus, the Company shall establish the Escrow Account with
the Escrow Agent, which shall be entitled “UMB Bank, N.A., as Escrow Agent for Green Realty Trust,
Inc.”. This Agreement shall be effective on the date on which the Registration Statement becomes
effective. Except as otherwise set forth herein for the Pennsylvania Subscribers, the escrow
period shall commence upon the effectiveness of this Agreement and shall continue until the earlier
of (i) the date upon which the Escrow Agent receives confirmation from the Company and the Dealer
Manager that the Company has raised the Minimum Offering, (ii) the Closing Date, or (iii) the
termination of the Offering by the Company prior to the receipt of the Minimum Offering (the
“Escrow Period”).

2. Operation of the Escrow.

	     a)	 	Deposits in the Escrow Account. During the Escrow Period, persons subscribing to
purchase Shares will be instructed by the Company, the Dealer Manager and the Selected Dealers
to make checks for subscriptions payable to the order of “UMB Bank, N.A., as Escrow Agent for
Green Realty Trust, Inc.” When a Selected Dealer’s internal supervisory procedures are
conducted at the site at which the subscription agreement and check were initially received by
Selected Dealer from the subscriber, Selected Dealer shall transmit the subscription agreement
and check to the Escrow Agent by noon of the next business day following receipt of the check
and subscription agreement. When, pursuant to Selected Dealer’s internal supervisory
procedures, Selected Dealer’s final internal supervisory procedures are conducted at a
different location (the “Final Review Office”), the Selected Dealer shall transmit the
check and subscription agreement to the Final Review Office by noon of the next business day
following the Selected Dealer’s receipt of the subscription agreement and check. The Final
Review Office will, by noon of the next business day following its receipt of the subscription
agreement and check, forward both the subscription agreement and check to the Escrow Agent.
If any subscription agreement solicited by the Selected Dealer is rejected by the Dealer
Manager or the Company, then the subscription agreement and check will be promptly returned to
the rejected subscriber. The Escrow Agent shall have no liability or responsibility regarding
a Selected Dealer’s internal supervisory procedures. Completed subscription agreements and
checks in payment for the purchase price shall be remitted to the Escrow Agent’s address in
Exhibit B designated for the receipt of such agreements and funds, and wires or Automated
ClearingHouse (ACH) payments shall be transmitted directly to the Escrow Account. Subscription
agreements received by the Escrow Agent shall be scanned and emailed by the Escrow Agent to
Phoenix American Financial Services, Inc. (the “Transfer Agent”) within 24 hours of

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	 	 	receipt by the Escrow Agent. The Escrow Agent shall also deliver the original subscription
agreements to the Transfer Agent. The Escrow Agent hereby agrees to maintain the funds
contributed by the Pennsylvania Subscribers in a manner in which they may be separately
accounted for so that the requirements of Section 3 of this Agreement can be met. Deposits
shall be held in the Escrow Account until such funds are disbursed in accordance with this
Agreement. Prior to disbursement of the funds deposited in the Escrow Account (the
“Escrowed Funds”), such funds shall not be subject to claims by creditors of the
Company or any of its affiliates. If any of the instruments of payment are returned to the
Escrow Agent for nonpayment prior to receipt of the Break Escrow Affidavit (as described
below), the Escrow Agent shall promptly notify the Company in writing via mail, email or
facsimile of such nonpayment, and the Escrow Agent is authorized to debit the Escrow Account
in the amount of such returned payment and the Escrow Agent shall delete the appropriate
account from the records maintained by the Escrow Agent. The Escrow Agent will maintain a
written account of each sale, which account shall set forth, among other things, the following
information: (i) the subscriber’s name and address, (ii) the subscriber’s social security
number or tax identification number, (iii) the number of Shares purchased by such subscriber,
(iv) the amount paid by such subscriber for such Shares, and (v) the state of residence.
During the Escrow Period neither the Company nor the Dealer Manager will be entitled to any
principal funds received into the Escrow Account.

	     (b)	 	Distribution of the Funds in the Escrow Account to Subscribers other than the
Pennsylvania Subscribers. If at any time on or prior to the Closing Date, the Minimum
Offering has been raised, then upon the happening of such event, the funds in the Escrow
Account shall remain in the Escrow Account until the Escrow Agent receives written direction
provided by the Company and the Dealer Manager instructing the Escrow Agent to deliver such
funds as the Company shall direct (other than any funds received from Pennsylvania Subscribers
which cannot be released until the conditions of Sections 3 and 4 hereof, respectively, have
been met) (“Initial Closing”). An affidavit or certification from an officer of the Company
and an officer of the Dealer Manager to the Escrow Agent stating that at least the Minimum
Offering has been timely raised, shall constitute sufficient evidence for the purpose of this
Agreement that such event has occurred (the “Break Escrow Affidavit”). The Affidavit
shall indicate (i) the date on which the Minimum Offering was raised and (ii) the actual total
number of Shares sold as of such date. Thereafter, the Escrow Agent shall release funds and
any interest or other income earned, based on the conditions of Section 4 hereof, thereon from
the Escrow Account as directed by the Company pursuant to written instruction that the Company
shall provide to the Escrow Agent from time to time. Accrued and unpaid interest on such
Escrowed Funds shall be paid pursuant to Section 4 below.

	     (c)	 	If the Escrow Agent has not received a Break Escrow Affidavit on or prior to the Closing
Date, the Escrow Agent shall promptly return the funds in the Escrow Account, together with
any remaining interest thereon, to each respective subscriber, and the Escrow Agent shall
promptly create and dispatch checks and wires drawn on the Escrow Account to return the full
amount of the funds deposited in the Escrow Account, together with their pro-rata share of any
remaining interest thereon, to the respective subscribers, and the Escrow Agent shall notify
the Company and the Dealer Manager of its distribution of the funds. For the purposes of
this Agreement “remaining interest” shall mean any interest that remains in the Escrow Account
after deducting the full amount of the escrow fees and

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	 	 	expenses which have been or are due under this Agreement or have been paid hereunder. Any
amounts previously paid hereunder will be reimbursed by the Escrow Agent to such party after
applying the interest to any escrow fees and expenses that are or will be due under this
Agreement as of the Closing Date. The subscription payments returned to each subscriber shall
be free and clear of any and all claims of the Company or any of its creditors.

