Document:

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                                  EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

                  This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of the
19th day of November, 1999 (the "Effective Date"), is made by and among Michael
Pokora ("Pokora" or "Employee") and Electric City Corp., a Delaware corporation
(the "Company").

                  For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Pokora do hereby
agree as follows:

                  Section 1. EMPLOYMENT AND DUTIES. On the terms and subject to
the conditions set forth in this Agreement, and subject to the ratification of
the board of directors of the Company on or before the Effective Date, the
Company agrees to employ Pokora as its Executive Vice-President of Sales and
Operations to render such services as would be customary for a Executive
Vice-President of Sales and Operations and to render such other services and
discharge such other responsibilities as 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 of Sales and Operations and consistent with
the organizational chart attached as Exhibit A hereto.

                  Section 2. PERFORMANCE. Pokora accepts the employment
described in Section 1 of this Agreement and agrees to concentrate all of his
time and efforts to the performance of the services described therein, including
the performance of such other services and responsibilities as 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 of Sales and
Operations.

                  Without limiting the generality of the foregoing Pokora
ordinarily shall devote not less than five 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. Pokora further agrees that
when the performance of his duties reasonably requires, he shall be present on
the Company's premises (if necessary) 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 Pokora
has 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 Pokora's obligations as outlined herein. Further, Pokora will have
reasonable, limited use of Company resources and his own salaried time, to
pursue such activities so long as such activities do not unreasonably interfere
with his obligations as Executive Vice-President of Sales and Operations. When
reasonable and consistent with the objectives of the Company, the Company agrees
to provide modest financial support to those organizations in which Mr. Pokora
becomes involved, subject to approval of the Chairman, CEO and President. Upon
request from the Company, Pokora agrees to furnish the Company with a list of
outside organizations in which he is involved, an explanation of said
involvement and the amount of remuneration received or expected to be received
for said involvement.

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                  Section 3. TERM. The term of employment under this Agreement
(the "Employment Period") shall commence on January 3, 2000 or earlier if agreed
to by the Parties hereto, and shall terminate on the 31st day of December, 2002,
unless earlier terminated pursuant to the termination provisions set forth
herein. The parties hereby agree and acknowledge that between the Effective Date
and commencement of the Employment Period, Kawamura shall discharge certain
responsibilities on behalf of his current employer, and in so doing, Kawamura
shall not be in breach of any provision of this Agreement. Notwithstanding
anything to the contrary herein, the parties acknowledge and agree that Pokora's
employment may be terminated only for Due Cause as more fully set forth herein.
At the end of the Employment Period, the continuation of Pokora's employment
with the Company shall be at the will of the Company and Pokora on terms and
conditions agreed to by the Company and Pokora, and there shall be no obligation
on the part of the Company or Pokora to continue such employment, provided;
however, that no later than June 30, 2002, the Company and Pokora shall each
provide reasonably specific notice to the other party of their respective
intentions in regard to continuation of Pokora's employment subsequent to the
conclusion of the Employment Period.

                  Section 4. COMPENSATION.

                  4.1. SALARY. For all the services to be rendered by Pokora
hereunder, the Company agrees to pay, during the Employment Period, a salary at
the annual rate of Two Hundred Fifty Thousand ($250,000) payable in equal
monthly installments at the end of each month during the term of this Agreement,
beginning no later than the 1st day of January, 2000, or at such other
intervals, not less frequently than once per month, as may be consistent with
the Company's normal compensation schedule. Pokora's salary may be subject to
annual review by the board of directors, which may not be reduced from the prior
year's salary.

                  4.2. BONUS. Pokora shall be entitled to a bonus on December 31
of each year, payable by February 15th the year after, up to forty percent (40%)
of his annual salary, provided the Company meets or exceeds the terms of an
annual business plan, with bonus parameter to be established as part of the
plan, to be mutually agreed upon between the Chief Executive Officer, the
President of the Company and the Board of Directors of the Company.

                  4.3. STOCK OPTIONS. The Company hereby agrees to grant to
Pokora an option to purchase shares of the common stock of the Company subject
to and in accordance with the following ( the "Option"):

                  (a)      OPTIONS. The Company hereby grants options to Pokora
                           to purchase 500,000 shares of the Company's common
                           stock, subject to the vesting provisions described
                           below:

                           (i)      On December 31, 2000, unless Pokora has been
                                    terminated for Due Cause prior thereto,
                                    Pokora shall become immediately vested in
                                    options to purchase 166,667 of the issued
                                    and outstanding shares of

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                                    common stock of the Company for Seven
                                    dollars ($7.00) per share.

                           (ii)     On December 31, 2001, unless Pokora has been
                                    terminated for Due Cause prior thereto,
                                    Pokora shall become immediately vested in
                                    options to purchase 166,666 of the issued
                                    and outstanding shares of common stock of
                                    the Company for Seven dollars ($7.00) per
                                    share.

                           (iii)    On December 31, 2002, unless Pokora has been
                                    terminated for Due Cause prior thereto,
                                    Pokora shall become immediately vested in
                                    options to purchase 166,666 of the issued
                                    and outstanding shares of common stock of
                                    the Company for Seven dollars ($7.00) per
                                    share.

