Document:

exv10w2

 

Exhibit 10.2

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (as it may be amended from time to time, this
“Agreement”), is entered into as of June 29, 2006 by Electric City Corp., a Delaware
corporation (the “Company”), and the Persons whose names appear on the signature pages of
this Agreement (each such Person is a “Purchaser”, and collectively all such Persons are
the “Purchasers”).

WITNESSETH:

     WHEREAS, the Series E Holders (as herein defined), collectively, own all of the issued and
outstanding shares of the Company’s Series E Preferred Stock (as herein defined); and

     WHEREAS, the Company desires (i) to induce the Series E Holders to convert all of their shares
of Series E Preferred Stock into shares of Common Stock (as herein defined), and (ii) to sell for
money and issue to the Purchasers shares of its Common Stock, all as more fully described herein;
and

     WHEREAS, each Series E Holder is willing to convert his or its shares of Series E Preferred
Stock into shares of Common Stock on the terms and conditions set forth herein, and the Purchasers
are willing to purchase shares of Common Stock from the Company in the amounts and for the purchase
price and otherwise on the terms and subject to the conditions set forth herein;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein,
the parties hereto hereby agree as follows:

ARTICLE 1  —  DEFINITIONS

     1.1 The following terms when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings, such meanings to
be equally applicable to the singular and plural forms thereof:

     “Affiliate” means, as applied to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such Person. For the
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), as applied to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.

     “Agreement” has the meaning set forth in the preamble of this Agreement.

     “Applicable State Law” has the meaning set forth in Section 4.1(d) hereof.

     “Board” means the board of directors of the Company.

 

 

     “Business Day” means any day other than a Saturday, Sunday or other day on
which commercial banks in the City of Chicago are authorized or required by law or executive
order to close.

     “Certificate of Designations” means, with respect to any series of preferred
stock of the Company, the Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof for such series of preferred stock.

     “Certificate of Incorporation” means the Certificate of Incorporation of the
Company, as amended or restated from time to time.

     “Closing” has the meaning set forth in Section 2.3 hereof.

     “Closing Date” has the meaning set forth in Section 2.3 hereof.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Commission” means the United States Securities and Exchange Commission or any
other Governmental Authority at the time administering the Securities Act or the Exchange
Act.

     “Commission Documents” has the meaning set forth in Section 4.2(f)
hereof.

     “Common Shares” means the shares of Common Stock to be issued and sold by the
Company to the Purchasers hereunder.

     “Common Stock” means shares of the Company’s common stock, par value $0.0001
per share.

     “Company” has the meaning set forth in the preamble of this Agreement.

     “Confidential Memorandum” means the Company’s Confidential Information Package
dated May 2006 which has been made available to the Purchasers.

     “Conversion” has the meaning set forth in Section 6.1 of this
Agreement.

     “Conversion Shares” means the shares of Common Stock to be issued upon
Conversion of the Series E Preferred Stock pursuant to Article 6 hereof.

     “Default Payments” has the meaning set forth in Section 5.8 hereof.

     “Effectiveness Deadline” has the meaning set forth in Section 5.8
hereof.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar or successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

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     “Excluded Conversion Shares” means Conversion Shares which are either (a)
covered by a registration statement on Form S-3 which, prior to the date hereof, has been
filed with the Commission and declared effective, or (b) upon issuance on the Closing Date
will be eligible for sale under Rule 144(k) by the Series E Holder receiving such shares.

     “Governmental Authority” means the government of any nation, state or other
political subdivision thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, and any corporation
or other entity owned or controlled, through stock or capital ownership or otherwise, by any
of the foregoing.

     “Investor Questionnaire” means a document in the form of Annex I to
this Agreement, duly completed and signed by a Purchaser purchasing Securities hereunder.

     “Investor Rights Agreement” means that certain Amended and Restated Investor
Rights Agreement dated as of March 19, 2004 made by and among the Company, Newcourt Capital
USA Inc., Morgan Stanley Dean Witter Equity Funding, Inc., Originators Investment Plan,
L.P., the Series E Holders, Technology Transformation Venture Fund, LP, and CIT Capital
Securities, Inc., as amended or restated from time to time.

     “Laurus” means Laurus Master Fund, Ltd., a Cayman Islands corporation.

     “Laurus Debt” means the Company’s indebtedness to Laurus.

     “Material Adverse Effect” means a material adverse effect on the business,
property, assets, prospects, operations or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole.

     “Non-Excluded Conversion Shares” means all Conversion Shares which are not
Excluded Conversion shares.

     “Offer Price” means $1.00 per share of Common Stock.

     “Officer’s Certificate” means a certificate of the Company signed by its Chief
Executive Officer or Chief Financial Officer.

     “Parke” means Parke P.A.N.D.A. Corporation, a California corporation.

     “Parke Acquisition” means the acquisition of Parke by the Company pursuant to
the merger of Parke with and into Parke Acquisition, LLC, a subsidiary of the Company, as
described in the Company’s current report on Form 8-K dated May 19, 2006 filed with the
Commission on May 22, 2006 and the exhibits thereto.

     “Parke Acquisition Agreement” means the Agreement and Plan of Merger dated as
of May 19, 2006 by and among Parke, Daniel W. Parke, the Company and Parke Acquisition, LLC,
a copy of which is attached hereto as Exhibit I.

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     “Person” means any individual, partnership, limited liability company, joint
venture, firm, corporation, association, trust or other enterprise or any Governmental
Authority.

     “Projections” means the financial projections included in the Confidential
Memorandum.

     “Purchasers” has the meaning set forth in the preamble of this Agreement.
“Purchaser” shall mean one of the Purchasers, as applicable in the context.

     “Registrable Securities” has the meaning set forth in Section 5.1(a)
hereof.

     “Registration Cure” has the meaning set forth in Section 5.8 hereof.

     “Registration Default” has the meaning set forth in Section 5.8 hereof.

     “Registration Statement” has the meaning set forth in Section 5.1(a)
hereof.

     “Regulatory Approvals” means (i) any and all certificates, permits, licenses,
franchises, concessions, grants, consents, approvals, orders, registrations, authorizations,
waivers, variances, exemptions, declarations, or clearances from, or filings or
registrations with, or reports or notices to, any Governmental Authority, and (ii) any and
all waiting periods imposed by applicable laws.

     “Rights Offering” means an offering by the Company to each Common Stock holder
of the right to purchase five (5) shares of Common Stock, at the Offer Price, for each share
of Common Stock which is already held by such holder, and on other terms and conditions
hereafter approved by the Board.

     “Rule 144” means Rule 144 promulgated by the Commission under the Securities
Act, as amended, and any similar or successor rule or regulation.

     “Securities” means, when used herein, the Common Shares which are to be issued
and sold by the Company under this Agreement to the Purchasers listed on Schedule I.

     “Securities Act” means the Securities Act of 1933, as amended, and any similar
or successor federal statute, and the rules and regulations of the Commission thereunder,
all as the same may be in effect from time to time.

     “Selling Stockholder Questionnaire” means a document in the form of Annex
II to this Agreement, duly completed and signed by a Purchaser purchasing Securities
hereunder.

     “Series E Agreements” means, collectively, the Certificate of Designations
applicable to the Series E Preferred Stock, the Investor Rights Agreement, the Stock Trading
Agreement and the Stockholders Agreement.

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     “Series E Holders” means, collectively, Cinergy Ventures II, LLC, Leaf Mountain
Company, LLC, SF Capital Partners, Ltd., Richard Kiphart, David R. Asplund, John Thomas
Hurvis Revocable Trust, John Donohue, Augustine Fund, LP, David Valentine, Robert L. Gipson
and Nikolaos D. Monoyios.

     “Series E Preferred Stock” means shares of the Company’s Series E Convertible
Preferred Stock, par value $0.01 per share.

     “Special Committee” means the special committee of the Board created by
resolution of the Board dated May 17, 2006 for purposes of the Transactions.

     “Stock Trading Agreement” means that certain Amended and Restated Stock Trading
Agreement dated as of March 19, 2004 made by and among the Company, Newcourt Capital USA
Inc., Morgan Stanley Dean Witter Equity Funding, Inc., Originators Investment Plan, L.P.,
the Series E Holders, Technology Transformation Venture Fund, LP, and CIT Capital
Securities, Inc., as amended or restated from time to time.

     “Stockholders Agreement” means that certain Amended and Restated Stockholders
Agreement dated as of March 19, 2004 made by and among the Company, Newcourt Capital USA
Inc., Morgan Stanley Dean Witter Equity Funding, Inc., Originators Investment Plan, L.P.,
Technology Transformation Venture Fund, LP and the Series E Holders, as amended or restated
from time to time.

     “Target Deadline” has the meaning set forth in Section 5.1(a) hereof.

     “Taxes” means any federal, state, county, local or foreign taxes, charges,
fees, levies, or other assessments, including, without limitation, all net income, gross
income, sales and use, ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipt, capital stock, business and occupation, disability,
employment, payroll, license, estimated, or withholding taxes or charges imposed by any
Governmental Authority, and includes any interest and penalties on or additions to any such
taxes (and, in the case of the Company and its Subsidiaries, Taxes for which the Company or
any of its Subsidiaries may be liable in its own right, or as the transferee of the assets
of, or as successor to, any other corporation, association, partnership, joint venture, or
other entity, or under Treasury Regulation Section 1.1502-6 or any similar provision of
state or local law).

     “Transaction Documents” means this Agreement and each other instrument,
document or agreement to which the Company and any Purchaser is a party or which is executed
or delivered by the Company or any Purchaser in connection with consummation of the
Transactions, as amended, modified or supplemented and in effect from time to time.

     “Transactions” means, collectively, the issuance and sale of the Securities
hereunder and the Conversion of the Series E Preferred Stock pursuant to Article 6 hereof.

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ARTICLE 2 – ISSUE, PURCHASE AND SALE OF SECURITIES

     2.1 Authorization of Issuance of Securities. The Company has authorized the issuance
and sale to the Purchasers listed on Schedule I hereto of up to 17,875,000 shares of Common
Stock on and subject to the terms and conditions of this Agreement. The Company has also
authorized the issuance of 21,648,346 Conversion Shares for issuance to the Series E Holders
pursuant to Article 6 of this Agreement.

     2.2 Purchase and Sale of Securities; Conversion of Series E Preferred Stock. Subject
to the terms and conditions herein set forth and at the Offer Price per share, the Company hereby
agrees to sell to each Purchaser listed on Schedule I hereto, and each such Purchaser
agrees to purchase from the Company, at the Closing, the number of shares of Common Stock, for the
aggregate purchase price, set forth opposite such Purchaser’s name on Schedule I hereto.
Also subject to the terms and conditions herein set forth, each Series E Holder agrees to
Conversion of his or its shares of Series E Preferred Stock at the Closing as provided in Article 6
hereof.

     2.3 Closing.

     (a) Subject to the satisfaction or waiver of the conditions to closing set forth in Article 3,
the closing of the purchase and sale of the Securities and the Conversion of the Series E Preferred
Stock (the “Closing”) shall take place at the offices of counsel for the Company, Schwartz
Cooper Chartered, 180 North LaSalle Street, Suite 2700, Chicago, Illinois 60601, or at such other
location as is mutually agreed upon by the Company and the Purchasers. The date upon which the
Closing shall be effective shall be June 30, 2006 (the “Closing Date”).

     (b) For the convenience of the parties hereto, the parties agree to ‘close by mail’ as
provided in clauses (b), (c) and (d) of this Section 2.3. Pursuant to such agreement, the
parties severally (and not jointly) agree to transmit their respective signatures and other closing
deliveries required under Article 3 hereof (other than payments of funds by the Purchasers and
issuance of new stock certificates by the Company) to the Company by not later than Friday, June
23, 2006. On or about Tuesday, June 27, 2006, the Company shall notify each of the Purchasers as
to whether all such closing deliveries (other than funds and new stock certificates) and (assuming
Closing hereunder) all conditions to closing of the Parke Acquisition are then satisfied, as
contemplated by Section 3.1(k) hereof. If all such Closing deliveries (other than funds
and new stock certificates) have not been received, such notice shall state the details of the
missing items. If all such Closing deliveries (other than funds and new stock certificates) have
been received, and the condition in Section 3.1(j) has been satisfied, and (assuming
Closing hereunder) all conditions to closing of the Parke Acquisition are then satisfied and the
Company so states in such notice to the Purchasers, then such notice shall also (i) include a
statement of the Offer Price, as finally determined, and a copy of the final definitive version of
Schedule I to be attached hereto, and (ii) provide that all Purchasers purchasing
Securities shall send payment of the purchase price therefore (as specified in such final
definitive version of Schedule I included with such notice) by wire transfer of immediately
available funds to the account specified on Annex III hereto by not later than 5:00 p.m.
Chicago time on Wednesday, June 28, 2006.

     (c) Assuming that funds are received as contemplated by the preceding clause (b) and in any
event by June 30, 2006, upon receipt of such funds the Company shall proceed with

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Closing, by (i) notifying all Purchasers that Closing is occurring; (ii) repaying the Laurus
Debt (excluding the portion thereof which is to be converted into shares of Common Stock as
contemplated by Section 3.1(j)); (iii) converting the remaining portion of the Laurus Debt
into shares of Common Stock; (iv) consummating the closing of the Parke Acquisition; and (v)
directing the Transfer Agent to issue new stock certificates for the Securities and Conversion
Shares in accordance with the provisions hereof and deliver the same to the Company for forwarding
to the Purchasers. The parties anticipate that repayment of the Laurus Debt, conversion of the
unpaid balance of the Laurus Debt, and consummation of the Parke Acquisition will all occur on June
30, 2006 and shall be effective on June 30, 2006, however, at the Company’s discretion, any of such
actions may occur on June 29, 2006 or July 3, 2006, provided that the Company has given all
Purchasers the notice required under (i) of this clause (c) prior to such action taking place. The
parties also acknowledge that consummation of the Parke Acquisition requires that the minimum gross
proceeds from the sale of Securities hereunder shall be $15,000,000. Accordingly, the Company is
authorized to proceed with Closing hereunder upon receipt of not less than $15,000,000 of gross
proceeds from the sales of Securities hereunder, even if one or more Purchasers shall have failed
to comply with its obligation to purchase Securities hereunder.

     (d) Promptly upon consummation of the items referred to in (ii), (iii), (iv) and (v) of clause
(c) preceding, the Company shall notify the Purchasers thereof and that Closing has been
consummated. Reasonably promptly thereafter (and in any event by July 10, 2006), the Company shall
provide to each Purchaser the stock certificates evidencing Securities and Conversion Shares
acquired by such Purchaser pursuant to Closing and all the other deliverables to such Purchaser
pursuant to Article 3 hereof.

     (e) In the event that Closing does not occur by the close of business on July 3, 2006, all
funds received by the Company will be returned to the applicable Purchasers by wire transfer by
July 7, 2006 and all Series E Preferred stock certificates received by the Company will be returned
to the applicable Purchasers by July 10, 2006. All other closing documentation received by the
Company from Purchasers will be destroyed.

