Document:

EXHIBIT 10.45

 

THIS

DOCUMENT PREPARED

BY AND WHEN

RECORDED

MAIL TO:

 

Jeffrey A. Hechtman, Esq.

Horwood Marcus & Berk Chtd.

180 North LaSalle Street

Suite 3700

Chicago, Illinois 60601

 

 

MORTGAGE,

ASSIGNMENT OF LEASES

AND

RENTS, AND SECURITY AGREEMENT

 

 

THIS MORTGAGE is made as of the 29th day of May, 2002 by ELECTRIC

CITY CORP., a Delaware corporation (“Mortgagor”) with a mailing address of 1280 Landmeier Road, Elk

Grove Village, Illinois, and AMERICAN

CHARTERED BANK, an Illinois state banking association, with a

mailing address of 1119 East Higgins Road, Schaumburg, Illinois 60173,

Attn:  William D. Provan (“Bank”).

 

A.            Pursuant to that certain Loan Agreement

dated as of even date herewith by and between Bank and Mortgagor, Switchboard

Apparatus, Inc., a Delaware corporation and Great Lakes Controlled Energy

Corporation, a Delaware corporation (collectively, “Borrowers”) (the “Loan

Agreement”), Bank has agreed to make available to Borrowers three

credit facilities described as follows:

 

(1)                                  a revolving credit facility with a

maximum principal amount at any one time outstanding equal to the lesser of

$2,000,000.00 or the Borrowing Base (as defined in the Loan Agreement),

evidenced by that certain Revolving Note dated as of the date hereof (the

“Revolving Note”);

 

(2)                                  a term loan in the principal amount

of $400,000.00 evidenced by that certain Term Note executed by Indemnitors in

favor of Lender, dated as of the date hereof (the “Term Note”); and

 

(3)                                  a mortgage loan in the principal

amount of $735,000.00 evidenced by that certain Mortgage Note dated as of the

date hereof (the “Mortgage Note”, which together with the Revolving Note and

the Term Note are collectively referred to as the “Note”).

 

B.            TO SECURE to Bank the repayment of the indebtedness

evidenced by the Note, with interest thereon; the payment of all charges

provided herein and all other sums, with interest

 

 

thereon, advanced in accordance herewith to protect the security of

this Mortgage; and the performance of the covenants and agreements contained

herein and in the Note and the Loan Agreement, all future advances and all

other indebtedness of Borrowers to Bank whether now or hereafter existing

(collectively, the “Secured Indebtedness”) and also in consideration of Ten

Dollars ($10.00), the receipt and sufficiency of which is hereby acknowledged,

Mortgagor does hereby convey, grant, mortgage and warrant to Bank and its

successors and assigns, forever, in all and singular with MORTGAGE COVENANTS,

the real estate (“Real Estate”) located in the County of Cook, State of

Illinois commonly known as 1280 Landmeier Road, Elk Grove Village,

Illinois and legally described on Exhibit

A attached hereto, subject only to covenants, conditions, easements and

restrictions set forth on Exhibit B, if any (“Permitted Encumbrances”).

 

C.            TOGETHER WITH all buildings, structures, improvements,

tenements, fixtures, easements, mineral, oil and gas rights, water rights,

appurtenances thereunto belonging, title or reversion in any parcels, strips,

streets and alleys adjoining the Real Estate, any land or vaults lying within

any street, thoroughfare, or alley adjoining the Real Estate, and any

privileges, licenses, and franchises pertaining thereunto, all of the foregoing

now or hereafter acquired, all leasehold estates and all rents, issues, and

profits thereof, for so long and during all such times as Mortgagor, its

successors and assigns may be entitled thereto, all the estate, interest,

right, title or other claim or demand which Mortgagor now has or may hereafter

have or acquire with respect to (i): proceeds of insurance in effect with

respect to the Property (as hereinafter defined) and (ii) any and all awards,

claims for damages, settlements and other compensation made for or consequent

upon the taking by condemnation, eminent domain or any like proceeding, or by

any proceeding or purchase in lieu thereof, of the whole or any part of the

Property, including, without limitation, any awards and compensation resulting

from a change of grade of streets and awards and compensation for severance

damages (which are pledged primarily and on a parity with the Real Estate and

not secondarily), and all apparatus, equipment or articles now or hereafter

located thereon used to supply heat, gas, air conditioning, water, light,

power, refrigeration (whether single units or centrally controlled), and

ventilation, and any other apparatus, equipment or articles used or useful in

the operation of the property including all additions, substitutions and

replacements thereof.  All of the

foregoing are declared to be a part of the Real Estate whether physically

attached or not, and it is agreed that all similar apparatus, equipment,

articles and fixtures hereafter placed on the Real Estate by Mortgagor or its

successors or assigns shall be considered as constituting part of the Real

Estate.  (All of the foregoing, together

with the Real Estate are hereinafter referred to as the “Property”.)

 

To have and to

hold the Property unto the Bank, its successors and assigns forever, for the

purposes and uses set forth herein, free from all rights and benefits under any

Homestead Exemption laws of the state in which the Property is located, which

rights and benefits Mortgagor does hereby expressly release and waive.

 

Mortgagor and Bank

covenant and agree as follows:

 

1.             Payment of

Principal and Interest.  Mortgagor will promptly pay or cause to be

paid when due all Secured Indebtedness.

 

2.             Payment

of Taxes.  Mortgagor

shall pay all general and special real estate and

 

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property taxes and

assessments on the Property when due. 

Mortgagor will, upon written request, furnish to Bank duplicate receipts

therefor within thirty (30) days following the date of payment.  Mortgagor shall pay in full “under protest”

any tax or assessment which Mortgagor may desire to contest, in the manner

provided by law.

 

2.1           Tax Deposits.  Upon

the occurrence of an Event of Default (as defined herein), Mortgagor will

deposit with the Bank commencing on the first day of each month following such

request or Event of Default and continuing on the first day of each month

thereafter, a sum equal to all real estate taxes and assessments (general and

special) next due upon or for the Property (the amount of such taxes next due

to be based upon the Bank’s reasonable estimate as to the amount of taxes and

assessments to be levied and assessed) reduced by the amount, if any, then on

deposit with the Bank divided by the number of months to elapse before one (1)

month prior to the date when such taxes and assessments will become due and

payable.  Such deposits are to be held

without any allowance for interest to Mortgagor and are to be used for the

payment of taxes and assessments (general and special) on the Property next due

and payable when they become due.  If

the deposited funds are insufficient to pay any such taxes or assessments

(general or special) when the same become due and payable, the Mortgagor shall,

within ten (10) days after demand therefore from the Bank, deposit such

additional funds as may be necessary to pay such taxes and assessments (general

and special) in full.  If the funds so

deposited exceed the amount required to pay such taxes and assessments (general

and special) for any year, the excess will be applied to a subsequent deposit

or deposits.  The deposits need not be

kept separate and apart from any other funds of the Bank.

 

3.             Application of

Payments.  All payments received by Bank under this

Mortgage, the Note and all other documents given to Bank to further evidence,

secure or guarantee the Secured Indebtedness (collectively, as amended,

modified, extended or renewed, the “Loan Documents”) will be applied by Bank

first to payments required from Mortgagor to Bank under Paragraph 2, then to

any sums advanced by Bank pursuant to Paragraph 8 to protect the security of

this Mortgage, then to interest payable on the Note which may be due, and then

to principal payable on the Note (and if principal is due in installments,

application shall be to such installments in the order of their maturity,

except that any prepayments may be applied to installments in inverse order of

maturity).  Any applications to

principal of proceeds from insurance policies, as provided in Paragraph 6, or

of condemnation awards, as provided in Paragraph 10, will not extend or

postpone the due date of any monthly installments of principal or interest, or

change the amount of such installments or of the other charges or payments

provided in the Note or other Loan Documents.

 

4.             Permitted

Encumbrances.  Except for the Permitted Encumbrances

or as permitted by the Loan Agreement, Mortgagor will not, without the prior

written consent of Bank, incur any additional indebtedness or create or permit

to be created or to remain, any mortgage, pledge, lien, lease, hypothecation,

encumbrance or charge on, or conditional sale or other title retention

agreement, with respect to the Property or any part thereof or income

therefrom, other than the other Loan Documents and the Permitted Encumbrances.

 

5.             Mechanics’ Liens; Other Liens.

 Mortgagor will not suffer or permit

any mechanics’ lien claims to be filed or otherwise asserted against the

Property, and will promptly discharge the same if any claims for lien or any

proceedings for the enforcement thereof are filed 

 

3

 

or commenced.  Except for the Permitted Encumbrances,

Mortgagor will not cause, create, suffer or otherwise permit to exist, any lien

security interest, or other encumbrance against the Property or the other Collateral

(as hereinafter defined).

 

6.             Insurance.

 

6.1           Definitions.  For

purposes of this Paragraph 6:

 

“Premises” means all land, improvements and

fixtures.

 

“Real Estate” means only the land.

