Exhibit

10.4




 




FORM OF

SERIES D CONVERTIBLE PREFERRED STOCK WARRANT




 




THE SECURITIES REPRESENTED BY THIS

CERTIFICATE HAVE NOT BEEN REGISTERED, QUALIFIED, APPROVED OR DISAPPROVED UNDER

THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND

MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE

REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR

AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH

LAWS AND NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY

OTHER FEDERAL OR STATE REGULATORY AUTHORITY HAS PASSED ON OR ENDORSED THE

MERITS OF THESE SECURITIES.




 




 




THE SERIES D PREFERRED STOCK ISSUABLE UPON

THE EXERCISE OF THE SECURITIES REPRESENTED HEREBY AND THE COMMON STOCK ISSUABLE

UPON CONVERSION OF SUCH SERIES D PREFERRED STOCK ARE SUBJECT TO AN INVESTOR

RIGHTS AGREEMENT AND A STOCK TRADING AGREEMENT, AS EACH OF THE SAME MAY BE

AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE

PRINCIPAL OFFICES OF THE COMPANY.




 




WARRANT NO.

     




 




WARRANT

CERTIFICATE




 




TO

PURCHASE SHARES OF SERIES D CONVERTIBLE PREFERRED STOCK,




 




PAR

VALUE $0.01 PER SHARE




 




OF




 




ELECTRIC

CITY CORP.




 




THIS IS TO CERTIFY THAT

                         or

his registered assigns (the “Holder”), is the owner of

                        

warrants (the “Warrants”), each of which entitles the registered Holder

thereof to purchase from Electric City Corp., a Delaware corporation (the “Company”),

one fully paid, duly authorized and nonassessable share of Series D Convertible

Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”),

of the Company at any time or from time to time on or before 5:00 p.m., New

York City time, on the Warrant Expiration Date, at an exercise price of $10.00

per share, subject to adjustment from time to time as set forth herein (the “Exercise

Price”), all on the terms and subject to the conditions hereinafter set

forth.




 




The number of shares of Series D Preferred Stock

issuable upon exercise of each Warrant (the “Number Issuable”) shall be

determined for each Warrant by dividing $10.00 by the 




 





























 




Exercise Price in effect at the time of such exercise, and is initially

one (1) share of Series D Preferred Stock. 

Capitalized terms used herein but not otherwise defined shall have the

meanings given them in Section 13 hereof or, if not therein

defined, in the Securities Purchase Agreement.




 




Section 1.               Exercise Of Warrants.  Subject to the last paragraph of this

Section 1, the Warrants evidenced hereby may be exercised, in whole or in

part, by the registered Holder hereof at any time or from time to time, on or

before 5:00 p.m., New York City time, on the Warrant Expiration Date upon

delivery to the Company at the principal executive office of the Company in the

United States of America, of (a) this Warrant Certificate, (b) a written notice

stating that such Holder elects to exercise the Warrants evidenced hereby in

accordance with the provisions of this Section 1 and specifying the number

of Warrants being exercised and the name or names in which such Holder wishes

the certificate or certificates for shares of Series D Preferred Stock to be

issued and (c) payment of the Exercise Price for the shares of Series D

Preferred Stock issuable upon exercise of such Warrants, which shall be payable

by any one or any combination of the following: (i) cash or (ii) certified or

official bank check payable to the order of the Company.  The documentation and consideration

delivered in accordance with clauses (a), (b) and (c) of this paragraph above

are collectively referred to herein as the “Warrant Exercise Documentation.”




 




As promptly as practicable, and in any event within

two (2) Business Days after receipt of the Warrant Exercise Documentation, the

Company shall deliver or cause to be delivered certificates representing the

number of validly issued, fully paid and nonassessable shares of Series D

Preferred Stock issuable in connection with such exercise, and if less than the

full number of Warrants evidenced hereby are being exercised, a new Warrant

Certificate or Certificates, of like tenor, for the number of Warrants

evidenced by this Warrant Certificate, less the number of Warrants then being

exercised; provided, however, that no new Warrant Certificate need be delivered

if the Warrant Expiration Date has occurred. 

Such exercise shall be deemed to have been made at the close of business

on the date of delivery of the Warrant Exercise Documentation so that the Person

entitled to receive shares of Series D Preferred Stock upon such exercise shall

be treated for all purposes as having become the record holder of such shares

of Series D Preferred Stock at such time.




