exv4w2






Exhibit 4.2



EXECUTION COPY




WARRANT



THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES LAWS UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.




LIGHTING SCIENCE GROUP CORPORATION




Warrant To Purchase Common Stock




			
	 	 	 
	Warrant No.: ___
	 	Number of Shares: 942,857
	Issuance Date:                     , 2008	 	 





THIS CERTIFIES THAT, for value received, Pegasus Partners IV, L.P. or its transferees, successors,
affiliates and assigns (the “Holder”) is entitled to purchase from Lighting Science Group
Corporation, a Delaware corporation (the “Company”), at any time after the Issuance Date (defined
below) and before the Expiration Date (defined below) at $7.00 per share (the “Exercise Price”)
nine hundred forty two thousand eight hundred fifty seven (942,857) fully paid nonassessable shares
of Common Stock (defined below) (the “Warrant Shares”), all subject to adjustment and upon the
terms and conditions provided herein.




     Section 1. Definitions.



          The following terms as used in this Warrant have the following meanings:




          (a) “Business Day” means any day other than Saturday, Sunday or federal holiday.




          (b) “Common Stock” means (i) the Company’s common stock, $.001 par value per share, and (ii)
any capital stock into which the Common Stock is changed or any capital stock resulting from a
reclassification of the Common Stock.




          (c) “Exercise Price” is equal to $7.00, subject to adjustment as detailed in Section 2(c) of
this Warrant.




          (d) “Expiration Date” means the fifth anniversary of the Issuance Date or, if such date falls
on a day that is not a Business Day or a day on which trading does not take place




1









 




on the principal exchange or automated quotation system on which the Common Stock is traded,
the next Business Day.




          (e) “Issuance Date” means July 25, 2008.




          (f) “Person” means a natural person or entity, or a government or any division, department or
agency thereof.




          (g) “Securities Act” means the Securities Act of 1933, as amended.




          (h) “Warrant” means this Warrant and all Warrants issued in exchange, transfer or replacement
thereof.




          (i) “Warrant Shares” has the meaning attributed to it in the preamble of this Warrant.




     Section 2. Exercise of Warrant.



          (a) This Warrant may be exercised by the Holder registered on the books of the Company, in
whole or in part, at any time on any Business Day after the Issuance Date and prior to 11:59 p.m.
Eastern Time on the Expiration Date by: (i) delivery of a written notice, in the form attached as
Exhibit A (the “Exercise Notice”), of Holder’s election to exercise this Warrant,
specifying the number of Warrant Shares to be purchased, (ii) payment to the Company of an amount
equal to the Exercise Price multiplied by the number of Warrant Shares being purchased (a) in cash
or wire transfer of immediately available funds or (b) by means of a cashless exercise pursuant to
Section 2(c) (such cash, wire transfer or cashless exercise referred to herein as the “Payment”)
and (iii) the surrender to a nationally recognized courier for overnight delivery to the Company,
as soon as practicable following such date, of this Warrant, (or an indemnification undertaking
with respect to this Warrant in the case of its loss, theft or destruction in such form and
substance as reasonably satisfactory to the Company).




     The Company shall, not later than the fifth Business Day (the “Delivery Date”) following
receipt of an Exercise Notice, the Payment and this Warrant or such indemnification (collectively,
the “Exercise Documents”), arrange for its transfer agent, on or before the Delivery Date, to issue
and surrender to a nationally recognized courier for overnight delivery to the address specified in
the Exercise Notice, a certificate, registered in the name of the Holder, for the number of shares
of Common Stock to which the Holder is entitled. Upon delivery of the Exercise Notice and the
Payment, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised on the Delivery Date,
irrespective of the date of delivery of the certificates evidencing the Warrant Shares.



          (b) Unless the rights represented by this Warrant have expired or been fully exercised, the
Company shall, as soon as practicable and in no event later than five Business Days after receipt
of the Exercise Documents and at its own expense, issue a new Warrant identical in all respects to
this Warrant, except it shall represent rights to purchase the number of Warrant Shares purchasable
immediately prior to exercise, less the number purchased.




2









 








          (c) In lieu of exercising this Warrant by means of paying via cash or wire transfer, the
Holder may elect to make the Payment by means of receiving shares equal to the value of this
Warrant (or portion thereof being exercised) by surrender of this Warrant at the principal office
of the Company together with the Notice of Exercise attached hereto as Exhibit A, duly completed to
indicate a net issuance exercise and executed by the Holder, in which event the Company shall issue
to the Holder a number of shares of Common Stock of the Company computed using the following
formula:




     X = Y(A-B)/A



     where X = the number of shares issued to the Holder;



Y = the number of shares purchasable (or portion thereof) under
this Warrant that are being exercised at the date of the calculation;



A = the current market price of the common stock of the Company
at the date of the calculation; and



B = the Exercise Price on the date of the calculation



          (d) No fractional shares of Common Stock are to be issued upon the exercise of this Warrant,
but rather the number of shares of Common Stock issued shall be rounded up or down to the nearest
whole number.




     Section 3. Covenants as to Common Stock. The Company hereby covenants and agrees as
follows:



          (a) This Warrant is, and any Warrants issued in substitution for or in replacement of this
Warrant upon issuance will be, duly authorized, executed and delivered.




          (b) All Warrant Shares upon issuance will be validly issued, fully paid and nonassessable and
free from all liens and charges with respect to the issue thereof.




          (c) As long as this Warrant may be exercised, the Company will have authorized and reserved at
least the number of shares of Common Stock needed to provide for the exercise of the rights then
represented by this Warrant.




     Section 4. Warrant Holder Not Deemed a Shareholder. Except as specifically provided
in Section 2(a), nothing contained in this Warrant shall be construed to (a) grant the Holder any
rights to vote or receive dividends or be deemed the holder of shares of the Company for any
purpose, (b) confer upon the Holder any of the rights of a shareholder of the Company or any right
to vote, give or withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice
of meetings, receive dividends or subscription rights, or otherwise, or (c) impose any liabilities
on the Holder to purchase any securities or as a shareholder of the Company, whether asserted by
the Company or creditors of the Company, prior to the issuance of the Warrant Shares.



3









 





     Section 5. Representations of Holder. The Holder, by the acceptance hereof,
represents that it is acquiring this Warrant and the Warrant Shares for its own account for
investment only and not with a view towards, or for resale in connection with, the public sale or
distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted
under the Securities Act. The Holder further represents, by acceptance hereof, that, as of this
date, Holder is an “accredited investor” as defined in Rule 501(a)(1) of Regulation D promulgated
under the Securities Act (an “Accredited Investor"). Upon exercise of this Warrant, the Holder
shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that
the Warrant Shares are being acquired solely for the Holder’s own account and not as a nominee for
any other party, for investment, and not with a view toward distribution or resale and that Holder
is an Accredited Investor. If Holder cannot make such representations because they would be
factually incorrect, it shall be a condition to Holder’s exercise of this Warrant that the Company
receive such other representations as the Company considers reasonably necessary to assure the
Company that the issuance of its securities upon exercise of this Warrant shall not violate any
federal or state securities laws. The Company shall not be penalized or disadvantaged by a
Holder’s inability to exercise this Warrant due to its inability to make the required
representations in connection with the exercise of this Warrant.



     Section 6. Ownership and Transfer.



          (a) The Company shall maintain at its principal executive offices (or such other office or
agency of the Company as it may designate by notice to the holder hereof), a register for this
Warrant, in which the Company shall record the name and address of the Person in whose name this
Warrant has been issued, as well as the name and address of each transferee who has acquired this
Warrant in accordance with applicable law and the terms of this Warrant. The Company may treat the
Person in whose name this Warrant is registered on the register as the owner and holder thereof for
all purposes, notwithstanding any notice to the contrary, but in all events recognizing any
transfers made in accordance with the terms of this Warrant.




