Document:

<PAGE>
EXHIBIT 10.8

                         EXECUTIVE EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as
of the 1st, day of February, 2003, by and between TELKONET COMMUNICATIONS, INC.,
a Delaware corporation (the "Company"), and Howard Lubert (the "Executive").

         W I T N E S S E T H:

                  WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, on the terms and subject to the
conditions set forth herein;

                  NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:

         1. EMPLOYMENT. The Company hereby employs the Executive as its Chief
Executive Officer and the Executive hereby accepts such employment, on the terms
and subject to the conditions hereinafter set forth.

         2. TERM. Subject to the provisions for the termination of this
Agreement as provided for herein, the term of this Employment Agreement shall
commence on the date hereof and shall continue through January 31st, 2006 (the
"Base Term") and shall automatically be extended for an additional one year
(each a "Renewal Year") at the end of the Base Term and each Renewal Term unless
on or before the sixtieth (60th) day prior to the end of the Base Term or a
Renewal Term, either party gives to the other party written notice of
termination of this Employment Agreement, in which case this Employment
Agreement shall terminate upon the completion of the then applicable employment
period.

         3. POSITION AND DUTIES.

                  (a) The Executive shall serve as the Chief Executive Officer
of the Company. Without limiting the general scope of the Executive's position:
(i) the Executive shall not be required to report to any single individual other
than the Chairman and the Board of Directors, (ii) no other individual shall be
elected or appointed as Chief Executive Officer of the Company, and (iii) no
individual or group of individuals (including a committee established or other
designee appointed by the Board) shall have any authority over or equal to the
authority of the Executive in his role as Chief Executive Officer or could have
the effect of, or appear to have the effect of, giving such authority to any
such individual or group. The Executive shall be entitled to the full protection
of applicable indemnification provisions of the certificate of incorporation and
bylaws of the Company, as the same may be amended from time to time, for his
service as a director, officer and employee of the Company.

                  (b) If:

                           (i) the Company materially changes the Executive's
duties and responsibilities as set forth in Paragraph 3(a) without his consent
(including, without limitation, violation of any of the provisions of clause
(i), (ii) or (iii) of Paragraph 3(a));

                           (ii) the Executive's place of employment is moved to
a location more than fifty (50) miles from the geographical center of Wayne,
Pennsylvania;

<PAGE>

                           (iii) there occurs a material breach by the Company
of any of its obligations under this Employment Agreement (other than those
specified in this Section 3(b)) that has not been cured in all material respects
within ten (10) days after the Executive gives notice thereof to the Company;

                           (iv) there occurs a "change in control" (as
hereinafter defined) of the Company; or

                           (v) the Board or any nominating committee thereof or
committee performing a Board nomination function fails to nominate the Executive
for election to the Board in connection with any shareholders' meeting to be
held or action to be taken for the election of directors;

                           (vi) the Executive has not been paid for a cumulative
sixty (60) day period without Executive's consent in excess of the period of
non-payment for similar Executives.

Then, the Executive shall have the right to terminate his employment with the
Company, but such termination shall not be considered a voluntary resignation or
termination of such employment or of this Employment Agreement by the Executive
but rather a discharge of the Executive by the Company without "cause" (as
defined in Paragraph 6(a)(ii)).

                  (c) The term "change in control" means the first to occur of
the following events:

                           (i) any person or group of commonly controlled
persons acquires, directly or indirectly, thirty percent (30%) or more of the
voting control or value of the equity interests in the Company; or

                           (ii) the shareholders of the Company approve an
agreement to merge or consolidate with another corporation or other entity
resulting (whether separately or in connection with a series of transactions) in
a change in ownership of twenty percent (20%) or more of the voting control or
value of the equity interests in the Company, or an agreement to sell or
otherwise dispose of all or substantially all of the Company's assets
(including, without limitation, a plan of liquidation or dissolution), or
otherwise approve of a fundamental alteration in the nature of the Company's
business.

         4. COMPENSATION.

                  During the term of this Employment Agreement, the Company
shall pay or provide, as the case may be, to the Executive the compensation and
other benefits and rights set forth in this Paragraph 4.

                  (a) The Company shall pay to the Executive a base salary
payable in accordance with the Company's usual pay practices (and in any event
no less frequently than monthly) at the rate of One Hundred Thirty Thousand
Dollars ($130,000) per annum, which may be increased (but not decreased) from
time to time (based upon the performance of the Company and the Executive).
Currently, this amount is payable bi-weekly.

                  (b) The Executive shall receive options to purchase One
Million (1,000,000) shares of common stock from the Employee Stock Incentive
Plan at the exercise price of $1.00 per share.

                  (c) The Company may pay to the Executive bonus compensation
for each calendar or fiscal year of the Company, not later than ninety (90) days
following the end of each year or the termination of his employment, as the case
may be, prorated on a per diem basis for partial calendar or fiscal years. It is
acknowledged that these bonuses may be based in part on the Executive's
performance and in part on the Company's performance.

<PAGE>

                  (d) During the Base Term of this Agreement and any Renewal
Term, the Company shall maintain in full force and effect, and the Executive
shall be entitled to participate in, all of the Company's employee benefit plan
and arrangements in effect on the date hereof in at least the same manner and
capacity as the officers and key management employees of the Company. The
Company shall not make any changes in such plans and arrangements which would
adversely affect the Executive's rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to all officers and key
management employees of the Company and does not result in a proportionately
greater reduction in the rights of or benefits to the Executive as compared with
any other officers of the Company. The Executive shall be entitled to
participate in or receive benefits under any employee benefit plan or
arrangement made available by the Company in the future to its officers and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements. Nothing
paid to the Executive under any plan or arrangement presently in effect or made
available to the Executive in the future shall be deemed to be in lieu of any
amounts payable to the Executive pursuant to this Section 4.

                  (e) The Company shall reimburse the Executive or provide him
with an expense allowance during the term of this Employment Agreement for
travel, entertainment and other expenses reasonably and necessarily incurred by
the Executive in connection with the Company's business. The Executive shall
furnish such documentation with respect to reimbursements to be made hereunder
as the Company shall reasonably request. Depending on the individual's exact
duties, a Company owned vehicle may be provided.

                  (f) Upon dissolution or liquidation of the Company, or upon a
merger or consolidation in which the Company is not the surviving corporation,
all Options awarded to the Executive under the ESOP and not previously exercised
and vested shall become fully exercisable and vested no later than the date of
such dissolution, merger or consolidation, and the Executive shall have the
right to exercise such Executive's Options in whole or in part at any time
within the next four (4) years.

                  (g) The Company shall pay the full cost of providing health
and group life insurance for the Executive, his spouse and eligible dependent
children and any other such benefits as the Company may choose to offer the
employees of the Company.

                  (h) The Company will reimburse the Executive for the monthly
cost of his cellular phone service.

         5. PAYMENT IN THE EVENT OF DISABILITY.

                  (a) In the event of the Executive's "permanent disability" (as
hereinafter defined) during the term of this Employment Agreement, for a period
of 6 months after determination of a permanent disability the Company shall pay
to the Executive an annual amount equal to the Executive's then effective per
annum rate of salary, as determined under Paragraph 4(a). The Company to the
extent prudent, shall insure against disability through an insurance company.
Such coverage shall contain a benefit for total, as well as partial and
residual, disabilities, and shall be in addition to the payment obligation
contained in this Paragraph 5(a). If such insurance is obtained, the premiums
shall be added to the employees W-2 as other compensation. The Company shall
review and revise the amount of coverage not less than annually in accordance
with the prior year's total cash compensation as soon as the amount of cash
compensation, including all cash bonuses, can be calculated.

<PAGE>

                  (b) For purposes of this Employment Agreement, the Executive's
"permanent disability" shall be deemed to have occurred after one hundred twenty
(120) days in the aggregate during any consecutive twelve (12) month period, or
after ninety (90) consecutive days, during which one hundred twenty (120) or
ninety (90) days, as the case may be, the Executive, by reason of his physical
or mental disability or illness, shall have been unable to discharge his duties
under this Employment Agreement. The date of permanent disability shall be such
one hundred twentieth (120th) or ninetieth (90th) day, as the case may be. In
the event either the Company or the Executive, after receipt of notice of the
Executive's permanent disability from the other, dispute that the Executive's
permanent disability shall have occurred, the Executive shall promptly submit to
a physical examination by the chief of medicine of any major accredited hospital
in the State of Maryland, and, unless such physician shall issue his written
statement to the effect that in his opinion, based on his diagnosis, the
Executive is capable of resuming his employment and devoting his full time and
energy to discharging his duties within thirty (30) days after the date of such
statement, such permanent disability shall be deemed to have occurred. In lieu
of any such examination, a determination by the disability carrier for the
Company shall suffice.

         6. TERMINATION.

                  (a) The employment of the Executive under this Employment
Agreement, and the terms hereof, may be terminated by the Company:

                           (i) on the death or permanent disability of the
Executive (as defined in Paragraph 5(b)), or;

                           (ii) for cause at any time by action of the Board.
For purposes hereof, the term "cause" shall mean:

(A) The Executive's fraud, commission of a felony or of an act or series of acts
which result in material injury to the business reputation of the Company,
commission of an act or series of repeated acts of dishonesty which are
materially inimical to the best interests of the Company, or the Executive's
willful and repeated failure to perform his lawful duties under this Employment
Agreement, which failure has not been cured within fifteen (15) days after the
Company gives notice thereof to the Executive, provided, however, that shall not
be entitled to any more than two notice cure opportunities during each fiscal
year of the Company; or

(B) The Executive's material breach of any material provision of this Employment
Agreement not involving performance of his duties, which breach has not been
cured in all substantial respects within ten (10) days after the Company gives
notice thereof to the Executive. Provided, however that Executive shall not be
entitled to any more than 2 week notice cure opportunities during each fiscal
year of the Company.

The exercise by the Company of its rights of termination under this Paragraph 6
shall be the Company's sole remedy in the event of the occurrence of an event as
a result of which such right to terminate arises. Upon any termination of this
Employment Agreement, the Executive shall be deemed to have resigned from all
offices held by the Executive in the Company.

In the event of a termination claimed by the Company to be for "cause" pursuant
to Paragraph 6(a)(ii), the Executive shall have the right to have the
justification for said termination determined by arbitration. In order to
exercise such right, the Executive shall serve on the Company within thirty (30)
days after termination a written request for arbitration. The Company
immediately shall request the appointment of an arbitrator by the American
Arbitration Association and thereafter the question of "cause" shall be
determined under the rules of the American Arbitration Association, and the
decision of the arbitrator shall be final and binding on both parties. The
parties shall use all reasonable efforts to facilitate and expedite the
arbitration and shall act to cause the arbitration to be completed as promptly
as possible. Expenses of the arbitration shall be borne equally by the parties,
unless apportioned otherwise by the arbitrators.

<PAGE>

(C) In the event of termination for any of the reasons set forth in subparagraph
(a)(i) or (a)(ii) of this Paragraph 6, or if the Executive terminates his
employment, unless as under subparagraph 3b, the Executive shall be entitled to
no further compensation or other benefits under this Employment Agreement,
except as to that portion of any unpaid salary and other benefits accrued and
earned by him hereunder up to and including the effective date of such
termination. If the Company terminates the Executive's employment other than
pursuant to subparagraph 6(a)(i) or 6(a)(ii) or if the Executive terminates his
employment pursuant to subparagraph 3(b), all of the compensation and benefits
payable to the Executive pursuant to this Employment Agreement shall be paid to
the Executive for a period of eighteen (18) months following the date of such
termination (the "Severance Period"). For purposes of this Paragraph 6(c), with
respect to any benefits payable to the Executive following termination, the
Company may elect to (i) pay to the Executive in cash an amount equivalent to
the value of the benefits to be paid for the duration of the Severance Period;
or (ii) continue to provide benefits to the Executive for the duration of the
Severance Period. If there occurs a change of control, or take over, of the
Company and the acquiring or controlling entity terminates the Executive, then
the Executive shall be paid for a period of Thirty Six (36) months following the
date of such termination (the "Severance Period"), including all of the
compensation and other benefits payable to the Executive pursuant to this
Employment Agreement.

(D) NON-COMPETITION AND CONFIDENTIALITY AGREEMENT The Executive acknowledges the
Company's reliance and expectation of the Executive's continued commitment to
performance of his duties and responsibilities during the term of this
Employment Agreement. In light of such reliance and expectation on the part of
the Company, the Executive hereby agrees to be bound by the terms of the
Noncompetition and Confidentiality Agreement, and is acknowledged by the
Executive's signature on this Employment Agreement.

To induce Telkonet Communications, Inc., a Delaware corporation ("Telkonet") to
employ the Employee pursuant to this Employment Agreement, the Employee agrees
that for the term of the Employment Agreement and a period of One (1) year
following termination of the Employment Agreement (the "Noncompetition Period"),
he will not (a) Participate In (as hereinafter defined) any other business or
organization which at any time during the Noncompetition Period is engaged in
the same business as or in competition with Telkonet within the geographic
confines of the markets where Telkonet's products are sold or targeted; (b)
directly or indirectly solicit for business any person or enterprise that at any
time during the two (2) year period preceding the date of termination of the
Employment Agreement was a customer of Telkonet; or (c) directly or indirectly
employ any person who, at any time during the two (2) year period preceding the
date of termination of the Employment Agreement was, or during the
Noncompetition Period is, an employee of Telkonet. As used in this Agreement,
"Participate In" shall mean "directly or indirectly, for his own benefit or for,
with, or through any other person or entity, own, manage, operate, control, loan
money to, or participate in the ownership, management, operation, or control of,
or be connected as a director, officer, employee, partner, consultant, agent,
independent contractor, or otherwise with, or acquiesce in the use of his name
in, provided, nothing contained herein shall prohibit the Employee from owning,
directly or indirectly up to 5.0% of the outstanding voting securities of any
company, the securities of which are traded on a national securities exchange or
listed for quotation on an automated system of quotation.

In consideration of the execution, delivery and performance of this
Noncompetition Agreement by the Employee, Telkonet has executed the Employment
Agreement, which confers a substantial economic benefit upon the Employee.

<PAGE>

Notwithstanding anything in this Noncompetition Agreement to the contrary, if at
any time the Employment Agreement is terminated by either Telkonet or the
Employee for any reason (whether or not constituting cause) or for no reason,
the provisions of this Noncompetition Agreement shall remain binding upon the
Employee. Nothing in this Noncompetition Agreement shall be deemed to entitle or
confer upon the Employee the right to be employed by Telkonet for a term or
otherwise alter the employment status of the Employee with Telkonet.

A material breach of this Noncompetition Agreement by the Employee could not
adequately be compensated by money damages and will constitute irreparable harm
and injury to Telkonet. In the event of any such material breach or threatened
or anticipated breach, Telkonet shall be entitled, in addition to any other
right and remedy available, to an injunction restraining such breach or a
threatened breach, and no bond or other security shall be required in connection
therewith provided Telkonet satisfies the applicable burden of proof with
respect to all legal requirements applicable to the issuance of an injunction
other than with respect to the inadequacy of money damages and/or irreparable
harm or injury. The Employee agrees that the provisions of this Noncompetition
Agreement are necessary and reasonable to protect Telkonet in the conduct of its
business. If any restriction contained in this Noncompetition Agreement shall be
deemed to be invalid, illegal, or unenforceable by reason of the extent,
duration, or geographical scope thereof, or otherwise, then the court making
such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, to the minimal extent necessary
to comply with applicable law or equitable considerations, and in its reduced
form such restriction shall then be enforceable in the manner contemplated
hereby.

This Noncompetition Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to conflict of
laws principles.

         7. MISCELLANEOUS.

                  (a) The Executive represents and warrants that he is not a
party to any agreement, contract or understanding, whether employment or
otherwise, which would restrict or prohibit him from undertaking or performing
employment in accordance with the terms and conditions of this Employment
Agreement.

                  (b) The provisions of this Employment Agreement are severable
and if any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision, to the extent enforceable in any jurisdiction,
nevertheless shall be binding and enforceable.

                  (c) The rights and obligations of the Company under this
Employment Agreement shall inure to the benefit of, and shall be binding on, the
Company and its successors and assigns, and the rights and obligations (other
than obligations to perform services) of the Executive under this Employment
Agreement shall inure to the benefit of, and shall be binding upon, the
Executive and his heirs, personal representatives and assigns.

                  (d) Any notice to be given under this Employment Agreement
shall be personally delivered in writing or shall have been deemed duly given
when received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested, and if mailed to the Company,
shall be addressed to its principal place of business and if mailed to the
Executive, shall be addressed to him at his home address last known on the
records of the Company, or at such other address or addresses as either the
Company or the Executive may hereafter designate in writing to the other.

<PAGE>

                  (e) The failure of either party to enforce any provision or
provisions of this Employment Agreement shall not in any way be construed as a
waiver of any such provision or provisions as to any future violations thereof,
or prevent that party thereafter from enforcing each and every other provision
of this Employment Agreement. The rights granted the parties herein are
cumulative and the waiver of any single remedy shall not constitute a waiver of
such party's right to assert all other legal remedies available to it under the
circumstances.

                  (f) This Employment Agreement supersedes all prior agreements
and understandings between the parties and may not be modified or terminated
orally. No modification, termination or attempted waiver shall be valid unless
in writing and signed by the party against whom the same is sought to be
enforced.

                  (g) This Employment Agreement shall be governed by and
construed according to the laws of the State of Maryland without giving effect
to applicable conflicts of law provisions.

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.

                                          TELKONET COMMUNICATIONS, INC.

                                          By: /s/ Warren V. Musser
                                              ----------------------------------
                                          Name:    Warren V. Musser
                                          Title:   Chairman

                                          /s/ Howard Lubert
                                          --------------------------------------
                                          Howard Lubert, Chief Executive Officer<PAGE>
EXHIBIT 10.9

                                 TELKONET, INC.
                               902-A Commerce Road
                            Annapolis, Maryland 21401
                                  410-897-5900

Mr. Howard Lubert
Re: Stock Option Plan - Registered Shares

Mr. Lubert,

      Your 83,333 vested options in the Telkonet, Inc. Stock Option Plan have
been registered on SEC Form S-8. Upon the proper exercise of your options you
will receive registered, free-trading shares of Telkonet, Inc. Common Stock from
the Telkonet, Inc. Transfer Agent. A copy of the exercise form has been attached
for your convenience.

If you have any questions regarding the exercise of options please contact Mr.
Stephen Sadle, Chief Operating Officer at 410-897-5900.

Sincerely,

/s/ E. Barry Smith, CFO

<PAGE>

                               EXERCISE OF OPTIONS

                        TELKONET, INC. STOCK OPTION PLAN

                                 TELKONET, INC.
                               902-A COMMERCE ROAD
                            ANNAPOLIS, MARYLAND 21401

         The undersigned hereby irrevocably elects to exercise, the attached
Option Certificate, according to the terms and conditions thereof, to the extent
of 83,333 shares of Common Stock and hereby tenders $_83,333.00 in full payment
of the purchase price.

/s/ Howard E. Lubert                          /s/ Robert Crabb
---------------------------                   ------------------------------
Optionee                                      Company Secretary
                                              (or other Company Officer)

Date: 6/19/03                                 Date: June 24, 2003

                                     * * * *
This completed form along with the proper remittance and the original Option
Agreement must be sent to the Company at the address above. Recommended that
these documents and funds be sent FedEx or certified mail in order to guarantee
proper delivery and provide for tracking in case of loss or delay.

       The Common Stock certificates are to be issued as indicated below:

Name                 Address                    SSN/Tax ID           No. Shares
----                 -------                    ----------           ----------
           Certificate to be delivered
           ---------------------------

<PAGE>

                          TELKONET COMMUNICATIONS, INC.
                          -----------------------------
                    902-A Commerce Road, Annapolis, MD 21401
                                  410 897 5900

                          General Release And Agreement
                          -----------------------------

NOTICE:

         Various state and federal laws, including the Civil Rights Acts of 1964
and 1991, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act of 1974, the
Family and Medical Leave Act, the Pennsylvania Wage Payment and Collection Act
and the Pennsylvania Human Relations Act prohibit employment discrimination
based on age, sex, race, color, national origin, religion, disability and
veteran status. These laws are enforced through the Equal Employment Opportunity
Commission ("EEOC"), the Pennsylvania Human Relations Commission and the
Department of Labor.

         If you sign this General Release and Agreement and accept the agreed
upon special transition allowance and other separation benefits described in
Exhibit A attached hereto, you are giving up your right to file suit in state or
federal court against Telkonet Communications, Inc. ("Telkonet"), with respect
to any claims relating to your employment or separation therefrom which arise up
to the date this Agreement is executed.

         This Agreement does not prevent you from filing a charge of
discrimination with the Equal Employment Opportunity Commission, although by
signing this Agreement you waive your right to recover any damages or other
relief in any claim or suit brought by or through the Equal Employment
Opportunity Commission or any other state or local agency on your behalf under
any federal or state discrimination law, except where prohibited by law. You
agree to release and discharge Telkonet not only from any and all claims which
you could make on your own behalf but also specifically waive any right to
become, and promise not to become, a member of any class in any proceeding or
case in which a claim or claims against Telkonet may arise, as it relates to any
employment issues, in whole or in part, from any event which occurred as of the
date of this Agreement. You agree to pay for any legal fees or costs incurred by
Telkonet as a result of any breach of the promises in this paragraph. The
parties agree that if you, by no action of your own, become a mandatory member
of any class from which you cannot, by operation of law or order of court, opt
out, you shall not be required to pay for any legal fees or costs incurred by
Telkonet as a result.

         We encourage you to discuss the following language with an attorney
prior to executing this Agreement. In any event, you should thoroughly review
and understand the effect of the Release before acting on it. Therefore, please
take this Release home and consider it for up to twenty-one (21) days before you
decide to sign it.

<PAGE>

                          TELKONET COMMUNICATIONS, INC.
                          -----------------------------
                    902-A Commerce Road, Annapolis, MD 21401
                                  410 897 5900

                          GENERAL RELEASE AND AGREEMENT
                          -----------------------------

         As consideration for the special transition benefits offered to me by
Telkonet Communications, Inc. ("Telkonet") (attached as Exhibit A and
incorporated herein), I, Howard Lubert release and discharge Telkonet, its
trustees, directors, officers, agents, employees, subsidiaries and any and all
affiliates, as well as any successor to Telkonet, from all claims, liabilities,
demands and causes of action, arising up to the date of execution of this
Agreement, fixed or contingent, which I may have or claim to have against
Telkonet arising from my employment or as a result of my separation from
employment, including an obligation to reinstate or re-employ me, and do hereby
covenant not to file a lawsuit or other legal action to assert such claims,
except as described in the Notice provision of this Agreement. This includes but
is not limited to claims arising pursuant to the Civil Rights Acts of 1964 and
1991, the Age Discrimination in Employment Act, the Americans with Disabilities
Act, the Employee Retirement Income Security Act of 1974, the Family and Medical
Leave Act, the Pennsylvania Wage Payment and Collection Act, the Pennsylvania
Human Relations Act or any other federal, state or local law or regulation
relating to discrimination in employment or equal opportunity, any claims
growing out of any legal restrictions on Telkonet's right to terminate its
employees or any other claim related to employment issues in contract or tort,
including claims for wrongful discharge, breach of employment agreement, slander
and defamation, as well as all claims for counsel fees and costs, except that
Telkonet or any of its insurance carriers are not released from any
indemnification obligation they have to me as a Director, Officer or former
Director, Officer of Telkonet .

         I agree that I will not at any time publicize, write about, divulge or
discuss the existence of this General Release and Agreement, with any person or
entity whatsoever, except as necessary with my attorney, tax/financial advisors,
and immediate family members. I also agree that I will take all steps necessary
to dismiss with prejudice any and all pending complaints, charges and grievances
against Telkonet, regardless of whether they have been filed internally or
externally, except as set forth in the Notice provision hereof. Finally both
Telkonet and I agree that we will not engage in any conduct or make any
statement that would disparage the personal, professional or business
reputations of Telkonet, its directors, officers, agents or employees

         I understand that this Agreement is revocable by me for a period of
seven (7) days following execution hereof by providing written notice to
Telkonet, Attn.: Pete Musser. This Agreement shall not become effective or
enforceable until this seven-day revocation period has ended.
         I have carefully read and fully understand all the provisions of this

Notice, General Release and Agreement which set forth the entire agreement
between me and Telkonet, and I acknowledge that I have not relied upon any
representation or statement, written or oral, not set forth in this document.

         IN WITNESS WHEREOF, _______________________ as hereunto set his/her
hand and seal this ____ day of _____________________, 2003.

                                               /s/ Howard Lubert
                                               ---------------------------------
                                               HOWARD LUBERT

WITNESS:                                       /s/ E. Barry Smith
                                               ---------------------------------
                                               E. Barry Smith, CFO

<PAGE>

                          TELKONET COMMUNICATIONS, INC.
                          -----------------------------

                    902-A Commerce Road, Annapolis, MD 21401
                                  410 897 5900

                                   SCHEDULE A

                     SUMMARY OF SPECIAL TRANSITION BENEFITS

The following is a summary of your special transition benefits:

         o        Separation compensation and benefits paid through December 17,
                  2004. Thereafter you will be eligible for continuation of
                  benefits under COBRA for which you will be responsible to pay
                  for at the then current premium.

         o        Vested options of 83,333 - ELECTION TO EXERCISE IS ATTACHED.

         o        Certification of options exercisable into free trading
                  registered shares attached.

         o        Upon receipt of your tax withholding payment your certificate
                  will be released to you via overnight mail.

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