Document:

Unassociated Document

    EXECUTION
      COPY

    ASSET
      PURCHASE AGREEMENT 

    

    This
      Asset Purchase Agreement (“Agreement”), dated as of March ___, 2006 (“Effective
      Date”) is entered into by and among ICEWEB
      ONLINE, INC., a
      Virginia corporation (“IOI”); ICEWEB,
      INC., a
      Delaware corporation (“IceWEB”); PATRIOTNET,
      INC., a
      Virginia corporation (“PatriotNet”); and PATRIOT
      COMPUTER GROUP, INC., a
      Virginia corporation (“PCG”). 

    

    RECITALS:

    

    
      	 	
              A.

            	
              PatriotNet
                is in the business of providing high-quality Internet services and
                acclaimed customer care and support (the “Business”).
                

            

    

     

    
      	 	
              B.

            	
              PatriotNet
                is the owner of certain assets which IOI wishes to acquire in exchange
                for
                certain cash consideration and common stock of IceWEB.
                

            

    

     

    
      	 	
              C.

            	
              IOI
                and IceWEB require and rely on representations and warranties by
                PatriotNet and PCG in consideration for IOI’s purchase of Assets (as
                defined below) and IceWEB’s issuance of IceWEB Shares (as defined
                below)

            

    

     

    NOW
      THEREFORE,
      in
      consideration of the Recital above, mutual covenants, agreements,
      representations and warranties contained in this Agreement, and for other good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

    

    ARTICLE
      I

    ACQUISITION
      OF ASSETS

    

    SECTION
      1.1 - ACQUISITION OF ASSETS; ASSUMPTION OF LIABILITIES

    

    1.11 Acquisition
      of Assets.
      IOI and
      PatriotNet hereby agree that for and in consideration of (a) the payment of
      cash
      consideration by IOI to PatriotNet of ONE HUNDRED NINETY THOUSAND AND NO/100
      US
      DOLLARS (US $190,000.00) at Closing; (b) the issuance by IceWEB of 100,000
      shares of IceWEB common stock to PatriotNet at Closing; and (c) the assumption
      by IOI of certain PatriotNet liabilities as defined below, PatriotNet shall
      sell
      to IOI, and IOI shall purchase from PatriotNet, free of all liens and
      encumbrances, to the extent of PatriotNet’s rights therein and except those
      excluded assets set forth on Schedule 1.11(a), all of the assets of PatriotNet
      related to or useful in the Business as set forth on Schedule 1.11(b) (“Assets”)
      and described generally as follows:

    

    a.
      Software and Documentation. Software
      and documentation developed, under development, and used by PatriotNet,
      including the billing system referred to as Sherlock, plus all other software
      and documentation developed by or for PatriotNet at any time.

    

    b.
      Other Content. Content
      not included in the software assets described in subparagraph a. above, whether
      said content is analog or digital, voice, video, or data content stored on
      tape,
      disk, or any form of analog, digital, electronic, or other media.

     

    
      
         

      

      
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    c.
      Customer Contracts.
      Contracts, agreements, licenses, and other commitments and arrangements, oral
      or
      written, with any person or entity (including for-profit businesses, non-profit
      organizations, and government entities) respecting the provision of Internet,
      technology, business and telework solutions and consulting businesses, broadband
      and narrowband Internet access service, and other businesses operated by
      PatriotNet or otherwise arising out of the Business. Also included, without
      limiting the inclusiveness of the customer contracts included among the Assets,
      are sales leads, teaming arrangements in process, hosting opportunities, and
      application service provider software provision opportunities. 

    

    d.
      Computer, and other Equipment.
      Computer, telecommunications, and other equipment and devices, peripheral
      devices, input/output devices, including mini- and micro-computers and other
      digital and analog data, voice, and video equipment of all types; modems,
      routers, switches, gateways, UPS equipment, telecommunications equipment, media,
      and tools and all ROMs, tapes, diskettes, and electronic media (the
“Equipment”), including PatriotNet’s rights under all related
      warranties.

    

    e.
      Office Furniture. Office
      furniture and fixtures.

    

    f.
      Leases.
      The
      entire leasehold or rental interest arising under leases of:

    

    (i)
      Equipment, including data processing hardware and associated telecommunications
      equipment, media, and tools;

    

    (ii)
      Office furnishings and fixtures; and

    

    (iii)
      Other personalty. 

    

    g.
      Other Contracts.
      Other
      contracts, agreements, licenses, commitments, arrangements, and
      permissions.

     

    h.
      Business Records. Copies
      of
      all business and marketing records, including accounting and operating records,
      asset ledgers, inventory records, budgets, personnel records, payroll records,
      customer lists, employment and consulting agreements, supplier lists,
      information and data respecting leased or owned equipment, files, correspondence
      and mailing lists, advertising materials and brochures, and other business
      records.

    

    i.
      Authorizations. Governmental
      approvals, authorizations, certifications, consents, variances, permissions,
      licenses, and permits to or from, or filings, notices, or recordings to or
      with,
      federal, state, and local governmental authorities, but subject, as to the
      re-assignability to IOI, to the procurement of any required government consents
      which shall be the sole responsibility of IOI after the Closing.

    

    j.
      Accounts Receivable. Accounts
      receivable as of the Effective Date, including all license fees, maintenance
      fees, hosting fees, and charges owing or to become owing to PatriotNet under
      Customer Contracts.

    
      
         

      

      
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    k.
      Websites, Domain Names, and Intellectual Property.
      Websites, domain names, patents, trademarks, service marks, trade names, and
      copyrights (including registrations, licenses, reservations of names and domain
      names, and applications pertaining thereto), and all other intellectual property
      rights, trade secrets, know-how, show-how, and other proprietary information,
      processes, and formulae (the “Intellectual Property”). The Websites and
      Intellectual Property includes the <patriot.net> website, the
<patriot.net> domain name, the PatriotNet service mark and trademark, all
      registered trademarks and service marks, all reserved trade names, all
      registered copyrights, and all filed patent applications and issued patents
      owned by PatriotNet.

    

    l.
      Insurance Policies.
      Insurance and reinsurance, surety, bonding, or indemnity policies, binders,
      or
      contracts, and the benefits of any prior insurance coverage to the extent still
      available.

    

    m.
      Claims. Claims
      PatriotNet may have against any person relating to or arising from the Assets,
      including rights to recoveries for damages or defective goods, to refunds,
      insurance claims, and choses in action.

    

    n.
      Liquid Assets. Deposits,
      other receivable items, prepaid expense items, and investments, and all other
      products and proceeds of any Assets. 

    

    o.
      Business Interests, Participations, and Ownership Positions.
Interests,
      participations, and ownership positions held by PatriotNet in any corporation,
      partnership, joint venture, co-marketing arrangement, or similar enterprise
      or
      undertaking relating to PatriotNet’s Business.

    

    p.
      Agreements with Employees and Independent Contractors Respecting Intellectual
      Property. Agreements
      with employees and independent contractors: acknowledging development of works
      for hire by employees and/or contractors for PatriotNet; assigning inventions
      and other intellectual property assignments; promising confidentiality,
      non-disclosure, and non-competition; and other agreements, covenants,
      restrictions and prohibitions, protecting PatriotNet’s Business and intellectual
      property rights. Provided, however, that said agreements respecting intellectual
      property shall in no way obligate IOI to employ any persons or accept duties
      delegated under independent contracts, except to the extent liabilities are
      expressly assumed in connection with the purchase of Assets.

    

    q.
      Security and other Deposits. All
      deposits posted by PatriotNet related to the Business. However, IOI is not
      assuming any lease of real property entered into by PatriotNet or PCG.
      Therefore, any security deposit posted with a landlord of real property (other
      than owners of co-location and other third party hosting facilities) is not
      assigned to IOI.

     

    1.12 Assumption
      of Liabilities.
      IOI and
      PatriotNet hereby agree that, in connection with the Assets being acquired
      by
      IOI from PatriotNet, PatriotNet shall delegate to IOI those liabilities as
      set
      forth in Schedule 1.12.a only, and IOI agrees to accept and assume those
      liabilities. Liabilities of PatriotNet not being assumed are set forth in
      Schedule 1.12.b. 

    
      
         

      

      
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    SECTION
      1.2 - ISSUANCE OF SHARES

    

    1.21 Issuance
      of Shares.
      IOI,
      IceWEB and PatriotNet hereby agree that on the Closing Date (as hereinafter
      defined), IceWEB shall issue to PatriotNet ONE HUNDRED THOUSAND (100,000) shares
      of IceWEB Common Stock (the “IceWEB Shares”). 

    

    1.22 Delivery
      of IceWEB Shares.
      Prior
      to
      or on the Closing Date, IceWEB will instruct its transfer agent to deliver
      the
      certificate representing the IceWEB Shares to PatriotNet at the Closing.

    

    1.23 Investment
      Intent.
      The
      IceWEB Shares have not been registered under the Securities Act of 1933, as
      amended (the “Act”), and may not be resold unless the IceWEB Shares are
      registered under the Act or an exemption from such registration is available.
      PatriotNet represents and warrants it is acquiring the IceWEB Shares for
      investment, and not with a view to the sale or distribution of the IceWEB
      Shares. Each certificate representing the IceWEB Shares will have a legend
      thereon incorporating language as follows:

     

    “The
      shares represented by this certificate have not been registered under the
      Securities Act of 1933, as amended (the “Act”) or any state securities laws. The
      shares have been acquired for investment and may not be sold or transferred
      in
      the absence of an effective Registration Statement for the shares under the
      Act
      unless in the opinion of counsel satisfactory to the Company, registration
      is
      not required under the Act or any applicable state securities laws. The shares
      are further subject to the terms of that certain Asset Purchase Agreement dated
      March ___, 2006, terms of which will be made available by the
      Company.”

     

    1.24 Registration
      Rights.

     

    a.
      Incidental
      Registration.
      In
      connection with any future Public Offering of IceWEB securities, PatriotNet
      shall have the right to require IceWEB to include all or (at PatriotNet’s
      election) any portion of the IceWEB Shares. Notwithstanding the foregoing,
      if
      the underwriters shall advise IceWEB in writing that, in their experience and
      professional opinion arrived at in good faith based upon existing market
      conditions, inclusion of such number of IceWEB Shares will adversely affect
      the
      price or distribution of the securities to be offered in such Public Offering,
      then PatriotNet shall then have the right to include only such number of IceWEB
      Shares that such advice by the underwriters indicates may be distributed
      without adversely affecting the other planned distribution of the securities.
      As
      between PatriotNet and any other holders of IceWEB Common Stock requesting
      to be
      included in such Public Offering, such availability for inclusion in the
      registration for such Public Offering shall be allocated pro
      rata
      based
      upon the total number of shares of IceWEB Common Stock owned or purchasable.
      In
      connection with any underwritten Public Offering, provided that all other
      holders of equity interests of IceWEB are subject to identical (or more
      restrictive) restrictions with respect to their equity interests, then
      Shareholders shall agree to refrain from selling or otherwise transferring
      (other than to affiliates) any IceWEB Shares not included in such Public
      Offering for a period of time (not to exceed 14 calendar days prior to and
      180
      calendar days after the effective date of the registration statement for such
      Public Offering) as may be appropriate under the circumstances and reasonably
      requested by IceWEB and the underwriters for such offering.

     

    
      
         

      

      
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    b.
      Certain
      Additional Agreements in Connection with Registrations.
      In
      connection with any Public Offering, IceWEB (i) shall furnish PatriotNet such
      numbers of copies of registration statements and prospectuses (and amendments
      and supplements thereto) as PatriotNet may reasonably request, and
      (ii)
      shall take all such other actions as are necessary or advisable to facilitate
      the registration and sale of such IceWEB Shares. In connection with any Public
      Offering as to which a Shareholder is requesting registration of IceWEB Shares,
      PatriotNet (A) shall provide IceWEB with such information regarding itself
      as
      may be reasonably required by IceWEB, and
      (B)
      shall reasonably cooperate with IceWEB in the preparation of the registration
      statement. In connection with any offering of IceWEB Shares pursuant to the
      provisions of this Section, IceWEB and PatriotNet shall provide each other
      with
      customary indemnifications that are no more favorable to IceWEB than those
      applicable to any other Persons participating in such Public
      Offering.

     

    c.
      Public
      Offering
      means
      any issuance or other sale of any IceWEB Common Stock (or securities convertible
      into, or exchangeable for, Common Stock or rights to acquire common Stock or
      such securities) of IceWEB pursuant to a registration statement filed with
      the
      Commission under the Securities Act, other than (i) a registration on Form
      S-8
      (or any successor form) relating solely to employee benefits or stock plans
      and
      (ii) a registration of IceWEB Common Stock entirely or primarily for the benefit
      of Barron Partners, LP, or its designees or assignees; provided, however, that
      if a registration statement is filed at the request of holders of the Common
      Stock of IceWEB and no shares of Common Stock will be sold under such
      registration statement on the account of IceWEB, then such registration
      statement will only be considered a Public Offering if such offering will result
      in gross proceeds of at least $5,000,000 to the selling security
      holders. 

    

    ARTICLE
      II

    CLOSING

    

    2.01 Time
      and Place of Closing.
      The
      transactions contemplated by this Agreement shall be consummated on or before
      five (5) business days following the Effective Date, at the law offices of
      Ira
      S. Saul, PLC, 4126 Leonard Drive, Fairfax Virginia 22030 (the “Closing Date”).
      The time and place at which the transactions contemplated hereby are consummated
      is hereinafter referred to as the “Closing”.

    

    2.02 Deliveries
      at Closing.
      At the
      Closing:

    

    (a) Subject
      to the Escrow Agreement as set forth in Paragraph 2.03 below, IOI shall deliver
      to PatriotNet the cash proceeds of $190,000.00; 

    

    (b) IceWEB
      shall deliver to PatriotNet, or provide its transfer agent instructions to
      issue
      and deliver, the IceWEB Shares; 

    

    (c) PatriotNet
      shall deliver the Assets to IOI, including all transfers required to be carried
      out through third parties (e.g.,
      transfer of patriot.net domain name through Verisign). 

    
      
         

      

      
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    (d) PatriotNet
      shall deliver Articles of Amendment changing its name to a name that does not
      use the “PatriotNet” trademark and service mark acquired by IOI, which shall be
      completed within five (5) business days following Closing; and

    

    (e) PatriotNet
      and IOI shall execute and deliver each to the other the Non-Solicitation
      Covenant (as defined below). 