                  (b) REGISTRATION RIGHTS. Pokora shall have piggy-back
         registration rights for all shares of stock obtained through the
         exercise of any options described in Section 4.3(a) above for any
         registration statement the Company files with the Securities and
         Exchange Commission registering shares of the Company's common stock
         that are similar to the shares to be issued hereunder. The Company will
         use its best efforts to file an S-8 registration statement covering the
         shares underlying the Options when Company becomes eligible to file an
         S-8 Registration Statement. The Company will bear the cost of
         registering the shares pursuant to this section.

                  (c) SALE OF ASSETS: CHANGE IN CONTROL. For all purposes of
         this Agreement, a Change of Control shall be deemed to have occurred
         when (i) the Company is merged or consolidated with another corporation
         which is not then controlled by the Company, or (ii) a majority of the
         Company's assets are sold or otherwise transferred to another such
         corporation or to a partnership, firm or one or more individuals not so
         controlled, or (iii) a majority of the members of the Company's Board
         of Directors consists of persons who were not nominated for election as
         directors by or on behalf of the Board of Directors, or (iv) a single
         person, or a group of persons acting in concert, obtains the power to
         cause the nominees of such person or group to be elected as a majority
         of the directors of the Company. Upon the occurrence of a Change of
         Control, the Options described in Section 4.3(a) above shall be
         automatically and immediately vested and be exercisable by Pokora
         subject to the terms of this Agreement.

                  (d) TERMINATION OPTIONS. The term of the Option hereunder
         shall be until December 31, 2009. Notwithstanding any other provision
         of this Agreement, upon any of the Options described above being fully
         vested, such fully vested Options may not be terminated unless Options
         terminate at December 31, 2009 without being exercised. If Pokora is
         terminated without Due Cause or for death or disability, the vested
         Options shall survive under the terms of this Agreement and the balance
         of the Options shall vest in accordance with the terms of Section
         4.3(a) of this Agreement.

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                  4.4. INSURANCE. During the Employment Period, the Company
shall apply for and procure in Pokora's name and for Pokora's benefit, if Pokora
is eligible and qualifies, and subject to the terms and conditions of the
applicable insurance plan, (a) short-term and permanent disability insurance
providing for disability benefits and life insurance substantially equivalent to
the benefit of other executives of the Company, (b) medical and dental insurance
for Pokora and Pokora's family substantially equivalent to the benefits of other
executives of the Company and (c) officer and director liability insurance, in
such amount as may be determined by the board of directors of the Company or as
may be required by law, and Pokora shall submit to any medical or other
examination and execute and deliver any application or other instrument in
writing, reasonably necessary to effectuate such insurance.

                  4.5. AUTOMOBILE. Pokora will be entitled to an automobile
allowance of $550.00 per month.

                  4.6. CELLULAR PHONE. The Company agrees to reimburse Pokora
for all business-related cellular phone calls, subject to the provisions of
Section 5.2.

                  4.7. OTHER BENEFITS. Except as otherwise specifically provided
herein, during the Employment Period, Pokora shall be eligible for all vacation
and non-wage benefits the Company provides generally for its other executives,
including four weeks paid vacation.

                  Section 5. BUSINESS EXPENSES.

                  5.1. REIMBURSEMENT. The Company shall reimburse Pokora for the
reasonable, ordinary, and necessary expenses incurred by him in connection with
the performance of his duties hereunder, including but not limited to, ordinary
and necessary travel expense and entertainment expenses, approved by the
President and the Chief Financial Officer.

                  5.2. ACCOUNTING. Pokora shall provide the Company with an
accounting of his expenses, which accounting shall clearly reflect which
expenses are reimbursable by the Company, Pokora will provide the Company with
such other supporting documentation and other substantiation of reimbursable
expenses as will conform to Internal Revenue Service or other requirements.

                  Section 6. COVENANTS OF POKORA.

                  6.1. CONFIDENTIALITY. During the Employment Period and
following the termination thereof for any reason, Pokora shall not disclose or
make any use of, for his own benefit or for the benefit of a business or entity
other than the Company or any corporation partnership, limited liability company
or other entity, more than 50% of the equity securities or partnership or
membership interests of which are owned directly or indirectly by the Company,
("Subsidiaries") any secret or confidential information, customer lists, and
lists of prospective customers, or any other information of or pertaining to the
Company, its Subsidiaries or their businesses, products, financial affairs,
customers or prospective customers, or services not generally known within the
trade of the Company or its Subsidiaries and which was acquired by

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him during his affiliation with the Company or its Subsidiaries unless required
by law or pursuant to a mutual release.

                  6.2. INVENTIONS AND SECRECY. Except as otherwise provided in
this Section 6.2, Pokora: (a) shall hold in a fiduciary capacity for the benefit
of the Company and its Subsidiaries, all secret or confidential information,
knowledge, or data of the Company, its Subsidiaries or their businesses or
production operations obtained by Pokora during his employment by the Company,
which shall not be generally known to the public or recognized as standard
practice (whether or not developed by Pokora) and shall not, during his
employment by the Company and after the termination of such employment for any
reason, communicate or divulge, any such information, knowledge or data to any
person, firm, or corporation other than the Company or its Subsidiaries, or
persons, firms or corporations designated by the Company; (b) shall promptly
disclose to the Company all inventions ideas, devices, and processes made or
conceived by him alone or jointly with others, from the time of entering the
Company's employ until such employment is terminated and within the one (1) year
period immediately following such termination, relevant or pertinent in any way,
whether directly or indirectly, to the businesses or production operations of
the Company or its Subsidiaries or resulting from or suggested by any work which
he may have done for or at the request of the Company or its Subsidiaries, (c)
shall, at all times during his employment with the Company, assist the Company
and its Subsidiaries in every proper way (entirely at the expense of the
Company) to obtain and develop for the benefit of the Company patents on such
inventions, ideas, devices, and processes, whether or not patented; and (d)
shall do all such acts and execute, acknowledge and deliver all such instruments
as may be necessary or desirable in the opinion of the Company to vest in the
Company, the entire interest in such inventions, ideas, devices, and processes
referred to above.

                  6.3. COMPETITION FOLLOWING TERMINATION. Within the two (2)
year period immediately following termination of Pokora's employment with the
Company for any reason, Pokora shall not, without the prior written consent of
the Company, which consent may be withheld at the sole discretion of the
Company: (a) engage directly or indirectly, whether as an officer, director,
stockholder (of 10% or more of such entity), partner, majority owner, managerial
employee, creditor, or otherwise with the operation, management, or conduct of
any business which competes with the businesses of the Company or its
Subsidiaries being conducted at the time of such termination within the United
States; (b) solicit, contact, interfere with, or divert any customer served by
the Company or its Subsidiaries, or any prospective customer identified by or on
behalf of the Company or its Subsidiaries if such intention is to divert
business from or compete with the Company, during Pokora's employment with the
Company or its Subsidiaries; or (c) solicit any person then or previously
employed by the Company or its Subsidiaries to join Pokora, whether as a
partner, agent, employee, or otherwise, in any enterprise engaged in a business
similar to the businesses of the Company or its Subsidiaries being conducted at
the time of such termination.

                  6.4. ACKNOWLEDGEMENT. Pokora acknowledges that the
restrictions set forth in this Section 6 are reasonable in scope and essential
to the preservation of the businesses and proprietary properties of the Company
and its Subsidiaries and that the enforcement thereof will not in any manner
preclude Pokora, in the event of Pokora's termination of employment with the

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Company, from becoming gainfully employed in such manner and to such extent as
to provide a standard of living for himself, the members of his family, and
those dependent upon him of at least the sort and fashion to which he and they
have become accustomed and may expect.

                  6.5. SEVERABILITY. The covenants of Pokora contained in this
Section 6 shall each be construed as an agreement independent of any other
provision in this Agreement and the existence of any claim or cause of action of
Pokora against the Company or its Subsidiaries, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company or its Subsidiaries of such covenants. The parties hereto expressly
agree and contract that it is not the intention of any party to violate any
public policy, statutory or common law, and that if any sentence, paragraph,
clause, or combination of the same of this Agreement is in violation of the law
of any state where applicable, such sentence, paragraph, clause or combination
of the same shall be void in the jurisdictions where it is unlawful, and the
remainder of such paragraph and this Agreement shall remain binding on the
parties to make the covenants of this Agreement binding only to the extent that
it may be lawfully done under existing applicable laws. In the event that any
part of any covenant of this Agreement is determined by a court of law to be
overly broad thereby making the covenant unenforceable, the parties hereto
agree, and it is their desire, that such court shall substitute a judicially
enforceable limitation in its place, and that as so modified the covenant shall
be binding upon the parties as if originally set forth herein.

                  Section 7. TERMINATION.

                  7.1 TERMINATION FOR DUE CAUSE, DEATH OR DISABILITY.

                           7.1.1 The Employment Period may be terminated only
         for the following reasons and upon the terms and conditions set forth
         below ("Due Cause"). Company, by a vote, requiring at least 3/4 of the
         board of directors ("Termination Vote") may terminate the Employment
         Period, effective upon written notice of such termination to Pokora, in
         the event of: (a) Intentionally Deleted; (b) material breach by Pokora
         of his covenants under this Agreement if unremedied within 15 days
         after written notice by the Company; (c) commission by Pokora of theft
         or embezzlement of property of the Company or other acts of dishonesty;
         (d) commission by Pokora of a crime resulting in material injury to the
         businesses, properties or reputations of the Company or its
         Subsidiaries or commission of other significant activities materially
         harmful to the businesses, properties or reputations of the Company or
         its Subsidiaries; (e) commission of an act by Pokora in the performance
         of his duties hereunder reasonably determined by a majority of the
         board of directors of the Company to amount to gross, willful, or
         wanton negligence; (f) willful refusal to perform or substantial
         neglect of the duties assigned to Pokora pursuant to Section 1 hereof
         if unremedied within 15 days after written notice by the Company; (g)
         any significant violation of any statutory or common law duty of
         loyalty to the Company or its Subsidiaries. All compensation shall
         cease immediately upon termination for Due Cause hereunder except for
         accrued and unpaid compensation.

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                           7.1.2 The Employment Period will be terminated upon
         the death of Pokora. All compensation shall cease immediately upon
         termination for death hereunder except for accrued and unpaid
         compensation.

                           7.1.3 For purposes of Paragraph 7.1(a), Pokora's
         employment hereunder will be terminated for Permanent Total Disability,
         immediately upon written notice from the Company, if an independent
         physician selected jointly by the parties shall have determined that
         Pokora has been unable due to illness or a physical or mental
         disability, to perform substantially all of the services required
         hereunder for a continuous period of 180 days, or for a period
         aggregating 180 days in any twelve month period. All compensation shall
         cease immediately upon termination for Permanent Total Disability
         hereunder except for accrued and unpaid compensation.

                  7.2 CHANGE OF CONTROL AND TERMINATION OTHER THAN DUE CAUSE.
Pokora's employment shall be deemed terminated for a reason other than Due Cause
by the Board of Directors if a Change of Control occurs. If Pokora's employment
is terminated for a reason other than Due Cause, then the Company shall pay as
severance compensation to Pokora the balance due under the terms of this
Agreement or twelve months compensation, including bonus, whatever is greater,
payable over a twelve month period commencing after the date of the Change of
Control or Pokora's termination without Due Cause as the case may be.

                  7.3 TERMINATION BY POKORA. Pokora may terminate the Employment
Period if the Company has breached a material term or condition of this
Agreement which is not cured or remedied within 15 days after the breach,
provided that Pokora's resignation for such breach shall be deemed a termination
by the Company without Due Cause for purposes of the Options vesting schedule in
Section 4.3(a) and the Termination provisions in Section 7.2 of this Agreement.
In the event Pokora terminates the Employment Period for any other reason any
Options not vested shall immediately terminate.

                  7.4 SURRENDER OF PROPERTIES. Upon termination of Pokora's
employment with the Company, regardless of the cause therefor, Pokora shall
promptly be deemed to have resigned from the Company's Board of Directors and
surrender to the Company or its Subsidiaries all property provided him by the
Company or its Subsidiaries, as applicable, for use in relation to his
employment and in addition, Pokora shall surrender to the Company or its
Subsidiaries, as applicable, 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
Subsidiaries or their customers or prospective customers or the products,
businesses, and operations of the Company or its Subsidiaries.

                  7.5 SURVIVAL OF COVENANTS. The covenants of Pokora set forth
in Section 6 of this Agreement shall survive the termination of the Employment
Period or termination of this Agreement for Due Cause.

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                  Section 8. GENERAL PROVISIONS.

                  8.1. NOTICE. Any notice required or permitted hereunder shall
be made in writing (a) either by actual delivery of the notice into the hands of
the party thereunder entitled, or (b) by the mailing of the notice in the United
States mail, certified or registered mail, return receipt requested, all postage
prepaid and addressed to the party to whom the notice is to be given at the
party's respective address set forth below, or such other address as the parties
may from time to time designate by written notice as herein provided.

If to the Company:

                  Electric City Corp.
                  1280 Landmeir Road
                  Elk Grove Village, Illinois 60007

With a copy (which shall
not constitute notice) to:

                  Kwiatt & Ruben, Ltd.
                  211 Waukegan Road
                  Suite 300
                  Northfield, Illinois  60093
                  Attn.: Philip E. Ruben

If to Pokora:

                  Michael Pokora

The notice shall be deemed to be received in case (a) on the date of its actual
receipt by the party entitled thereto and in case (b) on the date of its
mailing.

                  8.2. AMENDMENT AND WAIVER. No amendment or modification of
this Agreement shall be valid or binding upon: a) the Company unless made in
writing and signed by an officer of the Company, duly authorized by the board of
directors of the Company or; b) Pokora unless made in writing and signed by him.
The waiver by the Company or Pokora of the breach of any Provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such party.

                  8.3. GOVERNING LAW. The validity and effect of this Agreement
and the rights and obligations of the parties hereto shall be construed and
determined in accordance with the internal law, and not the conflicts law, of
the State of Illinois.

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                  8.4. ENTIRE AGREEMENT. This Agreement contains all of the
terms agreed upon by the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements and communications between the
parties dealing with such subject matter, whether oral or written.

                  8.5. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the transferees, successors and assigns of the
Company, including any company or corporation with which the Company may merge
or consolidate.

                  8.6. REMEDIES FOR BREACH. Pokora specifically acknowledges
that his services under this Agreement are unique and extraordinary and that
irreparable injury will result to the Company and its businesses and properties
in the event of a material breach of the terms and conditions of this Agreement
to be performed by him (including, but not limited to, leaving the employment
provided for hereunder except for a termination due to a Change of Control or a
material breach by the Company of this Agreement). Pokora, therefore, agrees
that in the event of his material breach of any of the terms and conditions of
this Agreement to be performed by him (including, but not limited to leaving the
employment provided for hereunder except for a termination due to a Change of
Control or a material breach by the Company of this Agreement which is not cured
or remedied within 15 days after such breach), the Company shall be entitled, if
it so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either at law or in equity, to enjoin him from performing services
for any other person, firm or corporation in violation of any of the terms of
this Agreement, and to obtain damages for any breach of this Agreement. In the
event of the material breach by the Company of any of the terms and conditions
of this Agreement to be performed by it, Pokora shall have all remedies, legal
or equitable, available to him under the laws of the State of Illinois. The
remedies provided herein shall be cumulative and in addition to any and all
other remedies which either party may have at law or in equity.

                  8.7. COSTS OF ENFORCEMENT. In the event of any suit or
proceeding seeking to enforce the terms, covenants, or conditions of this
Agreement, the prevailing party shall, in addition to all other remedies and
relief that may be available under this Agreement or applicable law, recover his
or its reasonable attorneys' fees and costs as shall be determined and awarded
by the court.

                  8.8. HEADINGS. Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.

                  8.9. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which when taken together, shall be and constitute one and the same instrument.

                  8.10 PUBLIC ANNOUNCEMENTS. The parties hereto agree no
announcement shall be made, unless required by law and with legal counsel's
advice, as it relates to this Agreement or the employment of Pokora with the
Company without the joint written approval of Pokora and the Company.

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                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date first set forth above.

                                   ELECTRIC CITY CORP.

                                   By:   /ss/ Joseph Marino
                                       -------------------------------------
                                   Its: Joseph Marino, Chairman of the Board
MICHAEL POKORA

                                   By:   /ss/ Brian Kawamura
                                       -------------------------------------
/ss/ Michael Pokora              Its: Brian Kawamura, President and Chief
--------------------------                Operating Officer

                                       10<PAGE>

                                  EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is made on the 14th day of
January, 2000, by and between Electric City Corp., a Delaware corporation, with
its principal place of business at 1280 Landmeier Road, Elk Grove Village,
Illinois (the "Company"), and Jeffrey Mistarz, whose residence address is
("Mistarz").

                                   WITNESSETH

         WHEREAS, the Company desires to assure itself of the services of
Mistarz, and Mistarz desires to be employed by the Company; and

         WHEREAS, the Company and Mistarz desire to clearly define and clarify
all material terms and conditions of this employment relationship through a
written agreement.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

1.       Term Of Employment.

         1.1 The Company agrees to employ Mistarz, and Mistarz agrees to serve
         in the employ of the Company, for the term set forth in paragraph 1.2,
         in the position and with the responsibilities, duties and authority set
         forth in paragraph 2, and on the other terms and conditions set forth
         in this Agreement.

         1.2 The term of Mistarz's employment under this Agreement shall be for
         a period commencing on January 1, 2000 and continuing through December
         31, 2002 unless sooner terminated in accordance with this Agreement.

         1.3 As used in this Agreement, the "Company" shall be defined as the
         Company, and any of its subsidiaries, affiliates, satellites, branches,
         or parent entities, and including, without limitation, the Company's
         successors, purchasers and assigns.

2.       Position And Duties.

         2.1 The Company agrees to employ Mistarz in the position of Chief
         Financial Officer, to render such services as would be customary for a
         Chief Financial Officer, including, but not limited to, management,
         oversight and supervision of the Company's financial affairs, budgets,
         financial planning, tax reporting and compliance activities, cash
         management, accounting functions, and such other responsibilities,
         consistent with Mistarz's position as Chief Financial Officer, as the
         Chief Executive Officer or Board of Directors, in their sole and
         exclusive discretion, shall assign. In the performance of his

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         duties, Mistarz shall report to the Chief Executive Officer, or such
         other official as the CEO or Board of Directors may designate.

         2.2 Performance. Mistarz agrees to devote his full time and best
         efforts to the diligent, loyal, faithful, timely, complete, and
         professional performance of all job duties as set forth in paragraph
         2.1 or assigned or reassigned from time to time by the Company. Without
         limiting the generality of the foregoing, Mistarz is expected to work
         full time (not less than five days per week, during normal business
         hours Monday through Friday), except for vacations and regular business
         holidays observed by the Company, plus any additional hours required by
         the Company or reasonably necessary to timely and expeditiously
         complete Mistarz's work assignments.

         2.3 No Prior Employment Restrictions. Mistarz warrants that he is not
         restricted by any restrictive covenant or confidentiality agreement
         from any prior employment from performing all of the duties required by
         this Agreement. Should a prior employer or such prior employer's
         assignee or successor in interest assert claims that Mistarz is so
         restricted, Mistarz shall indemnify, defend and hold harmless the
         Company from any reasonable attorneys' fees and costs incurred in
         defending such claims, and any damages resulting either from a final
         judgment or reasonable settlement of any such claims.

3.       Compensation.

         3.1 Salary. During the term of this Agreement, in consideration of the
         performance by Mistarz of the services set forth in paragraph 2 and his
         observance of the other covenants set forth herein, the Company shall
         pay Mistarz, and Mistarz shall accept a salary at the rate of One
         Hundred Seventy-Five Thousand Dollars ($175,000.00) per year, less any
         applicable withholdings or deductions, payable in accordance with the
         Company's standard payroll practices. Mistarz's salary may be subject
         to annual review by the CEO and the Board of Directors.

         3.2 Bonus. Mistarz shall be eligible for an annual bonus, if in the
         discretion of the Company's senior management, Mistarz's performance
         warrants payment of a bonus, as measured by Mistarz's attainment of
         performance goals to be mutually established and agreed upon by Mistarz
         and the Chief Executive Officer or his designee. The annual bonus for a
         calendar year shall be payable on February 15th of the following year,
         provided that Mistarz is actively employed by the Company on such date.
         If the Company establishes a formal annual bonus plan, Mistarz will be
         eligible consistent with the treatment of other senior executives of
         the Company.

         3.3 Benefits. Mistarz shall be eligible for the vacation and non-wage
         benefits the Company provides generally for its other senior
         executives, including four weeks paid vacation. Mistarz shall also be
         eligible to participate in the group insurance benefits provided by the
         Company for senior executives, including short-term and long-term
         disability insurance, life insurance, and medical and dental insurance,
         subject to the terms and conditions of the applicable insurance benefit
         plans. The Company will also provide

                                        2

<PAGE>

         officer liability insurance coverage for Mistarz, in such amount as may
         be determined by the Board of Directors or as may be required by law.
         Mistarz shall submit to any medical or other examination and execute
         and deliver any application or other instrument in writing, reasonably
         necessary to effectuate any such insurance benefits.

