AMENDMENT NO. 1 TO SECURITY AGREEMENT
EXHIBIT
10.3
This
Amendment No.1 to Security Agreement (this
“Amendment”) is made
as
of October 31, 2008, by and among Lime Energy Co., a Delaware corporation (the
“Debtor”),
and
Xxxxxxx X. Xxxxxxx (“Xxxxxxx”)
and
Advanced Biotherapy, Inc. (“ADVB”
and
together with Xxxxxxx, the “Secured
Parties,”
and
each, a “Secured
Party”),
and
amends the Security Agreement dated as of August 14, 2008 (“Existing
Agreement”)
by and
among the Debtor and the Secured Parties.
Explanatory
Statement
WHEREAS,
the Company issued to ADVB that certain Second Amended and Restated Revolving
Line of Credit dated August 14, 2008 in the maximum principal amount of
$1,500,000 (the “Existing
ADVB Note”);
WHEREAS,
ADVB has agreed to loan an additional $3,000,000 to the Company to be evidenced
by that certain Third Amended and Restated Revolving Line of Credit Note dated
the date hereof made by the Company in favor of ADVB (the “Third
Restated ADVB Note”,
together with the Xxxxxxx Note, the “Notes”);
WHEREAS,
the Third Restated ADVB Note replaces and supersedes the Existing ADVB
Note;
and
WHEREAS,
the Debtor and the Secured Parties desire to amend the Existing Agreement as
more specifically set forth herein.
NOW,
THEREFORE,
based on
the premises and agreements set forth herein, intending to be legally bound,
the
parties hereto agree as follows:
1. Defined
Terms.
All
capitalized terms used herein shall have the same meaning ascribed to them
in
the Existing Agreement, unless otherwise defined herein.
2. Representations,
Warranties and Covenants.
The
Debtor represents, warrants, covenants and agrees as follows:
(a) Debtor
is
the sole legal and beneficial owner of each item of the Collateral, having
good
and marketable title thereto, free and clear of any and all liens, charges,
encumbrances, taxes and assessments other than the Permitted Liens.
(b) The
execution, delivery and performance of this Amendment does not and will not
contravene or violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award presently in effect and
applicable to the Debtor, or result in a breach of or constitute a default
(with
or without the giving of notice or the lapse of time, or both) under any
indenture or any other agreement to which the Debtor is a party, or by which
the
Debtor or any of the Debtor's property may be bound or affected.
(c) The
Debtor has the full corporate right and authority to enter into this Amendment
and to perform this Amendment in accordance with the terms hereof.
3. Waiver.
Waiver
of, or acquiescence in, any default by the Debtor, or failure of a Secured
Party
to insist upon strict performance by the Debtor of any warranties or agreements
in this Agreement, shall not constitute a waiver of any subsequent or other
default or failure.
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4. Notes
and Agreement.
The
term “Notes” as used in the Existing Agreement, as amended by this Amendment,
means collectively the Xxxxxxx Note and the Third Restated ADVB Note, without
the need for any other modification or change thereof. The term “Agreement” as
used in the Existing Agreement means the Existing Agreement, as amended by
this
Amendment, without the need for any other modification or change
thereof.
5. Miscellaneous.
(a) This
Amendment shall bind and inure to the benefit of the respective parties hereto,
and their legal representatives, successors and assigns.
(b) This
Amendment may be modified or amended only by a writing signed by the Debtor
and
each Secured Party.
(c) This
Amendment shall be governed by, and interpreted and enforced in accordance
with,
the laws of the State of Illinois, as applied to contracts made and to be
performed in that state, without regard to conflicts of law
principles.
(d) This
Amendment may be signed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
agreement. Delivery by facsimile of an executed counterpart of this Amendment
shall be effective as an original executed counterpart hereof and shall be
deemed a representation that an original executed counterpart hereof will be
delivered.
(e) Except
as
provided in this Amendment, the Existing Agreement remains unchanged and in
full
force and effect.
[Signatures
on following page]
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IN
WITNESS WHEREOF,
the
undersigned have executed this Amendment No. 1 to Security Agreement effective
as of the date first set forth above.
DEBTOR:
Lime
Energy Co.
By:
/s/ Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Executive Vice President and Chief Financial Officer
SECURED
PARTIES
Xxxxxxx
X. Xxxxxxx
/s/
Xxxxxxx X. Xxxxxxx
Advanced
Biotherapy, Inc.
