greenballast8k41612.htm

0001005794-12-000031.txt : 20120419 0001005794-12-000031.hdr.sgml : 20120419 20120419172456 ACCESSION NUMBER: 0001005794-12-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20120416 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120419 DATE AS OF CHANGE: 20120419 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Green Ballast, Inc. CENTRAL INDEX KEY: 0001526543 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 451629984 STATE OF INCORPORATION: DE FISCAL YEAR END: 1211 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-54568 FILM NUMBER: 12769116 BUSINESS ADDRESS: STREET 1: 2620 THOUSAND OAKS STREET 2: SUITE 4000 CITY: MEMPHIS STATE: TN ZIP: 38118 BUSINESS PHONE: 901-260-4400 MAIL ADDRESS: STREET 1: 2620 THOUSAND OAKS STREET 2: SUITE 4000 CITY: MEMPHIS STATE: TN ZIP: 38118 8-K 1 greenballast8k41612.htm GREEN BALLAST, INC. 8-K APRIL 16, 2012 greenballast8k41612.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 16, 2012

GREEN BALLAST, INC.

(Exact name of registrant as specified in its charter)

Delaware		000-54568		45-1629984
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

2620 Thousand Oaks Blvd., Suite 4000, Memphis, Tennessee			38118
(Address of principal executive offices)			(Zip Code)
	(901) 260-4400
	(Registrant's telephone number, including area code) (Former name or former address, if changed since last report)

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement

On April 16, 2012, Green Ballast, Inc. (the “Company”) entered into a loan agreement with Gemini Master Fund, Ltd. (“Gemini”) and Green Ballast LLC (“GBL”), pursuant to which the Company issued promissory notes to each of Gemini and GBL (collectively, the “Short-Term Notes”). The Company may draw up to $150,000 under each Short-Term Note. On April 16, 2012, the Company had received $75,000 from each of Gemini and GBL under the Short-Term Notes. The Short-Term Notes bear interest at 12% per annum, mature on July 16, 2012, and are secured by all of the Company’s assets. The Short-Term Notes are subject to terms of the security interests granted to Gemini and GBL on April 15, 2011, in connection with our initial capitalization and the purchase of assets.

The Short-Term Notes contain standard provisions relating to the default and acceleration of the Company’s obligations upon the occurrence of an event of default, including: (i) failure to pay principal or interest; (ii) failure to comply with specified agreements, covenants or obligations; (iii) commencement of bankruptcy or other insolvency proceedings by or against the Company; (iv) entry into a change of control transaction; (v) material adverse change in condition, value or operation of a material portion of the collateral; (vi) filing of a monetary judgment against the Company for more than $50,000; and (v) event of default under the promissory notes previously issued to Gemini and GBL.

The Short-Term Notes contain covenants which prohibit the Company from taking any of the following actions: (i) incur debt (unless otherwise permitted); (ii) create any liens (unless otherwise permitted); (iii) repay any debts, others than regularly scheduled payments under existing debt; and (iv) enter into transactions with affiliates that must be disclosed in public filings with the Securities and Exchange Commission.

GBL is the holder of 32,500,000 shares of common stock of the Company and a $1,800,000 promissory note issued on April 15, 2011. IRC - Interstate Realty Corporation (“IRC”) is the managing member of GBL. IRC is the beneficial owner of the shares of common stock held by GBL by virtue of its voting and investment power over the shares. The Company’s Chief Executive Officer, J. Kevin Adams is the chairman and chief executive officer of IRC.

Gemini is the holder of a $1,800,000 promissory note convertible into 8,000,000 shares of our common stock and warrants exercisable into 5,000,000 shares of our common stock.

The foregoing summary of the loan agreement and the Short-Term Notes set forth in this Item 1.01 is qualified in its entirety by reference to the text of the loan agreement and the Short-Term Notes, copies of which are incorporated by reference herein as Exhibits 10.1, 10.2 and 10.3.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.

Item 9.01

Financial Statements and Exhibits

Exhibit No.

