Document:

exv10w3

Exhibit 10.3

FORM OF PREFERRED STOCK PURCHASE AGREEMENT

          This Preferred Stock Purchase Agreement (this “Agreement”) is dated as of the 14th day
of November, 2008, and is made by and between Lime Energy Co., a Delaware corporation (the
“Company”), and Richard P. Kiphart (the “Investor”).

RECITALS:

          A. The Company wishes to sell to Investor shares of the Company’s Series A-1 Convertible
Preferred Stock, par value $0.01 per share (“Preferred Stock”) as designated by the
Certificate of Designation attached hereto as Exhibit A (the “Certificate of
Designation”).

          B. The Company has previously issued to Investor that certain Second Amended and Restated
Revolving Line of Credit Note No. AR-3 dated August 14, 2008 in the maximum principal amount of
$14,500,000 (the “Revolving Note”). Contemporaneously with this Agreement, the Company has
paid to Investor all interest accrued through the date hereof on the Revolving Note, leaving a
remaining balance of $14,707,104.06. As payment for the Preferred Stock, Investor desires to
convert the remaining balance of the Revolving Note.

          C. The parties desire to set forth certain additional understandings among themselves
relating to the foregoing 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.	 	Purchase and Sale of Preferred Stock. Investor hereby purchases, and Company
hereby sells to Investor, Three Hundred Fifty-Eight Thousand and Seven Hundred Ten
(358,710) shares of Preferred Stock (the “Purchased Shares”). Investor hereby
converts all indebtedness under the Revolving Note (including principal, interest and any
fees, charges or other amounts payable by the Company pursuant to the terms of the
Revolving Note, including without limitation any “Unused Funds Fee” or “Termination Fee” as
those terms are defined in the Revolving Note) into the Purchased Shares as full payment of
the purchase price therefor. Upon issuance of such shares to Investor, the Revolving Note
shall be considered paid in full. Investor will deliver to Company the original Revolving
Note for cancellation, and liens held by Investor on any assets of the Company by virtue of
the Revolving Note shall be terminated. For clarification, liens on Company assets held by
Advanced Biotherapy, Inc., an affiliate of Investor, shall not be terminated by reason of
this Agreement.
	 
	 	2.	 	Condition to Convertibility. Investor acknowledges and agrees that,
notwithstanding the provisions of the Certificate of Designations, the Company is required,
pursuant to the rules of The NASDAQ Stock Market, Inc., including without limitation
Marketplace Rule 4350(i)(1)(D), to seek the approval of its stockholders in order for the
Purchased Shares to be convertible (“Required Approval”). The Company agrees to
use its reasonable best efforts to obtain the consent of a majority of its stockholders and
to file

 

 

	 	 	 	an Information Statement on Schedule 14C under the Securities Exchange Act of 1934, as
amended, on or before February 1, 2009 for the purpose of obtaining the Required Approval,
and Investor agrees to vote or cause to be voted all shares of Company stock over which he
has voting power in favor of such action. Notwithstanding any provisions of the Certificate
of Designations regarding convertibility of the Preferred Stock, Investor agrees, for
himself and his successors, assigns and transferees, that the Purchased Shares shall not be
convertible until the Required Approval is obtained, and the Company shall not instruct its
transfer agent to issue any Conversion Shares until the Required Approval is obtained. As
used in this Agreement, the term “Conversion Shares” means shares of Company Common
Stock issued upon conversion of the Purchased Shares.
	 
	 	3.	 	Investor Representations and Warranties. Investor hereby represents to the
Company that he is the sole legal and beneficial owner of the Revolving Note, free and
clear of any and all liens and other adverse interests or claims.
	 
	 	4.	 	Company Representations and Warranties. Company hereby represents and warrants
to Investor:

	 	a.	 	The Certificate of Designation was filed with the Delaware Secretary of
State on November 14, 2008 and is in full force and effect.
	 
	 	b.	 	That (i) the Purchased Shares are duly authorized, validly issued, and
upon conversion of the Revolving Note, fully paid and nonassessable, (ii) the
Conversion Shares, upon issuance to Investor in accordance with this Agreement and
the terms of the Certificate of Designation, will be duly authorized, validly
issued, fully paid and non-assessable, and (iii) the Company has reserved 358,710
shares of authorized but unissued Common Stock for issuance upon conversion of the
Purchased Shares.
	 
	 	c.	 	There are no authorized, issued or outstanding shares of preferred
stock of the Company other than the Preferred Stock and the Purchased Shares.
	 
	 	d.	 	The Company is a corporation duly incorporated and in good standing
under the laws of the State of Delaware. The Company has all requisite power and
authority to enter into and consummate the transactions described in this
Agreement.
	 
	 	e.	 	All corporate action on the part of the Company necessary for the
authorization, execution and delivery by the Company of this Agreement, the
consummation of the transactions contemplated hereby and otherwise for the
authorization, issuance and delivery of the Purchased Shares has been taken. This
Agreement and the Certificate of Designation are the valid and binding obligations
of the Company, enforceable in accordance with their respective terms, except as
such enforceability may be limited by general principles of equity and subject to
bankruptcy or other laws relating to or affecting the rights of creditors
generally. The execution, delivery and performance by the Company of this
Agreement and compliance therewith and the issuance and sale of the Purchased
Shares will not

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	 	 	 	result in any violation of and will not conflict with, or result in a breach of any
of the terms of, or constitute a default under, any provision of U.S. federal, state
or foreign law to which the Company is subject, or any mortgage, indenture,
agreement, instrument, judgment, decree, order, rule or regulation, or other
restriction to which the Company is a party or by which it or any of its assets are
bound, or result in the creation of any mortgage, pledge, lien, encumbrance or
charge upon any of its assets.
	 
	 	f.	 	The authorized capital stock of the Company consists of 200,000,000
shares of Common Stock, of which 8,700,209 shares are issued and outstanding as of
the date hereof, and 1,000,000 shares of Preferred Stock, of which the Purchased
Shares are the only shares issued and outstanding as of the date hereof.
	 
	 	g.	 	Copies of the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2007, the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2008, and any Reports on Form 8-K filed by the Company after June 30, 2008
(collectively, the “SEC Documents”) may be accessed on the SEC’s website and
through the Company’s website. As of their respective filing dates, each of the
SEC Documents complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of the
SEC promulgated thereunder.
	 
	 	h.	 	Since June 30, 2008, there has not been any change which by itself or
in conjunction with all other such changes, has had or could reasonably be expected
to have a material adverse effect, except as disclosed in the SEC Documents or
which has otherwise been disclosed to Investor.
	 
	 	i.	 	No information furnished by the Company to the Investor in connection
with this Agreement (including, without limitation, the information contained in
the SEC Documents) contains any untrue statement of a material fact, taken as a
whole.
	 
	 	j.	 	There is no litigation, claim, proceeding, or governmental
investigation pending or threatened against the Company that seeks to delay or
prevent the consummation of, or which would be reasonably likely to adversely
affect the Company’s ability to consummate the transactions contemplated hereby.

