Exhibit
10.9


 


THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ELECTRIC CITY CORP. THAT SUCH REGISTRATION IS NOT
REQUIRED.


 


Right to Purchase 280,000
Shares of Common Stock of Electric City Corporation (subject to adjustment as
provided herein)


 


COMMON
STOCK PURCHASE WARRANT


 


	
  No. 59

  	
  Issue Date:  September 11, 2003

  



 


ELECTRIC CITY CORP., a
corporation organized under the laws of the State of Delaware, hereby certifies
that, for value received, LAURUS MASTER FUND, LTD., or assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this Warrant and at any time or from time to time
before 5:00 p.m., New York time, through the close of business (Chicago time)
September 11, 2008 (the “Expiration Date”),
up to 280,000 fully paid and nonassessable shares of Common Stock (as
hereinafter defined), $.0001 par value per share, at the applicable Exercise
Price per share (as defined below).  The
number and character of such shares of Common Stock and the applicable Exercise
Price per share are subject to adjustment as provided herein.


 


As used herein the
following terms, unless the context otherwise requires, have the following
respective meanings:


 


(a)                                  The term “Company” shall include Electric City Corp. and any corporation
which shall succeed or assume the obligations of Electric City Corp. hereunder.


 


(b)                                 The term “Common Stock” includes (a) the Company’s Common Stock, par
value $.0001 per share, and (b) any other securities into which or for which
any of the securities described in (a) may be converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.


 


(c)                                  The term “Other Securities” refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.


 

















 


(d)                                 The “Exercise
Price” applicable under this Warrant shall be as follows:


 


a.                                       a price of $2.54 per share  for the first 80,000 shares acquired
hereunder;


 


b.                                      a price of $2.97 per share for the next
100,000 shares acquired hereunder; and


 


c.                                       a price of $3.18 per share  for any additional shares acquired
hereunder.


 


1.                                       Exercise of Warrant.


 


1.1                                 Number of Shares Issuable upon Exercise. 
From and after the date hereof through and including the Expiration
Date, the Holder shall be entitled to receive, upon exercise of this Warrant in
whole or in part, by delivery of an original or fax copy of an exercise notice
in the form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.


 


1.2                                 Fair Market Value. 
For purposes hereof, the “Fair Market
Value” of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:


 


(a)                                  If the Company’s Common Stock is traded
on the American Stock Exchange or 
another national exchange or is quoted on the National or SmallCap
Market of The Nasdaq Stock Market, Inc.(“Nasdaq”),
then the closing or last sale price, respectively, reported for the last
business day immediately preceding the Determination Date.


 


(b)                                 If the Company’s Common Stock is not
traded on the American Stock Exchange or 
another national  exchange or on
the Nasdaq but is traded on the NASD OTC Bulletin Board, then the mean of the
average of the closing bid and asked prices reported for the last business day
immediately preceding the Determination Date.


 


(c)                                  Except as provided in clause (d) below,
if the Company’s Common Stock is not publicly traded, then as the Holder and
the Company agree or in the absence of agreement by arbitration in accordance
with the rules then in effect of the American Arbitration Association, before a
single arbitrator to be chosen from a panel of persons qualified by education
and training to pass on the matter to be decided.


 


(d)                                 If the Determination Date is the date of
a liquidation, dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the Company’s charter, then
all amounts to be payable per share to holders of the Common Stock pursuant to
the charter in the event of such liquidation, dissolution or winding up, plus
all other amounts to be payable per share in respect of the Common Stock in
liquidation under the charter, assuming for the purposes of this clause (d)
that all of the shares of Common Stock then issuable upon exercise of the
Warrant are outstanding at the Determination Date.


 


 


2

















 


1.3.                              Company Acknowledgment. The Company will, at the time of the
exercise of the Warrant, upon the request of the holder hereof acknowledge in
writing its continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance
with the provisions of this Warrant. If the holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.


 


1.4.                              Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the
powers and duties of a warrant agent (as hereinafter described) and shall accept,
in its own name for the account of the Company or such successor person as may
be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.


