Exhibit 10.1


     

    
       

       

       
[BANK
      OF
      TEXAS LETTERHEAD]

     

     

    December
      __, 2006

     

    


    Lighting
      Science Group Corporation

    2100
      McKinney Ave., Suite 1555

    Dallas,
      Texas 75201

    Attention:
      Steve Hamilton

    


    LETTER
      AGREEMENT

    


    Ladies
      and Gentlemen:

    


    Reference
      is hereby made to that certain Loan Agreement dated as of June 29, 2006 (as
      may
      be amended from time to time, the “Loan
      Agreement”)
      by and
      between Lighting Science Group Corporation, a Delaware corporation
      (“Borrower”),
      and
      Bank of Texas, N.A. (“Bank”).
      Capitalized terms not otherwise defined herein have the meaning given to such
      terms in the Loan Agreement.

    


    Borrower
      has requested that Bank amend the Loan Documents to increase the amount of
      the
      Revolving Loan from $2,000,000.00 to $2,300,000.00. Bank consents to such
      amendment subject to the terms and conditions set forth herein.

    


    1.  Amendment
      to Loan Agreement.
      Section
      1.1
      of the
      Loan Agreement is hereby amended by amending and restating in its entirety
      the
      definition listed below as follows:

    


    “’Committed
      Sum’
means
      $2,300,000.00.”

    


    2.  Conditions
      Precedent.
      The
      effectiveness of this Letter Agreement is subject to the satisfaction of the
      following conditions precedent, unless specifically waived in writing by
      Bank:

    


    (a)  The
      representations and warranties contained in the Loan Agreement and in all other
      Loan Documents shall be true and correct as of the date hereof as if made on
      the
      date hereof;

    


    (b)  Bank
      shall have received this Letter Agreement, agreed to, acknowledged and duly
      executed by Borrower;

    


    (c)  Bank
      shall have received an amended and restated Guaranty Agreement duly executed
      for
      the benefit of Bank by such Guarantors as Bank may require, in form and
      substance satisfactory to Bank;

    


    (d)  Borrower
      shall have executed and delivered to Bank an amended and restated revolving
      promissory note in form and substance satisfactory to the Bank; and

    


    (e)  Borrower
      shall execute a Certificate of Corporate Resolutions in form and substance
      satisfactory to the Bank.

    


    3.  Ratifications,
      Representations, and Warranties.

    


    (a)  Ratifications
      and Acknowledgements by Borrower.
      Borrower ratifies and confirms that (i) each of the Loan Agreement, the Note
      and
      the other Loan Documents, as may be amended, is and remains in full force and
      effect in accordance with its respective terms; and (ii) each of the Loan
      Documents, as may be amended, is and shall continue to be legal, valid, binding
      and enforceable in accordance with its respective terms. The undersigned officer
      of Borrower executing this Letter Agreement represents and warrants that he
      has
      full power and authority to execute and deliver this Letter Agreement on behalf
      of Borrower and that such execution and delivery has been duly authorized by
      the
      Board of Directors of Borrower. Any reference in any of the Loan Documents
      to
      the “Loan Agreement” or “Note” shall be deemed to include references to the Loan
      Agreement and Note as amended through the date hereof.

    


    (b)  Renewal
      of Security Interests.
      Borrower renews, regrants and affirms the liens and security interests created
      and granted in the Security Agreement and all other Loan Documents. Borrower
      agrees that this Letter Agreement shall in no manner affect or impair the liens
      and security interests securing the indebtedness evidenced by the Note and
      the
      other Loan Documents and that such liens and security interests shall not in
      any
      manner be waived, the purposes of this Letter Agreement being to modify the
      Loan
      Documents as herein provided, and to carry forward all liens and security
      interests securing same, which are acknowledged by Borrower to be valid,
      subsisting and continuing.