 

6.2           Requirements.  Mortgagor, at its sole cost and expense,

shall insure and keep insured the Premises against such perils and hazards, and

in such amounts and with such limits, as Bank may from time to time require,

and, in any event, including but not limited to:

 

(a)                                  Insurance

of the Premises against loss or damage by fire or other casualty on an

“all-risk” form, including demolition and increased cost of construction,

debris removal and pollution clean-up in the full replacement cost of the

Premises (including increased cost of law and ordinance coverage), without deduction

for foundations and footings (and without co-insurance).

 

(b)                                 Insurance

against loss or damage by flood or mud slide in compliance with the Flood

Disaster Protection Act of 1973, as amended from time to time, if the Premises

are situated in an area designated as a special flood hazard area, in amounts

equal to the full replacement value of the Premises.

 

(c)                                  Insurance

on the Premises against loss or damage from an accident to and/or caused by

boilers and machinery, including but not limited to:  heating apparatus, pressure vessels, pressure pipes, electrical

or air conditioning equipment on a blanket comprehensive coverage form, in such

amount as Mortgagor shall deem advisable and as approved by Bank.  Additional provisions providing coverage for

removal of contaminated equipment and/or hazardous or toxic substances

contained within such equipment to approved disposal sites shall be considered

and obtained if required by Bank.

 

(d)                                 Commercial

general liability insurance covering Mortgagor ownership of and operations at

the Premises including personal injury; employee benefits liability; products

and completed operations liability; blanket contractual liability; advertising

liability; automobile liability including owned, non-owned or hired vehicles; garage

liability and garage keeper’s legal liability; and having a limit of not less

than $2,000,000.00 on a per occurrence basis.

 

4

 

(e)                                  At

all times when renovations are occurring at the Premises, Contractor’s

Liability Insurance to a limit of not less than $2,000,000.00 on a per

occurrence basis covering the Contractor’s construction operations at the

Premises with the Mortgagor and the Bank as additional insureds.

 

(f)            Such other insurance

as may be reasonably requested by Bank.

 

6.3           Policy

Requirements.  All insurance shall:

 

(a)           be carried in companies with a Best’s rating of A/X or better, or

otherwise acceptable to Bank;

 

(b)           in form and content acceptable to Bank;

 

(c)                                  provide thirty (30) days’ advance written notice

to Bank before any cancellation, adverse material modification or notice of

non-renewal;

 

(d)                                 to the extent limits are not otherwise specified

herein, contain deductibles which are in amounts acceptable to Bank; and

 

(e)                                  provide that no claims shall be paid thereunder

without ten (10) days advance written notice to Bank.

 

6.3.1        All physical damage policies and renewals shall contain a standard

mortgage clause naming the Bank as mortgagee, which clause must expressly state

that any breach of any condition or warranty by Mortgagor will not prejudice

the rights of Bank under such insurance; and a loss payable clause in favor of

the Bank for personal property, contents, inventory, equipment, loss of rents

and business interruption.  All liability

policies and renewals shall name the Bank as an additional insured.  No additional parties may appear in the

mortgage or loss payable clause without Bank’s prior written consent.  All deductibles shall be in amounts

acceptable to Bank.  In the event of the

foreclosure of this Mortgage or any other transfer of title to the Premises in

full or partial satisfaction of the Secured Indebtedness, all right, title and

interest of Mortgagor in and to all insurance policies and renewals thereof

then in force will pass to the purchaser or grantee.

 

6.4           Delivery of

Policies.  Any notice pertaining to insurance and

required pursuant to this Paragraph 6 shall be given in the manner provided in

Paragraph 15.  The insurance shall be

evidenced by the original policy or a true and certified copy of the original

policy, or in the case of liability insurance, by evidence of insurance on an

Acord 27 form.  Mortgagor shall deliver

originals of all policies and renewals, marked “paid”, (or evidence

satisfactory to Bank of the continuing coverage) to Bank at least 15 days

before the expiration of existing policies and, in any event, Mortgagor shall

deliver originals of such policies or certificates to Bank at least 15 days

before the expiration of existing policies. 

If Bank has not received satisfactory evidence of such renewal or

substitute insurance in the time frame herein specified, Bank will have the

right, but not the obligation, to purchase such insurance for Bank’s interest

only. Any amounts disbursed by Bank pursuant to this Paragraph will be a part

of the Secured Indebtedness and will bear interest at the 

 

5

 

default interest rate provided in the Note (“Default Rate”).  Nothing contained in this Paragraph 6 will

require Bank to incur any expense or take any action hereunder, and inaction by

Bank will never be considered a waiver of any right accruing to Bank on account

of this Paragraph 6.

 

6.5           Separate

Insurance.  Mortgagor may not carry any separate

insurance on the Premises concurrent in kind or form with any insurance

required hereunder or contributing in the event of loss without Bank’s prior

written consent, and any policy must have attached standard non-contributing

mortgagee clause, with loss payable to Bank, and must otherwise meet all other

requirements set forth herein.

 

6.6           Compliance

Certificate.  At Bank’s option, but not more often than

annually, Mortgagor will provide Bank with a report from an independent

insurance consultant of regional or national prominence, acceptable to Bank,

certifying that Mortgagor’s insurance is in compliance with this Paragraph 6.

 

6.7           Notice of

Casualty.  Mortgagor will give immediate notice of any

loss to Bank.  In case of loss covered

by any policies, and provided no Event of Default exists under this Mortgage,

the Note or the other Loan Documents, Mortgagor is authorized to adjust,

collect and settle all claims upon notice to Bank and receipt of Bank’s

consent, such consent not to be unreasonably withheld.  If an Event of Default exists, or Bank does

not consent to Mortgagor’s proposed adjustment, collection or settlement of the

claim, or 30 days have expired from the date of notice to the Bank, Bank is

authorized to adjust, collect and settle the claim and, in such case, Mortgagor

covenants to sign upon demand, or Bank may sign or endorse on Mortgagor’s

behalf, all necessary proofs of loss, receipts, releases and other papers

required by the insurance companies to be signed by Mortgagor.  Mortgagor hereby irrevocably appoints Bank as

its attorney-in-fact for the purposes set forth in the preceding sentence.  Bank may deduct from such insurance proceeds

any expenses incurred by Bank in the collection and settlement thereof,

including, but not limited to, attorneys’ and adjusters’ fees and charges.

 

6.8           Application of

Proceeds.  If all or any part of the Premises are

damaged or destroyed by fire or other casualty or are damaged or taken through

the exercise of the power of eminent domain or other cause described in

Paragraph 10, Mortgagor will promptly and with all due diligence restore and

repair the Premises in accordance with the provisions of this Paragraph

6.8.  If there is an Event of Default

existing under this Mortgage or the other Loan Documents or if the damage to

the Premises totals $250,000.00 or more to repair, then at Bank’s election, to

be exercised by written notice to Mortgagor within 30 days following Bank’s

unrestricted receipt in cash or the equivalent thereof of the net insurance

proceeds of the policies required to be maintained by Mortgagor hereunder,

award or other compensation (collectively, the “Proceeds”), the entire amount

of the Proceeds will either be:

 

(a)                                  applied to the Secured Indebtedness in the order

and manner as Bank may elect (subject to the requirements of the Loan

Documents) or

 

(b)                                 made available to Mortgagor on the terms and

conditions set forth in this Paragraph to finance the cost of restoration or

repair. Bank may require that 

 

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all plans and specifications for

such restoration or repair be submitted to and approved by Bank in writing

prior to commencement of the work.

 

6.8.1        If the damage to the Premises totals less than $250,000 to repair, then

the entire amount of the Proceeds will be made available to Mortgagor on the

terms and conditions set forth in this Paragraph to finance the cost of

restoration or repair. Bank may require that all plans and specifications for

such restoration or repair be submitted to and approved by Bank in writing prior

to commencement of the work.

 

6.8.2.       If the amount of the Proceeds to be made

available to Mortgagor pursuant to this Paragraph is less than the cost of the

restoration or repair as estimated by Bank at any time prior to completion

thereof, Mortgagor will cause to be deposited with Bank the amount of such

deficiency within thirty (30) days of Bank’s written request therefor (but in

no event later than the commencement of the work) and Mortgagor’s deposited

funds shall be disbursed prior to the Proceeds.  If Mortgagor is required to deposit funds under this Paragraph,

the deposit of such funds is a condition precedent to Bank’s obligation to

disburse the Proceeds held by Bank hereunder and in the event Mortgagor fails

to deposit such deficiency within said thirty (30) days, Bank may apply the

Proceeds to the Secured Indebtedness. 

The amount of the Proceeds which is to be made available to Mortgagor,

together with any deposits made by Mortgagor will be held by Bank to be

disbursed from time to time to pay the cost of repair or restoration, at Bank’s

option, to Mortgagor or directly to contractors, subcontractors, material

suppliers and other persons entitled to payment in accordance with and subject

to the conditions to disbursement as Bank may impose to assure that the work is

fully completed in a good and workmanlike manner and paid for and that no liens

or claims arise by reason thereof.

