Exhibit 10.5
STOCK PLEDGE AND SECURITY
AGREEMENT
THIS STOCK PLEDGE AND SECURITY
AGREEMENT (the “Agreement”) is made and entered into
effective as of the 18th 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 the shares of common stock (the
“Shares”) the Pledgor owns in Lumificient Corporation,
a Minnesota corporation and a wholly-owned subsidiary of the
Pledgor (“Lumificient”).
C. The continuing Security Interest
in the Shares 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 Shares . All
references to the Shares shall be appropriately adjusted to reflect
any stock split, distribution, recapitalization or other similar
arrangement affecting the Shares 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 Shares in any way, then any such
property shall be considered Shares 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 Shares 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
Shares are owned by the Pledgor free and clear of any liens,
charges or encumbrances other than those imposed by securities laws
and this Agreement.
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. Perfection of Security
Interest . The Security Interest in the Shares shall be
perfected by the Collateral Agent taking possession of the
certificates representing the Shares. The Collateral Agent shall
hold such securities on behalf of the Secured Parties.
5. Proxy . Pledgor hereby
irrevocably constitutes and appoints the Collateral Agent, whether
or not the Shares have been transferred into the name of the
Secured Parties, as the Pledgor’s proxy, with full power to
(a) attend meetings concerning the Shares held after the date
of this Agreement and, to vote the Shares 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 stockholders of
Lumificient is or may be necessary or appropriate, and (c) do
all things that Pledgor could do as a securities holder of
Lumificient, 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 have occurred an Event of
Default (as that term is defined below). Except upon the occurrence
and during the continuation of an Event of Default, Pledgor shall
be entitled to exercise any and all voting and/or consensual rights
and powers accruing to an owner of the Shares or any part thereof
for any purpose. Pledgor hereby revokes all proxies heretofore
given and agrees not to grant any proxy to any person or persons
with respect to the Shares other than as granted herein for so long
as this Agreement is in force.
6. Ordinary Care by the
Se
