Document:

exv10w1

 

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (as it may be amended from time to
time, this “Agreement”), is entered into as of March 19, 2004 by Electric City
Corp., a Delaware corporation (the “Company”), and the purchasers whose names
appear on the signature pages of this Agreement (each, a “Purchaser” and
collectively, the “Purchasers”).

W I T N E S S E T H:

     WHEREAS, the Company desires to sell and issue to the Purchasers shares of
its Common Stock and warrants to purchase shares of its Common Stock, all as
more fully described herein; and

     WHEREAS, each Purchaser desires to purchase such securities 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” shall have the meaning set forth in the preamble of this
Agreement.

     “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.

- 1 -

 

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

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

     “Closing Date” shall have 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” shall have the meaning set forth in Section
4.2(f) hereof.

     “Common Shares” means the shares of Common Stock to be issued by the
Company to the Purchasers hereunder (excluding any shares of Common Stock
which may be issued pursuant to exercise of the Common Stock Warrants).

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

     “Common Stock Warrants” means the warrants to purchase Common Stock
to be issued by the Company to the Purchasers pursuant to this Agreement,
as evidenced by Warrant Certificates.

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

     “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.

     “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 Rights Agreement” means that certain Investor Rights
Agreement dated as of July 31, 2001, by and among the Company and the
other parties thereto, as amended, restated, modified or supplemented and
in effect from time to time.

     “Issuable Warrant Shares” means, as of any date of determination
thereof, the unissued shares of Common Stock which the Purchasers then
have the right to acquire from the Company pursuant to exercise of the
Common Stock Warrants.

- 2 -

 

     “Issued Warrant Shares” means, as of any date of determination
thereof, all shares of Common Stock which the Purchasers then hold
pursuant to having exercised the Common Stock Warrants in whole or in
part.

     “MSDW” shall mean Morgan Stanley Dean Witter Equity Funding, Inc., a
Delaware corporation.

     “MSDW/OIP Agreement” shall mean that certain Securities Purchase
Agreement dated as of March 19, 2004 by and among the Purchasers, MSDW
and OIP, as it may be amended from time to time.

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

     “OIP” shall mean Originators Investment Plan, L.P., a Delaware
limited partnership.

     “Person” shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.

     “Placement Agent” means Morgan Keegan & Company, Inc.

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

     “Registration Statement” shall have 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.

     “Securities” means the Common Shares and the Common Stock Warrants
which are issued and sold by the Company to the Purchasers under this
Agreement.

     “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.

     “Target Deadline” shall have 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

- 3 -

 

entity, 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, the Warrant
Certificates 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 in connection with consummation of the
Transactions, as amended, modified or supplemented and in effect from
time to time.

     “Transactions” shall have the meaning set forth in Section 3.1(b).

     “Warrant Certificate” means a warrant certificate evidencing Common
Stock Warrants, duly executed and delivered by the Company pursuant to
this Agreement, and any replacement certificate issued by the Company in
respect thereof pursuant to partial exercise, transfer, loss or
mutilation of such warrant certificate, as such original or replacement
certificate may be amended and in effect from time to time.

     “Warrant Shares” means, as of any date of determination thereof,
collectively, all Issued Warrant Shares and all Issuable Warrant Shares.

ARTICLE 2 – ISSUE, PURCHASE AND SALE OF SECURITIES

     2.1 Authorization of Issuance of Securities. The Company has authorized
the initial issuance of up to 5,000,000 shares of Common Stock and up to
1,750,000 Common Stock Warrants on and subject to the terms and conditions of
this Agreement and has reserved out of its authorized and unissued Common Stock
for the purpose of effecting the exercise of the Common Stock Warrants, up to
1,750,000 shares of Common Stock.

     2.2 Purchase and Sale of Securities. Subject to the terms and conditions
herein set forth, the Company hereby agrees to sell to each Purchaser, and each
Purchaser severally for itself only agrees to purchase from the Company, at the
Closing, the number of shares of Common Stock and Common Stock Warrants, for
the aggregate purchase price, set forth opposite such Purchaser’s name on
Schedule I hereto. The obligations of each party to close hereunder shall be
conditioned upon closing hereunder by all Purchasers and the Company on the
Closing Date and in the event that any party shall not close as contemplated
hereby no other party shall be obligated to proceed with closing hereunder,
without prejudice to any rights which the other parties may have against such
non-closing party.

     2.3 Closing. 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 (the “Closing”) shall take place at 10:00 a.m. Central Time within
three Business Days of the date hereof (the “Closing Date”), at the offices of
the Placement Agent, or at such other date, time and/or location as is mutually
agreed upon by the Company and the Purchasers.

- 4 -

 

ARTICLE 3  —  CLOSING

     3.1 Purchasers’ Conditions to Closing. Each Purchaser’s obligation 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 and Warrant 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 contemplated by this Agreement (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;

     (c) Proceedings. On or prior to the Closing Date, all corporate and
other proceedings required to be taken under applicable laws, rules and
all regulations and all rules of The American Stock Exchange in
connection with the Transactions 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 shall not be prohibited by any applicable law, governmental
regulation or rules of AMEX;

     (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

- 5 -

 

contemplated hereunder) in connection with the consummation of the
Transactions shall have been obtained or made and be in full force and
effect;

     (h) MSDW/OIP Agreement. The closing of the transactions
contemplated by the MSDW/OIP Agreement shall occur simultaneously with
the Closing;

     (i) Average Closing Price. The volume weighted average closing
price of the Common Stock as quoted on the American Stock Exchange for
the five (5) consecutive trading days immediately preceding the Closing
Date shall be greater than or equal to $1.90;

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

     (k) 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, governmental regulation or rules of AMEX, 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

     (l) 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. The Company shall have provided the Purchasers with copies of
the consents obtained from the Company’s preferred stockholders, CIT
Capital Securities, Inc., Laurus Master Fund, Ltd. and Munder Power Plus
Fund, a series of the Munder Series Trust.

     (m) Costs and Expenses. The Company shall have paid (or reimbursed
the Purchasers for) the reasonable costs and expenses, including
reasonable attorneys’ fees, incurred by the Purchasers in connection with
the negotiation of the Transaction Documents and the Closing of the
Transactions; provided that the Company shall not be obligated to pay
more than $15,000 in the aggregate against all such costs and expenses
incurred.

     3.2 Company Conditions to Closing. The Company’s obligation to issue and
sell the Securities to each Purchaser 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;

- 6 -

 

     (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, governmental regulation or rules of AMEX, 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

     (f) 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.

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

     (a) 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) an executed Investor Questionnaire in the form attached as Annex
I hereto;

- 7 -

 

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

     (d) a completed Selling Stockholder Questionnaire for such Purchaser
in the form attached as Annex II hereto.

     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) one or more stock certificates representing the Common Shares
being purchased by such Purchaser, registered in the name of such
Purchaser or its nominee(s), as such Purchaser has specified in writing
to the Company prior to the Closing;

     (b) one or more Warrant Certificates representing the Common Stock
Warrants being purchased by such Purchaser, registered in the name of
such Purchaser or its nominee(s), as such Purchaser 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, Bylaws, resolutions of the Board
of Directors, good standing, and incumbency; and

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

ARTICLE 4  —  REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.

     4.1 Purchaser Representations, Warranties and Covenants. Each Purchaser,
severally as to itself only and not jointly as to any other Purchaser, hereby
represents and warrants to the Company, and agrees with the Company, as
follows:

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

     (i) the Company’s annual report on Form 10-KSB for the year ended
December 31, 2002 filed with the Commission on March 31, 2003;

     (ii) the Company’s quarterly report on Form 10-QSB for the period
ended March 31, 2003 filed with the Commission on May 15, 2003;

     (iii) the Company’s current report on Form 8-K dated June 3, 2003
filed with the Commission on June 5, 2003;

- 8 -

 

     (iv) the Company’s current report on Form 8-K dated June 27, 2003
filed with the Commission on July 2, 2003;

     (v) the Company’s quarterly report on Form 10-QSB for the period
ended June 30, 2003 filed with the Commission on August 14, 2003;

     (vi) the Company’s current report on Form 8-K dated September 11,
2003 filed with the Commission on September 16, 2003;

     (vii) the Company’s proxy statement for annual meeting of
stockholders to be held on September 24, 2003, mailed to stockholders on
August 29, 2003 and filed with the Commission on August 29, 2003;

     (viii) the Company’s registration statement on Form SB-2 filed with
the Commission on October 20, 2003, as amended by the first amendment
thereto filed with the Commission on November 14, 2003 and as amended by
the second amendment thereto filed with the Commission on February 19,
2004; and

     (ix) the Company’s quarterly report on Form 10-QSB for the period
ended September 30, 2003 filed with the Commission on November 13, 2003;
and

     (x) the Company’s audited balanced sheet as of the year ending
December 31, 2003, and the related statements of income and cash flow
(the “2003 Audited Financial Statements”).

Such Purchaser understands that no Person has been authorized to give any
information or to make any representations for or on behalf of the Company
other than as set forth in the Commission Documents or in this Agreement, and
each Purchaser represents and agrees that it has not relied on any such other
information or representations in making a decision to purchase the Securities
which such Purchaser agrees to purchase hereunder. 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, and has consulted with 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 statements referred to in clause (vii) above.

     (b) Such Purchaser represents that 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 has completed and delivered to the Company. Such Purchaser further
represents that 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 making an informed
investment decision with respect thereto, and can bear the economic risk of
loss of the entire investment in the Securities being purchased.

- 9 -

 

     (c) Such Purchaser acknowledges that it has sole responsibility for its
own due diligence investigation and its own investment decision, and that in
connection with 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, (ii) such
Purchaser has not relied on any representation made by the Placement Agent or
any Person affiliated with the Placement Agent, and (iii) 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.

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

	 	 	 	“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES
OR “BLUE SKY” LAWS (“APPLICABLE STATE LAW”). THESE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED,
TRANSFERRED OR HYPOTHECATED OR OTHERWISE ASSIGNED IN
THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT THERE IS AN
EXEMPTION FROM REGISTRATION.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holders of the Securities upon which it
is stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the Securities Act, (ii) in
connection with a sale transaction, such holder provides the Company with an
opinion of counsel acceptable to the Company, in an acceptable form, to the
effect that a public sale, assignment or transfer of the Securities may be made
without registration under the Securities Act, or (iii) such holder provides
the Company with reasonable assurances that the Securities have been or are
being sold pursuant to Rule 144.

     (f) Such Purchaser (or, if applicable, each managed account on whose
behalf Securities are being purchased by such Purchaser) will acquire the
Securities pursuant to this Agreement for 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

- 10 -

 

regarding the distribution of such Securities in violation of the
Securities Act. Such Purchaser hereby covenants and agrees to execute a lockup
agreement, containing a one hundred eighty (180) day restriction on the sale of
any Securities, and other standard terms and conditions, with any requesting
underwriter participating in a primary offering (as defined in Section 5.4
below). The foregoing obligation shall apply only if all officers and
directors of the Company and all significant equity holders of the Company
enter into similar agreements, and shall not apply to a registration relating
solely to employee benefit plans, or to a registration relating solely to a
transaction pursuant to Rule 145 under the Securities Act. If any Person,
including any officer or director of the Company and any equity holder of the
Company, is released from its obligations under the lockup agreement or such
similar arrangements, all such Purchaser shall be released from such
obligations.

     (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,
and such Purchaser acknowledges and agrees that the Registrable Securities are
not transferable on the books of the Company unless the certificate submitted
to the transfer agent evidencing such Registrable Securities is accompanied by

     (i) a separate certificate in acceptable form executed by an officer
of, or other authorized person designated by, such Purchaser to the
effect that (1) such Registrable Securities have been sold in accordance
with a registration statement pursuant to Section 5.1 or Section 5.4
hereof and the requirement of delivering a current prospectus has been
satisfied; or

     (ii) an opinion of counsel reasonably satisfactory to the Company
stating that registration is not required under 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 circumstances, and subject to the limitations,
set forth in Section 5.5(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 5.5 and ending the date on which the Company gives such
Purchaser written notice that such Purchaser may thereafter effect sales
pursuant to said prospectus.

