NEITHER THIS
WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED UNLESS (A) SUBSEQUENTLY REGISTERED PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR (B) THE
HOLDER HEREOF SHALL HAVE DELIVERED TO THE COMPANY A WRITTEN OPINION
OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO
THE COMPANY, TO THE EFFECT THAT THE SHARES TO BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED ARE BEING OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION.
Form of
Warrant To Purchase Common Stock
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Warrant No.:
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Number of Shares:
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Original Date
of Issuance: _November 13, 2008
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Lime Energy Co. , a
Delaware corporation (the “ Company ”), hereby
certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged,
,
the registered holder hereof or his permitted assigns registered on
the books of the Company (the “ Holder ”), is
entitled, subject to the terms and conditions set forth below, to
purchase from the Company upon surrender of this Warrant, at any
time or times on or after May 13, 2009 (the “
Exercise Eligibility Date ”), but before
November 13, 2011 (the “ Expiration Date
”), [ ] ( ) fully paid and nonassessable shares (the
“ Warrant Shares ”) of the Company’s
common stock, par value $0.0001 per share (the “ Common
Stock ”), at the exercise price per share equal to
$4.10 , subject to adjustment as hereinafter provided (the
“ Warrant Exercise Price ”).
1.
Definitions . In addition to the capitalized terms defined
elsewhere herein, the following terms as used in this Warrant shall
have the following meanings:
“
Business Day ” means any day other than Saturday,
Sunday or other day on which commercial banks in the City of
Chicago are authorized or required by law to remain
closed.
“ Fair
Market Value ” means, the fair market value of a share of
Common Stock as of a particular date (the “ Determination
Date ”) as follows:
(a) If
the Common Stock is traded on the NASDAQ Capital Market (“
NASDAQ ”) or another national exchange, then the
closing sale price reported for the last Business Day immediately
preceding the Determination Date.
(b) If
the Common Stock is not traded on NASDAQ or another national
exchange but is traded on the OTC Bulletin Board, then the mean of
the average of the closing bid and asked prices reported for the
last Business Day immediately preceding the Determination
Date.
(c) Except
as provided in clause (d) of this definition below, if the
Common Stock is not then publicly traded, then as the Holder and
the Company agree, or in the absence of agreement, as determined by
arbitration in accordance with Section 20 hereof.
(d) If
the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or
winding up pursuant to the Company’s charter, then all
amounts to be payable per share to holders of the Common Stock
pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all
of the shares of Common Stock then issuable upon exercise of this
Warrant are outstanding at the Determination Date.
“
Person ” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization or a government or any department or
agency thereof.
“
Securities Act ” means the Securities Act of 1933, as
amended.
(a) Subject
to the terms and conditions hereof, this Warrant may be exercised
by the Holder, in whole or in part, during normal business hours on
any Business Day on or after the Exercise Eligibility Date and
prior to 5:00 P.M. Chicago Time on the Expiration Date
by:
(i) delivery
of a duly executed written notice, in the form of the subscription
notice attached as Exhibit A hereto (the “
Exercise Notice ”), of such Holder’s election to
exercise this Warrant, which notice shall specify the number of
Warrant Shares to be purchased;
(ii) payment
to the Company of an amount equal to the Warrant Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant
is being exercised (the “ Aggregate Exercise Price
”), either in cash or by certified check or wire transfer of
immediately available funds; and
(iii) delivery
to the Company of this Warrant (or an indemnity and evidence with
respect to this Warrant in the case of its loss, theft, mutilation
or destruction as provided in Section 13).
In
the event of any exercise of the rights represented by this Warrant
in compliance with this Section 2(a), the Company shall, on or
before the tenth (10th) Business Day following the date of its
receipt of the Exercise Notice, the Aggregate Exercise Price and
this Warrant (or an indemnity and evidence with respect to this
Warrant in the case of its loss, theft, mutilation or destruction
as provided in Section 13) (the “ Exercise Delivery
Documents ”), deliver at the Company’s expense to
the Holder, a certificate or certificates for the Warrant Shares so
purchased, in such denominations as may be requested by Holder and
registered in the name of Holder. Upon the Company’s receipt
of the Exercise Delivery Documents, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of certificates
evidencing such Warrant Shares.
