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Exhibit 4.27    
  

STOCK TRADING AGREEMENT  

        This Stock Trading Agreement, dated as of February 27, 2003 (as it may be amended from time to time, this
"Agreement"), is made by Electric City Corp., a Delaware corporation, and SF Capital Partners ("SF"). 

W I T N E S S E T H:  

        WHEREAS, SF and the Company are parties to that certain Securities Purchase Agreement, dated as of February    , 2003 (as it may be amended from time
to time, the "SF Securities Purchase Agreement"), whereby the Company has agreed to sell and SF has agreed to purchase shares of the Company's Common
Stock (as herein defined) together with warrants to purchase additional shares of Common Stock; and 

        WHEREAS,
it is a condition precedent to the obligation of the Company to issue and sell, and the obligation of SF to purchase, such shares of Common Stock and such warrants that the
Parties hereto enter into this Agreement; 

        NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows: 

ARTICLE I

DEFINITIONS  

        1.1    Defined Terms.    The following additional terms when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the following meanings, such meanings to be equally applicable to the singular and plural forms thereof: 

        "Affiliate" means, as applied to any Person, any other Person controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as applied to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of any such other Person, whether through the ownership of voting securities or by contract or otherwise.
With respect to individuals, the term Affiliate shall also include such individuals' parents, spouse, children or grandchildren. 

        "Agreement" shall have the meaning set forth in the preamble hereof. 

        "Average Daily Trading Volume" with respect to any trading day, means the average daily trading volume of the Common Stock as reported on
the American Stock Exchange (or, if not traded on the American Stock Exchange, any national securities exchange or automated quotation services on which the Common Stock is then listed for trading)
for the twenty (20) consecutive trading days ending on the date immediately prior to such trading day. 

        "Block Sale" means a sale of at least 10,000 shares of Common Stock. 

        "Closing Price" means the closing price of the Common Stock as reported on the American Stock Exchange (or, if not traded on the American
Stock Exchange, any national securities exchange or automated quotation services on which the Common Stock is then listed for trading). 

        "Common Stock" means and includes the Company's authorized common stock, par value $0.0001 per share. 

1

 

        "Company" shall have the meaning set forth in the preamble hereof. 

        "SF Securities Purchase Agreement" shall have the meaning set forth in the first WHEREAS clause hereof. 

        "Parties" means all of the parties that are signatories to this Agreement. 

        "Person" means and includes an individual, a corporation, a limited liability company, an association, a partnership, a trust or estate, a
government or any department or agency thereof. 

ARTICLE II

TRADING RESTRICTIONS  

        2.1    Agreement for Benefit of Company.    SF hereby agrees that its obligations under this Agreement are for the
benefit of the Company and further agrees that the Company shall be entitled to enforce SF's obligations under this Agreement. 

        2.2    Public Sales.    SF shall be subject to the following trading restrictions from time to time concerning its
respective holdings of Common Stock: 

        (a)  During
the term of this Agreement and at any time the Closing Price on the then prior trading day is at least $1.00 per share but less than $2.00 per share, SF may sell
any of its Common Stock into the public market, subject to the following conditions: 

	(i)
	the
number of shares of Common Stock sold by SF on any trading day may not exceed twenty percent (20%) of the Average Daily Trading Volume;

	(ii)
	the
number of shares of Common Stock sold by SF into the public market in any three-month period may not exceed twenty percent (20%) of SF's total holdings of Common Stock
(calculated assuming the exercise of all rights, options and warrants to purchase Common Stock or securities convertible or exchangeable for shares of Common Stock, and the conversion or exchange of
all
securities convertible or exchangeable for Common Stock) held as of the date of this Agreement (as adjusted for stock splits, stock combinations and the like); and

	(iii)
	Block
Sales must be executed at a minimum price per share of ninety percent (90%) of the ask price as reported on the American Stock Exchange (or, if not traded on the American
Stock Exchange, any national securities exchange or automated quotation services on which the Common Stock is then listed for trading). 

        (b)  During
the term of this Agreement and at any time the Closing Price on the then prior trading day is less than $1.00 per share, SF may sell any of its Common Stock into
the public market, subject to the following conditions: 

	(i)
	the
number of shares of Common Stock sold by SF on any trading day may not exceed twenty percent (20%) of the Average Daily Trading Volume; and

	(ii)
	Block
Sales must be executed at a minimum price per share of ninety percent (90%) of the ask price as reported on the American Stock Exchange (or, if not traded on the American Stock
Exchange, any national securities exchange or automated quotation services on which the Common Stock is then listed for trading). 