     (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 constitutes legal, tax or
investment advice, other than the opinion of counsel delivered pursuant to
Section 3.4(d). 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.

     (j) Such Purchaser understands that the Securities (including the Issuable
Warrant Shares) are being offered and sold 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

- 11 -

 

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.

     (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 and secured parties, (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 5.7.

     (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 behalf of such Purchaser is authorized
to act for such Purchaser in purchasing the Securities.

     (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, 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 is a suitable investment for such trust as
authorized by the terms thereof and applicable laws and regulations.

- 12 -

 

     (iv) If such Purchaser is a limited partnership, it is a limited
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 limited partnership acting in an advisory
capacity, it is a limited 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 and
delivery 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 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.

     (m) Such Purchaser agrees to complete and execute and return to the
Company

     (i) the Investor Questionnaire in the form of Annex I to this
Agreement representing that such Purchaser is investing in Securities as
an “accredited investor;”

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

     (iii) the Selling Stockholder Questionnaire in the form of Annex II
to this Agreement,

in each case together with an executed signature page to this Agreement. Such
Purchaser represents and warrants that the answers to each of the foregoing are
true and correct as of the date hereof 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. Such Purchaser further represents and
warrants that it is not purchasing any Securities on behalf of any managed
account other than as listed in the Managed Account Representation Letter.

     (n) Such Purchaser represents that it 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

- 13 -

 

limited to transfer or voting of any of the securities, 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; such Purchaser 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 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) Such Purchaser represents, for itself, that as of the date hereof,
such Purchaser does not beneficially own any shares of Common Stock.

     (p) 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 otherwise purchase the Securities to
be purchased by such Purchaser.

     (q) 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, it will keep confidential
and will not disclose or divulge any confidential, proprietary or secret
information which such Purchaser may obtain from the Company in connection with
the Transactions which information the Company has identified in writing to the
Purchasers to be confidential, unless such information is known, or until such
information becomes known, by the public through no fault of such Purchaser.

     (r) Upon reasonable request from the Company, such Purchaser shall provide
the Company with such other information, documents and certifications that the
Company shall require to verify the information provided by such Purchaser in
connection with the offer and sale of the Securities to such Purchaser
hereunder and in connection with the registration of the Registrable Securities
pursuant to Section 5.1 and/or Section 5.4 hereof.

     (s) 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.

     (t) Such Purchaser understands and acknowledges that the Company intends
to use some or all of the proceeds from the sale of the Securities to redeem
some (but not all) of the outstanding shares of the Company’s Series A
Convertible Preferred Stock, Series C Convertible Preferred Stock and/or Series
D Convertible Preferred Stock.

     4.2 Company Representations, Warranties and Covenants. The Company hereby
represents and warrants to each Purchaser, and agrees with 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
would not be

- 14 -

 

reasonably expected to have a material adverse effect, with the requisite
power and authority to 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 and the consummation by the Company of the Transactions 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 such 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 thereof may be limited by (i)
bankruptcy, insolvency, moratorium and other laws affecting the rights and
remedies of creditors and secured parties, (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 5.7.

     (c) The Common Shares and the shares of Common Stock issued pursuant to
the MSDW/OIP Agreement are duly authorized and, when issued hereunder, 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), any agreement or by
the Company and subject to no preemptive rights, co-sale rights, rights of
first refusal or similar rights in favor of other Persons which have not been
waived. Assuming the accuracy of the representations of such Purchaser in this
Agreement, the Common Shares issuable hereunder will be issued in compliance
with all applicable federal and state securities laws. The shares of Common
Stock issuable upon the exercise of the Common Stock Warrants are duly
authorized and reserved for issuance, and, when issued upon such exercise, 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), any agreement or by
the Company and subject to no preemptive rights, co-sale rights, rights of
first refusal or similar rights in favor of other Persons which have not been
waived. Assuming the accuracy of the representations of such Purchaser in this
Agreement, when such shares of Common Stock are issued, such shares will be
issued in compliance with all applicable federal and state securities laws.
The Company has reserved for issuance 1,750,000 shares of Common Stock issuable
upon exercise of the Common Stock Warrants.

     (d) As of the date hereof, the Company has authorized 120,000,000 shares
of Common Stock and 5,000,000 shares of preferred stock. As of the date
hereof, the Company has 34,922,021 issued and outstanding shares of Common
Stock, 2,351,589 issued and outstanding shares of Series A Convertible
Preferred Stock, 233,613 issued and outstanding shares of Series C Convertible
Preferred Stock and 157,769 issued and outstanding shares of Series D
Convertible Preferred Stock. Other than the securities described in this
Section 4.2(d) and the options, rights and warrants to purchase up to
20,017,048 shares of Common Stock and warrants to purchase up to 375,000 shares
of Series D Preferred Stock, the Company does not have any other securities or
rights to purchase its securities outstanding.

     (e) The execution and delivery of this Agreement, 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

- 15 -

 

date) of the Company, including the Certificates of Designations of the
Series A, Series C and Series D 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) 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; and (iv) no
consent, approval, authorization, order, registration or qualification of or
with any such court or Governmental Authority is required for the valid
authorization, execution, delivery and performance by the Company of this
Agreement, the issue of the Securities or any Warrant Shares or the
consummation by the Company of the other transactions on its part contemplated
by this Agreement, except for such consents, approvals, authorizations,
registrations or qualifications as may be required under Federal securities law
or Applicable State Law, American Stock Exchange listing requirements or with
respect to requirements applicable to such Purchaser. The Company has obtained
all consents, approvals, waivers of rights and other authorizations from
securityholders of the Company necessary to the consummation of the
transactions contemplated by the MSDW/OIP Agreement.

     (f) Since January 1, 2003, 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, except that the Company’s
filing of the pro forma financial information which is set forth in the
Company’s current report on Form 8-K filed on July 2, 2003 was not timely filed
within 15 days after the Company’s sale of the assets of Switchboard Apparatus,
Inc. 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, except that the Company’s filing of the pro forma financial
information which is set forth in the Company’s current report on Form 8-K
filed on July 4, 2003 was not timely filed within 15 days after the Company’s
sale of the assets of Switchboard Apparatus, Inc. 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. The
Company is not required to file and will not be required to file any agreement,
note, lease, mortgage, deed or other instrument entered into prior to the date
hereof or

- 16 -

 

the Closing Date and to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound which has not
been previously filed as an exhibit to the Company’s reports filed or made with
the Commission under the Exchange Act. The Company meets the requirements for
use of Form SB-2 for registration of the resale of Registrable Securities.

     (g) Since December 31, 2002, 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 change
in the business, assets, properties, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken as a whole, or
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, and the Company and its Subsidiaries are in compliance with
the terms and requirements of such Regulatory Approvals. Since December 31,
2002, 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, or (iii) any other limitations on the conduct of business by the
Company or any of its Subsidiaries.

     (i) The Company has good and marketable fee simple title to the assets
reflected on the balance sheet set forth in the 2003 Audited Financial
Statements (the “Assets”). Except as set forth in Schedule 4.2(i), 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 real property improvements (including
leasehold improvements) and fixtures and equipment of the Company are
adequately insured and are structurally sound with no known material defects.
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 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 would not have a material adverse effect on the business
or financial condition of the Company. The Assets are valued on the Company’s
books at or below actual cost less an adequate and proper depreciation charge.
The Company has not

- 17 -

 

depreciated any of the Assets on an accelerated basis or in any other
manner inconsistent with applicable Internal Revenue Service tax and fiscal
guidelines, if any.

     (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 sale or issuance of the Securities or
(b) materially and adversely affects, or as to which there is a reasonable
possibility of an adverse decision that would materially and adversely affect,
either individually or collectively, the assets, business, properties,
prospects, operations or condition, financial or otherwise, of the Company and
its Subsidiaries, taken as a whole. 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, either individually or collectively, materially and adversely
affect the business, property, assets, prospects, operations or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole.

     (k) The Company maintains or is covered by valid policies of workers’
compensation insurance, product liability insurance, and of insurance with
respect to its properties and business. The Company currently maintains in
full force insurance 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 engaged in
similar lines of business. The Company currently maintains key man life
insurance for John Mitola in the amount of $5,000,000, which is and will remain
in full force and effect through December 31, 2005.

     (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 delivered 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. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of Taxes or other
governmental charges are adequate to cover any liability of the Company and its
Subsidiaries for Taxes through the date hereof. There are no liens for Taxes
with respect to any asset of the

- 18 -

 

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.

     (n) The offer, sale and issuance of the Securities 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 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) The net proceeds of the sale of the Securities will be used by the
Company to redeem certain shares of the Company’s outstanding preferred stock
and for other general corporate purposes.

     (p) Schedule 4.2(p) lists all agreements with any Person in which the
Company has granted registration rights with respect to its capital stock.
Schedule 4.2(p) 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. 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).

     4.3 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.

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 commercially reasonable efforts,
subject to receipt of all necessary information from the Purchaser, to prepare
and file with the Commission within 45 days of the Closing Date (the “Target
Deadline”) a registration statement (the “Registration Statement”) covering the
resale of the Common Shares, the shares of Common Stock to be acquired by the
Purchasers pursuant to the MSDW/OIP Agreement (the “MSDW Shares”) and the
Warrant Shares (collectively, the “Registrable Securities”) by the Purchasers
from time to time through the American Stock Exchange, the over-the-counter
market or in privately-negotiated transactions or otherwise.

- 19 -

 

     (b) Subject to the provisions of Section 5.2 below, use commercially
reasonable efforts, subject to receipt of all necessary information from the
Purchasers, to cause the Registration Statement to be declared effective as
promptly as practicable after filing thereof, but in no event later than the
date which is 120 days after the Closing Date (the “Effectiveness Deadline”).

     (c) Use its reasonable commercial efforts to keep the Registration
Statement continuously effective under the Securities Act until the date which
is the earlier of the date when (i) all Registrable Securities have been sold,
or (ii) all Registrable Securities may be sold immediately without registration
under the Securities Act and without volume restrictions pursuant to Rule
144(k) under the Securities Act, as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable
to the Company’s transfer agent and the Purchasers.

     (d) File documents required of the Company for customary “blue sky”
clearance in states specified in writing by the Purchasers and 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.

     (e) 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 under the Securities
Act), 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 (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the Commission; 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 agreement by which it is bound to do any of the foregoing.

     (f) Subject to Section 6.1, 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 promptly (and in any event within five (5) Business Days)
following Closing hereunder).

     (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

- 20 -

 

in any registration statement under Section 5.1 or Section 5.4 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 or Section 5.4 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 and Section
5.4 or pursuant to an exemption from registration under the Securities Act.

     5.4 Piggyback Registration. If at any time or times after the date hereof
but prior to the fifth (5th) anniversary of the Closing hereunder, the Company
shall determine or be required to register any shares of its Common Stock or
other equity securities for sale under the Securities Act in exchange for cash
(whether in connection with a public offering of securities by the Company (a
“primary offering”), a public offering of securities by stockholders of the
Company (a “secondary offering”) or both), but not in connection with a
registration on Forms S-8, S-4 or other form effected solely to implement an
employee benefit plan or a transaction to which Rule 145 or any other similar
rule of the Commission under the Securities Act is applicable, the Company
shall:

     (a) Promptly give written notice thereof to each of the Purchasers.

     (b) use commercially reasonable efforts to effect the registration
under the Securities Act of any Registrable Securities (but not any other
shares of Common Stock) which any Purchasers then continue to hold and
request to be registered in a writing delivered to the Company within 10
days after such Purchasers’ receipt of the notice referred to above,
subject to Section 5.4(c) below.

