Document:

Unassociated Document

    
      

    

    Exhibit
10.3

    INDEMNIFICATION
AGREEMENT

     

    This
Indemnification Agreement (“Agreement”) is
entered into as of June 13, 2008 by and between M-WAVE, Inc., a Delaware
corporation (the “Company”), and Jeff
Figlewicz (“Indemnitee”).

     

    RECITALS

     

    A.          
 The Company and Indemnitee recognize the continued difficulty in obtaining
liability insurance for its directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance.

     

    B.          
  The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited.

     

    C.          
  Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee  may not be
willing to continue to serve in such capacities without additional
protection.

     

    D.          
 The Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company and, in part, in order to
induce Indemnitee to continue to provide services to the Company, wishes to
provide for the indemnification and advancing of expenses to Indemnitee to the
maximum extent permitted by law.

     

    E.          
  In view of the considerations set forth above, the Company desires
that Indemnitee be indemnified by the Company as set forth herein.

     

    NOW,
THEREFORE, the Company and Indemnitee hereby agree as follows:

     

    1.          
  Indemnification.

     

    (a)       
    Indemnification of
Expenses.  The Company shall indemnify Indemnitee to the
fullest extent permitted by law if Indemnitee was or is or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, any threatened, pending or completed action,
suit, proceeding or alternative dispute resolution mechanism, or any hearing,
inquiry or investigation that Indemnitee in good faith believes might lead to
the institution of any such action, suit, proceeding or alternative dispute
resolution mechanism, whether civil, criminal, administrative, investigative or
other (hereinafter a “Claim”) by reason of
(or arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was serving at the request
of the Company as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action or inaction on the part of Indemnitee while serving in such
capacity (hereinafter an “Indemnifiable Event”)
against any and all expenses (including attorneys’ fees and all other costs,
expenses and obligations incurred in connection with investigating, defending,
being a witness in or participating in (including on appeal), or preparing to
defend, be a witness in or participate in, any such action, suit, proceeding,
alternative dispute resolution mechanism, hearing, inquiry or investigation),
judgments, fines, penalties and amounts paid in settlement (if such settlement
is approved in advance by the Company, which approval shall not be unreasonably
withheld) of such Claim and any federal, state, local or foreign taxes imposed
on Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement (collectively, hereinafter “Expenses”), including
all interest, assessments and other charges paid or payable in connection with
or in respect of such Expenses.  Such payment of Expenses shall be
made by the Company as soon as practicable but in any event no later than five
days after written demand by Indemnitee therefor is presented to the
Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           Reviewing
Party.  Notwithstanding the foregoing, (i) the obligations
of the Company under Section 1(a) shall be subject to the condition that
the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee
would not be permitted to be indemnified under applicable law, and (ii) the
obligation of the Company to make an advance payment of Expenses to Indemnitee
pursuant to Section 2(a) (an “Expense Advance”)
shall be subject to the condition that, if, when and to the extent that the
Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed
by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed).  Indemnitees’ obligation to reimburse the
Company for any Expense Advance shall be unsecured and no interest shall be
charged thereon.  If there has not been a Change in Control (as
defined in Section 10(c) hereof), the Reviewing Party shall be selected by
the Board of Directors, and if there has been such a Change in Control (other
than a Change in Control which has been approved by a majority of the Company’s
Board of Directors who were directors immediately prior to such Change in
Control), the Reviewing Party shall be the Independent Legal Counsel referred to
in Section 1(c) hereof.  If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation seeking
an initial determination by the court or challenging any such determination by
the Reviewing Party or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process and to appear in
any such proceeding.  Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and
Indemnitee.

     

    (c)       
    Change in
Control.  The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been approved
by a majority of the Company’s Board of Directors who were directors immediately
prior to such Change in Control) then, with respect to all matters thereafter
arising concerning the rights of Indemnitees to payments of Expenses and Expense
Advances under this Agreement or any other agreement or under the Company’s
Certificate of Incorporation or Bylaws as now or hereafter in effect,
Independent Legal Counsel (as defined in Section 10(d) hereof) shall be
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld).  Such counsel, among other things, shall
render its written opinion to the Company and Indemnitee as to whether and to
what extent Indemnitee would be permitted to be indemnified under applicable law
and the Company agrees to abide by such opinion.  The Company agrees
to pay the reasonable fees of the Independent Legal Counsel referred to
above.

    
      
         

      

      
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    (d)           Mandatory Payment of
Expenses.  Notwithstanding any other provision of this
Agreement other than Section 9 hereof, to the extent that Indemnitee has
been successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit,
proceeding, inquiry or investigation referred to in Section (1)(a) hereof
or in the defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against all Expenses incurred by Indemnitee in connection
therewith.

