Document:

Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (the “Agreement”)
is made and entered into this 31st day of May, 2003, by and among ELECTRIC CITY CORP., a Delaware corporation
(“ECC”), SWITCHBOARD APPARATUS, INC., a Delaware
corporation (the “Seller”),
HOPPENSTEADT ACQUISITION CORP., an
Illinois corporation (herein called “Purchaser”);

 

WITNESSETH:

 

WHEREAS,
ECC and its subsidiaries are engaged in the business of providing, among other
things, energy management services and the sale and manufacture of electric
distribution devices and equipment; and,

 

WHEREAS,
ECC owns and operates Seller as a wholly owned subsidiary, which subsidiary is
engaged in the business of selling and manufacturing of electrical distribution
devices and equipment (the “Switchgear
Business”); and,

 

WHEREAS,
ECC and the Seller have determined that they no longer desire to own and
operate the Switchgear Business and that they desire to sell and dispose of the
Switchgear Business; and,

 

WHEREAS,
Seller desires to sell to Purchaser, and Purchaser desires to purchase from
Seller, all of the assets, properties and business of Seller and the Switchgear
Business, except for the assets and properties expressly specified herein as
excluded, in accordance with all the terms and subject to all of the conditions
herein set forth, including Purchaser assuming certain liabilities and
obligations of Seller; and,

 

WHEREAS,  DALE
HOPPENSTEADT (“Hoppensteadt”)
is and has been since September, 2000 the President and Chief Operating Officer
of Seller and is also the President, a director and a shareholder of the
Purchaser.

 

NOW,
THEREFORE, in consideration of the premises hereof (which the parties agree are
hereby incorporated into and made a part of their agreement herein) and of the
mutual covenants and agreements herein set forth, it is hereby agreed as
follows:

 

1.                                      Definitions

 

“Agreement” shall mean
this Asset Purchase Agreement.

 

“Assumed Contracts” shall mean
all agreements and contracts listed on Schedule
4.9.

 

 

“Assumed Liabilities” shall mean collectively all of the liabilities and obligations of
Seller set forth or described on Schedule
3.1.

 

“Contract Date” shall mean
the date of this Agreement.

 

“Closing” shall mean
the act of completion of the closing of the transactions contemplated by this
Agreement on the Closing Date as set forth in Article 9 hereof.

 

“Closing Date” shall mean
the date on which the Closing takes place as set forth in paragraph 9.1 hereof.

 

“Excluded Assets” shall mean
collectively all of the assets and properties of Seller specifically excluded
from the Sale Assets as provided in paragraph 2.2 hereof.

 

“Financial Information” shall mean the financial information as of March 31, 2003 regarding the
Seller as set forth on Exhibit “A”.

 

“Hazardous Substances” shall mean any and all pollutants, contaminants, hazardous or toxic
materials, substances or wastes, including petrochemical products and wastes,
including without limitation those defined in the Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”),
the Superfund Amendments Reauthorization Act of 1986 (“SARA”), or under any other
applicable federal, state or local law, statute, regulation, order or decree
regulating substances threatening or potentially threatening to life, health,
welfare, public safety or the environment.

 

“Sale Assets” shall mean
collectively all of the assets, properties and business of Seller to be sold,
transferred, conveyed and assigned to Purchaser hereunder as provided in
paragraph 2.1 hereof.

 

2.                                      Assets,
Properties and Business Being Sold

 

2.1                               Sale Assets.  On the terms and subject to
the conditions herein set forth, at the Closing, Seller shall sell, assign,
transfer and convey to Purchaser, and Purchaser shall purchase and acquire, all
of the properties, assets and chooses in action, rights, licenses, permits,
franchises and interests of every kind and description, real, personal and
mixed, tangible and intangible, wherever located, owned by Seller (excluding
the Excluded Assets), as a going concern, together with any goodwill associated
therewith. Without limiting the generality of the foregoing, the Sale Assets
shall include the following:

 

2.1.1                                                All receivables of every kind and character, including without
limitation all of Seller’s trade accounts and customer notes receivable, drafts
and letters of credit and guarantees of any of the foregoing (herein called
collectively “Receivables”), but excluding those receivables set forth in paragraph 2.2.4 hereof.

 

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2.1.2                                                All of Seller’s inventories, if any, of every kind and character,
wherever located, including without limitation all raw materials, purchased
parts, manufactured parts and components, work in process and finished goods
(herein called collectively “Inventory”).

 

2.1.3                                                All of Seller’s fixed assets, including, without limitation, all
machinery and equipment, accessories, attachments and parts therefor, leasehold
improvements, office furniture and equipment, computers and computer equipment,
fixtures (herein called collectively “Fixed
Assets”).

 

2.1.4                                                All of Seller’s forms, office supplies, catalogs and warehouse and other
supplies, including without limitation pallets, strapping and other packaging,
production and manufacturing supplies and maintenance supplies (herein called
collectively “Supplies”).

 

2.1.5                                                All of Seller’s prepaid expenses and deposits (herein called
collectively “Prepaid Items”).

 

2.1.6                                                All of Seller’s books, records, computer tapes and discs, computer
software, files and other papers and documents of Seller, including without
limitation all price lists, sales records, sales correspondence, ledgers,
journals, statements, bills, invoices, customer and supplier lists, files and
records, data processing records and payroll and employment records (herein
called collectively “Books and Records”); provided, however, that ECC shall be entitled to keep copies of such
Books and Records to the extent reasonably required for ECC to comply with any
and all applicable laws and regulations to which ECC and/or Seller may be
subject to and for no other purposes.

 

2.1.7                                                All of Sellers patents, tradenames, trademarks, trademark registrations
and applications, know how, copyrights and copyright registrations, label
filings; brand names, logos and applications therefor, inventions, technical
expertise, research data, trade secrets, patterns, industrial designs, all
other intellectual property rights, and the goodwill symbolized thereby, and
all rights to recover for any past infringement thereof, and all right, title
and interest of Seller to the name “Switchboard Apparatus, Inc.” and all
variants whether owned by, licensed to, used in the Switchboard Business or in
which Seller have any rights.

 

2.1.8                                                All of Seller’s right, title and interest in and under the Assumed
Contracts.

 

2.1.9                                                All of Seller’s other assets, properties and rights specifically set
forth in this Agreement as being sold, transferred or assigned to, or purchased
by, Purchaser.

 

2.2                               Excluded Assets. Subject to the terms, provisions and conditions of paragraph 7.6
hereof, the only assets and properties that Seller shall retain and shall not
transfer to Purchaser, and which are specifically excluded from the Sale
Assets, are the following:

 

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2.2.1                                                All rights of Seller under or in connection with this Agreement.

 

2.2.2                                                The originals of minute books and stock transfer records of Seller.

 

2.2.3                                                All of Seller’s cash and cash equivalents on hand and in banks,
including checks deposited for collection.

 

2.2.4                                                The accounts receivable due Seller from each of Diamac Electric and
Electric City of Southern California.

 

2.2.5                                                The Retained Records as provided in paragraph 9.5 hereof.

 

2.2.6                                                All federal, state, local and foreign income and other tax refunds to
the extent that such refunds are attributable to any period prior to the
Closing Date.

 

2.3                               Consents. Seller shall use its commercially reasonable efforts, and Purchaser
shall cooperate therewith, to obtain all necessary consents to the assignment of
every unfilled customer order, unfilled purchase order, and Assumed Contracts
for which assignment to Purchaser is provided in this Agreement, to the extent
that same are not assignable without the consent of a third party.  In the event that, notwithstanding such
commercially reasonable efforts, Seller is unable to obtain any such consent,
this Agreement shall not require or constitute an assignment or attempted
assignment thereof if such assignment or attempted assignment would constitute
a breach thereof.  In such event, and
notwithstanding the absence of such consent, Purchaser as an agent for Seller,
at its option, may elect to perform and discharge Seller’s obligations
thereunder arising subsequent to the Closing Date, as provided herein, and
Purchaser shall, if and to the extent that it does so perform and discharge
Seller’s obligations, be entitled to all of the benefits arising therefrom or
thereunder subsequent to the Closing Date in the same mariner as though such
consent had been obtained.  The
foregoing notwithstanding, Seller shall be required to obtain a loan payoff
letter and an agreement to release any and all security and collateral
interests from American Chartered Bank (“ACB”) with respect to any interest which ACB may have in or to the Sale
Assets as a condition of the Closing.

 

3.                                      Consideration
and Assumption of Specific Liabilities by Purchaser

 

3.1                               Consideration.  As and for consideration of
the sale, transfer and assignment by Seller to Purchaser of the Sale Assets set
forth in paragraph 2 above (excluding any Excluded Assets as set forth in
paragraph 2.2), Purchaser agrees (i) to assume, satisfy and discharge the
Assumed Liabilities, as they become due and payable; and (ii) to pay to the
Seller, in cash, the sum of $798,000.00 (the “Cash Payment”).  The Cash Payment and the
Assumed Liabilities may hereinafter be collectively referred to as the “Purchase Price”.

 

3.2                               Seller’s Specific Representations Regarding
Assumed Liabilities.  With respect to Seller and the Switchgear
Business, Seller represents, warrants and

 

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covenants
to Purchaser that the following statements are true and correct as of the
Contract Date, and will be true and correct on the Closing Date:

 

3.2.1                                                Set forth on Schedule 3.1 is a true and correct list of all bank and car loans to which Seller is
a party.  Seller has performed in all
material respects its obligations under the loans, and there is no default or
event which with the giving of notice, the passage of time or both, would
result in a breach or default on the part of Seller under any such loan.  Seller has not assigned its interest under
the loans.  The loan amounts for the
loans as set forth on Schedule 3.1 is true and correct.  With
respect to such bank loans, Seller represents and warrants that Seller’s assets
have been pledged as part of the collateral for such bank loans.