ARTICLE
3  –  CLOSING

     3.1 Purchasers’ Conditions to Closing. The obligation of each Purchaser purchasing
Securities hereunder to purchase and pay for the Securities to be purchased by such Purchaser at
the Closing is subject to the satisfaction (or waiver by such Purchaser), on or before the Closing
Date, of each of the following conditions:

     (a) Receipt of Securities. Such Purchaser shall have received delivery of the
stock certificates evidencing the Securities to be issued to such Purchaser in accordance
with Section 3.4;

     (b) No Litigation; No Order. No action, suit or proceeding relating to the
Transactions shall be pending that seeks to restrain or prevent any of the Transactions, and
no order (including, without limitation, a temporary restraining order), decree, writ,
judgment or injunction shall be in effect that restrains, enjoins or prevents the
consummation of the Transactions;

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     (c) Proceedings. On or prior to the Closing Date, (i) the Special Committee
shall have duly approved the Transactions, and Board shall have approved the Parke
Acquisition, in accordance with law and the Company’s certificate of incorporation and
by-laws and the resolutions creating the Special Committee; and (ii) all other corporate and
other proceedings required to be taken in connection with the Transactions under applicable
laws, rules and regulations and the certificate of incorporation and by-laws of the Company
shall have been taken and all filings and documents incident thereto shall be reasonably
satisfactory in form and substance to such Purchaser;

     (d) Representations and Warranties. The Company’s representations and
warranties set forth in this Agreement shall have been true and correct in all material
respects (except to the extent that any of such representations and warranties is already
qualified as to materiality, in which case, such representations and warranties shall be
true and correct without further qualification) when made and shall continue to be true and
correct in all material respects on the Closing Date (except, in either case, to the extent
that any of such representations and warranties are specifically made as of a date prior to
the date of this Agreement, in which case such representations and warranties shall have
been true and correct as of the applicable earlier date(s));

     (e) Compliance with this Agreement. The Company shall have performed and
complied with all of the covenants, agreements and conditions set forth or contemplated
herein that are required to be performed or complied with by the Company on or before the
Closing Date;

     (f) Purchase Permitted by Applicable Laws; Legal Investment. The acquisition
of and payment for the Securities and the consummation of the Transactions (i) shall not be
prohibited by any applicable law or governmental regulation, and (ii) shall not subject the
Company to any penalty or, in its reasonable judgment, other onerous conditions under or
pursuant to any applicable law or governmental regulation;

     (g) Consents and Approvals. All consents, waivers, approvals, exemptions,
authorizations, or other actions by, or notices to, or filings with, any Governmental
Authority, self-regulatory agency and other Persons necessary or required in connection with
the execution, delivery or performance by the Company or enforcement against the Company of
this Agreement (including, without limitation, the issuance of the Securities contemplated
hereunder) in connection with the consummation of the Transactions shall have been obtained
or made and be in full force and effect;

     (h) Closing Deliveries. The Company shall have delivered the Closing
Deliveries in accordance with Section 3.4;

     (i) No Material Adverse Change. Neither the Company nor any of its
subsidiaries shall have sustained since December 31, 2005 any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court governmental action, order or decree, and
since December 31, 2005, there shall not have been any material change in or affecting the
general affairs, management, financial position, stockholders’ equity or

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results of operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Commission Documents;

     (j) Laurus Actions. Laurus shall have agreed with the Company that if the
Company repays all other amounts comprising Laurus Debt, Laurus will concurrently convert to
Common Stock, at a conversion price per share equal to the Offer Price, the portions of the
Laurus Debt consisting of (i) the outstanding balance of the revolving loan and (ii)
liquidated damages owing to Laurus pursuant to section 2(b) of the Registration Rights
Agreement dated as of November 22, 2005 between the Company and Laurus; and

     (k) Parke. All conditions to closing the Parke Acquisition are satisfied,
other than the condition that Closing occur hereunder and the Company receive gross proceeds
of not less than $15,000,000 from the sale of Securities hereunder.

     3.2 Company Conditions to Closing. The Company’s obligation to issue and sell the
Securities to each Purchaser purchasing any Securities at the Closing is subject to the
satisfaction (or waiver by the Company), on or before the Closing Date, of each of the following
conditions:

     (a) Receipt of Purchase Price. The Company shall have received from such
Purchaser payment of the purchase price payable by such Purchaser by wire transfer of
immediately available funds to the account specified on Annex III hereto;

     (b) No Litigation; No Order. No action, suit or proceeding relating to the
Transactions shall be pending that in the reasonable good faith judgment of the Company
seeks to restrain or prevent any of the Transactions and has a reasonable probability of
success;

     (c) Representations and Warranties. Such Purchaser’s representations and
warranties set forth in this Agreement shall have been true and correct in all material
respects (except to the extent that any of such representations and warranties is already
qualified as to materiality, in which case, such representations and warranties shall be
true and correct without further qualification) when made and shall continue to be true and
correct in all material respects on the Closing Date (except, in either case, to the extent
that any of such representations and warranties are specifically made as of a date prior to
the date of this Agreement, in which case such representations and warranties shall have
been true and correct as of the applicable earlier date(s));

     (d) Compliance with this Agreement. Such Purchaser shall have performed and
complied with all of the covenants, agreements and conditions set forth or contemplated
herein that are required to be performed or complied with by such Purchaser on or before the
Closing Date;

     (e) Purchase Permitted by Applicable Laws; Legal Investment. The acquisition
of and payment for the Securities by such Purchaser and the consummation of the Transactions
(i) shall not be prohibited by any applicable law or governmental regulation, and (ii) shall
not subject the Company to any penalty or, in its reasonable judgment, other onerous
conditions under or pursuant to any applicable law or governmental regulation; and

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     (f) Proceedings. On or prior to the Closing Date, the Special Committee shall
have duly approved the Transactions and Board shall have duly approved the Parke Acquisition
in accordance with law and the Company’s certificate of incorporation and by-laws and the
resolutions creating the Special Committee;

     (g) Consents and Approvals. All consents, waivers, approvals, exemptions,
authorizations, or other actions by, or notices to, or filings with, any Governmental
Authority, self-regulatory agency and other Persons necessary or required in connection with
the execution, delivery or performance by the Company or enforcement against the Company of
this Agreement (including, without limitation, the issuance of the Securities contemplated
hereunder) and the consummation of the Transactions shall have been obtained or made and be
in full force and effect; and

     (h) Laurus Actions. Laurus shall have agreed with the Company that if the
Company repays all other amounts comprising Laurus Debt, Laurus will concurrently convert to
Common Stock, at a conversion price per share equal to the Offer Price, the portions of the
Laurus Debt consisting of (i) the outstanding balance of the revolving loan and (ii)
liquidated damages owing to Laurus pursuant to section 2(b) of the Registration Rights
Agreement dated as of November 22, 2005 between the Company and Laurus.

     3.3 Closing Deliveries by Each Purchaser. At the Closing, each Purchaser shall
deliver to the Company the following:

     (a) if such Purchaser is purchasing any Securities, the purchase price for the
Securities being purchased by such Purchaser, as set forth on Schedule I hereto, by
wire transfer of immediately available funds to an account designated by the Company set
forth on Annex III hereto, which funds will be delivered to the Company in
consideration of the Securities issued to such Purchaser at the Closing;

     (b) if such Purchaser is purchasing any Securities, an executed completed Investor
Questionnaire;

     (c) if such Purchaser is purchasing any Securities, an executed representation letter
in acceptable form if the Purchaser is acting on behalf of a managed account in the purchase
of any Securities;

     (d) if such Purchaser is purchasing any Securities, an executed completed Selling
Stockholder Questionnaire; and

     (e) if such Purchaser is a Series E Holder, all certificates representing such
Purchaser’s shares of Series E Preferred Stock in the Company (except to the extent that
such certificates have previously been delivered pursuant to Article 6 hereof).

     3.4 Closing Deliveries by the Company. At the Closing, the Company shall deliver to
each Purchaser which has complied with its obligations under Sections 3.2 and 3.3:

     (a) if such Purchaser is purchasing any Securities, one or more stock certificates
representing the Securities being purchased by such Purchaser, registered in

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the name of such Purchaser or its nominee(s), as such Purchaser has specified in
writing to the Company prior to the Closing;

     (b) if such Purchaser is a Series E Holder, one or more stock certificates representing
the Conversion Shares being issued to such Series E Holder pursuant to Conversion of such
Series E Holder’s shares of Series E Preferred Stock, registered in the name of such Series
E Holder or its nominee(s), as such Series E Holder has specified in writing to the Company
prior to the Closing;

     (c) Officer’s Certificate. A certificate, dated the Closing Date and signed by
the Chief Executive Officer of the Company, certifying that the conditions set forth in
Sections 3.1(d) and 3.1(e) hereof have been satisfied on and as of such
date;

     (d) Secretary’s Certificate. A certificate, dated the Closing Date and signed
by the Secretary of the Company, certifying as to the Company’s Certificate of
Incorporation, By-Laws, resolutions of the Board of Directors, good standing, and
incumbency;

     (e) an opinion of counsel, dated the Closing Date, from outside counsel to the Company,
in substantially the form attached as Annex IV hereto.

ARTICLE
4  –  REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.

     4.1 Purchaser Representations, Warranties and Covenants. Each Purchaser hereby
represents and warrants to the Company as follows:

     (a) Such Purchaser has received or been given access to copies of the following:

     (i) the Company’s registration statement on Form S-3 filed with the Commission on
December 19, 2005, as amended by Form S-3/A filed with the Commission on March 3, 2006, as
amended by Amendment No. 2 to Form S-3 filed with the Commission on May 9, 2006;

     (ii) the Company’s current report on Form 8-K dated January 22, 2006 filed with the
Commission on January 26, 2006;

     (iii) the Company’s current report on Form 8-K dated February 22, 2006 filed with the
Commission on February 22, 2006;

     (iv) the Company’s current report on Form 8-K dated March 8, 2006 filed with the
Commission on March 14, 2006;

     (v) the Company’s current report on Form 8-K dated March 21, 2006 filed with the
Commission on March 22, 2006;

     (vi) the Company’s current report on Form 8-K dated April 3, 2006 filed with the
Commission on April 7, 2006;

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     (vii) the Company’s current report on Form 8-K dated April 21, 2006 filed with the
Commission on April 26, 2006;

     (viii) the Company’s current report on Form 8-K dated May 15, 2006 filed with the
Commission on May 16, 2006;

     (ix) the Company’s current report on Form 8-K dated May 19, 2006 filed with the
Commission on May 22, 2006;

     (x) the Company’s current report on Form 8-K dated May 22, 2006 filed with the
Commission on May 23, 2006;

     (xi) the Company’s annual report on Form 10-K for the year ended December 31, 2005
filed with the Commission on March 21, 2006;

     (xii) the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2006
filed with the Commission on May 15, 2006;

     (xiii) the Company’s current report on Form 8-K dated June 12, 2006 filed with the
Commission on June 13, 2006;

     (xiv) the Confidential Memorandum; and

     (xv) the Parke Acquisition Agreement attached hereto as Exhibit I.

Such Purchaser represents to the Company that such Purchaser has had access to such financial and
other information and has had the opportunity to ask questions and receive answers as it deemed
necessary in respect of the decision to purchase the Securities it is purchasing hereunder (or, if
such Purchaser is a Series E Holder, the decision to participate in the Conversion under Article 6
hereof), and has consulted with his or its own advisors concerning the proposed investment in the
Company. Such Purchaser understands that an investment in the Company involves a high degree of
risk for the reasons, among others, set forth under the caption “RISK FACTORS” in the Company’s
registration statement or in its annual report on Form 10-K referred to in clauses (i) and (xi),
respectively, above. Such Purchaser also understands that the Company makes no representations or
warranties concerning the Projections contained in the Confidential Memorandum, and that the
Projections are forward-looking and are subject to risks, uncertainties and other factors that
could cause the Company’s actual results to differ materially from those expressed in, or implied
by, the Projections.

     (b) Such Purchaser represents that he or it (or, if applicable, each managed account on whose
behalf Securities are being purchased by such Purchaser) is a sophisticated investor and an
“accredited investor” as defined in Rule 501 under the Securities Act (as certified by such
Purchaser pursuant to the Investor Questionnaire in the form attached hereto as Annex I
which such Purchaser shall complete and deliver to the Company if such Purchaser is purchasing
Securities). Such Purchaser further represents that he or it (or, if applicable, each managed
account on whose behalf Securities are being purchased by such Purchaser) has such knowledge and
experience in financial and business matters as to be capable of evaluating the merits and risks of
an investment in the Securities and participating in the Conversion and making an

12

 

informed investment decision with respect thereto, and can bear the economic risk of loss of
the entire investment in the Securities being purchased and Conversion Shares being acquired.

     (c) Such Purchaser acknowledges that he or it has sole responsibility for its own due
diligence investigation and its own investment decision, and that in connection with his or its
investigation and its investment decision (i) such Purchaser has not relied on any
representation by or on behalf of the Company not set forth in the Commission Documents or in this
Agreement, and (ii) such Purchaser has not relied on the fact that any other Person has
decided to invest in the Securities or in capital stock of the Company.

     (d) Such Purchaser understands and expressly acknowledges and agrees that none of the
Securities have been registered under the Securities Act, or qualified under any applicable
securities laws of any State of the United States (“Applicable State Law”) and therefore
the Securities may not be offered, sold, transferred, assigned, pledged, hypothecated or otherwise
disposed of, directly or indirectly, unless subsequently registered or qualified under the
Securities Act and under Applicable State Law or unless an exemption from the registration
requirements of the Securities Act and Applicable State Law is available and an opinion of counsel
indicates that such an exemption is available, in each case to the extent permitted by the terms of
this Agreement; provided, however, that if a transfer of Securities is between affiliated
Purchasers, the transferring Purchaser shall be required to deliver only a certificate (and not an
opinion of counsel) reasonably satisfactory to the Company stating that registration is not
required under the Securities Act. Each Purchaser which is participating in the Conversion under
Article 6 hereof understands and expressly acknowledges and agrees that not all of the Conversion
Shares have been registered under the Securities Act, or qualified under any Applicable State Law
and therefore such Conversion Shares may not be offered, sold, transferred, assigned, pledged,
hypothecated or otherwise disposed of, directly or indirectly, unless subsequently registered or
qualified under the Securities Act and under Applicable State Law or unless an exemption from the
registration requirements of the Securities Act and Applicable State Law is available and an
opinion of counsel indicates that such an exemption is available, in each case to the extent
permitted by the terms of this Agreement; provided, however, that if a transfer of
Conversion Shares is between affiliated Purchasers, the transferring Purchaser shall be required to
deliver only a certificate (and not an opinion of counsel) reasonably satisfactory to the Company
stating that registration is not required under the Securities Act.

     (e) Such Purchaser understands and agrees that all certificates representing the Securities,
and all certificates representing Non-Excluded Conversion Shares, shall bear a legend which will be
substantially in the form of the following:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN AVAILABLE

13

 

EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND STATE SECURITIES LAWS, AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY; PROVIDED, HOWEVER, THAT IF THE TRANSFER IS BETWEEN
AFFILIATED PURCHASERS, THE TRANSFERRING PURCHASER SHALL BE REQUIRED
TO DELIVER ONLY A CERTIFICATE (AND NOT AN OPINION OF COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY STATING THAT REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT. THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT.

     The Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security
interest in some or all of the Securities or Conversion Shares of such Purchaser to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and
who agrees to be bound by the provisions of this Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities or Conversion Shares to the
pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be
required in connection therewith. Further, no notice shall be required of such pledge. At the
appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Securities or Conversion Shares may reasonably request in
connection with a pledge or transfer of the Securities or Conversion Shares, including, if the
Securities or Conversion Shares are subject to registration pursuant to this Agreement, the
preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder.

