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                                                                   EXHIBIT 10.25

                    EMPLOYMENT AND NON-COMPETITION AGREEMENT

         THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement") is
made and entered into as of January 1, 2003 by and between PowerSecure, Inc., a
Delaware corporation (the "Company"), and Sidney Hinton, an individual who
presently resides in Wake Forest, North Carolina ("Employee").

                              W I T N E S S E T H:

         WHEREAS, the Company desires to employ Employee, and Employee desires
to serve the Company, upon the terms and subject to the conditions set forth
herein; and

         WHEREAS, the Company and Employee desire to set forth the terms and
conditions of such employment in this Agreement;

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee, intending to be legally bound hereby, agree as follows:

         SECTION 1. EMPLOYMENT. The Company hereby employs Employee, and
Employee hereby accepts such employment and agrees to serve the Company, upon
the terms and subject to the conditions set forth herein.

         SECTION 2. TERM. The term of Employee's employment hereunder shall
commence on the date first above written and shall expire three (3) years from
such date, unless earlier terminated in accordance with the provisions of
Section 5. In the event that this Agreement has not been earlier terminated in
accordance with the provisions of Section 5, the term of Employee's employment
hereunder shall be automatically extended without further action by the Company
or Employee for additional successive one-year periods unless either party, for
any reason or no reason, shall have given written notice of termination to the
other party no less than thirty (30) days prior to the commencement of any
one-year extension period. The term of Employee's employment hereunder,
including any extension period, is sometimes hereinafter referred to as the
"Employment Term."

         SECTION 3.  DUTIES OF EMPLOYEE.

                  (a) GENERAL DUTIES AND RESPONSIBILITIES. During and throughout
the Employment Term, Employee shall faithfully and diligently, to the best of
his ability, serve as the President and Chief Executive Officer and a member of
the Board of Directors of the Company, and in such additional management offices
and capacities and with such additional titles and duties as shall be designated
by the Company's Board of Directors (the "Board") during the Employment Term,
shall have the authority and perform the duties and responsibilities customary
for such offices, and shall have such other duties as may be assigned to him
from time to time by the Board or by the Chairman of the Board of the Company
(the "Chairman"). Employee shall perform his duties hereunder in accordance with
the policies from time to time established and amended by the Company and in
accordance with all applicable laws and regulations. Employee shall use his best
efforts to promote the best interests of the Company. Employee shall always be
subject to the direction, approval and control of the Board and the Chairman in
the performance of his duties. Employee acknowledges and agrees that he may be
required by the Company, without additional compensation, to perform services
for any other entity controlling, controlled by, under common control with or
otherwise affiliated with, the Company (any such entity hereinafter referred to
as an "Affiliate"), and to accept such office or position with any Affiliate as
the Board may reasonably require, including but not limited to service as an
officer and/or director of an Affiliate.

                  (b) PERFORMANCE OF SERVICES. During and throughout the
Employment Term, Employee shall devote his full time, attention, skill, ability
and energy during normal business hours (and outside such hours when reasonably
necessary to perform Employee's duties hereunder) exclusively to the business
and affairs of the Company and the performance of his duties under this
Agreement. Employee shall not, directly or indirectly, render any services of a
business, commercial or professional nature to any person or organization
without the prior written consent of the Board; provided, however, that the
provisions this Section 3(b) shall not preclude Employee from devoting time,
ability, energy and attention outside normal

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business hours throughout the Employment Term to reasonable participation in
community, civic, charitable or similar organizations, or the pursuit of
personal legal and financial affairs which do not interfere or conflict with the
performance of Employee's duties hereunder and are not adverse to the business
or best interests of the Company.

                  (c) PLACE OF EMPLOYMENT. Employee shall perform his services
hereunder at the Company's principal executive offices in Wake Forest, North
Carolina or at such other location as mutually agreed with the Board; provided,
however, that Employee agrees to undertake all reasonable travel required by the
Company to be conducted in connection with the business of the Company and the
performance of Employee's duties hereunder.

         SECTION 4. COMPENSATION. During and throughout the Employment Term, as
compensation for the services performed and other covenants made by Employee to
the Company hereunder, the Company shall pay and provide or cause to be provided
to Employee the following:

                  (a) BASE SALARY. The Company shall pay Employee a base salary
equal to $250,000 per year (the "Base Salary"), payable in approximately equal
installments in accordance with the Company's customary payroll practices.
Employee's Base Salary may be reviewed by or under the authority of the Board
and may be increased (but never decreased) at the sole discretion of the Board
or its designee (although the Board has no obligation to do so) based upon
whatever factors the Board or its designee deems appropriate including, but not
limited to, Employee's individual performance, the overall performance,
profitability and prospects of the Company and prevailing economic and industry
factors.

                  (b) BONUSES. So long as he remains employed with the Company,
Employee shall be entitled to receive the following bonuses:

                           (i) CASH FLOW BONUS.  Employee shall be entitled to
receive a bonus in the amount of 7% of the Company's "Cash Flow from Operations"
(the "Cash Flow Bonus") for each fiscal year of the Company during the
Employment Term, on the following terms and conditions:

                                    (A) The Company's "Cash Flow from
Operations" for any fiscal year shall be an amount equal to the Company's net
income (loss) before taxes, depreciation and amortization but after interest
(including interest reasonably allocated by Metretek Technologies, Inc., a
Delaware corporation and the corporate parent of the Company ("Metretek") from
its interest cost due to the Company's use of funds from Metretek's credit
facility) during such fiscal year, determined in accordance with generally
accepted accounting principles consistently applied, adjusted to exclude (I) all
items of income, gain, loss or expense during such fiscal year determined by the
Board to be extraordinary or unusual in nature and not incurred or realized in
the ordinary course of business, whether or not such items would otherwise be
considered to be extraordinary or unusual in accordance with generally accepted
accounting principles, and (II) any profit or loss attributable to the business
operations of any entity acquired by the Company during such fiscal year, and
shall be determined by the Board in its sole discretion based upon the Company's
financial statements for such fiscal year.

                                    (B) The Company shall pay any Cash Flow
Bonus within 90 days after the expiration of a Cash Flow Bonus Period. In the
event that the Company's Cash Flow from Operations during any fiscal year is
negative, then Employee shall not be entitled to any Cash Flow Bonus for such
fiscal year under any circumstances.

                                    (C) In order to be entitled to receive the
Cash Flow Bonus for any fiscal year, Employee must not have been terminated by
the Company for "Cause" or have voluntarily terminated his employment with the
Company during such fiscal year.

                           (ii) GENERAL BONUS PROGRAM. If the Company shall
adopt a bonus program or any other form of profit-sharing participation for
senior executive officers of the Company, Employee shall be eligible to
participate in such program in a manner and capacity commensurate with his
position and duties.

                  (c) POWERSECURE SHARES. In consideration in part for inducing
Employee to enter into this Agreement and to perform his services hereunder, the
Company shall issue to Employee shares of its common stock (the "PowerSecure
Shares") constituting in the aggregate 7% of the issued and outstanding
PowerSecure Shares as of the date hereof. All PowerSecure Shares shall be issued
subject to the terms and conditions of a Shareholders' Agreement, in
substantially the form attached hereto as Exhibit A, which contains certain
rights and restrictions on the PowerSecure Shares. Employee shall also be
involved in the Company's allocation of up to an additional 8% of the issued and
outstanding PowerSecure Shares as of the date hereof to other employees of the
Company.

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                  (d) EMPLOYEE BENEFIT PLANS. Employee shall be entitled to
participate in all pension, 401(k), retirement, life, disability and health
insurance, hospitalization, major medical and other the employee benefit plans
and arrangements, if any (as in effect and as amended from time to time), to the
extent that his position, tenure, salary, age, health and other qualifications
make his eligible to participate, generally made available by the Company to
comparable level employees, subject to and on a basis consistent with the terms,
rules and regulations, conditions and overall administration of such plans and
arrangements. Notwithstanding the foregoing sentence, the Company may
discontinue at any time any such the employee benefit plan or arrangement, to
the extent permitted by the terms of such plans or arrangements, and shall not
be required to compensate Employee for the elimination of any such employee
benefit plans or arrangements.

                  (e) EXPENSES. The Company shall, upon presentment by Employee
of appropriate receipts and vouchers therefor, reimburse Employee for all
reasonable, ordinary and necessary out-of-pocket business expenses incurred by
Employee in connection with the performance of his duties under this Agreement,
provided that such expenses are incurred and accounted for in accordance with
and subject to the normal policies and procedures of the Company.

                  (f) VACATION. Employee shall be entitled to reasonable
paid vacation time in accordance with the policies of the Company applicable to
executive officers of the Company.

         SECTION 5. TERMINATION OF EMPLOYMENT. Notwithstanding the provisions
of Section 2 hereof, the Employment Term and Employee's employment hereunder
shall terminate as follows:

                  (a) DEATH. Employee's employment hereunder shall automatically
terminate upon his death, and the Company shall pay to his designated
beneficiary (or, if none, to his estate) the pro rata portion of his Base Salary
and all other accrued and vested but unpaid compensation through the date of his
death, plus an amount equal to the Base Salary at the rate in effect on the date
of death for a period of twelve (12) months, payable in approximately equal
installments in accordance with the Company's customary payroll practices over
the subsequent twelve (12) months.

                  (b) DISABILITY. The Company shall have the right, in its sole
discretion, to terminate Employee's employment hereunder in the event of
Employee's "Disability" upon giving at least 30 days written notice to Employee
of its intention to terminate Employee's employment. In such event, the Company
shall pay to Employee the pro rata portion of his Base Salary and all other
accrued and vested but unpaid compensation through the date of termination, plus
an amount equal to the Base Salary at the rate in effect on the date of
termination for a period of twelve (12) months, payable in approximately equal
installments in accordance with the Company's customary payroll practices over
the subsequent twelve (12) months. For purposes of this Agreement, "Disability"
means the physical or mental inability of Employee, due to illness, accident or
other incapacity, to effectively perform the essential functions of his duties
hereunder for any period of 90 consecutive days, or 180 days during any
twelve-month period, or which results from an incapacity determined to be total
and permanent as determined by an independent physician selected by the Company.

                  (c) BY THE COMPANY FOR CAUSE. The Company shall have the
right, in its sole discretion, to terminate Employee's employment hereunder at
any time for "Cause" immediately upon giving written notice of termination to
Employee. Upon his termination for Cause, Employee shall be entitled to receive
only the accrued but unpaid portion of his Base Salary through the date of
termination, plus any accrued and vested but unpaid bonuses as of such date, but
Employee shall not be entitled to any other bonus or incentive compensation for
the year in which he was terminated. In addition, any unvested portion of any
option to purchase shares of common stock, par value $.01 per share of (the
"Metretek Stock Options") shall expire without vesting. Employee shall have no
right to receive any other or further compensation or benefits. For purposes of
this Agreement, "Cause" means only the following:

                           (i) The failure or refusal by Employee to perform
any of his duties hereunder, or the breach by Employee of any of his
obligations, covenants, representations, warranties or acknowledgments
hereunder, which failure, refusal or breach remains unremedied or uncured for a
period of twenty (20) business days after specific written notice thereof is
given to Employee by the Board or the Chairman;

                           (ii) Any act of dishonesty, disloyalty,
insubordination, fraud, breach of fiduciary duty or bad faith by Employee that
is materially detrimental to the Company or that results in substantial personal
enrichment of Employee; or

                           (iii) The conviction of Employee, or the entering of
a guilty plea or a plea of no contest by Employee with respect to (A) a felony,
or (B) a misdemeanor that involves theft, fraud or dishonesty, results in
Employee's imprisonment or impairs Employee's ability to perform his duties
hereunder or damages the reputation or business of the Company.