          (b) This Warrant may only be offered, sold, transferred or assigned in compliance with the
Securities Act and applicable state securities laws.




          (c) Subject to the terms of this Section 6, upon surrender of this Warrant to the Company at
its principal office or at the office of its transfer agent, if any, with the Assignment Form
annexed hereto as Exhibit B duly executed and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of the assignee
evidencing the portion of the Warrant certificate so transferred shall be issued to the transferee
and a new Warrant certificate evidencing the remaining portion of the Warrant certificate not so
transferred, if any, shall be issued to the transferring Holder. The delivery of the new Warrant
certificate by the Company to the transferee thereof shall be deemed to constitute acceptance by
such transferee of all of the rights and obligations of a holder of a Warrant certificate. Subject
to the terms of this Section 6, this Warrant may be divided or combined with other warrants which
carry the same rights upon presentation hereof at the principal office of the Company together with
a written notice specifying the names and denominations in which new Warrants are to be issued and
signed by the Warrant Holder hereof.




4









 








     Section 7. Adjustment of Exercise Price and Number of Shares. The Exercise Price and
the number of Warrant Shares shall be adjusted from time to time as follows:



          (a) Stock Splits. If the Company subdivides (by any stock split, recapitalization or
otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to the subdivision will be proportionately reduced and the number
of Warrant Shares will be proportionately increased. If the Company combines (by combination,
reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to the combination will be proportionately
increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under
this Section shall become effective at the close of business on the date the subdivision or
combination becomes effective.




          (b) Stock Dividends. If the Company declares a dividend or any other distribution
upon the Common Stock that is payable in shares of Common Stock or securities convertible into
shares of Common Stock, the number of Warrant Shares will be proportionately increased and the
Exercise Price in effect immediately prior to the declaration of the dividend or distribution will
be reduced to the quotient obtained by dividing (i) the number of shares of Common Stock
outstanding immediately prior to the declaration multiplied by the then effective Exercise Price by
(ii) the total number of shares of Common Stock outstanding immediately after the declaration.




          (c) Adjustment for Property Dividends. If the Company declares a dividend or any
other distribution upon the Common Stock that is payable in any of its assets (including cash) or
debt securities or any rights, options or warrants to purchase debt securities, assets or other
securities of the Company (other than Common Stock and other than any dividend or distribution upon
a merger or consolidation or sale to which Section 8 applies) (a “Property Dividend”), then and in
each such event the Exercise Price for this Warrant in effect immediately prior to the close of
business on the date for the determination of the holders of Common Stock entitled to receive such
dividend or distribution shall be decreased by the fair market value (as determined in good faith
by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by
a Board Resolution filed with the Warrant Agent) of such Property Dividend so distributed for each
share of Common Stock. 




     Any adjustment under this Section 7(c) shall, become effective immediately prior to the
opening of business on the day after the date for the determination of the holders of Common Stock
entitled to receive Property Dividend. If the Board of Directors determines the fair market value
of any Property Dividend for purposes of this Section 7(c) by reference to the actual or when
issued trading market for any securities comprising such Property Dividend, it must in doing so
consider the prices in such market over the same period used in computing the Current Market Price
per share of Common Stock.



     For purposes of clarity, if a declared Property Dividend would have reduced the Exercise Price
to an amount below $0, the Exercise Price will be reduced to $0 and any remaining fair market value
that would have resulted in a reduction of the Exercise Price below $0 shall be reflected in an
increase of the number of shares issuable upon exercise of this Warrant pursuant to Section 7(d)
hereto.



