AR NOTE ISSUANCE AGREEMENT
Exhibit
10.31
This
AR
Note Issuance Agreement (this “Agreement”)
is
dated as of the 6th day of June, 2008, and is made by and between Lime Energy
Co., a Delaware corporation (the “Company”),
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇”)
and
Advanced Biotherapy, Inc. (“ADVB”
and
together with ▇▇▇▇▇▇▇, “Noteholders”).
W
I T N E
S S E T H:
WHEREAS,
the Company and the Noteholders are parties to that certain Note Issuance
Agreement dated as of March 12, 2008 (the “Existing
Agreement”),
pursuant to which the Company 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 “Existing
Note”);
and
WHEREAS,
▇▇▇▇▇▇▇ desires to increase his commitment to the Company, and the parties
desire to amend and restate the Existing Note and to divide it into two separate
Notes (the “AR
Notes”)
payable to each Lender and separately reflecting each Lender’s commitment to the
Company;
WHEREAS,
the Company has agreed to make the AR Notes convertible if they are not paid
at
maturity; 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. Amended
and Restated Notes.
Contemporaneously with the execution of this Agreement and delivery by the
Company to the Noteholders of the AR Notes, Noteholders shall deliver to the
Company the original Existing Note.
2. Condition
to Advances.
It
shall be a condition to each advance under the AR Notes that no Event of Default
(as defined in the AR Notes) 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.
3. Manner
of Advances, Repayments and Prepayments.
All
advances requested by the Company shall be drawn 95/110 from ▇▇▇▇▇▇▇’▇ AR Note
and 15/110 from ADVB’s AR Note. As long as both AR Notes remain outstanding, all
repayments and prepayments shall be made between the two AR Notes in the same
proportion.
4. 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 its
AR
Note remains outstanding continue to reserve a sufficient amount of cash or
other immediately liquid assets as to enable it to make advances under its
AR
Note.
5. Subordination
by Noteholders.
Each
Noteholder agrees to subordinate its AR 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.
6. Information
Regarding Use of Proceeds.
Promptly following request therefore by either Noteholder, the Company shall
provide Noteholders with reasonable detail regarding the use of proceeds with
respect to any advance made under the AR Notes, subject to the Company’s
obligations under Regulation F-D.
7. Arbitration.
In the
event of any and all disagreements and controversies arising from this Agreement
or the AR Notes, 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. Any party involved in such disagreement or
controversy 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, any involved 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, no 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.
No
Noteholder shall assign its rights under this Agreement except in connection
with an assignment under the AR Note permitted by the terms
thereof.
(c) This
Agreement amends and restates the Existing Agreement in its entirety as of
the
date hereof, and this Agreement may be amended only by written execution by
all
parties. No waiver of any provision of this Agreement shall in any event be
effective unless the same shall be in writing and acknowledged by the party
against whom enforcement is sought, and then any such waiver shall be effective
only in the specific instance and for the specific purpose for which
given.
(d) The
descriptive headings of the several sections and paragraphs of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(e) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than
the
State of Illinois.
(f) Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this
Agreement shall be prohibited by, unenforceable or invalid under any
jurisdiction, such provision shall as to such jurisdiction, be severable and
be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other
jurisdiction.
(g) This
Agreement may be executed in one or more counterparts, all of which shall be
deemed but one and the same agreement and each of which shall be deemed an
original. Delivery by facsimile of an executed counterpart of this Agreement
shall be effective as an original executed counterpart hereof and shall be
deemed a representation that an original executed counterpart hereof will be
delivered.
(h) THE
PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT.
(i) ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE
OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT
OF
ILLINOIS; PROVIDED
THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. EACH
PARTY
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS
OF
THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
IN
WITNESS
WHEREOF, the undersigned have executed this Agreement as of the day and year
first above written.
LIME
ENERGY CO.
By:
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Executive Vice President and Chief Financial Officer
NOTEHOLDERS:
By:
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
ADVANCED
BIOTHERAPY
INC.
By:
/s/
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, President