This Stock Purchase Agreement
(this “ Agreement ” ) is made and
entered into as of November 18, 2008, by and among:
Lime Energy
Co. , a Delaware corporation (“ Lime
” ), and certain stockholders of Advanced Biotherapy,
Inc., a Delaware corporation (the “ Company
” ) listed in Schedule A (each a
“ Seller ,” collectively the “
Sellers ” ).
A.
The Sellers are holders of outstanding shares of common stock, par
value $0.001 per share (“ Company Common Stock
” ) of the Company and each Seller is the record
holder and has sole voting power over such number of shares of
Company Common Stock as is set forth opposite such Seller’s
name on Schedule A (the “
Shares ” ).
B.
Lime desires to purchase from Sellers and Sellers desire to sell to
Lime, all of the Shares owned by Sellers, in exchange for shares of
Lime’s common stock, par value $0.0001 per share (the “
Lime Common Stock ”) at an exchange ratio (the
“ Exchange Ratio ”) set forth on
Schedule B (the “
Transaction ”).
C
. Under the Marketplace Rules of The NASDAQ Stock Market, Inc.
(the “ Marketplace Rules ”), the issuance
of the Lime Common Stock pursuant to the Transaction requires the
approval of the stockholders holding at least a majority of the
outstanding stock of Lime (the “ Required
Approval ”).
D
. Lime intends to obtain the necessary approval of its
stockholders by written consent in lieu of meeting. To be
effective, such approval must be communicated to all of the
Lime’s stockholders through an information statement (the
“ Information Statement ”) pursuant to
Section 14(c) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (collectively,
the “ Exchange Act ”).
E.
Immediately after the closing of the Transaction, Lime will be the
beneficial holder of 90% or more of the issued and outstanding
Company Common Stock.
NOW, THEREFORE, in
consideration of the mutual benefits to be derived from this
Agreement and of the representations, warranties, conditions,
agreements and promises contained in this Agreement, the parties
agree as follows:
Certain
capitalized terms used in this Agreement have the meanings set
forth below and other capitalized terms used in this Agreement are
defined in the Sections of this Agreement where they first appear.
All capitalized terms shall be equally applicable to both the
singular and plural forms. Any agreement referred to below shall
mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions
thereof and by this Agreement.
“
Affiliate” shall mean, with respect to a
Person, any other Person that, directly or indirectly, Controls, is
Controlled by or is under common Control with such Person. The term
“Affiliated” has the meaning correlative to the
foregoing.
“
Consent” shall mean any approval, consent,
ratification, permission, waiver or authorization from or by a
Governmental Body including any governmental authorization in the
form of (a) permit, license, certificate, franchise,
permission, variance, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by
or under the authority of any Governmental Body or pursuant to any
Legal Requirement; or (b) right under any contract with any
Governmental Body.
“
Control, ” “
Controlled,” “ Controlling
” or “ under common Control with”
with respect to any Person, means having the ability to direct the
management and affairs of such Person, whether through the
ownership of voting securities, by contract or otherwise, and such
ability shall be deemed to exist when a Person holds at least 50%
of the outstanding voting securities of such Person.
“
Entity” shall mean any corporation (including
any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate,
trust, company (including any company limited by shares, limited
liability company or joint stock company), firm, society or other
enterprise, association, organization or entity.
“
GAAP” shall mean generally accepted accounting
principles for financial reporting in the United States, applied on
a basis consistent with the basis on which the financial statements
referred to herein were prepared.
“
Governmental Body” shall mean any:
(a) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other
government; or (c) governmental or quasi-governmental
authority of any nature (including any governmental division,
department, agency, commission, instrumentality, official,
organization, unit, body or Entity and any court or other
tribunal).
“
Indemnification Agreement ” refers to the
agreements between the Company and certain of its officers and
directors, copies of which have been provided to Lime.
“
Legal Requirement” shall mean any federal,
state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code,
edict, decree, rule, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Body (or under
the authority of any national securities exchange on which Lime
Common Stock is listed). Reference to any Legal Requirement means
such Legal Requirement as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time,
and reference to any section or other provision of any Legal
Requirement means that provision of such Legal Requirement from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such
section or other provision.