5









 





     “Current Market Price” means on any date:





          (i) if the reference is to the per share price of Common Stock on any date herein
specified and if on such date the Common Stock is listed or admitted to trading on any
national securities exchange or otherwise traded in the over-the-counter market in the
United States for the purpose of any computation under this Warrant, the average of the
Quoted Prices for the five consecutive Trading Days selected by the Company commencing not
more than 20 Trading Days before, and ending not later than, the earlier of (x) the date in
question and (y) in the case of any computation under Section 7(c), the day before the “ex”
date for the issuance or distribution requiring such computation; provided, however, that if
the “ex” date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Exercise Price pursuant this Section 7(c)
occurs on or after the 20th Trading Day prior to the day in question and prior to the “ex”
date for the issuance or distribution requiring such computation, the Quoted Price for each
Trading Day prior to the “ex” date for such other event shall be adjusted by multiplying
such Quoted Price by the same fraction by which the Exercise Price is so required (or would
have been required) to be adjusted pursuant to this Section 7(c), as a result of such other
event.




          (ii) if the reference is to the per share price of Common Stock on any date herein
specified and if on such date the Common Stock is not listed or admitted to trading on any
national securities exchange or otherwise traded in the over-the-counter market in the
United States, the amount which a willing buyer would pay a willing seller in an arm’s
length transaction on such date (neither being under any compulsion to buy or sell) for one
share of the Common Stock as determined as of such date (x) for the purposes of any
computation under this Agreement (except under Section 7(c)), by an Independent Financial
Expert as set forth in value report thereof using one or more valuation methods that such
Independent Financial Expert, in its best professional judgment, determines to be most
appropriate or (y) for the purposes of any computation under Section 7(c), by the Treasurer
or Chief Financial Officer of the Company in good faith, whose determination shall be
conclusive and evidenced by a certificate of such officer delivered to the Warrant Agent.




“ex date” means the first date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Quoted Price was obtained without the
right to receive such issuance or distribution.




“Independent Financial Expert” means any broker or dealer registered as such under the
Exchange Act that conducts an investment banking business of nationally recognized standing
selected by the Company that either (i) is reasonably acceptable to the Holder of this
Warrant or (ii) is a firm (x) which does not (and whose directors, officers, employees and
affiliates, to the knowledge of the Company, do not) have a material direct or indirect
financial interest in the Company (other than by virtue of compensation paid for advice or
opinions referred to in the exception to clause (z)), as determined by the Board of
Directors of the Company in its reasonable good faith judgment, (y) which has not been,
within the last two years, and, at the time it is called upon to give independent financial
advice to the Company, is not (and none of whose directors, officers, employees or



6









 






affiliates, to the knowledge of the Company, is) a promoter, director or officer of the
Company or an underwriter with respect to any of the securities of the Company and (z) which
does not provide any advice or opinions to the Company except as an independent financial
expert in connection with this Agreement.




“Quoted Price” means, on any Trading Day, with respect to any security, the last
reported sales price regular way or, in case no such reported sale takes place on such
Trading Day, the average of the reported closing bid and asked prices regular way, in either
case on the principal national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices in the over-the-counter market in
the United States as furnished by any Financial Industry Regulatory Authority member firm
that shall be selected from time to time by the Company for that purpose.




“Trading Day” means each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day
on which securities are not traded on the applicable securities exchange or in the
applicable securities market.



          (d) Adjustment for Property Dividend In Special Circumstances. In the event that the
Exercise Price is or has been reduced to $0 or a price that rounds to $0 due to adjustments to the
Exercise Price pursuant to Section 7(c) and the Company declares a dividend or any other
distribution upon the Common Stock that is a Property Dividend, this Section 7(d) shall apply and
the number of shares of Common Stock issuable upon exercise of the Warrant shall be adjusted in
accordance with the formula:




	 	 	 	 	 	 	 
	 

	 	N’    =     N  x
	 	     M     
	 	 
	 

	 	 	M - F	 	 






     where:





     N’ = the adjusted number of shares of Common Stock issuable upon exercise of this
Warrant.




