Document:

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                   UNITED STATES FIDELITY AND GUARANTY COMPANY
                     FIDELITY AND GUARANTY INSURANCE COMPANY
                         FIDELITY AND GUARANTY INSURANCE
                               UNDERWRITERS, INC.

                             MASTER SURETY AGREEMENT

This AGREEMENT is made and entered into by:

DualStar Technologies Corporation, 11-30th 47th Avenue, Long Island City, NY
11101, 13-3776834

Centrifugal Associates, Inc., 13-15 Jackson Avenue, Long Island City, NY 11101,
13-2511979

Centrifugal Service, Inc., 13-15 Jackson Avenue, Long Island City, NY 11101,
13-3691705

Centrifugal Mechanical Associates, Inc., 13-15 Jackson Avenue, Long Island City,
NY 11101,11-3270484

Mechanical Associates, Inc., 13-15 Jackson Avenue, Long Island City, NY 11101,
11-2967237

High-Rise Electric, Inc., 13-15 Jackson Avenue, Long Island City, NY 11101,
11-3272769

Property Control, Inc., 13-15 Jackson Avenue, Long Island City, NY 11101,
11-3270466

The Automation Group, Inc., 11-30 47th Avenue, Long Island City, NY 11101,
11-3267197

Trident Mechanical Systems, Inc., 13-15 Jackson Avenue, Long Island City, NY
11101, 11-3267212

Grace Systems Technologies, Inc., 11-30 47th Avenue, Long Island City, NY 11101,
11-3304464

DualStar Communications, Inc., 11-30 47th Avenue, Long Island City, NY 11101,
11-3304546

Integrated Controls Enterprises, Inc., 11-30 47th Avenue, Long Island City, NY
11101, 11-3336674

In favor of UNITED STATES FIDELITY AND GUARANTY COMPANY, FIDELITY AND GUARANTY
INSURANCE COMPANY, FIDELITY AND GUARANTY INSURANCE UNDERWRITERS, INC., and any
and all affiliated, associated and subsidiary companies thereof, now existing or
hereafter created, assumed or otherwise acquired (hereinafter referred to as
"SURETY"), their successors and assigns.

     In this AGREEMENT the words BOND, PERSON, UNDERSIGNED and PRINCIPAL are
defined:

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         BOND: (1) Contract of suretyship, guaranty or indemnity; (2) the
         continuation, extension, alteration, renewal or substitution of such
         contract; (3) a letter from SURETY to a PERSON or PRINCIPAL wherein
         SURETY represents to such PERSON or PRINCIPAL that it is prepared and
         willing to execute in behalf of PRINCIPAL the BOND(S) required by such
         PERSON'S invitation for bids or proposals and referred to herein as a
         BID LETTER.

         PERSON: Individual(s), partnership(s), association(s), corporation(s)
         or any other legal or commercial entity(ies);

         UNDERSIGNED: PERSON(S) who execute this AGREEMENT;

         PRINCIPAL: One or more UNDERSIGNED or any partnership, association,
         corporation or other legal or commercial entity in which UNDERSIGNED
         have a substantial, material and/or beneficial interest to the extent
         that the partnership, association, corporation or other legal or
         commercial entity would be considered a subsidiary, associated or
         affiliated company of UNDERSIGNED who, alone or with other PERSON(S),
         have secured, or may secure the performance and fulfillment of
         obligations by BOND(S) (whether or not required to do so by statute,
         ordinance, contract, order of court, rule of court, or otherwise),
         executed, provided, or procured by SURETY.

         In consideration of SURETY'S:

               (1)  heretofore having executed, provided or procured BOND(S) in
                    behalf of PRINCIPAL; or

               (2)  receiving requests for BOND(S) from UNDERSIGNED and
                    determining whether or not SURETY will execute, provide or
                    procure the BOND(S) requested; or

               (3)  hereafter executing, providing or procuring BOND(S) in
                    behalf of PRINCIPAL;

         UNDERSIGNED covenant and agree that:

I.