 


2.                                       Procedure for Exercise.


 


2.1                                 Delivery of Stock Certificates, etc. on
Exercise. The
Company agrees that the shares of Common Stock purchased upon exercise of this
Warrant shall be deemed to be issued to the Holder as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares in accordance herewith.  As soon as practicable after the exercise of
this Warrant in full or in part, and in any event within three (3) business days
thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the Holder, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly issued, fully
paid and nonassessable shares of Common Stock (or Other Securities) to which
such Holder shall be entitled on such exercise, plus, in lieu of any fractional
share to which such holder would otherwise be entitled, cash equal to such
fraction multiplied by the then Fair Market Value of one full share, together
with any other stock or other securities and property (including cash, where
applicable) to which such Holder is entitled upon such exercise pursuant to
Section 1 or otherwise.


 


2.2                                 Exercise.


 


(a)                                  Payment may be made either (i) in cash or
by certified or official bank check payable to the order of the Company equal
to the applicable aggregate Exercise Price, (ii) by delivery of the Warrant, or
shares of Common Stock and/or Common Stock receivable upon exercise of the
Warrant in accordance with Section (b) below, or (iii) by a combination of any
of the foregoing methods, for the number of Common Shares specified in such
Exercise Notice (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the Holder
per the terms of this Warrant) and the Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.


 


(b)                                 Notwithstanding any provisions herein to
the contrary, if the Fair Market Value of one share of Common Stock is greater
than the Exercise Price (at the date of calculation as set forth below), in
lieu of exercising this Warrant for cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof 


 


3

















 


being exercised) by surrender of this Warrant at the principal office
of the Company together with the properly endorsed Exercise Notice in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:


 


	
  X=Y

  	
  (A-B)

  	
   

  
	
   

  	
  A

  	
   

  



 


 


    Where
X=                the number of shares of Common Stock to
be issued to the Holder


 


Y=               the number of shares of Common Stock
purchasable under the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised (at the date of such
calculation)


 


A=             the Fair Market Value of one share of the
Company’s Common Stock (at the date of such calculation)


 


B=               Exercise Price (as adjusted to the date
of such calculation)


 


3.                                       Effect of Reorganization, etc.; Adjustment of Exercise Price.


 


3.1                                 Reorganization, Consolidation, Merger,
etc.  In case at any time or from time to time,
the Company shall (a) effect a reorganization, (b) consolidate with or merge
into any other person, or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction, proper and adequate
provision shall be made by the Company whereby the Holder of this Warrant, on
the exercise hereof as provided in Section 1 at any time after the consummation
of such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further adjustment
thereafter as provided in Section 4.


 


3.2                                 Dissolution. 
In the event of any dissolution of the Company following the transfer of
all or substantially all of its properties or assets, the Company, concurrently
with any distributions made to holders of its Common Stock, shall at its
expense deliver or cause to be delivered to the Holder the stock and other
securities and property (including cash, where applicable) receivable by the
Holder of the Warrant pursuant to Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and
having its principal office in New York, NY as trustee for the Holder of the
Warrant.


 


3.3                                 Continuation of Terms. 
Upon any reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this Section 3, this Warrant
shall continue in full force and effect and the terms hereof shall be
applicable to the shares of stock and other securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer


 


4

















 


of any such stock or other securities, including, in the case of any
such transfer, the person acquiring all or substantially all of the properties
or assets of the Company, whether or not such person shall have expressly
assumed the terms of this Warrant as provided in Section 4.  In the event this Warrant does not continue
in full force and effect after the consummation of the transactions described
in this Section 3, then the Company’s securities and property (including cash,
where applicable) receivable by the Holders of the Warrant will be delivered to
Holder or the Trustee as contemplated by Section 3.2.


 


4.                                       Extraordinary Events Regarding Common Stock. 
In the event that the Company shall (a) issue additional shares of the
Common Stock as a dividend or other distribution on outstanding Common Stock,
(b) subdivide its outstanding shares of Common Stock, or (c) combine its
outstanding shares of the Common Stock into a smaller number of shares of the
Common Stock, then, in each such event, the Exercise Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 4. 
The number of shares of Common Stock that the holder of this Warrant
shall thereafter, on the exercise hereof as provided in Section 1, be entitled
to receive shall be increased to a number determined by multiplying the number
of shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the
numerator is the Exercise Price that would otherwise (but for the provisions of
this Section 4) be in effect, and (b) the denominator is the Exercise Price in
effect on the date of such exercise.


