Exhibit 10.4
SECURITY AGREEMENT
THIS AGREEMENT
is made as of June 18, 2009
between NEXXUS LIGHTING, INC. , as debtor, a Delaware
corporation (“Debtor” ), and Jay Weil ,
as collateral agent ( “Collateral Agent” ) for
the secured parties ( “Secured Parties” )
pursuant to that certain Collateral Agent Agreement (the
“Collateral Agent Agreement” ) dated as of the
date hereof among Debtor, Collateral Agent and Secured
Parties.
FOR VALUE RECEIVED
, Debtor hereby represents,
warrants, covenants and agrees as follows:
1. Security
Interest .
(a) To secure its obligations under the Notes (as defined in
the Note and Warrant Purchase Agreement, dated as of June 18,
2009 between the Debtor and the Secured Parties (the
“Purchase Agreement” )), Debtor hereby grants to
Secured Parties, pari passu , a present and continuing first
priority security interest (the “Security Interest”) in
all of Debtor’s right, title and interest in, to and under
all its property (the “Collateral” ), whether
now owned or existing or hereafter acquired or arising and
wheresoever located, including, without limitation:
(i) all of Debtor’s software,
including all source code, object code and documentation, and
lexicon databases together, including all trade secrets, copyrights
and other property rights therein;
(ii) all of Debtor’s patents
and patent applications, and all continuations, divisions,
re-issues and renewals thereof, in whole or in part, together with
any patents that may be issued with respect thereto;
(iii) all of Debtor’s
trademarks, service marks and applications for trademarks and
service marks, including, but not limited to, the trademarks and
applications to register trademarks listed on Exhibit A
attached hereto and made a part hereof, all common law rights in
the trade marks, service marks and trade names subject to such
registrations, all statutory rights that may attach to any
registrations thereof and any related renewals, and all related
good will;
(iv) all of Debtor’s
copyrights and copyright applications;
(v) the right to sue for past,
present and future infringement or misappropriation of trade
secrets, copyrights, patents, trademarks and service marks, and all
rights corresponding thereto throughout the world;
(vi) all products and proceeds of
the foregoing, including the right to receive license fees,
royalties and other payments in respect thereof, the proceeds of
any infringement suits, and so forth;
(vii) all equipment (including all
machinery, tools and furniture), all inventory (including all
merchandise, raw materials, work in process, finished goods and
supplies), motor vehicles and goods (the “Tangible
Collateral” );
(viii) all accounts, accounts
receivable, rights to the payment of money, payment intangibles,
other receivables, contract rights, contracts, leases, chattel
paper, electronic chattel paper, commercial tort claims, insurance
refund claims and other insurance claims and proceeds, and general
intangibles of Debtor, including, without limitation, all tax
refund claims, goodwill, going concern value, blueprints, designs,
computer programs, software, service marks, inventions, trade
names, customer lists, product lines and research and development,
all of Debtor’s rights under all present and further
authorizations, permits, licenses and franchises heretofore or
hereafter granted to Debtor for the operation of Debtor’s
business, including, to the maximum extent permitted by law, all
rights incident to or appurtenant to such licenses and permits,
including, without limitation, the right to receive all proceeds
derived from or in connection with the sale, assignment or transfer
of such licenses and permits;
(ix) all instruments, documents of
title, letters of credit, rights to proceeds of letters of credit,
letter of credit rights, supporting obligations of every kind and
description, policies and certificates of insurance, securities,
securities entitlements, investment property, partnership
interests, membership interests in limited liability companies
(including, without limitation, all of Debtors’ right, title
and interest in and to all limited liability companies, including,
without limitation, Advanced Lighting Systems, LLC), and
partnership interests in partnerships and to any successor business
entities, and the right to receive all payments and distributions
due or to become due under all related partnership agreements,
operation agreements, and other constituent documents governing or
establishing such business entities), bank deposits, deposit
accounts, checking accounts, certificates of deposit and
cash;
(x) all accessions, additions or
improvements to, and all proceeds and products of, all of the
foregoing, including proceeds of insurance; and
(x) all books, records, documents,
computer tapes and discs relating to all of the
foregoing.
(b) All Collateral consisting of
accounts, contract rights, chattel paper, general intangibles and
other Collateral described in subparagraph (viii) above
arising from the sale, delivery or provision of goods and/or
services are sometimes hereinafter collectively called the “
Customer Receivables. ”
(c) Debtor hereby acknowledges and
agrees that the description of Collateral contained in this
Security Agreement covers, and is intended to cover, all assets of
Debtor. For avoidance of doubt, it is expressly understood and
agreed that, to the extent that the Uniform Commercial Code (
“UCC” ) is revised subsequent to the date hereof
such that the definition of any of the foregoing terms included in
the description of Collateral is changed, the parties agree that
any property which is included in such changed definitions which
would not otherwise be included in the foregoing grant on the date
hereof be included in such grant immediately upon the effective
date of such revision, it being the intention of the parties hereto
that the description of Collateral set forth herein be construed to
include the broadest possible range of property and assets and all
tangible and intangible personal property and fixtures of Debtor of
every kind and description.
