Exhibit 10.4

 

NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED UNLESS (A) SUBSEQUENTLY
REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR (B) THE HOLDER
HEREOF SHALL HAVE DELIVERED TO THE COMPANY A WRITTEN OPINION OF COUNSEL, IN
FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, TO THE EFFECT
THAT THE SHARES TO BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED ARE BEING
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO AN EXEMPTION FROM
SUCH REGISTRATION.

 

LIME ENERGY CO.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.:

Number of Shares: 62,500

 

Original Date of Issuance: August 10, 2009

 

LIME ENERGY CO., a Delaware corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, RICHARD P. KIPHART, the registered holder hereof or his
permitted assigns registered on the books of the Company (the “Holder”), is
entitled, subject to the terms and conditions set forth below including
Section 2 hereof, to purchase from the Company upon surrender of this Warrant,
at any time or times on or after February 20, 2010 (the “Exercise Eligibility
Date”), but before February 20, 2014 (the “Expiration Date”), Sixty Two
Thousand, Five Hundred (62,500) fully paid and nonassessable shares (the
“Warrant Shares”) of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”), at the exercise price per share equal to $6.40, subject to
adjustment as hereinafter provided (the “Warrant Exercise Price”).

 

1.                                       Definitions.  In addition to the
capitalized terms defined elsewhere herein, the following terms as used in this
Warrant shall have the following meanings:

 

“Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in the City of Chicago are authorized or required by law to
remain closed.

 

“Fair Market Value” means, the fair market value of a share of Common Stock as
of a particular date (the “Determination Date”) as follows:

 

(a)           If the Common Stock is traded on the NASDAQ Capital Market
(“NASDAQ”) or another national exchange, then the closing sale price reported
for the last Business Day immediately preceding the Determination Date.

 

(b)           If the Common Stock is not traded on NASDAQ or another national
exchange but is traded on the OTC Bulletin Board, then the mean of the average
of the closing bid and asked prices reported for the last Business Day
immediately preceding the Determination Date.

 

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(c)           Except as provided in clause (d) of this definition below, if the
Common Stock is not then publicly traded, then as the Holder and the Company
agree, or in the absence of agreement, as determined by arbitration in
accordance with Section 20 hereof.

 

(d)           If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company’s charter, then all amounts to be payable
per share to holders of the Common Stock pursuant to the charter in the event of
such liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of this Warrant are outstanding at the
Determination Date.

 

“Note” means the 2009 Revolving Line of Credit Note issued by the Company in
favor of Richard P. Kiphart in the original principal amount of $2 million.

 

“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization or a
government or any department or agency thereof.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

2.                                       Exercise of Warrant.

 

(a)                                  If and only if the outstanding principal
balance of the Note, together with accrued but unpaid interest thereon, shall
not have been paid in full by February 20, 2010, then subject to the terms and
conditions hereof, this Warrant may be exercised by the Holder, in whole or in
part, during normal business hours on any Business Day on or after the Exercise
Eligibility Date and prior to 5:00 p.m. Chicago Time on the Expiration Date by:

 

(i)            delivery of a duly executed written notice, in the form of the
subscription notice attached as Exhibit A hereto (the “Exercise Notice”), of
such Holder’s election to exercise this Warrant, which notice shall specify the
number of Warrant Shares to be purchased;

 

(ii)           payment to the Company of an amount equal to the Warrant Exercise
Price multiplied by the number of Warrant Shares as to which this Warrant is
being exercised (the “Aggregate Exercise Price”), either in cash or by certified
check or wire transfer of immediately available funds; and

 

(iii)          delivery to the Company of this Warrant (or an indemnity and
evidence with respect to this Warrant in the case of its loss, theft, mutilation
or destruction as provided in Section 13).

 

In the event of any exercise of the rights represented by this Warrant in
compliance with this Section 2(a), the Company shall, on or before the tenth
(10th) Business Day following the date of its receipt of the Exercise Notice,
the Aggregate Exercise Price and this Warrant (or an indemnity and evidence with
respect to this Warrant in the case of its loss, theft, mutilation or
destruction as provided in Section 13) (the “Exercise Delivery Documents”),
deliver at the Company’s expense to the Holder, a certificate or certificates
for the Warrant Shares so purchased, in such denominations as may be requested
by Holder and registered in the name of Holder.  Upon the Company’s receipt of
the Exercise Delivery Documents, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery
of certificates evidencing such Warrant Shares.

