Exhibit 10.1

 

 

 

November 21, 2016

 

 

Lighting Science Group Corporation, as Borrowers' Agent

1350 Division Road, Suite 102 | West Warwick, Rhode Island 02893

Attn.: General Counsel

Facsimile No.: (321) 779-5521

Office: (321) 610-9446

 

RE:     Seventh Amendment to Loan and Security Agreement

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Loan and Security Agreement dated as of
April 25, 2014 (as at any time amended, restated, supplemented or otherwise
modified, the "Loan Agreement"), among LIGHTING SCIENCE GROUP CORPORATION, a
Delaware corporation ("LSG"), BIOLOGICAL ILLUMINATION, LLC, a Delaware limited
liability company ("BioLogical"), ENVIRONMENTAL LIGHT TECHNOLOGIES CORP., a
Delaware corporation ("ELT"; LSG, BioLogical and ELT are hereinafter referred to
collectively as "Borrowers" and each individually as a "Borrower"), the various
financial institutions from time to time party thereto as lenders (collectively,
"Lenders") and ACF FINCO I LP, as assignee of FCC, LLC, in its capacity as agent
for Lenders (together with its successors and assigns in such capacity,
"Agent"). Each capitalized term used herein, unless otherwise defined herein,
shall have the meaning ascribed to such term in the Loan Agreement.

 

Borrowers, Agent and Lenders desire to amend the Loan Agreement, on the terms
and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

 

The Loan Agreement is hereby amended as follows:

 

(a)     By deleting the definition of "EBITDA" from Section 1 of the Loan
Agreement in its entirety and by substituting the following in lieu thereof:

 

"EBITDA" means, with respect to any period, Borrowers' net income (excluding
extraordinary gains) for such period, before provision for interest expense,
taxes, depreciation, amortization and non-cash stock compensation, plus (i) to
the extent deducted from the foregoing calculation of net income during such
period, impairment charges with respect to Borrowers' goodwill, plus (ii) to the
extent deducted from the foregoing calculation of net income during such period,
losses with respect to dispositions of Borrowers' Equipment made during such
period, minus (iii) to the extent included in the foregoing calculation of net
income during such period, gains with respect to dispositions of Borrowers'
Equipment made during such period, plus (iv) to the extent deducted from the
foregoing calculation of net income during such period, adjustments in the fair
market value of warrants issued by LSG, minus (v) to the extent included in the
foregoing calculation of net income during such period, adjustments in the fair
market value of warrants issued by LSG plus (vi) subject to satisfaction of the
conditions hereon set forth in the Sixth Amendment Consent Letter and the
Seventh Amendment Consent Letter, as applicable, the amount of cash equity
contributions, other than the Sixth Amendment Equity Contribution, permitted
hereunder in an amount not to exceed an aggregate of (i) $2,500,000 that is
contributed to LSG from Sponsor from and including the Sixth Amendment Effective
Date to and including March 30, 2017 plus (ii) an additional $2,500,000 that is
contributed to LSG from Sponsor from and including the Seventh Amendment
Effective Date to and including March 30, 2017, solely for purposes of
determining compliance with Item 21 of the Schedule during the relevant fiscal
quarters.

 

 

 
 

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(b)     By adding the following definitions of "Seventh Amendment", "Seventh
Amendment Consent Letter", "Seventh Amendment Effective Date" and "Seventh
Amendment Equity Contribution" to Section 1 of the Loan Agreement in appropriate
alphabetical order:

 

"Seventh Amendment" means that certain Seventh Amendment to Loan and Security
Agreement, dated as of the Seventh Amendment Effective Date, by and among the
Borrowers, Agent and the Lenders party thereto.

 

"Seventh Amendment Consent Letter" means that certain letter agreement dated as
of the Seventh Amendment Effective Date, by and among the Obligors, Agent and
Lenders, with respect to the Seventh Amendment Equity Contribution and related
matters.

 

"Seventh Amendment Effective Date" means November 21, 2016.

 

"Seventh Amendment Equity Contribution" means the cash equity contribution
related to the issuance of Series J Convertible Preferred Stock on the Seventh
Amendment Effective Date in an amount not to exceed $2,500,000, made by Sponsor
to LSG and immediately contributed to the capital of LSG in connection with the
Seventh Amendment on or prior to the Seventh Amendment Effective Date.

