EMPLOYMENT AGREEMENT



         EMPLOYMENT AGREEMENT (this "Agreement") made as of the 7th day of

September, 2000 by and between DENNIS S. ROSATELLI, with an address at 73 Lake

View Drive, Old Tappan, New Jersey 07675 (hereinafter referred to as "Employee")

and DUALSTAR COMMUNICATIONS, INC., a Delaware corporation having its principal

place of business at One Park Avenue, New York, New York 10016 (hereinafter

referred to as the "Company").



         1. Employment. The Company hereby employs Employee and Employee agrees

to work for the Company with the title specified on Schedule A below during the

Term (as defined below) of and upon the terms and conditions set forth in this

Agreement.



         2. Compensation/Benefits. (a) Base Salary. During the Term of this

Agreement, the Company agrees to pay Employee the base annual salary specified

on Schedule A below ("Base Salary"). Such Base Salary shall be reviewed no less

frequently than annually during the term of this Agreement and may be increased

but not decreased by the Company's board of directors in its sole and absolute

discretion, after taking into consideration a variety of factors, including,

without limitation, the performance of the Employee and the Company and the base

salary (and raises) paid by comparable companies to employees having comparable

responsibilities. In the event of any increase, the increased amount shall

become the Base Salary. Such Base Salary shall be payable in accordance with the

Company's normal business practices or in such other amounts and at such other

times as the parties may mutually agree.



         (b) Bonuses. During each year of the Term of this Agreement, the

Company agrees to submit for approval to the Board of Directors, in its sole and

absolute discretion, an incentive payment plan ("IPP"), which shall establish

performance targets for the Company and/or its business units, and bonus

payments based upon the achievement of such performance targets. The Company

agrees that the Employee shall participate in such IPP at a target bonus of 40%

of Base Salary, based upon 100% achievement of the performance targets

established in the IPP. The target bonus percentage shall be reviewed no less

frequently than annually during the term of this Agreement and may be increased

but not decreased by the Company's board of directors in its sole and absolute

discretion. In establishing performance targets and target bonus percentages for

the Employee, the Company will consider a variety of factors, including, without

limitation, performance targets set for, and bonus payments paid to, employees

having comparable responsibilities at comparable companies.



         (c) Benefits/Vacation. During the Term of this Agreement, the Company

also shall provide Employee with such other benefits, including medical,

disability, pension and severance plans, as are made generally available to

executive employees of the Company from time to time. Employee shall be entitled

to three weeks as vacation and such personal and sick benefit days during each

year of the Term in accordance with standard Company policies.



         (d) Life Insurance. Subject to Employee's submitting to any required

physical examinations, the Company shall purchase and maintain in effect a term

insurance policy with a face amount of one times Employee's Base Salary or other

greater amount as may be specified in the Company's executive benefit policies

or plans on the life of Employee and shall permit







                                       1



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Employee to designate the beneficiary thereof.



         (e) Stock Options. The Company shall recommend to the Compensation

Committee of the DualStar Technologies Corporation Board of Directors to issue

to Employee stock options (the "Options") to purchase up to 250,000 shares of

the Company's common stock at an exercise price of $4.50 per share, subject to

approval by the Board of Directors. The Options will be granted pursuant to the

DualStar Technologies Corporation 1994 Stock Option Plan and shall vest as

follows:



               (i)  one-third of the Options will vest upon the first

                    anniversary of the date hereof;



               (ii) two-thirds of the Options will vest ratably on a monthly

                    basis on the last day of each of the 24 calendar months

                    following the first anniversary of the date hereof.



All unvested Options shall vest in their entirety upon a Change of Control

(defined below) of the Company. The Options shall be evidenced by a written

Stock Option Agreement, in the form of Schedule B attached hereto



         3. Services. Employee agrees to devote substantially all of his working

time, attention and energies to the business of the Company and its Affiliates

under the general direction of the President and Chief Executive Officer.

Nothing herein shall be interpreted to preclude Employee from participating as

an officer or director of, or advisor to, any charitable or other tax exempt or

civic organization.



         4. Term. The term of this Agreement (the "Term" or the "Term of this

Agreement") shall commence on the date stated in the first paragraph of this

Agreement and employment shall commence on October 2, 2000, and the term of this

agreement shall continue through the Date of Termination, as hereinafter

defined.



         5. Early Termination. (a) In General. The Employee's employment

hereunder shall terminate and, other than the obligations listed in Paragraph

5(b), the Company's obligations hereunder shall cease, including the obligation

to pay compensation for any period after the date of termination on the Date of

Termination. The Date of Termination shall be (i) in the case of the death of

the Employee, the date of death; (ii) in the case of a termination by Employee,

the last date to be worked as specified in a written notice delivered by

Employee to the Company, which shall be not less than two weeks following the

date that such notice is given; (iii) in the case of a termination by the

Company other than for Cause (as defined below), the date set forth in a written

notice delivered by the Company to Employee, which date shall be not less than

two weeks following upon written notice following the date that such notice is

given; or (iv) in the case of a termination by the Company for Cause (as defined

below), the date upon which written notice of such termination is delivered to

Employee.



         "Cause" shall mean a finding by the Company's board of directors that

the Employee has acted with willful misconduct or gross negligence in connection

with the performance of his

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