 

6.8.3        Bank may require (a) evidence of the estimated cost of completion of

the restoration or repair satisfactory to Bank and (b) architect’s

certificates, waivers of lien, contractors’ sworn statements, title insurance

endorsements, plats of survey and other evidence of cost, payment and

performance acceptable to Bank.  If Bank

requires mechanics’ and materialmen’s lien waivers in advance of making

disbursements, such waivers will be deposited with an escrow trustee acceptable

to Bank pursuant to a construction loan escrow agreement satisfactory to

Bank.  No payment made prior to final

completion of the repair or restoration may exceed ninety percent (90%) of the

value of the work performed from time to time. 

Bank may commingle any of the funds held by it with its other general

funds.  Bank is not obligated to pay

interest in respect of the funds held by it and Mortgagor is not entitled to a

credit against any of the Secured Indebtedness except and to the extent the

funds are applied thereto pursuant to this Paragraph.  Without limitation of the foregoing, Bank has the right at all times

to apply the funds cure an Event of Default or to perform any obligations of

Mortgagor under the Loan Documents.

 

6.9           Insurance

Deposits.  Upon the occurrence of an Event of Default,

for the purpose of providing funds with which to pay premiums when due on all

policies of liability, fire and other hazard insurance covering the Premises,

Mortgagor will deposit with the Bank on the first day of each month a sum equal

to the Bank’s estimate of the premiums that will next become due and payable on

such policies reduced by the amount, if any, then on deposit with the Bank

divided by the number of months to elapse before one (1) month prior to the

date when such premiums

 

7

 

become due and payable.  No

interest may be allowed to Mortgagor on account of any deposit made hereunder

and the deposit need not be kept separate and apart from any other funds of the

Bank.

 

7.             Use,

Preservation and Maintenance of Property.  Mortgagor will not commit

waste or permit impairment or deterioration of the Property.  Mortgagor will not allow store, treat or

dispose of Hazardous Material (as defined in Paragraph 27), nor permit the same

to exist or be stored, treated or disposed of, from or upon the Property.  Mortgagor will promptly restore or rebuild

any buildings or improvements now or hereafter on the Property which may become

damaged or destroyed.  Mortgagor will

comply with all requirements of law or municipal ordinances with respect to the

use, operation, and maintenance of the Property, including all environmental,

health and safety laws and regulations, and will make no material alterations

in the Property, except as required by law, without the prior written consent

of Bank. Mortgagor will not grant or permit any easements, licenses, covenants

or declarations of use against the Property.

 

8.             Protection of

Bank’s Security.  If Mortgagor fails to perform any of the

covenants and agreements contained in this Mortgage, the Note or the other Loan

Documents, or if any action or proceeding is threatened or commenced which

materially affects Bank’s interest in the Property, then Bank, at Bank’s

option, upon notice to Mortgagor, may make such appearances, disburse such

sums, including attorneys’ fees, and take such action as it deems expedient or

necessary to protect Bank’s interest, including: (a) making repairs; (b)

paying, settling, or discharging tax liens, mechanics’ or other liens, (c)

procuring insurance; and (d) renting, operating and managing the Property and

paying operating costs and expenses, including management fees, of every kind

and nature in connection therewith, so that the Property shall be operational

and usable for its intended purposes. 

Bank, in making such payments, may do so in accordance with any bill,

statement, or estimate procured from the appropriate public office without

inquiry into the accuracy of same or into the validity thereof.

 

8.1.          Any amounts disbursed by Bank pursuant to this Paragraph 8 will be part

of the Secured Indebtedness and will bear interest at the Default Rate.  Nothing contained in this Paragraph 8 will

require Bank to incur any expense or take any action hereunder, and inaction by

Bank will never be considered a waiver of any right accruing to Bank.

 

9.             Inspection of

Property and Books and Records.  Mortgagor will permit Bank and its

representatives and agents to inspect the Property from time to time during

normal business hours and as frequently as Bank requests.  Mortgagor must keep and maintain full and

correct books and records showing in detail the income and expenses of the

Property.  From time to time, Mortgagor

will permit Bank or its agents to examine and copy such books and records at

its offices or at the address identified above.

 

10.           Condemnation.  The

proceeds of any award or claim for damages, direct or consequential, in

connection with any condemnation or other taking of the Property, or part

thereof, or for conveyance in lieu of condemnation, are hereby assigned and

must be paid directly to Bank. Mortgagor hereby grants a security interest to

Bank in and to such proceeds.  Bank is

authorized to collect such proceeds and, at Bank’s sole option and discretion,

to apply said proceeds either to restoration or repair of the Property or in

payment of the Secured Indebtedness. In the event the

 

8

 

Property is restored, Bank may pay the condemnation proceeds in

accordance with its customary loan payment procedures, and may charge its

customary fee for such services.

 

11.           Mortgagor Not

Released; Forbearance by Bank Not a Waiver; Remedies Cumulative. 

Extension or other modification granted by Bank to any successor in

interest of Mortgagor of the time for payment of all or any part of the Secured

Indebtedness will not operate to release, in any manner, the liability of the

Mortgagor.  Any forbearance or inaction

by Bank in exercising any right or remedy hereunder, or otherwise afforded by

applicable law, will not be a waiver of or preclude the exercise of any such

right or remedy.  Any acts performed by

Bank to protect the security of this Mortgage, as authorized by Paragraph 8 or

otherwise, will not be a waiver of Bank’s right to accelerate the maturity of

the Secured Indebtedness.  All remedies

provided in this Mortgage are distinct and cumulative to any other right or

remedy under this Mortgage or afforded by law or equity, and may be exercised

concurrently, independently or successively. 

No consent or waiver by Bank to or of any breach or default by Mortgagor

will be deemed a consent or waiver to or of any other breach or default.

 

12.           Successors and

Assigns Bound.  The covenants and agreements contained

herein shall bind, and the rights hereunder shall inure to, the respective

heirs, executors, legal representatives, successors and assigns of Bank and

Mortgagor.

 

13.           Tax on Secured

Indebtedness or Mortgage.  In the event of the passage, after the date

of this Mortgage, of any law deducting from the value of land for the purposes

of taxation, any lien thereon, or imposing upon Bank the obligation to pay the

whole, or any part, of the taxes or assessments or charges or liens required to

be paid by Mortgagor, or changing in any way the laws relating to the taxation

of mortgages or debts as to affect the Mortgage or the Secured Indebtedness,

the entire unpaid balance of the Secured Indebtedness will, at the option of

Bank, after 10 days written notice to Mortgagor, become due and payable;

provided, however, that if, in the opinion of Bank’s counsel, it is lawful for

Mortgagor to pay such taxes, assessments or charges, or to reimburse Bank

therefore, then there will be no such acceleration of the time for payment of

the unpaid balance of the Secured Indebtedness if a mutually satisfactory

agreement for reimbursement, in writing, is executed by Mortgagor and delivered

to Bank within the period.

 

14.           Strict

Performance.  Any failure by Bank to insist upon strict

performance by Mortgagor of any of the terms and provisions of this Mortgage or

of the other Loan Documents will not be deemed to be a waiver of any of the

terms or provisions of this Mortgage or of the other Loan Documents and Bank

will have the right thereafter to insist upon strict performance by Mortgagor.

 

15.           Notice.  Except

for any notice required under applicable law to be given in another manner, all

communications provided for herein must be in writing and will be deemed to

have been given or made when delivered personally, 3 days after deposited in

the United States mail (certified mail, postage prepaid) or one day after

deposited with a nationally recognized overnight courier (delivery prepaid), or

upon receipt of a confirmation of a facsimile transmission, addressed as

follows:

 

9

 

	

  To Bank:

  	

  American Chartered Bank

  
	

   

  	

  William Provan

  
	

   

  	

  1199 East Higgins Road

  
	

   

  	

  Schaumburg, Illinois 60173

  
	

   

  	

  Facsimile Number:  847-517-2848

  
	

   

  	

   

  
	

  With a copy to:

  	

  Horwood Marcus & Berk Chartered

  
	

   

  	

  Jeffrey A. Hechtman, Esq.

  
	

   

  	

  180 North LaSalle Street, Suite 3700

  
	

   

  	

  Chicago, Illinois 60601

  
	

   

  	

  Facsimile Number:  312-606-3232

  
	

   

  	

   

  
	

  To Mortgagor:

  	

  Electric City Corp.

  
	

   

  	

  1280 Landmeier Road

  
	

   

  	

  Elk Grove Village, Illinois 60007

  
	

   

  	

  Facsimile Number:  847-437-4969

  
	

   

  	

   

  
	

  With a copy to:

  	

  Schwartz Cooper Greenberger & Krauss

  
	

   

  	

  Andrew H. Connor

  
	

   

  	

  180 North LaSalle Street

  
	

   

  	

  Suite 2700

  
	

   

  	

  Chicago, Illinois 60601

  
	

   

  	

  Facsimile Number: 312-782-8416

  

 

16.           Governing Law;

Venue; Invalidity of Certain Provisions.

 

(a)           The validity, enforcement and interpretation of this Mortgage will be

governed by and construed in accordance with the laws of the State of Illinois,

without reference to the conflicts of law principles and applicable United

States federal law, and is intended to be performed in accordance with, and

only to the extent permitted by, such laws. 

