Exhibit 10.1
EMPLOYMENT AGREEMENT
          This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of
August 15, 2006 between Electric City Corp., a Delaware corporation (the
“Company”), and Jeffrey R. Mistarz (“Executive”).
W I T N E S S E T H:
          WHEREAS, Executive has been serving the Company as its executive vice
president and chief financial officer and the Company desires to contain to
retain the services of Executive in such capacities and Executive desires to
continue to be employed by the Company, on and subject to the terms and
conditions of this Agreement;
          NOW, THEREFORE, the Company and Executive agree as follows:
          1. Employment and Duties. The Company agrees to employ the Executive
as Executive Vice President and Chief Financial Officer of the Company and the
Executive agrees to be employed by the Company, on and subject to the terms of
this Agreement. The Executive shall report to and be subject to the authority
and direction of the Chief Executive Officer and the Board of Directors of the
Company and shall have such other responsibilities as may from time to time be
reasonably prescribed by the Chief Executive Officer or the Board of Directors
of the Company.
          The Executive accepts such employment agrees to concentrate all of his
professional time and efforts to the performance of the services described
therein, including the performance of such other services and responsibilities
as the Chief Executive Officer or the Board of Directors of the Company may from
time to time stipulate and which shall not be inconsistent with the position of
Executive Vice President and Chief Financial Officer. Without limiting the
generality of the foregoing, the Executive ordinarily shall devote not less than
five (5) days per week (except for vacations and regular business holidays
observed by the Company) on a full-time basis, during normal business hours
Monday through Friday. The Executive further agrees that when the performance of
his duties reasonably requires, he shall be present on the Company’s premises or
engaged in service to or on behalf of the Company at such times except during
vacations, regular business holidays or weekends.
          Notwithstanding the foregoing, the Company agrees that the Executive
shall have the right to participate in outside activities, including but not
limited to serving on boards of directors for civic, charitable or business
organizations, in a paid or unpaid capacity, so long as such activities are not
in direct conflict with the Executive’s obligations as outlined herein. Further,
the Executive shall have reasonable, limited use of the Company’s resources and
reasonable time during the Company’s business hours to pursue such activities so
long as such activities do not unreasonably interfere with his obligations as
President of the Company. Upon request by the Company, the Executive agrees to
furnish to the Company a list of organizations in which he is involved,
including a description of his involvement in such organizations and the amount
of any remuneration received or expected to be received from such involvement.

 

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          2. Term. The term of Executive’s employment under this Agreement (the
“Employment Period”) shall commence on the date hereof (the “Commencement
Date”), and expire on the day preceding the second anniversary of the
Commencement Date unless terminated earlier according to the terms of this
Agreement (the date of termination being referred to herein as the “Expiration
Date”). Executive’s and the Company’s rights and obligations under Sections 9,
10, 11 and 15(g) shall survive the expiration of the term of this Agreement. At
the end of the Employment Period, the continuation of Executive’s employment
with the Company shall be at the will of the Company and the Executive on terms
and conditions agreed to by the Company and Executive and there shall be no
obligation on the part of the Company or the Executive to continue such
employment.
          3. Compensation. During the term of this Agreement, Executive shall be
paid a gross salary (the “Salary”) at the annual rate of $210,000 as
compensation for all services to the Company. Such Salary shall be payable in 24
equal installments in accordance with the Company’s regular payroll practices
for salaried employees. The Company shall review Executive’s compensation on an
annual basis and give consideration to whether any increase is warranted, in the
Company’s sole discretion. Additionally, the Company shall reimburse Executive
for all reasonable expenses incurred by him in the course of performing his
duties under this Agreement, consistent with the Company’s policies in effect
from time to time with respect to reimbursement of business expenses, and
subject to Executive’s submission of appropriate expense reimbursement requests
and supporting documentation.
          The Executive shall also be entitled to twenty (20) paid vacation days
per year during the Employment Period, which will accrue ratably over each
twelve (12) month period, beginning on the first day of the Employment Period;
provided that he may take his vacation days for each contract year at any time
during such year. Up to five (5) vacation days may be accumulated and carried
over to the next contract year.
          4. Bonus. Executive will be eligible to participate in an annual bonus
plan during the term of this Agreement with goals (the “Annual Goals”)
established and approved by the Compensation Committee of the Board of Directors
of the Company and subject to the approval of the Board of Directors of the
Company. At the conclusion of the Plan Year, the Compensation Committee of the
Board of Directors of the Company shall determine the level of success achieved
by Executive against the Annual Goals and determine the amount of the annual
bonus plan payment to the Executive. If Executive’s employment is terminated for
reasons other than Due Cause or his voluntary resignation, he will be entitled
to receive any bonus earned up to the date of termination as reasonably
determined by the Board of Directors of the Company. All payments related to the
annual bonus plan are subject to the prior approval by the Board of Directors of
the Company.
          5. Stock Options. The Executive is hereby granted stock options (the
“Stock Options”) to purchase 300,000 shares of ELC’s common stock at a price
(the “Exercise Price”) equal to i) the closing price of the common stock on the
first day of the Employment Period, or ii) $1.00, which ever is greater. Such
Stock Options shall vest in accordance with the following schedule:

