Document:

EX-10.1

Exhibit 10.1

AMENDMENT TO CONVERTIBLE TERM NOTE

This Amendment to Convertible Term Note (this “Amendment”) is made as of the 31st day of
August, 2004 between Laurus Master Fund, Ltd., a Cayman Islands corporation (the “Holder”) and
Electric City Corp., a Delaware corporation (“Borrower”).

W I T N E S S E T H:

WHEREAS, Borrower has previously issued to Holder that certain Convertible Term Note is
original principal amount of $1,000,000 dated September 11, 2003 (the “Convertible Term Note”); and

WHEREAS, Borrower and Holder have agreed to amend the Convertible Term Note in certain
respects as set forth herein;

NOW, THEREFORE, the parties hereto hereby agrees as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein are
used with the meanings given such terms in the Convertible Term Note.

2. Amendments. The Convertible Term Note is hereby amended as follows:

(A) The definition of Maturity Date is hereby amended to September 1, 2006.

(B) The parties agree that, as of the date of this Amendment, the outstanding principal
balance of the Convertible Term Note is $676,789.81. Notwithstanding the provisions of Section 1.2
of the Convertible Term Note, no payments of principal under the Convertible Term Note shall be due
on August, 1, 2004 or any Repayment Date thereafter prior to February 1, 2005, and for each such
Repayment Date the Monthly Amount shall consist solely of accrued interest. Commencing on February
1, 2005 and on each Repayment Date thereafter, Borrower shall make monthly principal payments of
$35,000, with the remaining outstanding principal balance due and payable in full on the Maturity
Date (as amended by this Amendment), and for each such Repayment Date on or after February 1, 2005,
the Monthly Amount shall include both principal then due and accrued interest.

(C) The definition of Fixed Conversion Price in Section 2.12 is amended to $1.64.

3. Miscellaneous.

(A) Captions. Section captions and headings used in this Amendment are for
convenience only and are not part of and shall not affect the construction of this Amendment.

(B) Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York, without regard to principles of conflicts of laws. In the
event that any provision of this Amendment 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
unenforceability of any other provision of this Amendment.

(C) Counterparts; Facsimile Signature. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which shall together
constitute but one and the same document. This Amendment may be executed by facsimile signature,
and any such facsimile signature by any party hereto shall be deemed to be an original signature
and shall be binding on such party to the same extent as if such facsimile signature were an
original signature.

(D) Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

(E) References. From and after the date of execution of this Amendment, any reference
to the Convertible Term Note contained in any notice, request, certificate or other instrument,
document or agreement executed concurrently with or after the execution and delivery of this
Amendment shall be deemed to include this Amendment unless the context shall otherwise require.

(F) Continued Effectiveness. Notwithstanding anything contained herein, the terms of
this Amendment are not intended to and do not serve to effect a novation as to the Convertible Term
Note. The Convertible Term Note, as modified hereby, remains in full force and effect and are
hereby reaffirmed in all respects.

(G) Construction. Each party acknowledges that its legal counsel participated in the
preparation of this Amendment 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 Amendment to favor any party against the other.

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

IN WITNESS WHEREOF, the parties have executed this Amendment to Convertible Term Note as of
the date first set forth above.

ELECTRIC CITY CORP.

	 	 	 
	By:

	 	/s/ Jeffrey Mistarz
	

	 	 
	Name:

Title:

	 	Jeffrey Mistarz

Chief Financial Officer & Treasurer

LAURUS MASTER FUND, LTD.

	 	 	 
	By:

	 	/s/ Eugene Grin
	

	 	 
	Name:

Title:

	 	Eugene Grin

DirectorEX-10.2

Exhibit 10.2

AMENDMENT TO SECURITY AGREEMENT

This Amendment to Security Agreement (this “Amendment”) is made as of the 31st day of August,
2004 between Laurus Master Fund, Ltd., a Cayman Islands corporation (“Laurus”) and Electric City
Corp., a Delaware corporation (the “Company”).

