Exhibit 10.31
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.
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
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