    

    

    

    2.03 Escrow.
      At the
      Closing $50,000.00 (the “Escrow Amount”) will be deducted from the cash proceeds
      and held in escrow with Elizabeth C. Barclay, PLC, Escrow Agent, to pay
      undisclosed liabilities of PatriotNet or damages suffered by IOI or IceWEB
      because of a breach of representations and warranties by PatriotNet or PCG.
      The
      Escrow Agreement is attached as Exhibit 2.03.

    

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

    OF
      PATRIOTNET AND PCG

    

    PatriotNet
      and PCG, jointly and severally, hereby represent and warrant to IceWEB and
      IOI,
      jointly and severally, as follows:

    

    
      
        3.01
          Legal
          Capacity of PatriotNet.

      

    

    

    (a) PatriotNet
      has the legal capacity to execute and deliver this Agreement and to consummate
      the transactions contemplated hereby.

    

    (b) The
      execution and delivery of this Agreement by PatriotNet, and the consummation
      by
      it of the transactions contemplated hereby, does not violate or conflict with
      (i) any material terms of any organizational document or any instrument,
      contractual restriction or commitment of any kind or character to which
      PatriotNet is a party or by which it is bound, or (ii) any requirement of law
      or
      any judgment, decree or order of any governmental or regulatory authority to
      which PatriotNet is subject or by which PatriotNet or any of its respective
      assets or properties is bound.

    

    (c) This
      Agreement has been duly and validly executed by PatriotNet, and constitutes
      a
      valid and binding obligation of PatriotNet enforceable against PatriotNet in
      accordance with its terms. 

    

    3.02 Organization
      and Authority of PatriotNet.
      PatriotNet is a corporation duly organized, validly existing and in good
      standing under the laws of the Commonwealth of Virginia, and has all requisite
      corporate power and authority to carry on its Business as presently conducted
      and to own or lease and to operate its properties. PatriotNet is qualified
      to
      transact business as a foreign corporation in each jurisdiction wherein the
      failure to so qualify would have a material adverse effect on the Business,
      financial condition, results of operations, assets or properties of PatriotNet
      (a “PatriotNet Material Adverse Effect”). PatriotNet has no
      subsidiaries.

    
      
         

      

      
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    3.03 Legal
      Capacity of PCG.

    

    (a) PCG
      has
      the legal capacity to execute and deliver this Agreement and to consummate
      the
      transactions contemplated hereby.

    

    (b) The
      execution and delivery of this Agreement by PCG and the consummation by them
      of
      the transactions contemplated hereby, do not violate or conflict with
      (i) any material terms of any organizational document or any instrument,
      contractual restriction or commitment of any kind or character to which PCG
      is a
      party or by which it is bound, or (ii) any requirement of law or any judgment,
      decree or order of any governmental or regulatory authority to which PCG is
      subject or by which PCG or any of its assets or properties is
      bound.

    

    (c) This
      Agreement has been duly and validly executed by PCG and constitutes a valid
      and
      binding obligation of PCG enforceable against PCG in accordance with its terms.
      

    

    3.04 Organization
      and Authority of PCG.
      PCG is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the Commonwealth of Virginia, and has all requisite corporate power and
      authority to carry on its business as presently conducted and to own or lease
      and to operate its properties. PCG is qualified to transact business as a
      foreign corporation in each jurisdiction wherein the failure to so qualify
      would
      have a material adverse effect on the business, financial condition, results
      of
      operations, assets or properties of PCG (a “PCG Material Adverse Effect”).
      PatriotNet is a wholly owned subsidiary of PCG.

    

    3.05 PatriotNet
      Common Stock owned by PCG.
      PCG has
      good and marketable title to all of the issued and outstanding common stock
      of
      PatriotNet, which is fully paid and non-assessable. 

    

    3.06 Consents
      and Approvals.
      This
      Agreement and the transactions contemplated hereby have been duly authorized
      by
      the Board of Directors and by the Shareholders of both PatriotNet and PCG.
      Copies of all of said consents and approvals are attached as Schedule 3.06.
      No
      approval, order or consent of, filing or registration with or notice or payment
      to, any foreign, federal, state, county, local or other governmental or
      regulatory body, and no other approval or consent of, or filing with or notice
      or payment to, any other person is required by PatriotNet or PCG in connection
      with the execution and delivery by PatriotNet and PCG of this Agreement and
      the
      consummation and performance by it of the transactions contemplated hereby.
      To
      the Knowledge (defined below) of PatriotNet and PCG, the execution and delivery
      of this Agreement, the consummation of the transactions contemplated hereby,
      and
      the performance by PatriotNet and PCG of this Agreement in accordance with
      its
      terms and conditions will not (a) conflict with or result in the breach or
      violation of any of the terms or conditions of, or give rise to any acceleration
      of PatriotNet’s or PCG’s obligations or constitute (or with notice or lapse of
      time or both would constitute) a default under (i) the Articles of Incorporation
      or By-Laws of PatriotNet or PCG, as the same have been amended and/or restated
      from time to time; (ii) any instrument, contract or other material agreement
      by
      or to which PatriotNet or PCG is a party or by or to which PatriotNet’s or PCG’s
      assets or properties are bound or subject; (iii) any statute, law or regulation
      of any jurisdiction or any order, writ, judgment, injunction, award or decree
      of
      any court, arbitrator or governmental or regulatory body against, or binding
      upon, PatriotNet or PCG, or the respective assets or properties of PatriotNet
      or
      PCG; or (iv) any license, franchise, approval, certificate, permit or
      authorization applicable to PatriotNet or PCG, or any of their respective
      assets; or (b) result in the creation of any lien, charge or encumbrance of
      any
      nature, upon the capital stock of PatriotNet or PCG, or assets or property
      of
      PatriotNet or PCG. For purposes of this Agreement, “Knowledge” in the case of
      PatriotNet and PCG shall mean the actual knowledge of Cynthia H. de Lorenzi,
      Chief Executive Officer of PatriotNet and PCG, following reasonable inquiry
      by
      Cynthia H. de Lorenzi.

    
      
         

      

      
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    3.07 Litigation.
      To the
      Knowledge of PatriotNet, there is no action, suit or proceeding pending or
      threatened, or any investigation, at law or in equity, before any arbitrator,
      court or other governmental authority, pending or threatened, nor any judgment,
      decree, injunction, award or order outstanding, against or in any manner
      involving PatriotNet, or PCG, or any of PatriotNet’s or PCG’s properties or
      rights which (a) could reasonably be expected to have a PatriotNet Material
      Adverse Effect, or (b) could reasonably be expected to prevent the consummation
      of any of the transactions contemplated by this Agreement.

    

    3.08 Taxes.
      PatriotNet and PCG have filed or will file all tax returns that either was
      required to file, and have paid all taxes indicated on such returns for such
      periods which are due and payable as of the date hereof. All such tax returns
      were in all respects true, complete and correct. None of the income tax returns
      filed by, on behalf of or with respect to PatriotNet or PCG is currently the
      Subject of an audit, and no notice of a planned audit has been received by
      PatriotNet. PatriotNet is a C-corporation. 

    

    3.09 Corporate
      Records.
      PatriotNet has granted IOI and IceWEB access to all the tax, accounting,
      corporate and financial books and records relating to the Business. To the
      Knowledge of PatriotNet and PCG, all financial statements and other supporting
      information regarding the financial affairs relating to the Business supplied
      to
      IOI and IceWEB are true and correct in all material respects. Copies of
      financial statements submitted to IOI, on which IOI relies in purchasing the
      Assets, are attached as Schedule 3.09.

    

    3.10 PatriotNet’s
      Properties.
      PatriotNet has good and marketable title to all its Assets, including its
      contracts, domain names, websites, personal property, equipment, fixtures,
      customer contracts, software, processes, patents, copyrights, trademarks,
      franchises, licenses and other properties and assets (except for items leased
      or
      licensed to PatriotNet), in each case free and clear of all liens, claims and
      encumbrances of every kind and character. PatriotNet has no ownership interest
      in any real property, but it does have a leasehold interest as provided to
      IOI
      and IceWEB. The assets and properties owned, operated or leased by PatriotNet
      and used in its Business are in good operating condition, reasonable wear and
      tear excepted, and suitable for the uses for which intended.

    
      
         

      

      
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    3.11 Insurance.
      PatriotNet
      has granted IOI and IceWEB access to all performance bonds and policies of
      insurance, including fire and extended coverage, general liability, workers
      compensation, products liability, property, and other forms of insurance or
      indemnity the bonds held by PatriotNet. To the Knowledge of PatriotNet,
      PatriotNet is not in default with respect to any provisions of any such policy
      and has not failed to give any notice or present any claim hereunder in due
      and
      timely fashion. To the Knowledge of PatriotNet, all policies of insurance and
      the bonds are: (1) in full force and effect; (2) are sufficient for compliance
      by PatriotNet with all requirements of law and of all agreements and instruments
      to which PatriotNet is a party; (3) are valid, outstanding and enforceable;
      (4)
      provide adequate insurance coverage for the assets, business and operations
      of
      PatriotNet in amounts at least equal to customary coverage in PatriotNet’s
      industry; (5) will remain in full force and effect through the Closing; and
      (6)
      will not be affected by, and will terminate or lapse by reason of, the
      transactions contemplated by this Agreement.

    

    3.12 Employment
      Matters.
      PatriotNet has granted IOI and IceWEB access to all information regarding
      PatriotNet’s officers, their contracts, base salaries, accrued vacation pay,
      sick pay, and severance pay. PatriotNet has not incurred any unfunded deficiency
      or liability within the meaning of the Employee Retirement Income Security
      Act
      of 1974 (“ERISA”), has not incurred any liability to the Pension Benefit
      Guaranty Corporation established under ERISA in connection with any employee
      benefit plan and has no outstanding obligations or liabilities under any
      employee benefit plan. PatriotNet has not been a party to a “prohibited
      transaction,” which would subject PatriotNet to any tax or penalty. There is no
      collective bargaining agreement or negotiations therefor, labor grievance or
      arbitration proceeding against PatriotNet pending or threatened, and to the
      Knowledge of PatriotNet, there are no union organizing activities currently
      pending or threatened against or involving PatriotNet. There are no employment
      agreements being assigned and delegated to IOI. PatriotNet and PCG hold IOI
      and
      IceWEB absolutely free and harmless from all liabilities to PatriotNet employees
      and PCG employees. 

    

    3.13 Compliance
      with Laws.
      PatriotNet is not in violation of any federal, state, local or other law,
      ordinance, rule or regulation applicable to its Business, and has not received
      any actual or, to the Knowledge of PatriotNet, threatened complaint, citation
      or
      notice of violation or investigation from any governmental
      authority.

    

    3.14 Compliance
      with Environmental Laws.
      PatriotNet is in compliance with all applicable pollution control and
      environmental laws, rules and regulations. PatriotNet has no environmental
      licenses, permits and other authorizations relative to compliance with
      environmental laws, rules and regulations.

    

    3.15 Validity.
      All
      contracts, agreements, leases and licenses to which PatriotNet is a party or
      by
      which it or any of its properties or assets are bound or affected, are valid
      and
      in full force and effect; and no material breach or default exists, or upon
      the
      giving of notice or lapse of time, or both, would exist, on the part of
      PatriotNet or by any other party thereto.

    

    3.16 No
      Brokers.
      PatriotNet is not a party to any agreement pursuant to which PatriotNet, IOI,
      or
      IceWEB will become obligated to pay a commission to any person as a result
      of
      consummation of the transactions contemplated hereby.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    3.17 No
      Brokers.
      PCG is
      not a party to any agreement pursuant to which PCG, PatriotNet, IOI, or IceWEB
      will become obligated to pay a commission to any person as a result of
      consummation of the transactions contemplated hereby.

    

    3.18 Information
      on IceWEB.
      PatriotNet represents that it is an “accredited investor,” as such term is
      defined in Regulation D promulgated by the Act, is experienced in investments
      and business matters, has made investments of a speculative nature and, with
      its
      representatives, has such knowledge and experience in financial, tax and other
      business matters as to enable it to utilize the information made available
      by
      IceWEB to evaluate the merits and risks of and to make an informed investment
      decision with respect to this Agreement, which represents a speculative
      investment. PatriotNet is able to bear the risk of such investment for an
      indefinite period and to afford a complete loss thereof.

    

    3.19 Ownership
      of PatriotNet Shares and Authorization of Agreement.
      PCG
      represents that it is the sole owner of record and beneficially owns all of
      the
      shares of capital stock of PatriotNet issued and outstanding, all of which
      shares are owned free and clear of all rights, claims, liens and encumbrances,
      and have not been sold, pledged, assigned or otherwise transferred except
      pursuant to this Agreement. There are no outstanding subscriptions, rights,
      options, warrants or other agreements obligating PatriotNet to issue, sell
      or
      transfer any stock or other securities of PatriotNet.

    

    3.20 No
      Untrue Statements.
      No
      representation or warranty made by PatriotNet in this Agreement, or in any
      Schedule or Exhibit attached hereto, contains any untrue statement of a material
      fact or omits any material fact necessary in order to make the statements
      contained herein or therein not misleading. PatriotNet has not knowingly failed
      to disclose to IceWEB and IOI any facts material to the condition (financial
      or
      otherwise), properties, business, operations or prospects of
      PatriotNet.

    

    3.21 Prior
      Registration Rights.
      PatriotNet is under no obligation, contractual or otherwise, to register under
      the Act, any of its presently outstanding securities or any securities that
      may
      subsequently be issued by PatriotNet. 

    

    3.22 Non-Solicitation
      Covenant.
      Following the Closing, PatriotNet, PCG, and Cynthia H. de Lorenzi agree not
      to
      solicit the customers of PatriotNet, or IOI or IceWEB, in an attempt to provide
      goods or services to any such customer related to the Business, all as set
      forth
      in the Non-Solicitation Covenant attached at Schedule 3.22.

    

    ARTICLE
      IV

    [RESERVED]

    

    ARTICLE
      V

    REPRESENTATIONS
      AND WARRANTIES OF ICEWEB

    

    IceWEB
      hereby represents and warrants to PatriotNet as follows:

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    5.01 Legal
      Capacity of IceWEB.

    

    (a) IceWEB
      has the legal capacity to execute and deliver this Agreement and to consummate
      the transactions contemplated hereby.

    

    (b) The
      execution and delivery of this Agreement by IceWEB, and the consummation of
      the
      transactions contemplated hereby, do not violate or conflict with (i) any
      material terms of any organizational document or any instrument, contractual
      restriction or commitment of any kind or character to which IceWEB is a party
      or
      by which it is bound, or (ii) any requirement of law or any judgment, decree
      or
      order of any governmental or regulatory authority to which IceWEB is subject
      or
      by which IceWEB or any of its respective assets or properties is
      bound.

    

    (c) This
      Agreement has been duly and validly executed by IceWEB, and constitutes a valid
      and binding obligation of IceWEB enforceable against IceWEB in accordance with
      its terms except to the extent that (i) such enforcement may be limited by
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      affecting the enforcement of creditors’ rights generally and (ii) the
      availability of remedies, including specific performance, is subject to the
      discretion of the court before which any proceeding therefor may be
      brought.

    

    5.02 Organization
      and Authority of IceWEB.
      IceWEB
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of Delaware, and has all requisite corporate power and
      authority to carry on its business as presently conducted and to own or lease
      and to operate its properties. IceWEB is qualified to transact business as
      a
      foreign corporation in each jurisdiction wherein the failure to so qualify
      would
      have a material adverse effect on the business, financial condition, results
      of
      operations, assets or properties of IceWEB (an “IceWEB Material Adverse
      Effect”).

    

    5.03 Capitalization.
      The
      authorized, issued and outstanding capital stock of IceWEB is listed in filings
      with the US Securities and Exchange Commission. The IceWEB Shares have been
      duly
      authorized and, upon issuance as contemplated hereby, will be validly issued,
      fully paid and non-assessable and not subject to the preemptive or anti-dilution
      rights of any person. 

    

    5.04 Consents
      and Approvals.
      This
      Agreement and the transactions contemplated hereby have been duly authorized
      by
      the IceWEB Board of Directors. No approval, order or consent of, filing or
      registration with or notice or payment to, any foreign, federal, state, county,
      local or other governmental or regulatory body, and no approval or consent
      of,
      or filing with or notice or payment to, any other person is required by or
      with
      respect to IceWEB in connection with the execution and delivery by IceWEB of
      this Agreement and its consummation and performance of the transactions
      contemplated hereby. The execution and delivery of this Agreement, the
      consummation of the transactions contemplated hereby, and the performance by
      IceWEB of this Agreement in accordance with its terms and conditions will not
      (a) conflict with or result in the breach or violation of any of the terms
      or
      conditions of, or give rise to any acceleration of IceWEB’s obligations or
      constitute (or with notice or lapse of time or both would constitute) a default
      under (i) the Certificate of Incorporation or By-Laws of IceWEB (ii) any
      material instrument, contract or other agreement by or to which IceWEB is a
      party or by or to which IceWEB’s assets or properties are bound or Subject;
      (iii) any statute, law or regulation of any jurisdiction or any order, writ,
      judgment, injunction, award or decree of any court, arbitrator or governmental
      or regulatory body against, or binding upon, IceWEB or the assets or properties
      of IceWEB; or (iv) any license, franchise, approval, certificate, permit or
      authorization applicable to IceWEB or any of the its assets; or (b) result
      in
      the creation of any lien, charge or encumbrance of any nature, upon the assets
      or property of IceWEB.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    

    5.05 Filings.
      The
      Common Stock of IceWEB is registered under Section 12(g) of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”). IceWEB has filed with the
      United States Securities and Exchange Commission (“SEC”) all reports required to
      be filed by it under the Exchange Act (the “SEC Filings”), and IceWEB is current
      in its filing obligations under the Exchange Act. The cumulative SEC Filings
      are
      true, complete and accurate in all material respects. 

    

    5.06 Litigation.
      There is
      no action, suit or proceeding pending or threatened, or any investigation,
      at
      law or in equity, before any arbitrator, court or other governmental authority,
      pending or threatened, nor any judgment, decree, injunction, award or order
      outstanding, against or in any manner involving IceWEB or any of its properties
      or rights which (i) could reasonably be expected to have an IceWEB Material
      Adverse Effect, or (ii) could reasonably be expected to prevent the consummation
      of any of the transactions contemplated by this Agreement.

    

    5.07 Taxes.
      IceWEB
      has filed all tax returns that it was required to file, and has paid all taxes
      indicated on such returns for such periods which are due and payable as of
      the
      date hereof. All such tax returns were in all respects true, complete and
      correct and filed on a timely basis. None of the income tax returns filed by,
      on
      behalf of or with respect to IceWEB is currently the Subject of an audit, and
      no
      notice of a planned audit has been received by or on behalf of
      IceWEB.

    

    5.08 No
      Brokers.
      IceWEB
      is not a party to any agreement pursuant to which PatriotNet, PCG, IceWEB,
      or
      IOI will become obligated to pay a commission to any person as a result of
      consummation of the transactions contemplated hereby and any action by IceWEB.
      

    

    5.09 Knowledge
      of Inaccuracies.
      IceWEB
      has no knowledge that any of the representations or warranties of PatriotNet
      or
      PCG in this Agreement are inaccurate or in breach.

    

    5.10 Examination.
      IceWEB
      and its representatives have received or been given access to all of the
      information described or referred to in this Agreement and all other information
      requested by them. IceWEB and its representatives have been afforded the
      opportunity to meet with, ask questions of and receive answers from the
      management of PatriotNet and PCG regarding the Business in connection with
      the
      determination by IceWEB to enter into this Agreement and the agreements related
      hereto and consummate the transactions contemplated hereby and thereby, and
      all
      such questions have been answered to the full satisfaction of
      IceWEB.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    ARTICLE
      VI

    REPRESENTATIONS
      AND WARRANTIES OF IOI

    

    IOI
      hereby represents and warrants to PatriotNet as follows:

    

    6.01 Legal
      Capacity of IOI.

    

    (a) IOI
      has
      the legal capacity to execute and deliver this Agreement and to consummate
      the
      transactions contemplated hereby.

    

    (b) The
      execution and delivery of this Agreement by IOI, and the consummation of the
      transactions contemplated hereby, do not violate or conflict with (i) any
      material terms of any organizational document or any instrument, contractual
      restriction or commitment of any kind or character to which IOI is a party
      or by
      which it is bound, or (ii) any requirement of law or any judgment, decree or
      order of any governmental or regulatory authority to which IOI is subject or
      by
      which IOI or any of its respective assets or properties is bound.

    

    (c) This
      Agreement has been duly and validly executed by IOI, and constitutes a valid
      and
      binding obligation of IOI enforceable against IOI in accordance with its terms
      except to the extent that (i) such enforcement may be limited by bankruptcy,
      insolvency, reorganization, moratorium or other similar laws affecting the
      enforcement of creditors’ rights generally and (ii) the availability of
      remedies, including specific performance, is subject to the discretion of the
      court before which any proceeding therefor may be brought.

    

    6.02 Organization
      and Authority of IOI.
      IOI is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the Commonwealth of Virginia, and has all requisite corporate power and
      authority to carry on its business as presently conducted and to own or lease
      and to operate its properties. IOI is qualified to transact business as a
      foreign corporation in each jurisdiction wherein the failure to so qualify
      would
      have a material adverse effect on the business, financial condition, results
      of
      operations, assets or properties of IceWEB (an “IOI Material Adverse
      Effect”).

    

    6.03 Capitalization.
      The
      authorized capital stock of IOI consists of 5,000 shares of IOI Common Stock,
      of
      which 1,000 shares of IOI Common Stock are issued and outstanding on the date
      hereof. IOI is a wholly owned subsidiary of IceWEB. IOI is not a party to or
      bound by any options, calls, voting agreements, contracts, or commitments of
      any
      character relating to any issued or unissued capital stock or any other equity
      security issued or to be issued by IOI. The issued and outstanding IOI Common
      Stock has been duly authorized and is validly issued, fully paid and
      non-assessable and not subject to the preemptive or anti-dilution rights of
      any
      person. 

    

    6.04 Consents
      and Approvals.
      This
      Agreement and the transactions contemplated hereby have been duly authorized
      by
      the IOI Board of Directors. No approval, order or consent of, filing or
      registration with or notice or payment to, any foreign, federal, state, county,
      local or other governmental or regulatory body, and no approval or consent
      of,
      or filing with or notice or payment to, any other person is required by or
      with
      respect to IOI in connection with the execution and delivery by IOI of this
      Agreement and its consummation and performance of the transactions contemplated
      hereby. The execution and delivery of this Agreement, the consummation of the
      transactions contemplated hereby, and the performance by IOI of this Agreement
      in accordance with its terms and conditions will not (a) conflict with or result
      in the breach or violation of any of the terms or conditions of, or give rise
      to
      any acceleration of IOI’s obligations or constitute (or with notice or lapse of
      time or both would constitute) a default under (i) the Articles of Incorporation
      or By-Laws of IOI (ii) any material instrument, contract or other agreement
      by
      or to which IOI is a party or by or to which IOI’s assets or properties are
      bound or Subject; (iii) any statute, law or regulation of any jurisdiction
      or
      any order, writ, judgment, injunction, award or decree of any court, arbitrator
      or governmental or regulatory body against, or binding upon, IOI or the assets
      or properties of IOI; or (iv) any license, franchise, approval, certificate,
      permit or authorization applicable to IOI or any of the its assets; or (b)
      result in the creation of any lien, charge or encumbrance of any nature, upon
      the assets or property of IOI.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    6.05 Reserved.
      

    

    6.06 Litigation.
      There is
      no action, suit or proceeding pending or threatened, or any investigation,
      at
      law or in equity, before any arbitrator, court or other governmental authority,
      pending or threatened, nor any judgment, decree, injunction, award or order
      outstanding, against or in any manner involving IOI or any of its properties
      or
      rights which (i) could reasonably be expected to have an IOI Material Adverse
      Effect, or (ii) could reasonably be expected to prevent the consummation of
      any
      of the transactions contemplated by this Agreement.

    

    6.07 Taxes.
      IOI has
      filed all tax returns that it was required to file, and has paid all taxes
      indicated on such returns for such periods which are due and payable as of
      the
      date hereof. All such tax returns were in all respects true, complete and
      correct and filed on a timely basis. None of the income tax returns filed by,
      on
      behalf of or with respect to IOI is currently the Subject of an audit, and
      no
      notice of a planned audit has been received by or on behalf of IOI.

    

    6.08 No
      Brokers.
      IOI is
      not a party to any agreement pursuant to which PatriotNet, PCG, IceWEB, or
      IOI
      will become obligated to pay a commission to any person as a result of
      consummation of the transactions contemplated hereby and any action by IOI.
      

    

    6.09 Knowledge
      of Inaccuracies.
      IOI has
      no knowledge that any of the representations or warranties of PatriotNet or
      PCG
      in this Agreement are inaccurate or in breach.

    

    6.10 Examination.
      IOI and
      its representatives have received or been given access to all of the information
      described or referred to in this Agreement and all other information requested
      by them. IOI and its representatives have been afforded the opportunity to
      meet
      with, ask questions of and receive answers from the management of PatriotNet
      and
      PCG regarding the Business in connection with the determination by IOI to enter
      into this Agreement and the agreements related hereto and consummate the
      transactions contemplated hereby and thereby, and all such questions have been
      answered to the full satisfaction of IOI.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    

    ARTICLE
      VII

    CONDITIONS
      PRECEDENT TO THE 

    OBLIGATION
      OF ICEWEB AND IOI TO CLOSE

    

    The
      obligation of IceWEB and IOI to close the transactions contemplated hereby
      is
      subject to the fulfillment by PatriotNet and PCG prior to Closing of each of
      the
      following conditions, which may be waived in whole or in part by IceWEB and
      IOI:

    

    7.01 Compliance
      with Representations, Warranties and Covenants.
      The
      representations and warranties and covenants of PatriotNet and PCG contained
      in
      this Agreement shall have been true and correct when made and shall be true
      and
      correct in all material respects at the Closing with the same force and effect
      as if made at the Closing, and PatriotNet and PCG shall have performed all
      agreements, covenants and conditions required to be performed by PatriotNet
      and
      PCG prior to the Closing.

    

    7.02 No
      Adverse Change.
      There
      shall have been no event which has, had, or may have a material adverse effect
      upon the Business, financial condition, results of operation, assets,
      liabilities or prospects of PatriotNet or PCG.

    

    7.03 No
      Legal Proceedings.
      No suit,
      action or other legal or administrative proceeding before any court or other
      governmental agency shall be pending or threatened seeking to enjoin the
      consummation of the transactions contemplated hereby.

    

    7.04 Documents
      to be Delivered by PatriotNet and PCG.
      PatriotNet
      and PCG shall have delivered all of the documents required to be delivered
      to
      IOI and IceWEB under this Agreement. 

    

    7.05 Assets
      to be Delivered by PatriotNet.
      PatriotNet shall have delivered the Assets to IOI and the Assets shall be as
      represented in this Agreement.

    

    ARTICLE
      VIII

    CONDITIONS
      PRECEDENT TO THE OBLIGATIONS

    OF
      PATRIOTNET AND PCG TO CLOSE

    

    The
      obligations of PatriotNet and PCG to close the transactions is subject to the
      fulfillment prior to Closing of each of the following conditions, any of which
      may be waived, in whole or in part, by PatriotNet or PCG,
      respectively:

    

    8.01 Compliance
      with Representations, Warranties and Covenants.
      The
      representations and warranties made by IceWEB and IOI in this Agreement shall
      have been true and correct when made and shall be true and correct in all
      material respects at the Closing with the same force and effect as if made
      at
      the Closing, and IceWEB and IOI shall have performed all agreements, covenants
      and conditions required to be performed by IceWEB and IOI prior to the
      Closing.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    

    8.02 No
      Legal Proceedings.
      No suit,
      action or other legal or administrative proceedings before any court or other
      governmental agency shall be pending or threatened seeking to enjoin the
      consummation of the transactions contemplated hereby.

    

    8.03
      Issuance
      of IceWEB Shares and Payment of Cash Proceeds.
      IceWEB
      shall issue 100,000 IceWEB Shares and cause its transfer agent to deliver the
      certificates representing such shares, and IOI shall have paid the $190,000.00
      to the Closing agent for disbursement, and reimbursement of the attorneys’ fees
      of counsel to PatriotNet and PCG, as required by this Agreement.

     

    ARTICLE
      IX

     

    MODIFICATION,
      WAIVERS, TERMINATION AND EXPENSES

    

    9.01 Modifications.
      IceWEB,
      IOI, PatriotNet and PCG may amend, modify or supplement this Agreement in any
      manner as they may mutually agree in writing.

