Document:

Exhibit
10.8

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration
Rights Agreement (this “Agreement”) is made and entered into as of September
11, 2003, by and between Electric City Corp., a Delaware corporation (the
“Company”), and Laurus Master Fund, Ltd. (the “Purchaser”).

 

This Agreement is
made pursuant to the Security Agreement, dated as of the date hereof, by and
between the Purchaser and the Company (the “Security Agreement”), and pursuant
to the Notes and the Warrants referred to therein.

 

The Company and
the Purchaser hereby agree as follows:

 

1.                                       Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Security Agreement shall have the
meanings given such terms in the Security Agreement.  As used in this Agreement, the following terms shall have the
following meanings:

 

“Commission” means the Securities and Exchange
Commission.

 

“Common
Stock” means shares of the Company’s common stock, par value
$0.0001 per share.

 

“Effectiveness Date”
means the 90th day following the applicable Filing Date.

 

“Effectiveness Period”
shall have the meaning set forth in Section 2(a).

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended,
and any successor statute.

 

“Filing Date”
means, with respect to (1) the Registration Statement which is required to be
filed with respect to the Loans made on the initial funding date, the date
which is thirty (30) days after such initial funding date, and (2) with respect
to each $250,000 tranche of Loans funded after the initial funding date, the
date which is forty five (45)  days
after such funding of such additional $250,000 of Loans evidenced by a Minimum
Borrowing Note thereafter.

 

“Holder” or “Holders”
means the Purchaser or any of its affiliates or transferees to the extent any of
them hold Registrable Securities.

 

“Indemnified Party”
shall have the meaning set forth in Section 5(c).

 

“Indemnifying Party”
shall have the meaning set forth in Section 5(c).

 

“Notes” has the
meaning set forth in the Security Agreement.

 

“Proceeding” means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

 

 

“Prospectus” means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.

 

“Registrable Securities”
means the shares of Common Stock issued upon the conversion of the each Note
and issuable upon exercise of the Warrants.

 

“Registration Statement”
means each registration statement required to be filed hereunder, including the
Prospectus therein, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.

 

“Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

“Rule 415” means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

“Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

“Securities
Act” means the Securities Act of 1933, as amended, and any
successor statute.

 

“Trading Market” means any of the NASD OTC Bulletin
Board, NASDAQ SmallCap Market, the Nasdaq National Market, the American Stock
Exchange or the New York Stock Exchange

 

“Warrants” means
the Common Stock purchase warrants issued pursuant to the Security Agreement.

 

2.                                       Registration.

 

(a)                                  On
or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415.  Each Registration Statement shall be on Form
S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith).  The Company shall cause each Registration Statement to become

 

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effective and remain
effective as provided herein.  The
Company shall use its reasonable commercial efforts to cause the first such
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
the Effectiveness Date.  The Company
shall use its reasonable commercial efforts to cause any subsequent such
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
sixty (60) days after the filing thereof. 
The Company shall use its reasonable commercial efforts to keep each
Registration Statement continuously effective under the Securities Act until
the date which is the earlier date of when (i) all Registrable Securities
covered by such Registration Statement have been sold or (ii) all Registrable
Securities covered by such Registration Statement may be sold immediately
without registration under the Securities Act and without volume restrictions
pursuant to Rule 144(k), as determined by the counsel to the Company pursuant
to a written opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Holders (each, an “Effectiveness Period”).

 

(b)                                 If:
(i) any Registration Statement is not filed on or prior to the applicable
Filing Date for such Registration Statement; (ii) a Registration Statement
filed hereunder is not declared effective by the Commission by the date
required hereby with respect to such Registration Statement; (iii) after a
Registration Statement is filed with and declared effective by the Commission,
such Registration Statement ceases to be effective (by suspension or otherwise)
as to all Registrable Securities to which it is required to relate at any time
prior to the expiration of the Effectiveness Period applicable to such
Registration Statement (without being succeeded immediately by an additional
Registration Statement filed and declared effective) for a period of time which
shall exceed 30 days in the aggregate per year or more than 20 consecutive
calendar days (defined as a period of 365 days commencing on the date such
Registration Statement is declared effective); or (iv) the Common Stock is not
listed or quoted, or is suspended from trading on any Trading Market for a
period of three (3) consecutive Trading Days (provided the Company shall not
have been able to cure such trading suspension within 30 days of the notice
thereof or list the Common Stock on another Trading Market); (any such failure
or breach being referred to as an “Event,” and for purposes of clause (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii) the
date which such 30 day or 20 consecutive day period (as the case may be) is
exceeded, or for purposes of clause (iv) the date on which such three (3)
Trading Day period is exceeded, being referred to as “Event Date”), then until
the applicable Event is cured, the Company shall pay to each Holder an amount
in cash, as liquidated damages and not as a penalty, equal to 2.0% for each
thirty (30) day period (prorated for partial periods) on a daily basis of the
original principal amount of each applicable Note.  While such Event continues, such liquidated damages shall be paid
not less often than each thirty (30) days. 
Any unpaid liquidated damages as of the date when an Event has been
cured by the Company shall be paid within three (3) days following the date on
which such Event has been cured by the Company.