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  •   Upon execution of this Agreement and the start of the Employment Period,
Executive shall become immediately vested in Stock Options to purchase 100,000
shares of the Company’s common stock at the Exercise Price; and     •   On the
first anniversary of the first day of the Employment Period, so long as
Executive is employed by the Company as its President on such date, Executive
shall become immediately vested in Stock Options to purchase 100,000 shares of
the Company’s common stock at the Exercise Price; and     •   On the second
anniversary of the first day of the Employment Period, so long as Executive is
employed by the Company as its President on such date, Executive shall become
immediately vested in Stock Options to purchase 100,000 shares of the Company’s
common stock at the Exercise Price.

          For all purposes of this Section 5, a “Change in Control” shall be
deemed to have occurred when (i) ELC is merged or consolidated with another
entity which is not then controlled by ELC and, as a result, such merger or
consolidation results in at least fifty-one percent (51%) or greater of ELC’s
common stock being controlled or owned by another entity, or (ii) a majority of
the ELC’s assets are sold or otherwise transferred to another entity that is not
then controlled by or affiliated with ELC. Upon the occurrence of a Change in
Control, the Stock Options granted pursuant to this Section 5 shall be
automatically and immediately vested and become exercisable by Executive,
subject to the terms of Section 8 of this Agreement.
          Unless otherwise provided herein, the terms of the Stock Options
granted pursuant to this Section 5 shall be governed in accordance with the
provisions of ELC’s 2001 Employee Stock Incentive Plan (the “Plan”). The Stock
Options issued pursuant to this agreement shall be incentive stock options to
the extent permitted by law and the terms of the Plan, and the balance shall be
non-qualified options. If Executive’ employment with the Company is terminated,
as provided in Section 8, such Stock Options (whether or not vested) shall
survive or terminate as provided under Section 8.
          6. Registration Rights. Executive shall have piggy-back registration
rights for all shares of ELC’s common stock obtained through the exercise of any
Stock Options granted pursuant to Section 5 for any registration statement filed
by ELC with the Securities and Exchange Commission, except that Executive agrees
to waive his registration rights for any registration undertaken at the request
of, or registration that includes, the holders of shares of common stock having
a right to require that such shares receive priority treatment in such
registration to the extent that such waiver is requested by such holders. In
addition, Executive agrees that his registration rights shall be subject to
underwriter cutbacks as may be requested by an underwriter with respect to an
underwritten registration of ELC’s common stock.
          7. Benefits. During the term of this Agreement, Executive shall be
entitled to participate in and receive all benefits generally provided to its
senior executives by ELC from time to time.
          8. Disability; Death; Resignation; Termination for Due Cause.