W I T N E S S E T H:

WHEREAS, the parties hereto are all of the parties to that certain Security Agreement dated as
of September 11, 2003 (the “Security Agreement”); and

WHEREAS, Borrower and Holder have agreed to amend the Security Agreement in certain respects
as set forth herein;

NOW, THEREFORE, the parties hereto hereby agrees as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein are
used with the meanings given such terms in the Security Agreement.

2. Amendments. The Security Agreement is hereby amended as follows:

(A) The first sentence of clause (viii) of Section 2(a) is hereby amended and restated in its
entirety as follows:

If any Eligible Account is not paid by the Account Debtor within one hundred and
twenty (120) days after the date that such Eligible Account was invoiced (or, in the
case of invoices to Account Debtors which are electric service customers of Xcel
Energy (“Xcel”) in the State of Colorado pursuant to sales qualifying under Xcel’s
“Custom Efficiency” program, shall not be unpaid after the later of (x) one hundred
twenty (120) days from the date when invoiced or (y) January 31, 2005), or if any
Account Debtor assets a deduction, dispute, contingency, set-off, or counterclaim
with respect to any Eligible Account, (a “Delinquent Account”), the Company shall
promptly, and in any event within three (3) business days, (i) reimburse Laurus for
the amount of the Revolving Credit Advance made with respect to such Delinquent
Account, or (ii) replace such Delinquent Account with an otherwise Eligible Account.

(B) Clause (g) of the definition of Eligible Accounts set forth in Annex A to the Security
Agreement is hereby amended and restated in its entirety as follows:

(g) is documented by an invoice in a form approved by Laurus and shall not be
unpaid more than one hundred twenty (120) days from invoice date (or, in the case of
invoices to electric service customers of Xcel Energy (“Xcel”) in the State of
Colorado pursuant to sales qualifying under Xcel’s “Custom Efficiency” program,
shall not be unpaid after the later of (x) one hundred twenty (120) days from
invoice or (y) January 31, 2005);

(C) Clause (h) of the definition of Eligible Accounts set forth in Annex A to the Security
Agreement is hereby amended and restated in its entirety as follows:

(h) not more than twenty-five percent (25%) of the unpaid amount of invoices due
from such Account Debtor remains unpaid more than one hundred twenty (120) days from
invoice date (or, in the case of invoices to electric service customers of Xcel
Energy (“Xcel”) in the State of Colorado pursuant to sales qualifying under Xcel’s
“Custom Efficiency” program, remains unpaid after the later of (x) one hundred
twenty (120) days from invoice or (y) January 31, 2005);

(D) The definition of Minimum Borrowing Notes set forth in Annex A to the Security Agreement
is hereby amended and restated in its entirety as follows:

“Minimum Borrowing Note” shall mean each secured convertible revolving
note in substantially the form of Exhibit B, duly completed, made by the Company in
favor of Laurus (each, a “Secured Convertible Note”), each in a principal
amount equal to the Minimum Borrowing Amount.

(E) The definition of Initial Term set forth in Annex A to the Security Agreement is hereby
amended and restated in its entirety as follows:

“Initial Term” means September 11, 2003 through the close of business
on September 1, 2006, subject to acceleration at the option of Laurus upon the
occurrence of an Event of Default hereunder or other termination hereunder.

(F) A new Exhibit B is added to the Security Agreement in the form of Exhibit I to this
Amendment.

3. Miscellaneous.

(A) Captions. Section captions and headings used in this Amendment are for
convenience only and are not part of and shall not affect the construction of this Amendment.

(B) Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York, without regard to principles of conflicts of laws. In the
event that any provision of this Amendment 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
unenforceability of any other provision of this Amendment.

(C) Counterparts; Facsimile Signature. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which shall together
constitute but one and the same document. This Amendment may be executed by facsimile signature,
and any such facsimile signature by any party hereto shall be deemed to be an original signature
and shall be binding on such party to the same extent as if such facsimile signature were an
original signature.