	 	5.	 	Investor Acknowledgments. Investor understands, acknowledges and agrees that:

	 	a.	 	In reliance upon applicable exemptions, neither the Purchased Shares
nor any Conversion Shares have been registered under the Securities Act of 1933, as
amended, and the regulations promulgated thereunder, as in effect from time to time
(the “Securities Act”) or any U.S. state securities laws and the rules and
regulations thereunder (collectively with the Securities Act, the “Applicable
Securities Laws”).
	 
	 	b.	 	Because the Purchased Shares and Conversion Shares have not been
registered under the Applicable Securities Laws, the economic risk of the
investment must be borne indefinitely by Investor neither the Purchased Shares nor
any

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	 	 	 	Conversion Shares may be sold, pledged or hypothecated or otherwise transferred
unless subsequently registered under Applicable Securities Laws or an exemption from
such registration is available.
	 
	 	c.	 	No assignment, sale, pledge, hypothecation, transfer, exchange or other
disposition, or offer thereof whether direct or indirect, of the Purchased Shares
or any Conversion Shares may be made if, in the opinion of counsel to the Company,
such disposition or offer would require registration under the Securities Act or
would result in the violation of applicable federal, state or foreign securities
laws.
	 
	 	d.	 	A legend will be placed on the certificate or certificates evidencing
the Purchased Shares in substantially the following form:

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

	 	e.	 	A legend will be placed on the certificate or certificates evidencing
any Conversion Shares in substantially the following form:

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

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REASONABLY ACCEPTABLE TO THE COMPANY, TO THE EFFECT THAT THE SHARES
TO BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED ARE BEING
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION.

          6. Expenses. The Company agrees to pay the legal fees and expenses of Investor
arising in connection with the negotiation and execution of this Agreement and the consummation of
the transactions contemplated hereby.

          7. Arbitration. In the event of any and all disagreements and controversies arising
from this Agreement, 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.

          8. 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; provided
however that Investor shall not assign its rights under this Agreement.
Notwithstanding any assignment in violation of this Agreement, prior to receipt of
the Required Approval, the provisions of Section 2 shall be binding upon any
successors, assigns or transferees of the Purchased Shares.
	 
	 	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

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	 	 	 	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

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	 	 	 	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.

*************

(The next page is the signature page.)

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

	 	 	 	 	 
	 	COMPANY:

Lime Energy Co.

 	 
	 	By:  	 	 
	 	 	Jeffrey R. Mistarz 	 
	 	 	Executive Vice President and CFO 	 
	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 

	 	INVESTOR:	 	 
	 
	 
	 	 	 	 
	 

	 	 

Richard P. Kiphart
	 	 

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EXHIBIT A

FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

- 9 -exv10w4

Exhibit 10.5

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (this “Agreement”) is made and entered into as of
November 18, 2008, by and among: Lime Energy Co., a Delaware corporation (“Lime”), and
certain stockholders of Advanced Biotherapy, Inc., a Delaware corporation (the “Company”) listed in
Schedule A (each a “Seller,” collectively the “Sellers”).

Recitals 

     A.  The Sellers are holders of outstanding shares of common stock, par value $0.001 per share
(“Company Common Stock”) of the Company and each Seller is the record holder and has sole voting
power over such number of shares of Company Common Stock as is set forth opposite such Seller’s
name on Schedule A  (the “Shares”).

     B. Lime desires to purchase from Sellers and Sellers desire to sell to Lime, all of the Shares
owned by Sellers, in exchange for shares of Lime’s common stock, par value $0.0001 per share (the
“Lime Common Stock”) at an exchange ratio (the “Exchange Ratio”) set forth on Schedule B
(the “Transaction”).

     C. Under the Marketplace Rules of The NASDAQ Stock Market, Inc. (the “Marketplace Rules”), the
issuance of the Lime Common Stock pursuant to the Transaction requires the approval of the
stockholders holding at least a majority of the outstanding stock of Lime (the “Required
Approval”).

     D. Lime intends to obtain the necessary approval of its stockholders by written consent in
lieu of meeting. To be effective, such approval must be communicated to all of the Lime’s
stockholders through an information statement (the “Information Statement”) pursuant to Section
14(c) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Exchange Act”).

     E. Immediately after the closing of the Transaction, Lime will be the beneficial holder of 90%
or more of the issued and outstanding Company Common Stock.

     NOW, THEREFORE, in consideration of the mutual benefits to be derived from this Agreement and
of the representations, warranties, conditions, agreements and promises contained in this
Agreement, the parties agree as follows:

ARTICLE 1

DEFINITIONS

     Certain capitalized terms used in this Agreement have the meanings set forth below and other
capitalized terms used in this Agreement are defined in the Sections of this Agreement where they
first appear. All capitalized terms shall be equally applicable to both the singular and plural
forms. Any agreement referred to below shall mean such agreement as amended, supplemented and
modified from time to time to the extent permitted by the applicable provisions thereof and by this
Agreement.

     “Affiliate” shall mean, with respect to a Person, any other Person that, directly or indirectly,
Controls, is Controlled by or is under common Control with such Person. The term “Affiliated” has
the meaning correlative to the foregoing.

 

 

“Consent” shall mean any approval, consent, ratification, permission, waiver or authorization from
or by a Governmental Body including any governmental authorization in the form of (a) permit,
license, certificate, franchise, permission, variance, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement; or (b) right under any contract with any
Governmental Body.

“Control,” “Controlled,” “Controlling” or “under common Control with” with respect to any Person,
means having the ability to direct the management and affairs of such Person, whether through the
ownership of voting securities, by contract or otherwise, and such ability shall be deemed to exist
when a Person holds at least 50% of the outstanding voting securities of such Person.

“Entity” shall mean any corporation (including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint venture, estate, trust, company
(including any company limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity.

“GAAP” shall mean generally accepted accounting principles for financial reporting in the United
States, applied on a basis consistent with the basis on which the financial statements referred to
herein were prepared.

“Governmental Body” shall mean any: (a) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental authority of any nature
(including any governmental division, department, agency, commission, instrumentality, official,
organization, unit, body or Entity and any court or other tribunal).

“Indemnification Agreement” refers to the agreements between the Company and certain of its
officers and directors, copies of which have been provided to Lime.

“Legal Requirement” shall mean any federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict, decree, rule,
regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body (or under the authority of any
national securities exchange on which Lime Common Stock is listed). Reference to any Legal
Requirement means such Legal Requirement as amended, modified, codified, replaced or reenacted, in
whole or in part, and in effect from time to time, and reference to any section or other provision
of any Legal Requirement means that provision of such Legal Requirement from time to time in effect
and constituting the substantive amendment, modification, codification, replacement or reenactment
of such section or other provision.

“Lien” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest,
encumbrance, claim, infringement, interference, option, right of first refusal, equitable interest,
title retention or title reversion agreement, preemptive right, community property interest or
restriction of any nature, whether accrued, absolute, contingent or otherwise (including any
restriction on the voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any restriction on the
use of any asset and any restriction on the possession, exercise or transfer of any other attribute
of ownership of any asset).

“Lime Purchaser” shall mean either Lime or a wholly-owned Subsidiary of Lime, as determined by Lime
in its sole discretion.

 

 

“Lime Shares” shall mean the number of shares of Lime Common Stock to be issued to the Sellers upon
the terms and subject to the conditions set forth in this Agreement.

“Losses” shall mean damages, liabilities, losses, claims, diminution in value, obligations, liens,
assessments, judgments, Taxes, fines, penalties, reasonable costs and expenses (including, without
limitation, reasonable fees of counsel) and including all amounts paid in investigation, defense or
settlement of the foregoing.

“Merger” shall mean the merger following the Closing of the Company with and into Lime, the Lime
Purchaser or a wholly-owned Subsidiary of Lime not the Lime Purchaser, in accordance with Section
253 of the Delaware General Corporation Law

“Organizational Documents” shall mean an Entity’s certificate or articles of incorporation and
bylaws (in the case of a corporation) and similar organizational documents (in the case of other
types of Entities).

“Person” shall mean any individual, Entity or Governmental Body.

“Representatives” shall mean any party’s respective directors, officers, employees, investment
bankers, attorneys, accountants or other advisors or representatives.

“SEC” shall mean the United States Securities and Exchange Commission.

