Document:

exv10w1

 

Exhibit 10.1

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, IL 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:

Name:
	 	/s/ Jeffrey Mistarz
 

Jeffrey Mistarz
	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 
	 

	 	Address:
	 	1280 Landmeier Road	 	 
	 

	 	 	 	Elk Grove Village, IL 60007	 	 
	 

	 	 	 	Attn: Chief Financial Officer	 	 

 

 

GRID SHEET FOR REVOLVING LINE OF CREDIT NOTE

ADVANCES AND PAYMENTS OF PRINCIPAL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Amount of	 	Amount of	 	Unpaid Principal	 	Notation Made
	Date	 	Advance	 	Principal Paid	 	Balance	 	Byexv10w2

 

Exhibit 10.2

NOTE ISSUANCE AGREEMENT

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

W I T N E S S E T H:

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

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

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

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

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

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

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

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

 

 

     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: 

Name:

	 	/s/ Jeffrey Mistarz
 

Jeffrey R. Mistarz
	 	 
	Title:
	 	Executive Vice President and Chief Financial Officer	 	 

NOTEHOLDERS:

	 	 	 	 	 
	By:
Name:
	 	/s/ Richard P. Kiphart
 

Richard P. Kiphart	 	 

Advanced Biotherapy Inc.

	 	 	 	 	 
	By:

	 	Christopher W. Capps
 

     Christopher W. Capps, President

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