 

3.                                       Registration
Procedures.  If and whenever
the Company is required by the provisions hereof to effect the registration of
any Registrable Securities under the Securities Act, the Company will, as
expeditiously as possible:

 

(a)                                  prepare
and file with the Commission a registration statement with respect to such
Registrable Securities, respond as promptly as possible to any comments
received from 

 

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the Commission, and use
its best efforts to cause such Registration Statement to become and remain
effective for the Effectiveness Period with respect thereto, and promptly
provide to the Purchaser copies of all filings and Commission letters of
comment relating thereto;

 

(b)                                 prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may
be necessary to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such Registration
Statement and to keep such Registration Statement effective until the
expiration of the Effectiveness Period applicable to such Registration
Statement;

 

(c)                                  furnish
to the Purchaser such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the
Purchaser reasonably may request to facilitate the public sale or disposition
of the Registrable Securities covered by such Registration Statement;

 

(d)                                 use
its commercially reasonable efforts to register or qualify the Purchaser’s
Registrable Securities covered by such Registration Statement under the
securities or “blue sky” laws of such jurisdictions within the United States as
the Purchaser may reasonably request, provided, however, that the
Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;

 

(e)                                  list
the Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed;

 

(f)                                    immediately
notify the Purchaser at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event of
which the Company has knowledge as a result of which the Prospectus contained
in such Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing; and

 

(g)                                 make
available for inspection by the Purchaser and any attorney, accountant or other
agent retained by the Purchaser, all publicly available, non-confidential
financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company’s officers, directors and employees to
supply all publicly available, non-confidential information reasonably
requested by the attorney, accountant or agent of the Purchaser.

 

4.                                       Registration
Expenses.  All expenses
relating to the Company’s compliance with Sections 2 and 3 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel and independent public accountants for the
Company, fees and expenses (including reasonable counsel fees) incurred in connection
with complying with state securities or “blue sky” laws, fees of the NASD,
transfer taxes, fees of transfer agents and registrars, fees of, and
disbursements incurred by, one counsel for the Holders are called “Registration
Expenses”. All selling commissions applicable to the sale of

 

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Registrable Securities,
including any fees and disbursements of any special counsel to the Holders
beyond those included in Registration Expenses, are called “Selling
Expenses.”  The Company shall only be
responsible for Registration Expenses.

 

5.                                       Indemnification.

 

(a)                                  In
the event of a registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, the Company will indemnify and hold harmless
the Purchaser, and its officers, directors and each other person, if any, who
controls the Purchaser within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which the
Purchaser, or such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Purchaser, and each such person
for any reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by or on behalf of
the Purchaser or any such person in writing specifically for use in any such
document.

 

(b)                                 In
the event of a registration of the Registrable Securities under the Securities
Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless
the Company, and its officers, directors and each other person, if any, who
controls the Company within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact which was furnished in writing by the Purchaser
to the Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and each such
person for any reasonable legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Purchaser will be
liable in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished in writing to the Company by or on behalf of the
Purchaser specifically for use in any such document.  Notwithstanding the provisions of this paragraph, the Purchaser
shall not be required to indemnify any person or entity in excess of the 

 

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amount of the aggregate
net proceeds received by the Purchaser in respect of Registrable Securities in
connection with any such registration under the Securities Act.

 

(c)                                  Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof is
to be made against a party hereto obligated to indemnify such Indemnified Party
(an “Indemnifying Party”), notify the Indemnifying Party in writing thereof,
but the omission so to notify the Indemnifying Party shall not relieve it from
any liability which it may have to such Indemnified Party other than under this
Section 5(c) and shall only relieve it from any liability which it may have to
such Indemnified Party under this Section 5(c) if and to the extent the
Indemnifying Party is prejudiced by such omission. In case any such action
shall be brought against any Indemnified Party and it shall notify the Indemnifying
Party of the commencement thereof, the Indemnifying Party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel satisfactory to such Indemnified Party, and, after
notice from the Indemnifying Party to such Indemnified Party of its election so
to assume and undertake the defense thereof, the Indemnifying Party shall not
be liable to such Indemnified Party under this Section 5(c) for any legal
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof; if the Indemnified Party retains its own counsel, then the
Indemnified Party shall pay all fees, costs and expenses of such counsel, provided,
however, that, if the defendants in any such action include both the
indemnified party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the Indemnifying Party
or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the Indemnifying Party as
incurred.

 

(d)                                 In
order to provide for just and equitable contribution in the event of joint
liability under the Securities Act in any case in which either (i) the
Purchaser, or any officer, director or controlling person of the Purchaser,
makes a claim for indemnification pursuant to this Section 5 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of
the Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that
the Purchaser is responsible only for the portion represented by the percentage
that the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A)
the Purchaser will not be required to contribute any amount in excess of the
public offering price of all such securities offered by it pursuant to such
Fegistration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation 

 

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(within the meaning of
Section 10(f) of the Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.

 

6.                                       Representations
and Warranties.

 

(a)                                  The
Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of
the Exchange Act and, except with respect to certain matters which the Company
has disclosed to the Purchaser on Exhibit 12(j) to the Security
Agreement, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act.  The Company has
filed (i) its Annual Report on Form 10-K for the fiscal year ended December 31,
2002 and (ii) its Quarterly Report on Form 10-Q for the fiscal quarters ended
March 31, 2003 and June 30, 2003 (collectively, the “SEC Reports”).  Each SEC Report was, at the time of its
filing, in substantial compliance with the requirements of its respective form
and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective filing dates,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of
the Company included in the SEC Reports comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and regulations with
respect thereto.  Such financial statements
have been prepared in accordance with generally accepted accounting principles
(“GAAP”) applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed) and fairly present in all material
respects the financial condition, the results of operations and the cash flows
of the Company and its subsidiaries, on a consolidated basis, as of, and for,
the periods presented in each such SEC Report.

 

(b)                                 The
Common Stock is listed for trading on the American Stock Exchange and satisfies
all requirements for the continuation of such listing.  The Company has not received any notice that
its Common Stock will be delisted from the American Stock Exchange or that the
Common Stock does not meet all requirements for the continuation of such
listing.

 

(c)                                  Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security (other than a concurrent offering to
the Purchaser under a Note Purchase Agreement between the Company and the
Purchaser dated as of September 11, 2003) under circumstances that would cause
the offering of the Securities pursuant to the Security Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from selling the Common Stock pursuant to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or subsidiaries take any action or steps that would cause the offering of the
Common Stock to be integrated with other offerings (other than such concurrent
offering to the Purchaser).

 

7

 

(d)                                 The
Warrants, the Notes and the shares of Common Stock which the Purchaser may
acquire pursuant to the Warrants and the Notes are all restricted securities
under the Securities Act as of the date of this Agreement.  The Company will not issue any stop transfer
order or other order impeding the sale and delivery of any of the Registrable
Securities at such time as such Registrable Securities are registered for
public sale or an exemption from registration is available, except as required
by federal or state securities laws.

 

(e)                                  The
Company understands the nature of the Registrable Securities issuable upon the
conversion of each Note and the exercise of each Warrant and recognizes that
the issuance of such Registrable Securities may have a potential dilutive
effect.  The Company specifically
acknowledges that its obligation to issue the Registrable Securities is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the Company.

 

(f)                                    Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material respect.

 

(g)                                 The
Company will at all times have authorized and reserved a sufficient number of
shares of Common Stock for the full conversion of each Note and exercise of the
Warrants.

 

7.                                       Miscellaneous.

 

(a)                                  Remedies.  In the event of a breach by the Company or
by a Holder, of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement.

 

(b)                                 No Piggyback
on Registrations.  Except as
and to the extent specified in Schedule 7(b) hereto, neither the Company
nor any of its security holders (other than the Holders in such capacity
pursuant hereto) may include securities of the Company in any Registration
Statement other than the Registrable Securities, and the Company shall not
after the date hereof enter into any agreement providing any such right for
inclusion of shares in the Registration Statement to any of its security
holders. Except as and to the extent specified in Schedule 7(b) hereto,
the Company has not previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person that
have not been fully satisfied.

 

(c)                                  Compliance.  Each Holder covenants and agrees that it
will comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
any Registration Statement.

 

(d)                                 Discontinued
Disposition.  Each Holder agrees
by its acquisition of such Registrable Securities that, upon receipt of a
notice from the Company of the occurrence of a 

 

8

 

Discontinuation Event (as
defined below), such Holder will forthwith discontinue disposition of such
Registrable Securities under the applicable Registration Statement until such
Holder’s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement.  The Company
may provide appropriate stop orders to enforce the provisions of this
paragraph.  For purposes of this Section
7(d), a “Discontinuation Event” shall mean (i) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement (the
Company shall provide true and complete copies thereof and all written
responses thereto to each of the Holders); (ii) any request by the Commission
or any other Federal or state governmental authority for amendments or
supplements to such Registration Statement or Prospectus or for additional
information; (iii) the issuance by the Commission of any stop order suspending
the effectiveness of such Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and/or (v) the occurrence of
any event or passage of time that makes the financial statements included in
such Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to such Registration Statement,
Prospectus or other documents so that, in the case of such Registration
Statement or Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

(e)                                  Piggy-Back
Registrations.  If at any
time during any Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities required to be covered
during such Effectiveness Period and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans, then the Company shall send to each Holder
written notice of such determination and, if within fifteen (15) days after
receipt of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such holder requests to be registered, to the extent the
Company may do so without violating registration rights of others which exist
as of the date of this Agreement, subject to customary underwriter cutbacks
applicable to all holders of registration rights and subject to obtaining any
required the consent of any selling stockholder(s) to such inclusion under such
registration statement.

 

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(f)                                    Amendments
and Waivers.  The provisions
of this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of certain Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.

 

(g)                                 Notices.  Any notice or request hereunder may be given
to the Company or the Purchaser at the respective addresses set forth below or
as may hereafter be specified in a notice designated as a change of address
under this Section 7(g).  Any notice or
request hereunder shall be given by registered or certified mail, return
receipt requested, hand delivery, overnight mail or telecopy (confirmed by
mail).  Notices and requests shall be,
in the case of those by hand delivery, deemed to have been given when delivered
to any party to whom it is addressed, in the case of those by mail or overnight
mail, deemed to have been given three (3) business days after the date when
deposited in the mail or with the overnight mail carrier, and, in the case of a
telecopy, when confirmed.  The address
for such notices and communications shall be as follows:

 

	
  If to the
  Company:

  	
   

  	
  Electric City
  Corporation

  
	
   

  	
   

  	
  1280 Landmeier
  Road

  
	
   

  	
   

  	
  Elk Grove
  Village, Illinois 60007

  
	
   

  	
   

  	
  Attention:  Chief Financial Officer

  
	
   

  	
   

  	
  Facsimile:  847-437-4969

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Andrew H.
  Connor, Esq.

  
	
   

  	
   

  	
  Schwartz,
  Cooper, Greenberger & Krauss, Chtd.

  
	
   

  	
   

  	
  180 North
  LaSalle Street

  
	
   

  	
   

  	
  Chicago,
  Illinois  60601

  
	
   

  	
   

  	
  Facsimile:  312-782-8416

  
	
   

  	
   

  	
   

  
	
  If to a
  Purchaser:

  	
   

  	
  To the address
  set forth under

  such Purchaser name on the

  signature pages hereto.

  
	
   

  	
   

  	
   

  
	
  If to any other
  Person who is then the registered Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the address
  of such Holder as it

  appears in the stock transfer books

  of the Company

  

 

or such other
address as may be designated in writing hereafter in accordance with this
Section 7(g) by such Person.

 

10

 

(h)                                 Successors
and Assigns.  This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each Holder.
The Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder. Each Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted under the Notes
and the Securities Purchase Agreement with the prior written consent of the
Company, which consent shall not be unreasonably withheld..

 

(i)                                     Execution
and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement.
In the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.

 

(j)                                     Governing
Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that
all Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement shall be commenced exclusively in
the state and federal courts sitting in the City of New York, Borough of
Manhattan. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such Proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby. If either party
shall commence a Proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its reasonable attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
Proceeding.

 

(k)                                  Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

 

(l)                                     Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and 

 

11

 

the parties hereto shall
use their reasonable efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

 

(m)                               Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

 

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

 

12

 

IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.

 

	
   

  	
  ELECTRIC CITY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Mitola

  	
   

  
	
   

  	
  Name: 

  	
  John Mitola

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LAURUS MASTER FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Grin

  	
   

  
	
   

  	
  Name:

  	
  David Grin

  	
   

  
	
   

  	
  Title:

  	
  Partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  152 West 57th
  Street, 4th Floor

  New York, New York 10019

  
	
   

  	
  Attention:  David Grin

  
	
   

  	
  Facsimile:  212-541-4434

  

 

13Exhibit
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)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}]]