 


5.                                       Certificate as to Adjustments.  In each case
of any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable on the exercise of the Warrant, the Company at its expense
will promptly cause its Chief Financial Officer or other appropriate designee
to compute such adjustment or readjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration received or receivable by
the Company for any additional shares of Common Stock (or Other Securities)
issued or sold or deemed to have been issued or sold, (b) the number of shares
of Common Stock (or Other Securities) outstanding or deemed to be outstanding,
and (c) the Exercise Price and the number of shares of Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted or readjusted as provided in this
Warrant.  The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).


 


6.                                       Reservation of Stock, etc. Issuable on Exercise of Warrant. 
The Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of the Warrant, shares of Common Stock
(or Other Securities) from time to time issuable on the exercise of the
Warrant.


 


5

















 


7.                                       Assignment; Exchange of Warrant. 
Subject to compliance with applicable securities laws, this Warrant, and
the rights evidenced hereby, may be transferred by any registered holder hereof
(a “Transferor”) in whole or in
part.  On the surrender for exchange of
this Warrant, with the Transferor’s endorsement in the form of Exhibit B
attached hereto (the “Transferor Endorsement
Form”) and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, a legal opinion from the Transferor’s counsel that
such transfer is exempt from the registration requirements of applicable
securities laws, the Company at its expense but with payment by the Transferor
of any applicable transfer taxes) will issue and deliver to or on the order of
the Transferor thereof a new Warrant of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”),
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock called for on the face or faces of the Warrant so surrendered
by the Transferor.


 


8.                                       Replacement of Warrant.  On receipt
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction of this Warrant, on delivery of an indemnity agreement or
security reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of this Warrant, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.


 


9.                                       Registration Rights.  The Holder
of this Warrant has been granted certain registration rights by the
Company.  These registration rights are
set forth in a Registration Rights Agreement entered into by the Company and
Purchaser dated as of September 11, 2003.


 


10.                                 Maximum Exercise.  The Holder
shall not be entitled to exercise this Warrant on an exercise date, in
connection with that number of shares of Common Stock which would be in excess
of the sum of (i) the number of shares of Common Stock beneficially owned by
the Holder and its affiliates on an exercise date, and (ii) the number of
shares of Common Stock issuable upon the exercise of this Warrant with respect
to which the determination of this proviso is being made on an exercise date,
which would result in beneficial ownership by the Holder and its affiliates of
more than 4.99% of the outstanding shares of Common Stock of the Company on
such date.  For the purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13d-3 thereunder.  Notwithstanding the foregoing, the restriction described in this
paragraph may be revoked upon 75 days prior notice from the Holder to the
Company and is automatically null and void upon an Event of Default under the
Note.


 


11.                                 Warrant Agent.  The Company
may, by written notice to the each Holder of the Warrant, appoint an agent for
the purpose of issuing Common Stock (or Other Securities) on the exercise of
this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section
7, and replacing this Warrant pursuant to Section 8, or any of the foregoing,
and thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.


 


6

















 


12.                                 Transfer on the Company’s Books. 
Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.


 


13.                                 Notices, etc.  All notices
and other communications from the Company to the Holder of this Warrant shall
be mailed by first class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company in writing by such Holder or,
until any such Holder furnishes to the Company an address, then to, and at the
address of, the last Holder of this Warrant who has so furnished an address to
the Company.


 


14.                                 Voluntary Adjustment by the Company. 
The Company may at any time during the term of this Warrant reduce the
then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.


 


15.                                 No Shorting. 
The Purchaser or any of its
affiliates and investment partners will not and will not cause any
person or entity, directly or indirectly, to engage in “short sales” of the
Company’s Common Stock or any other hedging strategies.