     

    9.02 Waivers.
      IceWEB,
      IOI, PatriotNet and PCG may, in writing, extend the time for or waive compliance
      by the other with any of the covenants or conditions of the other contained
      herein.

    

    9.03 Termination
      before Closing.
      This
      Agreement may be terminated before the Closing:

    

    (a) By
      the
      mutual consent of IceWEB, IOI and PatriotNet; 

    

    (b) By
      IceWEB
      and IOI, if the representations and warranties of PatriotNet and PCG set forth
      herein shall not be accurate, or conditions precedent set forth herein shall
      not
      have been satisfied in all material respects;

    

    (c) By
      PatriotNet and PCG, if the representations and warranties of IceWEB and IOI
      set
      forth herein shall not be accurate, or conditions precedent set forth herein
      shall not have been satisfied in all material respects; and

    

    (d) In
      the
      event of any such termination, each party shall bear their own
      expenses.

    

    9.04 Termination
      after Closing.
      This
      Agreement may be terminated after the Closing:

    

    (a) By
      the
      mutual consent of IceWEB, IOI, PatriotNet and PCG; 

    

    (b) In
      the
      event of any such termination, each party shall bear their own
      expenses.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    

    ARTICLE
      X

    INDEMNIFICATION

    

    10.01 Indemnification
      by PatriotNet and PCG.
      PatriotNet and PCG, jointly and severally, hereby indemnify and hold IceWEB
      and
      IOI, jointly and severally, harmless from and against any and all damages,
      losses, liabilities, obligations, costs or expenses incurred by IceWEB or IOI
      and arising out of (a) the breach of any representation or warranty by
      PatriotNet or PCG, to the extent such breach results in a material adverse
      effect to the business and operation of IceWEB or IOI taken as a whole, or
      (b)
      failure to perform any covenant or obligation required to be performed by them
      hereunder, or (c) all liabilities of PatriotNet or PCG not being assumed by
      IOI;
      provided, however, that PatriotNet and PCG shall not be required to pay to
      IceWEB or IOI, in the aggregate, any amount greater than the Escrow Amount,
      and
      the Escrow Amount shall be the sole source of the payment of any obligations
      by
      PatriotNet or PCG under this Agreement.

    

    10.02 Indemnification
      by IceWEB and IOI.
      IceWEB
      and IOI, jointly and severally, hereby indemnify and hold PatriotNet and PCG,
      jointly and severally, harmless from and against any and all damages, losses,
      liabilities, obligations, costs or expenses incurred by PatriotNet or PCG and
      arising out of (a) the breach of any representation or warranty by IceWEB or
      IOI, to the extent such breach results in a material adverse effect to the
      business and operation of PatriotNet or PCG taken as a whole, or (b) failure
      to
      perform any covenant or obligation required to be performed by them hereunder;
      provided, however, that IceWEB and IOI shall not be required to pay to
      PatriotNet or PCG any amount greater than US $50,000.00 in the aggregate, said
      $50,000.00 shall be the sole source of the payment of any obligations by IceWEB
      or IOI under this Agreement, and said indemnification amount, or any portion
      thereof, shall not be paid by IceWEB or IOI until and unless liability therefor
      has been adjudicated by one of the Courts constituting a stipulated venue in
      Section 11.03 below, to finality. 

    

    10.03 Time
      for Assertion.
      No
      party to this Agreement shall have any liability (for indemnification or
      otherwise) with respect to any representation, warranty or covenant or
      obligation to be performed and complied hereunder, unless notice of any such
      liability is provided on or before 12 months from the date hereof.

    

    10.04 Waiver.
      The
      sole and exclusive remedy of PatriotNet, PCG, IceWEB and IOI for any breach
      of
      any covenant or agreement, or any inaccuracy or other breach of any
      representation or warranty, contained in this Agreement or any other writing
      delivered pursuant hereto or in connection herewith, for any indemnification
      with respect to any tort, violation of law, breach of contract or environmental
      liability or for any other matter relating to or arising under or in connection
      with this Agreement or any related agreements, or the transactions contemplated
      herein or therein shall be the indemnities contained in Sections 10.01 and
      10.02, respectively, and the parties hereby waive, release and agree not to
      assert any other right, whether arising by statute, common law or otherwise
      in
      connection therewith.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    

    ARTICLE
      XI

    MISCELLANEOUS
      PROVISIONS

    

    11.01 Waiver.
      Any
      party hereto may with respect to any other party hereto (a) extend the time
      for
      the performance of any of the obligations or other acts, (b) waive any
      inaccuracies in the representations and warranties contained herein or in any
      document delivered pursuant hereto and (c) waive compliance with any of the
      agreements or conditions contained herein. Any such extension or waiver shall
      be
      valid if set forth in an instrument in writing signed by the party or parties
      to
      be bound thereby. 

    

    11.02 Notices.
      All
      communications provided for herein shall be in writing and shall be deemed
      to be
      given or made (a) when delivered personally, including by courier service,
      (b) three business days following deposit in the United Sates mail,
      certified mail, return receipt requested, or (c) when transmitted by facsimile
      provided that electronic confirmation of receipt is retained by the party
      transmitting such facsimile. The addresses to which notices are to be provided
      are as follows:

    

    
      	
              If
                to IceWEB:

            	
              IceWEB,
                INC.

            
	 	
              620
                Herndon Parkway, Suite 105

            
	 	
              Herndon,
                Virginia 20170

            
	 	
              Attention:
                Anthony Munno, President

            
	 	
              Voice:
                (703) 344-0940 

            
	 	 
	 	 
	 	 
	
              with
                a copy to:

            	
              Ira
                S. Saul, PLC

            
	 	
              4126
                Leonard Drive

            
	 	
              Fairfax,
                VA 22030

            
	 	
              Attention:
                Ira Saul, Esq.

            
	 	 
	
              If
                to IOI:

            	
              Iceweb
                Online, Inc.

            
	 	
              620
                Herndon Parkway, Suite 105

            
	 	
              Herndon,
                Virginia 20170

            
	 	
              Attention:
                Anthony Munno, President

            
	 	
              Voice:
                (703) 344-0940

            
	 	 
	 	 
	 	 
	
              with
                a copy to:

            	
              Ira
                S. Saul, PLC

            
	 	
              4126
                Leonard Drive

            
	 	
              Fairfax,
                VA 22030

            
	 	
              Attention:
                Ira Saul, Esq.

            

    

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    
      	 	 
	
              If
                to PatriotNet:

            	
              PatriotNet,
                Inc. 

            
	 	
              10565
                Lee Highway

            
	 	
              Suite
                203

            
	 	
              Fairfax,
                VA 22030

            
	 	
              Attention:
                Chief Executive Officer

            
	 	 
	
              with
                a copy to:

            	
              Holland
                & Knight LLP

            
	 	
              1600
                Tysons Boulevard, Suite 700

            
	 	
              McLean,
                VA 22102

            
	 	
              Attention:
                Leigh-Alexandra Basha, Esq.

            
	
              If
                to PCG:

            	
              Patriot
                Computer Group, Inc. 

            
	 	
              10565
                Lee Highway

            
	 	
              Suite
                203

            
	 	
              Fairfax,
                VA 22030

            
	 	
              Attention:
                Chief Executive Officer

            
	 	 
	
              with
                a copy to:

            	
              Holland
                & Knight LLP

            
	 	
              1600
                Tysons Boulevard, Suite 700

            
	 	
              McLean,
                VA 22102

            
	 	
              Attention:
                Leigh-Alexandra Basha, Esq.

            

    

    

    Any
      party
      may change the address to which notice is to be provided to it by written notice
      to the other party hereto delivered pursuant to this Section.

    

    11.03 Governing
      Law; Venue.
      This
      Agreement and the rights and duties of the parties hereto shall be construed
      and
      determined in accordance with the laws of the Commonwealth of Virginia, without
      regard to the choice of laws provisions thereof. In the event of a dispute
      arising out of or related to this Agreement, all parties agree to litigate
      said
      dispute or disputes in either the General District Court of Fairfax County,
      Virginia or the Circuit Court of Fairfax County, Virginia

    

    11.04 Successors
      and Assigns.
      This
      Agreement shall be binding upon the parties and their successors and assigns
      and
      shall inure to the benefit of the other parties and successors and
      assigns.

    

    11.05 Counterparts.
      This
      Agreement may be executed in any number of counterparts and all such
      counterparts taken together shall be deemed to constitute one
      instrument.

    

    11.06 Entire
      Agreement.
      This
      Agreement constitutes the entire understanding of the parties with respect
      to
      transactions contemplated hereby, and all prior understandings with respect
      thereto, whether written or oral, shall be of no force and effect.

    

    11.07 Partial
      Invalidity.
      If any
      term of this Agreement shall be held to be invalid or unenforceable, such term
      shall be deemed to be severable and the validity of the other terms of this
      Agreement shall in no way be affected thereby.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    11.08 Headings.
      The
      descriptive headings of the various Sections or parts of this Agreement are
      for
      convenience only and shall not affect the meaning or construction of any of
      the
      provisions hereof.

    

    11.09 Limitation
      on Warranties. 

    

    (a)
      PatriotNet and PCG make no representations or warranties with respect to any
      projections, forecasts or forward-looking information provided to IceWEB or
      IOI.
      There is no assurance that any projected or forecasted results will be achieved.
      EXCEPT
      AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND WARRANTIES
      IN
ARTICLE
      III,
      PATRIOTNET AND PCG DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS
      OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
      ANY
      PARTICULAR PURPOSE, AND, EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE
      REPRESENTATIONS AND WARRANTIES IN ARTICLE
      III,
      ICEWEB AND IOI ACKNOWLEDGE THAT THEY WILL BE ACQUIRING THE ASSETS ON AN “AS IS,
      WHERE IS” BASIS.
      IceWEB
      and IOI acknowledge that neither PatriotNet and PCG nor any other person or
      entity has made any representation or warranty, express or implied, as to the
      accuracy or completeness of any information which is not included in this
      Agreement, and neither PatriotNet and PCG nor any other person will have, or
      be
      subject to, any liability to IceWEB or IOI, or any of their respective
      affiliates or any other person or entity resulting from the distribution of
      any
      such information to, or use of any such information by, IceWEB or IOI, or any
      of
      their respective affiliates, or any of their respective agents, consultants,
      accountants, counsel or other representatives. Without limitation of the
      foregoing, to the extent that any memoranda or summaries prepared by PatriotNet
      and PCG or by any of its advisors or representatives regarding the Business,
      the
      Assets or the assumed liabilities as set forth in Schedule 1.12.a are or have
      been provided to IceWEB or IOI, IceWEB or IOI acknowledges and agrees that
      no
      representation or warranty is made to IceWEB or IOI or any of their respective
      affiliates, or any other person or entity as to the completeness or accuracy
      of
      such memoranda or summaries.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    

    (b)
      IceWEB and IOI make no representations or warranties with respect to any
      projections, forecasts or forward-looking information provided to PatriotNet
      or
      PCG. There is no assurance that any projected or forecasted results will be
      achieved. EXCEPT
      AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND WARRANTIES
      IN
ARTICLES
      V AND VI,
      ICEWEB AND IOI DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS
      OR
      IMPLIED, AND, EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE
      REPRESENTATIONS AND WARRANTIES IN ARTICLES
      V AND VI,
      PATRIOTNET AND PCG ACKNOWLEDGE THAT THEY WILL BE ACQUIRING THE ICEWEB SHARES
      ON
      AN “AS IS, WHERE IS” BASIS.
      PatriotNet and PCG acknowledge that neither IceWEB, nor IOI, nor any other
      person or entity has made any representation or warranty, express or implied,
      as
      to the accuracy or completeness of any information which is not included in
      this
      Agreement, and neither IceWEB, nor IOI, nor any other person will have, or
      be
      subject to, any liability to PatriotNet or PCG, or any of their respective
      affiliates or any other person or entity resulting from the distribution of
      any
      such information to, or use of any such information by, PatriotNet or PCG,
      or
      any of their respective affiliates, or any of their respective agents,
      consultants, accountants, counsel or other representatives. Without limitation
      of the foregoing, to the extent that any memoranda or summaries prepared by
      IceWEB and IOI or by any of its advisors or representatives regarding IceWEB
      or
      IOI, or the IceWEB Shares, are or have been provided to PatriotNet or PCG,
      PatriotNet and PCG acknowledge and agree that no representation or warranty
      is
      made to PatriotNet or PCG or any of their respective affiliates, or any other
      person or entity as to the completeness or accuracy of such memoranda or
      summaries.

    

    

    

    (Remainder
      of page intentionally left blank; signatures on following
      pages.)

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Asset Purchase Agreement, effective as of the
      Effective Date. 

    

    
      	 	 	 	
              IOI:

            
	 	 	 	 	 
	 	 	 	
              ICEWEB
                ONLINE, INC., 

            
	 	 	 	
              a
                Virginia corporation

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              By:

            	 

	 	 	 	
               

            	
              Anthony
                Munno, President

            
	
              ATTEST:

            	 	 	 
	 	 	 	 	 
	
              By:

            	 
	 	 	 
	 	
              My
                Le Phuong, Corporate Secretary

            	 	 	 
	 	 	 	 	 
	
              (SEAL)

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              ICEWEB:

            
	 	 	 	 	 
	 	 	 	
              ICEWEB,
                INC., a
                Delaware corporation

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              By:

            	 

	 	 	 	
               

            	
              Anthony
                Munno, President

            
	
              ATTEST:

            	 	 	 
	 	 	 	 	 
	
              By:

            	 
	 	 	 
	 	
              My
                Le Phuong, Corporate Secretary

            	 	 	 
	 	 	 	 	 
	
              (SEAL)

            	 	 	 

    

    

    (Signatures
      continue on following page.)

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    
      	 	 	 	PATRIOTNET:
	 	 	 	 	 
	 	 	 	PATRIOTNET,
              INC.,
	 	 	 	 a
              Virginia corporation 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              By:

            	 

	 	 	 	 	
              Cynthia
                H. de Lorenzi

            
	 	 	 	 	
              Chief
                Executive Officer

            
	 	 	 	 	 
	 	 	 	 	 
	
              ATTEST:

            	 	 	 
	 	 	 	 	 
	
              By:

            	 
	 	 	 
	 	
                  ,
                Corporate Secretary

            	 	 	 
	 	 	 	 	 
	
              (SEAL)

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	PATRIOTNET:
	 	 	 	 	 
	 	 	 	PATRIOT
              COMPUTER GROUP, INC.,
	 	 	 	 a
              Virginia corporation 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              By:

            	
               

            
	 	 	 	 	
              
                Cynthia
                  H. de Lorenzi

              

            
	 	 	 	 	
              Chief
                Executive Officer

            
	 	 	 	 	 
	
              ATTEST:

            	 	 	 
	 	 	 	 	 
	
              By:

            	 
	 	 	 
	 	
                  ,
                Corporate Secretary

            	 	 	 
	 	 	 	 	 
	
              (SEAL)

            	 	 	 

    

    

     

    

    
      
         

      

      
        23Unassociated Document

    ASSET
      PURCHASE AGREEMENT

    

    

    This
      Asset Purchase Agreement (this “Agreement”) is made and entered into effective
      as of November 22, 2006 (“Effective Date”), by and among ICEWEB
      ONLINE, INC., a
      Virginia corporation (“Seller”), and LEROS
      ONLINE, INC., a
      Delaware corporation (“Purchaser”).

    

    RECITALS:

    

    
      	 	
              A.

            	
              Seller
                through an unincorporated division (the “Division”) is an Internet Service
                Provider (“ISP services”) and as such is in the business of providing
                access to the Internet to certain individuals and businesses (the
                “Business”). 

            

    

     

    
      	 	
              B.

            	
              Seller
                is the owner of certain assets used in the Business which Purchaser
                wishes
                to acquire, subject to the terms and conditions set forth in this
                Agreement, in exchange for certain cash consideration.
                

            

    

     

    NOW,
      THEREFORE,
      in
      consideration of the Recitals above, mutual covenants, agreements,
      representations and warranties contained in this Agreement, and for other good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

    

    ARTICLE
      I

    ACQUISITION
      OF ASSETS

    

    ACQUISITION
      OF ASSETS; ASSUMPTION OF LIABILITIES

    

    1.01 Acquisition
      of Assets.
      Subject
      to the terms and conditions of this Agreement, Purchaser and Seller hereby
      agree
      that Seller shall sell, transfer, assign, convey and deliver to Purchaser at
      Closing, and Purchaser shall purchase or acquire from Seller, free and clear
      of
      all liens, claims, rights, encumbrances or security interests, to the extent
      of
      Seller’s rights therein, substantially all of the assets or properties whether
      now existing or hereinafter acquired through the Closing Date (other than the
      Excluded Assets) exclusively relating to or exclusively held in connection
      with,
      necessary for, or material to, the Business and operation of the Division as
      the
      same may exist on the Closing Date and as more particularly set forth on
      Schedule 1.01 (“Assets”). Purchaser expressly understands that it will acquire
      the Assets on the Closing Date in their AS-IS
      WHERE IS CONDITION WITH ALL FAULTS.
      The
      Assets will include without limitation all those items in the following
      categories that conform to the definition of the term Assets:

    

    a.
      Software and Documentation. All
      right, title and interest in and to the Seller’s software technology used in the
      Business, including, but not limited to, Seller’s billing system and software
      known as “Sherlock,” and all modifications, enhancements, designs, concepts,
      techniques, methods, ideas, flow charts, coding sheets, notes, source codes,
      algorithms, and all other information relating thereto.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    

    b.
      Other Content. Content
      not included in the software assets described in subparagraph a. above, whether
      said content is analog or digital, voice, video, or data content stored on
      tape,
      disk, or any form of analog, digital, electronic, or other media.

     

    c.
      Contracts.
      Except
      as set forth in Section 1.02 and on Schedule 1.02(a), all right, title and
      interest in and to all contracts, agreements, licenses, and other commitments
      and arrangements, oral or written, policies, purchase and sale orders,
      quotations and other executory commitments of Seller with any person or entity
      (including for-profit businesses, non-profit organizations, and government
      entities) relating to the Business (the “Assigned Contracts”). 

    

    d.
      Computer, and other Equipment.
      All
      right, title and interest in and to all computer, telecommunications, and other
      equipment and devices listed on Schedule 1.01(d) (the “Equipment”), including
      Seller’s rights under all related warranties, if any.

    

    e.
      (Intentionally Omitted) 

    

    f.
      Leases.
      The
      entire leasehold or rental interest arising under leases of:

    

    (i)
      Equipment, including data processing hardware and associated telecommunications
      equipment, media, and tools set forth on Schedule 1.01(f); and

    

    (ii)
      Other personalty used in the Business and as set forth on Schedule 1.01(f),
      if
      any. 

    

    g.
      Other Contracts.
      All
      right, title and interest in and to all other contracts, agreements, licenses,
      commitments, arrangements, and permissions held or owned by the Seller and
      related to the Business.

     

    h.
      Business Records. Copies
      of
      all business and marketing records, including accounting and operating records,
      asset ledgers, inventory records, budgets, personnel records, payroll records,
      customer lists, employment and consulting agreements, supplier lists,
      information and data respecting leased or owned equipment, files, correspondence
      and mailing lists, advertising materials and brochures, and other business
      records relating to the Business.

    

    i.
      Permits. All
      franchises, licenses, permits, consents, filings, notices, recordings with,
      and
      other certificates of any regulatory, administrative agency or body issued
      to or
      held by Seller that are necessary or incidental to the conduct of the Business,
      as used exclusively in the Business, as more particularly described on Schedule
      1.01(i) (the “Permits”), but subject to the ability of Purchaser to assign, to
      the procurement of any required government consents which shall be the sole
      responsibility of Purchaser after the Closing.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    

    j.
      Accounts Receivable. Accounts
      receivable of the Business as of the Effective Date, including all license
      fees,
      maintenance fees, hosting fees, and charges owing or to become owing to Seller
      under Assigned Contracts as set forth on Schedule 1.01(j) (the “Accounts
      Receivable”).

    

    k.
      Websites, Domain Names, and Intellectual Property.
      All
      right, title and interest held or owned by Seller in and to the use of the
      name
“PatriotNet,” “Patriot.net,” or any variation thereof worldwide and all goodwill
      and other intangibles relating thereto, including all websites, domain names,
      patents, trademarks, service marks, trade names, and copyrights (including
      registrations, licenses, reservations of names and domain names, and
      applications pertaining thereto), and all other intellectual property rights,
      trade secrets, know-how, show-how, and other proprietary information, processes,
      and formulae. The Websites and intellectual property includes: the
<patriot.net> website, the <patriot.net> domain name, and the
      PatriotNet service mark and trademark. BECAUSE SELLER HAS OWNED THE ASSETS
      FOR A
      RELATIVELY SHORT PERIOD OF TIME, CERTAIN TRADEMARKS AND SERVICE MARKS HAVE
      NOT
      BEEN ASSIGNED FROM THE COMPANY FROM WHICH SELLER ACQUIRED SAME TO SELLER.
      PURCHASER ASSUMES ALL RESPONSIBILITIES FOR CAUSING REGISTERED TRADEMARKS AND
      SERVICE MARKS TO BE TRANSFERRED TO PURCHASER, ALL TO BE CARRIED OUT AT
      PURCHASER’S EXPENSE; PROVIDED THAT SELLER SHALL USE ITS BEST EFFORTS TO
      COOPERATE WITH THE PURCHASER TO ASSURE THE TIMELY TRANSFER OR ASSIGNMENT OF
      ALL
      SUCH TRADE OR SERVICES MARKS, INCLUDING EXECUTING ANY AND ALL ASSIGNMENT
      AGREEMENTS AND CONSENTS AND ARRANGING FOR ANY PRIOR OWNER OF THE MARKS TO
      EXECUTE SUCH AGREEMENTS OR CONSENTS.

    

    l.
      Insurance Policies.
      Insurance and reinsurance, surety, bonding, or indemnity policies, binders,
      or
      contracts, and the benefits of any prior insurance coverage to the extent still
      available directly related to the Business and insuring only risks related
      to
      the Business.

    

    m.
      Claims. All
      of
      Seller’s rights, claims, credits, causes of action or rights of set-off against
      third parties relating to the Assets, including, without limitation,
      unliquidated rights under warranties.

    

    n.
      Liquid Assets. Deposits,
      other receivable items, and prepaid expense items, and all amounts pre-billed
      and/or prepaid by any customer of the Seller and as more particularly set forth
      on Schedule 1.01(n). 

    

    o.
      (Intentionally Omitted)

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    

    p.
      Agreements with Employees and Independent Contractors Respecting Intellectual
      Property. Any
      and
      all agreements with employees and independent contractors, if any: acknowledging
      development of works for hire by employees and/or contractors for Seller;
      assigning inventions and other intellectual property assignments; promising
      confidentiality, non-disclosure, and non-competition; and other agreements,
      covenants, restrictions and prohibitions, protecting Seller’s Business and
      intellectual property rights; provided, however, that said agreements respecting
      intellectual property shall in no way obligate Purchaser to employ any persons
      or accept duties delegated under independent contracts, except to the extent
      liabilities are expressly assumed in connection with the purchase of
      Assets.

    

    q.
      Security and other Deposits. All
      of
      Seller’s right title and interest in and to security and other deposits posted
      or held by Seller related exclusively to the Business and as more particularly
      set forth on Schedule 1.01(q). However, Purchaser is not assuming any lease
      of
      real property entered into by Seller. Therefore, any security deposit posted
      with a landlord of real property (other than owners of co-location and other
      third party hosting facilities) is not assigned to Purchaser.

    

    r.
      Copyrights. All
      of
      Seller’s right, title and interest in and to the copyrights, copyright
      registrations, proprietary processes, trade secrets, license right,
      specifications, technical manuals and data, drawings, inventions, designs,
      patents, patent applications, trade names, trademarks, service marks, domain
      names, URLs, product information and data, know-how and development
      work-in-progress, customer lists, software, business and marketing plans and
      other intellectual property or intangible property embodied in or pertaining
      exclusively to the Business, whether pending, applied for or issued, whether
      filed in the United States or in other countries and as listed on Schedule
      1.01(r); and

    

    s.
      Authored Material. All
      things authored, discovered, developed, made, perfected, improved, designed,
      engineered, acquired, produced, conceived or first reduced to practice by Seller
      or any of its employees or agents that are exclusively used by Seller or any
      of
      its employees or agents in the conduct of the Business or developed by Seller
      exclusively for use in the Business, in any stage of development, including
      without limitation, modifications, enhancements, designs, concepts, techniques,
      methods, ideas, flow charts, coding sheets, notes and all other information
      relating to the Business; and

    

    t.
      Design and Documentation Matters. Any
      and
      all design and code documentation, algorithms, methodologies, processes, trade
      secrets, copyrights, design information, product information, technology,
      formulae, routines, engineering specifications, technical manuals, and data,
      drawings, inventions, know-how, techniques, engineering work papers and notes,
      development work in process, and other proprietary information and materials
      of
      any kind exclusively used in or derived from the Assets; and

    

    u.
      Goodwill. All
      goodwill associated with the Business or the Assets, together with the right
      to
      represent to third parties that Purchaser is successor to the Business;
      and

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    

    v.
      Telephone Numbers. The
      telephone numbers related exclusively to the Business including but not limited
      to the customer support 1(800) number for the Business; and

    

    w.
      Customer Lists. All
      customer, supplier and subscriber lists, dealer and distribution lists, pricing
      and cost information and business and marketing proposals relating to the
      Business, and all computer software programs relating to the development,
      production, sale or distribution of the Assets.

    

    1.02 Excluded
      Assets. The
      Seller will retain and not transfer, and the Purchaser will not purchase or
      acquire, the following assets (collectively, the “Excluded
      Assets”):

    

    a. notwithstanding
      Section 1.01(c), Seller represents that it is actively involved in the sale
      of
      hardware, software, professional services and bandwidth in certain non-ISP
      lines
      of business which are expressly excluded from the Assets being sold (the
“Non-ISP Assets”) which Non-ISP Assets are listed in Schedule 1.02(a) to this
      Agreement;
      and

    

    b. All
      assets of Seller not used exclusively in the Business. 

    

    1.03 Assumption
      of Liabilities.
      Except
      as set forth on Schedule 1.03, Purchaser does not assume or otherwise become
      responsible for, any liability or obligation of the Seller or claims of such
      liability or obligation, matured or unmatured, liquidated or unliquidated,
      fixed
      or contingent, or known or unknown, whether arising out of occurrences prior
      to,
      at or after the date hereof, including without limitation:

    

    a. Liability
      for a warranty claim for any product or service of the Seller based upon any
      express warranty, oral or written, or any implied warranty arising due to the
      statements or conduct of Seller or their employees or agents which shall have
      arisen prior to the Closing Date;

    

    b. Any
      injury to or death of any person or damage to or destruction of any property,
      whether based on negligence, breach of warranty, strict liability, enterprise
      liability or any other legal or equitable theory arising from defects in
      products manufactured, distributed or sold for use by, or for services performed
      by Seller which shall have arisen prior to the Closing Date;

    

    c. Any
      liabilities to or in respect of any employee of the Seller including, without
      limitation: (i) any employment agreement between the Seller and any employee;
      (ii) any liability under any employee benefit plan or other fringe benefit
      program maintained by Seller or to which the Seller makes contributions, or
      any
      contributions, benefits or liabilities thereto, or any liability for Seller’s
      withdrawal or partial withdrawal from or termination of any such plan or
      program; (iii) any liabilities arising under collective bargaining or similar
      agreement or arrangement; (iv) any claim arising as a result of or in connection
      with termination of any matter described in the immediately preceding clauses
      (i) through (iii), inclusive; and (v) any claim of an unfair labor practice,
      or
      any claim under any state unemployment compensation or worker’s compensation law
      or regulation or under any federal or state employment discrimination or wage
      and hour law or regulation, whether asserted prior to or after the Closing
      Date
      and whether or not the basis for any claim, liability, damages or penalty which
      shall have arisen prior to the Closing Date;

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    

    d. Any
      liability or obligation of Seller in respect of any tax (including without
      limitation any personal property tax accrued but not yet payable on or before
      the Closing Date);

    

    e. Any
      action, suit, claim or proceeding (i) against the Seller or (ii) which adversely
      affects the Assets and which shall have been asserted prior to the Closing
      Date
      or the basis of which shall have arisen prior to the Closing Date;

    

    f. Any
      of
      Seller’s liabilities or obligations resulting from entering into, or
      consummating the transactions contemplated by, this Agreement;

    

    g. All
      liabilities of the Seller under any agreement other than obligations to render
      services after Closing under Agreements with customers identified on Schedule
      1.01(c), including without limitation, any real property lease or debt for
      money
      borrowed or any employment agreement or consulting agreement or
      similar;

    

    h. Any
      liability of Seller in respect of any lease of real property or tangible
      personal property;

    

    i. Any
      other
      liabilities or obligations of the Seller whether actual or contingent;
      and

    

    j. Any
      liability of any affiliate of the Seller, including but not limited to, IceWeb,
      Inc., a Delaware corporation.

    

    1.04. Purchase
      Price. In
      consideration of and in exchange for the Seller’s sale, assignment, transfer,
      conveyance and delivery of all of the Assets, the Purchaser agrees to pay to
      the
      Seller at Closing US $150,000 by wire transfer in immediately available funds
      (the “Purchase Price”).

    

    1.05. Business
      Transition.

    

    a. Upon
      Closing, and ending upon the expiration of three (3) months thereafter, Seller
      shall exert its best efforts to (i) refer all customers under the Assigned
      Contracts to Purchaser that contact the Seller following the Closing Date,
      (ii)
      provide commercially reasonable assistance to Purchaser in connection with
      the
      transition to Purchaser of customer billing, Accounts Receivable, customer
      deposits, security deposits, employee and such other office and administrative
      matters relating to the operation of the Business as Purchaser reasonably
      requests for the purposes of achieving an orderly and successful transition
      thereof to Purchaser, and (iii) promptly furnish to Seller all enquiries or
      other sales leads for exclusively ISP services that Seller receives, not
      involving other businesses in which Seller or its affiliates are
      involved.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    

    b. Following
      Closing, Seller shall cooperate with Purchaser, execute such documents and
      instruments, and take such other actions as are reasonably requested by
      Purchaser to effectuate a smooth transition of the Business.

    

    c. Purchaser
      shall not offer employment to any employee of Seller except those employees
      identified in Schedule 1.05(c).

    

    

    ARTICLE
      II

    CLOSING

    

    2.01 Time
      and Place of Closing.
      Subject
      to the satisfaction of the conditions to Closing, the closing of the
      transactions contemplated by this Agreement shall take place on or before
      November 30, 2006, at the law offices of Ira S. Saul, PLC, 4126 Leonard Drive,
      Fairfax Virginia 22030, or at such other place and time thereafter as shall
      be
      mutually agreeable to the parties hereto (the “Closing Date”). The time and
      place at which the transactions contemplated hereby are consummated is
      hereinafter referred to as the “Closing”.

    

    2.02 Deliveries
      at Closing.
      The
      following documents, instruments and other materials shall be executed and
      delivered at or prior to Closing on the Closing Date:

    

    (a) Instruments
      of Transfer.
      The
      Seller shall execute and deliver to the Purchaser such bills of sale,
      assignments, endorsements, and other instruments and documents including but
      not
      limited to a bill of sale substantially in the form attached hereto as Exhibit
      2.02(a) reasonably satisfactory in form and substance to the Purchaser and
      its
      counsel as they may reasonably deem to be necessary or appropriate to vest
      in
      the Purchaser on the Closing Date good and marketable title to the Assets free
      and clear of any and all adverse claims, mortgages, pledges, liens, charges,
      security interests or other rights, interests or encumbrances, and a receipt
      for
      the price of other assets being acquired hereunder, title to which shall
      transfer upon delivery of such assets. Such instruments shall include
      instruments necessary to effect the assignment of the bank account utilized
      by
      the Business for collecting amounts due from customers under the Assigned
      Contracts.

    

    (b) Contract
      Assignments.
      With
      respect to the Assigned Contracts and other contracts and agreements to be
      assigned hereunder, the Seller shall execute and deliver to Purchaser, but
      will
      not cause any appropriate third party to execute and deliver to Purchaser
      (except as contemplated by Section 1.01(k)), such contracts of assignment as
      may
      be reasonably required by any third party to a contract which is being assigned
      to Purchaser by Seller pursuant to the terms of this Agreement (with all
      requests for such assignments being made by Purchaser) including providing
      its
      full cooperation with regard thereto following the Closing to effect such
      assignments as part of the transition of the Business to the Purchaser.

    
      
         

      

      
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    (c) UCC
      Termination and Related Matters. Seller
      shall execute and deliver such UCC Termination Statements and release
      statements, as appropriate and necessary to release in full all of the Assets
      from the liens and other security interest of any note, debt or other obligation
      of Seller to which the Seller or the Assets are bound.

    

    (d) Purchase
      Price. Purchaser
      shall deliver to the Seller the Purchase Price, as provided in Section
      1.04.

    

    (e) Related
      Agreements and Consents.
      The
      Purchaser and the Seller shall execute and deliver any other agreements,
      consents or other documents reasonably necessary to effectuate consummation
      of
      the transactions contemplated herein.

    

    (f) Assignment
      of Domain Name and Web site. Seller
      shall execute and deliver to the Purchaser a Registrant Name Change Agreement
      (RNCA) and/ or correspond with Network Solutions to authorize transfer of the
      “patriot.net” domain name and other domain names which will be assigned to
      Purchaser. A list of these domain names is attached hereto as Schedule
      2.02(f)

    

    2.03 Payment
      of Taxes and Other Charges.
      Purchaser
      shall (a) pay all transfer taxes, stamp taxes, recording taxes, charges and
      fees
      (other than sales taxes, income taxes or gains taxes for which the Seller is
      responsible under applicable tax law) in connection with the transactions
      contemplated hereby; and (b) the Seller and the Purchaser shall cooperate and
      jointly prepare and file any returns and other filings relating to any such
      taxes, fees, charges, or transfers, unless the returns and filings are capable
      of being prepared by the party responsible for paying such taxes . Each party
      hereto represents, warrants and covenants to every other party that it will
      cooperate with every other party to timely prepare and file such returns and
      filings. The Seller shall be responsible for any sales tax arising out of or
      in
      any way related to the transfer by the Seller of the Assets pursuant hereto,
      for
      which the Seller is responsible under applicable tax law. The Seller shall
      be
      responsible for any income taxes or gains taxes arising out of or in any way
      related to the transfer by the Seller of the Assets pursuant hereto. As required
      under Section 3.08, Seller shall be responsible for preparing and filing all
      tax
      returns required in connection with the operation of the Business prior to
      the
      Closing Date and shall be responsible for and shall pay all income and other
      taxes related thereto. 

    

    2.04 Notices
      of Sale.
      

    

    (a) Purchaser,
      at Purchaser’s expense, may prepare and mail, with copies delivered to the
      Seller, after Closing, such notices to and requests for the consent (where
      required for the assignment of leases or contracts) of the other party under
      each of the Assigned Contracts and other agreements assigned by the Seller
      and
      assumed by the Purchaser as are necessary or may be reasonably required by
      the
      Purchaser, advising such other party that such agreements have been assigned
      to
      the Purchaser and that the duties thereunder delegated to the Purchaser, and
      directing such other party to send to the Purchaser all future notices and
      correspondence relating to such agreements. 

    
      
         

      

      
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    (b)
      The
      Seller shall execute and deliver, or shall cause to be executed and delivered,
      on a timely basis to all appropriate United States federal, state, local and
      foreign governments or governmental entities, with a copy to the Purchaser,
      all
      notices, assignments or transfers of rights, reports, and other authorizations
      or documentation, if any, as may be necessary to assure the continued
      effectiveness, and transfer to the Purchaser, of all existing permits,
      approvals, licenses, and authorizations in effect with respect to and applicable
      exclusively to the operation of the Business and the Assets in compliance with
      applicable law and regulations, to the extent such are assignable or
      transferable.

    

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

    OF
      SELLER

    

    Seller
      hereby represents and warrants to Purchaser as follows:

    

    
      
        3.01
          Legal
          Capacity of Seller.

      

    

    

    (a) Seller
      has the legal capacity to execute and deliver this Agreement and to consummate
      the transactions contemplated hereby.

    

    (b) The
      execution, delivery and performance of this Agreement and consummation of the
      transactions contemplated hereby have been duly authorized by Seller, and Seller
      has taken all necessary corporate action and has all the necessary corporate
      power to enter into this Agreement and to consummate the transactions
      contemplated hereby.

    

    (c) This
      Agreement has been duly and validly executed by Seller, and constitutes a valid
      and binding obligation of Seller enforceable against Seller in accordance with
      its terms. 

    

    3.02 Organization
      and Authority of Seller.
      Seller
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the Commonwealth of Virginia, and has all requisite corporate power
      and
      authority to carry on its Business as presently conducted and to own or lease
      and to operate its properties. Seller is qualified to transact business as
      a
      foreign corporation in each other jurisdiction in which it conducts business
      except where the failure to be so qualified would not have a material adverse
      effect on the Business, financial condition, results of operations, assets
      or
      properties of Seller (a “Seller Material Adverse Effect”). Seller has no
      subsidiaries.

    
      
         

      

      
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    3.03 Consents
      and Approvals.
      This
      Agreement and the transactions contemplated hereby have been duly authorized
      by
      the Seller Board of Directors and by the Board of Directors of Seller’s parent
      corporation. No approval, order or consent of, filing or registration with
      or
      notice or payment to, any foreign, federal, state, county, local or other
      governmental or regulatory body, and no approval or consent of, or filing with
      or notice or payment to, any other person is required by or with respect to
      Seller in connection with the execution and delivery by Seller of this Agreement
      and its consummation and performance of the transactions contemplated hereby.
      The execution and delivery of this Agreement, the consummation of the
      transactions contemplated hereby, and the performance by Seller of this
      Agreement in accordance with its terms and conditions will not (a) conflict
      with
      or result in the breach or violation of any of the terms or conditions of,
      or
      give rise to any acceleration of Seller’s obligations or constitute (or with
      notice or lapse of time or both would constitute) a default under (i) the
      Articles of Incorporation or By-Laws of Seller (ii) any material instrument,
      contract or other agreement by or to which Seller is a party or by or to which
      Seller’s assets or properties are bound or subject; (iii) any statute, law or
      regulation of any jurisdiction or any order, writ, judgment, injunction, award
      or decree of any court, arbitrator or governmental or regulatory body against,
      or binding upon, Seller or the assets or properties of Seller; or (iv) any
      license, franchise, approval, certificate, permit or authorization applicable
      to
      Seller or any of the its assets; or (b) result in the creation of any lien,
      charge or encumbrance of any nature, upon the assets or property of
      Seller.

    

    3.04 Litigation.
      There is
      no action, suit or proceeding pending or threatened, or any investigation,
      at
      law or in equity, before any arbitrator, court or other governmental authority,
      pending or threatened, nor any judgment, decree, injunction, award or order
      outstanding, against or in any manner involving Seller or any of its properties
      or rights which (i) could reasonably be expected to have an Seller Material
      Adverse Effect, or (ii) could reasonably be expected to prevent the consummation
      of any of the transactions contemplated by this Agreement.

    

    3.05 No
      Brokers.
      Seller
      is not a party to any agreement pursuant to which Seller or Purchaser will
      become obligated to pay a commission to any person as a result of consummation
      of the transactions contemplated hereby and any action by Seller. 

    

    3.06 Knowledge
      of Inaccuracies.
      Seller
      has no knowledge that any of the representations or warranties of Seller in
      this
      Agreement are inaccurate or in breach.

    

    3.07 Disclaimer
      Regarding Employees.
      Seller
      expressly disclaims all warranties and representations regarding employees
      who
      have been operating the Business during the period of time Seller has owned
      the
      Assets and conducted the Business. Seller has identified certain employees
      to
      Purchaser who have been involved in the Business. Whether Purchaser wishes
      to
      hire said employees or not is entirely Purchaser’s decision. Whether said
      employees are willing and able to work for Purchaser is entirely within the
      control of said employees. No promises or representations have been made to
      any
      of Seller’s employees and no such promises or representations will be made to
      any Seller employees. Seller expressly disclaims all representations and
      warranties concerning the personnel necessary or desirable to operate the
      Business, necessary or desirable to efficiently transition the Assets to
      Purchaser, or otherwise enable or facilitate the integration of the Business
      and
      the Assets into Purchaser’s existing ISP operations. There are no employment
      contracts relating to any Seller employees that transfer to Purchaser or are
      available to be transferred to Purchaser. All employees of Seller involved
      in
      the Business are employees at will. Because Purchaser has an existing
      sophisticated ISP operation in place, into which the Assets will be integrated
      as Purchaser deems appropriate, the extent to which Purchaser pursues available
      Seller employees involved in the Business and the Assets is entirely within
      Purchaser’s purview. 

    
      
         

      

      
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    3.08 Taxes. The
      Seller will file if and when due following the Closing Date (after giving effect
      to any extensions granted by the requisite legal or regulatory authority) all
      returns, reports, elections, estimates, declarations, schedules, forms and
      other
      documents ("Tax Returns") relating to taxes regarding the Business required
      to
      be filed by any applicable United States federal, state, county, municipal,
      local, foreign or other laws, including, without limitation, consolidated,
      combined or unitary returns, for any taxable period ending prior to or on the
      Closing Date (the "Pre-Closing Tax Period"). The term "taxes" or "tax" as used
      in this section or referred to elsewhere in this Agreement shall mean all taxes,
      charges, fees, levies, penalties, or other assessments, including without
      limitation, income, capital gain, profit, gross receipts, ad valorem, excise,
      property, payroll, withholding, employment, severance, social security, workers'
      compensation, occupation, premium, customs duties, windfall profits, sales,
      use,
      and franchise taxes, imposed by the United States, or any state, county, local
      or foreign government or any subdivision or agency thereof, and including any
      interest, penalties, or additions attributable thereto. Nothing contained in
      this Agreement is to be construed as allocating responsibility to Seller for
      payment of taxes for which Purchaser is responsible under applicable tax
      law.

    

    3.9 Restrictive
      Covenants.
      The
      Seller is not a party to any agreement, contract or covenant limiting the
      freedom of the Seller to compete in the Business in any geographic region within
      or outside of the United States of America..

    

    3.10 Warranties.
      Except
      as required by federal or state law or as otherwise disclosed on Schedule 3.10
      hereto, the Seller has not made, extended or otherwise represented that it
      would
      provide any express warranty with respect to the products or services sold,
      distributed or leased to its clients or customers.

    

    3.11 Solvency
      of the Seller.
      As of
      the Effective Date and through the Closing Date, the Seller has been and will
      be
      solvent. "Solvent" shall mean, for purposes of application of this provision,
      that: (i) the fair salable value of the Sellers' property is in excess of the
      total amount of its debts; and (ii) the Seller is able to pay its debts as
      they
      mature.

    

    3.12 Compliance
      with Applicable Law.
      The
      Seller has been and is substantially in compliance with all laws applicable
      to
      the Business as it is presently being conducted or the Assets as they are
      presently being used in the conduct of the Business, except where the failure
      to
      comply with the same would not adversely affect the Business or the Assets.
      The
      Seller does not have knowledge of or received any notice of violation of any
      such rule or regulation which could result in any material liability of the
      Seller for penalties or damages or which could subject the Seller to any
      injunction or government writ, order or decree. There are no facts, events
      or
      conditions known to the Seller that could interfere with, prevent continued
      compliance with or give rise to any liability under laws applicable to the
      Business as it is presently being conducted or the Assets as they are presently
      being used in the conduct of the Business, except where the failure to do so
      would not have a Seller Material Adverse Effect.

    
      
         

      

      
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    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

    

    Purchaser
      hereby represents and warrants to Seller as follows:

    

    4.01 Legal
      Capacity of Purchaser.

    

    (a) Purchaser
      has the legal capacity to execute and deliver this Agreement and to consummate
      the transactions contemplated hereby.

    

    (b) This
      Agreement has been duly and validly executed by Purchaser, and constitutes
      a
      valid and binding obligation of Purchaser enforceable against Purchaser in
      accordance with its terms except to the extent that (i) such enforcement may
      be
      limited by bankruptcy, insolvency, reorganization, moratorium or other similar
      laws affecting the enforcement of creditors’ rights generally and (ii) the
      availability of remedies, including specific performance, is subject to the
      discretion of the court before which any proceeding therefor may be
      brought.

    

    4.02 Organization
      and Authority of Purchaser.
      Purchaser is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware. Purchaser has all requisite corporate
      power and authority to carry on its business as presently conducted and to
      own
      or lease and to operate its properties. Purchaser is qualified, or immediately
      prior to Closing will be qualified, to transact business as a foreign
      corporation in the Commonwealth of Virginia and in each other jurisdiction
      in
      which it conducts business except where the failure to be so qualified would
      not
      have a material adverse effect on the business, financial condition, results
      of
      operations, assets or properties of Purchaser (a “Purchaser Material Adverse
      Effect”).

    

    4.03 Consents
      and Approvals.
      Seller
      has taken all necessary corporate action and has all the necessary corporate
      power to enter into this Agreement and to consummate the transactions
      contemplated hereby. No approval, order or consent of, filing or registration
      with or notice or payment to, any foreign, federal, state, county, local or
      other governmental or regulatory body, and no approval or consent of, or filing
      with or notice or payment to, any other person is required by or with respect
      to
      Purchaser in connection with the execution and delivery by Purchaser of this
      Agreement and its consummation and performance of the transactions contemplated
      hereby. The execution and delivery of this Agreement, the consummation of the
      transactions contemplated hereby, and the performance by Purchaser of this
      Agreement in accordance with its terms and conditions will not (a) conflict
      with
      or result in the breach or violation of any of the terms or conditions of,
      or
      give rise to any acceleration of Purchaser’s obligations or constitute (or with
      notice or lapse of time or both would constitute) a default under (i) the
      Certificate of Incorporation or By-Laws of Purchaser (ii) any material
      instrument, contract or other agreement by or to which Purchaser is a party
      or
      by or to which Purchaser’s assets or properties are bound or subject; (iii) any
      statute, law or regulation of any jurisdiction or any order, writ, judgment,
      injunction, award or decree of any court, arbitrator or governmental or
      regulatory body against, or binding upon, Purchaser or the assets or properties
      of Purchaser; or (iv) any license, franchise, approval, certificate, permit
      or
      authorization applicable to Purchaser or any of the its assets; or (b) result
      in
      the creation of any lien, charge or encumbrance of any nature, upon the assets
      or property of Purchaser.

    
      
         

      

      
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    4.04 Litigation.
      There is
      no action, suit or proceeding pending or threatened, or any investigation,
      at
      law or in equity, before any arbitrator, court or other governmental authority,
      pending or threatened, nor any judgment, decree, injunction, award or order
      outstanding, against or in any manner involving Purchaser or any of its
      properties or rights which (i) could reasonably be expected to have a Purchaser
      Material Adverse Effect, or (ii) could reasonably be expected to prevent the
      consummation of any of the transactions contemplated by this
      Agreement.

    

    4.05 No
      Brokers.
      Purchaser is not a party to any agreement pursuant to which Seller or Purchaser
      will become obligated to pay a commission to any person as a result of
      consummation of the transactions contemplated hereby and any action by
      Purchaser. 

    

    4.06 Knowledge
      of Inaccuracies.
      Purchaser has no knowledge that any of the representations or warranties of
      Seller in this Agreement are inaccurate or in breach.

    

    4.07 Solvency
      of the Purchaser.
      As of
      the Effective Date and through the Closing Date, the Purchaser has been and
      will
      be solvent. "Solvent" shall mean, for purposes of application of this provision,
      that: (i) the fair salable value of the Purchasers' property is in excess of
      the
      total amount of its debts; and (ii) the Purchaser is able to pay its debts
      as
      they mature. 

    

    ARTICLE
      V

    CONDITIONS
      PRECEDENT TO THE

    OBLIGATION
      OF PURCHASER TO CLOSE

    

    The
      obligation of Purchaser to close the transactions contemplated hereby is subject
      to the fulfillment by Seller prior to Closing of each of the following
      conditions, which may be waived in whole or in part by Purchaser:

    

    5.01 Compliance
      with Representations, Warranties and Covenants.
      The
      representations and warranties and covenants of Seller contained in this
      Agreement shall have been true and correct when made and shall be true and
      correct in all material respects at the Closing with the same force and effect
      as if made at the Closing, and Seller shall have performed all agreements,
      covenants and conditions required to be performed by Seller prior to the
      Closing.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    

    5.02 No
      Adverse Change.
      There
      shall have been no event which has, had, or may have a material adverse effect
      upon the Business, financial condition, results of operations, assets,
      liabilities or prospects of Seller.

    

    5.03 No
      Legal Proceedings.
      No suit,
      action or other legal or administrative proceeding before any court or other
      governmental agency shall be pending or threatened seeking to enjoin the
      consummation of the transactions contemplated hereby.

    

    5.04 Documents
      to be Delivered by Seller.  Seller
      shall have delivered all of the documents required to be delivered to Purchaser
      at or prior to Closing, under this Agreement. 

    

    5.05 Assets
      to be Delivered by Seller.
      Seller
      shall have delivered the Assets to Purchaser and the Assets shall be as
      represented in this Agreement.

    

    ARTICLE
      VI

    CONDITIONS
      PRECEDENT TO THE OBLIGATIONS

    OF
      SELLER TO CLOSE

    

    The
      obligations of Seller to close the transactions is subject to the fulfillment
      by
      Purchaser prior to Closing of each of the following conditions, any of which
      may
      be waived, in whole or in part, by Seller:

    

    6.01 Compliance
      with Representations, Warranties and Covenants.
      The
      representations and warranties made by Purchaser in this Agreement shall have
      been true and correct when made and shall be true and correct in all material
      respects at the Closing with the same force and effect as if made at the
      Closing, and Purchaser shall have performed all agreements, covenants and
      conditions required to be performed by Purchaser prior to the
      Closing.

    

    6.02 No
      Legal Proceedings.
      No suit,
      action or other legal or administrative proceedings before any court or other
      governmental agency shall be pending or threatened seeking to enjoin the
      consummation of the transactions contemplated hereby.

    

    6.03
      Payment
      of Cash Proceeds.
      Purchaser shall have paid the $[150,000.00]
      in cash
      or immediately available funds as directed by Seller. 

    

    ARTICLE
      VII

    MODIFICATION,
      WAIVER, TERMINATION AND EXPENSES

    

    7.01 Modifications.
      Purchaser and Seller may amend, modify or supplement this Agreement in any
      manner as they may mutually agree in writing.

    
      
         

      

      
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    7.02 Waivers.
      Purchaser and Seller may, in writing, extend the time for or waive compliance
      by
      the other with any of the covenants or conditions of the other contained
      herein.

    

    7.03 Termination
      before Closing.
      This
      Agreement may be terminated before the Closing:

    

    (a) By
      the
      mutual consent of Purchaser and Seller; 

    

    (b) By
      Purchaser, if the representations and warranties of Seller set forth herein
      shall not be accurate, or conditions precedent set forth herein shall not have
      been satisfied in all material respects;

    

    (c) By
      Seller, if the representations and warranties of Purchaser set forth herein
      shall not be accurate, or conditions precedent set forth herein shall not have
      been satisfied in all material respects; and

    

    (d) This
      Agreement shall automatically terminate in the event the Closing shall not
      have
      occurred before the close of business on November 30, 2006. 

    

    In
      the
      event of any such termination, each party shall bear their own legal and other
      expenses of the preparation and execution of this Agreement and consummation
      of
      the transaction contemplated hereby and the parties shall have no further
      liability to one another hereunder.

    

    ARTICLE
      VIII

    INDEMNIFICATION

    

    8.01 Indemnification
      by Seller.
      Seller
      hereby agrees to indemnify and hold Purchaser harmless from and against any
      and
      all damages, losses, liabilities, obligations, costs or expenses incurred by
      Purchaser and arising out of (a) the breach of any representation or warranty
      by
      Seller, to the extent such breach results in a material adverse effect to the
      business and operation of Purchaser taken as a whole, or (b) failure to perform
      any covenant or obligation required to be performed by Seller hereunder;
      provided, however, that Seller shall not be required to pay to Purchaser, in
      the
      aggregate, any amount greater than $15,000.00 (the “Seller’s Indemnification
      Cap”) which shall be the limitation and a cap on damages payable to Purchaser
      under this Agreement. Notwithstanding the foregoing, in the event that the
      Seller fails to obtain written assignments or prior consents for the assignment
      of the Assigned Contract (as may be required pursuant to the terms of certain
      of
      such Assigned Contracts) prior to Closing, during the six (6) month period
      following the Closing, Seller agrees that it will indemnify the Purchaser
      against lost revenues directly resulting from Purchaser’s inability to obtain
      consent to assignment of an Assigned Contract which, but for this inability,
      would have been paid to Purchaser, and reasonable legal fees directly related
      to
      said inability, without regard to any limitation under the Seller’s
      Indemnification Cap.

    
      
         

      

      
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    8.02 Indemnification
      by Purchaser.
      Purchaser hereby agrees to indemnify and hold Seller harmless from and against
      any and all damages, losses, liabilities, obligations, costs or expenses
      incurred by Seller and arising out of (a) the breach of any representation
      or
      warranty by Purchaser, to the extent such breach results in a material adverse
      effect to the business and operation of Seller taken as a whole, or (b) failure
      to perform any covenant or obligation required to be performed by Purchaser
      hereunder; provided, however, that Purchaser shall not be required to pay to
      Seller any amount greater than $15,000.00 in the aggregate which shall be the
      limitation and a cap on damages payable to Purchaser under this Agreement

    

    8.03 Time
      for Assertion.
      No
      party to this Agreement shall have any liability (for indemnification or
      otherwise) with respect to any representation, warranty or covenant or
      obligation to be performed and complied hereunder, unless notice of any such
      liability is provided on or before 12 months from the date hereof.

    

    8.04 Waiver.
      Except
      for the covenants and agreements set forth in Section 9.01(d), (e), (f) and
      (g),
      the sole and exclusive remedy of Seller and Purchaser for any breach of any
      covenant or agreement, or any inaccuracy or other breach of any representation
      or warranty, contained in this Agreement or any other writing delivered pursuant
      hereto or in connection herewith, for any indemnification with respect to any
      tort, violation of law, breach of contract or environmental liability or for
      any
      other matter relating to or arising under or in connection with this Agreement
      or any related agreements, or the transactions contemplated herein or therein
      shall be the indemnities contained in Sections 8.01 and 8.02, respectively,
      and
      the parties hereby waive, release and agree not to assert any other right,
      whether arising by statute, common law or otherwise in connection
      therewith.

    

    ARTICLE
      IX

    COVENANTS

    

    9.01 Covenants
      of the Seller.

    

    (a) Notification.
      The
      Seller shall give prompt notice to the Purchaser of: (i) any notice or other
      communication received by the Seller prior to the Closing Date, relating to
      a
      default or an event which, with notice or lapse of time or both would become
      a
      default under this Agreement or become a material default under any other
      material contract, agreement, license or instrument related to the Business
      to
      which the Seller is a party, by which it or any of the Assets are bound or
      to
      which it or any of the Assets are subject; (ii) any event which, with notice
      or
      lapse of time or both, would cause any warranty, representation, or covenant
      of
      the Seller under this Agreement to be inaccurate, untrue, incomplete, misleading
      or violated in any respect; (iii) any notice or other communication from any
      third party alleging that the consent of such third party was, is or may be
      required in connection with the transactions contemplated by this Agreement;
      and
      (iv) any material adverse change in the Business or the Assets, or the
      operations, earnings, or condition (financial or otherwise) of the
      Seller.

    
      
         

      

      
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    (b) Conduct
      of Business; Certain Covenants.
      Prior to
      and through the Closing Date, the Seller shall conduct and operate the Business
      and will not, without prior written consent of the Purchaser, which consent
      shall not be unreasonably withheld, take any action other than in accordance
      with the ordinary and usual course of business. The Seller will use commercially
      reasonable efforts to preserve intact the Business, the Assets and the
      operation, organization and relationships with their employees, independent
      contractors, agents, suppliers, customers, regulators, licensing authorities
      and
      others having business dealings with it.

    

    (c) Access
      to Contracts and Information.
      Prior
      to
      the Closing Date, the Seller shall make available to the Purchaser any and
      all,
      licenses, permits, agreements, contracts, documents, certificates and other
      instruments material to the Business or any of the Assets, including without
      limitation, those to which the Seller is a party and those by which the Business
      or any of the Assets are bound and including without limitation, any and all
      materials relating to the intellectual property referred to in Section 1.01(a),
      (b), and (k), the Assigned Contracts, the Permits, the insurance materials
      referred to in Section 1.01(l), the Accounts Receivable, the leases referred
      to
      in Section 1.01(f), the agreements referred to in Section 1.01(p), the security
      and other deposits referred to in Section 1.01(q), to the extent permitted
      by
      law, but excluding the personal information of customers of the Business
      contained in the Sherlock database.

    

    (d) Non-Solicitation.
      During
      the period commencing on the Closing Date and for one (1) year thereafter (the
      “Non-Solicitation Period”): The
      Seller agrees it will not and agrees that IceWeb, Inc. will not induce any
      employee or independent contractor of the Purchaser to leave the Purchaser’s
      employ or service or hire any such employee or independent contractor (unless
      the board of directors of the Purchaser shall have authorized such employment
      and the Purchaser shall have consented thereto in writing). Also, during the
      Non-Solicitation Period, Seller and its affiliates shall not solicit, directly
      or indirectly, any of the customers of the Business being acquired pursuant
      to
      this Agreement in connection with the provision of ISP services or any similar
      or related services.

    

    (e) Confidential
      Information.
      The
      parties hereto recognize that a major need of the Purchaser is to preserve
      its
      specialized knowledge, trade secrets, customer lists and confidential
      information concerning the industry in which it operates. The strength and
      goodwill of the Purchaser is derived from the specialized knowledge, trade
      secrets, and confidential information generated from experience with the
      activities undertaken by the Purchaser and its subsidiaries. The disclosure
      of
      this information and knowledge to competitors would be beneficial to them and
      detrimental to the Purchaser, as would the disclosure of information about
      the
      products, methods, marketing practices, pricing practices, costs, profit
      margins, design specifications, analytical techniques, technical information,
      client contracts, inventory sources, customer information, employee information,
      and other similar items of the Purchaser and its subsidiaries. The Seller has
      or
      will have access to, and has obtained or will obtain, specialized knowledge,
      trade secrets and confidential information about the Business and the
      Purchaser’s operations and the operations of its subsidiaries, affiliates,
      and/or divisions. The term "confidential" or "proprietary information" shall
      not
      include information which is i) already known from sources not subject to any
      confidential obligations; ii) is or becomes generally available to the public
      other than as a result of a disclosure by the Purchaser; or iii) required to
      be
      disclosed by law, regulatory or judicial process. Therefore, the Seller hereby
      agrees as follows, recognizing that the Purchaser is relying on these agreements
      in entering into this Agreement:

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    

    During
      the Non-Solicitation Period, the Seller will keep secret and retain in strict
      confidence, and will not use, disclose to others, or publish any inventions
      or
      any confidential business information about the affairs of the Purchaser or
      the
      Business, including but not limited to confidential information concerning
      the
      Purchaser’s products, methods, marketing practices, pricing practices, costs,
      profit margins, design specifications, analytical techniques, technical
      information, client contracts, inventory sources, customer information, employee
      information, and other similar items of confidential information;

    

    (f) Referrals.
      Commencing on the Closing Date and thereafter, the Seller agrees and will cause
      Iceweb, Inc. to agree that they shall refer all customer inquiries relating
      to
      the Business to the Purchaser as soon as possible after receiving such
      inquiries.

    

    (g) Covenant
      Regarding Sales.
      The
      Seller covenants that Schedule 9.01(g) setting forth the revenues of the
      Division during the six month period ending immediately prior to the Effective
      Date (the “Revenue Reference Period”) is an accurate schedule of revenues
      received by the Division during this period of time. In the event that, within
      six (6) months following Closing, the Purchaser determines that the gross
      revenues of the Business as determined in accordance with generally accepted
      accounting principles are less than the amount disclosed in Schedule 9.01(g),
      Purchaser shall furnish a copy of a schedule to Seller setting forth the actual
      amount of revenues of the Business during the Revenue Reference Period and
      Seller agrees that it shall reduce the Purchase Price by a an amount (the
“Purchase Price Adjustment”) equal to the percentage amount of the revenue
      shortfall for such period (the “Revenue Shortfall Percentage”) multiplied by the
      Purchaser Price; provided that a Purchase Price Reduction payment shall only
      be
      required to be made the Seller in the event the Revenue Shortfall Percentage
      exceeds 5%. By way of example, if the Revenue Shortfall Percentage is 20%,
      then
      the amount of the Purchase Price Adjustment to be paid to the Purchaser by
      the
      Seller shall equal $150,000 X 20%, or $30,000. Within 15 days of the date of
      Seller’s receipt of the schedule of actual revenues for the Revenue Reference
      Period from the Purchaser, the Seller shall promptly remit to the Purchaser
      the
      amount of the Purchase Price Adjustment. The payment of such Purchase Price
      Adjustment by Seller to Purchaser shall be payable without regard to, and shall
      not count toward, the Seller’s Indemnification Cap.

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    ARTICLE
      X

    MISCELLANEOUS
      PROVISIONS

    

    10.01 Waiver.
      Any
      party hereto may with respect to any other party hereto (a) extend the time
      for
      the performance of any of the obligations or other acts, (b) waive any
      inaccuracies in the representations and warranties contained herein or in any
      document delivered pursuant hereto and (c) waive compliance with any of the
      agreements or conditions contained herein. Any such extension or waiver shall
      be
      valid if set forth in an instrument in writing signed by the party or parties
      to
      be bound thereby. 

    

    10.02 Notices.
      All
      communications provided for herein shall be in writing and shall be deemed
      to be
      given or made (a) when delivered personally, including by courier service,
      (b) three business days following deposit in the United Sates mail,
      certified mail, return receipt requested, or (c) when transmitted by facsimile
      provided that electronic confirmation of receipt is retained by the party
      transmitting such facsimile. The addresses to which notices are to be provided
      are as follows:

    

    
      	
              If
                to Seller :

            	
              Iceweb
                Online, Inc.

            
	 	
              620
                Herndon Parkway, Suite 105

            
	 	
              Herndon,
                Virginia 20170

            
	 	
              Attention:
                John Signrello, CEO

            
	 	
              Fax:
                (703) 964-0160

            
	 	
              Voice:
                (703) 344-0940

            
	 	 
	
              with
                a copy to:

            	
              Ira
                S. Saul, PLC

            
	 	
              4126
                Leonard Drive

            
	 	
              Fairfax,
                VA 22030

            
	 	
              Fax:
                (703) 273- 8842

            
	
               

            	
              Attention:
                Ira Saul, Esq.

            
	 	 
	
              If
                to Purchaser:

            	
              LEROS
                Online, Inc. 

            
	 	
              9990
                Lee Highway

            
	 	
              Suite
                500

            
	 	
              Fairfax,
                VA 22030

            
	 	
              Fax:
                (703) 691- 8125

            
	 	
              Attention:
                Dean M. Xenos, President and CEO

            

    

    

    Any
      party
      may change the address to which notice is to be provided to it by written notice
      to the other party hereto delivered pursuant to this Section.

    

    10.03 Governing
      Law; Venue.
      This
      Agreement and the rights and duties of the parties hereto shall be construed
      and
      determined in accordance with the laws of the Commonwealth of Virginia, without
      regard to the choice of laws provisions thereof. In the event of a dispute
      arising out of or related to this Agreement, all parties agree to litigate
      said
      dispute or disputes in either the General District Court of Fairfax County,
      Virginia or the Circuit Court of Fairfax County, Virginia, which are stipulated
      to be good, proper, appropriate, convenient and exclusive venues for the
      adjudication of disputes.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    

    10.04 Successors
      and Assigns.
      This
      Agreement shall be binding upon the parties and their successors and assigns
      and
      shall inure to the benefit of the other parties and successors and
      assigns.

    

    10.05 Counterparts.
      This
      Agreement may be executed in any number of counterparts and all such
      counterparts taken together shall be deemed to constitute one
      instrument.

    

    10.06 Entire
      Agreement.
      This
      Agreement and the schedules and exhibit hereto constitute the entire
      understanding of the parties with respect to transactions contemplated hereby,
      and all prior understandings with respect thereto, whether written or oral,
      shall be of no force and effect.

    

    10.07 Partial
      Invalidity.
      If any
      term of this Agreement shall be held to be invalid or unenforceable, such term
      shall be deemed to be severable and the validity of the other terms of this
      Agreement shall in no way be affected thereby.

    

    10.08 Headings.
      The
      descriptive headings of the various Sections or parts of this Agreement are
      for
      convenience only and shall not affect the meaning or construction of any of
      the
      provisions hereof.

    

    10.09 Limitation
      on Warranties.
      Seller
      makes no representations or warranties with respect to any Assets, and with
      respect to any projections, forecasts or forward-looking information provided
      to
      Purchaser. There is no assurance that any projected or forecasted results will
      be achieved. ASSETS
      ARE SOLD IN AS-IS WHERE IS CONDITION WITH ALL FAULTS, AS STATED
      ABOVE. EXCEPT
      AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND WARRANTIES
      IN
ARTICLE
      III,
      SELLER DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED,
      INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
      PURPOSE, AND, EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE
      REPRESENTATIONS AND WARRANTIES IN ARTICLE
      III,
      PURCHASER ACKNOWLEDGES THAT IT WILL BE ACQUIRING THE ASSETS ON AN “AS IS, WHERE
      IS” BASIS WITH ALL FAULTS.
      Purchaser acknowledges that neither Seller nor any other person or entity has
      made any representation or warranty, express or implied, as to the accuracy
      or
      completeness of any information which is not included in this Agreement, and
      neither Seller nor any other person will have, or be subject to, any liability
      to Purchaser, or any of their respective affiliates or any other person or
      entity resulting from the distribution of any such information to, or use of
      any
      such information by, Purchaser, or any of its respective affiliates, or any
      of
      their respective agents, consultants, accountants, counsel or other
      representatives. Without limitation of the foregoing, to the extent that any
      memoranda or summaries prepared by Seller or by any of its advisors or
      representatives regarding the Business, the Assets or the assumed liabilities
      are or have been provided to Purchaser, Purchaser acknowledges and agrees that
      no representation or warranty is made to Purchaser or any of its respective
      affiliates, or any other person or entity as to the completeness or accuracy
      of
      such memoranda or summaries. 

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    10.10 Covenants
      Regarding Employees.
      With
      the sole exception of Seller employees who have been specifically identified
      to
      Purchaser as persons exclusively employed to manage the Assets being sold
      hereunder, Purchaser agrees that it will not solicit, hire, make employment
      offers to, entertain offers of employment from, or retain or offer to retain
      as
      independent contractors, any employee, or independent contractor who works
      for
      Seller or an affiliate of Seller at Seller headquarters, for a period of one
      (1)
      year after Closing.

    

    10.11 Legal
      Fees and Expenses.
      Except
      as otherwise provided in this Agreement, each party hereto will bear its own
      legal, accounting, and other fees and expenses incident to the transactions
      contemplated herein.

    

    10.12 Survival.
      The
      provisions of Sections 1.01(d) and (k), 1.05, 2.03 and 3.08, and Articles III,
      IV, VIII and IX shall survive the Closing and Article VIII and Section 9.01(e)
      shall survive the termination of this Agreement and the obligations thereunder
      may not be assigned by the Seller without the prior written consent of the
      Purchaser.

    

    10.13 Remedies.
      Notwithstanding any other provision of this Agreement, it is acknowledged that
      Sections 9.01(d) and (e) are of a unique nature and of extraordinary value
      and
      of such a character that a breach thereof by the Seller may result in
      irreparable damage and injury to the Purchaser for which the Purchaser may
      not
      have any adequate remedy at law. Therefore, the non-breaching party shall be
      entitled to seek a decree of specific performance against the breaching party,
      or such other relief by way of restraining order, injunction or otherwise as
      may
      be appropriate to ensure compliance with this Agreement. The remedies provided
      by this Section 10.13 are non-exclusive and the pursuit of such remedies shall
      not in any way limit any other remedy available to the parties with respect
      to
      this Agreement, including, without limitation, any remedy available at law
      or
      equity with respect to any anticipatory or threatened breach of the provisions
      hereof.

    

    

    

    (Remainder
      of page intentionally left blank; signatures on following
      pages.)

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Asset Purchase Agreement effective as of the
      Effective Date. 

    

    
      	 	 	 	
              PURCHASER:

            
	 	 	 	 	 
	 	 	 	
              LEROS
                ONLINE, INC.

            
	 	 	 	
              a
                Delaware corporation

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              By:

            	 
	 	 	 	 	
              Dean
                M. Xenos, President and CEO

            
	 	 	 	 	 
	ATTEST:	 	 	 
	 	 	 	 	 
	
              By:

            	
               

            	 	 	 
	 	
              _______________,
                Corporate Secretary

            	 	 	 
	 	 	 	 	 
	(SEAL)	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              SELLER:

            
	 	 	 	 	 
	 	 	 	
              ICEWEB
                ONLINE, INC., 

            
	 	 	 	
               a
                Virginia corporation

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              By:

            	 
	 	 	 	 	
              John
                Signorello, President & CEO

            
	ATTEST:	 	 	 
	 	 	 	 	 
	
              By:

            	
               

            	 	 	 
	 	
              MyLe
                Phuong, Corporate Secretary

            	 	 	 
	 	 	 	 	 
	(SEAL)	 	 	 

    

    

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    Schedule
      1.02(a)

    Excluded
      Contracts and Assets

    

    Excluded
      Contracts

    

    (A) The
      following contracts are excluded from the contracts being conveyed as a category
      of Assets of the Business:

    

    i. At-Will
      Employment Contracts -ISP Assets. All
      contracts of employment with at-will employees of Seller. 

    

    Excluded
      Assets

    

    The
      following assets of the Seller shall be Excluded Assets:

    

    i. Non-ISP
      Assets. Other
      Non-ISP Assets operated by Seller which are expressly excluded from the Assets
      being sold to Purchaser are certain hosting businesses, application service
      provider businesses, software provision opportunities, email hosting, and sale
      of Internet and network security solutions. 

    

    ii.
      Other Excluded Assets. Seller
      Businesses selling computer hardware; other computer software; professional
      services, maintenance, and help desk; specialized services focused on small
      business solutions; hardware, software and services related to mobile computing,
      voice, video and data transmission, including mobile telephones and personal
      digital assistants. All other Seller assets related to or used in conjunction
      with Non-ISP Assets and other Excluded Assets, including furniture, fixtures,
      equipment (including computer, telecommunications and other equipment),
      contracts, leads, and opportunities. 

    

    Seller
      assumes no responsibility whatsoever to list those Seller assets not being
      sold
      to Purchaser. This list of Excluded Assets is provided to Purchaser in order
      to
      clarify and demarcate those Assets which are being sold by Seller to Purchaser.
      

     

    

     

    
      
         

      

      
        23

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