-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FefnnotDgBorzK65GLMd/lAK5u9rSorGCa0LfGYuZteB0iPxwRHjjEY1/p3iHge0 d+D38kAvDh6+VopA1okq1A== 0000950123-04-000402.txt : 20040115 0000950123-04-000402.hdr.sgml : 20040115 20040115143333 ACCESSION NUMBER: 0000950123-04-000402 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20040115 GROUP MEMBERS: MORGAN STANLEY DEAN WITTER EQUITY FUNDING INC GROUP MEMBERS: MSDW OIP INVESTORS INC GROUP MEMBERS: ORIGINATORS INVESTMENT PLAN L P SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ELECTRIC CITY CORP CENTRAL INDEX KEY: 0001065860 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600] IRS NUMBER: 364197337 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-58763 FILM NUMBER: 04527040 BUSINESS ADDRESS: STREET 1: 1280 LANDMEIER ROAD CITY: ELK GROVE STATE: IL ZIP: 60007 BUSINESS PHONE: 8474371666 MAIL ADDRESS: STREET 1: 1280 LANDMEIER ROAD CITY: ELK GROVE VILLAGE STATE: IL ZIP: 60007 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY CENTRAL INDEX KEY: 0000895421 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 363145972 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2127614000 MAIL ADDRESS: STREET 1: 1221 SIXTH AVENUE STREET 2: 5TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY DEAN WITTER & CO DATE OF NAME CHANGE: 19980326 FORMER COMPANY: FORMER CONFORMED NAME: DEAN WITTER DISCOVER & CO DATE OF NAME CHANGE: 19960315 SC 13D/A 1 y93268a1sc13dza.txt AMENDMENT #1 TO SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1) ELECTRIC CITY CORP - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK - -------------------------------------------------------------------------------- (Title of Class of Securities) 284868106 - -------------------------------------------------------------------------------- (CUSIP Number) PETER R. VOGELSANG, ESQ. MORGAN STANLEY 1585 BROADWAY NEW YORK, NEW YORK 10036 (212) 761-4000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) COPY TO: JOSHUA N. KORFF, ESQ. KIRKLAND & ELLIS LLP 153 EAST 53RD STREET NEW YORK, NEW YORK 10022 (212) 446-4800 DECEMBER 19, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 13 Pages - ------------------- ------------------ CUSIP No. 284868106 13D Page 2 of 13 Pages - ------------------- ------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Morgan Stanley - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY ------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON 3,972,451 (See Item 5) WITH ------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,972,451 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,972,451 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.37% (See Items 4 and 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) CO, IA - -------------------------------------------------------------------------------- - ------------------- ------------------ CUSIP No. 284868106 13D Page 3 of 13 Pages - ------------------- ------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Morgan Stanley Dean Witter Equity Funding, Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY ------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON 3,773,828 (See Item 5) WITH ------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,773,828 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,773,828 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% (See Items 4 and 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) CO - -------------------------------------------------------------------------------- - ------------------- ------------------ CUSIP No. 284868106 13D Page 4 of 13 Pages - ------------------- ------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Originators Investment Plan, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY ------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON 198,623 (See Item 5) WITH ------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------- 10 SHARED DISPOSITIVE POWER 198,623 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 198,623 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.6% (See Items 4 and 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - -------------------------------------------------------------------------------- - ------------------- ------------------ CUSIP No. 284868106 13D Page 5 of 13 Pages - ------------------- ------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) MSDW OIP Investors, Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY ------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON 198,623 (See Item 5) WITH ------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------- 10 SHARED DISPOSITIVE POWER 198,623 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 198,623 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.6% (See Items 4 and 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) CO - -------------------------------------------------------------------------------- Page 5 of 13 Pages This Amendment No. 1 ("Amendment") amends Schedule 13D filed on September 18, 2001 ("Schedule 13D") by each of the Reporting Persons (as defined in Item 2 of Schedule 13D). ITEM 2. IDENTITY AND BACKGROUND. Immediately preceding the defined term "MSDW" in the first full paragraph of Item 2 "Morgan Stanley Dean Witter & Co." is hereby replaced with "Morgan Stanley". The definition of "Additional Investors" in the second full paragraph of Item 2 is hereby amended to add the following entities as of December 19, 2003: Augustine Fund LP, an Illinois limited partnership ("Augustine"), Technology Transformation Venture Fund, LP, a Delaware limited partnership ("TVF"), and John Donohue, an individual ("Donohue"). ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 of Schedule 13D is hereby amended and restated as follows: Equity Funding and Originators and EP Power Finance, L.L.C., Newcourt Capital USA Inc. and Duke Capital Partners, LLC (each of EP Power Finance, L.L.C., Newcourt Capital USA Inc. and Duke Capital Partners, LLC, are collectively the "Original Additional Investors") entered into the Securities Purchase Agreement, dated as of July 31, 2001 with the Company (the "Securities Purchase Agreement") to acquire certain classes of the Company's securities. The transactions contemplated by the Securities Purchase Agreement were consummated on September 7, 2001. Under the terms of the Securities Purchase Agreement, Equity Funding and Originators collectively purchased $4,000,000 of the Company's securities as described more fully below. The funds for the purchase of securities purchased pursuant to the Securities Purchase Agreement by Equity Funding came from the working capital of Equity Funding. The funds for the purchase of securities purchased pursuant to the Securities Purchase Agreement by Originators, were contributed by the limited partners of Originators. The Reporting Persons are currently deemed to have beneficial ownership of the securities issued pursuant to the Securities Purchase Agreement (after giving effect to any dispositions pursuant to the SPA (as defined below) because Equity Funding and Originators directly own Common Stock or have the right to acquire Common Stock indirectly through the conversion of the Series A Preferred Stock or the exercise of the Common Stock Warrants, as applicable, within sixty days of the date hereof. It is anticipated that the exercise by Originators of the Common Stock Warrants will be done either on a net exercise basis or through additional capital contributions by Originators' limited partners. It is anticipated that the exercise by Equity Funding of the the Common Stock Warrants will be done either on a net exercise basis or by using the working capital of Equity Funding. Pursuant to the terms of the Securities Purchase Agreement, Equity Funding and Originators and the Original Additional Investors collectively purchased $16,000,000 in aggregate amount of the Company's Series A Preferred Stock, warrants to purchase Series A Preferred Stock, shares of the Common Stock and warrants to purchase Common Stock. Equity Funding purchased for $3,800,000 the following securities: Page 6 of 13 Pages - 380,000 shares of Series A Preferred Stock; - warrants to purchase 95,000 shares of Preferred Stock at an initial exercise price of $10.00 per share; - 76,206 shares of Common Stock; and - warrants to purchase 712,500 shares of Common Stock at an initial exercise price of $1.00 per share. Originators purchased for $200,000 the following securities: - 20,000 shares of Series A Preferred Stock; - warrants to purchase 5,000 shares of Series A Preferred Stock at an initial exercise price of $10.00 per share; - 4,011 shares of Common Stock; and - warrants to purchase 37,500 shares of Common Stock at an initial exercise price of $1.00 per share. The Series A Preferred Stock became convertible beginning on November 6, 2001 into shares of Common Stock at the option of the holder as determined by dividing $10.00 by the conversion price, which has been initially set at $1.00, multiplied by each share of Series A Preferred Stock, subject to adjustments as set forth in the Securities Purchase Agreement. Each outstanding share of Series A Preferred Stock is entitled