GUARANTY EXTENSION
AGREEMENT
This Guaranty
Extension Agreement (this “ Agreement ”)
is made and entered into as of the 24th day of August, 2009 by and
between Lighting Science Group Corporation, a Delaware corporation
(the " Borrower ”), and Pegasus Partners IV,
L.P., a Delaware limited partnership (the “
Guarantor ”).
WHEREAS, the
Borrower and Bank of Montreal (the “ Bank
”) have entered into that certain Bank of Montreal Loan
Authorization Agreement dated as of July 25, 2008, as amended
by that certain First Amendment to Bank of Montreal Loan
Authorization Agreement dated as of July 24, 2009 (the Bank of
Montreal Loan Authorization Agreement, as so amended, the “
Loan Agreement ”), whereby the Bank has agreed
to provide up to $20,000,000 of loans and other financial
accommodations (the “ Loans ”) to the
Borrower through August 24, 2009.
WHEREAS, the
Guarantor has guaranteed the Loans pursuant to that certain
Guaranty dated as of July 25, 2008 (as amended and as the same
may be amended from time to time, the “
Guaranty ”).
WHEREAS, the
Borrower desires to extend the maturity date of the Loans to
August 24, 2010 (the " Maturity Date ”) by
entering into the Second Amendment to Bank of Montreal Loan
Authorization Agreement (the “ Loan Extension
”) dated as of August 24, 2009 (the “
Extension Date ”), and has requested that the
Guarantor execute an Acknowledgement and Consent (the “
Guarantor Consent ”) consenting to the Loan
Extension and confirming that the Guaranty remains in full force
and effect through the Maturity Date.
NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto, the
parties hereto, intending to be legally bound, hereby agree as
follows:
Section 1.
Consent and Guaranty Extension . The Guarantor hereby agrees
to execute the Guarantor Consent and guarantee the Loans through,
but not after, the Maturity Date.
Section 2.
Fee . In order to induce the Guarantor to enter into the
Guarantor Consent, except as otherwise provided in
Section 2(d) , the Borrower agrees to pay the Guarantor
a fee (the “ Fee ”), such Fee to be
calculated and paid in accordance with this Section 2
.
(a)
The Fee shall be paid by the Borrower upon the earliest to occur of
(i) the Maturity Date, (ii) the date of termination of
the Loan Agreement or the Guaranty and (iii) a Change of Control
(defined below) (the “ Fee Payment Date
”).
(b)
Maturity Date or Early Termination . If the Fee Payment Date
is the Maturity Date or date of termination of the Loan Agreement
or the Guaranty, the Fee payable pursuant to this Agreement shall
be an amount equal to the product obtained by multiplying
(i) the Average Daily Loan Balance (as defined herein), by
(ii) the product of (A) fifteen percent (15%) multiplied
by (B) the Usage Percentage (as defined herein) (such Fee
being the “ Average Daily Balance Fee
”).
(c)
Change of Control . If the Fee Payment Date is the date of a
Change of Control, the Fee payable pursuant to this Agreement shall
be equal to the greater of (i) the Average Daily Balance Fee
and (ii) an amount equal to the product obtained by
multiplying (A) 1.0% of the total transaction consideration
(including, without limitation, consideration in the form of the
assumption or discharge of indebtedness) received by the Borrower
upon the Change of Control, by (B) the Usage
Percentage.
(d)
Termination Within 60 Days . Notwithstanding the foregoing,
if the Guaranty is terminated on or before the 60th day after the
Extension Date, no Fee is due pursuant to this
Agreement.
(e)
Additional Definitions . For purposes of this Agreement the
following terms will have the indicated meanings:
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