Mortgagor hereby irrevocably submits generally and unconditionally to

the exclusive jurisdiction of any local court, or any United States federal

court, sitting in the State of Illinois over any suit, action or proceeding

arising out of or relating to this Mortgage. 

Mortgagor hereby irrevocable waives, to the fullest extent permitted by

law, any objection that Mortgagor may now or hereafter have to the laying of

venue in any such court and any claim that any such court is an inconvenient

forum.  Mortgagor hereby agrees and

consents that, in addition to any methods of service of process provided for

under applicable law, all services of process in any such suit, action or

proceeding in any local court, or any United States federal court, sitting in

the State of Illinois, may be made by certified or registered mail, return

receipt requested, directed to Mortgagor at its address stated herein, and

service so made shall be complete 5 business days after the same shall have

been so mailed.  Nothing herein will

affect the right of Bank to serve process in any manner permitted by law or

limit the right of Bank to bring proceedings against Mortgagor in any other

court or jurisdiction.  This Mortgage

will be construed and enforced according to the laws of the State of Illinois.

 

10

 

(b)           The whole or partial invalidity, illegality or unenforceability of any

provision hereof at any time, whether under the terms of then applicable law or

otherwise, shall not affect (1) in the case of partial invalidity, illegality

or unenforceability, the validity, legality or enforceability of the provision

at that time except to the extent of the partial invalidity, illegality or

unenforceability; or (ii) the validity, legality or enforceability of the

provision at any other time or of any other provision hereof at that or any

other time.

 

17.           Prohibitions on

Transfer of the Property or of an Interest in Mortgagor.  It is

an Event of Default (as hereinafter defined) if Mortgagor creates, effects or

consents to or suffers or permits any conveyance, sale (including an installment

sale), assignment, transfer, lien, pledge, hypothecate, mortgage, security

interest, or other encumbrance or alienation, whether by operation of law,

voluntarily or otherwise, of the Property or any part of or interest in without

the prior written consent of Bank (referred to as a “Prohibited Transfer”).

 

18.           Event of

Default.  Each of the following constitutes an event

of default (“Event of Default”) under this Mortgage:

 

(a)           Mortgagor’s failure to pay any installment of principal or interest or

any other amount required under the Note, this Mortgage or any other Loan

Document when due and payable, whether at maturity or by acceleration or

otherwise;

 

(b)           Mortgagor’s failure to perform or observe any other covenant,

agreement, representation, warranty or other provision contained in the Note,

this Mortgage (other than an Event of Default described elsewhere in this

Paragraph 18) or the other Loan Documents, and such failure continues for more

than 10 days following written notice thereof given by Bank to Mortgagor,

unless the Event of Default is not capable of being cured within 10 days,

Mortgagor commences to cure the Event of Default within said 10 days and

thereafter Mortgagor diligently prosecutes the cure of the Event of Default, in

which event Mortgagor will have additional time as is reasonably necessary, not

to exceed 10 days, to cure such Event of Default; provided, however, that the

10 day cure period does not apply to the other subparagraphs of this Paragraph

18;

 

(c)           the occurrence of any breach of any representation or warranty

contained in this Mortgage or any other Loan Document;

 

(d)           the occurrence of a Prohibited Transfer;

 

(e)           the entry by a court having jurisdiction of a decree or order for

relief in respect of Mortgagor in any involuntary case brought under any

bankruptcy, insolvency, debtor relief, or similar law; or if Mortgagor, or any

person in control of Mortgagor: (i) files a voluntary petition in bankruptcy,

insolvency, debtor relief or for arrangement, reorganization or other relief

under the Federal Bankruptcy Act or any similar state or federal law; (ii)

consents to or suffers the appointment of or taking possession by a receiver,

liquidator, or trustee (or similar official) of the Mortgagor or for any part

of the Property or any substantial part of the Mortgagor’s other property;

(iii) makes any assignment for the

 

11

 

benefit of Mortgagor’s creditors; or (iv) fails

generally to pay Mortgagor’s debts as they become due;

 

(f)            the attachment, seizure, or levy of all or a

substantial part of Mortgagor’s assets;

 

(g)           the dissolution or termination of existence of Mortgagor, voluntarily

or involuntarily, or the amendment or modification in any respect of the

corporate documents of Mortgagor that would or may adversely affect Mortgagor’s

performance of its obligations under the Note, this Mortgage or the other Loan

Documents; or

 

(h)           the occurrence of an Event of Default under

any of the Loan Documents.

 

19.           Acceleration;

Remedies.  Upon the occurrence of an Event of Default,

Bank may declare all sums secured by this Mortgage and the other Loan Documents

to be immediately due and payable without further demand and may foreclose this

Mortgage by judicial proceeding.  Bank

will be entitled to collect in such proceeding all expenses of foreclosure,

including, but not limited to, attorneys’ fees and costs including abstracts

and title reports, all of which will become a part of the Secured Indebtedness

and immediately due and payable, with interest at the Default Rate.  The proceeds of any foreclosure sale of the

Property will be applied first to all costs, expenses and fees incident to the

foreclosure proceedings, then as set forth in Paragraph 3 of this Mortgage and

last, to Mortgagor.

 

20.           Assignment of

Leases and Rents.  In order to further secure payment of

the Secured Indebtedness and the observance, performance and discharge of the

Obligations, Mortgagor hereby absolutely and irrevocably assigns and transfers

to Bank and grants Bank a security interest in all of Mortgagor’s right, title

and interest in and to the Leases listed on Exhibit C and all present

and future leases affecting the Property (collectively, “Leases”) and all

rents, income, receipts, revenues, issues, avails and profits from or arising

out of the Property (collectively, “Rents”), subject only to the Permitted

Encumbrances.  Mortgagor hereby appoints

Bank its true and lawful attorney-in-fact, with the right, at Bank’s option at

any time, to demand, receive and enforce payment, to give receipts, releases

and satisfactions, and to sue, either in Mortgagor’s or Bank’s name, for all

Rents.  Notwithstanding the foregoing

assignment of Leases and Rents, so long as no Event of Default has occurred

which remains uncured, Mortgagor has license to collect Rents (such license to

be deemed revoked upon the occurrence of an Event of Default) provided that the

existence or exercise of such right of Mortgagor does not operate to

subordinate this assignment to any subsequent assignment, in whole or in part,

by Mortgagor, and any subsequent assignment by Mortgagor shall be subject to

the rights of the Bank hereunder.  This

Assignment may not be deemed or construed to constitute Bank as a mortgagee in

possession nor obligate Bank to take any action or to incur expenses or perform

or discharge any obligation, duty or liability.  Exercise of any rights under this Paragraph and the application

of the Rents to the Secured Indebtedness shall not cure or waive any Event of

Default.

 

If Mortgagor, as Lessor, neglects or refuses to

perform and keep all of the covenants and agreements contained in the Lease or

Leases, then Bank may perform and comply with any such Lease covenants and

agreements.  All related costs and

expenses incurred by the Bank will become

 

12

 

a part of the Secured Indebtedness and will be due and payable upon

demand by Bank with interest thereon accruing thereafter at the Default Rate.

 

21.           Appointment of

Receiver.  Upon acceleration under Paragraphs 17, 18 or

19 or abandonment of the Property, and without further notice to Mortgagor,

Bank will be entitled to have a receiver appointed by a court to enter upon,

take possession of and manage the Property and to collect the Rents including

those past due.  The receiver will have

the power to collect the Rents from the time of acceleration through the

pendency of any foreclosure proceeding and during the full statutory period of

redemption, if any.  All Rents collected

by the receiver will be applied as the appointing court may direct and, in the

absence of such direction, first to payment of the costs and expenses of the

management of the Property and collection of rents, including, but not limited

to, receiver’s fees, premiums on receiver’s bonds and attorneys’ fees, and then

as provided in Paragraph 3.  The

receiver will be liable to account only for those Rents actually received.

 

22.           Release. Upon payment of all Secured Indebtedness, Bank

will release this Mortgage upon payment by Mortgagor of all costs and fees to

release same, if any.  Mortgagor will be

responsible for recording the release, including all related costs of

recordation.

