Document:

Prepared by MerrillDirect

Exhibit
10.2

THIS NOTE AND THE SECURITIES ISSUABLE
UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE “ACT”) OR STATE SECURITIES LAWS AND NO TRANSFER OF THIS NOTE OR SUCH
SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER AND OF ALL
APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS, OR (B) PURSUANT TO AN EXEMPTION
THEREFROM UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

ELECTRIC
CITY CORP.

CONVERTIBLE
SENIOR SUBORDINATED PROMISSORY NOTE

	$1,000,000	April
  18, 2001
	 	New
  York, New York

             FOR
VALUE RECEIVED, the undersigned, Electric City Corp., a Delaware corporation
(the “Company” or “Payor”), hereby promises to pay to Newcourt
Capital USA, Inc., a Delaware corporation (“CIT” or “Payee”), at
1211 Avenue of the Americas, 22nd Floor, New York, NY 10036 (or at
such other place within the County of New York as Payee shall hereafter direct
by notice in writing to Payor) and its registered assigns, the principal sum of
One Million Dollars ($1,000,000), together with interest thereon at the rate
provided for herein from the date hereof, with such principal and interest
payable as herein provided.

1.          Loan,
Interest Rate and Payment Provisions.

             1.1        This Note is one of a duly authorized
issue of Notes issued pursuant to the Convertible Senior Subordinated
Promissory Note and Warrant Purchase Agreement, dated as of April 18, 2001 (as
it may be amended from time to time, the “Note Purchase Agreement”) by
and between the Company and CIT.  This
Note is transferable and assignable to one or more purchasers, in accordance
with applicable law.  The Company agrees
to issue from time to time replacement Notes in the form hereof to facilitate
such transfers and assignments.  The
Company shall keep at its principal office a register (the “Register”)
in which shall be entered the names and addresses of the registered holder of
this Note and particulars of all transfers of such Note.  References to the “holder” shall mean the
Person listed in the Register as the payee of this Note.  The ownership of the Note shall be proven by
the Register.

             1.2        The principal amount of this Note
outstanding from time to time shall bear interest from the date hereof, at a
rate of interest equal to the 11% per annum (the “Note Rate”).  Interest on this Note shall be computed on
the basis of a 365-day year and paid for the actual number of days
elapsed.  Unless previously paid
pursuant to the terms of Section 3, or converted pursuant to the terms
of Sections 4.1 or 4.2 hereof, all unpaid interest and principal
on this Note shall be paid in full on the Maturity Date.

 

             1.3        Unless previously converted pursuant to Sections
4.1 or 4.2 hereof, if payment of the principal amount of this Note,
together with accrued unpaid interest thereon at the Note Rate, is not paid in
full on the Maturity Date, or if any payment of interest is not paid when due,
then interest shall accrue on such unpaid amount at the Note Rate plus two percent
(2%) from and after such date of default to the date of the payment in full of
such unpaid amount (including from and after the date of the entry of judgment
in favor of Payee in an action to collect this Note).

             1.4        In no event shall Payee be entitled to
receive interest, at an effective rate in excess of the maximum rate permitted
by law.

             1.5        All payments made by the Payor on this
Note shall be in U.S. Dollars.  All
payments made by the Payor on this Note shall be applied first to the payment
of accrued but unpaid interest on this Note and then to the reduction of the
unpaid principal balance of this Note. 
In the event the date for the payment of any amount payable under this
Note falls due on a Saturday, Sunday or public holiday under the laws of the
State of New York, the time for payment of such amount shall be extended to the
next succeeding Business Day and interest at the Note Rate shall continue to
accrue on any principal amount so effected until the payment thereof on such
extended due date.

             1.6        Defined terms used herein shall, unless
otherwise defined herein, have the meanings assigned thereto in the Note
Purchase Agreement.  For purposes of
this Note, the term “Maturity Date” shall mean the earliest to occur
of:  (i) July 16, 2001; (ii) the closing
of a Qualifying Transaction; and (iii) the date of acceleration of the
indebtedness under this Note pursuant to Section 6.

2.          Replacement
of Note.  In case this Note is
mutilated, destroyed, lost or stolen, Payor shall, at its sole expense, execute
and deliver a new Note, in exchange and substitution for this Note.  In the case of destruction, loss or theft,
Payee shall furnish to Payor indemnity reasonably satisfactory to Payor, and in
any such case, and in the case of mutilation, Payee shall also furnish to Payor
evidence to its reasonable satisfaction of the mutilation, destruction, loss or
theft of this Note and of the ownership thereof.  Any replacement Note so issued shall be in the same outstanding principal
amount as this Note and dated the date to which interest shall have been paid
on this Note or, if no interest shall have yet been paid, dated the date of
this Note.

3.          Prepayment.  At the option of Payor, the principal amount
of this Note may be prepaid in whole at any time, or in part from time to time,
without penalty or premium, together with interest thereon accrued through the
date of such prepayment.  Each partial
prepayment of this Note shall first be applied to interest accrued through the date
of prepayment and then to principal.

4.          Conversion.

             4.1        Qualifying Transaction.  Concurrently with the closing of a
Qualifying Transaction, at the option of Payee, all or any part of the
principal of, and accrued interest on, this Note to the extent then outstanding
and unpaid, may, upon written notice delivered to Payor in the form attached
hereto as Exhibit “A”, be converted into that number of shares of Series
A Preferred Stock of Payor being sold in such Qualifying Transaction equal to
the amount of principal and interest that Payee elects to convert divided by
the per share purchase price of the Series A Preferred Stock sold in such
Qualifying Transaction.  Payor and Payee
agree that such conversion shall be subject to all of the applicable terms and
conditions of this Note, the Note Purchase Agreement and the Securities
Purchase Agreement.  Upon conversion of
all or any part of the principal of, and accrued interest on, this Note, Payee
shall become a party to the Securities Purchase Agreement and all documents
related to the issuance and sale of the Series A Preferred Stock and shall be
deemed to be a purchaser thereunder.

             4.2        No Qualifying Transaction.  In the event that a Qualifying Transaction
does not occur prior to July 16, 2001, then Payee may, at its sole option,
elect at any time and from time to time thereafter, by written notice delivered
to Payor in the form attached hereto as Exhibit “A”, to convert all or
any part of the principal of, and accrued interest on, this Note to the extent
outstanding and unpaid as of the date of conversion into that number of shares
of Common Stock of Payor equal to the sum that Payee elects to convert divided
by the lesser of (i) the average closing price of the Common Stock as quoted on
the American Stock Exchange (or any national securities exchange or automated
quotation service on which the Common Stock is then listed for trading) during
the five consecutive trading days ending on the day immediately prior to the
date of conversion or (ii) $1.00 (the “Conversion Price”) (as such
amount shall be adjusted from time to time pursuant to Section 4.3).  Payee agrees that such conversion shall be
subject to all of the applicable terms and conditions of this Note and the Note
Purchase Agreement.