     

    2.             
Expenses;
Indemnification Procedure.

     

    (a)           Advancement of
Expenses.  The Company shall advance all Expenses incurred by
Indemnitee.  The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than five
days after written demand by Indemnitee therefor to the Company.

     

    (b)           Notice/Cooperation by
Indemnitee.  Indemnitee shall, as a condition precedent to
Indemnitees’ right to be indemnified under this Agreement, give the Company
notice in writing as soon as practicable of any Claim made against Indemnitee
for which indemnification will or could be sought under this
Agreement.  Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitee).  In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitees’ power.

     

    (c)           No Presumptions; Burden of
Proof.  For purposes of this Agreement, the termination of any
Claim by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable
law.  In addition, neither the failure of the Reviewing Party to have
made a determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to Indemnitee’s claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.  In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.

    
      
         

      

      
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    (d)           Notice to
Insurers.  If, at the time of the receipt by the Company of a
notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies.  The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of Indemnitee, all amounts payable as a result of such action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies.

     

    (e)           Selection of
Counsel.  In the event the Company shall be obligated hereunder
to pay the Expenses of any Claim, the Company shall be entitled to assume the
defense of such Claim with counsel approved by Indemnitee, which approval shall
not be unreasonably withheld, upon the delivery to Indemnitee of written notice
of its election so to do.  After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same Claim;
provided that,
(i) Indemnitee shall have the right to employ Indemnitees’ counsel in any
such Claim at Indemnitee expense and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company,
(B) Indemnitee shall have reasonably concluded that there is a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to retain such counsel to defend such
Claim, then the fees and expenses of Indemnitee counsel shall be at the expense
of the Company.  The Company shall have the right to conduct such
defense as it sees fit in its sole discretion, including the right to settle any
claim against Indemnitee without the consent of the Indemnitee.

     

    3.             
Additional
Indemnification Rights; Nonexclusivity.

     

    (a)           Scope.  The
Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company’s Certificate of
Incorporation, the Company’s Bylaws or by statute.  In the event of
any change after the date of this Agreement in any applicable law, statute or
rule which expands the right of a Delaware corporation to indemnify a member of
its Board of Directors or an officer, employee, agent or fiduciary, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits afforded by such change.  In the event of any change
in any applicable law, statute or rule which narrows the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer,
employee, agent or fiduciary, such change, to the extent not otherwise required
by such law, statute or rule to be applied to this Agreement, shall have no
effect on this Agreement or the parties’ rights and obligations hereunder except
as set forth in Section 8(a) hereof.

     

    (b)           Nonexclusivity.  The
indemnification provided by this Agreement shall be in addition to any rights to
which Indemnitee may be entitled under the Company’s Certificate of
Incorporation, its Bylaws, any agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the State of Delaware,
or otherwise.  The indemnification provided under this Agreement shall
continue as to Indemnitee for any action Indemnitee took or did not take while
serving in an indemnified capacity even though Indemnitee may have ceased to
serve in such capacity.

    
      
         

      

      
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    4.        
     No Duplication of
Payments.  The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the
extent Indemnitee has otherwise actually received payment (under any insurance
policy, Certificate of Incorporation, Bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder.

     

    5.           
  Partial
Indemnification.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
Expenses incurred in connection with any Claim, but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee are entitled.

     

    6.       
     Mutual
Acknowledgement.  Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise.  Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company’s right under public policy to indemnify
Indemnitee.

     

    7.       
     Liability
Insurance.  To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company’s directors, if Indemnitee is a director; or of the
Company’s officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company’s key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or
fiduciary.

     

    8.         
   Exceptions.  Any
other provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement:

     

    (a)          
 Excluded Action
or Omissions.  To indemnify Indemnitee for Indemnitee’s acts,
omissions or transactions from which Indemnitee or the Indemnitee may not be
relieved of liability under applicable law;

     

    (b)           Claims Initiated by
Indemnitee.  To indemnify or advance expenses to Indemnitee
with respect to Claims initiated or brought voluntarily by Indemnitee and not by
way of defense, except (i) with respect to actions or proceedings brought
to establish or enforce a right to indemnification under this Agreement or any
other agreement or insurance policy or under the Company’s Certificate of
Incorporation or Bylaws now or hereafter in effect relating to Claims for
Indemnifiable Events, (ii) in specific cases if the Board of Directors has
approved the initiation or bringing of such Claim, or (iii) as otherwise
required under Section 145 of the Delaware General Corporation Law,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be;

    
      
         

      

      
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    (c)           Lack of Good
Faith.  To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that
each of the material assertions made by Indemnitee in such proceeding was not
made in good faith or was frivolous; or

     

    (d)           Claims Under
Section 16(b).  To indemnify Indemnitee for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of
1934, as amended, or any similar successor statute.