(D) Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

(E) References. From and after the date of execution of this Amendment, any reference
to the Security Agreement contained in any notice, request, certificate or other instrument,
document or agreement executed concurrently with or after the execution and delivery of this
Amendment shall be deemed to include this Amendment unless the context shall otherwise require.

(F) Continued Effectiveness. Notwithstanding anything contained herein, the terms of
this Amendment are not intended to and do not serve to effect a novation as to the Security
Agreement. The Security Agreement, as modified hereby, remains in full force and effect and are
hereby reaffirmed in all respects.

(G) Construction. Each party acknowledges that its legal counsel participated in the
preparation of this Amendment 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 Amendment to favor any party against the other.

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

IN WITNESS WHEREOF, the parties have executed this Amendment to Security Agreement as of the
date first set forth above.

ELECTRIC CITY CORP.

	 	 	 
	By:

	 	/s/ Jeffrey Mistarz
	

	 	 
	Name:

Title:

	 	Jeffrey Mistarz

Chief Financial Officer & Treasurer

LAURUS MASTER FUND, LTD.

	 	 	 
	By:

	 	/s/ Eugene Grin
	

	 	 
	Name:

Title:

	 	Eugene Grin

Director

EXHIBIT I TO AMENDMENT TO SECURITY AGREEMENT

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

SECURED CONVERTIBLE REVOLVING NOTE

1. FOR VALUE RECEIVED, ELECTRIC CITY CORP. a Delaware corporation (the “Borrower”)
promises to pay to LAURUS MASTER FUND, LTD., c/o Ironshore Corporate Services Ltd., P.O.
Box 1234 G.T., Queensgate House, South Church Street, Grand Cayman, Cayman Islands, Fax:
345-949-9877 (the “Holder”) or its registered assigns, on order, the sum of TWO MILLION
DOLLARS ($2,000,000), of, if different, the aggregate principal amount of all “Loans” (as
such term is defined in the Security Agreement referred to below), together with any
accrued and unpaid interest hereon, on September 1, 2006 (the “Maturity Date”).

2. Capitalized terms used herein without definition shall have the meanings ascribed
to such terms in the Security Agreement between Borrower and the Holder dated as of
September 11, 2003 (as amended, modified and supplemented from time to time, the “Security
Agreement”).

3. The following terms shall apply to this Note:

INTEREST

Interest Rate and Payments. Subject to Sections 5.3 and 6.7 hereof, interest payable
on this Note shall accrue at a rate per annum equal to the “prime rate” published in The Wall
Street Journal from time to time, plus one and three quarters percent (1.75%). Interest shall
be payable monthly in arrears commencing on    1, 200   and on the first day of each
consecutive calendar month thereafter The Prime Rate shall be increased or decreased as the case
may be for each increase or decrease in the Prime Rate in an amount equal to such increase or
decrease in the Prime Rate; each change to be effective as of the day of the change in such rate in
accordance with the terms of the Security Agreement.

ADVANCES, BORROWER CONVERSION RIGHTS, PAYMENTS UNDER NOTE

Mechanics of Advances. All Loans evidenced by this Note shall be made in accordance
with the terms and provisions of the Security Agreement.

Borrower’s Conversion Rights. Subject to the terms hereof, the Borrower shall have
the sole option to determine whether to satisfy payment of any payment of principal or interest
when due either in cash or in shares of Common Stock (as defined in the Security Agreement), or a
combination of both. Each month by the tenth (10th) day of such month, the Borrower
shall deliver to the Holder a written irrevocable notice in the form of Exhibit A attached hereto
electing to pay the amount specified therein payable on the first day of the next month in either
cash or Common Stock, or a combination of both (each, a “Repayment Election Notice”). Each
Repayment Election Notice shall be delivered to the Holder not later than the tenth
(10th) day of the month prior to the applicable payment date (the date by which such
notice is required to be given being hereinafter referred to as the “Notice Date”). If, for any
amount which is due on any repayment date, a Repayment Election Notice is not delivered to the
Holder by the applicable Notice Date for such repayment date, then the amount due on such repayment
date shall be paid in cash. If the Borrower repays all or a portion of the amount due on any
payment date in shares of Common Stock, the number of such shares to be issued for such payment
date shall be the number determined by dividing (x) the amount to be paid in shares of Common
Stock, by (y) the Fixed Conversion Price. For purposes hereof, the “Fixed Conversion Price” means
$1.64 (which has been determined on the date of this Note as an amount equal to the average closing
price for the five (5) trading days immediately prior to the date of this Note).