to dividends at a rate of 10% per year of its stated value, which is $10.00. The Company may pay dividends in cash or additional shares of Series A Preferred Stock until the first dividend payment that occurs after three years following the initial issuance of the Series A Preferred Stock. After that date, dividends must be paid in cash and the dividend rate increases 0.5% every six months to a maximum rate of 15% per year. As a result of share dividends to Equity Funding and Originators payable by the Company at the end of each quarter since the date of the Securities Purchase Agreement, Equity Funding has acquired an additional 102,060 shares of Series A Preferred Stock and Originators has acquired an additional 5,372 shares of Series A Preferred Stock. On August 31, 2002 all of the Preferred Stock Warrants held by Equity Funding and Originators expired in accordance with their terms and were not exercised. Equity Funding and Originators entered into a Securities Purchase Agreement, dated December 19, 2003, (the "SPA") attached hereto as Exhibit 12 with Augustine, TVF and Donohue. Pursuant to the SPA, on December 19, 2003, Equity Funding sold 104,500 shares of Series A Preferred Stock, 20,956 shares of Common Stock and 195,938 Common Stock Warrants to Augustine for an aggregate purchase price of $1,045,000; 23,750 shares of Series A Preferred Stock, 4,763 shares of Common Stock and 44,531 Common Stock Warrants to TVF for an aggregate purchase price of $237,500; and 23,750 shares of Series A Preferred Stock, 4,763 shares of Common Stock and 44,531 Common Stock Warrants to Donahue for an aggregate purchase price of $237,500. After giving effect to the expiration of the Preferred Stock Warrants, the dispositions described above and share dividends paid on the Series A Preferred Stock, Equity Funding directly beneficially owns 45,724 shares of Common Stock, 427,500 Common Stock Warrants and 330,060.40 shares of Series A Preferred Stock. Equity Funding directly beneficially owns no Preferred Stock Warrants. Pursuant to the SPA, on December 19, 2003, Originators sold 5,500 shares of Series A Preferred Stock, 1,102 shares of Common Stock and 10,312 Common Stock Warrants to Augustine for an aggregate purchase price of $55,000; 1,250 shares of Series A Preferred Stock, 251 shares of Common Stock and 2,344 Common Stock Warrants to TVF for an aggregate purchase price of $12,500; and 1,250 Page 7 of 13 Pages shares of Series A Preferred Stock, 251 shares of Common Stock and 2,344 Common Stock Warrants to Donahue for an aggregate purchase price of $12,500. After giving effect to the dispositions described above and share dividends paid on the Series A Preferred Stock, Originators directly beneficially owns 2,407 shares of Common Stock, 22,500 Common Stock Warrants and 17,371.60 shares of Series A Preferred Stock. Originators directly beneficially owns no Preferred Stock Warrants. After giving effect to the dispositions pursuant to the SPA, dividends paid on the Series A Preferred Stock, based on the initial conversion ratio, Equity Funding and Originators have the right to acquire 3,728,104 and 196,216 shares of Common Stock, respectively, as a result of the exercise of the Common Stock Warrants and the conversion of the Series A Preferred Stock into Common Stock with 60 days of the date of this Amendment. The information set forth in Item 4 of this Schedule 13D is hereby incorporated herein by reference. ITEM 4. PURPOSE OF TRANSACTION. Item 4 is hereby amended and restated as follows: This Amendment is being filed to report the dispositions by and share dividends paid to Equity Funding and Originators pursuant to the Securities Purchase Agreement and pursuant to the SPA. Each of the dispositions was made for cash and made in the ordinary course of the Equity Funding's and Originator's respective businesses. The Company's board of directors is currently comprised of twelve members. Equity Funding and Originators collectively have the right to elect one director of the Company. As of the date hereof Equity Funding and Originators have appointed Frederic F. Brace as an individual to serve on the Company's Board of Directors. Equity Funding and Originators expect to evaluate on a continuing basis their goals and objectives and general economic and equity market conditions, as well as the Company's business operations and prospects. Based on such evaluations, from time to time in the future, Equity Funding and Originators may (1) convert the Series A Preferred Stock into Common Stock or (2) exercise the Common Stock warrants for investment purposes. Equity Funding and Originators may make additional purchases of the Company's Common Stock, Common Stock Warrants or Series A Preferred Stock. Equity Funding and Originators may, subject to the Investor Rights Agreement and the Stock Trading Agreement (defined below), from time to time sell all or a portion of the Common Stock, Common Stock Warrants or Series A Preferred Stock that they hold either in private placements, in the open market pursuant to Rule 144, to the extent such rule is available for such sales, or otherwise in conformance with the federal securities laws. Equity Funding and Originators are presently evaluating further dispositions of their respective holdings of Common Stock, Series A Preferred Stock and Common Stock Warrants through private placements which may take place in the near future, however, neither Equity Funding nor Originators is obligated to make any such dispositions as of the date hereof. Except as set forth in the preceding paragraphs, as of the date hereof, the Reporting Persons do not have any plan or proposal that relates to or would result in: (a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; Page 8 of 13 Pages (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Issuer; (f) Any other material change in the Issuer's business or corporate structure; (g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) Any action similar to any of those enumerated above. Notwithstanding the foregoing, the Reporting Persons reserve the right to effect any such actions as any of them may deem necessary or appropriate in the future. The information set forth in Item 3 of this Schedule 13D is hereby incorporated herein by reference. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 of Schedule 13D is hereby amended and restated as follows: (a) As of the date hereof, the Reporting Persons beneficially own (or are deemed solely for purposes of Rule 13d-3 promulgated under the Exchange Act to beneficially own) directly or indirectly, an aggregate of 3,972,451 shares of Common Stock, or approximately 10.37% of the Common Stock outstanding on December 31, 2003 (including the number of shares of Common Stock that the Reporting Persons have the right to acquire within 60 days of the date hereof). (b) Assuming full exercise and conversion, as appropriate, of the securities issued to Equity Funding and Originators under the Securities Purchase Agreement and after giving effect to any dispositions pursuant to the SPA, MSDW may be deemed to have shared voting and dispositive power with respect to the Common Stock, as well as the Common Stock which may be obtained upon conversion of the Series A Preferred Stock and the Common Stock Warrants owned by Equity Funding and Originators. Assuming full exercise and conversion, as appropriate, of the securities issued to Originators under the Securities Purchase Agreement and after giving effect to any dispositions pursuant to the SPA, OIP may be deemed to have shared voting and dispositive power with respect to the Page 9 of 13 Pages Common Stock, as well as the Common Stock which may be obtained upon conversion of the Series A Preferred Stock and the Common Stock Warrants owned by Originators. The Reporting Persons disclaim beneficial ownership any of the shares of Common Stock beneficially owned by the Additional Investors. The filing of the Schedule 13D shall not be construed as an admission that the Reporting Persons are the beneficial owners of the Common Stock beneficially owned by the Additional Investors or that the Reporting Persons and any of such Additional Investors constitute such a person or group. The Reporting Persons are not responsible for the accuracy of any information filed by any of the Additional Investors. (c) Except for the transactions described herein, there have been no other transactions in the securities of the Company effected by the Reporting Persons in the last 60 days. (d) Except as stated within this Item 5, to the knowledge of the Reporting Persons, only the Reporting Persons have the right to receive or the power to direct the receipt of dividends from, or proceeds from the sale of, the shares of Common Stock (including both those owned directly and those obtainable upon conversion shares of Series A Preferred Stock and exercise of the Common Stock Warrants) of the Company reported by this statement. (e) Inapplicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 of Schedule 13D is hereby amended and restated as follows: In connection with the SPA, on December 19, 2003 each of Augustine, TVF and Donahue, entered into joinder agreements whereby they each became party to and became bound by the Investor Rights Agreement, the Stockholders Agreement and the Stock Trading Agreement (each as defined below). Pursuant to the terms of the Series A Preferred Stock, Equity Funding and Originators and the Additional Investors have the right to elect four directors of the twelve-member board of directors, subject to decrease depending on the number of shares of Series A Preferred Stock outstanding. As of the date hereof, Equity Funding and the Originators have the right to appoint one of the four Series A Preferred Stock directors. Frederic F. Brace has been selected by the Equity Funding and Originators as an individual to serve on the Company's Board of Directors. Depending on the number of shares of Series A Preferred Stock outstanding, the holders will also have special approval rights to approve certain matters in which the Company proposes to engage. In connection with the Securities Purchase Agreement, the Company entered into certain ancillary agreements -- the Investor Rights Agreement, the Stockholders Agreement and the Stock Trading Agreement. Under the terms of the Investor Rights Agreement, dated as of July 31, 2001 (the "Investor Rights Agreement"), which became effective on September 7, 2001, Equity Funding and Originators and the Additional Investors have the right to require the Company to register the shares of Common Stock received directly or indirectly pursuant to the Securities Purchase Agreement. The Additional Investors and Equity Funding and Originators, collectively, have the right to demand an aggregate of four registrations, each representing at least $5 million of market value. The Additional Investors and Equity Funding and Originators are also entitled to customary "piggyback" registration rights. Under the Investors Rights Agreement, the investors and Equity Funding Page 10 of 13 Pages and Originators have a right of first offer with respect to future sales by the Company of their capital stock to permit such parties to maintain their percentage ownership interests. On July 31, 2001, the Original Additional Investors and the Company entered into the Stockholders Agreement (the "Stockholders Agreement"), which became effective on September 7, 2001. Under the Stockholders Agreement, each investor (with Equity Funding and Originators collectively counted as one investor) has the right to designate one member to the Board of Directors and to have a representative attend all meetings of the Board of Directors as a board observer so long as it holds at least 200,000 shares of Series A Preferred Stock. Additionally, the Additional Investors and the Company have agreed that for so long as an additional investor owns at least 2,000,000 shares of Common Stock, subject to adjustments, a representative of such investor is entitled to attend all meetings of the Board of Directors as an observer if such investor does not have a designated board member. Each investor also agrees that if it converts more than 50% of the Series A Preferred Stock it purchases under the Securities Purchase Agreement, it will, at the request of the Company, convert the remainder of its Series A Preferred Stock. On July 31, 2001, the Original Additional Investors, Equity Funding and Originators and certain officers of the Company entered into the Stock Trading Agreement (the "Stock Trading Agreement") that limits their ability to sell Common Stock into the public market. The Stock Trading Agreement became effective on September 7, 2001. The parties to the Stock Trading Agreement may not sell their shares of Common Stock until the Company has completed a qualified primary offering, as set forth in the Stock Trading Agreement, without complying with the sale restrictions set forth in such agreement. If the Company does not complete a qualified public offering within 18 months after the closing of the Securities Purchase Agreement, the parties may sell their shares subject to certain trading volume and block sale limitations set forth in the Stock Trading Agreement. Each party to the Stock Trading Agreement and the Company has a right of first offer if any other party to the Stock Trading Agreement intends to sell its shares in a private transaction. The Stock Trading Agreement will terminate September 7, 2004. However, if a qualified primary offering is completed within three years after the Stock Trading Agreement becomes effective, the Stock Trading Agreement will terminate 18 months after the completion of the qualified primary offering. Except for the agreements described above or in response to Items 3 and 4 of this Schedule 13D, which are hereby incorporated herein by reference, to the best knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the persons enumerated in Item 2 of this Schedule 13D, and any other person, with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 1. Joint Filing Agreement.* 2. Officers and Directors of Morgan Stanley* 3. Officers and Directors of MSDW OIP Investors, Inc.* 4. Officers and Directors of Morgan Stanley* 5. Secretary's Certificate confirming power of Peter R. Vogelsang to sign on behalf of Morgan Stanley.* Page 11 of 13 Pages 6. Securities Purchase Agreement, dated as of July 31, 2001, by and among Electric City Corp., Newcourt Capital USA Inc., Duke Capital Partners, LLC, Morgan Stanley Dean Witter Equity Funding, Inc., Originators Investment Plan, L.P. and EP Power Finance, L.L.C.** 7. Investor Rights Agreement, dated as of July 31, 2001, by and among Electric City Corp. and the Parties set forth on Schedule I thereto.** 8. Stockholders Agreement, dated as of July 31, 2001, by and among Electric City Corp. and the Parties set forth on Schedule I thereto.** 9. Stock Trading Agreement, dated as of July 31, 2001, by and among Electric City Corp., Newcourt Capital Securities, Inc., Newcourt Capital USA Inc., EP Power Finance, L.L.C., Morgan Stanley Dean Witter Equity Funding, Inc., Originators Investment Plan, L.P., Duke Capital Partners, LLC and each of the Members of Management of Electric City Corp.** 10. Form of Warrant Certificate to Purchase Shares of Common Stock, Par Value $0.0001 Per Share, of Electric City Corp. (incorporated by reference to Exhibit E to Exhibit 6 hereto).*** 11. Form of Warrant Certificate to Purchase Shares of Series A Preferred Stock, Par Value $0.01 Per Share, of Electric City Corp. (incorporated by reference to Exhibit D to Exhibit 6 hereto).*** 12. Securities Purchase Agreement dated as of December 19, 2003 by and among Morgan Stanley Dean Witter Equity Funding, Inc., a Delaware corporation, Originators Investment Plan, L.P., a Delaware limited partnership, Augustine Fund LP, an Illinois limited partnership, Technology Transformation Venture Fund, LP, a Delaware limited partnership, and John Donohue, an individual.* 13. Joinder to Investor Rights Agreement dated as of December 19, 2003 by and among Electric City Corp., a Delaware corporation, Augustine Fund LP, an Illinois limited partnership, Technology Transformation Venture Fund, LP, a Delaware limited partnership, and John Donohue, an individual.* 14. Joinder to Stock Trading Agreement dated as of December 19, 2003 by and among Electric City Corp., a Delaware corporation, Augustine Fund LP, an Illinois limited partnership, Technology Transformation Venture Fund, LP, a Delaware limited partnership, and John Donohue, an individual.* 15. Joinder To Stockholders Agreement dated as of December 19, 2003 by and among Electric City Corp., a Delaware corporation, Augustine Fund LP, an Illinois limited partnership, Technology Transformation Venture Fund, LP, a Delaware limited partnership, and John Donohue, an individual.* * Filed herewith. ** Filed as an Exhibit by the Company in its Quarterly Statement on Form 10-QSB filed on August 13, 2001. *** Previously filed with Schedule 13D. Page 12 of 13 Pages SIGNATURES After reasonable inquiry and to the best of each of the undersigned's knowledge and belief, each of the undersigned certify that the information set forth in this statement is true, complete and correct. Date: January 15, 2004 MORGAN STANLEY By: /s/Peter R. Vogelsang ---------------------------------- Name: Peter R. Vogelsang Its: Authorized Signatory MORGAN STANLEY DEAN WITTER EQUITY FUNDING, INC. By: /s/ James T. Keane ---------------------------------- Name: James T. Keane Its: Vice President MSDW OIP INVESTORS, INC. By: /s/ James T. Keane ---------------------------------- Name: James T. Keane Its: Vice President ORIGINATORS INVESTMENT PLAN, L.P. BY MSDW OIP INVESTORS, INC. AS GENERAL PARTNER By: /s/ James T. Keane ---------------------------------- Name: James T. Keane Its: Vice President Page 13 of 13 Pages EX-99.1 3 y93268a1exv99w1.txt JOINT FILING AGREEMENT EXHIBIT 1 SCHEDULE 13D JOINT FILING AGREEMENT In accordance with the requirements of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, and subject to the limitations set forth therein, the parties set forth below agree to jointly file the Schedule 13D to which this joint filing agreement is attached, and have duly executed this joint filing agreement as of the date set forth below. Date: January 