Document:

<PAGE>

                                                                    Exhibit 10.8

LOAN NO. C-337112,
C-337153 AND C-337154

                    FRAUDULENT CONVEYANCE INDEMNITY AGREEMENT

            THIS FRAUDULENT CONVEYANCE INDEMNITY AGREEMENT (this "Agreement") is
given as of December 28, 2004, by BIMOMED REALTY TRUST, INC., a Maryland
corporation, ("Indemnitor") in favor of THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY, a Wisconsin corporation ("Lender").

                                 R E C I T A L S

            A. Lender has agreed to extend a certain loan (the "Loan") to BMR -
Bayshore Boulevard LLC, a Delaware limited liability company, BMR - 9885 Towne
Centre Drive LLC, a Delaware limited liability company and BMR - 3450 Monte
Villa Parkway LLC, a Delaware limited liability company (each a "Borrower" and
collectively, "Borrowers"), all as described in that certain Master Loan
Agreement of even date herewith among Borrowers and the Lender (the "Master Loan
Agreement").

            B. All capitalized terms used herein and not expressly defined
herein shall have the meaning ascribed to them in the Master Loan Agreement.

            C. The Loan will be secured by, among other things, those certain
Lien Instruments executed by Borrowers with respect to the real and/or personal
property described in such Lien Instruments.

            D. Each Borrower is owned 100% by BioMed Realty, L.P., of which
Indemnitor is the general partner and a limited partner.

            E. As a condition to extending the Loan to Borrowers, Lender has
required that Indemnitor execute this Agreement.

            NOW, THEREFORE, with reference to the foregoing Recitals, which are
hereby incorporated herein and made a part of this Agreement, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Indemnitor hereby agrees as follows:

            1. INDEMNITY. Indemnitor hereby agrees to indemnify, defend and hold
Lender and any successor to Lender under the Loan Documents harmless from and
against any and all claims, actions, liabilities, damages, losses, awards,
payments, costs and expenses (including, without limitation, reasonable costs of
investigation and

                                        1
<PAGE>

reasonable attorneys' fees) which arise out of or relate to claims, demands or
assertions that the obligations incurred by, or the conveyance of security
interests in properties of, Borrowers (or any of them) under the Loan Documents
were fraudulent conveyances or should be deemed void pursuant to any other
principles limiting the rights of creditors, whether such claims, demands or
assertions are made under the United States Bankruptcy Code (as amended or
replaced from time to time), including, without limitation, under Sections 544
or 548 thereof, or under any applicable state fraudulent conveyance statutes or
similar laws.

            2. EXERCISE OF REMEDIES. No failure on the part of Lender to
exercise and no delay in exercising any right or remedy hereunder, at law or in
equity, shall operate as a waiver thereof; nor shall Lender be estopped to
exercise any such right or remedy at any future time because of any such failure
or delay; nor shall any single or partial exercise of any such right or remedy
preclude any other or further exercise of such right or remedy or the exercise
of any other right or remedy. No waiver of any provision of this Agreement nor
consent to any departure by Indemnitor therefrom shall in any event be effective
unless the same shall be in writing and signed by Lender, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on Indemnitor shall in any case
entitle Indemnitor to any other or further notice or demand in similar or other
circumstances.

            3. NO WAIVER. This Agreement is not intended to be, and shall not be
construed to be, a guaranty, but rather is intended to constitute the primary
obligation of Indemnitor. Without limiting or lessening the primary liability of
Indemnitor hereunder, Lender may, without notice to Indemnitor,

      (a)   grant extensions of time or any other indulgences on the Loan and
            related obligations;

      (b)   take, give up, modify, vary, exchange, renew or abstain from
            perfecting or taking advantage of any security for the Loan and
            related obligations; and

      (c)   accept or make compositions or other arrangements with Borrowers
            under the Loan Documents, realize on any security, and otherwise
            deal with Borrowers and other parties and security as Lender may
            deem expedient; and

Indemnitor hereby waives any right to require Lender:

      (d)   to proceed against Borrowers or any other party or to proceed
            against or apply any security it may hold for the Loan or otherwise,
            before proceeding against Indemnitor;

                                        2
<PAGE>

      (e)   to require Lender to pursue any other remedy for the benefit of
            Indemnitor.

Lender may, at its election, foreclose upon any security held by it in one or
more judicial or non-judicial sales without affecting or impairing the liability
of Indemnitor, whether or not the indebtedness evidenced by the Loan Documents
shall have been paid in full. Indemnitor waives all rights or defenses arising
out of any election of remedies by Lender, notwithstanding that such election
may operate to impair or extinguish any right or remedy of Indemnitor against
Borrowers or any other security.

            By executing this Agreement, Indemnitor acknowledges that its
liability hereunder shall survive the dissolution of any or all of the
Borrowers.

            4. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California without giving effect to
the conflict of law principles of said State.

            5. ATTORNEYS' FEES. If Lender or any party to this Agreement
commences litigation for the interpretation, enforcement, termination,
cancellation or rescission of this Agreement, or for damages for the breach of
this Agreement, the prevailing party in such action shall be entitled to its
reasonable attorneys' fees, including appeals, and court and other costs
incurred, to be paid by the losing party as fixed by the court or in a separate
action brought for that purpose.

