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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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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