 

3.3                               Liabilities Not Assumed by Purchaser.  Except for the Assumed
Liabilities set forth on Schedule 3.1, Seller shall retain all of its other
liabilities and obligations (“Excluded
Liabilities”).

 

3.4                               Seller to Pay Liabilities Not Assumed.  Seller shall pay and
discharge, as they become due and payable, and perform in accordance with their
respective terms all Excluded Liabilities Purchaser is not assuming and
Purchaser shall not be liable for Excluded Liabilities.

 

3.5                               Waiver of Compliance with Bulk Sales Laws.  The parties hereby waive
compliance with all applicable laws relating to or affecting bulk transfers and
sales, including without limitation notifying the Illinois Department of
Revenue pursuant to Section 902(d) of the Illinois Income Tax Act (35 ILCS
5/902(d)), and Section 5j of the Illinois Retailers Occupation Tax Act (35 ILCS
120/5j).

 

3.6                               Allocation of the Purchase Price.  The Purchase Price shall be
allocated for tax purposes among the Sale Assets as determined by the Purchaser
subject to the reasonable consent of Seller. 
The final agreed upon allocation shall be binding on the parties hereto,
and the parties hereto shall file their respective tax returns, including
filing with the Internal Revenue Service Form 8594 and all other information as
may be required by Section 1060 of the Internal Revenue Code and regulations
promulgated thereunder, in accordance with such allocation.

 

4.                                      Representations,
Warranties and Covenants of ECC and Seller.   ECC and Seller, jointly and severally, represent, warrant and
covenant to Purchaser that the following statements are true and correct as of
the Contract Date, and will be true and correct on the Accounting Date and on
the Closing Date:

 

4.1                               Organization.  ECC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.  Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.  Seller has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now conducted and to enter into this Agreement and
perform its obligations hereunder.  ECC
and Seller are each duly licensed or qualified as a foreign corporation and in
good standing in the State of Illinois.

 

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4.2                               Authority and Binding Obligation.  All corporate action necessary
to authorize the execution and delivery by ECC and Seller of this Agreement and
the other documents required to be executed by ECC and Seller hereunder and the
performance of their respective obligations hereunder and thereunder have been
duly taken. The execution and delivery of this Agreement and the other
documents required to be executed by ECC and Seller hereunder and the
performance of ECC’s and Seller’s covenants and agreements herein and therein
contained do not and will not constitute or result in any material breach of
any of the terms, conditions or provisions of, or constitute a default under,
any provision of law known to ECC or Seller or any indenture, agreement or
other instrument of which ECC or Seller is a party or by which either of them may
be bound, or any order, decree, judgment or regulation of any arbitrator, court
or governmental body having jurisdiction over ECC or Seller or any of the Sale
Assets, or result in the creation of any lien, charge or encumbrance upon any
of the Sale Assets.  This Agreement is a
legal, valid and binding obligation of ECC and Seller, enforceable in
accordance with its terms, except as the enforceability hereof may be limited
by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors’ rights generally or the availability of equitable
remedies.

 

4.3                               Compliance with Laws.

 

4.3.1                                                ECC has not with respect to Seller received any notice that  Seller is a potentially responsible party
for a federal, state, municipal or local cleanup site or corrective action
under any environmental law, statute, regulation, ordinance or order.

 

4.3.2                                                ECC has not received any notice of noncompliance not previously
corrected with reference to Seller’s operations or the Sale Assets.

 

4.3.3                                                ECC has not had an environmental audit conducted with respect to
Seller’s operations or any location at which Seller operates its business,
which has not been made available prior to the date of this Agreement to
Hoppensteadt. For purposes hereof, an environmental audit shall mean any
evaluation, assessment, study or test performed by or at the request of ECC or
Seller or at the request of or on behalf of any federal, state, municipal or
local administrative, regulatory or governmental agency or authority.

 

4.4                               Taxes.  Except for the taxes which are
Assumed Liabilities, Seller will pay or cause to be paid all federal, state,
local and foreign income taxes and other taxes of Seller which are then due or
become due from Seller with respect to any period ending on or before the
Closing Date or events that occurred on or before the Closing Date.

 

4.5                               Title to Transferred Assets.  Subject to the Assumed
Liabilities, at the Closing, Seller will have good and marketable title, free
and clear of any claim, liability, tax lien, security interest, encumbrance,
restriction, or adverse right of use or ownership to all of the Sale Assets,
other than the security interest of American Chartered Bank, which security
interest shall be released at Closing.

 

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4.6                               Customer Orders.  Between the Contract Date and
the Closing Date, Seller will not accept any customer order or commitment other
than in the usual and ordinary course of business and in accordance with
Seller’s past practices for such customer or with the express consent and
approval of Dale Hoppensteadt on behalf of Purchaser.

 

4.7                               Purchase Orders.  Between the Contract Date and
the Closing Date, Seller will not issue any purchase order or purchase
commitment other than in the usual and ordinary course of business or with the
express consent and approval of 
Hoppensteadt on behalf of Purchaser.

 

4.8                               Leases.  Between the Contract Date and
the Closing Date, Seller will not enter into any lease or sublease without the
prior written consent of Hoppensteadt on behalf of Purchaser.

 

4.9                               Contracts.  Between the Contract Date and
the Closing Date, Seller will not enter into any Contract, other than in the
ordinary course of business or with the prior written consent of Hoppensteadt
on behalf of Purchaser.

 

4.10                        Intentionally Deleted.

 

4.11                        Proprietary Rights.  Set forth on Schedule 4.11 is a true and correct list of all United States, state and foreign
patents, patent applications, trademarks, trademark applications, trade names,
service marks, label filings, copyrights, royalty rights, brand names, logos,
applications therefor and registrations thereof and inventions owned or used
(pursuant to license agreements or otherwise) by Switchboard in the conduct of
its business (herein called collectively the “Proprietary
Rights”), and the
validity of such items has not been challenged or questioned in any prior,
pending or threatened litigation or claim. With respect to the Proprietary
Rights

 

4.11.1                                          Seller has the sole, exclusive and unencumbered right to use the
Proprietary Rights (including applications for any thereof), and none of its
past or present employees, officers, directors or shareholders, or anyone else,
has any rights with respect thereto.

 

4.11.2                                          The transactions contemplated by this Agreement in no way alter or
impair Seller’s right to the Proprietary Rights.

 

4.11.3                                          Seller and/or ECC has received no notice or claim of infringement, or
any claim challenging or questioning the validity or effectiveness, of any of
the Proprietary Rights and Seller and/or ECC does not know of any valid basis
for any such claim.

 

4.11.4                                          Neither Seller or ECC is liable, nor has either Seller or ECC made any
contract or arrangement whereby it is or may become liable, to any person for
any royalty or other compensation for use of any of the Proprietary Rights.

 

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4.12                        Accounts Receivable.  As of the Closing Date and
excluding those two (2) receivables set forth in paragraph 2.2.4 above, Seller
will provide to Purchaser a list of all Seller’s Receivables known to ECC.  Neither ECC nor the Seller is guaranteeing
or making any representations or warranties as to the credit worthiness or any
accounts receivable obligor or the collectability of payments due under any
Receivable, or the completeness or accuracy of such list.

 

4.13                        Litigation.  Except as set forth in Schedule 4.13 hereto, there is no legal action, suit, arbitration, or other legal,
administrative or governmental proceeding pending, or to the knowledge of ECC,
threatened against or relating to Seller or any of the Sale Assets at law, in
equity, or before any governmental department, commission, board or agency, nor
is ECC aware that there is a basis for any of the foregoing.  ECC does not know of any default with
respect to any judgment, injunction, order or decree of any court or any
governmental agency or instrumentality by which it or any of the Sale Assets is
bound or subject.  No such judgment,
injunction, order or decree is now in effect which in any way restrains or
limits Seller in the conduct of its business.

 

4.14                        Intentionally Deleted.

 

4.15                        Labor Contracts and Controversies.  ECC does not know of any
collective bargaining agreement with any labor union or any local or
subdivision thereof to which Seller is a party except as set forth on Schedule 4.15 hereof.

 

4.16                        Retirement and Benefit Plans.  Set forth on Schedule 4.16 is a complete list of all medical, health, hospitalization, life
insurance and other employee benefit plans, policies and programs in effect
pertaining to any of the employees of Seller of which ECC has knowledge.

 

4.17                        Intentionally Deleted.

 

4.18                        Intentionally Deleted.

 

4.19                        Suppliers.  Except as set forth on Schedule 4.19, ECC has no knowledge of any impending termination, cancellation,
limitation, modification or adverse change material to Seller’s relationship
with any supplier or vendor.

 

4.20                        Intentionally Deleted.

 

4.21                        Transactions With Related Parties.  Neither ECC, the Seller nor
any of their respective officers or directors (other than Hoppensteadt and Mike
Stelter), or any person closely related to any of them owns any equity
interest, directly or indirectly, in any proprietorship, firm, company,
corporation, partnership or other business entity (other than equity interests
in ECC) which (i) is a competitor of Seller, (ii) is a customer or supplier of
Seller, or (iii) has any contractual or business relationship with Seller;
provided that the foregoing does not apply to the ownership by any of them of
not more than two percent (2%) of the outstanding security of any corporation
or partnership

 

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listed on a
national securities exchange or an over-the-counter security traded on NASDAQ.

