Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this  "Agreement") is dated as of
August ___, 2005,  among Eagle  Broadband,  Inc., a company  incorporated in the
State of Texas (the "Company"),  and each purchaser  identified on the signature
pages hereto (each,  including its  successors  and assigns,  a "Purchaser"  and
collectively the "Purchasers"); and

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement,  the Company  desires to issue and sell to each  Purchaser,  and each
Purchaser,  severally  and not jointly,  desires to purchase from the Company in
the aggregate, up to 30,000,000 shares of Common Stock on the Closing Date.

         NOW,  THEREFORE,  IN CONSIDERATION of the mutual covenants contained in
this Agreement,  and for other good and valuable  consideration  the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

ARTICLE I.
                                   DEFINITIONS

     1.1  Definitions.  In  addition  to the  terms  defined  elsewhere  in this
Agreement,  for all purposes of this  Agreement,  the  following  terms have the
meanings indicated in this Section 1.1:

                  "Action"  shall  have the  meaning  ascribed  to such  term in
Section 3.1(j).

                  "Affiliate"  means any Person  that,  directly  or  indirectly
through one or more  intermediaries,  controls or is  controlled  by or is under
common control with a Person as such terms are used in and construed  under Rule
144. With respect to a Purchaser, any investment fund or managed account that is
managed  on a  discretionary  basis  by the  same  investment  manager  as  such
Purchaser will be deemed to be an Affiliate of such Purchaser.

                  "Closing"  means the closing of the  purchase  and sale of the
Common Stock pursuant to Section 2.1.

                  "Closing Date" means the date of the Closing.

                  "Commission" means the Securities and Exchange Commission.

                  "Common  Stock"  means the Common  Stock of the  Company,  par
         value $0.001 per share, and any securities into which such common stock
         may hereafter be reclassified.

                  "Common Stock Equivalents" means any securities of the Company
         or the  Subsidiaries  which would entitle the holder thereof to acquire
         at any time  Common  Stock,  including  without  limitation,  any debt,
         preferred stock, rights, options,  warrants or other instrument that is
         at any time convertible into or exchangeable for, or otherwise entitles
         the holder thereof to receive, Common Stock.

<PAGE>

                  "Disclosure  Schedules" means the Disclosure  Schedules of the
Company delivered concurrently herewith.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended.

                  "Intellectual Property Rights" shall have the meaning ascribed
to such term in Section 3.1(o).

                  "Liens" means a lien, charge, security interest,  encumbrance,
right of first refusal, preemptive right or other restriction.

                  "Market  Price" means the Closing Price  immediately  prior to
the date in question.

                  "Material  Adverse Effect" shall have the meaning  ascribed to
such term in Section 3.1(b).

                  "Material  Permits"  shall have the  meaning  ascribed to such
term in Section 3.1(m).

                  "Per Share Purchase Price" equals $0.135.

                  "Person"  means an  individual  or  corporation,  partnership,
trust,  incorporated  or  unincorporated  association,  joint  venture,  limited
liability company, joint stock company,  government (or an agency or subdivision
thereof) or other entity of any kind.

                  "Proceeding" means an action,  claim,  suit,  investigation or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

                  "Registration  Rights Agreement" shall be the agreement by and
between  the  Company  and each  Purchaser  dated the date hereof as attached as
Exhibit "A".

                  "Required  Approvals"  shall have the meaning ascribed to such
term in Section 3.1(e).

                  "Rule  144"  means  Rule  144  promulgated  by the  Commission
pursuant to the  Securities  Act, as such Rule may be amended from time to time,
or any similar rule or regulation  hereafter  adopted by the  Commission  having
substantially the same effect as such Rule.

                  "SEC Reports" shall have the meaning  ascribed to such term in
Section 3.1(h).

                  "Securities" means the Shares.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Shares"  means the shares of Common  Stock issued or issuable
to each Purchaser pursuant to this Agreement.

<PAGE>

                  "Subscription Amount" means, as to each Purchaser, the amounts
set forth below such  Purchaser's  signature block on the signature page hereto,
in United States dollars and in immediately available funds.

                  "Subsidiary"  shall mean the  subsidiaries of the Company,  if
any, set forth in the Company's SEC Reports.

                  "Trading  Day" means a day on which the Common Stock is traded
on a Trading Market.

                  "Trading Market" means the American Stock Exchange.

                  "Transaction Documents" means this Agreement, the Registration
Rights Agreement,  and any other documents or agreements  executed in connection
with the transactions contemplated hereunder.

                                  ARTICLE II.
                                PURCHASE AND SALE

     2.1 Closing.  On the Closing Date,  each Purchaser  shall purchase from the
Company,  severally and not jointly with the other  Purchasers,  and the Company
shall  issue  and  sell to each  Purchaser  a  number  of  Shares  equal to such
Purchaser's  Subscription  Amount divided by the Per Share Purchase  Price.  The
aggregate  Subscription  Amounts  for  Shares  sold  hereunder  shall  be  up to
$4,050,000.  Upon  satisfaction  of the conditions set forth in Section 2.2, the
Closing shall occur at the offices of the Company or such other  location as the
parties shall mutually agree.

     2.2 Deliveries.

          (a) On the  Closing  Date,  the Company  shall  deliver or cause to be
     delivered to each Purchaser the following:

               (i)  this  Agreement  and  Registration   Rights  Agreement  duly
          executed by the Company; and

               (ii)  documentation  sufficient to  demonstrate  that the listing
          application  for the  issuance  of the  Shares has been filed with the
          American Stock  Exchange.  The Shares will be issued to each Purchaser
          as set forth in Section 3.1(t).

     (b) On the  Closing  Date,  each  Purchaser  shall  deliver  or cause to be
delivered to the Company the following:

               (i)  this  Agreement  and  Registration   Rights  Agreement  duly
          executed by such Purchaser; and

               (ii) such Purchaser's Subscription Amount by wire transfer to the
          account as specified in writing by the Company.
<PAGE>

     2.3 Closing Conditions.

          (a) The  obligations of the Company  hereunder in connection  with the
     Closing are subject to the following conditions being met:

               (i) the  accuracy  in all  respects  when made and on the Closing
          Date of the representations and warranties of the Purchasers contained
          herein;

               (ii) all obligations,  covenants and agreements of the Purchasers
          required to be  performed  at or prior to the Closing  Date shall have
          been performed; and

               (iii) the  delivery by the  Purchasers  of the items set forth in
          Section 2.2(b) of this Agreement.