No Effective Registration. Notwithstanding anything to the contrary herein, the
Borrower shall be prohibited from exercising its right to repay any amount hereunder in shares of
Common Stock if at any time from the Notice Date for such payment through the date upon which such
payment is made by delivery of certificates for shares of Common Stock there fails to exist an
effective current Registration Statement (as defined in the Registration Rights Agreement) covering
the shares of Common Stock to be issued, or if an Event of Default hereunder exists and is
continuing, unless such requirement is otherwise waived in writing by the Holder in whole or in
part at the Holder’s option.

Common Stock Payment Guidelines. Notwithstanding anything to the contrary herein, if
the Borrower has elected to make a payment hereunder in shares of Common Stock and the closing
price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for any of the 11
trading days preceding the scheduled payment date was less than 115% of the Fixed Conversion Price,
then the Holder shall have the option to refuse to accept any portion of such payment in shares of
Common Stock.

Optional Prepayments in Common Stock. In the event that the average closing price of
the Common Stock on the Principal Market is greater than 115% of the Fixed Conversion Price for a
period of at least five (5) consecutive trading days, then the Borrower may, at its sole option,
provide the Holder written notice (a “Call Notice”) requiring the conversion at the Fixed
Conversion Price of all or a portion of the outstanding principal of this Note (subject to
compliance with Section 3.3 if payment is less than all of the principal and interest then due),
together with accrued interest on the amount being prepaid, as of the date set forth in such Call
Notice (the “Call Date”). The Call Date shall be at least eleven (11) trading days following the
date of the Call Notice. Provided that;

(i) on the Call Date there has been filed with the Securities and Exchange Commission
and declared effective a current registration statement covering the shares of Common Stock
which are to be issued pursuant to the Call Notice,

then on the Call Date the Borrower shall deliver to the Holder certificates evidencing the shares
of Common Stock issued in satisfaction of the principal and interest being retired.
Notwithstanding the foregoing, the Borrower’s right to issue shares of Common Stock in payment of
obligations under this Note shall be subject to the limitation that the number of shares of Common
Stock issued in connection with any Call Notice shall not exceed 25% of the aggregate dollar
trading volume of the Common Stock for the eleven (11) trading days immediately preceding the Call
Date (as such volume is reported by Bloomberg, L.P. If the price of the Common Stock falls below
115% of the Fixed Conversion Price during the eleven (11) trading day period immediately preceding
the Call Date, then the Holder will then be required to convert only such amount of the Note as
shall equal twenty five percent (25%) of the aggregate dollar trading volume (as such volume is
reported by Bloomberg L.P.) for each day that the Common Stock has exceeded 115% of the then
applicable Fixed Conversion Price.

The Borrower shall not be permitted to give the Holder more than one Call Notice under this
Note during any 22-day period.

Optional Prepayment in Cash. The Borrower will have the option of prepaying this Note
in full or in part at any time without penalty or premium.

HOLDER’S CONVERSION RIGHTS

Optional Conversion. Subject to the terms of this Article III, the Holder shall have
the right, but not the obligation, at any time until the Maturity Date, or thereafter during an
Event of Default (as defined in Article V), and, subject to the limitations set forth in Section
3.2 hereof, to convert all or any portion of the outstanding Principal Amount and/or accrued
interest and fees due and payable into fully paid and nonassessable shares of the Common Stock at
the Fixed Conversion Price. The shares of Common Stock to be issued upon such conversion are herein
referred to as the “Conversion Shares.”

