WAIVER, CONSENT, AND AMENDMENT AGREEMENT
THIS
WAIVER, CONSENT, AND AMENDMENT AGREEMENT (this “Agreement”) is made, entered
into, and effective as of June 2, 2006 by and between Lighting Science Group
Corporation, a Delaware corporation (the “Company”), and the undersigned holder
(the “Holder”) of shares of the Company’s 6% Convertible Preferred Stock, $0.001
par value per share (“Preferred Stock”) and/or a warrant or warrants (“PIPE
Warrants”) for the purchase shares of the Company’s common stock, $0.001 par
value per share (“Common Stock”). Any and all capitalized terms used but not
defined herein shall have the meaning(s) assigned to such terms in the Purchase
Agreement (defined below).
RECITALS
WHEREAS,
the Company and the Holder are parties to that certain Securities Purchase
Agreement dated May 10, 2005 by and among the Company and the parties listed
on
Exhibit
A
thereto
(the “Purchase Agreement”) and the Holder is the holder of shares of Preferred
Stock and/or PIPE Warrants;
WHEREAS,
the Company desires to borrow up to $2,000,000 from a traditional commercial
bank (the “Debt”) and, for each dollar of the Debt guaranteed by such Guarantor
(defined below), to sell, grant, and/or issue a warrant or warrants for the
purchase of two shares of the Common Stock at an exercise price of $0.30 per
share (the “Guarantee Warrants”) to each party (each a “Guarantor” and,
collectively, the “Guarantors”) that guarantees the Debt (but up to a maximum of
Guarantee Warrants to purchase 5,000,000 shares of Common Stock in the
aggregate);
WHEREAS,
pursuant to the Purchase Agreement, (a) the Company granted to the Holder the
Right of First Refusal to purchase all or any part of the Holder’s pro rata
share of any New Securities that the Company may, from time to time, propose
to
sell and issue and (b) no provision of the Purchase Agreement may be waived
or
amended other than by a written instrument signed by the Company and the holders
of at least a majority in interest of the then-outstanding shares of Preferred
Stock and no provision of the Purchase Agreement may be waived other than by
a
written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought;
WHEREAS,
pursuant to the Certificate of Designation of Preferred Stock of the Company
(the “Certificate of Designation”), (a) the Conversion Price (as defined in the
Certificate of Designation) shall be subject to adjustment in the event that
the
Company shall issue or distribute New Securities, in any such case at a price
per share less than $0.80 or that would entitle the holders of the New
Securities to subscribe for or purchase shares of Common Stock at less than
$0.80 per share and (b) the Company is restricted and limited from taking
certain actions, including any action to alter, modify, or amend the terms
of
the Preferred Stock in any way, without the vote or written consent by the
holders of at least a majority of the outstanding shares of Preferred Stock,
voting together as a single class;
WHEREAS,
pursuant to the PIPE Warrants, the Exercise Price (as defined in the PIPE
Warrants) shall be subject to adjustment in the event that the Company shall
issue or distribute New Securities, in any such case at a price per share less
than $0.80 (subject to any proportionate adjustment as provided in the PIPE
Warrants) or that would entitle the holders of the New Securities to subscribe
for or purchase shares of Common Stock at less than $0.80 (subject to any
proportionate adjustment as provided in the PIPE Warrants);
WHEREAS,
the Company has requested that Holder (a) waive its Right of First Refusal
with
respect to the Debt and the sale, grant and/or issuance of the Guarantee
Warrants, (b) waive its Conversion Price adjustments to the Preferred Stock,
and
its Exercise Price adjustments to the PIPE Warrants, that would otherwise be
triggered as a result of the sale, grant, and/or issuance of the Guarantee
Warrants, and (c) consent to the Debt, the sale, grant, and issuance of the
Guarantee Warrants, and the amendments and modifications to certain provisions
of the Transaction Documents (collectively, the “Contemplated Transactions”),
and Holder has agreed to do so on the condition that the Company execute and
enter into this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good, valuable, and binding consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to
be legally bound, hereby agree as follows:
1. Waivers
and Consents.