15, 2004 MORGAN STANLEY By: /s/Peter R. Vogelsang ---------------------------------- Name: Peter R. Vogelsang Its: Authorized Signatory MORGAN STANLEY DEAN WITTER EQUITY FUNDING, INC. By: /s/ James T. Keane ---------------------------------- Name: James T. Keane Its: Vice President MSDW OIP INVESTORS, INC. By: /s/ James T. Keane ---------------------------------- Name: James T. Keane Its: Vice President ORIGINATORS INVESTMENT PLAN, L.P. BY MSDW OIP INVESTORS, INC. AS GENERAL PARTNER By: /s/ James T. Keane ---------------------------------- Name: James T. Keane Its: Vice President Page 1 of 1 Pages EX-99.2 4 y93268a1exv99w2.txt OFFICERS AND DIRECTORS OF MSDW EQUITY FUNDING EXHIBIT 2 EXECUTIVE OFFICERS AND DIRECTORS OF MORGAN STANLEY DEAN WITTER EQUITY FUNDING, INC. The names of the Directors and the names and titles of the Executive Officers of Morgan Stanley Dean Witter Equity Funding, Inc. ("Equity Funding") are set forth below. The principal occupation for each of the persons listed below is an officer of Morgan Stanley & Co. Incorporated. If no address is given, the Director's or Executive Officer's business address is that of Morgan Stanley & Co. Incorporated at 1585 Broadway, New York, New York 10036. Unless otherwise indicated, each title set forth opposite an individual's name refers to Equity Funding and each individual is a United States citizen. DIRECTORS TITLE G. Andrea Botta Director James L. Liang Director Stephen R. Munger Director OFFICERS TITLE Stephen R. Munger Chairman and President Debra M. Aaron Vice President G. Andrea Botta Vice President Steven L. Brown Vice President Pietro Cinquegrana Vice President James T. Keane Vice President James L. Liang Vice President Louis A. Palladino, Jr. Vice President Bruce R. Sandberg Vice President Dhiren H. Shah Vice President James M. Wilmott Vice President Alexander C. Frank Treasurer Martin M. Cohen Vice President and Secretary EX-99.3 5 y93268a1exv99w3.txt OFFICERS AND DIRECTORS OF MSDW OIP INVESTORS, INC. EXHIBIT 3 EXECUTIVE OFFICERS AND DIRECTORS OF MSDW OIP INVESTORS, INC. The names of the Directors and the names and titles of the Executive Officers of MSDW OIP Investors, Inc. ("OIP") are set forth below. The principal occupation for each of the persons listed below is an officer of Morgan Stanley & Co. Incorporated. If no address is given, the Director's or Executive Officer's business address is that of Morgan Stanley & Co. Incorporated at 1585 Broadway, New York, New York 10036. Unless otherwise indicated, each title set forth opposite an individual's name refers to OIP and each individual is a United States citizen. DIRECTORS TITLE Tarek F. Abdel-Meguid Directors G. Andrea Botta Director Keith B. Hennessey Director Cordell G. Spencer Director OFFICERS TITLE Tarek F. Abdel-Meguid Chairman of the Board G. Andrea Botta President Debra M. Aaron Vice President David W. Albert Vice President Lisa A. Butler Vice President Stacie A. Cerza Vice President Pietro Cinquegrana Vice President James T. Keane Vice President Gavin L. MacDonald Vice President Louis A. Palladino, Jr. Vice President Bruce R. Sandberg Vice President Cordell G. Spencer Vice President James M. Wilmott Vice President Martin M. Cohen Vice President and Secretary Alexander C. Frank Treasurer EX-99.4 6 y93268a1exv99w4.txt OFFICERS AND DIRECTORS OF MORGAN STANLEY EXECUTIVE OFFICERS AND DIRECTORS OF MORGAN STANLEY DEAN WITTER & CO. EXHIBIT 4 EXECUTIVE OFFICERS AND DIRECTORS OF MORGAN STANLEY The names of the Directors and the names and titles of the Executive Officers of Morgan Stanley ("MS") and principal occupations are set forth below. The business address of each of the Directors or Executive Officers is that of MS at 1585 Broadway, New York, New York 10036. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to MS and each individual is a United States citizen.
NAME TITLE ---- ----- Philip J. Purcell Chairman of the Board and Chief Executive Officer Stephen F. Newhouse President Robert P. Bauman Retired; former Chief Executive Officer of Smithkline Beecham plc John E. Jacon Executive Vice President - Global Communications of Anheuser- Busch Companies, Inc. C. Robert Kidder Chairman of Borden Chemical, Inc. Charles F. Knight Chairman of Emerson Electric Co. John W. Madigan Chairman of Tribune Company Miles L. Marsh Former Chairman of the Board and Chief Executive Officer of Fort James Corporation Michael A. Miles Special Limited Partner of Forstmann Little & Co. Robert G. Scott Retired; former President and COO of Morgan Stanley Laura D'Andrea Tyson Dean of the London School of Business Stephen S. Crawford Executive Vice President and Chief Financial Officer Donald G. Kempf, Jr. Executive Vice President, Chief Legal Officer and Secretary Tarek F. Abdel-Meguid Head of Worldwide Investment Banking Division Zoe Cruz Head of Worldwide Fixed Income Division John P. Havens Head of Worldwide Institutional Equity Division Roger C. Hochschild President and COO, Discover Financial Services Mitchell M. Merin President and COO, Investment Management David W. Nelms Chairman and CEO, Discover Financial Services Vikram S. Pandit President and COO, Institutional Securities Group Joseph R. Perella Chairman of Institutional Securities Group John H. Schaefer Presedent and COO, Individual Investor Group
EX-99.5 7 y93268a1exv99w5.txt SECRETARY'S CERTIFICATE (VOGELSANG) EXHIBIT 5 SECRETARY'S CERTIFICATE MORGAN STANLEY I, Charlene Herzer, a duly elected and acting Assistant Secretary of Morgan Stanley, a corporation organized and existing under the laws of the State of Delaware, certify that, pursuant to approval of the Board of Directors as of May 31, 1997, Peter R. Vogelsang is authorized to sign any documents to be filed with any government or regulatory agency in connection with the Merchant Banking Division (now known as the Private Equity Division). IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal of the Corporation as of the 15th day of January, 2004. By: /s/ Charlene R. Herzer ------------------------- Charlene R. Herzer Assistant Secretary EX-99.12 8 y93268a1exv99w12.txt SECURITIES PURCHASE AGREEMENT EXHIBIT 12 SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (as it may be amended from time to time, this "Agreement"), is entered into as of December 19, 2003 by and among Morgan Stanley Dean Witter Equity Funding, Inc., a Delaware corporation ("MSDW"), Originators Investment Plan, L.P., a Delaware limited partnership ("OIP"), Augustine Fund LP, an Illinois limited partnership ("Augustine"), Technology Transformation Venture Fund, LP, a Delaware limited partnership ("TVF"), and John Donohue, an individual ("Donohue"). Collectively, MSDW and OIP are referred to herein as the "Sellers" and either may be referred to as a "Seller". Collectively, Augustine, TVF and Donohue are referred to herein as the "Purchasers" and any of them may be individually referred to as a "Purchaser". W I T N E S S E T H: WHEREAS, each Seller is the record and beneficial owners of certain shares of the Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock") and shares of the common stock, par value $0.0001 per share (the "Common Stock") of Electric City Corp., a Delaware corporation (the "Company"), and certain warrants to purchase shares of the Common Stock ("Common Stock Warrants"); and WHEREAS, each Seller desires to sell certain shares of Series A Preferred Stock, certain shares of Common Stock and certain Common Stock Warrants, and each Purchaser desires to purchase some of such securities from each Seller, 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: "Agreement" shall have the meaning set forth in the preamble of this Agreement. "Ancillary Agreements" means, collectively, the Investor Rights Agreement, the Stock Trading Agreement and the Stockholders Agreement. "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. "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. - 1 - EXHIBIT 12 "Commission Documents" shall have the meaning set forth in Section 4.1(a) hereof. "Common Stock" has the meaning set forth in the first WHEREAS clause of this Agreement. "Common Stock Warrants" has the meaning set forth in the first WHEREAS clause of this Agreement. "Company" has the meaning set forth in the first WHEREAS clause 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. "Joinder Agreements" means, collectively, the Joinder to Investor Rights Agreement, the Joinder to Stock Trading Agreement and the Joinder to Stockholders Agreement. "Joinder to Investor Rights Agreement" means a Joinder to Investor Rights Agreement in the form of Exhibit A to this Agreement. "Joinder to Stock Trading Agreement" means a Joinder to Stock Trading Agreement in the form of Exhibit B to this Agreement. "Joinder to Stockholders Agreement" means a Joinder to Stockholders Agreement in the form of Exhibit C to this Agreement. "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 Delano Securities Group, LLC. "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. - 2 - EXHIBIT 12 "Securities" means the shares of Series A Preferred, shares of Common Shares and the Common Stock Warrants which are to be sold by the Sellers 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. "Series A Preferred Stock" has the meaning set forth in the first WHEREAS clause of this Agreement. "Stock Trading Agreement" means that certain Stock Trading 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. "Stockholders 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. "Transactions" shall have the meaning set forth in Section 3.1(b). "Warrant Certificate" means a warrant certificate evidencing Common Stock Warrants, and any replacement certificate issued by the Company in respect thereof pursuant to transfer and sale of Common Stock Warrants pursuant to Closing of the Transactions under this Agreement. ARTICLE 2 - SALE AND PURCHASE OF SECURITIES 2.1 Sale and Purchase of Securities from MSDW. Subject to the terms and conditions herein set forth, MSDW hereby agrees to sell to each Purchaser, and each Purchaser severally for itself only agrees to purchase from MSDW, at the Closing, the number of shares of Series A Preferred Stock, the number of shares of Common Stock and the number of Common Stock Warrants, for the aggregate purchase price, set forth opposite such Purchaser's name on Schedule I hereto. Each Purchaser's obligations under this Section 2.1 are expressly not conditioned upon the purchase by any other Purchaser of any of the Securities that the other Purchasers hereunder have severally agreed to purchase from MSDW, or on the closing of the sale and purchase of Securities from OIP contemplated by Section 2.2 hereof, and no default by any Purchaser under this Section 2.1 or under Section 2.2, or by OIP under Section 2.2, shall excuse any other Purchaser from performing its obligations under this Section 2.1. 2.2 Sale and Purchase of Securities from OIP. Subject to the terms and conditions herein set forth, OIP hereby agrees to sell to each Purchaser, and each Purchaser severally for itself only agrees to purchase from OIP, at the Closing, the number of shares of Series A Preferred Stock, the number of shares of Common Stock and the number of Common Stock Warrants, for the aggregate purchase price, set forth opposite such Purchaser's name on Schedule II hereto. Each Purchaser's obligations under this Section 2.2 are expressly not conditioned upon the purchase by any other Purchaser of any of the Securities that the other - 3 - EXHIBIT 12 Purchasers hereunder have severally agreed to purchase from OIP, or on the closing of the sale and purchase of Securities from MSDW contemplated by Section 2.1 hereof, and no default by any Purchaser under this Section 2.2 or under Section 2.1, or by MSDW under Section 2.1, shall excuse any other Purchaser from performing its obligations under this Section 2.2. 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 on December 19, 2003 (the "Closing Date"), at the offices of the counsel for the Placement Agent, or at such other date, time and/or location as is mutually agreed upon by the Sellers and the Purchasers. ARTICLE 3 - CLOSING 3.1 Purchasers' Conditions to Closing With MSDW. Each Purchaser's obligation to purchase and pay for the Securities to be purchased by such Purchaser from MSDW 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 stock certificates and Warrant Certificates evidencing the Securities to be sold to such Purchaser in accordance with Section 3.6; (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) Representations and Warranties. MSDW'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. MSDW 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; (e) Joinder Agreements. Each of the Joinder Agreements shall have each been executed and delivered by the parties thereto, other than the Purchaser. (f) Consents and Approvals. All consents, waivers, approvals, exemptions, authorizations, or other actions by, or notices to, or filings with, any Governmental - 4 - EXHIBIT 12 Authority, self-regulatory agency and other Persons necessary or required in connection with the execution, delivery or performance by MSDW or enforcement against MSDW of this Agreement in connection with the consummation of the Transactions shall have been obtained or made and be in full force and effect. 3.2 MSDW's Conditions to Closing. MSDW's obligation to sell and transfer the Securities to be sold by it to each Purchaser at the Closing is subject to the satisfaction (or waiver by MSDW), on or before the Closing Date, of each of the following conditions: (a) Receipt of Purchase Price. MSDW 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 for MSDW on Schedule III hereto; (b) No Litigation; No Order. No action, suit or proceeding relating to the Transactions shall be pending that in the reasonable good faith judgment of MSDW 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) Joinder Agreements. Each of the Joinder Agreements shall have each been executed and delivered by the parties thereto, including each Purchaser. (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 such Purchaser or enforcement against such Purchaser of this Agreement in connection with the consummation of the Transactions shall have been obtained or made and be in full force and effect. 3.3 Purchasers' Conditions to Closing With OIP. Each Purchaser's obligation to purchase and pay for the Securities to be purchased by such Purchaser from OIP 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: - 5 - EXHIBIT 12 (a) Receipt of Securities. Such Purchaser shall have received delivery of stock certificates and Warrant Certificates evidencing the Securities to be sold to such Purchaser in accordance with Section 3.6; (b) No Litigation; No Order. No action, suit or proceeding relating to the Transactions shall be pending that seeks to restrain or prevent any of the Transactions, and no order (including, without limitation, a temporary restraining order), decree, writ, judgment or injunction shall be in effect that restrains, enjoins or prevents the consummation of the Transactions; (c) Representations and Warranties. OIP'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. OIP 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; (e) Joinder Agreements. Each of the Joinder Agreements shall have each been executed and delivered by the parties thereto, other than the Purchasers. (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 OIP or enforcement against OIP of this Agreement in connection with the consummation of the Transactions shall have been obtained or made and be in full force and effect. 3.4 OIP's Conditions to Closing. OIP's obligation to sell and transfer the Securities to be sold by it to each Purchaser at the Closing is subject to the satisfaction (or waiver by OIP), on or before the Closing Date, of each of the following conditions: (a) Receipt of Purchase Price. OIP 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 for OIP on Schedule III hereto; (b) No Litigation; No Order. No action, suit or proceeding relating to the Transactions shall be pending that in the reasonable good faith judgment of OIP seeks to restrain or prevent any of the Transactions and has a reasonable probability of success; - 6 - EXHIBIT 12 (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) Joinder Agreements. Each of the Joinder Agreements shall have each been executed and delivered by the parties thereto, including the Purchasers. (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 such Purchaser or enforcement against such Purchaser of this Agreement in connection with the consummation of the Transactions shall have been obtained or made and be in full force and effect. 3.5 Closing Deliveries by Each Purchaser. At the Closing, each Purchaser, severally for itself only, shall deliver the following: (a) the purchase price for the Securities being purchased by such Purchaser, as set forth on Schedules I and II hereto, by wire transfer of immediately available funds in the respective amounts payable to MSDW and OIP to their accounts specified on Schedule III hereto, which funds will be delivered in consideration of the Securities being sold to such Purchaser at the Closing by MSDW and OIP, respectively; and (d) each of the Joinder Agreements, executed by such Purchaser. 3.6 Closing Deliveries by the Company. At the Closing, each of MSDW and OIP shall deliver (or cause the Company to deliver) to each Purchaser which has complied with its obligations under Sections 3.2, 3.4 and 3.5: (a) a stock certificate representing the shares of Series A Preferred Stock 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 Sellers prior to the Closing; (b) a stock certificate representing the shares of Common Stock 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 Sellers prior to the Closing; - 7 - EXHIBIT 12 (c) a Warrant Certificate 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 Sellers prior to the Closing; and (d) each of the Joinder Agreements, executed by MSDW or OIP, as applicable, and by each of the other parties thereto other than the Purchasers. 