             4.3        Adjustments.  If at any time after the date hereof Payor:
(i) pays a dividend in Common Stock or makes a distribution on its Common Stock
in shares of its Common Stock; (ii)
subdivides its outstanding shares of Common Stock into a greater number of
shares; (iii) combines its outstanding shares of Common Stock into a smaller
number of shares; (iv) makes a distribution on its Common Stock in
shares of its capital stock other than Common Stock; or (v) issues by reclassification of its Common Stock any shares
of its capital stock; then the Conversion
Price in effect immediately prior to such action shall be proportionately
adjusted so that Payee may thereafter receive upon conversion of this Note the
aggregate number and kind of shares of capital stock of the Company that Payee
would have owned immediately following such action if Payee had converted this
Note immediately prior to such action.  The adjustment shall become effective
immediately after the record date in the case of a dividend or distribution and
immediately after the effective date in the case of a subdivision, combination
or reclassification.  Such adjustment
shall be made successively whenever any event listed above shall occur.

             4.4        Reorganization.  If Payor is a party to a consolidation,
combination, merger, reorganization or transfer or lease of all or
substantially all of its assets that reclassifies or changes its outstanding
Common Stock (a “Reorganization”), the person obligated to deliver
securities, cash or other assets upon conversion of this Note shall, as a
condition to effectiveness of the Reorganization, enter into an amendment to
this Note.  The amended Note shall
provide that Payee may convert it into the kind and amount of securities, cash
or other assets that Payee would have owned immediately after the
Reorganization if it had converted the Note immediately before the effective
date of the Reorganization.  The Payor
shall not effect any such Reorganization, unless upon or prior to the
consummation thereof the successor corporation (if other than the Company)
shall assume by written instrument the obligation to deliver to the Payee such
securities, cash or other assets as Payee shall be entitled to purchase in
accordance with the foregoing provisions. 
The successor to the Company shall provide to the Payee a notice briefly
describing the Reorganization and such successor’s compliance with this Section
4.4.  If this Section 4.4
applies as to a transaction, then Section 4.3 does not apply with
respect to such transaction.

 

             4.5        Reservation of Shares.  Payor has reserved and shall continue to
reserve out of its authorized but unissued shares of Common Stock enough shares
of Common Stock to permit the full conversion of this Note pursuant to Section
4.2.  All shares of Common Stock
that may be issued upon conversion of this Note shall be duly authorized,
validly issued, fully paid and non-assessable. 
Payor shall list such shares on each national securities exchange or
automated quotation service on which the Common Stock is listed for trading.

             4.6        Notices.  Whenever the Conversion Price is adjusted,
Payor shall promptly mail to Payee a notice of the adjustment, briefly stating
the facts requiring the adjustment and the manner of computing it.  If the Company takes any action that would
require an amendment to this Note pursuant to Section 4.4 hereof or
there is a liquidation or dissolution of the Company, the Company shall deliver
to Payee a notice stating the proposed record date for a dividend,
distribution, issuance, combination, reclassification, consolidation, merger,
transfer, lease, sale, liquidation or dissolution.  The Company shall provide such notice at least 20 days before
such date.

             4.7        Registration Rights.  The Company hereby grants to Payee
registration rights with respect to the resale of shares of Common Stock
issuable upon conversion of this Note, pursuant to the Registration Rights
Agreement.

5.          Covenants
of Payor.  In addition, Payor
covenants and agrees that, so long as this Note remains outstanding and unpaid,
in whole or in part:

             5.1        Payor will faithfully and in all material
respects perform all of its covenants and agreements under the Transaction
Documents.

             5.2        Payor will not issue any equity or debt
securities to any Person or issue or incur any debt without the prior written
consent of Payee; provided, however, Payor may issue (a)
securities as consideration for its contemplated acquisition of Great Lakes
Controlled Energy Corporation on terms reasonably satisfactory to Payee; (b)
stock options to employees of the Company to purchase Common Stock not to
exceed options to purchase in the aggregate more than 2,000,000 shares of
Common Stock; and (c) Common Stock issued to holders of the Company’s Series B
Convertible Preferred Stock as dividends in accordance with the Series B
Convertible Preferred Stock certificate of designations or pursuant to
conversion of the Series B Convertible Preferred Stock, or pursuant to the
exercise of currently outstanding options and warrants.

             5.3        Payor will promptly pay and discharge
all lawful taxes, assessments and governmental charges or levies imposed upon
it or upon its income and profits, or upon any of its property, before the same
shall become in default, as well as all lawful claims for labor, materials and
supplies that, if unpaid, might become a lien or charge upon such properties or
any part thereof, provided, that Payor shall have until May 1, 2001 to
pay real estate taxes applicable to its Elk Grove Village, Illinois premises.

 

             5.4        Payor will not make any loans or
advances to any Persons, other than accounts receivable arising in the ordinary
course of Payor’s business.  Payor will
not declare or pay any dividends or make any distributions on any of its equity
securities (other than Common Stock issued to holders of the Company’s Series B
Convertible Preferred Stock issued as dividends in accordance with the Series B
Convertible Preferred Stock certificate of designations), nor purchase or
otherwise acquire or redeem any of its equity securities.

             5.5        Payor will, promptly following its
obtaining knowledge of the occurrence of an Event of Default (as defined below)
or of any condition or event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default, furnish a statement of
Payor’s Chief Executive Officer to Payee setting forth the details of such
Event of Default or condition or event and the action that Payor intends to
take with respect thereto.