            6. NOTICES. All notices or other communications hereunder shall be
in writing and shall be deemed to have been properly given (i) upon delivery, if
delivered in person, (ii) one business day after having been deposited for
overnight delivery with Federal Express or another comparable overnight courier
service, or (iii) three business days after having been deposited in any post
office or mail depository regularly maintained by the U.S. Postal Service and
sent by registered or certified mail, postage prepaid, addressed as follows:

      If to Indemnitor:   BioMed Realty Trust, Inc.
                          Attn:  Gary A. Kreitzer
                          17140 Bernardo Center Drive, Suite 222
                          San Diego, CA  92128

      If to Lender:       The Northwestern Mutual Life Insurance Company
                          Attn: Real Estate Investment Department
                          720 E. Wisconsin Avenue
                          Milwaukee, Wisconsin  53202
                          RE: Loan Nos. 337112; 337153; 337154

                                        3
<PAGE>

      and                 Northwestern Investment Management Company, LLC
                          Attn:  Regional Manager
                          555 California Street, Suite 2800
                          San Francisco, CA  94104
                          RE: Loan Nos.337112; 337153; 337154

      or addressed as such party may from time to time designate by written
      notice to the other parties.

            IN WITNESS WHEREOF, Indemnitor has caused this Agreement to be
executed as of the day and year first above written.

                                     INDEMNITOR:

                                     BIOMED REALTY TRUST, INC.,
                                     a Maryland corporation

                                     By:   /s/ Gary A. Kreitzer
                                         ---------------------------------------
                                           Gary A. Kreitzer
                                           Executive Vice President

                                       4exv10w1

 

Exhibit 10.1

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

SECOND AMENDED AND RESTATED MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS, AND SECURITY AGREEMENT

     THIS MORTGAGE is made as of the 31st day of December, 2004 by ELECTRIC
CITY CORP., a Delaware corporation (“Mortgagor”) with a mailing address of 1280
Landmeier Road, Elk Grove Village, Illinois, 60007 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. Bank has agreed to make available to Electric City Corp., a Delaware
corporation and its subsidiary, Great Lakes Controlled Energy Corporation, a
Delaware corporation (“Great Lakes”), a mortgage loan in the principal amount
of $640,000.00 evidenced by that certain Mortgage Note dated as of September,
2003, as amended and restated from time to time (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 any other loan documents, all
future advances and all other indebtedness of Mortgagor and Great Lakes 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 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 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

2

 

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. 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
listed in the Chicago Title Insurance Title Policy Number 1401 008025556, and
other encumbrances which do not materially impair the value or use of the
Property (collectively, “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 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.

3

 

          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.
	 
	(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;

4

 

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

5

 

          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, 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 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

6

 

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 to 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 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. Except in
compliance with law and for matters of the types described in Exhibit D hereto,
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

7

 

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 Accounts.
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.

     Mortgagor shall maintain all of its operating, cash management,
depository, payment, lock box, remittance and investment accounts with Bank and
shall collectively maintain balances in such accounts as are necessary to
compensate Bank for any service charges on such accounts. Mortgagor shall
deposit into such accounts all amounts necessary to pay any service charges
payable to Bank in the event that sufficient compensating balances are not
maintained for any period immediately following notice from Bank of the amount
of such service charges.

     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, subject to Paragraph 6.8
hereof. 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 as provided in
Paragraph 6.8. In the event the 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

8

 

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, three (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:

	 	 	 	 	 
	

	 	To Bank:
	 	American Chartered Bank
	

	 	 	 	William D. 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

9

 

	 	 	 	 	 
	

	 	 	 	Facsimile Number: 312-606-3232
	 
	 	 	 	 
	

	 	To Mortgagor:
	 	Electric City Corp.
	

	 	 	 	Jeff Mistarz, CFO
	

	 	 	 	1280 Landmeier Road
	

	 	 	 	Elk Grove Village, Illinois 60007
	

	 	 	 	Facsimile Number: 847-437-4969
	 
	 	 	 	 
	

	 	With a copy to:
	 	Schwartz Cooper Greenberger & Krauss
	

	 	 	 	Andrew H. Connor, Esq.
	

	 	 	 	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
irrevocably 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 five (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.

     (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 (i) 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

10

 

permits any conveyance, sale (including an installment sale), assignment,
transfer, lien, pledge, hypothecation, 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 the Property other
than a Permitted Encumbrance, 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; or

     (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; or

     (c) the occurrence of any breach of any representation or warranty
contained in this Mortgage or any other Loan Document; or

     (d) the occurrence of a Prohibited Transfer; or

     (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 benefit of Mortgagor’s creditors; or (iv) fails
generally to pay Mortgagor’s debts as they become due; or

     (f) the attachment, seizure, or levy of all or a substantial part of
Mortgagor’s assets; or

     (g) the dissolution or termination of existence of Mortgagor,
voluntarily or involuntarily, or the amendment or modification in any
respect of the corporate documents

11

 

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 other
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 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 Paragraph 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

12

 

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 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 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

13

 

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 two (2) 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 $640,000.00, 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.SC? 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.

     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.

14

 

          (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, generation, manufacture, sale,
transport, handling, storage, treatment, reuse, presence, disposal or recycling
of such pollutant;

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

15

 

               (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 for matters of the types 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 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.

16

 

          (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 matters of the types described in Exhibit E hereto
(“Disclosed Material”). The term “released” may include, but is not 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 two (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 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

17

 

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 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 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

18

 

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 Paragraph 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 Paragraph 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.

               27.5.1.1 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

19

 

(collectively, “Mortgagor’s Indemnification Obligations”). Mortgagor’s
Indemnification Obligations shall survive in perpetuity with respect to any
Bank’s Environmental Liability.

               27.5.1.2 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
Mortgage 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 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

20

 

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
         , personally
known to me to be the    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    day of December, 2004.

	 	 	 
	

	 	

	

	 	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 2003.
	 
	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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]