exv10w1






Exhibit 10.1




SECOND AMENDED AND RESTATED




REVOLVING LINE OF CREDIT NOTE

No. AR — 3




			
	 	 	 
	$14,500,000
	 	Dated: August 14, 2008






     Lime Energy Co., a Delaware corporation (the “Company”), for value received, promises to pay
to Richard P. Kiphart (“Noteholder”), the principal amount of Fourteen Million Five Hundred
Thousand Dollars ($14,500,000) (the “Maximum Principal Amount”), or so much thereof as may be
advanced and be outstanding, together with interest thereon, to be computed on each advance from
the date of its disbursement as set forth herein. This Note is issued pursuant to that certain
Note Issuance Agreement dated of even date herewith, by and among the Company, Noteholder and the
other lender named therein, and the obligation of the Noteholder to make advances is subject to the
Company’s compliance with the conditions set forth in the Note Issuance Agreement.



     Noteholder authorizes the Company to record on the grid sheet accompanying this Note (the
“Grid Sheet”) all advances, repayments, prepayments and the unpaid principal balance from time to
time. As provided in the AR Note Issuance Agreement, all advances, repayments and prepayments on
the notes issued pursuant thereto are to be made pro rata among Noteholder and the lender named
therein. Noteholder agrees that, in the absence of manifest error, the record kept by the Company
on the Grid Sheet shall be conclusive evidence of the matters recorded, provided that the failure
of the Company to record or correctly record any amount or date shall not affect the obligation of
the Company to pay the outstanding principal balance of the advances and the interest thereon in
accordance with this Note.



     The following is a statement of the rights of Noteholder and the conditions to which this Note
is subject, and to which Noteholder, by the acceptance of this Note, agrees:



     1. Payment of Principal and Interest.



          1.1. Interest. The outstanding principal balance hereunder shall bear interest at the
rate of seventeen percent (17%) per annum with twelve percent (12%) per annum payable in cash (the
“Current Interest”) and the remaining five percent (5%) per annum to be capitalized (the
“Capitalized Interest”). The Current Interest shall be payable on the first day of each calendar
quarter, commencing on October 1, 2008 and continuing until the principal balance hereunder shall
have been paid in full. The Capitalized Interest shall be added to the outstanding principal
balance of this Note on the first calendar day of each quarter that this Note remains outstanding
(the “Capitalized Interest”) and shall be due and payable on the Maturity Date (as hereinafter
defined) or on such other date as may be required hereby. As used herein, references to the
“principal balance” shall include Capitalized Interest. For the avoidance of doubt, Capitalized
Interest shall bear interest at the same interest rate and shall be payable on the same terms as
principal advanced by the Noteholder. Capitalized Interest and Current Interest shall be
calculated based on a 365 day year for the actual number of days elapsed




          1.2. Principal. The entire outstanding principal balance and all accrued and unpaid
interest shall be immediately due and payable on March 31, 2009 (the “Maturity Date”).




          1.3. Borrowing and Repayment. The Company may from time to time during the term of
this Note borrow, partially or wholly, repay its outstanding borrowings, and reborrow, subject to
all of the limitations, terms and conditions of this Note; provided, however, that the total
outstanding borrowings under this Note shall not at any time exceed the Maximum Principal Amount.
The













 






outstanding principal balance of this Note, together with all accrued but unpaid interest,
including, without limitation, all Capitalized Interest, shall be due and payable in full on the
Maturity Date.




          1.4. Business Purpose; Usury Savings Clause. This Note is being issued for business
purposes. The Company and Noteholder intend to comply at all times with applicable usury laws. If
at any time such laws would render usurious any amounts due under this Note under applicable law,
then it is the Company’s and Noteholder’s express intention that the Company not be required to pay
interest on this Note at a rate in excess of the maximum lawful rate, that the provisions of this
Section 1.4 shall control over all other provisions of this Note which may be in apparent
conflict hereunder, that such excess amount shall be immediately credited to the principal balance
of this Note (or, if this Note has been fully paid, refunded by Noteholder to the Company), and the
provisions hereof shall be immediately reformed and the amounts thereafter decreased, so as to
comply with the then applicable usury law, but so as to permit the payment of the maximum amount
otherwise due under this Note.




          1.5. Application of Payments. Payments by the Company shall be applied first to any
and all accrued interest through the payment date and second to the unpaid principal balance.