          (b)  The  respective   obligations  of  the  Purchasers  hereunder  in
     connection with the Closing are subject to the following  conditions  being
     met:

               (i) the  accuracy  in all  respects  on the  Closing  Date of the
          representations and warranties of the Company contained herein;

               (ii) From the date  hereof to the  Closing  Date,  trading in the
          Common Stock shall not have been  suspended by the SEC (except for any
          suspension  of trading of limited  duration  agreed to by the Company,
          which suspension  shall be terminated  prior to the Closing),  and, at
          any time prior to the Closing Date, trading in securities generally as
          reported by Bloomberg  Financial Markets shall not have been suspended
          or  limited,  or minimum  prices  shall not have been  established  on
          securities  whose  trades  are  reported  by such  service,  or on any
          Trading  Market,  nor shall a banking  moratorium  have been  declared
          either by the United  States or New York State  authorities  nor shall
          there have occurred any material outbreak or escalation of hostilities
          or other national or international calamity that would have a Material
          Adverse Effect on the American Stock Exchange;

               (iii) all  obligations,  covenants and  agreements of the Company
          required to be  performed  at or prior to the Closing  Date shall have
          been performed; and

               (iv) the  delivery  by the  Company  of the  items  set  forth in
          Section 2.2(a) of this Agreement.

<PAGE>

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

     3.1  Representations  and Warranties of the Company. As of the date hereof,
the Company hereby makes the  representations  and warranties set forth below to
each Purchaser:

          (a) Subsidiaries.  All of the direct and indirect  subsidiaries of the
     Company are set forth in the SEC Reports as filed with the Commission.  The
     Company  owns,  directly or  indirectly,  all of the capital stock or other
     equity  interests of each Subsidiary  free and clear of any Liens,  and all
     the issued and  outstanding  shares of capital stock of each Subsidiary are
     validly  issued and are fully paid,  non-assessable  and free of preemptive
     and similar rights to subscribe for or purchase securities.

          (b)  Organization  and  Qualification.  Each  of the  Company  and the
     Subsidiaries is an entity duly incorporated or otherwise organized, validly
     existing and in good  standing  under the laws of the  jurisdiction  of its
     incorporation or organization (as applicable), with the requisite power and
     authority  to own and use its  properties  and  assets  and to carry on its
     business as currently conducted.  Neither the Company nor any Subsidiary is
     in  violation  or  default  of  any  of the  provisions  of its  respective
     certificate or articles of incorporation, bylaws or other organizational or
     charter  documents.  Each  of the  Company  and  the  Subsidiaries  is duly
     qualified  to  conduct  business  and  is in  good  standing  as a  foreign
     corporation or other entity in each jurisdiction in which the nature of the
     business  conducted  or  property  owned  by it  makes  such  qualification
     necessary, except where the failure to be so qualified or in good standing,
     as the case may be, could not have or  reasonably  be expected to result in
     (i) a material adverse effect on the legality,  validity or  enforceability
     of any Transaction Document,  (ii) a material adverse effect on the results
     of operations,  assets,  business,  prospects or financial condition of the
     Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
     effect on the  Company's  ability to perform in any  material  respect on a
     timely basis its obligations  under any  Transaction  Document (any of (i),
     (ii) or (iii),  a "Material  Adverse  Effect") and no  Proceeding  has been
     instituted  in any such  jurisdiction  revoking,  limiting or curtailing or
     seeking  to  revoke,   limit  or  curtail  such  power  and   authority  or
     qualification.

          (c)  Authorization;   Enforcement.   The  Company  has  the  requisite
     corporate  power  and  authority  to  enter  into  and  to  consummate  the
     transactions   contemplated  by  each  of  the  Transaction  Documents  and
     otherwise  to carry  out its  obligations  thereunder.  The  execution  and
     delivery  of each  of the  Transaction  Documents  by the  Company  and the
     consummation by it of the transactions  contemplated thereby have been duly
     authorized  by all  necessary  action  on the  part of the  Company  and no
     further  action is required by the Company in  connection  therewith  other
     than in connection with the Required Approvals.  Each Transaction  Document
     has been (or upon  delivery  will have been) duly  executed  by the Company
     and, when delivered in accordance  with the terms hereof,  will  constitute
     the valid and binding  obligation  of the Company  enforceable  against the
     Company in  accordance  with its terms except (i) as limited by  applicable
     bankruptcy,  insolvency,  reorganization,  moratorium  and  other  laws  of
     general  application  affecting  enforcement of creditors' rights generally
     and (ii) as  limited  by laws  relating  to the  availability  of  specific
     performance, injunctive relief or other equitable remedies.

          (d) No  Conflicts.  The  execution,  delivery and  performance  of the
     Transaction  Documents by the Company,  the issuance and sale of the Shares
     and the consummation by the Company of the other transactions  contemplated
     thereby do not and will not (i) conflict  with or violate any  provision of
     the Company's or any Subsidiary's certificate or articles of incorporation,
     bylaws or other organizational or charter documents, or (ii) conflict with,
     or  constitute  a default (or an event that with notice or lapse of time or
     both would become a default) under, result in the creation of any Lien upon
     any of the properties or assets of the Company or any  Subsidiary,  or give
     to  others  any  rights  of   termination,   amendment,   acceleration   or
     cancellation  (with or  without  notice,  lapse of time or  both)  of,  any
     agreement,  credit facility,  debt or other instrument filed  (evidencing a
     Company or Subsidiary debt or otherwise),  or (iii) subject to the Required
     Approvals,  conflict  with or  result  in a  violation  of any  law,  rule,
     regulation, order, judgment, injunction, decree or other restriction of any
     court or  governmental  authority to which the Company or a  Subsidiary  is
     subject (including  federal and state securities laws and regulations),  or
     (iv)  conflict  with or  violate  the  terms of any  agreement  filed as an
     exhibit to a SEC Report by which the Company or any  Subsidiary is bound or
     to which any property or asset of the Company or any Subsidiary is bound or
     affected;  except in the case of each of clauses  (ii) and  (iii),  such as
     could not have or  reasonably  be expected to result in a Material  Adverse
     Effect.
<PAGE>

          (e) Filings,  Consents and  Approvals.  The Company is not required to
     obtain any consent, waiver,  authorization or order of, give any notice to,
     or make any filing or registration with, any court or other federal, state,
     local or other  governmental  authority or other Person in connection  with
     the execution,  delivery and  performance by the Company of the Transaction
     Documents,  other than (i) filings or forms  required by the American Stock
     Exchange to notify the American Stock Exchange of the listing of additional
     shares,  (ii)  filings  required  pursuant to Sections 4.3 and 4.10 of this
     Agreement,  and  (iii)  such  filings  as are  required  to be  made  under
     applicable state securities laws (collectively, the "Required Approvals").

          (f) Issuance of the  Securities.  The Shares are duly  authorized and,
     when issued and paid for in accordance with the Transaction Documents, will
     be duly and validly issued, fully paid and nonassessable, free and clear of
     all Liens  imposed by the  Company  other  than  restrictions  on  transfer
     provided for in the  Transaction  Documents.  The Company has reserved from
     its duly  authorized  capital stock the maximum  number of shares of Common
     Stock issuable pursuant to this Agreement.