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                  (d) BY THE COMPANY WITHOUT CAUSE. The Company shall have the
right, in its sole discretion, to terminate Employee's employment hereunder at
any time effective upon the giving of written notice of such termination to
Employee (or at such later date as the notice provides). In such event, Employee
shall be entitled to receive (i) all amounts of the Base Salary and any bonuses
that are accrued but unpaid through the date of termination, (ii) an amount
equal to the Base Salary at the rate in effect on the date of termination for a
period of twelve (12) months, payable in approximately equal installments in
accordance with the Company's customary payroll practices over the subsequent
twelve (12) months, (iii) any rights and benefits of any of the employee
benefits accruing to him (including any plans in which he was participating) as
of the date of such termination, subject to the terms and conditions of such
plans and benefits, but Employee shall not attain vested status in any plans or
benefits in which he is not vested on the date of termination (except as
provided in clause (iv) below), and (iv) the Metretek Stock Options shall
immediately vest and become exercisable and remain exercisable for the periods
set forth in the respective stock option agreements.

                  (e) TERMINATION BY EMPLOYEE.

                           (i) VOLUNTARY TERMINATION. Employee agrees not to
voluntarily terminate his employment hereunder except by giving at least sixty
(60) days written notice to the Company, except as provided in Section 4(e)(ii)
below. Upon such voluntary termination by Employee, Employee shall be entitled
to receive only the accrued but unpaid portion of his Base Salary (but not any
bonus) through the date of termination and the accrued and vested rights and
benefits under any Employee benefits plan which he was entitled to receive at
the date of such termination, subject to the terms and conditions of such plans.
Any unvested portion of the Metretek Stock Options shall expire without vesting.

                           (ii) NORMAL RETIREMENT. In the event Employee
retires from employment with the Company on or after the age of sixty-five (65),
then Employee shall be entitled to receive (i) all amounts of the Base Salary
and any bonuses that are accrued but unpaid through the date of retirement, (ii)
an amount equal to the Base Salary at the rate in effect on the date of
retirement for a period of twelve (12) months, payable in approximately equal
installments in accordance with the Company's customary payroll practices over
the subsequent twelve (12) months, (iii) any rights and benefits of any of the
employee benefits accruing to him (including any plans in which he was
participating) as of the date of such retirement, subject to the terms and
conditions of such plans and benefits, but Employee shall not attain vested
status in any plans or benefits in which he is not vested on the date of
retirement, and (iv) any unvested portion of the Metretek Stock Options shall
expire without vesting.

                  (f) COMPENSATION UPON TERMINATION OF EMPLOYMENT FOLLOWING A
CHANGE IN CONTROL.

                           (i) AMOUNT OF COMPENSATION. If, during the
Employment Period, a "Change in Control" (as defined below) of either the
Company or Metretek occurs, and within three years after such date the Company
shall terminate Employee's employment without "Cause" or the employment of
Officer shall be terminated by Employee for "Good Reason" (as defined in below),
then:

                   (A) The Company shall pay to Employee in a lump sum in cash
                   within 30 days after the date of termination the aggregate of
                   the following amounts:

                           (I) To the extent not theretofore paid, the Base
                           Salary through the date of termination at the rate in
                           effect on the date the notice of termination was
                           given along with any earned but unpaid bonuses; and

                           (II) One times Employee's annual Base Salary at the
                           rate in effect on the date the notice of termination
                           was given; and

                           (III) In the case of compensation previously deferred
                           by Employee, all amounts of such compensation
                           previously deferred and not yet paid by the Company;
                           and

                   (B) The Company shall, promptly upon submission by Employee
                   of supporting documentation, pay or reimburse to Employee all
                   costs and expenses paid or incurred by Employee prior to the
                   date of termination which would have been payable under this
                   Agreement if Employee's employment had not terminated; and

                   (C) For a period of one year from the date of termination,
                   Employee and his family shall be permitted to continue to
                   participate in all life, accidental death, disability,
                   medical, dental and other

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                    insurance plans of the Company. If, despite the provisions
                    of this Section 5(f), benefits shall not be available under
                    any of such plans because Employee is no longer an employee
                    of the Company, then the Company itself shall, to the extent
                    necessary, pay or provide for payment of benefits to
                    Employee and/or Employee's family, or where applicable, pay
                    or provide to Employee and/or Employee's family the
                    difference between the benefits payable pursuant to this
                    Section 5(f) and the benefits actually payable pursuant to
                    the terms of such plans, in each case at the time such
                    payments would be payable pursuant to the terms of such
                    plans, programs and policies.

                           (ii) DEFINITION OF CHANGE IN CONTROL. For the
purpose of this Agreement, a "Change in Control" of either the Company or
Metretek (each a "Corporation" in this Section 5 (f)(ii) shall be deemed to have
occurred only if:

                  (A) Any person or group (as such terms are used in Sections 13
                  (d) (3) and 14 (d) (2) of the Securities Exchange Act of 1934,
                  as amended (the "Exchange Act") acquires the beneficial
                  ownership (within the meaning of Rule 13d-3 promulgated under
                  the Exchange Act), directly or indirectly, of 50% or more of
                  the aggregate voting power of all classes of the Corporation's
                  then outstanding voting securities entitled to vote generally
                  in the election of directors of the Corporation; provided,
                  however, that the following acquisitions shall not constitute
                  a Change in Control: (I) any acquisition directly from the
                  Corporation (excluding an acquisition by virtue of the
                  exercise of a conversion privilege), (II) any acquisition by
                  the Corporation or any subsidiary of the Corporation, or (III)
                  any acquisition by any employee benefit plan (or related
                  trust) for employees or any subsidiary of the Corporation; or

                  (B) Individuals who, as of the date hereof, constitute the
                  Board of Directors of the Corporation (the "Board" generally,
                  and as of the date hereof, the "Incumbent Board") cease for
                  any reason to constitute at least a majority of the Board,
                  provided that any person becoming a director subsequent to the
                  date hereof whose election, or nomination for election by the
                  Corporation's stockholders, was approved by a vote of at least
                  three-fifths of the directors then comprising the Incumbent
                  Board (other than an election or nomination of an individual
                  whose initial assumption of office is in connection with an
                  actual or threatened election contest relating to the election
                  of the directors of the Corporation, as such terms are used in
                  Rule 14a-11 of Regulation 14A promulgated under the Exchange
                  Act) shall be, for purposes of this Agreement, considered as
                  though such individual were a member of the Incumbent Board;
                  or

                  (C) Approval by the Corporation of a reorganization, merger,
                  combination, or consolidation, in each case, unless, following
                  such reorganization, merger, combination, or consolidation,
                  (I) more than 50% of, respectively, the then outstanding
                  shares of common stock of the corporation or other entity
                  resulting from such reorganization, merger, combination or
                  consolidation and the aggregate voting power of the then
                  outstanding voting securities of the resulting corporation or
                  other entity entitled to vote generally in the election of
                  directors is then beneficially owned, directly or indirectly,
                  by all or substantially all of the individuals and entities
                  who were the beneficial owners, respectively, of the
                  outstanding Common Stock and outstanding voting securities of
                  the Corporation immediately prior to such reorganization,
                  merger, combination, or consolidation, in substantially the
                  same proportion as their ownership immediately prior to such
                  reorganization, merger, combination, or consolidation, and
                  (II) at least a majority of the members of the board of
                  directors of the corporation or other entity resulting from
                  such reorganization, merger, combination or consolidation were
                  members of the Incumbent Board at the time of the execution of
                  the initial agreement providing for such reorganization,
                  merger, combination or consolidation; or

                  (D) Approval by the Corporation of the sale or other
                  disposition of all or substantially all of the assets of the
                  Corporation, other than to a corporation or other entity with
                  respect to which following such sale or other disposition the
                  conditions described in clauses (I) and (II) of Section 5
                  (f)(ii)(c) are satisfied.

                           (iii) DEFINITION OF GOOD REASON. For purposes of
this Agreement, "Good Reason" means:

                  (A) (I) The assignment to Employee of any position, authority,
                  duties or responsibilities inconsistent in any respect with
                  Employee's position (including, without limitation, status,
                  offices, title and reporting requirements), authority, duties
                  or responsibilities, prior to the Change in Control, or (II)
                  any other action by the Corporation which results in a
                  diminution in such position, authority, duties or
                  responsibilities,

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                  other than an insubstantial and inadvertent action which is
                  remedied by the Corporation promptly after receipt of notice
                  thereof given by Employee;

                  (B) Any reduction in Employee's base salary or in the extent
                  of Employee's entitlement to the employee benefits, expenses,
                  fringe benefits or perquisites referred to in Section 3;

                  (C) The Corporation's requiring Employee to be based at an
                  office location or to maintain his personal residence other
                  than where it is on the date of the change in control;

                  (D) The failure of the Corporation to obtain a satisfactory
                  agreement from any successor to the Corporation to assume and
                  agree to perform this Agreement;

                  (E) The imposition on Employee of business travel obligations
                  substantially greater than his business travel obligations
                  during the fiscal year prior to the Change in Control;

                  (F) Any purported termination by the Corporation of Employee's
                  employment other than as expressly permitted by this
                  Agreement; or

                  (G) Any other failure by the Corporation to comply with any
                  provision of this Agreement, other than an insubstantial and
                  inadvertent failure which is remedied by the Corporation
                  promptly after receipt of notice thereof given by Employee.

                  (g) EXPIRATION OF EMPLOYMENT TERM. In the event of the
expiration of the Employment Term (including any renewal or extension period
hereunder) without further renewal or extension, Employee shall be entitled to
receive (i) all amounts of the Base Salary and any bonuses that are accrued but
unpaid through the date of expiration, (ii) an amount equal to the Base Salary
at the rate in effect on the date of expiration for a period of twelve (12)
months, payable in approximately equal installments in accordance with the
Company's customary payroll practices over the subsequent twelve (12) months,
(iii) any rights and benefits of any of the employee benefits accruing to him
(including any plans in which he was participating) as of the date of such
expiration, subject to the terms and conditions of such plans and benefits, but
Employee shall not attain vested status in any plans or benefits in which he is
not vested on the date of expiration, and (iv) any unvested Metretek Stock
Options shall expire without vesting.

                  (h) NO FURTHER OBLIGATION TO EMPLOYEE. The payments and
benefits (if any) required to be made or provided to Employee pursuant to this
Section 5 shall be in full and complete satisfaction of, and shall constitute
the full settlement and release of the Company by Employee with regard to all
obligations of the Company owed to Employee pursuant to this Agreement. After
the date of termination of Employee's employment hereunder, the Company shall
have no further obligations to Employee under this Agreement except as otherwise
set forth herein.

                  (i) SURVIVAL OF EMPLOYEE'S OBLIGATIONS. Notwithstanding the
termination of this Agreement by either party hereto for any reason, the
obligations of Employee under Section 6 hereof and the other provisions thereof
shall survive the termination or expiration of this Agreement or Employee's
employment hereunder and shall remain in full force and effect for the period
provided therein.