	     (d)	 	After the Initial Closing, upon receipt by the Escrow Agent of instructions signed by the
Dealer Manager and the Company, the Escrow Agent shall release to the Company the Escrowed
Funds (other than any funds received from Pennsylvania Subscribers which cannot be released
until the conditions of Section 3 hereof, have been met) in accordance with such instructions.
The Company shall give the Escrow Agent one business day oral notification of the contents of
such instructions. Accrued and unpaid interest on such Escrowed Funds shall be paid pursuant
to Section 4 below.

3. Distribution of the Funds from Pennsylvania Subscribers.

	     (a)	 	Notwithstanding anything to the contrary herein, disbursements of funds contributed
by Pennsylvania Subscribers may only be distributed in compliance with the provisions of this
Section 3. Irrespective of any disbursement of funds from the Escrow Account pursuant to
Section 2 hereof, the Escrow Agent will continue to place deposits from the Pennsylvania
Subscribers into the Escrow Account, until such time as the Company notifies the Escrow Agent
in writing that total subscriptions (including amounts previously disbursed as directed by the
Company and the amounts then held in the Escrow Account) equal or exceed
$82,500,000, whereupon the Escrow Agent shall disburse to the Company, at the
Company’s request, any funds from the Pennsylvania Subscribers received by the Escrow Agent
for accepted subscriptions, but not those funds of a subscriber whose subscription has been
rejected or rescinded of which the Escrow Agent has been notified by the Company, or otherwise
in accordance with the Company’s written request.

	     (b)	 	If the Company has not received total subscriptions of at least $82,500,000 within 120 days of the date the Company first receives a subscription from a Pennsylvania
Subscriber (the “Initial Escrow Period”), the Company shall notify each Pennsylvania
Subscriber of the right of Pennsylvania Subscribers to have their investment returned to them.
If, pursuant to such notice, a Pennsylvania Subscriber requests the return of his or her
subscription funds within ten (10) days after receipt of the notification (the “Request
Period”), the Escrow Agent shall promptly refund, including the pro-rata share of any interest
earned thereon, directly to each Pennsylvania Subscriber the funds deposited in the Escrow
Account on behalf of the Pennsylvania Subscriber.

	     (c)	 	The funds of Pennsylvania Subscribers who do not request the return of their funds
within the Request Period shall remain in the Escrow Account for successive 120-day
escrow periods (each a “Successive Escrow Period”), each commencing automatically upon
the termination of the prior Successive Escrow Period, and the Company and Escrow Agent
shall follow the notification and payment procedure set forth in Section 3(b) above with
respect to the Initial Escrow Period for each Successive Escrow Period, provided that any
refunds made to a Pennsylvania Subscriber after a Successive Escrow Period shall

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	 	 	include a pro-rata share of any interest earned thereon after the Initial Escrow Period, until
the occurrence of the earliest of (i) the termination of the Offering, (ii) the receipt and
acceptance by the Company of total subscriptions that equal or exceed
$82,500,000 and the disbursement of the Escrow Account on the terms specified in
this Section 3, or (iii) all funds held in the Escrow Account that were contributed by
Pennsylvania Subscribers having been returned to the Pennsylvania Subscribers in accordance
with the provisions hereof.

	 	 	If, upon termination of the Offering, the Company has not received and accepted total
subscriptions that equal or exceed $82,500,000, all funds in the Escrow Account that
were contributed by Pennsylvania Subscribers will be promptly returned in full to such
Pennsylvania Subscribers, together with their pro-rata share of any interest earned thereon
pursuant to instructions made by the Company, upon which the Escrow Agent may conclusively
rely.

4.
Distribution of Escrow Interest.

	 	 	As soon as practical but no more than 45 days after the release of the funds to the Company
pursuant to the conditions in Sections 2 and 3 hereof, the Escrow Agent shall calculate and
distribute to each subscriber whose subscription funds were held in the Escrow Account for at
least 20 days its pro-rata share of interest based on the length of time its subscription funds
have been held in the Escrow Account. Escrow interest earned, but not payable to subscribers
pursuant to this Section 4, shall be paid to the Company, as instructed by the Company in
writing.

5. Funds in the Escrow Account. Upon receipt of funds from subscribers, the Escrow Agent
shall hold such funds in escrow pursuant to the terms of this Agreement. All funds in the Escrow
Account shall at all times be placed in “Short-term Investments” (as defined below) and the Escrow
Agent agrees to reinvest all earnings and interest derived therefrom in any of the Short-term
Investments specified below.

     “Short-term Investments” include short-term obligations of, or short-term obligations
guaranteed by, the United States government or bank money-market funds comprised of these
obligations or certificates of deposit of national or state banks that have deposits insured by the
Federal Deposit Insurance Corporation, including certificates of deposit of any bank acting as a
depository or custodian for any such funds, including, without limitation, such certificates or
instruments of the Escrow Agent, all of which instruments must be capable of being readily sold or
otherwise disposed of for cash on or before the earlier of (i) the date that the Minimum Amount is
achieved, or (ii) the Expiration Date, without any dissipation of the offering proceeds invested.

               The following securities are not permissible investments:

	          (a)	 	corporate equity or debt securities;

	          (b)	 	repurchase agreements;

	          (c)	 	bankers’ acceptances;

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	          (d)	 	commercial paper;

	          (e)	 	municipal securities; and

	          (f)	 	money market funds other than bank money market accounts.

     The Escrow Agent shall be entitled to sell or redeem any such investment as necessary to make
any distributions required under this Agreement and shall not be liable or responsible for any loss
resulting from any such sale or redemption.

     Income, if any, resulting from the investment of the funds in the Escrow Account shall be
distributed according to this Agreement.

     The Escrow Agent shall provide to the Company monthly statements (or more frequently as
reasonably requested by the Company) on the account balance in the Escrow Account and the activity
in such accounts since the last report.

6. Tax Reporting. The Escrow Agent shall provide subscribers with applicable Form 1099 for
amounts paid pursuant to Section 4 above in a timely manner.

7. Duties of the Escrow Agent. The Escrow Agent shall have no duties or responsibilities
other than those expressly set forth in this Agreement, and no implied duties or obligations shall
be read into this Agreement against the Escrow Agent. The Escrow Agent is not a party to, or bound
by, any other agreement among the other parties hereto with respect to the subject matter hereof,
and the Escrow Agent’s duties shall be determined solely by reference to this Agreement. The Escrow
Agent shall have no duty to enforce any obligation of any person, other than as provided herein.
The Escrow Agent shall be under no liability to anyone by reason of any failure on the part of any
party hereto or any maker, endorser or other signatory of any document or any other person to
perform such person’s obligations under any such document.