“SEC Reports” shall mean the reports, registration statements and definitive proxy statements filed
by an issuer with the SEC. “Company SEC Reports” shall refer to the SEC Reports filed by the
Company and “Lime SEC Reports” shall refer to the SEC Reports filed by Lime.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

An Entity shall be a “Subsidiary” of another Person if such Person directly or indirectly owns,
beneficially or of record, (a) an amount of voting securities of other interests in such Entity
that is sufficient to enable such Person to elect at leased a majority of the members of such
Entity’s board of directors or other governing body, or (b) at least 50% of the outstanding equity
or membership interests of such Entity.

“Tax” shall mean any tax (including any income tax, franchise tax, capital gains tax, gross
receipts tax, value-added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales
tax, use tax, property tax, business tax, withholding tax or payroll tax), levy, assessment,
tariff, duty (including any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or under the authority
of any Governmental Body.

“Warrants” shall mean any options, stock appreciation rights, warrants, convertible or exchangeable
securities or other rights, contracts, commitments, agreements, understandings or arrangements of
any kind relating to the issuance of any equity interests, or similar rights of an issuer or
granting to any Person any right to participate in the equity or income of the issuer or to
participate in or direct the election of any director or officer of the issuer or the manner in
which any shares of capital stock or other securities of the issuer are voted, or other rights of
any kind (absolute, contingent or otherwise) entitling any party to acquire or otherwise receive
from the issuer any shares of capital stock or other securities or receive or exercise any benefits
or rights similar to any rights enjoyed by or inuring to the holder of capital stock of the issuer,
including without limitation “phantom stock” or stock appreciation rights. “Lime Warrants”

 

 

shall mean the foregoing definition as applied to Lime as the issuer and “Company Warrants” shall
mean the foregoing definition as applied to the Company as the issuer.

ARTICLE 2

TRANSACTIONS AT THE CLOSING

     2.1 Purchase and Sale of Shares. Upon the terms and subject to the conditions set
forth in this Agreement and in reliance upon the representations and warranties contained herein,
at the Closing, each Seller shall sell and deliver to the Lime Purchaser the Shares owned by such
Seller as set forth on Schedule A and the Lime Purchaser shall purchase the Shares free
and clear of all Liens, for the Purchase Price determined in accordance with this Section
2.

     2.2 Purchase Price. The consideration (the “Purchase Price”) to be paid by the Lime
Purchaser to each Seller for its Shares shall be a number of Lime Shares as reflected on
Schedule A.

     2.3 Conditions to Closing. The closing of the Transaction (the “Closing”) is subject
to (i) the representations and warranties contained in Articles 3, 4 and 5 being true and
correct at and as of the Closing Date (as defined below) as if made or given on and as of the
Closing Date; (ii) Lime shall have been afforded access to information as provided in Section
6.3; and (iii) Lime shall have obtained the Required Approval and it shall have become
effective pursuant to Section 14(c) of the Exchange Act.

     2.4 Closing. The Closing shall take place at the offices of Reed Smith LLP, 10 S.
Wacker Drive, Chicago Illinois 60606, or at such other place as the Company shall designate in
writing to Sellers. Lime shall provide Sellers with at least five (5) business days’ notice in
advance of the closing date (the “Closing Date”), which notice shall identity the Lime Purchaser
and shall include a certification by Lime’s Chief Executive Officer that the Required Approval has
been obtained and become effective pursuant to Section 14(c) of the Exchange Act. At the Closing,
the Sellers shall convey and deliver to the Lime Purchaser stock certificates representing all of
the Shares, duly endorsed in blank or accompanied by stock powers duly executed in blank, against
payment of the Purchase Price for the Shares, as provided in Section 2.2, and Lime, on
behalf of the Lime Purchaser, shall deliver to each Seller the Lime Shares indicated on
Schedule A.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY

     Sellers’ Representative hereby represents and warrants to Lime, as of the date hereof and as
of the Closing Date:

     3.1 Organization. The Company is a corporation, validly existing and in good standing
under the laws of the State of Delaware and has all corporate power and authority to own, lease,
and operate its properties and to carry on its business as it is now being conducted. To the best
knowledge of Sellers’ Representative, the Company is duly organized under the laws of the State of
Delaware and has all necessary governmental approvals to own, lease, and operate its properties and
to carry on its business as it is now being conducted. Sellers’ Representative has delivered to
Lime complete and correct copies of the Organizational Documents, the stockholder record list,
prepared by the Company’s transfer agent as of November 4, 2008 (the “Stock Ledger”) and originals
or copies of minutes of director meetings and consents in lieu of meetings in possession of the
Company since June 2004 (collectively, the “Minutes”). To the best knowledge of Sellers’
Representative, the Stock Ledger is complete, accurate and current and

 

 

the Minutes are complete, accurate and current in all material respects. The Company has no
direct or indirect Subsidiaries.

     3.2 Capitalization; Title to Shares

          (a) The Company’s authorized capital stock consists solely of 2,000,000,000 shares of Company
Common Stock and 20,000,000 shares of preferred stock. The Shares represent at least ninety
percent (90%) of the issued and outstanding shares of Company Common Stock. As of the date hereof
(i) 1,167,621,940 shares of Company Common Stock are issued and outstanding, and (ii) 832,378,060
shares of Company Common Stock are held by the Company as non-voting treasury shares. No preferred
stock is issued and outstanding. All outstanding shares of Common Stock are and will on the
Closing Date be validly issued, fully paid and non-assessable.

          (b) To the best knowledge of Sellers’ Representative, (i) Schedule 3.2(b) is a true
and complete list as of the date hereof, and as of the Closing Date, of all issued and outstanding
Warrants, the number of shares of Company Common Stock subject to each such Warrant, and the name
of each Warrant holder; and (ii) except as set forth on Schedule 3.2(b), there are no
outstanding Warrants.

          (c) To the best knowledge of Sellers’ Representative: (i) the Company has not issued any
securities in violation of any preemptive or similar rights; (ii) except for 109,902,680 shares of
Company Common Stock reserved for issuance upon exercise of Warrants, there are no shares of
capital stock or other securities of the Company reserved for issuance for any purpose; and (iii)
the Company is not a party to any voting agreements, voting trusts, proxies or other agreements,
instruments or understandings with respect to the voting of any shares of the capital stock or
other securities of the Company, or any agreement with respect to the transferability, purchase or
redemption of any shares of capital stock or other securities of the Company.

     3.3 Company SEC Reports. To the best knowledge of Sellers’ Representative, as of
their respective dates, the Company SEC Reports:  (a) were prepared in accordance and complied in
all material respects with the requirements of the Securities Act or the Exchange Act, as the case
may be, applicable to such Company SEC Reports; and (b) did not at the time they were filed (and if
amended or superseded by a filing, then on the date of such filing and as so amended or superseded)
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

     3.4 Company Changes. To the best knowledge of Sellers’ Representative, except as set
forth on Schedule 3.4 or disclosed in the SEC Reports, other than any loans made by the
Company to Lime, since December 31, 2007, there have not been: (a) any transactions by the
Company, or any changes in the assets or liabilities of the Company, which, either individually or
in the aggregate, are material to the financial condition of the Company; (b) any changes in the
accounting practices, depreciation or amortization policies or rates theretofore adopted by any of
the Company, or any revaluation of any of its assets; (c) the entry into any material contract or
other binding obligation with any party other than Lime which is not immediately terminable by the
Company without penalty; (d) any declaration, setting aside or payment of any dividend (whether in
cash, stock or property) with respect to the Company Common Stock, or any other distribution to the
stockholders of the Company, whether of record or beneficial other than in the ordinary course of
business; (e) any amendment to the Organizational Documents of the Company; (f) the issuance or
repricing of any Warrants with respect to Company Common Stock; (g) any reclassification of shares
of Company Common Stock; (h) the authorization, issuance or reservation of any shares of capital
stock of the Company; (i) any new, or changes in any, Tax election or method of

 

 

accounting for Tax purposes; or (j) any agreement by the Company to do any of the things
described in the preceding clauses.