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          (a) Termination for Due Cause. The Employment Period may be terminated
by the Company for “Due Cause”, meaning any of the following:

(i)   a material breach by Executive of his covenants under this Agreement if
such material breach is not remedied within fifteen (15) calendar days following
written notice thereof from the Company or any Director of the Company, or, if
the breach cannot be remedied within fifteen (15) days, such longer time (not to
exceed forty-five (45) days) as may be reasonably necessary for Executive to
remedy such breach if Executive commences and diligently pursues efforts to
remedy such breach;   (ii)   commission by Executive of a felony, or of theft or
embezzlement of property of the Company;   (iii)   actions by Executive (other
than actions taken with the approval of the Board) which result in a material
injury to the businesses, properties or reputation of the Company or any of its
subsidiaries;   (iv)   refusal to perform or substantial neglect of the duties
assigned to Executive pursuant to Section 1 of this Agreement if such refusal or
neglect is not remedied within fifteen (15) calendar days following written
notice thereof from the Company or any Director of the Company; or   (v)   any
material violation of any statutory or common law duty of loyalty to the
Company.

All compensation to Executive under this Agreement shall immediately terminate
upon the effective date of any termination of the Employment Period for Due
Cause hereunder (other than any earned but unpaid salary, bonus and vacation in
accordance with Sections 3 and 4, respectively, herein for the period ending on
the date of termination) and all vested and unvested “Stock Options” (as defined
in Section 5) as of such date shall immediately expire, terminate and be of no
further force or effect; provided, however, that if the Employment Period is
terminated for a reason stated in clause (ii) or clause (iii) (or both) and no
other reason is given, and it shall be subsequently determined by a final
decision of a court or arbitrator having jurisdiction that Executive did not
commit the alleged acts in question, or, in the case of clause (iii) that the
acts did not result in a material injury to the businesses, properties or
reputation of the Company or any of its subsidiaries, then such vested and
unvested Stock Options shall be restored to Executive and he shall be treated as
having been terminated pursuant to Section 8(f) for the purposes of his rights
with respect to such Stock Options, except that the one year period shall
commence on the date of such final determination of such court or arbitrator,
which shall be deemed to be the ‘termination date’ for purposes of Section 8(f).
Any salary, bonus and accrued vacation shall be payable as follows: salary and
accrued vacation shall be paid at the next regularly scheduled payroll date, and
any bonus shall be payable in accordance with the applicable bonus plan.
          (b) Termination Due to Death. The Employment Period shall
automatically terminate upon the death of Executive and all compensation to
Executive shall immediately cease, other than any earned but unpaid salary,
bonus and vacation in accordance with Sections 3 and 4, respectively, herein for
the period ending on the date of termination. All unvested Stock Options

