The closing of Aston's investment is scheduled to be finalized by September 24, at which time Nexxus' current board members will resign.

Aston has agreed to purchase 600,000 shares of convertible preferred stock at $10 per share. The preferred stock will be convertible into shares of the company's common stock at a conversion price of $0.13 per share.

"We view the market for LED lighting to be in the early phase of adoption and we see Nexxus Lighting, with their product lines and intellectual property, as a platform on which to build and grow in the market," LaPenta said.

The proceeds of the investment will be used to pay off about $2.5 million of short-term debt and fund the upcoming settlement of a lawsuit with Koninklijke Philips Electronics NV and Philips Solid-State Lighting Solutions over LED lighting patents. Upon settlement, Nexxus Lighting will receive a license to use certain Philip's patents for LED lighting and will pay Philips a royalty with respect to certain company products. Additional proceeds will be used for working capital.

Upon conversion of the stock, Aston is expected to own about 73% of Nexxus' outstanding common stock. Aston will also initially have the right to appoint four members to its board, with the board not to exceed seven members.

"The last several quarters have been very challenging and the need to find a strong partner became a requirement for the company," said Nexxus president and CEO Mike Bauer.

Last year, Nexxus began marketing its replacement lamps directly to commercial customers via its web portal, www.arrayled.com. The move was designed to bring factory-direct pricing to customers of Array-brand LED replacement lamps, including ESCOs, lighting maintenance contractors, facility and property managers.

Several years ago, Nexxus Lighting, known as Super Vision at the time, was involved in a five-year legal battle with Color Kinetics, which settled in favor of Color Kinetics.