          (g) Capitalization.  The capitalization of the Company is as described
     in the Company's most recent Securities  Exchange Act filing filed with the
     Commission. The Company has not issued any capital stock since such filing,
     other than  approximately  1,000,000  shares to be issued in a  settlement,
     pursuant to the  exercise of employee  stock  options  under the  Company's
     stock  option  plans,  the  issuance of shares of Common Stock to employees
     pursuant to the Company's  employee stock  purchase  plan,  pursuant to the
     conversion or exercise of outstanding Common Stock  Equivalents.  No Person
     has any right of first refusal,  preemptive right,  right of participation,
     or any similar right to participate in the transactions contemplated by the
     Transaction Documents. Except as disclosed in the SEC Reports, there are no
     outstanding  options,  warrants,  script  rights to subscribe  to, calls or
     commitments of any character whatsoever relating to, or securities,  rights
     or obligations  convertible into or exchangeable  for, or giving any Person
     any right to  subscribe  for or  acquire,  any shares of Common  Stock,  or
     contracts, commitments, understandings or arrangements by which the Company
     or any  Subsidiary  is or may become  bound to issue  additional  shares of
     Common Stock,  or securities or rights  convertible  or  exchangeable  into
     shares of Common  Stock.  The  issue  and sale of the  Securities  will not
     obligate the Company to issue shares of Common Stock or other securities to
     any Person  (other than the  Purchasers)  and will not result in a right of
     any  holder of  Company  securities  to adjust  the  exercise,  conversion,
     exchange  or reset  price  under such  securities.  All of the  outstanding
     shares of capital stock of the Company are validly  issued,  fully paid and
     nonassessable,  have been issued in  compliance  with all federal and state
     securities  laws,  and  none of  such  outstanding  shares  was  issued  in
     violation of any  preemptive  rights or similar  rights to subscribe for or
     purchase   securities.   No  further   approval  or  authorization  of  any
     stockholder,  the Board of  Directors  of the Company or others is required
     for  the  issuance  and  sale  of the  Shares.  There  are no  stockholders
     agreements,  voting agreements or other similar  agreements with respect to
     the  Company's  capital  stock to which the  Company  is a party or, to the
     knowledge  of  the  Company,   between  or  among  any  of  the   Company's
     stockholders.
<PAGE>

          (h) SEC  Reports;  Financial  Statements.  The  Company  has filed all
     reports  required  to be  filed  by it  under  the  Securities  Act and the
     Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
     two years  preceding the date hereof (or such shorter period as the Company
     was  required  by law to file  such  material)  (the  foregoing  materials,
     including the exhibits thereto,  being  collectively  referred to herein as
     the "SEC  Reports").  None of the SEC Reports,  when filed,  contained  any
     untrue  statement  of a material  fact or omitted to state a material  fact
     required to be stated  therein or necessary in order to make the statements
     therein,  in light of the  circumstances  under  which they were made,  not
     misleading.  The financial  statements  of the Company  included in the SEC
     Reports  comply  in  all  material  respects  with  applicable   accounting
     requirements  and the rules and  regulations of the Commission with respect
     thereto as in effect at the time of filing. Such financial  statements have
     been  prepared  in  accordance  with  United  States   generally   accepted
     accounting  principles  applied on a  consistent  basis  during the periods
     involved ("GAAP"),  except as may be otherwise  specified in such financial
     statements  or the  notes  thereto  and  except  that  unaudited  financial
     statements  may not contain  all  footnotes  required  by GAAP,  and fairly
     present in all material respects the financial  position of the Company and
     its  consolidated  subsidiaries  as of and for the  dates  thereof  and the
     results of operations  and cash flows for the periods then ended,  subject,
     in the case of unaudited statements, to normal, immaterial,  year-end audit
     adjustments.

          (i) Material  Changes.  Since the date of the latest audited financial
     statements  included  within  the  SEC  Reports,   except  as  specifically
     disclosed in the SEC Reports,  (i) there has been no event,  occurrence  or
     development  that has had or that could reasonably be expected to result in
     a  Material  Adverse  Effect,  except as has been  reasonably  cured by the
     Company (ii) the Company has not incurred any  liabilities  (contingent  or
     otherwise) other than (A) trade payables and accrued  expenses  incurred in
     the  ordinary  course of business  consistent  with past  practice  and (B)
     liabilities  not  required  to be  reflected  in  the  Company's  financial
     statements  pursuant to GAAP or required to be  disclosed  in filings  made
     with the  Commission,  (iii) the  Company  has not  altered  its  method of
     accounting,  (iv) the  Company  has not  declared  or made any  dividend or
     distribution  of cash or other property to its  stockholders  or purchased,
     redeemed  or made any  agreements  to  purchase or redeem any shares of its
     capital  stock and (v) the Company has not issued any equity  securities to
     any officer,  director or Affiliate,  except  pursuant to existing  Company
     stock option plans. The Company does not have pending before the Commission
     any request for confidential treatment of information.
<PAGE>

          (j)  Litigation.  Except as disclosed in the SEC Reports,  there is no
     action,  suit,  inquiry,  notice of violation,  proceeding or investigation
     pending  or,  to  the  knowledge  of the  Company,  threatened  against  or
     affecting the Company, any Subsidiary or any of their respective properties
     before or by any court,  arbitrator,  governmental or administrative agency
     or  regulatory  authority  (federal,   state,  county,  local  or  foreign)
     (collectively,  an "Action") which (i) adversely  affects or challenges the
     legality, validity or enforceability of any of the Transaction Documents or
     the Securities or (ii) could, if there were an unfavorable  decision,  have
     or reasonably be expected to result in a Material Adverse Effect. Except as
     disclosed in the SEC Reports,  neither the Company nor any Subsidiary,  nor
     any director or officer  thereof,  is or has been the subject of any Action
     involving  a claim of  violation  of or  liability  under  federal or state
     securities laws or a claim of breach of fiduciary duty. To the knowledge of
     the Company, there is not pending or contemplated, any investigation by the
     Commission  involving  the  Company or any  current or former  director  or
     officer of the  Company.  The  Commission  has not issued any stop order or
     other order  suspending the  effectiveness  of any  registration  statement
     filed by the  Company  or any  Subsidiary  under  the  Exchange  Act or the
     Securities Act.

          (k) Labor  Relations.  No  material  labor  dispute  exists or, to the
     knowledge of the Company,  is imminent with respect to any of the employees
     of the Company  which could  reasonably be expected to result in a Material
     Adverse Effect.

          (l)  Compliance.  Neither the Company nor any Subsidiary (i) except as
     disclosed  in SEC Reports,  is in default  under or in violation of (and no
     event has occurred  that has not been waived that,  with notice or lapse of
     time or both,  would  result in a default by the Company or any  Subsidiary
     under),  nor has the Company or any Subsidiary  received  notice of a claim
     that it is in default under or that it is in violation  of, any  indenture,
     loan or credit  agreement or any other  agreement or instrument to which it
     is a party or by which it or any of its properties is bound (whether or not
     such default or  violation  has been  waived),  (ii) is in violation of any
     order of any court,  arbitrator  or  governmental  body, or (iii) is or has
     been in violation of any statute,  rule or regulation  of any  governmental
     authority,  including without  limitation all foreign,  federal,  state and
     local laws applicable to its business except in each case as could not have
     a Material Adverse Effect.