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as of such date of death shall immediately vest. Stock Options which are vested
prior to the date of death or on the date of death pursuant to the preceding
sentence may be exercised by his estate or executor within one (1) year
following the date of death. Any Stock Options which are not exercised within
such period of one (1) year thereafter shall thereupon expire, terminate and be
of no further force or effect. Any salary, bonus and accrued vacation shall be
payable as follows: salary and accrued vacation shall be paid at the next
regularly scheduled payroll date, and any bonus shall be payable in accordance
with the applicable bonus plan.
          (c) Termination Due to Permanent Total Disability. In the event that
Executive becomes “Permanently Disabled” (as defined below), the Company, at its
option, shall have the right to terminate the Employment Period by written
notice to Executive given in the manner required by Section 15(d) hereof. For
purposes hereof, “Permanently Disabled” shall mean physical or mental inability
of Executive to perform substantially all of the services required pursuant to
this Agreement, after reasonable accommodation on the part of the Company, for a
continuous period of one-hundred eighty (180) days or for a period aggregating
at least one-hundred eighty (180) days in any consecutive twelve (12) month
period. In the event that Executive disputes the Company’s determination that he
is Permanently Disabled, the determination shall be made by a qualified
physician selected jointly by the Company and Executive. In the event of
termination of the Employment Period pursuant to this Section 8(c), all
compensation to Executive shall immediately cease, other than any earned but
unpaid salary, bonus and vacation in accordance with Sections 3 and 4,
respectively, herein for the period ending on the date of termination, and any
vested Stock Options as of the date of termination shall be exercisable for up
to 90 days following such termination. Any Stock Options which are vested on the
date of termination may be exercised by Executive within one hundred eighty
(180) days following the date of termination. Any Stock Options which are vested
on the date of termination and are not exercised within such period of one
hundred eighty (180) and are not exercised by Executive within one hundred
eighty (180) days following the termination date shall thereupon expire,
terminate and be of no further force or effect. All unvested Stock Options as of
such date of termination shall immediately terminate. Any salary, bonus and
accrued vacation shall be payable as follows: salary and accrued vacation shall
be paid at the next regularly scheduled payroll date, and any bonus shall be
payable in accordance with the applicable bonus plan.
          (d) Termination by Executive. Executive may terminate the Employment
Period and his employment hereunder (i) in the event the Company has breached a
material term or condition of this Agreement which is not cured or remedied
within fifteen (15) days following Executive’s giving written notice of such
breach to the Board of Directors of the Company, or (ii) at Executive’s
convenience pursuant to Section 8(e) below. In the event that Executive
terminates the Employment Period due to an uncured breach by the Company, such
action shall be deemed to be a termination of the Employment Period by the
Company without Due Cause pursuant to Section 8(f) hereof. Any salary, bonus and
accrued vacation payable with respect to such termination shall be in accordance
with Sections 3 and 4 hereof.
          (e) Executive’s Termination For Convenience. In the event that the
Employment Period is terminated by Executive at his convenience, then Executive
will be due any earned but unpaid salary, bonus and vacation in accordance with
Sections 3 and 4, respectively, herein, and

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any vested Stock Options as of the date of termination shall be exercisable for
up to ninety (90) days following such termination. Any Stock Options which are
vested on the date of termination and are not exercised by Executive within
ninety (90) days following the termination date shall thereupon expire,
terminate and be of no further force or effect. Any unvested Stock Options as of
the date of termination shall immediately terminate. Any salary, bonus and
accrued vacation payable under this Section 8(e) shall be payable as follows:
salary and accrued vacation shall be paid at the next regularly scheduled
payroll date, and any bonus shall be payable, if at all, to the extent provided
in, and in accordance with, the applicable bonus plan.
          (f) Termination Other Than Due Cause, Death, Disability or
Resignation. In the event that the Employment Period is terminated for reasons
other than Due Cause, death, becoming Permanently Disabled, or Executive’s
resignation under Section 8(d) or 8(e), then all Stock Options then held by
Executive and scheduled to vest within one (1) year of the date of such
termination shall vest immediately and be exercisable at any time within one
(1) year after the date of such termination. Any Stock Options which are not
exercised within one (1) year following such termination date shall thereupon
expire, terminate and be of no further force or effect. Upon any termination
under this Section 8(f), the Company shall pay as severance compensation to
Executive (i) six (6) months’ salary compensation at his then annual salary
compensation rate, plus (ii) any bonus earned as of the termination date, and
(iii) any accrued vacation. Such severance compensation shall be paid to
Executive as follows: (x) the six (6) months’ salary compensation shall be
payable in installments in accordance with the Company’s regular payroll;
(y) any bonus shall be payable in accordance with the applicable terms governing
such bonus; and (z) accrued vacation shall be paid on termination.
          (g) Surrender of Properties. Upon any termination of Executive’s
employment with the Company, regardless of the cause therefore, Executive shall
be deemed to have resigned from the Company’s Board of Managers and as an
officer of the Company, if serving as such at that time, and shall promptly
deliver to the Company all property provided to him by the Company for use in
relation to his employment and any and all sales materials, lists of customers
and prospective customers, price lists, files, patent applications, records,
models or other materials and information of or pertaining to the Company or its
customers or prospective customers or the products, businesses and operations of
the Company.
          9. Non-Competition Covenant.
          (a) Executive’s Agreements. Executive acknowledges and agrees that
Executive possesses skills and experience qualifying him for employment in other
fields, and that the restrictions and limitations imposed on Executive below
will not unduly impair his ability to earn a living if his employment with the
Company is terminated. Further, Executive hereby acknowledges and agrees that
the Company’s and its subsidiaries’ products are sold throughout the United
States. Accordingly, Executive agrees that the geographic limitations and
restrictions contained in the non-competition covenant set forth below are
reasonable and necessary to protect the market share and business interests of
the Company and its subsidiaries.
          (b) Non-Compete Covenant. Executive agrees that during the two
(2) year period commencing on the date of this Agreement, Executive shall not,
directly or indirectly, engage in,

