Exhibit 10.2

                             SUBSCRIPTION AGREEMENT

     THIS  SUBSCRIPTION  AGREEMENT  (this "Agreement"), dated as of December 29,
2005, by and among FTS Group Inc., a Nevada corporation (the "Company"), and the
subscribers  identified  on  the  signature page hereto (each a "Subscriber" and
collectively  "Subscribers").

WHEREAS,  the  Company  and  the  Subscribers  are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the  provisions  of  Section 4(2), Section 4(6) and/or Regulation D ("Regulation
D")  as promulgated by the United States Securities and Exchange Commission (the
"Commission")  under  the  Securities  Act of 1933, as amended (the "1933 Act").

WHEREAS,  the  parties desire that, upon the terms and subject to the conditions
contained  herein,  the  Company  shall  issue  and  sell to the Subscribers, as
provided herein, and the Subscribers, in the aggregate, shall subscribe to up to
One  Million  Eight  Hundred  and Ninety-Six Thousand Five Hundred and Fifty-One
Dollars  ($1,896,551)  (the "Purchase Price") of promissory notes of the Company
with  an original discount of 21% ("Note" or "Notes") convertible into shares of
the  Company's common stock, $.001 par value (the "Common Stock") at a per share
conversion  price  set  forth  in  the Note ("Conversion Price"); share purchase
warrants  (the  "Warrants"), in the forms attached hereto as Exhibits A1 and A2,
to purchase shares of Common Stock (the "Warrant Shares"); and 37,000,000 shares
of  Common  Stock to be distributed pro rata among the Subscribers proportionate
to  the  Purchase  Price  paid  by  Subscribers ("Initial Shares").   The Notes,
shares of Common Stock issuable upon conversion of the Notes (the "Shares"), the
Warrants, the Warrant Shares and the Initial Shares are collectively referred to
herein  as  the  "Securities";  and

WHEREAS,  the  aggregate  proceeds  of  the  sale  of the Notes and the Warrants
contemplated  hereby  shall  be  held in escrow pursuant to the terms of a Funds
Escrow  Agreement  to  be  executed  by  the  parties  substantially in the form
attached  hereto  as  Exhibit  B  (the  "Escrow  Agreement").
NOW,  THEREFORE,  in  consideration of the mutual covenants and other agreements
contained  in  this  Agreement  the  Company and the Subscribers hereby agree as
follows:

     1.     Closing.  Subject  to  the  satisfaction  or waiver of the terms and
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conditions of this Agreement, on the "Closing Date" (as defined in Section 13(b)
hereof),  each  Subscriber  shall  purchase  and  the Company shall sell to each
Subscriber  a  Note  in  the  principal  amount designated on the signature page
hereto  and  the amount of Warrants determined pursuant to Section 3 below.  The
aggregate  principal  amount  of the Notes to be purchased by the Subscribers on
the  Closing  Date  shall,  in  the  aggregate,  be equal to the Purchase Price.

2.     Security  Interest.   The Subscribers will be granted a security interest
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in all the assets of the Company, including ownership of Subsidiaries as defined
in  Section  5(a)  of  this  Agreement, and the assets of the Subsidiaries to be
memorialized  in  "Security  Agreements",  forms  of which are annexed hereto as
Exhibit C1 and C2. The Company will execute such other agreements, documents and
financing  statements  to  be  filed  at  the  Company's  expense  with  such
jurisdictions,  states  and counties designated by the Subscribers.  The Company
will  also  execute  all  such  documents reasonably necessary in the opinion of
Subscriber  to  memorialize  and further protect the security interest described
herein.  The  Subscribers  will  appoint  a  Collateral  Agent to represent them
collectively  in  connection  with  the  security  interest to be granted in the
assets  of  the Company and Subsidiaries.  The appointment will be pursuant to a
"Collateral  Agent  Agreement",  a form of which is annexed hereto as Exhibit D.

3.     Warrants.
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     (a)     Class A Warrants.   On the Closing Date, the Company will issue and
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deliver Class A Warrants to the Subscribers.  One hundred (100) Class A Warrants
will  be  issued  for each one hundred (100) Shares which would be issued on the
Closing Date assuming the complete conversion of the Note on the Closing Date at
the  Conversion  Price  then in effect.  The exercise price to acquire a Warrant
Share  upon  exercise  of  a Class A Warrant shall be 120% of the average of the
volume  weighted  average  price  (VWAP)  of  the  Common  Stock  as reported by
Bloomberg  LP for the OTC Bulletin Board ("Bulletin Board") for the five trading
days  preceding the Closing Date, subject to reduction as described in the Class
A  Warrant.   The  Class A Warrants shall be exercisable until the date that the
Registration  Statement  (as  defined  in  the  Subscription Agreement) has been
effective  for the unrestricted public resale of the Warrant Shares for four (4)
years.

     (b)     Class B Warrants.   On the Closing Date, the Company will issue and
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deliver  Class B Warrants to the Subscribers.   Fifty (50) Class B Warrants will
be issued for each one hundred (100) Shares which would be issued on the Closing
Date  assuming  the  complete  conversion of the Note on the Closing Date at the
Conversion  Price then in effect.  The exercise price to acquire a Warrant Share
upon  exercise  of  a Class B Warrant shall be 100% of the average of the volume
weighted  average  price  (VWAP) of the Common Stock as reported by Bloomberg LP
for  the  Bulletin  Board  for the five trading days preceding the Closing Date.
The  Class  B Warrants shall be exercisable until the later of four months after
the  actual  effective  date  of  Registration  Statement  [defined  in  Section
11.1(iv)]  ("Actual  Effective Date"), or ninety days after the actual effective
date  of  the  Second  Registration Statement ("Second Registration Statement").

          4.     Subscriber's  Representations  and Warranties.  Each Subscriber
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hereby  represents  and  warrants to and agrees with the Company only as to such
Subscriber  that:

     (a)     Organization and Standing of the Subscribers.  If the Subscriber is
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an  entity,  such  Subscriber is a corporation, partnership or other entity duly
incorporated  or organized, validly existing and in good standing under the laws
of  the  jurisdiction  of  its  incorporation  or  organization.

     (b)     Authorization  and  Power.  Each Subscriber has the requisite power
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and authority to enter into and perform this Agreement and to purchase the Notes
and  Warrants  being  sold  to  it  hereunder.  The  execution,  delivery  and
performance  of  this Agreement by such Subscriber and the consummation by it of
the  transactions  contemplated  hereby and thereby have been duly authorized by
all  necessary  corporate  or  partnership  action,  and  no  further consent or
authorization  of  such  Subscriber  or  its  Board  of Directors, stockholders,
partners,  members,  as  the  case may be, is required.  This Agreement has been
duly  authorized, executed and delivered by Subscriber and constitutes, or shall
constitute  when  executed  and delivered, a valid and binding obligation of the
Subscriber  enforceable  against  the  Subscriber  in  accordance with the terms
thereof.

               (c)     No Conflicts.  The execution, delivery and performance of
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this  Agreement  and  the  consummation  by  Subscriber  of  the  transactions
contemplated  hereby  or  relating  hereto  do  not and will not (i) result in a
violation  of  such  Subscriber's  charter  documents  or  bylaws  or  other
organizational  documents  or (ii) conflict with, or constitute a default (or an
event  which with notice or lapse of time or both would become a default) under,
or  give  to  others  any  rights  of  termination,  amendment,  acceleration or
cancellation  of  any  agreement, indenture or instrument or obligation to which
such  Subscriber  is  a party or by which its properties or assets are bound, or
result in a violation of any law, rule, or regulation, or any order, judgment or
decree  of any court or governmental agency applicable to such Subscriber or its
properties  (except  for  such  conflicts, defaults and violations as would not,
individually  or  in  the  aggregate,  have  a  material  adverse effect on such
Subscriber).  Such  Subscriber  is  not  required  to  obtain  any  consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency  in  order for it to execute, deliver or perform any of its
obligations  under  this  Agreement  or  to  purchase  the  Notes or acquire the
Warrants  in accordance with the terms hereof, provided that for purposes of the
representation  made  in  this sentence, such Subscriber is assuming and relying
upon  the accuracy of the relevant representations and agreements of the Company
herein.

(d)     Information  on Company.   The Subscriber has been furnished with or has
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had  access  at the EDGAR Website of the Commission to the Company's Form 10-KSB
for the year ended December 31, 2004 as filed with the Commission, together with
all  subsequently  filed Forms 10-QSB, 8-K, and filings made with the Commission
available  at  the  EDGAR  website  (hereinafter referred to collectively as the
"Reports").  The  Subscriber has had an opportunity to ask questions and receive
answers  from  representatives  of the Company.  In addition, the Subscriber has
received  in  writing  from  the  Company  such other information concerning its
operations,  financial  condition  and  other  matters  as  the  Subscriber  has
requested in writing (such other information is collectively, the "Other Written
Information"),  and  considered  all  factors  the  Subscriber deems material in
deciding  on  the  advisability  of  investing  in  the  Securities.

     (e)     Information  on  Subscriber.  The Subscriber is, and will be at the
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time of the conversion of the Notes and exercise of the Warrants, an "accredited
investor", as such term is defined in Regulation D promulgated by the Commission
under the 1933 Act, is experienced in investments and business matters, has made
investments  of  a  speculative  nature  and  has purchased securities of United
States  publicly-owned companies in private placements in the past and, with its
representatives,  has  such knowledge and experience in financial, tax and other
business  matters  as  to  enable the Subscriber to utilize the information made
available  by  the  Company  to  evaluate the merits and risks of and to make an
informed  investment  decision  with  respect  to  the  proposed purchase, which
represents  a  speculative  investment.  The Subscriber has the authority and is
duly  and  legally qualified to purchase and own the Securities.  The Subscriber
is  able  to  bear  the  risk of such investment for an indefinite period and to
afford a complete loss thereof.  The information set forth on the signature page
hereto  regarding  the  Subscriber  is  accurate.

     (f)     Purchase  of  Notes  and  Warrants.  On  the  Closing  Date,  the
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Subscriber  will  purchase  the  Notes,  and  Warrants  as principal for its own
account  for  investment  only  and  not  with  a  view toward, or for resale in
connection  with,  the  public  sale  or  any  distribution  thereof.

     (g)     Compliance  with  Securities  Act.   The Subscriber understands and
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agrees  that  the  Securities have not been registered under the 1933 Act or any
applicable  state  securities laws, by reason of their issuance in a transaction
that  does  not  require  registration  under the 1933 Act (based in part on the
accuracy  of the representations and warranties of Subscriber contained herein),
and  that  such  Securities  must  be  held  indefinitely  unless  a  subsequent
disposition  is registered under the 1933 Act or any applicable state securities
laws  or  is  exempt  from  such  registration.

     (h)     Shares  Legend.  The  Shares, and the Warrant Shares shall bear the
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following  or  similar  legend:

"THE  SHARES  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES  ACT  OF 1933, AS AMENDED.  THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE  OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION  OF  COUNSEL  REASONABLY  SATISFACTORY  TO  FTS  GROUP  INC.  THAT  SUCH
REGISTRATION  IS  NOT  REQUIRED."

     (i)     Warrants  Legend.  The  Warrants  shall  bear  the  following
             ----------------
or  similar  legend:
"THIS  WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT  BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT
AND  THE  COMMON  SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED  FOR  SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE
SECURITIES  LAW  OR  AN  OPINION OF COUNSEL REASONABLY SATISFACTORY TO FTS GROUP
INC.  THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

(j)     Note  Legend.  The  Note  shall  bear  the  following  legend:
        ------------
"THIS  NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE  OF AN EFFECTIVE REGISTRATION
STATEMENT  AS  TO  THIS  NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY  TO  FTS  GROUP  INC.  THAT  SUCH  REGISTRATION  IS  NOT REQUIRED."
     (k)     Communication  of  Offer.  The  offer  to  sell  the Securities was
             ------------------------
directly  communicated  to  the  Subscriber  by the Company.  At no time was the
Subscriber  presented  with  or  solicited by any leaflet, newspaper or magazine
article,  radio  or  television  advertisement,  or  any  other  form of general
advertising  or  solicited  or invited to attend a promotional meeting otherwise
than  in  connection  and  concurrently  with  such  communicated  offer.
(l)     Authority;  Enforceability.  This  Agreement  and  other  agreements
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delivered  together with this Agreement or in connection herewith have been duly
authorized,  executed  and delivered by the Subscriber and are valid and binding
agreements  enforceable  in  accordance with their terms, subject to bankruptcy,
insolvency,  fraudulent transfer, reorganization, moratorium and similar laws of
general  applicability  relating to or affecting creditors' rights generally and
to  general  principles  of  equity; and Subscriber has full corporate power and
authority  necessary  to enter into this Agreement and such other agreements and
to perform its obligations hereunder and under all other agreements entered into
by  the  Subscriber  relating  hereto.

     (m)     Restricted Securities.   Subscriber understands that the Securities
             ---------------------
have  not  been registered under the 1933 Act and such Subscriber will not sell,
offer  to  sell,  assign,  pledge,  hypothecate or otherwise transfer any of the
Securities unless pursuant to an effective registration statement under the 1933
Act,  or  unless  an  exemption from registration is available.  Notwithstanding
anything  to  the  contrary  contained  in  this  Agreement, such Subscriber may
transfer  (without  restriction  and without the need for an opinion of counsel)
the  Securities  to  its  Affiliates  (as defined below) provided that each such
Affiliate  is  an  "accredited  investor"  under Regulation D and such Affiliate
agrees  to  be  bound  by  the  terms  and conditions of this Agreement. For the
purposes  of  this  Agreement,  an "Affiliate" of any person or entity means any
other  person  or  entity  directly  or indirectly controlling, controlled by or
under  direct  or indirect common control with such person or entity.  Affiliate
includes  each  subsidiary  of  the  Company.  For  purposes of this definition,
"control"  means  the power to direct the management and policies of such person
or  firm,  directly  or  indirectly,  whether  through  the  ownership of voting
securities,  by  contract  or  otherwise.

(n)     No  Governmental  Review.  Each  Subscriber  understands  that no United
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States  federal  or  state  agency or any other governmental or state agency has
passed  on  or  made  recommendations  or  endorsement  of the Securities or the
suitability of the investment in the Securities nor have such authorities passed
upon  or  endorsed  the  merits  of  the  offering  of  the  Securities.

(o)     Correctness  of  Representations.  Each Subscriber represents as to such
        --------------------------------
Subscriber  that  the  foregoing  representations  and  warranties  are true and
correct  as  of  the date hereof and, unless a Subscriber otherwise notifies the
Company  prior  to  the Closing Date shall be true and correct as of the Closing
Date.

     (p)     Restriction on Sales.   From the time the Subscriber was made aware
             --------------------
of  the  Offering  (as  defined  in  Section 8(c) hereof) until such time as the
Offering  is  publicly announced, the Subscriber will not offer to sell, solicit
offers  to  buy, dispose of, loan, pledge or grant any right with respect to the
Common  Stock.

(q)     Survival.  The  foregoing  representations  and warranties shall survive
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the  Closing  Date  for  a  period  of  three  years.

