Document:

EXHIBIT
        10.27

       

       

    

    REVOLVING
      LINE OF CREDIT NOTE

     

    
      	$3,000,000 	
              Dated:
March
                12. 2008

            

    

     

    Lime
      Energy Co, a Delaware corporation (the “Company”),
      for
      value
      received, promises to pay to
      Richard P. Kiphart (“Kiphart”)
      and
      Advanced Biotherapy, Inc. (“ADVB”
      and
      together with Kiphart, “Noteholders”),
      on
      a pro
      rata basis, the principal amount of Three Million Dollars ($3,000,000) (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 and the
      Noteholders, and the obligation of the Noteholders to make advances is subject
      to the Company's compliance with the conditions set forth in the Note Issuance
      Agreement. Assuming all terms and conditions to each advance request are met,
      each Noteholder shall be responsible for one-half of the Maximum Principal
      Amount, or One Million Five Hundred Thousand Dollars ($1,500,000) per
      Noteholder.

     

    Noteholders
      authorize 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. Noteholders
      agree 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 Noteholders and the conditions to
      which this Note is subject, and to which Noteholders, by the acceptance of
      this
      Note, agree:

     

    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 Noteholders. 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 Noteholders 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 Noteholders' 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 Noteholders 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 Noteholders a fee, on a pro rata basis (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 Noteholders terminating the lending
      relationship evidenced by this Note
      prior to the Maturity Date, the Company agrees to pay a termination fee to
      the
      Noteholders, on a pro rata
      basis, (the “Termination
      Fee”) calculated
      by dividing (a) One Hundred Fifty Thousand Dollars ($150,000) 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.  Events
      of Default.

     

    4.1.
      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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.2.
      Consequences
      of an Event of Default.
      If any
      Event of Default has occurred and is
      continuing, Noteholders 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).

     

    5.  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
      Noteholders in exercising any right hereunder shall operate as a waiver of
      such
      right under this Note.

     

    6.  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 Noteholders.

     

    7.  General
      Provisions.

     

    7.1  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 Kiphart c/o William Blair, 222 W. Adams, Chicago, EL 60606,
      to
      ADVB at 227 W. Monroe
      Street, Suite 3900, 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.

     

    7.2  Amendment.
      The
      provisions of this Note may be amended only by written agreement of the Company
      and Noteholders.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7.3  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
      Noteholders 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.

     

    7.4  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.

     

    7.5  Successors
      and Assigns.
      This
      Note shall be binding upon the Company's successors and assigns.

     

    7.6  Remedies
      Cumulative.
      The
      Noteholders' rights and remedies set forth in this Note are not intended to
      be
      exhaustive and the exercise by either 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.

     

    7.7  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.

     

    [The
      remainder of this page is intentionally left blank.]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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: 	280 Landmeier Road
	 	
                 

              	Elk Grove Village,
                IL 60007
                
	 	 	
                Attn:
                  Chief Financial Officer

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    GRID
      SHEET FOR REVOLVING LINE OF CREDIT NOTE 

     

    ADVANCES
      AND PAYMENTS OF PRINCIPAL

     

    
      	
              Date

            	
              Amount
                of Advance

            	
              Amount
                of Principal
                Paid

            	
              Unpaid
                Principal Balance

            	
              Notation
                Made

              ByUnassociated Document

    
      EXHIBIT
        10.28

    

    

    NOTE
      ISSUANCE AGREEMENT

     

    This
      Note
      Issuance Agreement (this “Agreement”)
      is
      dated as of the 12th day of March, 2008, and is made by and between Lime Energy
      Co., a Delaware corporation (the “Company”),
      and
      Richard P. Kiphart (“Kiphart”)
      and
      Advanced Biotherapy, Inc. (“ADVB” and together with Kiphart, “Noteholders”).

     

    WITNESSETH:

     

    WHEREAS,
      the Company has issued to the Noteholders that certain Revolving Line of
Credit
      Note dated March 12, 2008 and due March 31, 2009, in the maximum principal
      amount of $3,000,000
      (the “Note”); and

     

    WHEREAS,
      the execution and delivery by the parties hereto of this Agreement is one of
      the
      conditions precedent to the obligation of Noteholders to make loans to the
      Company under the Note; and

     

    WHEREAS,
      the parties desire to set forth certain additional understandings among
      themselves relating to the obligations of the Company to Noteholders and to
      certain other matters, all as more fully described herein;

     

    NOW,
      THEREFORE, in consideration of the premises and mutual agreements contained
      herein,
      the parties hereby agrees as follows:

     

    1.  Condition
      to Advances.
      It
      shall be a condition to each advance under the Note that no Event of Default
      (as
      defined in the Note) shall have occurred and be continuing. At the time of
      each
      request for an advance, the Company shall provide to the Noteholders a
      certificate, executed by the Chief Executive Officer or Chief Financial Officer
      of the Company, stating that no Event of Default has occurred and is
      continuing.

     

    2.  Commitment
      by ADVB.
      ADVB
      hereby covenants and agrees that it has reserved cash
      or
      other immediately liquid assets in the amount of $1,500,000 and shall at all
      times while the Note remains outstanding continue to reserve a sufficient amount
      of cash or other immediately liquid assets as to enable it to make advances
      under the Note.