     Certificates evidencing the Securities and Conversion Shares shall not contain any legend
(including the legend set forth in this Section 4.1(e)), (i) while a registration statement
(including the Registration Statement) covering the resale of such security is effective under the
Securities Act, or (ii) following any sale of such Securities pursuant to Rule 144, or (iii) if
such Securities or Conversion Shares are eligible for sale under Rule 144(k), or (iv) if such
legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause
its counsel to issue a legal opinion to the Company’s transfer agent promptly after the effective
date of the Registration Statement if required by the Company’s transfer agent to effect the
removal of the legend hereunder. The Company agrees that following the effective date of the
Registration Statement or at such time as such legend is no longer required under this Section
4.1(e), it will, no later than three (3) trading days following the delivery by a Purchaser to
the Company or the Company’s transfer agent of a certificate representing Securities or Conversion

14

 

Shares issued with a restrictive legend (such date, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing such Securities or
Conversion Shares that is free from all restrictive and other legends. The Company may not make
any notation on its records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section. Certificates for Securities or Conversion
Shares subject to legend removal hereunder shall be transmitted by the transfer agent of the
Company to the Purchasers by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company System.

     In addition to any other rights available to such Purchaser, if the Company fails to cause its
transfer agent to transmit to the Purchaser a certificate or certificates free of restrictive
legends by the Legend Removal Date, and if after such date the Purchaser is required by its broker
to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Purchaser of Securities or Conversion Shares (a “Buy-In”),
then the Company shall pay in cash to the Purchaser the amount by which (x) the Purchaser’s total
purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of Common Shares that the
Company was required to deliver to the Purchaser free of legends, times (B) the price at which the
sell order giving rise to such purchase obligation was executed. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect of the Buy-In,
together with applicable confirmations and other evidence reasonably requested by the Company.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver certificates free from
restrictive legends as required pursuant to the terms hereof.

     Each Purchaser, severally and not jointly with the other Purchasers, agrees that the removal
of the restrictive legend from certificates representing Securities or Conversion Shares as set
forth in this Section 4.1(e) is predicated upon the Company’s reliance that the Purchaser
will sell any Securities and Conversion Shares pursuant to either the registration requirements of
the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom.

     (f) Such Purchaser (or, if applicable, each managed account on whose behalf Securities are
being purchased by such Purchaser) will acquire the Securities and Conversion Shares he or it is
acquiring pursuant to this Agreement for his or its own account for investment and not with a view
to, or in connection with, the resale or distribution thereof or in any arrangement or
understanding with any other persons regarding the distribution of such Securities in violation of
the Securities Act.

     (g) Except as otherwise permitted by Rule 144, such Purchaser hereby covenants and agrees with
the Company not to make any sale of any Registrable Securities without causing the prospectus
delivery requirement under the Securities Act to be satisfied or otherwise complying with the
Securities Act.

     (h) Such Purchaser acknowledges that there may be times when the Company may temporarily
suspend the use of the prospectus forming a part of the Registration Statement in the

15

 

circumstances, and subject to the limitations, set forth in Section 5.4(c) below.
Such Purchaser hereby covenants and agrees that it will not sell any Registrable Securities
pursuant to said prospectus during the period commencing at the time at which the Company gives
such Purchaser written notice of the suspension of the use of said prospectus in accordance with
Section 5.4 until such time as an amendment to the Registration Statement has been filed by
the Company and declared effective by the Commission, or until such time as the Company has filed
an appropriate report with the Commission pursuant to the Exchange Act, as provided in Section
5.4(c) below.

     (i) Such Purchaser understands that nothing in the Commission Documents, this Agreement or any
other materials presented to such Purchaser in connection with the purchase and sale of the
Securities or Conversion of Series E Preferred Stock constitutes legal, tax or investment advice,
other than to the extent, if any, set forth in the opinion of counsel delivered pursuant to
Section 3.4(e). Such Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of
the Securities and acquisition of Conversion Shares.

     (j) Such Purchaser understands that the Securities are being offered and sold to it (and the
Conversion Shares issued to it) in reliance upon specific exemptions from the registration
requirements of the Securities Act and Applicable State Law and that the Company is relying upon
the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of such Purchaser to acquire the
Securities and Conversion Shares.

     (k) The execution and delivery of this Agreement by such Purchaser and the performance of this
Agreement and the consummation by such Purchaser or its advisory clients, as the case may be, of
the Transactions have been duly authorized by all necessary action of such Purchaser’s directors
and stockholders (if a corporation), partners (if a partnership) or members and managers (if a
limited liability company) and, if applicable, such Purchaser’s advisory clients; and this
Agreement, when duly executed and delivered by such Purchaser, will constitute a valid and legally
binding instrument, enforceable in accordance with its terms against such Purchaser or any of its
advisory clients, as the case may be; except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, moratorium and other laws affecting the rights and remedies of creditors
generally, (ii) rules of law governing specific performance, injunctive relief or other equitable
remedies and by general principles of equity, and (iii) the indemnification provisions of
Section 5.6.

     (l) Such Purchaser represents that:

     (i) If such Purchaser is a corporation, it is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation, with
all requisite power and authority to perform its obligations under this Agreement. If such
Purchaser is a limited liability company, it is a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization
or formation, with all requisite power and authority to perform its obligations under this
Agreement. The person executing this Agreement on

16

 

behalf of such Purchaser is authorized to act for such Purchaser in purchasing the
Securities and Conversion Shares.

     (ii) If such Purchaser is a corporation acting in an advisory capacity, it is a
corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (corporate and other) to
act on behalf of its advisory clients under this Agreement. If such Purchaser is a limited
liability company acting in an advisory capacity, it is a limited liability company duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization or formation, with full power and authority (limited liability company and
other) to act on behalf of its advisory clients under this Agreement.

     (iii) If such Purchaser is a trust, such trust has been duly created by a valid
instrument under applicable law and is validly existing with all requisite power and
authority to perform its obligations under this Agreement, and the trustee thereunder has
been duly appointed as trustee of such Purchaser with full power and authority to act on
behalf of such Purchaser and to perform the obligations of such Purchaser under this
Agreement. Furthermore, the trustee under such trust has independently determined that the
purchase of the Securities to be purchased by such Purchaser and acquisition of Conversion
Shares to be acquired by such Purchaser are a suitable investment for such trust as
authorized by the terms thereof and applicable laws and regulations.

     (iv) If such Purchaser is a partnership, it is a partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, with
full power and authority to perform its obligations under this Agreement.

     (v) If such Purchaser is a partnership acting in an advisory capacity, it is a
partnership duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with full power and authority to act on behalf of its
advisory clients under this Agreement.

     (vi) If such Purchaser is a corporation, limited liability company, partnership, trust
or other form of business entity, the execution, delivery and performance of this Agreement
by such Purchaser will not contravene or result in a default under any provision of existing
law or regulation to which such Purchaser is subject, the provisions of its trust
instrument, charter, by-laws, certificate of formation or organization, operating agreement,
partnership agreement or other governing documents or any indenture, mortgage or other
agreement or instrument to which it is a party or by which it is bound and does not require
on its part any approval, authorization, license or filing from or with any foreign,
federal, state or municipal board or agency which has not been obtained or duly made.

     (vii) If such Purchaser is an individual, he or she has full power and authority to
perform his or her obligations under this Agreement.

17

 

     (m) Concurrently with Closing under this Agreement, each Purchaser purchasing any Securities
will complete, execute and deliver to the Company

     (i) an Investor Questionnaire representing that such Purchaser is investing in
Securities as an “accredited investor;” and

     (ii) if such Purchaser is acting on behalf of a managed account in the purchase of any
Securities, an acceptable representation letter (the “Managed Account Representation
Letter”).

Concurrently with Closing under this Agreement, each Purchaser acquiring any Securities or
Conversion Shares will complete, execute and deliver to the Company a Selling Stockholder
Questionnaire for such Purchaser.

Each Purchaser represents and warrants, severally and not jointly, that the answers and statements
of such Purchaser set forth in each of such documents delivered by such Purchaser will be true and
correct as of the dates thereof and will be true and correct as of the effective date of the
Registration Statement. Notwithstanding the foregoing, from the effective date of the Registration
Statement through the date that the Registration Statement is no longer effective, each Purchaser
agrees to promptly notify the Company if at any time the information contained in the documents
delivered by or on behalf of such Purchaser pursuant to this Agreement becomes untrue or incorrect
in any manner and shall promptly provide the Company with corrected information if such information
is required to be disclosed in the Registration Statement or to make the statements made in the
Registration Statement not misleading. Such Purchaser further represents and warrants that it is
not purchasing any Securities or acquiring any Conversion Shares on behalf of any managed account
other than as listed in its Managed Account Representation Letter.

     (n) Such Purchaser represents that, other than under any Series E Agreements to which such
Purchaser is a party (if any), it: (i) has not entered into any contracts, arrangements,
understandings or relationships (written or otherwise) with any other Person or Persons (other than
the Company or a limited partner/member of such Purchaser, which in any case shall not violate any
securities laws) with respect to any securities of the Company (including but not limited to
transfer or voting of any of the Securities or Conversion Shares, finder’s fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or
the giving or withholding of proxies) or the operations, management or control of the Company; (ii)
is not bound together, under common control with, in a common enterprise with, or otherwise acting
in concert with, any other Person or Persons (other than a limited partner/member of such
Purchaser, which in any case shall not violate any securities laws) in connection with the
Transactions; and (iii) such Purchaser does not own any securities of the Company which are pledged
or otherwise subject to a contingency the occurrence of which would give another Person voting
power or investment power over such securities.

     (o) No state, federal or foreign regulatory approvals, permits, licenses or consents or other
contractual or legal obligations are required for such Purchaser to enter into this Agreement or to
purchase the Securities to be purchased by such Purchaser or to acquire the Conversion Shares to be
acquired by such Purchaser.

18

 

     (p) Without limiting the provisions of any confidentiality agreement entered into between such
Purchaser and the Company, such Purchaser agrees that, without the Company’s prior written consent,
until the Registration Statement is filed, such Purchaser will keep confidential and will not
disclose or divulge any confidential, proprietary or secret information (including the Projections
and other confidential information in the Confidential Memorandum) which such Purchaser has
received or may receive from the Company in connection with the Transactions which information the
Company has identified in writing to such Purchaser to be confidential, unless such information is
known, or until such information becomes known, by the public through no fault of such Purchaser
prior to the date the Registration Statement is filed.

     (q) The residence or principal place of business of such Purchaser is set forth on the
signature page to this Agreement and the offer and sale of the Securities to such Purchaser was
made solely in that state.

     (r) Such Purchaser understands and acknowledges that the Company intends to use the proceeds
from the sale of the Securities as follows:

	 	(i)	 	to repay the Laurus Debt (excluding the portion thereof which is to be
converted into shares of Common Stock in accordance with Section 3.1(j));
	 
	 	(ii)	 	to pay the cash portion of the consideration payable upon consummation of the
Parke Acquisition (which will not exceed $3,000,000);
	 
	 	(iii)	 	to pay expenses in connection with the foregoing and the consummation of the
Transactions, and
	 
	 	(iv)	 	for general corporate purposes.

Such Purchaser represents to the Company that such Purchaser has had the opportunity to (A) review
each of the agreements, notes, security agreements and other documents, agreements and instruments
evidencing the Laurus Debt and the Agreement and Plan of Merger relating to the Parke Acquisition
and to obtain any additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of information furnished by
the Company with respect to the Laurus Debt and the Parke Acquisition, and (B) ask questions and
receive answers concerning Parke, its business, assets, management, results of operations,
financial condition and prospects and the terms and conditions of the Parke Acquisition and to
obtain any additional information which the Company possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy of information furnished by the Company.
Such Purchaser understands that any acquisition by the Company of another company, such as Parke,
involves a high degree of risk and that there can be no assurance that any such acquisition will be
successful or beneficial to the Company.

     (s) Such Purchaser understands that as of June 12, 2006 the Common Stock no longer traded on
the American Stock Exchange, and that the Company has elected to voluntarily de-list the Common
Stock from the American Stock Exchange (as described in the Company’s current report on Form 8-K
dated May 22, 2006 filed with the Commission on May 23, 2006 referred to in subsection
4.1(a)(x) hereof) and have the Common Stock trade in the pink sheets until the

19

 

Company was able to have the Common Stock listed on the Over-the-Counter Bulletin Board
(“OTCBB”), which occurred on or about June 13, 2006; and

     (t) Other than the transactions contemplated hereunder, such Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such
Purchaser, executed any disposition, including short sales, in the securities of the Company during
the period commencing from the time that such Purchaser first received a term sheet from the
Company or any other Person setting forth the material terms of the transactions contemplated
hereunder until the date hereof (“Discussion Time”). Each Purchaser understands and
acknowledges, severally and not jointly with any other Purchaser, that the Commission currently
takes the position that coverage of short sales of shares of the Common Stock “against the box”
prior to the effective date of the Registration Statement is a violation of Section 5 of the
Securities Act, as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly
Available Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel,
Division of Corporation Finance. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of
the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the representation set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities and
acquire the Conversion Shares covered by this Agreement. Other than to other Persons party to this
Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this transaction).

     4.2 Company Representations and Warranties. The Company hereby represents and
warrants to each Purchaser as follows:

     (a) The Company and each of its subsidiaries has been duly organized and is validly existing
in good standing under the laws of the jurisdiction of its organization, is duly qualified as a
foreign entity and in good standing under the laws of each jurisdiction where its ownership, lease
or operation of property or the conduct of its business requires such qualification, other than in
such jurisdictions where the failure to be so qualified and in good standing could not reasonably
be expected to have a Material Adverse Effect. The Company has all requisite power and authority
to execute, deliver and perform its obligations under this Agreement, to consummate the
Transactions and to conduct its business as currently conducted.

     (b) The execution, delivery and performance of this Agreement by the Company, the
authorization, sale, issuance and delivery of the Securities and the authorization, issuance and
delivery of the Conversion Shares pursuant to the Conversion, and the consummation by the Company
of the Transactions on its part herein contemplated, have been duly authorized by all necessary
corporate action of the Company and this Agreement has been duly executed and delivered by the
Company; and this Agreement, when duly executed and delivered by each Purchaser and the Company,
will constitute a valid and legally binding instrument of the Company enforceable in accordance
with its terms, except as the enforceability hereof may be limited by (i) bankruptcy, insolvency,
moratorium and other laws affecting the rights and remedies of creditors generally, (ii) rules of
law governing specific performance, injunctive relief

20

 

or other equitable remedies and by general principles of equity, and (iii) the indemnification
provisions of Section 5.6.

     (c) Assuming the accuracy of the representations and warranties of each Purchaser contained in
this Agreement, the Common Shares issuable hereunder will be issued in compliance with all
applicable federal and state securities laws. The Common Shares are duly authorized and reserved
for issuance, and, when issued will be validly issued, fully paid and nonassessable, and free of
all liens, encumbrances and restrictions imposed by law (other than restrictions upon transfer
imposed generally by applicable securities laws), or any agreement of the Company and not subject
to any preemptive rights, co-sale rights, rights of first refusal or similar rights in favor of
other Persons which have not been validly waived.

     (d) As of the date hereof, the Company has authorized 200,000,000 shares of Common Stock and
5,000,000 shares of preferred stock. As of the date hereof, the Company has approximately
3,420,000 issued and outstanding shares of Common Stock and 232,613 issued and outstanding shares
of Series E Preferred Stock. Other than the securities described in this Section 4.2(d)
and outstanding options, rights and warrants to purchase up to approximately 2,201,141 shares of
Common Stock, the Company does not have any other securities or rights to purchase its securities
outstanding except the convertible notes evidencing the Laurus Debt and except the obligation to
issue shares of Common Stock as a portion of the merger consideration under the Parke Acquisition
Agreement. Conversion of a portion of the Laurus Debt into Common Stock, as contemplated by
Section 3.1(j), will result in the issuance of approximately 1,345,361 shares of Common
Stock to Laurus. Closing of the Parke Acquisition will result in the issuance of 5,000,000 shares
of Common Stock to Daniel W. Parke.