 

4.22                        Intentionally Deleted.

 

 

4.23                        No Brokers or Finders.  No person, firm or corporation
has or will have as a result of any action of Seller, Seller’s employees,
agents or representative any right, interest or valid claim for any commission,
fee or other compensation as a finder or broker, or for acting in any similar
capacity in connection with this Agreement or the transactions provided for
herein.

 

5.                                      Representations,
Warranties and Covenants of Purchaser

 

Purchaser
represents, warrants and, covenants to Seller that the following statements are
true and correct as of the Contract Date, arid will be true and correct on the
Closing Date:

 

5.1                               Organization, Good Standing and Power.  Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Illinois, and has all requisite corporate power and authority to own,
lease and operate its properties, to carry on its business a now being
conducted, and to enter into this Agreement and perform its obligations
hereunder. Purchaser is authorized to do business and is in good standing in
all jurisdictions where the nature of its business or the property owned,
leased or operated by it so requires and failure to be so qualified would have
a material adverse effect upon it.

 

5.2                               Authority and Binding Obligation.  All corporate action necessary
to authorize the execution and delivery by Purchaser of this Agreement and the
other documents required to be executed by Purchaser hereunder, and the
performance of its obligations hereunder and. thereunder have been duly taken.
The execution and delivery of this Agreement and the other documents required
to be executed by Purchaser hereunder and the performance of Purchaser’s
covenants and agreements herein and therein contained do not and will not
constitute or result in any material breach of any of the terms, conditions or
provisions of, or constitute a default under, any provision of law known to
Purchaser or any indenture, agreement or other instrument of which Purchaser is
a party or by which it may be bound, or any order, decree, judgment, regulation
or law of any court or governmental body having jurisdiction over Purchaser and
do not and will not require the consent or approval of any other person, court
or governmental authority. This Agreement is a legal, valid and binding
obligation of Purchaser, enforceable in accordance with its terms, except as
the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors’ rights
generally or the availability of equitable remedies.

 

5.3                               No Brokers or Finders.  No person, firm or corporation
has or will have as a result of any action by Purchaser or Purchaser’s
employees agents or representatives any right, interest or valid claim for any
commission, fee or other

 

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compensation
as a finder or broker, or for acting in any similar capacity, in connection
with this Agreement or the transactions provided for herein.

 

5.4                               Purchaser’s
Knowledge.  Purchaser acknowledges that Hoppensteadt has
been the President and Chief Operating Officer of Seller since ECC acquired
Seller in September, 2000, and prior to that time Hoppensteadt was President
and Chief Executive Officer of Seller’s predecessor, Switchboard Apparatus,
Inc., an Illinois corporation. 
Purchaser further acknowledges that Hoppensteadt will continue to serve
in such capacity until the Closing hereunder. 
Purchaser further acknowledges and agrees that Hoppensteadt has unique
and comprehensive knowledge of Seller’s business and operations and the
Switchboard Business and Purchaser agrees that such knowledge shall be
attributed to Purchaser for all purposes of this Agreement.  Purchaser further acknowledges that the
principle purpose of the representations and warranties of ECC and Seller
contained in Section 4 of this Agreement is to obtain disclosure from ECC of
any events, facts or matters which are known to ECC but not known to
Hoppensteadt (if any) which relate to the Sale Assets or the Switchboard Business.  Accordingly,

 

5.4.1                                                                        Purchaser represents and warrants to ECC and Seller that neither
Purchaser nor Hoppensteadt has actual knowledge of any events, facts or matters
which are inconsistent with the representations and warranties of ECC and
Seller contained in this Agreement, and that Hoppensteadt has not withheld or
failed to disclose to ECC and Seller any material fact about the business or
affairs of Seller; and

 

5.4.2                                                                        Purchaser covenants and agrees that neither
ECC nor Seller shall be (or be deemed to be) in breach of any representation or
warranty as to which the foregoing clause (5.4.1) is false or inaccurate in any
material respect.

 

5.5                               Special Covenant. 
Purchaser, for itself and Hoppensteadt, agrees that Hoppensteadt will
not, in his capacity as an employee and officer of Seller during the period
from the date of this agreement through the Closing, take, or authorize to be
taken or consent to the taking of by any employee of Seller, any action which
would cause ECC or Seller to be in breach of any covenant of either of them
hereunder, and Purchaser agrees that neither ECC nor Seller shall be (or be
deemed to be) in default of any obligation hereunder by reason of any action
which is taken or permitted to be taken by or on behalf of Seller by Hoppensteadt
or with his consent or approval.

 

6.                                      Additional
Representations and Covenants.

 

6.1                               Access to Information.  ECC and Seller agree that
Seller will make available to Purchaser and its authorized representatives
during normal business hours throughout the period prior to the Closing Date
all such information concerning the affairs of Seller, including all
properties, books, records, accounts and other documents, for their inspection
and review and such access to Seller’s officers and employees, and agents and
representatives of Seller, including Seller’s Accountants, at their respective
offices, as Purchaser may reasonably request from time to time.  Purchaser covenants

 

10

 

and agrees
that it will hold and cause its authorized representatives to hold in strict
confidence all information so obtained, and if the transactions herein provided
for are not consummated as contemplated herein, Purchaser will return and cause
their authorized representatives to return all such information and materials
as ECC or Seller may request, and will not disclose or divulge to or use for
its benefits or the benefit of any other person, firm or corporation, or allow
its authorized to do so, any portion of any such data or information, provided
that Purchaser shall not be obligated to treat as confidential any information
which Seller does not treat as confidential, or of which Purchaser had specific
knowledge prior hereto or which is or becomes publicly known or available other
than by violation hereof.  Purchaser
acknowledges that ECC is a reporting company under the Federal Securities Laws
and accordingly that Purchaser may not offer to purchase or sell, or purchase
or sell, any securities of ECC at any time when Purchaser is in possession of
material non-public information concerning ECC, and that information concerning
Seller which is made available to Purchaser hereunder may constitute material
non-public information concerning ECC. 
Purchaser further agrees that Hoppensteadt has been and may be now or
hereafter in possession of information concerning Seller which is material
non-public information concerning ECC and that all such knowledge of
Hoppensteadt is attributed to Purchaser for purposes hereof.  Purchaser, for itself and Hoppensteadt,
agrees to keep all such material non-public information confidential and to
refrain from purchasing or selling, or offering to purchase or sell, any
securities of ECC at any time when any such material non-public information is
known to Hoppensteadt.

 

6.2                               Conduct of Business.  Seller represents, covenants
and agrees that from and after the Contract Date and through the Closing Date,
except as disclosed in this Agreement or the Exhibits and Schedules hereto,
Seller will conduct its business in a manner not materially different from its
past practices and only in the usual and ordinary course, and consistent
therewith Seller will use its commercially reasonable efforts to:

 

6.2.1                                                Preserve intact the present business organization, keep available the
services of its present employees, and preserve its relationships with its
customers and suppliers.

 

6.2.2                                                Maintain all of its assets and properties in customary repair, order and
condition, reasonable wear and use and damage by fire or unavoidable casualties
excepted, and will also continue to carry and keep in effect its existing
insurance policies or substitute policies providing substantially equivalent
coverage, subject to variation in amount required by the ordinary operation of
its business.

 

6.2.3                                                Maintain its books, accounts and records in the usual and regular manner
on a basis consistent with prior years.

 

6.2.4                                                Comply with all laws and regulations applicable to its business.

 

6.3                               Negative Covenants.  Between the Contract Date and
the Closing Date, ECC and Seller covenant and agree that Seller will not, as it
relates solely to

 

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Switchboard,
without obtaining the prior consent of Purchaser, which consent will not
unreasonably be withheld:

 

6.3.1                                                Issue or sell, or issue any rights to purchase or subscribe to, or
subdivide or otherwise change, any shares of its stock of any class.

 

6.3.2                                                Declare, set aside, or pay any dividends on, or make any distribution in
respect of, Seller’s stock of any class.

 

6.3.3                                                Purchase, redeem or otherwise acquire, directly or indirectly, any of
Seller’s stock of any class.

 

6.3.4                                                Merge or consolidate with or into any other corporation, sell all or
substantially all of its assets and properties, or change in any material
manner the rights of its shares of capital stock or the character of its
business.

 

6.3.5                                                Encumber, mortgage or pledge any of the Sale Assets.

 

6.3.6                                                Sell, assign or otherwise dispose of any interest in any of the Sale
Assets, except in the ordinary course of business, except for write-downs and
write-offs of accounts receivable to reflect uncollectible amounts.

 

6.3.7                                                Make or promise any increase in salaries or other compensation, other
remuneration or employment benefits of any officer, director or other employee;
except for routine adjustments made in the ordinary course of business.

 

6.3.8                                                Institute, settle or agree to settle any action or proceeding materially
affecting any of the Sale Assets before any court or other body.

 

6.4                               Employees.  Effective immediately after
the Closing Date, the Seller shall be deemed to have terminated all of
Switchboard’s employees listed on Schedule
6.4 and the Purchaser shall be
deemed to have offered employment to each of the individuals set forth on Schedule 6.4.  With respect to all of
Switchboard’s employees actually hired by Purchaser, Purchaser shall be solely
responsible for all of its obligations to such employees accruing from and
after the Closing Date.  On the Closing
Date, Purchaser shall assume as an Assumed Liability all of the Seller’s
obligations for periods after the Closing Date under and in respect of Seller’s
existing collective bargaining agreement with Local No. 134, International
Brotherhood of Electrical Workers.

 

6.5                               Receivables.  Any amounts collected after
the Closing Date by ECC or Seller with respect to any Receivable which is part
of the Sale Assets shall be promptly transmitted to Purchaser in the form
received.

 

6.6                               Insurance Proceeds and Claims.  In the event that between the
Contract Date and the Closing Date any of the Sale Assets shall have suffered
any destruction or damage by fire, accident or other casualty or Act of God
which either does not

 

12

 

materially
and adversely affect the conduct of the business of Seller or the Sale Assets
as a whole or with respect to which Purchaser waives in whole or in part the
condition precedent provided in paragraph 7.3 hereof, at the Closing at the
Seller’s option either (a) all proceeds of insurance pertaining to such damages
or destroyed property and all rights and claims of every kind arising as a
result of such damage or destruction shall become the property of Purchaser,
and Seller and/or cause ECC to assign, transfer and deliver to Purchaser all
said insurance proceeds, rights and claims, or (b) the Cash Payment shall be
reduced by the amount of such insurance proceeds.

 

7.                                      Conditions
Precedent to Obligations to Purchaser. 
All of the obligations of Purchaser hereunder are subject to the following
express conditions precedent (all or any of which may be waived in whole or in
part by Purchaser), having been fulfilled on or before the Closing Date:

 

7.1                               Representations and Warranties.  The representations and
warranties of ECC and Seller contained herein shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date, except for such changes therein
as are expressly required or permitted by the terms of this Agreement or
consented to in writing by Purchaser.

 

7.2                               Performance; Certificate.  ECC shall perform and observe
and cause Seller to perform and observe in all material respects all
obligations and conditions herein required to be performed or observed by them
or either of them on or prior to the Closing Date; and ECC shall deliver to
Purchaser a certificate dated the Closing of the Chief Executive Office of ECC,
certifying as to the correctness of all representations and warranties of ECC
and Seller as of such date and as to compliance with paragraph 7.1 and this
paragraph 7.2.

 

7.3                               Absence of Material Changes.  Since the Contract Date, there
shall not have been any material adverse change in the business, financial
condition or results of operations of Seller or in its properties, assets,
revenues, earnings, inventory, relationships with suppliers and customers,
labor relations or prospects, and none of the Sale Assets shall have suffered
any destruction or damage by fire, accident or other casualty or Act of God,
whether or not covered by insurance, which materially and adversely affects the
conduct of the business of Seller or the Sale Assets as a whole.

 

7.4                               No Litigation.  Except as disclosed by
Seller’s disclosure schedules, no claim, proceeding, investigation or
litigation, either administrative or judicial, shall be threatened or pending
against any of the parties hereto which, in the reasonable opinion of counsel
for Purchaser, presents a reasonable possibility that the transactions
contemplated by this Agreement would be enjoined or prevented, or that the
right of Purchaser to acquire, retain or use the Sale Assets or continue in the
same manner the operations and business of Seller, if and when the same are
acquired, without additional costs would be materially and adversely affected.

 

7.5                               Consents.  Written consent to the
assignment of all of Assumed Contracts which are material shall have been
obtained from the appropriate party.

 

13

 

7.6                               Financial Condition of
Switchboard.  On the Closing Date, Seller will not have a
net asset value of less than $868,949.00, which net asset value shall be
calculated based upon the Financial Information attached to this Agreement in Exhibit “A” in the manner provided for
in Exhibit “B” attached
hereto and made a part hereof.  To the
extent that the net asset value of Seller on the Closing Date shall be less (or
more) than $868,949.00 on the Closing Date, the Cash Payment shall be reduced
(or increased).  Seller and Purchaser
acknowledge and agree that as of the Closing Date that the value of the
inventory shall be estimated and that within ten (10) days of the Closing Date
Purchaser and Seller shall jointly prepare and agree on an inventory list as of
the Closing Date as being a true, complete and accurate inventory as of the
Closing Date and both Purchaser and Seller shall signify their respective
approval of the inventory list by signing a copy thereof.  Within ten (10) days after Purchaser and
Seller have completed, accepted and approved such inventory list, Purchaser and
Seller shall jointly calculate any adjustment to the net asset value, as herein
defined, and the party which may owe any sum or sums to the other shall pay
such sum or sums within ten (10) days of the agreed upon adjustment to the net
asset value.

 

8.                                      Conditions
Precedent to Obligations of Seller. 
All of the obligations of ECC and Seller hereunder are subject to the
following express conditions precedent (all or any of which may be waived in
whole or in part by Seller) having been fulfilled on or before the Closing
Date:

 

8.1                               Representations and Warranties. The representations and warranties of Purchaser contained herein shall
be true on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except for such other changes therein as
are expressly required or permitted by the terms of this Agreement or consented
to in writing by Seller.

 

8.2                               Performance; Certificate.  Purchaser shall have performed
and observed all covenants, obligations and conditions herein required to be
performed or observed by it on or prior to the Closing Date; and Purchaser
shall have delivered to ECC and Seller a certificate dated the Closing Date of
Purchaser’s Chief Executive Officer certifying as to the correctness of all
representations and warranties of Purchaser as of such date and as to
compliance with paragraph 8.1 and this paragraph 8.2.

 

8.3                               No Litigation:  No claim, proceeding,
investigation or litigation, either administrative or judicial, shall be
threatened or pending against any of the parties hereto which, in the
reasonable opinion of counsel for ECC and Seller, presents a reasonable
possibility that the transactions contemplated by this Agreement would be enjoined
or prevented.

 

8.4                               Hoppensteadt
Closing Agreement.   Purchaser and Hoppensteadt shall have
delivered to Seller and ECC the written agreement, in form and substance
satisfactory to ECC and Seller, of Hoppensteadt stating that, as a material
inducement to ECC and Seller to close the transactions contemplated hereby,
Hoppensteadt acknowledges that he is familiar with this Agreement (including
paragraphs 5.4 and 5.5 hereof) and further stating that:

 

14

 

(a)                                  Hoppensteadt has no knowledge of any events, facts or matters which are
inconsistent with the representations and warranties of ECC and Seller
contained in this Agreement;

 

(b)                                 Hoppensteadt has not, in his capacity as an employee and officer of
Seller during the period from the date of this Agreement through the Closing,
taken, or authorized to be taken or consented to the taking of by any employee
of Seller, any action which caused or resulted in ECC or Seller being in breach
of any covenant of either of them hereunder; and

 

(c)                                  agreeing to indemnify ECC and Seller for any Damages (as defined in
paragraph 10.4 hereof) sustained by either of them as a result of any breach of
or inaccuracy in the foregoing statements in clauses (a) and (b) of this
paragraph 8.4.

 

9.                                      Closing

 

9.1                               Closing Date.  The Closing shall take place
on May 31, 2003 at the offices of Burke, Warren, MacKay & Serritella, P.C.,
330 N. Wabash Ave., 22 Floor, Chicago, Illinois 60611, at 10:00 a.m., local
time, or at such other date, time and place as shall be fixed in writing by the
mutual consent of Seller and Purchaser. 
The Closing shall be deemed to be effective as of the close of business
on the Closing Date.

 

9.2                               Purchaser’s Deliveries.  At the Closing, Purchaser
shall execute and deliver, or cause to be executed and delivered, the
following:

 

9.2.1                                                Certified copy of the appropriate proceedings of the Board of Directors
of Purchaser authorizing and approving this Agreement and the transactions and
documents contemplated herein.

 

9.2.2                                                Instrument(s) of assumption executed by Purchaser as of the Closing Date
of all of the Assumed Liabilities including the Assignment and Assumption
Agreement in the form of Exhibit “C”.

 

9.2.3                                                Certificates of Good Standing for Purchaser from the Secretary of State
of the State of Illinois dated within five (5) days prior to the Closing Date.

 

9.2.4                                                Officers’ Certificate, duly executed by the required officers of
Purchaser, as provided in paragraph 8.2 hereof.

 

9.2.5                                                Such other documents as Seller’s counsel may reasonably request to more
effectively carry out the terms and provisions of this Agreement.

 

15

 

9.3                               Seller’s Deliveries.  At the Closing, Seller shall
execute and deliver, or cause to be executed and delivered, the following:

 

9.3.1                                                Certified copy of the appropriate resolutions of the Board of Directors
and Shareholders of Seller and of the Board of Directors of ECC authorizing and
approving this Agreement and the transactions and documents contemplated herein.

 

9.3.2                                                Bills of Sale, assignments, title documents and other instruments of
conveyance as may be necessary or appropriate to transfer, assign and convey to
Purchaser as of the Closing Date good and marketable title to all of the Sale
Assets, and to effect such other assignments and conveyances, as provided in
this Agreement, in form and substance reasonably satisfactory to counsel for
Purchaser.

 

9.3.3                                                An executed copy of the opinion of Seller’s counsel.

 

9.3.4                                                Certificate of good standing for Seller and ECC from the Secretary of
State of Delaware and Illinois, dated within five (5) days prior to the Closing
Date.

 

9.3.5                                                Officers’ Certificate, duly executed by the required officers of Seller
and ECC, as provided in paragraph 7.2 hereof.

 

 

9.3.6                                                Appropriate lien releases (or agreements to release lien satisfactory to
Purchaser) from with respect to the loan described in item 2 on Schedule 3.1
attached.

 

9.4                               Possession.  Upon the Closing, possession
of all of the Sale Assets and all of Seller’s leased real and personal property
being assigned to Purchaser hereunder shall be delivered to Purchaser.