         3.4 Business Expense. The Company shall reimburse Mistarz for the
         reasonable, ordinary and necessary expenses incurred by him in
         connection with the performance of his duties, including but not
         limited to all cellular telephone expense related to Company business,
         and ordinary and necessary travel expense and entertainment expenses
         approved by the President and Chief Executive Officer. Mistarz shall
         provide the Company with an accounting of his expenses, including an
         identification of those expenses for which reimbursement by the Company
         is sought, and such supporting documentation and receipts as the
         Company may require from time to time, in conformance with Internal
         Revenue Service or other requirements.

         3.5 Stock Options. The Company hereby grants to Mistarz an option to
         purchase shares of the common stock of the Company subject to and in
         accordance with the following (the "Option"):

                  (a) Options. During the term of employment with the Company,
                  the Company hereby grants options to Mistarz to purchase
                  200,000 shares of the Company's common stock, subject to the
                  vesting provisions described below:

                      (i)      On December 31, 2000, unless Mistarz has
                               been terminated for Cause prior thereto or
                               if Mistarz has resigned voluntarily, Mistarz
                               shall become immediately vested in options
                               to purchase 66,667 of the issued and
                               outstanding shares of the Company's Common
                               stock for Seven Dollars ($7.00) per share.
                               Mistarz will have the right to exercise the
                               options in accordance with the following
                               schedule:

                               December 31, 2000  -  One-third

                               December 31, 2001  -  An additional one-third

                               December 31, 2002  -  Remaining one-third

                      (ii)     On December 31, 2001, unless Mistarz has
                               been terminated for Cause prior thereto or
                               if Mistarz has resigned voluntarily, Mistarz
                               shall become immediately vested in options
                               to purchase 66,667 of the issued and
                               outstanding shares of the Company's Common
                               stock for Seven Dollars ($7.00) per share.
                               Mistarz will have the right to exercise the
                               options in accordance with the following
                               schedule:

                                        3

<PAGE>

                               December 31, 2001  -  One-third

                               December 31, 2002  -  An additional one-third

                               December 31, 2003  -  Remaining one-third

                      (iii)    On December 31, 2002, unless Mistarz has
                               been terminated for Cause prior thereto or
                               if Mistarz has resigned voluntarily, Mistarz
                               shall become immediately vested in options
                               to purchase 66,666 of the issued and
                               outstanding shares of the Company's Common
                               stock for Seven Dollars ($7.00) per share.
                               Mistarz will have the right to exercise the
                               options in accordance with the following
                               schedule:

                               December 31, 2002  -  One-third

                               December 31, 2003  -  An additional one-third

                               December 31, 2004  -  Remaining one-third

                  (b) Registration Rights. Mistarz shall have piggy-back
                  registration rights for all shares of stock obtained through
                  the exercise of any options described in paragraph 3.5(a)
                  above for any registration statement the Company files with
                  the Securities and Exchange Commission registering shares of
                  the Company's common stock that are similar to the shares to
                  be issued hereunder. The Company will use its best efforts to
                  file an S-8 registration statement covering the shares
                  underlying the Options when Company becomes eligible to file
                  an S-8 Registration Statement. The Company will bear the cost
                  of registering the shares pursuant to this paragraph.

                  (c) Sale of Assets: Change in Control. Upon the sale of more
                  than forty percent (40%) of the net assets or shares of stock
                  of the Company to a person or entity not affiliated with the
                  Company or its parent company or subsidiaries, all of the
                  options described in Sections 3.5(a) (i) (ii) and (iii) above
                  shall be automatically granted to Mistarz and shall
                  immediately vest and be immediately exercisable by Mistarz
                  subject to the terms of this Agreement.

                  (d) Termination of Options. The term of the Options hereunder
                  shall be until December 31, 2009. Notwithstanding any other
                  provision of this Agreement, upon any of the Options described
                  above being granted, such granted but unexercised Options may
                  not be terminated prior to December 31, 2009. If Mistarz is
                  terminated without Cause or for death or disability, the
                  granted Options shall survive under the terms of this
                  Agreement.

                                        4

<PAGE>

4.       Termination Of Employment.

         4.1      Termination for Cause, Death or Disability.

                  4.1.1 The Company may terminate Mistarz's employment at any
                  time for Cause, including without limitation: (a) breach by
                  Mistarz of his covenants under this Agreement if unremedied
                  within 21 days after written notice by the Company; (b)
                  commission by Mistarz of theft or embezzlement of property of
                  the Company or other acts of dishonesty; (c) commission by
                  Mistarz of a crime resulting in injury to the businesses,
                  properties or reputation of the Company, (d) commission of an
                  act by Mistarz in the performance of his duties hereunder
                  reasonably determined by a majority of the board of directors
                  of the Company to amount to gross, willful, or wanton
                  negligence, (e) willful refusal to perform or substantial
                  neglect of the duties assigned to Mistarz pursuant to
                  paragraph 1 hereof if unremedied within 21 days after written
                  notice by the Company; (f) any significant violation of any
                  statutory or common law duty of loyalty to the Company. All
                  compensation shall cease immediately upon termination for
                  Cause hereunder except for accrued and unpaid compensation.

                  4.1.2 Mistarz's employment will be terminated immediately upon
                  his death. All compensation shall cease immediately upon
                  termination for death hereunder except for accrued and unpaid
                  compensation.