     (e) The execution and delivery of this Agreement, the authorization, sale, issuance and
delivery of the Securities and Conversion Shares and the consummation by the Company of the
Transactions on its part herein contemplated and the compliance by the Company with the terms
hereof do not (i) violate the Certificate of Incorporation (as amended to date) of the Company,
including the Certificate of Designations of the Series E Preferred Stock of the Company, or the
By-Laws (as amended to date) of the Company; or (ii) violate any of the terms or provisions of, or
constitute a default under or give a right of termination of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any
of their properties or assets are subject; or (iii) assuming the accuracy of the representations
and warranties of each Purchaser contained in this Agreement, result in a material violation of any
applicable law, statute or any order, judgment, decree, rule or regulation of any court or
Governmental Authority having jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets. No consent, approval, authorization, order, registration or
qualification of or with any court or Governmental Authority is required for the valid
authorization, execution, delivery and performance by the Company of this Agreement, the issuance
of the Securities and Conversion Shares or the consummation by the Company of the Transactions on
its part contemplated herein, except for such consents, approvals, authorizations, registrations or
qualifications as may be required under Federal securities law or Applicable State Law, or with
respect to requirements applicable to such Purchaser.

21

 

     (f) Since December 31, 2004, the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the Commission pursuant to the reporting
requirements of the Exchange Act (all of the foregoing filed prior to the date hereof (including
all exhibits included therein and financial statements and schedules thereto and documents
incorporated by reference therein) being hereinafter referred to as the “Commission
Documents”). As of their respective dates, the Commission Documents complied in all material
respects with the requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder applicable to the Commission Documents. Each Commission Document does not
as of the date hereof contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein in light of
the circumstances in which they were made not misleading. The Commission Documents, including the
financial statements, when they were filed with the Commission, conformed in all material respects
with the applicable accounting requirements and the published rules and regulations of the
Commission with respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of operations and cash flows for the periods then
ended.

     When the Registration Statement becomes effective, the documents incorporated by reference in
the Registration Statement, when they were or are filed with the Commission, conformed or will
conform in all material respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder, and none of such documents
contained or will contain an untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by reference in the Registration
Statement after the effective date or any further amendment or supplement thereto after the
effective date, when such documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished by any Purchaser in such Purchaser’s
Selling Stockholder Questionnaire.

     When the Registration Statement becomes effective, the Registration Statement will conform,
and any further amendments or supplements to the Registration Statement will conform, in all
material respects to the requirements of the Securities Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto, and as of the applicable filing date as to any
amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information

22

 

furnished in writing to the Company by any Purchaser in such Purchaser’s Selling Stockholder
Questionnaire.

     (g) Since December 31, 2005, neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental action,
order or decree.

     (h) Neither the Company nor any of its subsidiaries is in violation of, or in default under,
nor has there been any waiver given with respect to, any term or provision of any charter, by-law,
mortgage, indenture, agreement, instrument, statute, rule, law, regulation, judgment, decree,
order, writ, or injunction applicable to it, such that such violations and defaults in the
aggregate could reasonably be expected to result in any Material Adverse Effect or to materially
adversely affect the ability of the Company to perform in any material respect its obligations
under this Agreement. All Regulatory Approvals required by the Company and its subsidiaries to
conduct their respective business as now conducted by them have been obtained and are in full force
and effect (except where the failure to have a Regulatory Approval could not reasonably be expected
to have a Material Adverse Effect), and the Company and its subsidiaries are in material compliance
with the terms and requirements of such Regulatory Approvals. Except as set forth on Schedule
4.2(h), and except for de-listing the Common Stock from The American Stock Exchange (as
described in the Company’s current report on Form 8-K dated May 22, 2006 filed with the Commission
on May 23, 2006 referred to in subsection 4.1(a)(x) hereof), since December 31, 2005, none
of the Company or any of its subsidiaries has received any written notice or other written
communication from any Governmental Entity regarding (i) any revocation, withdrawal, suspension,
termination or modification of, or the imposition of any material conditions with respect to, any
Regulatory Approval, (ii) any violation of any law by the Company or any of its subsidiaries, (iii)
any other limitations on the conduct of business by the Company or any of its subsidiaries or (iv)
any comments from the staff of the Commission on the Commission Documents (other than comments on
the Company’s registration statement on Form S-3 filed with the Commission on December 19, 2005, as
amended by Form S-3/A filed with the Commission on March 3, 2006, as amended by Amendment No. 2 to
Form S-3 filed with the Commission on May 9, 2006 referred to in subsection 4.1(a)(i) hereof).

     (i) The Company has good and marketable title to the assets (the “Assets”)
reflected on the balance sheet included in the financial statements which are set forth in the
Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2006 filed with the
Commission on May 15, 2006 (the “March 31 Balance Sheet”), except for sales of inventory
and collection of receivables and payment of expenses in the ordinary course of business. Except
for liens and security interests securing the Laurus Debt, and for a mortgage lien on the Company’s
headquarters securing a loan from American Chartered Bank, none of the Assets is subject to any
encumbrances, except for minor liens that in the aggregate are not substantial in amount, do not
materially detract from the value of the property or assets subject thereto or interfere with the
present use thereof and have not arisen other than in the ordinary course of business. There are
no pending or threatened condemnation proceedings relating to any of the facilities of the Company.
The facilities, fixtures and equipment of the Company are in good operating condition and repair
(except for ordinary wear and tear and any defect for which the cost of repairing would not be
material), are sufficient for the operation of the Company’s business as

23

 

presently conducted and are in conformity in all material respects with all applicable laws,
ordinances, orders, regulations and other requirements (including applicable zoning, environmental,
motor vehicle safety or standards, occupational safety and health laws and regulations) relating
thereto currently in effect, except where the failure to conform could not reasonably be expected
to have a Material Adverse Effect.

     (j) Except as disclosed on Schedule 4.2(j), there is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the Company or any of
its subsidiaries before any court, arbitrator or administrative or governmental body that (a) seeks
to enjoin or otherwise prevent the consummation of the Transactions, or (b) materially and
adversely affects, or as to which there is a reasonable possibility of an adverse decision that
would have a Material Adverse Effect. Neither the Company nor any of its subsidiaries is in
violation of any judgment, order, writ, injunction, decree, rule or regulation of any court or
governmental department, commission, board, bureau, agency or instrumentality, the violation of
which reasonably could be expected to have a Material Adverse Effect.

     (k) The Company maintains or is covered by valid policies of workers’ compensation insurance,
product liability insurance, and casualty and liability insurance with respect to its properties
and business covering the respective risks of the Company and its subsidiaries of such types and in
such amounts, with such deductibles and with such insurance companies as are customary for other
companies of similar size and engaged in similar lines of business.

     (l) Except as set forth on Schedule 4.2(l), neither the Company nor any of its
subsidiaries is directly or indirectly a party to or otherwise involved in any transaction
including, without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service, with any Affiliate. The Company has made available to the Purchasers
copies of all agreements and documents related to all transactions listed on Schedule
4.2(l).

     (m) The Company and each of its subsidiaries has timely filed (or caused to be filed) all Tax
Returns that are required to be filed by (or with respect to) it on or before the date hereof and
has paid all Taxes due on or before the date hereof whether or not reflected on such Tax Returns,
including pursuant to any assessment received by it. All such Tax Returns were true, correct and
complete in all material respects. None of such Tax Returns has been audited by the relevant
taxing authority, and no taxing authority has notified (or threatened) the Company or any of its
subsidiaries, orally or in writing, that such taxing authority will or may audit any such return.
The Company and its subsidiaries have complied with all requirements of the Code, the Treasury
Regulations and any state, local or foreign law relating to the payment and withholding of Taxes
relating to them, and the Company and each of its subsidiaries have, within the time and in the
manner prescribed by applicable law, paid over to the proper taxing authorities all amounts
required to be so withheld and paid over relating to them. There are no liens for Taxes with
respect to any asset of the Company or any of its subsidiaries, except for liens with respect to
Taxes that are not yet due and payable. No taxing authority in a jurisdiction where the Company or
any of its subsidiaries, as the case may be, does not file tax returns has made a claim, assertion
or threat that the Company or any of its subsidiaries is or may be subject to taxation in such
jurisdiction.

24

 

     (n) Assuming the accuracy of the representations and warranties of the Purchasers contained in
this Agreement, the offer, sale and issuance of the Securities and the issuance of the Conversion
Shares are exempt from the registration requirements of the Securities Act. Neither the Company
nor any agent on its behalf has solicited or will solicit any offers to sell or has offered to sell
or will offer to sell all or any part of the Securities to any Person so as to bring the offering
and sale of such Securities by the Company within the registration provisions of the Securities
Act. The Company has filed all notices and satisfied all applicable registration or qualification
requirements of any state securities or Blue Sky law of any applicable jurisdiction with respect to
the offer, issuance and sale of the Securities.

     (o) Schedule 4.2(o) lists all agreements with any Person in which the Company has
granted registration rights with respect to its capital stock. Schedule 4.2(o) lists all
agreements, arrangements or understandings between the Company and one or more stockholders of the
Company relating to the transfer of any class of securities of the Company (including, without
limitation, tag-along rights, drag-along rights, rights of first offer or any similar rights or
obligations) or voting of any class of securities of the Company. Except as set forth on
Schedule 4.2(o), all holders of piggyback registration rights which otherwise would apply
with respect to the Registration Statement (as defined in Section 5.1 below) have waived
such rights with respect to the registration of the Registrable Securities (as defined in
Section 5.1 below).

     (p) The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of
2002 which are applicable to it as of the date hereof. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company
and designed such disclosure controls and procedures to ensure that material information relating
to the Company, including each of its subsidiaries, is made known to the certifying officers by
others within those entities, particularly during the period in which the Company’s most recently
filed periodic report under the Exchange Act, is being prepared. The Company’s certifying officers
have evaluated the effectiveness of the Company’s controls and procedures as of the date prior to
the filing date of the most recently filed periodic report under the Exchange Act (such date, the
“Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company’s internal controls (as such
term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s
knowledge, in other factors that could significantly affect the Company’s internal controls.

     (q) Prior to June 12, 2006, the Company’s Common Stock was registered pursuant to Section
12(b) of the Exchange Act and listed for trading on the American Stock Exchange. Commencing on
June 12, 2006, the Common Stock is registered pursuant to Section 12(g) of the Exchange Act. The
Common Stock is currently traded on the OTCBB. The Company has taken no action designed to, or
which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is
contemplating terminating such registration.

     (r) The Company understands and confirms that the Purchasers will rely on the foregoing
representations and covenants in effecting transactions in securities of the Company.

25

 

Excluding the Projections, as to which the Company makes no representations or warranties
whatsoever, all disclosure provided to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the disclosure schedules to this Agreement, furnished
by the Company with respect to the representations and warranties made herein are true and correct
in all material respects with respect to such representations and warranties and do not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were made, not
misleading. The Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 4.1 hereof.

     (s) Assuming the accuracy of the Purchasers’ representations and warranties contained in this
Agreement, neither the Company, nor to its knowledge any of its Affiliates, nor to its knowledge
any Person acting on its or their behalf, has made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of the Securities Act
or any applicable shareholder approval provisions.

     (t) Based on the financial condition of the Company as of the Closing Date after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the
Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on
or in respect of the Company’s existing debts and other liabilities (including known contingent
liabilities but excluding redemption of preferred stock) as they mature; and (ii) the current cash
flow of the Company, together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would be sufficient to
pay all amounts on or in respect of its debt when such amounts are required to be paid. The
Company has no knowledge of any facts or circumstances which lead it to believe that it will file
for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. The Commission Documents set forth as of the dates thereof
all outstanding secured and unsecured Indebtedness of the Company and each of its subsidiaries, or
for which the Company or any of its subsidiaries has commitments. For the purposes of this
paragraph, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed
in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of business; and (c) the
present value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.

     (u) The Company is eligible to register the resale of its Common Stock by the Purchasers under
Form S-3 promulgated under the Securities Act and the Company hereby covenants and agrees to use
its best efforts to maintain its eligibility to use Form S-3 until the Registration Statement
covering the resale of the Securities and the Non-Excluded Conversion Shares shall have been filed
with, and declared effective by, the Commission.

26

 

     (v) Neither the Company nor any person acting on behalf of the Company has offered or sold any
of the Securities by any form of general solicitation or general advertising. The Company has
offered the Securities for sale only to the Purchasers and certain other entities which it believes
are “accredited investors” within the meaning of Rule 501 under the Securities Act.

     (w) Neither the Company, nor to the knowledge of the Company, any agent or other person acting
on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from corporate funds, or
(iii) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

     4.3 Company Covenants. The Company hereby covenants as follows:

     (a) The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated
with the offer or sale of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchasers.

     (b) The Company shall file a current report on Form 8-K disclosing the material terms of the
transactions contemplated hereby, and shall attach the Transaction Documents thereto. The Company
and each Purchaser shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any
such press release or otherwise make any such public statement without the prior consent of the
Company, with respect to any press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which consent shall not unreasonably
be withheld, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser,
or include the name of any Purchaser in any filing with the Commission or any regulatory agency or
exchange, without the prior written consent of such Purchaser, except (i) as required by federal
securities law in connection with the Registration Statement and (ii) to the extent such disclosure
is required by law or such exchange’s regulations.

     (c) The Company has no existing shareholder rights plans. No claim will be made or enforced
by the Company or, to the knowledge of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions
of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.

     (d) The Company covenants and agrees that, if a Purchaser notifies the Company that such
Purchaser does not want the Company to provide such Purchaser, nor any of its agents or

27

 

counsel, with any information that the Company believes constitutes material non-public
information, then the Company will not provide any such information to such Purchaser, its agents
or counsel, unless prior thereto such Purchaser shall have executed a written agreement acceptable
to the Company regarding the confidentiality and use of such information. The Company understands
and confirms that any Purchaser which has made such a request to the Company will be relying on the
foregoing covenant in effecting transactions in securities of the Company.

     (e) From the date hereof until the effective date of the Registration Statement, neither the
Company nor any of its subsidiaries shall issue shares of Common Stock, except (i) upon
consummation of the Transactions, (ii) upon conversion of any of the Laurus Debt, (iii) upon
consummation of the Parke Acquisition, (iv) pursuant to exercise of outstanding options, warrants
and other rights to acquire such shares, or (v) pursuant to the Rights Offering.

     (f) The obligations of each Purchaser to acquire the Securities and Conversion Shares to be
acquired by him or it hereunder are several and not joint with the obligations of any other
Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser with respect to acquiring Securities or Conversion Shares hereunder.
Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such purchases of Securities or acquisitions of
Conversion Shares hereunder. Each Purchaser shall be entitled to independently protect and enforce
its rights to acquire Securities arising out of this Agreement and it shall not be necessary for
any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in its review and negotiation of
this Agreement. The Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was required or
requested to do so by the Purchasers. Notwithstanding the foregoing, each Series E Holder
acknowledges that it shall be a condition precedent to Conversion of the Series E Preferred Stock
under Article 6 hereof that all Series E Holders convert their shares of Series E Preferred Stock
in accordance therewith.

     (g) The net proceeds of the sale of the Securities will be used by the Company (i) to repay
the Laurus Debt (excluding the portion thereof which is to be converted into shares of Common Stock
in accordance with Section 3.1(j)); (ii) to pay the cash portion of the consideration
payable upon consummation of the Parke Acquisition (which is expected to not exceed $3,000,000);
(iii) to pay expenses in connection with the foregoing and the consummation of the Transactions,
and (iv) for general corporate purposes.

