Document:

Prepared by MerrillDirect

Exhibit 10.4

REGISTRATION RIGHTS AGREEMENT

             This
Registration Rights Agreement, dated as of April 18, 2001 (as it may be amended
from time to time, this “Agreement”), is made by and among Electric City
Corp., a Delaware corporation (the “Company”), and Newcourt Capital
Securities, Inc., a Delaware corporation (“Holder”, together with the
Company, the “Parties”).

WITNESSETH

             WHEREAS,
Holder intends to loan to the Company up to $2,000,000 aggregate principal
amount pursuant to that certain Convertible Senior Subordinated Promissory Note
and Warrant Purchase Agreement (as it may be amended from time to time, the “Note
Purchase Agreement”);

             WHEREAS,
the parties intend for the Company to issue in return for such advances one or
more convertible senior subordinated promissory notes (individually, as it may
be amended from time to time, a “Note” and collectively, the “Notes”)
and certain warrants to purchase shares of Common Stock of the Company (as it
may be amended from time to time, the “Warrants”); and

             WHEREAS,
it is a condition to the obligation of Holder to loan to the Company up to
$2,000,000 pursuant to the Note Purchase Agreement that the Parties execute and
deliver this Agreement.

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        Definitions.  All terms capitalized but not defined herein
shall have the meaning attributable to such terms in the Note Purchase
Agreement, except where the context otherwise requires.  The following additional terms when used in
this Agreement, including its preamble and recitals, shall, except where the
context otherwise requires, have the following respective meanings, such
meanings to be equally applicable to the singular and plural forms thereof:

                           “Agreement”
shall have the meaning set forth in the preamble of this Agreement.

                           “Commission”
means the United States Securities and Exchange Commission or other
governmental authority at the time administering the Securities Act.

             

                           “Common
Stock” means and includes the Company’s authorized common stock, par value
$.0001 per share.

                           “Company”
shall have the meaning set forth in the preamble of this Agreement.

             “Eligible Securities” means
(i) the shares of Common Stock issued upon conversion of any outstanding
principal or accrued interest under the Notes pursuant to Section 4.2 of such
Notes; (ii) the shares of Common Stock issued or issuable upon exercise of the
Warrants; and (iii) any other shares of Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with respect to or
in exchange for or in replacement of, the shares described in clauses (i) and
(ii) and this clause (iii); provided, however, that the foregoing
definition shall exclude in all cases any Eligible Securities sold by a Holder
in a transaction in which its rights under this Agreement are not also
assigned.

             “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and any similar or successor
federal statute, and the rules and regulations of the Commission thereunder,
all as the same may be in effect at the time.

              “Holder” means have the meaning set forth in the preamble
of this Agreement.

             “Note” or “Notes”
shall have the meaning set forth in the recitals hereof.

             “Note Purchase Agreement”
shall have the meaning set forth in the recitals hereof.

              “Parties” shall have the meaning set forth in the preamble
of this Agreement.

             “Registration Request” shall
have the meaning set forth in Section 2.1 hereof.

                            “Securities Act” means the Securities
Act of 1933, as amended, and any similar or successor federal statute, and the
rules and regulations of the Commission thereunder, all as the same may be in
effect at the time.

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

ARTICLE
II

REGISTRATION RIGHTS

             2.1        Requested Registration.

                                        (a)         At any time after the date hereof,
Holder may deliver to the Company a written request (a “Registration Request”)
that the Company file and use its best efforts to cause to become effective a
“shelf” registration statement on Form S-3 (or if Form S-3 is not then
available, Form S-1 or such other form that the Company is eligible to use with
respect to the Eligible Securities) under the Securities Act for an offering to
be made on a continuous basis pursuant to Rule 415 under the Securities Act
with respect to such number of Eligible Securities owned by Holder as shall be
specified in such request; provided, however, that the Company
shall not be required to effect more than two registrations on Form S-1 (or any
successor form) and two registrations on Form S-3 (or any successor form)
pursuant to this Section 2.1.  If
such offering is to be an underwritten offering, the managing underwriter or
underwriters must be reasonably acceptable to both Holder and the Company,
which acceptance shall not be unreasonably withheld. The Company shall also be
entitled to include in any registration statement filed pursuant to a
Registration Request, for sale in accordance with the method of disposition
specified in such Registration Request, such number of shares of Common Stock
as the Company shall be contractually obligated to sell for the account of
other security holders.  
Notwithstanding the foregoing provisions of this Section 2.1(a),
to the extent that, in the opinion of the underwriter or underwriters (if the
method of disposition shall be an underwritten public offering), marketing
considerations require the reduction of the number of shares of Common Stock
covered by any such registration, the number of shares of Common Stock to be
registered and sold pursuant to such registration shall be reduced as follows:

                           (i)          First, the number of shares of Common
Stock to be registered on behalf of Persons other than the Holder, if any,
shall be reduced (to zero, if necessary) pro rata according to the number of
shares of restricted Common Stock held by each to the extent permitted by the
Company’s agreements with such Persons; and

                           (ii)         Second, the number of shares of
Eligible Securities to be registered on behalf of the Holder and of shares of
Common Stock held by other Persons holding registration rights granted by the
Company entitled to be included pro rata with the Holder shall be reduced pro
rata according to the number of shares of Eligible Securities held by each. 

             In
the event that the number of shares of Eligible Securities that are actually
registered under any Registration Request under this Section 2.1(a) is
less than the number requested to be registered by the Holder because of
inclusion of shares of Common Stock held by other Persons with registration
rights that must be included in such registration pursuant to clause (ii)
above, then such Registration Request shall not be deemed to be one of the
Registration Requests that may be demanded by the Holder pursuant to this Section
2.1(a).

                                        (b)        As soon as practicable following the
receipt of a Registration Request, the Company will use its best efforts to
register under the Securities Act, for an offering to be made on a continuous
basis pursuant to Rule 415 of the Securities Act, the number of shares of
Eligible Securities specified in such Registration Request.

                           2.2        Registration Procedures.  If and whenever the Company is required by
the provisions of Section 2.1 to effect the registration of any Eligible
Securities under the Securities Act, the Company shall:

                                        (a)         prepare and file with the Commission a
registration statement with respect to such securities that will permit the
public resale thereof without restriction under the Securities Act and in
accordance with the method of distribution specified in the Registration Request,
and the Company shall use its best efforts (i) to cause such registration
statement to be filed within 45 days of receipt of the Registration Request,
(ii) to cause such registration statement to be declared effective as promptly
as practicable and (iii) to maintain the effectiveness of such registration
statement until such time as all securities registered thereunder shall have
been sold;

                                        (b)        promptly prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to effect and
maintain the effectiveness of such registration statement for the period
specified in Section 2.2(a) and as to comply with the provisions of the
Securities Act with respect to the disposition of all Eligible Securities
covered by such registration statement in accordance with the intended method
of disposition set forth in such registration statement for such period,
including such amendments or supplements as are necessary to cure any untrue
statement or omission referred to in Section 2.2(e)(vi);

                                        (c)         provide to the managing underwriter or
underwriters, not more than one counsel for all underwriters, Holder and not
more than one counsel for Holder the opportunity to participate in the
preparation of (i) such registration statement, (ii) each prospectus relating
thereto and included therein or filed with the Commission and (iii) each
amendment or supplement thereto;

                                        (d)        make available for inspection by the
parties referred to in Section 2.2(c) such financial and other
information and books and records of the Company, and cause the officers,
directors and employees of the Company, and counsel and independent certified
public accountants of the Company, to respond to such inquiries, as shall be
reasonably necessary, in the judgment of respective counsel to Holder and such
underwriter or underwriters, to conduct a reasonable investigation within the
meaning of the Securities Act; provided, however, that each such
person shall be required to retain in confidence and not to disclose to any
other person any information or records reasonably designated by the Company in
writing as being confidential until such time as such information becomes a
matter of public record (whether by virtue of its inclusion in such
registration statement or otherwise), unless (i) such person shall be required
to disclose such information pursuant to the subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter or (ii)
such information is required to be set forth in such registration statement or
the prospectus included therein or in an amendment to such registration
statement or an amendment or supplement to such prospectus in order that such
registration statement, prospectus, amendment or supplement, as the case may
be, shall not contain an untrue statement of a material fact or omit to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and such information has not been so set
forth after the request by Holder to such effect;

                                        (e)         immediately notify the persons referred
to in Section 2.2(c) and (if requested by any such person) confirm such
advice in writing, (i) when such registration statement or any prospectus
included therein or any amendment or supplement thereto has been filed and,
with respect to such registration statement or any such amendment, when the
same has become effective, (ii) of any material comments by the Commission with
respect thereto or any request by the Commission for amendments or supplements
to such registration statement or prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of any
proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company contemplated by Section 2.2(1)(i) cease to be
true and correct in all material respects, (v) of the receipt by the Company of
any notification with respect to the suspension of the qualification of any
Eligible Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose or (vi) at any time when a
prospectus is required to be delivered under the Securities Act, of the
occurrence or failure to occur of any event, or any other change in law, fact
or circumstance, as a result of which such registration statement, prospectus
or any amendment or supplement thereto, or any document incorporated by
reference in any of the foregoing, contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;

                                        (f)         take reasonable efforts to obtain the
withdrawal at the earliest practicable date of any order suspending the
effectiveness of such registration statement or any post–effective
amendment thereto;

                                        (g)        if requested by the managing underwriter
or underwriters or Holder, promptly incorporate in a prospectus supplement or
post–effective amendment such information as such managing underwriter or
underwriters or Holder reasonably specify should be included therein relating
to the terms of the sale of such Eligible Securities, including, without
limitation, information with respect to the number of Eligible Securities being
sold to such underwriters, the name and description of Holder, the purchase
price being paid therefor by such underwriters and any other terms of the
underwritten (or best efforts underwritten) offering of the Eligible Securities
to be sold in such offering, and make all required filings of such prospectus
supplement or post–effective amendment promptly after notification of the
matters to be incorporated in such prospectus supplement or post–effective
amendment;

                                        (h)        furnish to Holder and each underwriter
and counsel for Holder, if any, a copy of such executed registration statement,
each such amendment and supplement thereto (in each case including all exhibits
thereto, whether or not such exhibits are incorporated by reference therein)
and such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus)
and each amendment or supplement thereto, in conformity with the requirements
of the Securities Act, as Holder and managing underwriter, if any, may
reasonably request in order to facilitate the disposition of Eligible
Securities by Holder or by the participating underwriters;

                                        (i)          use its best efforts to (i) register
or qualify the Eligible Securities to be included in such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as Holder and each managing underwriter, if any, thereof shall
reasonably request, (ii) keep such registrations or qualifications in effect
for so long as is necessary to effect the disposition of such Eligible
Securities in the manner contemplated by the registration statement, the
prospectus included therein and any amendment or supplement thereto and (iii)
take any and all such actions as may be reasonably necessary or advisable to
enable Holder and any participating underwriter or underwriters to consummate
the disposition in such jurisdictions of such Eligible Securities;

                                        (j)          cooperate with Holder and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Eligible Securities to be sold, which certificates shall
be printed, lithographed or engraved, or produced by any combination of such
methods, and which shall not bear any restrictive legends; and, in the case of
an underwritten public offering, enable such Eligible Securities to be
registered in such names as the underwriter or underwriters may request at
least two (2) business days prior to any sale of such Eligible Securities;

                                        (k)         provide not later than the effective
date of the registration statement a transfer agent and registrar for such
Eligible Securities and a CUSIP number for all Eligible Securities;

                                        (l)          enter into an underwriting agreement,
engagement letter, agency agreement, “best efforts” underwriting agreement or
similar agreement, as appropriate, and take such other actions in connection
therewith as Holder shall reasonably request in order to expedite or facilitate
the disposition of such Eligible Securities, and in connection therewith,
whether or not an underwriting agreement is entered into and whether or not the
registration is an underwritten public offering, (i) make such representations
and warranties to Holder and the underwriters, if any, in form, substance and
scope as are customarily made in an underwritten public offering; (ii) obtain
an opinion of counsel to the Company in customary form and covering such
matters as are customarily covered by such an opinion as Holder and the
underwriters, if any, may reasonably request, addressed to Holder and the
underwriters, if any, and dated the effective date of such registration statement
(or, if such registration includes an underwritten public offering, dated the
date of the closing under the underwriting agreement); (iii) obtain a “cold
comfort” letter from the independent certified public accountants of the
Company addressed to Holder and the underwriters, if any, dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, also dated the date of the closing under the
underwriting agreement), such letter to be in customary form and covering such
matters as are customarily covered by such letters; (iv) deliver such documents
and certificates as may be reasonably requested by Holder and the managing
underwriter or underwriters, if any, to evidence compliance with clause (i) of
this Section 2.2(1) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company and (v)
undertake such obligations relating to expense reimbursement, indemnification
and contribution as are provided in Sections 2.3, 2.4 and 2.5
hereof;

                                        (m)        cause all such Eligible Securities
registered hereunder to be listed on each securities exchange or
over-the-counter market on which similar securities issued by the Company are
then listed, if applicable; and

                                        (n)        otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission.

                                        Notwithstanding
the provisions of Section 2.2(a), the Company’s obligation to file a
registration statement, or cause such registration statement to become
effective, shall be suspended, without incurring any liability to Holder, for a
period not to exceed 60 days if there exists at the time material non–public
information relating to the Company that, in the reasonable opinion of the Company,
should not be disclosed, provided that any such suspension shall occur no more
than once in any 12–month period. 
In such an event, the Company shall promptly inform Holder of the
Company’s decision to defer filing of a registration statement and shall notify
Holder promptly (but in any event not later than upon the expiration of the 60–day
period specified in the immediately preceding sentence) of the recommencement
of the Company’s best efforts to file the registration statement and to cause
the registration statement to become effective.  If the Company shall so postpone the filing of a registration
statement, (i) the Company shall use its reasonable best efforts to limit the
delay to as short a period as is practicable and (ii) Holder shall have the
right to withdraw the request for registration by giving written notice to the
Company at any time.  In the event of
such withdrawal, such request shall not be counted for purposes of the number
of requests for registration to which the Holder is entitled pursuant to Section
2.1(a).

                                        In
connection with each registration of Eligible Securities hereunder, Holder will
furnish to the Company in writing such information with respect to it and the
proposed distribution by it as shall be reasonably necessary in order to assure
compliance with applicable federal and state securities laws.  Holder also agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by Holder to the Company or of the occurrence of any other event, in
either case as a result of which any prospectus relating to such registration
contains an untrue statement of a material fact regarding Holder or the
distribution of such Eligible Securities or omits to state any material fact regarding
Holder or the distribution of such Eligible Securities required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and promptly to furnish to the Company any
additional information required to correct and update such previously furnished
information or required so that such prospectus shall not contain, with respect
to Holder or the distribution of such Eligible Securities, an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, in light of
the circumstances then existing.  Holder
further agrees that upon giving any notice referred to in the immediately
preceding sentence, or upon receipt of any notice from the Company pursuant to Section
2.2(e)(vi) hereof, Holder shall forthwith discontinue the disposition of
Eligible Securities pursuant to the registration statement applicable to such
Eligible Securities until Holder shall have received copies of an amended or
supplemented registration statement or prospectus, and if so directed by the
Company, Holder shall deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies, then in Holder’s possession of the
prospectus covering such Eligible Securities at the time of receipt of such
notice.

             2.3        Expense.  The Company shall pay all expenses incurred
in complying with Sections 2.1 and 2.2, including without
limitation all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company,
fees and expenses of one counsel for Holder, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
“blue sky” laws (other than those that by law must be paid by selling security
holders), transfer taxes, fees of transfer agents and registrars and stock
exchange listing fees, but excluding all underwriting discounts and selling
commissions applicable to the sale of Eligible Securities.

             2.4        Indemnification.

                           (a)         In the event of a registration of
Eligible Securities under the Securities Act pursuant to Sections 2.1
and 2.2, the Company shall indemnify and hold harmless Holder, each
officer and director of Holder, each underwriter of such Eligible Securities
thereunder and each other person, if any, who controls Holder or underwriter
within the meaning of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which Holder, or such officer, director,
underwriter or controlling person may become subject under the Securities Act
or otherwise or in any action in respect thereof, and will reimburse Holder and
each such officer, director, underwriter and controlling person for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which such Eligible Securities were registered under the
Securities Act pursuant to Sections 2.1 and 2.2, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however,
that the Company shall not be liable to Holder or such officer, director,
underwriter or controlling person in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in conformity with information furnished by Holder, or such officer,
director, underwriter or controlling person in writing specifically for use in
such registration statement or prospectus.

                           (b)        Holder will indemnify and hold harmless
the Company, each underwriter and each person, if any, who controls the Company
or any underwriter within the meaning of the Securities Act, each officer of
the Company who signs the registration statement, and each director of the
Company, against all losses, claims, damages or liabilities, joint or several,
to which the Company or any such officer, director, underwriter, or controlling
person may become subject under the Securities Act or otherwise, and shall
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, but only to the extent that any such loss, claim, damage
or liability (or action in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to Holder
furnished in writing to the Company by Holder specifically for use in the
registration statement or prospectus relating to such Eligible Securities.  Notwithstanding the immediately preceding
sentence, the liability of Holder hereunder shall not in any event exceed the
net proceeds received by Holder from the sale of Eligible Securities covered by
such registration statement.

                           (c)         Promptly after receipt by an
indemnified party hereunder of notice of the commencement of any action, such
indemnified party, if a claim in respect thereof is to be made against an
indemnifying party hereunder, shall notify such indemnifying party in writing
thereof, but the omission so to notify such indemnifying party shall not
relieve such indemnifying party from any liability that it may have to any
indemnified party other than under this Section 2.4 and, unless the
failure to so provide notice materially adversely affects or prejudices such indemnifying
party’s defense against any action, shall not relieve such indemnifying party
from any liability that it may have to any indemnified party under this Section
2.4.  In case any such action shall
be brought against any indemnified party and it shall notify an indemnifying
party of the commencement thereof, such indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from such indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, such indemnifying
party shall not be liable to such indemnified party under this Section 2.4
for any legal expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; provided, however,
that, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it that are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select a separate counsel and to assume and undertake the defense
of such action, with the expenses and fees of such separate counsel and other
expenses related to such defense to be reimbursed by the indemnifying party as
incurred.

                           (d)        No indemnifying party shall be liable
for any amounts paid in a settlement effected without the consent of such
indemnifying party, which consent shall not be unreasonably withheld or
delayed.  No indemnifying party shall
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the plaintiff to the
indemnified party of a release from all liability in respect of such claim or
litigation.

                           (e)         The reimbursements required by this Section
2.4 shall be made by periodic payment during the course of the
investigation or defense, as and when bills are received and expenses incurred.

             2.5        Contribution.  If for any reason the indemnity set forth in
Section 2.4 is unavailable or is insufficient to hold harmless an
indemnified party, then the indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by said
indemnity (a) in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and such indemnified party on
the other hand (determined by reference to, among other things, whether the
untrue statement of a material fact or omission to state a material fact
relates to information supplied by the indemnifying party or such indemnified
party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission) or (b) if
the allocation provided by 

Section 2.5(a) above is not permitted by applicable law or provides a
lesser sum to such indemnified party than the amount hereinafter calculated, in
such proportion as is appropriate to reflect not only the relative fault of the
indemnifying party and such indemnified party but also the relative benefits
received by the indemnifying party on the one hand and such indemnified party
on the other hand, as well as any other relevant equitable considerations.

                           The
Parties agree that it would not be just and equitable if contribution pursuant
to this Section 2.5 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
consideration referred to in the immediately preceding paragraph.  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses
referred to in such paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim.  Notwithstanding the
provisions of this Section 2.5, Holder shall not be required to
contribute any amount in excess of the amount by which the net proceeds of the
sale of Eligible Securities sold by Holder and distributed to the public
exceeds the amount of any damages that Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person that is not
guilty of such fraudulent misrepresentation.

             2.6        Underwriting Agreement.  If Eligible Securities are to be sold
pursuant to a registration statement in an underwritten offering pursuant to Sections
2.1 and 2.2, each of the Company and Holder agrees to enter into a
written agreement with the managing underwriter or underwriters selected in the
manner herein provided in such form and containing such provisions as are
reasonably satisfactory to the Company and Holder and as are customary in the
securities business for such an arrangement among such underwriter or
underwriters, Holder and companies of the Company’s size and investment
stature. Holder shall not be required to make any representations and
warranties to the Company or the underwriters other than representations or
warranties regarding the identity of Holder, Holder’s Eligible Securities,
Holder’s ability to transfer title to Holder’s Eligible Securities and Holder’s
intended method of distribution or any other representations required by
applicable law.

             

             2.7        Reports Under Securities Exchange Act of 1934.  With a view to making available to the
Holder the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit the Holder to
sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:

                           (a)         make and keep public information
available, as those terms are understood and defined in SEC Rule 144, at all
times so long as the Company remains subject to the periodic reporting
requirements under Sections 13 or 15(d) of the Exchange Act;

                           (b)        take such action, including the
voluntary registration of its Common Stock under Section 12 of the Exchange
Act, as is necessary to enable the Holder to use Form S-3 for the sale of its
Eligible Securities;

                           (c)         file with the SEC in a timely manner
all reports and other documents as may be required of the Company under the
Securities Act and the Exchange Act; and

                           (d)        furnish to Holder, so long as Holder
owns any Eligible Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC Rule
144, the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.

ARTICLE
III

MISCELLANEOUS

             3.1        Assignment; Third Party Beneficiaries.  All covenants and agreements contained in
this Agreement by or on behalf of any of the signatories shall bind and inure
to the benefit of the respective successors and assigns of the signatories,
whether so expressed or not.  If any
transferee of Holder shall acquire Eligible Securities in any manner (other
than by way of a registered public offering), whether by operation of law or
otherwise, such Eligible Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Eligible Securities such
transferee shall be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement.  The
benefits to which any such transferee shall be entitled shall include, without
limitation, the rights to register Eligible Securities under Sections 2.1
and 2.2.

 

             

             3.2        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 telecopier (with receipt confirmed), provided that a copy is mailed
by registered or 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 addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate as to itself by notice to the other
parties):

                           (i)          If to the Company: 1286 Landmeier
Road, Elk Grove Village, IL 60007-2410, Fax No. 847-437-4969, Attention:
General Counsel.

                           (ii)         If to Holder: at the address set forth
in the Note Purchase Agreement.

             3.3        Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

             3.4        Amendments.  This Agreement may not be amended or
modified, and no provision hereof may be waived, except in writing, and any
such writing shall only be effective with respect to a Party who has executed
such writing.  The failure of any of the
Parties to insist upon strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver of that term or deprive such Party of
the right thereafter to insist upon strict adherence to that term or any other
term of this Agreement.

             3.5        Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

             3.6        Remedies.  The Parties acknowledge that there may be no
adequate remedy at law if any Party fails to perform any of its obligations
hereunder and that each Party may be irreparably harmed by any such failure,
and accordingly agree that each Party, in addition to any other remedy that it
may be entitled in law or in equity, shall be entitled to compel specific
performance of the obligations of any other Party under this Agreement in
accordance with the terms and conditions of this Agreement in any court of the
United States or any state thereof having jurisdiction.

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

             3.8        Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights and privileges
of Holder shall be enforceable to the fullest extent permitted by law.

             3.9        Entire Agreement.  This Agreement is intended by the Parties as
a final expression of their agreement and a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject
matter contained herein.  There are no
restrictions, promises, warranties or undertakings other than those set forth
or referred to herein or therein.  This
Agreement supersedes all prior agreements and understandings between the
Parties with respect to such subject matter.

[Signature
Page Follows]

             IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
respective officers thereunto duly authorized as of the day and year first
above written.

 

ELECTRIC
CITY CORP.,

a Delaware corporation

 

	 	By:    /s/ John Mitola
	 	

	 	Name:   John Mitola
	 	

	 	Title:  Chief Executive Officer
	 	

 

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 PresidentPrepared by MerrillDirect

Exhibit
10.5

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	June
  8, 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 10% 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.

             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/ Jeffery Mistarz

	 	 	             Name:
  Jeffery Mistarz
	 	 	             Title:    Chief Financial 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:	

	 	 	Title:

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