 

(c)     By deleting Item 17 of the Schedule in its entirety and by substituting
in lieu thereof the following:

 

17. Ownership Structure

 

Class of Capital Stock

Authorized

Issued and Outstanding

Conversion Price1

       

Common Stock

975,000,000

217,780,6192

N/A

       

Series H Convertible Preferred Stock

135,000

111,513.52

$0.95

       

Series I Convertible Preferred Stock

90,000

57,365

$0.95

       

Series J Convertible Preferred Stock

95,100

88,0623

$0.95

       

Series K Preferred Stock

40,000

20,106.03

N/A

 

 

 

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1 Each issued and outstanding share of Series H Convertible Preferred Stock,
Series I Convertible Preferred Stock and Series J Convertible Preferred Stock is
currently convertible into approximately 1,052.6 shares of Common Stock.

2 Excludes 2,505,000 treasury shares.

3 The issued and outstanding shares of Series J Convertible Preferred Stock does
not include any shares of Series J Preferred Stock that may be issued by
Borrower pursuant to the preemptive rights of the holders of Borrower’s Series H
Convertible Preferred Stock, Series I Convertible Preferred Stock or Series J
Convertible Preferred Stock.

 

 

 
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Voting and Managerial Control:

1. Pegasus Capital Advisors, L.P. and its affiliates

2. Riverwood Capital Partners, L.P. and its affiliates

3. Zouk Holdings Limited and its affiliates

 

The effectiveness of the amendments contained herein is subject to Agent's
receipt of (a) a duly executed amendment to the Term Loan Agreement in form and
substance satisfactory to Agent, (b) a duly executed secretary's or manager's
certificate of resolutions with respect to each Borrower, in each case in form
and substance satisfactory to Agent, and (c) LSG's receipt in cash of the
Seventh Amendment Equity Contribution and an equity contribution under the Sixth
Amendment Consent Letter, in an aggregate amount equal to $5,000,000.

 

In consideration of the amendments contained herein and the consent set forth in
the Sixth Amendment Consent Letter, Borrowers hereby covenant and agree to, no
later than the earlier of (a) December 31, 2016 (or such other date as may be
agreed by Agent in its sole discretion (it being agreed that any date agreed
upon by Medley for delivery to Medley of the items described below shall be
deemed a date agreed to by Agent for purposes of this clause (a), as long as
Agent has received prior written confirmation of such agreement from Medley)),
and (b) solely in the case of the financial forecast described in clause (ii)
below, the date on which such forecast is required pursuant to Section 9(a) of
the Loan Agreement: (i) use commercially reasonable efforts to deliver to Agent
an appraisal prepared by an appraiser approved by Agent (it being agreed that
any appraiser approved by Medley shall be acceptable to Agent) of all
intellectual property owned by the Obligors, such appraisal to be in form and
substance satisfactory to Agent in its sole discretion (it being agreed that any
appraisal in form and substance acceptable to Medley shall be deemed
satisfactory to Agent), and (ii) deliver to Agent a financial forecast covering
the fiscal years 2016 and 2017 in a form reasonably satisfactory to Agent in its
sole discretion. Notwithstanding any provision of this letter amendment or any
other Loan Document, Borrowers’ failure to perform or observe any covenant or
other agreement contained in this paragraph shall constitute an immediate Event
of Default under the Loan Agreement.

 

By its signature hereto, each Borrower hereby (a) ratifies and reaffirms the
Obligations, each of the Loan Documents and all of such Borrower's covenants,
duties, indebtedness and liabilities under the Loan Documents; (b) acknowledges
and stipulates that the Loan Agreement and the other Loan Documents executed by
such Borrower are legal, valid and binding obligations of such Borrower that are
enforceable against such Borrower in accordance with the terms thereof; all of
the Obligations are owing and payable without defense, offset or counterclaim
(and to the extent there exists any such defense, offset or counterclaim on the
date hereof, the same is hereby waived by each Borrower); and the security
interests and liens granted by such Borrower in favor of Agent are duly
perfected, first priority security interests and liens; and (c) represents and
warrants to Agent and Lenders, to induce Agent and Lenders to enter into this
agreement, that (i) no Default exists on the date hereof or would result from
the effectiveness of this agreement, (ii) the execution, delivery and
performance of this agreement have been duly authorized by all requisite company
action on the part of such Borrower and this agreement has been duly executed
and delivered by such Borrower, and (iii) all of the representations and
warranties made by such Borrower in the Loan Agreement are true and correct on
and as of the date hereof. Without limiting the generality of the foregoing,
each Borrower acknowledges and agrees that nothing contained in this Amendment
shall be construed as a waiver of any Default that may in the future occur
pursuant to Section 13(a)(v) of the Loan Agreement, including as a result of any
breach of Section 7.6 of the Term Loan Agreement.

 

 

 
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In consideration of Agent's willingness to enter into this Amendment as set
forth herein, Borrowers jointly and severally agree to pay to Agent and Lenders,
on demand, all costs and expenses (including taxes and legal fees and expenses)
incurred by Agent and Lenders in connection with the preparation, negotiation
and execution of this agreement and any other Loan Documents executed pursuant
hereto and any and all amendments, modifications, and supplements thereto.
Except as otherwise expressly provided in this agreement, nothing herein shall
be deemed to amend or modify any provision of the Loan Agreement or any of the
other Loan Documents, each of which shall remain in full force and effect. This
agreement is not intended to be, nor shall it be construed to create, a novation
or accord and satisfaction, and the Loan Agreement as herein modified shall
continue in full force and effect. This agreement shall be governed by and
construed in accordance with the internal laws of the State of Georgia and shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. This agreement may be executed in any number
of counterparts and by different parties to this agreement on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement. Any manually
executed signature page hereto that is delivered by facsimile or other
electronic transmission shall be deemed to be an original signature hereto. To
the fullest extent permitted by applicable law, the parties hereto each hereby
waives the right to trial by jury in any action, suit, counterclaim or
proceeding arising out of or related to this agreement.

 

To induce Agent and Lenders to enter into this Amendment, each Borrower hereby
RELEASES, ACQUITS AND FOREVER DISCHARGES Agent and each Lender, and all
officers, directors, agents, employees, successors and assigns of Agent or any
Lender, from any and all liabilities, claims, demands, actions or causes of
action of any kind or nature (if there be any), whether absolute or contingent,
disputed or undisputed, at law or in equity, or known or unknown, that any
Borrower now has or ever had against Agent or any Lender arising under or in
connection with any of the Loan Documents or otherwise. Each Borrower represents
and warrants to Agent and Lenders that such Borrower has not transferred or
assigned to any Person any claim that such Borrower ever had or claimed to have
against Agent or any Lender.

 

[Signatures appear on following page]

 

 

 
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The parties hereto have caused this agreement to be duly executed under seal and
delivered by their respective duly authorized officers on the date first written
above.

 

 

AGENT AND SOLE LENDER:

 

ACF FINCO I LP, as assignee of FCC, LLC

 

By: /s/ John J. Nooney                             

Name:      John J. Nooney                         

Title:      Managing Director                     

 

[Signatures continue on following page.]

 

 

 

 

Letter Amendment to Loan and Security Agreement (Seventh Amendment) 

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Accepted and agreed to:

 

BORROWERS:

 

LIGHTING SCIENCE GROUP CORPORATION

 

By: /s/ Ed Bednarcik                                                          

Name: Ed Bednarcik                                                           

Title: Chief Executive Officer                                            

 

 

BIOLOGICAL ILLUMINATION, LLC

 

By: /s/ Ed Bednarcik                                                          

Name: Ed Bednarcik                                                           

Title: Chief Executive Officer                                            

 

 

ENVIRONMENTAL LIGHT TECHNOLOGIES CORP.

 

By: /s/ Ed Bednarcik                                                           

Name: Ed Bednarcik                                                            

Title: Chief Executive Officer                                             

 

 

 

 

Consented to by Guarantor:

 

 

LSGC, LLC

 

By: /s/ Ed Bednarcik                                                
            

Name: Ed Bednarcik                                                              

Title: Chief Executive Officer                                               

 

 

 

 

 

 

 

 

 

Letter Amendment to Loan and Security Agreement (Seventh Amendment)