Exhibit 10.3
2009 SECURITY
AGREEMENT
This 2009 Security Agreement (this
“Agreement”) is dated as of August 10, 2009,
and is made by and between Lime Energy Co., a Delaware
corporation (the “Debtor”), and Richard P. Kiphart
(the “Secured Party”).
Explanatory
Statement
The Debtor has agreed to grant to
the Secured Party a security interest in the Debtor’s assets
to secure the payment and performance of the obligations in
connection with that certain 2009 Revolving Line of Credit Note
made by the Debtor in favor of the Secured Party (“ 2009
Note ”) dated as of the date hereof.
NOW, THEREFORE
, for good and valuable
consideration, including, without limitation, the covenants and
conditions set forth herein, the parties hereto agree as
follows:
1.
Definitions
.
(a)
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 any and all payment obligations of the Debtor under the
2009 Note, and this Agreement.
“ Permitted Liens
” shall mean: (a) the liens and security interests of
any Senior Lender; (b) the liens and security interests of the
Secured Party 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 the 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 the Secured Party 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 the Debtor’s assets.
“ Senior Lender ”
shall mean each of American Chartered Bank and any commercial
lender which provides financing to the Debtor.
“ Senior Lien ”
shall mean liens made in favor of the Senior Lender by the
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 Party 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 the Obligations. Nothing in
this Agreement shall be deemed to constitute an assumption or
acceptance by the Secured Party of any of the obligations of the
Debtor under any of the Collateral or any contract or agreement for
purchase, sale, lease or disposition of the Collateral, and the
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 Party
and hold the Secured Party 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 Party hereunder, to the benefit of the Secured Party and
his 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 Party will execute and deliver to the Debtor such documents
as the Debtor shall reasonably request to evidence such
termination.
4.
Representations, Warranties and
Covenant