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the
Holder shall not be entitled to convert pursuant to the terms of this Note an amount that would be
convertible into that number of Conversion Shares which would exceed the difference between the
number of shares of Common Stock beneficially owned by such Holder or issuable upon exercise of
warrants held by such Holder and 4.99% of the outstanding shares of Common Stock of the Borrower.
For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Holder may
void the Conversion Share limitation described in this Section 3.2 upon 75 days prior notice to the
Borrower or without any notice requirement upon an Event of Default.

Mechanics of Holder’s Conversion. In the event that the Holder elects to convert this
Note into Common Stock, the Holder shall give notice of such election by delivering an executed and
completed notice of conversion (“Notice of Conversion”) to the Borrower and such Notice of
Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest
and fees that are being converted. On each Conversion Date (as hereinafter defined) and in
accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the
Principal Amount, accrued interest and fees as entered in its records and shall provide written
notice thereof to the Borrower within two (2) business days after the Conversion Date. Each date
on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the
provisions hereof shall be deemed a Conversion Date (the “Conversion Date”). A form of Notice of
Conversion to be employed by the Holder is annexed hereto as Exhibit A. The Borrower will cause
the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by
crediting the account of the Holder’s designated broker with the Depository Trust Corporation
(“DTC”) through its Deposit Withdrawal Agent Commission (“DWAC”) system within three (3) business
days after receipt by the Borrower of the Notice of Conversion (the “Delivery Date”).

4. In the case of the exercise of the conversion rights set forth herein the
conversion privilege shall be deemed to have been exercised and the Conversion Shares
issuable upon such conversion shall be deemed to have been issued upon the date of receipt
by the Borrower of the Notice of Conversion. The Holder shall be treated for all purposes
as the record holder of such Common Stock, unless the Holder provides the Borrower written
instructions to the contrary.

Late Payments. The Borrower understands that a delay in the delivery of the shares of
Common Stock in the form required pursuant to this Article beyond the Delivery Date could result in
economic loss to the Holder. As compensation to the Holder for such loss, the Borrower agrees to
pay late payments to the Holder for late issuance of such shares in the form required pursuant to
this Article III upon conversion of the Note, in the amount equal to the greater of (i) $250 per
business day after the Delivery Date and (ii) the Holder’s actual damages from such delayed
delivery. The Borrower shall pay any payments incurred under this Section in immediately available
funds upon demand and, in the case of actual damages, accompanied by reasonable documentation of
the amount of such damages.

Adjustment Provisions. The Fixed Conversion Price and number and kind of shares or
other securities to be issued upon conversion determined pursuant to Section 3.1 shall be subject
to adjustment from time to time upon the happening of certain events while this conversion right
remains outstanding, as follows:

Reclassification, etc. If the Borrower at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of securities of any class
or classes, this Note, as to the unpaid Principal Amount and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase an adjusted number of such securities and
kind of securities as would have been issuable as the result of such change with respect to the
Common Stock immediately prior to such reclassification or other change.

Stock Splits, Combinations and Dividends. If the shares of Common Stock are
subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend
is paid on the Common Stock in shares of Common Stock, the Fixed Conversion Price shall be
proportionately reduced in case of subdivision of shares or stock dividend or proportionately
increased in the case of combination of shares, in each such case by the ratio which the total
number of shares of Common Stock outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event.

Share Issuances. Subject to the provisions of this Section 3.6, if the Borrower shall
at any time prior to the conversion or repayment in full of the Principal Amount issue any shares
of Common Stock to a person other than the Holder (otherwise than (i) pursuant to Subsections A or
B above; (ii) pursuant to options, warrants, or other obligations to issue shares outstanding on
the date hereof as disclosed to Holder in writing; or (iii) pursuant to options that may be issued
under any employee incentive stock option and/or any qualified stock option plan adopted by the
Borrower) for a consideration per share (the “Offer Price”) less than the Fixed Conversion Price in
effect at the time of such issuance, then the Fixed Conversion Price shall be immediately reset to
such lower Offer Price. For purposes hereof, the issuance of any security of the Borrower
convertible into or exercisable or exchangeable for Common Stock shall result in an adjustment to
the Fixed Conversion Price only upon the conversion, exercise or exchange of such securities.