 

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(b)           Unless the rights represented by this Warrant shall have expired
or shall have been fully exercised, the Company shall, as soon as practicable
and in no event later than ten (10) Business Days after any exercise and at its
own expense, issue a new Warrant identical in all respects to this Warrant
exercised, except it shall represent rights to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under this Warrant
exercised, less the number of Warrant Shares with respect to which this Warrant
is exercised.

 

(c)           No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock issued
upon exercise of this Warrant shall be rounded up to the nearest whole number.

 

(d)           If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.

 

3.                                       Covenants.  The Company hereby
represents, covenants and agrees as follows:

 

(a)           This Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.

 

(b)           All Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable.

 

(c)           The Company has full power and authority to enter into this
Warrant, and to issue and deliver this Warrant and the Warrant Shares, and to
incur and perform fully the obligations provided herein, all of which have been
duly authorized by all necessary corporate action.

 

(d)           This Warrant has been duly executed and delivered and is the valid
and binding obligation of the Company enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium and other similar laws affecting creditors’ rights generally and by
general principles of equity.

 

(e)           Unless required by law, the Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant.

 

(f)            The Company agrees to maintain, at its aforesaid office, books
for the registration and the registration of transfer of the Warrants.

 

4.                                       Taxes.  The Company shall pay any and
all taxes, except income taxes, which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

5.                                       Holder Not Deemed a Stockholder. 
Except as otherwise specifically provided herein, this Warrant shall not entitle
Holder to vote or receive dividends or any other rights of a stockholder of the
Company, including, without limitation, any right to vote, give or withhold
consent to any corporate action (whether a reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings or receive subscription rights.

 

6.                                       Representations of Holder.  The Holder,
by the acceptance hereof, represents and warrants that it:

 

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(a)           is acquiring this Warrant and the Warrant Shares solely for its
own account, for investment and not with a view towards the distribution or
resale thereof in violation of the Securities Act or any applicable state
securities laws;

 

(b)           has received such documents, materials and information as the
Holder deems necessary or appropriate for evaluation of the acquisition of this
Warrant and the right to acquire Warrant Shares hereunder;

 

(c)           is an “accredited investor” as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in this Warrant and the Warrant Shares;

 

(d)           understands that no U.S. federal, state or regulatory agency has
recommended, approved or endorsed, or passed upon the fairness or suitability
of, an investment in this Warrant or the Warrant Shares or passed up on the
accuracy or adequacy of the information provided to the Holder; and

 

(e)           recognizes that an investment in the Warrant Shares involves a
high degree of financial risk, and that it can bear the economic risk of losing
its entire investment in the Warrant Shares and has sought, or will seek, such
accounting, legal and tax advice as it has considered, or will consider,
necessary to make an informed investment decision with respect to its
acquisition of this Warrant and of any Warrant Shares.

 

If the Holder cannot make any of the foregoing representations at the time of
any exercise of this Warrant because it would be factually incorrect at that
time, the Holder shall so notify the Company, and it shall be a condition to the
Holder’s exercise of this Warrant at that time that the Company receive such
other assurances as the Company then considers reasonably necessary to assure
the Company that the issuance of the Warrant Shares upon such exercise of this
Warrant at such time shall not violate the Securities Act or any state
securities laws.

 

7.                                       Restriction on Transfer.

 

(a)           This Warrant and the rights granted to Holder are transferable, in
whole or in part, upon surrender of this Warrant, together with a properly
executed transfer endorsement in the form of Exhibit B attached hereto;
provided, however, that any transfer or assignment shall be subject to the
approval of the Company, such approval not to be unreasonably withheld, and the
conditions set forth in Section 7(b) below.

 

(b)           Holder represents and warrants that he understands that the
Company is under no obligation to register this Warrant or any of the Warrant
Shares, under the Securities Act and that this Warrant and Warrant Shares will
be characterized as “restricted securities” under the Securities Act because
they are being acquired from the Company in a transaction not involving a public
offering.  The Holder also represents and warrants that he understands that
neither the Warrant nor the Warrant Shares may be offered for sale, sold,
assigned or transferred unless (i) at that time they have been registered
pursuant to an effective registration statement under the Securities Act and
applicable state securities laws, or (ii) the Holder shall have delivered to the
Company a written opinion of counsel, in form, substance and scope reasonably
acceptable to the Company, to the effect that the securities to be offered for
sale, sold, assigned or transferred are being offered for sale, sold, assigned
or transferred pursuant to an exemption from such registration.