     (c) In the case of a primary offering which is the registration of
shares of Common Stock by the Company in connection with an underwritten
public offering, (i) the Company shall not be required to include any
Registrable Securities in such underwriting unless the Purchasers which
are holders thereof accept the terms of the underwriting as agreed upon
between the Company and the underwriter or underwriters selected by it,
and (ii) if the underwriter(s) determines that marketing factors require
a limitation on the number of Registrable Securities to be offered, the
Company shall not be required to register Registrable Securities of the
Purchasers in excess of the amount, if any, of shares of the capital
stock which the principal underwriter of such underwritten offering shall
reasonably and in good faith agree to include in such offering in excess
of any amount to be registered for the Company, and any amount
of shares of Common Stock which the Company is obligated to include in such
registration pursuant for any other Person, and the number of shares to
be registered and sold by each Person (other than the Company) shall be
reduced pro rata according to the relative number of fully

- 21 -

 

diluted shares of Common Stock owned by such Person and all shares
owned by all Persons requesting inclusion in such registration.

     (d) All expenses relating to the registration and offering of
Registrable Securities pursuant to this Section 5.4 shall be borne by the
Company, except that the Purchasers shall bear underwriting and selling
commissions attributable to their Registrable Securities being
registered, any transfer taxes on shares being sold by such Purchaser.

     5.5 Company’s Other Obligations In Respect of Registrations. In
connection with any registration by the Company under this Article 5 (including
the Registration Statement) of any Purchaser’s Registrable Securities :

     (a) The Company will promptly notify each Purchaser holding Registrable
Securities covered by such 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 such registration statement (and to
each underwriter, if any, of such Registrable Securities ) such number of
copies of such 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 5.5(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 5.5(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

- 22 -

 

Purchaser holds) for a period of more than 90 days per suspension not more
than twice in any twelve month period, and the Company may not exercise this
right to suspend the use of such prospectus more than 180 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 commercially reasonable 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 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.

     (g) The Company will obtain a “cold comfort” letter from the independent
certified public accountants of the Company addressed to the holders of the
Registrable Securities included in such registration and the underwriters, if
any, dated the effective date of such registration statement (and, if such
registration statement includes an underwritten public offering, also dated the
date of the closing under the underwriting agreement), such letter to be in
customary form and covering such matters as are customarily covered by such
letters.

     5.6 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 the
Effectiveness Deadline (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 (the “Default Payment”) 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 (the
“Registration Default Period”), provided, however, that in no event shall the
payments to which a Purchaser shall be entitled pursuant to this Section 5.6
exceed five percent (5.0%) of the total purchase price paid by such Purchaser
hereunder.

     (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 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

- 23 -

 

Target Deadline or the Effectiveness Deadline, as applicable, 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 the Default Payment will not begin to accrue until after the extended
Target Deadline or Effectiveness Deadline, as applicable.

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

     5.7 Indemnification and Contribution.

     (a) For the purpose of this Section 5.7:

     (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 (A) 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 and (B) any registration statement filed pursuant
to Section 5.4 and any final prospectus, supplement or amendment included
in or relating to such 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 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

- 24 -

 

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 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 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 5.7, 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 5.7.

     (e) If the indemnification provided for in this Section 5.7 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

- 25 -

 

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 include, subject to the limitations set
forth in this Section 5.7, 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 5.7(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 5.7(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.

     5.8 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.

     5.9 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-KSB, within 120 days after the end of
each fiscal year of the Company), one copy of (i) its Annual Report on
Form 10-KSB or equivalent form (which shall contain financial statements
audited in accordance with generally accepted accounting principles by a
firm of certified public accountants), (ii) its quarterly reports on Form
10-QSB or equivalent form, and (iii) a full copy of the particular
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 (iii) of subparagraph (a) of this
Section 5.9 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;

- 26 -

 

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.

ARTICLE 6  —  MISCELLANEOUS

     6.1 Fees and Expenses. Each of the parties hereto shall be responsible
for their own expenses incurred in connection with the negotiation and Closing
of the purchase and sale of Securities contemplated hereby, provided that, to
the extent set forth in Section 3.1(m) hereof, the Company shall pay (or
reimburse the Purchasers for) the reasonable costs and expenses, including
reasonable attorneys’ fees, incurred by the Purchasers in connection with the
negotiation of the Transaction Documents and the Closing of the Transactions.
The Company shall reimburse the Purchasers for up to $20,000 of their
reasonable out-of-pocket expenses incurred in connection with the procedures in
Section 5.1 hereof, including reasonable fees and expenses, if any, of one
counsel or other advisors to all of the Purchasers upon delivery to the Company
of reasonable documentation setting forth such out-of-pocket expenses.

     6.2 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, 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.

     6.3 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.

     6.4 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.

     6.5 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

- 27 -

 

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, Greenberger & Krauss, 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.

     6.6 Counterparts. This Agreement may be executed in two 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 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.

     6.7 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.

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

- 28 -

 

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

	 	 	 	 	 
	 	 	ELECTRIC CITY CORP.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Jeffrey Mistarz
	

	 	 	 	
 
	 	 	Name: Jeffrey Mistarz
	 	 	Title: Chief Financial Officer and Treasurer

- 29 -

 

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

SECURITY EQUITY FUND, MID CAP VALUE SERIES

	 	 	 	 	 
	By:

	 	/s/ James P. Schier
	 	 
	

	 	
 	 	 
	Name: James P. Schier
	 	 
	Title: Vice President	 	 
	Address:	 	 
	

	 	One Security Place

Topeka, Kansas 66636	 	 

	 	 	 	 	 
	Telephone:
	 	 	 	 
	

	 	
 	 	 
	

	 	 	 	 
	Facsimile:
	 	 	 	 
	

	 	
 	 	 

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

UMBTRU for benefit of Security Mid Cap Growth Fund

Address of Nominee:
     UMB
Bank, na
     928
Grand Blvd, 10th Floor
     Kansas
City, MO 64106

Taxpayer ID Number:                                       

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

AMEX Affiliation or Association of Purchaser, if any:

- 30 -

 

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

SBL FUND, SERIES V

	 	 	 	 	 
	

	 	 	 	 
	By:

	 	/s/ James P. Schier	 	 
	

	 	
 	 	 
	Name: James P. Schier
	 	 
	Title: Vice President	 	 
	Address:
	 	 
	

	 	One Security Place

Topeka, Kansas 66636	 	 

	 	 	 	 	 
	Telephone:
	 	 	 	 
	

	 	
 	 	 
	

	 	 	 	 
	Facsimile:
	 	 	 	 
	

	 	
 	 	 

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

UMBTRU for benefit of Security Equity Fund, Mid Cap Value Series

Address of Nominee:
     
UMB Bank, na
     
928 Grand Blvd, 10th Floor
     
Kansas City, MO 64106

Taxpayer ID Number:                                       

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

AMEX Affiliation or Association of Purchaser, if any:

- 31 -

 

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

SECURITY MID CAP GROWTH

	 	 	 	 	 
	

	 	 	 	 
	By:

	 	/s/ James P. Schier	 	 
	

	 	
 	 	 
	Name: James P. Schier	 	 
	Title: Vice President	 	 
	Address:
	 	 
	

	 	One Security Place

Topeka, Kansas 66636	 	 

	 	 	 	 	 
	Telephone:
	 	 	 	 
	

	 	
 	 	 
	

	 	 	 	 
	Facsimile:
	 	 	 	 
	

	 	
 	 	 

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

UMBTRU for benefit of SBL Fund Series J

Address of Nominee:
     UMB
Bank, na
     928
Grand Blvd, 10th Floor
     Kansas
City, MO 64106

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

AMEX Affiliation or Association of Purchaser, if any:

- 32 -

 

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

SBL FUND, SERIES J

	 	 	 	 	 
	

	 	 	 	 
	By:

	 	/s/ James P. Schier	 	 
	

	 	
 	 	 
	Name: James P. Schier	 	 
	Title: Vice President	 	 
	Address:
	 	 
	

	 	One Security Place

Topeka, Kansas 66636	 	 

	 	 	 	 	 
	Telephone:
	 	 	 	 
	

	 	
 	 	 
	

	 	 	 	 
	Facsimile:
	 	 	 	 
	

	 	
 	 	 

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

UMBTRU for benefit of SBL Fund Series V

Address of Nominee:
     
UMB Bank, na
     
928 Grand Blvd, 10th Floor
     
Kansas City, MO 64106

Taxpayer ID Number:                                       

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

AMEX Affiliation or Association of Purchaser, if any:

EACH PURCHASER EXECUTING THESE SECURITIES PURCHASE AGREEMENT SIGNATURE PAGES ON
BEHALF OF ONE OR MORE MANAGED ACCOUNTS SHOULD PROVIDE THE NAME OF, AND
FOREGOING INFORMATION WITH RESPECT TO, EACH SUCH MANAGED ACCOUNT.

- 33 -

 

SCHEDULE I

SCHEDULE OF INVESTORS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number of	 	Number of	 	 
	Investor
	 	Common Shares
	 	Warrant Shares
	 	Purchase Price

	Security
Equity Fund,

Mid Cap Value Series

[address]

Telephone: (___)___-____

Facsimile: (___)___-____

	 	 	1,265,000	 	 	 	442,750	 	 	$	2,783.000	 
	SBL Fund,
Series V

[address]

Telephone: (___)___-____

Facsimile: (___)___-____

Email:	 	 	1,000,000	 	 	 	350,000	 	 	$	2,200,000	 
	Security Mid
Cap Growth

[address]

Telephone: (___)___-____

Facsimile: (___)___-____

Email:
	 	 	890,000	 	 	 	311,500	 	 	$	1,958,000	 
	SBL Fund,
Series J
[address]

Telephone: (___)___-____

Facsimile: (___)___-____

Email:

	 	 	1,845,000	 	 	 	645,750	 	 	$	4,059,000	 

- 34 -

 

ANNEX I

INVESTOR QUESTIONNAIRE

     The Securities are being offered for sale to “accredited investors” as
that term is defined in Rule 501 under the Securities Act of 1933, as amended
(the “Act”).

     The undersigned certifies that it (and the owner of each managed account
on whose behalf Securities are being purchased by it) is an “accredited
investor” because it is (check one or more items below):

	 	 	 	 	 
	           

	 	i.
	 	a bank as defined in section 3(a)(2) of the Act whether acting in its individual or fiduciary capacity;
	 
	 	 	 	 
	           

	 	ii.
	 	a savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting
in its individual or fiduciary capacity;
	 
	 	 	 	 
	           

	 	iii.
	 	a broker dealer registered pursuant to section 15 of the Securities Exchange Act of 1934, as amended;
	 
	 	 	 	 
	           

	 	iv.
	 	an insurance company as defined in section 2(13) of the Act;
	 
	 	 	 	 
	           

	 	v.
	 	an investment company registered under the Investment Company Act 1940, as amended (the “1940 Act”);
	 
	 	 	 	 
	           

	 	vi.
	 	a business development company as defined in section 2(a)(48) of the 1940 Act;
	 
	 	 	 	 
	           

	 	vii.
	 	a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or
(d) of the Small Business Investment Act of 1958;
	 
	 	 	 	 
	           

	 	viii.
	 	a plan established and maintained by a state or its political subdivision for the benefit of its employees,
provided that such plan has total assets in excess of $5,000,000;
	 
	 	 	 	 
	           

	 	ix.
	 	an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974
(“ERISA”), provided that the investment decision is made by a plan fiduciary, as defined in section 3(21) of
ERISA, and the plan fiduciary is either a bank, savings and loan association, insurance company or registered,
investment adviser or provided that the employee benefit plan has total assets in excess of $5,000,000; or if
a self-directed plan, with investment decisions made solely by persons that are accredited investors;
	 
	 	 	 	 
	           

	 	x.
	 	a private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

- 35 -

 

	 	 	 	 	 
	           

	 	xi.
	 	an organization described in section 501(c)(3) of the Internal Revenue Code, not formed for the specific
purpose of acquiring the Securities, with total assets in excess of $5,000,000;
	 
	 	 	 	 
	           

	 	xii.
	 	a director or executive officer, or general partner of the Company;
	 
	 	 	 	 
	           

	 	xiii.
	 	a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of
acquiring the Securities, with total assets in excess of $5,000,000;
	 
	 	 	 	 
	           

	 	xiv.
	 	a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the
Securities, and the purchase of the Securities is directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the Act;
	 
	 	 	 	 
	           

	 	xv.
	 	a natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his
purchase exceeds $1,000,000;
	 
	 	 	 	 
	           

	 	xvi.
	 	a natural person who had an individual income in excess of $200,000 in each of 2002 and 2003 or joint income
with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in 2004;
	 
	 	 	 	 
	           

	 	xvii.
	 	an entity in which all of the equity owners are accredited investors (described in any of (i)-(xvi) above).