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own, be employed by, become involved or affiliated with, render services to or
in any manner provide services to any business or enterprise which is
competitive with the business of the Company and its subsidiaries. Nor shall
Executive, during such period, interfere with, or attempt to interfere with the
relationship between the Company or any of its subsidiaries and any of their
respective customers, suppliers, clients, employees or consultants, whether by
solicitation or otherwise, whether alone or as a partner, officer, director,
shareholder, employee, consultant or independent contractor of any other entity.
Notwithstanding the foregoing, solely as a passive investor, Executive may own
or invest in interests in a company or entity which competes with the Company or
any of its subsidiaries, if such ownership or investment is solely in securities
which are traded on any national or international securities exchange and does
not at any time equal or exceed five percent (5%) or more of any class of
outstanding securities of such company or entity.
          10. Confidentiality Covenant.
          (a) Confidential Information. Executive recognizes and acknowledges
that, by virtue of and in the course of his employment with the Company,
Executive shall come into contact with, be exposed to, learn about, discover,
develop, generate or contribute to trade secrets, proprietary information or
other Confidential Information. For the purposes of this Agreement, the term
“Confidential Information” means all information or data at any time in the
possession of or accessible to Executive relating to the business and affairs of
the Company or of any subsidiary of the Company (a “Company Affiliate”) and not
generally known outside of the Company or the Company Affiliates, whether or not
the Company or a Company Affiliate invokes special measures to protect such
information or data, and shall include, without limitation, the Company’s and
the Company Affiliates’ data, designs, compilations of information, apparatus,
computer programs, identity of suppliers, identity of customers, customer
requirements, cost or price data, research data, business plans, marketing or
sales plans and information, financial data, salary and wage information,
policies and procedures, manufacturing and sales know-how and any other
information that is proprietary to or a trade secret of the Company or any
Company Affiliate, whether or not such information is considered a trade secret
within the meaning of applicable law. All Confidential Information, in whatever
form it may exist, whether in Executive’s memory or in some physical or
electronic or computerized form, is and shall be the sole and exclusive property
of the Company and the Company Affiliates. The rights and protections granted
herein with respect to Confidential Information are in addition to the rights,
remedies and protections afforded to the Company under any applicable law,
statute or regulation.
          (b) Agreement Not To Disseminate Confidential Information. Executive
agrees that he will not, at any time or in any manner, either directly or
indirectly, publish, communicate or otherwise reveal to any person or entity, or
use for any purpose whatsoever, except as may be necessary in the course of
performing his obligations to the Company, or as may be required by applicable
law, statute or regulation, any Confidential Information. Executive further
agrees to notify the Company before disclosing any Confidential Information
under compulsion of law and to cooperate with the Company in deciding the
substance and manner of such disclosure. Executive hereby specifically agrees
that all Confidential Information is valuable, material and

