CONVERTIBLE NOTE

Exhibit 10.1

CONVERTIBLE NOTE

     FOR VALUE RECEIVED, the undersigned, LIGHTING SCIENCE GROUP CORPORATION , a Delaware corporation (“ Borrower ”), promises to pay to the order of PEGASUS PARTNERS IV, L.P. , a Delaware limited partnership (“ Lender ”), the sum of THIRTY ONE MILLION SIX HUNDRED FORTY NINE THOUSAND NINE HUNDRED NINETY NINE DOLLARS AND THIRTY NINE CENTS ($31,649,999.39) or so much thereof as may be outstanding hereunder, together with interest.

          1. Interest Rate . Interest shall accrue on the unpaid principal balance of this Note from the date hereof at 14% per annum.

          2. Default Rate . All past due principal of and accrued interest on this Note shall bear interest from maturity (stated, by acceleration, or otherwise) until paid at the rate of 18% per annum.

          3. Advances .

     (a) On the date hereof, Lender will loan Borrower $13,150,761.11 (the “ First Term Advance ”).

     (b) On or before the tenth (10 ^th ) Business Day after the date hereof (such date to be determined by Lender in its reasonable discretion), Lender will loan Borrower $18,499,238.28 (the “ Second Term Advance ” and, together with the First Term Advance, the “ Term Advances ”). The Term Advances may not be prepaid.

          4. Use of Proceeds .

     (a) The proceeds of the First Term Advance will be used to: (i) pay in full that certain Promissory Note dated December 18, 2008, executed by Borrower and made payable to the order of Lender in the original principal amount of $1,950,000.00, (ii) pay in full that certain Promissory Note dated February 13, 2009, executed by Borrower and made payable to the order of Lender in the original principal amount of $7,000,000.00, (iii) pay in full that certain Promissory Note dated April 17, 2009, executed by Borrower and made payable to the order of Lender in the original principal amount of $2,000,000.00, (iv) pay in full that certain Promissory Note dated May 11, 2009, executed by Borrower and made payable to the order of Lender in the original principal amount of $500,000.00, and (v) pay $1,500,000.00 of the principal amount outstanding under that certain Loan Authorization Agreement (the “ Revolver ”), dated July 25, 2008, between Borrower and Bank of Montreal.

     (b) The proceeds of the Second Term Advance will be used to pay principal amounts outstanding under the Revolver.

          5. Repayments . The principal and interest of this Note shall be due and payable on the Maturity Date. As used herein, “ Maturity Date ” shall mean the earlier of (a) July 31, 2009 or (b) the Closing Date (as hereinafter defined); provided , that if the registration statement for the Offering (as hereinafter defined) of Borrower (the “ Registration Statement ”) is declared effective by the Securities and Exchange Commission (the “ SEC ”) prior to July 31, 2009, the Maturity Date shall be the Closing

Date (as hereinafter defined); provided further , that in no event shall the Maturity Date be later than September 3, 2009.

          6. Events of Default and Remedies . The entire unpaid principal balance of and all accrued interest on this Note shall immediately become due and payable, without notice or demand which are hereby waived, upon the occurrence of any one or more of the following events of default (individually or collectively, herein called a “ Default ”):

     (a) The failure or refusal of Borrower to pay all or any part of the principal of or accrued interest on this Note as and when same becomes due and payable in accordance with the terms hereof; or

     (b) Borrower shall: (i) become insolvent within the meaning of the Bankruptcy Code of the United States, as amended, (ii) admit in writing its inability to pay or otherwise fail to pay its or his or her debts generally as they become due, (iii) voluntarily seek consent to, or acquiesce in the benefit or benefits of any Debtor Relief Law, or (iv) be made the subject of any proceeding provided for by any Debtor Relief Law that could suspend or otherwise affect any of the rights of the holder hereof. As used herein, “ Debtor Relief Laws ” means the Bankruptcy Code of the United States, as amended and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws from time to time in effect affecting the rights of creditors generally; or

     (c) The nonpayment when due of any material indebtedness owed by Borrower, or the occurrence of any event under any document or instrument evidencing, securing, or executed in connection with any such indebtedness which could give the holder thereof the right to declare such indebtedness or any part thereof due prior to its scheduled maturity; or

     (d) The discovery by the holder hereof that any statement, representation, or warranty made by Borrower in any writing, document, or instrument ever delivered to the holder hereof in connection herewith was at the time made false, misleading, or erroneous in any material respect.

          Upon the occurrence of a Default, the holder of this Note may: (a) offset against this Note any sum or sums owed by the holder hereof to Borrower and (b) proceed to protect and enforce its rights either by suit in equity and/or by action at law, or by other appropriate proceedings, whether for the specific performance of any covenant or agreement contained in this Note or any document or instrument executed and delivered by Borrower in connection with this Note or in aid of the exercise of any power or right granted by this Note or any document or instrument executed and delivered by Borrower in connection with this Note or to enforce any other legal or equitable right of the holder of this Note.

          7. Cumulative Rights . No delay on the part of the holder of this Note in the exercise of any power or right under this Note, or under any document or instrument executed in connection herewith, shall operate as a waiver thereof, nor shall a single or partial exercise of any other power or right. Enforcement by the holder of this Note of any security for the payment hereof shall not constitute an election by it of remedies so as to preclude the exercise of any other remedy available to it.

          8. Waiver . Borrower, and each surety, endorser, guarantor, and other party ever liable for the payment of any sum of money payable on this Note jointly and severally waive demand, presentment, protest, notice of nonpayment, notice of intention to accelerate, notice of acceleration, notice of protest, and any and all lack of diligence or delay in collection or the filing of suit hereon which may occur, and agree that their liability on this Note shall not be affected by any renewal or

extension in the time of payment hereof, by any indulgences, or by any release or change in any security for the payment of this Note, and hereby consent to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases, or changes.

          9. Attorneys’ Fees and Costs . In the event that a Default shall occur, and in the event that thereafter this Note is placed in the hands of an attorney for collection, or in the event this Note is collected in whole or in part through legal proceedings of any nature, then and in any such case Borrower promises to pay all costs of collection, including, but not limited to, reasonable attorneys’ fees incurred by the holder hereof on account of such collection, whether or not suit is filed.

          10. Notices . Any notice or demand given hereunder by the holder shall be deemed to have been given and received (a) when actually received by Borrower, if delivered in person or by courier or messenger, or (b) two (2) Business Days (hereinafter defined) after a letter containing such notice, certified or registered, with postage prepaid, addressed to Borrower, is deposited in the United States Mail. The address of Borrower is 120 Hancock Lane, Westampton, New Jersey 08060 or such other address as Borrower shall advise the holder hereof by certified or registered letter.

          11. Governing Law . The laws of New York shall govern the construction, validity, enforcement and interpretation