EXHIBIT 10.12
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
Telkonet, Inc.
AND
Xxxx X. Xxxxxxxxxx
This AGREEMENT is made and entered into as of the 1st day of July.
2005, by and between Telkonet, Inc. ("Telkonet"), having its principle office at
00000 Xxxxxx Xxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000 and Xx. Xxxx X. Xxxxxxxxxx
(hereinafter call "Consultant"). a company having their principle place of
business at __________________________.
PRELIMINARY STATEMENT
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1. Telkonet proposes to use the service of Consultant for such activities
as mutually agreed to between the parties.
2. Consultant, by reason of knowledge, education, and/or experience, is
capable of rendering and does desire to render the services as
described in paragraph 1 below.
TERMS AND CONDITIONS.
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1. SERVICES TO BE RENDERED
Consultant shall act as Senior International Advisor to Telkonet
reporting directly to Xxx Xxxxxxx, CEO by providing international
business development services and advice of such nature, for such
purposes, and at such limes as are mutually agreed upon by the
parties. Consultant shall not modify any provisions of this Agreement
or any Purchase Order issued try Telkonet without prior written
consent of Telkonet.
Consultant shall render all services as an independent contractor and
shall not be Considered and employee of Telkonet for any purpose,
including but not limited to eligibility for Telkonet. Any and all
insurance that Consultant may desire shall be obtained and provided by
Consultant without cost or other obligation to Telkonet.
2. TERM
The consulting services provided under this Agreement shall be
performed, when required by Telkonet, during the period from July 1,
2005 to June 30, 2006. This may be extended annually, if agreed upon
by both parties in writing with sixty days notice prior to the
expiration date of the than current term. Nevertheless, tile
understood and agreed that Telkonet may terminate this Agreement and
the consulting services provided hereunder at any time and for any
time and for any reason prior to the completion of this term. If
Telkonet terminate this Agreement prior to its completion, Telkonet
shall be liable for work performed by Consultant prior to the
effective date of the termination.
3. PAYMENT
Telkonet shall issue the Consultant 10,000 shares of stock upon the
execution of this agreement by both parties. Thereafter, Telkonet will
issue 10,000 additional shares of stock per quarter for the initial
term (first year) followed by an issuance of 5,000 shares per quarter
of Telkonet stock during each successive renewal term(s).
Additionally, the Consultant will receive a5% commission on
international sales contracts generated by the consultant with a
minimum of 50% Gross Margin. Gross Margin defined as Gross Revenue
less the actual Telkonet product cost and labor directly related to
the delivery of the Gross Revenues The commission is payable quarterly
based on the collected revenues received by the Company during the
quarter. The Consultant, at his election, may receive stock in lieu of
cash for the earned commission in the quarter based on the average
share price during the quarter. Please refer to Attachment Ass an
illustration of the intended economics of this Consulting Agreement
This agreement is cancelable at anytime by either party through the
end of the current quarter.
4. NOTICES
All notices require or permitted pursuant to this Agreement shall be
deemed given if and when personally delivered in writing to the party
or its designated agent or representative, or if and when mailed by
United States Mail, registered or certified mail, return receipt
request, postage prepaid and properly addressed. All notices shall be
address:
To: Telkonet, Inc. 00000 Xxxxxx Xxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000
Attention Xxx Xxxxxxx, Chief Executive Officer
To Consultant: Xxxx X. Xxxxxxxxxx
________________________
________________________
Attention Xxxx X. Xxxxxxxxxx
Each party may specify a different address for receipt of such notices
by giving the other party at feast fifteen (15) days written notice
thereof.
5. INDEMNIFICATION
Consultant shall defend, indemnify and hold harmless Telkonet, its
officers, employees, and agents, from any and all damage, losses,
obligations, facilities, claims deficiencies, casts, and expenses of
every nature and kind incurred by Telkonet that are in whole or in
part cause by or alleged to be caused by acts or omissions of
Consultant, its officers, employees, agents, subcontractors, and
lower-tier subcontractors arising out of or relation to Consultant's
work under this Agreement
6. LAWS AND REGULATIONS
Consultant shall comply with all applicable federal, state, and local
laws and regulations and all applicable orders and regulations of the
executive and other departments, agencies, and instrumentalities of
the United States. Consultant shall further comply with Telkonet
policies that may be in effect during the term of the Agreement and
which are incorporated by reference as though fully set forth herein.
Consultant shall indemnify Telkonet in accordance with paragraph 6 for
any and all damages, losses, obligations, liabilities, claims,
deficiencies, Costs, and expenses that may result from Consultant's
breach of this paragraph.
7. APPLICABLE TAXES
All taxes applicable to any amounts paid by Telkonet to the Consultant
under this Agreement will be the Consultant's liability and Telkonet
shall not withhold nor pay any amounts for federal, state, or
municipal income tax, social security, unemployment or workers
compensation. The tax identification number for Consultant is
_____________.
8. CONFIDENTIAL AND PROPRIETARY INFORMATION
Consultant may not use non-public, confidential, proprietary, or trade
secret information obtained from or furnished by Telkonet for any
purpose other than providing services required under this Agreement.
Consultant will not duplicate, disclose, or divulge such information
without the express prior written consent of Telkonet. Information
need not be marked to be considered non-public, confidential,
proprietary, or trade secret information.
Consultant agrees to take reasonable steps to prevent the unauthorized
disclosure of such information, including but not limited to
initiating and pursuing court
proceedings seeking to prevent unauthorized disclosure by Consultants
officers, employees, agents, subcontractors, or lower-tier
subcontractors. Consultant shall return to Telkonet all documents
comprising, reflecting, or relating to such non-public, confidential,
proprietary. or trade secret information, including any such documents
developed or prepared by Consultant, promptly upon completion of
services required under the Purchase Order or termination of this
Agreement, whichever is earlier.
9. DATA AND COPYRIGHTS
All data developed, prepared, or originated by Consultant in the
performance of services under this Agreement and all data delivered to
Telkonet in connection with the performance of services under this
Agreement shall be the exclusive property of Telkonet. Telkonet shall
own all copyrights for such data and have the unlimited right to use,
reproduce, disclose, publish, translate, or deliver such data in any
manner whatsoever and to authorize others to do so without any
additional compensation due from Telkonet. Consultant shall not
include among data delivered to Telkonet any data that is or will be
copyrighted unless Consultant provides Telkonet with the written
permission of the copyright holder for Telkonet to use such data in
the manners provided in this Agreement without any additional
compensation due from which it may be recorded. Data includes but is
not limited to technical data, computer software, writings, designs,
specifications, Sound recording, video recordings, pictorial
reproductions, drawings or other graphic representations, and works of
any similar nature.
Consultant hereby grants Telkonet full and exclusive right, title, and
interest throughout the world in all inventions, improvement, or
discoveries conceived or made in the performance of services under
this Agreement Consultant shall promptly furnish and provide Telkonet
with complete information in this regard and shall execute all
documents, including assignments in the form specified by Telkonet.
10. CONFLICT OF INTEREST
Consultant represents that it has not been engaged or employed by
another company to perform services in connection with or relation to
the same requirements that are the subject matter of the prime
contract. If Consultant has had access to any non-public,
confidential, proprietary, or trade secret information obtained from
or furnished by Telkonet with respect to the subject matter of the
prime contract, Consultant shall not accept employment with or by any
competitor of Telkonet with respect to the subject matter of the prime
contract without obtaining written authorization of Telkonet in
advance.
11. DISPUTES
Except for disputes relating to paragraphs 9, 11 and 13 of this
Agreement, the Parties shall attempt to resolve all disputes relating
to the subject matter of this Agreement informally. If Consultant
disagrees with a determination made by Telkonet with respect to a
dispute subject to this paragraph, Consultant shall reduce
disagreement to writing and forward the writing to Telkonet within
fifteen (15) days of Telkonet's determination. In the absence of such
notice by Consultant, Telkonet determination shall be final and
conclusive. If Consultant submits such a notice, Telkonet will have
fifteen (15) days to affirm or reconsider its original determination.
No court or other action may be initiated relating to a dispute
subject to this paragraph unless and until this informal dispute
resolution process has been completed.
Pending a final resolution of any dispute relating to the subject
matter of this Agreement, Consultant shall diligently proceed with the
performance of this Agreement until Telkonet directs Consultant not to
perform.
12. SPECIFIC PERFORMANCE
Consultant acknowledges that a violation of the requirement of
paragraphs 9 or 11 of this Agreement would cause irreparable harm and
damage to Telkonet, and that the monetary amount of such damages would
be impossible to ascertain. Accordingly, Consultant agrees that
Telkonet is entitled to specific enforcement of such requirements and
Telkonet is entitled to obtain an injunction form any court of
competent jurisdiction enjoining and restraining violations of
paragraphs 9 or 11. These remedies are in addition to and cumulative
with other remedies and damages available to Telkonet. Disputes
subject to this paragraph are not subject to the informal resolution
requirements in paragraph 12 of this Agreement.
13. HEADINGS
The heading included herein are inserted only for convenience and
reference end in no way define, limit, or describe the scope of this
Agreement of the intent of any of its provisions.
14. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland.
15. ENTIRE AGREEMENT
This Agreement supersedes all written or oral agreements, If any. and
constitutes the entire Agreement between the parties with respect to
this Agreement. This Agreement may be modified only by the express
written consent of both Telkonet and Consultant.
16. SEVERABILITY
If any provision of this Agreement shall be determined to be illegal,
invalid, or unenforceable, the remaining provisions shall remain in
full force and effect.
17. SURVIVAL
The provisions of paragraphs 6, 9, 10, 11, and 12 shall survive
completion or termination of this Agreement.
18. EXECUTION OF AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Telkonet, Inc.
Signature: /s/ Xxx Xxxxxxx
By: Xxx Xxxxxxx
Title: Chief Executive Officer
Date: July 20, 2005
CONSULTANT
Signature: /s/ Xxxx X. Xxxxxxxxxx
By: Xxxx X. Xxxxxxxxxx
Title: Consultant
Date: July 13, 2005