     2. Unused Funds Fee. The Company agrees to pay to Noteholder a fee (the “Unused Funds
Fee”) calculated by multiplying (a) four percent (4%) times (b) the daily amount by which the
Maximum Principal Amount exceeds the outstanding advances made to the Company, excluding
Capitalized Interest, dividing the product by (c) 365 and then multiplying the quotient by (d) the
number of days in such calendar quarter. The Unused Funds Fee shall be payable quarterly in
arrears on the first Business Day (as hereinafter defined) of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date following the date hereof,
with a final payment on the Maturity Date or any earlier date on which all amounts payable
hereunder become due pursuant to the terms hereof. Any Unused Funds Fee that shall not be paid by
the tenth (10th) day of each calendar quarter shall accrue interest at the rate of
seventeen percent (17%) per annum until paid in full together with such accrued interest.
“Business Day” shall mean any day, other than a Saturday, Sunday, a day that is a legal holiday
under the laws of the State of Illinois or any other day on which banking institutions located in
Chicago, Illinois are authorized or required by law or other governmental action to close.



     3. Termination Fee. In the event, and on the date (the “Termination Date”), that the
Company delivers written notice to Noteholder terminating the lending relationship evidenced by
this Note prior to the Maturity Date, the Company agrees to pay a termination fee to the Noteholder
(the “Termination Fee”) calculated by dividing (a) Eight Hundred Thousand Dollars ($800,000) by (b)
three hundred sixty five days and then multiplying the quotient by (c) the number of days from the
Termination Date to the Maturity Date.



     4. Conversion of Note into Common Stock.



          4.1. Provided this Note has not been paid in full as of the Maturity Date, then, at any time
from April 1, 2009 to March 31, 2010, Noteholder is entitled, at its option, to convert all or any
portion of the principal amount then outstanding under this Note into shares of Common Stock of the
Company (“Conversion Shares”) at the Conversion Price. The Conversion Price shall be $7.93 per
share of Common Stock.




     4.2. Such conversion shall be achieved by submitting to the Company a conversion notice
executed by the Noteholder evidencing such Noteholder’s intention to convert this Note or the
specified portion hereof (“Notice of Conversion”). A Notice of Conversion may be submitted via
facsimile to the Company at the telecopier number for the Company provided on the signature page to
this Note (or at such other number as requested in advance of such conversion in writing by the
Company), and such facsimile copy shall be deemed an original Notice of Conversion for all
purposes. The Company and Noteholder shall each keep records with respect to the portion of this
Note then being



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converted and all portions previously converted; upon receipt by Noteholder of the requisite
Conversion Shares, the outstanding principal amount of the Note shall be reduced by the amount
specified in the Notice of Conversion resulting in such Conversion Shares. Upon request by the
Company, the Noteholder shall surrender this Note along with the Notice of Conversion for the
purposes of canceling this Note where the amount of principal so converted is the entire amount
outstanding under this Note.




          4.3. After the Maturity Date, if any principal amount remains outstanding under this Note, the
Company agrees it will provide Noteholder with ten calendar days’ advance written notice prior to
any repayment. Following such notice, the Noteholder may at its election choose to convert
pursuant to this Section 4 either the amount of principal proposed to be repaid, or the entire
principal amount then outstanding.




          4.4. No fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest whole share. Accrued
interest on the converted portion of the Note shall be payable upon conversion thereof, in cash or
Conversion Shares at the Conversion Price, at the Noteholder’s option as specified in the Notice of
Conversion. In all cases, the Company shall deliver the Conversion Shares to the Holder within
five (5) Business Days after its receipt of the Notice of Conversion, and at the address specified
in the Notice of Conversion.




     5. Events of Default.



          5.1. Definition. For purposes of this Note, an “Event of Default” shall be deemed to
have occurred if:





     (a) the Company fails to pay within ten (10) days after written demand the
Current Interest or Unused Funds Fee then due and payable on this Note; or




     (b) the Company fails to pay in full the principal balance (including, without
limitation, the Capitalized Interest) outstanding together with accrued but unpaid
interest thereon on the Maturity Date; or




     (c) the Company fails to pay the Termination Fee on the Termination Date; or




     (d) the Company makes an assignment for the benefit of creditors or admits in
writing its inability to pay its debts generally as they become due; or an order,
judgment or decree is entered adjudicating the Company bankrupt or insolvent; or any
order for relief with respect to the Company is entered under the Federal Bankruptcy
Code; or the Company petitions or applies to any tribunal for the appointment of a
custodian, trustee, receiver or liquidator of the Company, or of any substantial
part of the assets of the Company, or commences any proceeding relating to the
Company under bankruptcy reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction; or any such petition or
application is filed, or any such proceeding is commenced, against the Company and
such petition, application or proceeding is not dismissed within sixty (60) days, or




     (e) the Company sells all or substantially all of its assets.



          5.2. Consequences of an Event of Default. If any Event of Default has occurred and is
continuing, Noteholder may declare all or any portion of the outstanding principal balance of this
Note (together with all accrued interest and all other amounts due and payable with respect to this
Note) to be immediately due and payable and may demand, by written notice delivered to the Company,
immediate



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payment of all or any portion of the outstanding principal balance of this Note (together with
all such other amounts then due and payable under this Note).




     6. Waiver. The Company waives presentment, demand for performance, notice of
nonperformance, protest, notice of protest, and notice of dishonor. No delay on the part of
Noteholder in exercising any right hereunder shall operate as a waiver of such right under this
Note.



     7. Collection. If the indebtedness represented by this Note or any part thereof is
collected at law or in equity or in bankruptcy, receivership or other judicial proceedings or if
this Note is placed in the hands of attorneys for collection after default, the Company agrees to
pay, in addition to the principal and interest payable hereon, reasonable attorneys’ fees and costs
incurred by Noteholder.



     8. Security. The Company’s obligations under this Note are secured by that certain
Security Agreement dated as of the date hereof made by the Company in favor of the Noteholder and
Advanced Biotherapy, Inc.



     9. General Provisions.



          9.1. Notices. Any notice, request, demand or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly given (a) three (3)
days after being sent by registered or certified mail, return receipt requested, or (b) on the
first Business Day after being deposited with a nationally recognized overnight delivery service
for next Business Day delivery, or (c) when personally delivered, in each case with all postage and
fees prepared and addressed, as the case may be, to Noteholder c/o William Blair, 222 W. Adams,
Chicago, Illinois 60606, or to the Company at the address below its name on the signature page
hereof, with a copy to Reed Smith, LLP., 10 S. Wacker Drive, Suite 4000, Chicago, Illinois 60606,
Attention: Evelyn Arkebauer, or to such other person or address as either party shall designate to
the other from time to time in writing delivered in like manner.




          9.2. Amendment. This Note amends and restates in its entirety that certain Amended
and Restated Revolving Line of Credit Note dated June 6, 2008 heretofore delivered by Company to
Noteholder (the “Original Note”) and constitutes a renewal, extension and restatement of, and a
replacement and substitute for the Original Note. The indebtedness evidenced by the Original Note
is a continuing indebtedness and nothing herein shall be deemed to constitute a payment, settlement
or novation of the Original Note. The provisions of this Note may be amended only by written
agreement of the Company and Noteholder.




          9.3. Severability; Headings. In case any provision of this Note shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be effected or impaired thereby, unless to do so would deprive Noteholder or
the Company of a substantial part of its bargain. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.




          9.4. Entire Agreement; Changes. This Note contains the entire agreement between the
parties hereto superseding and replacing any prior agreement or understanding relating to the
subject matter hereof. Neither this Note nor any term hereof may be changed, waived, discharged or
terminated orally but, except as provided in Section 7.2 above, only by an instrument in
writing signed by the party against which enforcement of the change, waiver, discharge or
termination is sought.




          9.5. Successors and Assigns. This Note shall be binding upon the Company’s successors
and assigns.




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          9.6. Remedies Cumulative. The Noteholder’s rights and remedies set forth in this Note
are not intended to be exhaustive and the exercise by Noteholder of any right or remedy does not
preclude the exercise of any other rights or remedies that may now or subsequently exist in law or
in equity or by statute or otherwise.




          9.7. Governing Law. This Note shall be construed and enforced in accordance with, and
governed by, the internal laws of the State of Illinois, excluding that body of law applicable to
conflicts of law.




[Signature on following page]




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     IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name as of the date
first written above.




	 	 	 	 	 
	 	 	LIME ENERGY CO.	 

	 
	 	By:  	                   /s/ Jeffrey Mistarz
 	 
	 	Name:  	Jeffrey Mistarz 	 
	 	Title:  	Chief Financial Officer


	 
	 	Address: 	

           1280 Landmeier Road


Elk Grove Village, IL 60007
Attn:  Chief Financial Officer



Facsimile:  (847) 437-4969 	 



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GRID SHEET FOR

SECOND AMENDED AND RESTATED REVOLVING LINE OF CREDIT NOTE




ADVANCES AND PAYMENTS OF PRINCIPAL




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Amount of	 	Amount of	 	Unpaid Principal	 	Notation Made
	Date	 	Advance	 	Principal Paid	 	Balance	 	By






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