 




The Company shall pay all expenses in connection with,

and all taxes and other governmental charges (other than income taxes of the

Holder) that may be imposed in respect of the issue or delivery of any shares

of Series D Preferred Stock issuable upon the exercise of the Warrants

evidenced hereby.  The Company shall not

be required, however, to pay any tax or other charge imposed in connection with

any transfer involved in the issue of any certificate for shares of Series D

Preferred Stock in any name other than that of the registered Holder of the

Warrants evidenced hereby.




 




In connection with the exercise of any Warrants

evidenced hereby, at the Company’s option, no fractions of shares of Series D

Preferred Stock shall be issued, but in lieu thereof the Company may elect to

pay a cash adjustment in respect of such fractional interest in an amount equal

to any such fractional interest multiplied by $10.00 per share of Series D

Preferred Stock.  If more than one such

Warrant shall be exercised by the Holder thereof at the same time, the




 




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number of full shares of Series D Preferred Stock issuable on such

exercise shall be computed on the basis of the total number of Warrants so

exercised.




 




Section 2.               Adjustments.




 




(a)           Subdivision

or Combination of Stock or Stock Dividends.  In case the Company shall at any time subdivide its outstanding

shares of Series D Preferred Stock into a greater number of shares, by split or

otherwise, or issue additional shares of Series D Preferred Stock as a dividend

(other than as a dividend in respect of the outstanding Preferred Stock in

accordance with any of the Preferred Stock Certificates of Designations (as

such term defined in the Securities Purchase Agreement)), or make any other

distribution upon any class or series of stock payable in shares of common

stock or Convertible Securities of the Company, the Exercise Price in effect

immediately prior to such subdivision shall be proportionately reduced and,

conversely, in case the outstanding shares of Series D Preferred Stock of the

Company shall be combined into a smaller number of shares, the Exercise Price

in effect immediately prior to such combination shall be proportionately

increased.




 




(b)           Reorganization;

Reclassification; Consolidation; Merger or Sale of Assets.  In case of any capital reorganization or

reclassification or other change of outstanding shares of Series D Preferred

Stock (other than a change in par value, or from par value to no par value, or

from no par value to par value, or as a result of a subdivision or

combination), or in case of any consolidation or merger of the Company with or

into another Person (other than a consolidation or merger in which the Company

is the resulting or surviving person and that does not result in any

reclassification or change of outstanding Series D Preferred Stock) (any of the

foregoing, a “Transaction”), the Company, or such successor or

purchasing Person, as the case may be, shall execute and deliver to each Holder

of the Warrants evidenced hereby, at least five (5) Business Days prior to

effecting any of the foregoing Transactions, a certificate that the Holder of

each such Warrant then outstanding shall have the right thereafter to exercise

such Warrant into the kind and amount of shares of stock or other securities

(of the Company or another issuer) or property or cash receivable upon such

Transaction by a holder of the number of shares of Series D Preferred Stock

into which such Warrant could have been exercised immediately prior to such

Transaction (or, if the Series D Preferred Stock did not participate in any such

Transaction, the kind and amount of shares of stock or other securities (of the

Company or another issuer) or property or cash receivable upon such Transaction

by a holder of the number of shares of Common Stock into which such Series D

Preferred Stock could have been converted immediately prior to such

Transaction).  Such certificate shall

provide for adjustments that shall be as nearly equivalent as may be

practicable to the adjustments provided for in this Section 2 and

shall contain other terms identical to the terms hereof.   If, in the case of any such Transaction,

the stock, other securities, cash or property receivable thereupon by a holder

of Series D Preferred Stock (or, if applicable, by a holder of Common Stock

issuable upon conversion of the Series D Preferred Stock) includes shares of

stock or other securities of a Person other than the successor or purchasing

Persons and other than the Company, who controls or is controlled by the

successor or purchasing Person or who, in connection with such Transaction,

issues stock, securities, other property or cash to holders of Series D

Preferred Stock or Common Stock, then such certificate also shall be executed

by such Person, and such Person shall, in such certificate, specifically assume

the obligations of such successor or purchasing Person and acknowledge its

obligations to issue such stock, securities, other property




 




3





























 




or cash to Holders of the Warrants upon exercise thereof as provided

above.  The provisions of this Section 2(b)

similarly shall apply to successive Transactions.