         SECTION 6. COVENANTS. In consideration in part for the compensation to
be paid to Employee hereunder by the Company, and in order to induce the Company
to enter into this Agreement, Employee hereby makes the following covenants to
the Company:

                  (a) COVENANT NOT TO COMPETE. During the Employment Term and
for a period of one (1) year thereafter (or if the Company for any reason
defaults for a period of sixty (60) days in its severance obligations to
Employee under Section 5 hereof, upon the expiration of such default period), or
for a period of two (2) years thereafter if the termination of Employee's
employment hereunder is due to either termination by the Company for "Cause" or
voluntary termination by Employee (the "Restricted Period"), Employee shall not,
directly or indirectly, alone or in association with others, whether as owner,
shareholder, employee, Employee, director, partner, manager, member, lender,
investor, consultant, principal, agent, independent contractor, co-venturer or
in any other capacity, invest in, engage in, have a financial interest in, be in
any other way connected or affiliated with, or render advice or service to, any
Person that is in competition with the Company in the United States or in any
other country in which the Company does a material amount of business or
otherwise has material operations.

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                           (i) COMPETITION WITH THE COMPANY. For purposes of
this Agreement, (A) the phrase "in competition with the Company" shall be deemed
to include competition with the Company and its subsidiaries and Affiliates, or
their respective successors or assigns, or the businesses of any of them, and
(B) a business shall be deemed to be in competition with the Company if it is
engaged in any business activity or has products or services that are the same
or similar to the business activities, products or services of the Company
during the Employment Term. Notwithstanding the foregoing, nothing herein
contained shall prevent Employee from acquiring and holding for investment up to
two percent (2%) of any class of securities of any corporation, if such
securities are listed or traded on a national securities exchange or the Nasdaq
Stock Market or in the over-the-counter market.

                           (ii) INTERPRETATION OF COVENANT. The parties hereto
acknowledge and agree that the duration and area for which the covenant not to
compete set forth in this Section 6(a) is to be effective are fair and
reasonable and are reasonably necessary for the protection of the Company and
its business and good will, and Employee hereby waives any objections to or
defenses in respect thereof. In the event that any court determines that any
portion of the time period or the area, or both of them, are unreasonable,
arbitrary or against public policy, and that such covenant is to such extent
unenforceable, illegal or invalid, the parties hereto agree that this Section
6(a) shall be deemed amended to delete therefrom such provisions or portions
adjudicated to be unenforceable, illegal or invalid so that the covenant shall
remain in full force and effect for the greatest time period and in the greatest
geographical area that would render it enforceable, legal and valid. The parties
intend that the covenant set forth in the Section 6(a) shall be deemed to be a
series of separate covenants, one for each and every county of each and every
state of the United States of America and one for each and every political
subdivision of each and every other country where the covenant is intended to be
effective and is not proscribed by law.

                  (b) COVENANT REGARDING DISCLOSURE OR USE OF CONFIDENTIAL
INFORMATION.

                           (i) Employee acknowledges that during the Employment
Term and as a result of his employment by the Company, he will learn, obtain and
have access to confidential and proprietary information regarding the business
and affairs of the Company and its Affiliates. Employee hereby agrees that at
all times during and after the Employment Term he shall keep strictly
confidential and hold in confidence all Confidential Information (as defined
below), and shall not, directly or indirectly, use any Confidential Information
for Employee's own benefit or for the benefit of any other Person or divulge,
disclose, communicate or otherwise reveal any Confidential Information to any
Person in any manner whatsoever, other than to the directors, employees and
agents of the Company, and then only in the course of the Company's affairs to
the extent necessary for them to perform services to and responsibilities on
behalf of the Company.

                           (ii) As used herein, "Confidential Information"
means any and all information, however documented, which is confidential
property or otherwise non-public, related to the business and affairs of the
Company and its Affiliates, including, but not limited to, their assets,
properties, operations, finances, practices, procedures, policies, methods,
contracts, agreements and arrangements, lending policies, pricing policies,
price lists, financial plans, business plans, financial information, financial
projections, budgets, marketing strategies and techniques; the identity and
location of all past, present and prospective customers, suppliers, affiliates,
debtors, creditors, lenders, employees, consultants, advisors, agents,
distributors, wholesalers, clients and others who have dealings with the
Company; trade secrets, processes, photographs, graphics, product
specifications, formulas, compositions, samples, inventions, ideas, research and
development; patents, patent applications; copyrights and copyright applications
(in any such case, whether registered or to be registered in the United States
or any foreign country) applied for, issued to or owned by the Company; any and
all processes, computer programs and software (including object code and source
codes, database, technologies, engineering or technical data, drawings, sketches
or designs, manufacturing or distribution methods or techniques; and any other
information known to Employee to be confidential, proprietary, secret or
otherwise non-public information.

                           (iii) Employee hereby acknowledges and agrees that,
as between the Company and Employee, all of the Confidential Information,
however documented, whether or not developed, created or modified by Employee,
is the exclusive property of the Company.

                           (iv) Upon the termination or expiration of the
Employment Term, Employee shall leave with or return to the Company, without
making or retaining any copies, or other records of, all Confidential
Information including all copies, summaries, abstracts thereof and all
memoranda, notes, records, reports, books, letters, customer lists, manuals and
other writings or documents whatsoever pertaining thereto. Notwithstanding the
foregoing, as used herein "Confidential Information" does not mean or include
any information that is generally available to the public other than as a result
of a direct or indirect disclosure by Employee.

                                       7
<PAGE>

                  (c) COVENANTS REGARDING BUSINESS RELATIONSHIPS. Employee
agrees that during and throughout the Employment Term and the Restricted Period,
except when acting on behalf of the Company, he shall not, directly or
indirectly, (i) employ, solicit, induce, engage or cause any director, officer,
employee, independent contractor, consultant, salesman or other agent of the
Company (whether now or hereafter engaged by the Company) to (A) terminate his
employment or engagement with the Company, (B) accept employment or engagement
or otherwise render services to any other Person or business (wherever located,
and regardless of type of business conducted), or (C) interfere with the
business of the Company; or (ii) solicit any clients or customers of the Company
or interfere in any business relationship between the Company and any other
person, firm or entity, including any person who was at any time an employee,
consultant, contractor, advisor, supplier, lender or customer of the Company.
Employee shall not, at any time during or after the Employment Term, disparage
the business reputation of the Company or any of its shareholders, directors,
Employees, employees or agents or take actions that are harmful to the Company's
good will with others.

                  (d) INTELLECTUAL PROPERTY. During and throughout the
Employment Term and the Restricted Period, Employee agrees to disclose to the
Company any and all ideas, improvements, techniques, modifications, processes,
inventions, developments, discoveries, trade secrets, trademarks, service marks,
copy rights, trade names, business plans and any work of authorship
("Intellectual Property") developed, conceived, created, made, devised,
discovered, acquired or acquired knowledge of, by Employee during the Employment
Period, either by himself or in conjunction with any other person, which relates
in any way, directly or indirectly, or may be useful in any manner in the
business of the Company or its Affiliates, and any such item that is based upon
or utilizes Confidential Information, whether or not the Company or its
Affiliates obtains a patent, trademark, service mark or copyright thereon.
Employee hereby agrees that the Intellectual Property shall become and remain
the sole and exclusive property of the Company. Employee hereby acknowledges
that all of Employee's writing, works of authorship and other Intellectual
Property are works made for hire and the property of the Company, including
patents, trademarks, service marks, copyrights and other intellectual property
rights pertaining thereto. Employee shall, at the request and cost of the
Company or any of its Affiliates, render assistance as the Company deems
necessary or desirable to secure, prosecute and/or defend the rights thereto by
patent, trademark, service mark, copyright to otherwise to the Company or its
Affiliates, including without limitation the assignment, transfer and conveyance
to the Company or its Affiliates of all of Employee's right, title and interest
in and to the Intellectual Property.

                  (e) EMPLOYEE'S ACKNOWLEDGMENT. The Company spends considerable
amounts of time, money and effort in developing and maintaining good will in its
industry. Employee agrees the covenants contained within this Section 6 (i) are
reasonable and necessary in all respects to protect the goodwill, trade secrets,
confidential information, and business interests of the Company; (ii) are not
oppressive to Employee; (iii) do not impose any greater restraint on Employee
than is reasonably necessary to protect the goodwill, trade secrets,
confidential information and legitimate business interests of the Company; and
(iv) will not, upon the termination, of Employee's employment with the Company
for any reason whatsoever, cause Employee to be unable to earn a living that is
suitable and acceptable to Employee.

                  (f) EQUITABLE RELIEF. Employee hereby acknowledges and agrees
that his services to be rendered to the Company hereunder and his obligations
contained in this Section 6 are of special, unique and personal character which
gives them a peculiar value to the Company, that the Company cannot be
reasonably or adequately compensated in money damages in an action at law in the
event Employee breaches any obligations under this Section 6, and that the
provisions of this Section 6 are reasonable and necessary to protect the
business of the Company. Employee therefore expressly agrees that, in addition
to any other rights or remedies which the Company may have at law or in equity
or by reason of any other agreement, the Company shall be entitled to injunctive
and other equitable relief in the form of temporary, preliminary and permanent
injunctions without posting bond or other security in the event of any actual or
threatened breach of any such obligation by Employee and without the necessity
of proving actual damages, and to discontinue any salary, bonus, benefits and/or
insurance continuation provided hereunder. Nothing in this Agreement shall be
construed to prohibit the Company from pursuing any other remedy, and Employee
agrees that all remedies of the Company are cumulative.

                  (g) NATURE OF COVENANTS. Employee's covenants in Section 6
hereof are independent covenants, and the existence of any claim by Employee
against the Company under this Agreement or otherwise will not excuse Employee's
breach or waive Employee's obligation to perform, any covenant in this Section
6. If Employee's employment hereunder terminates for any reason, or the
Employment Term expires, this Section 6, and the other terms and conditions of
this Agreement necessary or appropriate to enforce the covenants of Employee in
Section 6, shall survive and remain in full force and effect.

                                       8
<PAGE>

         SECTION 7. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. Employee
represents and warrants to the Company that (a) Employee is under no contractual
or other restriction, arrangement or obligation which is or will be breached by
or in conflict or inconsistent with his execution and delivery of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder, and (b) Employee is under no physical or mental disability or
incapacity that would hinder the performance of his duties under this Agreement.

         SECTION 8. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this
Agreement shall preclude the Company from consolidating with, merging into, or
transferring all or substantially all of its assets to another entity which
assumes all of the Company's obligations and undertakings hereunder. Upon such a
consolidation, merger or transfer of assets, the term "Company" as used herein
shall mean such other entity, and this Agreement shall continue in full force
and effect.

         SECTION 9. EMPLOYEE ACKNOWLEDGMENT; COUNSEL. Employee acknowledges by
executing this Agreement and delivering it to the Company that (i) he has read
all of the terms and conditions hereof, including his obligations, covenants,
representations and warranties to the Company; (ii) the covenants of Employee in
Section 6 hereof are essential elements of this Agreement, and the Company would
not have entered into this Agreement or the Stock Purchase Agreement without
Employee's agreement to comply with such covenants; (iii) each and every term,
covenant and restriction is reasonable and necessary for the proper protection
of the Company's business; and (iv) he has been advised by the Company that he
should consult with independent counsel of his choice and have such counsel
review this Agreement and render advice thereon to Employee, and Employee has
either done so or voluntarily elected not to do so.

         SECTION 10. TAXES. All payments required to be made by the Company
hereunder to Employee shall be subject to withholding of such amounts relating
to taxes as the Company may reasonably determine it should withhold pursuant to
any applicable federal, state or local law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provision for payment of taxes, provided it is satisfied that all
requirements of law affecting its responsibilities to withhold such taxes have
been satisfied.

         SECTION 11. NO ATTACHMENT. Except as required by law, no right to
receive payment under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy, or similar process of
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.

         SECTION 12. ARBITRATION. Any dispute, controversy or claim arises out
of, under or in connection with, or otherwise relating to, this Agreement (other
than the Company's rights under Section 6) (a "Dispute"), including but not
limited to the parties' rights and obligations hereunder, or any actual or
alleged breach hereof, shall be determined and settled by binding arbitration in
Denver, Colorado in accordance with the rules of the commercial rules and
procedures of the American Arbitration Association, as amended by this
Agreement. Promptly after a Dispute arises, the parties agree to make a good
faith effort to select one mutually agreeable arbitrator. If the parties are
unable to reach agreement on an arbitrator within thirty (30) days after the
Dispute is submitted to arbitration, one arbitrator shall be selected in
accordance with the commercial rules and procedures of the American Arbitration
Association. Any determination, resolution or award made by the arbitrators
shall specify the findings of fact of the arbitrators and the reasons for the
determination, resolution or award, and such determination, resolution or award
shall be final and binding. If the parties hereto mutually agree to a resolution
of any Dispute prior to the arbitrators' decision, the agreement of the parties
shall resolve the Dispute. The party prevailing in any arbitration, as
determined by the arbitrator, shall be entitled to an award of all of its
out-of-pocket costs and expenses incurred in connection with the Dispute,
including but not limited to reasonable attorneys' fees, court costs and expert
fees. An arbitration award or decision may be entered by any court of competent
jurisdiction, or application may be made to such a court for judicial acceptance
of the award or decision and any appropriate order, including enforcement. The
parties hereby consent to the submission of any Dispute for settlement by
binding arbitration in accordance with this Section 12 and agrees to carry out
without delay the provisions of any arbitration award, decision or resolution.

         SECTION 13. GENERAL PROVISIONS.

                  (a) GOVERNING LAW. This Agreement shall in all respects be
governed by, and construed in accordance with, the internal substantive laws of
the State of Colorado, without giving effect to any conflict or choice of law
principles or rules.

                                       9
<PAGE>

                  (b) AMENDMENT. This Agreement may not be amended or modified
in whole or in part in any manner except in a writing which makes reference to
this Agreement executed by both parties hereto.

                  (c) ASSIGNMENT. Neither the Agreement, nor any rights,
obligations or duties hereunder, may be assigned or delegated by any party
hereto without the prior written consent of the other party hereto; provided,
however, that this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Company upon any sale of all or substantially
all of the Company's stock or assets, or upon any merger, consolidation or
reorganization of the Company with or into any other Person, so long as such
successors or assigns assume all of the Company's obligations hereunder. As used
in this Agreement, the term "Company" shall be deemed to refer to any such
successor or assign of the Company referred to in the preceding sentence.

                  (d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.

                  (e) ENTIRE AGREEMENT.

                           (i) This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersedes in their entirety all prior and contemporaneous written
and oral agreements, arrangements, understandings, negotiations, communications,
covenants, representations and warranties among the parties hereto relating to
the subject matter hereof.

                           (ii) Employee acknowledges that from time to time,
the Company may establish, maintain or distribute the employee manuals or
handbooks or personnel policy manuals, and Employees or other representatives of
the Company may make written or oral statements relating to personal policies
and procedures. Such manuals, handbooks and statements are intended only for
general guidance. No policies, procedures or statements of any nature by or on
behalf of the Company (whether written or oral, and whether or not contained in
any the employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement.

                  (f) NOTICES. Any and all notices, demands, requests, elections
and other communications required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given (i) upon personal delivery;
(ii) upon confirmation of receipt when sent by facsimile transmission; (iii) one
business day after deposit during normal business hours with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; (iv) five business days after being sent by first class
(certified or registered) mail, postage prepaid, return receipt requested, in
each case to the following addresses:

                                            If to the Company:

                                            PowerSecure, Inc.
                                            230 Capcom Avenue, Suite 107
                                            Wake Forest, NC  27587
                                            Attn:  Chairman of the Board
                                            Telephone:  (919) 556-3056
                                            Facsimile:  (919) 556-3596

                                            With copies to:

                                            Metretek Technologies, Inc.
                                            303 East 17th Street, Suite 660
                                            Denver, Colorado  80203
                                            Attn:  W. Phillip Marcum, President
                                            Telephone:  (303) 785-8080
                                            Facsimile:  (303) 785-8085

                                            and:

                                       10
<PAGE>

                                     Paul R. Hess, Esq.
                                     Kegler, Brown, Hill & Ritter Co., L.P.A.
                                     65 E. State Street, Suite 1800
                                     Columbus, Ohio  43215
                                     Telephone:  (614) 462-5400
                                     Facsimile:   (614) 464-2634

                                     If to Employee to:

                                     Sidney Hinton
                                     968 Jones Wynd
                                     Wake Forest, NC 27587
                                     Telephone: (919) 570-5286

Any party hereto may send any notice, demand, request, election or other
communication to the intended recipient at its address set forth above using any
other means (such as expedited courier, messenger service, telecopy, telex,
ordinary mail or electronic mail), but no such notice, demand, request or other
communication shall be deemed to have been given until it is actually received
by the recipient. Any party hereto may change its designated address by giving
written notice to all other parties.

                  (g) WAIVER. The obligations of any party hereunder may be
waived only with the written consent of the party or parties entitled to the
benefits the obligations so involved. Any waiver of a breach or violation of or
default under any provision of this Agreement shall not be construed or operate
as, or constitute, a waiver of any other or subsequent breach or violation of or
default under that provision or any other provision of this Agreement. The
failure of any party to insist upon strict compliance with any provision of this
Agreement on any one or more occasions shall not be construed or operate as, or
constitute, a continuing waiver of, or an estoppel of that party's right to
insist upon strict compliance with, that provision or any other provision of
this Agreement.

                  (h) SEVERABILITY. The provisions of this Agreement shall be
deemed severable. If any provision of this Agreement is determined to be
illegal, invalid or unenforceable in any situation: (i) the parties hereto shall
agree to a suitable and equitable provision to be substituted therefor in order
to carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision; and (ii) the remainder of this
Agreement shall remain in full force and effect, and the application of such
provision in any other situation shall not be affected.

                  (i) COUNTERPARTS. This Agreement may be executed in any number
of counterparts (including counterparts executed by less than all parties
hereto), each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

                  (j) HEADINGS. The headings used herein are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.

                  (k) NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, in intended to create or confer and shall not be construed
or operate as creating or conferring, any rights or remedies under or by reason
of this Agreement, upon any Person other than the parties hereto and their
respective successors and permitted assigns.

                  (l) FURTHER ASSURANCES. The parties hereto agree to take or
cause to be taken all actions, which are necessary, convenient or desirable in
order to effect the transactions contemplated by this Agreement.

                  (m) BEST EFFORTS. Each of the parties hereto shall act in good
faith and use its best efforts to bring about the transactions contemplated by
this Agreement.

                  (n) EXPENSES. Except as otherwise expressly provided herein,
each of the parties to this Agreement shall pay its own costs and expenses
incurred in connection with this Agreement and the consummation of the
transactions contemplated hereby.

                  (o) CONSTRUCTION. In the event an ambiguity or question or
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party hereto by virtue of the authorship of any of
the provisions of this Agreement.

                                       11
<PAGE>

                  (p) SPECIFIC PERFORMANCE. Each of the parties hereto
acknowledges and agrees that the other parties hereto would suffer irreparable
damage for which an adequate remedy at law would not be available in the event
any of the provisions of this Agreement is not performed in accordance with its
specific terms or otherwise is breached. Accordingly, each of the parties hereto
agrees that the non-breaching parties shall be entitled to an injunction,
restraining order or other form of equitable relief from any court of competent
jurisdiction to prevent breaches of, and to specifically enforce, the provisions
of this Agreement.

                  (q) INTERPRETATION OF CERTAIN PROVISIONS. Except as otherwise
expressly provided herein, as used in this Agreement:

                           (i) Any reference to any federal, state, local or
foreign statute or law shall be deemed also to include a reference to all rules
and regulations promulgated thereunder.

                           (ii) The term "including" means "including, without
limitation".

                           (iii) The term "Entity" means and includes a
corporation, partnership, limited liability company, joint venture, trust,
association, unincorporated organization, governmental or regulating body or
authority, or any other form of business or entity.

                           (iv) The term "Person" means and includes an
individual and an Entity.

                           (v) The number and gender of each noun and pronoun
and the terms "Person" and "Persons" and the like shall be construed to mean
such number and gender as the context, the circumstances or its antecedent may
require.

                           (vi) The terms "hereof", "herein", "hereunder" and
words of similar import refer to this Agreement as a whole, and not to any
Section, subsection or clause of this Agreement.

                           (vii) Each reference to a Section means such Section
of this Agreement.

                                * * * * * * * * *

                                       12
<PAGE>

         IN WITNESS WHEREOF, this Employment and Non-Competition Agreement has
been executed and delivered by or on behalf the parties hereto, effective as of
the date first above written.

                                  THE COMPANY:

                                  POWERSECURE, INC.

                                  By: /s/ W. Phillip Marcum
                                      ----------------------------------------
                                      W. Phillip Marcum, Chairman of the Board

                                  EMPLOYEE:

                                  /s/  Sidney Hinton
                                  --------------------------------------------
                                       Sidney Hinton

                                       13
<PAGE>
                                    EXHIBIT A

                        POWERSECURE SHAREHOLDER AGREEMENT

                               [See Exhibit 10.28]

                                       14<PAGE>
                                                                   EXHIBIT 10.26

                                                        EXECUTION
                                                          COPY

                             SHAREHOLDERS AGREEMENT

                  METRETEK CONTRACT MANUFACTURING COMPANY, INC.