                  4.1.3 Mistarz's employment hereunder will be terminated for
                  Permanent Total Disability, immediately upon written notice
                  from the Company, if an independent physician selected jointly
                  by the parties shall have determined that Mistarz has been
                  unable due to illness or a physical or mental disability, to
                  perform substantially all of the services required hereunder
                  for a continuous period of 180 days, or for a period
                  aggregating 180 days in any twelve month period. All
                  compensation shall cease immediately upon termination for
                  Permanent Total Disability hereunder except for accrued and
                  unpaid compensation.

         4.2 Surrender of Properties. Upon termination of Mistarz's employment
         with the Company, regardless of the cause therefor, or otherwise
         immediately upon request of the Company, Mistarz shall promptly
         surrender to the Company all property provided to him by the Company
         for use in relation to his employment and in addition, Mistarz shall
         surrender to the Company any and all financial and accounting
         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, finances, or
         operations of the Company.

         4.3 Survival of Covenants. The covenants of Mistarz set forth in
         paragraphs 4.2, 5, and 6 of this Agreement shall survive the
         termination of his employment hereunder.

                                        5

<PAGE>

5. Recognition of Company's Rights and Non-Disclosure.

         5.1 Non-Disclosure. At all times during Mistarz's employment by the
         Company and thereafter, Mistarz will hold in strictest confidence and
         will not disclose, use, or otherwise publish in any manner, including
         by any electronic medium, any of the Company's "Confidential
         Information" (defined below), except as such disclosure, use or
         publication may be required in connection with Mistarz's services for
         the Company, or unless a senior officer of the Company expressly
         authorizes such disclosure, use or publication in writing in advance.

         5.2 Confidential Information. The term "Confidential Information" means
         trade secrets, confidential knowledge, data and all other proprietary
         information of the Company. By way of illustration but not limitation,
         "Confidential Information" includes (a) inventions, trade secrets,
         ideas, processes, formulas, source and object codes, data, programs,
         other works of authorship, know-how, improvements, discoveries,
         developments, materials, designs, and techniques regarding any of the
         foregoing; and (b) information regarding, or plans for, research,
         development, new products, marketing and selling, business plans,
         budgets and unpublished financial statements, licenses, prices and
         pricing structures, costs, customer lists, the identity of suppliers
         and customers, and information regarding the skills and compensation of
         employees of the Company.

         5.3 Inventions. Mistarz: (a) shall, from the time of entering the
         Company's employ until such employment is terminated and within the one
         (1) year period immediately following such termination, promptly
         disclose to the Company all inventions, ideas, devices, and processes,
         made or conceived by him alone or jointly with others, that are
         relevant or pertinent in any way, whether directly or indirectly, to
         the businesses or production operations of the Company or resulting
         from or suggested by any work which he may have done for or at the
         request of the Company; (b) shall, at all times during his employment
         with the Company, assist the Company in every reasonable way (entirely
         at the expense of the Company) to obtain and develop for the benefit of
         the Company patents on such inventions, ideas, devices, and processes,
         whether or not patented; and (c) shall do all such acts and execute,
         acknowledge and deliver all such instruments as may be necessary or
         desirable in the opinion of the Company to vest in the Company, the
         entire interest in such inventions, ideas, devices, and processes
         referred to in this paragraph 5.3.

6.       Non-Competition and Non-Solicitation. Mistarz acknowledges that but for
         his employment with the Company: (i) Mistarz would not have had contact
         with the Company's customers, with many of whom the Company enjoys a
         near permanent relationship; (ii) Mistarz would not have had access to
         the Company's Confidential Information; and (iii) the Company's
         business is national in scope and cannot be confined to any particular
         geographic area of the United States or the State of Illinois. In
         consideration of the receipt of the Company's Confidential Information
         under the terms and conditions of this Agreement, for a period of two
         (2) years after termination of employment for any reason, Mistarz shall
         not, without the prior written consent of the Company's Chief Executive
         Officer, in any manner, directly or indirectly, own, manage, operate,

                                        6

<PAGE>

         control, be employed by, participate in, or be connected in any manner
         with the ownership, management, operation or control of, any other
         business (conducted for profit or not for profit) that is competitive
         with the business of the Company (business of the Company is defined by
         the business of the Company at the time of termination). The foregoing
         restrictions shall not preclude Mistarz from the ownership of not more
         than three percent (3%) of the voting securities of any corporation
         whose voting securities are registered under Section 12(g) of the
         Securities Exchange Act of 1934. Additionally, Mistarz agrees that,
         among other things, he shall not during the one (1) year period after
         termination of employment for any reason, directly or indirectly:

         A. Contact or solicit the trade or patronage of any customer of
            the Company for Mistarz or any other entity or person, with
            respect to the Company or the business engaged in by Company.
            The term "customers" shall for purposes of this Agreement be
            deemed to include, without limitation, the officers,
            directors, agents, employees, parents, subsidiaries and
            affiliates of any person or organization who is a customer at
            the time of Mistarz's termination of employment or was a
            customer within the twelve-month period immediately preceding
            such termination, and with whom Mistarz has been in contact on
            behalf of the Company, or with respect to whom Mistarz has
            used any Confidential Information.

         B. Solicit, induce or attempt to induce any employee of the
            Company to leave the Company's employ or engagement to become
            connected in any way with, or employ, engage or otherwise
            utilize any such employee in, any other business that is
            competitive with the Company or is engaged in the business of
            the Company.