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 electronically been given access to, and has reviewed, copies of the following (collectively, the "Commission Documents"): (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 current report on Form 8-K dated June 3, 2003 filed with the Commission on June 5, 2003; (iii) the Company's current report on Form 8-K dated June 27, 2003 filed with the Commission on July 2, 2003; (iv) the Company's quarterly report on Form 10-QSB for the period ended June 30, 2003 filed with the Commission on August 14, 2003; (v) the Company's current report on Form 8-K dated September 11, 2003 filed with the Commission on September 16, 2003; (vi) 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; (vii) the Company's registration statement on Form SB-2 filed with the Commission on October 20, 2003, as amended by first amendment thereto filed with the Commission on November 14, 2003; and (viii) the Company's quarterly report on Form 10-QSB for the period ended September 30, 2003 filed with the Commission on November 13, 2003. 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, 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 that such Purchaser has consulted with its own advisors concerning the purchase of Securities hereunder. Such - 8 - EXHIBIT 12 Purchaser understands that an investment in the Company involves a high degree of risk for the reasons, among others, set forth under the caption "RISK FACTORS" in the Company's registration statement referred to in clause (vii) above. (b) Such Purchaser has also been given copies of and has reviewed each of the Ancillary Agreements. Such Purchaser understands that it (or, if applicable, each managed account on whose behalf Securities are being purchased by such Purchaser) will become a party to and bound by each of the Ancillary Agreements pursuant to execution and delivery of the Joinder Agreements as contemplated hereby (c) 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. 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. (d) 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, such Purchaser has not relied on any representation by or on behalf of the Company not set forth in the Commission Documents, on the Placement Agent or any Person affiliated with the Placement Agent, on any representation by or on behalf of either Seller not set forth in this Agreement, or on the fact that any other Person has invested or decided to invest in the Securities or in capital stock of the Company. (e) Such Purchaser understands and expressly acknowledges and agrees that none of the Securities has been registered or qualified under the Securities Act, or 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. Such Purchaser further understands and acknowledges that the Ancillary Agreements impose certain further restrictions upon the sale or disposition of any of the Securities. (f) Such Purchaser understands and agrees that all certificates representing the shares of Series A Preferred Stock and Common Stock and all of the Warrant Certificates acquired by such Purchaser pursuant to this Agreement 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 - 9 - EXHIBIT 12 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. In addition, the certificates representing the shares of Series A Preferred Stock and Common Stock and all of the Warrant Certificates acquired by such Purchaser pursuant to this Agreement shall bear the legends required by the Investor Rights Agreement, the Stock Trading Agreement and the Stockholders Agreement in accordance with the terms thereof. (g) 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 (i) 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 regarding the distribution of such Securities in violation of the Securities Act, and (ii) subject to the restrictions set forth in the Ancillary Agreements. (h) 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, and (ii) rules of law governing specific performance, injunctive relief or other equitable remedies and by general principles of equity. (i) 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 and the Ancillary Agreements and the Joinder Agreements. 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 and the Ancillary Agreements and the Joinder Agreements. The person executing this Agreement on behalf of such Purchaser is authorized to act for such Purchaser in purchasing the Securities and executing and delivery this Agreement and the Joinder Agreements. - 10 - EXHIBIT 12 (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 and the Ancillary Agreements and the Joinder Agreements. 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 and the Ancillary Agreements and the Joinder Agreements. (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 and the Ancillary Agreements and the Joinder Agreements. 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. (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 and the Ancillary Agreements and the Joinder Agreements. (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 and the Ancillary Agreements and the Joinder Agreements. (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 and the Ancillary Agreements and the Joinder Agreements 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 and the Ancillary Agreements and the Joinder Agreements. (j) 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. - 11 - EXHIBIT 12 (k) Special Covenant and Voting Agreement. As an additional inducement to the Sellers hereto to enter into this Agreement, each of the Purchasers, severally for itself or himself, hereby agrees with the Sellers that, in the event that the Company at any time seeks the approval of the holders of outstanding Series A Preferred Stock, and any necessary consents pursuant to the Investor Rights Agreement, the Stock Trading Agreement and/or the Stockholders Agreement in order to effect a transaction in which holders of any shares of Series A Preferred Stock, with or without the participation of holders of other shares of preferred stock of the Company, may either: (i) participate in the redemption of some of their shares of Series A Preferred Stock for cash and concurrently exchange their remaining shares of Series A Preferred Stock for shares of a new series of the Company's convertible preferred stock which will have a lower dividend rate per annum (payable, at the election of the Company, in cash or additional shares of such new series of convertible preferred stock), or (ii) to exchange all of their shares of Series A Preferred Stock for shares of a different new series of the Company's convertible preferred stock which will have a dividend rate of 10% per annum (payable, at the election of the Company, in cash or additional shares of such new series of convertible preferred stock) and otherwise be similar in terms to the other new series of convertible preferred stock having the lower dividend rate; (a "Redemption and Exchange Transaction"), then (i) in connection with any vote, approval or written consent of the holders of shares of Series A Preferred Stock or the parties to the Stock Trading Agreement, the Stockholders Agreement and/or the Investor Rights Agreement pertaining to such proposed Redemption and Exchange Transaction, each of the Purchasers shall vote or otherwise grant its approval or written consent in favor of such proposed Redemption and Exchange Transaction if each other holder of Series A Preferred Stock grants its approval or written consent thereto. In addition, each of the Purchasers, severally for itself or himself, agrees with the Sellers that if a Redemption and Exchange Transaction is closed prior to February 1, 2004, that each Purchaser will elect to exchange all of its or his shares of Series A Preferred Stock for shares of a different new series of the Company's convertible preferred stock which will have a dividend rate of 10% per annum (payable, at the election of the Company, in cash or additional shares of such new series of convertible preferred stock), as described in and contemplated by clause (ii) above of this Section 4.1(k). 4.2 Each Seller's Representations, Warranties and Covenants. Each of the Sellers, for severally for itself and not jointly, hereby represents and warrants to each Purchaser, and agrees with each Purchaser, as follows: (a) Such Seller 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 and to consummate the Transactions on its part contemplated hereby. (b) The execution, delivery and performance of this Agreement by such Seller and the consummation by such Seller of the Transactions on its part contemplated hereby have been duly authorized by all necessary corporate or partnership action of such Seller and this Agreement has been duly executed and delivered by such Seller and constitutes a valid and legally binding obligation of such Seller, 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, and (ii) rules of law governing - 12 - EXHIBIT 12 specific performance, injunctive relief or other equitable remedies and by general principles of equity. (c) The execution and delivery by such Seller of this Agreement and the consummation by such Seller of the Transactions on its part herein contemplated do not (i) violate the certificate of incorporation or limited partnership certificate (as applicable) of such Seller, or the By-Laws or agreement of limited partnership (as applicable) of such Seller, or (ii) result in a material violation of any applicable statute or any order, judgment, decree, rule or regulation of any court or Governmental Authority having jurisdiction over such Seller or any of its assets; and (iii) 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 such Seller of this Agreement, or the consummation by such Seller of the other transactions on its part contemplated by this Agreement, except for such consents, approvals, authorizations, registrations or qualifications as have been obtained prior to execution of this Agreement by such Seller or as will be applicable upon execution of the Joinder Agreements by all parties thereto, including the Purchasers. (d) The Securities to be sold by such Seller to each Purchaser pursuant to this Agreement will be sold and delivered at Closing to each Purchaser free and clear of any liens, security interests or other encumbrances whatsoever, other than (i) restrictions applicable under the Ancillary Agreements, and (ii) restrictions generally applicable under state and federal securities laws. 