“
Lien” shall mean any lien, pledge,
hypothecation, charge, mortgage, security interest, encumbrance,
claim, infringement, interference, option, right of first refusal,
equitable interest, title retention or title reversion agreement,
preemptive right, community property interest or restriction of any
nature, whether accrued, absolute, contingent or otherwise
(including any restriction on the voting of any security, any
restriction on the transfer of any security or other asset, any
restriction on the receipt of any income derived from any asset,
any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of
ownership of any asset).
“
Lime Purchaser ” shall mean either Lime or a
wholly-owned Subsidiary of Lime, as determined by Lime in its sole
discretion.
“
Lime Shares” shall mean the number of shares of
Lime Common Stock to be issued to the Sellers upon the terms and
subject to the conditions set forth in this Agreement.
“
Losses ” shall mean damages, liabilities,
losses, claims, diminution in value, obligations, liens,
assessments, judgments, Taxes, fines, penalties, reasonable costs
and expenses (including, without limitation, reasonable fees of
counsel) and including all amounts paid in investigation, defense
or settlement of the foregoing.
“
Merger ” shall mean the merger following the
Closing of the Company with and into Lime, the Lime Purchaser or a
wholly-owned Subsidiary of Lime not the Lime Purchaser, in
accordance with Section 253 of the Delaware General Corporation
Law
“
Organizational Documents” shall mean an
Entity’s certificate or articles of incorporation and bylaws
(in the case of a corporation) and similar organizational documents
(in the case of other types of Entities).
“
Person” shall mean any individual, Entity or
Governmental Body.
“
Representatives” shall mean any party’s
respective directors, officers, employees, investment bankers,
attorneys, accountants or other advisors or
representatives.
“
SEC” shall mean the United States Securities
and Exchange Commission.
“
SEC Reports” shall mean the reports,
registration statements and definitive proxy statements filed by an
issuer with the SEC. “ Company SEC Reports
” shall refer to the SEC Reports filed by the Company and
“ Lime SEC Reports ” shall refer to the
SEC Reports filed by Lime.
“
Securities Act” shall mean the Securities Act
of 1933, as amended, and the rules and regulations promulgated
thereunder.
An Entity shall
be a “ Subsidiary” of another Person if
such Person directly or indirectly owns, beneficially or of record,
(a) an amount of voting securities of other interests in such
Entity that is sufficient to enable such Person to elect at leased
a majority of the members of such Entity’s board of directors
or other governing body, or (b) at least 50% of the
outstanding equity or membership interests of such
Entity.
“
Tax” shall mean any tax (including any income
tax, franchise tax, capital gains tax, gross receipts tax,
value-added tax, surtax, excise tax, ad valorem tax, transfer tax,
stamp tax, sales tax, use tax, property tax, business tax,
withholding tax or payroll tax), levy, assessment, tariff, duty
(including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest),
imposed, assessed or collected by or under the authority of any
Governmental Body.
“
Warrants” shall mean any options, stock
appreciation rights, warrants, convertible or exchangeable
securities or other rights, contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance
of any equity interests, or similar rights of an issuer or granting
to any Person any right to participate in the equity or income of
the issuer or to participate in or direct the election of any
director or officer of the issuer or the manner in which any shares
of capital stock or other securities of the issuer are voted, or
other rights of any kind (absolute, contingent or otherwise)
entitling any party to acquire or otherwise receive from the issuer
any shares of capital stock or other securities or receive or
exercise any benefits or rights similar to any rights enjoyed by or
inuring to the holder of capital stock of the issuer, including
without limitation “phantom stock” or stock
appreciation rights. “ Lime Warrants
”
shall mean the
foregoing definition as applied to Lime as the issuer and “
Company Warrants ” shall mean the foregoing
definition as applied to the Company as the issuer.
ARTICLE 2
TRANSACTIONS AT THE CLOSING
2.1 Purchase
and Sale of Shares . Upon the terms and subject to the
conditions set forth in this Agreement and in reliance upon the
representations and warranties contained herein, at the Closing,
each Seller shall sell and deliver to the Lime Purchaser the Shares
owned by such Seller as set forth on Schedule A
and the Lime Purchaser shall purchase the Shares free and clear of
all Liens, for the Purchase Price determined in accordance with
this Section 2 .
2.2 Purchase
Price . The consideration (the “ Purchase
Price ”) to be paid by the Lime Purchaser to each
Seller for its Shares shall be a number of Lime Shares as reflected
on Schedule A .
2.3 Conditions
to Closing . The closing of the Transaction (the “
Closing ”) is subject to (i) the
representations and warranties contained in Articles 3, 4 and
5 being true and correct at and as of the Closing Date (as
defined below) as if made or given on and as of the Closing Date;
(ii) Lime shall have been afforded access to information as
provided in Section 6.3 ; and (iii) Lime shall have
obtained the Required Approval and it shall have become effective
pursuant to Section 14(c) of the Exchange Act.
2.4 Closing
. The Closing shall take place at the offices of Reed Smith LLP, 10
S. Wacker Drive, Chicago Illinois 60606, or at such other place as
the Company shall designate in writing to Sellers. Lime shall
provide Sellers with at least five (5) business days’
notice in advance of the closing date (the “ Closing
Date ”), which notice shall identity the Lime
Purchaser and shall include a certification by Lime’s Chief
Executive Officer that the Required Approval has been obtained and
become effective pursuant to Section 14(c) of the Exchange Act. At
the Closing, the Sellers shall convey and deliver to the Lime
Purchaser stock certificates representing all of the Shares, duly
endorsed in blank or accompanied by stock powers duly executed in
blank, against payment of the Purchase Price for the Shares, as
provided in Section 2.2 , and Lime, on behalf of the
Lime Purchaser, shall deliver to each Seller the Lime Shares
indicated on Schedule A .
ARTICLE 3
REPRESENTATIONS AND WARRANTIES CONCERNING THE
COMPANY
Sellers’
Representative hereby represents and warrants to Lime, as of the
date hereof and as of the Closing Date:
3.1
Organization . The Company is a corporation, validly
existing and in good standing under the laws of the State of
Delaware and has all corporate power and authority to own, lease,
and operate its properties and to carry on its business as it is
now being conducted. To the best knowledge of Sellers’
Representative, the Company is duly organized under the laws of the
State of Delaware and has all necessary governmental approvals to
own, lease, and operate its properties and to carry on its business
as it is now being conducted. Sellers’ Representative has
delivered to Lime complete and correct copies of the Organizational
Documents, the stockholder record list, prepared by the
Company’s transfer agent as of November 4, 2008 (the
“ Stock Ledger ”) and originals or copies
of minutes of director meetings and consents in lieu of meetings in
possession of the Company since June 2004 (collectively, the
“ Minutes ”). To the best knowledge of
Sellers’ Representative, the Stock Ledger is complete,
accurate and current and
the Minutes are
complete, accurate and current in all material respects. The
Company has no direct or indirect Subsidiaries.
3.2
Capitalization; Title to Shares
(a) The
Company’s authorized capital stock consists solely of
2,000,000,000 shares of Company Common Stock and 20,000,000 shares
of preferred stock. The Shares represent at least ninety percent
(90%) of the issued and outstanding shares of Company Common Stock.
As of the date hereof (i) 1,167,621,940 shares of Company
Common Stock are issued and outstanding, and (ii) 832,378,060
shares of Company Common Stock are held by the Company as
non-voting treasury shares. No preferred stock is issued and
outstanding. All outstanding shares of Common Stock are and will on
the Closing Date be validly issued, fully paid and
non-assessable.
(b) To
the best knowledge of Sellers’ Representative, (i)
Schedule 3.2(b) is a true and complete list as of the
date hereof, and as of the Closing Date, of all issued and
outstanding Warrants, the number of shares of Company Common Stock
subject to each such Warrant, and the name of each Warrant holder;
and (ii) except as set forth on Schedule 3.2(b) ,
there are no outstanding Warrants.
(c) To
the best knowledge of Sellers’ Representative: (i) the
Company has not issued any securities in violation of any
preemptive or similar rights; (ii) except for 109,902,680
shares of Company Common Stock reserved for issuance upon exercise
of Warrants, there are no shares of capital stock or other
securities of the Company reserved for issuance for any purpose;
and (iii) the Company is not a party to any voting agreements,
voting trusts, proxies or other agreements, instruments or
understandings with respect to the voting of any shares of the
capital stock or other securities of the Company, or any agreement
with respect to the transferability, purchase or redemption of any
shares of capital stock or other securities of the
Company.
