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EXHIBIT 10.1
SECURITY AGREEMENT AND PROMISSORY NOTE
This Agreement made and entered into on April 22, 2005 by and
between:
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<S> <C> <C> <C>
DEBTOR: POWERSECURE, INC. COMPANY: Caterpillar Financial
Services Corporation
230 CAPCOM DRIVE 2120 West End Avenue
SUITE 107 Nashville, Tennessee 37203-0001
WAKE FOREST NC 27587
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1. Grant of Security Interest. Debtor hereby grants to Company a
first
priority, continuing security interest in the property described
below, and all
substitutions, replacements, additions and accessions
thereto:
(1) Used 3516 Caterpillar Engine 1 plus switchgear and
installation 7RN00779
(herein called the "Equipment"), and all accounts, chattel
paper, deposit
accounts, security agreements, instruments, contract rights,
policies and
certificates of insurance, documents and general intangibles
(including all
monies and credits now due or to become due to Debtor from, and
all claims
against, manufacturers, purchasers or other parties) with
respect to the
equipment, and, whether or not installed thereon, all exchanges,
parts, returns
and attachments therefor, whether any of the foregoing is now
owned or hereafter
acquired, and all proceeds and products of any of the foregoing
including, but
not limited to, proceeds in the form of chattel paper. All of
the above shall
hereinafter be called the "Collateral" and are defined pursuant
to the
provisions of the Uniform Commercial Code.
Debtor agrees not to remove any Equipment from 11251 NC Hwy 903
HALIFAX, NC
27839, HALIFAX without the prior written consent of Company.
Debtor shall
immediately notify Company of any condition or event that may
change the proper
location for the filing of any financing statements or other
public notices or
recordings for the purposes of perfecting security interests in
the Collateral,
including any change in Debtors name or business organization or
the location of
Debtor's place of business.
2. Obligations. The security interest hereby granted is to
secure the
prompt and unconditional payment and performance when due of all
of the
following (herein called the "Indebtedness'): (a) any and all
indebtedness owing
by Debtor to Company pursuant hereto and any and all amendments,
modifications,
restructures, restatements, renewals and extensions of said
indebtedness and (b)
all duties, obligations and liabilities of Debtor to Company
hereunder and under
all related agreements. Debtor agrees that the security interest
herein granted
to Company shall extend to all of the Collateral for so long as
any portion of
the Indebtedness secured hereby remains unpaid or undischarged,
whether such
property comprising a part of the Collateral is acquired by
Debtor prior to,
contemporaneously with, or subsequent to the date of this
Agreement.
3. (A) Promise to Pay. For Value Received, Debtor (jointly and
severally,
if more than one) promises to pay to the order of Company, in
immediately
available funds at the address of Company set forth above or at
such other place
as Company or the holder hereof shall designate in writing, the
principal amount
of $335,247.00 with interest on the outstanding principal from
and including the
date hereof at the per annum rate equal to that set forth below,
until paid in
full.
(B) Payment Schedule. Monthly payments of principal and interest
in
ARREARS, each in an amount equal to $6,773.56 shall be made
commencing 5-22-05
and continuing on the like day of each month thereafter through
and including
4-22-10 for a total of 60 payments. All payments received shall
be applied first
to accrued interest and other nonprincipal amounts then owing
under this
Agreement and then to the principal balance outstanding. The
acceptance of any
payment which is less than payment in full of all amounts due
and owing at such
time shall not constitute waiver of Company's or the holder's
right to receive
payment in full of all amounts due and owing at such time or any
prior or
subsequent time.
(C) Interest. Interest shall be computed at the per annum rate
equal to
7.85%. All interest payable hereunder shall be calculated on the
basis of the
actual number of days elapsed in a year of three hundred sixty
(360) days.
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(D) Time. Time is of the essence hereof. If any payment or
portion of a
payment or other sum due hereunder is not paid within 10 days
from the date such
payment is due, there shall be immediately due and payable from
Debtor to
Company a late fee equal to the lesser of 5% of the amount of
the overdue
payment or portion of a payment or other sum or the highest
amount allowed by
law.
(F) Savings. If at any time implementation of any provision of
this
Agreement shall raise or be deemed to raise the interest rate
per annum
contracted for, charged in or collectible under this Agreement
above the lawful
maximum interest rate per annum in effect from time to time in
the applicable
jurisdiction, then such interest rate per annum shall be limited
to such lawful
maximum interest rate; provided, however, that if the applicable
state law is
amended or the law of the United States of America pre-empts the
applicable
state law, so that it becomes lawful for the Company to receive
a greater
interest rate per annum than is presently allowed, Debtor agrees
that, on the
effective date of such amendment or pre-emption, as the case may
be, the lawful
maximum hereunder shall be increased to the maximum interest
rate per annum
allowed by the higher of the amended state law or the law of the
United States
of America. If from any circumstance, Company shall ever receive
as interest or
otherwise an amount which will exceed the applicable lawful
maximum rate, such
amount which would be excessive shall be deemed a mistake and
shall be either
refunded or applied to the reduction of any principal owing
under this
Agreement, as Company may elect.