8. Liability of the Escrow Agent; Indemnification. The Escrow Agent acts hereunder as a
depository only. The Escrow Agent is not responsible or liable in any manner for the sufficiency,
correctness, genuineness or validity of this Agreement or with respect to the form of execution of
the same. The Escrow Agent shall not be liable for any action taken or omitted by it, or any action
suffered by it to be taken or omitted, in good faith, and in the exercise of its own best judgment,
and may rely conclusively and shall be protected in acting upon any order, notice, demand,
certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent),
statement, instrument, report or other paper or document (not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the truth and acceptability of any
information therein contained) which is believed by the Escrow Agent to be genuine and to be signed
or presented by the proper person(s). The Escrow Agent shall not be held liable for any error in
judgment made in good faith by an officer or employee of the Escrow Agent or the Company unless it
shall be proved that the Escrow Agent, as appropriate, was grossly negligent or reckless in
ascertaining the pertinent facts or acted intentionally in bad faith. The Escrow Agent shall not be
bound by any notice of demand, or any waiver, modification, termination or rescission of this
Agreement or any of the terms hereof, unless evidenced by a writing delivered to the Escrow Agent
signed by the proper party or parties and, if the duties or rights of the Escrow Agent are
affected, unless it shall give its prior written consent thereto.

The Escrow Agent may consult legal counsel and shall exercise reasonable care in the selection of
such counsel, in the event of any dispute or question as to the construction of any provisions

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hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in
acting in accordance with the reasonable opinion or instructions of such counsel.

The Escrow Agent shall not be responsible, may conclusively rely upon and shall be protected,
indemnified and held harmless by the Company, for the sufficiency or accuracy of the form of, or
the execution, validity, value or genuineness of any document or property received, held or
delivered by it hereunder, or of the signature or endorsement thereon, or for any description
therein; nor shall the Escrow Agent be responsible or liable in any respect on account of the
identity, authority or rights of the persons executing or delivering or purporting to execute or
deliver any document, property or this Agreement.

In the event that the Escrow Agent shall become involved in any arbitration or litigation relating
to the funds in the Escrow Account, the Escrow Agent is authorized to comply with any decision
reached through such arbitration or litigation.

The Company hereby agrees to indemnify the Escrow Agent for, and to hold it harmless against, any
loss, liability or expense incurred in connection herewith without gross negligence, recklessness
or willful misconduct on the part of the Escrow Agent, including without limitation legal or other
fees arising out of or in connection with its entering into this Agreement and carrying out its
duties hereunder, including without limitation the costs and expenses of defending itself against
any claim of liability in the premises or any action for interpleader. The Escrow Agent will not be
under any obligation to institute or defend any action, suit, or legal proceeding in connection
herewith, unless first indemnified and held harmless to its satisfaction in accordance with the
foregoing, except that the Escrow Agent shall not be indemnified against any loss, liability or
expense arising out of its own gross negligence, recklessness or willful misconduct. Such indemnity
shall survive the termination or discharge of this Agreement or resignation of the Escrow Agent.

9. The Escrow Agent’s Fee. Escrow Agent shall be entitled to fees and expenses for its
regular services as Escrow Agent as set forth in Exhibit A. Additionally, Escrow Agent is
entitled to reasonable fees for extraordinary services and reimbursement of any reasonable out of
pocket and extraordinary costs and expenses related to its obligations as Escrow Agent under this
Agreement, including, but not limited to, reasonable attorneys’ fees. All of the Escrow Agent’s
compensation, costs and expenses shall be paid by the Company.

10. Security Interests. No party to this Agreement shall grant a security interest in any
monies or other property deposited with the Escrow Agent under this Agreement, or otherwise create
a lien, encumbrance or other claim against such monies or borrow against the same.

11. Dispute. In the event of any disagreement between the undersigned or the person or
persons named in the instructions contained in this Agreement, or any other person, resulting in
adverse claims and demands being made in connection with or for any papers, money or property
involved herein, or affected hereby, the Escrow Agent shall be entitled to refuse to comply with
any demand or claim, as long as such disagreement shall continue, and in so refusing to make any
delivery or other disposition of any money, papers or property involved or affected hereby, the
Escrow Agent shall not be or become liable to the undersigned or to any person named in such
instructions for its refusal to comply with such conflicting or adverse demands, and the Escrow
Agent shall be entitled to refuse and refrain to act until: (a) The rights of the adverse claimants
shall have been fully and finally adjudicated in a Court assuming and having

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jurisdiction of the parties and money, papers and property involved herein or affected hereby, or
(b) All differences shall have been adjusted by agreement and the Escrow Agent shall have been
notified thereof in writing, signed by all the interested parties.

12. Resignation of Escrow Agent. Escrow Agent may resign or be removed, at any time, for
any reason, by written notice of its resignation or removal to the proper parties at their
respective addresses as set forth herein, at least 60 days before the date specified for such
resignation or removal to take effect; upon the effective date of such resignation or removal:

	(a)	 	All cash and other payments and all other property then held by the Escrow Agent
hereunder shall be delivered by it to such successor escrow agent as may be designated in
writing by the Company, whereupon the Escrow Agent’s obligations hereunder shall cease and
terminate;

	(b)	 	If no such successor escrow agent has been designated by such date, all obligations
of the Escrow Agent hereunder shall, nevertheless, cease and terminate, and the Escrow Agent’s
sole responsibility thereafter shall be to keep all property then held by it and to deliver
the same to a person designated in writing by the Company or in accordance with the directions
of a final order or judgment of a court of competent jurisdiction; or

	(c)	 	Further, if no such successor escrow agent has been designated by such date, the
Escrow Agent may petition any court of competent jurisdiction for the appointment of a
successor agent; further the Escrow Agent may pay to such court-appointed successor agent all
monies and property deposited with Escrow Agent under this Agreement.

13. Notices. All notices, demands and requests required or permitted to be given under the
provisions hereof must be in writing and shall be deemed to have been sufficiently given, upon
receipt, if (i) personally delivered, (ii) sent by telecopy and confirmed by phone or (iii) mailed
by registered or certified mail, with return receipt requested, or by overnight courier with
signature required, delivered to the addresses set forth below, or to such other address as a party
shall have designated by notice in writing to the other parties in the manner provided by this
paragraph:

	 	 	 
	(1) If to Company:

	 	Green Realty Trust, Inc.

40 E. Chicago Avenue, #203

Chicago, Illinois 60610

Telephone: (630) 470-9105

Facsimile: (630) 470-9105

	 
	 	 
	(2) If to the Escrow Agent:

	 	UMB Bank, N.A.