	 	 	 	 	 	 	 
	

	 	INVESTOR:
	 	[name]	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	
 

- 36 -

 

SELLING STOCKHOLDER’S QUESTIONNAIRE

ELECTRIC CITY CORP.

Information furnished by:                                                                             

(Please
Print Name)

     Electric City Corp. (the “Company”) intends to file a registration
statement on Form SB-2 (the “Registration Statement”) under the Securities Act
of 1933 with the Securities and Exchange Commission (the “Commission”) for a
proposed public offering of shares of the Company’s Common Stock, $0.001 par
value per share (the “Common Stock”) to be sold by the undersigned, (the
“Selling Stockholder”). The purpose of this questionnaire is to obtain certain
information from the Selling Stockholder for use in the Registration Statement
and prospectus contained therein. Exhibit A to this Questionnaire contains
certain definitions that should be read before completing the Questionnaire.

     Please complete (using separate sheets if necessary), date, sign and
return this Questionnaire to Jeffrey Mistarz, CFO, Electric City Corp., 1280
Landmeier Road, Elk Grove Village, IL 60007 (847) 437-1666, no later than
                   , 2004. Please answer every question. If the answer to any
question is “no” or “none,” please so state.

* * * * *

- 37 -

 

THE QUESTIONNAIRE

1. Please set forth below your name and address exactly as it should appear in
the Registration Statement.

	 	 	 
	Name:
	 	 
	

	 	
 
	
 
	
 
	
 
	
 
	
 
	
 

	 	 	 
	Address:
	 	 
	

	 	
 
	
 
	
 
	
 
	
 
	
 
	
 

2. Please state the nature of any position, office or other material
relationship that the person listed above under Question No. 1 (or any officer,
director, partner or employee, as applicable) now has or has had during the
last 3 years with the Company or any of its affiliates.

3. List the total number of shares of Common Stock and other securities of the
Company that you beneficially own: Please carefully read the definitions in
Exhibit A attached hereto, particularly the definition of “beneficial
ownership” before completing this question.

	 	 	 
	Number of shares of Common Stock:
	 	 
	

	 	
 

	 	 	 
	Other securities of the Company:
	 	 
	

	 	
 
	
 
	
 
	
 
	
 
	
 
	
 

- 38 -

 

     If you are the sole direct beneficial owner of all shares and securities
listed above, please initial the space provided below. If you share beneficial
ownership of any of the shares of Common Stock or other securities of the
Company listed above with any other person, please describe the nature of such
relationship in the space below.

	 	 	 
	     If sole direct beneficial owner, please initial:
	 	 
	

	 	
 

	 	 	 
	     If not, please explain:
	 	 
	

	 	
 
	
 
	
 
	
 
	
 
	
 
	
 

4. If you have made any agreement to sell any securities of the Company, or if
you will make any sale or agreement to sell any such securities before the
effectiveness of the Registration Statement (excluding the sale of your shares
pursuant to the Registration Statement), please state below the number of such
shares sold or to be sold by you, the name(s) of the purchaser(s), and the
consideration received or to be received by you for such shares.

5. (a) Please state whether you have valid and marketable title to the Common
Stock (including any shares to be acquired pursuant to exercise of Warrants) to
be sold by you, free and clear of any liens, encumbrances, equities and claims,
and have full right, power and authority to sell, transfer and deliver such
Common Stock.

Yes                     No                    

     (b) If the answer to any part of the preceding question 5(a) is negative,
please explain.

- 39 -

 

     I/We have supplied the above information at the request of the Company for
use in the preparation of the Registration Statement in connection with the
public resale of shares of Common Stock.

     IF, AT ANY TIME PRIOR TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT,
ANY OF THE INFORMATION SET FORTH IN MY/OUR RESPONSES TO THIS QUESTIONNAIRE
CHANGES DUE TO PASSAGE OF TIME, OR ANY DEVELOPMENT OCCURS WHICH REQUIRES A
CHANGE IN MY/OUR ANSWER, OR MY/OUR ANSWER FOR ANY OTHER REASON BECOMES
INCORRECT, I/WE WILL PROMPTLY FURNISH TO THE PERSON TO WHOM A COPY OF THIS
QUESTIONNAIRE IS TO BE SENT AT THE ADDRESS SHOWN ON PAGE 1 ANY NECESSARY OR
APPROPRIATE CORRECTING INFORMATION. OTHERWISE, THE COMPANY IS TO UNDERSTAND
THAT THE ABOVE INFORMATION CONTINUES TO BE, TO THE BEST OF MY/OUR KNOWLEDGE,
INFORMATION AND BELIEF, COMPLETE AND CORRECT AS OF THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.

     I/We hereby confirm that I/we will not, directly or indirectly, either
alone or with other persons, bid for or purchase for any account in which I/we
have a beneficial interest, any shares of Common Stock, or take any action for
the purpose or which might have the effect of stabilizing the market price of
the Common Stock, until the distribution of the Common Stock pursuant to the
Registration Statement has been completed, in any such case in a manner that
violates Regulation M under the Exchange Act.

	 	 	 
	

	 	

	Signature

	 	Title*
	 
	 	 
	

	 	 
	Please Print Name
	 	 

Dated:                    , 200__

* If you are executing this Questionnaire on behalf of a corporation (or other
legal entity) or as an executor or custodian or in any other representative
capacity, please state the exact title of the capacity in which you are acting.

- 40 -

 

EXHIBIT A — DEFINITIONS

     Before you complete the Questionnaire, please carefully review the
following definitions of various terms used in the Questionnaire.

1. Affiliate. An “affiliate” of a specified person is a person that, directly
or indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, the person specified.

2. Beneficial Ownership. “Beneficial ownership” has been very broadly defined
by the Securities and Exchange Commission to encompass many situations that
might not be thought to confer ownership in the usual sense. Therefore
carefully read the following discussion. If you are uncertain as to whether
you beneficially own securities, please resolve your doubts in favor of
disclosing the securities in question on the Questionnaire. Space is
specifically provided in the Questionnaire for a disclaimer of beneficial
ownership.

     In general, you are a beneficial owner of a security if you, directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise, have or share either: (1) voting power, which includes the power to
vote, or to direct the voting of, such security; or (2) investment power, which
includes the power to dispose, or to direct the disposition, of such security.
It must be emphasized that the possession of either voting power or investment
power, whether or not shared, and whether exercised directly or indirectly,
suffices to confer beneficial ownership. It is not a matter of legal title or
authority but a question of fact that can go behind legal forms. As a result
of these rules several people can be beneficial owners of the same securities.

     A person is also deemed to be the “beneficial owner” of a security if that
person has the right to acquire beneficial ownership of the security within 60
days, whether through the exercise of any option, warrant or right (including
options traded on option exchanges) the conversion of securities, or pursuant
to a power to revoke a trust, discretionary account or similar arrangement.

     Securities held in the name of your spouse, your minor children, or any
relative of yours or of your spouse who is living in your home normally should
be considered as beneficially owned by you. The final determination of
beneficial ownership is determined in the light of all the facts of a
particular case. Remember, you can include securities in this Questionnaire
and disclaim beneficial ownership of such securities.

3. Control. The term “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a person, whether through the ownership of voting securities, by contract or
otherwise.

4. Material. The term “material”, as related to your interest in various
transactions, should be understood to mean an interest that is of such
materiality that a substantial likelihood exists that a reasonable shareholder
would consider it important in deciding how to vote. This does not mean that
there is a substantial likelihood that disclosure of an omitted fact would
cause a

- 41 -

 

reasonable shareholder to change his vote, but rather that the omitted fact
would have assumed actual significance in his deliberations.

5. Person. The term “person” should be understood to mean any individual,
company, or individuals and companies acting as a partnership, limited
partnership, syndicate or other group for the purpose of acquiring, holding, or
disposing of securities of an issuer.

- 42 -

 

ANNEX II

FORM OF OPINION OF COUNSEL

     1. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware. Great Lakes Controlled Energy
Corporation (the “Subsidiary”) is a corporation validly existing and in good
standing under the laws of the State of Delaware.

     2. Each of the Company and the Subsidiary is duly qualified as a foreign
corporation in the State of Illinois and in each other jurisdiction where the
character of the properties owned or leased by it or the nature of any business
transacted by it, as applicable, makes such qualification necessary except
where such nonqualification or lack of good standing would not have a material
adverse effect on the business of the Company and the Subsidiary, taken as a
whole.

     3. The Company has corporate power and authority (a) to execute and
deliver each of the Transaction Documents, (b) to issue, sell and deliver the
Securities pursuant to the terms of the Securities Purchase Agreement, and (c)
to perform its obligations under each of the Transaction Documents.

     4. The execution, delivery and performance of the Transaction Documents
has been approved by all necessary corporate action on the part of the Company.

     5. Each of the Transaction Documents has been duly authorized, executed
and delivered by the Company, and each constitutes the legally valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms.

     6. The definitive certificates evidencing the shares of Common Stock
(collectively, the “Common Shares”) to be delivered under the Securities
Purchase Agreement are in proper form under Delaware law, have been duly
authorized by the Board of Directors of the Company and, when signed by the
Company and duly countersigned by the Company’s transfer agent and registrar
and delivered to you against payment of the agreed consideration in accordance
with the provisions of the Securities Purchase Agreement, the Common Shares
will be duly authorized, validly issued, fully paid and nonassessable, and to
our knowledge, free of preemptive rights, co-sale rights, rights of first
refusal or similar rights imposed by law, agreement or the Company’s Articles
of By-laws.

     7. The shares of Common Stock which are initially issuable upon exercise
of the Warrants have been duly authorized and reserved for issuance with
respect to such matters and when issued and paid for upon exercise of the
Warrants will be duly authorized, validly issued, fully paid and nonassessable,
and to our knowledge, free of preemptive rights, co-sale rights, rights of
first refusal or similar rights imposed by law, agreement or the Company’s
Articles of By-laws.

     8. The execution and delivery of, and the performance by the Company of
its obligations under, the Transaction Documents, including, without
limitation, the issuance of the Common Shares as of the date hereof do not;

- 43 -

 

     (a) conflict with or result in the violation by the Company of its
Certificate of Incorporation or By-laws;

     (b) to our knowledge, conflict with or result in a breach of or a
default by the Company or the Subsidiary under any agreement which is
listed on Schedule E hereto or under any court order or decree; or

     (c) conflict with or violate any law or published regulation
applicable to the Company or the Subsidiary.

     9. The issuance, sale and delivery of the Warrants and the issue, sale and
delivery of the shares of Common Stock by the Company pursuant to the terms of
the Securities Purchase Agreement, including upon exercise of the Warrants, do
not require the registration of such securities under the Securities Act of
1933, as amended.

     10. Other than as disclosed in the Transaction Documents, the execution
and delivery of, and the performance by the Company of its obligations under,
the Transaction Documents do not require the consent, approval or authorization
of any court, regulatory, administrative or other governmental body that is
normally applicable to transactions of the type contemplated by the Securities
Purchase Agreement which consent or approval has not been obtained and is in
full force and effect or which consent or approval has been waived in writing
which waiver is in full force and effect.