 




(c)           Special

Distributions.  In the event that

the Company shall declare a dividend or make any other distribution (including,

without limitation, in cash, in notes or other debt securities or in capital

stock (which shall include, without limitation, any options, warrants or other

rights to acquire capital stock)) of the Company, whether or not pursuant to a

stockholder rights plan, “poison pill” or similar arrangement (but excluding

any dividend or distribution that results in an adjustment to the Exercise

Price pursuant to Section 2(a)) in other property or assets, to

holders of Series D Preferred Stock (a “Special Distribution”), then the

Board of Directors shall set aside the amount of such dividend or distribution

that each Holder of Warrants would have been entitled to receive had it

exercised such Warrants prior to the record date for such dividend or

distribution.  Upon the exercise of a

Warrant evidenced hereby, the Holder shall be entitled to receive such dividend

or distribution that such Holder would have received had such Warrant been

exercised immediately prior to the record date for such dividend or

distribution.




 




Section 3.               Notice of Certain Events.  In case at any time or from time to time the

Company shall declare any dividend or any other distribution to the holders of

its Series D Preferred Stock or Common Stock, or shall authorize the granting

to the holders of its Series D Preferred Stock or Common Stock of rights or

warrants to subscribe for or purchase any additional shares of stock of any

class or any other right, or shall authorize the issuance or sale of any other

shares or rights that would result in an adjustment to the Exercise Price

pursuant to Section 2(a) or would result in a Special Distribution

described in Section 2(c), or there shall be any capital reorganization or

reclassification of the Series D Preferred Stock or Common Stock or

consolidation or merger of the Company with or into another Person, or any sale

or other disposition of all or substantially all the assets of the Company, or

there shall be a voluntary or involuntary dissolution, liquidation or winding

up of the Company, then, in any one or more of such cases the Company shall mail

to each Holder of the Warrants evidenced hereby at such Holder’s address as it

appears on the transfer books of the Company, as promptly as practicable but in

any event at least  ten (10) Business

Days prior to the applicable date hereinafter specified, a notice stating




 




(a)           the date on which a record is to be

taken for the purpose of such dividend, distribution, rights or warrants or, if

a record is not to be taken, the date as of which the holders of Series D

Preferred Stock or Common Stock of record to be entitled to such dividend,

distribution, rights or warrants are to be determined,




 




(b)           the issue date of such dividend,

distribution, rights or warrants, and




 




(c)           the date on which such

reorganization, reclassification, consolidation, merger, sale, disposition,

dissolution, liquidation or winding up is expected to become effective.




 




Such notice also shall specify the date as of which it is expected that

the holders of Series D Preferred Stock or Common Stock of record shall be

entitled to exchange their Series D Preferred Stock or Common Stock for shares

of stock or other securities or property or cash




 




4





























 




deliverable upon such reorganization, reclassification, consolidation,

merger, sale, disposition, dissolution, liquidation or winding up.




 




Section 4.               Certain Covenants.  The Company will at all times reserve and

keep available, free from preemptive rights, out of the aggregate of its

authorized but unissued Series D Preferred Stock or its authorized and issued

Series D Preferred Stock held in its treasury, for the purpose of enabling it

to satisfy any obligation to issue Series D Preferred Stock upon exercise of

the Warrants, the maximum number of shares of Series D Preferred Stock that may

then be deliverable upon the exercise of all outstanding Warrants. The Company

shall take all action required to increase the authorized number of shares of

Series D Preferred Stock if at any time there shall be insufficient authorized

but unissued shares of Series D Preferred Stock to permit such reservation or

to permit the exercise of all outstanding Warrants.




 




The Company or, if appointed, the transfer agent for

the Series D Preferred Stock (the “Transfer Agent”) and every subsequent

transfer agent for any shares of the Company’s capital stock issuable upon the

exercise of any of the rights of purchase aforesaid will be irrevocably

authorized and directed at all times to reserve such number of authorized

shares as shall be required for such purpose. 

The Company will keep a copy of this Warrant Certificate on file with

the Transfer Agent and with every subsequent transfer agent for any shares of

the Company’s capital stock issuable upon the exercise of the rights of

purchase represented hereby.




 




Before taking any action that would cause an

adjustment pursuant to Section 2 hereof to reduce the Exercise

Price below the then par value (if any) of the Series D Preferred Stock, the

Company will take any corporate action that may, in the opinion of its counsel

(which may be counsel employed by the Company), be necessary in order that the

Company may validly and legally issue fully paid and nonassessable Series D

Preferred Stock at the Exercise Price as so adjusted.




 




The Company covenants that all Series D Preferred

Stock that may be issued upon exercise of the Warrants will, upon issue, be

validly issued, fully paid, nonassessable, free of preemptive rights and free

from all taxes, liens, charges and security interests with respect to the issue

thereof.




 




Section 5.               Registered Holder.  The person in whose name this Warrant

Certificate is registered shall be deemed the owner hereof and of the Warrants

evidenced hereby for all purposes.




 




Section 6.               Transfer of Warrants.  Any transfer of the rights represented by

this Warrant Certificate shall be effected by the surrender of this Warrant

Certificate, along with the form of assignment attached hereto, properly

completed and executed by the registered Holder hereof, at the principal

executive office of the Company in the United States of America.  Thereupon, the Company shall issue in the

name or names specified by the registered Holder hereof and, in the event of a

partial transfer, in the name of the registered Holder hereof, a new Warrant

Certificate or Certificates evidencing the right to purchase such number of

shares of Series D Preferred Stock as shall be equal to the number of shares of

Series D Preferred Stock then purchasable hereunder.




 




5





























 




Section 7.               Restrictive Legend.  Each certificate representing the Series D

Preferred Stock issued upon exercise of this Warrant shall be stamped or

otherwise imprinted with a legend in the following form (in addition to any

legend required under applicable state securities laws):




 




THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE

NOT BEEN REGISTERED, QUALIFIED, APPROVED OR DISAPPROVED UNDER THE SECURITIES

ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE

SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION

STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE

EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS AND

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER

FEDERAL OR STATE REGULATORY AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF

THESE SECURITIES.




 




THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO AN

INVESTOR RIGHTS AGREEMENT AND A STOCK TRADING AGREEMENT, AS EACH OF THE SAME

MAY BE AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION

AT THE PRINCIPAL OFFICES OF THE COMPANY.




 




Said legends shall be removed by the Company, upon the request of the

holder thereof, at such time as the restrictions on the transfer of the

applicable security under applicable securities laws and the obligations

imposed on the holder thereof under the Investor Rights Agreement and Stock

Trading Agreement, as applicable, shall have terminated.




 




Section 8.               Denominations.  The Company will, at its expense, promptly

upon surrender of this Warrant Certificate at the principal executive office of

the Company in the United States of America, execute and deliver to the

registered Holder hereof a new Warrant Certificate or Certificates in

denominations specified by such Holder for an aggregate number of Warrants

equal to the number of Warrants evidenced by this Warrant Certificate.




 




Section 9.               Replacement of Warrants.  Upon receipt of evidence satisfactory to the

Company of the loss, theft, destruction or mutilation of this Warrant

Certificate and, in the case of loss, theft or destruction, upon delivery of an

indemnity reasonably satisfactory to the Company (in the case of an insurance

company or other institutional investor, its own unsecured indemnity agreement

shall be deemed to be reasonably satisfactory), or, in the case of mutilation,

upon surrender and cancellation thereof, the Company will issue a new Warrant

Certificate of like tenor for a number of Warrants equal to the number of

Warrants evidenced by this Warrant Certificate.




 




Section 10.             Governing Law.  Except as to matters governed by the General

Corporation Law of the State of Delaware and decisions thereunder of the

Delaware courts applicable to Delaware corporations, which shall be governed by

such laws and decisions, this




 




6





























 




Warrant Certificate shall be construed and enforced in accordance with,

and the rights of the parties shall be governed by, the laws of the State of

New York applicable to agreements made and to be performed entirely within such

State.




 




Section 11.             Rights Inure to Registered

Holder.  The Warrants evidenced by

this Warrant Certificate will inure to the benefit of and be binding upon the

registered Holder thereof and the Company and their respective successors and

permitted assigns.  Nothing in this

Warrant Certificate shall be construed to give to any Person other than the

Company and the registered Holder and their respective successors and permitted

assigns any legal or equitable right, remedy or claim under this Warrant

Certificate, and this Warrant Certificate shall be for the sole and exclusive

benefit of the Company and such registered Holder.  Nothing in this Warrant Certificate shall be construed to give

the registered Holder hereof any rights as a Holder of shares of Series D

Preferred Stock or Common Stock until such time, if any, as the Warrants

evidenced by this Warrant Certificate are exercised in accordance with the

provisions hereof.




 




Section 12.             Notices.  All notices, demands and other communications

provided for or permitted hereunder shall be made in writing and shall be given

by registered or certified first-class mail, return receipt requested,

nationally recognized overnight delivery service or personal delivery,




 




(a)                                  if

to the Holder of a Warrant, at such Holder’s last known address appearing on

the books of the Company; and




 




(b)                                 if

to the Company, at its principal executive office in the United States located

at the address designated for notices in the Securities Purchase Agreement,




 




or such other address as shall have been furnished to the party given

or making such notice, demand or other communication.  All such notices and communications shall be deemed to have been

duly given: when delivered by hand, if personally delivered; when delivered if

delivered by a nationally recognized overnight delivery service; and five (5)

Business Days after being deposited in the mail, as aforesaid, postage prepaid,

if mailed.