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significantly affects the effective and successful conduct of the Company’s and
the Company Affiliates’ businesses and related good will.
          (c) Public Information. Notwithstanding the foregoing, the
confidentiality obligations set forth above shall not apply to any information
that now is or hereafter becomes generally known to the public (other than as a
result of a breach of this Agreement or a similar agreement under which the
Company or a Company Affiliate has rights).
          (d) Protection of Confidential Information. Executive will take all
necessary steps and precautions to protect any Confidential Information. Upon
termination of Executive’s employment with the Company or upon the Company’s
written request, Executive shall promptly turn over to the Company any and all
correspondence, notes, agreements, memoranda, computer disks and tapes,
documents and other media and other property of the Company in Executive’s
control containing or reflecting Confidential, Information, keeping no copies or
extracts.
          11. Remedies. Executive agrees that money damages may not constitute
an adequate remedy for the violation by Executive of Section 9 or Section 10,
and any such violation by Executive is likely to cause irreparable damage to the
Company and that such damages would be difficult to determine. Accordingly, in
the event of any such violation or any threatened violation of Section 9 or
Section 10, in addition to all other legal and equitable remedies available to
the Company, the Company shall be entitled to injunctive relief, both temporary
and permanent, without bond, to enforce the provisions of such Sections. The
non-prevailing party in any final, unappealable decision regarding enforcement
of Section 9 or Section 10 shall be responsible for and indemnify the prevailing
party for all reasonable legal fees, court costs and related expenses incurred
by such prevailing party in seeking enforcement.
          12. Inventions and Discoveries. All discoveries, inventions,
processes, methods and improvements, conceived, developed, or otherwise made by
Executive, alone or with others, at any time while he is employed by the Company
or any Company Affiliate, and which
     (i) in any way relates to the Company’s present or proposed business or
products, or
     (ii) in any way relates to the Company’s actual or demonstrably anticipated
research or development, or
     (iii) results from work performed by Executive for the Company,
whether or not patentable or subject to copyright protection, and whether or not
reduced to tangible form or practice (“Developments”), shall be the sole
property of the Company. Executive hereby assigns to the Company all proprietary
right, title and interest of Executive throughout the world in and to all
Developments. Executive hereby agrees that the Developments constitute works
made for hire under the patent and copyright laws of the United States of
America.

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          13. Court Authorized to Modify Covenants. If a court or other body of
authority and competent jurisdiction determines that the covenant contained in
Section 9 of this Agreement are unenforceable, in whole or in part, due to the
duration or geographic scope of the restrictions or limitations imposed therein
or for any other reason, then such court or other body of authority is hereby
authorized and directed by the Company and the Executive to make such
modifications to Section 9 as are necessary to render said covenants enforceable
to the maximum extent permitted under applicable law.
          14. Survival of Covenants. The covenants set forth in Sections 9 and
10 herein shall survive the termination of the Employment Period or termination
of this Agreement for a period of two (2) years.
          15. Miscellaneous Provisions.
          (a) Governing Law. This Agreement shall be governed by the internal
laws (as opposed to conflicts of laws) and decisions of the State of Illinois.
          (b) Severability. Subject to the provisions of Section 13 above, if
any provision of this Agreement shall be held to be invalid by reason of the
operation of any applicable law, or by reason of the interpretation placed
thereon by any court or other governmental body, (i) this Agreement shall be
construed as not containing such provision and a substitute provision shall be
inserted therefore by such court or other governmental body which effectuates to
the maximum extent permitted by law the intent of the parties hereto, (ii) such
provision and the replacement thereof shall not affect the validity of any other
provision hereof, and (iii) any and all other provisions hereof which otherwise
are lawful and valid shall remain in full force and effect.
          (c) No Waiver. The failure of the Company to assert any of its rights
under this Agreement or the delay or partial enforcement of any of its rights
hereunder shall not operate or be construed as a waiver of any breach of this
Agreement, except as such waiver may be expressly set forth in writing and
signed by the Company. The waiver by the Company of any breach of any provision
of this Agreement shall not be construed as a waiver of any subsequent breach,
whether of the same or of a different character.
          (d) Notices. All notices, demands and other communications which may
or are required to be given hereunder or with respect hereto shall be in
writing, shall be given either by personal delivery or by recognized overnight
delivery service, and shall be deemed to have been given or made when personally
delivered, addressed as follows:

     
If to the Company to:
  c/o Electric City Corp.
1280 Landmeier Road
Elk Grove Village, Illinois 60007
Attn: Chief Executive Officer
Phone: (847) 437-1666
Fax: (847) 437-4969

or to such other address as the Company may from time to time designate to the
Executive in accordance with this section.