     

    3.  Subordination
      by Noteholders.
      Noteholders agree to subordinate the Note in the event the
      Company arranges to have a commercial lender provide financing to the Company
      for similar purposes,
      which subordination must be on terms and conditions acceptable to the
      Noteholders in their reasonable
      discretion.

     

    4.  Information
      Regarding Use of Proceeds.
      Promptly following request therefore by the Noteholders, the Company shall
      provide Noteholders with reasonable detail regarding the use of proceeds with
      respect to any advance made under the Note, subject to the Company's obligations
      under Regulation F-D.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.  Arbitration.
      In the
      event of any and all disagreements and controversies arising from this Agreement
      or the Note, such disagreements and controversies shall be subject to binding
      arbitration as arbitrated in accordance with the then current Commercial
      Arbitration Rules of the American Arbitration Association in Chicago, Illinois
      before one neutral arbitrator. Either party may apply to the arbitrator seeking
      injunctive relief until the arbitration award is rendered or the controversy
      is
      otherwise resolved. Without waiving any remedy under this Agreement, either
      party may also seek from any court having jurisdiction any interim or
      provisional relief that is necessary to protect the rights or property of that
      party, pending the establishment of the arbitral tribunal (or pending the
      arbitral tribunal's determination of the merits of the controversy). In the
      event of any such disagreement or controversy, neither party shall directly
      or
      indirectly reveal, report, publish or disclose any information relating to
      such
      disagreement or controversy to any person, firm or corporation not expressly
      authorized by the other party to receive such information or use such
      information or assist any other person in doing so, except to comply with actual
      legal obligations of such party, or unless such disclosure is directly related
      to an arbitration proceeding as provided herein, including, but not limited
      to,
      the prosecution or defense of any claim in such arbitration. The costs and
      expenses of the arbitration (excluding attorneys' fees) shall be paid by the
      non-prevailing party or as determined by the arbitrator.

     

    6.  Miscellaneous.

     

    (a)  All
      of
      the WHEREAS clauses and other recitals at the beginning of this Agreement are
      hereby
      incorporated into and made part of this Agreement.

     

    (b)  This
      Agreement shall be binding upon, and shall inure solely to the benefit of,
      each
      of the parties
      hereto, and each of their respective heirs, executors, administrators,
      successors and permitted assigns,
      and no other person shall acquire or have any right under or by virtue of this
      Agreement. No Noteholder
      shall assign its rights under this Agreement except in connection with an
      assignment under the Note
      permitted by the terms thereof.

     

    (c)  This
      Agreement may be amended only by written execution by all parties. No waiver
      of
any
      provision of this Agreement shall in any event be effective unless the same
      shall be in writing and acknowledged
      by the party against whom enforcement is sought, and then any such waiver shall
      be effective
      only in the specific instance and for the specific purpose for which
      given.

     

    (d)  The
      descriptive headings of the several sections and paragraphs of this Agreement
      are inserted
      for convenience only and do not constitute a part of this
      Agreement.

     

    (e)  All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement
      shall be governed by the internal laws of the State of Illinois, without giving
      effect to any choice
      of
      law or conflict of law provision or rule (whether of the State of Illinois
      or
      any other jurisdiction) that
      would cause the application of the laws of any jurisdiction other than the
      State
      of Illinois.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f)  Wherever
      possible, each provision of this Agreement shall be interpreted in such manner
      as to be effective and valid under applicable law, but if any provision of
      this
      Agreement shall be prohibited
      by, unenforceable or invalid under any jurisdiction, such provision shall as
      to
      such jurisdiction, be
      severable and be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remaining
      provisions of this Agreement or affecting the validity or enforceability of
      such
      provision in any other
      jurisdiction.

     

    (g)  This
      Agreement may be executed in one or more counterparts, all of which shall be
      deemed but one and the same agreement and each of which shall be deemed an
      original. Delivery by facsimile of an executed counterpart of this Agreement
      shall be effective as an original executed counterpart hereof and shall be
      deemed a representation that an original executed counterpart hereof will be
      delivered.

     

    (h)
      THE
      PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
      COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, ANY
      RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
      RIGHTS UNDER THIS AGREEMENT.

     

    (i) ANY
      LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
      WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
      OF
      THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
      DISTRICT OF ILLINOIS; PROVIDED
      THAT
      NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER FROM
      BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. EACH
      PARTY
      HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS
      OF
      THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
      DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
      AND EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
      ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
      ANY
      SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
      ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        	
                LIME
                  ENERGY CO.

                 

                By:
                  /s
                  Jeffrey
                  Mistarz                                             
                  

                Name:
                  Jeffrey R. Mistarz

                Title:  
                  Executive Vice President and Chief Financial Officer

                 

                NOTEHOLDERS:

                

                By:
                  /s
                  Richard P. Kiphart 

                Name:
                  Richard
                  P.
                  Kiphart

                 

                Advanced Biotherapy
                  Inc.

                 

                By:
                  Christopher
                  W.
                  Capps                                    

                Christopher
                  W. Capps,
                  President

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