     3.5 Full Disclosure. To the best knowledge of Sellers’ Representative, no written
information furnished by Sellers’ Representative to Lime in connection with this Agreement
contains, as of the date of such written information, any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading.

     3.6 Litigation. To the best knowledge of Sellers’ Representative, there is no
litigation, claim, proceeding, or governmental investigation pending or threatened against the
Company or the Sellers that seeks to delay or prevent the consummation of, or which would be
reasonably likely to adversely affect the Sellers’ ability to consummate, the Transaction.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF EACH SELLER

Each Seller represents and warrants to Lime, for himself and not on behalf of any other Seller, as
of the date hereof and as of the Closing Date as follows:

     4.1 Authority; No Conflict.

          (a) Seller has all necessary individual power, capacity and authority to execute and deliver
this Agreement, to perform Seller’s obligations hereunder, and to consummate the Transaction. This
Agreement has been duly and validly executed and delivered by Seller and constitutes the legal,
valid and binding obligation of Seller, enforceable against Seller in accordance with its terms,
subject to the effect of (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to rights of creditors generally and (ii) rules of
law and equity governing specific performance, injunctive relief and other equitable remedies.

          (b) Neither the execution and delivery of this Agreement nor the performance thereof do or
will, directly or indirectly (with or without notice or lapse of time or both), (i) contravene,
conflict with, or result in a violation of any Legal Requirements to which the Seller, or any of
the Seller’s Shares, are subject; or (ii) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify,
any contract to which the Seller is a party, except, in the case of clauses (i) and (ii), for any
such conflicts, violations, breaches, defaults or other occurrences that would not prevent the
Seller from performing Seller’s obligations under this Agreement in any material respect.

          (c) The execution and delivery of this Agreement by the Seller does not, and the performance
of this Agreement will not, require any Consent of, or filing with or notification to, any
Governmental Body, except (i) for applicable requirements, if any, of the Exchange Act, the
Securities Act and state securities or “blue sky” laws (“Blue Sky Laws ”), and (ii) such other
Consents, filings or notifications where failure to obtain such Consents, or to make such filings
or notifications, would not prevent the Seller from performing his, her or its obligations under
this Agreement.

     4.2 Ownership. Seller owns, beneficially or of record, the number of Shares set forth
opposite the Seller’s name on Schedule A hereto, free and clear of any and all Liens or
other restrictions on transfer, other than those arising under the Exchange Act, the Securities
Act, Blue Sky Laws and other

 

 

securities laws. Except as set forth on Schedule 3.2(b), Seller does not own any
Warrants of the Company other than the Shares.

     4.3 Access to Information. Seller has had an opportunity to review this Agreement
with assistance of counsel and other advisors of Seller’s own choosing.

     4.4 Review of Lime SEC Reports. Seller has had access to the Lime SEC Reports and the
Company SEC Reports and has had an opportunity to review the Lime SEC Reports and the Company SEC
Reports with assistance of counsel and other advisors of Seller’s own choosing. Seller and Seller’s
advisors have been afforded the opportunity to ask questions of and receive answers from Lime
regarding Lime and the Lime SEC Reports.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF LIME

Lime represents and warrants to the Sellers as of the date hereof and as of the Closing Date as
follows:

     5.1 Organization and Good Standing. Lime is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as now being conducted, to own or use its
properties and assets that it purports to own or use, and to perform all of its obligations under
contracts to which Lime is party or by which Lime or any of its assets are bound. Lime is duly
qualified to do business as a foreign corporation and is in good standing (where such concept is
applicable) under the laws of each state or other jurisdiction in which either the ownership or use
of the properties owned or used by it, or the nature of the activities conducted by it, requires
such qualification, except where the failure to be so qualified could not reasonably be expected
to, individually or in the aggregate, result in a material adverse effect on Lime.

     5.2 Authority; No Conflict.

          (a) Other than obtaining the Required Approval: (i) Lime has all necessary corporate power and
authority to execute and deliver this Agreement and to perform its obligations hereunder; (ii) the
execution and delivery of this Agreement by Lime have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of Lime are necessary to
authorize this Agreement; (iii) this Agreement has been duly and validly executed and delivered by
Lime and, assuming the due execution and delivery of this Agreement by the Sellers, constitutes the
legal, valid and binding obligation of Lime, enforceable against Lime in accordance with its terms
subject to the effect of (A) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to rights of creditors generally, and (B) rules of
law and equity governing specific performance, injunctive relief and other equitable remedies.

          (b) The execution and delivery of this Agreement does not and will not, directly or indirectly
(with or without notice or lapse of time or both); (i) contravene, conflict with, or result in a
violation of any provision of the Organizational Documents of Lime, or (ii) contravene, conflict
with, or result in a violation of, any Legal Requirement.

          (c) The execution and delivery of this Agreement by Lime does not require any Consent of, or
filing with or notification to, any Governmental Body, except (i) for applicable requirements, if
any, of the Exchange Act, the Securities Act, the Marketplace Rules, and Blue Sky Laws, and
(ii) such other Consents, filings or notifications where failure to obtain such Consents, or to
make

 

 

such filings or notifications, would not prevent Lime from performing its obligations under
this Agreement in any material respect.

     5.3 Capitalization. The authorized capital stock of Lime consists of 200,000,000
shares of Lime Common Stock and 1,000,000 shares of Series A-1 Convertible Preferred Stock, US
$0.01 par value per share (“Lime Preferred Stock”). As of the date hereof, (a) 9,555,053 shares of
Lime Common Stock are issued and outstanding, all of which are duly authorized, validly issued,
fully paid and nonassessable, (b)  546,424 shares of Lime Common Stock are reserved for issuance
upon exercise of outstanding Warrants, and (c) 358,710 shares of Lime Preferred Stock are issued
and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable.
Lime has accepted subscription agreements for another 933,049 shares of Lime Common Stock and for
Warrants to purchase 233,263 shares of Lime Common Stock, and such shares and warrants will be
issued prior to the Closing in accordance with the terms of the subscription agreements.

     5.4 Availability of Common Stock. Lime has authorized but unissued shares of Lime
Common Stock in an amount sufficient to consummate the Transaction.

     5.5 Lime SEC Reports. As of their respective dates, the Lime SEC Reports: (a) were
prepared in accordance and complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, applicable to such Lime SEC Reports, and
(b) did not at the time they were filed (and if amended or superseded by a filing, then on the date
of such filing and as so amended or superseded) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading.

     5.6 Absence of Certain Changes. Except as described in that certain Written Consent
in Lieu of Meeting, executed by the stockholders of Lime on November 13, 2008, a copy of which has
previously been delivered to Sellers, since September 30, 2008, there has not been any change which
by itself or in conjunction with all other such changes, has had or could reasonably be expected to
have a material adverse effect, except as disclosed in the Lime SEC Reports.

     5.7 Full Disclosure. No written information furnished by Lime to Sellers in
connection with this Agreement contains, as of the date of such written information, any untrue
statement of a material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading.

     5.8 Litigation. There is no litigation, claim, proceeding, or governmental
investigation pending or threatened against Lime that seeks to delay or prevent the consummation
of, or which would be reasonably likely to adversely affect the Lime’s ability to consummate, the
Transaction.

ARTICLE 6

ADDITIONAL AGREEMENTS

     6.1 No Company Changes. From the date hereof through the Closing Date, each Seller
who is a director or officer of the Company agrees that such Seller will not, directly or
indirectly, as a stockholder, director or officer of the Company, take or permit to occur any
action or inaction which could result in any of the representations and warranties set forth in
Article 3 to be no longer true in all material respects.

 

 

     6.2 Required Approval. Lime agrees to use its reasonable best efforts to obtain the
consent of a majority of its stockholders and to file the Information Statement on or before
February 1, 2009 for the purpose of obtaining the Required Approval, and each Seller agrees to vote
or cause to be voted all shares of Lime Common Stock and Lime Preferred Stock over which Seller has
voting power in favor of such action.

