Item 1.01 Entry Into a Material Definitive Agreement.
On August 1, 2014
, Lime Energy Co.
(the "Company") entered into a Letter of
Credit Agreement (the "Agreement") with Richard P. Kiphart
, the Company's
Chairman and largest individual stockholder. Pursuant to the Agreement,
agreed to cause the issuance of one or more Letters of Credit
(collectively, the "Letter of Credit") for the benefit of a surety at the
Company's request, up to an aggregate amount of $1,300,000
. The Letter of
Credit will be used to guarantee certain obligations of the Company in
connection with its performance under the customer contract described in Item
7.01 of this Current Report on Form 8-K. Mr. Kiphart's obligation to cause the
issuance of, or leave in place, the Letter of Credit will terminate on
December 31, 2019
The Company will indemnify Mr. Kiphart
for any liability in connection with any
payment or disbursement made under the Letter of Credit. The Company will also
pay all of Mr. Kiphart's
fees and out-of-pocket expenses incurred in connection
with the Letter of Credit. All such indemnification, fees and expenses will be
payable by the Company within ten business days of the Company's receipt of
Pursuant to the Agreement, the Company will issue to Mr. Kiphart
a warrant (the
"Warrant") to purchase 50,000 shares of the Company's common stock as
consideration for his obligations under the Agreement. The Warrant will be
issued between August 11 and August 13, 2014
at an exercise price equal to the
closing price on the NASDAQ Stock Market
on the date of issuance. The Warrant
has a five year term and may be exercised on a cashless basis at Mr. Kiphart's
election. In addition, the Company has agreed to pay to Mr. Kiphart
interest at six percent per annum on the aggregate amount of the letter of
The foregoing description of the Agreement, the Warrant and the transactions
contemplated thereby is not intended to be complete and is qualified in its
entirety by the complete text of the Agreement and the Warrant, copies of which
are attached as Exhibits 10.1 and 4.1, respectively, and are incorporated herein
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information contained in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the Agreement described above, the Company agreed to issue to
a Warrant to purchase 50,000 shares of its common stock. The Warrant
will be issued between August 11 and August 13, 2014
and will have an exercise
price equal to the closing price on the NASDAQ Stock Market
on the date of
issuance. The Warrant may be exercised in whole or in part at any time prior to
the five year anniversary of its date of issuance. All of the investors are
"accredited investors" as defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933, as amended (the "Act"). The offer and sale of the
Warrant will be made in reliance upon an exemption from the registration
requirements pursuant to Section 4(2) under the Act, and Regulation D
promulgated thereunder. There will be no general solicitation or advertising of
the offering. Appropriate legends will be affixed by the Company to each of the
share and Warrant certificates that have been or will be issued.
Additional information regarding the transaction is incorporated herein by
reference to Item 1.01 of this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure.
On July 29, 2014
, the Company announced that it has been awarded a contract by
Duke Energy Business
Services ("Duke Energy") for a small business energy saver program. The program
was initiated by the Company and Duke Energy in 2012 and targets small business
customers in North & South Carolina
with an average electric demand of 100 kW or
less. Pending regulatory approval, the new award would expand the program to a
broader territory in North Carolina
and South Carolina
and would extend the
program for five years. Among other things, the Company would perform energy
usage and equipment assessments of small business facilities and would perform
upgrades to those facilities through its network of contractors.
Item 9.01 Financial Statements and Exhibits.
4.1 Form of Warrant to Purchase Common Stock.
10.1 Letter of Credit Agreement dated August 1, 2014, by and between
the Company and Richard P. Kiphart
Cautionary Note Regarding Forward-Looking Statements
This Current Report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of
1934. Forward-looking statements are subject to known and unknown risks and
uncertainties, many of which may be beyond our control. We caution you that the
forward-looking information presented in this press release is not a guarantee
of future events, and that actual events and results may differ materially from
those made in or suggested by the forward-looking information contained in this
press release. In addition, forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may," "plan,"
"will," "expect," "intend," "estimate," "anticipate," "believe," "continue,"
"could" or "would" or the negative thereof or variations thereon or similar
terminology. A number of important factors (including, any failure to achieve
necessary regulatory approvals for the programs offered by the Company) could
cause actual events and results to differ materially from those contained in or
implied by the forward-looking statements, as well as other risk factors
discussed in our most recent Annual Report on Form 10-K, or as may be described
from time to time in our subsequent SEC
filings. Any forward-looking
information presented herein is made only as of the date of this current report,
and we do not undertake any obligation to update or revise any forward-looking
information to reflect changes in assumptions, the occurrence of unanticipated
events, or otherwise.