1010 Grand Blvd., 4th Floor

Mail Stop: 1020409

Kansas City, Missouri 64106

Attention: Lara Stevens,

Corporate Trust

Telephone: (816) 860-3017

Facsimile: (816) 860-3029

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	(3) If to Dealer Manager:
	 	Newport Coast Securities, Inc.

18872 MacArthur Blvd

First Floor

Irvine, California 92612

Facsimile: (949) 756-0981

13. Governing Law. This Agreement shall be construed and enforced in accordance with the
laws of the State of New York without regard to the principles of conflicts of law.

14. Binding Effect; Benefit. This Agreement shall be binding upon and inure to the benefit
of the permitted successors and assigns of the parties hereto.

15. Modification. This Agreement may be amended, modified or terminated at any time by a
writing executed by the Dealer Manager, the Company and the Escrow Agent.

16. Assignability. This Agreement shall not be assigned by the Escrow Agent without the
Company’s prior written consent.

17. Counterparts. This Agreement may be executed in one or more counterparts, each of which
will be deemed an original, but all of which together will constitute one and the same instrument.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for all
purposes, including the filing of any claim, action or suit in the appropriate court of law.

18. Headings. The section headings contained in this Agreement are inserted for convenience
only, and shall not affect in any way, the meaning or interpretation of this Agreement.

19. Severability. This Agreement constitutes the entire agreement among the parties and
supersedes all prior and contemporaneous agreements and undertakings of the parties in connection
herewith. No failure or delay of the Escrow Agent in exercising any right, power or remedy may be,
or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right,
power or remedy preclude any other or further exercise of any right, power or remedy. In the event
that any one or more of the provisions contained in this Agreement, shall, for any reason, be held
to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement.

20. Earnings Allocation; Tax Matters; Patriot Act Compliance; OFAC Search Duties. The
Company or its agent shall be responsible for all tax reporting under this Agreement. The Company
shall provide to Escrow Agent upon the execution of this Agreement any documentation requested and
any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of
2001, as amended from time to time. The Transfer Agent, or its agent, shall complete an OFAC
search, in compliance with its policy and procedures, of each subscription and shall inform the
Company if a subscription fails the OFAC search.

21. Miscellaneous. This Agreement shall not be construed against the party preparing it,
and shall be construed without regard to the identity of the person who drafted it or the party who
caused it to be drafted and shall be construed as if all parties had jointly prepared this
Agreement and it shall be deemed their joint work product, and each and every provision of this
Agreement

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shall be construed as though all of the parties hereto participated equally in the drafting hereof;
and any uncertainty or ambiguity shall not be interpreted against any one party. As a result of the
foregoing, any rule of construction that a document is to be construed against the drafting party
shall not be applicable.

22. Termination of the Escrow Agreement. This Agreement, except for Sections 8 and 11
hereof, which shall continue in effect, shall terminate upon written notice from the Company to the
Escrow Agent. Unless otherwise provided, final termination of this Agreement shall occur on the
date that all funds held in the Escrow Account are distributed either (a) to the Company or to
subscribers and the Company has informed the Escrow Agent in writing to close the Escrow Account or
(b) to a successor escrow agent upon written instructions from the Company.

23. Relationship of Parties. The Escrow Agent is not affiliated with either the Dealer
Manager or the Company, and this Agreement does not create any partnership or joint venture among
them.

     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their duly
authorized representatives as of the date first written hereinabove:

	 	 	 	 	 
	 	DEALER MANAGER: 

Newport Coast Securities, Inc.

 	 
	 	By:  	---------------------------
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMPANY:

Green Realty Trust, Inc.

 	 
	 	By:  	-----------------------------
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ESCROW AGENT:

UMB BANK, N.A.

 	 
	 	By:  	------------------------------
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

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EXHIBIT A

ESCROW FEES AND EXPENSES

	 	 	 	 	 	 	 	 	 
	Acceptance Fee
	 	 	 	 	 	 	 	 
	Review escrow agreement and establish account
	 	$	3,000	 	 	 	 	 
	Annual Fee
	 	 	 	 	 	 	 	 
	Maintain account
	 	$	3,000	 	 	 	 	 
	Transaction Fees
	 	 	 	 	 	 	 	 
	(a) per outgoing wire transfer
	 	$	30.00	 	 	 	 	 
	(b) per Form 1099 (Int., B or Misc.)
	 	$	5.00	 	 	 	 	 
	(c) per investment purchase, sale or settlement
	 	$	35.00	 	 	 	*	 

 

			
	*	 	Excludes money market mutual fund transactions

Fees specified are for the regular, routine services contemplated by the Escrow Agreement, and any
additional or extraordinary services, including, but not limited to disbursements involving a
dispute or arbitration, or administration while a dispute, controversy or adverse claim is in
existence, will be charged based upon time required at the then standard hourly rate. In addition
to the specified fees, all expenses related to the administration of the Escrow Agreement (other
than normal overhead expenses of the regular staff) such as, but not limited to, travel, postage,
shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be
reimbursable. Acceptance and first year annual fees will be payable at the initiation of the escrow
and annual fees will be payable in advance thereafter. Other fees and expenses will be billed as
incurred.

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EXHIBIT B

Payment Instructions

Escrow Agent Wiring Instructions:

UMB Bank, N.A.

ABA Routing Number: 101000695

Account Number: 9800006823

Account Name: UMB Bank, N.A., as Escrow Agent for Green Realty Trust,
Inc.

Attention: Lara Stevens

Checks Payable Information:

UMB Bank, N.A., as Escrow Agent for

Attention: Lara Stevens, Corporate Trust

1010 Grand Boulevard, 4th Floor

M/S 1020409

Kansas City, Missouri 64106

Company Wire Instructions:

Green Realty Trust, Inc.

c/o Bank of America

231 S. LaSalle St.

Chicago, IL 60604

ABA Routing Number: 026009593

Account Number: 002873103255

FFC Account Name: XXXXXXXX Corporation

FFC: xxxxxxxxxx

Attn: xxxxxxxxx

12Exhibit 10.7

Exhibit 10.7

***  Certain information contained in this agreement, marked in brackets [***], has been omitted
and filed separately with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.

FOURTH AMENDMENT TO

CREDIT AGREEMENT

Dated as of November 9, 2010

among

POWERSECURE INTERNATIONAL, INC.,

as the Borrower,

CITIBANK, N.A.,

as Administrative Agent and Co-Syndication Agent

SUNTRUST BANK,

as Co-Syndication Agent

BRANCH BANKING AND TRUST COMPANY,

as Documentation Agent

and

The Other Lenders Party Hereto

CITIBANK, N.A.