     11. As of the date hereof, there are no legal or governmental actions,
suits or proceedings pending, or to our knowledge threatened, against the
Company or the Subsidiary (i) pertaining to the validity or enforceability of
each of the Transaction Documents, or (ii) seeking to enjoin or otherwise
prevent the consummation of the transactions contemplated by the Securities
Purchase Agreement and the other Transaction Documents.

     12. We have participated with officers of the Company in the preparation
of the Commission Documents and during the course of such participation, no
facts came to our attention that caused us to believe that the Commission
Documents contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading at that time, or that the Commission
Documents and each amendment thereto, as of the respective dates they were
filed or as of the date of this opinion contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; it being understood that we express no belief with respect to
the financial statements, schedules and other financial data included in or
omitted from the Commission Documents.

     13. We have participated in conferences with officers of the Company at
which the contents of the Securities Purchase Agreement and related matters
were discussed and during the course of such participation, no facts came to
our attention that caused us to believe that the Securities Purchase Agreement
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading at that time, or that the Securities Purchase Agreement, as of
its date or as of the date

- 44 -

 

of this opinion, contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.

- 45 -

 

ANNEX III

WIRE INSTRUCTIONS

Each Purchaser’s purchase price for Securities shall be wired to:

	 	 	 
	Bank:

	 	American Chartered Bank

1199 E. Higgins Road

Schaumburg, IL 60173
	 
	 	 
	ABA#:

	 	071925046
	 
	 	 
	

	 	For Credit to: Electric City Corp., Acct. #

- 46 -exv10w2

 

Exhibit 10.2

REDEMPTION AND EXCHANGE AGREEMENT

     This Redemption and Exchange Agreement (the
“Agreement”) is entered into as of March
19, 2004, by and among Electric City Corp., a Delaware corporation (the
“Company”), and the undersigned holders of Preferred Stock
of the Company listed on the Schedule of Investors (the “Schedule of
Investors”) attached hereto as Schedule A (each, a
“Participating Investor”, and collectively, the
“Participating Investors”).

RECITALS

     WHEREAS, the Participating Investors are holders of shares of the
Company’s Series A Convertible Preferred Stock, Series C Convertible Preferred
Stock, and/or Series D Convertible Preferred Stock (collectively, the
“Prior Preferred Stock”) and certain of the Participating
Investors are also holders of warrants to purchase shares of Series D
Convertible Preferred Stock (the “Prior Warrants”); and

     WHEREAS, the Company desires to redeem and/or exchange all of the
outstanding shares of Prior Preferred Stock and all the outstanding Prior
Warrants from the Participating Investors, and the Participating Investors
desire to have such shares and warrants redeemed and/or exchanged; and

     WHEREAS, the Company shall grant to all Participating Investors the option
to (i) have certain of their shares of Prior Preferred Stock redeemed and all
their remaining shares of Prior Preferred Stock exchanged for shares of the
Company’s newly issued Series E Convertible Preferred Stock, par value $0.01
per share (the “Series E Preferred Stock”) all their Prior
Warrants exchanged for new warrants in substantially the form attached hereto
as Exhibit A (the “Series E Warrants”) to
purchase shares of Series E Preferred Stock (the “Series E Warrant
Shares”), or (ii) not have any of their shares of Prior Preferred
Stock redeemed and instead have all of their shares of Prior Preferred Stock
exchanged for shares of the Series E Preferred Stock and all of their Prior
Warrants exchanged for Series E Warrants; and

     WHEREAS, the Participating Investors desire to enter into this Agreement
to provide for the redemption and/or exchange of the Prior Preferred Stock and
Prior Warrants as described above;

     NOW THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, and subject to the terms and
conditions hereof, the parties hereby agree as follows:

     1.     Redemption of Prior Preferred Stock. Subject to the
terms and conditions of this Agreement, each Participating Investor (each, a
“Redeeming Investor” and collectively, the
“Redeeming Investors”) listed on Schedule
B attached hereto (the “Redemption Schedule”),
agrees, severally and not jointly,
to sell, and the Company agrees to purchase from each Redeeming Investor,
the number and type of shares of Prior Preferred Stock (the “Redeemed
Shares”) set forth opposite such Redeeming Investor’s name on the
Redemption Schedule at the

 

 

cash purchase price per share set forth opposite
such Redeeming Investor’s name on the Redemption Schedule and at the aggregate
purchase price set forth opposite such Redeeming Investor’s name on the
Redemption Schedule (the “Redemption Price”). The Company’s
agreement with each Redeeming Investor is a separate agreement, and the
purchase of the Redeemed Shares from each Redeeming Investor is a separate
purchase.

     2.     Series E Authorization. The Company has authorized
(a) 300,000 shares of Series E Preferred Stock (the “Series E
Shares”), having the rights, privileges, preferences and restrictions
set forth in the Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof of Series E Convertible
Preferred Stock of the Company, in the form attached hereto as Exhibit
B (the “Series E Certificate of Designations”),
(b) the issuance of Series E Warrants for the purchase of Series E Warrant
Shares, and (c) the reservation of shares of the Company’s Common Stock for
issuance upon conversion of the Series E Shares and Series E Warrant Shares
(the “Series E Conversion Shares”).

     3.     Exchange of Prior Preferred Stock for Series E Preferred
Stock. Subject to the terms and conditions of this Agreement and
immediately after the consummation of the redemption in accordance with Section
1 and the other provisions of this Agreement, each Participating Investor,
severally and not jointly, agrees to exchange, and the Company hereby agrees to
issue Series E Shares to each Participating Investor in exchange for, such
Participating Investor’s remaining shares of Prior Preferred Stock held by such
Redeeming Investor, at a ratio of one (1) Series E Share for every ten (10)
shares of Prior Preferred Stock, in each case in the amount set forth on
Schedule C attached hereto (the “Series E Exchange
Schedule”). The Series E Shares issued pursuant to this Agreement
shall have the rights, preferences, privileges and restrictions as set forth in
the Series E Certificate of Designations and shall be subject to the terms set
forth in the Amended and Restated Stockholders Agreement (the
“Stockholders Agreement”) and the Amended and Restated
Investor Rights Agreement (the “Investor Rights Agreement”),
each dated of even date herewith (collectively, the “Ancillary
Agreements”).

     4.     Exchange of Prior Warrants for Series E Warrants.
Subject to the terms and conditions of this Agreement, the Company hereby
agrees to issue to each Participating Investor holding any Prior Warrants, in
exchange for such Prior Warrants, Series E Warrants to purchase up to the
number of Series E Warrant Shares equal to the number of shares of Prior
Preferred Stock for which the Prior Warrant is exercisable divided by ten, as
set forth on Schedule D attached hereto (the
“Warrant Exchange Schedule”). The Series E Warrants shall
be exercisable at a price per share equal to the exercise price of the Prior
Warrants multiplied by ten, subject to adjustment in certain circumstances, and
shall have an expiration date which is the same as that of the Prior Warrants.
The Company’s agreement with each Participating Investor holding Prior Warrants
is a separate agreement, and the issuance of a Series E Warrant to each such
Participating Investor is a separate issuance.

     5.     Closing.

              5.1     The Closing Date. The closing of the foregoing
redemptions and exchanges (the “Closing”) shall take place
at the offices of Schwartz, Cooper, Greenberger & Krauss, Chartered, 180 N.
LaSalle St., Chicago, Illinois 60601, at 2:00 p.m. Chicago time on

-2-

 

March 19,
2004 or such other date, time and/or location as the Company and a majority in
interest of Participating Investors shall agree.

              5.2     Delivery. At the Closing,

     (a)     each Participating Investor will deliver to the Company, as
applicable, (i) a stock certificate or stock certificates representing the
shares of Prior Preferred Stock to be redeemed and/or exchanged, registered in
the name of such Participating Investor, together with (ii) an executed Stock
Power in the form of Exhibit C attached hereto, and (iii)
the Prior Warrants, if any, held by such Participating Investor;

     (b)     the Company shall deliver to each Participating Investor, as
applicable, (i) the Redemption Price set forth opposite such Participating
Investor’s name on the Redemption Schedule as payment for the shares of Prior
Preferred Stock being redeemed by check or by wire transfer pursuant to such
Participating Investor’s instructions, (ii) stock certificates representing the
number of Series E Shares set forth opposite such Participating Investor’s name
on the Series E Exchange Schedule, (iii) Series E Warrants replacing any Prior
Warrants of such Participating Investor, (iv) an opinion of counsel to the
Company in substantially the form attached hereto as Exhibit
D.

              5.3     Ancillary Agreements. At the Closing, the Company
and the Participating Investors shall enter into the Ancillary Agreements.

              5.4     Restatement of Stock Trading Agreements. In
addition, the Stock Trading Agreement dated as of July 31, 2001 by and among
certain of the Participating Investors and certain other persons and entities
(the “2001 Stock Trading Agreement”), the Stock Trading
Agreement dated as of June 4, 2002 by the Company and Richard P. Kiphart (the
“2002 Stock Trading Agreement”); and the Stock Trading
Agreement dated as of June 27, 2003 by and among the Company and certain of the
Participating Investors (the “2003 Stock Trading Agreement”
and, collectively with the 2001 Stock Trading Agreement and the 2002 Stock
Trading Agreement, the “Stock Trading Agreements”) shall
collectively be combined, amended and restated into a single Amended and
Restated Stock Trading Agreement in the form of Exhibit E
hereto (the “Amended and Restated Stock Trading Agreement”.

     6.     Representations and Warranties of the Company. In
connection with the redemption of Prior Preferred Stock and the exchange of
shares of Prior Preferred Stock and Prior Warrants for shares of Series E
Preferred Stock or Series E Warrants, as the case may be, hereunder, the
Company hereby represents and warrants as follows:

              6.1     Organization of the Company. The Company has been
duly organized and is validly existing in good standing under the laws of the
jurisdiction of its organization, with the requisite power and authority to
perform its obligations under this
Agreement, to consummate the transactions contemplated hereby and to
conduct its business as currently conducted.

              6.2     Authority. The Company has full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery by the Company of this Agreement, and the performance by
the Company of its obligations hereunder, have been duly

-3-

 

and validly authorized
by all necessary corporate action on the part of the Company. This Agreement
has been duly and validly executed and delivered by the Company and constitutes
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the enforceability thereof may
be limited by (i) bankruptcy, insolvency, moratorium and other laws affecting
the rights and remedies of creditors and secured parties and (ii) rules of law
governing specific performance, injunctive relief or other equitable remedies
and by general principles of equity. Each of the Series E Warrants, when
executed and delivered by the Company under this Agreement, will have been duly
and validly executed and delivered by the Company and will constitute a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be limited
by (i) bankruptcy, insolvency, moratorium and other laws affecting the rights
and remedies of creditors and secured parties and (ii) rules of law governing
specific performance, injunctive relief or other equitable remedies and by
general principles of equity. The shares of Series E Preferred Stock to be
issued hereunder, when issued in accordance with the terms of this Agreement,
will be validly issued, fully paid and nonassessable.

