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$32,846,619.02
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New York, New
York
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August 27, 2009
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FOR VALUE
RECEIVED, the undersigned, LIGHTING SCIENCE GROUP
CORPORATION , a Delaware corporation (“
Borrower ”), promises to pay to the order of
PEGASUS PARTNERS IV, L.P. , a Delaware limited partnership
(“ Lender ”), the sum of THIRTY TWO
MILLION EIGHT HUNDRED FORTY SIX THOUSAND SIX HUNDRED NINETEEN
DOLLARS AND TWO CENTS ($32,846,619.02) or so much thereof as may be
outstanding hereunder, together with interest.
1.
Interest Rate . Interest shall accrue on the unpaid
principal balance of this Note from the date hereof at 14% per
annum.
2.
Default Rate . All past due principal of and accrued
interest on this Note shall bear interest from maturity (stated, by
acceleration, or otherwise) until paid at the rate of 18% per
annum.
3.
Proceeds; Cancellation of Prior Note . The proceeds of this
Note shall be deemed to satisfy in full the obligations of Borrower
under that certain Convertible Note (the “ Prior
Note ”) dated May 15, 2009, by and between
Borrower and Lender. Promptly following the execution of this Note,
Lender shall return the Prior Note to Borrower marked “paid
in full.”
4.
Repayments . The principal and interest of this Note shall
be due and payable on the Maturity Date. As used herein, “
Maturity Date ” shall mean the earlier of
(a) July 31, 2010 or (b) the Closing Date (as
hereinafter defined).
5. Events
of Default and Remedies . The entire unpaid principal balance
of and all accrued interest on this Note shall immediately become
due and payable, without notice or demand which are hereby waived,
upon the occurrence of any one or more of the following events of
default (individually or collectively, herein called a “
Default ”):
(a) The failure or
refusal of Borrower to pay all or any part of the principal of or
accrued interest on this Note as and when same becomes due and
payable in accordance with the terms hereof; or
(b) Borrower
shall: (i) become insolvent within the meaning of the
Bankruptcy Code of the United States, as amended, (ii) admit
in writing its inability to pay or otherwise fail to pay its or his
or her debts generally as they become due, (iii) voluntarily
seek consent to, or acquiesce in the benefit or benefits of any
Debtor Relief Law, or (iv) be made the subject of any
proceeding provided for by any Debtor Relief Law that could suspend
or otherwise affect any of the rights of the holder hereof. As used
herein, “ Debtor Relief Laws ” means the
Bankruptcy Code of the United States, as amended and all other
applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization or similar
debtor relief laws from time to time in effect affecting the rights
of creditors generally; or
(c) The nonpayment
when due of any material indebtedness owed by Borrower, or the
occurrence of any event under any document or instrument
evidencing, securing, or executed in connection with any such
indebtedness which could give the holder thereof the right to
declare such indebtedness or any part thereof due prior to its
scheduled maturity; or
(d) The discovery
by the holder hereof that any statement, representation, or
warranty made by Borrower in any writing, document, or instrument
ever delivered to the holder hereof in connection herewith was at
the time made false, misleading, or erroneous in any material
respect.
Upon the
occurrence of a Default, the holder of this Note may:
(a) offset against this Note any sum or sums owed by the
holder hereof to Borrower and (b) proceed to protect and
enforce its rights either by suit in equity and/or by action at
law, or by other appropriate proceedings, whether for the specific
performance of any covenant or agreement contained in this Note or
any document or instrument executed and delivered by Borrower in
connection with this Note or in aid of the exercise of any power or
right granted by this Note or any document or instrument executed
and delivered by Borrower in connection with this Note or to
enforce any other legal or equitable right of the holder of this
Note.
6.
Cumulative Rights . No delay on the part of the holder of
this Note in the exercise of any power or right under this Note, or
under any document or instrument executed in connection herewith,
shall operate as a waiver thereof, nor shall a single or partial
exercise of any other power or right. Enforcement by the holder of
this Note of any security for the payment hereof shall not
constitute an election by it of remedies so as to preclude the
exercise of any other remedy available to it.
7.
Waiver . Borrower, and each surety, endorser, guarantor, and
other party ever liable for the payment of any sum of money payable
on this Note jointly and severally waive demand, presentment,
protest, notice of nonpayment, notice of intention to accelerate,
notice of acceleration, notice of protest, and any and all lack of
diligence or delay in collection or the filing of suit hereon which
may occur, and agree that their liability on this Note shall not be
affected by any renewal or extension in the time of payment hereof,
by any indulgences, or by any release or change in any security for
the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases, or changes, regardless
of the number of such renewals, extensions, indulgences, releases,
or changes.
8.
Attorneys’ Fees and Costs . In the event that a
Default shall occur, and in the event that thereafter this Note is
placed in the hands of an attorney for collection, or in the event
this Note is collected in whole or in part through legal
proceedings of any nature, then and in any such case Borrower
promises to pay all costs of collection, including, but not limited
to, reasonable attorneys’ fees incurred by the holder hereof
on account of such collection, whether or not suit is
filed.
9.
Notices . Any notice or demand given hereunder by the holder
shall be deemed to have been given and received (a) when
actually received by Borrower, if delivered in person or by courier
or messenger, or (b) two (2) Business Days (as
hereinafter defined) after a letter containing such notice,
certified or registered, with postage prepaid, addressed to
Borrower, is deposited in the United States Mail. The address of
Borrower is 1227 South Patrick Drive, Building 2A, Satellite Beach,
Florida 32937 or such other address as Borrower shall advise the
holder hereof by certified or registered letter.
10.
Governing Law . The laws of New York shall govern the
construction, validity, enforcement and interpretation of this
Note, except to the extent federal laws otherwise govern the
validity, construction, enforcement and interpretation
hereof.
11.
Headings . The headings of the sections of this Note are
inserted for convenience only and shall not be deemed to constitute
a part hereof.
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12.
Successors and Assigns . All of the covenants, stipulations,
promises and agreements contained in this Note by or on behalf of
Borrower shall bind its successors and assigns, whether so
expressed or not; provided, that Borrower may not, without
the prior written consent of the holder hereof, assign any rights,
duties, or obligations under this Note.
13.
Maximum Interest Rate . Regardless of any provision
contained herein, or in any other document executed in connection
herewith, the holder hereof shall never be entitled to receive,
collect or apply, as interest hereon, any amount in excess of the
maximum rate of interest permitted to be charged from time to time
by applicable law, and in the event the holder hereof ever
receives, collects or applies, as interest, any such excess, such
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