By:
/s/ Xxxxxxxxxxx X. Xxxxx
Name:
Xxxxxxxxxxx X. Xxxxx
Title:
President
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This
Security Agreement (this “Agreement”)
is
made as of August 14, 2008, by and among Lime Energy Co., a Delaware
corporation (the “Debtor”),
and
Xxxxxxx X. Xxxxxxx (“Xxxxxxx”)
and
Advanced Biotherapy, Inc. (“ADVB”
and
together with Xxxxxxx, the “Secured
Parties,”
and
each, a “Secured
Party”).
Explanatory
Statement
Debtor
has agreed to grant to Secured Parties a security interest in the Debtor’s
assets to secure the payment and performance of the obligations in connection
with (i) that certain Second Amended and Restated Revolving Line of Credit
Promissory Note made by the Debtor in favor of Xxxxxxx (“Xxxxxxx
Note”)
and
(ii) that certain Second Amended and Restated Revolving Line of Credit Note
made by Debtor to ADVB (the “ADVB
Note”
and
together with the Xxxxxxx Note, the “Notes”),
each
dated as of the date hereof.
NOW,
THEREFORE, based
on
the premises and agreements set forth herein, intending to be legally bound,
and
to secure the payment of an indebtedness equal to the aggregate principal
amount
of the Notes, plus accrued interest, as detailed in the Notes, the parties
hereto agree as follows:
1. (a)
Definitions.
As used
herein, the capitalized terms set forth in bold
below
shall have the following meanings:
“Collateral”
shall
mean all right, title and interest of the Debtor in and to (a) all
Accounts, (b) all Instruments, (c) all Inventory, (d) all General
Intangibles, (e) all Equipment, (f) any and all Proceeds, (g) all
contract rights, (h) all computer software, and (i) all right, title
and interest in and to any and all other assets and property of the Debtor
to
secure the Obligations, but shall not include any Equipment or other Collateral
obtained or acquired or to be obtained or acquired by the Debtor on a lease
financing basis.
“Obligations”
shall
mean the payment obligations of the Debtor under the Notes.
“Permitted
Liens”
shall
mean: (a) the liens and security interests of the Senior Lenders;
(b) the liens and security interests of the Secured Parties hereunder;
(c) liens for taxes, assessments, or similar charges either not yet due or
being contested in good faith; (d) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary course
of
business and securing obligations which are not yet delinquent;
(e) purchase money liens or purchase money security interests upon or in
any property acquired or held by Debtor in the ordinary course of business
to
secure indebtedness outstanding on the date of this Agreement; (f) liens
and security interests which, as of the date of this Agreement, have been
disclosed to and approved by Secured Parties in writing; and (g) those
liens and security interests which in the aggregate constitute an immaterial
and
insignificant monetary amount with respect to the net value of Debtor’s
assets.
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“Senior
Lenders”
shall
mean each of American Chartered Bank and any commercial lender which provides
financing to Debtor.
“Senior
Lien”
shall
mean liens made in favor of the Senior Lenders by Debtor.
“UCC”
shall
mean the Uniform Commercial Code as in effect in the State of Illinois from
time
to time.
(b) Incorporation
of UCC Terms.
Except
as specifically defined in this Agreement, all words, terms and/or phrases
used
in this Agreement shall be defined by the applicable definition ascribed
thereto
in Article 9 of the UCC, which definitions are incorporated herein by
reference as if fully set forth herein, including: “Accounts”,
“Documents”,
“Equipment”,
“General
Intangibles”,
“Goods”,
“Instruments”,
“Inventory”
and
“Proceeds”.
If a
term is defined in Article 9 of the UCC differently than in another Article
of the UCC, the term shall have the meaning ascribed to such term in
Article 9.
2. Grant
of Security Interest.
The
Debtor hereby grants and conveys to the Secured Parties a continuing perfected
security interest in and a lien upon all of the Debtor’s right, title and
interest in, to and under the Collateral, whether presently existing or
hereafter created or acquired, and all products and proceeds for the foregoing
to secure the payment and performance of Debtor’s obligations under the Notes.