                            DATED AS OF JUNE 27, 2002

<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                        PAGE
                                                                                                        ----
<S>     <C>                                                                                          <C>
SECTION 1.   DEFINITIONS.................................................................................4
          1.1.        Certain Defined Terms..............................................................4
          1.2.        Certain Other Defined Terms........................................................5
          1.3.        Other Definitional Provisions......................................................5

SECTION 2.   RESTRICTIONS ON TRANSFERS OF EMPLOYEE SHARES................................................6
          2.1.        General Restrictions on Transfer...................................................6
          2.2.        Effect of Prohibited Transfer......................................................6

SECTION 3.   RIGHT OF FIRST REFUSAL......................................................................6
          3.1.        Right of First Refusal.............................................................6
          3.2.        Purchase Price.....................................................................6
          3.3.        Closing of Right of First Refusal..................................................6
          3.4.        Sale to Prospective Purchaser......................................................7
          3.5.        Permitted Transfers................................................................7
          3.6.        Securities Act Matters.............................................................7

SECTION 4.   TAG-ALONG RIGHTS............................................................................8
          4.1.        Tag-Along Rights...................................................................8
          4.2.        Tag-Along Notice...................................................................8
          4.3.        Exercise of Tag-Along Right........................................................8
          4.4.        Exceptions.........................................................................8

SECTION 5.   DRAG-ALONG RIGHT............................................................................8
          5.1.        Drag-Along Right...................................................................8
          5.2.        Drag-Along Notice..................................................................8
          5.3.        Purchase Agreement.................................................................9

SECTION 6.   PREEMPTIVE RIGHTS...........................................................................9
          6.1         Preemptive Rights for New Securities...............................................9
          6.2         Acceptance of Preemptive Offer.....................................................9
          6.3         Closing of Exercise of Preemptive Offer............................................9
          6.4         Company Sale of Refused Securities.................................................9
          6.5         Excepted Securities...............................................................10

SECTION 7.   COMPANY'S CALL RIGHT.......................................................................10
          7.1.        Call Right........................................................................10
          7.2.        Call Price........................................................................10
          7.3.        Mechanics of Exercise.............................................................11
          7.4.        Closing of Call Right.............................................................11

SECTION 8.  EFFECTUATION PROVISIONS.....................................................................11
          8.1.        Enabling Action...................................................................11
          8.2.        Legend............................................................................11
          8.3.        Acknowledgement of Necessity of Restrictions......................................12
          8.4.        Record of Transfers...............................................................12
          8.5.        Voting of Shares .................................................................12
          8.6.        No Contrary Action................................................................12
          8.7.        Company Determinations............................................................12

SECTION 9.  TERMINATION OF AGREEMENT....................................................................12
          9.1.        Termination.......................................................................12
          9.2.        Effect of Termination.............................................................13
</TABLE>

                                       2
<PAGE>
<TABLE>
<S>     <C>                                                                                          <C>
SECTION 10.  ARBITRATION................................................................................13

SECTION 11.  GENERAL PROVISIONS.........................................................................13
         11.1.        Governing Law.....................................................................13
         11.2.        Amendment.........................................................................13
         11.3.        Assignment........................................................................13
         11.4.        Successors and Assigns............................................................13
         11.5.        Entire Agreement..................................................................13
         11.6.        Notices...........................................................................13
         11.7.        Waiver............................................................................15
         11.8.        Severability......................................................................15
         11.9.        Counterparts......................................................................15
         11.10.       Headings..........................................................................15
         11.11.       No Third Party Beneficiaries......................................................15
         11.12.       Further Assurances................................................................15
         11.13.       Best Efforts......................................................................15
         11.14.       Expenses..........................................................................15
         11.15.       Construction......................................................................15
         11.16.       Specific Performance..............................................................15
         11.17.       No Agency or Partnership..........................................................16
</TABLE>

                                       3
<PAGE>
                             SHAREHOLDERS AGREEMENT

         THIS SHAREHOLDERS AGREEMENT (this "Agreement") is made and entered into
as of the 27th day of June, 2002, by and among Metretek Contract Manufacturing
Company, Inc., a Florida corporation (the "Company"), Metretek, Incorporated, a
Florida corporation ("Metretek Florida"), Thomas Kellogg ("Kellogg"), and such
additional persons and entities that from time to time execute this Agreement as
Employee Shareholders (collectively with Kellogg, the "Employee Shareholders").

                                    RECITALS

         WHEREAS, Metretek Florida is the holder of all (100%) of the issued and
outstanding shares of capital stock of the Company; and

         WHEREAS, the Company desires to issue additional shares of its capital
stock on the date hereof to Kellogg, and from time to time hereafter to other
Employee Shareholders; and

         WHEREAS, it is a condition to the Company's issuance of shares of its
capital stock that Kellogg and any other Employee Shareholders enter into this
Agreement and that such shares be owned upon the terms and subject to the
conditions set forth herein; and

         WHEREAS, the Company, Kellogg and all such additional Employee
Shareholders believe it is in the best interests of the Company and its
shareholders to provide for the stability of the ownership of the Company and to
provide for the orderly issuance, ownership and transfer of the Company's
securities;

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

SECTION 1. DEFINITIONS.

         1.1. Certain Defined Terms. As used herein, the following terms shall
have the following respective meanings:

         "Affiliate" means, with respect to any Person, any (i) officer,
director, general partner, trustee, manager, or record or beneficial holder of
more than 10% of the outstanding voting interests of, such Person, (ii) any
other Person which directly or indirectly controls, is controlled by, or is
under common control with such Person, or (iii) any Relation of any of the
foregoing Persons. For purposes of this definition, a Person shall be deemed to
"control" another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
"controlled" Person, whether through ownership of voting securities, by
contract, or otherwise. For purposes of this Agreement, Persons are
"unaffiliated" with each other if neither is an Affiliate of the other.

         "Agreement" means this Shareholders Agreement, as from time to time
amended, supplemented or restated in accordance with the terms of this
Agreement.

         "Articles" means the Articles of Incorporation of the Company, as from
time to time amended, supplemented or restated in accordance with the terms of
the Articles and the FBCA.

         "Board" means the Board of Directors of the Company.

         "Bylaws" means the Bylaws of the Company, as from time-to-time amended,
supplemented or restated in accordance with the terms of the Articles, the
Bylaws and the FBCA.

          "Closing" means a closing of the purchase and sale of Shares made
pursuant to this Agreement.

                                       4
<PAGE>

         "Company" means Metretek Contract Manufacturing Company, Inc., a
Florida corporation, and its successors and assigns.

         "Employee Shares" means any Shares owned from time to time by the
Employee Shareholders or any Affiliate of the Employee Shareholders.

         "FBCA" means the Florida Business Corporation Act, as from time to time
amended, and any successor statutes.

         "IPO" means an underwritten initial public offering of Shares pursuant
to a registration statement which has become effective under the Securities Act.

         "Metretek Florida" means Metretek, Incorporated, a Florida corporation,
and its successors and assigns.

         "Person" means an individual, corporation, partnership, limited
liability company, joint venture, trust, association, unincorporated
organization, regulatory or governmental body or authority or any other form of
business, entity or organization.

         "Purchase Price" means the purchase price to be paid for Shares
purchased and sold under this Agreement.

         "Purchaser" means any Person purchasing Shares under this Agreement.

         "Relation" means, with respect to any Person, such Person's
grandparents, parents, siblings, spouse, children, stepchildren or
grandchildren, whether by blood, marriage or adoption.

         "Representative" means, with respect to a Shareholder, the Person who
is in legal control of the Shares owned by such Shareholder, including, but not
limited to, an executor, representative, guardian or trustee of the Shareholder
or the Shareholder's estate, as applicable.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Seller" means any Person selling Shares under this Agreement.

         "Shares" means the shares of capital stock of the Company, and other
securities into which the shares are converted, reclassified, reorganized or
exchanged.

         "Shareholder" means each of the Employee Shareholders and Metretek
Florida, and any other Person whom after the date hereof becomes bound by the
terms of, and a party to, this Agreement, as the result of or in connection with
a Transfer of Shares to such Person or otherwise.

         "Subsidiary" means, with respect to any Person, another Person of which
at least a majority of the voting securities or voting interests of such Person
are owned, directly or indirectly, by such Person.

         "Transfer" means any sale, issuance, grant, assignment, transfer,
conveyance, distribution, pledge, hypothecation, encumbrance, disposition,
transfer, gift of, or attempt to create or grant a security interest in the
shares, whether voluntary or involuntary, by operation of law or otherwise
(including, without limitation, by will or intestate distribution, or pursuant
to a merger, consolidation, sale of assets or other form of reorganization).

         1.2. Certain Other Defined Terms. Capitalized terms used in this
Agreement that are not defined in Section 2.1 shall be used as defined in this
Agreement.

         1.3. Other Definitional Provisions. Except as otherwise expressly
provided herein, as used in this Agreement:

                  (a) Any reference to any federal, state, local or foreign
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder.

                  (b) The term "including" means "including, without
limitation".

                                       5
<PAGE>

                  (c) The number and gender of each name and pronoun and the
term "Person" or "Persons" or the like shall be construed to mean such number
and gender as the context, circumstances or its antecedent may require.

                  (d) The terms "hereof", "herein", "hereunder", and the like
refer to this Agreement as a whole, and not to any Section, subsection, or
clause of this Agreement.

                  (e) Each reference to a Section means such Section of this
Agreement.

SECTION 2. RESTRICTIONS ON TRANSFERS OF EMPLOYEE SHARES.

         2.1. General Restrictions on Transfer. No Employee Shareholder shall
directly or indirectly Transfer or agree to Transfer any Shares now owned or
hereafter acquired by such Employee Shareholder, unless (i) such Transfer is
made in compliance in all respects with the provisions of this Agreement, and
the transferee (if other than the Company or Metretek Florida) has agreed in
writing to become a party to, and be bound by the terms of, this Agreement as a
holder of Employee Shares and subject to the same terms and conditions as the
Employee Shareholders, or (ii) the Transfer is a "Permitted Transfer" (as
defined in Section 3.6). The restrictions and prohibitions set forth in this
Agreement shall not apply to any Shares owned or held by Metretek Florida or any
of it subsidiaries or affiliates.

         2.2. Effect of Prohibited Transfer. Any Transfer, or attempted or
purported Transfer, of any Employee Shares that is not made in compliance in all
respects with, or which violates any of, the provisions of this Agreement shall
be null and void and be given no effect, and neither the Company nor any Person
acting as share transfer agent for the Company shall recognize the Transfer or
recognize the transferee as the holder of any Shares for any purpose.

SECTION 3. RIGHT OF FIRST REFUSAL.

         3.1. Right of First Refusal.

                  (a) Notice of Offer. If any Employee Shareholder (the "Selling
Employee Shareholder") receives a bona fide written offer (the "Offer") from any
Person (the "Prospective Purchaser") to purchase any or all of the Selling
Employee Shareholder's Shares (the Shares subject to the Offer hereinafter
referred to as the "Offered Shares"), then such Selling Employee Shareholder
shall first offer such Shares at the proposed purchase price set forth in the
Offer (the "Offer Price") and give notice of the Offer (the "Notice of Offer")
to the Company and to Metretek Florida. The Notice of Offer shall include the
number of Offered Shares, the Offer Price, the identity of the Prospective
Purchaser and the terms of the proposed Transfer in reasonable detail, including
the name and address of the Prospective Purchaser (including its name and
address), and the other material terms of the Offer. The Notice of Offer shall
also contain an irrevocable offer by the Selling Employee Shareholder to sell
the Offered Shares to the Company upon the terms and conditions of the Rights of
Refusal set forth in this Agreement.

                  (b) Company's Right of First Refusal. The Company shall have
the irrevocable first right and option (the "Right of First Refusal") to
purchase all, but not less than all, of the Offered Shares upon the terms and
conditions set forth in this Section 3.1(b). The Company may exercise its Right
of First Refusal by giving written notice of such exercise (the "Notice of
Exercise") to the Selling Employee Shareholder on or before the thirtieth (30th)
day after the Company shall have received the Notice of Offer from the Selling
Employee Shareholder. The Company shall have the right, without the consent or
approval of the Employee Selling Shareholder, to assign its Right of First
Refusal with respect to any Offered Shares to Metretek Florida or any of its
Affiliates, in which case the assignee shall have all of the rights and duties
of the Company under this Agreement with respect to the Offered Shares.

         3.2 Purchase Price. The Purchase Price to be paid for each Offered
Share purchased by the Company in accordance with this Section 3 shall be the
Offer Price for such Offered Share as set forth in the Notice of Offer, and
shall be paid on the same terms set forth in the Offer or, at the option of the
Company, by check or wire transfer of immediately available funds, at the
Closing, or by any other means mutually acceptable to the Company and the
Selling Employee Shareholder.

         3.3 Closing of Right of First Refusal. The Closing of the purchase and
sale of the Offered Shares pursuant to this Section 3 shall take place at the
principal place of business of the Company on a date forty-five (45) business
days after the date the Company receives the Notice of Offer, unless the Company
and the Selling

                                       6
<PAGE>

Employee Shareholder mutually agree on a different place or time. At the
Closing, the Selling Employee Shareholder shall deliver to the Company all
certificates representing the Offered Shares duly endorsed in blank, or with
duly endorsed blank stock powers attached, and otherwise in proper form for
Transfer, against payment by the Company, by Company, bank cashiers or certified
check, or by wire transfer of immediately available funds to an account
designated by the Selling Employee Shareholder, of the Purchase Price for the
Offered Shares, pursuant to the terms and conditions of the Offer, as modified
as permitted by this Agreement or mutual consent of the Company and the Selling
Employee Shareholder. Upon Closing, the Selling Employee Shareholder shall
conclusively be deemed, unless the Company, in its sole discretion, provides
otherwise in writing, to have given the following representations and warranties
to the Company, which shall survive the Closing: (A) The Selling Employee
Shareholder is the legal, beneficial and record owner of the Offered Shares, has
good and marketable title thereto and the absolute right to Transfer the same to
the Company, and such Offered Shares, upon Transfer to the Company, will be free
and clear of all security interests, pledges, claims, liens, option, rights of
first refusal, limitations or voting rights and restrictions of any kind
whatsoever (other than restrictions imposed by this Agreement and by federal and
state securities laws); and (B) the Transfer of Offered Shares by the Selling
Employee Shareholder as contemplated by this Agreement does not require any
consent or approval of any governmental authority, court or other Person that
has not already been obtained.

         3.4 Sale to Prospective Purchaser. If the Right of First Refusal shall
not have been timely exercised for the purchase of all (100%) of the Offered
Shares, then the Selling Employee Shareholder shall have the right, for a period
ending 60 days after the earlier of (i) the day the Right of First Refusal
expires, or (ii) the day the Selling Employee Shareholder receives notice that
the Company will not exercise its Right of First Refusal to purchase 100% of the
Offered Shares, to Transfer all, but not less than all, of the Offered Shares
free of the Right of First Refusal to the Prospective Purchaser at the same
price and otherwise upon the same terms (or at a price that is greater than
and/or upon terms more favorable to the Selling Employee Shareholders than the
terms) described in the Offer. If the Selling Employee Shareholder does not
Transfer the Offered Shares to the Prospective Purchaser within such 60-day
period, then the Transfer by the Selling Employee Shareholder of the Offered
Shares will be again subject to the Right of First Refusal. It shall be a
condition of the effectiveness of the Transfer of the Offered Shares to a
Prospective Purchaser that the Prospective Purchaser shall have agreed in
writing with the Company to become a party to this Agreement as an Employee
Shareholder, and to be bound by and to comply with all the terms of this
Agreement applicable to Employee Shareholders, and that the Offered Shares so
purchased shall be subject to all of the restrictions applicable to the Employee
Shareholders' Shares set forth in this Agreement.

         3.5 Permitted Transfers. Notwithstanding any other provision of this
Section 3 to the contrary, the following Transfers (collectively, the "Permitted
Transfers") of Shares by the Employee Shareholders shall not be subject to the
Right of First Refusal:

                  (a) any Transfer of Shares made by an Employee Shareholder to
the Company, Metretek Florida or a subsidiary of either;

                  (b) any Transfer of Shares made by an Employee Shareholder to
any Relation of such Employee Shareholder or an Entity owned or controlled by
the Employee Shareholders or any Relation of the Employee Shareholders, for no
consideration for estate planning purposes (provided the transferee complies
with the provisions in clause (ii) of the last sentence of Section 3.4 as if the
transferee were a Prospective Purchaser);

                  (c) any Transfer of Shares by an Employee Shareholders
pursuant to such Employee Shareholder's Tag-Along Right under Section 4; and

                  (d) any Transfer of Shares made by an Employee Shareholder
that has been approved in advance in writing by the Company, which approval may
be withheld or delayed for any reason or no reason in its sole discretion.

         3.6 Securities Act Matters. Notwithstanding any other provision of
this Agreement to the contrary, but subject to express written waiver by the
Company in the exercise of its good faith and reasonable judgment, the Employee
Shareholders shall not make any Transfer of Shares without the registration of
the Transfer of such Shares under the Securities Act and applicable state
securities laws or until the Company shall have received such legal opinions or
other assurances that such Transfer is exempt from the registration requirements
under the Securities Act and applicable state securities laws as the Company in
its good faith and reasonable discretion deems appropriate in light of the fact
and circumstances relating to such proposed Transfer, together with such
representations, warranties

                                       7
<PAGE>

and indemnifications from the transferor and the transferee as the Company in
its good faith and reasonable discretion deems appropriate to confirm the
accuracy of the facts and circumstances that are the basis for any such opinion
or other assurances and to protect the Company from any liability resulting from
any such Transfer.

SECTION 4. TAG-ALONG RIGHT.

         4.1 Tag-Along Right. In the event Metretek Florida desires to Transfer
all, or any part constituting a majority of all then outstanding Shares, of its
Shares of the Company for value to an unaffiliated third party ("Tag-Along
Purchaser"), then the Employee Shareholders shall have the right ("Tag-Along
Right"), subject to applicable law and compliance with any other restrictions
applicable to such Transfer, to participate in such Transfer in accordance with
this Section 4.

         4.2 Tag-Along Notice. Metretek Florida may Transfer any Shares to a
Tag-Along Purchaser under the circumstances set forth in Section 4.1 only if (i)
the Tag-Along Purchaser agrees to provide the Employee Shareholders with the
right to participate in the Transfer of the Shares to such Tag-Along Purchaser
upon the same terms and conditions as Metretek Florida, and (ii) Metretek
Florida first notifies the Employee Shareholders, in writing, of such intended
Transfer at least fifteen (15) days prior to the proposed date of Transfer (the
"Tag-Along Notice"). The Tag-Along Notice shall set forth in reasonable detail
the terms of the Transfer, the date on or about which such Transfer is to be
consummated, the number of Shares to the Transferred, and the name and address
of the Tag-Along Purchaser.

         4.3 Exercise of Tag-Along Right. If any Employee Shareholder desires to
exercise his Tag-Along Right under this Section 4, then such Employee
Shareholder shall notify Metretek Florida in writing within ten (10) days after
receipt of the Tag-Along Notice that he will sell to either the Prospective
Purchaser or to Metretek Florida, at Metretek Florida's option, a number of
Shares on the same terms and conditions as the Selling Stockholder set forth in
the Tag-Along Notice. If the Tag-Along Purchaser will not purchase all of the
Shares which the Employee Shareholder wishes to sell pursuant to this Section 4,
then the number of Shares which the Employee Shareholder may Transfer pursuant
to this Section 4 shall be equal to the product obtained by multiplying (x) the
total number of Shares being purchased by the Tag-Along Purchaser, by (y) a
fraction, (i) the numerator of which is the total number of Shares owned by the
Employee Shareholder, and (ii) the denominator of which is the total number of
Shares then outstanding.

         4.4 Exceptions. Notwithstanding any other provision of this Section 4
to the contrary, the Tag-Along Right of the Employee Shareholders set forth in
this Section 4 shall not apply to the following Transfers:

                  (i) any Transfer of Shares made by Metretek Florida in
connection with an IPO;

                  (ii) any Transfer of Shares by Metretek Florida to any
Employee Shareholder;

                  (iii) any Transfer of Shares by Metretek Florida to, Metretek,
the Company or any Affiliate of either; or

                  (v) any other Transfer of Shares that has been approved in
writing by Employee Shareholders holding a majority of the then outstanding
Employee Shares.

SECTION 5. DRAG-ALONG RIGHT.

         5.1 Drag-Along Right. If Metretek Florida desires to Transfer all
of its Shares in any transaction with an unaffiliated third party ("Drag-Along
Purchaser"), then Metretek Florida shall have the right (the "Drag-Along
Right"), subject to applicable law and compliance with any other restrictions
applicable to such Transfer, to require the Employee Shareholders to Transfer,
and the Employee Shareholders hereby agrees to Transfer, all of the Employee
Shares to the Drag-Along Purchaser, upon the same terms and conditions as
applicable to Metretek Florida.

         5.2 Drag-Along Notice. In order to exercise its Drag-Along Right,
Metretek Florida shall give written notice to the Employee Shareholders at least
fifteen (15) days prior to the proposed date of Transfer (the "Drag-Along
Notice"). The Drag-Along Notice shall set forth in reasonable detail the terms
and conditions of the

                                       8
<PAGE>

Transfer, the date on which such Transfer is to be consummated, and the name and
address of the Drag-Along Purchaser.

         5.3 Purchase Agreement. If Metretek Florida exercises its
Drag-Along Right, then the Employee Shareholders shall agree to enter into a
purchase agreement in form and substance approved by Metretek Florida to the
extent such Agreement shall contain customary representations from the Employee
Shareholders as to the ownership of the Shares to be purchased in the absence of
liens thereon and customary indemnification provisions solely with respect to
such representations from the Employee Shareholders. No Employee Shareholder
shall be required to participate in a proposed Transfer pursuant to the exercise
of the Drag-Along Right unless his liability for breaches of representations and
warranties made in connection with the Transfer is limited to no more than the
total sales price received by such Employee Shareholder in such sale.

SECTION 6. PREEMPTIVE RIGHTS.

         6.1 Preemptive Rights for New Securities. Except in the case of
Excepted Securities (as defined in Section 6.5), the Company shall not issue,
sell or exchange, agree to issue, sell or exchange, or reserve or set aside for
issuance, sale or exchange (i) any Shares, (ii) any other equity security of the
Company, (iii) any debt security of the Company which by its terms is
convertible into or exchangeable for any equity security of the Company, (iv)
any security that is a combination of debt and equity, or (v) any option,
warrant or other right to subscribe for, purchase or otherwise acquire any
equity security or any debt security referred to above to any Person (the "New
Purchaser"), unless in each case the Company shall have first offered (the
"Preemptive Offer") to sell such securities (the "New Securities") to the
Employee Shareholders by delivering to the Employee Shareholders a written
notice of such Preemptive Offer stating that the Company proposes to sell such
New Securities, and setting forth the number or amount and type of the New
Securities proposed to be sold, the proposed purchase price therefor, the
proposed New Purchaser or class of proposed New Purchasers (if known) and any
other terms and conditions of such Preemptive Offer. The Preemptive Offer shall
be its terms remain open and irrevocable for a period of ten (10) days from the
date it is delivered by the Company (the "Preemptive Period").

         6.2 Acceptance of Preemptive Offer. Each Employee Shareholder shall
have the option, exercisable at any time during the Preemptive Period by
delivering written notice of acceptance to the Company (an "Acceptance Notice"),
to subscribe for and purchase, on the terms and conditions as set forth in the
Preemptive Offer, the number or amount of such New Securities up to his Equity
Percentage of the total number or amount of New Securities proposed to be
issued. An Employee Shareholder's "Equity Percentage" shall be equal to a
fraction, the numerator of which shall be equal to the total number of Shares
then owned by such Employee Shareholder, and the denominator of which shall be
the total number of Shares then outstanding, in each case including Shares into
which any then outstanding shares of preferred stock are then convertible, but
without giving effect to any other option, warrant or right to acquire Shares.

