Document:

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                                  EXHIBIT 10.4
                               EQUIPMENT TERM NOTE

$500,000.00                                                     July _____, 2000
                                                               Chicago, Illinois

         On or before July _____, 2003, Electric City Corp., a Delaware
corporation, (the "Undersigned"), whose address is1280 Landmeier Road, Elk Grove
Village, Illinois 60007, for value received, promises to pay to the order of
LaSalle Bank National Association, a national banking association (hereinafter,
together with any holder hereof, called "Lender"), whose address is 135 South
LaSalle Street, Chicago, Illinois 60603 the principal sum of FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($500,000.00). The undersigned also promises to pay
to the Lender interest on the unpaid principal amount hereof from time to time
outstanding from the date hereof until maturity (whether by acceleration or
otherwise) and, after maturity, until paid, at the interest rates and at such
times as are provided in that certain Loan Agreement, dated as of June 28, 2000
between the Undersigned and the Lender (the "Loan Agreement"). This Note is
executed pursuant to the Loan Agreement and any and all amendments thereto, in
which the terms and conditions of the Equipment Term Loan are set forth. Terms
not otherwise defined herein shall have the meanings assigned thereto in the
Loan Agreement.

         The principal amount of the indebtedness evidenced hereby shall be
payable in _____ equal installments of $__________ on the first day of each
month (each such date a "Payment Date") with the first payment due on
__________________. Interest on the unpaid principal balance hereof shall be
payable on each Payment Date. After maturity, whether by acceleration or
otherwise, interest shall be payable on demand. Interest shall be computed on
the basis of a year consisting of 360 days and shall be paid for the actual
number of days elapsed, unless otherwise specified herein.

         Principal and interest shall be paid to the Lender at its address set
forth above or at such other place as the holder of this Note shall designate in
writing to the Undersigned. Payments of both principal and interest are to be
made in lawful money of the United States of America in same day or immediately
available funds to the account designated by the Lender.

         This Note is secured by, among other things, that certain Security
Agreement dated as of June 28, 2000 by and between the Undersigned and the
Lender (the "Security Agreement"); and that certain Mortgage dated as of July
_____, 2000 by and between the Undersigned and the Lender (the "Mortgage"; with
the Loan Agreement, the Security Agreement and the Mortgage, together with all
other documents executed in connection with the Loan Agreement hereinafter
collectively referred to as the "Ancillary Agreements"). The undersigned hereby
acknowledges and agrees that a default hereunder shall be deemed a default under
the Ancillary Agreements, including that certain Term (Mortgage) Note dated as
of July _____, 2000 in the original principal amount of $500,000.00 given by the
Undersigned to the Lender, and that certain Note dated June 28, 2000 in the
original principal amount of $2,000,000.00 given by the Undersigned to the
Lender.

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         The Undersigned, without notice or demand of any kind, shall be in
default hereunder upon the occurrence and during the continuance of any Event of
Default set forth in the Loan Agreement, and without demand or notice of any
kind, the entire unpaid amount of all Liabilities shall become immediately due
and payable at the option of the Lender, and the Lender may take any action or
avail itself of any remedy set forth in the Loan Agreement.

         UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
THE UNDERSIGNED WAIVES THE BENEFIT OF ANY LAW, TO THE EXTENT PERMITTED BY LAW,
THAT WOULD OTHERWISE RESTRICT OR LIMIT LENDER IN THE EXERCISE OF ITS RIGHT,
WHICH IS HEREBY ACKNOWLEDGED, TO APPROPRIATE WITHOUT NOTICE AND REGARDLESS OF
THE COLLATERAL, AT ANY TIME HEREAFTER, ANY INDEBTEDNESS MATURED OR UNMATURED,
OWING FROM LENDER TO THE UNDERSIGNED. UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, THE LENDER MAY, WITHOUT DEMAND OR NOTICE OF
ANY KIND, APPROPRIATE AND APPLY TOWARD THE PAYMENT OF SUCH OF THE OBLIGATIONS,
AND IN SUCH ORDER OF APPLICATION, AS THE LENDER MAY, FROM TIME TO TIME ELECT,
ANY AND ALL SUCH BALANCES, CREDITS, DEPOSITS, ACCOUNTS, MONEYS, CASH EQUIVALENTS
AND OTHER ASSETS, OF OR IN THE NAME OF THE UNDERSIGNED THEN OR THEREAFTER WITH
THE LENDER.

         UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
THE UNDERSIGNED RATIFIES AND CONFIRMS WHATEVER LENDER MAY DO WITH RESPECT TO THE
COLLATERAL AND AGREES THAT LENDER SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT
OR MISTAKES OF FACT OR LAW MADE IN GOOD FAITH. THE LENDER AND THE UNDERSIGNED
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT EITHER OR
ANY MAY HAVE TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE LOAN AGREEMENT OR
ANY OF THE OTHER LIABILITIES, OR THE COLLATERAL, OR ANY AGREEMENT, EXECUTED OR
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THE LOAN AGREEMENT OR HEREWITH
OR ANY COURSE OF CONDUCT OR COURSE OF DEALING, IN WHICH THE LENDER AND THE
UNDERSIGNED ARE ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDER GRANTING ANY FINANCIAL ACCOMMODATION TO THE UNDERSIGNED.