3.3 Company SEC
Reports . To the best knowledge of Sellers’
Representative, as of their respective dates, the Company SEC
Reports: (a) were prepared in accordance and complied in
all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, applicable to such Company
SEC Reports; and (b) did not at the time they were filed (and
if amended or superseded by a filing, then on the date of such
filing and as so amended or superseded) contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
3.4 Company
Changes . To the best knowledge of Sellers’
Representative, except as set forth on Schedule 3.4 or
disclosed in the SEC Reports, other than any loans made by the
Company to Lime, since December 31, 2007, there have not been:
(a) any transactions by the Company, or any changes in the
assets or liabilities of the Company, which, either individually or
in the aggregate, are material to the financial condition of the
Company; (b) any changes in the accounting practices,
depreciation or amortization policies or rates theretofore adopted
by any of the Company, or any revaluation of any of its assets;
(c) the entry into any material contract or other binding
obligation with any party other than Lime which is not immediately
terminable by the Company without penalty; (d) any
declaration, setting aside or payment of any dividend (whether in
cash, stock or property) with respect to the Company Common Stock,
or any other distribution to the stockholders of the Company,
whether of record or beneficial other than in the ordinary course
of business; (e) any amendment to the Organizational Documents
of the Company; (f) the issuance or repricing of any Warrants
with respect to Company Common Stock; (g) any reclassification
of shares of Company Common Stock; (h) the authorization,
issuance or reservation of any shares of capital stock of the
Company; (i) any new, or changes in any, Tax election or
method of
accounting for
Tax purposes; or (j) any agreement by the Company to do any of
the things described in the preceding clauses.
3.5 Full
Disclosure . To the best knowledge of Sellers’
Representative, no written information furnished by Sellers’
Representative to Lime in connection with this Agreement contains,
as of the date of such written information, any untrue statement of
a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
3.6
Litigation . To the best knowledge of Sellers’
Representative, there is no litigation, claim, proceeding, or
governmental investigation pending or threatened against the
Company or the Sellers that seeks to delay or prevent the
consummation of, or which would be reasonably likely to adversely
affect the Sellers’ ability to consummate, the
Transaction.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EACH SELLER
Each Seller
represents and warrants to Lime, for himself and not on behalf of
any other Seller, as of the date hereof and as of the Closing Date
as follows:
4.1 Authority;
No Conflict .
(a) Seller
has all necessary individual power, capacity and authority to
execute and deliver this Agreement, to perform Seller’s
obligations hereunder, and to consummate the Transaction. This
Agreement has been duly and validly executed and delivered by
Seller and constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms,
subject to the effect of (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to rights of creditors generally and
(ii) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies.
(b) Neither
the execution and delivery of this Agreement nor the performance
thereof do or will, directly or indirectly (with or without notice
or lapse of time or both), (i) contravene, conflict with, or
result in a violation of any Legal Requirements to which the
Seller, or any of the Seller’s Shares, are subject; or
(ii) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any
contract to which the Seller is a party, except, in the case of
clauses (i) and (ii), for any such conflicts, violations,
breaches, defaults or other occurrences that would not prevent the
Seller from performing Seller’s obligations under this
Agreement in any material respect.
(c) The
execution and delivery of this Agreement by the Seller does not,
and the performance of this Agreement will not, require any Consent
of, or filing with or notification to, any Governmental Body,
except (i) for applicable requirements, if any, of the
Exchange Act, the Securities Act and state securities or
“blue sky” laws (“ Blue Sky Laws
”), and (ii) such other Consents, filings or
notifications where failure to obtain such Consents, or to make
such filings or notifications, would not prevent the Seller from
performing his, her or its obligations under this
Agreement.
4.2
Ownership . Seller owns, beneficially or of record, the
number of Shares set forth opposite the Seller’s name on
Schedule A hereto, free and clear of any and all
Liens or other restrictions on transfer, other than those arising
under the Exchange Act, the Securities Act, Blue Sky Laws and
other
securities
laws. Except as set forth on Schedule 3.2(b) , Seller
does not own any Warrants of the Company other than the
Shares.