    


    (c)  Representations
      and Warranties of Borrower.
      Borrower represents and warrants to Bank as follows: (i) the execution, delivery
      and performance of this Letter Agreement and any and all other Loan Documents
      executed and/or delivered in connection herewith have been authorized by all
      requisite corporate action on the part of Borrower; (ii) the representations
      and
      warranties contained in the Loan Agreement, as amended hereby, and the other
      Loan Documents are true and correct on and as of the date hereof as though
      made
      on and as of the date hereof; (iii) no default or Event of Default under the
      Loan Agreement or other Loan Documents has occurred; (iv) Borrower is in full
      compliance with all covenants and agreements contained in the Loan Documents;
      (v) Borrower
      has not granted or suffered to exist any security interest, lien or encumbrance
      on the assets of Borrower other than Bank’s first priority liens; and (vi)
      Borrower shall pay promptly when due all amounts owed under the Loan Agreement,
      the Note and the other Loan Documents.

    


    4.  Loan
      Document.
      This
      Letter Agreement shall constitute a Loan Document under the Loan
      Agreement.

    


    5.  Governing
      Law.
      THIS
      LETTER AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH
      SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
      OF
      TEXAS (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES).

    


    6.  Counterparts.
      This
      Letter Agreement may be executed in any number of counterparts and by the
      different parties hereto on separate counterparts, each of which when so
      executed and delivered shall be deemed an original for all purposes, and all
      of
      which together shall constitute one and the same instrument. Each counterpart
      hereof may be transmitted via facsimile and a facsimile of a counterpart signed
      by one or more of the parties shall be deemed an original for all purposes
      and
      have the same force and effect as a manually signed original.

    


    7.  Loan
      Agreement Remains in Effect; No Waiver.
      Except
      as expressly provided herein or amended through the date hereof, all terms
      and
      provisions of the Loan Agreement, Security Agreement and the other the Loan
      Documents shall remain unchanged and in full force and effect and are hereby
      ratified and confirmed. No waiver by the Bank of any Event of Default shall
      be
      deemed to be a waiver of any other Event of Default. No delay or omission by
      Bank in exercising any power, right or remedy shall impair such power, right
      or
      remedy or be construed as a waiver thereof or an acquiescence therein, and
      no
      single or partial exercise of any such power, right or remedy shall preclude
      other or further exercise thereof or the exercise of any other power, right
      or
      remedy under the Loan Agreement, the Loan Documents or otherwise.

    


    8.  Survival
      of Representations and Warranties.
      All
      representations and warranties made in this Letter Agreement or any other Loan
      Document shall survive the execution and delivery of this Letter Agreement
      and
      the other Loan Documents, and no investigation by Bank or any closing shall
      affect such representations and warranties or the right of Bank to rely upon
      such representations and warranties.

    


    9.  Severability.
      Any
      provision of this Letter Agreement held by a court of competent jurisdiction
      to
      be invalid or unenforceable shall not impair or invalidate the remainder of
      this
      Letter Agreement and the effect thereof shall be confined to the provision
      so
      held to be invalid or unenforceable.

    


    10.  Successors
      and Assigns.
      This
      Letter Agreement is binding upon and shall inure to the benefit of the Bank
      and
      Borrower and their respective successors and assigns; provided, however, that
      Borrower may not assign or transfer any of its rights or obligations hereunder
      without the prior written consent of Bank.

    


    11.  Headings.
      The
      headings, captions and arrangements used in this Letter Agreement are for
      convenience only and shall not affect the interpretation of this Letter
      Agreement.

    


    [Remainder
      of page intentionally left blank.]

    


    



    Sincerely,

    


    BANK
      OF
      TEXAS, N.A.

    


    


    By:      

    Ben
      Parkey, Assistant Vice President

    


    


    ACCEPTED,
      ACKNOWLEDGED, AND AGREED TO 

    EFFECTIVE
      AS OF THE DATE FIRST WRITTEN ABOVE:

    


    BORROWER:

    


    LIGHTING
      SCIENCE GROUP CORPORATION,

    a
      Delaware corporation

    


    


    By:
            

    Name:
            

    Title: