**Exhibit
        10.6**
 
 **EMPLOYMENT
        AGREEMENT**
  **THIS
        AGREEMENT** is by
        and between **MICROWAVE
        SATELLITE TECHNOLOGIES, INC.,** a New
        Jersey corporation with corporate offices located in Hawthorne, New Jersey
        (“MST”) and **FRANK
        T. MATARAZZO** (“Executive”).
 
 **WHEREAS** ,
        MST is
        being acquired by Telkonet, Inc. (the “Acquisition”);
 
 **WHEREAS** ,
        prior
        to the Acquisition, MST was a corporation owned by Executive; and
 
 **WHEREAS** ,
        subject
        to the Acquisition being completed (the “Effective Date”), MST desires to employ
        Executive, and Executive desires to be employed by MST.
 
 **NOW
        THEREFORE** ,
        MST
        hereby employs Executive, and Executive hereby accepts employment with MST
        on
        the following terms and conditions:
 
 **1.**  **Duties** **.**  MST
        hereby employs Executive in the capacity of President and Chief Executive
        Officer. In such capacity, Executive shall perform the duties of a president
        and
        chief executive officer in a professional, supervisory and managerial nature
        solely for the benefit of MST and pertaining to the business and affairs
        of MST
        as determined by the Board of Directors and/or the Executive Committee of
        MST.
        Executive shall report directly to Telkonet, Inc.’s Chief Executive Officer (the
“Telkonet CEO”). Executive’s duties and responsibilities shall also include, but
        not be limited to, the following:
 
 (a)  Serve
        as
        the chief executive officer of MST’s operations and provide leadership for MST’s
        activities;
 
 (b)  Oversee
        all MDU and, after a transition period as determined by the Telkonet CEO,
        all
        the hotel and motel operations of MST and Telkonet, Inc. In conjunction with
        the
        2006 planning process, the Executive and the Telkonet CEO and/or his designees
        will define the geographic boundaries and managed solution offerings to be
        the
        Executive’s responsibility;
 
 (c)  Hire,
        compensate, discipline and terminate MST staff within the approved budget,
        establish job descriptions, duties and responsibilities of all MST staff
        in
        accordance with MST Bylaws, and the policies and procedures of MST, perform
        regular evaluations of all MST staff, determine the level of compensation
        of
        such staff on the basis of such evaluations, within the approved budget and
        in
        accordance with the policies of MST and have primary responsibility for the
        day-to-day operations of MST;
 
 (d)  Alert
        and
        advise the Board of Directors and/or the Executive Committee about reasonably
        significant matters needing their attention and action;
 
 
 (e)  Serve
        as
        the representative of MST in activities related to its objectives and
        policies;
 
 (f)  Direct
        the coordination of the activities of MST committees and projects;
  (g)  Oversee,
        under the direction of the Board of Directors and with the assistance of
        MST’s
        outside certified public accountant (the “MST Accountant”), the custody and use
        of all funds, securities, property and, generally, all assets of MST and
        the
        deposit of the funds of MST;
 
 (h)  Oversee
        the preparation of a proposed annual budget of MST;
 
 (i)  Oversee
        the receipt and disbursement of MST funds in accordance with the adopted
        budget
        of MST;
 
 (j)  Supervise
        the sales, installation and support of all MST subscriber acquisition
        activities;
 
 (k)  Oversee,
        develop and expand all aspects of MST’s business, sales and production
        operations;
 
 (l)  Present
        an annual financial report to the Board of Directors;
 
 (m)  Present
        to the Board of Directors an annual report of all activities of
        MST;
 
 (n)  Negotiate,
        evaluate and execute all contracts, agreements and commitments arising in
        the
        ordinary course of MST’s business for and on behalf of MST, consistent with the
        duties and responsibilities set forth above;
 
 (o)  Make
        expenditures consistent with the approved budget of MST; and
 
 (p)  Implement
        all Board directives and perform all such other duties that may be assigned
        from
        time-to-time by the Board of Directors in its discretion.
 
 **2.**  **Term** **.** The term
        of this Agreement (the “Term”) shall commence on the Effective Date and shall
        expire on December 31, 2008, unless terminated as provided in Section 6 or
        extended by the written mutual consent of the parties.
 
 **3.**  **Extent
        of Services** **.** During
        the Term and any extension thereof, Executive shall devote his full time
        and
        efforts to the performance, to the best of his abilities, of such duties
        and
        responsibilities inherent in the position of President and Chief Executive
        Officer, as described in Section 1 above, and as the Board of Directors and/or
        the Officers of MST shall determine, consistent therewith.
 
 2
 **4.**  **Compensation** **.**
 
 (a)  Salary .
        Executive shall be paid Two Hundred Fifty Thousand Dollars ($250,000.00)
        on an
        annualized basis in accordance with MST’s normal payroll practices, and subject
        to all lawfully required withholding.
  (b)  Executive
        Participation in MST Staff Benefits Plans .
        Following the Effective Date, Executive shall be entitled to participate
        in any
        group health programs and other benefit and incentive plans, which may be
        instituted from time-to-time for MST employees, and for which Executive
        qualifies under the terms of such plans. All such benefits shall be provided
        on
        the same terms and conditions as generally apply to all other MST employees
        under these plans and may be modified by MST from time-to-time.
 
 (c)  Expenses .
        Subject
        to approval by the Telkonet CEO, Executive shall be reimbursed by MST for
        all
        ordinary, reasonable, customary and necessary expenses incurred by him in
        the
        performance of his duties and responsibilities as President. Executive agrees
        to
        prepare documentation for such expenses as may be necessary for MST to comply
        with the applicable rules and regulations of the Internal Revenue Service.
        MST
        will provide an auto for the Executive’s business use.
 
 **5.**  **Vacation** **.** At full
        pay and without any adverse effect to his compensation, provided all other
        terms
        and conditions of this Agreement are satisfied, Executive shall be entitled
        to
        three (3) weeks of vacation for each full calendar year during the term of
        this
        Agreement. Executive agrees to schedule his vacation leave in advance upon
        written notice to the Telkonet CEO and at a time with minimum disruption
        to MST.
        Carryover of vacation days in excess of one week is subject to the prior
        approval of the CEO of Telkonet.
 
 **6.**  **Termination** **.** This
        Agreement shall terminate in accordance with Section 2 of this Agreement,
        or
        upon the first to occur of any of the following events:
 
 (a)  The
        bankruptcy or dissolution of MST;
 
 (b)  The
        death
        of Executive;
 
 (c)  The
        mutual consent of Executive and MST;
 
 (d)  “Cause”
        exists for termination. For purposes of this Agreement, “cause” shall include,
        but not be limited to, the following: (1) theft, fraud, embezzlement, dishonesty
        or other similar behavior by Executive; (2) any material breach by Executive
        of
        any provision of this Agreement; (3) any habitual neglect of duty or misconduct
        of Executive in discharging any of his duties and responsibilities under
        this
        Agreement; (4) any conduct of Executive which is detrimental to or embarrassing
        to MST, including, but not limited to, Executive being indicated or convicted
        of
        a felony or any offense involving moral turpitude; or (5) any default of
        Executive’s obligations hereunder, or any failure or refusal of Executive to
        comply with the policies, rules and regulations of MST, which default, failure
        or refusal is not cured within a reasonable time (but not to exceed thirty
        (30)
        days) after written notification thereof to Executive by MST. If cause exists
        for termination, Executive shall be entitled to no further compensation,
        except
        for accrued leave and vacation and except as may be required by applicable
        law.
 
 3
 **7.**  **Surrender
        of Books and Papers** **.** Upon
        termination of this Agreement (irrespective of the time, manner, or cause
        of
        termination, be it for cause or otherwise), Executive shall immediately
        surrender to MST all books, records, or other written papers or documents
        entrusted to him or which he has otherwise acquired pertaining to MST and
        all
        other MST property in Executive’s possession, custody or control.
 
 **8.**  **Inventions
        and Patents** **.** Executive agrees that Executive will promptly from time-to-time fully inform
        and
        disclose to MST any and all ideas, concepts, copyrights, copyrightable material,
        developments, inventions, designs, improvements and discoveries of whatever
        nature that Executive may have or produce during the term of Executive’s
        employment under this Agreement that pertain or relate to the then current
        business of MST (the “Creations”), whether conceived by Executive alone or with
        others and whether or not conceived during regular working hours. All Creations
        shall be the exclusive property of MST and shall be “works made for hire” as
        defined in 17 U.S.C. §101, and MST shall own all rights in and to the Creations
        throughout the world, without payment of royalty or other consideration to
        Executive or anyone claiming through Executive. Executive hereby transfers
        and
        assigns to MST (or its designee) all right, title and interest in and to
        every
        Creation. Executive shall assist MST in obtaining patents or copyrights on
        all
        such inventions, designs, improvements and discoveries being patentable or
        copyrightable by Executive or MST and shall execute all documents and do
        all
        things necessary to obtain letters of patent or copyright, vest the MST with
        full and exclusive title thereto, and protect the same against infringement
        by
        others, and such assistance shall be given by Executive, if needed, after
        termination of this Agreement for whatever cause or reason. Executive hereby
        represents and warrants that Executive has no current or future obligation
        with
        respect to the assignment or disclosure of any or all developments, inventions,
        designs, improvements and discoveries of whatever nature to any previous
        Employer, entity or other person and that Executive does not claim any rights
        or
        interest in or to any previous unpatented or uncopyrighted developments,
        inventions, designs, improvements or discoveries.
 
 **9.**  **Trade
        Secrets, Non-Competition and Non-Solicitation** **.**
 
 (a)  Trade
        Secrets .
        Contemporaneous with the execution of this Agreement and during the term
        of
        employment under this Agreement, MST shall deliver to Executive or permit
        Executive to have access to and become familiar with various confidential
        information and trade secrets of MST and Telkonet, Inc., including without
        limitation, data, production methods, customer lists, product format or
        developments, other information concerning the business of MST and Telkonet,
        Inc., and other unique processes, procedures, services and products of MST
        and
        Telkonet, Inc., which are regularly used in the operation of the business
        of the
        MST and Telkonet, Inc. (collectively, the “Confidential Information”). Executive
        shall not disclose any of the Confidential Information that he receives from
        MST, Telkonet, Inc. or their clients and customers in the course of his
        employment with MST, directly or indirectly, nor use it in any way, either
        during the term of this Agreement or at any time thereafter, except as required
        in the course of employment with MST. Executive further acknowledges and
        agrees
        that Executive owes MST and Telkonet, Inc., a fiduciary duty to preserve
        and
        protect all Confidential Information from unauthorized disclosure or
        unauthorized use. All files, records, documents, drawings, graphics, processes,
        specifications, equipment and similar items relating to the business of MST
        and/or Telkonet, Inc., whether prepared by Executive or otherwise coming
        into
        Executive’s possession in the course of his employment with MST, shall remain
        the exclusive property of MST and Telkonet, Inc. and shall not be removed
        from
        the premises of MST and/or Telkonet, Inc. without the prior written consent
        of
        MST and/or Telkonet, Inc. unless removed in relation to the performance of
        Executive’s duties under this Agreement. Any such files, records, documents,
        drawings, graphics, specifications, equipment and similar items, and any
        and all
        copies of such materials which have been removed from the premises of MST
        and/or
        Telkonet, Inc., shall be returned by Executive to MST. Executive further
        acknowledges that the covenants of Executive herein are intended to include
        the
        protection of the confidential information of MST's and Telkonet, Inc.’s
        customers and clients, that come into the possession of Executive as a result
        of
        his employment with MST, and that such customers and clients of MST shall
        be
        entitled to rely on and enforce these covenants against Executive for their
        own
        benefit.
 
 4
 (b)  Non-Competition .
        Executive acknowledges that he will be provided with and have access to the
        Confidential Information, the unauthorized use or disclosure of which would
        cause irreparable injury to MST, that MST’s willingness to enter into this
        Agreement is based in material part on Executive’s agreement to the provisions
        of this Section  9(b) and that
        Executive’s breach of the provisions of this Section would materially and
        irreparably damage MST. In consideration for MST’s disclosure of Confidential
        Information to Executive, Executive’s access to the Confidential Information,
        and the salary paid to executive by MST hereunder, Executive agrees that
        during
        Executive’s employment with MST under this Agreement and for one (1) year after
        the termination of Executive’s employment and regardless whether such
        termination is with or without cause, Executive shall not, directly or
        indirectly, either as an executive, employee, employer, consultant, agent,
        principal, partner, stockholder, corporate officer, director, advisor or
        in any
        other individual or representative capacity, engage or participate in any
        business that is in competition in any manner whatsoever with the Restricted
        Business (as defined herein) in New York City and any Major Metropolitan
        areas
        MST has committed and deployed, or undertaken significant development of,
        its
        managed solution. “Restricted Business” means (1) any business conducted by MST
        at any time prior to, or during Executive’s employment pursuant to this
        Agreement, and (2) any other related or similar business conducted by MST
        or
        Telkonet, Inc. during Executive’s employment with MST under this
        Agreement.
 