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 Sellers 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 - MISCELLANEOUS 5.1 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. 5.2 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 each of the Sellers. 5.3 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. 5.4 Governing Law; Consent To Jurisdiction; Prevailing Party Legal Fees and Expenses. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED - 13 - EXHIBIT 12 BY, THE LAWS OF THE STATE OF NEW YORK. 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. IN THE EVENT OF ANY LEGAL PROCEEDING CONCERNING ANY DISPUTE AMONG ANY OF THE PARTIES TO THIS AGREEMENT ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PREVAILING PARTY OR PARTIES IN SUCH PROCEEDING SHALL BE ENTITLED TO RECOVER REASONABLE ATTORNEYS' FEES AND EXPENSES FROM THE NON-PREVAILING PARTY OR PARTIES. 5.5 Notices. All notices, requests, consents and other communication hereunder shall be in writing, shall be mailed by first class registered or certified mail, or nationally recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as addressed as follows: if to either of the Sellers, to: c/o Morgan Stanley Dean Witter Equity Funding, Inc. 1585 Broadway New York, NY 10036 Attn: James Wilmott or Peter Vogelsang if to Augustine, to: Augustine Fund LP 141 West Jackson Blvd., Suite 2182 Chicago, IL 60604 Attn: John Porter or Thomas Duszynski if to TTVF, to: Technology Transformation Venture Fund LP c/o Custer Management Inc. 14 S. High Street New Albany, OH 43054 Attn: William Custer If to Donohue, to: John Donohue 43896 Yosemite Drive Big Bear Lake, CA 92315 or to such other address as any party hereto shall designate to the other parties in writing in accordance herewith. 5.6 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. - 14 - EXHIBIT 12 5.7 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. 5.8 Confidentiality. Each party hereto hereby agrees that he or it will not publicly disclose, and will not include in any public announcement, the existence of or any of the terms of this Agreement without the prior written consent of each of the other parties, unless such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. Notwithstanding the foregoing, the parties agree that the existence of this Agreement and its terms may be disclosed to the Company and to the other parties to the Investor Rights Agreement, the Stock Trading Agreement and the Stockholders Agreement. [Balance of page intentionally left blank; signature pages follow.] - 15 - EXHIBIT 12 IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as of the date first above written. SELLERS: MORGAN STANLEY DEAN WITTER EQUITY FUNDING, INC. By:_________________________________________ Name:_______________________________________ Title:______________________________________ ORIGINATORS INVESTMENT PLAN, L.P. By:_________________________________________ Name:_______________________________________ Title:______________________________________ PURCHASERS: AUGUSTINE FUND LP By:_________________________________________ Name:_______________________________________ Title:______________________________________ TECHNOLOGY TRANSFORMATION VENTURE FUND, LP By:_________________________________________ Name:_______________________________________ Title:______________________________________ ____________________________________________ John Donohue - 16 - EXHIBIT 12 SCHEDULE I SECURITIES TO BE SOLD BY MSDW
Shares of Series Shares of Common Aggregate Purchaser A Preferred Stock Common Stock Warrants Purchase Price --------- ----------------- --------- -------------- -------------- Augustine Fund LP 104,500 20,956 195,938 $ 1,045,000 Technology Venture Fund LP 23,750 4,763 44,531 $ 237,500 John Donohue 23,750 4,763 44,531 $ 237,500
- 17 - EXHIBIT 12 SCHEDULE II SECURITIES TO BE SOLD BY OIP
Shares of Series Shares of Common Aggregate Purchaser A Preferred Stock Common Stock Warrants Purchase Price - --------- ----------------- --------- -------------- -------------- Augustine Fund LP 5,500 1,102 10,312 $55,000 Technology Venture Fund LP 1,250 251 2,344 $12,500 John Donohue 1,250 251 2,344 $12,500
- 18 - EXHIBIT 12 SCHEDULE III PAYMENT INSTRUCTIONS Payments to MSDW: Citibank NY ABA No: 021-000089 Acct Name: Morgan Stanley Acct # : 38896527 Ref : Electric City Payments to OIP: Citibank NY ABA No: 021-000089 Acct Name: Originators Investment Plan L.P. Acct # : 30421543 Ref : Electric City - 19 - EX-99.13 9 y93268a1exv99w13.txt JOINDER TO INVESTOR RIGHTS AGREEMENT EXHIBIT 13 JOINDER TO INVESTOR RIGHTS AGREEMENT This Joinder To Investor Rights Agreement (this "Agreement") is dated as of December 19, 2003 and is by and among Electric City Corp., a Delaware corporation (the "Company"), Augustine Fund LP, an Illinois limited partnership ("Augustine"), Technology Transformation Venture Fund, LP, a Delaware limited partnership ("TVP"), and John Donohue, an individual ("Donohue"). W I T N E S S E T H: WHEREAS, the Company is a party to that certain Investor Rights Agreement dated as of July 31, 2001, as amended (the "Existing Agreement") among the Company and the holders of its outstanding Series A Convertible Preferred Stock and CIT Capital Securities, Inc. (formerly named Newcourt Capital Securities, Inc.); and WHEREAS, Morgan Stanley Dean Witter Equity Funding, Inc. ("MSDW") and Originators Investment Plan, L.P. ("OIP"), as "Sellers", and Augustine, TVF and Donohue, as "Purchasers", are parties to that certain Securities Purchase Agreement, dated as of December 19, 2003, whereby MSDW and OIP have agreed to sell and Augustine, TVF and Donohue have agreed to purchase certain outstanding shares of the Company's Series A Convertible Preferred Stock, certain shares of the Company's Common Stock and certain warrants to purchase additional shares of the Company's Common Stock; and WHEREAS, it is a condition precedent to the obligations of each of Augustine, TVF and Donohue to purchase such securities from MSDW and OIP that the parties hereto enter into this Agreement and the Company is agreeable to the same; and NOW, THEREFORE, the Parties agree as follows: 1. Definitions. All terms capitalized but not defined herein shall have the meaning attributable to such terms in the Existing Agreement, except where the context otherwise requires. 2. Joinder. Each of the parties to this Agreement hereby agrees that from and after date hereof each of Augustine, TVF and Donohue shall be a party to and be bound by the Investor Rights Agreement as an Investor and a Holder thereunder (as such terms are defined therein). 3. Representations. Each of Augustine, TVF and Donohue, severally for itself or himself only, hereby represents and warrants to the Company that this Agreement has been duly executed and delivered by Augustine, TVF or Donohue (as applicable) and constitutes the valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. Each of Augustine, TVF and Donohue hereby acknowledges that it or he has received a copy of the Existing Agreement. 