          (m) Regulatory Permits.  The Company and the Subsidiaries  possess all
     certificates, authorizations and permits issued by the appropriate federal,
     state, local or foreign regulatory  authorities  necessary to conduct their
     respective  businesses  as described  in the SEC Reports,  except where the
     failure to possess such permits could not have or reasonably be expected to
     result in a Material Adverse Effect ("Material  Permits"),  and neither the
     Company nor any Subsidiary has received any notice of proceedings  relating
     to the revocation or modification of any Material Permit.
<PAGE>

          (n) Title to Assets.  The Company and the  Subsidiaries  have good and
     marketable  title in fee simple to all real property  owned by them that is
     material to the business of the Company and the  Subsidiaries  and good and
     marketable title in all personal property owned by them that is material to
     the  business of the Company  and the  Subsidiaries,  in each case free and
     clear of all Liens,  except for Liens as do not materially affect the value
     of such  property  and do not  materially  interfere  with the use made and
     proposed to be made of such  property  by the Company and the  Subsidiaries
     and Liens for the payment of federal,  state or other taxes, the payment of
     which is neither  delinquent nor subject to penalties and except where such
     failure  could not have a Material  Adverse  Effect.  Any real property and
     facilities held under lease by the Company and the Subsidiaries are held by
     them under valid,  subsisting and  enforceable  leases of which the Company
     and the Subsidiaries are in compliance, except where such failure could not
     have a Material Adverse Effect.

          (o) Patents and Trademarks.  The Company and the Subsidiaries have, or
     have rights to use, all patents, patent applications, trademarks, trademark
     applications,  service marks, trade names,  copyrights,  licenses and other
     similar  rights  necessary  or material  for use in  connection  with their
     respective businesses as described in the SEC Reports and which the failure
     to so  have  could  have  a  Material  Adverse  Effect  (collectively,  the
     "Intellectual Property Rights"). Neither the Company nor any Subsidiary has
     received a written notice that the Intellectual Property Rights used by the
     Company or any  Subsidiary  violates  or  infringes  upon the rights of any
     Person.  To the knowledge of the Company,  all such  Intellectual  Property
     Rights are  enforceable  and there is no existing  infringement  by another
     Person of any of the Intellectual Property Rights of others.

          (p)  Insurance.  The  Company  and the  Subsidiaries  are  insured  by
     insurers of  recognized  financial  responsibility  against such losses and
     risks and in such amounts as are prudent and customary in the businesses in
     which  the  Company  and  the  Subsidiaries  are  engaged.  To the  best of
     Company's knowledge, such insurance contracts and policies are accurate and
     complete.  Neither the Company nor any 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 without a significant
     increase in cost.

          (q) Transactions With Affiliates and Employees. Except as set forth in
     the SEC  Reports,  none of the officers or directors of the Company and, to
     the  knowledge  of the  Company,  none of the  employees  of the Company is
     presently a party to any  transaction  with the  Company or any  Subsidiary
     (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, or otherwise  requiring payments to or from any officer,  director
     or such employee or, to the  knowledge of the Company,  any entity in which
     any officer,  director,  or any such employee has a substantial interest or
     is an  officer,  director,  trustee or  partner,  in each case in excess of
     $60,000  other  than (i) for  payment  of  salary  or  consulting  fees for
     services  rendered,  (ii)  reimbursement for expenses incurred on behalf of
     the Company and (iii) for other employee  benefits,  including stock option
     agreements under any stock option plan of the Company.
<PAGE>

          (r) Sarbanes-Oxley;  Internal Accounting  Controls.  The Company is in
     material  compliance with all provisions of the  Sarbanes-Oxley Act of 2002
     which  are  applicable  to it as of  the  Closing  Date.  The  Company  has
     established  disclosure controls and procedures (as defined in Exchange Act
     Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure
     controls and procedures to ensure that material information relating to the
     Company,  including  its  subsidiaries,  is made  known  to the  certifying
     officers by others within those entities, particularly during the period in
     which the Company's most recently filed periodic  report under the Exchange
     Act,  as the  case may be,  is being  prepared.  The  Company's  certifying
     officers have  evaluated the  effectiveness  of the Company's  controls and
     procedures  as of the date  prior to the filing  date of the most  recently
     filed periodic  report under the Exchange Act (such date,  the  "Evaluation
     Date").  The Company  presented in its most recently filed periodic  report
     under the Exchange Act the conclusions of the certifying officers about the
     effectiveness  of the  disclosure  controls and  procedures  based on their
     evaluations as of the Evaluation  Date.  Since the Evaluation  Date,  there
     have been no  significant  changes in the Company's  internal  controls (as
     such term is defined in Item 307(b) of  Regulation  S-K under the  Exchange
     Act)  or,  to  the  Company's  knowledge,   in  other  factors  that  could
     significantly affect the Company's internal controls.

          (s) Certain Fees. No brokerage or finder's fees or commissions  are or
     will  be  payable  by the  Company  to any  broker,  financial  advisor  or
     consultant,  finder,  placement  agent,  investment  banker,  bank or other
     Person with respect to the  transactions  contemplated  by this  Agreement,
     other than  compensation in the form of cash fees and a warrant to purchase
     common stock to The Keystone  Equities Group in connection with the sale of
     the Shares at Closing. The Purchasers shall have no obligation with respect
     to any fees or with  respect  to any  claims  made by or on behalf of other
     Persons for fees of a type  contemplated in this Section that may be due in
     connection with the transactions contemplated by this Agreement.

          (t) Listing and Maintenance  Requirements.  The Company's Common Stock
     is  registered  pursuant  to Section  12(b) of the  Exchange  Act,  and the
     Company  has taken no action  designed  to,  or which to its  knowledge  is
     likely to have the effect of,  terminating  the  registration of the Common
     Stock under the Exchange Act nor has the Company  received any notification
     that the Commission is  contemplating  terminating such  registration.  The
     Common  Stock  will be  listed  on the  American  Stock  Exchange  prior to
     issuance  and the Company will  forward to each  Purchaser  the Shares once
     listing  approval  has been  granted by the American  Stock  Exchange.  The
     Company has not received any notification  that the American Stock Exchange
     is contemplating  terminating such listing, the Company believes that it is
     in compliance with all such listing and maintenance  requirements and, that
     once  listing  approval  is  granted,  the sale and  issuance of the Shares
     hereunder  will not  contravene  the rules and  regulations of the American
     Stock Exchange.