6.          Events
of Default.  The occurrence of any
of the following events shall be deemed an event of default hereunder (each an
“Event of Default”):

             6.1        Payor shall (a) default in the payment
when due of principal or interest on this Note or (b) default in the due
observance or performance of any other covenant, condition or agreement on the
part of Payor to be observed or performed pursuant to the terms of this Note or
any other note issued pursuant to the Note Purchase Agreement, or Payor shall
default in the due observance or performance of any covenant, condition or
agreement on the part of Payor to be observed or performed pursuant to the terms
of any Transaction Document to which Payor is a party and the same shall
continue for ten (10) days after such default; or

             6.2        The dissolution of Payor or its
Subsidiary or any vote in favor thereof by the board of directors and/or
stockholders of Payor or its Subsidiary, as the case may be; or

             6.3        Payor or its Subsidiary shall become
insolvent, however evidenced, or make an assignment for the benefit of
creditors, or file with a court of competent jurisdiction an application for
appointment of a receiver or similar official with respect to it or any
substantial part of its assets or there shall be filed by Payor or its
Subsidiary a petition seeking relief under any provision of the Federal
Bankruptcy Code or any other federal or state statute now or hereafter in
effect affording relief to debtors, or there shall be filed against Payor or
its Subsidiary any such application or petition; or

             6.4        Payor or its Subsidiary shall admit in
writing its inability to pay its debts as they mature; or

             6.5        Payor or its Subsidiary shall sell all
or substantially all of its assets or merge or be consolidated with or into
another entity other than, in the case of any Subsidiary, Payor or another
Subsidiary of Payor provided, however, that the Company may consummate the
acquisition of Great Lakes Controlled Energy Corporation; or

 

             6.6        There occurs and continues any default
or event of default under the Designated Senior Debt or other indebtedness of
the Company with a principal amount greater than $250,000 and the same entitles
the holders thereof to accelerate payment thereof, or there commences and
continues any proceeding to foreclose a security interest or lien in any
material property or assets of Payor or its Subsidiary upon default in the
payment or performance of any debt of Payor or its Subsidiary; or

             6.7        The entry against Payor or its
Subsidiary of a final judgment for the payment of money of $10,000 or more by a
court of competent jurisdiction if such judgment has not been discharged (or
the discharge thereof not duly provided for) in accordance with its terms
within thirty (30) days of the date of entry thereof, or a stay of execution
thereof procured within thirty (30) days from the date of entry thereof and,
within such period (or such longer period during which execution of such
judgment shall have been effectively stayed) an appeal therefrom shall not have
been prosecuted and the execution thereof caused to be stayed during such
appeal; or

             6.8        An attachment or garnishment shall have
been levied against any material assets of Payor or its Subsidiary and such
levy is not vacated, bonded or otherwise terminated within thirty (30) days
after the date of the effectiveness of the levy.

Upon the occurrence of any Event of
Default and at any time thereafter, Payee shall have the right to declare the
principal of, accrued but unpaid interest on, and all other amounts payable
under this Note to be forthwith due and payable, whereupon all such amounts
shall be immediately due and payable to Payee, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived; provided,
however, in case of the occurrence of an Event of Default under Sections
6.3 or 6.4, such amounts shall become immediately due and payable
without any such declaration by Payee.

7.          Suits
for Enforcement and Remedies.  If
any one or more Events of Default shall occur and be continuing, Payee may
proceed to (a) protect and enforce Payee’s rights either by suit in equity
or by action at law, or both, whether for the specific performance of any
covenant, condition or agreement contained in this Note or in any agreement or
document referred to herein or in aid of the exercise of any power granted in
this Note or in any agreement or document referred to herein, (b) enforce
the payment of this Note, or (c) enforce any other legal or equitable
right of Payee under this Note.  No
right or remedy herein or in any other agreement or instrument conferred upon
Payee is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and shall be in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise.

8.          Subordination.  This Note is subordinated to principal and
accrued interest and fees on Designated Senior Debt to the extent provided in
the Note Purchase Agreement.  The
Company agrees, and each holder by accepting this Note agrees, to such
subordination.

9.          Unconditional
Obligation; Fees, Waivers, etc.

             9.1        The obligations to make the payments
provided for in this Note are absolute and unconditional and not subject to any
defense, set-off, counterclaim, rescission, recoupment or adjustment
whatsoever.

 

             9.2        If Payee shall seek to enforce the
collection of any amount of principal of and/or interest on this Note, there
shall be immediately due and payable from Payor, in addition to the then unpaid
principal of, and accrued unpaid interest on, this Note, all costs and expenses
incurred by Payee in connection therewith, including, without limitation,
reasonable attorneys’ fees, costs of suit and disbursements, including
reasonable out-of-pocket expenses of Payee or its attorneys.

             9.3        No forbearance, indulgence, delay or
failure to exercise any right or remedy with respect to this Note shall operate
as a waiver, nor as an acquiescence in any default, nor shall any single or
partial exercise of any right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy.

             9.4        Any term, covenant, agreement or
condition of this Note may, with the consent of Payor, be amended or compliance
therewith may be waived (either generally or in a particular instance and
either retroactively or prospectively), if Payor shall have obtained the
consent in writing of Payee.

             9.5        Payor hereby expressly waives demand and
presentment for payment, notice of nonpayment, notice of dishonor, protest,
notice of protest, bringing of suit, and diligence in taking any action to
collect amounts called for hereunder, and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereon, regardless of
and without any notice, diligence, act or omission with respect to the
collection of any amount called for hereunder or in connection with any right,
lien, interest or property at any and all times which Payee had or is existing
as security for any amount called for hereunder, except as specifically
provided herein.

10.        Miscellaneous.

             10.1      The headings of the various paragraphs of
this Note are for convenience of reference only and shall in no way modify any
of the terms or provisions of this Note.

             10.2      Notices, demands or other communications
given or made in connection with this Note shall be in writing and delivered in
accordance with the provisions of Section 9.3 of the Note Purchase Agreement.

             10.3      This Note and the obligations of Payor and
the rights of Payee shall be governed by and construed in accordance with the
internal substantive laws of the State of New York without giving effect to the
choice of laws rules thereof.

 

             10.4      PAYOR
(A) AGREES THAT ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE WILL BE INSTITUTED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, OR ANY FEDERAL COURT IN THE
STATE OF NEW YORK, (B) WAIVES ANY OBJECTION THAT PAYOR MAY HAVE NOW OR
HEREAFTER BASED UPON FORUM NON CONVENIENS OR TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND (C) IRREVOCABLY CONSENTS TO THE JURISDICTION OF
THE STATE COURTS LOCATED IN THE STATE OF NEW YORK IN ANY SUCH SUIT, ACTION OR
PROCEEDING.  PAYOR FURTHER AGREES TO
ACCEPT AND ACKNOWLEDGE SERVICE OF ANY AND ALL PROCESS THAT MAY BE SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING IN THE COURTS OF THE STATE OF NEW YORK, AND
AGREES THAT SERVICE OF PROCESS UPON THE PAYOR, MAILED BY CERTIFIED MAIL TO
PAYOR’S ADDRESS, WILL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON PAYOR, IN ANY SUIT, ACTION OR PROCEEDING. 
FURTHER, BOTH PAYOR AND PAYEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
TO ENFORCE THIS NOTE.

             10.5      This Note shall bind the Company and its
successors and assigns.

             IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed as
of the date first written above.