     6.3 Due Diligence. From the date hereof through the Closing Date, Sellers’
Representative agrees to give, and to cause the Company to give, Lime, its counsel, accountants and
other representatives access to the properties, books, records, contracts and documents of the
Company for purpose of such inspection as Lime deems appropriate, and shall furnish or cause to be
furnished to Lime and its representatives all information with respect to the business and affairs
of the Company as Lime may request.

     6.4 Market Standoff. From the date hereof through the Closing Date or date of
termination of this Agreement, if applicable, each Seller hereby agrees not to sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any option to purchase,
pledge or otherwise transfer or dispose of (other than to donees who agree to be similarly bound)
any Lime Common Stock or Company Common Stock beneficially owned by such Seller.

     6.5 Other Company Stockholders. Following the Closing Date, Lime will offer or
otherwise effect to the remaining stockholders of the Company an exchange of Lime Common Stock for
their shares of Company Common Stock at the Exchange Ratio.

     6.6 General Release. Effective upon the Closing Date:

          (a) Each Seller, for Seller and Seller’s heirs, devisees, legal representatives, successors,
and assigns (each, a “Releasing Party” and, collectively, the “Releasing Parties”), does hereby
acknowledge complete satisfaction of and does hereby fully, finally, and forever release and
discharge each of the Company and its directors and officers (collectively, the “Released Parties”)
of and from any and all commitments, actions, debts, claims, counterclaims, suits, causes of
action, damages, demands, liabilities, obligations, costs, expenses, and compensation of every kind
or nature whatsoever, past, present, or future, at law or in equity, whether known or unknown,
contingent or otherwise, which such Releasing Parties, or any of them, had, has, or may have had at
any time in the past and through and including the Closing Date, against the Released Parties, or
any of them, which relate to or arise out of such Releasing Party’s relationship with the Company
or any of its predecessors or Affiliates, or such Releasing Party’s rights or status as a
stockholder of the Company or any of its predecessors or Affiliates, and further including, without
limitation, any claims of fraud or fraudulent inducement in connection with the negotiation,
execution, delivery, and performance of this Agreement (collectively, the “Causes of Action”);
provided, however, that nothing in this Section shall release, acquit, or discharge any Causes of
Action or preclude a lawsuit or claim in respect of any Causes of Action that a Releasing Party may
have or bring arising under this Agreement or the other documents and agreements executed and
delivered pursuant to this Agreement, or that a Releasing Party may have or bring arising under his
respective Indemnification Agreement or the bylaws of the Company, or any other rights of
indemnification or constitution of law or in equity.

          (b) Each Releasing Party represents, warrants, covenants, and agrees that such Releasing Party
(a) has not and will not assign any Causes of Action or possible Causes of Action against any
Released Party, (ii) fully intends to release all Causes of Action against the Released Parties,
including, without limitation, unknown and contingent Causes of Action (other than those
specifically reserved above), and (iii) has consulted with counsel with respect to the matters
covered hereby and has been fully apprised of the consequences hereof.

 

 

          (c) Each Releasing Party covenants and agrees not to institute any litigation, lawsuit, claim,
or action against any of the Released Parties with respect to any released Causes of Action.

     6.7 Best Efforts. As soon as practicable, Lime shall commence and continue in good
faith to take all reasonable action required to obtain all consents, approvals and agreements of,
and to give all notices to and make all filings with, any third parties, including Governmental
Authorities, necessary or appropriate to authorize, approve or permit the full and complete
consummation of the Transaction and the Merger. In addition, Lime shall use its best efforts to
take, or cause to be taken, all action or do, or cause to be done, all things necessary, proper or
advisable under this Agreement, applicable laws and regulations to enable, consummate, make
effective and evidence the Transaction and the Merger.

     6.8 Directors’ and Officers’ Insurance and Indemnification.

          (a) Continuation of Existing Indemnification. Lime agrees that all rights to
indemnification now existing or hereafter arising at or prior to the Closing in favor of the
directors or officers of the Company as provided in its Certificate of Incorporation or Bylaws as
in effect on the date hereof or pursuant to the Indemnification Agreements in effect on the date
hereof shall survive the Closing and shall continue in full force and effect for a period of not
less than six years from the Closing; provided, however, that in the event any claim or claims are
asserted or made within such six year period, all rights to indemnification in respect of any such
claim or claims shall continue until final disposition of any and all such claims. After the
Closing, Lime shall continue to perform the obligations of the Company under the Indemnification
Agreements. Without limiting the foregoing, in the event that any party covered by existing
indemnification protection becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter, including the transactions contemplated hereby,
occurring prior to, and including, the Closing, Lime shall periodically advance to such party its
legal and other expenses (including the cost of any investigation and preparation incurred in
connection therewith), provided that such funds advanced shall be promptly returned to the Company
in the event it shall be judicially determined that such party is not entitled to indemnification
by the Company or Lime.

          (b) Cooperation. In the event any action, suit, proceeding or investigation
challenging this Agreement or the ability of the parties hereto to consummate the Transaction is
commenced by a third party, whether before or after the Closing, Lime and the Sellers’
Representative agree (except for matters involving any breach of an Article 4 representation, in
which chase the applicable Seller agrees) to cooperate and use all reasonable efforts to defend
against and respond thereto.

     6.9 Indemnity of Sellers. Each Seller makes no representation or warranty regarding
and shall have no responsibility for (a) the truth or accuracy of any information with respect to
or supplied by Lime, or any of its Affiliates (except for information supplied in writing by such
Seller) contained in the Information Statement or the Registration Statement or any amendment or
supplement thereto, or (b) the conformance of the Information Statement with the requirements of
the Exchange Act and other applicable law, or (c) the conformance of the Registration Statement
with the requirements of the Securities Act and other applicable law. With respect to such
information, and in addition to the obligations under Section 6.8 above, Lime shall
indemnify each Seller, director and officer of the Company as of the date hereof (collectively, the
"Indemnified Party”), against any (i) losses, claims, damages or liabilities, joint or several, and
amounts paid in any settlement approved by Lime (which approval shall not be unreasonably withheld
or delayed) in connection with the foregoing, to which any of such persons may be subject, and (ii)
legal or other expenses reasonably incurred by such persons in connection with investigating or
defending against any such losses, claims, damages or liabilities insofar as such losses, claims,
damages or liabilities are caused by (A) any untrue statement or alleged untrue statement of a
material fact contained in the Information Statement or Registration Statement, or any

 

 

amendment or supplement thereto, (B) arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (C) the failure of the Information Statement to comply with the
requirements of the Exchange Act and other applicable law, or (D) the failure of the Registration
Statement to comply with the requirements of the Securities Act and other applicable law. This
indemnity shall be payable as incurred and on demand. Each person entitled to be indemnified
pursuant to this Section 6.9 shall give notice to Lime in writing promptly after obtaining
knowledge of any claim or litigation for which indemnity may be had hereunder, but failure to do so
shall not affect the right to indemnity hereunder. Lime shall only be obligated under this Section
to pay the costs and expenses of one counsel for the Indemnified Parties as a group. If the
indemnification provisions above are unavailable or insufficient to hold harmless the Indemnified
Party in respect of any losses, claims, damages, or liabilities, then Lime shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault of such Indemnified
Party, on the one hand, and Lime, on the other hand.