Description

10.1	Loan Agreement dated April 16, 2012, between Green Ballast, Inc., Gemini Master Fund Ltd. and Green Ballast LLC

10.2	12% Senior Secured Note dated April 16, 2012, issued to Green Ballast LLC.

10.3	12% Senior Secured Note dated April 16, 2012, issued to Gemini Master Fund, Ltd.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 19, 2012

Green Ballast, Inc.

By:

/s/ William H. Bethell

	Name: William H. Bethell
	Title: Chief Financial Officer

EX-10.1 2 loanagreement.htm LOAN AGREEMENT loanagreement.htm

Exhibit 10.1

LOAN AGREEMENT

This LOAN AGREEMENT (the “Agreement”) is made as of this 16th day of April, 2012, by and among GREEN BALLAST, INC., a Delaware corporation (the “Company”), GREEN BALLAST LLC, a Tennessee limited liability company (“GBL”), and GEMINI MASTER FUND, LTD., a Cayman Islands corporation (“Gemini”, an together with GBL, “Lenders”).

W I T N E S S E T H:

WHEREAS, GBL is the holder of an 8% Senior Secured Note issued by the Company on or about April 15, 2011 in the original principal amount of $1,800,000 (“GBL Note”), and Gemini is the holder of an 8% Senior Secured Convertible Note issued by the Company on or about April 15, 2011 in the original principal amount of $1,800,000 (together with the GBL Note, the “2011 Notes”);

WHEREAS, the Company’s obligations under the Notes are secured by all the assets of the Company pursuant to a Security Agreement and an Intellectual Property Security Agreement (collectively, “Security Agreement”) entered into by the Company in favor of the Lenders on or about April 15, 2011, which security interest is shared equally by GBL and Gemini; and

WHEREAS, the Company desires to enter into certain additional secured financial transactions with the Lenders, and the Lenders desire to enter into such transactions with the Company, as more specifically described herein;

NOW, THEREFORE, for and in consideration of the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Loans.

(a) Loan Amount. Subject to the terms and conditions of this Agreement, the Security Agreement and the Notes (as defined below), the Lenders may make loans (the “Loans”) to the Company, from time to time during the period from the date of this Agreement until June 30, 2012 (the “Drawdown Period”), in an aggregate principal amount at any one time outstanding not to exceed $300,000. Each Lender shall advance 50% of the aggregate amount of Loans made to the Company hereunder, such that each Lender’s Loans hereunder shall not exceed $150,000 in principal amount.

(b) Advances. Promptly following execution hereof, the Lenders shall advance in the aggregate $150,000 of Loans pursuant to this Agreement (i.e., $75,000 per Lender). Thereafter, at any time and from time to time during the Drawdown Period, the Company may request by written notice to the Lenders that additional Loan amounts be advanced hereunder (each a “Drawdown Request”), provided that (i) each Drawdown Request shall be for at least $20,000 and no more than $100,000 in the aggregate (i.e., between $10,000 and $50,000 per Lender), (ii) no Drawdown Request shall be given less than 15 days following the date hereof nor less than 15 following any immediately preceding Drawdown Request, (iii) each Drawdown Request shall be delivered to each party (which may be by email) simultaneously and specify the aggregate Loan amount

requested under such Drawdown Request, the Loan amount requested for each Lender under such Drawdown Request, and the date on which the Company desires such Loan amount to be advanced (“Drawdown Date”), and (iv) no Loans may be advanced pursuant to a Drawdown Request unless both Lenders approve in writing the requested Loan amount and the Drawdown Date, it being understood that either Lender may deny such Drawdown Request in its sole discretion for any reason or no reason. So long as the Company is not in default under this Agreement, the Security Agreement or the Notes, the Lenders shall advance the Loan amount requested under each Drawdown Request and approved by both Lenders within three (3) business days following the applicable Drawdown Date.

(c) Use of Proceeds. The Company shall use the proceeds of all Loans solely for lawful general business purposes which are included within the budgets furnished to the Lenders, provided that the Company shall not furnish any material non-public information concerning the Company to Gemini.