Sole Bookrunner

 

 

 

FOURTH AMENDMENT TO CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”), dated as of
November 9, 2010, among POWERSECURE INTERNATIONAL, INC., a Delaware corporation (the
“Borrower”), CITIBANK, N.A., in its capacity as a lender party to the Credit Agreement
defined below (“Citibank”), SUNTRUST BANK, in its capacity as a Lender (as defined in the
Credit Agreement) (“SunTrust”) and BRANCH BANKING AND TRUST COMPANY, in its capacity as a
Lender (as defined in the Credit Agreement) (“BB&T”), Citibank, SunTrust and BB&T are
hereby collectively referred as the “Lenders”) and CITIBANK, N.A., in its capacity as
Administrative Agent (the “Administrative Agent”).

BACKGROUND

A. The Borrower, the Lenders and the Administrative Agent are parties to that certain Credit
Agreement, dated as of August 23, 2007, as amended by that certain First Amendment to Credit
Agreement, dated as of January 17, 2008, that certain Second Amendment to Credit Agreement, dated
as of April 18, 2008, and that certain Third Amendment to Credit Agreement, dated as of
November 12, 2008 (said Credit Agreement, as amended, the “Credit Agreement”; the terms
defined in the Credit Agreement and not otherwise defined herein shall be used herein as defined in
the Credit Agreement).

B. The Borrower, the Lenders and the Administrative Agent desire to make amendments to the
Credit Agreement.

NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereafter set
forth, and for other good and valuable consideration, the receipt and adequacy of which are all
hereby acknowledged, the parties hereto covenant and agree as follows:

1. AMENDMENTS.

(a) The definition of “Applicable Rate” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:

“Applicable Rate” means the following percentages per annum, based upon the
Leverage Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(a):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Alternate	 
	 	 	 	 	 	 	 	 	 	 	Eurodollar	 	 	Base Rate for	 
	 	 	 	 	 	 	 	 	 	 	Rate for	 	 	Revolving	 
	 	 	 	 	 	 	Revolving	 	 	Revolving and	 	 	and Term	 
	Pricing Level	 	 	Leverage Ratio	 	Commitment Fee	 	 	Term Loans	 	 	Loans	 
	I	 	 	Less than 1.25 to 1.00
	 	 	0.375	 	 	 	2.000	 	 	 	0.250	 
	II	 	Greater than or equal to 1.25 to 1.00 but less than 2.25 to 1.00
	 	 	0.400	 	 	 	2.250	 	 	 	0.500	 
	III	 	Greater than or equal to 2.25 to 1.00 but less than 2.75 to 1.00
	 	 	0.450	 	 	 	2.750	 	 	 	1.000	 
	IV	 	Greater than or equal to 2.75 to 1.00
	 	 	0.5125	 	 	 	3.250	 	 	 	1.500	 

 

 

 

Any increase or decrease in the Applicable Rate resulting from a change in the Leverage
Ratio shall become effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered for any Fiscal Quarter pursuant to
Section 6.02(a); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section 6.02(a), then Pricing Level IV
shall apply as of the first Business Day after the date on which such Compliance Certificate
was required to have been delivered and shall remain in effect until the first Business Day
immediately following the date such Compliance Certificate is actually delivered to the
Administrative Agent. Notwithstanding the foregoing, the Applicable Rate in effect from and
after the Fourth Amendment Closing Date through and including the date the Compliance
Certificate is delivered pursuant to Section 6.02(a) for the Fiscal Quarter ending
December 31, 2010 shall be Level I.

In the event that any financial statement delivered pursuant to Section 6.01(a) or
6.01(b) or any Compliance Certificate delivered pursuant to Section 6.02(a) is shown
to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when
such inaccuracy is discovered), and such inaccuracy, if corrected, would have lead to a
higher Applicable Rate for any period (an “Applicable Period”) than the Applicable
Rate applied for such Applicable Period, then (i) the Borrower shall immediately deliver to
the Administrative Agent a correct Compliance Certificate for such Applicable Period,
(ii) the Applicable Rate shall be determined using the Pricing Level applicable for such
Applicable Period based upon the corrected Compliance Certificate, and (iii) the Borrower
shall immediately pay to the Administrative Agent the accrued additional interest and fees
owing as a result of such increased Applicable Rate for such Applicable Period, which
payment shall be promptly applied by the Administrative Agent in accordance with the terms
hereof. This paragraph shall not limit the rights of the Administrative Agent and the
Lenders under Section 2.08 and Article VIII and other provisions of this
Agreement. The obligations of the Borrower under this paragraph shall survive termination
of the Commitments and the repayment of all other Obligations hereunder.

 

2

 

(b) The definition of “Revolving Maturity Date” set forth in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:

“Revolving Maturity Date” means (a) November 12, 2013 or (b) such earlier date
as the (i) the Obligations become due and payable pursuant to this Agreement (whether
by acceleration, prepayment in full, scheduled reduction or otherwise) or (ii) there
shall exist an Event of Default under Section 8.01(f) of this Agreement.

(c) The definition of “Term Maturity Date” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:

“Term Maturity Date” means (a) November 12, 2015, or (b) such earlier date as
(i) the Obligations become due and payable pursuant to this Agreement (whether by
acceleration, prepayment in full, scheduled reduction or otherwise) or (ii) there shall
exist an Event of Default under Section 8.01(f).

(d) Section 1.01 of the Credit Agreement is hereby amended by adding the defined term
“Fourth Amendment Closing Date” in proper alphabetical order to read as follows:

“Fourth Amendment Closing Date” means the date that all conditions of
effectiveness set forth in Section 4 of the Fourth Amendment to Credit Agreement,
dated as of November 9, 2010, among the Borrower, the Lenders party thereto and the
Administrative Agent are satisfied.

(e) Section 2.02(a) of the Credit Agreement is hereby amended to read as follows:

(a) The Borrower may, by notice to the Administrative Agent (who shall promptly notify
the Lenders) not later than 45 days prior to November 12, 2013, elect to convert the portion
of the aggregate amount of Revolving Loans outstanding on November 12, 2013 (not to exceed
the PowerSecure Recurring Revenue Project Capital Allowance as of such date), into term
loans (“Term Loans”) in such aggregate amount. Term Loans may not be repaid and
then reborrowed.

(f) Section 7.02(k) of the Credit Agreement is hereby amended to read as follows:

(k) Investments in the form of Permitted Acquisitions; provided,
however, (i) the aggregate Acquisition Consideration for any Permitted Acquisition
shall not exceed $10,000,000 and (ii) the aggregate Acquisition Consideration for all
Permitted Acquisitions made after November 9, 2010 shall not exceed $20,000,000.

