Document:

Employment Agr - Tienor

    Exhibit
      10.17

     

    
      EXECUTION
        COPY

       

      EMPLOYMENT
        AGREEMENT

       

      THIS
        AGREEMENT
        is dated
        March 15, 2007 (the “Effective
        Date”)
        by and
        between TELKONET,
        INC., a
        Utah
        corporation (“TELKONET”)
        and
JASON
        TIENOR
        (“Executive”).

      

      WHEREAS,
        TELKONET is the purchaser of the outstanding membership units of Ethostream
        LLC
        (“ETHOSTREAM”),
        pursuant to a Unit Purchase Agreement of even date herewith by and among
        TELKONET, ETHOSTREAM and the members of ETHOSTREAM (the “Purchase
        Agreement”);

       

      WHEREAS,
        TELKONET desires to maintain the business of ETHOSTREAM and to expand and
        further develop the business of ETHOSTREAM; and

      

      WHEREAS,
        TELKONET, in connection with the consummation of the purchase of the outstanding
        membership units of ETHOSTREAM, desires to employ Executive effective as
        of the
        Closing Date (as defined in the Purchase Agreement), and Executive desires
        to
        accept such employment, on the terms and conditions set forth
        below.

      

      NOW,
        THEREFORE,
        in
        consideration of the mutual covenants contained herein, and for such other
        good
        and valuable consideration, the receipt and sufficiency of which are hereby
        conclusively acknowledged, the parties, intending to be legally bound, agree
        as
        follows:

      

      1.     Duties. 
        TELKONET
        hereby employs Executive in the capacity of CEO of ETHOSTREAM. In such capacity,
        Executive shall perform his duties in a professional, supervisory and managerial
        nature solely for the benefit of TELKONET and pertaining to the business
        and
        affairs of TELKONET as determined by the Board of Directors and/or the Executive
        Committee of TELKONET. Executive shall report directly to TELKONET’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
        head of ETHOSTREAM’s operations and provide leadership for ETHOSTREAM’s
        activities;

      

      (b) Under
        the
        direction of the Board of Directors and with the assistance of the Human
        Resource Department of TELKONET: hire, compensate, discipline and terminate
        ETHOSTREAM staff; establish or oversee the establishment of job descriptions,
        duties and responsibilities of all ETHOSTREAM staff; and, perform or oversee
        the
        performance of regular evaluations of all ETHOSTREAM staff and determine
        the
        level of compensation of such staff on the basis of such
        evaluations;

      

      (c) Alert
        and
        advise the Board of Directors and/or the Executive Committee of TELKONET
        about
        reasonably significant matters needing their attention and action;

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d) Serve
        as
        the representative of ETHOSTREAM in activities related to its objectives
        and
        policies;

      

      (e) Direct
        the coordination of the activities of ETHOSTREAM committees and
        projects;

      

      (f) Under
        the
        direction of the Board of Directors and with the assistance of TELKONET’s
        outside certified public accountant or the Finance Department of TELKONET:
        oversee the custody, use and consumption of ETHOSTREAM’s assets; oversee the
        receipt, disbursement and expenditure of ETHOSTREAM’s funds; oversee the
        preparation of a proposed annual budget of ETHOSTREAM;

      

      (i) Supervise
        the sales, installation and support of all ETHOSTREAM subscriber acquisition
        activities;

      

      (j) Oversee,
        under the direction of the Board of Directors, the development and expansion
        of
        ETHOSTREAM’s business, sales and production operations;

      

      (l) Present
        to the Board of Directors an annual report of all activities of
        ETHOSTREAM;

      

      (m) Oversee
        the negotiation, evaluation and execution of all contracts, agreements and
        commitments arising in the ordinary course of ETHOSTREAM’s business for and on
        behalf of ETHOSTREAM, consistent with the duties and responsibilities set
        forth
        above; and

      

      (o) 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 March 14, 2010. This Term may be extended by the mutual agreement
        of
        both parties unless the Executive is terminated as provided in Section
        6.

      

      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, as described in Section 1 above, and as the Board of Directors
        and/or the TELKONET CEO shall determine, consistent therewith.