 

9.5                               Books and Records.  Upon the Closing, except for
financial, tax and accounting records of Seller that ECC reasonably deems
necessary to retain for the purpose of preparing its tax returns and SEC
filings and reports, Seller shall deliver to Purchaser possession of the files,
records, computer printouts, contents of data bases and other documents and
papers that are included in the Sale Assets and are not Excluded Assets (herein
collectively called the “Records”). Seller shall retain possession of all such financial, tax and
accounting records and any other files, records and data not delivered to
Purchaser hereunder (herein collectively called the “Retained Records”). After the Closing, ECC and Seller and their representatives shall
have the right of access to said Records relating to any period ending on or
prior to the Closing Date, at all reasonable times during business hours and to
make copies thereof at their expense, and Purchaser and its representatives
shall have the right of access to said Retained Records relating to any period
ending on or prior to the Closing Date, at all reasonable times during business
hours and to make copies thereof at their expense. In the event that Purchaser,
within a period of five (5) years after the Closing Date, desires to dispose of
any of the Records, Purchaser shall give ECC and Seller at least thirty

 

16

 

(30) days’
prior written notice thereof and ECC and Seller shall have the right to take
possession of any of said Records that Purchaser desires to dispose of within
said 30-day period. In the event that ECC or Seller, within a period of five
(5) years after the Closing Date, desires to dispose of any of the Retained
Records or move any of the Retained Records outside of the Chicago, Illinois
area, ECC or Seller shall give Purchaser at least thirty (30) days’ prior
written notice thereof, and Purchaser shall have the right to take possession
of any of said, Retained Records that Seller desires to dispose of or move
within said 30-day period, Purchaser will use due care in taking care of the
Records while they are in its possession, and ECC and Seller will use due care
taking care of the Retained Records while they are in their possession.

 

10.                               Indemnification
and Survival

 

10.1                        Survival of Representations and Warranties of
ECC and Seller.  The representations and warranties of ECC
and Seller in this Agreement shall survive and remain in full force and effect
only until the first anniversary of the Closing.

 

10.2                        Survival of Representations and Warranties of
Buyer.  The representations and warranties of the Buyer in this Agreement
shall survive and retain in full force and effect only until the first
anniversary of the Closing.

 

10.3                        Claims for Breach of Representations and
Warranties.  To preserve a claim for a breach of a
representation or warranty, the party claiming the breach shall be obligated to
notify in writing the party claimed to be in breach of any such breach, or
facts that can reasonably be expected to give rise to such breach, while such
representation and warranty is still in full force and effect; failure to do so
shall bar a party’s claim of breach with respect to such representation or
warranty forever.

 

10.4                        Seller Indemnification.  Subject to the express
limitations and conditions set forth in this Article 10, ECC and the Seller
shall indemnify, defend and hold harmless the Buyer and its Affiliates from,
against and in respect of any and all damages, claims, losses and costs (the “Damages”) arising out of, resulting from or in any way related to:  (i) any breach of any representation or
warranty made by ECC or Seller in this Agreement or in any certificate or document
required to be delivered by ECC or Seller pursuant hereto; (ii) any failure to
perform or satisfy any of the covenants or agreements made by ECC or Seller in
this Agreement or in any certificate or document required to be delivered by
ECC or Seller pursuant hereto; (iii) any failure to perform or satisfy any of
the covenants and agreements made by ECC or Seller in this Agreement or in any
certificate or document required to be delivered by ECC or Seller pursuant
hereto; (iv) the Excluded Assets; and/or (v) Excluded Liabilities.

 

10.5                        Buyer Indemnification.  Subject to the express
limitations and conditions set forth in this Article 10, the Buyer shall
indemnify, defend and hold harmless ECC and the Seller from, against and in
respect of any and all Damages arising out of, resulting from or in any way
related to:  (i) any breach of any
representation or warranty made by the Buyer or Hoppensteadt in this Agreement
or in any certificate or document required to be delivered by Buyer or
Hoppensteadt pursuant hereto; (ii) any failure to

 

17

 

perform or
satisfy any of the covenants or agreements made by the Buyer or Hoppensteadt in
this Agreement or in any certificate or document required to be delivered by
Buyer pursuant hereto and/or (iii) the Assumed Liabilities.

 

10.6                        Procedure.  Promptly after the assertion
by any third party of any claim, demand or notice (a “Third Party Claim”) against any Person or Persons entitled to indemnification under this
Article IX (the “Indemnified Parties”) that results or could reasonably be expected to result in the
incurrence by such Indemnified Parties of any Damages for which the Indemnified
Party would be entitled to indemnification pursuant to this Agreement, such
Indemnified Parties shall promptly notify the parties from whom such
indemnification could be sought (the “Indemnifying
Parties”) of such
Third Party claim; provided, however, that any failure to give such notice
shall not waive any rights of an Indemnified Party except to the extent the
rights of the Indemnifying Party are actually prejudiced or to the extent that
any applicable period contemplated by Section 10.3 hereof has expired without
notice being given.  Thereupon, the
Indemnifying Parties shall have the right, upon written notice (the “Defense Notice”) to the Indemnified Parties within 30 days after receipt by the
Indemnifying Parties of notice of the Third Party Claim (or sooner if such
claim so requires) (“Defense Notice Deadline”) to conduct, at their own expense, the defense against the Third Party
Claim in their own names or, if necessary, in the name of the Indemnified
Parties.  The Defense Notice shall
specify the counsel the Indemnifying Parties shall appoint to defend such Third
Party Claim (the “Defense Counsel”), and the Indemnified Parties shall have the right to approve the
Defense Counsel, which approval shall not be unreasonably withheld.  In the event the Indemnified Parties and the
Indemnifying Parties cannot agree on such counsel within 10 days after the
Defense Notice is given, then the Indemnifying Parties shall propose an
alternate Defense Counsel, which shall be subject again to the Indemnified
Parties’ approval, which approval shall not be unreasonably withheld.  Any Indemnified Party shall have the right
to employ separate counsel in any such Third Party Claim and/or to participate
in the defense thereof, but the fees and expenses of such counsel shall not be
included as part of any Damages incurred by the Indemnified Party unless (A) the
Indemnifying Parties shall have failed to give the Defense Notice within the
prescribed period, (B) the interest of the Indemnified Party and the
Indemnifying Parties with respect to the Third Party Claim are sufficiently
adverse to prohibit the representation by the same counsel of both parties
under applicable Legal Requirements, ethical rules or equitable principles, or
(C) the employment of such counsel at the expense of the Indemnifying Parties
has been specifically authorized by the Indemnifying Parties.  The Party or Parties conducting the defense
of any Third Party Claim shall keep the other Parties apprised of all
significant developments.

 

10.7                        Settlement and Compromise.

 

(i)                                     At no time prior to the expiration of the Defense Notice Deadline shall
an Indemnified Party admit any liability with respect to or settle, compromise
or discharge any Third Party Claim without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed.

 

18

 

(ii)                                  Upon receipt of a Defense Notice, the Indemnified Party shall not admit
any liability with respect to, or settle, compromise or discharge any Third
Party Claim without the prior written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed.

 

(iii)                               In the event that the Indemnifying Party has not provided to the
Indemnified Party a Defense Notice with respect to Third Party Claim within the
Defense Notice Deadline, then the Indemnified Party may admit liability with
respect thereto, defend, settle, compromise and discharge such Third Party
Claim without in any way relieving the Indemnifying Party of its obligations
hereunder.

 

11.                               Seller
Covenant Not to Compete.  Seller
and ECC hereby covenant and agree that for a period of five (5) years following
the Closing Date, neither ECC nor Seller will:

 

(a)                                  alone or in conjunction with any other corporation, firm, partnership,
person, venture or other entity, directly or indirectly, engage in the design,
manufacture, sale or distribution of any products of the type presently being
designed, manufactured, sold or distributed by Seller in any geographical area
in which Seller was engaged in such business on the Closing Date; provided,
however, that neither ECC nor Seller will be deemed to be in violation of this
clause (a) by reason of any activities of any entity or person (or affiliate or
subsidiary thereof) which, after the Closing Date, acquires control of ECC or
Seller or with which ECC or Seller is merged or consolidated after the Closing
Date;

 

(b)                                 induce any employee, customer or supplier of Purchaser to terminate his,
her or its employment or business relationship with Purchaser; and

 

(c)                                  use or reveal any secret or confidential information relating to the
Switchboard Business acquired by Purchaser, provided, however, that the
foregoing shall not apply (i) to any information which, following the Closing
Date, is received by ECC or Seller from a third person other than Purchaser who
is lawfully in possession of such information and not in the violation of any
contractual or legal obligation to Purchaser with respect to such information,
or which is public knowledge or within the public domain other than as a result
of disclosures by ECC or Seller after the Closing Date, or (ii) to any
disclosure of any such information pursuant to requirements of law or legal
proceedings or in any dispute proceeding between the parties hereto.  In the event that ECC or Seller believes
that it may be necessary or appropriate to make disclosure of any such
confidential information pursuant to clause (c)(ii) preceding, if possible it
will provide Purchaser with reasonable advance notice of the applicable
circumstances in order to permit Purchaser the opportunity to seek an
appropriate protective order or similar ruling if Purchaser so desires.

 

It is the desire and intent of
the parties that the terms and provisions of this Article 11 be enforced to the
fullest extent permissible under the law and public policy applied by any
jurisdiction in which enforcement is sought. 
Accordingly, if and to the extent that any portion of this Article 11
shall be adjudicated to be invalid or unenforceable because it covers too
extensive a geographical area or too long a period of time, then said portion

 

19

 

shall be deemed reformed to the
least extent necessary to make such portion valid and enforceable.