The
Holder unconditionally and irrevocably waives forever any and all rights of
the
Holder with respect to the Right of First Refusal, any Conversion Price
adjustments, and any Exercise Price adjustments (if any) and any and all other
rights of the Holder that would otherwise be triggered as a result of the sale,
grant, and/or issuance of the Guarantee Warrants and/or the consummation of
the
Contemplated Transactions. The Holder hereby approves and consents to the
Contemplated Transactions. This Agreement shall be and constitute a written
consent pursuant to Section 228 of the General Corporation Law of the State
of
Delaware and shall be and constitute a written waiver, consent, amendment,
and
modification under and pursuant to and in accordance with the Purchase
Agreement, the Certificate of Designation, and the PIPE Warrants. The waivers,
amendments, and other changes to the Purchase Agreement and the Certificate
of
Designation contemplated by this Agreement shall apply to
all
holders of shares of Preferred Stock, and all shares of Preferred Stock,
outstanding as of the date of this Agreement.
2. Amendments
to the Certificate of Designation.
The
Holder hereby approves and consents, and the Company consents, to the following
amendments to the Certificate of Designation (or an Amended and Restated
Certificate of Designation that integrates the following amendments to the
Certificate of Designation):
(a) Paragraph
6(g) of the Certificate of Designation shall be amended and modified by (i)
deleting each reference to “$0.80” therein and (ii) substituting “$0.50”
therefor;
(b) Paragraph
10 of the Certificate of Designation shall be amended and modified by (i)
deleting the reference to “$0.80” in the definition of “Conversion Price”
therein and (ii) substituting “$0.50” therefor;
(c) The
Certificate of Designation shall be amended and modified to otherwise change
all
references to “Conversion Price” therein (and conform any and all provisions
therein relating to the term Conversion Price as used therein, including,
without limitation, provisions relating to adjustments to the Conversion Price
therein) from $0.80 to $0.50;
(d) If
the
Current Market Price (as defined in the Certificate of Designation) of the
Common Stock is less than $0.50 per share on December 29, 2006, then Paragraph
6(g) of the Certificate of Designation shall be further and immediately amended
and modified by (i) deleting each reference to “$0.50” therein and (ii)
substituting “$0.30” therefor;
(e) If
the
Current Market Price of the Common Stock is less than $0.50 per share on
December 29, 2006, then Paragraph 10 of the Certificate of Designation shall
be
further and immediately amended and modified by (i) deleting the reference
to
“$0.50” in the definition of “Conversion Price” therein and (ii) substituting
“$0.30” therefor; and
(f) If
the
Current Market Price of the Common Stock is less than $0.50 per share on
December 29, 2006, then the Certificate of Designation shall be further and
immediately amended and modified to otherwise change all references to
“Conversion Price” therein (and conform any and all provisions therein relating
to the term Conversion Price as used therein, including, without limitation,
provisions relating to adjustments to the Conversion Price therein) from $0.50
to $0.30.
(g)
Paragraph
10 of the Certificate of Designation shall be amended and modified by (i)
deleting the reference to “$1.60” in the definition of “Forced Conversion
Conditions” therein and (ii) substituting “$1.00” therefor.
3. Amendments
to the PIPE Warrants.
The
Holder hereby approves and consents, and the Company consents, to the following
amendments to the PIPE Warrants (or Amended and Restated Warrants that integrate
the following amendments to the PIPE Warrants):
(a) The
PIPE
Warrants shall be amended and modified by (i) deleting the reference to “$0.96”
for purposes of the definition of “Exercise Price” therein and (ii) substituting
“$0.30” therefor;
(b) Section
6
of the PIPE Warrants shall be amended and modified by (i) deleting each
reference to “$0.80” therein and (ii) substituting “$0.30” therefor;
and
(c) The
PIPE
Warrants shall be amended and modified to otherwise change all references to
“Exercise Price” (and conform any and all provisions relating to the Exercise
Price) from $0.96 to $0.30 and change and conform any and all provisions
relating to adjustments to the Exercise Price from $0.80 to $0.30.