Nothing in this Agreement shall be deemed to constitute an assumption or
acceptance by either Secured Party of any of the obligations or the Debtor
under
any of the Collateral or any contract or agreement for purchase, sale, lease
or
disposition of the Collateral, and Debtor hereby specifically confirms and
acknowledges that it shall remain liable for any obligations it may have
under
or in respect of any of the Collateral and agree to indemnify the Secured
Parties and hold the Secured Parties harmless against any such liability
or
obligation.
3. Continuing
Security Interest.
This
Agreement creates a continuing perfected security interest in and lien upon
the
Collateral and shall: (a) remain in full force and effect until all
Obligations have been paid in full or otherwise discharged; (b) be binding
upon the Debtor and its successors, permitted transferees and permitted assigns;
and (c) inure, together with the rights and remedies of the Secured Parties
hereunder, to the benefit of each Secured Party and their respective successors,
transferees and assigns. Upon the payment in full of all Obligations, the
security interest and lien granted hereunder shall terminate and all rights
to
the Collateral shall revert to the Debtor. Upon such termination, the Secured
Parties will execute and deliver to the Debtor such documents as the Debtor
shall reasonably request to evidence such termination.
4. Representations,
Warranties and Covenants.
The
Debtor represents, warrants, covenants and agrees as follows:
(a) Debtor
is
the sole legal and beneficial owner of each item of the Collateral, having
good
and marketable title thereto, free and clear of any and all liens, charges,
encumbrances, taxes and assessments other than the Permitted Liens.
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(b) The
execution, delivery and performance of this Agreement and the endorsement
and
delivery of the Collateral does not and will not contravene or violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect and applicable to the
Debtor,
or result in a breach of or constitute a default (with or without the giving
of
notice or the lapse of time, or both) under any indenture or any other agreement
to which the Debtor is a party, or by which the Debtor or any of the Debtor’s
property may be bound or affected.
(c) Debtor
shall pay and perform all of the obligations secured by this Agreement according
to their terms.
(d) Debtor
shall defend the title to the Collateral against all persons and against
all
claims and demands whatsoever, which Collateral is free and clear of any
and all
liens, security interests, claims, charges, encumbrances, taxes and assessments,
except for the Permitted Liens.
(e) Debtor
shall do the following: (i) furnish any further assurances of title
reasonably requested by a Secured Party; (ii) execute any written agreement
or do any other acts reasonably necessary to effectuate the purposes and
provisions of the Agreement; (iii) execute any instrument or statement required
by law in order to perfect or continue the security interest of the Secured
Parties in the Collateral; and (iv) pay all costs of filing in connection
therewith.
(f) Debtor
shall keep the Collateral free and clear of all liens, charges, encumbrances,
taxes and assessments other than the Permitted Liens.
(g) Debtor
shall pay, when due, all taxes, assessments and license fees relating to
the
Collateral unless such taxes and/or assessments are being contested by Debtor
in
good faith.
(h) The
Debtor has the full corporate right and authority to enter into this Agreement
and to pledge the Collateral in accordance with the terms hereof.
(i) Except
for the filing of financing statements with the Secretary of State for the
State
of Illinois under the UCC, no authorization, approval or other action by,
and no
notice to or filing with, any governmental or regulatory authority, agency
or
office is required either (1) for the grant by the Debtor or the
effectiveness of the security interest and lien granted hereby or for the
execution, delivery and performance of this Agreement by the Debtor, or
(2) for the perfection of or the exercise by the Secured Parties of any of
their rights and remedies hereunder.
5. Waiver.
Waiver
of, or acquiescence in, any default by the Debtor, or failure of a Secured
Party
to insist upon strict performance by the Debtor of any warranties or agreements
in this Agreement, shall not constitute a waiver of any subsequent or other
default or failure.
6. Debtor
Remains Liable.
Anything herein to the contrary notwithstanding (a) the Debtor shall remain
liable under any agreements which have been (in whole or in
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part)
pledged or assigned herein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed,
(b) the exercise by the Secured Parties of any of the rights hereunder
shall not release the Debtor from any of its respective duties or obligations
under any such agreements, and (c) no Secured Party shall have any
obligation or liability under any such agreements by reason of this Agreement,
nor shall either Secured Party be obligated to perform any of the obligations
or
duties of the Debtor thereunder or to take any action to collect or enforce
any
claim for payment assigned hereunder.
7. Governing
Statute.