              6.3     Capitalization. As of the date hereof, the Company
has authorized 120,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock. As of the date hereof, the Company has 34,922,021 issued and
outstanding shares of Common Stock, 2,351,589 issued and outstanding shares of
Series A Convertible Preferred Stock, 233,613 issued and outstanding shares of
Series C Convertible Preferred Stock and 157,769 issued and outstanding shares
of Series D Convertible Preferred Stock. Other than the securities described
in this Section 6.3 and other outstanding options, rights and warrants to
purchase up to 20,017,048 shares of Common Stock and the Prior Warrants to
purchase up to 375,000 shares of Series D Preferred Stock, the Company does not
have any other securities or rights to purchase its securities outstanding.
The Series E Certificate of Designations in the form of Exhibit B hereto has
been duly filed in the office of the Secretary of State of Delaware and is
effective. Upon closing of the transactions contemplated hereby, the Company
will not have outstanding any shares of Prior Preferred Stock or any Prior
Warrants and will have outstanding 210,469 shares of Series E Preferred Stock
and Series E Warrants to purchase up to 3,750 additional shares of Series E
Preferred Stock. All shares of Series E Preferred Stock which will be issued
and outstanding upon closing of the transactions contemplated hereby will be
fully paid and non-assessable and subject to no preemptive rights in favor of
other persons or entities which have not been waived. Assuming the accuracy of
the representations of each Participating Investor in this Agreement, the
shares of Series E Preferred Stock and Series E Warrants issued to such
Participating Investor hereunder will be issued in compliance with all
applicable federal and state securities laws. The Company has reserved for
issuance under the Series E Warrants 3,750 shares of Series E Preferred Stock.
Shares of Series E Preferred Stock which are issued pursuant to exercise of the
Series E Warrants in accordance with the terms thereof will be fully-paid and
non-assessable and subject to no preemptive rights in favor of other
persons or entities which have not been waived. The Company has also reserved
for issuance pursuant to conversion of the shares of Series E Preferred Stock
to be issued hereunder or upon exercise of the Series E Warrants, 21,421,900
shares of its Common Stock, par value $0.0001 per share. Shares of such Common
Stock which are issued pursuant to conversion of shares of Series E Preferred
Stock in accordance with the terms thereof will be fully-paid and
non-assessable and subject to no preemptive rights in favor of other persons or
entities which have not been waived.

-4-

 

              6.4     No Conflicts. The execution and delivery by the
Company of this Agreement does not, and the performance by the Company of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not, (a) conflict with or result in a violation or
breach of any of the terms, conditions or provisions of the Certificate of
Incorporation (including the Certificates of Designations of Prior Preferred
Stock) or the bylaws, as amended, of the Company; or (b) conflict with or
result in a material violation or material breach of any term or provision of
any agreement to which the Company is a party, after giving effect to the
consents and waivers of the Participating Investors set forth in this
Agreement; or (c) 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 such court or governmental
authority is required for the valid authorization, execution, delivery and
performance by the Company of this Agreement, the issue of the shares of Series
E Preferred Stock and Series E Warrants hereunder or the consummation by the
Company of the other transactions on its part contemplated by this Agreement,
except for such consents, approvals, authorizations, registrations or
qualifications as may be required under Federal securities law or Applicable
State Law, American Stock Exchange listing requirements or with respect to
requirements applicable to the Participating Investors. Giving effect to
Section 7.12 hereof, the Company has obtained all consents, approvals, waivers
of rights and other authorizations from securityholders of the Company and
other persons and entities necessary to permit the Company to consummate the
transactions contemplated by this Agreement.

              6.5     SEC Filings. Since March 31, 2003, the Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Securities and Exchange Commission (the
“Commission”) pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (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,
except that the Company’s filing of the pro forma financial information which
is set forth in the Company’s current report on Form 8-K filed on July 2, 2003
was not timely filed within 15 days after the Company’s sale of the assets of
Switchboard Apparatus, Inc. The Commission Documents, taken as a whole, do 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,
except that the Company’s filing of the pro forma financial information which
is set forth in the Company’s current report on Form 8-K filed on July 2, 2003
was not timely filed within 15 days after the Company’s sale of the assets of
Switchboard Apparatus, Inc. 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

-5-

 

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. The Company is not
required to file and will not be required to file any agreement, note, lease,
mortgage, deed or other instrument entered into prior to the date hereof or the
Closing Date and to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound which has not been
previously filed as an exhibit to the Company’s reports filed or made with the
Commission under the Exchange Act.

              6.6     No Material Loss. Since December 31, 2002, 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.

              6.7     Cancellation of Prior Preferred Stock. Upon
consummation of the redemption and exchange transactions contemplated by
Sections 1, 3 and 4 hereof, all shares of Prior Preferred Stock shall be
cancelled and thereafter treated as authorized shares of the Company’s
preferred stock undesignated as to series and no further shares of Prior
Preferred Stock shall be issued by the Company.

              6.8     Required Registration. The Company agrees that, on
or before July 7, 2004, shall use commercially reasonable efforts, subject to
receipt of all necessary information from the Participating Investors who
desire to have shares registered thereunder, the Company will prepare and file
with the Commission a registration statement covering the resale of the shares
of Common Stock which may be acquired by pursuant to conversion of shares of
Series E Preferred Stock through the American Stock Exchange, the
over-the-counter market or in privately-negotiated transactions or otherwise.
Such registration shall otherwise be in accordance with the provisions of the
Investor Rights Agreement applicable to a “Requested Registration” thereunder
but shall not be deemed to be a “Requested Registration” for purposes thereof.

     7.     Representations, Warranties and Covenants of the Participating
Investor. In connection with the transactions contemplated
hereunder, each Participating Investor hereby represents, warrants and
covenants to the Company as follows:

              7.1     Ownership of Shares. The Participating Investor
owns, beneficially and of record, all the shares of Prior Preferred Stock and
Prior Warrants tendered hereunder and has good and valid title to all such
shares of Prior Preferred Stock and Prior Warrants, free and clear of all
liens, charges, pledges, claims, restrictions on transfer, mortgages,
security interests or encumbrances of any kind whatsoever, and of any
rights of first refusal of any kind (other than those under the Stock Trading
Agreement dated as of July 31, 2001 by and among the Participating Investors,
certain other parties and the Company, as amended, which restrictions are being
waived under Section 7.12 hereof), and the Participating Investor has not
granted any rights to purchase such shares of Prior Preferred Stock to any
other person or entity. The Participating Investor has the unrestricted power
and authority to transfer its shares of Prior Preferred Stock to the Company.
Upon delivery to the Company of the stock certificates representing its shares
of Prior Preferred Stock and/or Prior Warrants, as the case may be, and

-6-

 

upon
the Closing of the redemptions and/or exchanges set forth herein, the Company
shall acquire good and valid title to such shares of Prior Preferred Stock
and/or Prior Warrants, as the case may be, free and clear of all liens,
charges, pledges, claims, restrictions on transfer, mortgages, security
interests or encumbrances of any kind whatsoever.

              7.2     Authorization; No Violation. The Participating
Investor has, and will have on the Closing Date, full legal capacity, power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Participating Investor and constitutes his, her or its legal,
valid and binding obligation, enforceable against him, her or it in accordance
with its terms, except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, moratorium and other laws affecting the rights and
remedies of creditors and secured parties and (ii) rules of law governing
specific performance, injunctive relief or other equitable remedies and by
general principles of equity. Neither the execution, delivery and performance
of this Agreement by the Participating Investor nor the consummation of any of
the transactions provided for hereby will result in any violation or breach of
or default (or an event which with notice or the passage of time or both would
constitute a default) under any contract, franchise or permit to which the
Participating Investor is a party, or by which the Participating Investor is
bound, after giving effect to the consents and waivers of the Participating
Investors set forth in this Agreement.

              7.3     Broker’s or Finder’s Commissions. No broker’s or
finder’s or placement fee or commission or other remuneration has been paid or
given directly or indirectly by the Participating Investor for soliciting the
redemption or the exchange of shares of Prior Preferred Stock or Prior Warrants
for shares of Series E Preferred Stock or Series E Warrants hereunder, and the
Participating Investor will hold the Company harmless from any claim, demand or
liability for broker’s or finder’s or placement fees or commissions or other
remuneration alleged to have been incurred in connection with the sale and
issuance of the Series E Shares and/or the Series E Warrants due to any actions
of the Participating Investor.

              7.4     Restricted Securities. The Participating Investor
understands that the Series E Shares, the Series E Warrants, the Series E
Warrant Shares and the Series E Conversion Shares (i) have not been registered
under the Securities Act of 1933, as amended (the “Securities
Act”), (ii) are “restricted securities” under Rule 144 of the
Securities Act and (iii) are being issued pursuant to an exemption from
registration contained in the Securities Act based in part upon the
representations of the Participating Investor contained herein.

              7.5     Acquisition for Investment. The Participating
Investor is acquiring the Series E Shares, the Series E Warrants, the Series E
Warrant Shares and the Series
E Conversion Shares, as the case may be, for his, her or its own account
for investment and not as a nominee and not with a view to the distribution
thereof. The Participating Investor understands that the Participating
Investor must bear the economic risk of such investment indefinitely unless
such Series E Shares, Series E Warrants, Series E Warrant Shares or Series E
Conversion Shares are registered pursuant to the Securities Act, or an
exemption from such registration is available, and that the Company has no
present intention of registering the Series E Shares, the Series E Warrants,
the Series E Warrant Shares or the Series E Conversion Shares other than as
contemplated by the Investor Rights Agreement.

-7-

 

              7.6     Economic Risk. By reason of the Participating
Investor’s business or financial experience, the Participating Investor has the
capacity to protect its own interests in connection with the acquisition of the
Series E Shares, the Series E Warrants, the Series E Warrant Shares and the
Series E Conversion Shares, as the case may be, and has the ability to bear the
economic risk (including the risk of total loss) of the Participating
Investor’s investment.

              7.7     Disclosure. The Participating Investor represents
that it or he has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of participating in
the transactions contemplated hereby and making an informed investment decision
with respect thereto, and acknowledges that it or he has sole responsibility
for its or his own due diligence investigation and its own investment decision,
and that in connection with its investigation and its investment decision, it
or he has not relied on any representation by or on behalf of the Company not
set forth in the Commission Documents or in this Agreement, or on the fact that
any other person or entity has decided to participate in such transactions or
invest in any securities or in capital stock of the Company.

              7.8     Legends. The Participating Investor understands and
acknowledges that the certificates evidencing the Series E Shares, the Series E
Warrants and the Series E Warrant Shares to be issued hereunder will be
imprinted with the following legends (in addition to any legend required by
state securities laws or any of the Ancillary Agreements):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR THE SECURITIES LAWS OF ANY STATE.
THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

THE SHARES OF COMMON STOCK ISSUABLE UPON THE [CONVERSION]
[EXERCISE] OF THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO AN
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT, AN AMENDED AND
RESTATED STOCKHOLDERS AGREEMENT AND AN AMENDED AND RESTATED STOCK
TRADING AGREEMENT, EACH AS IT MAY BE AMENDED FROM
TIME TO TIME, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE
PRINCIPAL OFFICES OF THE COMPANY.

              7.9     Accredited Investor. The Participating Investor is
an “accredited investor” as defined in Rule 501(a) of Regulation D under the
Securities Act.

              7.10     Understanding of Terms of Series E Preferred Stock.
The Participating Investor acknowledges that it has had an opportunity to
review the provisions of the Series E Certificate of Designations and
understands the differences in rights, preferences, privileges and restrictions
between the shares of Prior Preferred Stock and Series E Preferred Stock.

-8-

 

              7.11     Advice of Counsel and Other Advisors. Each
Participating Investor has reviewed this Agreement in its entirety, has had an
opportunity to obtain the advice of counsel and any other advisors deemed
appropriate by the Participating Investor prior to executing this Agreement and
fully understands all provisions hereof. Each Participating Investor has
reviewed with such Participating Investor’s own tax advisors the federal,
state, local and foreign tax consequences of the transactions contemplated by
this Agreement, and is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. Each
Participating Investor understands that each Participating Investor (and not
the Company) shall be responsible for each Participating Investor’s own tax
liability that may arise as a result of the transactions contemplated by this
Agreement.

              7.12     Consents and Waivers. (a) Each Participating
Investor hereby consents to the Company’s and each other Participating
Investor’s entering into this Agreement and performing his, her or its
obligations hereunder, including effecting the redemption of certain shares of
Prior Preferred Stock and the exchange of shares of Prior Preferred Stock for
shares of Series E Preferred and the exchange of Prior Warrants for Series E
Warrants, all as provided herein. Each Participating Investor also consents to
the Company’s and each other Participating Investor’s entering into the
Ancillary Agreements and performing his, her or its obligations thereunder.
Each Participating Investor also consents to the Company’s and each other
Participating Investor’s entering into the Amended and Restated Stock Trading
Agreement and performing his, her or its obligations thereunder.