     6.10 Notification of Certain Matters.

          (a) Lime shall give prompt notice to the Sellers’ Representative of (i) the occurrence, or
failure to occur, of any event which occurrence or failure to occur would be likely to cause any
representation or warranty made by Lime in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Closing; (ii) any notice of, or other
communication relating to, a default or event which, with notice or lapse of time or both, would
become a default, received by Lime prior to the Closing, under any agreement, indenture or
instrument to which Lime or any of its subsidiaries is a party or is subject which default would
materially and adversely affect the ability of Lime to perform its obligations hereunder and to
effect the Closing; (iii) any notice or other communication from any third party received by Lime
alleging that the consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement; and (iv) any notice or other communication from any
regulatory authority received by Lime in connection with the Transaction or the Merger.

          (b) Sellers’ Representative shall give prompt notice to Lime (i) upon Seller’s Representative
obtaining knowledge of the occurrence, or failure to occur, of any event which occurrence or
failure to occur would be likely to cause any representation or warranty made by any Seller in this
Agreement to be untrue or inaccurate in any material respect at any time from the date hereof to
the Closing; (ii) of any notice of, or other communication relating to, a default or event which,
with notice or lapse of time or both, would become a default, received by Sellers’ Representative
prior to the Closing, under any agreement, indenture or instrument to which any Seller is a party
or is subject which default would materially and adversely affect the ability of such Seller to
perform Seller’s obligations hereunder and to effect the Closing; (iii) of any notice or other
communication from any third party received by Sellers’ Representative alleging that the consent of
such third party is or may be required in connection with the transactions contemplated by this
Agreement; and (iv) of any notice or other communication from any regulatory authority received by
Sellers’ Representative in connection with the Transaction or the Merger .

     6.11 Company Patents. Lime shall maintain in effect, for a period of not less than one
(1) year following the Closing, the Company patents set forth in Schedule 6.11.

     6.12 Company Warrants. Notwithstanding any provisions to the contrary in the Company
Warrants which may provide for expiration or cancellation on a change of control or merger of the
Company, Lime agrees to offer (the “Warrant Offer”) to each Company Warrant holder the right to
exchange such holder’s Company Warrants for new Lime Warrants to acquire such number of shares of

 

 

Lime Common Stock as such holder would have received had the holder exercised the Company
Warrant in full prior to the Merger. Any such new Warrant will have an aggregate exercise price
equal to the aggregate exercise price under the applicable Company Warrant, shall have the same
expiration date as the applicable Company Warrant, and shall otherwise be in form and substance
reasonably acceptable to Sellers’ Representative. The Warrant Offer shall be transmitted to each
Warrant holder within 30 days following the Closing together with the form of the new Lime Warrant.
Copies of each Warrant Offer and form of new Lime Warrant shall also be provided to Sellers’
Representative.

     6.13 No Legal Actions. Lime shall, and Sellers’ Representative shall cause the Company
to, execute contemporaneously with the execution hereof, a general release and agreement (the
"General Release”) in substantially the form attached hereto as Exhibit 1. The General
Release shall constitute a separate agreement, the consideration for which shall be the agreement
of each Seller to approve and execute this Agreement and the General Release shall survive the
expiration or other termination of this Agreement.

     6.14 Appointment of Board of Directors. Within ten (10) days following the Closing,
Lime shall use its best efforts to cause Christopher W. Capps to be appointed as a director of
Lime. Unless otherwise notified by Richard P. Kiphart, for so long as Richard P. Kiphart shall own
any of the capital stock of Lime, Lime shall use its best efforts to cause Mr. Capps to be
nominated as a director for each election of directors, unless Mr. Capps shall have resigned or
been removed in accordance with Delaware law.

     6.15 Registration Statement. Lime shall prepare and file a registration statement
with the SEC under the Securities Act on Form S-4, registering the Lime Common Stock to be issued
in connection with the Merger (the “Registration Statement”), no later than December 31, 2008.
Thereafter, Lime shall use its best efforts to cause such Registration Statement to be declared
effective as soon as possible. Without limiting the foregoing, Lime will promptly respond to all
SEC comments, inquiries and requests.

     6.16 Merger. Lime shall effect the Merger within forty-five (45) days following the
Closing, or, if later, within 5 business days after the effectiveness of the Registration
Statement. Among the terms of the Merger, the separate corporate existence of the Company will
terminate and each of the outstanding shares of Company Common Stock not already owned by Lime
shall be, at the Company stockholder’s election, converted into shares of Lime Common Stock at the
Exchange Ratio set forth on Schedule B or converted into the right to receive cash at the rate of
$0.008625 per share.

     6.17 Reports under Exchange Act. With a view to making available to the Sellers the
benefits of Rule 144 under the Securities Act, or any other similar rule or regulation of the SEC
that may at any time permit the Sellers to sell the Lime Shares to the public without registration
(“Rule 144”), Lime agrees to: (a) make and keep adequate current public information available,
within the meaning of Rule 144; (b) file with the SEC in a timely manner all reports and other
documents required of Lime under the Securities Act and the Exchange Act so long as Lime remains
subject to such requirements and the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and (c) furnish to each Seller so long as such Seller owns any
Lime Shares, promptly upon request (i) a written statement by Lime, if true, that it has complied
with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy
of or free online access to the most recent Lime SEC Reports, and (iii) such oher information as
may reasonably be requested by a Seller in order to sell Lime Shares pursuant to Rule 144 without
registration.

 

 

ARTICLE 7

SURVIVAL; INDEMNIFICATION

     7.1 Survival.

          (a) The representations, warranties, covenants, and agreements of the Sellers made herein and
in all agreements, documents, and instruments executed and delivered by each Seller in connection
herewith (i) are material, shall be deemed to have been relied upon by Lime, and shall survive the
execution hereof regardless of any investigation on the part of Lime or its Representatives, with
Lime reserving its rights hereunder, and (ii) shall bind each Seller’s successors and assigns,
whether so expressed or not, and shall inure to the benefit of Lime and its respective successors
and assigns.

          (b) The representations and warranties of the parties made herein and in all agreements,
documents, and instruments executed and delivered by any party in connection herewith shall expire
and be of no further force or effect on March 31, 2009, except that any written claim for breach
thereof made prior to such expiration date and delivered to the party against whom such claim is
made shall survive thereafter and, as to any such claim, such applicable expiration will not effect
the rights to indemnification of any party hereunder; provided, however, that any such written
claim with respect to fraud, intentional misrepresentation or willful breach, may be given at any
time.

     7.2 Indemnification.

          (a) Indemnification by the Sellers. Each Seller acknowledges and agrees that Lime has
relied on the representations, warranties, covenants and other agreements of such Seller contained
in this Agreement. Accordingly, each Seller, on his/her/its own behalf and on behalf of his/her/its
Seller’s successors, executors, administrators, estate, heirs and assigns (collectively, the
“Stockholder Indemnifying Parties”) agrees to severally defend, indemnify and hold Lime, its
directors, officers, employees and agents (collectively, the “Lime Indemnified Parties”) harmless
from and against any and all Losses as the same are incurred, of any kind or nature whatsoever
(whether or not arising out of third-party claims) which may be sustained or suffered by any such
Lime Indemnified Party based upon, arising out of, or by reason of (i) any breach of any
representation or warranty made by such Seller in this Agreement; (ii) any breach of any covenant
or agreement made by such Seller in this Agreement, and (iii) the inaccuracy or incompleteness of
any information provided to Lime in writing by such Seller and stated specifically to be used for
inclusion in the Information Statement or the Registration Statement.

          (b) Notice; Payment of Losses; Defense of Third-Party Claims.

     (i) With respect to any claim for indemnification based on breach of any covenant or
agreement made by the Sellers in this Agreement, and as to which there is no third party
claim, Lime shall notify Sellers’ Representative of such breach and claim, which notice
shall provide reasonable detail as to the alleged breach and Sellers’ Representative shall
have ten (10) business days to effect a cure of such breach. If such cure cannot be
effected, or if the Sellers’ Representative contests such breach, the parties shall proceed
with the claim for indemnification as provided in Section 7.2(b)(iii) below.