     

    9.            
Period of
Limitations.  No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against Indemnitee,
Indemnitee’s estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.

     

    10.           Construction of Certain
Phrases.

     

    (a)           For
purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent or fiduciary of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.

     

    (b)           For
purposes of this Agreement, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on Indemnitee with respect to an employee benefit plan; and references
to “serving at the request of the Company” shall include any service as a
director, officer, employee, agent or fiduciary of the Company which imposes
duties on, or involves services by, such director, officer, employee, agent or
fiduciary with respect to an employee benefit plan, its participants or its
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan, Indemnitee shall be deemed to have acted in a
manner “not opposed to the best interests of the Company” as referred to in this
Agreement.

    
      
         

      

      
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    (c)           For
purposes of this Agreement a “Change in Control” shall be deemed to have
occurred if (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company, (A) who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company’s then outstanding Voting Securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person, or (B) becomes the “beneficial owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power
represented by the Company’s then outstanding Voting Securities,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of transactions)
all or substantially all of the Company’s assets.

     

    (d)           For
purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney
or firm of attorneys, selected in accordance with the provisions of
Section 1(c) hereof, who shall not have otherwise performed services for
the Company or Indemnitee within the last three years (other than with respect
to matters concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).

     

    (e)           For
purposes of this Agreement, a “Reviewing Party” shall mean any appropriate
person or body consisting of a member or members of the Company’s Board of
Directors or any other person or body appointed by the Board of Directors who is
not a party to the particular Claim for which Indemnitee are seeking
indemnification, or Independent Legal Counsel.

     

    (f)           For
purposes of this Agreement, “Voting Securities” shall mean any securities of the
Company that vote generally in the election of directors.

     

    11.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original.

     

    12.           Binding Effect; Successors
and Assigns.  This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives.  The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, substantially all, or a substantial part, of the business and/or assets of
the Company, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.  This Agreement shall continue in
effect with respect to Claims relating to Indemnifiable Events regardless of
whether Indemnitee continues to serve as a director, officer, employee, agent or
fiduciary of the Company or of any other enterprise at the Company’s
request.

    
      
         

      

      
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    13.           Attorneys’
Fees.  In the event that any action is instituted by Indemnitee
under this Agreement or under any liability insurance policies maintained by the
Company to enforce or interpret any of the terms hereof or thereof, Indemnitee
shall be entitled to be paid all Expenses incurred by Indemnitee with respect to
such action, regardless of whether Indemnitee is ultimately successful in such
action, and shall be entitled to the advancement of Expenses with respect to
such action, unless, as a part of such action, a court of competent jurisdiction
over such action determines that each of the material assertions made by
Indemnitee as a basis for such action was not made in good faith or was
frivolous.  In the event of an action instituted by or in the name of
the Company under this Agreement to enforce or interpret any of the terms of
this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee in defense of such action (including costs and expenses incurred with
respect to Indemnitee counterclaims and cross-claims made in such action), and
shall be entitled to the advancement of Expenses with respect to such action,
unless, as a part of such action, a court having jurisdiction over such action
determines that each of Indemnitee material defenses to such action was made in
bad faith or was frivolous.

     

    14.           Notice.  All
notices and other communications required or permitted hereunder shall be in
writing, shall be effective when given, and shall in any event be deemed to be
given (a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage prepaid,
(b) upon delivery, if delivered by hand, (c) one business day after
the business day of deposit with Federal Express or similar overnight courier,
freight prepaid, or (d) one day after the business day of delivery by
facsimile transmission, if delivered by facsimile transmission, with copy by
first class mail, postage prepaid, and shall be addressed if to Indemnitee, at
the Indemnitee address as set forth beneath Indemnitee signatures to this
Agreement and if to the Company at the address of its principal corporate
offices (attention:  Secretary) or at such other address as such party
may designate by ten days’ advance written notice to the other party
hereto.

     

    15.           Consent to
Jurisdiction.  The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a
claim.

    
      
         

      

      
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    16.           Severability.  The
provisions of this Agreement shall be severable in the event that any of the
provisions hereof (including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, and the remaining provisions shall remain enforceable
to the fullest extent permitted by law.  Furthermore, to the fullest
extent possible, the provisions of this Agreement (including, without
limitations, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

     

    17.           Choice of
Law.  This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the State of Delaware, as
applied to contracts between Delaware residents, entered into and to be
performed entirely within the State of Delaware, without regard to the conflict
of laws principles thereof.

