FORM OF
SUBSCRIPTION AGREEMENT
(Tranche
B)
This Subscription
Agreement (this “ Agreement ”) is made and
entered into by and between Lime Energy Co., a Delaware corporation
(the “ Company ”), and the undersigned purchaser
(the “ Purchaser ”) of the Units (defined below)
effective as of November 13, 2008.
WHEREAS, Purchaser
desires to subscribe for and purchase the Units for the Purchase
Price (as defined below); and
WHEREAS, the
Company desires to issue and sell to Purchaser the Units for the
Purchase Price.
NOW, THEREFORE, in
consideration of the premises and the mutual obligations and
covenants set forth herein, the parties hereto agree as
follows:
(a) Purchaser
hereby subscribes for (i)
shares of Common Stock, par value $0.0001 per share (the “
Common Stock ”), of the Company and, (ii) a
warrant to purchase
shares of Common Stock (the " Warrant ”, attached
hereto as Exhibit A , the shares of Common Stock and
the Warrants together, the “ Units ”) for an
aggregate purchase price of $
(the “ Purchase Price ”).
(b) This
subscription shall be deemed accepted by the Company once this
Agreement has been executed by the Company and Purchaser. Purchaser
understands, acknowledges and agrees that this subscription is and
shall be irrevocable, except that Purchaser shall have no
obligation hereunder in the event that the Required Approvals (as
defined below) are not obtained by January 31,
2009.
(c) The
closing of the purchase and sale of the Units shall be subject to
the following:
(i) Purchaser
understands, acknowledges and agrees that the Company is required,
pursuant to the rules of The NASDAQ Stock Market, Inc., to seek the
approval of its stockholders (A) to issue the Units and the
shares of stock issuable upon exercise of the Warrants, (B) to
allow one or more affiliates of the Company to also purchase Units
on the same terms and conditions as those offered to Purchaser, and
(C) to allow affiliated lenders of the Company to purchase
convertible preferred securities in exchange for cancellation of
outstanding Company indebtedness to such lenders (collectively, the
“ Required Approvals ”).
(ii) The
closing shall take place at the offices of Reed Smith LLP, 10 S.
Wacker Drive, Chicago Illinois 60606 following receipt of the
Required Approvals, or at such other place as the Company shall
designate in writing to Purchaser. The Company shall
provide
Purchaser with
at least five (5) business days’ notice in advance of
the closing, which notice shall certify to Purchaser by the
Company’s Chief Executive Officer that the Required Approvals
have been obtained. At the closing, the Purchase Price shall be
received by the Company from Purchaser by wire transfer of
immediately available funds and the Company shall deliver the Units
to Purchaser.
(d) Purchaser
further understands, acknowledges and agrees that:
(i) In
reliance upon applicable exemptions, the Units have not been
registered under the Securities Act of 1933, as amended (the
“ Act ”), and the rules and regulations
thereunder or any U.S. state securities laws and the rules and
regulations thereunder.
(ii) No
federal or state agency has made any finding or determination as to
the fairness of this subscription or investment or any
recommendation or endorsement of the Units.
(iii) Because
the Units have not been registered under the Act or applicable U.S.
state securities laws, the economic risk of the investment must be
borne indefinitely by Purchaser and the Units may not be sold,
pledged or hypothecated or otherwise transferred unless
subsequently registered under the Act and applicable U.S. state
securities laws or an exemption from such registration is available
and only with the prior written consent of the Company.
Registration under the Act and applicable U.S. state securities
laws is unlikely at any time in the future.
(iv) No
assignment, sale, pledge, hypothecation, transfer, exchange or
other disposition, or offer thereof whether direct or indirect, of
the Units may be made if, in the opinion of counsel to the Company,
such disposition or offer would require registration under the Act
or would result in the violation of applicable federal, state or
foreign securities laws.
2.
Representations, Warranties and Agreements of Purchaser .
Purchaser hereby represents, warrants, acknowledges and agrees
that:
(a)
Organization and Standing of Purchaser . If Purchaser is not
an individual, Purchaser is duly incorporated, organized or formed
(as applicable), validly existing, and (if applicable) in good
standing under the law of the jurisdiction of its incorporation,
organization or formation; if required by applicable law, Purchaser
is duly qualified and in good standing in the jurisdiction of its
principal place of business, if different from its jurisdiction of
incorporation, organization or formation; and Purchaser has full
power and authority to execute and deliver this Agreement and to
perform its obligations thereunder, and all necessary actions by
the board of directors, stockholders, managers, members, partners,
trustees, beneficiaries, or other applicable persons necessary for
the due authorization, execution, delivery and performance of this
Agreement by Purchaser have been duly taken.
(b)
Authorization and Power . Purchaser has duly executed and
delivered this Agreement, and this Agreement constitutes the legal,
valid and binding obligation of Purchaser enforceable against it in
accordance with its terms (except as may be limited by bankruptcy,
insolvency or similar laws of general application and by the effect
of general principles of equity, regardless of whether considered
at law or in equity).
2
(c)
No Conflicts . Purchaser’s authorization, execution,
delivery, and performance of this Agreement does not and will not
(i) conflict with, or result in a breach, default or violation
of, (A) the organizational documents of such Purchaser, if
Purchaser is not an individual, (B) any contract or agreement
to which Purchaser is a party or is otherwise subject, or
(C) any law, rule, regulation, order, judgment, decree, writ,
injunction or arbitral award to which Purchaser is subject; or
(ii) require any consent, approval or authorization from,
filing or registration with, or notice to, any governmental body or
other person, unless such requirement has already been
satisfied.
(d)
Communication by Purchaser . Purchaser has had a reasonable
opportunity to ask questions of and receive answers from the
Company concerning the Units and the Company, and the transactions
which are the subject of the Required Approvals, and all such
questions have been answered to the full satisfaction of Purchaser.
Furthermore, Purchaser represents that in connection with its
review of this Agreement and the transactions contemplated hereby,
it either (i) it has not been represented by counsel and
assumes all risks thereto, or (ii) has been represented by
counsel other than counsel for the Company.
(e)
Compliance with Securities Act . Purchaser understands that
the Units have not been registered under the Act in reliance on an
exemption therefrom, and that the Company is under no obligation to
register the Units. Purchaser will not transfer the Units in
violation of the Act or any other applicable securities laws.
Purchaser is purchasing the Units for its own account and not for
the account of any other person and not with a view to distribution
or resale to others.
(f)
Information on Purchaser . The Purchaser is, and will be at
the time of the issuance of the shares of Common Stock an
“accredited investor,” as such term is defined in
Regulation D promulgated by the Commission under the Act, is
experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities in
private placements in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business
matters as to enable the Purchaser to utilize the information made
available by the Company to evaluate the merits and risks of and to
make an informed investment decision with respect to the proposed
purchase, which represents a speculative investment. If Purchaser
is an individual, the Purchaser has the authority and is duly and
legally qualified to purchase and own the Units. The Purchaser is
able to bear the risk of such investment for
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