        (c)  Effective
with the Closing Date and during the term of this Agreement, SF agrees that it will not engage, either directly or indirectly, in short sales of the Common
Stock and represents and warrants that it has not engaged, either directly or indirectly, in short sales of the Common Stock at any time prior to the Closing Date. Notwithstanding anything contained
herein to the contrary, SF Capital shall have the right to create and maintain a short position in the Company's Common Stock 

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so long as the amount of the short position does not exceed the number of shares of Common Stock obtainable upon exercise of the Common Stock Warrants held by SF. 

        2.3    Transfer to Affiliates.    Notwithstanding anything in this Agreement to the contrary, SF may freely sell or
otherwise transfer any capital stock of the Company (or securities exercisable or exchangeable for or convertible into shares of Company capital stock) it owns to its Affiliates without such sale or
transfer being subject to the terms of this Agreement; provided, however, that any such Affiliate shall become a party to this Agreement and its
ownership and sales of shares of Common Stock or other securities shall be aggregated with SF's for purposes of Section 2.2. 

        2.4    Term of Trading Agreement.    The term of this Agreement shall commence on the Closing Date under the SF
Securities Purchase Agreement and terminate on the earlier of September 7, 2004 or the date
that the Company's Common Stock is no longer listed on any national securities exchange or automated quotation services. 

ARTICLE III

GENERAL PROVISIONS  

        3.1    Legend on Share Certificates.    

        (a)  All
Company securities issued at the Closing (as defined in the SF Securities Purchase Agreement) that are subject to the terms and provisions of  Article II, in addition to such other legends as may be
required by law and any other legend required by any agreement or document executed in
connection with the Closing under the SF Securities Purchase Agreement shall bear the following legend: 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN REQUIREMENTS AS TO TRADING CONTAINED IN THE STOCK TRADING AGREEMENT, DATED AS OF FEBRUARY    , 2003, BETWEEN THE
COMPANY AND THE HOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. 

        (b)  Upon
the termination of this Agreement or for sales in conformance with the provisions of this Trading Agreement, SF (or the applicable purchaser) shall be entitled to
receive, in exchange for any security bearing the legend regarding this Agreement specifically set forth in Section 3.1(a), a security without
such legend. 

ARTICLE IV

MISCELLANEOUS  

        4.1    Injunctive Relief.    It is acknowledged that it is impossible to measure in money the damages that would be
suffered if SF fails to comply with the obligations imposed on it by this Agreement and that, in the event of any such failure, the Company would be irreparably damaged and would not have an adequate
remedy at law. The Company shall, therefore, be entitled to injunctive relief and/or specific performance to enforce such obligations of SF, and if any action should be brought in equity to enforce
any of such provisions of this Agreement, SF shall not raise the defense that there is an adequate remedy at law. 

        4.2    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 Agreement shall be construed and enforced in accordance with,
and the rights of the Parties shall be governed by, the laws of the State of Illinois. 

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        4.3    Entire Agreement; Waiver.    This Agreement contains the entire agreement among the Parties hereto with respect
to the subject matter hereof. No waiver of any term or provision shall be effective unless in writing signed by the Party to be charged in accordance herewith. 

        4.4    Binding Effect.    This Agreement shall be binding on and inure to the benefit of the Parties and, subject to
the terms and provisions hereof, their respective legal representatives, successors and assigns. 

        4.5    Invalidity of Provision.    The invalidity or unenforceability of any provision of this Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in
any other jurisdiction. 

        4.6    Counterparts.    This Agreement may be executed in two or more counterparts, all of which shall be deemed but
one and the same instrument and each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart for
each of the parties hereto. Delivery by facsimile by any of the parties hereto of an executed counterpart of this Agreement shall be effective as an original executed counterpart hereof and shall be
deemed a representation that an original executed counterpart hereof will be delivered. 

        4.7    Notices.    All notices, consents and other communications under this Agreement shall be in writing and shall
be deemed to have been duly given when (a) delivered by hand, (b) sent by facsimile (with receipt confirmed), provided that a copy is mailed by certified mail, return receipt requested,
or (c) when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested), in each case to the appropriate address and facsimile
number set forth below (or to such other address and facsimile number as a Party may designate as to itself by notice to the other Party): 

	

(i)	
 	

If to the Company:	
 	

1280 Landmeier Road

Elk Grove Village, IL 60007-2410

Fax No. 847-437-4969

Attention: General Counsel
	

(ii)	
 	

If to SF: at the address set forth in the SF Securities Purchase Agreement.