(d) Security. The Loans and obligations under the Notes and this Agreement shall (i) constitute Obligations (as defined in the Security Agreement) under the Security Agreement and (ii) be secured by the Collateral (as defined in the Security Agreement).

(e) Maturity Date. The Company shall promptly repay any and all Loans on or prior to July 16, 2012 (“Maturity Date”).

(f) Interest. All Loans outstanding shall accrue interest daily at a rate equal to 12% per annum, or at such default rate as set forth under the Notes following an Event of Default (as defined in the Notes), and such interest shall be payable on the Maturity Date.

(g) Notes. All Loans outstanding by each Lender shall be evidenced by a promissory note issued and delivered to such Lender in the form of Exhibit A attached hereto (each a “Note” and collectively the “Notes”). The parties hereto agree that the Notes shall constitute Permitted Indebtedness under and as defined in the 2011 Notes, and the security interest securing the Company’s obligations under the Notes pursuant to the Security Agreement shall constitute Permitted Liens under and as defined in the 2011 Notes.

2. Equal Treatment; No Group. The parties agree that the Company shall treat the Lenders equally with respect to the Notes. In particular, all amounts advanced and repaid under the Notes shall be made in equal amounts and at the same times, the Lenders shall have the identical rights under the Notes, and the Company’s obligations to the Lenders under the Notes shall be the same. The Lenders are not agents, affiliates or partners of each other, and nothing contained herein, and no action taken by any Lender pursuant hereto or under the Notes, constitutes or shall be deemed to constitute the Lenders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Lenders are in any way acting or agreeing to act jointly, in concert, or as a group with respect to any equity securities of the Company (including without limitation the decision to acquire, dispose of or vote any such securities).

3. Representations and Warranties of the Company. In order to induce the Lenders to enter into this Agreement, the Company represents and warrants the following:

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(a) Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite right, power and authority to execute, deliver and perform this Agreement.

(b) Enforceability. The execution, delivery and performance of this Agreement and the Notes by the Company have been duly authorized by all requisite corporate action. Upon the execution and delivery of this Agreement by the Lenders, this Agreement and the Notes shall constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except to the extent that its enforcement is limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights generally and by general principles of equity.

(c) No Violations; Consents. The execution, delivery and performance of this Agreement and the Notes by the Company do not and will not violate or conflict with any provision of the Company’s Certificate of Incorporation or Bylaws and do not and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default, cause the acceleration of performance, or require any consent under, or result in the creation of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, any material instrument or agreement to which the Company is a party or by which the Company or its properties may be bound or affected. The execution, delivery and performance by the Company of this Agreement and the issuance of the Notes require no consent of, action by or in respect of, or filing with, any person, governmental body, agency, or official.

4. Representations and Warranties of the Lender. In order to induce the Company to enter into this Agreement, each Lender, severally for itself only, represents and warrants the following:

(a) Authority. Such Lender is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has all requisite right, power and authority to execute, deliver and perform this Agreement.

(b) Enforceability. This Agreement has been duly executed and delivered by such Lender, and, upon its execution by the Company, shall constitute the legal, valid and binding obligation of such Lender, enforceable in accordance with its terms, except to the extent that its enforcement is limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights generally and by general principles of equity.

(c) No Violations. The execution, delivery and performance of this Agreement by such Lender do not and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default, cause the acceleration of performance, or require any consent under, or result in the creation of any lien, charge or encumbrance upon any property or assets of such Lender pursuant to, any material instrument or agreement to which such Lender is a party or by which such Lender or its properties may be bound or affected, and, do not or will not violate or conflict with any provision of the articles of incorporation or bylaws, partnership agreement, operating agreement, trust agreement or similar organizational or governing document of such Lender, as applicable.

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5. Expenses. The Company shall pay $1,500 as and for Gemini’s legal fees incurred in connection with the preparation of the documentation and consummation of the transactions contemplated hereby, which amount shall be deducted by Gemini from the amount being advanced as Loans hereunder.

6. Entire Agreement; No Oral Modification. This Agreement, together with the Notes and Security Agreement, contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings with respect thereto and may not be amended or modified except in a writing signed by all parties hereto.