4. No
Continuing Waiver or Consent.
No
waiver by the Holder hereunder shall be deemed to be a continuing waiver in
the
future or a waiver of any provision, condition or requirement of any of the
Transaction Documents other than as specifically waived by the Holder hereunder,
nor shall any consent given by the Holder hereunder be deemed to be a consent
to
any thing or matter other than a consent to the Contemplated Transactions.
5. Further
Assurances; Legal Prohibitions.
Each
party hereto shall (a) furnish such information, (b) execute and deliver
such documents, and (c) do all other such acts and things, in each case, if
and as reasonably requested by any other party hereto for the purpose of
carrying out the intents and purposes of this Agreement and the Contemplated
Transactions. If
the
performance by the Company of any obligation(s) of the Company under this
Agreement may be prohibited or otherwise limited by applicable law, the Company
and the Holder shall use commercially reasonable efforts to enable the Company
to fully satisfy, fulfill, and perform such obligation(s) or satisfy, fulfill,
and perform such obligation(s) to the extent not prohibited by applicable
law.
6. Entire
Agreement; Modification.
This
Agreement (together with the Transaction Documents and each other document
contemplated by this Agreement) terminates, supersedes, and replaces all prior
written and oral agreements among the parties hereto with respect to the subject
matter of this Agreement, and constitutes (together with the Transaction
Documents and each other document contemplated by this Agreement) a complete
and
exclusive statement of the terms of the agreement by and among the parties
hereto with respect to the subject matter of this Agreement. This Agreement
shall be deemed to be a “Transaction Document” under the Purchase Agreement.
The
Company and the Holder acknowledge and agree that this Agreement does not in
any
way affect or diminish the rights, duties or obligations of the Company or
the
Holder under any of the Transaction Documents, except as specifically set forth
herein.
This
Agreement may not be amended or otherwise modified except by a written agreement
executed by all parties to be charged with or otherwise affected by any such
amendment or modification.
7. Conditions
Precedent.
Notwithstanding anything to the contrary in this Agreement, this Agreement
shall
be effective and binding upon the Company, the Holder, and each of the
successors and permitted assigns of the Company and the Holder, respectively,
upon the execution of this Agreement by the Company and the Holder and the
delivery of counterparts of this Agreement executed by each party hereto on
the
signature page(s) of this Agreement.
8. Severability.
If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement shall remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree shall remain in full force and effect
to
the extent not held invalid or unenforceable
9. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original copy of this Agreement and all of which, when taken
together, shall be deemed to constitute one (1) and the same
instrument.
10. Assignments,
Successors, and No Third-Party Rights. This
Agreement shall apply to, be binding in all respects upon, and inure to the
benefit of the successors, heirs, personal representatives, and permitted
assigns of the parties hereto. Nothing expressed or referred to in this
Agreement shall be construed to give any party other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all
of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and the successors, heirs, personal representatives,
and permitted assigns of the parties hereto.
11. Miscellaneous.
Unless
stated otherwise herein (a) the singular number includes the plural and
vice
versa
and
words of any gender include each other gender, in each case, as appropriate,
(b) headings and captions may not be construed in interpreting provisions,
and (c) this Agreement shall be governed by and construed exclusively in
accordance with the laws of the State of Delaware, excluding the body of law
relating to conflict of laws. On and after the date hereof, all references
to
the Transaction Documents shall refer to the Transaction Documents as amended
and modified by this Agreement.
Remainder
of Page Intentionally Left Blank.
Signature
Page To Follow.
IN
WITNESS WHEREOF, the parties hereto have executed this Waiver, Consent, and
Amendment Agreement effective as of the date first written above.
COMPANY:
Lighting
Science Group Corporation
By:
Name:
Title:
HOLDER:
[INSERT
NAME OF HOLDER]
By:
Name:
Title:
Date:
June ______, 2006
Signature
Page No. 1 of 1 to Waiver, Consent, and Amendment
Agreement.