 (c)  Reasonableness
        of Restrictions .
        Executive acknowledges that the restrictions set forth in Section
        9(b) of this
        Agreement are reasonable in scope and necessary for the protection of the
        business and goodwill of MST. Executive agrees that should any portion of
        the
        covenants in Section
        9 be
        unenforceable because of the scope thereof or the period covered thereby
        or
        otherwise, the covenant shall be deemed to be reduced and limited to enable
        it
        to be enforced to the maximum extent permissible under the laws and public
        policies applied in the jurisdiction in which enforcement is
        sought.
 
 (d)  Soliciting
        Executives .
        Executive shall not during the term of this Agreement or for a period of
        one (1)
        year after termination of Executive’s employment hereunder for any reason,
        whether by resignation, discharge or otherwise, either directly or indirectly,
        employ, enter into agreement with, or solicit the employment of, Executives
        of
        MST or Telkonet, Inc. for the purpose of causing them to leave the employment
        of
        MST or Telkonet, Inc. or take employment with any business that is in
        competition in any manner whatsoever with the business of MST or Telkonet,
        Inc.
 
 (e)  Injunctive
        Relief; Extension of Restrictive Period .
        In the
        event of a breach of any of the covenants by Executive or MST contained in
        this
        Agreement, it is understood that damages will be difficult to ascertain,
        and
        either party may petition a court of law or equity for injunctive relief
        in
        addition to any other relief which Executive or MST may have under the law,
        including but not limited to reasonable attorneys’ fees.
 
 5
 **10.**  **Miscellaneous** **.**
 
 (a)  This
        Agreement shall be binding upon the parties and their respective heirs,
        executors, administrators, successors and assigns. Executive shall not assign
        any part of his rights under this Agreement without the prior written consent
        of
        MST.
 
 (b)  This
        Agreement contains the entire agreement and understanding between the parties
        and supersedes any and all prior understandings and agreements between the
        parties regarding Executive’s employment.
 
 (c)  No
        modification hereof shall be binding unless made in writing and signed by
        the
        party against whom enforcement is sought. No waiver of any provisions of
        this
        Agreement shall be valid unless the same is in writing and signed by the
        party
        against whom it is sought to be enforced, unless it can be shown through
        custom,
        usage or course of action.
 
 (d)  This
        Agreement is executed in, and it is the intention of the parties hereto that
        it
        shall be governed by, the laws of the State of New Jersey.
 
 (e)  The
        provisions of this Agreement shall be deemed to be severable, and the invalidity
        or unenforceability of any provision shall not affect the validity or
        enforceability of the other provisions hereof.
 
 (f)  Any
        notice or communication permitted or required by this Agreement shall be
        in
        writing and shall become effective upon personal service, or service by wire
        transmission, which has been acknowledged by the other party as being received,
        or two (2) days after its mailing by certified mail, return receipt requested,
        postage prepaid addressed as follows:
 
 (1)  If
        to
        MST, to the then Chair of the Board at the Chair’s last recorded address on the
        records of MST, with a copy to the general counsel for MST.
 
 (2)  If
        to
        Executive, to:
 
 Frank
        Matarazzo
 258-263
        Goffle Road
 Hawthorne,
        New Jersey 07506
 
 6
 **IN
        WITNESS WHEREOF** ,
        MST and
        Executive have executed this Agreement as of the Effective Date.
  
 **MICROWAVE
                  SATELLITE**
                **TECHNOLOGIES,
                  INC.**
                
                
                
                By:_____________________________
                
                Name:
                Title:
              **EXECUTIVE**
                
                
                
                
                
                By:____________________________________
                
                Frank T.
                  Matarazzo
 
 
  7