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If to the Executive to:
  Mr. Jeffrey R. Mistarz
 
 
 
 
 
 
 
  Phone: (____) ____-_____
 
  Fax: (____) ____-_____

No notice, request, demand, instruction, or other document to be given hereunder
to any party shall be effective for any purpose unless personally delivered, or
delivered by commercial overnight delivery service, or sent by certified or
registered mail, return receipt requested, to the appropriate address, or
transmitted by telecopier to the fax number provided herein. Notices that are
mailed shall be deemed to have been given on the third day following deposit of
same in any United States Post Office mailbox in the state to which the notice
is addressed or on the fourth day following deposit in any such post office box
other than in the state to which the notice is addressed, postage prepaid,
addressed as set forth herein. Notices sent via commercial overnight delivery
service shall be deemed to have been given the next business day after deposit
with the commercial delivery service. Notices that are transmitted via
telecopier shall be deemed to have been given the business day transmitted, if
transmitted before 3:00 p.m. recipient’s time, and on the next business day, if
transmitted after 3:00 p.m. recipient’s time, as evidenced by a telecopier
confirmation of successful transmission. The address and telecopier numbers for
the purposes of this Section may be changed by giving written notice of such
change in the manner herein provided for giving notice.
          (e) Modification. This Agreement shall not be amended, modified or
supplemented except in writing and signed by the Company and Executive.
          (f) Headings. The paragraph headings and captions used herein are
intended solely for convenience of reference and shall not control or effect the
interpretation, meaning or construction of any provision of this Agreement.
          (g) Arbitration. The parties hereto agree that in the event of any
disagreements or controversies arising from this Agreement or any other
agreements between the Company and Executive relating to the breach, termination
or validity thereof or the past, present and future dealings between the
parties, such disagreements and controversies shall be subject to binding
arbitration in Cook County, Illinois, as arbitrated in accordance with the then
current Commercial Arbitration Rules of the American Arbitration Association
(the “AAA”) before one neutral arbitrator. Such arbitrator shall be selected by
mutual agreement of the parties within thirty (30) days of written notice of
said disagreement or controversy. If the parties cannot mutually agree to an
arbitrator within thirty (30) days, then the AAA shall designate the arbitrator.
Either party may apply to the arbitrator seeking injunctive relief until the
arbitration award is rendered or the controversy is otherwise resolved. Without
waiving any remedy under this Agreement, either party may also seek from any
court having jurisdiction any interim or provisional relief that is necessary to
protect the rights or property of that party, pending the establishment of the
arbitral tribunal (or pending the arbitral tribunal’s determination of the
merits of the controversy). In the event of any such disagreement or
controversy, neither party shall directly or indirectly reveal, report, publish
or disclose any information relating to such disagreement or controversy to any
person, firm or corporation not expressly authorized by the

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other party to receive such information or use such information or assist any
other person in doing so, except to comply with actual legal obligations of such
party or unless such disclosure is directly related to an arbitration proceeding
as provided herein, including, but not limited to, the prosecution or defense of
any claim in such arbitration. The costs and expenses of the arbitration
(excluding attorneys’ fees) shall be paid by the non-prevailing party or as
determined by the arbitrator. This paragraph shall survive the termination of
this Agreement.
[Balance of page intentionally left blank; signature page follows.]

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          IN WITNESS WHEREOF, the parties have caused this Employment Agreement
to be executed as of the date first above written.

            ELECTRIC CITY CORP.
      By:   /s/ David Asplund       Name:   David Asplund      Title:   Chief
Executive Officer              /s/ Jeffrey Mistarz       Jeffrey R. Mistarz     
     

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