     N = the current number of shares of Common Stock issuable upon exercise of this
Warrant.




     M = the Closing Price per share of Common Stock on the Business Day immediately
preceding the ex date for such distribution.




F = the fair market value on the ex date for such distribution of the assets,
securities, rights or warrants distributable to one share of Common Stock after taking
into account, in the case of any rights, options or warrants, the consideration
required to be paid upon exercise thereof. The board of directors of the Company shall
reasonably determine the fair market value in good faith.



          The adjustment shall be made successively whenever any such distribution is made and shall
become effective immediately after the record date for the determination of stockholders entitled
to receive such distribution.





     This subsection (d) does not apply to regular quarterly cash dividends. If any
adjustment is made pursuant to this subsection (d) as a result of the issuance of rights,



7









 






options or warrants and at the end of the period during which any such rights, options
or warrants are exercisable, not all such rights, options or warrants shall have been
exercised, this Warrant shall be immediately readjusted as if “F” in the above formula was
the fair market value on the ex date for such distribution of the indebtedness or assets
actually distributed upon exercise of such rights, options or warrants divided by the number
of shares of Common Stock outstanding on the ex-dividend date for such distribution.
Notwithstanding anything to the contrary contained in this subsection (d), if “M-F” in the
above formula is less than $1.00, the Company may elect to, and if “M-F” or is a negative
number, the Company shall, in lieu of the adjustment otherwise required by this subsection
(d), distribute to the holder of this Warrant, upon exercise thereof, the evidences of
indebtedness, assets, rights, options or warrants (or the proceeds thereof) which would have
been distributed to such holder had this Warrant been exercised immediately prior to the
record date for such distribution.



          As used in this subsection “Closing Price” on any date of determination means (i) the closing
sale price for the regular trading session (without considering after hours or other trading
outside regular trading session hours) of the Common Stock (regular way) as reported in the
composite transactions for the principal United States securities exchange on which the Common
Stock is listed, (ii) if the Common Stock is not so reported, the last quoted bid price for the
Common Stock in the over-the-counter market as reported by the OTC Bulletin Board, the National
Quotation Bureau or similar organization, or (iii) if the Common Stock is not so quoted, the
average of the mid-point of the last bid and ask prices for the Common Stock from at least three
nationally recognized investment banking firms that the Company selects for this purpose.




          (e) Issuance of Common Stock Below Current Fair Market Value. If the Company shall
issue or sell shares of Common Stock, or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common Stock issued or sold
to someone other than the Holder, at a price per share (determined, in the case of such rights,
options, warrants or convertible or exchangeable securities, by dividing (A) the total amount
receivable by the Company in consideration (notes or debt shall not be considered consideration) of
the issuance and sale of such rights, options, warrants or convertible or exchangeable securities,
plus the total consideration, if any, payable to the Company upon exercise, conversion or exchange
thereof, by (B) the total number of shares of Common Stock covered by such rights, options,
warrants or convertible or exchangeable securities) that is lower than the then current Fair Market
Value per share of Common Stock in effect immediately prior to such sale or issuance, then the
number of Warrant Shares thereafter issuable upon the exercise of this Warrant shall be determined
by adding the number of Warrant Shares theretofore issuable upon exercise of this Warrant to the
product of (x) the Cheap Stock Issued, multiplied by (y) the Ownership Ratio. Such adjustment shall
be made successively whenever any such sale or issuance is made.




     This Section 7(e) shall not apply to (i) securities issued to employees, officers, directors,
consultants or other service providers of the Company pursuant to a plan or agreement approved by
the board of directors, including the Lighting Science Group Corporation 2005 Equity Based
Compensation Plan, (ii) securities issued to settle the Company’s directors’ fees, (iii) securities
issued pursuant to the exercise or conversion of currently issued warrants, options, restricted
stock, convertible preferred stock or other derivative instruments of the Company, (iv) securities



8









 




issued as a dividend on preferred stock of the Company, and (v) securities issued pursuant to an
acquisition of shares or assets of a target company at a value not less than the fair market value
as determined by an independent investment banking firm.





“Cheap Stock Issued” shall be the number of additional shares of Common Stock issued or
offered by the Company for subscription or purchase as described above minus the number of
 shares of Common Stock that the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at the then current Fair Market Value per share of
Common Stock.




“Ownership Ratio” shall be a fraction, the numerator of which shall be the number of Warrant
Shares prior to such time issuable upon exercise of this Warrant, and the denominator of
which shall be the number of shares of Common Stock then outstanding (on a fully diluted
basis) on the date of issuance or sale of such shares of Common Stock or such rights,
options, warrants or convertible or exchangeable securities. For purposes of such
adjustments, the shares of Common Stock which the holder of any such rights, options,
warrants or convertible or exchangeable securities shall be entitled to subscribe for or
purchase shall be deemed to be issued and outstanding as of the date of the sale and
issuance of the rights, warrants or convertible or exchangeable securities.




“Fair Market Value” shall be equal to a discount of 10% to the average VWAP of the Common
Stock for the thirty days preceding the issuance of such shares of Common Stock, or rights,
options, warrants or convertible or exchangeable securities.




“VWAP” means, for any date, the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted for trading
as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to
4:02 p.m. (New York City time); (b) if the OTC Bulletin Board is not a Trading Market, the
volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on
the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink
Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the Common Stock so
reported; or (d) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the holder of this Warrant
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by
the Company.




“Trading Market” means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the American Stock Exchange, The
Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market, the New
York Stock Exchange or the OTC Bulletin Board.



9









 





     Section 8. Purchase Rights; Reorganization, Reclassification, Consolidation, Merger or
Sale.



          (a) Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all
or substantially all of the Company’s assets to another Person or other transaction in each case
that is effected in such a way that holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange
for Common Stock is referred to herein as an “Organic Change.” Upon the consummation of any (i)
sale of all or substantially all of the Company’s assets to an acquiring Person or (ii) other
Organic Change following which the Company is not a surviving entity, the Company will secure from
the Person purchasing the assets or the successor resulting from the Organic Change (in each case,
the “Acquiring Entity”) a written agreement to deliver to Holder in exchange for this Warrant, a
security of the Acquiring Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant and reasonably satisfactory to the Holder. Prior to the consummation
of any other Organic Change, the Company shall make appropriate provision to insure that Holder
will thereafter have the right to acquire and receive in lieu of the shares of Common Stock
immediately theretofore acquirable and receivable upon the exercise of this Warrant, such shares of
stock, securities or assets that would have been issued or payable in the Organic Change with
respect to or in exchange for the number of Warrant Shares that would have been acquirable as of
the date of the Organic Change.




     Section 9. Registration Rights. Pegasus Partners IV, L.P. shall have the registration
rights as set forth in Exhibit C hereto (the “Registration Rights Agreement”) with respect
to the Warrant Shares, which Registration Rights Agreement shall be dated no later than the
Issuance Date as the same may be amended, modified and/or supplemented from time to time.



     Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company shall promptly, on receipt of an indemnification
undertaking reasonably satisfactory to the Company (or, in the case of a mutilated Warrant, the
Warrant), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen,
mutilated or destroyed.



     Section 11. Notice. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Warrant must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
fax transmittal (provided confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the party to receive the
same. The addresses and fax numbers for communications shall be:



10









 




If to the Company:



Lighting Science Group Corporation

2100 McKinney Ave

Suite 1555

Dallas, TX 75201

Tel: 214-382-3630

Fax: 214-382-3631

Attention: Stephen Hamilton



With a copy to:



Haynes and Boone, LLP

901 Main Street, Suite 3100

Dallas, TX 75202-3789

Fax: (214) 200-0577

Attention: Greg R. Samuel, Esq.