        4.8    Headings.    The descriptive headings of the several paragraphs of this Agreement are inserted for convenience
only and do not constitute part of this Agreement. 

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

4

 

        IN
WITNESS WHEREOF, the Parties hereto have executed this Stock Trading Agreement as of the day and year first above written. 

	ELECTRIC CITY CORP.	 	SF CAPITAL PARTNERS
	

By:	

	
 	

By:	

	Name:	  
	 	Name:	  

	Title:	  
	 	Title:	  

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Exhibit 4.27Exhibit 10.45

 

FORM
OF COMMON STOCK WARRANT

 

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

 

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

 

WARRANT NO. 30

 

WARRANT CERTIFICATE

 

TO PURCHASE SHARES OF COMMON STOCK,

 

PAR VALUE $0.0001 PER SHARE

 

OF

 

ELECTRIC CITY CORP.

 

THIS IS TO CERTIFY THAT Munder Power Plus Fund, a series of The Munder Funds, Inc., or its
registered assigns (the “Holder”), is the owner of 300,000 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 $0.0001 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, at an exercise price of $0.92 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 $0.92 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 Munder Securities Purchase Agreement.

 

1

 

Section 1.                                            Exercise Of Warrants. 
Subject to the last paragraph of this Section 1, the
Warrants evidenced hereby may be exercised, in whole or in part, by the
registered Holder hereof at any time or from time to time on or before 5:00
p.m., New York City time, on the Warrant Expiration Date, upon delivery to the
Company at the principal executive office of the Company in the United States
of America, of (a) this Warrant Certificate, (b) a written notice stating that
such Holder elects to exercise the Warrants evidenced hereby in accordance with
the provisions of this Section 1 and specifying the number of
Warrants being exercised and the name or names in which such Holder wishes the
certificate or certificates for shares of 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) wire transfer of immediately available funds, (ii) certified or
official bank check payable to the order of the Company or (iii) by the
surrender (which surrender shall be evidenced by cancellation of the relevant
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 exercised 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 exercised 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. An exercise of a Warrant in accordance with clause
(iii) is herein referred to as a “Cashless 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.”

 

As promptly as practicable, and in any event within
five (5) 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 or
surrendered; 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.

 

2

 

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, on the date that the
Company files its Report 10-KSB for fiscal year 2003 with the Securities and
Exchange Commission (i) the consolidated revenue reported in such 10-KSB is
less than $25 million and (ii) the closing price of the Company’s Common Stock
on such date of filing is less than $2.00 per share, then the Exercise Price
shall be adjusted to $0.75 per share as of the filing date. Notwithstanding the
foregoing, if, at any time following the closing date and during the term of
the Warrant, the Company shall in any manner issue any of its Common Stock or
any equity securities or debt that is convertible into Common Stock and such
issuance price (or convertible price) is less than $0.92 per share (or $0.75
per share upon the occurrence of (i) and (ii) of this Section 2(a)), and
the Exercise Price in effect on the date immediately prior to the date of such
issue is greater than such issuance price or convertible price, then,
immediately upon such issue, the Exercise Price then in effect shall be reduced
to such lower price per share.

 

(b)                                 Subdivision; Combination of Stock or
Stock Dividends.  In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of
shares, by split or otherwise, or issue additional shares of Common Stock as a
dividend, 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
(i) 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), (ii) 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) or (iii) transfer or
sale of all or substantially all of the Company’s Assets to another person (any
of the foregoing, a “Transaction”), the Company, or such successor or
purchasing Person, as the case may be, shall execute and deliver to the Holder
of the Warrants evidenced hereby, at least five (5) Business Days prior to
effecting any of the foregoing Transactions, a certificate that the Holder of
each such Warrant then outstanding shall have the right thereafter to exercise
such Warrant into the kind and highest 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

 

3

 

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)                                 Adjustment for Other Distributions. 
If the Company distributes to all holders of its Common Stock any of its
assets (including but not limited to cash), debt securities, preferred stock,
or any rights or warrants to purchase debt securities, preferred stock, assets
or other securities of the Company, the Exercise Price shall be adjusted in
accordance with the following formula:

 

	
  E’

  	
  =

  	
  E

  	
  x

  	
  M

  	
  -

  	
  F

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  M

  	
   

  

 

 

where:

 

E’                                     =                                         the adjusted Exercise Price.