4.3 Access to
Information . Seller has had an opportunity to review this
Agreement with assistance of counsel and other advisors of
Seller’s own choosing.
4.4 Review of
Lime SEC Reports . Seller has had access to the Lime SEC
Reports and the Company SEC Reports and has had an opportunity to
review the Lime SEC Reports and the Company SEC Reports with
assistance of counsel and other advisors of Seller’s own
choosing. Seller and Seller’s advisors have been afforded the
opportunity to ask questions of and receive answers from Lime
regarding Lime and the Lime SEC Reports.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF LIME
Lime represents
and warrants to the Sellers as of the date hereof and as of the
Closing Date as follows:
5.1
Organization and Good Standing . Lime is a corporation duly
organized, validly existing, and in good standing under the laws of
its jurisdiction of incorporation, with full corporate power and
authority to conduct its business as now being conducted, to own or
use its properties and assets that it purports to own or use, and
to perform all of its obligations under contracts to which Lime is
party or by which Lime or any of its assets are bound. Lime is duly
qualified to do business as a foreign corporation and is in good
standing (where such concept is applicable) under the laws of each
state or other jurisdiction in which either the ownership or use of
the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except where the
failure to be so qualified could not reasonably be expected to,
individually or in the aggregate, result in a material adverse
effect on Lime.
5.2 Authority;
No Conflict.
(a) Other
than obtaining the Required Approval: (i) Lime has all
necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; (ii) the
execution and delivery of this Agreement by Lime have been duly and
validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Lime are necessary to
authorize this Agreement; (iii) this Agreement has been duly
and validly executed and delivered by Lime and, assuming the due
execution and delivery of this Agreement by the Sellers,
constitutes the legal, valid and binding obligation of Lime,
enforceable against Lime in accordance with its terms subject to
the effect of (A) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to rights of creditors generally, and
(B) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies.
(b) The
execution and delivery of this Agreement does not and will not,
directly or indirectly (with or without notice or lapse of time or
both); (i) contravene, conflict with, or result in a violation
of any provision of the Organizational Documents of Lime, or
(ii) contravene, conflict with, or result in a violation of,
any Legal Requirement.
(c) The
execution and delivery of this Agreement by Lime does not require
any Consent of, or filing with or notification to, any Governmental
Body, except (i) for applicable requirements, if any, of the
Exchange Act, the Securities Act, the Marketplace Rules, and Blue
Sky Laws, and (ii) such other Consents, filings or
notifications where failure to obtain such Consents, or to
make
such filings or
notifications, would not prevent Lime from performing its
obligations under this Agreement in any material
respect.
5.3
Capitalization . The authorized capital stock of Lime
consists of 200,000,000 shares of Lime Common Stock and 1,000,000
shares of Series A-1 Convertible Preferred Stock, US $0.01 par
value per share (“ Lime Preferred Stock
”). As of the date hereof, (a) 9,555,053 shares of Lime
Common Stock are issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable, (b)
546,424 shares of Lime Common Stock are reserved for issuance upon
exercise of outstanding Warrants, and (c) 358,710 shares of
Lime Preferred Stock are issued and outstanding, all of which are
duly authorized, validly issued, fully paid and nonassessable. Lime
has accepted subscription agreements for another 933,049 shares of
Lime Common Stock and for Warrants to purchase 233,263 shares of
Lime Common Stock, and such shares and warrants will be issued
prior to the Closing in accordance with the terms of the
subscription agreements.
5.4
Availability of Common Stock . Lime has authorized but
unissued shares of Lime Common Stock in an amount sufficient to
consummate the Transaction.
5.5 Lime SEC
Reports . As of their respective dates, the Lime SEC Reports:
(a) were prepared in accordance and complied in all material
respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, applicable to such Lime SEC
Reports, and (b) did not at the time they were filed (and if
amended or superseded by a filing, then on the date of such filing
and as so amended or superseded) contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
5.6 Absence of
Certain Changes . Except as described in that certain Written
Consent in Lieu of Meeting, executed by the stockholders of Lime on
November 13, 2008, a copy of which has previously been
delivered to Sellers, since September 30, 2008, th
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