          (u) Application of Takeover Protections.  The Company and its Board of
     Directors  have  taken all  necessary  action,  if any,  in order to render
     inapplicable any control share acquisition,  business  combination,  poison
     pill (including any distribution under a rights agreement) or other similar
     anti-takeover  provision under the Company's  Certificate of  Incorporation
     (or similar  charter  documents) or the laws of its state of  incorporation
     that is or could become  applicable  to the  Purchasers  as a result of the
     Purchasers and the Company fulfilling their obligations or exercising their
     rights under the Transaction  Documents,  including without  limitation the
     Company's  issuance of the Securities and the Purchasers'  ownership of the
     Securities.
<PAGE>

          (v) Disclosure. The Company confirms that, neither the Company nor any
     officer,  director  or  employee  of the  Company  acting on its behalf has
     provided  any of the  Purchasers  or  their  agents  or  counsel  with  any
     information  that  constitutes  or might  constitute  material,  non-public
     information.  The Company understands and confirms that the Purchasers will
     rely  on  the   foregoing   representations   and  covenants  in  effecting
     transactions in securities of the Company.  All disclosure  provided to the
     Purchasers  regarding  the  Company,  its  business  and  the  transactions
     contemplated  hereby  furnished by or on behalf of the Company with respect
     to the representations and warranties made herein are true and correct with
     respect to such  representations  and  warranties  and do not  contain  any
     untrue  statement  of a material  fact or omit to state any  material  fact
     necessary in order to make the  statements  made  therein,  in light of the
     circumstances  under  which they were made,  not  misleading.  The  Company
     acknowledges   and  agrees  that  no  Purchaser   makes  or  has  made  any
     representations or warranties with respect to the transactions contemplated
     hereby other than those specifically set forth in Section 3.2 hereof.

          (w) No Integrated  Offering.  Assuming the accuracy of the Purchasers'
     representations  and  warranties  set forth in  Section  3.2,  neither  the
     Company,  nor any of its affiliates,  nor any Person acting on its or their
     behalf  has,  directly  or  indirectly,  made  any  offers  or sales of any
     security or solicited any offers to buy any security,  under  circumstances
     that would, to the best of the Company's knowledge,  cause this offering of
     the  Securities,  when,  and if,  integrated  with prior  offerings  by the
     Company, to require shareholder  approval,  including,  without limitation,
     under the rules and  regulations  of any  exchange or  automated  quotation
     system  on  which  any of the  securities  of the  Company  are  listed  or
     designated.

          (x) Taxes.  Except for matters that would not,  individually or in the
     aggregate, have, or reasonably be expected to result in, a Material Adverse
     Effect,  to the  best of the  Company's  knowledge,  the  Company  and each
     Subsidiary  has filed all necessary  federal,  state and foreign income and
     franchise  tax  returns  and has paid or  accrued  all  taxes  shown as due
     thereon,  and the Company has no  knowledge of a tax  deficiency  which has
     been asserted or threatened against the Company or any Subsidiary.

          (y)  Foreign  Corrupt  Practices.  Neither  the  Company,  nor  to the
     knowledge of the Company, any agent or other person acting on behalf of the
     Company,  has (i)  directly  or  indirectly,  used any  corrupt  funds  for
     unlawful  contributions,  gifts,  entertainment or other unlawful  expenses
     related to foreign or domestic political  activity,  (ii) made any unlawful
     payment to foreign or domestic government  officials or employees or to any
     foreign or domestic  political  parties or campaigns from corporate  funds,
     (iii)  failed to disclose  fully any  contribution  made by the Company (or
     made by any  person  acting on its  behalf of which the  Company  is aware)
     which is in violation of law, or (iv) violated in any material  respect any
     provision of the Foreign Corrupt Practices Act of 1977, as amended.
<PAGE>

                  (z) Acknowledgment  Regarding  Purchasers' Purchase of Shares.
         To the Company's knowledge,  each of the Purchasers is acting solely in
         the  capacity  of  an  arm's  length  purchaser  with  respect  to  the
         Transaction  Documents and the transactions  contemplated  hereby.  The
         Company further acknowledges that no Purchaser is acting as a financial
         advisor or fiduciary of the Company (or in any similar  capacity)  with
         respect to this Agreement and the transactions  contemplated hereby and
         any  advice  given  by  any  Purchaser  or  any  of  their   respective
         representatives  or agents in  connection  with this  Agreement and the
         transactions   contemplated   hereby  is  merely   incidental   to  the
         Purchasers'  purchase of the Shares.  The Company further represents to
         each Purchaser that the Company's decision to enter into this Agreement
         has been based solely on the independent evaluation of the transactions
         contemplated hereby by the Company and its representatives.

                  (aa) Accountants.  The Company's  accountants are set forth in
         SEC Reports.  To the Company's  knowledge,  such  accountants,  who the
         Company  expects  will  express  their  opinion  with  respect  to  the
         financial  statements to be included in the Company's  Annual Report on
         Form 10-K for the year ending August 31, 2005, are a registered  public
         accounting firm as required by the Securities Act.

         3.2  Representations  and Warranties of the Purchasers.  Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

          (a)  Organization;  Authority.  If  applicable,  such  Purchaser is an
     entity duly organized, validly existing and in good standing under the laws
     of the  jurisdiction  of its  organization  with full right,  corporate  or
     partnership  power  and  authority  to  enter  into and to  consummate  the
     transactions  contemplated  by the  Transaction  Documents and otherwise to
     carry  out  its  obligations  thereunder.  If  applicable,  the  execution,
     delivery and performance by such Purchaser of the transactions contemplated
     by this Agreement have been duly  authorized by all necessary  corporate or
     similar action on the part of such Purchaser.  Each Transaction Document to
     which it is a party  has been duly  executed  by such  Purchaser,  and when
     delivered  by such  Purchaser in  accordance  with the terms  hereof,  will
     constitute  the valid and legally  binding  obligation  of such  Purchaser,
     enforceable  against it in accordance with its terms, except (i) as limited
     by general  equitable  principles  and applicable  bankruptcy,  insolvency,
     reorganization,  moratorium and other laws of general application affecting
     enforcement  of  creditors'  rights  generally,  (ii)  as  limited  by laws
     relating to the availability of specific performance,  injunctive relief or
     other  equitable  remedies  and  (iii)  insofar  as   indemnification   and
     contribution provisions may be limited by applicable law.

          (b)  Purchaser  Representation.  Such  Purchaser  does  not  have  any
     agreement  or  understanding,  directly or  indirectly,  with any Person to
     distribute  any of the  Securities.  Such  Purchaser  is not required to be
     registered as a  broker-dealer  under Section 15 of the Exchange Act nor is
     such Purchaser an affiliate of a broker-dealer.
<PAGE>

          (c) Investment Representations.  Purchaser understands that the Common
     Stock is being offered and sold pursuant to an exemption from  registration
     contained   in  the   Securities   Act  based  in  part  upon   Purchaser's
     representations contained in the Agreement,  including, without limitation,
     that the  Purchaser  is an  "accredited  investor"  within  the  meaning of
     Regulation D under the Securities  Act. The Purchaser  confirms that it has
     received  or has had  full  access  to all  the  information  it  considers
     necessary  or  appropriate  to make an informed  investment  decision  with
     respect  to the  Securities,  including  access  to and  review  of all SEC
     Reports as of the date hereof.  The Purchaser  further confirms that it has
     had an  opportunity  to ask questions and receive  answers from the Company
     regarding the SEC Reports,  the Company's and its  Subsidiaries'  business,
     management  and  financial  affairs  and the  terms and  conditions  of the
     offering and the Securities and to obtain  additional  information  (to the
     extent the Company  possessed such  information or could acquire it without
     unreasonable  effort  or  expense)  necessary  to  verify  any  information
     furnished to the Purchaser or to which the Purchaser had access.