 

23.           Security

Agreement.  Without limiting any other provisions of

this Mortgage, this Mortgage constitutes a Security Agreement under the

Illinois Uniform Commercial Code, 810 ILCS 5/1-101 et seq., as in effect from

time to time (herein called the “Code”) with respect to all fixtures,

appliances, equipment, furniture and personal property of every nature, and all

replacements, substitutions, accessions, extensions, additions, improvements,

betterments and renewals to any of the foregoing, and all proceeds thereof, now

or hereafter located on the Property as set forth in the description of the

Property above (as those terms are defined in the Code), including but not

limited to the air-conditioning, heating, gas, water, power, light, and

ventilation systems which are presently located at the Property, and with

respect to all funds and other sums which may be deposited with Bank pursuant

hereto (all for the purposes of this paragraph called “Collateral”), and

Mortgagor hereby grants to Bank a security interest in the Collateral.  All of the terms, provisions, conditions and

agreements contained in this Mortgage pertain and apply to the Collateral as

fully and to the same extent as to any other property comprising the

Property.  This Mortgage is a

self-operative security agreement but Mortgagor agrees to execute and deliver

on demand security agreements, financing statements, control agreements and

other instruments as Bank may request in order to perfect its security interest

or to impose the lien hereof more specifically upon any of such property and

authorizes Bank to execute and file the same on behalf of Mortgagor.  Bank will have all the rights and remedies

in addition to those specified herein of a secured party under the Code.  Any

Code requirement for reasonable notice shall be met if such notice is delivered

as provided herein at least 10 days prior to the time of any sale, disposition,

or other event or matter giving rise to the notice (which period of time and

method of notice is agreed to be commercially reasonable).

 

24.           Collateral Protection Act. 

Pursuant to the requirements of the Illinois Collateral

Protection Act, Mortgagor is hereby notified as follows:

 

Unless the Mortgagor provides the Bank with

evidence of the insurance coverage required by this Mortgage or any of the

other Loan Documents, Bank may purchase insurance at Mortgagor’s

 

13

 

expense to protect Bank’s interest in the Property or any other

collateral for the Secured Indebtedness. 

This insurance may, but need not protect Mortgagor’s interests.  The coverage the Bank purchases may not pay

any claim that Mortgagor makes or any claim that is made against Mortgagor in

connection with the Property or any other collateral for the Secured  Indebtedness.  Mortgagor may later cancel any insurance purchased by Bank but

only after providing Bank with evidence that Mortgagor has obtained insurance

as required by this Mortgage.  If Bank

purchases insurance for the Property or any other collateral for the Secured

Indebtedness, Mortgagor will be responsible for the costs of that insurance,

including interest in any other charges that Bank may lawfully impose in

connection with the placement of the insurance, until the effective date of the

cancellation or expiration of the insurance. 

The costs of the insurance may be added to the total outstanding indebtedness.  The costs of the insurance may be more than

the cost of insurance that Mortgagor may be able to obtain on its own.

 

25.           Additional

Advances.  This Mortgage is given, to secure not only

presently existing Secured Indebtedness under the Loan Documents, but also

future advances, whether such advances are obligatory or to be made at the

option of the Bank or otherwise, as are made within 20 years from the date

hereof, to the same extent as if such future advances were made on the date of

the execution of this Mortgage, although there may be no advance made at the

time of execution of this Mortgage and although there may be no indebtedness

secured hereby outstanding at the time any advance is made.  The lien of this Mortgage will be valid as

to the Secured Indebtedness, including future advances, from the time of its

filing for record in the recorder’s office of the county in which the Property

is located.  The total amount of

indebtedness secured hereby may increase or decrease from time to time, but the

total unpaid principal balance of indebtedness secured hereby (including

disbursements that the Bank, may, but is not obligated to, make under this

Mortgage, the Loan Documents, or any other document with respect thereto) at

any one time outstanding may be substantially less but shall not exceed

$6,200,000.00, plus interest thereon, and any disbursements made for payment of

taxes, special assessments, or insurance on the Property and interest on such

disbursements, and all disbursements by Bank pursuant to 735 ILCS

5/15-1302(b)(5) (all such Secured Indebtedness being hereinafter referred to as

the maximum amount secured hereby). 

This Mortgage will be valid and have priority to the extent of the

maximum amount secured hereby over all subsequent liens and encumbrances,

including statutory liens, excepting solely taxes and assessments levied on the

Property given priority by law.

 

26.                                 Business Loan.  Mortgagor hereby represents and warrants

that:

 

(a)           the proceeds of this loan will be used for the purposes specified in

815 ILCS 205/4(1)(a) or (c) of the Illinois Compiled Statutes, as amended:

 

(b)           this loan constitutes a “business loan” within the purview of that

Section;

 

(c)           this loan is a transaction exempt from the Truth in Lending Act, 15

U.S.C. 1601, et seq.; and

 

(d)           the proceeds of the Secured Indebtedness will not be used for the

purchase of registered equity securities within the purview of Regulation “U”

issued by the Board of Governors of the Federal Reserve System.

 

14

 

27.           Environmental

Compliance.

 

27.1         Definitions.  For

purposes of this Paragraph:

 

(a)           “Premises” means:  The Real Estate including improvements presently and hereafter

situated thereon or thereunder, construction material used in such

improvements, surface and subsurface soil and water, areas leased to tenants,

and all business, uses and operations thereon.

 

(b)           “Environmental Laws” means (i) any present or

future federal statute, law, code, rule, regulation, ordinance, order, standard,

permit, license, guidance document or requirement (including consent decrees,

judicial decisions and administrative orders) together with all related

amendments, implementing regulations and reauthorizations, pertaining to the

protection, preservation, conservation or regulation of the environment,

including, but not limited to:  the

Comprehensive Environmental Response, Compensation, and Liability Act, 42

U.S.C. Section 9601 et seq. (“CERCLA”); the Resource

Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (“RCRA”); the Toxic

Substances Control Act, 15 U.S.C. Section 2601 et seq. (“TOSCA”); the Clean

Air Act, 42 U.S.C. Section 7401 et seq.; and the Clean Water Act, 33

U.S.C. Section 1251 et seq.; and (ii) any present or future

state or local statute, law, code, rule, regulation, ordinance, order,

standard, permit, license or requirement (including consent decrees, judicial

decisions and administrative orders) together with all related amendments,

implementing regulations and reauthorizations, pertaining to the protection,

preservation, conservation or regulation of the environment.

 

(c)           “Hazardous Material” means (but shall not include

materials and supplies stored and used in compliance with Environmental Laws):

 

(i)            “hazardous substances” as defined by CERCLA;

 

(ii)           “hazardous wastes”, as defined by RCRA;

 

(iii)          “hazardous substances”, as defined by the Clean Water Act;

 

(iv)          any item which is banned or otherwise regulated pursuant to TOSCA;

 

(v)           any item which is regulated by the Federal Insecticide, Fungicide and

Rodenticide Act, 7 U.S.C. 136 et seq.;

 

(vi)          any item which triggers any thresholds regulated by or invoking any

provision of the Emergency Planning and Community Right-To-Know Act, 42 U.S.C.

11001 et

seq.;

 

(vii)         any hazardous, dangerous or toxic chemical, material, waste, pollutant,

contaminant or substance (“pollutant”) within the meaning of any Environmental

Law prohibiting, limiting or otherwise regulating the use, exposure, release,

emission, discharge,

 

15

 

generation, manufacture, sale, transport, handling, storage, treatment,

reuse, presence, disposal or recycling of such pollutant;

 

(viii)        any petroleum, crude oil or fraction thereof;

 

(ix)           any radioactive material, including any source, special nuclear or

by-product material as defined at 42 U.S.C. Section 2011 et seq., and amendments

thereto and reauthorizations thereof;

 

(x)            asbestos-containing materials in any form or

condition; and

 

(xi)           polychlorinated biphenyls (“PCBs”) in any form or condition.

 

(d)           “Environmental Actions” means:

 

(i)            any notice of violation, complaint, claim,

citation, demand, inquiry, report, action, assertion of potential

responsibility, lien, encumbrance, or proceeding regarding the Premises, whether

formal or informal, absolute or contingent, matured or unmatured, brought or

issued by any governmental unit, agency, or body, or any person or entity

respecting: (a) Environmental Laws; (b) the environmental condition of the

Premises, or any portion thereof, or any property near the Premises, including

actual or alleged damage or injury to humans, public health, wildlife, biota,

air, surface or subsurface soil or water, or other natural resources; or

(c)  the use, exposure, release,

emission, discharge, generation, manufacture, sale, transport, handling,

storage, treatment, reuse, presence, disposal or recycling of Hazardous

Material either on the Premises or off-site.

 

(ii)           any violation or claim of violation by Mortgagor of any Environmental

Laws whether or not involving the Premises;

 

(iii)          any lien for damages caused by, or the recovery of any costs incurred

by any person or governmental entity for the investigation, remediation or

cleanup of any release or threatened release of Hazardous Material; or

 

(iv)          the destruction or loss of use of property, or the injury, illness or

death of any officer, director, employee, agent, representative, tenant or

invitee of Mortgagor or any other person alleged to be or possibly to be,

arising from or caused by the environmental condition of the Premises or the

release, emission or discharge of Hazardous Materials from the Premises.

 

27.2         Representations

and Warranties.  Mortgagor hereby represents and warrants to

Bank that:

 

(a)           Compliance.  To the

best of Mortgagor’s knowledge based on all appropriate and thorough inquiry and

except as described in Exhibit D hereto, the Premises and Mortgagor have

been and are currently in compliance with all Environmental Laws.  There have been, to the best of Mortgagor’s

knowledge based on all appropriate and thorough inquiry, no past, and there are

no pending or threatened, Environmental Actions to which Mortgagor is a party

or

 

16

 

which relate to the Premises. 