              (b)     Each Participating Investor hereby waives any and all defaults and
events of default which arise or may arise pursuant to or by reason of any the
actions described in Section 7.12(a) above on the part of the Company or any
other Participating Investor under any agreements, instruments or documents to
which or by which any Participating Investor and the Company may be bound
immediately prior to the execution of this Agreement, including, without
limitation, (i) the Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof of Series A Convertible
Preferred Stock of the Company; (ii) the Certificate of Designations,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
Series C Convertible Preferred Stock of the Company; and (iii) the Certificate
of Designations, Preferences and Relative, Participating, Optional and Other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions Thereof of Series D Convertible Preferred Stock of the Company;
and (iv) any and all agreements entered into in connection with such
Participating Investor’s original purchase of Prior Preferred Stock from the
Company, including without limitation, any securities purchase agreement,
investor rights agreement and any stockholders agreement and any supplements or
amendments thereto.

              (c)     Each Participating Investor and the Company hereby acknowledges that
this Agreement is being entered into in connection with (i) the Company’s
issuance of up to 5,000,000 shares of Common Stock and warrants to purchase up
to 1,750,000 additional shares of Common Stock to Security Benefit Group, Inc.
and/or affiliates thereof (the “Purchaser”) for gross
proceeds of up to $11,000,000, a portion of which gross proceeds will be used
by the Company to effect the redemptions under Section 1 hereof, and (ii) the
concurrent sale by Morgan Stanley and OIP of an aggregate of 1,000,000 shares
of Common Stock to the Purchaser

-9-

 

(which will be issued pursuant to the
concurrent conversion of 100,000 shares of Series A Preferred by Morgan Stanley
and OIP). Each Participating Investor and the Company hereby further
acknowledges that the sale by Morgan Stanley and OIP described in clause (ii)
preceding is for a per share price which is below the current market price of
the Common Stock and is being consummated as a requirement of the Purchaser to
its agreement to purchase the Common Stock and warrants from the Company
described in clause (ii) preceding. Each Participating Investor and the
Company hereby further acknowledges that the Purchaser has required, as a
condition to entering into such transactions, that the securities which the
Purchaser is to acquire from the Company and from Morgan Stanley and OIP shall
not be subject to the Ancillary Agreements or any of the existing Stock Trading
Agreements and the Purchaser shall not be a party to any of such agreements,
and each Participating Investor and the Company hereby agrees and consents
thereto. Each Participating Investor further acknowledges that the Purchaser
has required, as a condition to entering into such transactions, that the
securities which the Purchaser is to acquire from the Company and from Morgan
Stanley and OIP shall be registered by the Company under the Securities Act of
1933, as amended, and further required that the parties to the Investor Rights
Agreement dated as of July 31, 2001, as amended (the “Prior Investor
Rights Agreement”) and the parties to the Investor Rights Agreement
to be executed in connection with Closing under this Agreement agree to waive
their piggyback registration rights and the provisions of section 2.8 of the
Prior Investor Rights Agreement and the Investor Rights Agreement in respect of
such registration for the Purchasers, and each Participating Investor hereby
agrees and consents thereto and waives its piggyback registration rights and
rights under section 2.8 under each of the Prior Investor Rights Agreement and
the Investor Rights Agreement with respect to such registration.

              (d)     Each Participating Investor, other than Asplund, hereby acknowledges
that Asplund is also a director of the Company and hereby waives any and all
claims of conflicts of interest against Asplund arising from or with respect to
Asplund’s participation in the transactions contemplated hereby.

              (e)     Each Participating Investor hereby agrees that, for purposes of the
remaining term of the 2001 Stock Trading Agreement referred to in Section 5.3
hereof, the number of shares of “Uncovered Stock” of Leaf Mountain Company, LLC
thereunder immediately following the Closing Date hereunder shall remain
unchanged as a result of the transaction (calculated in accordance with the
provisions of the 2001 Stock Trading Agreement).

              (f)     Each Participating Investor other than SF Capital hereby consents to
the termination of the Stock Trading Agreement dated as of February 27, 2003
between the Company and SF Capital, effective upon consummation of the
redemption and exchange transactions pursuant to Sections 1, 3 and 4 hereof.

              (g)     Each Participating Investor hereby consents to the Company and Cinergy
Ventures II, LLC entering into an amendment to the Series E Warrant issued to
Cinergy Ventures at Closing hereunder to extend the expiration date thereunder
to October 31, 2004, provided that the Company’s board of directors shall have
approved such action by the Company.

-10-

 

              7.13     Termination of Rights Associated with Redeemed
Shares. With respect to a Participating Investor who is a Redeeming
Investor, such Redeeming Investor acknowledges that upon the Closing, all of
the Redeeming Investor’s rights under any and all agreements entered into in
connection with the Redeeming Investor’s original purchase of the Redeemed
Shares, including without limitation, any securities purchase agreement,
investor rights agreement and any stockholders agreement and any supplements or
amendments thereto, shall immediately terminate and be of no further force and
effect with respect to the Redeemed Shares. The Redeeming Holder further
agrees to execute and deliver any additional instruments necessary to document
such termination of rights and to fully carry out the purposes of these
covenants.

              7.14     Accrued Dividends On Prior Preferred Shares Up To
Closing. The Company hereby agrees that each Participating Investor
shall receive credit for accrued dividends on its Prior Preferred Shares for
the period from and including January 1, 2004 up to but not including the
Closing Date at the dividend rate applicable under the Prior Preferred Shares.
The Participating Investors agree that the Company may satisfy this obligation
by calculating and paying the initial dividend payable with respect to the
Series E Shares following the Closing Date on a basis that equitably reflects
such agreement by the Company.

     8.     Conditions to Investors’ Obligations to Close. Each
Participating Investor’s obligation to redeem and/or exchange its Prior
Preferred Shares or Prior Warrants at the Closing is subject to the fulfillment
on or before the Closing of each of the following conditions, unless waived by
the applicable Participating Investor:

              8.1     Receipt of Consideration. Such Participating
Investor shall have received delivery of the cash to be issued to such
Participating Investor in accordance with Section 1, if applicable, and the
Series E Shares and Series E Warrants to be issued to such Participating
Investor in accordance with Sections 3 and 4.

              8.2     Representations and Warranties. The representations
and warranties made by the Company in Section 6 shall be true and correct in
all material respects as of the date of the Closing

              8.3     Covenants. All covenants agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Closing shall have been performed or complied with in all material respects (it
being understood that the Company shall
be deemed to have certified as to the satisfaction of the conditions set
forth in Section 8..2 above and this Section 8.3 by consummating the
transactions hereunder).

              8.4     Qualifications. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Series E Shares, the Series E Warrants, the Series E Warrant
Shares and the Series E Conversion Shares pursuant to this Agreement shall be
obtained and effective as of the Closing.

-11-

 

              8.5     Certificates of Designations. The Series E
Certificate of Designations and shall have been duly authorized, executed and
filed with and accepted by the Secretary of State of the State of Delaware.

              8.6     Investor Rights Agreement. The Company and the
Participating Investors shall have executed and delivered the Investor Rights
Agreement.

              8.7     Stockholders Agreement. The Company and the Participating
Investors shall have executed and delivered the Stockholders
Agreement.

              8.8      Amended and Restated Stock Trading Agreement. The Company
and the Participating Investors and certain officers of the Company shall have
executed and delivered the Amended and Restated Stock Trading Agreement.

              8.9     Proceedings and Documents. All corporate and other
proceedings required to carry out the transactions contemplated by this
Agreement, and all instruments and other documents relating to such
transactions, shall be reasonably satisfactory in form and substance to the
Participating Investors, and the Participating Investors shall have been
furnished with such instruments and documents as they shall have reasonably
requested.

              8.10     Consents and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
the performance by the Company of its obligations pursuant to the
Agreement.

              8.11      No Litigation; No Order. No action, suit or proceeding
relating to the transactions contemplated by this Agreement shall be pending
that in the reasonable good faith judgment of the Participating Investors seeks
to restrain or prevent any of such transactions and has a reasonable
probability of success.

              8.12     Full Participation By Holders. All holders of any shares of
Prior Preferred Stock and all holders of any Prior Warrants shall be
signatories hereto and shall participate in the redemption and exchange
transactions contemplated hereby, such that upon closing hereunder no shares of
Prior Preferred Stock and no Prior Warrants shall remain outstanding or be
issuable by the Company.

     9.      Conditions to Company’s Obligation to Close. The Company’s
obligation to redeem the shares of Prior Preferred Stock and to accept for
exchange shares of Prior Preferred Stock and Prior Warrants and issue the
Series E Shares and the Series E Warrants at the Closing
is subject to the fulfillment on or before the Closing of the following
conditions, unless waived by the Company:

              9.1     Receipt of Consideration. The Company shall have
received from each Participating Investor stock certificates representing the
shares of Prior Preferred Stock to be redeemed or exchanged pursuant hereto,
accompanied by executed stock powers in acceptable form, and any Prior Warrants
of such Participating Investor, as the case may be.

-12-

 

              9.2     Representations and Warranties. The representations
and warranties made by the Participating Investors in Section 7 shall be true
and correct in all material respects as of the date of the Closing.

              9.3     Covenants. All covenants, agreements and conditions
contained in the Agreements to be performed by Participating Investors on or
prior to the date of the Closing shall have been performed or complied with in
all material respects as of the date of the Closing (it being understood that
each Participating Investors shall be deemed to have certified as to himself,
herself or itself, as to the satisfaction of the conditions set forth in
Section 9.2 above and this Section 9.3 by consummating the transactions
hereunder).

              9.4     Compliance with Securities Laws. The Company shall be
satisfied that the offer and sale of the Series E Shares, the Series E
Warrants, the Series E Warrant Shares and the Series E Conversion Shares shall
be qualified or exempt from registration or qualification under all applicable
federal and state securities laws (including receipt by the Company of all
necessary blue sky law permits and qualifications required by any state, if
any).

              9.5     Certificate of Designations. The Series E
Certificate of Designations shall have been duly authorized, executed and filed
with and accepted by the Secretary of State of the State of Delaware.

              9.6     Investor Rights Agreement. The Company and the
Participating Investors shall have executed and delivered the Investors Rights
Agreement.

              9.7     Stockholders Agreement. The Company and the
Participating Investors shall have executed and delivered the Stockholders
Agreement.

              9.8     Amended and Restated Stock Trading Agreement. The
Company and the Participating Investors and certain officers of the Company
shall have executed and delivered the Amended and Restated Stock Trading
Agreement.

              9.9     Consents and Waivers. The Company and the
Participating Investors shall have obtained any and all consents, permits and
waivers necessary or appropriate for consummation of the transactions
contemplated by the Agreement.

              9.10     Proceedings and Documents. All corporate and other
proceedings required to carry out the transactions contemplated by this
Agreement, and all instruments and other documents relating to such
transactions, shall be reasonably satisfactory in form and substance to the
Company, and the Company shall have been furnished with such instruments and
documents as it shall have reasonably requested.

              9.11     No Litigation; No Order. No action, suit or
proceeding relating to the transactions contemplated by this Agreement shall be
pending that in the reasonable good faith judgment of the Company seeks to
restrain or prevent any of such transactions and has a reasonable probability
of success.

-13-

 

     10.     Other Provisions.

              10.1     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.

              10.2     Further Assurances. The parties agree to execute
such further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.

              10.3     Counterparts. This Agreement may be executed in two
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 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.

              10.4     Entire Agreement. This Agreement represents the
entire agreement between the parties with respect to the subject matter hereof
and may be modified or amended only in a writing signed by the Company and a
majority in interest of Participating Investors.