 

12.                               Intentionally
Deleted.

 

13.                               Assignment.  Neither this Agreement nor the rights or
obligations contained herein shall be assignable by any party except with the
written consent of all of the other parties hereto. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, personal representatives, successors and assigns,
subject to the foregoing sentence.

 

14.                               Notices.  All notices, requests, demands and other
communications hereunder shall be in writing, and shall be deemed to have been
given when delivered in person or received by first class, registered or
certified U.S. mail, return receipt requested, postage and registration or
certification fees prepaid, or delivered by reliable overnight delivery
service, providing a receipt evidencing delivery, or by facsimile with a copy
also delivered by any of the foregoing means:

 

	
  If to Purchaser, to:

  	
   

  	
  Hoppensteadt Acquisition Corp.

  
	
   

  	
   

  	
  2820 South 19th
  Avenue

  
	
   

  	
   

  	
  Broadview, Illinois  60155

  
	
   

  	
   

  	
  Attention:  Dale Hoppensteadt, President

  
	
   

  	
   

  	
  Telephone:  (708) 450-0990

  
	
   

  	
   

  	
  Facsimile:  (708) 450-1032

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  Burke, Warren, MacKay &
  Serritella, P.C.

  
	
   

  	
   

  	
  330 North Wabash Avenue, 22nd
  Floor

  
	
   

  	
   

  	
  Chicago, Illinois  60611

  
	
   

  	
   

  	
  Attention:  Thomas W. Murphy, Esq.

  
	
   

  	
   

  	
  Telephone:  (312) 840-7000

  
	
   

  	
   

  	
  Facsimile:  (312) 840-7900

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Goschi & Goschi, Ltd.

  
	
   

  	
   

  	
  120 South LaSalle Street

  
	
   

  	
   

  	
  Chicago, Illinois  60603

  
	
   

  	
   

  	
  Attention:  Peter E. Goschi, Esq.

  
	
   

  	
   

  	
  Telephone:  (312) 641-3070

  
	
   

  	
   

  	
  Facsimile:  (312) 641-3002

  
	
   

  	
   

  	
   

  
	
  If to Seller, to:

  	
   

  	
  Electric City Corp.

  
	
   

  	
   

  	
  1280 Landmeier Road

  
	
   

  	
   

  	
  Elk Grove Village,
  Illinois  60007

  
	
   

  	
   

  	
  Attention:  Jeff Mistarz

  
	
   

  	
   

  	
  Telephone:  (847) 437-1666

  
	
   

  	
   

  	
  Facsimile:  (847) 437-4969

  

 

20

 

	
  with a copy
  to:

  	
   

  	
  Schwartz
  Cooper Greenberger & Krauss, Chtd.

  
	
   

  	
   

  	
  180 North
  LaSalle Street, Suite 2700

  
	
   

  	
   

  	
  Chicago,
  Illinois  60601

  
	
   

  	
   

  	
  Attention:  Andrew H. Connor, Esq.

  
	
   

  	
   

  	
  Telephone:  (312) 845-5118

  
	
   

  	
   

  	
  Facsimile:   (312) 782-8416

  

 

or at such other address as
hereafter shall be furnished by a notice sent in like manner by such addressee
to the others.

 

15.                               Termination

 

15.1                        This Agreement may be terminated any time prior to the Closing Date: (i)
by the mutual written consent of the parties; or (ii) by ECC and Seller if any
of the conditions provided for in Article 8 hereof shall not have been
satisfied, complied with or performed by June 30, 2003, and ECC and Seller
shall not have waived such failure of satisfaction, noncompliance or
nonperformance; or (iii) by Purchaser if any of the conditions provided for in
Article 7 hereof shall not have been satisfied, complied with or performed by
June 30, 2003, and Purchaser shall not have waived such failure of
satisfaction, noncompliance or nonperformance; or (iv) otherwise as expressly
provided in this Agreement.

 

15.2                        In the event that the Closing shall not take place on or before June 30,
2003, either party shall have the right, exercisable upon giving written notice
to the other party within five (5) days after said date, to terminate this
Agreement, unless such failure of Closing shall be due to the breach default or
intentional delay of the party so seeking to terminate this Agreement.

 

15.3                        Except for a termination pursuant to clause (i) of subparagraph 15.1
hereof, and except otherwise as expressly provided in this Agreement, the right
of any party to terminate this Agreement as provided in this Article 15 shall
be in addition to, and not in substitution for, any and all other relief to
which such party may be entitled, either at law, in equity or by agreement.

 

16.                               Miscellaneous

 

16.1                        Severability.  Every provision of this
Agreement is intended to be severable, and, if any term or provision is
determined to be illegal or invalid for any reason whatsoever, such illegality
or invalidity shall not affect the legality or validity of the remainder of
this Agreement.

 

16.2                        Exhibits, Schedules and Headings.  The Exhibits and Schedules to
this Agreement are hereby made a part hereof and shall be construed with and as
an integral part of this Agreement. The headings of the various Articles and
paragraphs of this Agreement have been inserted for convenience only, are not a
part of this

 

21

 

Agreement,
and shall not be deemed in any manner to modify, explain, enlarge, or restrict
any of the provisions of this Agreement.

 

16.3                        Expenses.  Except where otherwise
expressly provided for in this Agreement, each of the parties hereto shall pay
their own expenses, including without limitation the fees and expenses of their
respective attorneys and accountants, in connection with this Agreement and the
transactions contemplated herein, whether or not the Closing takes place.
Seller shall pay all sales and use taxes, if any, required on account of the
consummation of the transactions contemplated hereby.

 

16.4                        Waiver.  Failure or delay on the part
of any of the parties hereto to exercise any right, power or privilege
hereunder, or under any instrument executed pursuant hereto, shall not operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege preclude any other or further exercise thereof or of any
other right, power or privilege. All waivers hereunder must be in writing.

 

16.5                        Further Assurances. Following the Closing, the parties, without further consideration of
any kind, shall each execute and deliver, or cause to be executed and
delivered, such other instruments, and take, or cause to be taken, such other
action, as shall reasonably be requested by another party hereto to more
effectively assign, transfer and convey the Sale Assets to Purchaser or to more
effectively carry out the other terms and provisions of this Agreement. Seller
shall use reasonable efforts to assist Purchaser in effecting a smooth
transition in ownership and operation of the Sale Assets after the Closing
Date, but Seller shall not be required to incur any cost or expense other than
as specifically provided herein.

 

16.6                        Entire Agreement.  This Agreement (including the
Exhibits hereto and other documents referred to herein as having been delivered
or furnished by either party to the other) constitutes the entire Agreement and
supersedes all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof.

 

16.7                        Amendments.  This Agreement may not be
modified or changed except by an instrument or instruments in writing signed by
both of the parties hereto.

 

16.8                        Governing Law.  This Agreement shall be
governed and construed and enforced in accordance with the laws of the State of
Illinois without regard to its conflicts of law provisions.

 

16.9                        Gender and Number.  Whenever the context requires
or permits, words used in the singular shall be construed to mean or include
the plural and vice versa, and pronouns of any gender or, neuter, shall be deemed
to mean or include any other gender and neuter.

 

16.10                 Counterparts.  This Agreement may be executed
in as many counterparts as may be deemed necessary or convenient, each of which
when so executed shall be deemed an original, but all such counterparts shall
constitute one and the same instrument.

 

22

 

16.11                 Public Announcement.  The parties will cooperate as
to and jointly approve the contents of a general public announcement of this
transaction upon the execution and delivery of this Agreement.

 

16.12                 Intentionally Deleted.

 

16.13                 Fax Copies.  Purchaser, ECC and Seller
agree that “Facsimile” transmissions of signed documents shall be regarded and
accepted as if they bore original signatures. Promptly after such Facsimile
transmission the original documents bearing the original signatures shall be
provided to the other party.

 

16.14                 Arbitration.  Except as otherwise provided
in this Agreement, any controversy, dispute or claim between the parties
arising out of, related to or in connection with this Agreement or the
performance or breach hereof shall be submitted to and settled by arbitration
conducted by the American Arbitration Association in Chicago, Illinois, in
accordance with its commercial arbitration rules as then in effect; provided
that the arbitration shall be by a single arbitrator mutually selected by
Purchaser and Seller, and if the parties do not agree within twenty (20) days
after the date of notification of a request for such arbitration made by either
of the parties, the selection of the single arbitrator shall be made by the
American Arbitration Association in accordance with said rules. In addition to,
and not in substitution for any and all other relief in law or equity that may
be granted by the arbitrator, the arbitrator may grant equitable relief and
specific performance to compel compliance hereunder. The determination of the
arbitrator shall be accompanied by a written opinion of the arbitrator and
shall be final, binding and conclusive on the parties, and judgment on the
arbitrator’s award, including without limitation equitable relief and specific
performance, may be entered in and enforced by any court having jurisdiction
thereof. Fees and expenses of the American Arbitration Association and of the
arbitrator shall be borne as shall be determined by the arbitrator, and the
arbitrator may in his discretion award attorneys’ fees and expenses in addition
to any other remedy that is allowed and regardless of whether such remedy
includes an award of damages.

 

IN WITNESS
WHEREOF, the parties hereto have executed and delivered this Agreement as of
the date first above written.

 

 

	
   

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
  ELECTRIC CITY CORP.,

  a Delaware corporation

  	
   

  	
  SWITCHBOARD APPARATUS, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Jeffrey Mistarz

  	
   

  	
  By: 

  	
  /s/ Jeffrey Mistarz

  
	
  Name:

  	
  Jeffrey Mistarz

  	
   

  	
  Name:

  	
  Jeffrey Mistarz

  
	
  Title: 

  	
  CFO & Treasurer

  	
   

  	
  Title: 

  	
  Vice President

  
							

 

	
   

  	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HOPPENSTEADT ACQUISITION
  CORP.,

  an Illinois corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  /s/ Dale Hoppensteadt

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Dale Hoppensteadt

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
							

 

24Exhibit 10.2

 

STRATEGIC ALLIANCE, CO-MARKETING

AND LICENSING AGREEMENT

 

This Strategic
Alliance, Co-Marketing and Licensing Agreement (this “Agreement”) is made and
entered into as of the 31st day of May, 2003 by and between Hoppensteadt
Acquisition Corp., an Illinois corporation (“Supplier”) and Electric City
Corp., a Delaware corporation (“ECC”).

 

W I T N E S S E T H:

 

WHEREAS,
Supplier is a seller of electrical distribution devices and equipment,
including items which Supplier manufactures and items which Supplier purchases
from others and resells; and

 

WHEREAS, ECC
and its subsidiaries are engaged in the business of providing energy management
services and building control systems; and

 

WHEREAS, ECC
desires from time to time to purchase items from Supplier, which items may be
incorporated into products or services being sold by ECC and/or its
subsidiaries or may be purchased for resale; and

 

WHEREAS, the
parties desire to enter into this Agreement with respect to the terms upon
which ECC may from time to time place purchase orders with Supplier for ECC’s
own account and from time to time act as a sales representative or reseller for
Supplier’s products and with respect to certain other matters;

 

NOW,
THEREFORE, the parties agree as follows:

 

1.             Definitions.  Certain capitalized terms are defined in the
text hereof.  In addition, the following
terms have the meanings ascribed below when used in this Agreement:

 

“Due Date”
means, with respect to any Order for Products, the date specified in such Order
for the Products specified therein to be shipped.

 

“ECC Order”
means a purchase order transmitted by ECC to the Supplier for Products under
this Agreement under which ECC is the purchaser, which purchase order may be
either a hardcopy document or an EDI instrument sent to the Supplier via email
or internet or by another telecommunications means which has been used to
communicate with respect to this Agreement.

 

“EDI” means
electronic data interchange, including email.

 

“Margin” means
the profit after taking into consideration all costs associated with producing
the product including the cost of materials, shipping costs, costs of overhead,
including internal and external sales commissions, engineering costs if any and
any and all associated labor costs, both direct and indirect.

 

1

 

“Order” means
either an ECC Order or a Third Party Order, as applicable.

 

“Product”
means a product or service which the Supplier sells (which may be proprietary
or may be a product which is manufactured by a third party and which Seller
purchases for resale), as specified in the applicable Order, together with any
related product literature and documentation, operation, maintenance and safety
manuals, and warranties (including pass-through of any warranties of the
Supplier=s vendors).

 

“Third Party
Customer” means a purchaser of Products which ECC has identified and for which
ECC has issued an Order to the Supplier or from which ECC has obtained an Order
and transmitted it to the Supplier, or which has directly transmitted an Order
to the Supplier pursuant to sales solicitation efforts of ECC.

 

“Third Party
Order” means a purchase order transmitted by ECC or a Third Party Customer to
the Supplier for Products under this Agreement under which the Third Party
Customer is the purchaser, which purchase order may be either a hardcopy
document or an EDI instrument sent to the Supplier via email or internet or by
another telecommunications means which has been used to communicate with
respect to this Agreement.

 

2.             Appointment of ECC as Sales
Representative.  The Supplier hereby
appoints and authorizes, subject to the terms and conditions herein, ECC as a
non-exclusive independent sales representative for the purpose of soliciting
and transmitting to the Supplier Third Party Orders for all of Supplier’s
Products and services.  ECC agrees to
use reasonable efforts to solicit orders and promote the sale of the Supplier’s
products on projects and to customers that ECC has identified as prospective
targets (“Targets”).  ECC shall have the
right to be the exclusive sales representative for the Supplier to all accounts
listed on the attached Exhibit A (as it may be modified and in effect from time
to time, the “Exclusive Target List”), except that the parties recognize and
acknowledge that Supplier may not be able to grant exclusivity to ECC with
regard to certain Products that Supplier resells from others.  ECC and Supplier shall mutually agree on
additions to the Exclusive Target List from time to time based on consideration
of the strength of ECC’s customer relationships.  ECC additionally agrees to promote Supplier’s products from
time-to-time with the specifying engineering community.  Such sales efforts may result in additions
to the Exclusive Target List if mutually agreed to by both parties.  ECC shall be solely responsible for all
costs and expenses relating to its activities as such a sales representative,
and be an independent contractor and have no power or right to create any
obligation or liability, express or implied, on behalf of the Supplier.

 

3.             Sales of Products.  The Supplier hereby agrees to sell and
deliver to ECC or its Third Party Customers Products in accordance with the
terms and conditions of this Agreement and Orders transmitted to the Supplier
from time to time and accepted while this Agreement remains in effect.

 

4.             Commissions.  The Supplier shall pay ECC commissions based
upon the net invoice of shipments of Products under Third Party Orders,
exclusive of freight and transportation costs and any applicable sales or
similar taxes.  The commission amount
will be set according to the terms set forth on Exhibit B attached and may be
amended from time to time by agreement of the parties.

 

2

 

Commissions shall be payable on
or before the 30th day of the month following the receipt of payment from the
customer.  Upon termination of this
Agreement, the Supplier will submit to ECC, within ninety (90) days following
the date of such termination, a final accounting of the amount owed to ECC
pursuant to this Section 4.  At any
time, ECC may desire to act as a full project supplier, and under such terms
will act as a full reseller of Supplier’s Products and will earn a negotiated
markup on such a transaction.

 

5.             Term of Agreement.

 

(a)           This Agreement shall commence on May
30, 2003 and shall have an initial term of five (5) years and shall thereafter
automatically be extended for subsequent one (1) periods unless either party
terminates this Agreement.  This
Agreement shall automatically terminate if ECC is acquired by or merged with or
into any direct competitor of Supplier.

 

(b)           ECC may terminate this Agreement
pursuant to the provisions of Subsection 10(b).

 

(c)           Either party may terminate this Agreement
on a prospective basis by giving the other party not less than ninety (90)
days=notice of such termination, with such termination to be effective at the
end of the then current term hereof unless the notice of termination specifies
an earlier date (which shall be not less than ninety (90) days after the date
upon which such notice of termination is given).

 

(d)           Except as otherwise provided in
Section 10, no Order which has been placed and accepted hereunder shall be
affected by any such termination (unless the parties agree otherwise at that
time) and this Agreement shall continue to be applicable to all such pending
Orders until the same have been completed, even if such completion runs beyond
the specified date of termination.

 

(e)           Each party=s obligations under this
Agreement which by their nature and language would continue beyond the
termination, expiration or cancellation of this Agreement shall survive said
termination, expiration or cancellation of this Agreement.

 

6.             Prices, Terms of Payment.

 

(a)           Except as set forth in Subsection
4(c) below, the Supplier=s prices for Products hereunder shall be its best
available prices generally in effect from time to time.  Notwithstanding any other provision of this
Agreement, Supplier and ECC agree to mutually cooperate at all times on
respective prices, commissions and markups and to share proportionately in any
price concessions in order to win business. 
This provision does not create a binding obligation on either party to
accept any specific order and concession.

 

(b)           Payment terms for Products shipped
under each Order accepted hereunder shall be the Supplier’s standard terms in
effect from time to time except as otherwise provided in the applicable Order.

 

3

 

(c)           Any Order may specify prices for the
Products thereunder and unless the Supplier gives a timely notice that such
prices are not acceptable (or such Order is not accepted) as required by
Subsection 5(b) hereof, such prices shall be the applicable prices under such
Order.

 

7.             Orders.

 

(a)           Order shall be in writing and may be
on ECC’s or the applicable Third Party Customer’s standard Order form.  Each Order will specify the type(s) of
Product(s) ordered, quantities, applicable Due Dates, and the location to which
such Products are to be shipped.

 

(b)           The terms and conditions of this
Agreement shall take precedence and govern any accepted Order, notwithstanding
any contrary terms and conditions in such Order, unless such Order specifically
states otherwise and references this Agreement and the provision hereof which
is to be superseded in respect of such Order and the Supplier affirmatively
acknowledges such change to ECC in writing, in which case such conflicting
provision contained in such Order shall control as to that Order.

 

8.             Representations and Warranties.

 

(a)           ECC hereby represents and warrants to
the Supplier that ECC has all requisite power and authority to enter into and
perform its obligations under this Agreement and that this Agreement has been
duly and validly executed and delivered by ECC and constitutes the valid,
binding and enforceable obligation of ECC.

 

(b)           The Supplier hereby represents and
warrants to ECC that the Supplier has all requisite power and authority to
enter into and perform its obligations under this Agreement and that this
Agreement has been duly and validly executed and delivered by the Supplier and
constitutes the valid, binding and enforceable obligation of the Supplier.

 

(c)           All Products sold under this
Agreement or any Order shall be subject to the Supplier’s standard warranty in
effect at the time, which warranty shall extend to the original end user of the
Product, including, in the case of Products purchased by ECC and resold new,
ECC’s customer.  All standard written
product warranties offered by any vendor to the Supplier whose goods are
incorporated into any Products or are resold by the Supplier as Products shall
be passed through or assigned by the Supplier to original end users in
accordance with the terms of such warranties.

 

9.             Advertising, Brand Naming
Rights, Customer Access, Product Marketing and Trademarks.

 

(a)           The Supplier will provide to ECC
copies of inputs for all advertising literature and advertising materials of
the Supplier relating to the Products. 
The Supplier agrees that ECC may use such information and materials in
ECC=s advertising and promotional materials, including any internet “web” page,
and the Supplier hereby consents and gives permission to ECC to reproduce any
photographs , artwork and other graphic images which may be provided by the
Supplier for such use.

 

4

 

The Supplier agrees that ECC
shall have no liability for any content which has been provided by the Supplier
and the Supplier agrees to indemnify and hold harmless ECC for any claims,
actions or proceedings based on or arising out of any information,
photography,  logos or other artwork or
graphics provided by the Supplier, including, without limitation, any claim of
infringement of any trademark, trade name or similar right of any third
party.  The Supplier hereby consents to
ECC=s use of the name of the Supplier in ECC=s promotional and advertising
efforts.  ECC may also private label
Supplier’s Products where appropriate under the name Electric City Corp.

 

(b)           If requested by ECC in connection
with any Orders for Products which ECC intends to resell to end users, the
Supplier will place on such Products (or packaging therefore) a statement in
form and substance acceptable to ECC to the effect that such Products have been
manufactured by the Supplier for ECC.

 

(c)           Except as set forth above, neither
party shall use, without the prior written consent of the other, any trademark,
trade name of the other, or any other word or devices likely to be confused
therewith as part of its corporate, firm or trade name in connection with any
form of advertisement or otherwise.

 

(d)           For the term of this Agreement and
any extensions, ECC shall have access to all records and contact information
for Supplier’s customers and the end users who have purchased the Supplier’s
products at any time.  ECC will have the
right to pursue the sale of ECC’s energy saving and building automation
technologies to such customers and end users. 
ECC and Supplier will cooperate on joint marketing initiatives to pursue
the sale of each party’s products and services to such customers and end
users.  ECC will also have the right to
pursue the sale of ECC’s energy saving and building automation technologies to
any customers that ECC sells Supplier’s Products to.

 

(e)           For the term of this Agreement and
any extension, ECC will retain the rights to the brand name, TP3 and Total
Primary Power Package.  ECC may pursue
the sale of this concept in the future and will give Supplier the right of
first offer to manufacture the system with respect to such sales.  In the event that the Supplier declines any
such first offer, ECC shall be free to source the system or any elements
thereof from other vendors (and any such action in such circumstances by ECC
shall not be deemed to be in violation of any non-competition agreements
between ECC and the Supplier).

 

(f)            Supplier agrees that, for the term
of this Agreement and any extensions, if Supplier desires to sell energy saving
or building automation systems, it will only sell those systems produced and
supplied by ECC.  ECC agrees to provide
Supplier with similar rights as are provided to ECC by Supplier under this
Agreement, to the extent that ECC can do so without violating any other agreements
it may have with sales representatives, distributors and dealers of its
products.  While this Agreement is in
effect and for a period of one (1) year thereafter, Supplier agrees not to
compete with ECC in any manner related to the sale of energy savings and
building automation systems and service.

 

5

 

10.           Default.

 

(a)           Time is of the essence on all
Orders.  In the event that the Supplier
for any reason anticipates difficulty in complying with the requirements of any
Order, the Supplier shall promptly notify ECC and, if applicable, the affected
Third Party Customer thereof in writing. 
Accordingly,

 

(i)            if
the Supplier fails to perform in respect of any Order within the time specified
herein or any extension thereof; or

 

(ii)           if
the Supplier fails to perform any of the provisions of any Order, or so fails
to make progress so as to endanger timely performance of any Order in
accordance with its terms;

 

and in either of these two circumstances the Supplier does not cure
such failure within a period of thirty (30) days after receipt of notice
thereof from ECC or the affected Third Party Customer, then ECC or the affected
Third Party Customer may by written notice of default to the Supplier,
terminate the whole or any part of any affected Order (except with respect to
Products already completed and received and accepted by the purchaser under
such Orders hereunder).

 

(b)           In
addition, in the event that the Supplier shall be in breach or default of any
term, condition or covenants of this Agreement or any Order placed hereunder
and such breach or default shall continue for a period of thirty (30) days
after the giving of written notice thereof to the Supplier, or if any
bankruptcy or insolvency proceeding is commenced by or against the Supplier or
in the event of appointment of a receiver or trustee for the Supplier or its
assets  or an assignment by the Supplier
for the benefit of creditors, then ECC shall have the right to terminate this
Agreement by written notice to the Supplier or to cancel any affected ECC
Order(s) without any charge, obligation or liability whatsoever except as to
the payment for Products already completed and received and accepted by ECC.

 

(d)           The
rights and remedies provided in this Section 10 shall not be exclusive and are
in addition to any other rights and remedies provided hereunder or by law.

 

11.           Notices.  All notices or requests required to be given
hereunder and all other communications related to the Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered, or
sent by telefax or confirmed email, or overnight delivery courier service as
follows:

 

	
  If to ECC:

  	
   

  	
  Electric
  City Corp.

  
	
   

  	
   

  	
  1280
  Landmeier Road

  
	
   

  	
   

  	
  Elk Grove
  Village, IL  60007

  
	
   

  	
   

  	
  Attention:
  Chief Executive Officer

  
	
   

  	
   

  	
  Facsimile:
  (847) 437-4969

  
	
   

  	
   

  	
  Telephone:
  (847) 437-1666

  
	
   

  	
   

  	
  Email:

  

6

 

 

	
  If to the
  Supplier:

  	
   

  	
  Hoppensteadt
  Acquisition Corp.

  
	
   

  	
   

  	
  2820 South
  19th Avenue

  
	
   

  	
   

  	
  Bridgeview,
  IL  60155

  
	
   

  	
   

  	
  Attention:
  Dale Hoppensteadt

  
	
   

  	
   

  	
  Facsimile:
  (708) 450-1032

  
	
   

  	
   

  	
  Telephone:
  (708) 450-0990

  
	
   

  	
   

  	
  Email:

  

 

12.           Independent Contractors.  It is understood and agreed that ECC and the
Supplier are, and at all times during the effective period of this Agreement
shall remain, independent contractors. 
This Agreement shall not be construed as creating any relationship
between ECC and the Supplier=s employees.

 

13.           Assignment.  This Agreement may not be assigned by either
party hereto without the prior written consent of the other party, and any
purported assignment without such consent will be void.

 

14.           Waivers and Amendments.  The failure of either party hereto to
enforce at any time any of the provisions of this Agreement, to exercise any
election or option provided herein, or to require at any time the performance
by the other party of any of the provisions herein will not in any way be
construed to be a waiver of such provisions or the right to enforce the same at
any later time.  No amendment,
modification, or waiver of any provisions of this Agreement or consent to the
departure therefrom shall be effective unless in writing signed by duly
authorized officers or representatives of both parties.

 

15.           Severability.  If any term or provision of this Agreement
shall be found to be illegal or unenforceable then, notwithstanding same, this
Agreement shall remain in full force and effect and such term or provision
shall be deemed stricken, but the parties shall negotiate in good faith to try
agree upon a replacement provision hereto which will be legal and enforceable
and has the effect of providing substantially the same rights and benefits as
the provision which has been deemed stricken.

 

16.           Headings.  The headings of each section of this
Agreement are provided for convenience only and are not part of this
Agreement.  If any conflict of
interpretation arises between a heading and the text of this Agreement, the
text will control.

 

17.           Governing Law.  This Agreement will be governed by the
internal laws (as opposed to conflicts of laws) of the State of Illinois, and
by applicable United States federal law.

 

18.           Entire Agreement.  This Agreement and the attachments hereto
and made a part hereof sets forth the entire agreement of the parties with
respect to the subject matter hereof and supersedes and merges all prior
agreements and understandings.

 

19.           Binding Arbitration.  Any controversy, dispute or claim between
the parties arising out of, related to or in connection with this Agreement or
the performance or breach hereof shall be

 

7

 

submitted to and settled by
arbitration conducted by the American Arbitration Association in Chicago,
Illinois, in accordance with its commercial arbitration rules as then in
effect; provided that the arbitration shall be by a single arbitrator
mutually selected by ECC and Supplier, and if the parties do not agree within
twenty (20) days after the date of notification of a request for such
arbitration made by either of the parties, the selection of the single
arbitrator shall be made by the American Arbitration Association in accordance
with said rules.  In addition to, and
not in substitution for any and all other relief in law or equity that may be
granted by the arbitrator, the arbitrator may grant equitable relief and
specific performance to compel compliance hereunder.  The determination of the arbitrator shall be accompanied by a
written opinion of the arbitrator and shall be final, binding and conclusive on
the parties, and judgment on the arbitrator’s award, including without
limitation equitable relief and specific performance, may be entered in and
enforced by any court having jurisdiction thereof.  Fees and expenses of the American Arbitration Association and of
the arbitrator shall be borne as shall be determined by the arbitrator, and the
arbitrator may in his discretion award attorneys’ fees and expenses in addition
to any other remedy that is allowed and regardless of whether such remedy
includes an award of damages.

 

[Balance of page intentionally
left blank; signature page follows.]

 

8

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered by their duly authorized representatives as of the date first set
forth above.

 

 

	
   

  	
  HOPPENSTEADT
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Dale
  Hoppensteadt

  	
   

  
	
   

  	
  Name:

  	
  Dale
  Hoppensteadt, President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ELECTRIC
  CITY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jeffrey
  Mistarz

  	
   

  
	
   

  	
  Name:

  	
  Jeffrey
  Mistarz

  	
   

  
	
   

  	
  Title:

  	
  CFO &
  Treasurer

  	
   

  
										

 

9

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