AR NOTE ISSUANCE AGREEMENT
Exhibit 10.3
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 Xxxxxxx X. Xxxxxxx (“Xxxxxxx”) and Advanced Biotherapy, Inc. (“ADVB” and
together with Xxxxxxx, “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, Xxxxxxx 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 Xxxxxxx’x 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.
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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.
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(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
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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.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first
above written.
| LIME ENERGY CO. | ||||
By: Name: |
/s/ Xxxxxxx Xxxxxxx
|
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Title:
|
Executive Vice President and Chief Financial Officer | |||
| NOTEHOLDERS: | ||||
By: Name: |
/s/ Xxxxxxx Xxxxxxx
|
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| Advanced Biotherapy Inc. | ||||
By:
|
/s/ Xxxxxxxxxxx Xxxxx
|
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