     (h) The Company will use reasonable efforts to commence the Rights Offering within forty (40)
days after Closing hereunder (but not prior to filing the Registration Statement required to be
filed under Section 5.1(a) hereof) and shall offer to sell up to 29,475,000 shares of Common Stock
thereunder at the Offer Price per share.

     (i) Excluded Conversion Shares need not carry the legend set forth in Section 4.1(e) (or any
similar securities law legend) and, upon request, the Company will cause any certificates

28

 

evidencing Excluded Conversion Shares which bear such a legend to be reissued without the
legend.

     4.4 Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Purchasers herein shall survive the execution of this
Agreement, the delivery to the Purchasers of the Securities and the payment therefore and the
issuance to the Series E Holders of the Conversion Shares.

ARTICLE
5  –  REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT

     5.1 Required Registration. The Company shall:

     (a) Subject to Section 5.2 below, use its best efforts, subject to receipt of all
necessary information from the Purchasers, to prepare and file with the Commission a registration
statement (the “Registration Statement”) by (the “Target Date”) the later of (i) 15
Business Days after the date upon which the Commission declares effective its registration
statement (File No 333-130443) on Form S-3, or (ii) 30 days after the consummation of the Parke
Acquisition; provided that the Target Date shall not be later than August 4, 2006 in any
event. The Registration Statement shall cover the resale of the Common Shares and any Non-Excluded
Conversion Shares (collectively, the “Registrable Securities”) by the Purchasers from time
to time through the over-the-counter market or in privately-negotiated transactions or otherwise.

     (b) Provide a draft of the Registration Statement to each Purchaser for review and comment no
later than five (5) trading days prior to the thirtieth (30th) day following
consummation of the Parke Acquisition. Subject to the provisions of Section 5.2 below, and
to receipt of all necessary information from the Purchasers, the Company use reasonable efforts to
cause the Registration Statement to be declared effective as promptly as practicable after filing
thereof, and in any event by December 31, 2006.

     (c) Cause the Registration Statement to be declared effective as of 4:00 p.m. eastern time on
the date when declared effective, which shall be a date not later than the fifth (5th)
business day after the Company receives notification from the Commission that it has no further
comments with respect to the Registration Statement.

     (d) File a prospectus with the Commission by 9:00 a.m. on the first trading day after the date
when the Registration Statement is declared effective, whether required or not under Rule 424.

     (e) Use reasonable efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earlier of the date (i) when all Registrable Securities
have been sold, or (ii) which is 30 months after the date upon which the Registration Statement is
declared effective.

     (f) File any documents required of the Company for customary “blue sky” clearance in Wisconsin
and New York and any other states specified in writing by the Purchasers and

29

 

reasonably required by the Purchasers in order to resell the Registrable Securities;
provided, however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so qualified or has not so
consented.

     (g) File with the Commission in a timely manner the reports and other documents required to be
filed by it under the Securities Act and the Exchange Act (or, if the Company is not required to
file such reports, it will, upon the request of any Purchaser, make publicly available other
information so long as necessary to permit sales by the Purchasers under Rule 144), all to the
extent required to enable the Purchasers to sell the Registrable Securities from time to time
without registration under the Securities Act within the limitations provided by Rule 144;
provided, however, that nothing in this Agreement shall require the Company to file reports
under the Securities Act or the Exchange Act, to register any of its securities under the Exchange
Act, or to make publicly available any information concerning the Company at any time when it is
not required by law or by any other agreement by which it is bound to do any of the foregoing.

     (h) Subject to Section 7.1, all expenses relating to the registration and offering of
the Registrable Securities pursuant to this Section 5.1 shall be borne by the Company,
except that the Purchasers shall bear underwriting and selling commissions attributable to their
Registrable Securities being registered and any transfer taxes on shares being sold by such
Purchaser.

     5.2 Purchasers’ Cooperation. In addition to and without limitation of any other
covenant, representation or warranty contained in this Agreement, each Purchaser shall:

     (a) Complete the Selling Stockholder Questionnaire related to the Registration Statement in
the form attached hereto as Annex II and deliver the same to the Company at the Closing and
thereafter promptly provide to the Company any updates necessary for any information therein to be
true and correct.

     (b) Furnish to the Company, upon the Company’s request, all information regarding such
Purchaser and the intended distribution of such Purchaser’s Registrable Securities included in any
Registration Statement under Section 5.1 for the purpose of preparing such Registration
Statement, to the extent that such information is required to comply with applicable legal
requirements.

     (c) Upon the Company’s request, notify the Company of the number of Registrable Securities
held by such Purchaser and the number of Registrable Securities that have been sold and remain to
be sold pursuant to any registration statement under Section 5.1 on which any Registrable
Securities are registered. In any event, each Purchaser shall promptly notify the Company when all
registered Registrable Securities of such Purchaser have been sold.

     5.3 Transfer of Shares. Each Purchaser agrees not to effect any disposition of any
Registrable Securities or the right to purchase any Registrable Securities that would constitute an
offer or sale within the meaning of the Securities Act except as contemplated in Section
5.1 or pursuant to an exemption from registration under the Securities Act.

     5.4 Company’s Other Obligations In Respect of Registration. In connection with the
registration by the Company of the Registration Statement:

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     (a) The Company will promptly notify each Purchaser holding Registrable Securities covered by
the Registration Statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of which the
prospectus included in such Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or incomplete in the light of the circumstances then
existing.

     (b) The Company will furnish to each Purchaser with respect to the Registrable Securities
registered under the Registration Statement (and to each underwriter, if any, of such Registrable
Securities ) such number of copies of the Registration Statement and any amendment or supplement
thereto and of prospectuses and preliminary prospectuses in conformity with the requirements of the
Securities Act as such Purchaser shall reasonably request.

     (c) The Company shall prepare and file with the Commission such amendments and supplements to
such Registration Statement and the prospectus used in connection therewith as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading or incomplete in
the light of the circumstances then existing; provided, however, the Company may, subject
to the last sentence of this Section 5.4(c), temporarily suspend the use of the prospectus
forming a part of such registration statement in the event that, and during such period as, (i) the
Company is engaged in confidential negotiations or other confidential business activities,
disclosure of which would be required to be included or incorporated by reference in such
prospectus or registration statement, and (ii) the Board of Directors of the Company determines in
good faith that such disclosure would have a material adverse effect on any such confidential
negotiations or other confidential business activities or would be materially detrimental to the
Company. In such event, subject to the last sentence of this Section 5.4(c), the Company
may suspend the use of such prospectus until such time as an amendment to such Registration
Statement has been filed by the Company and declared effective by the Commission, or until such
time as the Company has filed an appropriate report with the Commission pursuant to the Exchange
Act. Anything herein to the contrary notwithstanding, the Company does not have the right to
suspend the use of such prospectus or otherwise restrict the Purchasers’ ability to sell or
otherwise transfer the Registrable Securities (or any other securities of the Company any Purchaser
holds) for a period of more than 90 days (which need not be consecutive days) in any twelve month
period.

     (d) The Company will promptly inform the Purchasers when any stop order by the Commission has
been issued with respect to the Registrable Securities and use its best efforts to promptly cause
such stop order to be withdrawn.

     (e) The Company will cause all Registrable Securities registered pursuant to such Registration
Statement to be listed on each securities exchange or market system on which the Company’s Common
Stock then is listed.

     (f) The Company will take such other actions as may be reasonably necessary to effect the
registration of the resale of the Registrable Securities in accordance with the terms of

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this Agreement, to allow such Registrable Securities to trade in the same market system or
exchange where the Company’s Common Stock then trades, and to comply with all rules and regulations
of the Commission applicable thereto.

     5.5 Indemnification and Contribution.

     (a) For the purpose of this Section 5.5:

     (i) The term “Selling Shareholder” shall include a Purchaser and its officers,
directors, trustees, partners and members and successors and assigns and any Person which
controls the Purchaser and the officers, directors, trustees, partners and members of any
such Person; and

     (ii) The term “Registration Statement” shall include the Registration Statement
to be filed pursuant to Section 5.1 hereof and any final prospectus, supplement or
amendment included in or relating to the Registration Statement.

     (b) The Company agrees to indemnify and hold harmless each Selling Shareholder from and
against any losses, claims, damages or liabilities to which such Person may become subject (under
the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon any untrue statement or alleged
untrue statement of a material fact contained in a Registration Statement or the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading or arise out of any failure by the Company to fulfill
any undertaking included in a Registration Statement and the Company will reimburse such Selling
Shareholder for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of, or is based upon, any such untrue
statement or omission made in such Registration Statement in reliance upon written information
furnished to the Company by or on behalf of such Selling Shareholder expressly for use in
preparation of the Registration Statement, or the failure of such Selling Shareholder to comply
with the covenants and agreements contained in Sections 4.1, 5.2 and 5.3
hereof respecting sale of any Registrable Securities or any statement or omission in any prospectus
that is corrected or made not misleading in any subsequent prospectus that was delivered to the
related Purchaser prior to the pertinent sale or sales by such Purchaser.

     (c) Each Purchaser, severally and not jointly, agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, and each of its officers and directors who sign the Registration Statement) from
and against any losses, claims, damages or liabilities to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or otherwise), insofar
as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise
out of, or are based upon, any failure by such Purchaser to comply with the covenants and
agreements contained in Sections 4.1, 5.2 and 5.3 hereof respecting sale of
any Registrable Securities, or any untrue statement or alleged untrue statement of a material fact
contained (or incorporated by reference), or the omission or alleged omission to state therein a

32

 

material fact required to be stated therein or necessary to make the statements therein not
misleading, in the Registration Statement on the effective date thereof if such untrue statement
was made in reliance upon and in conformity with written information furnished by or on behalf of
such Purchaser for use in preparation of such Registration Statement. Such Purchaser will
reimburse the Company (or such officer, director or controlling person), as the case may be, for
any legal or other expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. In no event shall the liability of such Purchaser hereunder
be greater in amount than the dollar amount of the net proceeds received by such Purchaser upon the
sale of the Registrable Securities giving rise to such indemnification obligation.

     (d) Promptly after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an indemnifying person pursuant
to this Section 5.5, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an indemnified person, such
indemnifying person shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such indemnified person for any
legal expenses subsequently incurred by such indemnified person in connection with the defense
thereof; provided, however, that if there exists or shall exist a conflict of interest that
would make it inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person, the indemnified
person shall be entitled to retain its own counsel (in addition to local counsel) at the expense of
such indemnifying person; provided, further, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel for all indemnified
parties. The indemnifying party shall not be liable for any settlement of any proceeding effected
without its written consent, but, if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party or parties in
accordance with the provisions of this Section 5.5.

     (e) If the indemnification provided for in this Section 5.5 from the indemnifying
person is determined by a court of competent jurisdiction to be unavailable to an indemnified
person hereunder in respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying person, in lieu of indemnifying such indemnified person, shall
contribute to the amount paid or payable by such indemnified person as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying person and indemnified persons in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying person and indemnified
persons shall be determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission or alleged
omission, has been made by, or relates to information supplied by, such indemnifying person or
indemnified persons, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to

33

 

include, subject to the limitations set forth in this Section 5.5, any reasonable
legal or other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.5(e) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of this Section
5.5(e), no Purchaser shall be required to contribute any amount in excess of the dollar amount
of the gross proceeds received by such Purchaser upon the sale of the Registrable Securities giving
rise to such contribution obligation. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

     5.6 Termination of Conditions and Obligations. The conditions precedent imposed by
Article 2 or this Article 5 upon the transferability of the Registrable Securities
shall cease and terminate as to any particular number of the Registrable Securities when such
Registrable Securities shall have been effectively registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition set forth in the
Registration Statement covering such Registrable Securities or at such time as an opinion of
counsel satisfactory to the Company shall have been rendered to the effect that such conditions are
not necessary in order to comply with the Securities Act.

     5.7 Information Available. So long as a registration statement is effective covering
the resale of any Registrable Securities of a Purchaser, the Company will furnish to such
Purchaser:

     (a) As soon as practicable after available (but in the case of the Company’s Annual
Report on Form 10-K, within 120 days after the end of each fiscal year of the Company), one
copy of (i) its Annual Report on Form 10-K or equivalent form (which shall contain financial
statements audited in accordance with generally accepted accounting principles by a firm of
certified public accountants), and (ii) a full copy of the Registration Statement covering
the Registrable Securities of such Purchaser which are registered thereby (the foregoing, in
each case, excluding exhibits);

     (b) Upon the reasonable request of such Purchaser, any exhibits excluded by the
parenthetical to clause (ii) of subparagraph (a) of this Section 5.7 and all other
information that is made available to shareholders; and

     (c) Upon the reasonable request of such Purchaser, an adequate number of copies of the
prospectuses to supply to any other party requiring such prospectuses;

and the Company, upon the reasonable request of such Purchaser, will meet with such Purchaser or a
representative thereof at the Company’s headquarters to discuss all information relevant for
disclosure in the Registration Statement covering such Registrable Securities and will otherwise
cooperate with such Purchaser conducting an investigation for the purpose of reducing or
eliminating such Purchaser’s exposure to liability under the Securities Act, including the
reasonable production of information at the Company’s headquarters.

34

 

     5.8 Effect of Failure to File or Obtain Effectiveness of Registration Statement.

     (a) If the Registration Statement covering the resale of all the Registrable Securities
required to be filed by the Company pursuant to this Agreement has not been filed with the
Commission on or before the Target Deadline or has not been declared effective by the Commission on
or before November 3, 2006 (either event, a “Registration Default”), then following such
Registration Default and until such Registration Default is cured by the Company filing such
Registration Statement with the Commission or such Registration Statement being declared effective
by the Commission, as applicable (a “Registration Cure”), the Company shall pay to each
Purchaser an amount equal to the product of (x) one thirtieth (1/30th) of one percent
(1%) of the purchase price paid by such Purchaser on the Closing Date, multiplied by (y) the number
of days which elapse between the date of the Registration Default and the date of the Registration
Cure, provided, however, that in no event shall the payments to which a Purchaser shall be
entitled pursuant to this Section 5.8 exceed twelve percent (12.0%) of the total purchase
price paid by such Purchaser hereunder.

Amounts payable in respect of any Registration Default are sometimes referred to herein as
“Default Payments”.

     (b) Notwithstanding the foregoing, if the sole reason why the Registration Statement has not
been filed on or before the Target Deadline or has not become effective on or before December 31,
2006 (the “Effectiveness Deadline”) is because any of the Purchasers did not provide the
Company with information which is required to be disclosed in the Registration Statement and which
the Company requested such Purchaser to so provide in writing at least ten (10) days prior to the
Target Deadline or December 31, 2006, as applicable, then the Target Deadline and the Effectiveness
Deadline shall be extended until the later of (i) ten (10) days after the information has been
provided to the Company or (ii) ten (10) days after the date which otherwise would be the Target
Deadline or the Effectiveness Deadline, as applicable, and the Company’s obligation to pay Default
Payments will not begin to accrue until after the extended Target Deadline or Effectiveness
Deadline, as applicable.

     (c) The Default Payments shall be paid in cash, at the end of each 30-day period following the
Registration Default.