7. Binding Effect; Benefits. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors and assigns; however, nothing in this Agreement, expressed or implied, is intended to confer on any other person other than the parties hereto, or their respective heirs, successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

8. No Usury. To the fullest extent permitted by law, the Company agrees not to insist upon or plead or in any manner whatsoever claim, and shall resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, in force at the time of execution of this Agreement or hereafter, in connection with any action that may be brought by either Lender in order to enforce any right or remedy under this Agreement or the Notes. Notwithstanding any provision to the contrary contained herein or the Notes, it is expressly agreed and provided that the total liability of the Company under the Notes for payments in the nature of interest shall not exceed the maximum lawful interest rate authorized under applicable law. If the effective interest rate otherwise applicable under this Agreement or the Notes exceeds such maximum lawful interest rate, then such applicable interest rate shall be reduced so as not to exceed such maximum lawful interest rate.

9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

10. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the United States of America and the State of New York, both substantive and remedial. Exclusive venue and jurisdiction for any action arising hereunder shall lie in the court of competent jurisdiction located in New York, New York, and the parties specifically agree to submit to such jurisdiction and waive any objections to such venue.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

	LENDERS:

	GREEN BALLAST LLC, a Tennessee limited liability company

By:

/s/ Mary F. Sharp

	Name:	Mary F. Sharp
	Title:	President

GEMINI MASTER FUND, LTD.

By: GEMINI STRATEGIES, LLC, as investment manager

By:

/s/ Steven Winters

	Name:	Steven Winters
	Title:	Managing Member

	COMPANY:

	GREEN BALLAST, INC., a Delaware corporation

By:

/s/ Kevin Adams

	Name:	Kevin Adams
	Title:	Chief Executive Officer

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EXHIBIT A

Form of Note

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EX-10.2 3 notegreenballast.htm 12% SENIOR SECURED NOTE GREEN BALLAST, INC. notegreenballast.htm

Exhibit 10.2

Original Issue Date: April 16, 2012

$150,000.00

GREEN BALLAST, INC.

12% SENIOR SECURED NOTE

This 12% Senior Secured Note of Green Ballast, Inc., a Delaware corporation (the “Company”), having its principal place of business at 2620 Thousand Oaks Blvd., Suite 4000, Memphis, Tennessee 38118 (this “Note”, and together with the other 12% Senior Secured Note issued on or about the date hereof pursuant to the Loan Agreement (as defined below), the “Notes”), is duly authorized and validly issued.

FOR VALUE RECEIVED, the Company promises to pay to GREEN BALLAST LLC, a Tennessee limited liability company, or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, on or before July 16, 2012 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, the principal sum of $150,000.00 or such greater or lesser amount as represents the aggregate unpaid principal amount of all Loans made by the Holder to the Company under the Loan Agreement, and to pay interest to the Holder on the aggregate outstanding principal amount of this Note in accordance with the provisions hereof.

The Company’s obligations under this Note are secured by the Collateral (as defined in the Security Agreement).

This Note is subject to the following additional provisions:

Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Loan Agreement and (b) the following terms shall have the following meanings:

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with an individual or entity, as such terms are used in and construed under Rule 405 under the Securities Act of 1933, as amended.

“Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Subsidiary thereof; (b) there is commenced against the Company or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Company or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Subsidiary thereof suffers any appointment of any

custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment; (e) the Company or any Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Company or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“Business Day” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Change of Control Transaction” means the occurrence after the date hereof of any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 33% of the voting securities of the Company (other than by the holder of Notes), or (ii) the Company merges into or consolidates with any other entity, or any entity merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction, or (iii) the Company sells or transfers all or substantially all of its assets to a third party and the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, or (iv) a replacement at one time or within a three year period of more than one-half of the members of the Company’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), or (v) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (i) through (iv) above.

“Event of Default” shall have the meaning set forth in Section 5.

“Fundamental Transaction” means any Change of Control Transaction.

“Late Fees” shall have the meaning set forth in Section 2(d).