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2. Collateral
Agent . The rights of
Secured Parties in the Collateral will be exercisable by Collateral
Agent as agent for Secured Parties pursuant to the Purchase
Agreement. In such capacity, from time to time and at any time,
Collateral Agent may in its sole discretion take any and all
actions, exercise any and all rights and remedies, give any and all
waivers and forbearances, and make any and all determinations and
elections that Secured Parties are entitled to exercise under this
Agreement and the Notes. Debtor will be entitled to rely solely on
the actions of Collateral Agent as binding all Secured
Parties.
3. Other
Matters .
(a) Perfection . From time to
time and at any time, Debtor will execute such financing
statements, assignments, notices of assignments, registrations of
the collateral assignment of its patents, trademarks and
copyrights, and such other filings, notices and any other documents
and do such other acts as Collateral Agent may reasonably request
for the purpose of perfecting, confirming, continuing, enforcing
and/or protecting the security interest of Secured Parties in the
Collateral. Debtor will furnish to Collateral Agent promptly upon
request such information as may be necessary to complete such
financing statements, filings and other documents. From time to
time and at any time, Collateral Agent may file any and all such
documents with the appropriate registries as necessary to perfect,
confirm, continue, enforce or protect the security interest of
Secured Parties in the Collateral. Debtor hereby appoints
Collateral Agent as its attorney in fact with the power and
authority to execute and deliver in Debtor’s name any of the
foregoing financing statements, assignments, notices of assignments
and other documents that Debtor refuses or is unable to so execute
and deliver. This power of attorney is coupled with an interest and
is irrevocable.
(b) Obligations of Collateral
Agent . In addition to those duties and powers of Collateral
Agent pursuant to the Purchase Agreement, upon payment in full of
all outstanding amounts due under the Notes, Collateral Agent will
promptly terminate all financing statements, filings and other
documents referenced in Section 3(a) hereof, and execute and
deliver to Debtor such termination statements, releases,
re-assignments and other instruments as necessary to re-vest in
Debtor full title to the Collateral and to remove all liens and
security interests of Secured Parties therein. Collateral Agent
hereby appoints Debtor as its attorney in fact with the power and
authority to execute and deliver in the name of Collateral Agent
and/or Secured Parties any of the foregoing termination statements,
releases, re-assignments and other instruments that Collateral
Agent and/or Secured Parties refuse or are unable to so execute and
deliver. This power of attorney is coupled with an interest and is
irrevocable.
(c) Rights and Remedies of
Secured Parties . The rights and remedies of Secured Parties
with respect to the security interest granted hereby are in
addition to those set forth in the Notes, and those which are now
or hereafter available to Secured Parties as a matter of law or
equity. Each right, power and remedy of Secured Parties provided
for herein or in the Notes, or now or hereafter existing at law or
in equity, will be cumulative and concurrent and will be in
addition to every right, power or remedy provided for herein and
the exercise by Secured Parties of any one or more of the rights,
powers or remedies provided for in this Agreement or the Notes, or
now or hereafter existing at law or in equity, will not preclude
the simultaneous or later exercise by any person, including Secured
Parties, of any or all other rights, powers or remedies.
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4. Use of
Collateral . Unless
an Event of Default has occurred and is continuing under any
Note:
(a) Debtor may deal in the
Collateral in the ordinary course of business, including the
payment of expenses incurred in the ordinary course of the
Debtor’s business and the repayment of any loans listed on
Schedule 4.1, but in no event may Debtor transfer or assign
(i) all or substantially all of its rights in the Collateral
to any other person (including a subsidiary or affiliate of Debtor)
or (ii) any rights in all or any portion of the Collateral to
any subsidiary or affiliate of Debtor, in each case without the
prior written consent of Collateral Agent. Debtor may grant
licenses to third parties for the use of, and/or sublicense of, all
or any part of the Collateral, on a non-exclusive basis or
exclusive basis, but in no event shall any such exclusive license
have a term of more than one year unless Debtor first obtains the
prior written consent of Collateral Agent. Licenses may be granted
for up-front or recurring license fees, or for other consideration,
for such periods of time as Debtor deems appropriate (including
license terms that extend beyond the maturity of any Note), and on
such other terms and conditions as Debtor deems appropriate, and
all such licenses, sublicenses and other grants of rights will
survive any repossession of or foreclosure on the Collateral by
Collateral Agent;
(b) the proceeds of Debtor’s
licensing and other dealings in the Collateral may be used by
Debtor for any proper corporate purposes; and
(c) Debtor may grant one or more
third