ARTICLE 6 – CONVERSION OF SERIES E PREFERRED STOCK

     6.1 Conversion of Series E Preferred Stock. Notwithstanding anything to the contrary
set forth in the Certificate of Designations of the Series E Preferred Stock or any of the Series E
Agreements or any of the other Transaction Documents, in order to induce Company to sell and issue
to the Series E Holders which are listed on Schedule I hereto shares of its Common Stock
hereunder and in consideration of the mutual agreement by all of the Series E Holders to convert
all of their shares of Series E Preferred Stock to Common Stock on the terms and conditions as set
forth below, each Series E Holder hereby represents and warrants to and covenants and agrees with
the Company as follows:

     (a) Such Series E Holder hereby elects, for itself, to convert all of its shares of Series E
Preferred Stock, whether now held or acquired after the date hereof but prior to the Closing

35

 

Date (including any shares which may be issuable in respect of accrued but unpaid dividends on
Series E Preferred as of the Closing Date, it being agreed by the Company that if the Closing
occurs on a date other than a date when Series E Preferred Stock dividends are payable, a pro-rated
dividend through the day of Closing will be credited to each holder of Series E Preferred Stock for
purposes hereof) into shares of Common Stock, as provided by the Certificate of Designations
applicable to the Series E Preferred Stock, however, notwithstanding the provisions of such
Certificate of Designations, such Series E Holder agrees with the Company that such Series E
Holder’s aggregate shares of Series E Preferred Stock shall convert into the specific number of
shares of Common Stock of the Company set forth opposite such Series E Holder’s name on
Schedule II hereto. Such election to convert is irrevocable, subject only to the condition
precedent that Closing of the sale of Securities hereunder shall occur in accordance herewith.
Such election to convert is made now, but such conversion shall not be consummated until the
Closing of the sale of Securities hereunder. (The conversion of Series E Preferred Stock elected
hereby by each of the Series E Holders is sometimes referred to herein as the “Conversion”.
Shares of Common Stock issued to the Series E Holders pursuant to the Conversion are herein
sometimes referred to as “Conversion Shares”. The Conversion shall be automatic at and
upon the Closing and shall require no further action on the part of any Series E Holder. Upon the
Conversion, the rights of each Series E Holder with respect to Series E Preferred Stock shall cease
in their entirety and such Series E Holder shall be treated for all purposes as having become the
owner of the Conversion Shares issuable upon Conversion of such Series E Holder’s Series E
Preferred Stock.

     (b) Such Series E Holder represents and warrants that it or he is the owner of record of the
number of shares of Series E Preferred Stock of the Company set forth opposite such Series E
Holder’s name on Schedule II hereto. Such Series E Holder further represents and warrants
that such shares of Series E Preferred Stock are owned of record by such Series E Holder free and
clear of any security interests, pledges, mortgages, claims, liens or other encumbrances of any
kind whatsoever, other than any under the Series E Agreements.

     (c) Such Series E Holder is concurrently herewith delivering to the Company any and all
certificates representing such Series E Holder’s shares of Series E Preferred Stock (other than any
lost certificates, if any), to be held by the Company pending consummation of Closing hereunder.
Such Series E Holder acknowledges and agrees that all certificates representing the shares of
Series E Preferred Stock owned by such Series E Holder, whether or not delivered to the Company at
the Closing or otherwise, shall be deemed surrendered and cancelled as of the Closing Date and of
no further force nor effect upon Closing. In the event that Closing does not occur and this
Agreement is terminated in accordance with its terms, the Company shall promptly thereafter return
all such certificates which have been delivered to the Company to such Series E Holder.

36

 

     (d) Subject to Section 6.1(e), as promptly as practicable after the Closing, the
Company, through its transfer agent, shall issue and deliver to or upon the written order of such
Series E Holder, to the place designated by such Series E Holder, a certificate or certificates for
the number of shares of Common Stock as set forth opposite such Series E Holder’s name on
Schedule II hereto. The Person in whose name the certificate or certificates for Common
Stock are to be issued shall be deemed to have become the stockholder of record in respect of such
Common Stock on the Closing Date unless the transfer books of the Company are closed on that date,
in which event such Series E Holder shall be deemed to have become the stockholder of record in
respect of such Common Stock on the next succeeding date on which the transfer books are open.

     (e) The Company shall pay any tax that may be payable in respect of the Conversion and
issuance and delivery of Conversion Stock pursuant thereto.

     (f) Each Series E Holder hereby waives any and all of its or his rights, preferences and
powers conferred upon it or him pursuant to the Certificate of Designations of the Series E
Preferred Stock relating to or in connection with the Conversion hereunder, to the extent that any
of the provisions of such Certificate of Designations conflict with the agreements of the Series E
Holders under this Article 6, including, without limitation, any adjustment of the Conversion Price
thereunder which would result in a different number of Conversion Shares being issued to any of the
Series E Holders than is provided for under this Article 6.

     (g) Each Series E Holder hereby agrees that all of the Series E Agreements shall be terminated
and of no further force or effect upon Closing and consummation of the Conversion hereunder;
provided, that each of the parties thereto which is not a Series E Holder consents in
writing to such termination. In the event that such consents are obtained but not prior to the
Closing Date, then such termination shall be effective upon the date when the last of all such
written consents of non Series E Holders is obtained.

     6.2 No Reissuance of Series E Preferred Stock. Following consummation of the
Conversion, all converted shares of Series E Preferred Stock shall be permanently retired and may
not thereafter be issued or reissued as shares of Series E Preferred Stock.

     6.3 Cumulative Shares. The shares of Conversion Stock received by each Series E
Holder pursuant to the Conversion shall be in addition to the shares of Common Stock currently
owned by such Series E Holder and any Common Shares being purchased by such Series E Holder
pursuant to this Agreement.

     6.4 Waiver of Rights under Rights Offering. In consideration of the agreements of the
Company and the other Series E Holders in this Article 6, each Series E Holder hereby waives any
right to participate in the Rights Offering which the Company is required to commence pursuant to
Section 4.3(h), such waiver to become irrevocable upon Closing hereunder and consummation of the
Conversion.

ARTICLE
7  –  MISCELLANEOUS

     7.1 Binding Agreement; Assignment. This Agreement shall be binding upon, and shall
inure solely to the benefit of, each of the parties hereto, and each of their respective heirs,

37

 

executors, administrators, successors and permitted assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement. No Purchaser may assign any of its rights
or obligations hereunder to any other person or entity without the prior written consent of the
Company, which shall not be unreasonably withheld.

     7.2 Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and may be amended only by written
execution by all parties. By executing this Agreement below, each Purchaser agrees to be bound by
all of the terms, provisions, warranties, covenants and conditions contained herein. Upon
acceptance by the Company, this Agreement shall be binding on all parties hereto.

     7.3 Governing Law; Consent To Jurisdiction. EXCEPT AS TO MATTERS GOVERNED BY THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE AND DECISIONS THEREUNDER OF THE DELAWARE COURTS
APPLICABLE TO DELAWARE CORPORATIONS, WHICH SHALL BE GOVERNED BY SUCH LAWS AND DECISIONS, THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE LAWS OF THE STATE OF ILLINOIS. FURTHERMORE, EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.

     7.4 Notices. All notices, requests, consents and other communications hereunder shall
be in writing, shall be mailed by first class registered or certified mail, or nationally
recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and
shall be delivered as addressed as follows:

	 	 	 	 	 
	 

	 	if to the Company, to:
	 	Electric City Corp.
	 

	 	 	 	1280 Landmeier Road
	 

	 	 	 	Elk Grove Village, Illinois 60007
	 

	 	 	 	Attn: Jeffrey Mistarz, Chief Financial Officer
	 
	 	 	 	 
	 	 	with a copy (which shall not constitute notice hereunder) mailed to:
	 
	 	 	 	 
	 

	 	 	 	Schwartz Cooper Chartered
	 

	 	 	 	180 North LaSalle Street, Suite 2700
	 

	 	 	 	Chicago, Illinois 60601
	 

	 	 	 	Attn: Andrew H. Connor, Esq.

or to such other person at such other place as the Company shall designate to the Purchasers in
writing in accordance herewith; and if to any Purchaser, to such Purchaser, at its address as set
forth at the end of this Agreement, or at such other address as such Purchaser designate to the
Company in writing in accordance herewith.

     7.5 Counterparts. This Agreement may be executed in one or more counterparts, all of
which shall be deemed but one and the same instrument and each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to produce or account

38

 

for more than one such counterpart for each of the parties hereto. Delivery by facsimile by
any of the parties hereto of an executed counterpart of this Agreement shall be effective as an
original executed counterpart hereof and shall be deemed a representation that an original executed
counterpart hereof will be delivered.

     7.6 Headings. The descriptive headings of the several paragraphs of this Agreement
are inserted for convenience only and do not constitute a part of this Agreement.

     7.7 WAIVER OF JURY TRIAL. THE PARTIES HERETO, AFTER CONSULTING OR HAVING HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT.

[Balance of page intentionally left blank; signature pages follow.]

39

 

     IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as of the
date first above written.

	 	 	 	 	 
	 	 	ELECTRIC CITY CORP.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey Mistarz
	 

	 	 	 	 
	 

	 	 	 	Name: Jeffrey Mistarz

Title: Chief Financial Officer

40

 

Accepted and agreed to as of the date first above written:

	 	 	 	 	 
	CINERGY VENTURES II, LLC, a

Delaware limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ Gregory C. Wolf	 	 
	 

	 	 	 	 
	Name:

	 	Gregory C. Wolf	 	 
	Title:

	 	Vice President	 	 

	 	 	 
	Address:

	 	Attn:                                        
	 

	 	Cinergy Ventures II, LLC
	 

	 	139 East 4th Street
	 

	 	26th Floor
	 

	 	Atrium II EA610
	 

	 	Cincinnati, OH 45202
	 

	 	Telephone: (___) ___-___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                        

Address of Nominee:

                                                                    
            

                                                             
                   

Taxpayer ID Number:                                         

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

 

 

Accepted and agreed to as of the date first above written:

	 	 	 	 	 
	LEAF MOUNTAIN COMPANY, LLC, an

Illinois limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ John J. Jiganti	 	 
	 

	 	 	 	 
	Name:

	 	John J. Jiganti	 	 
	Title:

	 	Manager	 	 

	 	 	 
	Address:

	 	Attn:                                        
	 

	 	Leaf Mountain Company, LLC
	 

	 	190 South LaSalle Street, Suite 1700
	 

	 	Chicago, IL 60603
	 

	 	Telephone: (___) ___-___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                        

Address of Nominee:

                                                              
                  

                                                                    
            

Taxpayer ID Number:                                         

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

 

 

Accepted and agreed to as of the date first above written:

AUGUSTINE FUND LP, an Illinois limited partnership

	 	 	 	 	 
	 

	 	 	 	 
	By:

	 	/s/ August Fund LP, by Augustine Capital Management, LLC, its
general partner, by
Thomas F. Duszynski	 	 
	 

	 	 	 	 
	Name:

	 	Thomas Duszynski	 	 
	Title:

	 	Member	 	 

	 	 	 
	Address:

	 	Attn:                                        
	 

	 	Augustine Fund, LP
	 

	 	141 West Jackson Blvd., Suite 2182
	 

	 	Chicago, IL 60604
	 

	 	Telephone: (___) ___-___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                        

Address of Nominee:

                                                                  
              

                                                                    
            

Taxpayer ID Number:                                         

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

 

 

Accepted and agreed to as of the date first above written:

	 	 	 	 	 
	SF CAPITAL PARTNERS, LTD., a British Virgin

Islands corporation	 	 
	 
	 	 	 	 
	By:

	 	/s/ Brian H. Davidson	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:

	 	Authorized Signatory	 	 

	 	 	 
	Address:

	 	Attn:                                        
	 

	 	SF Capital Partners, Ltd.
	 

	 	c/o Stark Offshore Management LLC
	 

	 	3600 South Lake Drive
	 

	 	St. Francis, Wisconsin 53235
	 

	 	Telephone: (___) ___-___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                        

Address of Nominee:

                                                                    
            

                                                                    
            

Taxpayer ID Number:                                         

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

                                                                    
            

 

 

Accepted and agreed to as of the date first above written:

JOHN THOMAS HURVIS REVOCABLE TRUST, an

Illinois trust

	 	 	 
	By:

	 	  /s/ John Thomas Hurvis
	 

	 	 
	Name:

	 	John Thomas Hurvis
	Title:

	 	Trustee

	 	 	 
	Address:

	 	John Thomas Hurvis Revocable Trust
	 

	 	John Thomas Hurvis Trustee
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: ( )
	 

	 	Facsimile: ( )

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

45

 

Accepted and agreed to as of the date first above written:

	 
	/s/ Richard P. Kiphart

	 
 RICHARD
P. KIPHART

	 	 	 
	Address:

	 	Richard P. Kiphart
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___-___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

46

 

Accepted and agreed to as of the date first above written:

	 
	Davie R. Asplund
 
 DAVID
R. ASPLUND

	 	 	 
	Address:

	 	David R. Asplund
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: ( )
	 

	 	Facsimile: ( )

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

47

 

Accepted and agreed to as of the date first above written:

	 
	/s/ John Donohue
 
 JOHN
DONOHUE

	 	 	 
	Address:

	 	John Donohue
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

48

 

Accepted and agreed to as of the date first above written:

	 
	/s/ David Valentine
 
 DAVID
VALENTINE

	 	 	 
	Address:

	 	David Valentine
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: ( )
	 

	 	Facsimile: ( )

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

49

 

Accepted and agreed to as of the date first above written:

	 
	/s/ Robert Gipson
 
 ROBERT
L. GIPSON

	 	 	 
	Address:

	 	Robert L. Gipson
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___-___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

50

 

Accepted and agreed to as of the date first above written:

	 
	  /s/ Thomas O. Boucher, Jr., attorney in fact
 
 THOMAS
GIPSON

	 	 	 
	Address:

	 	Thomas Gipson
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___-___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

51

 

Accepted and agreed to as of the date first above written:

	 
	  /s/ Nikolaos D. Monoyios
 
 NIKOLAOS
D. MONOYIOS

	 	 	 
	Address:

	 	Nikolaos D. Monoyios
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

52

 

Accepted and agreed to as of the date first above written:

	 
	  /s/ Martin Mellish
 
 MARTIN
MELLISH

	 	 	 
	Address:

	 	Martin Mellish
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

53

 

Accepted and agreed to as of the date first above written:

NETTLESTONE ENTERPRISES, LTD., a British Virgin Islands corporation

	 	 	 
	By:

	 	/s/ M. S. Heyworth
	 

	 	 
	Name:

	 	M. S. Heyworth
	Title:

	 	Director

	 	 	 
	Address:

	 	Nettlestone Enterprises Limited
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___
	 
	 	 
	Address for Notices and Correspondence:

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

54

 

Accepted and agreed to as of the date first above written:

	 
	/s/
Christopher W. Capps
 
 CHRISTOPHER
W. CAPPS

	 	 	 
	Address:

	 	Christopher W. Capps
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

55

 

Accepted and agreed to as of the date first above written:

GREGORY H. EKIZIAN REVOCABLE TRUST

	 	 	 
	By:

	 	  /s/ Gregory H. Ekizian
	 

	 	 
	Name:

	 	Gregory H. Ekizian
	Title:

	 	Trustee

	 	 	 
	Address:

	 	Gregory H. Ekizian Revocable Trust
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

56

 

Accepted and agreed to as of the date first above written:

	 
	/s/ Rebecca Kiphart
 
 REBECCA
KIPHART

	 	 	 
	Address:

	 	Rebecca Kiphart
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

57

 

Accepted and agreed to as of the date first above written:

	 
	  /s/ Julia Gluck
 
 JULIA
GLUCK

	 	 	 
	Address:

	 	Julia Gluck
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Telephone: (___) ___- ___
	 

	 	Facsimile: (___) ___- ___

Nominee (name in which Securities are to be registered, if different than name of the Purchaser)

                                                            

Address of Nominee:

                                                                                

                                                                                

Taxpayer ID Number:                                                             

(if acquired in the name of a nominee, the Taxpayer ID number of such nominee)

58

 