          (d) Purchaser  Bears  Economic  Risk.  The  Purchaser has  substantial
     experience in evaluating and investing in private placement transactions of
     securities  in  companies  similar to the  Company so that it is capable of
     evaluating  the merits and risks of its  investment  in the Company and has
     the  capacity to protect its own  interests.  The  Purchaser  must bear the
     economic risk of this investment until the Securities are sold pursuant to:
     (i) an effective  registration  statement under the Securities Act; or (ii)
     an exemption from registration is available with respect to such sale.

          (e)  Acquisition  for Own Account.  The  Purchaser  is  acquiring  the
     Securities for the Purchaser's own account for investment  only, and not as
     a nominee or agent and not with a view towards or for resale in  connection
     with their distribution.

          (f) Purchaser Can Protect Its Interest.  The Purchaser represents that
     by  reason  of  its,  or  of  its  management's,   business  and  financial
     experience, the Purchaser has the capacity to evaluate the merits and risks
     of its  investment  in the Common Stock and to protect its own interests in
     connection  with the  transactions  contemplated  in this Agreement and the
     Transactional Documents.  Further,  Purchaser is aware of no publication of
     any  advertisement in connection with the transactions  contemplated in the
     Agreement or the Related  Agreements.  The Company  acknowledges and agrees
     that each  Purchaser does not make or has not made any  representations  or
     warranties with respect to the transactions  contemplated hereby other than
     those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

     4.1 Legends.


          (a)  The  Purchaser   understands   that  the  certificates  or  other
     instruments representing the Securities,  until such time as they have been
     registered  under the Securities  Act,  shall bear a restrictive  legend in
     substantially  the following form (and a stop-transfer  order may be placed
     against transfer of such certificates or other instruments):

     "THE COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS AMENDED,  OR ANY APPLICABLE  STATE SECURITIES LAWS. THE COMMON STOCK MAY
     NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
     OF (A) AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE  SECURITIES  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
     (B) AN  OPINION  OF  COUNSEL,  IN  REASONABLY  ACCEPTABLE  FORM,  THAT SUCH
     REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE  STATE SECURITIES
     LAWS, OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. "


          (b)  Certificates  evidencing  the Shares shall not contain any legend
     (including  the  legend  set  forth  in  Section   4.1(a)),   (i)  while  a
     registration statement (including the registration statement filed pursuant
     to Section 4.10) covering the resale of such  Securities is effective under
     the Securities Act provided that the Purchaser  confirms in writing that it
     has or  will  comply  with  the  prospectus  delivery  requirements  of the
     Securities  Act, or (ii) following any sale of such Shares pursuant to Rule
     144, or (iii) if such Shares are eligible  for sale under Rule  144(k),  or
     (iv) if such legend is not required under  applicable  requirements  of the
     Securities  Act  (including  judicial  interpretations  and  pronouncements
     issued by the Staff of the Commission). The Company shall cause its counsel
     to issue a legal opinion to the Company's transfer agent promptly after the
     date that the registration  statement covering the resale by the Purchasers
     of the Shares is first  declared  effective  if required  by the  Company's
     transfer agent to effect the removal of the legend hereunder  provided that
     the  Purchaser  confirms  in writing  that it has or will  comply  with the
     prospectus delivery  requirements of the Securities Act. The Company agrees
     that  following  such  date or at such  time as such  legend  is no  longer
     required  under this Section  4.1(b),  it will, no later than three Trading
     Days  following the delivery by a Purchaser to the Company or the Company's
     transfer  agent  of  a  certificate   representing  Shares  issued  with  a
     restrictive legend (such date, the "Legend Removal Date"), deliver or cause
     to be delivered to such  Purchaser a certificate  representing  such Shares
     that is free from all  restrictive  and other legends.  The Company may not
     make any notation on its records or give instructions to any transfer agent
     of the Company that enlarge the  restrictions on transfer set forth in this
     Section.

<PAGE>

     4.2  Furnishing  of  Information.  The  Company  covenants  to use its best
efforts to timely file (or obtain  extensions in respect thereof and file within
the  applicable  grace  period) all reports  required to be filed by the Company
after the date hereof pursuant to the Exchange Act.

     4.3 Securities Laws Disclosure;  Publicity. The Company shall, by 9:00 a.m.
Eastern time on the Trading Day following the date hereof file a Current  Report
on Form 8-K,  disclosing  the material  terms of the  transactions  contemplated
hereby.

     4.4  Shareholders  Rights  Plan.  No claim will be made or  enforced by the
Company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring  Person" under any shareholders  rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the  provisions of any such plan or  arrangement,  by
virtue of  receiving  Securities  under the  Transaction  Documents or under any
other  agreement  between  the  Company and the  Purchasers.  The Company  shall
conduct  its  business  in a manner so that it will not  become  subject  to the
Investment Company Act.

     4.5 Non-Public  Information.  The Company covenants and agrees that neither
it nor any other Person  acting on its behalf will provide any  Purchaser or its
agents or counsel with any  information  that the Company  believes  constitutes
material non-public information,  unless prior thereto such Purchaser shall have
executed  a written  agreement  regarding  the  confidentiality  and use of such
information.  The Company  understands and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

     4.6 Reimbursement. If any Purchaser becomes involved in any capacity in any
Proceeding by or against any Person who is a stockholder of the Company  (except
as a result of sales,  pledges,  margin sales and similar  transactions  by such
Purchaser  to or with any  current  stockholder),  solely  as a  result  of such
Purchaser's acquisition of the Securities under this Agreement, the Company will
reimburse such Purchaser for its reasonable legal and other expenses  (including
the cost of any  investigation  preparation and travel in connection  therewith)
incurred  in  connection   therewith,   as  such  expenses  are  incurred.   The
reimbursement  obligations  of the  Company  under  this  paragraph  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 the  Purchasers  are
actually  named in such  action,  proceeding  or  investigation,  and  partners,
directors,  agents,  employees and controlling persons (if any), as the case may
be, of the Purchasers, and shall be binding upon and inure to the benefit of any
successors,  assigns,  heirs and personal  representatives  of the Company,  the
Purchasers,  and any such Person.  The Company also agrees that the  Purchasers,
Affiliates,  partners, directors, agents, employees or controlling persons shall
have no liability to the Company or any Person  asserting claims on behalf of or
in right of the Company  solely as a result of acquiring  the  Securities  under
this Agreement.

     4.7  Indemnification  of  Purchasers.  Subject  to the  provisions  of this
Section 4.7,  the Company will  indemnify  and hold the  Purchasers,  directors,
officers,  shareholders,  partners,  employees  and agents  (each,  a "Purchaser
Party")  harmless  from any and all losses,  liabilities,  obligations,  claims,
contingencies,  damages,  costs and expenses,  including all judgments,  amounts
paid in  settlements,  court costs and reasonable  attorneys'  fees and costs of
investigation  that any such Purchaser  Party may suffer or incur as a result of
or  relating  to (a)  any  breach  of any  of the  representations,  warranties,
covenants or  agreements  made by the Company in this  Agreement or in the other
Transaction Documents or (b) any action instituted against a Purchaser or any of
them or their  respective  Affiliates,  by any stockholder of the Company who is
not an Affiliate  of such  Purchaser,  with  respect to any of the  transactions
contemplated  by the Transaction  Documents  (unless such action is based upon a
breach of such  Purchaser's  representations,  warranties or covenants under the
Transaction  Documents or any  agreements or  understandings  such Purchaser may
have with any such  stockholder  or any  violations by the Purchaser of state or
federal  securities  laws or any  conduct by such  Purchaser  which  constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought  against any  Purchaser  Party in respect of which  indemnity  may be
sought  pursuant to this  Agreement,  such Purchaser Party shall promptly notify
the  Company  in  writing,  and the  Company  shall have the right to assume the
defense thereof with counsel of its own choosing. Any Purchaser Party shall have
the right to employ  separate  counsel in any such action and participate in the
defense  thereof,  but the fees and  expenses  of such  counsel  shall be at the
expense of such  Purchaser  Party  except to the extent that (i) the  employment
thereof has been  specifically  authorized  by the Company in writing,  (ii) the
Company has failed after a reasonable  period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate  counsel,  a material  conflict on any material  issue between the
position of the Company and the position of such  Purchaser  Party.  The Company
will not be liable to any  Purchaser  Party  under  this  Agreement  (i) for any
settlement by a Purchaser  Party  effected  without the Company's  prior written
consent,  which shall not be  unreasonably  withheld or delayed;  or (ii) to the
extent,  but only to the  extent  that a loss,  claim,  damage or  liability  is
attributable  to any  Purchaser  Party's  breach of any of the  representations,
warranties,  covenants or agreements made by the Purchasers in this Agreement or
in the other Transaction Documents.
<PAGE>

     4.8  Reservation  of Common Stock.  As of the date hereof,  the Company has
reserved  and the Company  shall  continue to reserve and keep  available at all
times, free of preemptive  rights, a sufficient number of shares of Common Stock
for the  purpose of  enabling  the  Company  to issue  Shares  pursuant  to this
Agreement.

     4.9 Listing of Common Stock.  The Company hereby agrees to use best efforts
to maintain  the listing of the Common  Stock on a Trading  Market.  The Company
further  agrees,  if the Company  applies to have the Common Stock traded on any
other Trading Market,  it will include in such application all of the Shares and
will take such  other  action as is  necessary  to cause all of the Shares to be
listed on such other  Trading  Market as promptly as possible.  The Company will
take all action reasonably  necessary to continue the listing and trading of its
Common  Stock on a  Trading  Market  and will  comply in all  respects  with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
the Trading Market.

     4.10 Registration  Rights Granted.  The Company hereby grants  registration
rights to the Purchaser pursuant to a Registration  Rights Agreement dated as of
even date herewith  between the Company and the  Purchaser,  attached  hereto as
Exhibit "A".
<PAGE>

                                   ARTICLE V.
                                  MISCELLANEOUS

     5.1  Termination.  This  Agreement may be terminated by any  Purchaser,  as
applied  to such  Purchaser,  by  written  notice to the other  parties,  if the
Closing has not been consummated on or before August 19, 2005,  provided however
that no such  termination  will  affect  the  right of any  party to sue for any
breach by the other party (or parties).

     5.2 Fees and  Expenses.  Each party shall pay the fees and  expenses of its
advisers, counsel, 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.  The Company shall pay all stamp and
other taxes and duties levied in connection with the sale of the Securities.

     5.3 Entire Agreement. The Transaction Documents, together with the exhibits
and  schedules  thereto,  contain the entire  understanding  of the parties with
respect to the subject  matter  hereof and supersede  all prior  agreements  and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

     5.4  Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication is delivered via facsimile at the facsimile number
set forth on the signature  pages  attached  hereto prior to 6:30 p.m. (New York
City  time)  on a  Trading  Day,  (b) the next  Trading  Day  after  the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (c) the second  Trading Day following the date of mailing,  if sent by U.S.
nationally  recognized  overnight courier service, or (d) upon actual receipt by
the party to whom such  notice is  required  to be given.  The  address for such
notices and communications shall be as set forth on the signature pages attached
hereto.

     5.5  Amendments;  Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument  signed, in the case of an amendment,  by
the Company and each Purchaser or, in the case of a waiver, by the party against
whom  enforcement  of any such waiver is sought.  No waiver of any default  with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed to be a  continuing  waiver in the  future or a waiver of any  subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise  any right  hereunder in
any manner impair the exercise of any such right.

     5.6  Construction.  The headings  herein are for  convenience  only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof. 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.
<PAGE>

     5.7 Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors and permitted  assigns.  The
Company may not assign this  Agreement  or any rights or  obligations  hereunder
without the prior written  consent of each  Purchaser.  Any Purchaser may assign
any or all of its  rights  under  this  Agreement  to any  Person  to whom  such
Purchaser  assigns or transfers any Securities,  provided such transferee agrees
in  writing to be bound,  with  respect to the  transferred  Securities,  by the
provisions hereof that apply to the "Purchasers".

     5.8 No  Third-Party  Beneficiaries.  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7.

     5.9 Governing  Law. All questions  concerning the  construction,  validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
Texas, without regard to the principles of conflicts of law thereof.  Each party
agrees that all legal proceedings  concerning the  interpretations,  enforcement
and defense of the  transactions  contemplated  by this  Agreement and any other
Transaction  Documents (whether brought against a party hereto or its respective
affiliates,  directors,  officers,  shareholders,  employees or agents) shall be
commenced  exclusively  in the state and federal  courts  sitting in the City of
Houston. Each party hereby irrevocably submits to the exclusive  jurisdiction of
the  state  and  federal  courts  sitting  in  the  City  of  Houston,  for  the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed herein (including with respect to
the enforcement of any of the  Transaction  Documents),  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  improper or  inconvenient  venue for such
proceeding.

     5.10 Survival.  The representations and warranties herein shall survive the
Closing and delivery of the Shares for one (1) year. The parties  understand and
agree that  neither  pary is  required to  supplement  the  representations  and
warranties herein.

     5.11 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken  together 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,  it being  understood  that both parties need not
sign the same  counterpart.  In the event that any  signature  is  delivered  by
facsimile  transmission,  such  signature  shall  create  a  valid  and  binding
obligation  of the  party  executing  (or on  whose  behalf  such  signature  is
executed)  with the same force and effect as if such  facsimile  signature  page
were an original thereof.

     5.12 Severability. If any provision of this Agreement is held to be invalid
or  unenforceable  in  any  respect,  the  validity  and  enforceability  of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
<PAGE>

     5.13 Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated,  lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange  and  substitution  for and upon  cancellation
thereof,  or  in  lieu  of  and  substitution  therefor,  a new  certificate  or
instrument,  but only upon receipt of evidence  reasonably  satisfactory  to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity,  if requested.  The  applicants  for a new  certificate or instrument
under  such  circumstances  shall  also  pay any  reasonable  third-party  costs
associated with the issuance of such replacement Securities.

     5.14  Remedies.  In  addition  to being  entitled  to  exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  and the Company will be entitled to specific  performance  under the
Transaction  Documents.  The  parties  agree that  monetary  damages  may not be
adequate  compensation  for  any  loss  incurred  by  reason  of any  breach  of
obligations  described in the  foregoing  sentence and hereby agrees to waive in
any action for specific  performance  of any such  obligation the defense that a
remedy at law would be adequate.

     5.15 Payment Set Aside.  To the extent that the Company  makes a payment or
payments to any Purchaser  pursuant to any  Transaction  Document or a Purchaser
enforces or exercises its rights 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.

     5.16  Independent  Nature  of  Purchasers'   Obligations  and  Rights.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers  are in any way acting in concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Document.  Each
Purchaser  shall be  entitled to  independently  protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other  Transaction  Documents,  and it shall not be necessary  for any other
Purchaser  to be  joined  as an  additional  party  in any  proceeding  for such
purpose.  Each Purchaser has been  represented by its own separate legal counsel
in their review and negotiation of the Transaction  Documents.  Saul Ewing,  LLP
does not represent any of the Purchasers but only The Keystone  Equities  Group,
who has acted as placement agent to the transaction.  The Company has elected to
provide all  Purchasers  with the same terms and  Transaction  Documents for the
convenience of the Company and not because it was required or requested to do so
by the Purchasers.
<PAGE>

     5.17  Liquidated  Damages.  The  Company's  obligations  to pay any partial
liquidated  damages or other amounts owing under the Transaction  Documents is a
continuing  obligation of the Company and shall not  terminate  until all unpaid
partial liquidated damages and other amounts have been paid  notwithstanding the
fact that the instrument or security  pursuant to which such partial  liquidated
damages or other amounts are due and payable shall have been canceled.

     5.18  Construction.  The  parties  agree  that  each of them  and/or  their
respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved  against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.

                            (Signature Page Follows)



<PAGE>



                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


Eagle Broadband, Inc.                               Address for Notice:
                                                    -------------------


By:                                                 Eagle Broadband, Inc.
     Name: Eric Blachno                             101 Courageous Drive
     Title: Chief Financial Officer                 League City, TX 77573

With a copy to (which shall not constitute notice): Brewer & Pritchard, P.C.
    Name: Thomas C. Pritchard                       Three Riverway, Suite 1800
    Title: Partner                                  Houston, TX 77056





                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]


<PAGE>






                              EAGLE BROADBAND, INC.
                 PIPE PLACEMENT - RESTRICTED (144) COMMON STOCK
                        PURCHASE AGREEMENT SIGNATURE PAGE

 Please complete two copies of this Signature Page and return both copies along
                  with the attached Investor Questionnaire to:

      The Keystone Equities Group, 1003 Egypt Road, P.O. Box 1155, Oaks, PA
   19456-1155 Attn: Lori Powell - Investment Banking (you may also fax a copy
                   to (610) 415-6328 then mail the originals)

I, the  undersigned  investor,  do hereby agree to be bound by all the terms and
provisions of this Stock Purchase Agreement and to perform all of my obligations
thereunder  with respect to the  Securities to be purchased.  Set forth below is
the name(s) in which  Shares  should be issued (if Shares are to be held by more
than one owner,  each tenant or other person  involved must sign this  Signature
Page).

          **ALL APPLICABLE SECTIONS MUST BE COMPLETED - PLEASE PRINT**
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
Purchaser's Name                            Nominee Name (i.e. Trust, Company)



--------------------------------------------------------------------------------
Social Security/Tax I.D. Number of Subscriber          Telephone Number



--------------------------------------------------------------------------------
Social Security Number of Co-Subscriber        Fax Number
(if applicable)


                                               ---------------------------------
                                               E-Mail Address
--------------------------------------------------------------------------------




--------------------------------------------------------------------------------
Address of Record                              City, State and Zip Code




------------------------------------------------------  ------------------------
Mailing Address (if different than Address of Record))  City, State and Zip Code
(NOTE: SECURITIES CAN NOT BE MAILED TO A POST OFFICE BOX)
<PAGE>





-------------------------------------------------------------------------------
REGISTRATION AS IT SHOULD APPEAR ON THE SECURITY CERTIFICATES [PLEASE PRINT]

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




-------------------------------------------------------------------------------
Investor Signature                                           Date




-------------------------------------------------------------------------------
Investor Co-Signature (if applicable)                        Date






-------------------------------------------------------------------------------
NUMBER OF [SHARES/UNIT]
TO BE PURCHASED                PRICE PER [SHARE/UNIT]  AGGREGATE PURCHASE PRICE
-------------------------------------------------------------------------------

________________             X       $0.135/SHARE COMMON STOCK  $______________

WIRING INSTRUCTIONS:
COMMERCE BANK, ABA #036001808.  For credit to the Account of Keystone-Eagle
Broadband ESCROW ACCOUNT #7760011590
FBO:  INSERT INDIVIDUAL INVESTOR NAMES
Bank/Address: Commerce Bank, 498 2nd Ave., Collegeville, PA  19426
PLEASE NOTE:  WHEN WIRING FUNDS,  THE INVESTOR NAME MUST BE INDICATED ON THE FBO
LINE AS PART OF THE INSTRUCTIONS.

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



--------------------------------------------------------------------------------
**If the SUBSCRIBER IS A REGISTERED REPRESENTATIVE WITH A NASD MEMBER FIRM OR AN
AFFILIATED PERSON OF AN NASD MEMBER FIRM, have the acknowledgement  below signed
by the appropriate party of the NASD firm you work for.

THE UNDERSIGNED NASD MEMBER FIRM ACKNOWLEDGES  RECEIPT OF THE NOTICE REQUIRED BY
RULE 3040 OF THE NASD CONDUCT RULES.



___________________________________________     By: __________________
Name of NASD Member Firm (Company Name)             Signature
of Authorized Accepting Officer
-------------------------------------------------------------------------------





Subscription Agreed To and Accepted By:

THE KEYSTONE EQUITIES GROUP, L.P.  EAGLE BROADBAND, INC.

By:  _____________________________________      By: ___________________________
       Name:                                          Name:
       Title:                                         Title:

Date: ____________________________________      Date: _________________________