Computation of Consideration. For purposes of any computation respecting consideration
received pursuant to Subsection C above, the following shall apply:

(a) in the case of the issuance of shares of Common Stock for cash, the consideration shall be
the amount of such cash, provided that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Borrower for any underwriting of the issue or otherwise
in connection therewith;

(b) in the case of the issuance of shares of Common Stock for a consideration in whole or in
part other than cash, the consideration other than cash shall be deemed to be the fair market value
thereof as determined in good faith by the Board of Directors of the Borrower (irrespective of the
accounting treatment thereof); and

(c) in the case of the issuance of securities convertible into or exchangeable for shares of
Common Stock, no adjustment to the Offer Price shall be made until actual exercise of any such
rights of conversion or exchange. Upon any such exercise, the aggregate consideration received for
such securities shall be deemed to be the consideration received by the Borrower for the issuance
of such securities plus the additional minimum consideration, if any, to be received by the
Borrower upon the conversion or exchange thereof (the consideration in each case to be determined
in the same manner as provided in clauses (a) and (b) of this Subsection (D)).

Reservation of Shares. During the period the conversion right exists, the Borrower
will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents
that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
The Borrower agrees that its issuance of this Note shall constitute full authority to its officers,
agents, and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of Common Stock upon the
conversion of this Note.

Registration Rights. The Holder has been granted registration rights with respect to
the shares of Common Stock issuable upon conversion of this Note as more fully set forth in a
Registration Rights Agreement dated the date hereof.

EVENTS OF DEFAULT

5. The occurrence of any of the following events is an Event of Default (“Event of
Default”):

Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay when due
any installment of principal, interest or other fees hereon or on any other promissory note issued
pursuant to the Security Agreement, when due in accordance with the terms of such note.

Breach of Covenant. The Borrower breaches any covenant or other term or condition of
this Note in any material respect and such breach, if subject to cure, continues for a period of
thirty (30) days after the occurrence thereof.

Breach of Representations and Warranties. Any material representation or warranty of
the Borrower made herein, or the Security Agreement, or in any Ancillary Agreement shall be
materially false or misleading.

Stop Trade. An SEC stop trade order or Principal Market trading suspension of the
Common Stock shall be in effect for 5 consecutive days or 5 days during a period of 10 consecutive
days, excluding in all cases a suspension of all trading on a Principal Market, provided
that the Borrower shall not have been able to cure such trading suspension within 30 days of the
notice thereof or list the Common Stock on another Principal Market within 60 days of such notice.
The “Principal Market” for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ
SmallCap Market, NASDAQ National Market System, American Stock Exchange, or New York Stock Exchange
(whichever of the foregoing is at the time the principal trading exchange or market for the Common
Stock), or any securities exchange or other securities market on which the Common Stock is then
being listed or traded.

Default Under Related Agreement. The occurrence of an Event of Default under and as
defined in the Security Agreement.

6. 4.6 Failure to Deliver Common Stock or Replacement Note. The Borrower’s
failure to timely deliver Common Stock to the Holder pursuant to and in the form required
by this Note, and Section 9 of the Securities Purchase Agreement, or if required, a
replacement Note if such failure to timely deliver Common Stock shall not be cured within
two (2) days or such failure to deliver a replacement Note is not cured within seven (7)
Business Days.

7. 4.7 Payment Grace Period. The Borrower shall have a three (3) business day
grace period to pay any monetary amounts due under this Note or the Purchase Agreement or
any Related Document, after which grace period a default interest rate of five percent (5%)
per annum above the then applicable interest rate hereunder shall apply to the monetary
amounts due.

DEFAULT PAYMENTS

Default Payment. If an Event of Default occurs, the Holder, at its option, may elect,
in addition to all rights and remedies of Holder under the Security Agreement and all obligations
of Borrower under the Security Agreement, to require the Borrower to make a Default Payment
(“Default Payment”). The Default Payment shall be the outstanding principal amount of the Note,
plus accrued but unpaid interest, all other fees then remaining unpaid, and all other amounts
payable hereunder.

