Exhibit 10.6
LIMITED LIABILITY COMPANY
EQUITY INTEREST PLEDGE AND SECURITY AGREEMENT
THIS LIMITED LIABILITY COMPANY
EQUITY INTEREST PLEDGE AND SECURITY AGREEMENT (the
“Agreement”) is made and entered into effective as of
the 18 day of June, 2009, by and between Nexxus Lighting, Inc., a
Delaware corporation (the “Pledgor”) and Jay Weil, as
collateral agent (“Collateral Agent”) for the secured
parties (“the Secured Parties”) pursuant to that
certain Collateral Agent Agreement, dated of even date herewith,
among Pledgor, Collateral Agent and the Secured Parties (the
“Collateral Agent Agreement”).
BACKGROUND
A. Pursuant to that certain Note and
Warrant Purchase Agreement, dated of even date herewith, between
the Company and the purchasers set forth on Schedule I thereto (the
“Purchase Agreement”), the Pledgor is selling, and the
Secured Parties are purchasing, Secured Promissory Notes Due
January 2011 in the aggregate principal amount not to exceed
$5,000,000 (the “Notes”).
B. In order to secure the timely
payment and performance of the Notes, the Pledgor desires to grant
the Secured Parties a first-in-priority, perfected and continuing
security interest in 100% of the equity interests (the
“Interests”) of Advanced Lighting Systems, LLC, a
Delaware limited liability company and a wholly-owned subsidiary of
the Pledgor (“ALS”).
C. The continuing security interest
in the Interests shall be evidenced by this Agreement. Capitalized
terms used, but not defined, in this Agreement have the meanings
set forth in the Purchase Agreement.
NOW, THEREFORE, for and in
consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
AGREEMENT
1. Recitals and Defined Terms
. The parties hereto acknowledge that the aforementioned recitals
are true and correct and agree that such recitals, together with
the definitions set forth therein and in the preamble to this
Agreement, are hereby incorporated into this Agreement by this
reference.
2. Additional Interests . All
references to the Interests shall be appropriately adjusted to
reflect any split, distribution, recapitalization or other similar
arrangement affecting the Interests after the date of this
Agreement. In the event that the Pledgor receives, or becomes
entitled to, any property (whether real or personal, tangible or
intangible) in connection with or related to the Interests in any
way, then any such property shall be considered Interests under
this Agreement.
3. Creation of Security
Interest . Pledgor hereby affirms, acknowledges, ratifies,
grants and assigns in favor of the Secured Parties a first, prior
and sole lien and security interest (the “Security
Interest”) in the Interests and in all accessions,
substitutions, replacements and proceeds thereof, including without
limitation, whether by law, merger or exchange, to
secure
the Obligations (as defined below). Pledgor
hereby warrants and represents to the Secured Parties that the
Interests are owned by the Pledgor free and clear of any liens,
charges or encumbrances other than those imposed by securities laws
and this Agreement. The equity interest of the Pledgor comprising
the Interests is 100% of the entire equity ownership of ALS, which
is owned of record and beneficially by Pledgor. Such ownership
interest is uncertificated. Upon execution of this Agreement,
Pledgor shall deliver a copy of ALS’ operating agreement to
the Collateral Agent.
For purposes of this Agreement the
term “Obligations” shall mean: (a) all
indebtedness, liabilities and obligations of Pledgor to the Secured
Parties under the Notes, and any note or notes hereafter issued in
substitution or replacement thereof, (b) all obligations of
the Pledgor under this Agreement and (c) in the foregoing
cases whether due or to become due, and whether now existing or
hereafter arising or incurred.
4. Delivery . Simultaneously
with execution hereof, Pledgor shall execute and deliver to the
Collateral Agent a UCC-1 Financing Statement(s) for filing in the
State of Delaware evidencing the first security interest granted by
Pledgor to the Secured Parties in the Interests. The Pledgor agrees
that, at any time and from time to time, Pledgor will promptly
execute and deliver all further instruments and documents, and take
all further action, that may be reasonably necessary or desirable,
or that the Collateral Agent may reasonably request, in order to
perfect and protect any security interest granted hereby or to
enable the Secured Parties or the Collateral Agent to exercise and
enforce their rights and remedies hereunder with respect to the
Interest.
5. Proxy . Pledgor hereby
irrevocably constitutes and appoints the Collateral Agent, whether
or not the Interests have been transferred into the name of the
Secured Parties, as the Pledgor’s proxy, with full power to
(a) attend meetings concerning the Interests held after the
date of this Agreement and, to vote the Interests at those meetings
in such manner as the Collateral Agent shall, in his sole and
absolute discretion, deem appropriate, (b) consent, in the
sole and absolute discretion of the Collateral Agent, to any action
by or concerning Pledgor for which consent of the members of ALS is
or may be necessary or appropriate, and (c) do all things that
Pledgor could do as a securities holder of ALS, giving and granting
unto the Collateral Agent full power of substitution and
revocation. Notwithstanding the provisions contained in the
preceding sentence (hereinafter referred to as the “Proxy
Rights”), neither the Collateral Agent nor the Secured
Parties, or any of them, shall have the right to perform, exercise,
take or assert any of the Proxy Rights unless and until there shall
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