         The Undersigned waives any and all presentment, demand, notice of
dishonor, protest, and all other notices and demands in connection with the
enforcement of Lender's rights hereunder and under the Loan Agreement, and
hereby consents to, and waives notice of release, with or without consideration,
of the Undersigned or of any Collateral.

         The Lender may at any time transfer this Note and Lender's rights in
the Loan Agreement and in any or all of the Collateral, and Lender thereafter
shall be relieved from all liability with respect to such Collateral.

                                     2

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         TO INDUCE THE LENDER TO MAKE THE LOAN EVIDENCED BY THIS NOTE, THE
UNDERSIGNED IRREVOCABLY AGREES THAT, ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY
AS A RESULT OR IN CONSEQUENCE OF THIS NOTE, THE LOAN AGREEMENT OR ANY OTHER
AGREEMENT WITH THE LENDER, OR THE COLLATERAL, SHALL BE INSTITUTED AND LITIGATED
ONLY IN COURTS HAVING SITUS IN THE CITY OF CHICAGO, ILLINOIS, AND THE
UNDERSIGNED HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE
OR FEDERAL COURT LOCATED AND HAVING ITS SITUS IN SAID CITY, AND WAIVES ANY
OBJECTION BASED ON FORUM NONCONVENIENS.

         The Equipment Term Loan evidenced hereby has been made and this Note
has been delivered at the Lender's main office. This Note shall be governed and
construed in accordance with the laws of the State of Illinois, in which state
it shall be performed, and shall be binding upon the Undersigned and its
successors and assigns. If this Note contains any blanks when executed by the
Undersigned, the Lender is hereby authorized, without notice to the Undersigned,
to complete any such blanks according to the terms upon which the Equipment Term
Loan was granted. Wherever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or be invalid under
such law, such provision shall be severable, and be ineffective to the extent of
such prohibition or invalidity, without invalidating the remaining provisions of
this Note. If more than one party shall execute this Note, the term
"Undersigned" as used herein shall mean all parties signing this Note, and each
one of them, and all such parties, their respective heirs, executors,
administrators, successors and assigns, shall be, jointly and severally,
obligated hereunder.

         As used herein, all provisions shall include the masculine, feminine,
neuter, singular and plural thereof, wherever the context and facts require such
construction and in particular the word "Undersigned" shall be so construed.

                  IN WITNESS WHEREOF, the Undersigned has executed this
Equipment Term Note on the date above set forth.

                                         ELECTRIC CITY CORP.

                                         By:  /s/ Jeffrey Mistarz
                                              ----------------------------------
                                         Its: Chief Financial Officer
                                              ----------------------------------

                                    3<PAGE>

                                  Exhibit 10.5

                         SUBORDINATED SECURED TERM NOTE

$972,000                                                            May 30, 2000

          FOR VALUE RECEIVED, the undersigned, Electric City Corporation, an
Illinois corporation (the "Maker"), hereby unconditionally promises to pay to
the order of Joseph Marino(the "Holder"), at the office of Holder at
_______________________, Illinois _______, or at such other place as Holder may
from time to time designate to the Maker in writing, in lawful money of the
United States of America and in immediately available funds, the principal sum
of NINE HUNDRED SEVENTY-TWO THOUSAND AND NO/100 DOLLARS ($972,000). This
Subordinated Secured Term Note shall bear interest at the rate of ten percent
(10%) per annum on the unpaid principal amount hereof outstanding from time to
time, from the date hereof and shall be payable in equal monthly installments of
principle and interest in the amount of FORTY-FOUR THOUSAND, NINE HUNDRED TWENTY
SIX AND 56/100 DOLLARS ($44,927.56), with the first installment due and payable
on June 24, 2000, and the final installment due and payable on May 24, 2002, if
not sooner paid. Upon the occurrence and during the continuance of a default as
hereinafter described, the Maker shall pay interest on the outstanding principal
balance of this Subordinated Secured Term Note at the rate of fifteen percent
(15%) per annum. From and after the date when the principal balance hereof
becomes due and payable, whether by acceleration or otherwise, interest hereon
shall be payable on demand.