“Loan Agreement” means that certain Loan Agreement, dated on or about the date hereof, among the Company, the Holder and another lender, as amended, modified or supplemented from time to time in accordance with its terms.

“Mandatory Default Amount” means the sum of (i) 115% of the outstanding principal amount of this Note, plus 100% of accrued and unpaid interest hereon, and (ii) all other amounts, costs, expenses and liquidated damages due in respect of this Note.

“New York Courts” shall have the meaning set forth in Section 6(d).

“Original Issue Date” means the date of the issuance of this Note, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence this Note.

“Permitted Indebtedness” means (a) the indebtedness evidenced by the Notes and the 2011 Notes, (b) lease obligations and purchase money indebtedness incurred in connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets, (c) purchase order non-convertible (nor otherwise equity-linked) debt financing in which a third party lender advances funds solely for financing the manufacture, production and/or purchase of inventory pursuant to purchase orders previously received by the Company, repayment of which is (i) secured solely by such inventory manufactured, produced or purchased and accounts receivables from the sales thereof, and (ii) due promptly following such sales, and (d) indebtedness that (i) is expressly subordinate to the Notes pursuant to a written subordination agreement with the Holder that is acceptable to the Holder in its sole and absolute discretion and (ii) matures at a date later than the Maturity Date.

“Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with generally accepted account principles; (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien; (c) Liens incurred in connection with Permitted Indebtedness under clauses (a), (b) and (c) thereunder, provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or leased.

“Subsidiary” means any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

Section 2. Interest; Outstanding Amounts; No Prepayment.

a) Interest Rate. Interest shall accrue daily on the outstanding principal amount of this Note at a rate per annum equal to 12%.

b) Payment of Interest. On the Maturity Date, the Company shall pay to the Holder any accrued but unpaid interest hereunder.

c) Interest Calculations. Interest shall be calculated on the basis of a 360-day year and actual days elapsed, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the person or entity in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note.

d) Late Fees. All overdue accrued and unpaid interest to be paid hereunder, when not paid within 10 calendar days of the due date therefor, shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (“Late Fees”) which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.

e) Amounts Outstanding. The Holder of this Note is authorized to record the date and amount of each Loan evidenced by this Note, the date and amount of each payment or prepayment of principal hereof and the interest rate with respect thereto on a separate schedule, and any such schedule shall be conclusive and binding for all purposes absent manifest error; provided, however, that the failure of the Holder to make any such recordation or endorsement shall not affect the obligations of the Company hereunder or under the Loan Agreement or Security Agreement.

f) Prepayment. The Company may prepay or redeem any portion of the principal amount of this Note without the prior written consent of the Holder, provided that it prepays or redeems all outstanding Notes at the same times and in the same proportional amounts.

Section 3. Registration of Transfers and Exchanges. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Holder in whose name this Note is duly registered on the records of the Company as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 4. Negative Covenants. As long as any portion of this Note remains outstanding, the Company shall not, and shall not permit any of its Subsidiaries, to directly or indirectly:

a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

b) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

c) repay, repurchase or offer to repay, repurchase or otherwise acquire any indebtedness for borrowed money, other than regularly scheduled principal and interest payments as such terms are in effect as of the Closing Date and under the other Notes;

d) repay, repurchase or offer to repay, repurchase or otherwise acquire any indebtedness to any current or former employees, officers or directors of the Company (other than for reimbursement of Company business expenses advanced by such person);

e) enter into any transaction with any Affiliate of the Company which is required to be disclosed in a public filing with the Securities and Exchange Commission unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

f) enter into any agreement with respect to any of the foregoing.