      

      4.     Compensation.

      

      (a) Salary.
        Executive shall be paid One Hundred Forty Eight Thousand Dollars ($148,000.00)
        on an annualized basis in accordance with TELKONET’s normal payroll practices,
        and subject to all lawfully required withholding. The base salary may be
        increased annually as determined by the TELKONET CEO.

      

      
        
          
          

        

        
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      (b) Bonus.
        The
        Board of Directors of TELKONET and the Executive will agree upon milestones
        for
        bonus achievement. The actual bonus amount will be determined by the Board
        of
        Directors with the recommendation/review by the TELKONET CEO.

      

      (c) Executive
        Participation in TELKONET Staff Benefits Plans.
        Following the Effective Date, Executive shall be entitled to participate
        in any
        group health programs and other benefit plans, which may be instituted from
        time-to-time for TELKONET 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 TELKONET employees under these
        plans
        and may be modified by TELKONET from time-to-time.

      

      (d) Expenses.
        Subject
        to approval by the TELKONET CEO, Executive shall be reimbursed by TELKONET
        for
        all ordinary, reasonable, customary and necessary expenses incurred by him
        in
        the performance of his duties and responsibilities. Executive agrees to prepare
        documentation for such expenses as may be necessary for TELKONET to comply
        with
        the applicable rules and regulations of the Internal Revenue Service. TELKONET
        will provide a monthly stipend equal to $700 to Executive for the purpose
        of
        obtaining 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. Carryover of vacation days in excess
        of two
        weeks is subject to the prior approval of the TELKONET CEO.

      

      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
        death
        of Executive;

      

      (b) The
        mutual consent of Executive and TELKONET;

      

      (c) “Cause”
        exists for termination. For purposes of this Agreement, “cause” shall mean the
        occurrence of any of the following: (1) theft, fraud, embezzlement, or any
        other
        act of dishonesty by Executive; (2) any material breach by Executive of any
        provision of this Agreement which breach is not cured within a reasonable
        time
        (but not to exceed thirty (30) days) after written notification thereof to
        Executive by TELKONET; (3) any habitual neglect of duty or misconduct of
        Executive in discharging any of his duties and responsibilities under this
        Agreement after a written demand for performance was delivered to Executive
        that
        specifically identified the manner in which the Board believed the Executive
        had
        failed to discharge his duties and responsibilities, and the Executive failed
        to
        resume substantial performance of such duties and responsibilities on a
        continuous basis immediately following such demand; (4) commission by Executive
        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 TELKONET generally applicable
        to TELKONET employees, 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 TELKONET. 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.

      

      
        
          
          

        

        
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      (d) “Good
        reason” exists for Executive to terminate his employment with TELKONET. For
        purposes of this Agreement, “good reason” shall mean the occurrence of any of
        the following: (1) any material adverse reduction in the scope of Executive’s
        authority or responsibilities as CEO of ETHOSTREAM; (2) any reduction in
        the
        amount of Executive’s compensation or participation in any employee benefits; or
        (3) Executive’s principal place of employment is actually or constructively
        moved to any office or other location 50 miles or more outside of Milwaukee,
        Wisconsin. If Executive terminates his employment with TELKONET for “good
        reason,” then, upon notice to TELKONET by Executive of such termination,
        TELKONET shall continue to pay Executive's base salary and provide Executive
        with continued participation in each employee benefit plan in which Executive
        participated immediately prior to the termination date for the period starting
        on the first day after the termination date and ending upon expiration of
        the
        Term.

      

      If
        Executive is terminated by TELKONET for any reason other than for “cause,” then
        TELKONET shall continue to pay Executive's base salary and provide Executive
        with continued participation in each employee benefit plan in which Executive
        participated immediately prior to the termination for the period starting
        on the
        first day after the termination and ending upon the expiration of the Term.
        In
        the event TELKONET fails to renew this Agreement upon expiration of the Term,
        then TELKONET shall continue to pay Executive's base salary and provide
        Executive with continued participation in each employee benefit plan in which
        Executive participated immediately prior to expiration of the Term for a
        period
        of three months following expiration of the Term.