 




Section 13.             Definitions.  For the purposes of this Warrant

Certificate, the following terms shall have the meanings indicated below:




 




“Business Day”

means any day other than a Saturday, Sunday or other day on which commercial

banks in the City of New York are authorized or required by law or executive

order to close.




 




“Company” shall have

the meaning set forth in the preamble hereof.




 




“Series A Preferred

Stock” means shares of the Company’s Series A Convertible Preferred Stock,

par value $0.01 per share.




 




“Series C Preferred

Stock” means shares of the Company’s Series C Convertible Preferred Stock,

par value $0.01 per share.




 




7





























 




“Series D Preferred

Stock” shall have the meaning set forth in the preamble hereof.




 




“Convertible

Securities” means any rights to subscribe for or to purchase, or any

options or warrants for the purchase of, Series D Preferred Stock or any stock,

notes or securities convertible into or exchangeable for Series D Preferred

Stock.




 




“Exercise Price”

shall have the meaning set forth in the preamble hereof.




 




“Holder” shall

have the meaning set forth in the preamble.




 




“Number Issuable”

shall have the meaning set forth in the preamble.




 




“Person” means any

individual, corporation, limited liability company, partnership, trust,

incorporated or unincorporated association, joint venture, joint stock company,

government (or an agency or political subdivision thereof) or other entity of

any kind.




 




“Preferred Stock”

means shares of any of the Series A Preferred Stock, the Series C Preferred

Stock or the Series D Preferred Stock.




 




“Securities Purchase

Agreement” means that certain Securities Purchase Agreement, dated as of

June 27, 2003, among the Company, the Holder and the other parties signatory

thereto, as the same may be amended, modified or otherwise supplemented from

time to time in accordance with its terms.




 




“Special Distribution”

shall have the meaning set forth in Section 2(c) hereof.




 




“Transaction”

shall have the meaning set forth in Section 2(b) hereof.




 




“Transfer Agent”

shall have the meaning set forth in Section 4 hereof.




 




“Warrants” shall

have the meaning set forth in the preamble hereof.




 




“Warrant Exercise

Documentation” shall have the meaning set forth in Section 1

hereof.




 




“Warrant Expiration

Date” means June 27, 2004.




 




[BALANCE

OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]




 




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IN WITNESS WHEREOF, the Company has caused

this Warrant Certificate to be duly executed as of the Closing Date (as defined

in the Securities Purchase Agreement).




 




 




	

   


  	

  COMPANY:


  	

  ELECTRIC CITY CORP.,


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

    /s/ John P. Mitola


  	

   


  
	

   


  	

  Name:


  	

  John P. Mitola


  
	

   


  	

  Title:


  	

  Chief Executive Officer


  
	

   


  	

   


  
	

   


  	

   


  
	

  ATTEST:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

    /s/ Jeffrey

  Mistarz


  	

   


  	

   


  
						





 




9





























 




Form of Assignment Form




 




[To be executed upon

assignment of Warrants]




 




The undersigned hereby assigns and transfers unto

                                        ,

whose Social Security Number or Tax ID Number is

                                   

and whose record address is

                                                     

the rights represented by the attached Warrant Certificate with respect to

       Warrants to which the attached Warrant

Certificate relates, and irrevocably appoints

                           

as agent to transfer this security on the books of the Company.  Such agent may substitute another to act for

such agent.




 




	

   


  	

  Signature:


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  (Signature must conform in all respects to name of

  holder as specified on the face of the Warrant Certificate)


  
	

   


  	

   


  
	

   


  	

  Signature Guarantee:


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  Date:


  	

   


  	

   


  	

   


  
				





 





























 




(SUBSCRIPTION FORM TO BE

EXECUTED UPON EXERCISE OF


SOME OR ALL OF THE WARRANTS)




 




The undersigned,

registered Holder, successor or assignee of such registered Holder of the

within Warrant Certificate, hereby:




 




(a) subscribes for

        shares of Series D Preferred Stock

which the undersigned is entitled to purchase under the terms of the within

Warrant Certificate, (b) makes the full cash payment therefor called for

by the within Warrant Certificate, and (c) directs that the Series D Preferred

Stock issuable upon exercise of said Warrants be issued as described hereunder.




 




 




	

   


  	

   


  
	

   


  	

  (Name)


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  (Address)


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  SIGNATURE


  
	

   


  	

   


  
	

  Dated: