Document:

Exhibit
10.4

 

REGISTRATION
RIGHTS AGREEMENT

 

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

 

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

 

The Company and the Purchaser hereby agree as follows:

 

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

 

“Commission”
means the Securities and Exchange Commission.

 

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

 

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

 

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

 

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

 

“Filing
Date” means, with respect to the Registration Statement
required to be filed hereunder, a date no later than forty five (45) days
following the date upon which the principal amount of the Term Loan to the
Company in original principal amount of $1,000,000 has been funded to the
Company.

 

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

 

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

 

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

 

“Note”
has the meaning set forth in the Securities Purchase Agreement.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.                                       Registration.

 

(a)                                  On
or prior to the Filing Date the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415.  The Registration Statement shall be on Form
S-B2 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-B2, in which case such registration shall be
on another appropriate form in accordance herewith).  The Company shall cause the Registration Statement to become
effective 

 

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

 

(b)                                 If:
(i) the Registration Statement is not filed on or prior to the Filing Date;
(ii) the Registration Statement is not declared effective by the Commission by
the Effectiveness Date; (iii) after the Registration Statement is filed with
and declared effective by the Commission, the Registration Statement ceases to
be effective (by suspension or otherwise) as to all Registrable Securities to
which it is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time which
shall exceed 30 days in the aggregate per year or more than 20 consecutive
calendar days (defined as a period of 365 days commencing on the date the
Registration Statement is declared effective); or (iv) the Common Stock is not
listed or quoted, or is suspended from trading on any Trading Market for a
period of three (3) consecutive Trading Days (provided the Company shall not
have been able to cure such trading suspension within 30 days of the notice
thereof or list the Common Stock on another Trading Market); (any such failure
or breach being referred to as an “Event,” and for purposes of clause (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii) the
date which such 30 day or 20 consecutive day period (as the case may be) is
exceeded, or for purposes of clause (iv) the date on which such three (3)
Trading Day period is exceeded, being referred to as “Event Date”), then until
the applicable Event is cured, the Company shall pay to each Holder an amount
in cash, as liquidated damages and not as a penalty, equal to 1.0% for each
thirty (30) day period (prorated for partial periods) on a daily basis of the
original principal amount of the Note. 
While such Event continues, such liquidated damages shall be paid not
less often than each thirty (30) days. 
Any unpaid liquidated damages as of the date when an Event has been
cured by the Company shall be paid within three (3) days following the date on
which such Event has been cured by the Company.

 

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

 

(a)                                  prepare
and file with the Commission the Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments
received from the Commission, and use its best efforts to cause the
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and promptly provide to the Purchaser copies of
all filings and Commission letters of comment relating thereto;

 

(b)                                 prepare
and file with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection therewith as may
be

 

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necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement and to keep such
Registration Statement effective until the expiration of the Effectiveness
Period;

 

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

 

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

 

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

 

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

 

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

 

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

 

5.                                       Indemnification.

 

(a)                                  In
the event of a registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, the Company will indemnify and hold harmless
the

 

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

 

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

 

(c)                                  Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof is
to be made against a party hereto obligated to indemnify such Indemnified Party
(an “Indemnifying Party”), notify the Indemnifying Party in writing thereof,
but the omission so to notify the Indemnifying Party shall

 

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

 

(d)                                 In
order to provide for just and equitable contribution in the event of joint
liability under the Securities Act in any case in which either (i) the
Purchaser, or any officer, director or controlling person of the Purchaser,
makes a claim for indemnification pursuant to this Section 5 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of
the Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that
the Purchaser is responsible only for the portion represented by the percentage
that the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A)
the Purchaser will not be required to contribute any amount in excess of the
public offering price of all such securities offered by it pursuant to such
Fegistration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.

 

6.                                       Representations
and Warranties.

 

(a)                                  The
Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of
the Exchange Act and, except with respect to certain matters which the Company
has disclosed to the Purchaser on Schedule 4.21 to the Securities Purchase
Agreement, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and

 

6

 

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

 

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

 

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

 

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

 

(e)                                  The
Company understands the nature of the Registrable Securities issuable upon the
conversion of the Note and the exercise of the Warrant and recognizes that the
issuance of such Registrable Securities may have a potential dilutive
effect.  The Company specifically

 

7

 

acknowledges that its
obligation to issue the Registrable Securities is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.

 

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

 

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

 

7.                                       Miscellaneous.

 

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

 

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

 

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

 

(d)                                 Discontinued
Disposition.  Each Holder
agrees by its acquisition of such Registrable Securities that, upon receipt of
a notice from the Company of the occurrence of a Discontinuation Event (as
defined below), such Holder will forthwith discontinue disposition of such
Registrable Securities under the applicable Registration Statement until such
Holder’s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. 
For purposes of this Section 7(d), a “Discontinuation Event” shall mean
(i) when the Commission notifies the Company whether there will be a

 

8

 

“review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); (ii) any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to such Registration Statement or Prospectus or
for additional information; (iii) the issuance by the Commission of any stop
order suspending the effectiveness of such Registration Statement covering any
or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any
of the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose; and/or (v) the occurrence of
any event or passage of time that makes the financial statements included in
such Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to such Registration Statement,
Prospectus or other documents so that, in the case of such Registration
Statement or Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

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

 

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

 

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

 

	
  If to the Company:

  	
   

  	
  Electric City
  Corporation

  1280 Landmeier Road

  Elk Grove Village, Illinois 60007

  Attention:  Chief Financial Officer

  Facsimile:  847-437-4969

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Andrew H. Connor, Esq.

  Schwartz, Cooper, Greenberger & Krauss, Chtd.

  180 North LaSalle Street

  Chicago, Illinois  60601

  Facsimile:  312-782-8416

  
	
   

  	
   

  	
   

  
	
  If to a Purchaser:

  	
   

  	
  To the address set
  forth under

  such Purchaser name on the

  signature pages hereto.

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the address of such
  Holder as it

  appears in the stock transfer books

  of the Company

  

 

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

 

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

 

(i)                                     Execution
and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement.
In the event that any

 

10

 

signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

 

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

 

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

 

(l)                                     Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

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

 

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

 

11

 

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

 

	
   

  	
  ELECTRIC CITY CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Mitola

  	
   

  
	
   

  	
  Name:

  	
  John Mitola

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  LAURUS MASTER FUND, LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Grin

  	
   

  
	
   

  	
  Name:

  	
  David Grin

  	
   

  
	
   

  	
  Title:

  	
  Partner

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  152 West 57th
  Street, 4th Floor

  
	
   

  	
  New York, New
  York 10019

  
	
   

  	
  Attention:  David Grin

  
	
   

  	
  Facsimile:  212-541-4434

  
					

 

12Exhibit 10.5

 

THIS WARRANT AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ELECTRIC CITY CORP. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Right to Purchase 140,000 Shares of Common Stock of Electric City
Corporation (subject to adjustment as provided herein)

 

COMMON STOCK PURCHASE WARRANT

 

	
  No. 58

  	
   

  	
  Issue Date:  September 11,
  2003

  

 

ELECTRIC CITY
CORP., a corporation organized under the laws of the State of Delaware, hereby
certifies that, for value received, LAURUS MASTER FUND, LTD., or assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this Warrant and at any time or from time to time
before 5:00 p.m., New York time, through the close of business (Chicago time)
September 11, 2008 (the “Expiration Date”),
up to 140,000 fully paid and nonassessable shares of Common Stock (as
hereinafter defined), $.0001 par value per share, at the applicable Exercise
Price per share (as defined below).  The
number and character of such shares of Common Stock and the applicable Exercise
Price per share are subject to adjustment as provided herein.

 

As used herein
the following terms, unless the context otherwise requires, have the following
respective meanings:

 

(a)                                  The
term “Company” shall include
Electric City Corp. and any corporation which shall succeed, or assume the
obligations of, Electric City Corp. hereunder.

 

(b)                                 The
term “Common Stock” includes (a)
the Company’s Common Stock, par value $.0001 per share, and (b) any other
securities into which or for which any of the securities described in (a) may
be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

 

(c)                                  The
term “Other Securities” refers to
any stock (other than Common Stock) and other securities of the Company or any
other person (corporate or otherwise) which the holder of

 

 

the Warrant at any time shall
be entitled to receive, or shall have received, on the exercise of the Warrant,
in lieu of or in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in replacement of Common
Stock or Other Securities pursuant to Section 4 or otherwise.

 

(d)                                 The
“Exercise Price” applicable under
this Warrant shall be as follows:

 

a.                                       a
price of $2.44 per share  for the first
40,000 shares acquired hereunder;

 

b.                                      a
price of $2.65 per share  for the next
50,000 shares acquired hereunder; and

 

c.                                       a
price of $3.07 per share  for any
additional shares acquired hereunder.

 

1.                                       Exercise of Warrant.

 

1.1.                              Number of Shares Issuable
upon Exercise.  From and
after the date hereof through and including the Expiration Date, the Holder
shall be entitled to receive, upon exercise of this Warrant in whole or in
part, by delivery of an original or fax copy of an exercise notice in the form
attached hereto as Exhibit A (the “Exercise
Notice”), shares of Common Stock of the Company, subject to
adjustment pursuant to Section 4.

 

1.2.                              Fair Market Value.  For purposes hereof, the “Fair Market Value” of a share of Common
Stock as of a particular date (the “Determination
Date”) shall mean:

 

(a)                                  If the Company’s Common Stock is traded
on the American Stock Exchange or 
another national exchange or is quoted on the National or SmallCap
Market of The Nasdaq Stock Market, Inc.(“Nasdaq”),
then the closing or last sale price, respectively, reported for the last
business day immediately preceding the Determination Date.

 

(b)                                 If the Company’s Common Stock is not
traded on the American Stock Exchange or another national exchange or on the
Nasdaq but is traded on the NASD OTC Bulletin Board, then the mean of the
average of the closing bid and asked prices reported for the last business day
immediately preceding the Determination Date.

 

(c)                                  Except as provided in clause (d) below,
if the Company’s Common Stock is not publicly traded, then as the Holder and
the Company agree or in the absence of agreement by arbitration in accordance
with the rules then in effect of the American Arbitration Association, before a
single arbitrator to be chosen from a panel of persons qualified by education
and training to pass on the matter to be decided.

 

(d)                                 If the Determination Date is the date of
a liquidation, dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the Company’s charter, then
all amounts to be payable per share to holders of the Common Stock

 

2

 

pursuant to the charter in the
event of such liquidation, dissolution or winding up, plus all other amounts to
be payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of the Warrant are outstanding at the
Determination Date.

 

1.3.                              Company
Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which such holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to
afford to such holder any such rights.

 

1.4.                              Trustee
for Warrant Holders. In the event that a bank or trust company shall have
been appointed as trustee for the holders of the Warrant pursuant to Subsection
3.2, such bank or trust company shall have all the powers and duties of a
warrant agent (as hereinafter described) and shall accept, in its own name for
the account of the Company or such successor person as may be entitled thereto,
all amounts otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this Section 1.

 

2.                                       Procedure for Exercise.

 

2.1                                 Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that
the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares in accordance herewith.  As soon as practicable after the exercise of
this Warrant in full or in part, and in any event within three (3) business
days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the Holder, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly issued, fully
paid and nonassessable shares of Common Stock (or Other Securities) to which
such Holder shall be entitled on such exercise, plus, in lieu of any fractional
share to which such holder would otherwise be entitled, cash equal to such
fraction multiplied by the then Fair Market Value of one full share, together
with any other stock or other securities and property (including cash, where
applicable) to which such Holder is entitled upon such exercise pursuant to
Section 1 or otherwise.

 

2.2                                 Exercise.  Payment may be made either (i) in cash or by
certified or official bank check payable to the order of the Company equal to
the applicable aggregate Exercise Price, (ii) by delivery of the Warrant, or
shares of Common Stock and/or Common Stock receivable upon exercise of the
Warrant in accordance with Section (b) below, or (iii) by a combination of any
of the foregoing methods, for the number of Common Shares specified in such
Exercise Notice (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the Holder
per the terms of this Warrant) and the Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.  Notwithstanding any

 

3

 

provisions herein to the
contrary, if the Fair Market Value of one share of Common Stock is greater than
the Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof
being exercised) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Exercise Notice in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:

 

	
   

  	
  X=Y

  	
  (A-B)

  	
   

  
	
   

  	
   

  	
  A

  	
   

  
	
   

  	
   

  	
   

  
	
  Where 

  	
  X=

  	
  the number
  of shares of Common Stock to be issued to the Holder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y=

  	
  the number
  of shares of Common Stock purchasable under the Warrant or, if only a portion
  of the Warrant is being exercised, the portion of the Warrant being exercised
  (at the date of such calculation)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A=

  	
  the Fair
  Market Value of one share of the Company’s Common Stock (at the date of such
  calculation)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B=

  	
  Exercise
  Price (as adjusted to the date of such calculation)

  

 

3.                                       Effect
of Reorganization, etc.; Adjustment of Exercise Price.

 

3.1                                 Reorganization,
Consolidation, Merger, etc.  In case at any time or from time to time, the Company shall (a)
effect a reorganization, (b) consolidate with or merge into any other person,
or (c) transfer all or substantially all of its properties or assets to any
other person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition to the consummation of such a
transaction, proper and adequate provision shall be made by the Company whereby
the Holder of this Warrant, on the exercise hereof as provided in Section 1 at
any time after the consummation of such reorganization, consolidation or merger
or the effective date of such dissolution, as the case may be, shall receive,
in lieu of the Common Stock (or Other Securities) issuable on such exercise
prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such Holder would have been
entitled upon such consummation or in connection with such dissolution, as the
case may be, if such Holder had so exercised this Warrant, immediately prior
thereto, all subject to further adjustment thereafter as provided in Section 4.

 

3.2                                 Dissolution.  In the event of any dissolution of the
Company following the transfer of all or substantially all of its properties or
assets, the Company, concurrently with any distributions made to holders of its
Common Stock, shall at its expense deliver or cause to be delivered to the
Holder the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrant pursuant to Section 3.1,
or, if the Holder shall so instruct the Company, to a bank or trust company
specified by the Holder and having its principal office in New York, NY as
trustee for the Holder of the Warrant.

 

 

4

 

3.3           Continuation
of Terms.  Upon any reorganization,
consolidation, merger ortransfer (and any dissolution following any transfer)
referred to in this Section 3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and
other securities and property receivable on the exercise of this Warrant after
the consummation of such reorganization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may be,
and shall be binding upon the issuer of any such stock or other securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant as provided
in Section 4.  In the event this Warrant
does not continue in full force and effect after the consummation of the
transactions described in this Section 3, then the Company’s securities and
property (including cash, where applicable) receivable by the Holders of the
Warrant will be delivered to Holder or the Trustee as contemplated by Section
3.2.