 

	 	ELECTRIC CITY CORP.	 
	 	a Delaware corporation	 
	 	 	 
	 	By 
  /s/ John Mitola	 
	 	

	 
	 	             Name:  John Mitola	 
	 	             Title:  Chief Executive Officer	 

 

 

 

 

[SIGNATURE PAGE TO CONVERTIBLE SENIOR SUBORDINATED PROMISSORY
NOTE]

 

CONVERTIBLE
SENIOR SUBORDINATED 

PROMISSORY
NOTE

GRID

 

 

	DATE	 	Amount
  of Loan	 	Note
  Rate	 	Principal
  Amount of Note and/or Interest Repaid or Converted and Date	 	Notation
  Made By
	

	 	

	 	

	 	

	 	

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

EXHIBIT
A

Form
of Conversion Notice

Dated:
____________________, ____

To:       Electric
City Corp. (the “Company”)

                           Reference
is made to the Convertible Senior Subordinated Promissory Note and Warrant
Purchase Agreement (as it may be amended from time to time, the “Agreement”)
dated April 18, 2001.  Terms defined
therein are used herein as therein defined.

                           The
undersigned, pursuant to the provisions set forth in the Agreement and the
Note, hereby irrevocably elects and agrees to convert (i) outstanding
principal under the Note in the amount of $_______, and (ii) accrued but
unpaid interest thereon in the amount of $_______, which together are
convertible in the aggregate into _______ shares of Series A Preferred Stock
[Common Stock] of the Company.

                           The
undersigned hereby represents that it is converting such principal and accrued
interest under the Note for its own account for investment purposes and not
with the view to any sale or distribution and that the undersigned will not
offer, sell or otherwise dispose of such securities in violation of applicable
securities laws.

	 	Newcourt Capital USA, Inc.,	 
	 	a Delaware corporation	 
	 	 	 
	 	By:	 
	 	 	

	 	 	Name: 
  John Mitola
	 	 	

	 	Title:Prepared by MerrillDirect

Exhibit
10.3

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED, QUALIFIED,
APPROVED OR DISAPPROVED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS AND NEITHER THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR STATE
REGULATORY AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF THESE SECURITIES.

THE
COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE SECURITIES REPRESENTED HEREBY
ARE SUBJECT TO A REGISTRATION RIGHTS AGREEMENT, AS THE SAME MAY BE AMENDED FROM
TIME TO TIME, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICES OF THE COMPANY.

WARRANT NO. 11

WARRANT CERTIFICATE

TO PURCHASE SHARES OF COMMON STOCK,

PAR VALUE $.0001 PER SHARE

OF

ELECTRIC CITY CORP.

             THIS IS TO CERTIFY THAT Newcourt
Capital USA, Inc., a Delaware corporation or its registered assigns (the “Holder”),
is the owner of 1,700,000 warrants (the “Warrants”), each of which
entitles the registered Holder thereof to purchase from Electric City Corp., a
Delaware corporation (the “Company”), one fully paid, duly authorized
and nonassessable share of Common Stock, par value $.0001 per share (the “Common
Stock”), of the Company at any time or from time to time on or before 5:00
p.m., New York City time, on the Warrant Expiration Date (which shall in no
event be later than April 18, 2004), at an exercise price of $2.50 per share,
subject to adjustment from time to time as set forth herein (the “Exercise
Price”), all on the terms and subject to the conditions hereinafter set forth.

             The number of shares of Common
Stock issuable upon exercise of each Warrant (the “Number Issuable”)
shall be determined for each Warrant by dividing $2.50 by the Exercise Price in
effect at the time of such exercise, and is initially one (1) share of Common
Stock.  Capitalized terms used herein
but not otherwise defined shall have the meanings given them in Section 13
hereof or, if not therein defined, in the Note Purchase Agreement.

             Section 1.         Exercise Of Warrant.  Subject to the last paragraph of this Section
1, the Warrants evidenced hereby may be exercised, in whole or in part, by
the registered Holder hereof at any time or from time to time on or before 5:00
p.m., New York City time, on the Warrant Expiration Date, upon delivery to the
Company at the principal executive office of the Company in the United States
of America, of (a) this Warrant Certificate, (b) a written notice stating that
such Holder elects to exercise the Warrants evidenced hereby in accordance with
the provisions of this Section 1 and specifying the number of Warrants
being exercised and the name or names in which such Holder wishes the
certificate or certificates for shares of Common Stock to be issued and (c)
payment of the Exercise Price for the shares of Common Stock issuable upon
exercise of such Warrants, which shall be payable by any one or any combination
of the following: (i) cash, (ii) certified or official bank check payable to
the order of the Company, (iii) by the surrender (which surrender shall be
evidenced by cancellation of the number of Warrants represented by any Warrant
certificate presented in connection with a Cashless Exercise (as defined
below)) of a Warrant or Warrants (represented by one or more relevant Warrant
certificates), and without the payment of the Exercise Price in cash, in return
for the delivery to the surrendering Holder of such number of shares of Common
Stock equal to the number of shares of Common Stock for which such Warrant is
exercisable as of the date of exercise (if the Exercise Price were being paid
in cash) reduced by that number of shares of Common Stock equal to the number
of shares for which such Warrant is exercisable multiplied by a fraction the
numerator of which is (A) the Exercise Price and the denominator of which is
(B) the Market Price of one share of Common Stock on the Business Day that
immediately precedes the day of exercise of the Warrant, or (iv) by the
delivery of shares of Common Stock that are either held by the Holder or are
acquired in connection with such exercise, and without payment of the Exercise
Price in cash.  Any share of Common
Stock delivered as payment of the Exercise Price in connection with an In–Kind
Exercise (as defined below) shall be deemed to have a value equal to the Market
Price of one share of Common Stock on the Business Day that immediately
precedes the day of exercise of the Warrant. 
An exercise of a Warrant in accordance with clause (iii) is herein
referred to as a “Cashless Exercise” and an exercise of a Warrant in
accordance with clause (iv) is herein referred to as an “In–Kind
Exercise.” The documentation and consideration, if any, delivered in
accordance with clauses (a), (b) and (c) of this paragraph above are
collectively referred to herein as the “Warrant Exercise Documentation.”
For the purposes of this Section 1, Market Price shall be calculated
without reference to the last sentence of the definition thereof.