         (A)   This AGREEMENT binds UNDERSIGNED and the heirs, personal
               representatives, successors and assigns thereof, jointly and
               severally, to SURETY in connection with all BOND(S) heretofore or
               hereafter executed, provided or procured by SURETY in behalf of
               PRINCIPAL in any penal sum and in favor of any obligee(s);

         (B)   This AGREEMENT shall not be construed as an offer by UNDERSIGNED
               to indemnify SURETY which SURETY must accept prior to its
               executing, providing or procuring BOND(S) n behalf of PRINCIPAL,
               but shall be construed

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               as part of the consideration on which SURETY has relied or will
               rely in executing, providing or procuring BOND(S) in behalf of
               PRINCIPAL;

         (C)   SURETY has relied up on and will rely on the covenants and
               agreements of UNDERSIGNED as consideration for the BOND(S)
               executed, provided or procured in behalf of PRINCIPAL;

         (D)   This AGREEMENT inures to the benefit of any co-surety or
               reinsurer of SURETY in said BOND(S) and in the event SURETY
               procures the execution of BOND(S) by other sureties, this
               AGREEMENT shall inure to the benefit of such other sureties.

 II.     UNDERSIGNED will pay or cause to be paid to SURETY, its successors and
         assigns, the premium charged or to be charged by SURETY for executing,
         providing or procuring BOND (S) for PRINCIPAL.

 III.    (A)   UNDERSIGNED shall exonerate, hold harmless, and keep indemnified
               SURETY from and against any and all demands, claims, liabilities,
               losses and expenses of whatsoever kind or nature (including but
               not limited to, interest, court costs and counsel fees) imposed
               upon, sustained, or incurred by SURETY by reason of (1) SURETY
               having executed, provided or procured BOND(S) in behalf of
               PRINCIPAL, or (2) UNDERSIGNED'S failure to perform or comply with
               any of the provisions of this AGREEMENT;

         (B)   In order to exonerate hold harmless, and indemnify SURETY,
               UNDERSIGNED shall upon demand of SURETY, place SURETY in funds
               before SURETY makes any payment; such funds shall be, at SURETY'S
               option, money or property, or liens or security interests in
               property. (The amount of such money or property or the value of
               the property to become subject to liens or security interests,
               shall be determined by Surety).

         (C)   SURETY may reduce the amount of UNDERSIGNED'S liability to SURETY
               hereunder by applying to such liability any money payable to
               UNDERSIGNED by SURETY; (Such Liability may arise from
               UNDERSIGNED'S as obligation to exonerate, to hold harmless and to
               indemnify SURETY and may be liquidated or unliquidated; and the
               "money payable to UNDERSIGNED" may be, but is not limited to, any
               money payable to SURETY as an insurer of UNDERSIGNED or another
               PERSON to return to UNDERSIGNED an unearned or other premium or
               to settle a claim of UNDERSIGNED against SURETY or a PERSON
               insured by SURETY.)

IV.      (A)   The liability of UNDERSIGNED hereunder shall extend to and
               include all amounts paid by SURETY in good faith under the belief
               that: (1) SURETY was or might be liable therefor; (2) such
               payments were necessary or advisable to protect any of SURETY'S
               rights or to avoid or lessen SURETY'S liability or alleged
               liability;

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         (B)   The liability of UNDERSIGNED to SURETY shall include interest
               from date of SURETY'S payments at the maximum rate permitted in
               the jurisdiction in which this AGREEMENT is enforced, or is
               enforceable;

         (C)   The voucher(s) or other evidence of such payment(s) or an
               itemized statement of payment(s) sworn to by an officer of SURETY
               shall be prima facie evidence of the fact and extent of the
               liability of UNDERSIGNED to SURETY.

V.       (A)   Separate suits may be brought hereunder as causes of action
               accrue, and the bringing of suit or the recovery of judgment upon
               any cause of action shall not prejudice or bar the bringing of
               other suits upon other causes of action, whether theretofore or
               thereafter arising;

         (B)   Each UNDERSIGNED is the agent for all UNDERSIGNED for the purpose
               of accepting service of any process in the jurisdiction in which
               the UNDERSIGNED accepting the process resides, is domiciled, is
               doing business or is found;

         (C)   In the event SURETY should file suit at law or-in equity to
               enforce the terms of this AGREEMENT, SURETY shall be entitled to
               recover its own reasonable attorney's fees and expenses from
               UNDERSIGNED in connection with such suit.

VI.      When BOND(S) secure the performance and fufillment of contracts,
         PRINCIPAL and UNDERSIGNED, agree that

         (A)   (1) SURETY has the rights of indemnification, exoneration and
               subrogation; and (2) SURETY'S rights of indemnification,
               exoneration and subrogation may be enforced as provided by
               applicable law or, at option of SURETY, as follows:

         for BOND(S) other than completion and subdivision bonds, as defined by
         SURETY:

               (a)  with respect to each specific contract secured by BOND(S),
                    all money and property representing the consideration for
                    the contract is dedicated for: (i) the performance of the
                    contract; (ii) the payment of obligation(s) to
                    subcontractor(s), laborer(s) and supplier(s) of material(s)
                    and service(s) incurred or to be incurred in the performance
                    of the contract for which SURETY is liable under BOND(S);
                    and (iii) the satisfaction of the obligations herein and all
                    other indebtednesses and liabilities of PRINCIPAL or
                    UNDERSIGNED to SURETY;

               (b)  to partially implement this dedication SURETY may, in its
                    sole discretion, demand that PRINCIPAL request delivery of
                    the consideration for the contract to a bank designated by
                    SURETY for deposit of the proceeds of the consideration for
                    the contract(s) in an account in the name of PRINCIPAL
                    designated as a "Special Account" and withdrawal(s) from

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                    said "Special Account' shall be by check(s) payable to the
                    beneficiaries of this dedication, signed by a representative
                    of PRINCIPAL and by a representative of SURETY;

               (c)  this dedication may be implemented in any other manner
                    provided at law or in equity.

         (B)   In the event of (1) any breach of any of the agreements herein;
               (2) any breach, delay or default in any contract secured by
               BOND(S); (3) any breach or default of BOND(S); (4) any change or
               threat of change in the character, identity, control, beneficial
               ownership or existence of PRINCIPAL; (5) any assignment by
               PRINCIPAL for the benefit of creditors; (6) the appointment of a
               receiver or trustee or any application for appointment of a
               receiver or trustee for PRINCIPAL, whether insolvent or not; (7)
               any proceedings or the exercise of any rights by any PERSON which
               deprives or impairs PRINCIPAL's use of its plant, machinery,
               equipment, plans, drawings, tools, supplies or materials; (8)
               upon the happening of any event other than those specified in (1)
               through (7) and completely different from those events, which, in
               its sole opinion, reasonably believes it would expose SURETY to
               loss, cost or expense;

               (a)  SURETY shall have the right, in its discretion, to take
                    possession of any part or all of the work under contract(s)
                    secured by BOND(S) (together with plant, machinery,
                    equipment, job books and records, plans, drawings, tools,
                    supplies or material wherever located and owned or useable
                    by PRINCIPAL) and, at the expense of UNDERSIGNED, to
                    complete or cause completion of any such work, or relet or
                    consent to the reletting or completion of such contract(s),
                    and;

               (b)  SURETY is authorized and empowered to assert, pursue and
                    prosecute, in its discretion, and at the expense of
                    UNDERSIGNED (in the name of PRINCIPAL or in the name of
                    SURETY), all claim(s) of PRINCIPAL arising or growing out of
                    contract(s) and work done thereunder secured by BOND(S)
                    against: (i) Obligee(s) in BOND(S); or (ii) any PERSON,
                    government or governmental agency. (The authority and power
                    to prosecute said claim(s) is deemed to include the
                    authority to settle said claim(s) or any part thereof, and
                    will notify UNDERSIGNED; and the money or property awarded
                    by Obligee(s) representative, a judicial or quasi-judicial
                    officer or a panel or board, or the money or property to
                    become due in settlement of said claims is deemed to be a
                    portion of the "money or property representing the
                    consideration for the contract" and subject to the
                    dedication in sub-paragraph (A) of this paragraph).

VII.     (A)   UNDERSIGNED are not obligated to request SURETY to execute,
               provide or procure BOND(S) required of them in the performance
               and fulfillment of obligations;

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         (B)   SURETY has the right to decline to execute, provide or procure
               BOND(S) requested by PRINCIPAL;

         (C)   If SURETY executes, provides or procures a bid or proposal bond
               or furnishes a BID LETTER in behalf of PRINCIPAL, SURETY has the
               right to decline to execute the final BOND(S) (including, but not
               limited to, performance, payment or maintenance bond(s)) that may
               be required in connection with any award that may be made under
               the bid, proposal or tender for which the bid or proposal bond is
               given.

 VIII.   UNDERSIGNED shall not be relieved of liability hereunder by any change,
         addition, substitution, continuation, renewal, extension, successor or
         new obligation in connection with BOND(S) or any contract(s) secured
         thereby, whether known or consented to by SURETY, and notice of
         SURETY'S consent is hereby waived.

 IX.     (A)   SURETY'S rights hereunder shall be deemed to be cumulative with,
               and in addition to, all other rights of SURETY, however derived;

         (B)   SURETY is not required to exhaust its remedies or rights against
               PRINCIPAL or to await receipt of any or final dividends from the
               legal representative(s) of PRINCIPAL before asserting its rights
               hereunder against UNDERSIGNED;

         (C)   This AGREEMENT shall be liberally construed so as to protect,
               hold harmless exonerate and indemnify SURETY.

X.       (A)   At any time during business hours until such time as (1) the
               liability of SURETY under BOND(S) is terminated or (2) SURETY is
               fully reimbursed all its losses, costs and expenses as a result
               of having executed, provided, or procured BOND(S) in behalf of
               PRINCIPAL, SURETY shall have access to the books, records and
               accounts of UNDERSIGNED;

         (B)   When requested by SURETY, banks, depositories, obligees in
               BOND(S), materialmen, supply houses, or other PERSON(S) are
               hereby authorized to furnish SURETY any information requested
               with respect to PRINCIPAL or UNDERSIGNED.

 XI.     (A)   There shall be no waiver, modification or change of the terms of
               this AGREEMENT without the written approval of an officer of
               SURETY.

         (B)   If an UNDERSIGNED previously executed an agreement of indemnity
               or MASTER SURETY AGREEMENT in favor of SURETY and upon which
               SURETY relied when it executed, provided or procured BOND(S) in
               behalf of any PERSON as PRINCIPAL, SURETY'S acceptance of this
               AGREEMENT neither terminates such agreement of indemnity or
               MASTER SURETY AGREEMENT nor relieves such UNDERSIGNED from
               liability to SURETY thereon in connection with such BOND(S).

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         (C)   This AGREEMENT may be terminated as to any UNDERSIGNED upon
               written notice given to SURETY by such UNDERSIGNED or such
               UNDERSIGNED'S legal representatives or successors by Registered
               or Certified Mail addressed to SURETY at its Home Office in
               Baltimore, Maryland;

         (D)   If an UNDERSIGNED: (1) dies; (2) becomes physically or mentally
               disabled to the extent that he or she is unable to perform the
               duties of owner, partner, officer or employee of an UNDERSIGNED
               which is or may become PRINCIPAL in BOND(S); (3) terminates his
               or her marriage by annulment, or divorce; or (4) sells or
               disposes of his or her interest in an UNDERSIGNED which is or may
               become PRINCIPAL in BOND(S); this AGREEMENT may be terminated as
               to such UNDERSIGNED upon receipt by SURETY at its Home Office in
               Baltimore, Maryland, of written notice of such death, disability,
               annulment, divorce, sale or disposition (such written notice
               shall be given as specified in Subparagraph XI (C));

         (E)   Termination of this AGREEMENT pursuant to Subparagraph XI(C) or
               XI(D) shall not be effective until thirty (30) days after receipt
               of said written notice by SURETY;

         (F)   Termination of this AGREEMENT pursuant to Subparagraph XI(C) or
               XI(D) shall not relieve any UNDERSIGNED from liability to SURETY
               arising out of BOND(S) executed, provided or procured by SURETY
               in behalf of PRINCIPAL prior to the effective date of such
               termination and for which this AGREEMENT is part of the
               consideration on which SURETY relied in executing, providing or
               procuring such BOND(S)

         (G)   UNDERSIGNED agree to be bound with any additional UNDERSIGNED who
               execute this AGREEMENT after the date of execution of this
               agreement, jointly and severally, to SURETY, with prior notice
               from SURETY, and agrees to assume all the rights, liabilities and
               obligations of an UNDERSIGNED of this AGREEN4ENT. The rights,
               liabilities and obligations of an additional UNDERSIGNED shall be
               the same as those set forth in this AGREEMENT as though such
               person were an UNDERSIGNED on the .

XII.     In the event that the execution of this AGREEMENT by any one or more of
         UNDERSIGNED is defective or invalid for any reason, such defect or
         invalidity shall have no effect upon the validity of this AGREEMENT as
         to any other UNDERSIGNED. Similarly, should any portion of this
         AGREEMENT be deemed invalid or unenforceable, the remaining provisions
         shall be valid and enforceable.

XIII.    This AGREEMENT constitutes the entire AGREEMENT between the parties and
         all previous representations, negotiations, discussions and promises
         concerning SURETY'S willingness to provide, procure or execute bonds in
         any specific amount, single limit or aggregate work program, or
         concerning SURETY'S intention to enforce or retain from enforcing any
         of the terms of this AGREEMENT or exempt any specific assets or waive
         any of the terms hereof are hereby merged into this AGREEMENT.

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CAUTION!
READ BEFORE SIGNING

The UNDERSIGNED represent to the SURETY that they have carefully read the entire
AGREEMENT and that by executing this AGREEMENT they are bound to the SURETY with
respect to all BOND(S) executed, provided, or procured or to be executed,
provided or procured by SURETY in behalf of PRINCIPAL as defined on page 1.

IN WITNESS WHEREOF, the UNDERSIGNED who are individuals have hereunto set their
hand and seals, and the UNDERSIGNED who are partnerships, corporations or
unincorporated associations have caused this AGREEMENT to be duly executed by
their duly authorized representatives all on this 3rd day of November, 1997.

ATTEST:                                 NAME:  DualStar Technologies Corporation

/s/ Stephen J. Yager                    By: /s/Gregory Cuneo
------------------------------------       -------------------------------------
Secretary, Stephen J. Yager             Title:  Gregory Cuneo, President

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<TABLE>
<CAPTION>

<S>                                         <C>
ATTEST:                                     NAME: Centrifugal Associates, Inc.

/s/ Joseph C. Chan                          By:/s/ Stephen J. Yager
------------------------------------------     -----------------------------------------------
Secretary, Joseph C. Chan                   Title: Stephen J. Yager, President

ATTEST:                                     NAME: Centrifugal Service, Inc.

/s/ Daniel F. Tangel                        By:/s/ Elven M. Tangel
------------------------------------------     -----------------------------------------------
Secretary, Daniel F. Tangel                 Title: Elven M. Tangel, President

ATTEST:                                     NAME:  Centrifugal/Mechanical Associates, Inc.

/s/ Gregory Cuneo                           By:/s/ Stephen J. Yager
------------------------------------------     -----------------------------------------------
Secretary, Gregory Cuneo                    Title: Stephen J. Yager, President

ATTEST:                                     NAME: Mechanical Associates, Inc.

/s/ Armando Spaziani                        By:/s/ Ronald Fregara
------------------------------------------     -----------------------------------------------
Secretary, Armando Spaziani                 Title: Ronald Fregara, President

ATTEST:                                     NAME: High-Rise Electric, Inc.

/s/ Nicholas Ahel                           By:/s/ Barry I. Halpern
------------------------------------------     -----------------------------------------------
Secretary, Nicholas Ahel                    TITLE: Barry I. Halpern, President

ATTEST:                                     NAME: Property Control, Inc.

/s/ Ronald Fregara                          By:/s/ Gregory Cuneo
------------------------------------------     -----------------------------------------------
Secretary, Ronald Fregara                   Title: Gregory Cuneo, President

ATTEST:                                     NAME: The Automation Group, Inc.

/s/ Armando Spaziani                        By:/s/ Richard DiBello
------------------------------------------     -----------------------------------------------
Secretary, Armando Spaziani                 TITLE: Richard DiBello, President

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>                                         <C>
ATTEST:                                     NAME: Trident Mechanical Systems, Inc.

/s/ Michael K. Matura                       By:/s/ Peter C. Vrankovic
------------------------------------------     -----------------------------------------------
Secretary, Michael K. Matura                TITLE:  Peter C. Vrankovic, President

ATTEST:                                     NAME: Grace Systems Technologies, Inc.

/s/ Vincent M. D'Onofrio                    By:/s/ Donald J. Skorka
------------------------------------------     -----------------------------------------------
Secretary, Vincent M. D'Onofrio             TITLE: Donald J. Skorka, Jr., President

ATTEST:                                     NAME:  DualStar Commuications, Inc.