(G) Waivers. Debtor hereby waives presentment for payment,
demand for
payment, protest, notice of protest, notice of nonpayment,
notice of dishonor,
notice of acceleration and notice of intent to accelerate
hereunder, and all
other notices in connection with this Agreement, filing of suit
and diligence in
collecting any sums due hereunder or otherwise under the
Indebtedness or in
enforcing this Agreement.
4. Representations and Warranties. Debtor represents and
warrants to
Company as follows: (a) the execution, delivery and performance
of this
Agreement and other agreements and documents evidencing the
Indebtedness secured
hereby are duly authorized by Debtor, and are not in conflict
with any provision
of law, the articles of incorporation or the by-laws of Debtor,
or any other
indenture, agreement or undertaking by which Debtor is bound;
(b) this Agreement
and other agreements or documents evidencing the Indebtedness
secured hereby
constitute valid obligations of Debtor, legally binding upon it
and enforceable
in accordance with their terms; (c) all property forming part of
the Collateral
is now or, at the time it becomes part of the Collateral shall
be, owned by
Debtor by good and marketable title, and shall at all times be
and remain free
from all liens, claims, security interests and encumbrances,
except for the
security interest granted hereby and any other security
interest(s) agreed to in
writing by Company, and Debtor shall defend the Collateral
against all claims
and demands of all persons claiming an interest therein; (d) all
financial
statements and data and any other information or documentation
related to the
business or financial condition of Debtor which have been or may
hereafter be
furnished to Company to induce it to advance funds or extend
credit to Debtor
shall fairly represent the operations and financial condition of
Debtor, as of
the date stated therein, and shall be accurate and correct in
all material
respects; (e) Debtor is and shall remain a Corporation
registered in the state
of NC ("Business Location"); (f) Debtor will not change its form
of business
organization or Business Location without prior written notice
to Company; and
(g) no representation, warranty, or statement by Debtor
contained herein or any
other agreement or document evidencing the Indebtedness secured
hereby, or any
certificate or other document furnished or to be furnished by
Debtor in
connection with the transaction contemplated hereby, contains or
at the time of
delivery shall contain any untrue statement of material fact, or
omits, or shall
omit at the time of delivery, to state a material fact required
to make such
certificate or other document not misleading. The
representations and warranties
specified above are in addition to and not in lieu of any
representations and
warranties set forth in any other agreement or document
evidencing the
Indebtedness secured hereby.
5. Financing Statements. etc. Debtor shall take any and all
steps Company
may from time to time require to establish and maintain
Company's valid,
perfected security interest in the Collateral, including to
execute or obtain
the execution of, in form and substance satisfactory to Company,
such notices,
subordinations, releases or waivers, UCC assignments, UCC
financing statements,
and other documents that Company may deem necessary to perfect,
extend, or
clarify Company's right in the Collateral securing or intended
to secure
Debtor's obligations to Company hereunder. Debtor hereby
irrevocably appoints
Company as Debtor's Attorney-in-Fact for the signing and filing
of such
documents and authorizes Company to delegate these limited
powers. Debtor agrees
to pay all costs, including attorney's fees, incurred in
connection with such
filings and otherwise preserving and protecting Company's
interest in the
Collateral.
6. Use and Disposition of Collateral; First and Prior Lien. The
Collateral
shall remain in Debtor's control and possession at all times.
Debtor agrees that
it will not in any way misuse, conceal, pledge, mortgage,
encumber or sell,
lease, assign, transfer
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or otherwise dispose of the Collateral. Debtor further agrees
that it will keep
the Collateral free of, and shall defend the Collateral from and
against, all
liens, claims, security interests and encumbrances, except for
the security
interest granted hereunder and any other security interest(s)
agreed to in
writing by Company. Debtor, at its sole expense, shall maintain
the Equipment in
good repair and operating condition. The Equipment is and shall
remain personal
property at all times notwithstanding the manner in which it is
attached or
affixed to realty. All proceeds including, but not limited to,
proceeds in the
form of chattel paper received by Debtor forming part of the
Collateral shall be
received under an express trust for the benefit of Company,
shall not be
commingled with other monies, assets or accounts of Debtor, and
shall be
immediately paid to Company (unless otherwise permitted in
writing by Company).
7. Inspection of Collateral; Taxes and Charges. Company may
inspect the
Collateral, and inspect and copy all records pertaining to same,
at any time and
wherever located, and Debtor shall fully cooperate with Company
to identify and
provide evidence of the location, possession, and
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