              10.5     Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

              10.6     Notices. All notices and other communications
required or permitted hereunder shall be in writing and shall be delivered
personally or transmitted by facsimile, or, if sent within the U.S., mailed by
first-class mail, postage prepaid, addressed (i) if to a Participating
Investor, at such Participating Investor’s address set forth in the Schedule of
Investors, or at such other address as such Participating Investor shall have
furnished to the Company in writing, or (ii) if to the Company, at its address
set forth below

Electric City Corp.

1280 Landmeier Road

Elk Grove Village, Illinois 60007

Attention: Chief Financial Officer

Facsimile No.: (847)-437-4969

-14-

 

or at such other address as the Company shall have furnished to such
Participating Investor in writing. All such notices and other communications
shall be deemed to have been duly given when delivered by hand, if personally
delivered; when delivered by courier, if delivered by commercial courier
service; three (3) business days after being deposited in the mail, postage
prepaid, first class registered or certified, if mailed, and when receipt is
mechanically acknowledged, if telecopied.

              10.7     Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

              10.8     Amendment and Waiver. No failure or delay on the
part of the parties hereto in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. Any amendment, to any
provision of this Agreement shall be effective only if it is made or given in
writing and signed by the Company and each of the Participating Investors. Any
waiver of any provision of this Agreement, and any consent to any departure by
the Company or any Participating Investor from the terms of any provision of
this Agreement, shall be effective only if it is made or given in writing and
signed by each party which is entitled to the benefit of enforcement of such
provision.

              10.9     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 Participating Investors herein shall survive the
execution of this Agreement and consummation of the redemption and exchange
transactions contemplated by Sections 1, 3 and 4 hereof.

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

-15-

 

     IN WITNESS WHEREOF, the undersigned have executed this Redemption and
Exchange Agreement as of the date set forth above.

	 	 	 	 	 	 	 
	COMPANY	 	PARTICIPATING INVESTORS
	 
	 	 	 	 	 	 
	ELECTRIC CITY CORP.,	 	NEWCOURT CAPITAL USA INC.,
	 
	 	 	 	 	 	 
	By:

	 	/s/ John Mitola

	 	By:
	 	/s/ Daniel M. Morash

	Name:

	 	John Mitola
	 	Name:
	 	Daniel M. Morash
	Title:

	 	Chief Executive Officer
	 	Title:
	 	Managing Director
	 
	 	 	 	 	 	 
	 	 	 	 	MORGAN STANLEY DEAN
WITTER
 EQUITY FUNDING, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ James T. Keane

	 

	 	 	 	Name:
	 	James T. Keane
	 

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	 	 	 	 	ORIGINATORS INVESTMENT PLAN, L.P.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ James T. Keane

	 

	 	 	 	Name:
	 	James T. Keane
	 

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	 	 	 	 	CINERGY VENTURES II, LLC,
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Richard G. Beach

	 

	 	 	 	Name:
	 	Richard G. Beach
	 

	 	 	 	Title:
	 	Assistant Secretary
	 
	 	 	 	 	 	 
	 	 	 	 	LEAF MOUNTAIN COMPANY, LLC
	 
	 	 	 	 	 	 
	  

	 	 	 	By:
	 	/s/ Jack J. Jiganti

	  

	 	 	 	Name:	 	Jack J. Jiganti
	 

	 	 	 	Title:
	 	Manager

-16-

 

	 	 	 	 	 	 	 
	 	 	 	 	SF CAPITAL PARTNERS, LTD.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Brian H. Davidson

	 

	 	 	 	Name:
	 	Brian H. Davidson
	 

	 	 	 	Title:
	 	Authorized Signatory
	 
	 	 	 	 	 	 
	 	 	 	 	/s/ Richard Kiphart

	 	 	 	 	RICHARD KIPHART
	 
	 	 	 	 	 	 
	 	 	 	 	/s/ David P. Asplund

	 	 	 	 	DAVID P. ASPLUND
	 
	 	 	 	 	 	 
	 	 	 	 	JOHN THOMAS HURVIS REVOCABLE TRUST
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ John Thomas Hurvis

	 

	 	 	 	Name:
	 	John Thomas Hurvis
	 

	 	 	 	Title:
	 	Trustee
	 
	 	 	 	 	 	 
	 	 	 	 	/s/ John Donohue

	 	 	 	 	JOHN DONOHUE
	 
	 	 	 	 	 	 
	 	 	 	 	AUGUSTINE FUND, LP
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Thomas Duszynski

	 

	 	 	 	Name:
	 	Thomas Duszynski
	 

	 	 	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	 	 	TECHNOLOGY
TRANSFORMATION
 VENTURE FUND, LP
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ William M. Custer

	 

	 	 	 	Name:
	 	William M. Custer
	 

	 	 	 	Title:
	 	President

-17-

 

SCHEDULE A

Schedule of Investors

Newcourt Capital USA Inc.

1211 Avenue of the Americas

22nd Floor

New York, NY 10036

Morgan Stanley Dean Witter Equity Funding, Inc.

1585 Broadway

New York, NY 10036

Originators Investment Plan, L.P.

1585 Broadway

New York, NY 10036

Cinergy Ventures II, LLC

139 East 4th Street

26th Floor

Atrium II EA610

Cincinnati, OH 45202

Leaf Mountain Company, LLC

190 South LaSalle Street, Suite 1700

Chicago, IL 60603

SF Capital Partners, Ltd.

C/o Stark Asset Management, LLC

3600 South Lake Drive

St. Francis, WI 53235

Richard P. Kiphart

c/o William Blair & Co.

222 W. Adams Street

Chicago, IL 60606

David R. Asplund

c/o Delano Group Securities, LLC

141 W. Jackson Blvd, Suite 2176

Chicago, IL 60604

-18-

 

John Thomas Hurvis Revocable Trust

John Thomas Hurvis Trustee

C/o Old World Industries

4065 Commercial Avenue

Northbrook, IL 60062

John Donohue

43896 Yosemite Drive

Big Bear Lake, CA 92315

Augustine Fund, LP

141 West Jackson Blvd., Suite 2182

Chicago, IL 60604

Technology Transformation Venture Fund, LP

c/o Custer Management Inc.

14 S. High Street

New Albany, OH 43054

-19-

 

Schedule B

Redemption Schedule

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number and Type of	 	 	 	 	 	 
	 	 	Shares of Preferred	 	 	 	 	 	Aggregate
	 	 	Stock Tendered for	 	Redemption Price	 	Redemption
	Name of Redeeming Investor
	 	Redemption
	 	Per Share
	 	Price

	Newcourt Capital USA Inc.
	 	180,976 Series A	 	$	13.00	 	 	$	2,352,688	 
	Morgan Stanley Dean
Witter Equity Funding,
Inc.
	 	45,194 Series A	 	$	13.00	 	 	$	587,522	 
	Originators Investment
Plan, L.P.
	 	2,379 Series A	 	$	13.00	 	 	$	30,927	 
	Cinergy Ventures II, LLC
	 	145,993 Series A	 	$	13.00	 	 	$	2,192,619	 
	 
	 	22,670 Series D	 	 	 	 	 	 	 	 
	Leaf Mountain Company, LLC
	 	116,307 Series A	 	$	13.00	 	 	$	1,511,991	 
	John Thomas
Hurvis Revocable Trust
	 	14,513 Series A	 	$	13.00	 	 	$	207,090	 
	 
	 	1,417 Series D	 	 	 	 	 	 	 	 
	Technology Transformation
Venture Fund, LP
	 	9,013 Series A	 	$	13.00	 	 	$	117,169	 

 

 

Schedule C

Series E Exchange Schedule

	 	 	 	 	 
	 	 	Number and Type of	 	Number of Shares of
	 	 	Shares of Preferred	 	Series E Preferred
	 	 	Stock Tendered for	 	Stock Received in
	Name of Participating Investor
	 	Exchange
	 	the Exchange

	Newcourt Capital USA Inc.
	 	322,816 Series A	 	32,282
	Morgan Stanley Dean Witter Equity
Funding, Inc.
	 	80,616 Series A	 	8,062
	Originators Investment Plan, L.P.
	 	4,242 Series A	 	424
	Cinergy Ventures II, LLC
	 	260,415 Series A	 	30,085
	 
	 	40,438 Series D	 	 
	Leaf Mountain Company, LLC
	 	207,463 Series A	 	20,746
	SF Capital Partners, Ltd.
	 	203,204 Series A	 	23,476
	 
	 	31,554 Series D	 	 
	John Thomas Hurvis Revocable Trust
	 	25,887 Series A	 	2,841
	 
	 	2,527 Series D	 	 
	David R. Asplund
	 	25,400 Series A	 	2,934
	 
	 	3,944 Series D	 	 
	John Donohue
	 	25,090 Series A	 	2,509
	Technology Transformation Venture
Fund, LP
	 	16,077 Series A	 	1,608
	Augustine Fund LP
	 	145,397 Series A	 	14,540
	Richard Kiphart
	 	420,606 Series A	 	70,944
	 
	 	233,613 Series C	 	 
	 
	 	55,219 Series D	 	 

 

 

Schedule D

Warrant Exchange Schedule

	 	 	 	 	 	 	 	 	 
	 	 	Number and Type of	 	Number and Type of	 	 
	 	 	Warrant Shares	 	Warrant Shares	 	 
	Name of Participating	 	Tendered for	 	Received in the	 	New Exercise Price
	Investor
	 	Exchange
	 	Exchange
	 	per Share

	Cinergy Ventures II, LLC
	 	15,000	 	1,500	 	$	100.00	 
	SF Capital Partners Ltd.
	 	7,500	 	750	 	$	100.00	 
	Richard P. Kiphart
	 	13,125	 	1,312	 	$	100.00	 
	David R. Asplund
	 	937	 	94	 	$	100.00	 
	John Thomas Hurvis
Revocable Trust
	 	938	 	94	 	$	100.00	 

-2-

 

Exhibit A

Forms of Series E Warrant

[attached]

-3-

 

Exhibit B

Form of Series E Certificate of Designations

[attached]

-4-

 

Exhibit C

Form of Stock Power

     Pursuant to that certain Redemption and Exchange Agreement dated as of
March____, 2004 (the “Agreement”), for value received the
undersigned (“Participating Investor”) hereby sells, assigns
and transfers unto Electric City Corp., a Delaware corporation (the
“Company”), the number of shares of the Company’s Preferred
Stock tendered pursuant to the Agreement, which shares of Preferred Stock are
represented on the date hereof by the following stock certificate(s) of Prior
Preferred Stock (as defined in the Agreement), standing in Participating
Investor’s name on the books of the Company:

	 	 	 
	Certificate
No.
 	 	Number and Type of Shares
Represented by Certificate
 
	

	 	

	 
	 	 
	

	 	

	 
	 	 
	

	 	

	 
	 	 
	

	 	

     Such shares represented by the above-listed stock certificate(s) are to be
redeemed and/or exchanged in accordance with the terms and conditions of the
Agreement into shares of the Company’s Series E Convertible Preferred Stock,
and the undersigned does hereby irrevocably constitute and appoint                                      as

such Participating
Investor’s attorney to transfer such shares on the books of the Company with
full power of substitution in the premises.

	 	 	 	 	 
	Dated:
                 , 2004
	 	 	 	 
	 	 	PARTICIPATING INVESTOR
	 
	 	 	 	 
	 	 	[Insert Investor Name]
	 
	 	 	 	 
	

	 	Signature:
	 	

	

	 	Signer Name:
	 	

	

	 	Title:
	 	

(The signature on this Stock Power must correspond with the name as written
upon the face of the certificate(s) being surrendered in every particular,
without alteration, enlargement or any change whatever.)

-5-

 

Exhibit D

Form of Opinion of Counsel

[to be attached]

-6-

 

Exhibit E

Form of Amended and Restated Stock Trading Agreement

[attached]

-7-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]