     (ii) For all indemnification claims other than those provided for in Section
7.2(b)(i) above, a Lime Indemnified Party shall give written notice of a claim for
indemnification to the applicable Stockholder Indemnifying Party promptly after receipt of
any written claim by any third party and in any event not later than twenty (20) business
days after receipt of any such

 

 

written claim (or not later than ten (10) business days after the receipt of any such
written claim in the event such written claim in the form of a formal complaint filed with a
court of competent jurisdiction and served on the Lime Indemnified Party or in the form of a
final determination by any Governmental Body); provided, however, that failure to give such
notice shall not limit the right of the Lime Indemnified Party to recover indemnity or
reimbursement except to the extent that the Stockholder Indemnifying Party suffers any
material prejudice or material harm with respect to such claim as a result of such failure.
The Lime Indemnified Party shall provide the Stockholder Indemnifying Party with such
further information concerning any such claims as the Stockholder Indemnifying Party may
reasonably request by written notice.

     (iii) Within ten (10) business days after receiving notice of a claim for
indemnification or reimbursement, the Stockholder Indemnifying Party shall, by written
notice to the Lime Indemnified Party, either (i) concede or deny liability for the claim in
whole or in part, or (ii) in the case of a claim asserted by a third party, advise that the
matters set forth in the notice are, or will be, subject to contest or legal proceedings not
yet finally resolved. If the Stockholder Indemnifying Party concedes liability in whole or
in part, it shall, within twenty (20) business days of such concession, pay the amount of
the claim to the Lime Indemnified Party to the extent of the liability conceded. Any such
payment shall be made in immediately available funds equal to the amount of such claim so
payable. If the Stockholder Indemnifying Party denies liability in whole or in part or
advises that the matters set forth in the notice are, or will be, subject to contest or
legal proceedings not yet finally resolved, then the Stockholder Indemnifying Party shall
make no payment (except for the amount of any conceded liability payable as set forth above
and reimbursement of expenses as set forth herein) until the matter is resolved in
accordance with this Agreement.

     (iv) In the case of any third party claim, if, within ten (10) business days after
receiving the notice described in the preceding paragraph (a), the Stockholder Indemnifying
Party gives written notice to the Lime Indemnified Party stating that the Stockholder
Indemnifying Party would be liable under the provisions hereof for indemnity in the amount
of such claim if such claim were valid and that the Stockholder Indemnifying Party disputes
and intends to defend against such claim, liability or expense at the Stockholder
Indemnifying Party’s own cost and expense, then, except as provided below, counsel for the
defense shall be selected by the Stockholder Indemnifying Party (subject to the consent of
such Lime Indemnified Party which consent shall not be unreasonably withheld) and such
Stockholder Indemnifying Party shall not be required to make any payment to such Lime
Indemnified Party with respect to such claim, liability or expense as long as the
Stockholder Indemnifying Party is conducting a good faith and diligent defense at its own
expense; provided, however, that the assumption of defense of any such matters by the
Stockholder Indemnifying Party shall relate solely to the claim, liability or expense that
is subject or potentially subject to indemnification. If the Stockholder Indemnifying Party
assumes such defense in accordance with the preceding sentence, it shall have the right,
with the consent of such Lime Indemnified Party, which consent shall not be unreasonably
withheld, to settle all indemnifiable matters related to claims by third parties which are
susceptible to being settled provided the Stockholder Indemnifying Party’s obligation to
indemnify such Lime Indemnified Party therefor will be fully satisfied only by payment of
money by the Stockholder Indemnifying Party pursuant to a settlement which includes a
complete release of such Lime Indemnified Party. The Stockholder Indemnifying Party shall
keep such Lime Indemnified Party apprised of the status of the claim, liability, or expense
and any resulting suit, proceeding or enforcement action, shall furnish such Lime
Indemnified Party with all documents and information that such Lime Indemnified Party shall
reasonably request, and shall consult with such Lime Indemnified Party prior to acting on
major matters, including settlement discussions. Notwithstanding anything herein stated,
such Lime Indemnified Party shall at all

 

 

times have the right to fully participate in such defense at its own expense directly
or through counsel; provided, however, if the named parties to the action or proceeding
include both the Stockholder Indemnifying Party and such Lime Indemnified Party and
representation of both parties by the same counsel would be inappropriate under applicable
standards of professional conduct as set forth in a reasoned written opinion issued by
counsel for such Lime Indemnified Party, the reasonable expense of separate counsel for such
Lime Indemnified Party shall be paid by the Stockholder Indemnifying Party. If (A) no such
notice of intent to dispute and defend is given by the Stockholder Indemnifying Party, or if
such diligent good faith defense is not being or ceases to be conducted, or (B) the third
party claim relates to breaches of representations and warranties made by a Stockholder
Indemnifying Party that relate to the Company, its business or operations, Lime may
undertake the defense of such claim, liability, or expense at the Stockholder Indemnifying
Party’s own cost and expense (with counsel selected by Lime), and shall have the right to
compromise or settle, such claim, liability, or expense (exercising reasonable business
judgment). If such claim, liability, or expense is one that by its nature cannot be defended
solely by the Stockholder Indemnifying Party, then such Lime Indemnified Party shall make
available all information and assistance that the Stockholder Indemnifying Party may
reasonably request and shall cooperate with the Stockholder Indemnifying Party in such
defense.

          (c) Limitation on Contribution and Certain Other Rights. Each Seller hereby agrees
that if, following the Closing Date, any Losses become due from such Seller pursuant to this
Section 7.2 (a “Loss Payment ”), such Seller shall have no rights against Lime, the Company
or any of their directors, officers or employees (in their capacity as such), whether by reason of
contribution, indemnification, subrogation or otherwise, in respect of any such Loss Payment, and
each Seller shall not take any action against Lime or any such Person with respect thereto.

          (d) Limitations. The aggregate liability of each Seller under Section 7.2
shall not exceed an amount equal to the number of shares of Company Common Stock sold by such
Seller multiplied by $0.008625, together with the value of any Lime Warrants received by such
Seller pursuant to Section 6.12.

ARTICLE 8

MISCELLANEOUS PROVISIONS

     8.1 Fees, Expenses and Taxes. Lime shall pay the fees and expenses of Rutter Hobbs &
Davidoff Incorporated, as counsel for the Sellers’ Representative, in connection with this
Agreement and the Transaction. All other fees, expenses and Taxes incurred in connection with this
Agreement and the Transaction shall be paid by the party incurring such fees, expenses, or Taxes.
Lime and the Sellers understand that the Transaction is a taxable event to the Sellers and agree
that the Transaction is not intended to be a tax-free reorganization.

     8.2 Termination. This Agreement shall terminate by mutual agreement of Lime and the
Sellers’ Representative or if the Closing has not occurred by March 31, 2009. Upon termination of
this Agreement no party shall have any liability to any other party, unless the reason for
termination is that the Closing has failed to occur due to a breach of a party’s obligations
hereunder.

     8.3 Amendment. This Agreement may not be amended, except by an instrument in writing
signed by or on behalf of Lime and the Sellers’ Representative.

 

 

     8.4 Waiver.

          (a) Neither any failure nor any delay by any party in exercising any right, power or privilege
under this Agreement or any of the documents referred to in this Agreement will operate as a waiver
of such right, power or privilege and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. To the maximum extent permitted by Legal
Requirements, (i) no waiver that may be given by a party will be applicable except in the specific
instance for which it is given; and (ii) no notice to or demand on one party will be deemed to be a
waiver of any obligation of that party or of the right of the party giving such notice or demand to
take further action without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.