 

E                                         =                                         the current Exercise Price.

 

M                                    =                                         the Market Price of one share of Common Stock on the
record date mentioned below.

 

F                                         =                                         the fair market value (determined in good faith by the Board of Directors of the Company)
on the record date of the assets, securities, rights or warrants applicable to
one share of Common Stock.

 

The adjustment shall be made successively whenever any
such distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution.  This Section 2(d)
does not apply to any dividend or distribution that results in an adjustment to
the Exercise Price pursuant to Section 2(a) or Section 2(b)
above.

 

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 Section 2(d), or there shall be any capital

 

4

 

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 ten (10) Business Days prior to the applicable date
hereinafter specified, a notice stating (a) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or warrants or, if
a record is not to be taken, the date as of which the holders of 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 as “treasury shares”, 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.

 

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.

 

5

 

Section 5.                                            Registered Holder. 
The person in whose name this Warrant Certificate is registered shall be
deemed the owner hereof and of the Warrants evidenced hereby for all purposes.

 

Section 6.                                            Transfer of Warrants. 
Any transfer of the rights represented by this Warrant Certificate shall
be effected by the surrender of this Warrant Certificate, along with the form
of assignment attached hereto, properly completed and executed by the
registered Holder hereof, at the principal executive office of the Company in
the United States of America. 
Thereupon, the Company shall issue in the name or names specified by the
registered Holder hereof and, in the event of a partial transfer, in the name
of the registered Holder hereof, a new Warrant Certificate or Certificates
evidencing the right to purchase such number of shares of 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 AND
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER
FEDERAL OR STATE REGULATORY AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF
THESE SECURITIES.

 

THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A
STOCK TRADING AGREEMENT, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY
OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE COMPANY.

 

Said legends shall be
removed by the Company, upon the request of the Holder hereof, at such time as
the restrictions on the transfer of the applicable security under applicable
securities laws and the obligations imposed on the Holder hereof under the
Stock Trading Agreement 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

 

6

 

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 Illinois
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 hereof and the Company and
their respective successors and permitted assigns.  Nothing in this Warrant Certificate shall be construed to give to
any Person other than the Company and the registered Holder and their
respective successors and permitted assigns any legal or equitable right,
remedy or claim under this Warrant Certificate, and this Warrant Certificate
shall be for the sole and exclusive benefit of the Company and such registered
Holder.  Nothing in this Warrant
Certificate shall be construed to give the registered Holder hereof any rights
as a holder of shares of 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 given by registered or certified first-class mail,
return receipt requested, nationally recognized overnight delivery service or
personal delivery, (a) if to the Holder, at the 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 Munder Securities Purchase Agreement, or such
other address as shall have been furnished to the party given or making such
notice, demand or other communication. 
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered if
delivered by a nationally recognized overnight delivery service; and five (5)
Business Days after being deposited in the mail, as aforesaid, postage prepaid,
if mailed.

 

Section 13.                                      Definitions.  For the
purposes of this Warrant Certificate, the following terms shall have the
meanings indicated below:

 

7

 

“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks in the City of Chicago
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.

 

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

 

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

 

 “Issue Date”
shall mean December 16, 2002.

 

“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 ten (10) consecutive Business Days
ending two (2) days prior to the day as of which “Market Price” is being
determined.

 

“Munder Securities Purchase Agreement” means
that certain Securities Purchase Agreement, dated December 16, 2002, by
the Company and Munder Power Plus Fund, a series of The Munder Funds, Inc., 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.

 

“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.

 

8

 

“Warrant Expiration Date” means
December 15, 2007.

 

[SIGNATURE PAGE FOLLOWS]

 

9

 

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:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Greg
  Rice

  	
   

  	
   

  	
   

  
							

 

10

 

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:

  	
   

  	
   

  	
   

  
					

 

11

 

(SUBSCRIPTION FORM
TO BE EXECUTED UPON EXERCISE OF

SOME OR ALL OF THE WARRANTS)

 

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

 

(a) subscribes for
       shares of 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:

  	
   

  	
   

  
				

 

12

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