         6.3 Closing of Exercise of Preemptive Offer. The Closing of the
issuance, sale and purchase of the New Securities pursuant to this Section 6
shall take place at the principal office of the Company on the later of the
fifth (5th) business day after the expiration of the Preemptive Notice Period or
the date of the closing of the issuance of New Securities. At such Closing, the
Employee Shareholders desiring to purchase New Securities shall pay the Purchase
Price for the New Securities being purchased as set forth in the Preemptive
Offer by bank cashier's or certified check, or wire transfer of immediately
available funds to an account designated by the Company, along with such written
investment representations and warranties as may be reasonably requested by the
Company for securities law purposes, against delivery of certificates,
registered in the name of such Employee Shareholders, representing the New
Securities so purchased.

         6.4 Company Sale of Refused Securities. If Acceptance Notices are not
given by the Employee Shareholders in the aggregate for all of the New
Securities subject to the Preemptive Offer, then the Company shall have the
right for a period of ninety (90) days from the expiration of the Preemptive
Period to sell all or any part of the New Securities as to which Acceptance
Notices have not been given by the Employee Shareholders (the "Refused
Securities") to any other Persons, but only upon terms and conditions that, in
the aggregate, are not more favorable to such other Persons or less favorable to
the Company than those set forth in the Preemptive Offer. Any New Securities not
timely purchased by the Employee Shareholders or any other Persons in accordance
with this Section 6 may not be issued, sold or otherwise Transferred by the
Company until they are again offered to the Employee Shareholders under the
procedures specified in this Section 6.

                                       9
<PAGE>

         6.5 Excepted Securities. As used herein, the term "Excepted Securities"
means (i) Shares (or options therefor) issued, granted or sold to directors,
officers, employees or representatives of, or consultants or advisors to, the
Company under any stock plan approved by the Board; (ii) Shares issued by the
Company in a bona fide underwritten public offering registered under the
Securities Act, (iii) securities issued pursuant to the conversion or exercise
of convertible or exercisable securities, (iv) securities issued in connection
with a stock split or stock dividend or pursuant to a reverse stock split, and
(v) securities listed, granted or sold with the consent of the holders of a
majority of the then outstanding Employee Shares.

SECTION 7. COMPANY'S CALL RIGHT.

         7.1 Call Right. In the event that the employment of any Employee
Shareholder (the "Terminated Shareholder") is terminated for any reason, whether
with or without cause, and whether by the Company or by the Terminated
Shareholder, then the Company shall have the irrevocable first right and option
("Call Right"), but not the obligation, for a period of six (6) months year
after the date of termination of the Terminated Shareholder's employment (the
"Call Period") to purchase, and if the Company exercises its Call Right then the
Terminated Shareholder shall have the obligation to sell to the Company, all of
the Shares owned by such Terminated Shareholder on the date of termination of
employment (the "Call Shares"), upon the terms and conditions set forth in this
Section 7. The Company shall have the right, without the consent or approval of
the Terminating Shareholder, to assign its Call Right with respect to any Call
Shares to Metretek Florida or any of its Affiliates, in which case the assignee
shall have all of the rights and duties of the Company under this Agreement with
respect to the Call Shares.

         7.2 Call Price. The Purchase Price to be paid for the Call Shares
purchased in accordance with this Section 7 (the "Call Price") shall be equal to
the value of such Call Shares as determined as follows:

         (i) The amount mutually agreed to between the Terminated Shareholder
and the Company, if such agreement can be obtained within thirty (30) days after
the Company gives the Call Notice (as defined below) (the "Call Price Agreement
Period"); or

         (ii) The value of the Call Shares as determined by the following
appraisal process. The Company shall select a "Qualified Appraiser" that is
unaffiliated with the Company (the "Company Appraiser"), and give written notice
of the name, address and other reasonable identification of the Company
Appraiser to Terminated Shareholder (the "Company Appraiser Notice"), within
thirty (30) days after the expiration of the Call Price Agreement Period. For
purposes of this Agreement, a "Qualified Appraiser" shall mean an investment
banking firm or other Person that is in the business of conducting, and is
qualified to conduct, an appraisal of businesses such as the business of the
Company. The designation of the Company Appraiser shall be subject to the
approval of the Terminated Shareholder, which approval shall not be unreasonably
withheld and will be deemed to have given, unless the Terminated Shareholder
delivers to the Company, within fourteen (14) days after the Company provides
the Company Appraiser Notice (the "Company Appraiser Objection Period"), written
notice (the "Terminated Shareholder Rejection Notice") of (i) objection to the
Company Appraiser and (ii) the name, address and other reasonable identification
of another Qualified Appraiser unaffiliated with the Terminated Shareholder (the
"Terminated Shareholder Appraiser"). If the Terminated Shareholder does not duly
reject the Company Appraiser, then the value of the Call Shares as determined in
the written opinion of the Company Appraiser shall be binding on the Company and
the Terminated Shareholder for purposes of this Section 7. If the Terminated
Shareholder does duly reject the Company Appraiser and designate an Terminated
Shareholder Appraiser, then within thirty (30) days following the Terminated
Shareholder Rejection Notice, the two appraisers shall determine and state in
writing signed by them their opinion of the value of the Call Shares. In the
event that the appraisers agree on a value of the Call Shares, then such value
shall be binding on the Company and the Terminated Shareholder for purposes of
this Section 7. In the event the two appraisers cannot agree upon a value of the
Call Shares, then (i) the two appraisers shall select a third Qualified
Appraiser (the "Neutral Appraiser") within fourteen (14) days after delivery of
their written opinions, (ii) the Neutral Appraiser shall determine and set forth
in a written opinion within thirty (30) days of being selected the value of the
Call Shares, and the value of the Call Shares shall be equal to the average of
the value thereof set forth in the three appraisals, all with equal weighting.
The Company and the Terminated Shareholder shall each be responsible for
one-half (50%) of all costs and expenses of all appraisers. Signed opinions of
the value of the Call Shares by all appraisers shall be promptly delivered to
both the Company and the Terminated Shareholder.

                                       10
<PAGE>

         7.3 Mechanics of Exercise. The Company may exercise its Call Right at
any time during the Call Period by giving written notice thereof to the
Terminated Shareholder (the "Call Notice").

         7.4 Closing of Call Right. The Closing of the purchase and sale of the
Call Shares pursuant to this Section 7 shall take place at the principal place
of business of the Company no later than fifteen (15) days after the date the
Call Price is determined as provided in Section 7.2, unless the Company and the
Terminated Shareholder mutually agree on a different place or time. At the
Closing, the Terminated Shareholder shall deliver to the Company all
certificates representing the Call Shares duly endorsed in blank, or with duly
endorsed blank stock powers attached, and otherwise in proper form for Transfer,
against payment by the Company of the Call Price by wire transfer of immediately
available funds, or other means mutually acceptable to the Company and the
Terminated Shareholder; provided, however, that the Company shall have the right
to pay up to one-half (50%) of the Call Price, over a time period not to exceed
three (3) years from the Closing, by delivering to the Terminated Shareholder at
the Closing a duly executed promissory note made payable to the Terminated
Employee containing the terms of such payment, and the unpaid principle balance
of the note shall bear interest at the rate announced as of the day prior to the
Closing, as changed on the first business day of each calendar year, announced
by Wells Fargo as its "prime lending rate" (by whatever equivalent term it uses
from time to time). At the Closing, the Terminated Shareholder shall
conclusively be deemed, unless the Company, in its sole discretion, permits
otherwise in writing, to have given the following representations and warranties
to the Company, which shall survive the Closing: (A) the Terminated Shareholder
is the legal, beneficial and record owner of the Call Shares, as good and
marketable title thereto and the absolute right to Transfer the same to the
Company, and the Call Shares, upon Transfer to the Company, will be free and
clear of all security interests, pledges, claims, liens, options, right to first
refusal, limitations on voting rights and restrictions of any kind whatsoever
(other than restrictions imposed by this Agreement and by federal and state
securities laws); and (B) the Transfer of the Call Shares by the Terminated
Shareholder as contemplated by this Agreement does not require any consent or
approval of any governmental authority, court or other Person that has not
already been obtained.

SECTION 8. EFFECTUATION PROVISIONS

         8.1 Enabling Action.

                  (a) If any amendment to the Articles and/or of the Bylaws of
the Company, or any other action requiring the vote, consent or approval of the
shareholders of the Company, is required in order to make permissible or lawful
any of the purchases of its own Shares which the Company may be obligated or
entitled to make in accordance with the terms of this Agreement, then the
Employee Shareholders agree to vote all Employee Shares then held by them in
favor of, or shall consent in writing to, such amendment or action, whether such
amendment or action is voted upon or consented to at, prior to or after the time
of such purchase or purchases by the Company.

                  (b) The foregoing agreement by the Employee Shareholders to
vote their Employee Shares in a certain manner shall be deemed, in each
instance, to include an agreement by each Employee Shareholder to use his best
efforts to take all actions necessary to call, or cause the Company and the
appropriate officers and directors of the Company to call, as promptly as
practicable, a special meeting of the shareholders or to act by written consent.

                  (c) When any action is required to be taken by an Employee
Shareholder pursuant to this Agreement, such Employee Shareholder shall take all
steps necessary to implement such action, including calling a special meeting of
shareholders or executing or causing to be executed one or more consents in
writing in lieu of a meeting of the shareholders, in each case as promptly as
practical.

         8.2 Legend. The Company shall cause each certificate representing
Employee Shares to bear, in bold, all-caps typeface, the following legends (or
legends to a similar effect):

                  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
                  THE SECURITIES LAWS OF ANY STATE AND, ACCORDINGLY, NEITHER
                  THESE SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
                  ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS
                  THE SAME IS REGISTERED UNDER THE SECURITIES ACT OF

                                       11
<PAGE>

                  1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR
                  UNLESS IN THE OPINION OF COUNSEL FOR THE COMPANY AN EXEMPTION
                  FROM SUCH REGISTRATION IS AVAILABLE AND THE COMPANY RECEIVES
                  EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO IT
                  (WHICH EVIDENCE MAY INCLUDE AN OPINION OF COUNSEL).

                  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  RESTRICTIONS ON TRANSFER CONTAINED IN THAT CERTAIN
                  SHAREHOLDERS AGREEMENT DATED AS OF JUNE 27, 2002 BETWEEN THE
                  CORPORATION AND CERTAIN OF ITS SHAREHOLDERS. THE COMPANY WILL
                  MAIL A COPY OF SUCH AGREEMENT TO THE HOLDER OF THIS
                  CERTIFICATE WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER RECEIPT
                  OF A WRITTEN REQUEST THEREFOR.

         8.3 Acknowledgement of Necessity of Restrictions. The Employee
Shareholders and the Company agree and acknowledge that the restrictions on the
issuance, transfer and encumbrance of Employee Shares of the Company imposed by
this Agreement are imposed to accomplish legitimate purposes of the Company, and
that such restrictions are not more restrictive than necessary to accomplish
those purposes.

         8.4 Record of Transfers. The Company shall not make or record any
Transfer of its Shares which are subject to the provisions of this Agreement on
its books and records unless and until there shall have been full compliance
with the provisions of this Agreement and there shall have been furnished to the
Company such affidavits, certificate or other documents evidencing such
compliance as the Company may reasonably request.

         8.5 Voting of Shares. Each Employee Shareholder shall vote any and all
Shares or other voting securities of the Company which he owns or has the right
or power to vote to cause the Company to provide the Employee Shareholders with
the rights and benefits contemplated by this Agreement, and to comply with and
perform fully each of the obligations, commitments, covenants, and agreements of
the Company to and with the Employee Shareholders contained in this Agreement
and shall take any and all action as a shareholder of the Company as may be
necessary to cause the Company to provide such rights and benefits and to comply
with such obligations, commitments, covenants, and agreements.