 

4.                                       Extraordinary
Events Regarding Common Stock.  In the event that the Company shall (a)
issue additional shares of the Common Stock as a dividend or other distribution
on outstanding Common Stock, (b) subdivide its outstanding shares of Common
Stock, or (c) combine its outstanding shares of the Common Stock into a smaller
number of shares of the Common Stock, then, in each such event, the Exercise
Price shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Exercise Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event, and the product so obtained
shall thereafter be the Exercise Price then in effect. The Exercise Price, as
so adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 4.  The number of shares of Common Stock that
the holder of this Warrant shall thereafter, on the exercise hereof as provided
in Section 1, be entitled to receive shall be increased to a number determined
by multiplying the number of shares of Common Stock that would otherwise (but
for the provisions of this Section 4) be issuable on such exercise by a
fraction of which (a) the numerator is the Exercise Price that would otherwise
(but for the provisions of this Section 4) be in effect, and (b) the
denominator is the Exercise Price in effect on the date of such exercise.

 

5.                                       Certificate
as to Adjustments.  In each case of any adjustment or readjustment in the shares of
Common Stock (or Other Securities) issuable on the exercise of the Warrant, the
Company at its expense will promptly cause its Chief Financial Officer or other
appropriate designee to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares
of Common Stock (or Other Securities) issued or sold or deemed to have been
issued or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Exercise Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. 
The Company will forthwith mail a copy of each such certificate to the
holder of the Warrant and any Warrant agent of the Company (appointed pursuant
to Section 11 hereof).

 

6.                                       Reservation
of Stock, etc. Issuable on Exercise of Warrant.  The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrant, shares of Common Stock (or Other Securities) from
time to time issuable on the exercise of the Warrant.

 

5

 

7.                                       Assignment;
Exchange of Warrant.  Subject to compliance with applicable securities laws, this
Warrant, and the rights evidenced hereby, may be transferred by any registered
holder hereof (a “Transferor”) in
whole or in part.  On the surrender for
exchange of this Warrant, with the Transferor’s endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with evidence reasonably satisfactory to the Company
demonstrating compliance with applicable securities laws, which shall include,
without limitation, a legal opinion from the Transferor’s counsel that such
transfer is exempt from the registration requirements of applicable securities
laws, the Company at its expense but with payment by the Transferor of any
applicable transfer taxes) will issue and deliver to or on the order of the
Transferor thereof a new Warrant of like tenor, in the name of the Transferor
and/or the transferee(s) specified in such Transferor Endorsement Form (each a
“Transferee”), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for
on the face or faces of the Warrant so surrendered by the Transferor.

 

8.                                       Replacement of
Warrant.  On receipt
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction of this Warrant, on delivery of an indemnity agreement or
security reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of this Warrant, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.

 

9.                                       Registration
Rights.  The Holder
of this Warrant has been granted certain registration rights by the
Company.  These registration rights are
set forth in a Registration Rights Agreement entered into by the Company and
Purchaser dated as of September 11, 2003.

 

10.                                 Maximum
Exercise.  The Holder
shall not be entitled to exercise this Warrant on an exercise date, in connection
with that number of shares of Common Stock which would be in excess of the sum
of (i) the number of shares of Common Stock beneficially owned by the Holder
and its affiliates on an exercise date, and (ii) the number of shares of Common
Stock issuable upon the exercise of this Warrant with respect to which the
determination of this proviso is being made on an exercise date, which would
result in beneficial ownership by the Holder and its affiliates of more than
4.99% of the outstanding shares of Common Stock of the Company on such
date.  For the purposes of the proviso
to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. 
Notwithstanding the foregoing, the restriction described in this
paragraph may be revoked upon 75 days prior notice from the Holder to the
Company and is automatically null and void upon an Event of Default under the
Note.

 

11.                                 Warrant Agent.  The Company may, by written
notice to the each Holder of the Warrant, appoint an agent for the purpose of
issuing Common Stock (or Other Securities) on the exercise of this Warrant
pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing
this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

 

6

 

12.                                 Transfer on the
Company’s Books.  Until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary.