          (b) At any time prior to the Closing Date, Lime (with respect to the Sellers) and the Sellers’
Representative (with respect to Lime), may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of such other party to this Agreement,
(ii) waive any inaccuracies in the representation and warranties contained in this Agreement or any
document delivered pursuant to this Agreement and (iii) waive compliance with any covenants,
obligations or conditions contained in this Agreement. Any agreement on the part of a party to this
Agreement to any such extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party.

     8.5 Entire Agreement. This Agreement and the documents and instruments and other
agreements among the parties hereto as contemplated by or referred to herein constitute the entire
agreement among the parties to this Agreement and supersede all prior agreements and
understandings, both written and oral, among or between any of the parties with respect to the
subject matter hereof.

     8.6 Execution of Agreement; Counterparts; Electronic Signatures.

          (a) This Agreement may be executed in several counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same instrument, and shall become effective
when counterparts have been signed by each of the parties and delivered to the other parties; it
being understood that all parties need not sign the same counterpart.

          (b) The exchange of copies of this Agreement and of signature pages by facsimile transmission
(whether directly from one facsimile device to another by means of a dial-up connection or whether
mediated by the worldwide web), by electronic mail in “portable document format”(“.pdf” format), or
by any other electronic means intended to preserve the original graphic and pictorial appearance of
a document, or by a combination of such means, shall constitute effective execution and delivery of
this Agreement as to the parties and may be used in lieu of an original Agreement for all purposes.
Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures
for all purposes.

     8.7 Governing Law. Except to the extent that the corporate laws of the State of
Delaware apply to a party, this Agreement shall be governed by, and construed in accordance with,
the laws of the State of Illinois, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.

     8.8 Consent to Jurisdiction; Venue. In any action or proceeding between Lime and any
of the Sellers arising out of or relating to this Agreement or the Transaction, each of the
parties: (a) irrevocably and unconditionally consents and submits to the exclusive jurisdiction and
venue of any
state or federal court located in the City of Chicago, Illinois (each, a “Chicago Court ”);
and (b) agrees

 

 

that all claims in respect of such action or proceeding may be heard and determined
exclusively in any Chicago Court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law.

     8.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN THE PARTIES ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

     8.10 Attorneys’ Fees. In any action at law or suit in equity to enforce this
Agreement or the rights of any of the parties hereunder, and except as provided in
Section 7 and Section 8.1 , the prevailing party in such action or suit shall be
entitled to receive a reasonable sum for its attorneys’ fees and all other reasonable costs and
expenses incurred in such action or suit.

     8.11 Assignments and Successors. This Agreement shall be binding upon, and shall be
enforceable by and inure solely to the benefit of, the parties hereto and their respective
successors and assigns; provided, however, that neither this Agreement nor any of the Sellers’
rights hereunder may be assigned by any Seller without the prior written consent of Lime, provided
the assignment of rights by any Seller to the Sellers’ Representative shall not require any such
consent.. Any attempted assignment of this Agreement or of any such rights by any Seller without
such consent shall be void and of no effect.

     8.12 No Third Party Rights. Except for the persons referenced in Sections
6.4, 6.6, 6.8, 6.9, 6.12, 6.13, and 6.14 who
are intended third party beneficiaries of such Sections and this Agreement, nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person (other than the
parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

     8.13 Notices. All notices, Consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized overnight courier service
(costs prepaid); or (b) sent by facsimile or e-mail with confirmation of transmission by the
transmitting equipment confirmed with a copy delivered as provided in clause (a), in each case to
the following addresses or facsimile numbers and marked to the attention of the person (by name or
title) designated below (or to such other address, facsimile number, e-mail address or person as a
party may designate by notice to the other parties) between the hours of 9:00 a.m. and 5:00 p.m. in
the recipient’s time zone:

If to Lime:

Lime Energy Co.

1280 Landmeier Road

Elk Grove Village, Illinois 60007-2410

Attention: Jeffrey R. Mistarz

Fax no.: (847) 437-4969

with a copy to:

Reed Smith LLP

10 S. Wacker Drive

Chicago, Illinois 60606-7507

 

 

Attention: Evelyn Arkebauer

Fax no.: (312) 207-6400

If to any Seller, to the Sellers’ Representative and counsel on behalf of the Sellers’
Representative:

Richard P. Kiphart

William Blair & Co.

222 W. Adams Street

Chicago, Illinois 60606

Fax no.: (312) 368-9418

with a copy to:

Rutter Hobbs & Davidoff Incorporated

1901 Avenue of the Stars, Suite 1700

Los Angeles, CA 90067-6018

Attention: Joel Weinstein

Fax no.: (310) 286-1728

     8.14 Legal Representation of the Parties . This Agreement was negotiated by the
parties with the benefit of legal representation and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any party shall not apply
to any construction or interpretation hereof.

     8.15 Enforcement of Agreement. Except as otherwise expressly provided herein, any and
all remedies herein expressly conferred upon a party hereunder shall be deemed cumulative with and
not exclusive of any other remedy conferred hereby or by law on such party, and the exercise of any
one remedy shall not preclude the exercise of any other. The parties acknowledge and agree that
each other party hereunder would be irreparably damaged if any of the provisions of this Agreement
are not performed in accordance with their specific terms and that any breach of this Agreement by
a party hereunder could not be adequately compensated in all cases by monetary damages alone.
Accordingly, in addition to any other right or remedy to which a party hereunder may be entitled,
at law or in equity, it shall be entitled to enforce any provision of this Agreement by a decree of
specific performance and temporary, preliminary and permanent injunctive relief to prevent breaches
or threatened breaches of any of the provisions of this Agreement, without posting any bond or
other undertaking.

     8.16 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only
in part or degree will remain in full force and effect to the extent not held invalid or
unenforceable.

     8.17 Appointment of Sellers’ Representative. Each Seller hereby irrevocably
authorizes and appoints Richard P. Kiphart (the “Sellers’ Representative”) as such Seller’s
representative and attorney-in-fact to act in the capacity contemplated by this Agreement. If the
Sellers’ Representative or any successor shall resign, die or become unable to act as Sellers’
Representative, a replacement shall be promptly appointed by a writing signed by Sellers who hold a
majority of the Shares being sold hereby, which replacement shall thereafter be the Sellers’
Representative with the same powers and duties as the previous Sellers’ Representative. Sellers’
Representative shall not be liable to any Seller or any other person for anything which he may do
or refrain from doing in connection with this Agreement except in the event of fraud, or willful
misconduct by Sellers’ Representative. In connection with the exercise of his

 

 

duties, Sellers’ Representative will be entitled to consult with and rely upon legal counsel
and other professional advisors, with the costs thereof to be allocated among the Sellers, and
Sellers’ Representative will have no liability hereunder for actions taken in good faith reliance
upon the advice of such advisors.

 

 

     8.18 Sellers (other than Sellers’ Representative) shall, jointly and severally, indemnify
Sellers’ Representative for, and hold him harmless against, any Losses arising out of or in
connection with his duties as Sellers’ Representative including the cost and expenses of defending
himself against any Losses, except for Losses arising from the fraud or willful misconduct of
Sellers’ Representative.

[ Remainder of page intentionally left blank – signature pages follow ]

-18A-

 

SIGNATURE PAGE

TO

STOCK PURCHASE AGREEMENT

LIME ENERGY CO. AND SELLERS (listed on Schedule A)

LIME:

Lime Energy Co.

	 	 	 	 	 
	By:

	 	/s/ Jeffrey Mistarz	 	 
	 

	 	 

Jeffrey Mistarz
	 	 
	 

	 	Executive Vice President and CFO	 	 

SELLERS:

For completion by Seller who is a natural person:

	 	 	 
	 

Signature

	 	 
	 
	 	 
	 

Print Name

	 	 
	 
	 	 
	For completion by Seller who is not a natural person (trust, partnership, etc.):
	 
	 	 
	 

Print Name of Entity

	 	 

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 

	 	 	 
	 

Print Name and Title

	 	 

-19-

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