4. Miscellaneous. - 1 - EXHIBIT 13 (a) All terms, covenants, agreements, representations, warranties and undertakings in this Agreement shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. (b) Changes in or additions to this Agreement may be made or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived, only in accordance with the provisions of the Existing Agreement. (c) This Agreement shall be governed and construed in accordance with the laws of the State of New York without giving effect to the conflict of laws principles thereof. (d) 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. (e) The section and paragraph headings herein are for convenience only and shall not effect the construction hereof. (f) The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. [Balance of page intentionally left blank; signature pages follow.] - 2 - EXHIBIT 13 IN WITNESS WHEREOF, the parties hereto have caused this Joinder To Investor Rights Agreement to be executed as of the day and year first above written. ELECTRIC CITY CORP. TECHNOLOGY TRANSFORMATION VENTURE FUND, LP By:____________________________ By:_______________________________ Name:__________________________ Name:_____________________________ Title:_________________________ Title:____________________________ AUGUSTINE FUND LP. __________________________________ By:____________________________ John Donohue Name:__________________________ Title:_________________________ - 3 - EX-99.14 10 y93268a1exv99w14.txt JOINDER TO STOCK TRADING AGREEMENT EXHIBIT 14 JOINDER TO STOCK TRADING AGREEMENT This Joinder to Stock Trading Agreement (this "Agreement") is dated as of December 19, 2003 and is by and among Electric City Corp., a Delaware corporation (the "Company"), Augustine Fund LP, an Illinois limited partnership ("Augustine"), Technology Transformation Venture Fund, LP, a Delaware limited partnership ("TVF"), and John Donohue, an individual ("Donohue"). W I T N E S S E T H: WHEREAS, the Company is a party to that certain Stock Trading Agreement dated as of July 31, 2001, as amended (the "Existing Agreement") among the Company and the holders of its outstanding Series A Convertible Preferred Stock; and WHEREAS, Morgan Stanley Dean Witter Equity Funding, Inc. ("MSDW") and Originators Investment Plan, L.P. ("OIP"), as "Sellers", and Augustine, TVF and Donohue, as "Purchasers", are parties to that certain Securities Purchase Agreement, dated as of December 19, 2003, whereby MSDW and OIP have agreed to sell and Augustine, TVF and Donohue have agreed to purchase certain outstanding shares of the Company's Series A Convertible Preferred Stock, certain shares of the Company's Common Stock and certain warrants to purchase additional shares of the Company's Common Stock; and WHEREAS, Section 2.2 of the Existing Agreement imposes certain limitations upon private sale by any "Party" thereunder of any shares of capital stock of the Company and/or any securities exercisable or for or convertible into shares of capital stock of the Company, including the requirement that any transferee become a "Party" to the Existing Agreement, and accordingly, each of Augustine, TVF and Donohue is willing to become a "Party" to the Existing Agreement and to enter into this Agreement for such purpose, and the Company is agreeable to the same; NOW, THEREFORE, the parties hereto hereby agree as follows: 1. Definitions. All terms capitalized but not defined herein shall have the meaning attributable to such terms in the Existing Agreement, except where the context otherwise requires. 2. Joinder. Each of Augustine, TVF and Donohue hereby agrees with the Company, for the benefit of all parties to the Existing Agreement, that from and after date hereof each of Augustine, TVF and Donohue shall be a party to and be bound by the Existing Agreement with respect to all of the securities being acquired by Augustine, TVF and Donohue, respectively, from MSDW and OIP, including any shares of Common Stock which may hereafter be acquired pursuant to exercise of any of the warrants to purchase additional shares of the Company's Common Stock being acquired and including any shares of the Company's Common Stock which may hereafter be acquired pursuant to conversion of shares of Series A Convertible Preferred Stock. 3. Representations. Each of Augustine, TVF and Donohue, severally for itself or himself only, hereby represents and warrants to the Company that this Agreement has been duly - 1 - EXHIBIT 14 executed and delivered by Augustine, TVF or Donohue (as applicable) and constitutes the valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. Each of Augustine, TVF and Donohue hereby acknowledges that it or he has received a copy of the Existing Agreement. 4. Miscellaneous. (a) All terms, covenants, agreements, representations, warranties and undertakings in this Agreement shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. (b) Changes in or additions to this Agreement may be made or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived, only in accordance with the provisions of the Existing Agreement. (c) This Agreement shall be governed and construed in accordance with the laws of the State of New York without giving effect to the conflict of laws principles thereof. (d) This Agreement may be executed in counterparts, each of which shall together constitute one and the same instrument. (e) The section and paragraph headings herein are for convenience only and shall not effect the construction hereof. (f) The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. [Balance of page intentionally left blank; signature pages follow.] - 2 - EXHIBIT 14 IN WITNESS WHEREOF, the parties hereto have caused this Joinder To Stock Trading Agreement to be executed as of the day and year first above written. ELECTRIC CITY CORP. TECHNOLOGY TRANSFORMATION VENTURE FUND, LP By:________________________________ By:_________________________________ Name:______________________________ Name:_______________________________ Title:_____________________________ Title:______________________________ AUGUSTINE FUND LP. ____________________________________ By:________________________________ John Donohue Name:______________________________ Title:_____________________________ - 3 - EXHIBIT 14 - 4 - EX-99.15 11 y93268a1exv99w15.txt JOINDER TO STOCKHOLDERS AGREEMENT EXHIBIT 15 JOINDER TO STOCKHOLDERS AGREEMENT This Joinder To Stockholders Agreement (this "Agreement") is dated as of December 19, 2003 and is by and among Electric City Corp., a Delaware corporation (the "Company"), Augustine Fund LP, an Illinois limited partnership ("Augustine"), Technology Transformation Venture Fund, LP, a Delaware limited partnership ("TVP"), and John Donohue, an individual ("Donohue"). W I T N E S S E T H: WHEREAS, the Company is a party to that certain Stockholders Agreement dated as of July 31, 2001, as amended (the "Existing Agreement") among the Company and the holders of its outstanding Series A Convertible Preferred Stock; and WHEREAS, Morgan Stanley Dean Witter Equity Funding, Inc. ("MSDW") and Originators Investment Plan, L.P. ("OIP"), as "Sellers", and Augustine, TVF and Donohue, as "Purchasers", are parties to that certain Securities Purchase Agreement, dated as of December 19, 2003, whereby MSDW and OIP have agreed to sell and Augustine, TVF and Donohue have agreed to purchase certain outstanding shares of the Company's Series A Convertible Preferred Stock, certain shares of the Company's Common Stock and certain warrants to purchase additional shares of the Company's Common Stock; and WHEREAS, it is a condition precedent to the obligations of each of Augustine, TVF and Donohue to purchase such securities from MSDW and OIP that the parties hereto enter into this Agreement and the Company is agreeable to the same; and NOW, THEREFORE, the Parties agree as follows: 1. Definitions. All terms capitalized but not defined herein shall have the meaning attributable to such terms in the Existing Agreement, except where the context otherwise requires. 2. Joinder. Each of Augustine, TVF and Donohue hereby agrees with the Company, for the benefit of all parties to the Existing Agreement, that from and after date hereof each of Augustine, TVF and Donohue shall be a party to and be bound by the Existing Agreement as a Holder thereunder (as such term is defined therein). 3. Representations. Each of Augustine, TVF and Donohue, severally for itself or himself only, hereby represents and warrants to the Company that this Agreement has been duly executed and delivered by Augustine, TVF or Donohue (as applicable) and constitutes the valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. Each of Augustine, TVF and Donohue hereby acknowledges that it or he has received a copy of the Existing Agreement. 4. Miscellaneous. - 1 - EXHIBIT 15 (a) All terms, covenants, agreements, representations, warranties and undertakings in this Agreement shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. (b) Changes in or additions to this Agreement may be made or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived, only in accordance with the provisions of the Existing Agreement. (c) This Agreement shall be governed and construed in accordance with the laws of the State of New York without giving effect to the conflict of laws principles thereof. (d) 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. (e) The section and paragraph headings herein are for convenience only and shall not effect the construction hereof. (f) The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. [Balance of page intentionally left blank; signature pages follow.] - 2 - EXHIBIT 15 IN WITNESS WHEREOF, the parties hereto have caused this Joinder To Stockholders Agreement to be executed as of the day and year first above written. ELECTRIC CITY CORP. TECHNOLOGY TRANSFORMATION VENTURE FUND, LP By:________________________________ By:_________________________________ Name:______________________________ Name:_______________________________ Title:_____________________________ Title:______________________________ AUGUSTINE FUND LP. ____________________________________ By:________________________________ John Donohue Name:______________________________ Title:_____________________________ - 3 - -----END PRIVACY-ENHANCED MESSAGE-----