7.       Injunction.

              7.1 In view of Mistarz's access to the Company's customer base and
              the Company's Confidential Information, and in consideration of
              the value of such property to the Company, Mistarz agrees that the
              covenants contained in paragraphs 4.2, 5 and 6 hereof are
              necessary to protect the interests of the Company in its
              Confidential Information, and to protect and maintain near
              permanent customer relationships and other legitimate, proprietary
              interests of the Company, both actual and potential, which Mistarz
              would not have had access to or any involvement in but for his
              employment relationship with the Company. Mistarz confirms and
              agrees that enforcement of the covenants in paragraphs 4.2, 5 and
              6 hereof would not prevent Mistarz from earning a livelihood.
              Mistarz further agrees that in the event of an actual or
              threatened breach by Mistarz of any of the covenants set forth
              herein, the Company would be irreparably harmed and the full
              extent of injury resulting therefrom would be impossible to
              calculate and the Company therefore will not have an adequate
              remedy at law. Accordingly, Mistarz agrees that temporary and
              permanent injunctive relief would be appropriate remedies against
              such breach, without bond or security; provided, however, that
              nothing herein shall be construed as limiting any other legal or
              equitable remedies available to the Company. The parties to this
              Agreement consent to the jurisdiction of the courts of general
              jurisdiction of

                                        7

<PAGE>

              the State of Illinois, and to the federal courts situated in the
              State of Illinois, for any proceedings under paragraphs 6 or 7 of
              this Agreement.

              7.2 The Company shall have the right to disclose the contents of
              this Agreement or to deliver a copy of this Agreement bearing
              Mistarz's signature to any person to whom or for whose benefit the
              Company reasonably believes Mistarz has solicited, or has or may
              disclose or use any Confidential Information in violation of this
              Agreement.

              7.3 Mistarz and the Company agree that if, in any proceeding, the
              court or other authority shall refuse to enforce the covenants
              herein set forth because such covenants cover too extensive a
              geographic area or too long a period of time, any such covenant
              shall be deemed appropriately amended and modified in keeping with
              the intention of the parties to the maximum extent permitted by
              law.

8.   General Provisions.

         8.1  Notice. Any Notice required or permitted hereunder shall be made
              in writing (a) either by actual delivery of the notice into the
              hands of the party thereunder entitled, or (b) by the mailing of
              the notice in the United States mail, certified or registered
              mail, return receipt requested, all postage prepaid and addressed
              to the party to whom the notice is to be given at the party's
              respective address set forth below, or such other address as the
              parties may from time to time designate by written notice as
              herein provided.

              If to the Company:    Electric City Corp.
                                    1280 Landmeier Road
                                    Elk Grove Village, Illinois 60007

              With a copy (which shall not constitute notice) to:

                                    Wildman, Harrold, Allen & Dixon
                                    225 West Wacker Drive
                                    Chicago, IL  60606
                                    Attn: Neil G. Wolf

              If to CFO:            Jeffrey Mistarz

              This notice shall be deemed to be received in case (a) on the date
              of its actual receipt by the party entitled thereto and in case
              (b) on the date of its mailing.

                                        8

<PAGE>

              8.2. Amendment and Waiver. No amendment or modification of this
              Agreement shall be valid or binding upon: a) the Company unless
              made in writing and signed by an officer of the Company, duly
              authorized by the board of directors of the Company or; b) Mistarz
              unless made in writing and signed by him. The waiver by the
              Company or Mistarz of the breach of any provision of this
              Agreement by the other party shall not operate or be construed as
              a waiver of any subsequent breach by such party.

              8.3. Governing Law. The validity and effect of this Agreement and
              the rights and obligations of the parties hereto shall be
              construed and determined in accordance with the internal law, and
              not the conflicts law, of the State of Illinois.

              8.4. Entire Agreement. This Agreement contains all of the terms
              agreed upon by the parties with respect to the subject matter
              hereof and supersedes all prior agreements, arrangements and
              communications between the parties dealing with such subject
              matter, whether oral or written.

              8.5. Binding Effect. This Agreement shall be binding upon and
              shall inure to the benefit of the transferees, successors and
              assigns of the Company, including, any company or corporation with
              which the Company may merge or consolidate.

              8.6. Costs of Enforcement. In the event of any suit or proceeding
              seeking to enforce the terms, covenants, or conditions of this
              Agreement, the prevailing party shall, in addition to all other
              remedies and relief that may be available under this Agreement or
              applicable law, recover his or its reasonable attorneys' fees and
              costs as shall be determined and awarded by the court.

              8.7. Headings. Numbers and titles to paragraphs hereof are for
              information purposes only and, where inconsistent with the text,
              are to be disregarded.

              8.8. Counterparts. This Agreement may be executed in any number of
              counterparts, each of which shall be deemed an original, but all
              of which when taken together, shall be and constitute one and the
              same instrument.

              8.9. Public Announcements. The parties hereto agree no
              announcement shall be made, unless required by law and with legal
              counsel's advice, as it relates to this Agreement or the
              employment of Mistarz with the Company without the joint written
              approval of Mistarz and the Company.

                                        9

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.

                               ELECTRIC CITY CORP.

                             By:  /ss/ John Mitola
                                 -------------------------------------------
                                  John Mitola
                                  Its: Chief Executive Officer

                             By:  /ss/ Brian Kawamura
                                 -------------------------------------------
                                  Brian Kawamura
                                  Its: President and Chief Operating Officer

                                  /ss/ Jeffrey Mistarz
                                 -------------------------------------------
                                  JEFFREY MISTARZ

                                    10

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