On October 29, 2009, Nexxus Lighting, Inc. (the "Company") entered into an agreement (the "Exchange Agreement") with the holders (the "Preferred Shareholders") of all of its outstanding Series A preferred stock, $.001 par value per share (the "Series A preferred stock"), including certain of its directors or entities affiliated with such directors, to exchange all 1,571.15 outstanding shares of the Company's Series A preferred stock for other securities of the Company (the "Exchange"). The Exchange will only be effective upon consummation of a "Qualified Public Offering," as such term is defined in the Exchange Agreement and, upon consummation of the Exchange, the Company will have no shares of Series A preferred stock outstanding. The shares of Series A preferred stock were originally issued by the Company in a November 2008 private placement. Preferred Shareholders are entitled to dividends at the rate of 8% per annum, escalating to up to 16% per annum if, among other things, the Series A preferred stock is not redeemed within twelve months after issuance. Pursuant to the terms of the Series A preferred stock, at the option of the Preferred Shareholders, if the Company raises $20 million or more in certain financing transactions, the Company is obligated to redeem all of its outstanding Series A preferred stock.

On October 29, 2009, the Company filed a registration statement with the Securities and Exchange Commission (the "SEC") relating to a proposed follow-on offering of its common stock (the "Proposed Follow-on Offering"). Although there can be no assurance as to whether or when any such offering would be commenced or completed, or as to the size or terms of any such offering, such offering is expected to constitute a "Qualified Public Offering," as such term is defined in the Exchange Agreement.

If the Proposed Follow-on Offering constitutes a "Qualified Public Offering" within the meaning of the Exchange Agreement, the Exchange will be effected simultaneously with the closing of the Proposed Follow-on Offering. Preferred Shareholders holding an aggregate of 1,091.15 shares of Series A preferred stock have elected to receive common stock in the Exchange. The number of shares of common stock to be delivered in the Exchange will be determined by dividing $5,455,750 (which represents the stated value of the Series A preferred stock being exchanged for common stock) by the greater of (i) $3.15 or (ii) the per share public offering price in the Proposed Follow-on Offering. The shares of common stock issuable in Exchange for the Company's Series A preferred stock will be freely tradable without restriction or further registration under the federal securities laws, except for any shares acquired by the Company's "affiliates," as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), whose sales will be subject to certain limitations and restrictions.

The Preferred Shareholders holding the remaining 480 shares of Series A preferred stock, which has a stated value of $2,400,000, are entities affiliated with Mariner Private Equity, LLC, of which Patrick Doherty, one of the Company's directors, is president, and Michael Brown, one of the Company's directors. In the Exchange, these Preferred Shareholders will receive convertible promissory notes (the "Exchange Notes") in the aggregate principal amount of $2,400,000 and warrants to purchase an aggregate of 935,040 shares of the Company's common stock (the "Exchange Warrants"). The Exchange Notes will bear interest at 1% per annum and mature three years after issuance. The number of shares of common stock deliverable upon conversion of the Exchange Notes will be determined by dividing the aggregate principal amount of the Exchange Notes by $5.33 (the sum of $5.08 (the "market value" of the Company's common stock immediately preceding the entering into of the Exchange Agreement) plus the "warrant coverage value," which is equal to $.25). "Market value" and "warrant coverage value" have been determined by applicable NASDAQ rules. "Market value" means the consolidated closing bid price of the Company's common stock immediately preceding the entering into of the Exchange Agreement. "Warrant coverage value" means a value of $0.125 for each 100% of warrant coverage. For each $1.00 in principal amount of an Exchange Note, the noteholder will be issued Exchange Warrants to purchase

As a result of the Exchange, entities affiliated with Mariner Private Equity, LLC, of which Patrick Doherty, one of the Company's directors, is president, will receive Exchange Notes aggregating $1,650,000 and Exchange Warrants to purchase 642,840 shares of common stock and Michael Brown, one of the Company's directors, will receive Exchange Notes aggregating $750,000 and Exchange Warrants to purchase 292,200 shares of common stock.

The Company intends to use approximately $0.8 million of the net proceeds of the Proposed Follow-on Offering to pay accumulated dividends on its Series A preferred stock. The Company is obligated to pay all accrued, but unpaid, dividends on its Series A preferred stock in cash within three business days following the consummation of a "Qualified Public Offering." Of this amount, entities affiliated with Mariner Private Equity, LLC will receive approximately $159,500 and Michael Brown will receive approximately $72,500.

Neither the Exchange Notes, the Exchange Warrants, nor the shares of common stock issuable in the Exchange or upon exercise of the Exchange Warrants, or conversion of the Exchange Notes, have been registered for sale under the Securities Act, and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements. The issuance and sale of the common stock issuable in the Exchange, the Exchange Notes, the Exchange Warrants and the common stock issuable upon exercise of the Exchange Warrants or conversion of the Exchange Notes will be made in reliance upon the exemption provided in Section 4(2) of the Securities Act and/or Regulation D promulgated under the Securities Act. No form of general solicitation or general advertising was conducted in connection with the Exchange. Each of the Exchange Notes, Exchange Warrants and common stock issuable in the Exchange will contain restrictive legends preventing the . . .

The disclosure under Item 1.01 is incorporated by reference in this Item 2.03

The disclosure under Item 1.01 is incorporated by reference in this Item 3.02. The Company will issue and sell its securities in the Exchange pursuant to an exemption from registration under Section 4(2) of the Securities Act and/or Regulation D promulgated under the Securities Act. Each of the Preferred Shareholders has represented to the Company that such Preferred Shareholder is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated under the Securities Act.

(d) Exhibits.

Exhibit
  No.                                     Description

10.1      Preferred Stock Exchange Agreement, dated as of October 29, 2009, by and
          between the Company and each Preferred Shareholder set forth on Schedule I
          thereto (incorporated by reference to the Company's Registration Statement
          on Form S-1 (File No. 333-162743) filed October 29, 2009).

10.2      Form of Convertible Promissory Note (incorporated by reference to the
          Company's Registration Statement on Form S-1 (File No. 333-162743) filed
          October 29, 2009).

10.3      Form of Common Stock Purchase Warrant (incorporated by reference to the
          Company's Registration Statement on Form S-1 (File No. 333-162743) filed
          October 29, 2009).