Exhibit 10.7
COLLATERAL AGENT
AGREEMENT
dated as of June 18,
2009
by and among
Nexxus Lighting, Inc.
Jay Weil, as Collateral
Agent
and
the Noteholders from time to time
hereunder
COLLATERAL AGENT
AGREEMENT
This COLLATERAL AGENT AGREEMENT,
dated as of June 18, 2009 (this “ Agreement
”), is entered into by and among Nexxus Lighting, Inc., a
Delaware corporation (the “ Company ”), Jay
Weil, as collateral agent (the “ Collateral Agent
”) and the undersigned holders of the Company’s Secured
Promissory Notes Due January 2011 (the “ Transaction
Notes ” or the “ Notes ”) (each such
holder individually, a “ Noteholder ” and all
such holders together with permitted assignees thereof,
collectively, the “ Noteholders ”).
WHEREAS:
A. Capitalized terms used, but not
defined, in this Agreement have the meanings set forth in the Note
and Warrant Purchase Agreement, dated as of June 18, 2009
between the Company and the original Noteholders (the “
Securities Purchase Agreement ”);
B. The Company wishes to sell the
Transaction Notes to the Noteholders and the Noteholders wish to
purchase such Transaction Notes from the Company on the terms and
conditions set forth in the Securities Purchase Agreement and the
other applicable Transaction Documents;
C. Each Transaction Note will be
secured by a perfected security interest in the collateral
described in the Security Agreement; and
D. Each of the Noteholders desires
to appoint, and the Company desires to consent to the appointment
of, the Collateral Agent to act in such capacity for the benefit of
the Noteholders;
NOW, THEREFORE, in consideration of
the premises and the mutual covenants contained herein, and other
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1. APPOINTMENT
(a) Each Noteholder hereby
(i) appoints Jay Weil as the Collateral Agent hereunder and
(ii) authorizes the Collateral Agent in such capacity to take
any and all such actions on its behalf with respect to the
Collateral and the obligations of the Company as set out in the
Transaction Documents.
(b) The Collateral Agent shall not
have, by reason of this Agreement, or any Transaction Document, a
fiduciary relationship in respect of any Noteholder.
(c) The Collateral Agent shall not
have any duties or responsibilities, except those expressly set
forth herein and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this
Agreement or the Transaction Documents or otherwise exist against
the Collateral Agent.
(d) The duties of the Collateral
Agent shall be mechanical and administrative in nature.
(e) As to (i) any matters not
expressly provided for by this Agreement, and the Transaction
Documents (including, without limitation, enforcement of any
security interests) and (ii) any amendments, consents or
waivers of any Transaction Document, the Collateral Agent shall not
be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the
instructions of the Required Noteholders. For purposes of this
Agreement, the term “Required Noteholders” means at any
time the holders of Notes having an aggregate outstanding principal
amount of 35.1% or more of all Notes issued pursuant to the
Securities Purchase Agreement which are then outstanding. The
instructions given by Required Noteholders shall be binding upon
all Noteholders.
(f) Nothing in this Agreement or any
Transaction Document, express or implied, is intended to or shall
be construed to impose upon the Collateral Agent any obligations in
respect of this Agreement or any Transaction Document, except as
expressly set forth herein or in the Transaction Notes and the
Security Documents. Nothing in this Agreement or any Transaction
Document, express or implied, is intended to or shall be construed
to impose upon the Collateral Agent any obligations in respect of
the Warrants or Additional Warrants.
2. COLLATERAL
(a) Each Noteholder hereby
acknowledges and agrees that if the Collateral Agent possesses any
Collateral (as such term is defined in the Security Agreement), the
Collateral shall be held by the Collateral Agent for the benefit of
the Noteholders for application to the Obligations in accordance
with this Agreement and the Security Agreement and related security
documents (collectively, the “ Security Documents
”).
(b) Any Collateral or proceeds
thereof received by a Noteholder in connection with the exercise of
any right or remedy (including set-off) by the Collateral Agent or
any such Person relating to the Collateral, other than in
accordance with the terms of this Agreement, shall be segregated
and held in trust and forthwith paid over to the Collateral Agent
for the benefit of all Noteholders in the same form as
received.
(c) The Collateral Agent and the
Company hereby agree that, at any time and from time to time, at
his or its sole cost and expense, he or it shall promptly execute
and deliver all further agreements, instruments, documents and
certificates and take all further action that may be necessary in
order to fully effect the purposes of this Agreement and to enable
the Collateral Agent to exercise and enforce his rights and
remedies under the Notes and Security Documents with respect to the
Collateral or any part thereof.
3. REMEDIES, RELEASES
(a) The Collateral Agent, at the
direction of the Required Noteholders, shall have the right to
enforce rights, exercise remedies (including set-off) and make
determinations regarding the release, disposition, or restrictions
with respect to the
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Collateral. In exercising rights and remedies
with respect to the Collateral, the Collateral Agent, at the
direction of the Required Noteholders, may enforce the provisions
of the Notes and Security Documents and exercise remedies
thereunder, all in such order and in such manner as it may
determine in the exercise of his sole discretion. Such exercise and
enforcement shall include the rights of the Collateral Agent to
sell or otherwise dispose of Collateral upon foreclosure, to incur
reasonable expenses in connection with such sale or disposition,
and to exercise all the rights and remedies of a secured creditor
under the Notes and Security Documents, bankruptcy or similar laws
providing for the relief of debtors or affecting the rights of
creditors generally, and the laws relating to the perfection or
priority of a secured interest of any applicable jurisdiction;
provided , that unless and until the Collateral Agent
shall have received such direction, the Collateral Agent may (but
shall not be obligated to) take such action, or refrain from taking
such action, in order to preserve or protect liens on and the value
of the Collateral, with respect to any Event of Default (as defined
in the Security Agreement) as it shall deem advisable in the best
interests of the Noteholders.
(b) If (i) in connection with
the exercise of any of the Noteholders’ remedies under this
Agreement (subject to Section 3(a) hereof), the
Collateral Agent disposes of any part of the Collateral or
(ii) in connection with any conveyance, sale, lease, transfer
or other disposition permitted under the Notes and Security
Documents (such action, a “ Permitted Disposition
”), any part of the Collateral is conveyed, sold, leased,
transferred or otherwise disposed of, then in either such
case (i) or (ii), the liens, if any, of the Collateral Agent
for the benefit of any of the Noteholders on such Collateral shall
be automatically, unconditionally and simultaneously released. The
Collateral Agent (on behalf of the Noteholders) shall promptly
execute and deliver such termination statements, releases and other
documents reasonably required or requested to effectively confirm
such release. The Noteholders hereby (x) authorize and direct
the Collateral Agent to execute such documents and take such other
actions as are necessary to carry out the foregoing and
(y) expressly agree that no additional consent from
Noteholders is required in connection with any Permitted
Disposition, so long as the Company certifies in an officer’s
certificate that such action is permitted under the Notes and
Security Documents.
4. CERTAIN ACTIONS
(a) Notices from the Noteholders
to the Collateral Agent . Each of the Noteholders hereby agrees
to give the Collateral Agent and each other Noteholder prompt
written notice of the occurrence of (i) any Event of Default
under such Person’s Transaction Note or any Security
Documents of which such Person has written notice and
(ii) acceleration of the maturity of the Company’s
obligations under such Person’s Transaction Note or the
Security Documents wherein such obligations have been declared to
be or have automatically become due and payable earlier than the
scheduled maturity thereof or termination date thereunder (or
similar remedial actions including demands for cash) have been
taken and setting forth the aggregate amount of obligations that
have been so accelerated, in each case as soon as practicable after
the occurrence thereof (and, in any event, within five
(5) Business Days after the occurrence thereof);
provided , however , that the failure to provide such
notice shall not limit or impair the rights of the Noteholders or
the obligations of the Company hereunder or under the Transaction
Notes or any Security Documents.
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(b) Notices from the Collateral
Agent to the Noteholders . The Collateral Agent hereby agrees
to give each Noteholder written notice of an Event of Default
promptly following his receipt of written notice thereof. The
Collateral Agent shall not be deemed to have actual knowledge or
notice of the occurrence of any Event of Default under any Note or
Security Document unless the Collateral Agent has received written
notice from an authorized officer of a Noteholder or the Company
referring to this Agreement and the applicable Note or Security
Document describing such Event of Default and stating that such
notice is a “Notice of Event of Default.”
(c) Location of Collateral .
The Company hereby agrees not to effect any change (i) in the
Company’s legal name, (ii) in the location of its chief
executive office, (iii) in the Federal Taxpayer Identification
Number or organizational identification number, if any, of any of
the Company or (iv) in the Company’s jurisdiction of
organization (in each case, including by merging with or into any
other entity, reorganizing, dissolving, liquidating, reorganizing
or organizing in any other jurisdiction), without giving the
Collateral Agent not less than thirty (30) days’ prior
written notice, or such lesser notice period agreed to by the
Collateral Agent, of its intention so to do, clearly describing
such change and providing such other information in connection
therewith as the Collateral Agent may reasonably request. The
Company further agrees to provide the Collateral Agent with
certified organizational documents reflecting any of the changes
described in this clause (c) promptly following such change;
and to provide the Collateral Agent with notice of any change in
the location of any office in which the Company maintains books or
records relating to Collateral owned by it or any office or
facility at which Collateral is located (including the
establishment of any such new office or facility).
(d) Delegation of Duties .
The Collateral Agent may execute any of his duties under this
Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of one counsel of his choice concerning all
matters pertaining to such duties. The Collateral Agent shall not
be responsible for the negligence or misconduct of any agent or
attorney-in-fact selected by it with reasonable care.
5. COORDINATION OF ACTION
(a) It is the objective of the
Noteholders to coordinate their approach to the taking of all
action under the Notes and Security Documents. In furtherance of
such objective, any Noteholder proposing to give any waiver or
consent under, or approve any amendment, modification or supplement
to, any Note or Security Document (or authorize or direct any other
person to do so), to accelerate the obligations owed to it or to
take, authorize or direct any enforcement action with respect
thereto shall comply with the terms of this Section 5 before
taking any such action.
(b) Unless otherwise expressly
provided herein, neither the Collateral Agent shall take and no
other Noteholder shall authorize or direct any of such persons to
take, any action under any Security Document which requires
direction, authorization or
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consent of the Noteholders (including the
exercise of remedies hereunder or thereunder) unless the direction,
authorization, or consent of the Required Noteholders is given with
respect to such direction, authorization or consent. No Noteholder
shall have any right, to take any action with respect to the
Collateral independently of the Collateral Agent (other than to
direct the Collateral Agent to take action in compliance with this
Agreement).
6. EXCULPATORY PROVISIONS
(a) Neither the Collateral Agent nor
any of his employees, agents, attorneys-in-fact or affiliates shall
be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this
Agreement (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from his or such person’s own
gross negligence or willful misconduct) or (ii) responsible in
any manner to any Noteholder for any recitals, statements,
representations or warranties made by the Company or any officer
thereof, contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or
received by the Collateral Agent under or in connection with this
Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or for any failure
of the Company or any other party thereto to perform its
obligations hereunder or thereunder. The Collateral Agent shall not
be under any obligation to any Noteholder to ascertain or to
inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Company or any
other person.
(b) The Collateral Agent shall have
no obligation to expend or risk his own funds or otherwise incur
any financial liability in the performance of any of his duties
hereunder.
(c) Beyond the exercise of
reasonable care in the custody thereof and as otherwise
specifically set forth herein or in the Security Documents, the
Collateral Agent shall have no duty as to any of the Collateral in
his possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of
rights against prior parties or any other rights pertaining thereto
and the Collateral Agent shall not be responsible for filing any
financing statements or continuation statements or recording any
documents or instruments with any governmental authority at any
time or times or otherwise perfecting or maintaining the perfection
of any security interest in the Collateral. The Collateral Agent
shall not be liable or responsible for any loss or diminution in
the value of any of the Collateral, by reason of the act or
omission of any carrier, forwarding agency or other agent or bailee
selected by the Collateral Agent in good faith.
(d) The Collateral Agent shall not
be responsible (i) for the existence, genuineness or value of
any of the Collateral or for the validity, perfection, priority or
enforceability of the liens on any of the Collateral, whether
impaired by operation of law or by reason of any of any action or
omission to act on his part hereunder, except to the extent such
action or omission constitutes gross negligence or willful
misconduct on the part of the Collateral Agent, (ii) for the
validity or sufficiency of the Collateral or any
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agreement or assignment contained therein,
(iii) for the validity of the title of the Company to the
Collateral, (iv) for insuring the Collateral or (v) for
the payment of taxes, charges, assessments or liens upon the
Collateral or (vi) otherwise as to the maintenance of the
Collateral.
7. A. RELIANCE BY COLLATERAL
AGENT
(a) The Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by him to be
genuine and correct and to have been signed, sent or made by the
proper person or persons and upon advice and statements of legal
counsel (including counsel to the Company), independent accountants
and other experts selected by the Collateral Agent. The Collateral
Agent shall be fully justified in failing or refusing to take any
action under this Agreement unless he shall first receive such
legal advice or the concurrence by the consent of the Required
Noteholders as he deems appropriate or he shall first be
indemnified or receive security to his satisfaction by the
Noteholders against any and all liability and expense that may be
incurred by him by reason of taking or continuing to take any such
action. The rights, privileges, protections and benefits given to
the Collateral Agent including his rights to be indemnified, are
extended to, and shall be enforceable by the Collateral Agent and
to each agent, custodian and other persons employed by the
Collateral Agent in accordance herewith to act
hereunder.
(b) If the Company seeks the consent
or approval of the Required Noteholders to the taking or refraining
from taking any action hereunder, the Company shall send notice
thereof to each Noteholder. Any such consents shall be solicited
and tabulated by the Company, or a solicitation and/or tabulation
agent engaged by the Company, and the Company shall provide the
Collateral Agent with c