Default Payment Date and Default Notice Period. The Default Payment shall be due and
payable on the fifth business day after the date written notice is sent from the Holder to the
Borrower of an Event of Default as defined in Article IV (“Default Payment Date”). The period
between the date of the written notice from the Holder to the Borrower of an Event of Default and
the Default Payment Date shall be the “Default Notice Period.” If during the Default Notice
Period, the Borrower cures the Event of Default, the Event of Default will no longer exist and any
rights the Holder had pertaining to the Event of Default will no longer exist. If the Event of
Default is not cured during the Default Notice Period, all amounts payable hereunder shall be due
and payable on the Default Payment Date, all without further demand, presentment or notice, or
grace period, all of which hereby are expressly waived.

 Default Interest Rate. Following the occurrence and during the continuance of an
Event of Default, interest on this Note shall automatically be increased to one and one half
percent (1.5%) per month, and all outstanding Obligations, including unpaid interest, shall
continue to accrue interest from the date of such Event of Default at such interest rate applicable
to such Obligations until such Event of Default is cured or waived.

Cumulative Remedies. The remedies under this Note shall be cumulative.

MISCELLANEOUS

Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder
hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

Notices. Any notice herein required or permitted to be given shall be in writing and
provided in accordance with the terms of the Security Agreement.

 Amendment Provision. The term “Note” and all reference thereto, as used throughout
this instrument, shall mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented, and any successor instrument as it may be amended
or supplemented.

Assignability. This Note shall be binding upon the Borrower and its successors and
assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be
assigned by the Holder in accordance with the requirements of the Security Agreement.

Cost of Collection. If default is made in the payment of this Note, the Borrower
shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of New York, without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of New York or in the federal courts located in
the state of New York. Both parties and the individual signing this Note on behalf of the Borrower
agree to submit to the jurisdiction of such courts. 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 Note 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 unenforceability of
any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Borrower in any other
jurisdiction to collect on the Borrower’s obligations to Holder, to realize on any collateral or
any other security for such obligations, or to enforce a judgment or other court order in favor of
Holder.

Maximum Payments. Nothing contained herein shall be deemed to establish or require
the payment of a rate of interest or other charges in excess of the maximum permitted by applicable
law. In the event that the rate of interest required to be paid or other charges hereunder exceed
the maximum permitted by such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

Security Interest. The Holder of this Note has been granted a security interest in
certain assets of the Borrower more fully described in a Security Agreement dated as of September
11, 2003.

Construction. Each party acknowledges that its legal counsel participated in the
preparation of this Note 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
Note to favor any party against the other.

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

8.

1

IN WITNESS WHEREOF, the Borrower has caused this Secured Convertible Revolving Note to
be signed in its name effective as of this    day of    , 200   .

ELECTRIC CITY CORP.

By:   

Name:   

Title:   

WITNESS:

2

260593.1 044202-321362

NOTICE OF CONVERSION

(To be executed by the Holder in order to convert the Note)

9. The undersigned hereby elects to convert $   of the principal and $   
of the interest due on the Secured Convertible Revolving Note issued by Electric City Corp.
on    , 200   into Shares of Common Stock of Electric City Corp. (the “Borrower”)
according to the conditions set forth in such Note, as of the date written below.

	 	 	 	 	 
	 
	 	 	 	 
	Date of Conversion:
	 	 	 	 
	 
	 	 	 	 
	Conversion Price:
	 	 	 	 
	 
	 	 	 	 
	Shares To Be Delivered:
	 	 	 	 
	 
	 	 	 	 
	Signature:
	 	 	 	 
	 
	 	 	 	 
	Print Name:
	 	 	 	 
	 
	 	 	—	 
	Address:
	 	 	—	 
	 
	 	 	 	 
	Holder DWAC instructions
	 	 	 	 

10.

260593.1 044202-321363

3

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