              
As promptly as practicable, and in any event within two Business Days
after receipt of the Warrant Exercise Documentation, the Company shall deliver
or cause to be delivered certificates representing the number of validly
issued, fully paid and nonassessable shares of Common Stock issuable in
connection with such exercise, and if less than the full number of Warrants
evidenced hereby are being exercised, a new Warrant Certificate or
Certificates, of like tenor, for the number of Warrants evidenced by this
Warrant Certificate, less the number of Warrants then being exercised; provided,
however, that no new Warrant Certificate need be delivered if the
Warrant Expiration Date has occurred. 
Such exercise shall be deemed to have been made at the close of business
on the date of delivery of the Warrant Exercise Documentation so that the Person
entitled to receive shares of Common Stock upon such exercise shall be treated
for all purposes as having become the record holder of such shares of Common
Stock at such time.

             The Company shall pay all expenses
in connection with, and all taxes and other governmental charges (other than
income taxes of the Holder) that may be imposed in respect of the issue or
delivery of any shares of Common Stock issuable upon the exercise of the
Warrants evidenced hereby.  The Company
shall not be required, however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for
shares of Common Stock in any name other than that of the registered Holder of
the Warrants evidenced hereby.

             In connection with the exercise of
any Warrants evidenced hereby, at the Company’s option, no fractions of shares
of Common Stock shall be issued, but in lieu thereof the Company may elect to
pay a cash adjustment in respect of such fractional interest in an amount equal
to any such fractional interest multiplied by the current Market Price per
share of Common Stock on the Business Day that precedes the day of
exercise.  If more than one such Warrant
shall be exercised by the Holder thereof at the same time, the number of full
shares of Common Stock issuable on such exercise shall be computed on the basis
of the total number of Warrants so exercised.

             Section 2.         Adjustments. The Exercise Price
shall be subject to adjustment from time to time as provided in this Section
2.

             (a)         Adjustment
of Exercise Price Upon Issuance of Common Stock.  If after April 18, 2001 (the “Issue Date”) the Company
shall issue or sell any shares of its Common Stock (except upon exercise of the
Warrants and shares issued as a result of adjustments made under the terms of
the Warrants) for a consideration per share less than (including, without
limitation, those circumstances described in paragraphs (i) through (ix) below)
the Exercise Price in effect on the date immediately prior to the date of such
issue or sale, then, immediately upon such issue or sale, the Exercise Price
then in effect shall be reduced to the price (calculated to the nearest cent)
determined by dividing (I) an amount equal to the sum of (A) the aggregate
consideration to be received by the Company upon the full exercise of this Warrant
(the “Aggregate Price”) and (B) the aggregate consideration, if any,
received by the Company for all shares of Common Stock issued or sold on the
date of such issue or sale, by (II) an amount equal to the sum of (X) the
Number Issuable prior to adjustment and (Y) the number of shares of Common
Stock issued or sold on the date of such issuance or sale.

             No adjustment of the Exercise
Price, however, shall be made in an amount less than $.01 per share, but any
lesser adjustment shall be carried forward and shall be made upon the time of
and together with the next subsequent adjustment, if any.

             For the purposes of this Section
2(a), the following paragraphs (i) through (ix) shall also be applicable:

                           (i)          Issuance of Rights or Options.  In case at any time after the Issue Date the
Company shall in any manner grant (whether directly or by assumption in a
merger or otherwise) any rights to subscribe for or to purchase, or any options
or warrants for the purchase of, Common Stock or any stock, notes or securities
convertible into or exchangeable for Common Stock (such convertible or
exchangeable stock, notes or securities being herein called “Convertible
Securities”), whether or not such rights, options or warrants or the right
to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
the exercise of such rights, options or warrants or upon conversion or exchange
of such Convertible Securities (determined by dividing (A) the total amount, if
any, in cash or in property received or receivable by the Company as
consideration for the granting of such rights, options or warrants, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of such rights, options or warrants, plus, in the
case of such rights, options or warrants that relate to Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable upon
the issue or sale of such Convertible Securities and upon the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the exercise of such rights, options or warrants or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such rights, options or warrants) shall be less than the Exercise
Price in effect immediately prior to the time of the granting of such rights,
options or warrants, then the total maximum number of shares of Common Stock
issuable upon the exercise of such rights, options or warrants or upon
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such rights, options or warrants shall (as of the date of granting
of such rights or options) be deemed to be outstanding and to have been issued
for such price per share.  Except as
provided in Section 2(a)(iii), no further adjustment of the Exercise
Price shall be made upon the actual issue of such Common Stock or of such
Convertible Securities upon exercise of such rights, options or warrants or
upon the actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.

                           (ii)         Issuance of Convertible Securities.  In case at any time after the Issue Date the
Company shall in any manner issue (whether directly or by assumption in a
merger or otherwise) or sell any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (A) the total amount in cash or in property
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the conversion or exchange thereof, by (B)
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities) shall be less than the Exercise
Price in effect immediately prior to the time of such issue or sale, then the
total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall (as of the date of the issue
or sale of such Convertible Securities) be deemed to be outstanding and to have
been issued for such price per share; provided, however, that (I) except as
otherwise provided in Section 2(a)(iii), no further adjustment of the
Exercise Price shall be made upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities, and (II) if any such
issue or sale of such Convertible Securities is made upon exercise of any
rights to subscribe for or to purchase or any option to purchase any such
Convertible Securities for which adjustments of the Exercise Price have been or
are to be made pursuant to other provisions of this Section 2(a), no
further adjustment of the Exercise Price shall be made by reason of such issue
or sale.

                           (iii)        Change in Option Price or Exercise
Price.  If the purchase price
provided for in any right or option referred to in Section 2(a)(i), the
additional consideration, if any, payable upon the conversion or exchange of
any Convertible Securities referred to in Section 2(a)(i) or 2(a)(ii),
or the rate at which any Convertible Securities referred to in Section
2(a)(i) or 2(a)(ii) are convertible into or exchangeable for Common
Stock shall change (other than under or by reason of provisions designed to
protect against dilution), the Exercise Price then in effect hereunder shall
forthwith be readjusted (increased or decreased, as the case may be) to the
Exercise Price that would have been in effect at such time had such rights,
options or Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or conversion rate, as the case may
be, at the time initially granted, issued or sold.  On the expiration of any such option or right referred to in Section
2(a)(i) or the termination of any such right to convert or exchange any
such Convertible Securities referred to in Section 2(a)(i) or 2(a)(ii),
the Exercise Price then in effect hereunder shall forthwith be readjusted
(increased or decreased, as the case may be) to the Exercise Price that would
have been in effect at the time of such expiration or termination had such
right, option or Convertible Securities, to the extent outstanding immediately
prior to such expiration or termination, never been granted, issued or sold,
and the Common Stock issuable thereunder shall no longer be deemed to be
outstanding.  If the purchase price
provided for in any such right or option referred to in Section 2(a)(i)
or the rate at which any Convertible Securities referred to in Section 2(a)(ii)
are convertible into or exchangeable for Common Stock shall be reduced at any
time under or by reason of provisions with respect thereto designed to protect
against dilution, then in case of the delivery of shares of Common Stock upon
the exercise of any such right or option or upon conversion or exchange of any
such Convertible Securities, the Exercise Price then in effect hereunder shall,
if not already adjusted, forthwith be adjusted to such amount as would have
obtained had such right, option or Convertible Securities never been issued as
to such shares of Common Stock and had adjustments been made upon the issuance
of the shares of Common Stock delivered as aforesaid, but only if as a result
of such adjustment the Exercise Price then in effect hereunder is thereby
reduced.