 

13.                                 Notices, etc.  All notices and other
communications from the Company to the Holder of this Warrant shall be mailed
by first class registered or certified mail, postage prepaid, at such address
as may have been furnished to the Company in writing by such Holder or, until
any such Holder furnishes to the Company an address, then to, and at the
address of, the last Holder of this Warrant who has so furnished an address to
the Company.

 

14.                                 Voluntary
Adjustment by the Company.  The Company may at any time during the term
of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the Board of Directors of the Company.

 

15.                                 No
Shorting.  The Purchaser or any of its affiliates and investment partners will
not and will not cause any person or entity, directly or indirectly, to engage
in “short sales” of the Company’s Common Stock or any other hedging strategies.

 

16.                                 Miscellaneous.  This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant shall be governed by and construed in accordance with the laws of State
of New York without regard to principles of conflicts of laws.  Any action brought concerning the
transactions contemplated by this Warrant shall be brought only in the state
courts of New York or in the federal courts located in the state of New York; provided,
however, that the Holder may choose to waive this provision and bring an action
outside the state of New York.  The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury.  The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this
Warrant is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law.  Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Warrant.  The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof.  The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision. 
The Company acknowledges that legal counsel participated in the
preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Warrant to favor any party
against the other party.

 

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

 

7

 

IN WITNESS WHEREOF, the Company
has executed this Warrant as of the date first written above.

 

	
   

  	
  ELECTRIC
  CITY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Mitola

  	
   

  
	
   

  	
  Name:

  	
  John Mitola

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  Witness:

  	
   

  
	
   

  	
   

  
	
  /s/ Jeffrey
  Mistarz

  	
   

  	
   

  
					

 

8

 

Exhibit A

 

FORM OF SUBSCRIPTION

 

(To be signed only on exercise of Warrant)

 

	
  TO:

  	
  Electric
  City Corp.

  1280 Landmeier Road

  Elk Grove Village, Illinois  60007

  Attention:  Chief Financial Officer

  

 

The undersigned, pursuant to
the provisions set forth in the attached Warrant
(No.         ), hereby irrevocably
elects to purchase (check applicable box):

 

                                                   
shares of the Common Stock covered by such Warrant; or

 

                                  the
maximum number of shares of Common Stock covered by such Warrant pursuant to
the cashless exercise procedure set forth in Section 2.

 

The undersigned herewith makes
payment of the full Exercise Price for such shares at the price per share
provided for in such Warrant, which is
$                  .  Such payment takes the form of (check
applicable box or boxes):

 

                                    $                    
in lawful money of the United States; and/or

 

                                  the
cancellation of such portion of the attached Warrant as is exercisable for a
total of
              
shares of Common Stock (using a Fair Market Value of
$              
per share for purposes of this calculation); and/or

 

                              the
cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2.2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchaseable
pursuant to the cashless exercise procedure set forth in Section 2.

 

The undersigned requests that
the certificates for such shares be issued in the name of, and delivered
to 
                                     
whose address is
                                                    

 

 

The undersigned represents and
warrants that all offers and sales by the undersigned of the securities
issuable upon exercise of the within Warrant shall be made pursuant to
registration of the Common Stock under the Securities Act of 1933, as amended
(the “Securities Act”) or pursuant to an exemption from registration under the
Securities Act.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature
  must conform to name of holder as

  specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Address)

  

 

 

Exhibit B

 

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

 

For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees” the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of Electric City Corp. into which the within Warrant relates specified
under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of Electric City
Corp. with full power of substitution in the premises.

 

	
  Transferees

  	
   

  	
  Address

  	
   

  	
  Percentage

  Transferred

  	
   

  	
  Number
  Transferrred

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature
  must conform to name of holder as

  specified on the face of the Warrant)

  
	
   

  
	
  Signed in
  the presence of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  	
  (address)

  
	
   

  	
   

  	
   

  	
   

  
	
  ACCEPTED AND
  AGREED:

  [TRANSFEREE]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (address)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  	
   

  

 

 

10

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