         8.6 No Contrary Action. No Employee Shareholder shall take any action
as an officer, director or shareholder of the Company which would prevent such
Employee Shareholder or the Company from providing the Employee Shareholders
with the rights and benefits contemplated by this Agreement, or which would
otherwise cause such Employee Shareholder or the Company to breach any of its
obligations, commitments, covenants and agreement to and with the Employee
Shareholder set forth in this Agreement.

         8.7 Company Determinations. All determinations hereunder by the Company
to exercise any of its rights and obligations shall be made by the Board,
exclusive of the Shareholder who owns, controls or holds the Shares at issue and
his Affiliates.

SECTION 9. TERMINATION OF AGREEMENT

         9.1 Termination. This Agreement, and the rights and obligations of the
parties hereunder, shall remain in effect until terminated on the earlier of:

                  (a) The date this Agreement is terminated by unanimous
written consent of the Company, Metretek Florida and all Employee Shareholders;

                  (b) The date on which only Metretek Florida holds all issued
and outstanding Shares;

                  (c) The date of the consummation of an IPO;

                  (d) The date of the completion of the liquidation, dissolution
or winding-up of the affairs of the Company; or

                                       12
<PAGE>
                  (e) The date of the sale of all of the Shares of the Company
to a third party in compliance with this Agreement.

         9.2 Effect of Termination. Termination of this Agreement for any reason
shall not affect any rights or obligations of any Employee Shareholder or of the
Company accrued hereunder prior to such termination, or any right or remedy with
respect to a breach or default hereunder.

SECTION 10. ARBITRATION.

         Any dispute, controversy or claim arises out of, under or in connection
with, or otherwise relating to, this Agreement (a "Dispute"), including but not
limited to the parties' rights and obligations hereunder, or any actual or
alleged breach hereof, shall be determined and settled by binding arbitration in
Florida in accordance with the rules of the commercial rules and procedures of
the American Arbitration Association, as amended by this Agreement. Promptly
after a Dispute arises, the parties agree to make a good faith effort to select
one mutually agreeable arbitrator. If the parties are unable to reach agreement
on an arbitrator within thirty (30) days after the Dispute is submitted to
arbitration, one arbitrator shall be selected in accordance with the commercial
rules and procedures of the American Arbitration Association. Any determination,
resolution or award made by the arbitrators shall specify the findings of fact
of the arbitrators and the reasons for the determination, resolution or award,
and such determination, resolution or award shall be final and binding. If the
parties hereto mutually agree to a resolution of any Dispute prior to the
arbitrators' decision, the agreement of the parties shall resolve the Dispute.
The party prevailing in any arbitration, as determined by the arbitrator, shall
be entitled to an award of all of its out-of-pocket costs and expenses incurred
in connection with the Dispute, including but not limited to reasonable
attorneys' fees, court costs and expert fees. An arbitration award or decision
may be entered by any court of competent jurisdiction, or application may be
made to such a court for judicial acceptance of the award or decision and any
appropriate order, including enforcement. The parties hereby consent to the
submission of any Dispute for settlement by binding arbitration in accordance
with this Section 12 and agrees to carry out without delay the provisions of any
arbitration award, decision or resolution.

SECTION 11. GENERAL PROVISIONS.

         11.1 Governing Law. This Agreement shall in all respects be governed
by, and construed in accordance with, the internal substantive laws of the State
of Florida, without giving effect to any conflict or choice of law principles or
rules.

         11.2 Amendment. This Agreement may not be amended or modified in whole
or in part in any manner except in a writing which makes reference to this
Agreement executed by all parties hereto.

         11.3 Assignment. No Employee Shareholder may not assign any or all of
his rights or delegate any or all of his duties under this Agreement without the
prior written consent of the Company, which may be withheld or delayed for any
reason or no reason in its sole discretion.

         11.4 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, legatees,
personal representatives, devisees, executors, successors and permitted assigns.

         11.5 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersedes in their entirety all prior and contemporaneous written
and oral agreements, arrangements, understandings, negotiations, communications,
covenants, representations and warranties among the parties hereto relating to
the subject matter hereof.

         11.6 Notices. Any and all notices, demands, requests, elections and
other communications required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given (i) upon personal delivery;
(ii) upon confirmation of receipt when sent by facsimile transmission; (iii) one
business day after deposit during normal business hours with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; (iv) five business days after being sent by first class
(certified or registered) mail, postage prepaid, return receipt requested, in
each case to the following addresses:

                                       13
<PAGE>
                  If to the Company, to:

                  Metretek Contract Manufacturing Company, Inc.
                  300 North Drive
                  Melbourne, FL 32934
                  Attn: Chief Executive Officer
                  Phone 321-259-9700
                  Fax 321-259-2900

                  With copies to:

                  Metretek Technologies, Inc.
                  303 East 17th Avenue
                  Denver, Colorado 80203
                  Attn: W. Phillip Marcum, President
                  Telephone: (303) 785-8080
                  Facsimile: (303) 785-8085

                  Paul R. Hess, Esq.
                  Kegler, Brown, Hill & Ritter Co., L.P.A.
                  65 E. State Street, Suite 1800
                  Columbus, Ohio  43215
                  Telephone: (614) 462-5400
                  Facsimile: (614) 464-2634

                  If to the Metretek Florida, to:

                  Metretek, Incorporated
                  300 North Drive
                  Melbourne, FL 32934
                  Attn: Chief Executive Officer
                  Phone 321-259-9700
                  Fax 321-259-2900

                  With copies to:

                  Metretek Technologies, Inc.
                  303 East 17th Avenue
                  Denver, Colorado  80203
                  Attn: W. Phillip Marcum, President
                  Telephone: (303) 785-8080
                  Facsimile: (303) 785-8085

                  Paul R. Hess, Esq.
                  Kegler, Brown, Hill & Ritter Co., L.P.A.
                  65 E. State Street, Suite 1800
                  Columbus, Ohio 43215
                  Telephone: (614) 462-5400
                  Facsimile: (614) 464-2634

                  If to one or more Employee Shareholders, to:

                  The address of such Employee Shareholder set
                  forth on the Signature Page hereof below his
                  name.

         Any party hereto may send any notice, demand, request, election or
other communication to the intended recipient at its address set forth above
using any other means (such as expedited courier, messenger service, telecopy,
telex, ordinary mail or electronic mail), but no such notice, demand, request or
other communication shall

                                       14
<PAGE>

be deemed to have been given until it is actually received by the recipient. Any
party hereto may change its designated address by giving written notice to all
other parties. Upon receipt of a request from an Employee Shareholder, the
Company shall provide such Employee Shareholder with a list of all such
addresses.

         11.7 Waiver. The obligations of any party hereunder may be waived only
with the written consent of the party or parties entitled to the benefits the
obligations so involved. Any waiver of a breach or violation of or default under
any provision of this Agreement shall not be construed or operate as, or
constitute, a waiver of any other or subsequent breach or violation of or
default under that provision or any other provision of this Agreement. The
failure of any party to insist upon strict compliance with any provision of this
Agreement on any one or more occasions shall not be construed or operate as, or
constitute, a continuing waiver of, or an estoppel of that party's right to
insist upon strict compliance with, that provision or any other provision of
this Agreement.

         11.8 Severability. If any provision of this Agreement is determined by
any court of law to be illegal, invalid or unenforceable in any situation, such
illegality, invalidity or unenforceability shall not affect or impair the
legality, validity or enforceability of that provision in any other situation or
of any other provision of this Agreement in any situation which shall remain in
full force and effect and this Agreement shall be construed as if such illegal,
invalid or unenforceable provision were omitted. The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof or thereof. If any provision of this Agreement, or the
application thereof to any Person or any circumstance, is invalid or
unenforceable: (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision; and (b) the
remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.

         11.9 Counterparts. This Agreement may be executed in any number of
counterparts (including counterparts executed by less than all parties hereto),
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

         11.10 Headings. The headings used herein are solely for convenience of
reference and shall not be given any effect in the construction or
interpretation of this Agreement.

         11.11 No Third Party Beneficiaries. Nothing in this Agreement,
express or implied, in intended to create or confer and shall not be construed
or operate as creating or conferring, any rights or remedies under or by reason
of this Agreement, upon any Person other than the parties hereto and their
respective successors and permitted assigns.

         11.12 Further Assurances. The parties hereto agree to take or cause to
be taken all actions, including without limitation, the execution and delivery
of documents and the voting of their Shares, which are necessary, convenient or
desirable in order to effect the transactions contemplated by this Agreement.

         11.13 Best Efforts. Each of the parties hereto shall act in good faith
and use its best efforts to bring about the transactions contemplated by this
Agreement.

         11.14 Expenses. Each of the parties to this Agreement shall pay its own
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby.

         11.15 Construction. In the event an ambiguity or question or intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party hereto by virtue of the authorship of any of the
provisions of this Agreement.

         11.16 Specific Performance. Each of the parties hereto acknowledges and
agrees that the other parties hereto would suffer irreparable damage for which
an adequate remedy at law would not be available in the event any of the
provisions of this Agreement is not performed in accordance with its specific
terms or otherwise is breached. Accordingly, each of the parties hereto agrees
that the non-breaching parties shall be entitled to an injunction, restraining
order or other form of equitable relief from any court of competent jurisdiction
to prevent breaches of, and to specifically enforce, the provisions of this
Agreement.

                                       15
<PAGE>

         11.17 No Agency or Partnership. Nothing contained in this Agreement
shall make or constitute any party to the representative, agent, principal or
partner of any other party and it is understood that no party has the capacity
to make commitments of any kind whatsoever or incur obligations or liabilities
binding upon any other party.

                                    * * * * *

                                       16
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed, or cause
their duly authorized representatives to duly execute, this Shareholders
Agreement to be effective as of the day first above written.

                                THE COMPANY:

                                METRETEK CONTRACT MANUFACTURING COMPANY, INC.

                                By: /s/ W. Phillip Marcum
                                    ---------------------------
                                    W. Phillip Marcum, Chairman

                                METRETEK FLORIDA:

                                METRETEK, INCORPORATED

                                By: /s/ W. Phillip Marcum
                                    ---------------------------
                                    W. Phillip Marcum, Chairman

                                EMPLOYEE SHAREHOLDER:

                                /s/ Thomas R. Kellogg
                                -------------------------------
                                Thomas R. Kellogg, Individually

                                -------------------------------
                                Street Address

                                -------------------------------
                                City, State, Zip Code

                                       17
<PAGE>

               SIGNATURE PAGE FOR ADDITIONAL EMPLOYEE SHAREHOLDER

         IN WITNESS WHEREOF, the undersigned has duly executed, or cause its
duly authorized representative to duly execute, this Shareholders Agreement, and
has agreed to become a party to this Shareholders Agreement and to be bound by
all terms and conditions set forth therein as an "Employee Shareholder",
effective as of the date set forth below his or its signature below.

                   EMPLOYEE SHAREHOLDER:

                   /s/ Lee Arrowood
                   ------------------------------------------
                   Signature

                   Lee Arrowood
                   ------------------------------------------
                   Print Name

                   ------------------------------------------
                   Street Address

                   ------------------------------------------
                   City, State, Zip Code

                   ------------------------------------------
                   Dated:

                                       18

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