All required governmental permits and licenses are in effect, and

Mortgagor is in compliance therewith. 

Mortgagor has not received any notice of any Environmental Action

respecting Mortgagor, the Premises or any off-site facility to which has been

sent any Hazardous Material for off-site treatment, recycling, reclamation,

reuse, handling, storage, sale or disposal.

 

(b)           Absence of

Hazardous Material.  No use, exposure, release, emission,

discharge, generation, manufacture, sale, handling, reuse, presence, storage,

treatment, transport, recycling or disposal of Hazardous Material has, to the

best of Mortgagor’s knowledge based on all appropriate and thorough inquiry,

occurred or is occurring on or from the Premises except in compliance with

Environmental Laws and as described in Exhibit E hereto (“Disclosed

Material”). The term “released” may include. but not be limited to, any

spilling, leaking, pumping, pouring, emitting, emptying, discharging,

injecting, escaping, leaching, dumping, or disposing into the environment

(including the abandonment or discarding of barrels, containers and other

receptacles containing any Hazardous Material).  To the best of Mortgagor’s knowledge based on all appropriate and

thorough inquiry, all Hazardous Material used, treated, stored, transported to

or from, generated or handled on the Premises has been disposed of on or off

the Premises in a lawful manner.  To the

best of Mortgagor’s knowledge based on all appropriate and thorough inquiry, no

environmental, public health or safety hazards currently exist with respect to

the Premises.  To the best of

Mortgagor’s knowledge based on all appropriate and thorough inquiry, no

underground storage tanks (including but not limited to petroleum or heating

oil storage tanks) are present on or under the Premises, or have been on or

under the Property except as has been disclosed in writing to Bank (“Disclosed

Tanks”).

 

27.3         Mortgagor’s

Covenants.  Mortgagor hereby covenants and agrees with

Bank as follows:

 

(a)           Compliance.  The

Premises and Mortgagor comply with all Environmental Laws.  All required governmental permits and

licenses will be obtained and maintained, and Mortgagor will comply with

them.  All Hazardous Material on the Premises

will be disposed of in a lawful manner without giving rise to liability under

any Environmental Laws.  Mortgagor will

satisfy all requirements of applicable Environmental Laws for the registration,

operation, maintenance, closure and removal of all underground storage tanks on

the Premises, if any.  Without limiting

the foregoing, all Hazardous Material will be handled in compliance with all

applicable Environmental Laws.

 

(b)           Absence of

Hazardous Material.  Other than Disclosed Material, no Hazardous

Material will be introduced to or used, exposed, released, emitted, discharged,

generated, manufactured, sold, transported, handled, stored, treated, reused,

presented, disposed of or recycled on the Premises without 30 days’ prior

written notice to Bank.

 

(c)           Environmental

Actions and Right to Consent.  Mortgagor will immediately notify Bank of

all Environmental Actions and provide copies of all written notices,

complaints, correspondence and other documents relating thereto within 2

business days of receipt, and Mortgagor will keep Bank informed of all

responses thereto.  Mortgagor will

promptly cure and have dismissed with prejudice all Environmental Actions in a

manner satisfactory to Bank and 

 

17

 

Mortgagor will keep the Premises free of any encumbrance arising from

any judgment, liability or lien imposed pursuant to any Environmental

Actions.  Notwithstanding the foregoing

sentence, Mortgagor may, diligently, in good faith and by appropriate legal

proceedings, contest such proceedings provided:  (1) Mortgagor first furnishes to Bank such deposits or other

collateral as Bank, in its sole discretion, deems sufficient to fully protect

Bank’s interests;  (2) such contest will

have the effect of preventing any threatened or pending sale or forfeiture of

all or any portion of the Premises or the loss or impairment of Bank’s lien and

security interests in and to the Premises; and 

(3) such contest will not cause Bank to incur any liability, in Bank’s

sole judgment.  Mortgagor will permit

Bank, at Bank’s option, to appear in and to be represented in any such contest

and will pay upon demand all expenses incurred by Bank in so doing, including

attorneys’ fees.

 

(d)           Future

Environmental Audits.  Mortgagor will provide such information and

certifications which Bank may reasonably request from time to time to monitor

Mortgagor’s compliance with this Article for the sole purpose of protecting

Bank’s security interest.  To protect

its security interest, Bank will have the right, but not the obligation, at any

time upon reasonable prior notice and without unreasonable interference with

any tenant’s business to enter upon the Premises, take samples, review

Mortgagor’s books and records, interview Mortgagor’s employees and officers,

and conduct such other activities as Bank, at its sole discretion, deems

appropriate.  Mortgagor will cooperate

fully in the conduct of such an audit. 

If Bank decides to conduct such an audit because of: (1) an

Environmental Action;  (2) Bank’s

considering taking possession of or title to the Premises after an Event of Default

by Mortgagor;  (3) a material change in

the use of the Premises, which in Bank’s opinion, increases the risk to its

security interest due to an Environmental Action; or (4) the introduction of

Hazardous Material other than Disclosed Material to the Premises other than as

permitted by this Mortgage; then Mortgagor will pay upon demand all costs and

expenses connected with such audit, which, until paid, will become additional

indebtedness secured by the Loan Documents and will bear interest at the Default

Rate.  Nothing in this Article may give

or be construed as giving Bank the right to direct or control Mortgagor’s

actions in complying with Environmental Laws.

 

(e)           Event of

Default and Opportunity to Cure.  If Mortgagor fails to comply with any of its

covenants contained in this Section 27 within 30 days after notice by Bank to

Mortgagor, Bank may, at its option, declare an Event of Default.  If, however, the noncompliance cannot, in

Bank’s reasonable determination, be corrected within the thirty 30-day period,

and if Mortgagor has promptly commenced and diligently pursues action to cure

such noncompliance to Bank’s reasonable satisfaction, then Mortgagor will have

such additional time as is reasonably necessary to correct such noncompliance,

provided Mortgagor continues to diligently pursue corrective action, but in no

event more than a total of 60 days after the initial notice of noncompliance by

Bank.

 

(f)            Governmental

Actions.  There are no pending or threatened:  (1) actions or proceedings from any governmental

agency or any other entity regarding the condition or use of the Property, or

regarding any environmental, health or safety law; or (2) “superliens” or

similar governmental actions or proceedings that could impair the value of the

Property, or the priority of the lien of this Mortgage or any of the other Loan

Documents (collectively “Environmental Proceedings”).  Mortgagor will promptly notify Bank of any notices, or other

knowledge obtained by Mortgagor hereafter of any pending or threatened Environmental

Proceedings, and Mortgagor

 

18

 

will promptly cure and have dismissed with prejudice any such

Environmental Proceedings to the satisfaction of Bank.

 

(g)           Fees; Costs.  Any

fees, costs and expenses imposed upon or incurred by Bank on account of any

breach of this Section 27 will be immediately due and payable by Mortgagor to

Bank upon demand, and will (together with interest thereon at the Default Rate

accruing from the date such fees, costs and expenses are so imposed upon or

incurred by Bank) become part of the Secured Indebtedness.  Mortgagor will keep, save and protect,

defend, indemnify and hold Bank harmless from and against any and all claims,

loss, cost, damage, liability or expense, including reasonable attorneys’ fees,

sustained or incurred by Bank by reason of any Environmental Proceedings or the

breach or default by Mortgagor of any representation, warranty or covenant

contained in this Paragraph.

 

27.4         Bank’s Right to

Rely.  Bank is entitled to rely upon Mortgagor’s

representations, warranties and covenants contained in this Article despite any

independent investigations by Bank or its consultants.  The Mortgagor will take all necessary

actions to determine for itself, and to remain aware of, the environmental

condition of the Premises.  Mortgagor

will have no right to rely upon any independent environmental investigations or

findings made by Bank or its consultants unless otherwise stated in writing

therein and agreed to in writing by Bank.

 

27.5         Indemnification.  The

term “Bank’s Environmental Liability” will mean any and all losses,

liabilities, obligations, penalties, claims, fines, demands, litigation,

defenses, costs, judgments, suits, proceedings, damages (including consequential,

punitive and exemplary damages), disbursements or expenses of any kind or

nature whatsoever (including reasonable attorneys’ fees at trial and appellate

levels and experts’ fees and disbursements and expenses incurred in

investigating, defending against, settling or prosecuting any suit, litigation,

claim or proceeding) which may at any time be either directly or indirectly

imposed upon, incurred by or asserted or awarded against Bank or any of Bank’s

parent and subsidiary corporations and their affiliates, shareholders,

directors, officers, employees, and agents (collectively Bank’s “Affiliates”)

in connection with or arising from:

 

(a)           any Hazardous Material used, exposed, emitted, released, discharged,

generated, manufactured, sold, transported, handled, stored, treated, reused,

presented, disposed of or recycled on, in or under all or any portion of the

Premises, or any surrounding areas;

 

(b)           any misrepresentation, inaccuracy or breach of any warranty, covenant

or agreement contained or referred to in this Section 27;

 

(c)           any violation, liability or claim of violation or liability, under any

Environmental Laws;

 

(d)           the imposition of any lien for damages caused by, or the recovery of

any costs incurred for the cleanup of, any release or threatened release of

Hazardous Material; or

 

(e)           any Environmental Actions.

