Exhibit 10.3
AR
NOTE ISSUANCE AGREEMENT
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 Richard P.
Kiphart (“ Kiphart ”) and Advanced Biotherapy,
Inc. (“ ADVB ” and together with Kiphart,
“ Noteholders ”).
W I T
N E S S E T H:
WHEREAS, the Company 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, Kiphart 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 Kiphart’s 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