SCHEDULE I

SCHEDULE OF PURCHASES OF COMMON SHARES

	 	 	 	 	 	 	 	 	 
	 	 	Number of	 	 
	 	 	Common	 	 
	Purchaser	 	Shares	 	Purchase Price
	CINERGY VENTURES II, LLC
	 	 	1,100,000	 	 	$	1,100,000	 
	 
	 	 	 	 	 	 	 	 
	LEAF MOUNTAIN COMPANY, LLC
	 	 	1,300,000	 	 	$	1,300,000	 
	 
	 	 	 	 	 	 	 	 
	AUGUSTINE FUND LP
	 	 	1,000,000	 	 	$	1,000,000	 
	 
	 	 	 	 	 	 	 	 
	SF CAPITAL PARTNERS, LTD.
	 	 	2,000,000	 	 	$	2,000,000	 
	 
	 	 	 	 	 	 	 	 
	JOHN THOMAS HURVIS REVOCABLE TRUST
	 	 	200,000	 	 	$	200,000	 
	 
	 	 	 	 	 	 	 	 
	RICHARD P. KIPHART
	 	 	5,700,000	 	 	$	5,700,000	 
	 
	 	 	 	 	 	 	 	 
	DAVID R. ASPLUND
	 	 	1,500,000	 	 	$	1,500,000	 
	 
	 	 	 	 	 	 	 	 
	DAVID VALENTINE
	 	 	200,000	 	 	$	200,000	 
	 
	 	 	 	 	 	 	 	 
	TOM GIPSON
	 	 	1,500,000	 	 	$	1,500,000	 
	 
	 	 	 	 	 	 	 	 
	ROBERT GIPSON
	 	 	450,000	 	 	$	450,000	 
	 
	 	 	 	 	 	 	 	 
	NIKOLAOS D. MONOYIOS
	 	 	450,000	 	 	$	450,000	 
	 
	 	 	 	 	 	 	 	 
	NETTLESTONE ENTERPRISES LIMITED
	 	 	1,500,000	 	 	$	1,500,000	 
	 
	 	 	 	 	 	 	 	 
	MARTIN MELLISH
	 	 	250,000	 	 	$	250,000	 
	 
	 	 	 	 	 	 	 	 
	CHRISTOPHER W. CAPPS
	 	 	25,000	 	 	$	25,000	 
	 
	 	 	 	 	 	 	 	 
	GREGORY H. EKIZIAN REVOCABLE TRUST
	 	 	400,000	 	 	$	400,000	 
	 
	 	 	 	 	 	 	 	 
	REBECCA KIPHART
	 	 	200,000	 	 	$	200,000	 
	 
	 	 	 	 	 	 	 	 
	JULIA GLUCK
	 	 	100,000	 	 	$	100,000	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total:
	 	 	17,875,000	 	 	$	17,875,000	 

 

 

SCHEDULE II

SCHEDULE OF CONVERSION OF

SERIES E PREFERRED STOCK TO COMMON STOCK

	 	 	 	 	 	 	 	 	 
	 	 	Current Number of Shares	 	Number of Shares of
	Investor	 	Of Series E Preferred Stock	 	Common Stock
	CINERGY VENTURES II, LLC
	 	 	35,668	 	 	 	1,902,293	 
	 
	 	 	 	 	 	 	 	 
	LEAF MOUNTAIN COMPANY,
LLC
	 	 	20,159	 	 	 	2,015,900	 
	 
	 	 	 	 	 	 	 	 
	AUGUSTINE FUND LP
	 	 	16,280	 	 	 	1,628,000	 
	 
	 	 	 	 	 	 	 	 
	SF CAPITAL PARTNERS,
LTD.
	 	 	22,376	 	 	 	2,237,600	 
	 
	 	 	 	 	 	 	 	 
	JOHN THOMAS HURVIS
REVOCABLE TRUST
	 	 	6,376	 	 	 	340,053	 
	 
	 	 	 	 	 	 	 	 
	RICHARD P. KIPHART
	 	 	89,034	 	 	 	8,903,400	 
	 
	 	 	 	 	 	 	 	 
	DAVID R. ASPLUND
	 	 	3,542	 	 	 	354,200	 
	 
	 	 	 	 	 	 	 	 
	JOHN DONOHUE
	 	 	2,940	 	 	 	294,000	 
	 
	 	 	 	 	 	 	 	 
	DAVID VALENTINE
	 	 	1,457	 	 	 	145,700	 
	 
	 	 	 	 	 	 	 	 
	ROBERT GIPSON
	 	 	19,136	 	 	 	1,913,600	 
	 
	 	 	 	 	 	 	 	 
	NIKOLAOS D. MONOYIOS
	 	 	19,136	 	 	 	1,913,600	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total:
	 	 	236,104	 	 	 	21,648,346exv10w3

 

Exhibit 10.3

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of June 30, 2006
between Parke Acquisition, LLC, a California limited liability company (the “Company”), and
Daniel Parke (“Executive”).

W I T N E S S E T H:

     WHEREAS, Parke P.A.N.D.A. Corporation, a California corporation (“PPC”), has been
merged with and into the Company, pursuant to the terms of a certain Agreement and Plan of Merger
dated as of May 19, 2006 (the “Merger Agreement”), among Electric City Corp.
(“ELC”), the Company, PPC, Executive, and The Parke Family Trust as the sole stockholder of
PPC; and

     WHEREAS, the Company desires to retain the services of Executive and Executive desires to be
employed by the Company, on and subject to the terms and conditions of this Agreement;

     NOW, THEREFORE, the Company and Executive agree as follows:

     1. Employment and Duties. The Company agrees to employ the Executive as President of
the Company and the Executive agrees to be employed by the Company, on and subject to the terms of
this Agreement. The Executive shall report to and be subject to the authority and direction of the
Chief Executive Officer of ELC and the Board of Managers of the Company, shall have responsibility
for managing the Company, and shall have such other responsibilities as may from time to time be
reasonably prescribed by the Chief Executive Officer of ELC or the Board of Managers of the
Company, which shall include but not be limited to overseeing integration and operations of the PPC
business as acquired.

     The Executive accepts such employment agrees to concentrate all of his professional time and
efforts to the performance of the services described therein, including the performance of such
other services and responsibilities as the Board of Directors of the Company may from time to time
stipulate and which shall not be inconsistent with the position of Chief Executive Officer.
Without limiting the generality of the foregoing, the Executive ordinarily shall devote not less
than five (5) days per week (except for vacations and regular business holidays observed by the
Company) on a full-time basis, during normal business hours Monday through Friday. The Executive
further agrees that when the performance of his duties reasonably requires, he shall be present on
the Company’s premises or engaged in service to or on behalf of the Company at such times except
during vacations, regular business holidays or weekends.

     Notwithstanding the foregoing, the Company agrees that the Executive shall have the right to
participate in outside activities, including but not limited to serving on boards of directors for
civic, charitable or business organizations, in a paid or unpaid capacity, so long as such
activities are not in direct conflict with the Executive’s obligations as outlined herein.

 

 

Further, the Executive shall have reasonable, limited use of the Company’s resources and
reasonable time during the Company’s business hours to pursue such activities so long as such
activities do not unreasonably interfere with his obligations as President of the Company. Upon
request by the Company, the Executive agrees to furnish to the Company a list of organizations in
which he is involved, including a description of his involvement in such organizations and the
amount of any remuneration received or expected to be received from such involvement.

     2. Term. The term of Executive’s employment under this Agreement (the “Employment
Period”) shall commence on the date hereof (the “Commencement Date”), and expire on the
day preceding the second anniversary of the Commencement Date unless terminated earlier according
to the terms of this Agreement (the date of termination being referred to herein as the
“Expiration Date”). Executive’s and the Company’s rights and obligations under Sections 9,
10, 11 and 14(g) shall survive the expiration of the term of this Agreement. At the end of the
Employment Period, the continuation of Executive’s employment with the Company shall be at the will
of the Company and Executive on terms and conditions agreed to by the Company and Executive and
there shall be no obligation on the part of the Company or Executive to continue such employment.

     3. Compensation. During the term of this Agreement, Executive shall be paid a gross
salary (the “Salary”) at the annual rate of $250,000 as compensation for all services to
the Company. Such Salary shall be payable in 24 equal installments in accordance with the
Company’s regular payroll practices for salaried employees. The Company shall review Executive’s
compensation on an annual basis and give consideration to whether any increase is warranted, in the
Company’s sole discretion. Additionally, the Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his duties under this Agreement, consistent
with the Company’s policies in effect from time to time with respect to reimbursement of business
expenses, and subject to Executive’s submission of appropriate expense reimbursement requests and
supporting documentation.

     During the Employment Period, the Executive shall also be entitled to an automobile allowance
of $800 per month.

     The Executive shall also be entitled to twenty (20) paid vacation days per year during the
Employment Period, which will accrue ratably over each twelve (12) month period, beginning on the
first day of the Employment Period; provided that he may take his vacation days for each
contract year at any time during such year. Up to five (5) vacation days may be accumulated and
carried over to the next contract year.

     4. Bonus. Executive will be eligible to participate in an annual bonus plan during
the term of this Agreement with goals (the “Annual Goals”) established and approved by the
Compensation Committee of the Board of Directors of ELC and subject to approval of the Board of
Managers of the Company. At the conclusion of the Plan Year, the Compensation Committee of the
Board of Managers of the Company shall determine the level of success achieved by Executive against
the Annual Goals and determine the amount of the annual bonus plan payment to the Executive. If
Executive’s employment is terminated for reasons other than Due Cause or

- 2 -

 

his voluntary resignation, he will be entitled to receive any bonus earned up to the date of
termination as reasonably determined by the Board of Managers of the Company. All payments related
to the annual bonus plan are subject to the prior approval by the Board of Managers of the Company.

     5. Stock Options. The Executive is hereby granted stock options (the “Stock
Options”) to purchase 46,667 shares of ELC’s common stock at a price (the “Exercise Price”)
equal to the closing price of the common stock on the first day of the Employment Period. Such
Stock Options shall vest in accordance with the following schedule:

	 	•	 	Upon execution of this Agreement and the start of the Employment Period, Executive shall
become immediately vested in Stock Options to purchase 15,555 shares of the Company’s
common stock at the Exercise Price; and
	 
	 	•	 	On the first anniversary of the first day of the Employment Period, so long as Executive
is employed by the Company as its President on such date, Executive shall become
immediately vested in Stock Options to purchase 15,556 shares of the Company’s common stock
at the Exercise Price; and
	 
	 	•	 	On the second anniversary of the first day of the Employment Period, so long as
Executive is employed by the Company as its President on such date, Executive shall become
immediately vested in Stock Options to purchase 15,556 shares of the Company’s common stock
at the Exercise Price.

Such Stock Options shall be granted pursuant to the ELC 2001 Stock Option Plan as amended, and to
the maximum extent permissible under applicable law and the ELC 2001 Stock Incentive Plan as
amended, such Stock Options shall be Incentive Stock Options within the meaning of Section 424(f)
of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

     For all purposes of this Section 5, a “Change in Control” shall be deemed to have occurred
when (i) ELC is merged or consolidated with another entity which is not then controlled by ELC and,
as a result, such merger or consolidation results in at least fifty-one percent (51%) or greater of
ELC’s common stock being controlled or owned by another entity, or (ii) a majority of the ELC’s
assets are sold or otherwise transferred to another entity that is not then controlled by or
affiliated with ELC. Upon the occurrence of a Change in Control, the Stock Options granted
pursuant to this Section 5 shall be automatically and immediately vested and become exercisable by
Executive, subject to the terms of Section 8 of this Agreement.

     Unless otherwise provided herein, the terms of the Stock Options granted pursuant to this
Section 5 shall be governed in accordance with the provisions of ELC’s 2001 Employee Stock
Incentive Plan (the “Plan”). The Stock Options issued pursuant to this agreement shall be
incentive stock options to the extent permitted by law and the terms of the Plan, and the balance
shall be non-qualified options. If Executive’ employment with the Company is terminated, as

- 3 -

 

provided in Section 8, such Stock Options (whether or not vested) shall survive or terminate
as provided under Section 8.

     6. Registration Rights. Executive shall have piggy-back registration rights for all
shares of ELC’s common stock obtained through the exercise of any Stock Options granted pursuant to
Section 5 for any registration statement filed by ELC with the Securities and Exchange Commission,
except that Executive agrees to waive his registration rights for any registration undertaken at
the request of, or registration that includes, the holders of shares of common stock received
pursuant to conversion of ELC’s Series E Convertible Preferred Stock to the extent that such waiver
is requested by such holders. In addition, Executive agrees that his registration rights shall be
subject to underwriter cutbacks as may be requested by an underwriter with respect to an
underwritten registration of ELC’s common stock.

     7. Benefits. During the term of this Agreement, Executive shall be entitled to
participate in and receive all benefits generally provided to its senior executives by ELC from
time to time.

     8. Disability; Death; Resignation; Termination for Due Cause.

     (a) Termination for Due Cause. The Employment Period may be terminated for “Due Cause”
(as defined below) by the Company upon the affirmative vote of a majority of the Board of Managers
(a “Termination Vote”). Upon a Termination Vote, a written notice of such termination
shall be given to Executive in the manner required by Section 14(d) hereof. For purposes hereof,
“Due Cause” shall mean any of the following:

	(i)	 	a material breach by Executive of his covenants under this Agreement if such material breach
is not remedied within fifteen (15) calendar days following written notice thereof from the
Company or any Manager of the Company, or, if the breach cannot be remedied within fifteen
(15) days, such longer time (not to exceed forty five (45) days) as may be reasonably
necessary for Executive to remedy such breach if Executive commences and diligently pursues
efforts to remedy such breach;
	  
	(ii)	 	commission by Executive of a felony, or of theft or embezzlement of property of the Company;
	  
	(iii)	 	actions by Executive (other than actions taken with the approval of the Board) which result
in a material injury to the businesses, properties or reputation of the Company or any of its
subsidiaries;
	  
	(iv)	 	refusal to perform or substantial neglect of the duties assigned to Executive pursuant to
Section 1 of this Agreement if such refusal or neglect is not remedied within fifteen (15)
calendar days following written notice thereof from the Company or any Manager of the Company;
or
	  
	(v)	 	any material violation of any statutory or common law duty of loyalty to the Company.

- 4 -

 

All compensation to Executive under this Agreement shall immediately terminate upon the effective
date of any termination of the Employment Period for Due Cause hereunder (other than any earned but
unpaid salary, bonus and vacation in accordance with Sections 3, 4 and 7, respectively, herein for
the period ending on the date of termination) and all vested and unvested “Stock Options” (as
defined in Section 5) as of such date shall immediately expire, terminate and be of no further
force or effect; provided, however, that if the Employment Period is terminated for a
reason stated in clause (ii) or clause (iii) (or both) and no other reason is given, and it shall
be subsequently determined by a final decision of a court or arbitrator having jurisdiction that
Executive did not commit the alleged acts in question, or, in the case of clause (iii) that the
acts did not result in a material injury to the businesses, properties or reputation of the Company
or any of its subsidiaries, then such vested and unvested Stock Options shall be restored to
Executive and he shall be treated as having been terminated pursuant to Section 8(f) for the
purposes of his rights with respect to such Stock Options, except that the one year period shall
commence on the date of such final determination of such court or arbitrator, which shall be deemed
to be the ‘termination date’ for purposes of Section 8(f). Any salary, bonus and accrued vacation
shall be payable as follows: salary and accrued vacation shall be paid at the next regularly
scheduled payroll date, and any bonus shall be payable in accordance with the applicable bonus
plan.

