BILL OF SALE AND DEBT GUARANTY
AGREEMENT
This Bill of Sale
and Debt Guaranty Agreement (this “Agreement”) is made
and entered into as of the 22nd day of November, 2005 by and
between ELECTRIC CITY CORP., a Delaware corporation
(“Electric City”) and ELC VNPP SUB I, LLC, a Delaware
limited liability company (“Sub I”).
WHEREAS, Electric
City and Commonwealth Edison Company, an Illinois public utility
company (“ComEd”), are parties to that certain
Agreement dated September 9, 2003, a copy of which is attached
hereto as Exhibit A (the “ComEd
Agreement”), pursuant to which Electric City is developing in
northern Illinois a large-scale, automatic power curtailment system
designed to curtail power at participating customer sites to be
known as the “Virtual Negawatt Power” system plan (the
“VNPP TM ”) for use by certain select customers of
ComEd;
WHEREAS, to
finance its business operations, Electric City has authorized the
sale to Laurus Master Fund, Ltd. (“Laurus”) of that
certain Convertible Term Note dated November 22, 2005 made by
Electric City in favor of Laurus in the aggregate principal amount
of Five Million Dollars ($5,000,000), a copy of which is attached
hereto as Exhibit B (the “Note”), and has
entered into that certain Securities Purchase Agreement dated as of
November 22, 2005 by and between Electric City and Laurus, a
copy of which is attached hereto as Exhibit C (the
“Securities Purchase Agreement”, and together with the
Note the “Loan Documents”);
WHEREAS, Sub I is
a wholly-owned subsidiary of Electric City;
WHEREAS, Electric
City desires to sell, transfer and assign to Sub I that certain
equipment of Electric City used by Electric City to perform the
ComEd Agreement as set forth on Exhibit D attached hereto
(collectively, the “Transferred Equipment”), and all
rights of payment under the ComEd Agreement with respect to the
Transferred Equipment; and
WHEREAS, in
consideration for being sold, transferred and assigned the
Transferred Equipment and the related rights of payment under the
ComEd Agreement, Sub I has agreed to guaranty the obligations of
Electric City under the Loan Documents;
NOW, THEREFORE, in
consideration of the promises herein contained, and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by the parties hereto, it is hereby agreed as
follows:
1. Sale
of Transferred Equipment; Assignment of Certain Payment Rights
Under ComEd Agreement . On the terms and subject to the
conditions set forth in this Agreement, Electric City hereby sells,
transfers, assigns, conveys and delivers to Sub I, and Sub I hereby
purchases, acquires and accepts from Electric City, (i) all of
Electric City’s right, title and interest in, to and under
the Transferred Equipment free and clear of all obligations other
than those under the ComEd Agreement and free and clear of all
liens other than those in favor of Laurus, and (ii) all of
Electric City’s right, title and interest in and to payments
to be received by it under the ComEd Agreement after the date
hereof with respect to operation of the Transferred
Equipment. The
assignment of Electric City’s right, title and interest in
and to future payments under the ComEd Agreement with respect to
operation of the Transferred Equipment shall be irrevocable so long
as any indebtedness remains outstanding under the Note.
2.
Guaranty of Debt . In consideration of the above transfer of
the Transferred Equipment and rights of payment, Sub I hereby
agrees to guaranty payment of the principal amount of the Note, as
and when the same becomes due, together with interest thereon and
all fees, charges, expenses and all other amounts payable with
respect to the Note pursuant to the Loan Documents, and to evidence
such guaranty by executing and delivering to Laurus a Subsidiary
Guaranty in the form which Laurus has requested, effective
immediately.
3.
Retained Rights Under ComEd Agreement; Sales of
Additiona
|