 

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(c)           Unless upon their issuance such Warrant Shares are then registered
under the Securities Act pursuant to an effective registration statement, any
certificates representing Warrant Shares issued in accordance with this Warrant
shall bear a legend substantially in the following form:

 

THE SHARES OF COMMON STOCK OF LIME ENERGY CO. (THE “COMPANY”) REPRESENTED BY
THIS CERTIFICATE (THE “SHARES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED UNLESS (A) SUBSEQUENTLY REGISTERED PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR (B) THE HOLDER HEREOF SHALL HAVE DELIVERED TO THE COMPANY A
WRITTEN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE
TO THE COMPANY, TO THE EFFECT THAT THE SHARES TO BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED ARE BEING OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION.

 

(d)           If the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall be a Saturday, Sunday
or a legal holiday, then such action may be taken or such right may be exercised
on the next succeeding day not a Saturday, Sunday or legal holiday.

 

8.                                       Adjustment of Warrant Exercise Price
and Number of Warrant Shares upon Subdivision or Combination of Common Stock.

 

(a)           If the Company at any time after the date of issuance of this
Warrant subdivides (by any stock split or stock dividend of its Common Stock)
its outstanding shares of Common Stock into a greater number of shares of Common
Stock, the Warrant Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of Warrant Shares
obtainable upon exercise of this Warrant will be proportionately increased.  If
the Company at any time after the date of issuance of this Warrant combines (by
reverse stock split or otherwise) its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, the Warrant Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares obtainable upon exercise of this Warrant will be
proportionately decreased.  Any adjustment under this Section 8(a) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

 

(b)           Upon any adjustment of the Warrant Exercise Price or number of
issuable Warrant Shares pursuant to this Section 8, the Company will give
written notice thereof to the Holder, setting forth in reasonable detail the
calculation of such adjustment.

 

9.                                       Reorganization, Reclassification. 
Consolidation, Merger or Sale.

 

If at any time, as a result of:

 

(a)           a capital reorganization or reclassification (other than a
subdivision or combination provided for in Section 8(a)), or

 

(b)           a merger or consolidation of the Company with another corporation
(whether or not the Company is the surviving corporation) or sale of
substantially all of the Company’s stock, the Common Stock issuable upon
exercise of this Warrant shall be changed into or exchanged for the same or

 

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a different number of shares of any class or classes of capital stock of the
Company or any other Person, or other securities convertible into such shares,
then, as a part of such reorganization, reclassification, merger, consolidation
or sale, appropriate adjustments shall be made in the terms of this Warrant (or
of any securities into which this Warrant is exercised or for which this Warrant
is exchanged), so that Holder shall thereafter be entitled to receive, upon
exercise of this Warrant or of such substitute securities, the kind and amount
of shares of stock, other securities, money and property which Holder would have
received at the time of such capital reorganization, reclassification, merger,
consolidation or sale, if Holder had exercised this Warrant immediately prior to
such capital reorganization, reclassification, merger, consolidation or sale. 
This Warrant, including, without limitation, the provisions of this Section 9
will be binding upon any entity succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s
assets.  The provisions of this Section 9 shall similarly apply to
(x) successive capital reorganizations, reclassifications, mergers,
consolidations and sale and (y) the securities of any other Person that are at
the time receivable upon the exercise of this Warrant.

 

10.                                 Voluntary Adjustment by the Company.  The
Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the company.

 

11.                                 Notice of Adjustment.  Whenever the number
of Warrant Shares or number or kind of securities or other property purchasable
upon the exercise of this Warrant or the Exercise Price is adjusted, as herein
provided, the Company shall promptly notify the Holder, in accordance with
Section 15 below, of such adjustment or adjustments setting forth the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, seeing forth a brief statement of
the facts requiring such adjustment and setting forth the computation by which
such adjustment was made.

 

12.                                 Notice of Corporate Action.  If at any time:

 

(a)           the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
or any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or

 

(b)           there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or

 

(c)           there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;

 

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days’ prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and
(ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 20 days’ prior written notice of the date when the same shall take
place.  Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common

 

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Stock shall be entitled to any such dividend, distribution or right, and the
amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up.

 

13.                                 Lost, Stolen, Mutilated or Destroyed
Warrant.  If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall promptly, on receipt of evidence reasonably satisfactory to the Company of
the ownership of, and the loss, theft, mutilation or destruction of, this
Warrant, and an indemnity reasonably satisfactory to the Company (or in the case
of a mutilated Warrant, the Warrant), issue in lieu thereof a new Warrant of
like denomination and tenor as this Warrant so lost, stolen, mutilated or
destroyed.

 

14.                                 Authorized Shares.

 

(a)           The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant.  The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the market upon which
the Common Stock may be listed.

 

(b)           The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or though any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment.  Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

 

(c)           Before taking any action which would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

 

15.                                 Notice.  Any notices, consents, waivers or
other communications required or permitted to be given under the terms of this
Warrant must be in writing and will be deemed to have been made upon receipt
when delivered personally, via pre-paid overnight courier or by certified mail,
postage pre-paid, return receipt requested.  The addresses for such
communications shall be:

 

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If to the Company:

 

Lime Energy Co.

1280 Landmeier Road

Elk Grove Village, Illinois 60007

Attention:

Jeffrey R. Mistarz

 

Executive Vice President and

 

Chief Financial Officer

 

If to the Holder:

 

Richard P. Kiphart

c/o William Blair & Co. LLC

222 West Adams Street

Chicago, Illinois 60606

 

or such other address as the Company or Holder, as applicable, may specify in
written notice given to the other party in accordance with this Section 15.

 

16.           Amendments.  This Warrant and any term hereof may be changed,
waived, discharged, or terminated only by an instrument in writing signed by the
party hereto against which enforcement of such change, waiver, discharge or
termination is sought.

 

17.           Expiration.  This Warrant, in all events, shall be wholly void and
of no effect after 5:00 p.m. Chicago Time on the Expiration Date.

 

18.           Successors and Assigns.  The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and permitted assigns.

 

19.           Descriptive Headings; Governing Law.  The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant.  All questions concerning the
construction, validity, enforcement and interpretation of this Warrant 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.

 

20.           Arbitration.  In the event of any and all disagreements and
controversies arising from this Warrant, 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 Warrant, 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.

 

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The costs and expenses of the arbitration (excluding attorneys’ fees) shall be
paid by the non-prevailing party or as determined by the arbitrator.

 

21.           Nonwaiver and Expenses.  No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date.  If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

22.           Limitation of Liability.  No provision hereof, in the absence of
affirmative action by Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of Holder, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

 

23.           Remedies.  Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant.  The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by a duly
authorized officer, as of the 10th day of August, 2009.

 

 

 

LIME ENERGY CO.,
a Delaware corporation

 

 

 

 

 

By:

/s/ Jeffrey R. Mistarz

 

Name:

Jeffrey R. Mistarz

 

Title:

Executive Vice President and

 

 

Chief Financial Officer

 

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EXHIBIT A TO WARRANT

 

SUBSCRIPTION FORM

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

 

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.         ), hereby irrevocably elects to purchase                     
shares of the Common Stock covered by such Warrant.

 

The undersigned herewith makes payment of the Aggregate Exercise Price for such
shares at the price per share provided for in such Warrant.  Such payment takes
the form of $                     in lawful money of the United States.

 

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to
                                                                                                             ,
whose address is
                                                                                                                            .

 

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the “Securities Act”) or pursuant to an exemption from
registration under the Securities Act.

 

 

Date:                                      , 20       

 

 

Richard P. Kiphart

 

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EXHIBIT B TO WARRANT

 

FORM OF TRANSFEROR ENDORSEMENT

 

(To be signed only on transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns, and transfers unto
the person(s) named below under the heading “Transferees” the right represented
by the within Warrant to purchase the percentage and number of shares of Common
Stock of Lime Energy Co. into which the within Warrant relates specified under
the headings “Percentage Transferred” and “Number Transferred,” respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of Lime Energy Co. with full power of
substitution in the premises.

 

Transferees

 

Address

 

Percentage Transferred

 

Number Transferred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dated:

 

 

 

 

 

(Signature must conform to name of holder as specified n the face of the
Warrant)

 

 

 

Signed in the presence of:

 

 

 

 

 

 

 

 

(Name)

 

(Address)

 

 

 

 

 

 

ACCEPTED AND AGREED:
[TRANSFEREE]

 

 

 

 

 

 

 

 

(Name)

 

(Address)

 

 

 

 

 

 

 

 

(Address)

 

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