     (b) Termination Due to Death. The Employment Period shall automatically terminate
upon the death of Executive and all compensation to Executive shall immediately cease, other than
any earned but unpaid salary, bonus and vacation in accordance with Sections 3, 4 and 7,
respectively, herein for the period ending on the date of termination. All unvested Stock Options
as of such date of death shall immediately vest. Stock Options which are vested prior to the date
of death or on the date of death pursuant to the preceding sentence may be exercised by his estate
or executor within one (1) year following the date of death. Any Stock Options which are not
exercised within such period of one (1) year thereafter shall thereupon expire, terminate and be of
no further force or effect. Any salary, bonus and accrued vacation shall be payable as follows:
salary and accrued vacation shall be paid at the next regularly scheduled payroll date, and any
bonus shall be payable in accordance with the applicable bonus plan.

     (c) Termination Due to Permanent Total Disability. In the event that Executive becomes
“Permanently Disabled” (as defined below), the Company, at its option, shall have the right to
terminate the Employment Period by written notice to Executive given in the manner required by
Section 14(d) hereof. For purposes hereof, “Permanently Disabled” shall mean physical or
mental inability of Executive to perform substantially all of the services required pursuant to
this Agreement, after reasonable accommodation on the part of the Company, for a continuous period
of one-hundred eighty (180) days or for a period aggregating at least one-hundred eighty (180) days
in any consecutive twelve (12) month period. In the event that Executive disputes the Company’s
determination that he is Permanently Disabled, the determination shall be made by a qualified
physician selected jointly by the Company and Executive. In the event of termination of the
Employment Period pursuant to this Section 8(c), all compensation to Executive shall immediately
cease, other than any earned but unpaid salary, bonus and vacation in accordance with Sections 3, 4
and 7, respectively, herein for the period

- 5 -

 

ending on the date of termination, and any vested Stock Options as of the date of termination
shall be exercisable for up to 90 days following such termination. Any Stock Options which are
vested on the date of termination may be exercised by Executive within one hundred eighty (180)
days following the date of termination. Any Stock Options which are vested on the date of
termination and are not exercised within such period of one hundred eighty (180) and are not
exercised by Executive within one hundred eighty (180) days following the termination date shall
thereupon expire, terminate and be of no further force or effect. All unvested Stock Options as of
such date of termination shall immediately terminate. Any salary, bonus and accrued vacation shall
be payable as follows: salary and accrued vacation shall be paid at the next regularly scheduled
payroll date, and any bonus shall be payable in accordance with the applicable bonus plan.

     (d). Termination by Executive. Executive may terminate the Employment Period and his
employment hereunder (i) in the event the Company has breached a material term or condition of this
Agreement which is not cured or remedied within fifteen (15) days following Executive’s giving
written notice of such breach to the Board of Managers of the Company, or (ii) at Executive’s
convenience pursuant to Section 8(e) below. In the event that Executive terminates the Employment
Period due to an uncured breach by the Company, such action shall be deemed to be a termination of
the Employment Period by the Company without Due Cause pursuant to Section 8(f) hereof. Any
salary, bonus and accrued vacation payable with respect to such termination shall be in accordance
with Sections 3, 4 and 7 hereof.

     (e) Executive’s Termination For Convenience. In the event that the Employment Period
is terminated by Executive at his convenience, then Executive will be due any earned but unpaid
salary, bonus and vacation in accordance with Sections 3, 4 and 7, respectively, herein, and any
vested Stock Options as of the date of termination shall be exercisable for up to ninety (90) days
following such termination. Any Stock Options which are vested on the date of termination and are
not exercised by Executive within ninety (90) days following the termination date shall thereupon
expire, terminate and be of no further force or effect. Any unvested Stock Options as of the date
of termination shall immediately terminate. Any salary, bonus and accrued vacation payable under
this Section 8(e) shall be payable as follows: salary and accrued vacation shall be paid at the
next regularly scheduled payroll date, and any bonus shall be payable, if at all, to the extent
provided in, and in accordance with, the applicable bonus plan.

     (f) Termination Other Than Due Cause, Death, Disability or Resignation. In the event
that the Employment Period is terminated for reasons other than Due Cause, death, becoming
Permanently Disabled, or Executive’s resignation under Section 8(d) or 8(e), then all Stock Options
then held by Executive and scheduled to vest within one (1) year of the date of such termination
shall vest immediately and be exercisable at any time within one (1) year after the date of such
termination. Any Stock Options which are not exercised within one (1) year following such
termination date shall thereupon expire, terminate and be of no further force or effect. Upon any
termination under this Section 8(f), the Company shall pay as severance compensation to Executive
(i) six (6) months’ salary compensation at his then annual salary compensation rate, plus (ii) any
bonus earned as of the termination date, and (iii) any accrued vacation. Such severance
compensation shall be paid to Executive as follows: (x) the six (6)

- 6 -

 

months’ salary compensation shall be payable in installments in accordance with the Company’s
regular payroll; (y) any bonus shall be payable in accordance with the applicable terms governing
such bonus; and (z) accrued vacation shall be paid on termination.

     (g). Surrender of Properties. Upon any termination of Executive’s employment with the
Company, regardless of the cause therefore, Executive shall be deemed to have resigned from the
Company’s Board of Managers and as an officer of the Company, if serving as such at that time, and
shall promptly deliver to the Company all property provided to him by the Company for use in
relation to his employment and any and all sales materials, lists of customers and prospective
customers, price lists, files, patent applications, records, models or other materials and
information of or pertaining to the Company or its customers or prospective customers or the
products, businesses and operations of the Company.

     (h) Contractor’s License. So long as Executive is employed by the Company (or, while the
Company is a subsidiary of ELC, ELC or any affiliate of ELC), the Company may use Executive’s C-10
Electronic Contracting License and Executive will be the sponsoring agent for the Company. If
Executive ceases to be employed by the Company (or while the Company is a subsidiary of ELC, ELC or
an affiliate of ELC), for any reason, Executive shall retain all rights to such license.

     9 Confidentiality Covenant.

     (a) Confidential Information. Executive recognizes and acknowledges that, by virtue
of and in the course of his employment with the Company, Executive shall come into contact with, be
exposed to, learn about, discover, develop, generate or contribute to trade secrets, proprietary
information or other Confidential Information. For the purposes of this Agreement, the term
“Confidential Information” means all information or data at any time in the possession of
or accessible to Executive relating to the business and affairs of the Company or of ELC or of any
other subsidiary of ELC (each, a “Company Affiliate”) and not generally known outside of
the Company or the Company Affiliates, whether or not the Company or a Company Affiliate invokes
special measures to protect such information or data, and shall include, without limitation, the
Company’s and the Company Affiliates’ data, designs, compilations of information, apparatus,
computer programs, identity of suppliers, identity of customers, customer requirements, cost or
price data, research data, business plans, marketing or sales plans and information, financial
data, salary and wage information, policies and procedures, manufacturing and sales know-how and
any other information that is proprietary to or a trade secret of the Company or any Company
Affiliate, whether or not such information is considered a trade secret within the meaning of
applicable law. All Confidential Information, in whatever form it may exist, whether in
Executive’s memory or in some physical or electronic or computerized form, is and shall be the sole
and exclusive property of the Company and the Company Affiliates. The rights and protections
granted herein with respect to Confidential Information are in addition to the rights, remedies and
protections afforded to the Company under any applicable law, statute or regulation.

- 7 -

 

     (b) Agreement Not To Disseminate Confidential Information. Executive agrees that he
will not, at any time or in any manner, either directly or indirectly, publish, communicate or
otherwise reveal to any person or entity, or use for any purpose whatsoever, except as may be
necessary in the course of performing his obligations to the Company, or as may be required by
applicable law, statute or regulation, any Confidential Information. Executive further agrees to
notify the Company before disclosing any Confidential Information under compulsion of law and to
cooperate with the Company in deciding the substance and manner of such disclosure. Executive
hereby specifically agrees that all Confidential Information is valuable, material and
significantly affects the effective and successful conduct of the Company’s and the Company
Affiliates’ businesses and related good will.

     (c) Public Information. Notwithstanding the foregoing, the confidentiality
obligations set forth above shall not apply to any information that now is or hereafter becomes
generally known to the public (other than as a result of a breach of this Agreement or a similar
agreement under which the Company or a Company Affiliate has rights).

     (d) Protection of Confidential Information. Executive will take all necessary steps
and precautions to protect any Confidential Information. Upon termination of Executive’s
employment with the Company or upon the Company’s written request, Executive shall promptly turn
over to the Company any and all correspondence, notes, agreements, memoranda, computer disks and
tapes, documents and other media and other property of the Company in Executive’s control
containing or reflecting Confidential, Information, keeping no copies or extracts.

     (e) Remedies. Executive agrees that money damages may not constitute an adequate
remedy for the violation by Executive of this Section 9, and any such violation by Executive is
likely to cause irreparable damage to the Company and that such damages would be difficult to
determine. Accordingly, in the event of any such violation or any threatened violation of this
Section 9, in addition to all other legal and equitable remedies available to the Company, the
Company shall be entitled to injunctive relief, both temporary and permanent, without bond, to
enforce the provisions of such Sections. The non-prevailing party in any final, unappealable
decision regarding enforcement of this Section 9 shall be responsible for and indemnify the
prevailing party for all reasonable legal fees, court costs and related expenses incurred by such
prevailing party in seeking enforcement.

     10. Inventions and Discoveries. All discoveries, inventions, processes, methods and
improvements, conceived, developed, or otherwise made by Executive, alone or with others, at any
time while he is employed by the Company or any Company Affiliate, and which

     (i) in any way relates to the Company’s present or proposed business or products, or

     (ii) in any way relates to the Company’s actual or demonstrably anticipated research or
development, or

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     (iii) results from work performed by Executive for the Company,

whether or not patentable or subject to copyright protection, and whether or not reduced to
tangible form or practice (“Developments”), shall be the sole property of the Company.
Executive hereby assigns to the Company all proprietary right, title and interest of Executive
throughout the world in and to all Developments. Executive hereby agrees that the Developments
constitute works made for hire under the patent and copyright laws of the United States of America.

     11. Court Authorized to Modify Covenants. If a court or other body of authority and
competent jurisdiction determines that the covenant contained in Section 9 of this Agreement are
unenforceable, in whole or in part, due to the duration or geographic scope of the restrictions or
limitations imposed therein or for any other reason, then such court or other body of authority is
hereby authorized and directed by the Company and the Executive to make such modifications to
Section 9 as are necessary to render said covenants enforceable to the maximum extent permitted
under applicable law.

     12 Survival of Covenants. The covenants set forth in Sections 9 and 10 herein shall
survive the termination of the Employment Period or termination of this Agreement for a period of
two (2) years.

     13. Miscellaneous Provisions.

     (a) Governing Law. This Agreement shall be governed by the internal laws (as opposed
to conflicts of laws) and decisions of the State of California.

     (b) Severability. Subject to the provisions of Section 11 above, if any provision of
this Agreement shall be held to be invalid by reason of the operation of any applicable law, or by
reason of the interpretation placed thereon by any court or other governmental body, (i) this
Agreement shall be construed as not containing such provision and a substitute provision shall be
inserted therefore by such court or other governmental body which effectuates to the maximum extent
permitted by law the intent of the parties hereto, (ii) such provision and the replacement thereof
shall not affect the validity of any other provision hereof, and (iii) any and all other provisions
hereof which otherwise are lawful and valid shall remain in full force and effect.

     (c) No Waiver. The failure of the Company to assert any of its rights under this
Agreement or the delay or partial enforcement of any of its rights hereunder shall not operate or
be construed as a waiver of any breach of this Agreement, except as such waiver may be expressly
set forth in writing and signed by the Company. The waiver by the Company of any breach of any
provision of this Agreement shall not be construed as a waiver of any subsequent breach, whether of
the same or of a different character.

     (d) Notices. All notices, demands and other communications which may or are required
to be given hereunder or with respect hereto shall be in writing, shall be given either by

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personal delivery or by recognized overnight delivery service, and shall be deemed to have
been given or made when personally delivered, addressed as follows:

	 	 	 
	If to the Company to:

	 	c/o Electric City Corp.
	 

	 	1280 Landmeier Road
	 

	 	Elk Grove Village, Illinois 60007
	 

	 	Attn: Chief Executive Officer
	 

	 	Phone: (847) 437-1666
	 

	 	Fax: (847) 437-4969

or to such other address as the Company may from time to time designate to the Executive in
accordance with this section.

	 	 	 
	If to the Executive to:

	 	Mr. Daniel Parke
	 
	 	 
	 

	 	Phone:
	 

	 	Fax:

No notice, request, demand, instruction, or other document to be given hereunder to any party shall
be effective for any purpose unless personally delivered, or delivered by commercial overnight
delivery service, or sent by certified or registered mail, return receipt requested, to the
appropriate address, or transmitted by telecopier to the fax number provided herein. Notices that
are mailed shall be deemed to have been given on the third day following deposit of same in any
United States Post Office mailbox in the state to which the notice is addressed or on the fourth
day following deposit in any such post office box other than in the state to which the notice is
addressed, postage prepaid, addressed as set forth herein. Notices sent via commercial overnight
delivery service shall be deemed to have been given the next business day after deposit with the
commercial delivery service. Notices that are transmitted via telecopier shall be deemed to have
been given the business day transmitted, if transmitted before 3:00 p.m. recipient’s time, and on
the next business day, if transmitted after 3:00 p.m. recipient’s time, as evidenced by a
telecopier confirmation of successful transmission. The address and telecopier numbers for the
purposes of this Section may be changed by giving written notice of such change in the manner
herein provided for giving notice.

     (e) Modification. This Agreement shall not be amended, modified or supplemented
except in writing and signed by the Company and Executive.

     (f) Headings. The paragraph headings and captions used herein are intended solely for
convenience of reference and shall not control or effect the interpretation, meaning or
construction of any provision of this Agreement.

     (g) Arbitration. The parties hereto agree that in the event of any disagreements or
controversies arising from this Agreement or any other agreements between the Company and Executive
relating to the breach, termination or validity thereof or the past, present and future

- 10 -

 

dealings between the parties, such disagreements and controversies shall be subject to binding
arbitration in Los Angeles County, California, as arbitrated in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association (the “AAA”) before one neutral
arbitrator. Such arbitrator shall be selected by mutual agreement of the parties within thirty (30)
days of written notice of said disagreement or controversy. If the parties cannot mutually agree to
an arbitrator within thirty (30) days, then the AAA shall designate the arbitrator. Either party
may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or
the controversy is otherwise resolved. Without waiving any remedy under this Agreement, either
party may also seek from any court having jurisdiction any interim or provisional relief that is
necessary to protect the rights or property of that party, pending the establishment of the
arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the
controversy). In the event of any such disagreement or controversy, neither party shall directly
or indirectly reveal, report, publish or disclose any information relating to such disagreement or
controversy to any person, firm or corporation not expressly authorized by the other party to
receive such information or use such information or assist any other person in doing so, except to
comply with actual legal obligations of such party or unless such disclosure is directly related to
an arbitration proceeding as provided herein, including, but not limited to, the prosecution or
defense of any claim in such arbitration. The costs and expenses of the arbitration (excluding
attorneys’ fees) shall be paid by the non-prevailing party or as determined by the arbitrator.
This paragraph shall survive the termination of this Agreement.

[Balance of page intentionally left blank; signature page follows.]

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     IN WITNESS WHEREOF, the parties have caused this Employment Agreement to be executed as of the
date first above written.

	 	 	 	 	 	 	 
	 	 	PARKE INDUSTRIES, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey Mistarz
 

Jeffrey Mistarz
	 	 
	 

	 	Title:
	 	Manager	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Daniel Parke	 	 
	 	 	 	 	 
	 	 	Daniel Parke	 	 

- 12 -

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