Exhibit 10.23

                              INVESTMENT AGREEMENT

INVESTMENT  AGREEMENT  (this  "AGREEMENT"),  dated as of March 27th, 2006 by and
between Millenium Holding Group, Inc., a Nevada corporation (the "Company"), and
Dutchess  Private  Equities  Fund,  LP,  a  Delaware  limited  partnership  (the
"Investor").

Whereas,  the parties desire that,  upon the terms and subject to the conditions
contained  herein,  the Investor shall invest up to Eight Million,  Five Hundred
Thousand dollars  ($8,500,000) to purchase the Company's Common Stock, $0.05 par
value per share (the "Common Stock");

Whereas,  such  investments  will be made in  reliance  upon the  provisions  of
Section 4(2) under the Securities Act of 1933, as amended (the "1933 Act"), Rule
506 of  Regulation  D, and the rules  and  regulations  promulgated  thereunder,
and/or upon such other exemption from the registration  requirements of the 1933
Act as may be available with respect to any or all of the  investments in Common
Stock to be made hereunder; and

Whereas,  contemporaneously  with the execution and delivery of this  Agreement,
the parties hereto are executing and delivering a Registration  Rights Agreement
substantially  in the form  attached  hereto (as amended from time to time,  the
"Registration  Rights  Agreement")  pursuant  to which the Company has agreed to
provide  certain  registration  rights  under  the 1933  Act,  and the rules and
regulations promulgated thereunder, and applicable state securities laws.

NOW  THEREFORE,  in  consideration  of the  foregoing  recitals,  which shall be
considered an integral part of this Agreement,  the covenants and agreements set
forth  hereafter,  and other good and  valuable  consideration,  the receipt and
sufficiency of which is hereby acknowledged, the Company and the Investor hereby
agree as follows:

SECTION 1. DEFINITIONS.

     As used in this  Agreement,  the  following  terms shall have the following
meanings  specified  or  indicated  below,  and such  meanings  shall be equally
applicable to the singular and plural forms of such defined terms.

     "1933  Act"  shall  have the  meaning  set  forth in the  preamble  of this
agreement.

     "1934 Act" shall mean the  Securities  Exchange  Act of 1934,  as it may be
amended.

     "Affiliate" shall have the meaning specified in Section 5(h), below.

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     "Agreement" shall mean this Investment Agreement.

     "Best Bid" shall mean the highest posted bid price of the Common Stock.

     "Buy In" shall have the meaning specified in Section 6, below.

     "Buy In Adjustment Amount" shall have the meaning specified in Section 6.

     "By-laws" shall have the meaning specified in Section 4(c).

     "Certificate of Incorporation"  shall have the meaning specified in Section
4(c).

     "Closing" shall have the meaning specified in Section 2(g).

     "Closing Date" shall mean no more than seven (7) Trading Days following the
Put Notice Date.

     "Common  Stock"  shall have the meaning  set forth in the  preamble of this
Agreement.

     "Control" or "Controls" shall have the meaning specified in Section 5(h).

     "Covering Shares" shall have the meaning specified in Section 6.

     "Effective  Date" shall mean the date the SEC declares  effective under the
1933 Act the Registration Statement covering the Securities.

     "Environmental Laws" shall have the meaning specified in Section 4(m).

     "Execution  Date"  shall mean the date  indicated  in the  preamble to this
Agreement.

     "Indemnities" shall have the meaning specified in Section 11.

     "Indemnified Liabilities" shall have the meaning specified in Section 11.

     "Ineffective  Period"  shall mean any period of time that the  Registration
Statement  or  any  Supplemental  Registration  Statement  (as  defined  in  the
Registration  Rights Agreement)  becomes  ineffective or unavailable for use for
the sale or resale, as applicable,  of any or all of the Registrable  Securities
(as  defined in the  Registration  Rights  Agreement)  for any reason (or in the
event the prospectus  under either of the above is not current and  deliverable)
during any time period required under the Registration Rights Agreement.

     "Investor"  shall  have  the  meaning  indicated  in the  preamble  of this
Agreement.

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     "Material Adverse Effect" shall have the meaning specified in Section 4(a).

     "Maximum Common Stock Issuance" shall have the meaning specified in Section
2(H).

     "Minimum  Acceptable Price" shall mean the minimum per share price that the
Company  will accept for the  purchase of its Shares.  With respect to every Put
Notice,  the Company shall indicate the Minimal  Acceptable  Price for that Put.
The Minimal Acceptable Price shall be as a dollar per share amount.

     "Open Period" shall mean the period  beginning on and including the Trading
Day immediately  following the Effective Date and ending on the earlier to occur
of (I) the date which is thirty  (30) months from the  Effective  Date;  or (II)
termination of the Agreement in accordance with Section 9, below.

     "Pricing Period" shall mean the period beginning on the Put Notice Date and
ending on and  including  the date that is five (5) Trading  Days after such Put
Notice Date.

     "Principal  Market"  shall mean the  American  Stock  Exchange,  Inc.,  the
National  Association  of Securities  Dealers,  Inc.  Over-the-Counter  Bulletin
Board,  the  NASDAQ  National  Market  System  or the  NASDAQ  SmallCap  Market,
whichever is the principal market on which the Common Stock is listed.

     "Prospectus"  shall  mean  the  prospectus,   preliminary   prospectus  and
supplemental prospectus used in connection with the Registration Statement.

     "Purchase Amount" shall mean the total amount being paid by the Investor on
a particular Closing Date to purchase the Securities.

     "Purchase Price" shall mean ninety-six  percent (96%) of the lowest closing
Best Bid price of the Common Stock during the Pricing Period.

     "Put" shall have the meaning set forth in Section 2(b)(1) hereof.

     "Put Amount" shall have the meaning set forth in Section 2(b)(1) hereof.

     "Put  Notice"  shall  mean a written  notice  sent to the  Investor  by the
Company stating the Put Amount in U.S.  dollars,  the Company intends to sell to
the  Investor  pursuant  to the terms of the  Agreement  and stating the current
number of Shares issued and outstanding on such date.

     "Put Notice Date" shall mean the Trading Day immediately  following the day
on which the  Investor  receives a Put  Notice,  however a Put  Notice  shall be
deemed delivered on (A) the Trading Day it is received by facsimile or otherwise
by the Investor if such notice is received prior to 9:00 am Eastern Time, or (B)

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the  immediately  succeeding  Trading  Day if it is  received  by  facsimile  or
otherwise  after 9:00 am  Eastern  Time on a Trading  Day.  No Put Notice may be
deemed delivered on a day that is not a Trading Day.

     "Put Restriction"  shall mean the days between the beginning of the Pricing
Period and Closing Date.  During this time, the Company shall not be entitled to
deliver another Put Notice.

     "Registration  Period"  shall have the meaning  specified in Section  5(c),
below.

     "Registration  Rights  Agreement"  shall have the  meaning set forth in the
recitals, above.

     "Registration  Statement" means the  registration  statement of the Company
filed under the 1933 Act covering the Common Stock issuable hereunder.

     "Related Party" shall have the meaning specified in Section 5(h).

     "Resolution" shall have the meaning specified in Section 8(e).

     "SEC" shall mean the U.S. Securities & Exchange Commission.

     "SEC Documents" shall have the meaning specified in Section 4(f).

     "Securities"  shall mean the shares of Common Stock issued  pursuant to the
terms of the Agreement.

     "Shares" shall mean the shares of the Company's Common Stock.

     "Sold Shares" shall have the meaning specified in Section 6.

     "Subsidiaries" shall have the meaning specified in Section 4(a).

     "Trading  Day"  shall  mean any day on which the  Principal  Market for the
Common Stock is open for trading, from the hours of 9:30 am until 4:00 pm.

     "Transaction Documents" shall mean this Agreement,  the Registration Rights
Agreement,  and each of the other agreements  entered into by the parties hereto
in connection with this Agreement.

SECTION 2. PURCHASE AND SALE OF COMMON STOCK.

(A) PURCHASE AND SALE OF COMMON STOCK.  Subject to the terms and  conditions set
forth herein, the Company shall issue and sell to the Investor, and the Investor
shall purchase from the Company, up to that number of Shares having an aggregate
Purchase Price of Eight Million, Five Hundred Thousand dollars ($8,500,000).

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(B) DELIVERY OF PUT NOTICES.

(I) Subject to the terms and conditions of the Transaction  Documents,  and from
time to time during the Open Period,  the Company  may, in its sole  discretion,
deliver a Put Notice to the Investor which states the dollar amount  (designated
in U.S.  Dollars) (the "Put Amount"),  which the Company  intends to sell to the
Investor  on a Closing  Date (the  "Put").  The Put Notice  shall be in the form
attached hereto as Exhibit C and  incorporated  herein by reference.  The amount
that the Company  shall be entitled to Put to the  Investor  (the "Put  Amount")
shall be equal to, at the Company's  election,  either:  (A) Two Hundred percent
(200%) of the average  daily volume  (U.S.  market only) of the Common Stock for
the Ten (10) Trading Days prior to the applicable Put Notice Date, multiplied by
the average of the three (3) daily closing bid prices immediately  preceding the
Put Date,  or (B) one  hundred  thousand  dollars  ($100,000).  During  the Open
Period, the Company shall not be entitled to submit a Put Notice until after the
previous  Closing has been  completed.  The Purchase  Price for the Common Stock
identified in the Put Notice shall be equal to two hundred percent (200%) of the
lowest closing Best Bid price of the Common Stock during the Pricing Period.

(C) COMPANY'S RIGHT TO WITHRDRAWL.  The Company shall reserve the right, but not
the  obligation,  to withdraw  that portion of the Put that is below the Minimal
Acceptable Price, by submitting to the Investor,  in writing, a notice to cancel
that portion of the Put. Any shares  above the Minimal  Acceptable  price due to
the  Investor  shall be  carried  out by the  Company  under  the  terms of this
Agreement.

(D) Reserved

(E)  CONDITIONS TO INVESTOR'S  OBLIGATION  TO PURCHASE  SHARES.  Notwithstanding
anything to the contrary in this Agreement, the Company shall not be entitled to
deliver a Put Notice and the  Investor  shall not be  obligated  to purchase any
Shares at a Closing  (as defined in Section  2(G)  unless each of the  following
conditions are satisfied:

(I) a Registration Statement shall have been declared effective and shall remain
effective  and available for the resale of all the  Registrable  Securities  (as
defined in the  Registration  Rights  Agreement)  at all times until the Closing
with respect to the subject Put Notice;

(II) at all times during the period beginning on the related Put Notice Date and
ending on and  including the related  Closing Date,  the Common Stock shall have
been  listed on the  Principal  Market  and shall not have been  suspended  from
trading thereon for a period of two (2) consecutive Trading Days during the Open
Period and the Company shall not have been notified of any pending or threatened
proceeding or other action to suspend the trading of the Common Stock;

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(III) the Company has complied  with its  obligations  and is  otherwise  not in
breach of a material  provision of, or in default  under,  this  Agreement,  the
Registration  Rights  Agreement or any other  agreement  executed in  connection
herewith which has not been corrected prior to delivery of the Put Notice Date;

(IV) no  injunction  shall  have been  issued  and  remain  in force,  or action
commenced by a  governmental  authority  which has not been stayed or abandoned,
prohibiting the purchase or the issuance of the Securities; and

(V) the issuance of the  Securities  will not violate any  shareholder  approval
requirements of the Principal Market.

If any of the events  described in clauses (i) through (v) above occurs during a
Pricing  Period,  then the Investor shall have no obligation to purchase the Put
Amount of Common Stock set forth in the applicable Put Notice.

(F) RESERVED

(G) MECHANICS OF PURCHASE OF SHARES BY INVESTOR.  Subject to the satisfaction of
the  conditions set forth in Sections 2(E), 7 and 8, the closing of the purchase
by the  Investor  of Shares (a  "Closing")  shall  occur on the date which is no
later than seven (7) Trading Days following the applicable Put Notice Date (each
a "Closing Date").  Prior to each Closing Date, (I) the Company shall deliver to
the Investor pursuant to this Agreement, certificates representing the Shares to
be  issued  to the  Investor  on such  date  and  registered  in the name of the
Investor;  and (II) the Investor shall deliver to the Company the Purchase Price
to be paid for such Shares,  determined  as set forth in Sections 2(b) and 2(d).
In lieu of delivering  physical  certificates  representing  the  Securities and
provided  that  the  Company's  transfer  agent  then  is  participating  in The
Depository  Trust Company ("DTC") Fast Automated  Securities  Transfer  ("FAST")
program,  upon request of the Investor,  the Company shall use its  commercially
reasonable  efforts to cause its transfer agent to  electronically  transmit the
Securities by crediting the account of the Investor's  prime broker (which shall
be specified by the Investor a reasonably  sufficient  time in advance) with DTC
through its Deposit Withdrawal Agent Commission ("DWAC") system.

The Company  understands  that a delay in the issuance of Securities  beyond the
Closing Date could result in economic loss to the Investor.  After the Effective
Date, as  compensation  to the Investor for such loss, the Company agrees to pay
late  payments to the  Investor  for late  issuance of  Securities  (delivery of
Securities  after the applicable  Closing Date) in accordance with the following
schedule  (where  "No.  of Days Late" is  defined as the number of trading  days
beyond the Closing Date. The Amounts are cumulative.):

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 LATE PAYMENT FOR EACH
   NO. OF DAYS LATE              $10,000 OF COMMON STOCK
   ----------------              -----------------------
        1                                $100
        2                                $200
        3                                $300
        4                                $400
        5                                $500
        6                                $600
        7                                $700
        8                                $800
        9                                $900
        10                             $1,000
        Over 10                        $1,000 + $200 for each
                                       Business Day late beyond 10 days

The Company shall pay any payments  incurred  under this Section in  immediately
available  funds upon demand by the  Investor.  Nothing  herein  shall limit the
Investor's right to pursue actual damages for the Company's failure to issue and
deliver  the  Securities  to the  Investor,  except to the extent that such late
payments shall constitute payment for and offset any such actual damages alleged
by the Investor, and any Buy In Adjustment Amount.

(H) OVERALL LIMIT ON COMMON STOCK ISSUABLE.  Notwithstanding  anything contained
herein to the contrary,  if during the Open Period the Company becomes listed on
an exchange  that limits the number of shares of Common Stock that may be issued
without shareholder approval,  then the number of Shares issuable by the Company
and  purchasable by the Investor,  including the shares of Common Stock issuable
to the  Investors,  shall not exceed that  number of the shares of Common  Stock
that may be  issuable  without  shareholder  approval,  subject  to  appropriate
adjustment  for stock splits,  stock  dividends,  combinations  or other similar
recapitalization   affecting  the  Common  Stock  (the  "Maximum   Common  Stock
Issuance"),  in excess of the  Maximum  Common  Stock  Issuance  shall  first be
approved by the Company's shareholders in accordance with applicable law and the
By-laws and Amended and Restated Certificate of Incorporation of the Company, if
such issuance of shares of Common Stock could cause a delisting on the Principal
Market.  The parties  understand and agree that the Company's failure to seek or
obtain such  shareholder  approval shall in no way adversely affect the validity
and due  authorization  of the issuance and sale of Securities or the Investor's
obligation  in  accordance  with the terms and  conditions  hereof to purchase a
number  of Shares in the  aggregate  up to the  Maximum  Common  Stock  Issuance
limitation,  and that such approval  pertains only to the  applicability  of the
Maximum Common Stock Issuance limitation provided in this Section 2(H).

SECTION 3. INVESTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS.

The Investor represents and warrants to the Company, and covenants, that:

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(A)  SOPHISTICATED  INVESTOR.  The  Investor  has, by reason of its business and
financial experience, such knowledge, sophistication and experience in financial
and business matters and in making investment  decisions of this type that it is
capable  of  (I)  evaluating  the  merits  and  risks  of an  investment  in the
Securities and making an informed investment  decision;  (II) protecting its own
interest;  and  (III)  bearing  the  economic  risk  of such  investment  for an
indefinite period of time.

(B)  AUTHORIZATION;  ENFORCEMENT.  This  Agreement  has been  duly  and  validly
authorized,  executed and delivered on behalf of the Investor and is a valid and
binding agreement of the Investor enforceable against the Investor in accordance
with its terms, subject as to enforceability to general principles of equity and
to applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation
and other similar laws relating to, or affecting  generally,  the enforcement of
applicable creditors' rights and remedies.

(C) SECTION 9 OF THE 1934 ACT. During the term of this  Agreement,  the Investor
will  comply  with the  provisions  of Section 9 of the 1934 Act,  and the rules
promulgated thereunder, with respect to transactions involving the Common Stock.
The Investor  agrees not to short,  either  directly or  indirectly  through its
affiliates,  principals or advisors,  the Company's common stock during the term
of this Agreement.

(D) ACCREDITED  INVESTOR.  Investor is an "Accredited  Investor" as that term is
defined in Rule 501(a)(3) of Regulation D of the 1933 Act.

(E) NO CONFLICTS.  The execution,  delivery and  performance of the  Transaction
Documents  by  the  Investor  and  the  consummation  by  the  Investor  of  the
transactions  contemplated  hereby and thereby will not result in a violation of
Partnership Agreement or other organizational documents of the Investor.

(F) OPPORTUNITY TO DISCUSS.  The Investor has received all materials relating to
the Company's  business,  finance and  operations  which it has  requested.  The
Investor  has  had an  opportunity  to  discuss  the  business,  management  and
financial affairs of the Company with the Company's management.

(G) INVESTMENT  PURPOSES.  The Investor is purchasing the Securities for its own
account for  investment  purposes and not with a view towards  distribution  and
agrees to resell or otherwise  dispose of the  Securities  solely in  accordance
with the  registration  provisions  of the 1933 Act (or pursuant to an exemption
from such registration provisions).

(H) NO REGISTRATION AS A DEALER. The Investor is not and will not be required to
be  registered  as a  "dealer"  under  the 1934  Act,  either as a result of its
execution and performance of its obligations under this Agreement or otherwise.

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(I) GOOD  STANDING.  The  Investor  is a Limited  Partnership,  duly  organized,
validly existing and in good standing in the State of Delaware.

(J) TAX LIABILITIES.  The Investor understands that it is liable for its own tax
liabilities.

(K) REGULATION M. The Investor will comply with Regulation M under the 1934 Act,
if applicable.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as set forth in the  Schedules  attached  hereto,  or as disclosed on the
Company's SEC  Documents,  the Company  represents  and warrants to the Investor
that:

(A) ORGANIZATION AND QUALIFICATION.  The Company is a corporation duly organized
and validly existing in good standing under the laws of the State of Nevada, and
has the requisite corporate power and authorization to own its properties and to
carry on its business as now being conducted. Both the Company and the companies
it owns or controls,  its  "Subsidiaries," are duly qualified to do business and
are in good standing in every jurisdiction in which its ownership of property or
the nature of the business conducted by it makes such  qualification  necessary,
except to the extent that the failure to be so qualified or be in good  standing
would not have a Material Adverse Effect.  As used in this Agreement,  "Material
Adverse Effect" means any material  adverse effect on the business,  properties,
assets, operations,  results of operations,  financial condition or prospects of
the  Company  and  its  Subsidiaries,  if  any,  taken  as a  whole,  or on  the
transactions  contemplated  hereby or by the  agreements  and  instruments to be
entered  into in  connection  herewith,  or on the  authority  or ability of the
Company to perform its obligations  under the Transaction  Documents (as defined
in Section 1 and 4(b), below).

(B) AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

(I) The Company has the  requisite  corporate  power and authority to enter into
and perform this Agreement,  the Registration Rights Agreement,  and each of the
other  agreements  entered  into by the parties  hereto in  connection  with the
transactions  contemplated  by this Agreement  (collectively,  the  "Transaction
Documents"), and to issue the Securities in accordance with the terms hereof and
thereof.

(II) The execution and delivery of the Transaction  Documents by the Company and
the  consummation by it, of the  transactions  contemplated  hereby and thereby,
including  without  limitation the  reservation for issuance and the issuance of
the Securities pursuant to this Agreement, have been duly and validly authorized
by the Company's Board of Directors and no further consent or  authorization  is
required by the Company, its Board of Directors, or its shareholders.

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(III)  The  Transaction  Documents  have  been  duly and  validly  executed  and
delivered by the Company.

(IV) The Transaction  Documents  constitute the valid and binding obligations of
the Company  enforceable  against the Company in  accordance  with their  terms,
except as such  enforceability may be limited by general principles of equity or
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting generally,  the enforcement of creditors'
rights and remedies.

(C)  CAPITALIZATION.  As of the date hereof, the authorized capital stock of the
Company  consists  of  50,000,000  shares of Common  Stock,  $0.05 par value per
share, of which  21,095,769 and 19,451,166  shares are issued and outstanding as
of September 30, 2005 and December 31, 2004,  respectively,  3,000,000 shares of
Preferred Stock authorized with no shares issued or outstanding; as of September
30, 2005,  and  5,326,275  shares  reserved  for  issuance  pursuant to options,
warrants and other convertible  securities.  All of such outstanding shares have
been,  or upon  issuance  will  be,  validly  issued  and  are  fully  paid  and
nonassessable.

Except as disclosed in the Company's  publicly  available  filings with Periodic
Filings,

(I) no shares of the Company's capital stock are subject to preemptive rights or
any other similar rights or any liens or  encumbrances  suffered or permitted by
the Company;  (II) there are no outstanding debt securities;  (III) there are no
outstanding  shares  of  capital  stock,  options,  warrants,  scrip,  rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements  by which the Company or any of its  Subsidiaries  is or may become
bound to issue  additional  shares of capital stock of the Company or any of its
Subsidiaries  or options,  warrants,  scrip,  rights to  subscribe  to, calls or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
Subsidiaries;  (IV) there are no  agreements  or  arrangements  under  which the
Company or any of its  Subsidiaries  is obligated to register the sale of any of
their securities under the 1933 Act (except the Registration  Rights Agreement),
(V)  there  are  no  outstanding  securities  of  the  Company  or  any  of  its
Subsidiaries which contain any redemption or similar  provisions,  and there are
no contracts,  commitments,  understandings or arrangements by which the Company
or any of its  Subsidiaries  is or may become  bound to redeem a security of the
Company or any of its Subsidiaries;  (VI) there are no securities or instruments

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containing  anti-dilution  or similar  provisions  that will be triggered by the
issuance of the  Securities  as described in this  Agreement;  (VII) the Company
does not  have  any  stock  appreciation  rights  or  "phantom  stock"  plans or
agreements or any similar plan or  agreement;  and (VIII) there is no dispute as
to the  classification of any shares of the Company's capital stock. The Company
has furnished to the Investor,  or the Investor has had access through EDGAR to,
true and correct  copies of the Company's  Amended and Restated  Certificate  of
Incorporation,   as  in  effect  on  the  date  hereof  (the   "Certificate   of
Incorporation"), and the Company's By-laws, as in effect on the date hereof (the
"By-laws"),  and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof in respect thereto.

(D) ISSUANCE OF SHARES. The Company has reserved  17,708,334 Shares for issuance
pursuant to this  Agreement has been duly  authorized  and reserved for issuance
(subject to adjustment  pursuant to the Company's  covenant set forth in Section
5(f) below)  pursuant to this  Agreement.  Upon issuance in accordance with this
Agreement,  the Securities will be validly issued, fully paid and non-assessable
and free from all taxes, liens and charges with respect to the issue thereof. In
the event the Company cannot register a sufficient number of Shares for issuance
pursuant to this  Agreement,  the Company will use its best efforts to authorize
and  reserve  for  issuance  the number of Shares  required  for the  Company to
perform its obligations hereunder as soon as reasonably practicable.

(E) NO CONFLICTS.  The execution,  delivery and  performance of the  Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated  hereby  and  thereby  will not (I)  result in a  violation  of the
Certificate of Incorporation,  any Certificate of Designations,  Preferences and
Rights  of any  outstanding  series of  preferred  stock of the  Company  or the
By-laws;  or (II) conflict  with, or constitute a material  default (or an event
which  with  notice or lapse of time or both would  become a  material  default)
under, or give to others any rights of termination,  amendment,  acceleration or
cancellation  of,  any  material   agreement,   contract,   indenture  mortgage,
indebtedness or instrument to which the Company or any of its  Subsidiaries is a
party,  or to the Company's  knowledge  result in a violation of any law,  rule,
regulation, order, judgment or decree (including United States federal and state
securities  laws and  regulations and the rules and regulations of the Principal
Market or principal  securities  exchange or trading  market on which the Common
Stock is traded or listed)  applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its  Subsidiaries  is
bound or affected. Except as disclosed in Schedule 4(e), neither the Company nor
its  Subsidiaries  is in  violation  of any term of, or in  default  under,  the
Certificate of Incorporation,  any Certificate of Designations,  Preferences and
Rights of any  outstanding  series of preferred  stock of the Company or the By-
laws or their organizational charter or by-laws,  respectively, or any contract,
agreement, mortgage,  indebtedness,  indenture,  instrument, judgment, decree or
order or any  statute,  rule or  regulation  applicable  to the  Company  or its
Subsidiaries, except for possible conflicts, defaults, terminations, amendments,

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<PAGE>
accelerations,  cancellations  and violations that would not  individually or in
the aggregate have a Material  Adverse  Effect.  The business of the Company and
its  Subsidiaries  is not  being  conducted,  and  shall  not be  conducted,  in
violation of any law,  statute,  ordinance,  rule,  order or  regulation  of any
governmental  authority or agency,  regulatory  or  self-regulatory  agency,  or
court,   except  for  possible   violations   the  sanctions  for  which  either
individually  or in the  aggregate  would not have a  Material  Adverse  Effect.
Except as specifically  contemplated by this Agreement and as required under the
1933 Act or any securities  laws of any states to the Company's  knowledge,  the
Company is not  required to obtain any consent,  authorization,  permit or order
of, or make any filing or  registration  (except  the  filing of a  registration
statement)  with,  any court,  governmental  authority or agency,  regulatory or
self-regulatory agency or other third party in order for it to execute,  deliver
or perform any of its obligations  under,  or  contemplated  by, the Transaction
Documents  in  accordance  with the  terms  hereof  or  thereof.  All  consents,
authorizations,  permits, orders, filings and registrations which the Company is
required to obtain  pursuant to the  preceding  sentence  have been  obtained or
effected  on or prior to the date  hereof and are in full force and effect as of
the date  hereof.  Except as  disclosed  in Schedule  4(e),  the Company and its
Subsidiaries are unaware of any facts or circumstances  which might give rise to
any of the  foregoing.  The Company is not, and will not be, in violation of the
listing requirements of the Principal Market as in effect on the date hereof and
on  each  of the  Closing  Dates  and is not  aware  of any  facts  which  would
reasonably lead to delisting of the Common Stock by the Principal  Market in the
foreseeable future.

(F) SEC DOCUMENTS;  FINANCIAL STATEMENTS. As of the date hereof, the Company has
filed all reports,  schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting  requirements  of the 1934
Act  (all of the  foregoing  filed  prior to the date  hereof  and all  exhibits
included  therein and financial  statements and schedules  thereto and documents
incorporated  by reference  therein  being  hereinafter  referred to as the "SEC
Documents").  The Company has delivered to the Investor or its  representatives,
or they have had access  through  EDGAR to, true and complete  copies of the SEC
Documents.  As of their  respective  dates,  the SEC  Documents  complied in all
material  respects  with the  requirements  of the 1934  Act and the  rules  and
regulations of the SEC promulgated  thereunder  applicable to the SEC Documents,
and  none of the SEC  Documents,  at the  time  they  were  filed  with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.  As of
their respective dates, the financial  statements of the Company included in the
SEC  Documents  complied as to form in all  material  respects  with  applicable
accounting  requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally  accepted  accounting  principles,  by a firm  that is a member of the
Public  Companies  Accounting  Oversight Board ("PCAOB")  consistently  applied,
during the periods  involved  (except (I) as may be otherwise  indicated in such

                                       12
<PAGE>
financial  statements  or the notes  thereto,  or (II) in the case of  unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position  of  the  Company  as of the  dates  thereof  and  the  results  of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited  statements,  to normal year-end audit adjustments).  No other written
information provided by or on behalf of the Company to the Investor which is not
included  in the  SEC  Documents,  including,  without  limitation,  information
referred to in Section 4(d) of this Agreement,  contains any untrue statement of
a  material  fact or omits to state  any  material  fact  necessary  to make the
statements  therein,  in the light of the  circumstance  under which they are or
were made, not  misleading.  Neither the Company nor any of its  Subsidiaries or
any of their officers, directors, employees or agents have provided the Investor
with any material,  nonpublic information which was not publicly disclosed prior
to the date  hereof and any  material,  nonpublic  information  provided  to the
Investor by the Company or its Subsidiaries or any of their officers, directors,
employees or agents prior to any Closing Date shall be publicly disclosed by the
Company prior to such Closing Date.

(G) ABSENCE OF CERTAIN  CHANGES.  Except as set forth in the SEC Documents,  the
Company does not intend to change the business  operations of the Company in any
material way. The Company has not taken any steps, and does not currently expect
to take any steps,  to seek  protection  pursuant to any bankruptcy law nor does
the Company or its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings.

(H) ABSENCE OF LITIGATION. Except as set forth in the SEC Documents, there is no
action,  suit,  proceeding,  inquiry  or  investigation  before or by any court,
public board,  government agency,  self-regulatory  organization or body pending
or,  to the  knowledge  of  the  executive  officers  of  Company  or any of its
Subsidiaries,  threatened against or affecting the Company,  the Common Stock or
any of the  Company's  Subsidiaries  or any of the  Company's  or the  Company's
Subsidiaries'  officers or directors in their  capacities  as such,  in which an
adverse decision could have a Material Adverse Effect.

(I)  ACKNOWLEDGMENT   REGARDING  INVESTOR'S  PURCHASE  OF  SHARES.  The  Company
acknowledges  and agrees that the  Investor is acting  solely in the capacity of
arm's  length  purchaser  with  respect  to the  Transaction  Documents  and the
transactions  contemplated hereby and thereby.  The Company further acknowledges
that the  Investor  is not acting as a  financial  advisor or  fiduciary  of the
Company (or in any similar  capacity) with respect to the Transaction  Documents
and the transactions contemplated hereby and thereby and any advice given by the
Investor or any of its respective  representatives  or agents in connection with
the Transaction  Documents and the transactions  contemplated hereby and thereby
is merely incidental to the Investor's  purchase of the Securities.  The Company

                                       13
<PAGE>
further represents to the Investor that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

(J) NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as
set forth in the SEC  Documents,  as of the date  hereof,  no event,  liability,
development  or  circumstance  has  occurred  or  exists,  or to  the  Company's
knowledge  is  contemplated  to  occur,  with  respect  to  the  Company  or its
Subsidiaries  or  their  respective  business,  properties,  assets,  prospects,
operations or financial condition, that would be required to be disclosed by the
Company under applicable securities laws on a registration  statement filed with
the SEC  relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.

(K)  EMPLOYEE  RELATIONS.  Neither the Company  nor any of its  Subsidiaries  is
involved in any union labor  dispute nor, to the knowledge of the Company or any
of its Subsidiaries, is any such dispute threatened. Neither the Company nor any
of its  Subsidiaries is a party to a collective  bargaining  agreement,  and the
Company and its  Subsidiaries  believe that relations  with their  employees are
good.  No  executive  officer  (as  defined in Rule  501(f) of the 1933 Act) has
notified the Company that such officer intends to leave the Company's  employ or
otherwise terminate such officer's employment with the Company.

(L)  INTELLECTUAL  PROPERTY  RIGHTS.  The  Company and its  Subsidiaries  own or
possess adequate rights or licenses to use all trademarks,  trade names, service
marks,  service mark  registrations,  service  names,  patents,  patent  rights,
copyrights, inventions, licenses, approvals, governmental authorizations,  trade
secrets and rights  necessary  to conduct  their  respective  businesses  as now
conducted.  Except  as set  forth in the SEC  Documents,  none of the  Company's
trademarks,  trade names,  service marks,  service mark  registrations,  service
names, patents,  patent rights,  copyrights,  inventions,  licenses,  approvals,
government  authorizations,  trade secrets or other intellectual property rights
necessary  to conduct its  business as now or as proposed to be  conducted  have
expired or  terminated,  or are expected to expire or  terminate  within two (2)
years from the date of this Agreement.  The Company and its  Subsidiaries do not
have any knowledge of any  infringement  by the Company or its  Subsidiaries  of
trademark,  trade name rights, patents, patent rights,  copyrights,  inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other  similar  rights of others,  or of any such  development  of similar or
identical  trade secrets or technical  information by others and,  except as set
forth in the SEC Documents,  there is no claim,  action or proceeding being made
or brought against, or to the Company's knowledge, being threatened against, the
Company or its Subsidiaries  regarding  trademark,  trade name, patents,  patent
rights,  invention,  copyright,  license,  service names, service marks, service
mark registrations,  trade secret or other infringement; and the Company and its
Subsidiaries are unaware of any facts or circumstances  which might give rise to
any of the foregoing.  The Company and its Subsidiaries have taken  commercially

                                       14
<PAGE>
reasonable  security measures to protect the secrecy,  confidentiality and value
of all of their intellectual properties.

(M)  ENVIRONMENTAL  LAWS.  The  Company  and its  Subsidiaries  (I) are,  to the
knowledge  of  management  of the  Company,  in  compliance  with  any  and  all
applicable foreign,  federal,  state and local laws and regulations  relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes,  pollutants or contaminants  ("Environmental  Laws"); (II)
have,  to the  knowledge of  management  of the  Company,  received all permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct their  respective  businesses;  and (III) are in  compliance,  to the
knowledge  of the  Company,  with all terms and  conditions  of any such permit,
license or approval where, in each of the three (3) foregoing cases, the failure
to so comply would have,  individually or in the aggregate,  a Material  Adverse
Effect.

(N) TITLE.  The Company and its  Subsidiaries  have good and marketable title to
all  personal  property  owned by them which is material to the  business of the
Company  and its  Subsidiaries,  in each  case  free  and  clear  of all  liens,
encumbrances  and defects  except such as are  described in the SEC Documents or
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company or any
of its  Subsidiaries.  Any real property and facilities  held under lease by the
Company or any of its Subsidiaries are held by them under valid,  subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such  property and buildings by the
Company and its Subsidiaries.

(O)  INSURANCE.  Each of the Company's  Subsidiaries  are insured by insurers of
recognized  financial  responsibility  against such losses and risks and in such
amounts as  management  of the  Company  reasonably  believes  to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged.  Neither  the  Company  nor any such  Subsidiary  has been  refused any
insurance  coverage  sought or applied  for and neither the Company nor any such
Subsidiary  has any  reason  to  believe  that it will not be able to renew  its
existing  insurance  coverage  as and when such  coverage  expires  or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not have a Material Adverse Effect.

(P) REGULATORY PERMITS.  The Company and its Subsidiaries have in full force and
effect  all  certificates,   approvals,  authorizations  and  permits  from  the
appropriate  federal,   state,  local  or  foreign  regulatory  authorities  and
comparable foreign regulatory agencies, necessary to own, lease or operate their
respective  properties and assets and conduct their respective  businesses,  and
neither  the  Company  nor any  such  Subsidiary  has  received  any  notice  of
proceedings  relating to the revocation or modification of any such certificate,
approval,  authorization  or permit,  except for such  certificates,  approvals,

                                       15
<PAGE>
authorizations  or  permits  which  if not  obtained,  or  such  revocations  or
modifications which, would not have a Material Adverse Effect.

(Q)  INTERNAL  ACCOUNTING  CONTROLS.  The Company  and each of its  Subsidiaries
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurance  that (I)  transactions  are executed in  accordance  with
management's general or specific authorizations;  (II) transactions are recorded
as necessary to permit  preparation of financial  statements in conformity  with
generally accepted accounting  principles by a firm with membership to the PCAOB
and to maintain asset  accountability;  (III) access to assets is permitted only
in accordance with management's general or specific authorization;  and (IV) the
recorded  accountability  for assets is  compared  with the  existing  assets at
reasonable  intervals  and  appropriate  action  is taken  with  respect  to any
differences.

(R) NO MATERIALLY  ADVERSE  CONTRACTS,  ETC.  Neither the Company nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment,  decree,  order,  rule or regulation  which in the judgment of the
Company's  officers has or is expected in the future to have a Material  Adverse
Effect.  Neither  the  Company  nor any of its  Subsidiaries  is a party  to any
contract or agreement which in the judgment of the Company's  officers has or is
expected to have a Material Adverse Effect.

(S) TAX STATUS.  The Company and each of its  Subsidiaries has made or filed all
United  States  federal and state income and all other tax returns,  reports and
declarations  required by any  jurisdiction  to which it is subject  (unless and
only to the extent that the Company and each of its  Subsidiaries  has set aside
on its books  provisions  reasonably  adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental  assessments and
charges  that are  material  in amount,  shown or  determined  to be due on such
returns,  reports and  declarations,  except those being contested in good faith
and has set aside on its books provision  reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or declarations  apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any  jurisdiction,  and the officers of the
Company know of no basis for any such claim.

(T)  CERTAIN  TRANSACTIONS.  Except as set forth in the SEC  Documents  filed at
least  ten (10) days  prior to the date  hereof  and  except  for  arm's  length
transactions pursuant to which the Company makes payments in the ordinary course
of business  upon terms no less  favorable  than the Company  could  obtain from
third  parties and other than the grant of stock  options  disclosed  in the SEC
Documents,  none of the  officers,  directors,  or  employees  of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as employees,  officers and  directors),  including any
contract,  agreement  or  other  arrangement  providing  for the  furnishing  of
services to or by, providing for rental of real or personal property to or from,

                                       16
<PAGE>
or  otherwise  requiring  payments  to or from  any  officer,  director  or such
employee  or, to the  knowledge of the Company,  any  corporation,  partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.

(U) DILUTIVE EFFECT. The Company understands and acknowledges that the number of
shares of Common Stock issuable upon  purchases  pursuant to this Agreement will
increase in certain circumstances including, but not necessarily limited to, the
circumstance  wherein the trading price of the Common Stock declines  during the
period between the Effective Date and the end of the Open Period.  The Company's
executive officers and directors have studied and fully understand the nature of
the  transactions  contemplated by this Agreement and recognize that they have a
potential  dilutive effect. The Board of Directors of the Company has concluded,
in its good faith business judgment, that such issuance is in the best interests
of the Company.  The Company  specifically  acknowledges  that,  subject to such
limitations  as are  expressly  set  forth  in the  Transaction  Documents,  its
obligation  to issue  shares of Common  Stock upon  purchases  pursuant  to this
Agreement is absolute and  unconditional  regardless of the dilutive effect that
such issuance may have on the ownership  interests of other  shareholders of the
Company.

(V) LOCK-UP.  The Company shall cause its  officers,  insiders,  directors,  and
affiliates  or other related  parties  under control of the Company,  to refrain
from selling Common Stock during each Pricing Period.

(W) NO GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor
any person acting on its behalf, has engaged in any form of general solicitation
or general  advertising  (within the meaning of Regulation D) in connection with
the offer or sale of the Common Stock offered hereby.

(X) NO BROKERS,  FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS.  No brokers,
finders or financial advisory fees or commissions will be payable by the Company
with respect to the  transactions  contemplated  by this  Agreement,  other than
disclosed in this Agreement.

SECTION 5. COVENANTS OF THE COMPANY

(A) BEST EFFORTS.  The Company shall use commercially  reasonable efforts timely
to satisfy each of the conditions to be satisfied by it as provided in Section 7
of this Agreement.

(B) BLUE SKY. The Company shall, at its sole cost and expense, on or before each
of the Closing Dates, take such action as the Company shall reasonably determine
is  necessary  to  qualify  the  Securities  for,  or obtain  exemption  for the
Securities  for,  sale to the Investor at each of the Closings  pursuant to this
Agreement under  applicable  securities or "Blue Sky" laws of such states of the

                                       17
<PAGE>
United States, as reasonably  specified by Investor,  and shall provide evidence
of any such action so taken to the Investor on or prior to the Closing Date.

(C) REPORTING STATUS.  Until the earlier to occur of (I) the first date which is
after the date this  Agreement is terminated  pursuant to Section 9 and on which
the Holders (as that term is defined in the Registration  Rights  Agreement) may
sell  all  of  the  Securities  without  restriction  pursuant  to  Rule  144(k)
promulgated  under  the 1933 Act (or  successor  thereto);  and (II) the date on
which (A) the Holders shall have sold all the Securities; and (B) this Agreement
has been  terminated  pursuant  to Section 9 (the  "Registration  Period"),  the
Company shall file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as a reporting  company
under the 1934 Act.

(D) USE OF  PROCEEDS.  The Company  will use the  proceeds  from the sale of the
Shares  (excluding  amounts  paid by the  Company  for fees as set  forth in the
Transaction  Documents) for general  corporate and working capital  purposes and
acquisitions or assets,  businesses or operations or for other purposes that the
Board of Directors deem to be in the best interest of the Company.

(E) FINANCIAL INFORMATION.  The Company agrees to make available to the Investor
via EDGAR or other  electronic  means the  following to the Investor  during the
Registration  Period:  (I) within five (5) Trading Days after the filing thereof
with the SEC, a copy of its Annual Reports on Form 10-KSB, its Quarterly Reports
on Form 10-QSB, any Current Reports on Form 8-K and any Registration  Statements
or  amendments  filed  pursuant  to the  1933  Act;  (II) on the same day as the
release thereof, facsimile copies of all press releases issued by the Company or
any of its Subsidiaries;  (III) copies of any notices and other information made
available   or   given   to  the   shareholders   of  the   Company   generally,
contemporaneously   with  the  making   available  or  giving   thereof  to  the
shareholders;  and (IV)  within  two (2)  calendar  days of filing  or  delivery
thereof, copies of all documents filed with, and all correspondence sent to, the
Principal Market, any securities exchange or market, or the National Association
of Securities  Dealers,  Inc.,  unless such  information  is material  nonpublic
information.

(F) RESERVATION OF SHARES.  Subject to the following sentence, the Company shall
take all action necessary to at all times have authorized,  and reserved for the
purpose of issuance,  a  sufficient  number of shares of Common Stock to provide
for the  issuance  of the  Securities  hereunder.  In the event that the Company
determines  that it does not have a sufficient  number of  authorized  shares of
Common  Stock to reserve and keep  available  for  issuance as described in this
Section  5(f),  the Company  shall use its  commercially  reasonable  efforts to
increase the number of authorized shares of Common Stock by seeking  shareholder
approval for the authorization of such additional shares.

(G) LISTING.  The Company shall promptly  secure and maintain the listing of all
of the Registrable  Securities (as defined in the Registration Rights Agreement)
upon the  Principal  Market  and each other  national  securities  exchange  and

                                       18
<PAGE>
automated  quotation  system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, such listing
of all Registrable  Securities from time to time issuable under the terms of the
Transaction  Documents.  Neither the Company nor any of its  Subsidiaries  shall
take any action which would be reasonably expected to result in the delisting or
suspension of the Common Stock on the Principal Market (excluding suspensions of
not more than one (1) trading day resulting from business  announcements  by the
Company).  The Company  shall  promptly  provide to the  Investor  copies of any
notices  it  receives  from  the  Principal   Market   regarding  the  continued
eligibility of the Common Stock for listing on such automated  quotation  system
or  securities  exchange.  The  Company  shall  pay all  fees  and  expenses  in
connection with satisfying its obligations under this Section 5(g).

(H) TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of
its Subsidiaries not to, enter into, amend, modify or supplement,  or permit any
Subsidiary  to  enter  into,  amend,   modify  or  supplement,   any  agreement,
transaction,  commitment  or  arrangement  with  any of its or any  Subsidiary's
officers,  directors,  persons who were officers or directors at any time during
the previous two (2) years,  shareholders who beneficially own 5% or more of the
Common Stock, or Affiliates or with any individual related by blood, marriage or
adoption to any such  individual  or with any entity in which any such entity or
individual  owns a 5% or more  beneficial  interest  (each a  "Related  Party"),
except  for (I)  customary  employment  arrangements  and  benefit  programs  on
reasonable terms, (II) any agreement, transaction,  commitment or arrangement on
an arms-length basis on terms no less favorable than terms which would have been
obtainable  from a person other than such Related Party, or (III) any agreement,
transaction,  commitment or  arrangement  which is approved by a majority of the
disinterested directors of the Company. For purposes hereof, any director who is
also an officer of the Company or any  Subsidiary  of the Company shall not be a
disinterested  director  with  respect  to  any  such  agreement,   transaction,
commitment or arrangement.  "Affiliate" for purposes hereof means,  with respect
to any person or entity,  another person or entity that, directly or indirectly,
(I) has a 5% or more equity  interest  in that person or entity,  (II) has 5% or
more common ownership with that person or entity,  (III) controls that person or
entity, or (IV) is under common control with that person or entity. "Control" or
"Controls"  for  purposes  hereof  means  that a person or entity has the power,
direct or  indirect,  to  conduct or govern the  policies  of another  person or
entity.

(I) FILING OF FORM 8-K.  On or before the date  which is four (4)  Trading  Days
after the Execution  Date,  the Company shall file a Current  Report on Form 8-K
with  the SEC  describing  the  terms  of the  transaction  contemplated  by the
Transaction  Documents  in the form  required by the 1934 Act, if such filing is
required.

                                       19
<PAGE>
(J)  CORPORATE  EXISTENCE.  The Company  shall use its  commercially  reasonable
efforts to preserve and continue the corporate existence of the Company.

(K) NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE
A PUT. The Company shall promptly  notify Investor upon the occurrence of any of
the  following  events  in  respect  of  a  Registration  Statement  or  related
prospectus  in respect of an  offering  of the  Securities:  (I)  receipt of any
request  for  additional  information  by the SEC or any other  federal or state
governmental  authority  during the period of  effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or related
prospectus;  (II)  the  issuance  by the  SEC  or any  other  federal  or  state
governmental  authority of any stop order  suspending the  effectiveness  of any
Registration  Statement or the initiation of any  proceedings  for that purpose;
(III)  receipt  of  any  notification  with  respect  to the  suspension  of the
qualification or exemption from  qualification of any of the Securities for sale
in any  jurisdiction  or the  initiation  or notice of any  proceeding  for such
purpose;  (IV) the happening of any event that makes any statement  made in such
Registration  Statement or related  prospectus or any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration  Statement,  related
prospectus or documents so that,  in the case of a  Registration  Statement,  it
will not contain any untrue  statement  of a material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  and that in the case of the related prospectus, it will
not  contain  any  untrue  statement  of a  material  fact or omit to state  any
material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading; and (V) the Company's reasonable determination that a post-effective
amendment to the  Registration  Statement would be appropriate,  and the Company
shall  promptly make  available to Investor any such  supplement or amendment to
the related prospectus. The Company shall not deliver to Investor any Put Notice
during the continuation of any of the foregoing events.

(L)  REIMBURSEMENT.  If (I)  Investor  becomes  involved in any  capacity in any
action,  proceeding or investigation  brought by any shareholder of the Company,
in  connection  with or as a  result  of the  consummation  of the  transactions
contemplated  by the Transaction  Documents,  or if Investor is impleaded in any
such action,  proceeding or  investigation by any person (other than as a result
of a breach of the Investor's  representations  and warranties set forth in this
Agreement);  or (II)  Investor  becomes  involved in any capacity in any action,
proceeding or investigation  brought by the SEC against or involving the Company
or in connection  with or as a result of the  consummation  of the  transactions
contemplated by the Transaction Documents (other than as a result of a breach of
the Investor's  representations and warranties set forth in this Agreement),  or
if Investor is impleaded in any such action,  proceeding or investigation by any
person,  then in any such case,  the Company  will  reimburse  Investor  for its

                                       20
<PAGE>
reasonable legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith, as such expenses are incurred. In
addition,  other than with  respect to any matter in which  Investor  is a named
party, the Company will pay to Investor the charges, as reasonably determined by
Investor,  for the time of any  officers or  employees  of  Investor  devoted to
appearing  and preparing to appear as witnesses,  assisting in  preparation  for
hearings,  trials or pretrial  matters,  or otherwise with respect to inquiries,
hearing,  trials,  and other proceedings  relating to the subject matter of this
Agreement. The reimbursement obligations of the Company under this section shall
be in addition to any  liability  which the Company may  otherwise  have,  shall
extend upon the same terms and conditions to any affiliates of Investor that are
actually  named in such  action,  proceeding  or  investigation,  and  partners,
directors, agents, employees, attorneys,  accountants,  auditors and controlling
persons (if any),  as the case may be, of Investor and any such  affiliate,  and
shall be binding upon and inure to the benefit of any successors of the Company,
Investor and any such affiliate and any such person.

(M) TRANSFER AGENT. Upon effectiveness of the Registration Statement, and for so
long as the  Registration  Statement is  effective,  the Company  shall  deliver
instructions  to its transfer  agent to issue  Shares to the  Investor  that are
covered for resale by the Registration Statement free of restrictive legends.

SECTION 6. RESERVED

SECTION 7. CONDITIONS OF THE COMPANY'S OBLIGATION TO SELL.

The obligation  hereunder of the Company to issue and sell the Securities to the
Investor is further subject to the satisfaction, at or before each Closing Date,
of each of the following  conditions set forth below.  These  conditions are for
the  Company's  sole benefit and may be waived by the Company at any time in its
sole discretion.

(A) The Investor shall have executed each of this Agreement and the Registration
Rights Agreement and delivered the same to the Company.

(B) The Investor  shall have delivered to the Company the Purchase Price for the
Securities being purchased by the Investor between the end of the Pricing Period
and the Closing Date via a Put Settlement  Sheet (hereto  attached as Exhibit D)
After receipt of  confirmation  of delivery of such  Securities to the Investor,
the Investor,  by wire transfer of immediately  available  funds pursuant to the
wire instructions  provided by the Company will disburse the funds  constituting
the Purchase Amount.

(C) No statute, rule, regulation,  executive order, decree, ruling or injunction
shall  have been  enacted,  entered,  promulgated  or  endorsed  by any court or
governmental   authority  of  competent   jurisdiction   which   prohibits   the
consummation of any of the transactions contemplated by this Agreement.

                                       21
<PAGE>
SECTION 8. FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE.

The  obligation of the Investor  hereunder to purchase  Shares is subject to the
satisfaction,  on or  before  each  Closing  Date,  of  each  of  the  following
conditions set forth below.

(A) The  Company  shall have  executed  each of the  Transaction  Documents  and
delivered the same to the Investor.

(B) The Common Stock shall be authorized  for quotation on the Principal  Market
and trading in the Common Stock shall not have been  suspended by the  Principal
Market or the SEC,  at any time  beginning  on the date  hereof and  through and
including the respective  Closing Date  (excluding  suspensions of not more than
one (1)  Trading Day  resulting  from  business  announcements  by the  Company,
provided that such suspensions occur prior to the Company's  delivery of the Put
Notice related to such Closing).

(C) The  representations and warranties of the Company shall be true and correct
as of the date when made and as of the applicable Closing Date as though made at
that time  (except for (I)  representations  and  warranties  that speak as of a
specific  date and (II) with  respect to the  representations  made in  Sections
4(g),  (h) and (j) and the third  sentence of Section 4(k) hereof,  events which
occur on or after the date of this  Agreement  and are  disclosed in SEC filings
made by the Company at least ten (10) Trading Days prior to the  applicable  Put
Notice Date) and the Company shall have  performed,  satisfied and complied with
the covenants,  agreements and conditions required by the Transaction  Documents
to be  performed,  satisfied  or complied  with by the Company on or before such
Closing  Date.  The  Investor  may  request  an update as of such  Closing  Date
regarding the representation contained in Section 4(c) above.

(D)  The  Company  shall  have  executed  and  delivered  to  the  Investor  the
certificates  representing,  or have executed electronic book-entry transfer of,
the  Securities  (in such  denominations  as such Investor  shall request) being
purchased by the Investor at such Closing.

(E) The  Board of  Directors  of the  Company  shall  have  adopted  resolutions
consistent with Section 4(b)(ii) above (the  "Resolutions") and such Resolutions
shall not have been amended or rescinded prior to such Closing Date.

(F) Reserved

(G) No statute, rule, regulation,  executive order, decree, ruling or injunction
shall  have been  enacted,  entered,  promulgated  or  endorsed  by any court or
governmental   authority  of  competent   jurisdiction   which   prohibits   the
consummation of any of the transactions contemplated by this Agreement.

                                       22
<PAGE>
(H) The  Registration  Statement  shall be effective on each Closing Date and no
stop order suspending the  effectiveness of the Registration  statement shall be
in  effect  or to the  Company's  knowledge  shall  be  pending  or  threatened.
Furthermore,  on each Closing  Date (I) neither the Company nor  Investor  shall
have  received  notice  that the SEC has issued or intends to issue a stop order
with  respect  to such  Registration  Statement  or that the SEC  otherwise  has
suspended or withdrawn the effectiveness of such Registration Statement,  either
temporarily  or  permanently,  or intends or has threatened to do so (unless the
SEC's concerns have been addressed and Investor is reasonably satisfied that the
SEC no longer is considering or intends to take such action),  and (II) no other
suspension of the use or withdrawal of the  effectiveness  of such  Registration
Statement or related prospectus shall exist.

(I)  At  the  time  of  each  Closing,  the  Registration  Statement  (including
information or documents  incorporated by reference  therein) and any amendments
or supplements thereto shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the  statements  therein  not  misleading  or which  would  require  public
disclosure or an update supplement to the prospectus.

(J) If  applicable,  the  shareholders  of the Company  shall have  approved the
issuance  of any  Shares in excess  of the  Maximum  Common  Stock  Issuance  in
accordance  with Section  2(h) or the Company  shall have  obtained  appropriate
approval  pursuant to the requirements of Nevada law and the Company's  Articles
of Incorporation and By-laws.

(K) The  conditions  to such  Closing set forth in Section  2(e) shall have been
satisfied on or before such Closing Date.

(L) The Company  shall have  certified  to the  Investor the number of Shares of
Common Stock outstanding when a Put Notice is given to the Investor.

SECTION 9. TERMINATION. This Agreement shall terminate upon any of the following
events:

(I) when the Investor has purchased an aggregate of Eight Million,  Five Hundred
Thousand  dollars  ($8,500,000)  in the Common Stock of the Company  pursuant to
this Agreement; or,

(II) on the date which is thirty (30) months after the Effective Date;

(III) the Company has the option to terminate this agreement  within thirty days
notice, provided no outstanding shares are due the Investor for a Put.

SECTION 10. SUSPENSION

This Agreement  shall be suspended upon any of the following  events,  and shall
remain suspended until such event is rectified:

                                       23
<PAGE>
(I) the  trading of the Common  Stock is  suspended  by the SEC,  the  Principal
Market or the NASD for a period of two (2)  consecutive  Trading Days during the
Open Period; or,

(II) The Common  Stock ceases to be  registered  under the 1934 Act or listed or
traded  on  the   Principal   Market.   Upon  the   occurrence  of  one  of  the
above-described  events,  the Company shall send written notice of such event to
the Investor.

SECTION 11. INDEMNIFICATION.

In consideration of the parties mutual  obligations set forth in the Transaction
Documents, each of the parties (in such capacity, an "Indemnitor") shall defend,
protect,  indemnify  and hold  harmless  the other and all of the other  party's
shareholders,  officers,  directors,  employees, counsel, and direct or indirect
investors  and any of the  foregoing  person's  agents or other  representatives
(including,   without   limitation,   those  retained  in  connection  with  the
transactions contemplated by this Agreement)  (collectively,  the "Indemnitees")
from and against any and all actions,  causes of action, suits, claims,  losses,
costs,  penalties,  fees,  liabilities and damages,  and reasonable  expenses in
connection therewith  (irrespective of whether any such Indemnitee is a party to
the  action  for which  indemnification  hereunder  is  sought),  and  including
reasonable  attorneys' fees and disbursements  (the "Indemnified  Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (I)
any  misrepresentation  or breach of any  representation or warranty made by the
Indemnitor or any other certificate,  instrument or document contemplated hereby
or thereby;  (II) any breach of any  covenant,  agreement or  obligation  of the
Indemnitor  contained in the  Transaction  Documents  or any other  certificate,
instrument  or document  contemplated  hereby or thereby;  or (III) any cause of
action,  suit or claim brought or made against such  Indemnitee by a third party
and arising out of or resulting  from the  execution,  delivery,  performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document   contemplated   hereby  or  thereby,   except   insofar  as  any  such
misrepresentation,  breach or any untrue  statement,  alleged untrue  statement,
omission or alleged  omission is made in reliance  upon and in  conformity  with
information  furnished to Indemnitor  which is specifically  intended for use in
the  preparation of any such  Registration  Statement,  preliminary  prospectus,
prospectus  or amendments  to the  prospectus.  To the extent that the foregoing
undertaking  by  the  Indemnitor  may  be  unenforceable  for  any  reason,  the
Indemnitor  shall make the maximum  contribution to the payment and satisfaction
of each of the Indemnified  Liabilities  which is permissible  under  applicable
law. The indemnity provisions contained herein shall be in addition to any cause
of  action or  similar  rights  Indemnitor  may have,  and any  liabilities  the
Indemnitor or the Indemnitees may be subject to.

                                       24
<PAGE>
SECTION 12. GOVERNING LAW; MISCELLANEOUS.

(A)  GOVERNING  LAW.  This  Agreement  shall be governed by and  interpreted  in
accordance with the laws of the Commonwealth of Massachusetts  without regard to
the principles of conflict of laws. Each party hereby irrevocably submits to the
exclusive  jurisdiction  of the state and federal  courts sitting in the City of
Boston,  County of Suffolk,  for the adjudication of any dispute hereunder or in
connection  herewith or with any  transaction  contemplated  hereby or discussed
herein,  and hereby  irrevocably  waives,  and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve  process in any manner  permitted by law.
If any  provision of this  Agreement  shall be invalid or  unenforceable  in any
jurisdiction,  such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or  enforceability  of any  provision  of this  Agreement  in any other
jurisdiction.

(I) DISPUTES SUBJECT TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW

All disputes  arising under this agreement  shall be governed by and interpreted
in accordance with the laws of the Commonwealth of Massachusetts, without regard
to principles of conflict of laws. The parties to this agreement will submit all
disputes  arising under this agreement to  arbitration in Boston,  Massachusetts
before a single arbitrator of the American Arbitration  Association ("AAA"). The
arbitrator  shall be  selected  by  application  of the rules of the AAA,  or by
mutual  agreement  of the  parties,  except  that  such  arbitrator  shall be an
attorney admitted to practice law in the Commonwealth of Massachusetts. No party
to this  agreement  will  challenge  the  jurisdiction  or venue  provisions  as
provided in this section.

(B) LEGAL FEES;  AND  MISCELLANEOUS  FEES.  Except as otherwise set forth in the
Transaction  Documents,  each  party  shall  pay the  fees and  expenses  of its
advisers,  counsel,  the  accountants  and other experts,  if any, and all other
expenses  incurred  by such  party  incident  to the  negotiation,  preparation,
execution,  delivery and performance of this Agreement.  Any attorneys' fees and
expenses  incurred by either the Company or by the Investor in  connection  with
the preparation,  negotiation,  execution and delivery of any amendments to this
Agreement or relating to the  enforcement of the rights of any party,  after the

                                       25
<PAGE>
occurrence of any breach of the terms of this  Agreement by another party or any
default by another party in respect of the transactions  contemplated hereunder,
shall be paid on  demand  by the  party  which  breached  the  Agreement  and/or
defaulted,  as the case may be. The Company  shall pay all stamp and other taxes
and duties levied in connection with the issuance of any Securities.

(C)  COUNTERPARTS.  This  Agreement  may be  executed  in two or more  identical
counterparts,  all of which shall be considered  one and the same  agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered  to the other  party;  provided  that a facsimile  signature  shall be
considered  due execution  and shall be binding upon the signatory  thereto with
the same force and effect as if the signature were an original,  not a facsimile
signature.

(D)  HEADINGS;   SINGULAR/PLURAL.   The  headings  of  this  Agreement  are  for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation  of,  this  Agreement.  Whenever  required by the context of this
Agreement, the singular shall include the plural and masculine shall include the
feminine.

(E)  SEVERABILITY.  If any  provision  of this  Agreement  shall be  invalid  or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or the  validity  or  enforceability  of  any  provision  of  this
Agreement in any other jurisdiction.

(F) ENTIRE AGREEMENT; AMENDMENTS. This Agreement supersedes all other prior oral
or written  agreements between the Investor,  the Company,  their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this  Agreement  and the  instruments  referenced  herein  (including  the other
Transaction  Documents)  contain the entire  understanding  of the parties  with
respect to the matters  covered herein and therein and,  except as  specifically
set forth  herein or therein,  neither the  Company nor the  Investor  makes any
representation,  warranty, covenant or undertaking with respect to such matters.
No provision of this  Agreement  may be amended  other than by an  instrument in
writing signed by the Company and the Investor,  and no provision  hereof may be
waived other than by an instrument  in writing  signed by the party against whom
enforcement is sought.

(G)  NOTICES.  Any notices or other  communications  required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been  delivered  (I) upon receipt,  when  delivered  personally;  (II) upon
receipt,  when sent by  facsimile  (provided  confirmation  of  transmission  is
mechanically or electronically generated and kept on file by the sending party);
or (III)  one (1) day  after  deposit  with a  nationally  recognized  overnight
delivery  service,  in each case properly  addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

                                       26
<PAGE>
IF TO THE COMPANY:

Millenium Holding Group, Inc.
12 Winding Road
Henderson, NV 89052
Telephone: (702) 492-7721
Facsimile: (702) 492-7728

IF TO THE INVESTOR:

Dutchess Private Equities Fund, LP,
50 Commonwealth Avenue, Suite 2
Boston, MA 02116
Telephone: 617-301-4700
Facsimile: 617-249-0947

Each party shall provide five (5) days' prior written  notice to the other party
of any change in address or facsimile number.

(H) NO ASSIGNMENT. This Agreement may not be assigned.

(I) NO THIRD PARTY BENEFICIARIES.  This Agreement is intended for the benefit of
the parties  hereto and is not for the benefit of, nor may any provision  hereof
be enforced by, any other person.

(J) SURVIVAL. The representations and warranties of the Company and the Investor
contained  in  Sections  2 and 3, the  agreements  and  covenants  set  forth in
Sections 4 and 5, and the  indemnification  provisions  set forth in Section 10,
shall survive each of the Closings and the termination of this Agreement.

(K) PUBLICITY. The Company and Investor shall consult with each other in issuing
any press  releases or otherwise  making public  statements  with respect to the
transactions contemplated hereby and no party shall issue any such press release
or otherwise  make any such public  statement  without the prior  consent of the
other  parties,  which  consent shall not be  unreasonably  withheld or delayed,
except that no prior consent shall be required if such disclosure is required by
law, in which such case the  disclosing  party shall  provide the other  parties
with prior notice of such public statement.  Notwithstanding the foregoing,  the
Company  shall not  publicly  disclose  the name of  Investor  without the prior
consent  of such  Investor,  except  to the  extent  required  by law.  Investor
acknowledges  that this Agreement and all or part of the  Transaction  Documents
may be  deemed  to be  "material  contracts"  as that  term is  defined  by Item
601(b)(10) of Regulation  S-B, and that the Company may therefore be required to
file such  documents  as exhibits to reports or  registration  statements  filed
under the 1933 Act or the 1934 Act.  Investor  further agrees that the status of
such documents and materials as material contracts shall be determined solely by
the Company, in consultation with its counsel.

                                       27
<PAGE>
(L) FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(M)  PLACEMENT  AGENT.  The Company  agrees to pay  _____________,  a registered
broker  dealer ____ percent (__%) of the Put Amount on each draw toward the fee.
The Investor  shall have no obligation  with respect to any fees or with respect
to any claims made by or on behalf of other  persons or  entities  for fees of a
type  contemplated  in this  Section  that  may be due in  connection  with  the
transactions  contemplated  by the  Transaction  Documents.  The  Company  shall
indemnify and hold harmless the Investor, their employees,  officers, directors,
agents,  and partners,  and their  respective  affiliates,  from and against all
claims,  losses,   damages,  costs  (including  the  costs  of  preparation  and
attorney's  fees) and  expenses  incurred  in  respect  of any such  claimed  or
existing fees, as such fees and expenses are incurred.

(N) NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

(O)  REMEDIES.  The Investor and each holder of the Shares shall have all rights
and remedies set forth in this Agreement and the  Registration  Rights Agreement
and all rights and  remedies  which such  holders  have been granted at any time
under any other  agreement  or contract and all of the rights which such holders
have under any law.  Any person  having any rights  under any  provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any default or breach
of any  provision  of this  Agreement,  including  the  recovery  of  reasonable
attorneys fees and costs, and to exercise all other rights granted by law.

(P)  PAYMENT  SET  ASIDE.  To the  extent  that the  Company  makes a payment or
payments to the Investor hereunder or under the Registration Rights Agreement or
the Investor enforces or exercises its rights hereunder or thereunder,  and such
payment or payments or the proceeds of such  enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside,  recovered from, disgorged by or are required to be refunded,  repaid
or otherwise  restored to the Company,  a trustee,  receiver or any other person
under any law  (including,  without  limitation,  any  bankruptcy  law, state or
federal law, common law or equitable cause of action), then to the extent of any
such  restoration  the  obligation  or part  thereof  originally  intended to be
satisfied  shall be revived  and  continued  in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

                                       28
<PAGE>
(Q) PRICING OF COMMON STOCK.  For purposes of this  Agreement,  the bid price of
the Common Stock in this Agreement shall be as reported on Bloomberg.

SECTION 13. Non-Disclosure of Non-Public Information.

(a) The Company shall not disclose non-public  information to the Investor,  its
advisors, or its representatives, unless prior to disclosure of such information
the  Company  identifies  such  information,  in  writing,  as being  non-public
information and provides the Investor,  such advisors and  representatives  with
the  opportunity to accept or refuse to accept such  non-public  information for
review. The Company may, as a condition to disclosing any non-public information
hereunder,  require the Investor's  advisors and representatives to enter into a
confidentiality agreement in form reasonably satisfactory to the Company and the
Investor.

(b) Nothing herein shall require the Company to disclose non-public  information
to the Investor or its advisors or  representatives,  and the Company represents
that it  does  not  disseminate  non-public  information  to any  investors  who
purchase  stock in the  Company in a public  offering,  to money  managers or to
securities analysts,  provided, however, that notwithstanding anything herein to
the contrary, the Company will, as hereinabove provided,  immediately notify the
advisors and representatives of the Investor and, if any,  underwriters,  of any
event or the existence of any  circumstance  (without any obligation to disclose
the specific  event or  circumstance)  of which it becomes  aware,  constituting
non-public  information (whether or not requested of the Company specifically or
generally  during  the course of due  diligence  by such  persons or  entities),
which, if not disclosed in the prospectus included in the Registration Statement
would  cause such  prospectus  to include a material  misstatement  or to omit a
material  fact  required to be stated  therein in order to make the  statements,
therein,  in light of the circumstances in which they were made, not misleading.
Nothing  contained  in this  Section  13 shall be  construed  to mean  that such
persons or entities other than the Investor  (without the written consent of the
Investor  prior to disclosure  of such  information)  may not obtain  non-public
information  in the course of conducting  due  diligence in accordance  with the
terms of this  Agreement  and nothing  herein shall  prevent any such persons or
entities  from  notifying  the Company of their  opinion  that based on such due
diligence by such persons or entities,  that the Registration Statement contains
an untrue  statement of material  fact or omits a material  fact  required to be
stated  in the  Registration  Statement  or  necessary  to make  the  statements
contained  therein,  in light of the  circumstances in which they were made, not
misleading.

                                      * * *

                                       29
<PAGE>
SIGNATURE PAGE OF INVESTMENT AGREEMENT

Your  signature on this  Signature  Page evidences your agreement to be bound by
the terms and conditions of the Investment Agreement and the Registration Rights
Agreement as of the date first written above.

The undersigned  signatory hereby certifies that he has read and understands the
Investment  Agreement,  and the representations  made by the undersigned in this
Investment Agreement are true and accurate, and agrees to be bound by its terms.

DUTCHESS PRIVATE EQUITIES FUND, L.P.
BY ITS GENERAL PARTNER,
DUTCHESS CAPITAL MANAGEMENT, LLC


By_________________________________,

Douglas H. Leighton, Managing Member



MILLENIUM HOLDING GROUP, INC.



By_________________________________,

Richard Ham, Chief Executive Officer

                                       30
<PAGE>
<PAGE>


LIST OF EXHIBITS

EXHIBIT A                        Registration Rights Agreement
EXHIBIT B                        Opinion of Company's Counsel
EXHIBIT C                        Put Notice
EXHIBIT D                        Put Settlement Sheet




                                       31
<PAGE>
LIST OF SCHEDULES


SCHEDULE 4(A) SUBSIDIARIES



            FYNRE




                                       32
<PAGE>
EXHIBIT A




                                       33
<PAGE>
EXHIBIT B


FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
                                                               Date: __________
[TRANSFER AGENT]

Re: Millenium Holding Group, Inc.

Ladies and Gentlemen:

     We are counsel to Millenium Holding Group,  Inc., a Nevada corporation (the
"Company"),  and have  represented  the Company in connection  with that certain
Subscription Agreement (the "Subscription  Agreement") entered into by and among
the Company and  _________________________  (the "Holder") pursuant to which the
Company has agreed to issue to the Holder shares of the Company's  common stock,
$0.05 par value per share (the "Common  Stock") on the terms and  conditions set
forth in the Subscription Agreement. Pursuant to the Subscription Agreement, the
Company also has entered into a  Registration  Rights  Agreement with the Holder
(the  "Registration  Rights  Agreement")  pursuant to which the Company  agreed,
among other things,  to register the  Registrable  Securities (as defined in the
Registration  Rights Agreement),  including the shares of Common Stock issued or
issuable under the  Subscription  Agreement under the Securities Act of 1933, as
amended (the "1933 Act"). In connection with the Company's obligations under the
Registration  Rights  Agreement,  on ____________ ___, 2006, the Company filed a
Registration Statement on Form S- ___ (File No. 333-________) (the "Registration
Statement") with the Securities and Exchange  Commission (the "SEC") relating to
the Registrable Securities which names the Holder as a selling shareholder there
under.

     In connection with the foregoing, we advise you that [a member of the SEC's
staff has advised us by  telephone  that the SEC has entered an order  declaring
the Registration  Statement  effective] [the  Registration  Statement has become
effective] under the 1933 Act at [enter the time of effectiveness] on [enter the
date of  effectiveness]  and to the  best  of our  knowledge,  after  telephonic
inquiry  of  a  member  of  the  SEC's  staff,  no  stop  order  suspending  its
effectiveness  has been issued and no  proceedings  for that purpose are pending
before,  or threatened by, the SEC and the Registrable  Securities are available
for resale under the 1933 Act pursuant to the Registration Statement.

                                           Very truly yours,

                                           [Company Counsel]

                                       34
<PAGE>
EXHIBIT C

Date:

RE: Put Notice Number __

Dear Mr. Leighton,

This is to inform you that as of today,  Millenium Holding Group, Inc., a Nevada
corporation (the "Company"), hereby elects to exercise its right pursuant to the
Investment  Agreement to require  Dutchess Private Equities Fund, LP to purchase
shares of its common stock. The Company hereby certifies that:

The amount of this put is $__________.

The Pricing Period runs from ________ until _______.

The current number of shares issued and outstanding as of the Company are:


Regards,




Richard Ham, CEO
Millenium Holding Group, Inc.

                                       35
<PAGE>
EXHIBIT D
PUT SETTLEMENT SHEET

Date:

Dear Mr. Ham,

Pursuant to the Put given by Millenium  Holding Group,  Inc. to Dutchess Private
Equities Fund, L.P. on _________________  200_, we are now submitting the amount
of common shares for you to issue to Dutchess.

Please have a certificate  bearing no  restrictive  legend  totaling  __________
shares issued to Dutchess  Private  Equities Fund, LP  immediately  and send via
DWAC to the following account:

XXXXXX

If not DWAC eligible, please send FedEx Priority Overnight to:

XXXXXX

Once  these  shares  are  received  by us, we will  have the funds  wired to the
Company.

Regards,

Douglas H. Leighton

                                       36
<PAGE>
    DATE                                             PRICE
    ----                                             -----
Date of Day 1 . . . . . . . . . . . . . . . . Closing Bid of Day 1
Date of Day 2 . . . . . . . . . . . . . . . . Closing Bid of Day 2
Date of Day 3 . . . . . . . . . . . . . . . . Closing Bid of Day 3
Date of Day 4 . . . . . . . . . . . . . . . . Closing Bid of Day 4
Date of Day 5 . . . . . . . . . . . . . . . . Closing Bid of Day 5


        LOWEST 1 (ONE) CLOSING BID IN PRICING PERIOD
                                                   ------------

        PUT AMOUNT
                                                   ------------

        AMOUNT WIRED TO COMPANY
                                                   ------------

        PURCHASE PRICE (96)% (NINETY-SIX PERCENT))
                                                   ------------

        AMOUNT OF SHARES DUE
                                                   ------------


The undersigned has completed this Put as of this ___th day of _________, 200_.

MILLENIUM HOLDING GROUP, INC.


------------------------------

RICHARD HAM, CEO

                                       37
<PAGE>
SCHEDULE 4(C) CAPITALIZATION

    3,000,000      Authorized Preferred Stock, $0.001 par value per share
            0      Shares issued and outstanding as of February 23, 2006
   50,000,000      Authorized Common Stock, $0.05 par value per share
   21,095,769      Shares issued and outstanding as of February 23, 2006



                                       38
<PAGE>
SCHEDULE 4(E) CONFLICTS


             None

                                       39
<PAGE>
SCHEDULE 4(G) MATERIAL CHANGES

             None

                                       40
<PAGE>
SCHEDULE 4(H) LITIGATION

             None

                                       41
<PAGE>
SCHEDULE 4(L) INTELLECTUAL PROPERTY

             None


                                       42
<PAGE>
SCHEDULE 4(N) LIENS

             None


                                       43
<PAGE>
SCHEDULE 4(T) CERTAIN TRANSACTIONS


             None



                                       44
<PAGE>
                          REGISTRATION RIGHTS AGREEMENT

     Registration  Rights Agreement (the  "Agreement"),  dated as of March 27th,
2006 by and between Millenium Holding Group, Inc., a corporation organized under
the laws of State of Nevada,  with its principal  executive office at 12 Winding
Road, Henderson,  NV 89052,(the "Company"),  and Dutchess Private Equities Fund,
L.P.,  a  Delaware   limited   partnership  with  its  principal  office  at  50
Commonwealth Avenue, Suite 2, Boston, MA 02116 (the "Holder").

     Whereas,  in connection  with the  Investment  Agreement by and between the
Company and the Investor of even date herewith (the "Investment Agreement"), the
Company has agreed to issue and sell to the Investor an indeterminate  number of
shares of the  Company's  Common  Stock,  $0.05 par value per share (the "Common
Stock"), to be purchased pursuant to the terms and subject to the conditions set
forth in the Investment Agreement; and

     Whereas,  to induce the  Investor to execute  and  deliver  the  Investment
Agreement,  the Company has agreed to provide certain  registration rights under
the  Securities  Act  of  1933,  as  amended,  and  the  rules  and  regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable  state  securities  laws,  with respect to the shares of Common Stock
issuable pursuant to the Investment Agreement.

     Now therefore,  in consideration  of the foregoing  premises and the mutual
covenants contained hereinafter and other good and valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the Company and the
Investor hereby agree as follows:

Section 1. DEFINITIONS.

     As used in this  Agreement,  the  following  terms shall have the following
meanings:

     "Execution Date" means the date first written above.

     "Investor"  means Dutchess  Private Equities Fund, L.P., a Delaware limited
partnership.

     "Person" means a corporation,  a limited liability company, an association,
a partnership,  an organization,  a business,  an individual,  a governmental or
political subdivision thereof or a governmental agency.

     "Potential  Material Event" means any of the following:  (i) the possession
by  the  Company  of  material  information  not  ripe  for  disclosure  in  the
Registration Statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such  information in
the  Registration  Statement would be detrimental to the business and affairs of
the Company,  or (ii) any material  engagement  or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in the Registration  Statement at such time,
which  determination  shall be accompanied by a good faith  determination by the
Board of  Directors  of the Company  that the  Registration  Statement  would be
materially misleading absent the inclusion of such information.

     "Principal  Market"  shall  mean  The  American  Stock  Exchange,  National
Association of Securities Dealer's,  Inc.  Over-the-Counter  electronic bulletin
board, the Nasdaq National Market or The Nasdaq SmallCap Market whichever is the
principal market on which the Common Stock is listed.

     "Register,"  "Registered,"  and  "Registration"  refer to the  Registration
effected by  preparing  and filing one (1) or more  Registration  Statements  in
compliance  with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor  rule providing for offering  securities on a continuous  basis ("Rule
415"),  and the declaration or ordering of  effectiveness  of such  Registration
Statement(s)  by the United  States  Securities  and  Exchange  Commission  (the
"SEC").

                                       1
<PAGE>
     "Registrable  Securities"  means (i) the shares of Common  Stock  issued or
issuable  pursuant to the Investment  Agreement,  and (ii) any shares of capital
stock issued or issuable with respect to such shares of Common Stock, if any, as
a result of any stock  split,  stock  dividend,  recapitalization,  exchange  or
similar event or otherwise, which have not been (x) included in the Registration
Statement  that  has  been  declared  effective  by the  SEC or (y)  sold  under
circumstances  meeting  all of the  applicable  conditions  of Rule  144 (or any
similar provision then in force) under the 1933 Act.

     "Registration  Statement" means the  registration  statement of the Company
filed under the 1933 Act covering the Registrable Securities.

     All  capitalized  terms used in this  Agreement and not  otherwise  defined
herein  shall  have  the  same  meaning  ascribed  to them as in the  Investment
Agreement.

Section 2. REGISTRATION.

     (a) The  Company  shall,  within  twenty-one  (21) days of the date of this
Agreement,  file  with  the  SEC  the  Registration  Statement  or  Registration
Statements (as is necessary) on Form SB-2 (or, if such form is  unavailable  for
such  a   registration,   on  such  other  form  as  is  available  for  such  a
registration),  covering the resale of all of the Registrable Securities,  which
Registration  Statement(s)  shall  state  that,  in  accordance  with  Rule  416
promulgated  under the 1933 Act, such  Registration  Statement  also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon stock splits,  stock dividends or similar  transactions.  The Company shall
initially  register for resale  17,708,334 shares of Common Stock which would be
issuable on the date preceding the filing of the Registration Statement based on
the closing bid price of the Company's  Common Stock on such date and the amount
reasonably  calculated that represents Common Stock issuable to other parties as
set forth in the Investment Agreement except to the extent that the SEC requires
the share amount to be reduced as a condition of effectiveness..

     (b) The  Company  shall use  commercially  reasonable  efforts  to have the
Registration  Statement(s)  declared  effective  by the SEC within  ninety  (90)
calendar days after the Execution Date.

     (c)  The  Company  agrees  not  to  include  any  other  securities  in the
Registration  Statement  covering the Registrable  Securities without Investor's
prior  written  consent  which  Investor  may  withhold in its sole  discretion.
Furthermore,  the Company  agrees  that it will not file any other  Registration
Statement  for  other   securities,   until  thirty   calendar  days  after  the
Registration  Statement for the Registrable  Securities is declared effective by
the SEC.

Section 3. RELATED OBLIGATIONS.

     At  such  time  as the  Company  is  obligated  to  prepare  and  file  the
Registration  Statement  with the SEC pursuant to Section 2(a), the Company will
effect the  registration  of the  Registrable  Securities in accordance with the
intended method of disposition  thereof and, with respect  thereto,  the Company
shall have the following obligations:

     (a) The Company  shall use  commercially  reasonable  efforts to cause such
Registration   Statement  relating  to  the  Registrable  Securities  to  become
effective  within ninety (90) days after the Execution  Date and shall keep such
Registration  Statement  effective until the earlier to occur of (i) the date on
which (A) the Investor shall have sold all the Registrable  Securities;  and (B)
the Investor has no right to acquire any additional shares of Common Stock under
the Investment Agreement (the "Registration Period"). The Registration Statement
(including  any  amendments or supplements  thereto and  prospectuses  contained
therein)  shall not contain any untrue  statement of a material  fact or omit to
state a material  fact required to be stated  therein,  or necessary to make the
statements  therein,  in light of the circumstances in which they were made, not

                                       2
<PAGE>
misleading. The Company shall use its commercially reasonable efforts to respond
to all SEC comments within seven (7) business days from receipt of such comments
by the Company.  The Company shall use its  commercially  reasonable  efforts to
cause the  Registration  Statement  relating to the  Registrable  Securities  to
become  effective no later than five (5) business days after notice from the SEC
that the Registration  Statement may be declared effective.  The Investor agrees
to  provide  all  information  which it is  required  by law to  provide  to the
Company,  including  the  intended  method  of  disposition  of the  Registrable
Securities,  and the Company's  obligations set forth above shall be conditioned
on the receipt of such information.

     (b) The  Company  shall  prepare  and file  with  the SEC  such  amendments
(including  post-effective  amendments)  and  supplements  to  the  Registration
Statement  and  the  prospectus  used  in  connection  with  such   Registration
Statement,  which  prospectus  is to be filed  pursuant to Rule 424  promulgated
under the 1933 Act,  as may be  necessary  to keep such  Registration  Statement
effective during the Registration  Period, and, during such period,  comply with
the  provisions  of  the  1933  Act  with  respect  to  the  disposition  of all
Registrable  Securities of the Company  covered by such  Registration  Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the  Investor
thereof as set forth in such Registration  Statement. In the event the number of
shares of Common Stock covered by the  Registration  Statement filed pursuant to
this  Agreement  is at any time  insufficient  to cover  all of the  Registrable
Securities,  the Company shall amend such Registration  Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover all of the Registrable Securities, in each case, as soon as
practicable,  but in any  event  within  thirty  (30)  calendar  days  after the
necessity  therefor arises (based on the then Purchase Price of the Common Stock
and other  relevant  factors on which the  Company  reasonably  elects to rely),
assuming the Company has  sufficient  authorized  shares at that time, and if it
does not, within thirty (30) calendar days after such shares are authorized. The
Company shall use commercially reasonable efforts to cause such amendment and/or
new Registration  Statement to become effective as soon as practicable following
the filing thereof.

     (c) The Company  shall make  available  to the Investor  whose  Registrable
Securities  are included in any  Registration  Statement  and its legal  counsel
without charge (i) promptly after the same is prepared and filed with the SEC at
least one (1) copy of such Registration  Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference  and all exhibits,  the  prospectus  included in such  Registration
Statement  (including  each  preliminary  prospectus)  and, with regards to such
Registration Statement(s),  any correspondence by or on behalf of the Company to
the SEC or the staff of the SEC and any correspondence from the SEC or the staff
of the SEC to the Company or its representatives; (ii) upon the effectiveness of
any  Registration  Statement,  the Company  shall make  available  copies of the
prospectus,   via  EDGAR,  included  in  such  Registration  Statement  and  all
amendments and supplements  thereto;  and (iii) such other documents,  including
copies of any  preliminary or final  prospectus,  as the Investor may reasonably
request  from  time  to time in  order  to  facilitate  the  disposition  of the
Registrable Securities.

     (d) The Company shall use commercially  reasonable  efforts to (i) register
and qualify the Registrable  Securities  covered by the  Registration  Statement
under such  other  securities  or "blue  sky" laws of such  states in the United
States as any  Investor  reasonably  requests;  (ii)  prepare  and file in those
jurisdictions,   such  amendments  (including  post-effective   amendments)  and
supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof during the Registration  Period;  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (x)  qualify to do business  in any  jurisdiction  where it would not
otherwise  be  required  to qualify but for this  Section  3(d),  or (y) subject
itself to general taxation in any such jurisdiction.  The Company shall promptly
notify each  Investor  who holds  Registrable  Securities  of the receipt by the
Company of any  notification  with respect to the suspension of the registration
or  qualification  of any of the  Registrable  Securities  for  sale  under  the
securities  or "blue sky" laws of any  jurisdiction  in the United States or its
receipt of actual notice of the  initiation or threatening of any proceeding for
such purpose.

                                       3
<PAGE>
     (e) As promptly as  practicable  after  becoming  aware of such event,  the
Company  shall  notify  Investor in writing of the  happening  of any event as a
result of which the prospectus included in the Registration  Statement,  as then
in effect,  includes an untrue statement of a material fact or omission to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in light of the circumstances  under which they were made,
not misleading ("Registration Default") and use all diligent efforts to promptly
prepare a supplement  or amendment to such  Registration  Statement and take any
other  necessary  steps  to  cure  the  Registration  Default,  (which,  if such
Registration  Statement is on Form S-3, may consist of a document to be filed by
the Company with the SEC pursuant to Section  13(a),  13(c),  14 or 15(d) of the
1934  Act  (as  defined  below)  and  to be  incorporated  by  reference  in the
prospectus)  to correct such untrue  statement or omission,  and make  available
copies of such supplement or amendment to each Investor.  The Company shall also
promptly notify  Investor (i) when a prospectus or any prospectus  supplement or
post-effective  amendment has been filed, and when the Registration Statement or
any  post-effective  amendment  has become  effective  (the Company will prepare
notification of such  effectiveness  which shall be delivered to the Investor on
the same day of such  effectiveness  and by overnight mail),  additionally,  the
Company will promptly provide to the Investor, a copy of the effectiveness order
prepared by the SEC once it is received by the  Company;  (ii) of any request by
the SEC for amendments or supplements to the  Registration  Statement or related
prospectus  or  related   information,   (iii)  of  the   Company's   reasonable
determination  that a  post-effective  amendment to the  Registration  Statement
would be appropriate,  (iv) in the event the Registration Statement is no longer
effective,  or (v)  if  Registration  Statement  is  stale  as a  result  of the
Company's  failure to timely  file its  financials  or  otherwise.  The  Company
acknowledges  that its failure to cure the Registration  Default within ten (10)
business  days will cause the Investor to suffer  damages in an amount that will
be difficult to ascertain. Accordingly, the parties agree that it is appropriate
to include a provision for liquidated damages. The parties acknowledge and agree
that the liquidated  damages provision set forth in this section  represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form  and  amount  of such  liquidated  damages  are  reasonable  and  will  not
constitute a penalty.  It is the intention of the parties that interest  payable
under any of the terms of this  Agreement  shall not exceed the  maximum  amount
permitted  under any  applicable  law. If a law, which applies to this Agreement
which sets the  maximum  interest  amount,  is finally  interpreted  so that the
interest in connection with this Agreement exceeds the permitted  limits,  then:
(1) any such  interest  shall be reduced by the amount  necessary  to reduce the
interest to the  permitted  limit;  and (2) any sums already  collected (if any)
from the  Company  which  exceed the  permitted  limits  will be refunded to the
Company. The Investor may choose to make this refund by reducing the amount that
the  Company  owes under  this  Agreement  or by making a direct  payment to the
Company. If a refund reduces the amount that the Company owes the Investor,  the
reduction  will be treated as a partial  payment.  In case any provision of this
Agreement is held by a court of competent  jurisdiction to be excessive in scope
or otherwise invalid or  unenforceable,  such provision shall be adjusted rather
than  voided,  if  possible,  so that it is  enforceable  to the maximum  extent
possible,  and the validity and  enforceability  of the remaining  provisions of
this Agreement will not in any way be affected or impaired thereby.

     (f) The Company shall use  commercially  reasonable  efforts to prevent the
issuance  of  any  stop  order  or  other  suspension  of  effectiveness  of the
Registration  Statement,  or the suspension of the  qualification  of any of the
Registrable  Securities  for sale in any  jurisdiction  and, if such an order or
suspension  is issued,  to obtain the  withdrawal of such order or suspension at
the earliest  possible  moment and to notify the Investor who holds  Registrable
Securities  being sold of the issuance of such order and the resolution  thereof
or its receipt of actual notice of the  initiation  or threat of any  proceeding
for such purpose.

     (g) The  Company  shall  permit  the  Investor  and one (1) legal  counsel,
designated  by the  Investor,  to  review  and  comment  upon  the  Registration
Statement and all amendments and  supplements  thereto at least one (1) calendar
day prior to their filing with the SEC.

     However,  any  postponement of a filing of a Registration  Statement or any
postponement of a request for  acceleration or any postponement of the effective
date or  effectiveness  of a  Registration  Statement by written  request of the
Investor  (collectively,  the  "Investor's  Delay") shall not act to trigger any

                                       4
<PAGE>
penalty  of any kind,  or any cash  amount  due or any  in-kind  amount  due the
Investor  from the Company  under any and all  agreements  of any nature or kind
between the Company and the Investor.  The event(s) of an Investor's Delay shall
act to suspend all  obligations  of any kind or nature of the Company  under any
and all agreements of any nature or kind between the Company and the Investor. .

     (h) At the request of the Investor, the Company shall cause to be furnished
to Investor, on the date of the effectiveness of the Registration  Statement,  a
legal  opinion,  in form  and  substance  reasonably  acceptable  to  Investor's
counsel, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement.

     (i) The Company  shall hold in  confidence  and not make any  disclosure of
information  concerning a Investor provided to the Company unless (i) disclosure
of such  information  is necessary  to comply with  federal or state  securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or omission in any  Registration  Statement,  (iii) the release of
such   information   is  ordered   pursuant  to  a  subpoena  or  other   final,
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by  disclosure  in  violation  of this  Agreement or any other
agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  a  Investor  is  sought  in  or  by  a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice to such  Investor  and allow such  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

     (j) The  Company  shall use  commercially  reasonable  efforts to  maintain
designation  and  quotation  of all the  Registrable  Securities  covered by any
Registration  Statement  on the  Principal  Market.  If,  despite the  Company's
commercially  reasonable efforts,  the Company is unsuccessful in satisfying the
preceding  sentence,  it shall use commercially  reasonable efforts to cause all
the Registrable Securities covered by any Registration Statement to be listed on
each other national  securities exchange and automated quotation system, if any,
on which  securities  of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable  Securities is then permitted
under the rules of such  exchange or system.  The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section 3(j).

     (k) The Company shall  cooperate with the Investor to facilitate the prompt
preparation and delivery of certificates representing the Registrable Securities
to  be  offered  pursuant  to  the   Registration   Statement  and  enable  such
certificates to be in such denominations or amounts,  as the case may be, as the
Investor  may  reasonably  request  (and  after  any  sales of such  Registrable
Securities  by the  Investor,  such  certificates  not bearing  any  restrictive
legend).

     (l) The  Company  shall  provide a transfer  agent for all the  Registrable
Securities not later than the effective date of the first Registration Statement
filed pursuant hereto.

     (m) If  requested  by the  Investor,  the  Company  shall  (i) as  soon  as
reasonably  practical  incorporate in a prospectus  supplement or post-effective
amendment such  information  as such Investor  reasonably  determines  should be
included   therein   relating  to  the  sale  and  distribution  of  Registrable
Securities,  including,  without  limitation,  information  with  respect to the
offering of the  Registrable  Securities to be sold in such offering;  (ii) make
all required filings of such prospectus  supplement or post-effective  amendment
as soon as  reasonably  possible  after  being  notified  of the  matters  to be
incorporated  in such prospectus  supplement or  post-effective  amendment;  and
(iii) supplement or make amendments to any Registration  Statement if reasonably
requested by such Investor.

     (n) The  Company  shall use  commercially  reasonable  efforts to cause the
Registrable  Securities covered by the applicable  Registration  Statement to be
registered with or approved by such other  governmental  agencies or authorities
as  may  be  necessary  to  consummate  the  disposition  of  such   Registrable
Securities.

     (o) The Company shall  otherwise  use  commercially  reasonable  efforts to
comply with all applicable  rules and  regulations of the SEC in connection with
any registration hereunder.

                                       5
<PAGE>
     (p) Within one (1)  business  day after the  Registration  Statement  which
includes  Registrable  Securities is declared  effective by the SEC, the Company
shall deliver to the transfer agent for such Registrable Securities, with copies
to the Investor, confirmation that such Registration Statement has been declared
effective by the SEC.

     (q) The  Company  shall  take all other  reasonable  actions  necessary  to
expedite and facilitate  disposition  by the Investor of Registrable  Securities
pursuant to the Registration Statement.

Section 4. OBLIGATIONS OF THE INVESTOR.

     (a) At least five (5) calendar days prior to the first  anticipated  filing
date of the  Registration  Statement  the Company  shall  notify the Investor in
writing of the information the Company requires from Investor if Investor elects
to  have  any  of the  Registrable  Securities  included  in  such  Registration
Statement.  It shall be a condition  precedent to the obligations of the Company
to complete  the  registration  pursuant to this  Agreement  with respect to the
Registrable  Securities of the Investor and Investor shall furnish in writing to
the Company such information  regarding itself, the Registrable  Securities held
by it and the intended method of disposition of the Registrable  Securities held
by it as shall  reasonably  be  required  to  effect  the  registration  of such
Registrable  Securities and shall execute such documents in connection with such
registration  as the Company may  reasonably  request.  Investor  covenants  and
agrees  that,  in  connection  with any  sale of  Registrable  Securities  by it
pursuant  to the  Registration  Statement,  it shall  comply  with the  "Plan of
Distribution"  section of the current  prospectus  relating to such Registration
Statement.

     (b) The Investor, by Investor's  acceptance of the Registrable  Securities,
agrees to cooperate  with the Company as reasonably  requested by the Company in
connection  with  the  preparation  and  filing  of any  Registration  Statement
hereunder, unless Investor has notified the Company in writing of an election to
exclude all Investor's Registrable Securities from such Registration Statement.

     (c) The  Investor  agrees  that,  upon  receipt of written  notice from the
Company of the  happening of any event of the kind  described in Section 3(f) or
the  first  sentence  of  3(e),  such  Investor  will  immediately   discontinue
disposition of Registrable Securities pursuant to any Registration  Statement(s)
covering such Registrable  Securities until Investor's  receipt of the copies of
the supplemented or amended prospectus contemplated by Section 3(f) or the first
sentence of 3(e)

Section 5. EXPENSES OF REGISTRATION.

     All expenses,  other than underwriting  discounts and commissions and other
than as set forth in the  Investment  Agreement,  incurred  in  connection  with
registrations including comments, filings or qualifications pursuant to Sections
2  and  3,  including,   without  limitation,  all  registration,   listing  and
qualifications fees, printing and accounting fees, and fees and disbursements of
counsel for the Company or for the Investor shall be paid by the Company.

Section 6. INDEMNIFICATION.

     In the event any  Registrable  Securities are included in the  Registration
Statement under this Agreement:

     (a) To the fullest  extent  permitted by law, the Company will,  and hereby
does,  indemnify,  hold  harmless  and  defend  Investor  who holds  Registrable
Securities,  the directors,  officers,  partners,  employees,  counsel,  agents,
representatives  of, and each Person, if any, who controls,  any Investor within

                                       6
<PAGE>
the meaning of the 1933 Act or the  Securities  Exchange Act of 1934, as amended
(the "1934 Act") (each, an "Indemnified  Person"),  against any losses,  claims,
damages,  liabilities,  judgments, fines, penalties,  charges, costs, attorneys'
fees,  amounts paid in settlement or expenses,  joint or several  (collectively,
"Claims"), incurred in investigating,  preparing or defending any action, claim,
suit, inquiry,  proceeding,  investigation or appeal taken from the foregoing by
or before any court or governmental,  administrative or other regulatory agency,
body or the SEC,  whether  pending or threatened,  whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may become subject  insofar as such Claims (or actions or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue  statement  or alleged  untrue  statement  of a material  fact in the
Registration Statement or any post-effective  amendment thereto or in any filing
made in connection with the  qualification  of the offering under the securities
or other "blue sky" laws of any jurisdiction in which the Investor has requested
in writing that the Company  register or qualify the Shares ("Blue Sky Filing"),
or the  omission  or alleged  omission to state a material  fact  required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances under which the statements therein were made, not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final  prospectus  (as amended or  supplemented,  if the  Company  files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state  therein any material  fact  necessary to make the  statements
made therein,  in light of the circumstances  under which the statements therein
were made, not  misleading,  or (iii) any violation or alleged  violation by the
Company  of the 1933  Act,  the 1934  Act,  any other  law,  including,  without
limitation,  any state  securities  law,  or any rule or  regulation  thereunder
relating  to the offer or sale of the  Registrable  Securities  pursuant  to the
Registration  Statement (the matters in the foregoing  clauses (i) through (iii)
being,  collectively,  "Violations").  Subject to the  restrictions set forth in
Section 6(c) the Company shall reimburse the Investor and each such  controlling
person,  promptly as such expenses are incurred and are due and payable, for any
reasonable  legal  fees  or  other  reasonable  expenses  incurred  by  them  in
connection  with  investigating  or  defending  any such Claim.  Notwithstanding
anything  to  the  contrary  contained  herein,  the  indemnification  agreement
contained in this Section 6(a): (i) shall not apply to a Claim arising out of or
based  upon a  Violation  which  is due to  the  inclusion  in the  Registration
Statement of the information  furnished to the Company by any Indemnified Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement or any such amendment thereof or supplement thereto; (ii) shall not be
available  to the extent such Claim is based on (a) a failure of the Investor to
deliver or to cause to be delivered the prospectus made available by the Company
or (b) the  Indemnified  Person's use of an incorrect  prospectus  despite being
promptly  advised in advance by the Company in writing not to use such incorrect
prospectus;  (iii) any  claims  based on the  manner of sale of the  Registrable
Securities by the Investor or of the Investor's  failure to register as a dealer
under  applicable  securities  laws; (iv) any omission of the Investor to notify
the  Company  of any  material  fact that  should be stated in the  Registration
Statement or prospectus  relating to the Investor or the manner of sale; and (v)
any  amounts  paid in  settlement  of any Claim if such  settlement  is effected
without the prior  written  consent of the Company,  which  consent shall not be
unreasonably  withheld.  Such  indemnity  shall  remain in full force and effect
regardless of any investigation  made by or on behalf of the Indemnified  Person
and shall  survive  the resale of the  Registrable  Securities  by the  Investor
pursuant to the Registration Statement.

     (b) In  connection  with any  Registration  Statement in which  Investor is
participating, Investor agrees to severally and jointly indemnify, hold harmless
and defend, to the same extent and in the same manner as is set forth in Section
6(a),  the Company,  each of its  directors,  each of its officers who signs the
Registration Statement, each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act and the Company's  agents  (collectively
and together with an Indemnified  Person, an "Indemnified  Party"),  against any
Claim or Indemnified Damages to which any of them may become subject,  under the
1933  Act,  the 1934 Act or  otherwise,  insofar  as such  Claim or  Indemnified
Damages  arise  out of or are  based  upon any  Violation,  in each  case to the
extent,  and only to the extent,  that such Violation is due to the inclusion in
the Registration  Statement of the written information  furnished to the Company
by  such  Investor  expressly  for  use in  connection  with  such  Registration
Statement;  and, subject to Section 6(c), such Investor will reimburse any legal
or other expenses  reasonably  incurred by them in connection with investigating
or defending any such Claim;  provided,  however,  that the indemnity  agreement
contained in this Section 6(b) and the  agreement  with respect to  contribution
contained  in Section 7 shall not apply to  amounts  paid in  settlement  of any

                                       7
<PAGE>
Claim if such  settlement is effected  without the prior written consent of such
Investor, which consent shall not be unreasonably withheld;  provided,  further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified  Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration  Statement.  Such  indemnity  shall remain in full force and effect
regardless of any  investigation  made by or on behalf of such Indemnified Party
and shall  survive  the resale of the  Registrable  Securities  by the  Investor
pursuant to the Registration Statement. Notwithstanding anything to the contrary
contained herein, the  indemnification  agreement contained in this Section 6(b)
with respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in  the  preliminary  prospectus  were  corrected  on  a  timely  basis  in  the
prospectus,  as then amended or  supplemented.  This  indemnification  provision
shall apply  separately to each Investor and  liability  hereunder  shall not be
joint and several.

     (c) Promptly  after receipt by an Indemnified  Person or Indemnified  Party
under this Section 6 of notice of the  commencement  of any action or proceeding
(including  any  governmental  action or  proceeding)  involving  a Claim,  such
Indemnified  Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any  indemnifying  party under this Section 6, deliver to the
indemnifying  party  a  written  notice  of the  commencement  thereof,  and the
indemnifying  party shall have the right to  participate  in, and, to the extent
the indemnifying  party so desires,  jointly with any other  indemnifying  party
similarly  noticed,  to assume  control  of the  defense  thereof  with  counsel
mutually  satisfactory to the indemnifying  party and the Indemnified  Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying  party, if, in
the  reasonable  opinion  of  counsel  retained  by the  Indemnified  Person  or
Indemnified  Party, the  representation by counsel of the Indemnified  Person or
Indemnified  Party and the  indemnifying  party  would be  inappropriate  due to
actual or  potential  differing  interests  between such  Indemnified  Person or
Indemnified  Party and any  other  party  represented  by such  counsel  in such
proceeding.  The  indemnifying  party shall pay for only one (1) separate  legal
counsel for the Indemnified  Persons or the Indemnified  Parties, as applicable,
and such counsel shall be selected by the Investor, if the Investor are entitled
to  indemnification  hereunder,  or the  Company,  if the Company is entitled to
indemnification  hereunder, as applicable.  The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying  party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information  reasonably available to
the  Indemnified  Party or  Indemnified  Person which  relates to such action or
Claim.  The indemnifying  party shall keep the Indemnified  Party or Indemnified
Person  fully  appraised  at all times as to the  status of the  defense  or any
settlement  negotiations  with respect thereto.  No indemnifying  party shall be
liable for any settlement of any action,  claim or proceeding  effected  without
its written consent,  provided,  however,  that the indemnifying party shall not
unreasonably  withhold,  delay or condition its consent.  No indemnifying  party
shall,  without  the consent of the  Indemnified  Party or  Indemnified  Person,
consent  to  entry  of any  judgment  or  enter  into  any  settlement  or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified  Party or Indemnified  Person of a
release from all liability in respect to such Claim.  Following  indemnification
as provided for  hereunder,  the  indemnifying  party shall be surrogated to all
rights of the Indemnified Party or Indemnified  Person with respect to all third
parties,  firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the  indemnifying  party
within a  reasonable  time of the  commencement  of any such  action  shall  not
relieve such  indemnifying  party of any liability to the Indemnified  Person or
Indemnified  Party  under  this  Section  6,  except  to  the  extent  that  the
indemnifying party is prejudiced in its ability to defend such action.

     (d) The indemnity  agreements  contained herein shall be in addition to (i)
any cause of action or similar  right of the  Indemnified  Party or  Indemnified
Person against the  indemnifying  party or others,  and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

                                       8
<PAGE>
Section 7. CONTRIBUTION.

     To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying  party agrees to make the maximum  contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest  extent  permitted  by law;  provided,  however,  that:  (i) no
contribution  shall be made under  circumstances  where the maker would not have
been liable for  indemnification  under the fault standards set forth in Section
6;  (ii)  no   seller   of   Registrable   Securities   guilty   of   fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution  from any seller of Registrable  Securities who was not
guilty of fraudulent misrepresentation;  and (iii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

Section 8.  REPORTS UNDER THE 1934 ACT.

     With a view to making  available  to the  Investor the benefits of Rule 144
promulgated  under the 1933 Act or any other  similar rule or  regulation of the
SEC that may at any time permit the Investor to sell  securities  of the Company
to the public  without  registration  ("Rule  144"),  provided that the Investor
holds any Registrable Securities are eligible for resale under Rule 144 (k), the
Company agrees to:

     (a)  make  and keep  public  information  available,  as  those  terms  are
understood and defined in Rule 144;

     (b) file with the SEC in a timely  manner all reports  and other  documents
required  of the  Company  under  the  1933  Act and the 1934 Act so long as the
Company remains subject to such  requirements  (it being understood that nothing
herein  shall  limit  the  Company's  obligations  under  Section  5(c)  of  the
Investment  Agreement)  and the filing of such  reports and other  documents  is
required for the applicable provisions of Rule 144; and

     (c) furnish to the Investor, promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements of Rule 144,
the  1933  Act and the  1934  Act,  (ii) a copy of the  most  recent  annual  or
quarterly report of the Company and such other reports and documents so filed by
the Company,  and (iii) such other information as may be reasonably requested to
permit  the  Investor  to sell  such  securities  pursuant  to Rule 144  without
registration.

Section 9. NO ASSIGNMENT OF REGISTRATION RIGHTS.

     The rights under this Agreement shall not be assignable.

Section 10. AMENDMENT OF REGISTRATION RIGHTS.

     Provisions of this  Agreement may be amended only with the written  consent
of the Company and Investor.

Section 11. MISCELLANEOUS.

     (a) Any notices or other  communications  required or permitted to be given
under the terms of this Agreement that must be in writing will be deemed to have
been delivered (i) upon receipt, when delivered  personally;  (ii) upon receipt,
when sent by facsimile  (provided a confirmation of transmission is mechanically
or electronically generated and kept on file by the sending party); or (iii) one
(1) day after deposit with a nationally  recognized  overnight delivery service,
in each case properly  addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:

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<PAGE>
          If to the Company:

                Millenium Holding Group, Inc.
                12 Winding Road
                Henderson, NV 89052
                Telephone: (702) 492-7721
                Facsimile: (702) 492-7728

          If to the Investor:

                Dutchess Private Equities Fund, LP
                50 Commonwealth Ave, Suite 2
                Boston, MA 02116
                Telephone: 617-301-4700
                Facsimile: 617-249-0947

     Each party shall  provide five (5) business  days prior notice to the other
party of any change in address, phone number or facsimile number.

     (b)  Failure  of any  party to  exercise  any right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     (c) The laws of the Commonwealth of  Massachusetts  shall govern all issues
arising from or related to this  Agreement  without  regard to the principles of
conflict  of laws.  Each  party  hereby  irrevocably  submits  to the  exclusive
jurisdiction  of the state and  federal  courts  sitting  in the City of Boston,
County  of  Suffolk,  for  the  adjudication  of  any  dispute  hereunder  or in
connection  herewith or with any  transaction  contemplated  hereby or discussed
herein,  and hereby  irrevocably  waives,  and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve  process in any manner  permitted by law.
If any  provision of this  Agreement  shall be invalid or  unenforceable  in any
jurisdiction,  such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or  enforceability  of any  provision  of this  Agreement  in any other
jurisdiction.

     (d) This  Agreement and the  Transaction  Documents  constitute  the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions,  promises, warranties or undertakings, other
than those set forth or referred to herein and therein.

     (e) This  Agreement  and the  Transaction  Documents  supersede  all  prior
agreements  and  understandings  among the parties  hereto  with  respect to the
subject matter hereof and thereof.

     (f) The headings in this  Agreement are for  convenience  of reference only
and shall not limit or otherwise affect the meaning hereof. Whenever required by
the  context  of this  Agreement,  the  singular  shall  include  the plural and
masculine  shall include the feminine.  This Agreement shall not be construed as
if it had been prepared by one of the parties,  but rather as if all the parties
had prepared the same.

     (g) This Agreement may be executed in two or more  identical  counterparts,
each of which shall be deemed an original but all of which shall  constitute one
and the same  agreement.  This  Agreement,  once  executed  by a  party,  may be
delivered to the other party hereto by facsimile  transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

                                       10
<PAGE>
     (h) Each party shall do and perform, or cause to be done and performed, all
such  further  acts and  things,  and shall  execute  and deliver all such other
agreements,  certificates,  instruments  and  documents,  as the other party may
reasonably  request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

Section 12. DISPUTES SUBJECT TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW

     All  disputes  arising  under  this  agreement  shall  be  governed  by and
interpreted in accordance with the laws of the  Commonwealth  of  Massachusetts,
without  regard to principles of conflict of laws. The parties to this agreement
will submit all disputes  arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA").  The  arbitrator  shall be selected by  application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an attorney  admitted to practice law in the Commonwealth of  Massachusetts.  No
party to this agreement will challenge the  jurisdiction or venue  provisions as
provided in this section.

                                       11
<PAGE>
                 SIGNATURE PAGE OF REGISTRATION RIGHTS AGREEMENT


Your  signature on this  Signature  Page evidences your agreement to be bound by
the terms and conditions of the Investment Agreement and the Registration Rights
Agreement as of the date first written above.

The undersigned  signatory hereby certifies that he has read and understands the
Registration Rights Agreement,  and the representations  made by the undersigned
in this  Registration  Rights Agreement are true and accurate,  and agrees to be
bound by its terms.


                               DUTCHESS PRIVATE EQUITIES FUND, L.P.,
                               BY ITS GENERAL PARTNER,
                               DUTCHESS CAPITAL MANAGEMENT, LLC



                               By:____________________________
                                  Douglas H. Leighton, Managing Member



MILLENIUM HOLDING GROUP, INC.


By__________________________________
    Richard Ham, CEO

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