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Exhibit 10.4 SECURITY AGREEMENT
This Security Agreement (this "
Agreement ") is made as of August 14, 2008, by and
among Lime Energy Co., a Delaware corporation (the " Debtor
"), and Richard P. Kiphart (" Kiphart ") and Advanced
Biotherapy, Inc. (" ADVB " and together with Kiphart, 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 Kiphart ("
Kiphart 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 Kiphart 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.
"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 doc
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