(b) Unless
the rights represented by this Warrant shall have expired or shall
have been fully exercised, the Company shall, as soon as
practicable and in no event later than ten (10) Business Days
after any exercise and at its own expense, issue a new Warrant
identical in all respects to this Warrant exercised, except it
shall represent rights to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant
exercised, less the number of Warrant Shares with respect to which
this Warrant is exercised.
(c) No
fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common
Stock issued upon exercise of this Warrant shall be rounded up to
the nearest whole number.
(d) If
this Warrant shall have been exercised in part, the Company shall,
at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant
Shares called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant.
3.
Covenants . The Company hereby represents, covenants and
agrees as follows:
(a) This
Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized
and validly issued.
(b) All
Warrant Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly issued,
fully paid and nonassessable.
(c) The
Company has full power and authority to enter into this Warrant,
and to issue and deliver this Warrant and the Warrant Shares, and
to incur and perform fully the obligations provided herein, all of
which have been duly authorized by all necessary corporate
action.
(d) This
Warrant has been duly executed and delivered and is the valid and
binding obligation of the Company enforceable in accordance with
its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium and other similar laws affecting
creditors’ rights generally and by general principles of
equity.
(e) Unless
required by law, the Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant.
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(f) The
Company agrees to maintain, at its aforesaid office, books for the
registration and the registration of transfer of the
Warrants.
4.
Taxes . The Company shall pay any and all taxes, except
income taxes, which may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this
Warrant.
5. Holder
Not Deemed a Stockholder . Except as otherwise specifically
provided herein, this Warrant shall not entitle Holder to vote or
receive dividends or any other rights of a stockholder of the
Company, including, without limitation, any right to vote, give or
withhold consent to any corporate action (whether a reorganization,
issue of stock, reclassification of stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings or receive
subscription rights.
6.
Representations of Holder . The Holder, by the acceptance
hereof, represents and warrants that it:
(a) is
acquiring this Warrant and the Warrant Shares solely for its own
account, for investment and not with a view towards the
distribution or resale thereof in violation of the Securities Act
or any applicable state securities laws;
(b) has
received such documents, materials and information as the Holder
deems necessary or appropriate for evaluation of the acquisition of
this Warrant and the right to acquire Warrant Shares
hereunder;
(c) is
an “accredited investor” as such term is defined in
Rule 501 of Regulation D promulgated under the Securities
Act and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an
investment in this Warrant and the Warrant Shares;
(d) understands
that no U.S. federal, state or regulatory agency has recommended,
approved or endorsed, or passed upon the fairness or suitability
of, an investment in this Warrant or the Warrant Shares or passed
up on the accuracy or adequacy of the information provided to the
Holder; and
(e) recognizes
that an investment in the Warrant Shares involves a high degree of
financial risk, and that it can bear the economic risk of losing
its entire investment in the Warrant Shares and has sought, or will
seek, such accounting, legal and tax advice as it has considered,
or will consider, necessary to make an informed investment decision
with respect to its acquisition of this Warrant and of any Warrant
Shares.
If
the Holder cannot make any of the foregoing representations at the
time of any exercise of this Warrant because it would be factually
incorrect at that time, the Holder shall so notify the Company, and
it shall be a condition to the Holder’s exercise of this
Warrant at that time that the Company receive such other assurances
as the Company then considers reasonably necessary to assure the
Company that the issuance of the Warrant Shares upon such exercise
of this Warrant at such time shall not violate the Securities Act
or any state securities laws.
7.
Restriction on Transfer .
(a) This
Warrant and the rights granted to Holder are transferable, in whole
or in part, upon surrender of this Warrant, together with a
properly executed transfer endorsement in the form of
Exhibit B attached hereto; provided , however,
that any transfer or assignment shall be subject to the approval of
the Company, such approval not to be unreasonably withheld, and the
conditions set forth in Section 7(b) below.
(b) Holder
represents and warrants that it understands that the Company is
under no obligation to register this Warrant or any of the Warrant
Shares, under the Securities Act and that this Warrant and Warrant
Shares will be characterized as “restricted securities”
under the Securities Act because they are being acquired from the
Company in a transaction not involving a public offering. The
Holder also represents and warrants that it understands that
neither the Warrant nor the Warrant Shares may be offered for sale,
sold, assigned or transferred unless (i) at that time they
have been registered p
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