The UCC
shall govern the rights, duties and remedies of the parties and any provisions
herein declared invalid under any law shall not invalidate any other provision
or this Agreement.
8. Remedies
Upon Default.
(a) Upon
any
Event of Default (as defined in the Notes), the Obligations secured by this
Agreement shall immediately become due and payable in full without notice
or
demand and the Secured Parties shall have all the rights, remedies and
privileges with respect to the retention and sale of the Collateral and
disposition of the proceeds thereof as are accorded by the applicable sections
of the Uniform Commercial Code respecting “Default.”
(b) Upon
any
Event of Default, the Debtor shall assemble all materials relevant to the
Collateral and make it available to the Secured Parties at the place and
at the
time designated in the demand. The proceeds of all sales and collections
of the
Collateral shall be applied as follows:
(i) to
the
payment of costs and expenses of such sales and collections incurred by Secured
Parties;
(ii) any
surplus then remaining to the payment of unpaid interest under the Notes;
(iii) any
surplus remaining to the payment of the unpaid principal of the Notes;
(iv) to
the
payment of any other amounts required by applicable law, including without
limitation, the UCC; and
(v) any
surplus then remaining shall be paid over (subject to the rights of third
parties) to the Debtor or for its account. The Debtor shall remain liable
for
any deficiency resulting from the sale of the Collateral and shall pay any
such
deficiency forthwith on demand.
9. Subordination.
The
security interest in the Collateral described in Section
2
is
hereby expressly subordinated to the any lien now or hereafter granted to
the
Senior Lenders by Debtor or by law, notwithstanding the date, order or method
of
attachment or perfection of any such Senior Liens or the provisions of any
applicable law.
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10. Termination.
This
Agreement shall terminate upon payment of all indebtedness and performance
of
all obligations under the Notes, and each Secured Party shall execute and
deliver to the Debtor a UCC-3 financing statement terminating the lien of
such
Secured Party on the Collateral.
11. Miscellaneous.
(a) This
Agreement shall bind and inure to the benefit of the respective parties hereto,
and their legal representatives, successors and assigns.
(b) This
Agreement may be modified or amended only by a writing signed by the Debtor
and
each Secured Party.
(c) All
notices, requests, demands, claims and other communications hereunder
(“Notices”)
shall
be in writing. Any Notice hereunder shall be deemed duly given (i) upon
receipt if delivered in person; (ii) upon the third business day after
being sent if sent by registered or certified mail, return receipt requested
with postage thereon prepaid; or (iii) on the next business day if sent by
Federal Express or similar overnight courier service; in each case addressed
to
the intended recipient as set forth below (or to such other address as the
intended receipt may request by way of Notice delivered in accordance with
this
Section):
If
to the
Debtor, to:
Lime
Energy Co.
0000
Xxxxxxxxx Xxxx
Xxx
Xxxxx
Xxxxxxx, XX 00000
Attention:
Chief Financial Officer
With
a
copy to:
Xxxx
Xxxxx LLP
00
X.
Xxxxxx Xxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxxxx
If
to the
Xxxxxxx:
Xxxxxxx
X. Xxxxxxx
Xxxxxxx
Xxxxx &Co.
000
X.
Xxxxx Xxxxxx
Xxxxxxx,
XX 00000
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If
to
ADVB:
Advanced
Biotherapy, Inc.
000
X.
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attention:
Chief Executive Officer
(d) This
Agreement shall be governed by, and interpreted and enforced in accordance
with,
the laws of the State of Illinois, as applied to contracts made and to be
performed in that state, without regard to conflicts of law principles.
(e) This
Agreement may be signed in one or more counterparts, each of which shall
be
deemed an original but all of which together will constitute one and the
same
agreement.
IN
WITNESS WHEREOF,
the
undersigned have executed this Security Agreement effective as of the date
first
set forth above.
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DEBTOR:
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Lime
Energy Co.
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By:
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/s/
Xxxxxxx Xxxxxxx
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Name:
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Xxxxxxx
Xxxxxxx
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Title:
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Chief
Financial Officer
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SECURED
PARTIES
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Xxxxxxx
X. Xxxxxxx
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/s/
Xxxxxxx Xxxxxxx
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Advanced
Biotherapy, Inc.
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By:
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/s/
Xxxxxxxxxxx X. Xxxxx
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Name:
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Xxxxxxxxxxx
X. Xxxxx
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Title:
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President
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