Section 5. Events of Default.

a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

i. any default in the payment of (A) the principal amount under the Notes or 2011 Notes, or (B) interest, liquidated damages and other amounts owing under the Notes or 2011 Notes, as and when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise) which default is not cured within 3 business days;

ii. the Company shall fail to observe or perform any other covenant or agreement contained in the Notes which failure is not cured, if possible to cure, within 30 days after notice of such failure is delivered by the Holder or by any other holder of Notes or after the Company has become or should have become aware of such failure, whichever is earlier;

iii. a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) the Loan Agreement or Security Agreement or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not otherwise covered below);

iv. the Company or any Subsidiary shall be subject to a Bankruptcy Event;

v. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $50,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

vi. the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction);

vii. if any Security Agreement ceases to be in full force and effect (including failure to create a valid and perfected first priority lien on and security interest in all the Collateral (as defined in the Security Agreement) and Intellectual Property Rights (as defined therein) of the Company and its Subsidiaries) at any time for any reason;

viii. any material adverse change in the condition, value or operation of a material portion of the Collateral or Intellectual Property Rights;

ix. any monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their respective properties or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days; or

x. any Event of Default under any of the Notes or 2011 Notes.

b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration,

shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence and during the continuance of any Event of Default, the interest rate on this Note shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 5(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 6. Miscellaneous.

a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, shall be in writing and delivered personally, by facsimile, by email or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number, email or address as the Company may specify for such purpose by notice to the Holder delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number, email or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified to such party prior to 8:30 p.m. (New York City time), (ii) the date immediately following the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified to such party between 8:30 p.m. (New York City time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached to the Loan Agreement.

b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. All Notes rank pari passu with each other.

c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company, as well as an affidavit and indemnification agreement in form and substance reasonably acceptable to the Company.

d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Note, the Loan Agreement or Security Agreement (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Note, the Loan Agreement or Security Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses reasonably incurred in the investigation, preparation and prosecution of such action or proceeding.

e) Waiver; Amendments. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any

term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver by the Company or the Holder must be in writing. No waiver hereunder shall be effective without the prior written consent of all holders of Notes. This Note shall not be directly or indirectly effectively modified or amended without the prior written consent of all holders of Notes.

f) Third Party Beneficiary. Each holder of Notes other than the Holder shall be a third party beneficiary of this Note and may enforce the terms of this Note, it being understood that such other holder(s) is/are materially relying on the terms of this Note.

g) Successors and Assigns. Subject to any restrictions on transfer set forth herein and/or in this Note or the Loan Agreement, this Note may be assigned by the Holder with the prior written consent of other holders of Notes, such consent not to be unreasonably withheld or delayed. The Note may not be assigned by the Company, except to a successor in the event of a Fundamental Transaction. The Note shall be binding on and inure to the benefit of the parties thereto and their respective successors and assigns.

h) Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances..

i) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

j) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

k) Assumption. Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior to such Fundamental Transaction, all of the obligations of the Company under this Note, the Loan Agreement and Security Agreement pursuant to written agreements in form and substance satisfactory to the Holder (such approval not to be unreasonably withheld or delayed) and (ii) issue to the Holder a new Note of such successor entity evidenced by a written instrument substantially similar in form and substance to this Note, including, without limitation, having a principal amount and interest rate equal to the principal amount and the interest rate of this Note and having similar ranking to this Note, which shall be satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed). The provisions of this Section 6(i) shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations of this Note.

l) Usury. This Note shall be subject to the anti-usury limitations contained in the Loan Agreement.

*********************

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

GREEN BALLAST, INC.

By:

/s/ Kevin Adams

	Name:	Kevin Adams
	Title:	Chief Executive Officer

EX-10.3 4 notegemiini.htm 12% SENIOR SECURED NOTE GEMIINI MASTER FUND, LTD. notegemiini.htm

Exhibit 10.3

Original Issue Date: April 16, 2012

$150,000.00

GREEN BALLAST, INC.

12% SENIOR SECURED NOTE

FOR VALUE RECEIVED, the Company promises to pay to GEMIINI MASTER FUND, LTD., a Cayman Islands company, or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, on or before July 16, 2012 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, the principal sum of $150,000.00 or such greater or lesser amount as represents the aggregate unpaid principal amount of all Loans made by the Holder to the Company under the Loan Agreement, and to pay interest to the Holder on the aggregate outstanding principal amount of this Note in accordance with the provisions hereof.