Exhibit 10.2
NOTE ISSUANCE AGREEMENT
     This Note Issuance Agreement (this “Agreement”) is dated as of the 12th day
of March, 2008, and is made by and between Lime Energy Co., a Delaware
corporation (the “Company”), and Richard P. Kiphart (“Kiphart”) and Advanced
Biotherapy, Inc. (“ADVB” and together with Kiphart, “Noteholders”).
W I T N E S S E T H:
     WHEREAS, the Company has issued to the Noteholders that certain Revolving
Line of Credit Note dated March 12, 2008 and due March 31, 2009, in the maximum
principal amount of $3,000,000 (the “Note”); and
     WHEREAS, the execution and delivery by the parties hereto of this Agreement
is one of the conditions precedent to the obligation of Noteholders to make
loans to the Company under the Note; and
     WHEREAS, the parties desire to set forth certain additional understandings
among themselves relating to the obligations of the Company to Noteholders and
to certain other matters, all as more fully described herein;
     NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereby agrees as follows:
     1. Condition to Advances. It shall be a condition to each advance under the
Note that no Event of Default (as defined in the Note) shall have occurred and
be continuing. At the time of each request for an advance, the Company shall
provide to the Noteholders a certificate, executed by the Chief Executive
Officer or Chief Financial Officer of the Company, stating that no Event of
Default has occurred and is continuing.
     2. Commitment by ADVB. ADVB hereby covenants and agrees that it has
reserved cash or other immediately liquid assets in the amount of $1,500,000 and
shall at all times while the Note remains outstanding continue to reserve a
sufficient amount of cash or other immediately liquid assets as to enable it to
make advances under the Note.
     3. Subordination by Noteholders. Noteholders agree to subordinate the Note
in the event the Company arranges to have a commercial lender provide financing
to the Company for similar purposes, which subordination must be on terms and
conditions acceptable to the Noteholders in their reasonable discretion.
     4. Information Regarding Use of Proceeds. Promptly following request
therefore by the Noteholders, the Company shall provide Noteholders with
reasonable detail regarding the use of proceeds with respect to any advance made
under the Note, subject to the Company’s obligations under Regulation F-D.

 

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     5. Arbitration. In the event of any and all disagreements and controversies
arising from this Agreement or the Note, such disagreements and controversies
shall be subject to binding arbitration as arbitrated in accordance with the
then current Commercial Arbitration Rules of the American Arbitration
Association in Chicago, Illinois before one neutral arbitrator. Either party may
apply to the arbitrator seeking injunctive relief until the arbitration award is
rendered or the controversy is otherwise resolved. Without waiving any remedy
under this Agreement, either party may also seek from any court having
jurisdiction any interim or provisional relief that is necessary to protect the
rights or property of that party, pending the establishment of the arbitral
tribunal (or pending the arbitral tribunal’s determination of the merits of the
controversy). In the event of any such disagreement or controversy, neither
party shall directly or indirectly reveal, report, publish or disclose any
information relating to such disagreement or controversy to any person, firm or
corporation not expressly authorized by the other party to receive such
information or use such information or assist any other person in doing so,
except to comply with actual legal obligations of such party, or unless such
disclosure is directly related to an arbitration proceeding as provided herein,
including, but not limited to, the prosecution or defense of any claim in such
arbitration. The costs and expenses of the arbitration (excluding attorneys’
fees) shall be paid by the non-prevailing party or as determined by the
arbitrator.
     6. Miscellaneous.
     (a) All of the WHEREAS clauses and other recitals at the beginning of this
Agreement are hereby incorporated into and made part of this Agreement.
     (b) This Agreement shall be binding upon, and shall inure solely to the
benefit of, each of the parties hereto, and each of their respective heirs,
executors, administrators, successors and permitted assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
Noteholder shall assign its rights under this Agreement except in connection
with an assignment under the Note permitted by the terms thereof.
     (c) This Agreement may be amended only by written execution by all parties.
No waiver of any provision of this Agreement shall in any event be effective
unless the same shall be in writing and acknowledged by the party against whom
enforcement is sought, and then any such waiver shall be effective only in the
specific instance and for the specific purpose for which given.
     (d) The descriptive headings of the several sections and paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
     (e) All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Illinois.

 

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     (f) Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by, unenforceable or
invalid under any jurisdiction, such provision shall as to such jurisdiction, be
severable and be ineffective to the extent of such prohibition or invalidity,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
     (g) This Agreement may be executed in one or more counterparts, all of
which shall be deemed but one and the same agreement and each of which shall be
deemed an original. Delivery by facsimile of an executed counterpart of this
Agreement shall be effective as an original executed counterpart hereof and
shall be deemed a representation that an original executed counterpart hereof
will be delivered.
     (h) THE PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT.
     (i) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF
THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION. EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
LIME ENERGY CO.

         
By:
Name:
  /s/ Jeffrey Mistarz
 
Jeffrey R. Mistarz    
Title:
  Executive Vice President and Chief Financial Officer    

NOTEHOLDERS:

         
By:
Name:
  /s/ Richard P. Kiphart
 
Richard P. Kiphart    

Advanced Biotherapy Inc.

         
By:
  Christopher W. Capps
 
     Christopher W. Capps, President