 


16.                                 Miscellaneous.  This Warrant
and any term hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. This Warrant shall be
governed by and construed in accordance with the laws of State of New York
without regard to principles of conflicts of laws.  Any action brought concerning the transactions contemplated by
this Warrant shall be brought only in the state courts of New York or in the
federal courts located in the state of New York; provided, however, that
the Holder may choose to waive this provision and bring an action outside the
state of New York.  The individuals
executing this Warrant on behalf of the Company agree to submit to the
jurisdiction of such courts and waive trial by jury.  The prevailing party shall be entitled to recover from the other
party its reasonable attorney’s fees and costs.  In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability
of any other provision of this Warrant. 
The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.  The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.  The Company
acknowledges that legal counsel participated in the preparation of this Warrant
and, therefore, stipulates that the rule of construction that ambiguities are
to be resolved against the drafting party shall not be applied in the interpretation
of this Warrant to favor any party against the other party.


 


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


 


7

















 


IN WITNESS WHEREOF, the Company has executed this
Warrant as of the date first written above.


 


 


	
   

  	
  ELECTRIC CITY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Mitola

  	
   

  
	
   

  	
  Name:

  	
  John
  Mitola

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
  Witness:

  	
   

  
	
   

  	
   

  
	
  /s/
  Jeffrey Mistarz

  	
   

  	
   

  
					



 


8

















 


Exhibit A


 


FORM OF SUBSCRIPTION


 


(To be signed only
on exercise of Warrant)


 


	
  TO:

  	
   

  	
  Electric City Corp.

  
	
   

  	
   

  	
  1280 Landmeier Road

  
	
   

  	
   

  	
  Elk Grove Village,
  Illinois  60007

  
	
   

  	
   

  	
  Attention:  Chief Financial Officer

  



 


The undersigned, pursuant
to the provisions set forth in the attached Warrant (No.           ),
hereby irrevocably elects to purchase (check applicable box):


 


                                
shares of the Common Stock covered by such Warrant; or


 


                the maximum number of shares of
Common Stock covered by such Warrant pursuant to the cashless exercise
procedure set forth in Section 2.


 


The undersigned herewith
makes payment of the full Exercise Price for such shares at the price per share
provided for in such Warrant, which is
$                        .  Such payment takes the form of (check applicable
box or boxes):


 


                $                        
in lawful money of the United States; and/or


 


                the cancellation of such portion of
the attached Warrant as is exercisable for a total of
                        
shares of Common Stock (using a Fair Market Value of $
                        
per share for purposes of this calculation); and/or


 


                the cancellation of such number of
shares of Common Stock as is necessary, in accordance with the formula set
forth in Section 2.2, to exercise this Warrant with respect to the maximum
number of shares of Common Stock purchaseable pursuant to the cashless exercise
procedure set forth in Section 2.


 


The undersigned requests
that the certificates for such shares be issued in the name of, and delivered
to                                        whose
address is                                                                                                                                                                                                                        .


 


The undersigned
represents and warrants that all offers and sales by the undersigned of the
securities issuable upon exercise of the within Warrant shall be made pursuant
to registration of the Common Stock under the Securities Act of 1933, as amended
(the “Securities Act”) or pursuant to an exemption from registration under the
Securities Act.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform
  to name of holder as

  specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Address)

  



 

















 


Exhibit B


 


FORM OF TRANSFEROR
ENDORSEMENT


(To be signed only
on transfer of Warrant)


 


For value received, the
undersigned hereby sells, assigns, and transfers unto the person(s) named below
under the heading “Transferees” the right represented by the within Warrant to
purchase the percentage and number of shares of Common Stock of Electric City
Corp. into which the within Warrant relates specified under the headings
“Percentage Transferred” and “Number Transferred,” respectively, opposite the
name(s) of such person(s) and appoints each such person Attorney to transfer
its respective right on the books of Electric City Corp. with full power of
substitution in the premises.


 


	
  Transferees

  	
   

  	
  Address

  	
   

  	
  Percentage

  Transferred

  	
   

  	
  Number
  Transferrred

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform
  to name of holder as

  specified on the face of the Warrant)

  



 


Signed in the presence
of:


 


	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
  (address)

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  	
   

  
	
  [TRANSFEREE]

  	
   

  	
  (address)

  
	
   

  	
   

  	
   

  
	
  (Name)