          Holder acknowledges and agrees that this Subordinated Secured Term
Note and any right to payment hereunder and the security interests granted under
the General Security Agreement of even date herewith may be subordinated in
right only to the extent and in the manner provided below to the prior payment
and satisfaction in full of the Senior Indebtedness (as defined hereinafter).
The term "Senior Indebtedness" shall mean, including but not limited to, amounts
due to Maker's primary corporate lender ("Senior Lender") the principal and
interest on, and any and all other fees, expenses, reimbursement obligations and
other amounts due pursuant to the terms of all agreements, documents and
instruments providing for, creating, securing, or evidencing: (i) commercial or
institutional indebtedness of the Maker now existing or hereafter incurred or
created, or (ii) all deferrals, renewals, extensions, replacements, refinancing
or refundings of, and amendments, modifications, and supplements to, such
commercial or institutional indebtedness of the Maker. The Senior Lender shall
be one (1) commercial or institutional lender providing financing for the
Debtor. Holder agrees to enter into a subordination agreement in form and
substance acceptable to the Senior Lender, subject to the terms hereof, upon
written request of the Maker. The term Senior Security Interests shall mean any
security interests granted by Maker in favor of the Senior Lender. Unless the
Maker has received notice from the Senior Lender of the occurrence and
continuation of an event of default under any Senior Indebtedness, the Maker may
pay, and the Holder may receive, regularly scheduled payments under this
Subordinated Secured Term Note as and when due in accordance with its terms.

          Whenever any payment to be made hereunder shall be stated to be due on
a day which is not a business day, the due date thereof shall be extended to the
next succeeding business day and, with respect to the payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.

          In no contingency or event whatsoever shall interest charged
hereunder, however such interest may be characterized or computed, exceed the
highest rate permissible under any law

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which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Holder has
received interest hereunder in excess of the highest rate applicable hereto,
such excess shall be applied to repayment of principal or refunded as Holder
shall decide.

          All Obligations, and all rights, powers and remedies of the Holder,
expressed herein shall be in addition to, and not in limitation of, those
provided by law or in any written agreement or instrument (other than this
Subordinated Secured Term Note) relating to any of the Obligations.

          Maker shall be in default hereunder if: (1) any amount payable on any
of the Obligations, or on the obligations of any obligor hereunder, is not paid
within five (5) business days after written notice from Holder that such amount
is past due; or (2) Maker shall otherwise fail to perform any of the material
promises to be performed by it hereunder or under any other security agreement
or other agreement with Holder and Maker has not cured such failure within
thirty (30) days after written notice thereof from Holder; or (3) Maker
dissolves and liquidates; or (4) Maker, or any other party liable with respect
to the Obligations, or any guarantor or accommodation endorser or third party
pledgor, shall make any assignment for the benefit of creditors, or there shall
be commenced any bankruptcy, receivership, insolvency, reorganization,
dissolution or liquidation proceedings by or against, or the entry of any
judgment in excess of $100,000, levy, attachment, garnishment or other process
against Maker or any guarantor, or any other party liable with respect to the
Obligations, or accommodation endorser or third party pledgor for any of the
Obligations or any collateral under a separate security agreement signed by any
one of them, unless released, satisfied, stayed or dismissed within thirty (30)
days of written notice from Holder; or (5) any oral or written warranty,
representation, certificate or statement of Maker to Holder is untrue and Maker
fails to cure the same within thirty (30) days of written notice from Holder.

          Whenever Maker shall be in default as aforesaid, upon written demand
of Holder, the entire unpaid amount of all Obligations shall become immediately
due and payable; and Holder may exercise, from time to time, any and all rights
and remedies available to it under the Uniform Commercial Code of Illinois, or
otherwise available to it, including those available under any written
instrument (in addition to this Subordinated Secured Term Note) relating to any
of the Obligations or any security therefor.

          Maker and any and all endorsers and accommodation parties, and each of
them, waive any and all presentment, demand, notice of dishonor, protest, and
all other notices and demands in connection with the enforcement of Holder's
rights hereunder, except as otherwise provided herein. No Obligation shall be
waived by the Holder except in writing. No delay on the part of the Holder in
the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by the Holder of any right or remedy shall preclude
other or further exercise thereof, or the exercise of any other right or remedy.
Maker hereby represents that this Subordinated Secured Term Note (i) is valid,
binding and enforceable in accordance with its provisions, and no conditions
precedent exist to its legal effectiveness; (ii) contains the entire agreement
between Maker and Holder; and (iii) is the final expression of their intention.
No modification, discharge, termination or waiver or any of the provisions
hereof shall be binding upon the Holder, except as expressly set forth in
writing duly signed and delivered on behalf of the Holder.

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          This Subordinated Secured Term Note shall be governed and construed in
accordance with the laws of the State of Illinois, in which state it shall be
performed, and shall be binding upon Maker and its legal representatives,
successors and assigns. Wherever possible, each provision of this Subordinated
Secured Term Note shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Subordinated Secured
Term Note shall be prohibited by or be invalid under such law, such provision
shall be severable, and be ineffective to the extent of such prohibition or
invalidity, without invalidating the remaining provisions of this Subordinated
Secured Term Note.

          IN WITNESS WHEREOF, Maker has signed this Subordinated Secured Term
Note as of the above-referenced date.

                                        ELECTRIC CITY CORPORATION

                                        By:       /s/ Jeffrey Mistarz
                                                  ------------------------------
                                        Name:     Jeffrey Mistarz
                                                  ------------------------------
                                        Title:    Chief Financial Officer
                                                  ------------------------------

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