/s/ Donald J. Skorka                        By:/s/ Vincent M. D'Onofrio
------------------------------------------     -----------------------------------------------
Secretary, Donald J. Skorka, Jr.            TITLE:  Vincent M. D'Onofrio, President

ATTEST:                                     NAME: Integrated Controls Enterprises, Inc.

/s/ Nicholas Ahel                           By:/s/ Peter D. Aiello
------------------------------------------     -----------------------------------------------
Secretary, Nicholas Ahel                    TITLE:  Peter  D. Aiello, President

</TABLE><PAGE>

                              CONSULTING AGREEMENT

         This Consulting Agreement dated as of June 1, 2000 by and between
DualStar Technologies Corporation, a Delaware corporation having its address at
1 Park Avenue, New York, New York 10016 ("DualStar"), and TechOne Capital Group
LLC, a Delaware limited liability company having its address at 18 Corporate
Woods Boulevard, Third Floor, Albany, New York 12211 ("TechOne").

         WHEREAS, DualStar and TechOne are parties to that certain letter
agreement effective as of August 12, 1999, as amended by letter dated March 24,
2000 (together, the "Letter Agreements"), pursuant to which DualStar has engaged
TechOne to provide certain consulting services to DualStar and its subsidiaries;
and

         WHEREAS, DualStar and TechOne desire to amend and extend the consulting
engagement contemplated by the Letter Agreements by entering into this
Consulting Agreement.

         NOW, THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the parties hereto agree as follows:

         1. Upon execution and delivery of this Consulting Agreement by DualStar
and TechOne, the Letter Agreements shall terminate and be of no further force
and effect, except that any amounts due to TechOne by DualStar, at the time of
such termination, shall be immediately due and payable, and TechOne shall not be
prevented from collecting such amounts notwithstanding the termination of the
Letter Agreements.

         2. Subject to the terms and conditions set forth herein, TechOne hereby
agrees to provide to DualStar and its subsidiaries consulting services (the
"Services") in connection with DualStar's strategic alternatives and the
implementation of an expanded communications business plan adopted by DualStar
Communications, Inc., a wholly-owned subsidiary of DualStar, and DualStar hereby
agrees to pay TechOne for the Services a sum of $30,000 per month, payable in
advance on the first day of each month during the Term (defined below), and to
reimburse TechOne for all out-of-pocket expenses incurred by TechOne and its
personnel in furtherance of performing the Services.

         3. All personnel assigned by TechOne to perform Services will be
principals, employees or contractors (collectively, "personnel") of TechOne and
TechOne will pay all salaries and expenses of, any applicable federal, social
security, federal and state unemployment taxes, and any other payroll or
withholding taxes relating to such employees. TechOne will be considered, for
all purposes, an independent contractor, and its will not, directly or
indirectly, act as an agent, servant or employee of DualStar.

         4. This Consulting Agreement will be effective from the date hereof and
will terminate on June 1, 2003, at which time it may be renewed, extended or
modified by a written agreement signed by both parties hereto.

<PAGE>

                                       2

         5. TechOne agrees that the Services to be provided hereunder will be
performed by qualified, careful and efficient personnel in strict conformity
with the best practices and highest applicable standards. TechOne is responsible
for the direct management and supervision of its personnel.

         6. TechOne agrees not to use or disclose to anyone other than
employees, principals, consultants attorneys and other professionals of TechOne
who have acknowledged this confidentiality covenant and agree in writing to be
bound by it, during the terms of this Consulting Agreement and for a period of
two (2) years following the termination hereof, any Confidential Information
(defined below). For purposes of this Consulting Agreement, "Confidential
Information: is (a) information contained in any materials delivered to TechOne
pursuant to this Consulting Agreement, and (b) information which relates to
DualStar's business affairs or that of any of its affiliates, but does not
include any information otherwise made available to TechOne in any other
capacity apart from this Consulting Agreement or is otherwise publicly available
through no act or failure to act on the part of TechOne. Upon the termination of
this Consulting Agreement, TechOne shall deliver to DualStar all Confidential
Information and other material in which DualStar has exclusive rights.

