ASSET PURCHASE AGREEMENT
 
THIS ASSET PURCHASE AGREEMENT, dated as of July 16, 2007 (this “Agreement”), is
by and among Microwave Satellite Technologies, Inc., a New Jersey corporation,
with an address at 259-263 Goffle Road, Hawthorne, NJ 07506 (“Purchaser”),
Newport Telecommunications Co., a New Jersey general partnership, with an
address at 100 Town Square Place, Jersey City, New Jersey 07310 (“Seller”) and,
with respect to Section 6 of this Agreement, Telkonet, Inc., a Delaware
corporation, with an address at 2034 Seneca Meadows Parkway, Germantown,
Maryland 20876-7004 (“Telkonet”).
 
W I T N E S S E T H:

WHEREAS, Seller owns and operates facilities and holds certain rights over and
pursuant to which it provides one or more of the following telecommunications
services to its customers at certain residential and commercial properties in
the Jersey City, New Jersey development known as Newport which are set forth on
Schedule A annexed hereto (collectively, the “Newport Properties”): (i) certain
broadband internet services through Cogent Communications and others; and (ii)
certain telephone service through Verizon (collectively, the “Broadband
Business”); and

WHEREAS, Seller desires to sell and transfer to Purchaser and Purchaser desires
to purchase substantially all of the assets of Seller in connection with
Seller’s operation of the Broadband Business, as more particularly described
herein.
 
NOW, THEREFORE, in consideration of the foregoing premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
 
1.    Purchase and Sale; Closing.
 
(a)    Sale Assets. In consideration of the Purchase Price (as defined in
Section 2(a)), Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase from Seller, all of the following, free and clear of all liens, claims
and encumbrances (except as otherwise expressly set forth in this Agreement), on
the terms and conditions set forth herein: all properties, privileges, rights,
interests and claims, real and personal, tangible and intangible, of every type
and description, including goodwill, owned by Seller in connection with, or
relating to, the Broadband Business and those other personal property assets
identified on Schedule 4(c) attached hereto (collectively, the “Sale Assets”),
including, without limitation, to the extent applicable: (i) all franchises,
contracts and other instruments (including without limitation the Business
Instruments (as defined in Section 4(e)) and set forth on Schedule 4(e)), all
permits, licenses, governmental authorizations, and other intangibles and all
goodwill in connection therewith; (ii) all electronic devices, trunk and
distribution cable, amplifiers, power supplies, vaults and pedestals, grounding
and pole hardware, “Subscriber” (as hereinafter defined) devices (including,
without limitation, converters, traps, decoders, switches and fittings) and
headend equipment (origination, signal processing and transmission); (iii) all
equipment and any inventory (including without limitation the items set forth on
Schedule 4(c)); (iv) all Seller’s Subscriber credit information and Subscriber
lists for the Broadband Business; (v) all Seller’s rights to enter upon the
Newport Properties, including the buildings situated thereon, in order to
operate the Broadband Business thereat; (vii) all engineering specifications,
maps, plans, diagrams and blue prints, including system engineering drawings and
as-built maps for the Broadband Business; and (viii) all books, records and
computer files relating to the Broadband Business; provided, however, that the
Sale Assets shall not include, and Purchaser shall not acquire any interest in,
any of the Excluded Assets (as defined in Section 1(b)).
 

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(b)    Excluded Assets. For purposes of this Agreement, the “Excluded Assets”
means (i) Seller’s cash and cash-equivalents as of the Closing Date (as defined
in Section 1(c)) and any securities and similar investments, whether marketable
or unmarketable; (ii) any and all insurance policies, bonds, letters of credit
and other similar items and any rights and claims thereunder; (iii) any and all
claims and rights of any nature whatsoever for any period prior to the Closing
Date, including, without limitation, any and all claims against former employees
or agents of Seller relating to any third-party reimbursements due to Seller for
any period prior to the Closing Date, and any and all claims, rights and
interests in and to any refunds for taxes or fees of any nature whatsoever for
any period prior to the Closing Date; (iv) Seller’s business certificates and
partnership records (except to the extent relating to the Broadband Business);
(v) Seller’s employee records and records relating to pensions and benefit
plans, (vi) Seller’s trademarks, trade names, service marks, service names,
logos, websites and similar proprietary rights; (vii) all rights accruing to
Seller under this Agreement; (viii) all programming agreements other than those
set forth on Schedule 1(b)(viii), provided, that Purchaser shall be entitled to
designate as an Excluded Asset any of such agreements set forth on Schedule
1(b), by giving Seller written notice thereof at least thirty (30) days prior to
Closing; (ix) Seller’s accounts receivable for services relating to the
Broadband Business, including, but not limited to, Seller’s pro-rata portion of
its accounts receivable for the services relating to the Broadband Business
which were provided during the calendar month in which the Closing occurs (which
is acknowledged to be based on the numbers of days in such month prior to the
Closing) (provided that any accounts receivable with respect to services
provided in connection with the Broadband Business which remain uncollected
sixty days after invoices are mailed or 60 days after the Closing, whichever
shall occur later, shall become the property of Purchaser); (x) all telephone
wire; (xi) all assets of Seller identified on Schedule 1(b)(xi); and (xii) all
other assets of Seller other than the Sale Assets.  
 
(c)    Closing.  The closing of the transactions contemplated hereby (the
“Closing”) shall take place simultaneously upon the execution of this Agreement
(the “Closing Date”). The Closing shall be deemed to be effective as of 12:01
a.m. on the Closing Date.
 
2.    Purchase Price; Adjustment of Purchase Price.
 
(a)    Purchase Price. The purchase price for the Sale Assets shall be Two
Million Five Hundred Fifty Thousand Dollars ($2,550,000.00) consisting of: (a)
One Million Five Hundred and Thirty Thousand Dollars ($1,530,000.00) (the “Stock
Consideration”) paid in unregistered shares of $0.001 par value common stock of
Telkonet (the “Telkonet Common Stock”) based on the average of the closing price
for one share of Telkonet Common Stock for the ten (10) trading days occurring
immediately prior to the Closing Date; and (b) One Million Twenty Thousand
Dollars ($1,020,000.00) (the “Cash Consideration”, together with the Stock
Consideration, as adjusted pursuant to Section 2(b) hereof, the “Purchase
Price”) payable by wire transfer. The Purchase Price will be paid by Purchaser
as provided in Section 2(b), hereof.
 
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(b)    Adjustment to Purchase Price. The Purchase Price shall be paid as
follows: Upon the signing of this Agreement, Five Hundred Ten Thousand Dollars
($510,000.00) shall be delivered to Seller by wire transfer pursuant to wire
instructions provided by Seller and the remainder of the Cash Consideration
(which is acknowledged to be Five Hundred Ten Thousand Dollars ($510,000.00)
(the “Deposited Cash Consideration”) and the Stock Consideration will be
deposited by the Purchaser with U.S. Bank Corporate Trust Services (the “Escrow
Agent”) and shall be subject to and disbursed pursuant to the terms of that
certain Escrow Agreement to be entered into by and between Purchaser, Seller and
Escrow Agent attached hereto as Exhibit A (the “Escrow Agreement”). The Escrow
Agent shall deposit the Deposited Cash Consideration into a high yield interest
bearing account (the “Escrow Fund”) which shall be held therein until released
from escrow pursuant to the terms of the Escrow Agreement (the “Escrow Period”).
The Stock Consideration shall be deposited with the Escrow Agent by the
Purchaser delivering to the Escrow Agent: (i) stock certificates representing an
aggregate amount of shares of Telkonet Common Stock equal to the Stock
Consideration (the “Deposited Shares”); and (ii) stock powers for the Deposited
Shares, duly endorsed in blank by Telkonet. Escrow Agent shall pay to Seller the
Stock Consideration and Deposited Cash Consideration (and any earnings thereon)
in accordance with, and pursuant to the terms of, the Escrow Agreement, less any
credits to be provided to Purchaser in accordance with this Section 2(b). A
credit shall be provided to Purchaser if the number of “Subscribers” in “Good
Standing” (as such terms are defined below), delivered to Purchaser at Closing
is less than 1841 (which is acknowledged to be 95% of the 1938 Subscribers that
Seller believes to be in Good Standing). In the event that a credit shall be
issued to Purchaser in accordance with this Section 2(b), the credit to
Purchaser shall be an amount equal to the product of: (i) the difference
between: (A) 1841; less (B) the actual number of Subscribers in Good Standing;
multiplied by (ii) a fraction having a numerator of 2,550,000 and a denominator
of 1938 (i.e. the number of Subscribers Seller believes will be in Good Standing
(such fraction, the “Credit Per Subscriber”). If the Subscribers in Good
Standing are at least 1841, the Escrow Agent shall pay all of the Deposited Cash
Consideration, Stock Consideration and earnings thereon to the Seller. At the
end of the Escrow Period if the number of Subscribers in Good Standing delivered
to Purchaser at Closing exceeds 2035 (i.e. which is 105% of the 1938 Subscribers
Seller believes will be in Good Standing), the Purchaser shall immediately pay
additional consideration (in addition to the Stock Consideration and the Cash
Consideration (including any earnings thereon) in the amount equal to the
product of: (i) the difference between: (A) the actual number of Subscribers in
Good Standing; less (B) 2035; multiplied by (ii) the Credit Per Subscriber. The
amount of any credit to be provided to Purchaser or additional consideration to
be paid to Seller pursuant to this Section 2(b) shall be paid: (i) all in cash
so long as such amount does not exceed $100,000.00; or (ii) 40% in cash and 60%
in Telkonet Common Stock (based on the average of the closing price for one
share of Telkonet Common Stock for the ten (10) trading days occurring
immediately prior to the Closing Date), if such amount exceeds $100,000.00. For
purposes of this Agreement the term “Subscriber” shall mean any customer of
Seller who is existing as of the date of Closing. For purposes of clarity: (i) a
customer shall include any person or entity from whom Seller, directly or
indirectly, receives compensation with respect to or in exchange for providing
telephone or internet services, including any person who becomes a customer
prior to the Closing Date as a result of any marketing program or campaign
conducted by or on behalf of Seller described in Schedule 4(l) hereof; and (ii)
a customer shall count as one Subscriber of Seller regardless of whether such
customer subscribes to one or a combination of the internet or telephone
services provided by Seller. A Subscriber shall be in “Good Standing” if his or
her account is no more than sixty (60) days’ in arrears on the date of Closing,
measured from the date that payment is due for the first unpaid month’s
services. The procedure for finalizing the number of Subscribers in Good
Standing, additional consideration to be paid to Seller, if any, and the credits
to be provided to Purchaser, if any, shall be as set forth in the Escrow
Agreement. The credits to be paid to Purchaser, if any, or the additional
consideration to be paid to Seller, if any, shall be paid pursuant to the terms
of this Section 2(b) and the Escrow Agreement.
 
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(c)    Allocation of Purchase Price. The Purchase Price shall be allocated among
the Sale Assets in accordance with Schedule 1(c). Seller and Purchaser shall be
bound by such allocations, shall not take any position inconsistent with such
allocations, and shall file all returns and reports with respect to the
transactions contemplated by this Agreement on the basis of such allocations.
 
3.    Liabilities Not Assumed. Seller agrees that Purchaser is not assuming any
liabilities or obligations of Seller hereunder other than: (i) obligations and
liabilities with respect to the period from and after the Closing arising under
any of the Business Instruments and Licenses set forth on Schedule 4(e) and
Schedule 4(f), respectively, (ii) obligations and liabilities arising out of
Purchaser’s operation of the Broadband Business from and after the Closing
including, without limitation, executory Subscriber contracts and (iii)
obligations and liabilities for Subscriber prepayments, deposits and credits of
the Broadband Business as of the Closing Date (all such liabilities and
obligations described in Sections 3(i), (ii) and (iii) being hereinafter
collectively referred to as the “Assumed Liabilities.” For purposes of clarity,
the parties agree that Purchaser is not assuming any obligations or liabilities
arising under or related to the legal proceedings described in Schedule 4(g)
hereto and should Purchaser incur any loss or damage directly resulting from the
obligations or liabilities arising under or related to the legal proceedings
described in Schedule 4(g) and seek indemnification for such losses or damages
in accordance with the terms of this Agreement, the limitations set forth in
Section 9(e) hereof shall not apply. At and after the Closing Date, Purchaser
shall assume, discharge and otherwise satisfy the Assumed Liabilities. Other
than any Assumed Liabilities, obligations and liabilities with respect to the
pre-Closing period shall be the responsibility of Seller, and if any such item
is paid by Purchaser following the Closing, Seller shall be obligated to
reimburse Purchaser therefor in accordance with the terms of this Agreement.
 
4.    Seller’s Representations and Warranties. Seller represents and warrants to
Purchaser as follows:
 
(a)    Organization; Authority. Seller is a New Jersey general partnership and
has all requisite power and authority to conduct the Broadband Business as it is
now being conducted and to own and operate the Sale Assets. Newport
Telecommunications Company., Inc., the corporate general partner of Seller is
authorized to execute and deliver this Agreement on behalf of Seller in
accordance with Seller’s partnership agreement. This Agreement is the legal,
valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms except insofar as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting creditors’ rights generally, or by principles
governing the availability of equitable remedies.
 
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(b)    Consents. Except as set forth on Schedule 4(b), neither the execution and
delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby will (i) violate or conflict with Seller’s
partnership agreement; (ii) violate, conflict with, constitute a default under,
result in the termination of, accelerate the performance required by or result
in the imposition of any encumbrance pursuant to any agreement or other
instrument to which the Seller is a party or by which Seller is bound except
where the violation, conflict, default, termination, acceleration or imposition
would not have a Material Adverse Effect; or (iii) violate any statute, law,
rule or regulation or any judgment, decree, order, regulation or rule of any
court or federal, state or local governmental authority to which Seller is
subject. Schedule 4(b) sets forth a true and complete list of all consents,
approvals, waivers, filings and notices necessary or required to consummate the
transactions contemplated hereby (collectively, the “Required Consents”). As
used in this Agreement the term “Material Adverse Effect” means any effect or
change that would be materially adverse to the Broadband Business or the Sale
Assets, or on the ability of Seller to timely consummate the transactions
contemplated hereby.
 
(c)    Title to Sale Assets. Except as set forth on Schedule 4(c), Seller has
sole, good and valid title to all of the Sale Assets consisting of tangible and
intangible personal property, including without limitation Business Instruments
(subject to the terms of such Business Instruments), Licenses (subject to the
terms of such Licenses), Subscriber accounts, Subscriber lists, inventory,
equipment and general intangibles, all free and clear of any liens, claims and
other encumbrances. A true and complete list of Seller’s material tangible
assets is set forth on Schedule 4(c).
 
(d)    Right of Access to Real Property. Attached as Exhibit B is that certain
Grant of License and Right of Entry Agreement dated as of January 1, 2007,
between Hudson Conduit Associates LLC (“Hudson Conduit”) and Seller (the
“License and ROE”), permitting Seller to have access to those Newport Properties
set forth in the License and ROE in order to provide the Broadband Business
thereat, through a certain conduit owned by Hudson Conduit. Seller has a good
and valid license and right of access and entry to those Newport Properties
described in the License and ROE in order to provide the Broadband Business
thereat. The License and ROE is subject to Permitted Encumbrances (as
hereinafter defined). As used herein, “Permitted Encumbrances” means (a) liens
for taxes, assessments and governmental charges not yet due and payable; (b)
zoning laws and ordinances and similar legal requirements; (c) rights reserved
to any governmental authority to regulate the affected real property; and (d)
mortgages, deeds of trust or similar instruments, (e) ground or underlying
leases, (f) security interests of the applicable property owners and (g) all
easements, rights-of-way, servitudes, permits, restrictions and imperfections or
irregularities in title which are reflected in the public records and that do
not individually or in the aggregate materially or adversely interfere with any
rights of Seller in and to the License and ROE, including but not limited to
rights to conduct the Broadband Business or to consummate the transactions
contemplated herein. The Parties agree that no access rights have been provided
for telecommunications services provided by Seller to its customers at the Shore
Condominium Residences at Newport located at 20 Newport Parkway, Jersey City,
New Jersey (the “Shore Building”) since Purchaser has obtained or will obtain
access rights separately from Shore at Newport Condominium Association, Inc.
 
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(e)    Business Instruments. Schedule 4(e) sets forth a true and complete list
of all contracts, franchises, leases (for real and personal property), licenses,
pole attachment and other utility agreements, retransmission consent agreements,
service and access agreements and all other agreements and instruments (other
than Licenses) relating to the Broadband Business which are not Excluded Assets
(the “Business Instruments”), including the parties thereto and the subject
matter and expiration dates thereof. Seller has delivered to Purchaser true and
complete copies of all Business Instruments, including all amendments,
modifications and supplements thereto. Each Business Instrument is in full force
and effect and constitutes the legal, valid and binding obligation of Seller
and, to Seller’s Knowledge any other party(ies) thereto and is enforceable in
accordance with its respective terms, except insofar as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect affecting creditors’ rights generally,
or by principles governing the availability of equitable remedies. There are no
defaults which have occurred and are continuing beyond any applicable notice and
cure periods under any of the Business Instruments by Seller or, to Seller’s
Knowledge, the other party(ies) thereto; nor has any event occurred that, with
the giving notice or the passage of time or both, would constitute a default or
event of default thereunder. The Business Instruments delivered to Purchaser
contain all obligations and liabilities of Seller with respect to such
instruments or the rights granted thereunder. Seller is not a party to, and
neither Seller, the Sale Assets nor the Broadband Business is subject to or
bound by, any agreement limiting Seller’s ability to compete in any services
provided in connection with the Broadband Business in the United States. As used
in this Agreement the term “Knowledge of Seller” or “Seller’s Knowledge” shall
mean the actual knowledge of Rick Garrigan, Seller’s, General Manager and all
direct reports to him and/or such knowledge that such individuals could be
expected to discover or otherwise become aware in the course of conducting a
reasonably comprehensive investigation concerning the existence of such fact or
matter.
 
(f)    Licenses. Schedule 4(f) sets forth a true and complete list of all
governmental or regulatory licenses, permits and other governmental
authorizations and approvals held by Seller relating to the Broadband Business
(“Licenses”), including the grant and the termination dates thereof. To the
Knowledge of Seller, all Licenses are in full force and effect, and Seller has
not been notified that it is subject to any fines or penalties in connection
therewith.
 
(g)    Legal Proceedings. Except as set forth on Schedule 4(g), there is (i) no
suit, action or proceeding pending or, to Seller’s Knowledge, threatened,
against Seller or the Broadband Business or any of the Sale Assets, and (ii) no
judgment, decree, injunction, rule or order or any investigation or proceeding
of any court, governmental department, agency or instrumentality involving
Seller and/or the Sale Assets or the Broadband Business.
 
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(h)    Financial Statements. Seller has delivered to Purchaser true and correct
copies of the financial statements identified on Schedule 4(h) (collectively,
the “Seller’s Financial Statements”). Seller’s Financial Statements: (i) are
correct and complete in accordance with the books and records of Seller, (ii)
fairly present the financial condition of Seller as of such dates and the
results of its operations for the periods covered thereby, and (iii) were
prepared in accordance with GAAP (subject to year-end adjustments and except for
the omission of certain footnotes and other presentation items required by GAAP
with respect to audited financial statements, which adjustments, footnotes and
presentation items, if prepared as required for audited financial statements,
would not reveal any fact or condition materially adverse to the financial
condition or results of Seller presented in such unaudited Statements).
 
(i)    Conduct of Business. Except as set forth on Schedule 4(i): (i), Seller
has operated the Broadband Business in compliance in material respects with all
applicable laws, regulations, ordinances and other legal requirements; and (ii)
the Sale Assets constitute all of the assets, rights and properties necessary to
conduct, operate and maintain the Broadband Business as conducted, operated and
maintained by Seller immediately prior to the date hereof.
 
(j)    Brokers. Seller has not employed any broker, finder or investment banker
in connection with the Sale Assets transaction contemplated by this Agreement,
nor is any broker, finder or investment banker entitled to any brokerage, finder
or other fee or commission from Purchaser, in connection with this Agreement or
the transactions contemplated hereby.
 
(k)    Sales Tax. There is no sales tax due from Seller with respect to the
Broadband Business for periods prior to the Closing Date that are outstanding
other than sales taxes for periods for which as of the Closing Date a sales tax
return is not yet required to be filed.
 
(l)    Long Term Obligations. The form(s) of all written agreement(s), if any,
which Seller may enter into with Subscribers, obligating Seller to provide
specific services in connection with the Broadband Business, is/are attached to
Schedule 4(l) hereof.
 
5.    Purchaser’s Representations and Warranties. Purchaser represents and
warrants to Seller as follows:
 
(a)    Organization; Authority. Purchaser is a corporation duly organized and in
good standing under the laws of the State of New Jersey and has all requisite
power and authority to carry on its business as it is now being conducted and to
own and operate the properties and assets it now owns. Purchaser, has all
requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement is the legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect or by principles governing the availability of
equitable remedies.
 
(b)    No Violation. Neither the execution and delivery of this Agreement by
Purchaser nor the consummation by Purchaser of the transactions contemplated
hereby will (i) violate or conflict with Purchaser’s certificate of formation or
operating agreement; (ii) violate, conflict with, constitute a default under,
result in the termination of or accelerate the performance required by any
agreement or arrangement to which Purchaser is a party or by which Purchaser is
bound; or (iii) violate any statute, law, rule or regulation or any judgment,
decree, order, regulation or rule of any court or federal, state or local
governmental authority, which violation, conflict, default, termination or
acceleration would have a material adverse effect on the ability of Purchaser to
perform its obligations hereunder.
 
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(c)    Legal Proceedings. There is no (i) suit, action, proceeding pending or to
Purchaser’s Knowledge, threatened against Purchaser, and (ii) judgment, decree,
injunction, rule or order or any investigation or proceeding of any court
agreement department, agency or instrumentally involving Purchaser, which would
cause Purchaser to be unable to consummate the transactions contemplated by this
Agreement. As used in this Agreement the term “Knowledge of Purchaser” or
“Purchaser’s Knowledge” shall mean the actual knowledge of Frank Matarazzo
Purchaser’s, Chief Executive Officer and/or such knowledge that such individual
could be expected to discover or otherwise become aware in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or matter
 
(d)    Brokers. Purchaser has not employed any broker finder or investment
banker in connection with the Sale Assets Transaction contemplated by this
agreement, nor is any broker, finder or investment banker entitled to any
brokerage finder or other fee or commission from Purchaser or Telkonet in
connection with this Agreement or the transactions contemplated hereby.
 
(e)    Financial Statements. The Purchaser’s financial statements are identified
on Schedule 5(e) (the “Purchaser’s Financial Statements”). Purchaser’s Financial
Statements: (i) are correct and complete in accordance with the books and
records of Purchaser, (ii) fairly present the financial condition of Purchaser
as of such dates and the results of its operations for the periods covered
thereby, and (iii) were prepared in accordance with GAAP (subject to year-end
adjustments and except for the omission of certain footnotes and other
presentation items required by GAAP with respect to audited financial
statements, which adjustments, footnotes and presentation items, if prepared as
required for audited financial statements, would not reveal any fact or
condition materially adverse to the financial condition or results of Purchaser
presented in such unaudited Statements).
 
6.    Telkonet’s Representations and Warranties; Breach of Representations or
Warranties.

(a)   Telkonet hereby represents and warrants to Seller, the following:

(i)    Organization. Telkonet is a corporation duly organized and validly
existing under the laws of the State of Delaware and is in good standing under
such laws. Telkonet has the requisite corporate power to own and operate its
properties and assets and to carry on its business as presently conducted and as
proposed to be conducted. Telkonet is qualified to do business as a foreign
corporation in each jurisdiction in which the ownership of its property or the
nature of its business requires such qualification.
 
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(ii)    Authority; No Conflict. The execution, delivery and performance by
Telkonet of its obligations under this Agreement and the consummation by
Telkonet of all transactions contemplated to consummated by Telkonet pursuant to
this Agreement have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by Telkonet and constitutes the
valid and binding obligations of Telkonet enforceable in accordance with its
respective terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights and general principles of equity that restrict
the availability of equitable remedies. The execution and delivery of this
Agreement and the consummation of the transactions contemplated to be
consummated by Telkonet hereunder, including, without limitation, the issuance,
sale and delivery of the shares of Telkonet common stock comprising: (i) the
Stock Consideration; and (ii) the additional consideration to be delivered to
Seller in accordance with the terms of Section 2(b) of this Agreement, if
applicable, (collectively, the “Shares”), will not: (A) conflict with or violate
any provision of the Certificate of Incorporation, Bylaws or other governing
document of Telkonet; or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of or create in any party the right to
accelerate, terminate, modify or cancel any contract, lease, sublease, license,
agreement, mortgage for borrowed money, instrument of indebtedness or other
arrangement to which Telkonet is a party or by which Telkonet is bound or to
which its assets are subject.

(iii)    Legal Proceedings. There is no (i) suit, action, proceeding pending or
to the knowledge of Telkonet, threatened against Telkonet, and (ii) judgment,
decree, injunction, rule or order or any investigation or proceeding of any
court agreement department, agency or instrumentally involving Telkonet, which
would restrict of prohibit Telkonet from consummating the transactions
contemplated by this Agreement, including, without limitation, issuing and
delivering all of the Shares to Seller, as contemplated under this Agreement.

(iv)    Governmental Consents. No consent, approval, order or authorization of,
or registration qualification, designation declaration or filing with any
federal, state, local or provincial governmental authority or any other
regulatory agency or authority is required in connection with the issuance, sale
and delivery of the Shares as contemplated by this Agreement except for filings
which have been made prior to Closing under applicable federal and state
securities laws.

(v)    Issuance of Stock Consideration. The issuance, sale and delivery of the
Shares has been duly authorized by all necessary corporate action on the part of
Telkonet. The Shares, when so issued, sold and delivered in accordance with this
Agreement, will be duly and validly issued, fully paid and non-assessable. 

(vi)    Title to Shares. Telkonet is the sole owner of the Shares, has the
unrestricted right to sell and transfer the Shares to Seller and Telkonet will
transfer and deliver the Shares to Seller free and clear of all liens,
encumbrances, options or other adverse claims (as defined in the Uniform
Commercial Code) of any kind whatsoever.

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(b)    Indemnification by Telkonet. The representations and warranties contained
in this Section 6 shall survive for the duration of the applicable statute of
limitations with respect to the matters set forth therein. Telkonet shall
indemnify and hold all “Seller Indemnitees” (as defined in Section 9, below)
harmless from and against any “Damages” (as defined in Section 9, below)
asserted against, imposed upon or incurred by any such Seller Indemnitee to the
extent resulting from a breach of any of Telkonet’s representations or
warranties set forth in this Section 6.
 
7.    Purchaser’s Access to Seller’s Books and Records After Closing. Seller
shall, for a period of three (3) years after Closing, give Purchaser’s officers,
employees, accountants and other representatives, at Purchaser’s expense,
reasonable access to Seller’s business and financial records and accounts during
Seller’s business hours to the extent reasonably necessary (and at no expense to
Seller), to enable Purchaser to obtain any information and data required in
connection with the preparation of Purchaser’s and its affiliates’ financial
statements and any regulatory filings relating to the Broadband Business.
 
8.    Closing Conditions and Deliveries.
 
(a)    Seller’s Deliveries. At or prior to the Closing, Seller shall deliver the
following to Purchaser:
 
(i)      Four (4) originals of the Escrow Agreement in the form of Exhibit A
annexed hereto, duly executed by Seller;
 
(ii)    Four (4) original of the Assignment and Assumption Agreement in the form
of Exhibit C annexed hereto, duly executed by Seller;
 
(iii)    such other instruments or documents as Purchaser shall request to
evidence the transfer of all the Sale Assets to Purchaser in accordance with the
terms hereof (including, without limitation, a Bill of Sale in the form of
Exhibit D, attached hereto);
 
(iv)    All Required Consents, other than any renewal of Seller’s ARIN
membership, in a form reasonably satisfactory to Purchaser, the terms of which
shall not contain any change in the underlying instrument that would constitute
a Materially Adverse Effect;
 
(v)     a true and complete list of Subscribers as of a date reasonably close to
(and not more than five (5) business days preceding) the Closing Date, an
updated list of Subscriber deposits and prepayments;
 
(vi)    a true and complete accounts receivable aging report as of a date not
more than two (2) business days prior to the Closing Date;
 
(vii)   evidence, reasonably satisfactory to Purchaser, of the release or
termination of all security interests, liens and other encumbrances affecting
the Sale Assets (other than the Permitted Encumbrances), if any;
 
(viii)   Four (4) original executed copies of an Agreement of Lease between 25
River Drive South Urban Renewal Company, as Landlord and Microwave Satellite
Technologies, Inc., as tenant for the office premises located on the 6th floor
of Newport Office Center VIII, 100 Town Square Place, Jersey City, New Jersey.
 
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(ix)    A Certificate dated as of the Closing Date and signed by the duly
authorized officer of the corporate general partner of Seller: (A) attesting to
the incumbency of each person who shall execute this Agreement as an officer of
the corporate general partner on behalf of Seller and any other agreement
entered into in connection with this Agreement to which Seller is a party; and
(B) certifying that attached thereto is a true and complete copy of the
Partnership Agreement of the Seller as in effect as of the Closing Date; and
 
(x)     Written resolutions of the corporate general partner of Seller
authorizing the execution, delivery and performance of the corporate general
partner on behalf of the Seller of this Agreement and any other agreement
executed in connection with this Agreement to which Seller shall be a party.
 
(b)    Purchaser’s Deliveries. At or prior to the Closing, Purchaser shall
deposit the Stock Consideration and the Deposited Cash Consideration with the
Escrow Agent as provided for in Section 2(b) herein and shall deliver the
following to Seller:
 
(i)      Five Hundred Ten Thousand Dollars ($510,000.00) shall be delivered to
Seller by wire transfer pursuant to wire instructions provided by Seller;
 
(ii)    Four (4) originals of the Escrow Agreement in the form of Exhibit A
annexed hereto, duly executed by Purchaser;
 
(iii)    Four (4) original of the Assignment and Assumption Agreement in the
form of Exhibit C annexed hereto, duly executed by Purchaser;
 
(iv)    Four (4) originals of a fully executed License from Purchaser to Realty
Information Systems Co. to use fiber constituting a portion of the Sale Assets
in the form annexed hereto as Exhibit E.
 
(v)    A Secretary’s Certificate dated as of the Closing Date and signed by the
Secretary of Purchaser: (A) attesting to the incumbency of each person who shall
execute this Agreement and any other agreement entered into in connection with
this Agreement to which Purchaser is a party; (B) certifying that attached
thereto is a true and complete copy of the Certificate of Incorporation of the
Purchaser as in effect as of the Closing Date; and (C) certifying that attached
thereto is a true and complete copy of Purchaser’s Bylaws as in effect as of the
Closing Date.
 
(vi)    Written resolutions or the requisite approvals of the board of directors
of the Purchaser and the shareholders of the Purchaser, in form and substance
reasonably satisfactory to Seller, authorizing the execution, delivery and
performance by Purchaser of this Agreement and any other agreement executed in
connection with this Agreement to which Purchaser is a party, which copy shall
be certified by the appropriate officer of the Purchaser as being the true and
correct copies of such approvals.
 
(vii)   Written resolutions or the requisite approvals of the board of directors
of Telkonet, in form and substance reasonably satisfactory to Seller,
authorizing the issuance of the Shares and the execution, delivery and
performance by Telkonet of its obligations under this Agreement, which copy
shall be certified by the appropriate officer of Telkonet as being the true and
correct copies of such approvals.
 
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9.    Survival and Indemnification.
 
(c)    Survival of Representations and Warranties.  The representations and
warranties contained in this Agreement shall survive the Closing for a period of
one (1) year, except that the representations and warranties set forth in: (i)
the second sentence of Section 4(a), (ii) Section 4(c) (to the extent related to
the title of the Sale Assets), (iii) Section 4(j), (iv) the second sentence of
Section 5(a) and (v) Section 5(d) shall survive for the duration of the
applicable statute of limitations with respect to the matters set forth therein.
 
(d)    Indemnification by Seller. Subject to the limitations set forth in
Section 9(e) below, Seller shall indemnify and hold Purchaser and its affiliates
(including said parties’ officers, directors, partners, shareholders, managers,
members, employees and agents) (“Purchaser Indemnitees”) harmless from and
against any demand, claim, action, damage or liability (including without
limitation reasonable attorney’s fees) (collectively, “Damages”) asserted
against, imposed upon or incurred by any such Purchaser Indemnitee to the extent
resulting from: (i) a breach of any of Seller’s representations or warranties
set forth herein; (ii) a breach of any of Seller’s covenants set forth herein;
(iii) any litigation, legal proceeding or claim against Purchaser or Purchaser
Indemnitees relating to Seller’s relationship with any Subscriber, the Broadband
Business or the Sale Assets during the time period prior to the Closing Date; or
(iv) any liability or obligation relating to the period prior to the Closing
Date and not specifically assumed by Purchaser in accordance with the provisions
hereof (any such claim, a “Purchaser Indemnification Claim”).
 
(e)    Indemnification by Purchaser. Purchaser shall indemnify and hold Seller
and its affiliates (including said parties’ officers, directors, partners,
shareholders, managers, members, employees and agents (“Seller Indemnitees”)
harmless from and against any Damages asserted against, imposed upon or incurred
by any such Seller Indemnitee to the extent resulting from: (i) a breach of any
of Purchaser’s representations or warranties set forth herein; (ii) a breach of
any of Purchaser’s covenants set forth herein; (iii) any litigation, legal
proceeding or claim against Seller or Seller Indemnitees relating to Purchaser’s
relationship with any of its customers (including, any Subscriber), the
Broadband Business or the Sale Assets during the time period following the
Closing Date; or (iv) any liability or obligation relating to the period prior
to the Closing Date and which has been specifically assumed by Purchaser in
accordance with the provisions hereof (any such claim, a “Seller Indemnification
Claim”).
 
(f)    Indemnification Procedures. Purchaser shall promptly notify Seller of any
Purchaser Indemnification Claim and Seller shall promptly notify Purchaser of
any Seller Indemnification Claim, provided, that the failure to give such notice
shall not affect any of Purchaser’s or Seller’s right to indemnification unless
the party from which indemnification is sought shall have been materially
prejudiced thereby. If the claim is as a result of a third party matter, the
indemnifying party shall be entitled to participate in the defense thereof, and,
if it so chooses, to assume the defense thereof with counsel that it selects,
and subject to the other party’s right to participate in such defense and to
employ its own counsel, at its own expense. Neither Seller nor Purchaser shall
consent to the entry of any judgment or enter into any settlement with respect
to the other party without the prior written consent of such other party, which
consent will not be unreasonably withheld, provided that Seller or Purchaser,
shall have assumed the defense of a Purchaser Indemnification Claim or Seller
Indemnification Claim, as applicable, and such party shall have acknowledged in
writing its obligation to provide indemnification in connection with such claim.
 
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(e)    Limitations. Seller shall not be liable to the Purchaser Indemnitees
under this Section 9 for any Damages unless and until the cumulative amount
otherwise due to the Purchaser Indemnitees for all claims for Damages under this
Section 9 exceeds Seventy-Five Thousand Dollars ($75,000.00). Thereafter, the
amount due to the Purchaser Indemnitees for all claims for indemnification under
this Section 9 in excess of Seventy-Five Thousand Dollars ($75,000.00) shall be
indemnifiable, but in no event shall the Seller be required to indemnify the
Purchaser Indemnitees under this Section 9 once the aggregate of: (i) the amount
of Seller’s liability to the Purchaser Indemnitees under this Section 9 for any
Damages; and (ii) the aggregate amount incurred by the “Newport Entities” (as
defined in that certain Agreement dated as of the date hereof, by and among
Seller, Purchaser and those other parties identified therein as “Building
Owners” which provides for agreements among the parties relating to DirecTV
programming services at certain Newport Properties (the “DirecTV Agreement”))
arising from or related to the “Newport Entities Obligations” (as defined in the
DirecTV Agreement) exceed One Million Dollars ($1,000,000.00).

 
(f)    Sole Remedy. The remedies set forth in this Section 9 of the Agreement
shall be the exclusive remedies of the: (i) parties to this Agreement, (ii) the
Seller Indemnitees and (iii) the Purchaser Indemnitees with respect to the
subject matter of this Agreement and shall control and determine the rights and
obligations of the: (A) parties to this Agreement, (B) the Seller Indemnitees,
and (C) the Purchaser Indemnitees, with respect to all claims, demands, losses
and other causes of action arising in connection with this Agreement.
 
(g)    Insurance Proceeds. The amount of any Damages for indemnification to be
provided under this Section 9 shall be net of any amount actually recovered by
the Purchaser Indemnitees or Seller Indemnitees, as applicable, under any
applicable insurance policies with respect to such Damages.
 
10.   Access to Books and Records. Seller shall have the right, from time to
time, at Seller’s expense, through its duly authorized agents, to review and
inspect, during reasonable business house and upon reasonable notice to the
Purchaser, all corporate books and business records pertaining to the Broadband
Business for periods prior to the Closing Date which were transferred from
Seller to Buyer in accordance with the terms of this Agreement.
 
11.     Miscellaneous.
 
(g)    Notices. Any notice or other correspondence to be given in connection
with this Agreement shall be in writing and shall be delivered by hand,
overnight courier, registered or certified mail (postage prepaid, with return
receipt requested), or by facsimile (provided that the sender receives printed
confirmation of receipt) to the addresses and/or facsimile numbers set forth
below or to such other address or facsimile number as a party may designate by
notice given to the other party in accordance with the terms hereof. Any notice
to be given by a party may be given by such party’s counsel. Each notice shall
be deemed effective upon its receipt or refusal.
 
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Notices to Seller :
James Lavin
Newport Telecommunications Co.
111 Town Square Place
Jersey City, New Jersey 07310
with a copy to:
James T. LeFrak
Lefrak Organization, Inc.
40 West 57th Street, 23rd Floor
New York, New York 10019
     
with a copy to:
Riker, Danzig, Scherer Hyland & Perretti, LLP
One Speedwell Avenue
PO Box 1981
Morristown, New Jersey 07962
Attention: Robert Daleo, Esq.
Fax: (973) 538-1984
   
Notices to Purchaser:
 
Frank T. Matarazzo
258-263 Goffle Road
Hawthorne, New Jersey 07506
Fax: (973) 304-6081
 
with a copy to:
Womble Carlyle Sandridge & Rice, PLLC
1401 Eye Street, N.W.
Seventh Floor
Washington, DC 20005
Attention: Howard J. Barr
Fax: (202) 261-0006

 
(h)    Expenses; Taxes. Except as otherwise set forth herein, each party shall
be responsible for its own fees and expenses (including legal fees) in
connection with the transactions contemplated hereby. Purchaser shall be
responsible for and shall pay all federal, state and local transfer, sales, use
and other taxes with respect to the sale of the Sale Assets.
 
(i)    Further Assurances. Seller and Purchaser hereby agree, at their own cost
and expense, to execute and deliver any agreement, document or instrument and to
take or cause to be taken any further action that the other may request in order
to more fully give effect to the transactions contemplated hereby.
 
(j)    Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of New Jersey without giving effect to the principles
of conflicts of laws.
 
(k)    Entire Agreement; Amendment; Waiver.  This Agreement (including all
schedules, exhibits and other agreements executed in connection with this
Agreement) constitutes the entire agreement and understanding of the parties and
supersedes any and all prior and contemporaneous agreements, understandings,
correspondence, representations and warranties, oral or written. This Agreement
shall not be amended, nor shall any term or provision hereof be waived, except
in a writing signed by the party(ies) affected thereby. No waiver shall operate
as a waiver of, or estoppel with respect to, any subsequent breach.
 
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(l)     Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that neither party shall assign its obligations or rights
hereunder without the other party’s prior written consent. Any attempted or
purposed assignment in violation of this Section shall be null and void and have
no force or effect.
 
(m)   Counterparts; Facsimile Signatures.  This Agreement may be executed in
counterparts that together shall constitute a single instrument. A facsimile
copy of any signature hereto and to any amendment or supplement hereto shall be
valid.
 
(n)    Confidentiality.  The parties covenant and agree not to communicate the
terms or any aspect of this Agreement and the transactions contemplated hereby
to any person or entity and to hold, in the strictest confidence, the content of
any and all information in respect of the Sale Assets, Broadband Business,
Seller or Purchaser, which is disclosed by Seller to Purchaser or by Purchaser
to Seller, as applicable, without the express written consent of the party
disclosing such information; provided, however, that either party may, without
consent, disclose the terms hereof and the transactions contemplated hereby (a)
to its respective advisors, consultants, attorneys, accountants, partners,
investors, and lenders (the “Transaction Parties”) without the express written
consent of the other party, so long as any such Transaction Parties to whom
disclosure is made shall also agree to keep all such information confidential in
accordance with the terms hereof; and (b) if disclosure is required by law or by
regulatory or judicial process or pursuant to any regulations promulgated by the
New York Stock Exchange or other public exchange for the sale and purchase of
securities, provided that in such event Seller or Purchaser, as applicable,
shall notify the other party in writing of such required disclosure, shall
exercise all commercially reasonable efforts to preserve the confidentiality of
the confidential documents or information, as the case may be, including,
without limitation, reasonably cooperating with the other party to obtain an
appropriate order or other reliable assurance that confidential treatment will
be accorded such confidential documents or information, as the case may be, by
such tribunal and shall disclose only that portion of the confidential documents
or information which it is legally required to disclose. The foregoing
confidentiality obligations shall not apply to the extent that: (A) any such
information is: (i) a matter of public record; (ii) is provided in other sources
readily available or (iii) is otherwise properly, legally and generally known,
in the telecommunications industry other than as a result of disclosure by
Seller or Purchaser or the Transaction Parties, as applicable; or (B) such
information was in the party’s possession prior to entering into this Agreement
or prior to the disclosure by the other party. The provisions of this
Section shall survive the Closing.
 
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(i)     Non-competition. In consideration of the payment of the Purchase Price
and the other provisions of this Agreement, Seller shall not, for a period of
three (3) years from the date of this Agreement: (a) own, operate, manage,
maintain or participate in any business which is primarily engaged in the
business of offering or providing telephone, video or internet services at the
Newport Properties, whether on a resale basis or otherwise (b) market or assist
in the marketing at the Newport Properties of any telephone, video or internet
services which are provided at the Newport Properties by any third party other
than Purchaser or its affiliates; (c) either alone or in conjunction with any
other third party, directly or indirectly, solicit or divert or attempt to
solicit or divert any employee of the Purchaser or in any way interfere with the
relationship between Purchaser and any of its employees, or (d) either alone or
in conjunction with any other third party, directly or indirectly, solicit or
attempt to solicit any resident of the Newport Properties for the purpose of
selling any telephone, internet or video services at the Newport Properties
which are then provided by Seller. Notwithstanding the foregoing, it is
expressly understood and agreed to by Purchaser that Seller, its affiliates
and/or any Owner (as defined in that certain Master Communications Access and
Service Agreement dated as of the date hereof (the “Master Access Agreement”)),
whether or not an affiliate of Seller, may assist (so long as such assistance is
not in violation of that certain Marketing Program and Support Agreement
attached as Exhibit B to the Master Access Agreement) other providers or
resellers of telephone, video or internet services in providing telephone, video
or internet services at the Newport Properties (even if such services are
competitive with the Broadband Business), which assistance shall include, but
not be limited to, providing such providers or resellers access to the Newport
Properties to install or maintain facilities or equipment at the Newport
Properties; provided, however, that, except for providing such entities with
access to the Newport Properties through the Hudson Conduit, for which Seller,
its affiliates or Owners, whether or not an affiliate of Seller, may receive
compensation and any charges which Realty Information Systems Co.  may impose
for permitted uses of certain fiber as provided for in that certain License
Agreement by and between Purchaser and Realty Information Systems Co., dated as
of the date hereof, Seller shall not be permitted to receive compensation in
exchange for assisting such entities. Provided, further, that nothing contained
in this Agreement shall prohibit or impair Seller or its affiliates or Owners
from: (i) transacting business with or providing services on behalf of
Purchaser; or (ii) from satisfying any obligations or responsibilities under any
applicable federal, state or local law, rule, regulation or ordinance or under
that certain MDU System Operator Agreement dated as of June 14, 2003 by and
between Seller and Minnesota Digital Universe. Provided, further that, subject
to the forty (40) month and five percent (5%) limitation on the new installation
of wiring within certain buildings located at the Newport Properties as provided
for in Section 1.01 of the Master communications and Access Agreement, nothing
contained herein shall prohibit or restrict Seller or its affiliates or Owners
from assisting any tenant or resident of the Newport Property in installing or
maintaining any equipment for any video, internet or telephone services (even if
such services are competitive with the Broadband Business), including, without
limitation, by providing or facilitating such tenants or residents with access
to certain areas located at the Newport Properties. Provided, further that
nothing contained within this Agreement shall prohibit Seller or its affiliates
or owners from purchasing or otherwise acquiring up to (but not more than)
twenty-five percent (25%) of any class of the securities of any third party (but
may not otherwise participate in the activities of such third party) if such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934.
Purchaser and Seller acknowledge and agree that providing tenants or residents
of the Newport Properties with the phone numbers and other contact information
of any provider or reseller of telephone, video or internet services which is
providing or re-selling such services at the Newport Properties shall be
permitted under this Agreement and shall not be deemed to be in violation of the
Marketing Program and Support Agreement referenced above.
 
(j)     True Up for Purchase of Centrex Lines. Pursuant to the terms of this
Agreement, all of Seller’s right, title and interest in and to that certain
Services Agreement dated as of December 30, 2004, by and between Newport
Telecommunication and Verizon New Jersey Inc. pertaining to Newport
Telecommunication’s purchase of Centrex lines from Verizon New Jersey, Inc. (the
“Centrex Agreement”) shall be assigned and transferred to Purchaser. In
connection therewith, Seller and Purchaser acknowledge and agree that in the
event that Purchaser shall be charged with any fee relating to Purchaser’s
failure to purchase the requisite minimum number of Centrex lines pursuant to
the Minimum Line Obligation under the Centrex Agreement, Seller hereby agrees to
reimburse Purchaser the amount of any such fee to the extent that such amount
exceeds the amount charged for Purchaser’s actual purchase and usage of the
Centrex lines.
 
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(k)    Satellite Services. From the date hereof and until July 14, 2008,
Purchaser shall not, directly or indirectly, offer, sell or solicit sales of,
take orders for, or provide or install equipment for, any direct-to-home
satellite broadcast services to be provided at the Newport Properties.
 
(l)    Packeteer Lease. Purchaser and Seller hereby acknowledge and agree that
after the Closing : (i) Seller will assign and transfer to Purchaser all of its
right, title and interest in and to that certain Lease Agreement dated as of
August 22, 2006 by and between Newport Telecommunications Company, Inc. and CIT
Technology Financing Services, Inc. (“CIT”) (the “Packeteer Lease”); or (ii) if
Seller cannot transfer and assign all of its, right, title and interest in the
Packeteer Lease to Purchaser, Purchaser shall enter into a new lease agreement
with CIT for the same equipment that is the subject of the Packeteer Lease (the
“New Packeteer Lease Agreement”). In the event that subsection (ii) of this
Section 11(l) shall apply and Purchaser shall enter into the New Packeteer Lease
Agreement with CIT, Seller shall pay Purchaser the excess amount, if any, that
Purchaser shall be obligated to pay under the New Packeteer Lease Agreement as
compared with the amount that Purchaser would have been obligated to pay to CIT
under the Packeteer Lease.
 
[Remainder of Page Intentionally Omitted]
 
[Next Page is Signature Page]
 
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IN WITNESS WHEREOF, this Asset Purchase Agreement has been executed and
delivered as of the date first above written.
 

        Microwave Satellite Technologies, Inc.  
   
   
    By:    /s/ Frank T. Matarazzo  

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Name: Frank T. Matarazzo   Title: Chief Executive Officer 

        NEWPORT TELECOMMUNICATIONS CO.      
By: Newport Telecommunications Company,
Inc., its partner 
 
   
   
    By:    /s/ James T. LeFrak  

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Name: James T. LeFrak
 
Title: Vice President

       
TELKONET, INC. (solely with respect to Section
6 of this Agreement)
 
   
   
    By:   /s/ Ron Pickett  

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Name: Ron Pickett
  Title: President

 

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