Exhibit 10.27

 

PROMISSORY NOTE

 

  Waukesha, Wisconsin $161,074.79 August 1, 2016

 

FOR VALUE RECEIVED, the undersigned Telkonet, Inc. ("Maker"), hereby promises to
pay to the order of PETER T. KROSS or its assigns ("Holder"), the principal sum
of One Hundred Sixty One Thousand, Seventy Four Dollars and Seventy Nine Cents
($161,074.79), together with interest on the unpaid principal balance (including
unpaid interest) as set forth below.

 

1.       Interest Rate. The unpaid balance of this Note outstanding from time to
time shall bear interest at the following rate (the "Applicable Rate"):

 

a.       The Applicable Rate shall be 3% per annum.

 

2.       Principle and Interest Payments. Beginning on September 1, 2016, and on
the first day of each month thereafter through and including June 1, 2017, Maker
shall make monthly payments of principle and interest in the fixed amount of
$16,329.79 (the "Fixed Payments"). The Fixed Payments are calculated based on a
level ten month amortization of the full initial principal balance of
$161,074.79, using the Applicable Rate of 3% per annum.

 

3.       Subordination. The Holder acknowledges that this Promissory Note
represents and unsecured obligation of Maker. The Holder further agrees that if
requested by the Maker's lender, Heritage Bank of Commerce ("HBOC"), that the
Holder will execute a Subordination Agreement in a form that is acceptable to
the Maker's lender, HBOC.

 

4.       Compounding of Interest. Any required interest payments not timely made
hereunder, shall be added to the principal balance 20 days after the due date.
Thereafter, interest shall accrue on the revised principal balance, including
the defaulted interest payment(s).

 

6.       Manner of Payment. All payments of principal and interest on this Note
shall be made by immediately available funds to such place as Holder shall
designate to Maker. If any payment of principal or interest on this Note is due
on a day which is not a business day in the State of Wisconsin, such payment
shall be due on the next succeeding business day, and such extension of time
shall be taken into account in calculating the amount of interest payable under
this Note.

 

7.       Prepayment. The unpaid principal and interest due under this Note may
be prepaid in whole or in part at any time without premium or penalty.

 

8.       Default. The occurrence of any one or more of the following events with
respect to Maker shall constitute an event of default hereunder ("Event of
Default"):

 

(a)       If Maker fails to make any payment when due according to the terms of
this Note.

 

 

 

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(b)       The institution by Maker of proceedings under the United States
Bankruptcy Code, or any other applicable federal or state law seeking an order
for relief; the consent of Maker to the institution of bankruptcy or insolvency
proceedings against it; the consent by Maker to the filing of any such petition
or to the appointment of a receiver, liquidator, assignee, trustee or other
similar official of Maker or of any substantial part of the property of Maker;
the making by Maker of an assignment for the benefit of creditors; or the
inability of Maker to pay its debts generally as they become due.

 

(c)       A sale of all or substantially all of Maker's assets to a person or
entity or a group of persons or entities that do not currently control Maker.

 

10.       Remedies. If an Event of Default occurs, Holder may, at its option and
by written notice to Maker, declare the entire unpaid principal balance of this
Note, together with all accrued interest thereon, immediately due and payable.
Failure by Holder to exercise the option set forth in the preceding sentence
shall not constitute a waiver of the right to exercise the same at a later time
or upon the occurrence of any subsequent Event of Default. Holder may use any
and all remedies in law and equity to enforce and collect the amount owed under
this Note and Maker shall be responsible for Holder's reasonable costs of
enforcement and collection, including, without limitation, reasonable attorney
fees.

 

11.       Waiver; Modifications. No delay or omission of Holder in exercising
any right or power hereunder shall impair such right or power or be construed as
a waiver of any default or an acquiescence therein; and no single or partial
exercise of any such right or power shall preclude other or further exercise
thereof; or the exercise of any other right. All rights and remedies hereunder
or afforded by law shall be cumulative and shall be available to Holder until
the principal amount of and all interest on this Note have been paid in full. No
modification, waiver, estoppel, amendment, discharge or change of this Note
shall be valid unless it is in writing and signed by the party against which the
enforcement of such modification, waiver, estoppel, amendment, discharge or
change is sought.

 

12.       Notices. All notices, consents, waivers, and other communications
under this Note must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), or (b)
received by the addressee, if sent by a nationally recognized overnight delivery
service, in each case to the appropriate addresses set forth below (or to such
other addresses and facsimile numbers as a party may designate by notice to the
other parties):

 

If to the Holder, to:

Peter T. Kross

248 Grosse Point Blvd.

Grosse Point Farms, MI 48230

 

If to the Maker, to:

Telkonet, Inc.

20800 Swenson Drive, Suite 175

Waukesha, WI 53186

 

 

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13.       Governing Law; WAIVER OF JURY TRIAL. This Note shall be construed and
interpreted according to the internal laws of the State of Wisconsin, excluding
any choice of law rules that may direct the application of the laws of another
jurisdiction. Each party irrevocably consents to the exclusive, personal
jurisdiction in any court of competent jurisdiction located in the State of
Wisconsin, with respect to any action arising out of or pertaining to this Note.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS NOTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY.

 

14.       Headings. All section headings herein are inserted for convenience
only and shall not modify or affect the construction or interpretation of any
provision of this Note.

 

15.       Severability. If any provision of this Note is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Note will remain in full force and effect. Any provision of this Note held
invalid or unenforceable only in part of degree will remain in full force and
effect to the extent not held invalid or unenforceable.

 

IN WITNESS WHEREOF, Maker has caused this instrument to be duly executed as of
the date first above written.

 

 

  MAKER:   TELKONET, INC.       BY: /s/ Jason Tienor   Jason Tienor   Its:  
Chief Executive Officer

 

 

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