If to the Holder, at the address and fax number set forth on Appendix I to this Warrant. Each
party shall provide five days’ prior written notice to the other party of any change in address or
fax number. Written confirmation of receipt (A) given by the recipient of any notice, consent,
waiver or other communication, (B) mechanically or electronically generated by the sender’s fax
machine containing the time, date, recipient fax number and an image of the first page of the
transmission, or (C) provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of receipt.




     Section 12. Amendment and Waiver. Except as otherwise provided herein, this Warrant
may not be modified or amended except pursuant to an instrument in writing signed by the Company
and the Holder. No provision hereunder may be waived other than in a written instrument executed
by the waiving party.



     Section 13.  Governing Law. This Warrant shall be construed and enforced in
accordance with, and all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State of Texas, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of
Texas or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Texas.



     Section 14. Restrictive Legends. At all times this Warrant and until such time as a
registration statement has been declared effective by the U.S. Securities and Exchange Commission
or the Warrant Shares may be sold pursuant to Rule 144 under the Securities Act without any
restriction as to the number of securities that can then be immediately sold, certificates for any
Warrant Shares will, in addition to any legend required under applicable securities law, bear a
restrictive legend substantially in the form first set forth above.



11









 





     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of                     ,
2008.



	 	 	 	 	 
	 	LIGHTING SCIENCE GROUP CORPORATION

 	 
	 	By:  	/s/ Stephen Hamilton
	 
	 	 	Name:  	Stephen A. Hamilton 	 
	 	 	Title:  	Vice President-Finance 	 
	 




12









 





Exhibit A To Warrant




LIGHTING SCIENCE GROUP CORPORATION




EXERCISE NOTICE




TO BE EXECUTED BY THE REGISTERED HOLDER

TO EXERCISE THIS WARRANT




     The undersigned holder hereby exercises the right to purchase                      shares of
Common Stock (“Warrant Shares”) of Lighting Science Group Corporation, a Delaware corporation (the
“Company”), evidenced by the attached Warrant (the “Warrant”). Capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth in the Warrant.



     1. Payment of Exercise Price (check applicable box).




[ ] Payment in the sum of $                     [is enclosed] [has been wire transferred
to the Company at the following account:                     ] in accordance with the
terms of the Warrant.



     2. Delivery of Warrant Shares. The Company shall deliver the Warrant Shares in the
name of the undersigned or in such other name as is specified below in accordance with the terms of
the Warrant at the following address:




                                                            




                                                            




                                                            



     3. Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.



Date:                           __, ______




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






13









 





ACKNOWLEDGMENT




     The Company hereby acknowledges this Exercise Notice and hereby directs                      to issue the
above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions
dated ___, 200___from the Company and acknowledged and agreed to by                     .



	 	 	 	 	 
	 	LIGHTING SCIENCE GROUP CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




14









 





Exhibit B To Warrant




ASSIGNMENT




To be Executed by the Registered Holder in Order to Assign Warrants




     For Value Received,                                                             hereby sells, assigns
and transfers
unto



 




(PLEASE TYPE OR PRINT NAME AND ADDRESS)




 





 





 




(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)




	 	 	 
	and be delivered to
	 	 
	 

	 	 




(PLEASE PRINT OR TYPE NAME AND ADDRESS)



                                                            of the Warrants represented by this Warrant Certificate and
does hereby irrevocably constitute and appoint                                                              Attorney to transfer
this Warrant Certificate on the books of the Company, with full power of substitution in the
premises.




	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(SIGNATURE)





THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND TO THE NAME WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND
MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM
PURSUANT TO S.E.C. RULE 17 Ad — 15).




15









 





Exhibit C To Warrant




[Registration Rights Agreement attached]




16









 





Appendix I




Holder’s Contact Information




Name:




Address:




City, State, Zip:




Telephone Number:




Facsimile Number:




E-mail Address:





17