 

19

 

27.5.1      Mortgagor shall indemnify, defend (at trial and

appellate levels and with counsel, experts and consultants acceptable to Bank

and at Mortgagor’s sole cost) and hold Bank and its Affiliates free and

harmless from and against Bank’s Environmental Liability (collectively,

“Mortgagor’s Indemnification Obligations”). 

Mortgagor’s Indemnification Obligations shall survive in perpetuity with

respect to any Bank’s Environmental Liability.

 

27.5.2      Mortgagor and its successors and assigns hereby

waive, release and agree not to make any claim or bring any cost recovery

action against Bank under or with respect to any Environmental Laws.

Mortgagor’s obligation to Bank under this indemnity shall likewise be without

regard to fault on the part of Mortgagor or Bank with respect to the violation

or condition which results in liability to Bank.

 

28.           Compliance with

Illinois Mortgage Foreclosure Law.  If any provision in this

Mortgage is inconsistent with any provision of the Illinois Mortgage

Foreclosure Law (735 ILCS 5/15-1101 et.  seq. of the Illinois

Compiled Statutes) (the “Act”) the provisions of the Act will take precedence

over the Mortgage provisions, but will not invalidate or render unenforceable

any other Mortgage provision that can be construed in a manner consistent with

the Act.  If any Mortgage provision

grants to Bank any rights or remedies upon Mortgagor’s default which are more

limited than the rights that would otherwise be vested in Bank under the Act in

the absence of the provision, Bank will be vested with the rights granted in

the Act to the full extent permitted by law. 

Without limiting the generality of the foregoing, all expenses incurred

by Bank to the extent reimbursable under Sections 15-1510 and 15-1512 of the

Act, whether incurred before or after any decree or judgment of foreclosure,

and whether or not enumerated in Paragraph 19 of this Mortgage, will be added

to the Secured Indebtedness secured by this Mortgage or by the judgment of

foreclosure.

 

29.           Interpretation.  This

Mortgage will be construed pursuant to the laws of the State of Illinois.  The headings of sections and paragraphs in

this Note are for convenience only and may not be construed in any way to limit

or define the content, scope, or intent of the provisions.  The use of singular and plural nouns, and

masculine, feminine, and neuter pronouns, are fully interchangeable, where the

context so requires.  If any provision

of this Mortgage, or any paragraph, sentence, clause, phrase or word, or the

application thereof, in any circumstances, is adjudicated to be invalid, the

validity of the remainder of this Mortgage will be construed as if such invalid

part were never included.  Time is of

the essence of the payment and performance of this Mortgage.  This Mortgage may be executed in

counterparts which, when taken together, shall constitute a whole.

 

30.           Waiver of Right

of Redemption.  To the full extent permitted by law, Mortgagor

hereby covenants and agrees that it will not at any time insist upon or plead,

or in any manner whatsoever claim or take any advantage of, any stay, exemption

or extension law or any so–called “Moratorium Law” now or at any time

hereafter in force, nor claim, take or insist upon any benefit or advantage of

or from any law now or hereafter in force providing for the valuation or

appraisement of the Property, or any part thereof, prior to any sale or sales

thereof to be made pursuant to any provisions herein contained, or to any

decree, judgment or order of any court of competent jurisdiction; or after such

sale or sales claim or exercise any rights under any statute now 

 

20

 

or hereafter in force to redeem the property so sold, or any part

thereof, or relating to the marshalling thereof, upon foreclosure sale or other

enforcement hereof.  To the full extent

permitted by law, Mortgagor hereby expressly waives any and all rights of

redemption, on its own behalf, on behalf of all persons claiming or having an

interest (direct or indirect) by, through or under Mortgagor and on behalf of

each and every person acquiring any interest in or title to the Property

subsequent to the date hereof, it being the intent hereof that any and all such

right of redemption of Mortgagor, and of all other persons, are and will be

deemed to be hereby waived to the full extent permitted by applicable law.  To the full extent permitted by law,

Mortgagor agrees that it will not, by involving or utilizing any applicable law

or laws or otherwise, hinder, delay or impede the exercise of any right, power

or remedy herein or otherwise granted or delegated to Bank, but will suffer and

permit the exercise of every such right, power and remedy as though no such law

or laws have been or will have been made or enacted.  To the full extent permitted by law, Mortgagor hereby agrees that

no action for the enforcement of the lien or any provision hereof will be

subject to any defense which would not be good and valid in an action at law

upon the Note.

 

31.           WAIVER OF JURY

TRIAL.  TO THE EXTENT NOT PROHIBITED BY LAW,

MORTGAGOR DOES HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR

PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OF THE  BANK UNDER THIS MORTGAGE, THE NOTE, OR ANY OF THE LOAN DOCUMENTS,

OR RELATING THERETO OR ARISING THEREFROM AND AGREES THAT ANY SUCH ACTION OR

PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

21

 

IN WITNESS

WHEREOF, Mortgagor has

executed this Mortgage.

 

	

   

  	

  ELECTRIC CITY CORP., a Delaware

  corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Jeffrey Mistarz

  
	

   

  	

  Name:

  	

    Jeffrey Mistarz

  
	

   

  	

  Its:

  	

    Chief Financial Officer & Treasurer

  
					

 

22

 

	

   

  	

   

  	

   

  	

   

  
	

  STATE OF

  ILLINOIS

  	

  )

  	

   

  	

   

  
	

   

  	

  ) SS.

  	

   

  	

   

  
	

  COUNTY OF COOK

  	

  )

  	

   

  	

   

  

 

I, the undersigned, a Notary Public, in and for the County and

State aforesaid, DO HEREBY CERTIFY, that Jeffrey Mistarz, personally

known to me to be the Chief Financial Officer & Treasurer of Electric

City Corp., a Delaware corporation, appeared before me this day in

person and acknowledged that as such duly authorized member of the company, he

signed and delivered the said instrument as his free and voluntary act, and as

the free and voluntary act and deed of said corporation, for the uses and

purposes therein set forth.

 

Given under my hand and official seal this 29th day of May, 2002.

 

 

	

   

  	

    /s/

  
	

   

  	

  Notary Public

  
	

   

  	

   

  
	

   

  	

  My commission

  expires:

  	

   

  

 

 

EXHIBIT A

 

 

LOT 9 IN GULLO INTERNATIONAL

CONTEMPORARY PARK, BEING A RESUBDIVISION OF LOT 230 IN HIGGINS INDUSTRIAL PARK

UNIT 165, BEING A SUBDIVISION IN THE SE 1/4 OF SECTION 27, TOWNSHIP 41 NORTH,

RANGE 11, EAST OF THE THIRD PRINCIPAL MERIDIAN (EXCEPTING THEREFROM THE NORTH

220.00 FEET OF THE EAST 420.00 FEET) IN COOK COUNTY, ILLINOIS.

 

 

EXHIBIT B

 

PERMITTED

ENCUMBRANCES

 

 

1.                                       GENERAL REAL ESTATE TAXES FOR THE SECOND

INSTALLMENT OF THE YEAR 2001.

 

2.                                       COVENANTS AND RESTRICTIONS (BUT OMITTING ANY SUCH

COVENANT OR RESTRICTION BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL

STATUS OR NATIONAL ORIGIN UNLESS AND ONLY TO THE EXTENT THAT SAID COVENANT

(A) IS EXEMPT UNDER CHAPTER 42,

SECTION 3607 OF THE UNITED

STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE AGAINST

HANDICAPPED PERSONS), RELATING TO BUILDING TYPE, LOADING DOCKS, OFF-STREET

AUTOMOBILE PARKING, CONSTRUCTION, LANDSCAPING, WATER TOWERS, WATER TANK, STAND

PIPES, PENTHOUSES, ELEVATORS AND SIMILAR EQUIPMENT, EASEMENTS, STORAGE YARDS

FOR EQUIPMENT, THAT THE LAND SHALL NOT BE USED AS A DUMPING GROUND AND HEIGHT

OF FENCES, WALL, SHRUBS, PLANTS OR TREES, LOCATION OF BUILDINGS, SIDEWALKS AND

HEIGHT OF EQUIPMENT CONTAINED IN THE DEED RECORDED AUGUST 6, 1980 AS

DOCUMENT NO. 25538654, WHICH DOES NOT CONTAIN A REVERSIONARY OR FORFEITURE CLAUSE.

 

3.                                       BUILDING LINE OVER THE NORTH 25 FEET,

SOUTHWESTERLY 25 FEET AND WESTERLY 25 FEET OF LOT 230, AS SHOWN ON THE PLAT OF

SUBDIVISION RECORDED DECEMBER 16, 1974 AS DOCUMENT 22937292.

 

4.                                       EASEMENT OVER THE NORTH 25 FEET, THE WESTERLY 25

FEET AND THE SOUTHWESTERLY 25 FEET OF LOT 230 FOR UNDERGROUND PUBLIC UTILITIES,

SEWER, WATER AND DRAINAGE PURPOSES, AS SHOWN ON THE PLAT OF SUBDIVISION

RECORDED DECEMBER 16, 1974 AS DOCUMENT 22937292.

 

5.                                       EASEMENT IN FAVOR OF NORTHERN ILLINOIS GAS

COMPANY, THE ILLINOIS BELL TELEPHONE COMPANY AND THE COMMONWEALTH EDISON

COMPANY, AND ITS/THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, TO INSTALL, OPERATE

AND MAINTAIN ALL EQUIPMENT NECESSARY FOR THE PURPOSE OF SERVING THE LAND AND

OTHER PROPERTY, TOGETHER WITH THE RIGHT OF ACCESS TO SAID EQUIPMENT, AND THE

PROVISIONS RELATING THERETO CONTAINED IN THE PLAT RECORDED/FILED AS DOCUMENT

NO. 22937292, 

 

 

AFFECTING THE NORTH 25 FEET, THE WESTERLY 25

FEET, THE SOUTHWESTERLY 25 FEET AND THE EAST 10 FEET OF LOT 230.

 

6.                                       25 FOOT BUILDING LINE AS SHOWN ON THE PLAT OF

GULLO INTERNATIONAL CONTEMPORARY PARK SUBDIVISION RECORDED MAY 16,

1984 AS DOCUMENT 27088665, OVER THE SOUTHERLY LINE OF THE LAND.

 

7.                                       EASEMENT

FOR UNDERGROUND PUBLIC UTILITIES, SEWER, WATER, DRAINAGE AND CABLE TV, AS SHOWN

ON THE PLAT OF SUBDIVISION AFORESAID RECORDED AS DOCUMENT 27088665, OVER THE

SOUTHERLY 25 FEET AND THE NORTH 10 FEET OF THE LAND.

 

8.                                       EASEMENT

IN FAVOR OF THE ILLINOIS BELL TELEPHONE COMPANY, THE COMMONWEALTH EDISON

COMPANY AND NORTHERN ILLINOIS GAS COMPANY, AND ITS/THEIR RESPECTIVE SUCCESSORS

AND ASSIGNS, TO INSTALL, OPERATE AND MAINTAIN ALL EQUIPMENT NECESSARY FOR THE

PURPOSE OF SERVING THE LAND AND OTHER PROPERTY, TOGETHER WITH THE RIGHT OF

ACCESS TO SAID EQUIPMENT, AND THE PROVISIONS RELATING THERETO CONTAINED IN THE

PLAT RECORDED/FILED AS DOCUMENT NO. 27088665, AFFECTING THE SOUTHERLY 25

FEET AND THE NORTH 10 FEET OF THE LAND.

 

 

EXHIBIT C

 

IDENTIFIED

LEASES

 

 

NONE

 

 

EXHIBIT D

 

COMPLIANCE

EXCEPTIONS

 

 

All matters set forth in that certain Phase I

Environmental Site Assessment performed by STS Consultants dated April 24,

2002.

 

 

EXHIBIT E

 

DISCLOSED

MATERIALS

 

 

All matters set forth in that certain Phase I

Environmental Site Assessment performed by STS Consultants dated April 24,

2002.EXHIBIT 10.46

 

REVOLVING

NOTE

 

	

  $2,000,000.00

  	

  May 29, 2002

  
	

   

  	

  Chicago, Illinois

  

 

FOR VALUE RECEIVED, ELECTRIC CITY CORP., a Delaware

corporation, SWITCHBOARD APPARATUS, INC., a Delaware corporation, and GREAT

LAKES CONTROLLED ENERGY CORPORATION, a Delaware corporation (collectively,

“Borrowers”), jointly and severally, hereby promise to pay, to the order of

AMERICAN CHARTERED BANK, an Illinois banking association (“Bank”), the

principal sum of TWO MILLION AND 00/100 DOLLARS ($2,000,000.00) or such lesser amount

as may be outstanding from time to time hereunder (the “Loan”), as follows:

 

Borrowers shall jointly and severally make monthly

payments of all accrued and unpaid interest. 

The first interest payment shall be due on June 1, 2002, and each

interest payment thereafter shall be due and payable on the first day of each

and every month thereafter.  All

outstanding principal and all accrued and unpaid interest hereunder shall be

due and payable on April 30, 2003, unless the Loan is accelerated in accordance

with the terms hereof.

 

Capitalized terms not otherwise defined herein shall

have the meaning assigned to such terms in that certain Loan Agreement dated

May 29, 2002, by and between Borrowers and Bank, as amended from time to time

(the “Loan Agreement”).

 

Interest on the outstanding principal amount hereunder

shall be computed on the basis of the actual number of days elapsed on the

basis of a year of 360 days at the variable per annum rate equal to the

Revolving Credit Interest Rate from time to time in effect.

 

To the extent that the outstanding principal evidenced

by this Note is less than the lesser of (i) $2,000,000.00 and (ii) the

Borrowing Base, Borrowers are in compliance with all of the terms of the Loan

Agreement and the other Loan Documents and no Event of Default has occurred and

is continuing, Borrowers may, from time to time, borrow, repay and reborrow

additional amounts hereunder; provided, however, that the

outstanding principal amount hereunder shall not, at any time, exceed the

lesser of (i) $2,000,000.00 and (ii) the Borrowing Base.

 

Any nonpayment of any installment of principal and/or

interest due under this Note within five days after it became due and payable

(no prior demand therefor being necessary) shall be subject to a late charge,

payable on demand, of 5.0% of the overdue amount.

 

All amounts evidenced by this Note may become

immediately due and payable, subject to the terms of the Loan Agreement, upon

the occurrence of any Event of Default specified in the Loan Agreement.

 

 

This Note is secured by the Security Agreements and

the other Loan Documents.  Reference is

hereby made to the Security Agreements and the other Loan Documents, which are

incorporated herein by this reference as fully and with the same effect as if

set forth herein at length.

 

Borrowers shall be permitted to make prepayment of the

indebtedness evidenced by this Note, in whole or in part, from time to time

without penalty or premium.

 

Borrowers authorize the Bank, without giving notice

and without affecting the liability of Borrowers, to extend the time of, or

assign, payment of this Note in whole or in part.

 

Regardless of the adequacy of any collateral given in

connection with the indebtedness evidenced hereby, Bank shall have the right,

upon an Event of Default which is continuing, to apply to the indebtedness

evidenced hereby any monies, cash, cash equivalents, securities, instruments,

or other assets of the undersigned held by or in the control of Bank.

 

Borrowers waive presentment, protest and notice of dishonor.

 

No delay on the part of the Bank in exercising any

right under this Note, the Loan Documents or other undertaking securing or

affecting this Note, shall operate as a waiver of such right or any other right

under this Note, nor shall any omission in exercising any right on the part of

the Bank under this Note operate as a waiver of any other right.

 

Borrowers promises and agrees to pay all costs

(including reasonable attorneys’ and paralegals’ fees and expenses) incurred or

paid by the Bank in enforcing this Note.

 

If any provision of this Note is held to be

unenforceable, such provision shall be deemed ineffective to the extent of such

unenforceability, without invalidating the remaining provisions of this Note.

 

BORROWERS WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY ACTION OR

PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (I) UNDER THIS NOTE OR UNDER ANY OF

THE LOAN DOCUMENTS OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT WHICH

MAY BE DELIVERED IN THE FUTURE IN CONNECTION WITH THE LOAN, OR (II) ARISING FROM

THE TRANSACTIONS CONTEMPLATED BY THIS NOTE, THE LOAN DOCUMENTS AND ANY BANKING

RELATIONSHIP BETWEEN BORROWERS AND BANK IN CONNECTION WITH THE LOAN, AND AGREE

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

A JURY.

 

BORROWERS IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS

IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS NOTE

OR ANY OF THE LOAN DOCUMENTS SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS

WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS.  BORROWERS HEREBY CONSENT AND SUBMIT

 

2

 

TO THE

JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID CITY AND

STATE.  BORROWERS HEREBY WAIVE ANY RIGHT

THEY MAY HAVE TO TRANSFER OR CHANGE VENUE OF ANY SUCH ACTION OR PROCEEDING.

 

Any notice, demand, request or other communication

which any party hereto may be required or may desire to give hereunder shall be

deemed to have been given if made in accordance with the terms of the Loan

Agreement.

 

This Note shall be governed by and construed in

accordance with the laws of the State of Illinois in all respects, including

matters of construction, validity and performance.

 

 

	

   

  	

  ELECTRIC

  CITY CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Jeffrey

  Mistarz

  	

   

  
	

   

  	

  Its:

  	

    Chief

  Financial Officer & Treasurer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SWITCHBOARD

  APPARATUS, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Jeffrey

  Mistarz

  	

   

  
	

   

  	

  Its:

  	

    Vice

  President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  GREAT

  LAKES CONTROLLED ENERGY

  CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Jeffrey

  Mistarz

  	

   

  
	

   

  	

  Its:

  	

    Vice

  President

  	

   

  

 

3

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