Item 1.01 Entry into a Material Definitive Agreement.
Seventh
Amendment to
ACF
Loan and Security Agreement
On November 21, 2016, Lighting Science Group Corporation (the “
Company
”) entered into a Seventh Amendment to Loan and Security Agreement (the “
Seventh
ACF Amendment
”) by and among the Company, BioLogical Illumination, LLC (“
BioLogical
”) and Environmental Light Technologies Corp. (“
ELT
” and, collectively with the Company and BioLogical, the “
Borrowers
”), the financial institutions from time to time party thereto as lenders (the “
ACF Lenders
”) and ACF FinCo I LP, as assignee of FCC, LLC, d/b/a First Capital, in its capacity as agent for the ACF Lenders (“
Ares
”), which amends that certain Loan and Security Agreement dated April 25, 2014 by and among the Borrowers, the ACF Lenders and Ares (as amended from time to time and as the same may be further amended, modified or supplemented from time to time, the “
ACF Loan Agreement
”).
As disclosed in Item 3.02 of this Current Report, on November 21, 2016, the Company issued 5,000 Series J Securities (as defined below) to LSGC Holdings III LLC (“
Holdings III
”) for aggregate proceeds of $5,000,000 (the “
November Series J
Offering
”). Among other things, the Seventh ACF Amendment amends the definition of EBITDA in the ACF Loan Agreement to provide that the cash proceeds from the November Series J Offering may be included in the calculation of EBITDA for purposes of determining compliance with the EBITDA covenant levels for each of the twelve-month periods ending December 31, 2016 and March 31, 2017 (together, the “
Specified Covenant Periods
”).
Further, pursuant to the Seventh ACF Amendment, the Borrowers agreed to, no later than December 31, 2016, (a) use commercially reasonable efforts to deliver to Ares an appraisal of the intellectual property owned by the Borrowers and LSGC, LLC, a wholly owned subsidiary of the Company, and (b) deliver to Ares a financial forecast covering the 2016 and 2017 fiscal years.
The foregoing description of the Seventh ACF Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Seventh ACF Amendment, which is filed as Exhibit 10.1 to this Current Report and is incorporated herein by reference.
Fifth
Amendment
and Limited Consent
to Medley Term Loan Agreement
On November 21, 2016, the Company also entered into a Fifth Amendment and Limited Consent to Term Loan Agreement (the “
F
ift
h Medley Amendment
”) by and among the Company, Medley Capital Corporation (“
Medley
”) and the lenders from time to time party thereto (the “
Medley Lenders
”), which amends that certain Term Loan Agreement dated February 19, 2014 by and among the Company, Medley and the Medley Lenders (as amended from time to time and as the same may be further amended, modified or supplemented from time to time, the “
Medley Term Loan Agreement
”). Among other things, the Fifth Medley Amendment amends the definition of EBITDA in the Medley Term Loan Agreement to provide that the cash proceeds from the November Series J Offering may be included in the calculation of EBITDA for purposes of determining compliance with the EBITDA and minimum Fixed Charge Coverage Ratio (as defined in the Medley Term Loan Agreement) covenant levels for the Specified Covenant Periods.
Further, pursuant to the Fifth Medley Amendment, the Company agreed to, no later than December 31, 2016, (a) use commercially reasonable efforts to deliver to Medley an appraisal of the Company’s intellectual property and (b) deliver to Medley a financial forecast covering the 2016 and 2017 fiscal years. The Company also agreed to reimburse Medley for up to $40,000 of documented out-of-pocket costs, fees and expenses incurred in connection with its financial advisor’s review of the financial forecasts to be delivered by the Company.
The foregoing description of the Fifth Medley Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Fifth Medley Amendment, which is filed as Exhibit 10.2 to this Current Report and is incorporated herein by reference.