                           (iv)       Stock Dividends.  In case at any time the Company shall
declare a dividend or make any other distribution upon any class or series of
stock of the Company payable in shares of Common Stock or Convertible
Securities, any shares of Common Stock or Convertible Securities, as the case
may be, issuable in payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration.

                           (v)        Consideration for Stock.  Anything herein to the contrary
notwithstanding, in case at any time any shares of Common Stock or Convertible
Securities or any rights, options or warrants to purchase any such Common Stock
or Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the amount received by the Company
therefor, without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith.

                           In case at any time
any shares of Common Stock or Convertible Securities or any rights or options
to purchase any such shares of Common Stock or Convertible Securities shall be
issued or sold for a consideration other than cash, in whole or in part, the
amount of the consideration other than cash received by the Company shall be
deemed to be the fair value of such consideration as determined reasonably and
in good faith by the Board of Directors of the Company, without deduction of
any expenses incurred or any underwriting commissions or concessions paid or
allowed by the Company in connection therewith.  In case at any time any shares of Common Stock or Convertible
Securities or any rights or options to purchase such shares of Common Stock or
Convertible Securities shall be issued in connection with any merger or consolidation
in which the Company is the surviving company, the amount of consideration
received therefor shall be deemed to be the fair value as determined reasonably
and in good faith by the Board of Directors of the Company of such portion of
the assets and business of the nonsurviving corporation as the Board may
determine to be attributable to such shares of Common Stock, Convertible
Securities, rights or options, as the case may be.  In case at any time any rights or options to purchase any shares
of Common Stock or Convertible Securities shall be issued in connection with
the issue and sale of other securities of the Company, together comprising one
integral transaction in which no consideration is allocated to such rights or
options by the parties thereto, such rights or options shall be deemed to have
been issued for an amount of consideration equal to the fair value thereof as
determined reasonably and in good faith by the Board of Directors of the
Company.

                           (vi)       Record Date.  In case the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock or
in Convertible Securities or (B) to subscribe for or purchase shares of Common
Stock or Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold as a result of the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.

                           (vii)      Treasury Shares.  The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock for the purposes of this Section
2(a).

                           (viii)     Adjustment to Determination of Exercise
Price.  When making the calculations
and determinations described in this Section 2(a), there shall not be
taken into account (A) the issuance of Common Stock upon the exercise of
options or warrants outstanding on the Issue Date or upon conversion of the
Notes and (B) the issuance of Common Stock upon exercise of the Warrants evidenced
by this Warrant Certificate.

                           (ix)        Good Faith.  If any event occurs as to which in the
reasonable opinion of the Board of Directors of the Company, in good faith, the
other provisions of this Section 2 are not strictly applicable but the
lack of any adjustment in the Exercise Price or the Number Issuable or both
would not in the opinion of the Board of Directors of the Company fairly
protect the exercise rights of the holders of the Warrants, in accordance with
the basic intent and principles of such provisions, then the Board of Directors
of the Company shall appoint a firm of independent certified public accountants
(which may be the regular auditors of the Company) of recognized national
standing, which shall give their opinion upon the adjustment, if any, to the
Exercise Price or Number Issuable or both, as the case may be, on a basis
consistent with the basic intent and principles of this Section 2,
necessary to preserve, without dilution, the exercise rights of all the
registered Holders of the Warrants in accordance with this Warrant Certificate.

                           (x)         Notice of Change in Exercise Price.  The Company promptly shall deliver to each
registered Holder of Warrants at least five Business Days prior to effecting
any transaction that would result in an increase or decrease in the Exercise
Price pursuant to this Section 2, together with a certificate, signed by
the Chief Executive Officer, President or a Vice–President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated and
specifying the increased or decreased Exercise Price then in effect following
such adjustment. 

             (b)        Subdivision
or Combination of Stock.  In case
the Company shall at any time subdivide its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior
to such subdivision shall be proportionately reduced and, conversely, in case
the outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased.

             (c)         Reorganization;
Reclassification; Consolidation; Merger or Sale of Assets.  In case of any capital reorganization or
reclassification or other change of outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or in case
of any consolidation or merger of the Company with or into another Person
(other than a consolidation or merger in which the Company is the resulting or
surviving person and that does not result in any reclassification or change of
outstanding Common Stock) (any of the foregoing, a “Transaction”), the
Company, or such successor or purchasing Person, as the case may be, shall
execute and deliver to each Holder of the Warrants evidenced hereby, at least
five Business Days prior to effecting any of the foregoing Transactions, a
certificate that the Holder of each such Warrant then outstanding shall have
the right thereafter to exercise such Warrant into the kind and amount of
shares of stock or other securities (of the Company or another issuer) or
property or cash receivable upon such Transaction by a holder of the number of
shares of Common Stock into which such Warrant could have been exercised
immediately prior to such Transaction. 
Such certificate shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
2 and shall contain other terms identical to the terms hereof.   If, in the case of any such Transaction, the
stock, other securities, cash or property receivable thereupon by a holder of
Common Stock includes shares of stock or other securities of a Person other
than the successor or purchasing Persons and other than the Company, who
controls or is controlled by the successor or purchasing Person or who, in
connection with such Transaction, issues stock, securities, other property or
cash to holders of Common Stock, then such certificate also shall be executed
by such Person, and such Person shall, in such certificate, specifically assume
the obligations of such successor or purchasing Person and acknowledge its
obligations to issue such stock, securities, other property or cash to Holders
of the Warrants upon exercise thereof as provided above.  The provisions of this Section 2(c)
similarly shall apply to successive Transactions. 

             (d)        Special
Distributions.  In the event that
the Company shall declare a dividend or make any other distribution (including,
without limitation, in cash, in notes or other debt securities or in capital
stock (which shall include, without limitation, any options, warrants or other
rights to acquire capital stock)) of the Company, whether or not pursuant to a
stockholder rights plan, “poison pill” or similar arrangement (but excluding any
dividend or distribution that results in an adjustment to the Exercise Price
pursuant to Section 2(a)) in other property or assets, to holders of
Common Stock (a “Special Distribution”), then the Board of Directors
shall set aside the amount of such dividend or distribution that each Holder of
Warrants would have been entitled to receive had it exercised such Warrants
prior to the record date for such dividend or distribution.  Upon the exercise of a Warrant evidenced
hereby, the Holder shall be entitled to receive such dividend or distribution
that such Holder would have received had such Warrant been exercised
immediately prior to the record date for such dividend or distribution.  

             Section 3.         Notice of Certain Events.  In case at any time or from time to time the
Company shall declare any dividend or any other distribution to the holders of
its Common Stock, or shall authorize the granting to the holders of its Common
Stock of rights or warrants to subscribe for or purchase any additional shares
of stock of any class or any other right, or shall authorize the issuance or
sale of any other shares or rights that would result in an adjustment to the
Exercise Price pursuant to Section 2(a) or would result in a Special
Distribution described in Section 2(d), or there shall be any capital
reorganization or reclassification of the Common Stock or consolidation or
merger of the Company with or into another Person, or any sale or other
disposition of all or substantially all the assets of the Company, or there shall
be a voluntary or involuntary dissolution, liquidation or winding up of the
Company, then, in any one or more of such cases the Company shall mail to each
Holder of the Warrants evidenced hereby at such Holder’s address as it appears
on the transfer books of the Company, as promptly as practicable but in any
event at least 10 Business Days prior to the applicable date hereinafter
specified, a notice stating (a) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights or warrants or, if a record
is not to be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution, rights or warrants are to be
determined, (b) the issue date of such dividend, distribution, rights or
warrants or (c) the date on which such reorganization, reclassification,
consolidation, merger, sale, disposition, dissolution, liquidation or winding
up is expected to become effective. 
Such notice also shall specify the date as of which it is expected that
the holders of Common Stock of record shall be entitled to exchange their
Common Stock for shares of stock or other securities or property or cash
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, disposition, dissolution, liquidation or winding up.

             Section 4.         Certain Covenants.  The Company will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock or its authorized and issued Common Stock
held in its treasury, for the purpose of enabling it to satisfy any obligation
to issue Common Stock upon exercise of the Warrants, the maximum number of
shares of Common Stock that may then be deliverable upon the exercise of all
outstanding Warrants. The Company shall take all action required to increase
the authorized number of shares of Common Stock if at any time there shall be
insufficient authorized but unissued shares of Common Stock to permit such
reservation or to permit the exercise of all outstanding Warrants.

             The Company or, if appointed, the
transfer agent for the Common Stock (the “Transfer Agent”) and every
subsequent transfer agent for any shares of the Company’s capital stock
issuable upon the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep
a copy of this Warrant Certificate on file with the Transfer Agent and with every
subsequent transfer agent for any shares of the Company’s capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants.  The Company will furnish such
Transfer Agent a copy of all notices of adjustments and certificates related
thereto, transmitted to each Holder pursuant to Section 2(a)(x) hereof.

             Before taking any action that would
cause an adjustment pursuant to Section 2 hereof to reduce the Exercise
Price below the then par value (if any) of the Common Stock, the Company will
take any corporate action that may, in the opinion of its counsel (which may be
counsel employed by the Company), be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Common Stock at the
Exercise Price as so adjusted.

             The Company covenants that all
Common Stock that may be issued upon exercise of the Warrants will, upon issue,
be validly issued, fully paid, nonassessable, free of preemptive rights and
free from all taxes, liens, charges and security interests with respect to the
issue thereof.

             Section 5.         Registered Holder.  The person in whose name this Warrant
Certificate is registered shall be deemed the owner hereof and of the Warrants
evidenced hereby for all purposes.  The
registered Holder of this Warrant Certificate, in its capacity as such, shall
not be entitled to any rights whatsoever as a stockholder of the Company,
except as herein provided.

             Section 6.         Transfer of Warrants.  Any transfer of the rights represented by
this Warrant Certificate shall be effected by the surrender of this Warrant
Certificate, along with the form of assignment attached hereto, properly
completed and executed by the registered Holder hereof, at the principal
executive office of the Company in the United States of America.  Thereupon, the Company shall issue in the
name or names specified by the registered Holder hereof and, in the event of a
partial transfer, in the name of the registered Holder hereof, a new Warrant
Certificate or Certificates evidencing the right to purchase such number of
shares of Common Stock as shall be equal to the number of shares of Common
Stock then purchasable hereunder.

             Section 7.         Restrictive Legend.  Each certificate representing the Common
Stock issued upon exercise of this Warrant shall be stamped or otherwise
imprinted with a legend in the following form (in addition to any legend
required under applicable state securities laws):

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED, QUALIFIED,
APPROVED OR DISAPPROVED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS. 

THE
SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A REGISTRATION RIGHTS AGREEMENT,
AS THE SAME MAY BE AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICES OF THE COMPANY.

Said legend shall be
removed by the Company, upon the request of the holder thereof, at such time as
the restrictions on the transfer of the applicable security under applicable
securities laws shall have terminated.

             Section 8.         Denominations.  The Company will, at its expense, promptly
upon surrender of this Warrant Certificate at the principal executive office of
the Company in the United States of America, execute and deliver to the
registered Holder hereof a new Warrant Certificate or Certificates in
denominations specified by such Holder for an aggregate number of Warrants
equal to the number of Warrants evidenced by this Warrant Certificate.

             Section 9.         Replacement of Warrants.  Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant
Certificate and, in the case of loss, theft or destruction, upon delivery of an
indemnity reasonably satisfactory to the Company (in the case of an insurance
company or other institutional investor, its own unsecured indemnity agreement
shall be deemed to be reasonably satisfactory), or, in the case of mutilation,
upon surrender and cancellation thereof, the Company will issue a new Warrant
Certificate of like tenor for a number of Warrants equal to the number of
Warrants evidenced by this Warrant Certificate.

             Section 10.       Governing Law.  Except as to matters governed by the General
Corporation Law of the State of Delaware and decisions thereunder of the
Delaware courts applicable to Delaware corporations, which shall be governed by
such laws and decisions, this Warrant Certificate shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the laws of the State of New York applicable to agreements made and to be
performed entirely within such State.

             Section 11.       Rights Inure to Registered Holder.  The Warrants evidenced by this Warrant
Certificate will inure to the benefit of and be binding upon the registered
Holder thereof and the Company and its successors and permitted assigns.  Nothing in this Warrant Certificate shall be
construed to give to any Person other than the Company and the registered
Holder and its successors thereof any legal or equitable right, remedy or claim
under this Warrant Certificate, and this Warrant Certificate shall be for the
sole and exclusive benefit of the Company and such registered Holder.  Nothing in this Warrant Certificate shall be
construed to give the registered Holder hereof any rights as a Holder of shares
of Common Stock until such time, if any, as the Warrants evidenced by this
Warrant Certificate are exercised in accordance with the provisions hereof.

             Section 12.       Notice. All notices, demands and
other communications provided for or permitted hereunder shall be made in
writing and shall be by registered or certified first–class mail, return
receipt requested, nationally recognized overnight service or personal
delivery, (a) if to the Holder of a Warrant, at such Holder’s last known
address appearing on the books of the Company; and (b) if to the Company, at
its principal executive office in the United States located at the address
designated for notices in the Note Purchase Agreement, or such other address as
shall have been furnished to the party given or making such notice, demand or
other communication.  All such notices
and communications shall be deemed to have been duly given: when delivered by
hand, if personally delivered; when delivered if delivered by a nationally
recognized overnight delivery service; and five Business Days after being
deposited in the mail, as aforesaid, postage prepaid, if mailed.

             Section 13.       Definitions.  Capitalized terms used herein but not
otherwise defined have the meanings given to them in the Securities Purchase
Agreement.  For the purposes of this
Warrant Certificate, the following terms shall have the meanings indicated
below:

             “Aggregate Price” shall have
the meaning set forth in Section 2(a) hereof.

             “Business Day” means any day
other than a Saturday, Sunday or other day on which commercial banks in the
City of New York are authorized or required by law or executive order to close.

             “Cashless Exercise” shall
have the meaning set forth in Section 1 hereof.

             “Company” shall have the
meaning set forth in the preamble hereof.

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

             “Convertible Securities”
shall have the meaning set forth in Section 2(a)(i) hereof.

             “Exercise Price” shall have
the meaning set forth in the preamble hereof.

             “Holder” shall have the
meaning set forth in the preamble.

             “In-Kind Exercise” shall
have the meaning set forth in Section 1 hereof.

             “Issue Date” shall have the
meaning set forth in Section 2(a) hereof.

             “Market Price” means the
last reported sale price of the applicable security as reported by the American
Stock Exchange, or the National Association of Securities Dealers, Inc.
Automatic Quotations System, or, if the applicable security is listed or
admitted for trading on another securities exchange, the last reported sales
price of the applicable security on the principal exchange on which the
applicable security is listed or admitted for trading (which shall be for
consolidated trading if applicable to such exchange), or if neither so reported
or listed or admitted for trading, the last reported bid price of the
applicable security in the over–the–counter market.  In the event that the Market Price cannot be
determined as aforesaid, the Board of Directors of the Company shall determine
the Market Price on the basis of such quotations as it in good faith considers
appropriate, in consultation with a nationally recognized investment bank.  The Market Price shall be such price
averaged over a period of 10 consecutive Business Days ending two days prior to
the day as of which “Market Price” is being determined.

             “Note Purchase Agreement”
means that certain Convertible Senior Subordinated Promissory Note and Warrant
Purchase Agreement, dated as of April 18, 2001, among the Company and the
Holder, as the same may be amended, modified or otherwise supplemented from
time to time in accordance with its terms.

             “Number Issuable” shall have
the meaning set forth in the preamble.

             “Person” means any
individual, corporation, limited liability company, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.

             “Special Distribution” shall
have the meaning set for this Section 2(d) hereof.

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

             “Transfer Agent” shall have
the meaning set forth in Section 4 hereof.

             “Warrants” shall have the
meaning set forth in the preamble hereof.

             “Warrant Exercise Documentation”
shall have the meaning set forth in Section 1 hereof.

             “Warrant Expiration Date”
means the third anniversary of the Issue Date.

 

[Signature Page Follows]

 

             IN WITNESS
WHEREOF,
the Company has caused this Warrant Certificate to be duly executed as of the
Issue Date.

 

	 	COMPANY
	 	 
	 	ELECTRIC CITY CORP.,
	 	a Delaware corporation
	 	 
	 	 
	 	By:	  /s/ John Mitola
	 	 	

	 	Name:	 John Mitola
	 	 	

	 	Title:	 CEO
	 	 	

	 	 
	 	HOLDER
	 	 	 
	 	NEWCOURT CAPITAL USA,
	 	INC., a Delaware
  corporation
	 	 
	 	 
	 	By:	  /s/ Guy Piazza
	 	 	

	 	Name:	 Guy Piazza
	 	 	

	 	Title:	 Managing Director
	 	 	

	 
	 
	 	By:	  /s/ Karen Scowcroft
	 	 	

	 	Name:	 Karen Scowcroft
	 	 	

	 	Title:	 Vice President
	 	 	

	 
							

 

 

Form of Assignment Form

[To be executed upon
assignment of Warrants]

             The undersigned hereby assigns and
transfers unto ______________________, whose Social Security Number or Tax ID
Number is ____________________ and whose record address is
___________________________________ the rights represented by the attached
Warrant Certificate with respect to ___ Warrants to which the attached Warrant
Certificate relates, and irrevocably appoints ______________________ as agent
to transfer this security on the books of the Company.  Such agent may substitute another to act for
such agent.

 

	 	 	Signature:
	 	 	 
	 	 	 
	 	 	 
	 	 	

	 	 	(Signature
  must conform in all respects to name of holder as specified on the face of
  the Warrant Certificate)
	 	 	 
	 	 	Signature
  Guarantee:
	 	 	 
	 	 	 
	 	 	 
	 	 	

	Date:	

	 

 

 

(SUBSCRIPTION FORM TO BE
EXECUTED UPON EXERCISE OF

SOME OR ALL OF THE WARRANTS)

             The undersigned, registered Holder
or assignee of such registered Holder of the within Warrant Certificate,
hereby:

             (a) subscribes for ___ shares
of Common Stock which the undersigned is entitled to purchase under the terms
of the within Warrant Certificate, (b) makes the full cash payment
therefor called for by the within Warrant Certificate or elects a Cashless
Exercise or In-Kind Exercise as provided therein, and (c) directs that the
Common Stock issuable upon exercise of said Warrants be issued as described
hereunder.

	 	 	 
	 	 	 
	 	 	 
	 	 	

	 	 	(Name)
	 	 	 
	 	 	 
	 	 	 
	 	 	

	 	 	(Address)
	 	 	 
	 	 	 
	 	 	 
	 	 	

	 	 	SIGNATURE
	Dated:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]