Exhibit 10.2

[LSG Letterhead]

 

 

 

October 4, 2007

LED Holdings, LLC
11390 Sunrise Gold Circle #800
Rancho Cordova, CA 95742

 

Gentlemen:

Reference is hereby made to the Exchange and Contribution Agreement, dated as of
October 4, 2007 (the "Agreement"), by and between LED Holdings, LLC ("LED") and
Lighting Science Group Corporation ("LSG").

In order to induce LED to enter into the Agreement, and in consideration of the
transactions contemplated thereby, LSG hereby agrees to indemnify and hold
harmless LED, and its affiliated entities, members, directors, officers,
employees, representatives, agents, controlling persons (within the meaning of
the federal securities laws) and advisors (collectively, the "Indemnified
Parties" and each an "Indemnified Party") to the fullest extent permitted by
law, from and against any and all losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, and reasonable costs, expenses and
disbursements (and any and all actions, suits, proceedings and investigations in
respect thereof and any and all reasonable legal or other costs, expenses and
disbursements in giving testimony or furnishing documents in response to a
subpoena or otherwise), including, without limitation, the reasonable costs,
expenses and disbursements, as and when incurred, of investigating, preparing or
defending any such action, proceeding or investigation (whether or not in
connection with litigation to which an Indemnified Party is a party), directly
or indirectly, caused by, relating to, based upon, arising out of or in
connection with (a) any third party challenge of or complaint with respect to
the transactions contemplated by the Agreement and the other documents
contemplated thereby, or (b) any untrue statement or alleged untrue statement of
a material fact contained in, or omissions or alleged omissions from any filing
with any governmental agency or similar statements or omissions in or from any
information furnished by LSG to LED or any other person in connection with the
transactions contemplated by the Agreement; provided, however, that such
indemnity agreement shall not apply to any portion of any such loss, claim,
damage, obligation, penalty, judgment, award, liability, cost, expense or
disbursement to the extent it is found in a final judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of an Indemnified Party.

If any action, suit, proceeding or investigation is commenced, as to which any
Indemnified Party proposes to demand indemnification, LED shall notify LSG with
reasonable promptness; provided, however, that any failure by LED to so notify
LSG shall not relieve LSG from its obligations hereunder, except to the extent
that such failure has materially and adversely

--------------------------------------------------------------------------------

affected the rights of LSG. LED shall have the right to retain counsel of its
own choice to represent it, and LSG shall pay the reasonable fees, expenses and
disbursement of such counsel; and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with LSG and any counsel
designated by LSG. LSG shall be liable for any settlement of any claim against
any Indemnified Party made with LSG's written consent, which consent shall not
be unreasonably withheld. LSG shall not, without the prior written consent of
LED, settle or compromise any claim, or permit a default or consent to the entry
of any judgment in respect thereof, unless such settlement, compromise or
consent includes, as an unconditional term thereof, the giving by the claimant
to LED and the applicable Indemnified Parties of an unconditional and
irrevocable release from all liability in respect of such claim.

In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to this letter agreement is made but is found in a
final judgment by a court of competent jurisdiction (not subject to further
appeal) that such indemnification may not be enforced in such case, even though
the express provisions hereof provide for indemnification in such case, then
LSG, on the one hand, and LED, on the other hand, shall contribute to the
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements to which the Indemnified Parties may be
subject in accordance with the relative benefits received by LSG, on the one
hand, and LED, on the other hand, and also the relative fault of LSG, on the one
hand, and LED, on the other hand, in connection with the statements, acts or
omissions which resulted in such losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, and reasonable costs, expenses and
disbursements and the relevant equitable considerations shall also be
considered.

This letter agreement constitutes the entire agreement among the undersigned
with respect to the subject matter contained herein and supersedes any and all
prior agreements or understandings, oral or written, among any or all of the
undersigned relating to such subject matter.

This letter agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.

The parties shall use their reasonable efforts to take, or cause to be taken,
all actions, including, without limitation, the execution and delivery of such
other documents, certificates, agreements and other instruments, as may be
reasonably necessary, proper or advisable to consummate and make effective as
promptly as practical the provisions contained herein and to cooperate with each
other in connection with the foregoing.

The rights hereunder may not be assigned nor may the obligations hereunder be
delegated to any person, without the prior written consent of all of all the
parties hereto.

This letter agreement may not be amended or otherwise modified without the prior
written consent of all of the parties hereto. This letter agreement will be
governed by and construed and interpreted in accordance with the substantive
laws of the State of New York,

2

--------------------------------------------------------------------------------

without giving effect to any choice of law or conflicts of law provision or rule
that would cause the application of the laws of a jurisdiction other than New
York.

All judicial proceedings brought against any party hereto arising out of or
relating to this letter agreement, or any obligations hereunder, shall be
brought in any state court of competent jurisdiction in the State of New York,
County of New York, or any federal court of competent jurisdiction in the
Southern District of New York. By executing and delivering this letter
agreement, each party, for itself and in connection with its properties,
irrevocably (i) accepts generally and unconditionally the exclusive jurisdiction
and venue of such courts, (ii) waives any defense of forum non coveniens, (iii)
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to such party
at its address set forth above, (iv) agrees that service as provided in clause
(iii) above is sufficient to confer personal jurisdiction over such party in any
such proceeding in any such court, and otherwise constitutes effective and
binding service in every respect and (v) agrees that the rights to serve process
and bring proceedings provided above shall be in addition to any other rights to
serve process in any other manner permitted by law and to bring proceedings in
the courts of any other jurisdiction.

 

[Signature page follows.]

3

--------------------------------------------------------------------------------

Please confirm that this arrangement is agreeable to you by countersigning a
copy of this letter and returning it to us.

LIGHTING SCIENCE GROUP CORPORATION

 

By: ______________________________
Name:
Title:

 

Acknowledged and agreed to as
of the date first written above:

LED HOLDINGS, LLC

 

By: ____________________
Name:
Title: