LIGHTING
SCIENCE GROUP CORPORATION
2100 McKinney Ave., Suite 1515
Dallas, Texas 75201
Pegasus
Partners IV, L.P.
505 Park Avenue, 22nd Floor
New York, New York 10022
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RE:
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Promissory Note in Favor of Pegasus Partners IV, L.P.
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This
letter agreement (this “ Letter Agreement
”) is delivered to Pegasus Partners IV, L.P., a Delaware
limited partnership (“ Pegasus ”), in
connection with the making of that certain Promissory Note,
executed as of the date hereof by Lighting Science Group
Corporation, a Delaware corporation (the “
Company ”), and payable to the order of Pegasus
(the “ Promissory Note ”).
In
connection with, and in consideration of, the agreements contained
herein and in the Promissory Note, the Company and Pegasus hereby
agree as follows:
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1.
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The Company agrees to use its best efforts to conduct a rights
offering during the second fiscal quarter of 2009 (the “
Offering ”) for preferred or common stock of
the Company, the net proceeds of which would raise approximately
Thirty Million Dollars ($30 million), upon the terms in that
certain Summary of Terms attached hereto as Exhibit A . The
parties acknowledge and agree that the bracketed items and blanks
contained in the attached Summary of Terms will be completed in
good faith based upon market conditions at the time of the
Offering.
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2.
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Subject to Paragraph 16 of the Promissory Note, the net cash
proceeds of any Offering shall be applied to payment of:
(i) the unpaid principal amount of the Promissory Note,
together with accrued interest thereon; (ii) the unpaid
principal amount of the Company’s outstanding unsecured
bridge loans, together with accrued interest thereon;
(iii) the anticipated cash needs of the Company during 2009,
net of other available financings; and (iv) the
Company’s outstanding borrowings that are guaranteed by
Pegasus or an affiliate of Pegasus.
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This
Letter Agreement may be executed by facsimile signature and in any
number of counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
If the
above correctly sets forth the parties’ agreement, please
execute this Letter Agreement in the space provided
below.
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Very
truly yours,
LIGHTING SCIENCE GROUP CORPORATION
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By:
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/s/
Stephen Hamilton
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Name:
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Stephen
Hamilton
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Title:
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Vice
President — Finance
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ACCEPTED
AND AGREED THIS 13th DAY OF FEBRUARY, 2009
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PEGASUS
PARTNERS IV, L.P.
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By:
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PEGASUS
INVESTORS IV, LP,
its general partner
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By:
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PEGASUS
INVESTORS IV GP, L.L.C.,
its general partner
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By:
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/s/
Richard Weinberg
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Name:
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Richard
Weinberg
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Title:
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Vice
President
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Signature Page to Letter
Agreement
RIGHTS
OFFERING OF SERIES D PREFERRED STOCK
OF
LIGHTING SCIENCE GROUP CORPORATION (the “ Company
”)
FEBRUARY 13, 2009
I.
SUMMARY OF TERMS OF RIGHTS TO BE OFFERED
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The
offering will remain open for a period of 30 days. The
offering will commence upon the effectiveness of a registration
statement filed pursuant to the Securities Act of 1933, as
amended.
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Type
of Security Underlying Subscription Right:
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Series D
Non-Convertible Preferred Stock (the “ Series D
Preferred ”) and attached Warrants (the “
Warrants ”).
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Each
whole subscription right will entitle the holder to purchase one
share of Series D Preferred and one Warrant to purchase Common
Stock for $[___] (the “ Original Purchase Price
”).
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Holders
of record of the Company’s (i) Common Stock,
(ii) 6% Convertible Preferred Stock, (iii) Series B
Preferred Stock, and (iv) Warrants will receive one subscription
right for every one share of Common Stock issued or issuable to
such holder on the record date. In addition, each employee of the
Company will be entitled to participate in the offering for an
amount of up to 10% (in the aggregate) of the rights offered to the
above security holders; provided , that the source of the
allocation of these rights would be determined at the time of the
offering. Each Eligible Participant will also have the right to
subscribe for
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