(g) Section 7.12(a) of the Credit Agreement is hereby amended to read as follows:

(a) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio as of
the end of any Fiscal Quarter of the Borrower to be less than 1.25 to 1.00.

 

3

 

*** Certain information contained in this agreement, marked in brackets [***], has been omitted
and filed separately with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.

(h) Section 7.12(d) of the Credit Agreement is hereby amended to read as follows:

(d) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth as
of the end of any Fiscal Quarter to be less than the sum of (i) $55,000,000, plus (ii) an
amount equal to 50% of Consolidated Net Income earned in each Fiscal Year ending after
December 31, 2010 (with no reduction for any net loss in any such Fiscal
Year), which shall be added after the completion of each Fiscal Year, plus (iii) an amount
equal to 100% of the aggregate increases in Shareholders’ Equity of the Borrower and its
Subsidiaries after December 31, 2009 by reason of the issuance and sale of Equity Interests
of the Borrower or any Subsidiary (other than issuances to the Borrower or a wholly-owned
Subsidiary), including upon any conversion of debt securities of the Borrower into such
Equity Interests, minus (iv) the amount of any non-cash charges or losses after
December 31, 2009 which do not subsequently represent a cash charge or loss, which shall be
deducted as of the Fiscal Quarter in which they are incurred.

(i) The Compliance Certificate is hereby amended to be in the form of Exhibit E
attached to this Fourth Amendment.

2. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof, the Borrower
represents and warrants that, as of the Fourth Amendment Closing Date:

(a) the representations and warranties contained in the Credit Agreement and the other Loan
Documents are true and correct on and as of the Fourth Amendment Closing Date as made on and as of
such date, except to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date, and except that the
representations contained in subsections (a) and (b) of Section 5.05 of the Credit
Agreement shall be deemed to refer to the most recent statements furnish pursuant to
subsections (a) and (b), respectively, of Section 6.01 of the Credit Agreement;

(b) no event has occurred and is continuing which constitutes a Default or an Event of
Default;

(c) (i) the Borrower has full power and authority to execute and deliver this Fourth
Amendment, (ii) this Fourth Amendment has been duly executed and delivered by the Borrower, and
(iii) this Fourth Amendment and the Credit Agreement, as amended hereby, constitute the legal,
valid and binding obligations of the Borrower, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable Debtor Relief Laws and by general
principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at
law) and except as rights to indemnity may be limited by federal or state securities laws;

(d) neither the execution, delivery and performance of this Fourth Amendment or the Credit
Agreement, as amended hereby, nor the consummation of any transactions contemplated herein or
therein, will violate any Law or conflict with any Organization Documents of the Borrower, or any
indenture, agreement or other instrument to which the Borrower or any of it property is subject;

(e) no authorization, approval, consent, or other action by, notice to, or filing with, any
Governmental Authority or other Person not previously obtained is required for (i) the

 

4

 

*** Certain information contained in this agreement, marked in brackets [***], has been omitted
and filed separately with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.

(f) execution, delivery or performance by the Borrower, of this Fourth Amendment or (ii) the
acknowledgement by each Guarantor of this Fourth Amendment; and

(g) [***], a Subsidiary of PowerSecure, Inc., has been inactive since August 6, 2010, the date
of its incorporation.

3. CONDITIONS TO EFFECTIVENESS. All provisions of this Fourth Amendment shall be
effective upon satisfaction or completion of the following:

(a) the Administrative Agent shall have received counterparts of this Fourth Amendment
executed by the Lenders;

(b) the Administrative Agent shall have received counterparts of this Fourth Amendment
executed by the Borrower and acknowledged by each Guarantor;

(c) the Administrative Agent shall have received an opinion of the Borrower’s counsel, in form
and substance satisfactory to the Administrative Agent, with respect to matters set forth in
Sections 2(c), (d), and (e) of this Fourth Amendment;

(d) the Administrative Agent shall have received in immediately available funds, for the
account of each Lender in connection with this Fourth Amendment, a fee in an amount equal to the
product of (i) 0.20% and (ii) such Lender’s Revolving Commitment;

(e) the documents required to be delivered pursuant to Section 6.14 of the Credit
Agreement with respect to [***] shall have been delivered; and

(f) the Administrative Agent shall have received, in form and substance satisfactory to the
Administrative Agent and its counsel, such other documents, certificates and instruments as the
Administrative Agent shall require.

4. REFERENCE TO THE CREDIT AGREEMENT.

(a) Upon the effectiveness of this Fourth Amendment, each reference in the Credit Agreement to
“this Agreement”, “hereunder”, or words of like import shall mean and be a reference to the Credit
Agreement, as affected and amended hereby.

(b) The Credit Agreement, as amended by the amendments referred to above, shall remain in full
force and effect and is hereby ratified and confirmed.

5. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all costs and
expenses of the Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Fourth Amendment and the other instruments and documents to be
delivered hereunder (including the reasonable fees and out-of-pocket expenses of counsel for
the Administrative Agent with respect thereto).

 

5

 

6. GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor (a) acknowledges,
consents and agrees to the execution, delivery and performance by the Borrower of this Fourth
Amendment, (b) acknowledges and agrees that its obligations in respect of its Guaranty (i) are not
released, diminished, waived, modified, impaired or affected in any manner by this Fourth Amendment
or any of the provisions contemplated herein and (ii) cover the Aggregate Revolving Commitments as
increased by this Fourth Amendment, (c) ratifies and confirms its obligations under its Guaranty,
and (d) acknowledges and agrees that it has no claims or offsets against, or defenses or
counterclaims to, its Guaranty.

7. EXECUTION IN COUNTERPARTS. This Fourth Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which when taken together shall
constitute but one and the same instrument. For purposes of this Fourth Amendment, a counterpart
hereof (or signature page thereto) signed and transmitted by any Person party hereto to the
Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be
treated as an original. The signature of such Person thereon, for purposes hereof, is to be
considered as an original signature, and the counterpart (or signature page thereto) so transmitted
is to be considered to have the same binding effect as an original signature on an original
document.

8. GOVERNING LAW; BINDING EFFECT. This Fourth Amendment shall be governed by and
construed in accordance with the laws of the State of New York applicable to agreements made and to
be performed entirely within such state, provided that each party shall retain all rights arising
under federal law, and shall be binding upon the parties hereto and their respective successors and
assigns; provided, however, that the Borrower may not assign any of its rights
arising from this Fourth Amendment or any other Loan Document, and any prohibited assignment shall
be null and void.

9. HEADINGS. Section headings in this Fourth Amendment are included herein for
convenience of reference only and shall not constitute a part of this Fourth Amendment for any
other purpose.

10. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FOURTH AMENDMENT, AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

6

 

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of the date
first above written.

	 	 	 	 	 
	 	POWERSECURE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Christopher T. Hutter
 	 
	 	 	Christopher T. Hutter 	 
	 	 	Vice President, Chief Financial Officer and 

Secretary 	 

Signature Page

 

 

 

	 	 	 	 	 
	 	CITIBANK, N.A., as Administrative Agent and Lender

 	 
	 	By:  	/s/ Gary Pitcock
 	 
	 	 	Gary D. Pitcock 	 
	 	 	Vice President 	 
	 	 	 	 	 
	 	SUNTRUST BANK, as Lender

 	 
	 	By:  	/s/ J. Lance Walton
 	 
	 	 	Name:  	J. Lance Walton 	 
	 	 	Title:  	Senior Vice President 	 
	 	 	 	 	 
	 	BRANCH BANKING AND TRUST COMPANY, 
as Lender

 	 
	 	By:  	Steven G. Ballard
 	 
	 	 	Name:  	Steven G. Ballard 	 
	 	 	Title:  	SVP 	 

Signature Page

 

 

 

*** Certain information contained in this agreement, marked in brackets [***], has been omitted
and filed separately with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.

ACKNOWLEDGED AND AGREED:

POWERSECURE, INC.

POWERSERVICES, INC.

ENERGYLITE, INC.

UTILITYENGINEERING, INC.

UTILITYDESIGN, INC.

WATERSECURE HOLDINGS, INC. (f/k/a Marcum Gas Transmission, Inc.)

REID’S TRAILER, INC.

EFFICIENTLIGHTS, LLC

SOUTHERN FLOW COMPANIES, INC.

POWERPACKAGES, LLC

MARCUM GAS METERING, INC. (f/k/a Metretek, Incorporated)

INNOVATIVE ELECTRONIC SOLUTIONS LIGHTING, LLC

[***]

	 	 	 	 	 
	By:

	 	/s/ Christopher T. Hutter	 	 
	 

	 	 

Christopher T. Hutter
	 	 
	 

	 	Chief Financial Officer for all	 	 

Signature Page

 

 

 

EXHIBIT E

FORM OF COMPLIANCE CERTIFICATE

Financial
Statement Date:                     

To: Citibank, N.A., as Administrative Agent under the Agreement defined below

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of August 23, 2007 (as amended,
extended, supplemented or otherwise modified in writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among PowerSecure International,
Inc. (the “Borrower”), the Lenders from time to time party thereto, and Citibank, N.A., as
Administrative Agent.

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                         of
the Borrower, that, as such, he/she is authorized to execute and deliver this Certificate to the
Administrative Agent on the behalf of the Borrower, and that:

[Use following for Fiscal Year-end financial statements]

1. Attached hereto as Schedule 1 are the Fiscal Year end audited financial statements
required by Section 6.01(a) of the Agreement for the Fiscal Year of the Borrower ended as
of the date set forth above as the Financial Statement Date, together with the report and opinion
of an independent certified public accountant required by such section. Such financial statements
fairly present in all material respects when considered in relation to the consolidated financial
statements of the Borrower and its Subsidiaries.

[Use following for Fiscal Quarter-end financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required by
Section 6.01(b) of the Agreement for the Fiscal Quarter of the Borrower ended as of the
date set forth above as the Financial Statement Date. Such financial statements fairly present in
all material respects when considered in relation to the consolidated financial statements of the
Borrower and its Subsidiaries.

2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or
has caused to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of the Borrower during the accounting period covered by the
attached financial statements.

 

Exhibit  E - Page 1

 

3. A review of the activities of the Borrower during such fiscal period has been made under the
supervision of the undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents [add, if applicable:
except as hereinafter listed], and to the best knowledge of the undersigned as of the date hereof
no Default or Event of Default under the Agreement has occurred and is continuing as of the date
hereof [add, if applicable: except the following list of each Default or Event of Default under the
Agreement, and its nature and status, that has occurred and is continuing as of
the date of this Certificate.]

4. The financial covenant analyses and information set forth on Schedule 2 attached hereto
are true and accurate on and as of the date set forth above as the Financial Statement Date.

 

Exhibit  E - Page 2

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate
as of                     
                    ,
                  
  .

	 	 	 	 	 
	 	POWERSECURE INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

Exhibit  E - Page 3

 

For the Fiscal Quarter/Year ended                     (“Financial Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

	 	 	 	 	 
	I. Section 7.12(a) – Fixed Charge Coverage Ratio.
	 	 	 	 
	 
	 	 	 	 
	A. Consolidated EBITDA:
	 	 	 	 
	 
	 	 	 	 
	1. Consolidated Net Income for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	2. To the extent involved in calculating such
Consolidated Net Income and without
duplication, Consolidated Interest
Charges:
	 	$	                    	 
	 
	 	 	 	 
	3. To the extent included in calculating such
Consolidated Net Income and without
duplication, amount of taxes, based on or
measured by income, deducted in
determining such Consolidated Net Income
for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	4. To the extent included in calculating such
Consolidated Net Income and without
duplication, depreciation and amortization
expense deducted in determining such
Consolidated Net Income for Subject
Period:
	 	$	                    	 
	 
	 	 	 	 
	5. To the extent included in calculating such
Consolidated Net Income and without
duplication, all non-cash charges or
losses which do not represent a cash
charge or loss for Subject Period or in a
future period:
	 	$	                    	 
	 
	 	 	 	 
	6. To the extent included in calculating such
Consolidated Net Income and without
duplication, non-recurring charges
consisting of Founders Severance Payments
and relocation expenses of not to exceed
$14,200,000 in aggregate amount:
	 	$	                    	 
	 
	 	 	 	 
	7. To the extent included in calculating such
Consolidated Net Income, Federal, state,
local and foreign income tax credits of
the Borrower and its Subsidiaries for
Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	8. To the extent included in calculating such
Consolidated Net Income, Consolidated
Interest Income for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	9. To the extent included in calculating such
Consolidated Net Income, all non-cash
items increasing Consolidated Net Income
for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	10. Consolidated EBITDA (Lines I.A.1. + 2. +
3. + 4. + 5. + 6. - 7. - 8. - 9.):
	 	$	                    	 

 

Exhibit E

 

	 	 	 	 	 
	B. Consolidated Lease Expense for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	C. Taxes based on income and paid in cash (net of tax refunds) for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	D. Consolidated Interest Charges (excluding, to the extent included in Consolidated Lease Expense,
the interest component of Capital Leases) for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	E. Scheduled payments of principal of Consolidated Funded Indebtedness (excluding, to the extent
included in Consolidated Lease Expense, the principal component of Capital Leases) for Subject
Period:
	 	$	                    	 
	 
	 	 	 	 
	F. Consolidated Lease Expense for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	G. Restricted Payments for Subject Period:
	 	$	                    	 
	 
	 	 	 	 
	H. During Revolving Availability Period, an amount equal to the product of (x) 0.20 and (y) the
amount by which Total Revolving Outstandings exceeds $15,000,000 on the Financial Statement
Date:
	 	$	                    	 
	 
	 	 	 	 
	I. Fixed Charge Coverage Ratio ((Line I.A.10. + I.B. – I.C.)  ̧ (Lines I.D. + I.E. + I.F. +
I.G. + I.H., if applicable)):
	 	              to 1.00	 
	 
	 	 	 	 
	Minimum permitted – See Section 7.12(a) of the Agreement
	 	 	1.25 to 1.00	 
	 
	 	 	 	 
	II. Section 7.12(b) – Leverage Ratio.
	 	 	 	 
	 
	 	 	 	 
	A. Consolidated Funded Indebtedness at Financial Statement Date:
	 	 	 	 
	 
	 	 	 	 
	1. all obligations for borrowed money and all
obligations evidenced by bonds,
debentures, notes, loan agreements or
other similar instruments:
	 	$	                    	 
	 
	 	 	 	 
	2. Non-contingent obligations outstanding in
respect of letters of credit (including
standby and commercial), bankers’
acceptances, bank guaranties, surety bonds
or other similar instruments:
	 	$	                    	 
	 
	 	 	 	 
	3. all obligations to pay the deferred
purchase price of property or services
(other than trade accounts payable in the
ordinary course of business):
	 	$	                    	 
	 
	 	 	 	 
	4. indebtedness (excluding prepaid interest
thereon) secured by a Lien on property
owned or being purchased (including
indebtedness arising under conditional
sales or other title retention
agreements), whether or not such
indebtedness shall have been assumed or is
limited in recourse:
	 	$	                    	 
	 
	 	 	 	 
	5. Attributable Indebtedness in respect of
Capital Leases and Synthetic Lease
Obligations:
	 	$	                    	 

 

Exhibit E

 

	 	 	 	 	 
	6. Guarantees of Indebtedness of types
specified in Lines II.A.1., II.A.2.,
II.A.3., II.A.4. and II.A.5. above:
	 	$	                    	 
	 
	 	 	 	 
	7. Consolidated Funded Indebtedness
(Lines II.A.1. + 2. + 3. + 4. + 5. + 6.):
	 	$	                    	 
	 
	 	 	 	 
	B. Consolidated EBITDA for Subject Period:
	 	 	 	 
	 
	 	 	 	 
	1. Consolidated EBITDA for Subject Period
(See Line I.A.10.):
	 	$	                    	 
	 
	 	 	 	 
	C. Leverage Ratio (Line II.A.7.  ̧ Line II.B.1.):
	 	               to 1.00	 
	 
	 	 	 	 
	Maximum permitted – See Section 7.12(b) of the Agreement
	 	 	3.25 to 1.00	 
	 
	 	 	 	 
	III. Section 7.12(c) – Asset Coverage Ratio.
	 	 	 	 
	 
	 	 	 	 
	A. 80% of Book Value of Accounts on the determination date:
	 	$	                    	 
	 
	 	 	 	 
	B. 60% of Book Value of Inventory on the determination date:
	 	$	                    	 
	 
	 	 	 	 
	C. 50% of Book Value of Net Fixed Assets on the determination date:
	 	$	                    	 
	 
	 	 	 	 
	D. Consolidated Funded Indebtedness (See Line II.A.7.):
	 	$	                    	 
	 
	 	 	 	 
	E. Outstanding Term Loans on the determination date:
	 	$	                    	 
	 
	 	 	 	 
	F. Minimum Asset Coverage Ratio (Lines III.A. + III.B. + III.C.)  ̧ (Lines III.D. – III.E.):
	 	               to 1.00	 
	 
	 	 	 	 
	Minimum required – See Section 7.12(c) of the Agreement
	 	 	1.25 to 1.00	 
	 
	 	 	 	 
	IV. Section 7.12(d) – Consolidated Tangible Net Worth.
	 	 	 	 
	 
	 	 	 	 
	A. Consolidated Tangible Net Worth:
	 	$	                    	 
	 
	 	 	 	 
	B. Minimum Consolidated Tangible Net Worth:
	 	 	 	 
	 
	 	 	 	 
	1. $55,000,000:
	 	$	                    	 
	 
	 	 	 	 
	2. 50% of Consolidated Net Income for each Fiscal Year beginning with
each Fiscal Year after December 31, 2010 (with no reduction for any
net loss in any such Fiscal Year):
	 	$	                    	 
	 
	 	 	 	 
	3. 100% of the aggregate increases in Shareholders’ Equity after
December 31, 2009 by reason of issuance and sale of Equity Interests
of the Borrower or any Subsidiary (other than issuances to the
Borrower or a wholly-owned Subsidiary):
	 	$	                    	 
	 
	 	 	 	 
	4. Non-cash charges or losses after December 31, 2009 which do not
subsequently represent a cash charge or loss:
	 	$	                    	 
	 
	 	 	 	 
	5. Minimum Consolidated Tangible Net Worth (Lines IV.B.1. + 2. + 3. - 4.:
	 	$	                    	 

 

Exhibit E

 

	 	 	 	 	 
	V. Section 7.12(e) – Debt to Worth Ratio.
	 	 	 	 
	 
	 	 	 	 
	A. Total Liabilities at Financial Statement Date:
	 	$	                    	 
	 
	 	 	 	 
	B. Consolidated Tangible Net Worth at Financial Statement Date
	 	$	                    	 
	 
	 	 	 	 
	C. Debt to Worth Ratio (Line V.A. ÷ Line V.B.):
	 	               to 1.00	 
	 
	 	 	 	 
	Maximum permitted – See Section 7.12(d) of the Agreement
	 	 	1.50 to 1.00	 

For purposes hereof, “Subject Period” is the period of four consecutive Fiscal Quarters ending on
the Financial Statement Date.

 

Exhibit E

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