     

    18.           Subrogation.  In
the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of Indemnitee who
shall execute all documents required and shall do all acts that may be necessary
to secure such rights and to enable the Company effectively to bring suit to
enforce such rights.

     

    19.           Amendment and
Termination.  No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto.  No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.

     

    20.           Integration and Entire
Agreement.  This Agreement sets forth the entire understanding
between the parties hereto and supersedes and merges all previous written and
oral negotiations, commitments, understandings and agreements relating to the
subject matter hereof between the parties hereto.

     

    21.           No Construction as
Employment Agreement.  Nothing contained in this Agreement
shall be construed as giving Indemnitee any right to be retained in the employ
of the Company or any of its subsidiaries.

    

      
        
           

        

        
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    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

     

    

    
      	 	
              M-WAVE,
      Inc.

            
	 	 	 
	 	
              By:

            	 
	 	 	 
	 	
              Title:

            	 
      
	 	 	 
	 	
              Address:
      1300 Norwood Avenue

            
	 	
               
      Itasca, IL 60143

            

    

     

     

    AGREED TO
AND ACCEPTED BY:

     

     

    
    

    
      
        	
                Signature:

              	 
      	 
      
	 
      	 
      	 
      
	
                Printed
      Name:

              	 
      	 
      
	 
      	 
      	 
      
	
                Address:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 	 

      

    

     

     

    -10-Exhibit
      10.30

    AMENDED
      AND RESTATED

    REVOLVING
      LINE OF CREDIT NOTE

    No.
      AR - 1

    

    
      	
              $9,500,000

            	 	
              Dated:
                June 6, 2008

            

    

     

    Lime
      Energy Co., a Delaware corporation (the “Company”),
      for
      value received, promises to pay to Richard P. Kiphart (“Noteholder”),
      the
      principal amount of Nine Million Five Hundred Thousand Dollars ($9,500,000)
      (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 AR 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 June 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) Four Hundred Seventy-Five Thousand Dollars ($475,000)
      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 is equal to the lower of $7.93 or the
      average of the last reported sales price of one share of the Common Stock on
      the
      Nasdaq Capital Market for each of the thirty consecutive trading days ending
      on
      the date immediately preceding the Maturity Date. 

     

    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 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 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.  General
      Provisions.

     

    8.1 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. 

     

    8.2 Amendment.
      This
      Note amends and restates in its entirety that certain Revolving Credit Note
      dated March 12, 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. 

     

    8.3 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. 

     

    8.4 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. 

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.6 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.

     

    8.7 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.

     

    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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              GRID
                SHEET FOR AMENDED AND RESTATED REVOLVING LINE OF CREDIT
                NOTE

               

              ADVANCES
                AND PAYMENTS OF PRINCIPAL

            

    

     

    
      	
              Date

            	
              Amount
                of Advance

            	
              Amount
                of Principal Paid 

            	
              Unpaid
                Principal Balance

            	
              Notation
                Made By

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      AMENDED
        AND RESTATED

      REVOLVING
        LINE OF CREDIT NOTE

      No.
        AR - 2

      

      
        	
                $1,500,000

              	 	
                Dated:
                  June 6, 2008

              

      

       

      Lime
        Energy Co., a Delaware corporation (the “Company”),
        for
        value received, promises to pay to Advance Biotherapy, Inc. (“Noteholder”),
        the
        principal amount of One Million Five Hundred Thousand Dollars ($1,500,000)
        (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 AR 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 June 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) Seventy-Five Thousand Dollars ($75,000) 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 is equal to the lower of $7.93 or
        the
        average of the last reported sales price of one share of the Common Stock
        on the
        Nasdaq Capital Market for each of the thirty consecutive trading days ending
        on
        the date immediately preceding the Maturity Date. 

       

      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 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 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.  General
        Provisions.

       

      8.1 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 at 227 W. Monroe Street, Suite
        2900, Chicago, Illinois 60606, Attention: Chief Executive Officer, 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. 

       

      8.2 Amendment.
        This
        Note amends and restates in its entirety that certain Revolving Credit Note
        dated March 12, 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. 

       

      8.3 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. 

       

      8.4 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
        8.2
        above,
        only by an instrument in writing signed by the party against which enforcement
        of the change, waiver, discharge or termination is sought. 

       

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

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      8.6 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.

       

      8.7 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.

       

      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

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                GRID
                  SHEET FOR AMENDED AND RESTATED REVOLVING LINE OF CREDIT
                  NOTE

                 

                ADVANCES
                  AND PAYMENTS OF PRINCIPAL

              

      

       

      
        	
                Date

              	
                Amount
                  of Advance

              	
                Amount
                  of Principal Paid 

              	
                Unpaid
                  Principal Balance

              	
                Notation
                  Made By

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