         7. TechOne's obligation to perform the Services hereunder shall be
excused without liability when prevented by strike, act of God, governmental
action, accident or any other condition beyond its reasonable control. TechOne
agrees to resume performance of Services as soon as practicable following
cessation of such condition.

         8. This Consulting Agreement may be terminated prior to the end of the
Term or any renewal thereof as provided in this Paragraph 8 and the rights and
remedies of the parties upon such termination shall be as set forth in this
Paragraph. Either party (the "Non-defaulting Party") may terminate this
Consulting Agreement upon a material breach of this Consulting Agreement by the
other party (the "Defaulting Party") if such material breach is not cured by the
Defaulting Party within fifteen (15) days of its receipt of written notice
regarding such breach from the Non-defaulting Party. Other than termination as a
result of a material breach by TechOne, DualStar may terminate this Consulting
Agreement only by giving written notice to TechOne of DualStar's intention to
terminate this Consulting Agreement accompanied by payment of (i) all unpaid
amounts due hereunder from DualStar to TechOne for Services rendered through the
date of termination, plus all reimbursable amounts for which TechOne has
delivered to DualStar an invoice on or before the termination date, (ii)
$25,000, which will be used by TechOne for reimbursable expenses incurred prior
to the termination date and not yet invoiced, and (iii) an amount equal to the
product of $30,000 times the greater of (A) the number of months remaining in
the Term hereof, and (B) 24. Not later than 60 days following the termination
date, TechOne shall provide DualStar with an itemized invoice for reimbursable
expenses incurred by TechOne prior to the termination date. To the extent that
the $25,000 payment contemplated by clause (ii) above exceeds such invoiced
amount, TechOne will remit the difference to DualStar with the itemized invoice.
To the extent that the $25,000 payment contemplated by clause (ii) above is less
than the

<PAGE>

                                       3

invoiced amount, DualStar will remit such difference to TechOne within 30 days
following receipt of the itemized invoice.

         9. DualStar shall not in any action or proceeding, or otherwise, assert
any claim for consequential damages against TechOne on account of any loss,
cost, damage or expense which DualStar may suffer or incur because of any act or
omission of TechOne or its employees in the performance of the Services, and
DualStar hereby expressly waives all such claims.

         10. This Consulting Agreement may not be assigned by either party
without the prior written consent of the other party.

         11. This Consulting Agreement will be governed in all respects by the
law of the State of Delaware.

         12. This Consulting Agreement may be amended only by an instrument in
writing executed by the parties or their permitted assignees.

         13. All notices pursuant to this Consulting Agreement shall be in
writing, and hand delivered or mailed by first class mail, postage prepaid, or
sent via facsimile to the attention of the person listed below and to the party
intended as the recipient thereof at the address of such party set forth below,
or at such other address or to the attention of such other person as such party
shall have designated for such purpose in a written notice complying as to
delivery with the terms of this Paragraph.

             If to TechOne:   TechOne Capital Group LLC
                              18 Corporate Woods Boulevard, Third Floor
                              Albany, New York 12211
                              Attention: Chairman
                              Fax: (518) 462-3045

             If to DualStar:  DualStar Technologies Corporation
                              1 Park Avenue
                              New York, New York 10016
                              Attention:  President and Chief Executive Officer
                              Fax: (212) 616-6254

         14. Failure by either party at any time to require performance by the
other party or to claim a breach of any provision of this Consulting Agreement
will not be construed as a waiver of any right accruing under this Consulting
Agreement, nor affect any subsequent breach, nor affect the effectiveness of
this Agreement or any part hereof, nor prejudice either party as regards any
subsequent action.

         15. This Consulting Agreement constitutes the entire agreement between
TechOne and DualStar with respect to the subject matter hereof and no
representation or

<PAGE>

                                       4

statement not contained in the main body of this Agreement shall be binding upon
DualStar or TechOne as a warranty or otherwise.

         IN WITNESS WHEREOF, the parties hereto have respectively caused this
Consulting Agreement to be executed by their duly authorized signatories as of
the day and year first above written.

DUALSTAR TECHONOLOGIES CORPORATION

By: /s/
    --------------------------------------------
    Name:  Gregory Cuneo
    Title: President and Chief Executive Officer

TECHONE CAPITAL GROUP LLC

By: /s/
    --------------------------------------------
    Name:  James P. Ashman
    Title: Executive Vice President and
            Chief Financial Officer

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