      

      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 TELKONET all books, records, or other written papers or documents
        entrusted to him or which he has otherwise acquired pertaining to TELKONET
        and/or ETHOSTREAM and all other TELKONET 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 TELKONET 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 TELKONET (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 TELKONET and shall be “works
        made for hire” as defined in 17 U.S.C. §101, and TELKONET 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 TELKONET (or its designee) all right, title
        and
        interest in and to every Creation. Executive shall assist TELKONET in obtaining
        patents or copyrights on all such inventions, designs, improvements and
        discoveries being patentable or copyrightable by Executive or TELKONET and
        shall
        execute all documents and do all things reasonably necessary (at TELKONET’S sole
        cost and expense) to obtain letters of patent or copyright, vest the TELKONET
        with full and exclusive title thereto, and protect the same against infringement
        by third parties, 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.

      

      
        
          
          

        

        
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      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, TELKONET shall deliver to Executive or permit
        Executive to have access to and become familiar with various confidential
        information and trade secrets of TELKONET, including without limitation,
        data,
        production methods, customer lists, product format or developments, other
        information concerning the business of TELKONET and ETHOSTREAM, and other
        unique
        processes, procedures, services and products of ETHOSTREAM and TELKONET,
        which
        are regularly used in the operation of the business of the ETHOSTREAM and
        TELKONET (collectively, the “Confidential Information”) For purposes of the
        preceding sentence, information is not treated as being Confidential Information
        if it: (i) is or becomes generally available to the public other than by
        Executive in violation of this Agreement; (ii) is obtained by Executive in
        good
        faith from a third party who discloses such information to Executive on a
        non-confidential basis without violating any obligation of confidentiality
        or
        secrecy relating to the information disclosed; (iii) is independently developed
        by Executive outside the scope of his employment without use of Confidential
        Information; or (iv) is Executive’s personnel information. Executive shall not
        disclose any of the Confidential Information that he receives from ETHOSTREAM,
        TELKONET or their clients and customers in the course of his employment with
        TELKONET, directly or indirectly, nor use it in any way, either during the
        term
        of this Agreement or for a period of five (5) years thereafter, except as
        required in the course of employment with TELKONET. Executive further
        acknowledges and agrees that Executive owes ETHOSTREAM and TELKONET, 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 ETHOSTREAM and/or TELKONET, whether prepared by Executive or
        otherwise coming into Executive’s possession in the course of his employment
        with TELKONET, shall remain the exclusive property of TELKONET and shall
        not be
        removed from the premises of ETHOSTREAM and/or TELKONET without the prior
        written consent of TELKONET 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 TELKONET,
        shall be returned by Executive to TELKONET.

      

      (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 TELKONET, that TELKONET’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 TELKONET. In consideration for TELKONET’s disclosure of
        Confidential Information to Executive, Executive’s access to the Confidential
        Information, and the salary paid to executive by ETHOSTREAM hereunder, Executive
        agrees that during the term of Executive’s employment with ETHOSTREAM 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 North America. “Restricted
        Business” means any business conducted by TELKONET, either itself or through
        ETHOSTREAM, at any time prior to or during Executive’s employment pursuant to
        this Agreement.

      

      
        
          
          

        

        
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      (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 TELKONET. 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 or solicit the employment of, any employee of ETHOSTREAM or TELKONET
        for
        the purpose of causing them to leave the employment of ETHOSTREAM or TELKONET
        or
        take employment with any business that is in competition in any manner
        whatsoever with the business of ETHOSTREAM or TELKONET.

      

      (e) Injunctive
        Relief; Extension of Restrictive Period.
        In the
        event of a breach of any of the covenants by Executive or TELKONET 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 TELKONET may have under the
        law,
        including but not limited to reasonable attorneys’ fees.

      

      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
        TELKONET.

      

      (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.

      

      
        
          
          

        

        
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      (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 Wisconsin without giving effect
        to applicable conflict of laws provisions.

      

      (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
        TELKONET:

      

      Lorna
        M.
        Kleinrock, PHR

      Vice
        President, Human Resources

      Telkonet,
        Inc.

      20374
        Seneca Meadows Parkway

      Germantown,
        Maryland 20876

      

      (2) If
        to
        Executive, to: 

      

      Jason
        Tienor

      ETHOSTREAM,
        LLC

      10200
        Innovation Drive

      Milwaukee,
        WI 53226

      

      [signature
        on next page]

      

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF,
        TELKONET and Executive have executed this Agreement as of the Effective
        Date.

       

    

     

    
      	
              TELKONET,
                INC.

               

              

              By:
                ___________________________

              Name:

              Title:

            	
              EXECUTIVE

               

              

                By:
                  /s/ Jason Tienor        

                Jason
                  Tienor

              

            

    

     

     

     

     

    8Employment Agr - Sobieski

    Exhibit
      10.18

     

    EXECUTION
      COPY

     

    EMPLOYMENT
      AGREEMENT

     

    THIS
      AGREEMENT
      is dated
      March 15, 2007 (the “Effective
      Date”)
      by and
      between TELKONET,
      INC., a
      Utah
      corporation (“TELKONET”)
      and
      JEFFREY SOBIESKI (“Executive”).

    

    WHEREAS,
      TELKONET is the purchaser of the outstanding membership units of ETHOSTREAM
      LLC
      (“ETHOSTREAM”),
      pursuant to a Unit Purchase Agreement of even date herewith by and among
      TELKONET, ETHOSTREAM and the members of ETHOSTREAM (the “Purchase
      Agreement”);

    

    WHEREAS,
      TELKONET desires to maintain the business of ETHOSTREAM and to expand and
      further develop the business of ETHOSTREAM; and

    

    WHEREAS,
      TELKONET, in connection with the consummation of the purchase of the outstanding
      membership units of ETHOSTREAM, desires to employ Executive effective as of
      the
      Closing Date (as defined in the Purchase Agreement), and Executive desires
      to
      accept such employment, on the terms and conditions set forth
      below.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants contained herein, and for such other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      conclusively acknowledged, the parties, intending to be legally bound, agree
      as
      follows:

    

    1.     Duties. 
      TELKONET
      hereby employs Executive in the capacity of CIO of ETHOSTREAM. In such capacity,
      Executive shall perform his duties in a professional, supervisory and managerial
      nature solely for the benefit of TELKONET and pertaining to the business and
      affairs of TELKONET as determined by the Board of Directors and/or the Executive
      Committee of TELKONET. Executive shall report directly to ETHOSTREAM’s Chief
      Executive Officer (the “ETHOSTREAM’S CEO”). Executive’s duties and
      responsibilities shall also include, but not be limited to, the
      following:

    

    (a) Serve
      as
      the most senior information systems executive of ETHOSTREAM’s operations and
      activities;

    

    (b) Oversee
      internal systems design, internal systems programming, applications programming,
      telecommunications, information systems, network systems, computer operations,
      data warehouse, and enterprise wide systems; and oversee the needs analysis,
      acquisition, and maintenance of all information processing
      equipment.

    

    (c) Assist
      in
      the supervision of the sales, installation and support of all ETHOSTREAM
      subscriber acquisition activities;

    

    (d) Make
      internal systems expenditures consistent with the approved budget of ETHOSTREAM;
      and

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) Implement
      all directives from the ETHOSTREAM CEO 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 March 14, 2010. This Term may be extended by the mutual agreement
      of
      both parties unless the Executive is terminated as provided in Section
      6.

    

    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 as described in Section 1 above, and as the Board of Directors
      and/or the TELKONET CEO shall determine, consistent therewith.

    

    4.     Compensation.

    

    (a) Salary.
      Executive shall be paid One Hundred Forty Eight Thousand Dollars ($148,000.00)
      on an annualized basis in accordance with TELKONET’s normal payroll practices,
      and subject to all lawfully required withholding. The base salary may be
      increased annually as determined by the TELKONET CEO.

    

    (b) Bonus.
      The
      Board of Directors of TELKONET and the Executive will agree upon milestones
      for
      bonus achievement. The actual bonus amount will be determined by the Board
      of
      Directors with the recommendation/review by the TELKONET CEO. 

    

    (c) Executive
      Participation in TELKONET Staff Benefits Plans.
      Following the Effective Date, Executive shall be entitled to participate in
      any
      group health programs and other benefit plans, which may be instituted from
      time-to-time for TELKONET 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 TELKONET employees under these plans
      and may be modified by TELKONET from time-to-time. 

    

    (d) Expenses.
      Subject
      to approval by the TELKONET CEO, Executive shall be reimbursed by TELKONET
      for
      all ordinary, reasonable, customary and necessary expenses incurred by him
      in
      the performance of his duties and responsibilities. Executive agrees to prepare
      documentation for such expenses as may be necessary for TELKONET to comply
      with
      the applicable rules and regulations of the Internal Revenue Service. TELKONET
      will provide a monthly stipend equal to $700 to Executive for the purpose of
      obtaining 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 ETHOSTREAM CEO. Carryover of vacation days in excess
      of
      two weeks is subject to the prior approval of the TELKONET CEO.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    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
      death
      of Executive;

    

    (b) The
      mutual consent of Executive and TELKONET;

    

    (c) “Cause”
      exists for termination. For purposes of this Agreement, “cause” shall mean the
      occurrence of any of the following: (1) theft, fraud, embezzlement, or any
      other
      act of dishonesty by Executive; (2) any material breach by Executive of any
      provision of this Agreement which breach is not cured within a reasonable time
      (but not to exceed thirty (30) days after written notification thereof to
      Executive by TELKONET; (3) any habitual neglect of duty or misconduct of
      Executive in discharging any of his duties and responsibilities under this
      Agreement after a written demand for performance was delivered to Executive
      that
      specifically identified the manner in which the Board believed the Executive
      had
      failed to discharge his duties and responsibilities, and the Executive failed
      to
      resume substantial performance of such duties and responsibilities on a
      continuous basis immediately following such demand; (4) commission by Executive
      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 TELKONET generally applicable
      to TELKONET employees, 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 TELKONET. 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.

    

    (d) “Good
      reason” exists for Executive to terminate his employment with TELKONET. For
      purposes of this Agreement, “good reason” shall mean the occurrence of any of
      the following: (1) any material adverse reduction in the scope of Executive’s
      authority or responsibilities as CIO of ETHOSTREAM; (2) any reduction in the
      amount of Executive’s compensation or participation in any employee benefits; or
      (3) Executive’s principal place of employment is actually or constructively
      moved to any office or other location 50 miles or more outside of Milwaukee,
      Wisconsin. If Executive terminates his employment with TELKONET for “good
      reason,” then, upon notice to TELKONET by Executive of such termination,
      TELKONET shall continue to pay Executive's base salary and provide Executive
      with continued participation in each employee benefit plan in which Executive
      participated immediately prior to the termination date for the period starting
      on the first day after the termination date and ending upon the expiration
      of
      the Term.

    

    If
      Executive is terminated by TELKONET for any reason other than for “cause,” then
      TELKONET shall continue to pay Executive's base salary and provide Executive
      with continued participation in each employee benefit plan in which Executive
      participated immediately prior to the termination for the period starting on
      the
      first day after the termination and ending upon the expiration of the Term.
      In
      the event TELKONET fails to renew this Agreement upon expiration of the Term,
      then TELKONET shall continue to pay Executive's base salary and provide
      Executive with continued participation in each employee benefit plan in which
      Executive participated immediately prior to expiration of the Term for a period
      of three months following expiration of the Term.

    

    
      
        
        

      

      
        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 TELKONET all books, records, or other written papers or documents
      entrusted to him or which he has otherwise acquired pertaining to TELKONET
      and/or ETHOSTREAM and all other TELKONET 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 TELKONET 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 TELKONET (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 TELKONET and shall be “works
      made for hire” as defined in 17 U.S.C. §101, and TELKONET 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 TELKONET (or its designee) all right, title
      and
      interest in and to every Creation. Executive shall assist TELKONET in obtaining
      patents or copyrights on all such inventions, designs, improvements and
      discoveries being patentable or copyrightable by Executive or TELKONET and
      shall
      execute all documents and do all things reasonably necessary (at TELKONET’s sole
      cost and expense) necessary to obtain letters of patent or copyright, vest
      the
      TELKONET with full and exclusive title thereto, and protect the same against
      infringement by third parties, 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, TELKONET shall deliver to Executive or permit
      Executive to have access to and become familiar with various confidential
      information and trade secrets of TELKONET, including without limitation, data,
      production methods, customer lists, product format or developments, other
      information concerning the business of TELKONET and ETHOSTREAM, and other unique
      processes, procedures, services and products of ETHOSTREAM and TELKONET, which
      are regularly used in the operation of the business of the ETHOSTREAM and
      TELKONET, (collectively, the “Confidential Information”). For purposes of the
      preceding sentence, information is not treated as being Confidential Information
      if it: (i) is or becomes generally available to the public other than by
      Executive in violation of this Agreement; (ii) is obtained by Executive in
      good
      faith from a third party who discloses such information to Executive on a
      non-confidential basis without violating any obligation of confidentiality
      or
      secrecy relating to the information disclosed; (iii) is independently developed
      by Executive outside the scope of his employment without use of Confidential
      Information; or (iv) is Executive’s personnel information. Executive shall not
      disclose any of the Confidential Information that he receives from ETHOSTREAM,
      TELKONET or their clients and customers in the course of his employment with
      TELKONET, directly or indirectly, nor use it in any way, either during the
      term
      of this Agreement or for a period of five (5) years thereafter, except as
      required in the course of employment with TELKONET. Executive further
      acknowledges and agrees that Executive owes ETHOSTREAM and TELKONET, 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 ETHOSTREAM and/or TELKONET, whether prepared by Executive or
      otherwise coming into Executive’s possession in the course of his employment
      with TELKONET, shall remain the exclusive property of TELKONET and shall not
      be
      removed from the premises of ETHOSTREAM and/or TELKONET without the prior
      written consent of TELKONET 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 TELKONET,
      shall be returned by Executive to ETHOSTREAM.

    

    
      
        
        

      

      
        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 TELKONET, that TELKONET’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 TELKONET. In consideration for TELKONET’s disclosure of
      Confidential Information to Executive, Executive’s access to the Confidential
      Information, and the salary paid to executive by ETHOSTREAM hereunder, Executive
      agrees that during the term of Executive’s employment with ETHOSTREAM 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 North America. “Restricted
      Business” means any business conducted by TELKONET, either itself or through
      ETHOSTREAM, at any time prior to or during Executive’s employment pursuant to
      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 TELKONET. 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,
      solicit the employment of, any employee of ETHOSTREAM or TELKONET for the
      purpose of causing them to leave the employment of ETHOSTREAM or TELKONET or
      take employment with any business that is in competition in any manner
      whatsoever with the business of ETHOSTREAM or TELKONET.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (e) Injunctive
      Relief; Extension of Restrictive Period.
      In the
      event of a breach of any of the covenants by Executive or TELKONET 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 TELKONET may have under the
      law,
      including but not limited to reasonable attorneys’ fees.

    

    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
      TELKONET.

    

    (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 Wisconsin without giving effect
      to applicable conflict of laws provisions.

    

    (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.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (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 TELKONET:

            

    

    Lorna
      M.
      Kleinrock, PHR

    Vice
      President, Human Resources 

    Telkonet,
      Inc.

    20374
      Seneca Meadows Parkway

    Germantown,
      Maryland 20876

    

    
      	
            	(2)	
              If
                to Executive, to: 

            

    

    Jeffrey
      Sobieski

    ETHOSTREAM,
      LLC

    10200
      Innovation Drive

    Milwaukee,
      WI 53226

    

     

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      of page intentionally left blank]

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      TELKONET and Executive have executed this Agreement as of the Effective
      Date.

    
 

    
      	
              TELKONET,
                INC.

               

              

              By:
                ___________________________

              Name:

              Title:

            	
              EXECUTIVE

               

              

                By:
                  /s/ Jeffrey Sobieski    

                Jeffrey
                  Sobieski

              

            

    

     

     

     

     

    8

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