(r)          Regulation  M.  Subscribers  will  comply  with  Regulation  M,  if
applicable.
     5.     Company  Representations and Warranties.  The Company represents and
            ---------------------------------------
warrants  to  and  agrees  with  each  Subscriber  that:
     (a)     Due  Incorporation.  The  Company and each of its Subsidiaries is a
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corporation or other entity duly incorporated or organized, validly existing and
in  good  standing  under  the  laws of the jurisdiction of its incorporation or
organization  and has the requisite corporate power to own its properties and to
carry  on  its  business  as  presently  conducted.  The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in each jurisdiction where the nature of the business conducted or
property  owned  by  it  makes  such  qualification  necessary, other than those
jurisdictions  in  which  the  failure  to  so qualify would not have a Material
Adverse  Effect.  For  purposes  of  this Agreement, a "Material Adverse Effect"
shall  mean  a  material  adverse  effect on the financial condition, results of
operations,  properties or business of the Company and its Subsidiaries taken as
a  whole.  For  purposes  of this Agreement, "Subsidiary" means, with respect to
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any entity at any date, any corporation, limited or general partnership, limited
liability  company,  trust, estate, association, joint venture or other business
entity  of  which  more than 50% of (i) the outstanding capital stock having (in
the  absence  of contingencies) ordinary voting power to elect a majority of the
board  of directors or other managing body of such entity, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of  such  partnership  or  limited  liability  company or (iii) in the case of a
trust,  estate,  association,  joint  venture  or  other  entity, the beneficial
interest  in such trust, estate, association or other entity business is, at the
time of determination, owned or controlled directly or indirectly through one or
more  intermediaries,  by such entity.  All the Company's Subsidiaries as of the
Closing  Date  are  set  forth  on  Schedule  5(a)  hereto.
     (b)     Outstanding  Stock.  All  issued  and outstanding shares of capital
             ------------------
stock  of  the Company has been duly authorized and validly issued and are fully
paid  and  nonassessable.
(c)     Authority;  Enforceability.  This Agreement, the Note, the Warrants, the
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Escrow  Agreement,  Security  Agreement  and Collateral Agent Agreement, and any
other  agreements  delivered  together  with  this  Agreement  or  in connection
herewith  (collectively  "Transaction  Documents")  have  been  duly authorized,
executed  and  delivered  by  the  Company  and are valid and binding agreements
enforceable  in  accordance with their terms, subject to bankruptcy, insolvency,
fraudulent  transfer,  reorganization,  moratorium  and  similar laws of general
applicability  relating  to  or  affecting  creditors'  rights  generally and to
general  principles  of  equity.  The  Company  has  full  corporate  power  and
authority  necessary  to enter into and deliver the Transaction Documents and to
perform  its  obligations  thereunder.
(d)     Additional  Issuances.   There  are  no  outstanding  agreements  or
        ---------------------
preemptive  or similar rights affecting the Company's common stock or equity and
        -
no  outstanding  rights,  warrants  or  options  to  acquire,  or  instruments
convertible  into  or  exchangeable  for,  or  agreements or understandings with
respect  to  the sale or issuance of any shares of common stock or equity of the
Company  or  other  equity  interest  in  any of the Subsidiaries of the Company
except  as  described  on  Schedule  5(d).
(e)     Consents.  No  consent,  approval,  authorization or order of any court,
        --------
governmental  agency or body or arbitrator having jurisdiction over the Company,
or  any  of its Affiliates, the Bulletin Board nor the Company's shareholders is
required  for  the  execution  by  the  Company of the Transaction Documents and
compliance  and  performance  by  the  Company  of  its  obligations  under  the
Transaction  Documents,  including, without limitation, the issuance and sale of
the  Securities.
(f)     No  Violation  or Conflict.  Assuming the representations and warranties
        --------------------------
of  the  Subscribers in Section 4 are true and correct, neither the issuance and
sale  of  the  Securities nor the performance of the Company's obligations under
this  Agreement  and  all  other agreements entered into by the Company relating
thereto  by  the  Company  will:
     (i)     violate,  conflict  with,  result  in  a breach of, or constitute a
default  (or  an  event  which with the giving of notice or the lapse of time or
both  would be reasonably likely to constitute a default) under (A) the articles
or  certificate  of  incorporation, charter or bylaws of the Company, (B) to the
Company's  knowledge, any decree, judgment, order, law, treaty, rule, regulation
or  determination applicable to the Company of any court, governmental agency or
body,  or arbitrator having jurisdiction over the Company or over the properties
or  assets  of  the Company or any of its Affiliates, (C) the terms of any bond,
debenture,  note  or any other evidence of indebtedness, or any agreement, stock
option or other similar plan, indenture, lease, mortgage, deed of trust or other
instrument  to  which  the Company or any of its Affiliates is a party, by which
the Company or any of its Affiliates is bound, or to which any of the properties
of  the  Company  or  any  of its Affiliates is subject, or (D) the terms of any
"lock-up" or similar provision of any underwriting or similar agreement to which
the Company, or any of its Affiliates is a party except the violation, conflict,
breach,  or  default  of  which  would  not  have  a Material Adverse Effect; or
     (ii)     result  in  the  creation  or  imposition  of  any lien, charge or
encumbrance  upon  the  Securities or any of the assets of the Company or any of
its  Affiliates  except  as  described  herein;  or
     (iii)     result  in  the activation of any anti-dilution rights or a reset
or  repricing of any debt or security instrument of any other creditor or equity
holder  of  the  Company,  nor result in the acceleration of the due date of any
obligation  of  the  Company;  or
          (iv)     result  in  the  activation  of  any  piggy-back registration
rights  of  any person or entity holding securities of the Company or having the
right  to receive securities of the Company, except for 360,000 shares issued to
Dutchess  Private  Equities  Fund.
     (g)     The  Securities.  The  Securities  upon  issuance:
             ---------------
     (i)     are,  or  will be, free and clear of any security interests, liens,
claims  or  other  encumbrances, subject to restrictions upon transfer under the
1933  Act  and  any  applicable  state  securities  laws;

(ii)     have  been,  or will be, duly and validly authorized and on the date of
issuance of the Shares and upon exercise of the Warrants, the Shares and Warrant
Shares  will  be  duly  and  validly  issued, fully paid and nonassessable or if
registered  pursuant  to  the  1933  Act,  and  resold  pursuant to an effective
registration  statement  will  be  free  trading  and  unrestricted);
     (iii)     will  not have been issued or sold in violation of any preemptive
or  other  similar  rights  of  the  holders  of  any securities of the Company;
(iv)     will not subject the holders thereof to personal liability by reason of
being  such  holders;  and
          (v)     assuming  the representations warranties of the Subscribers as
set  forth  in  Section  4  hereof  are  true  and correct, will not result in a
violation  of  Section  5  under  the  1933  Act.
(h)     Litigation.  There  is  no  pending  or,  to  the  best knowledge of the
        ----------
Company,  threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or  any  of its Affiliates that would affect the execution by the Company or the
performance  by  the Company of its obligations under the Transaction Documents.
Except  as  disclosed  in  the  Reports  or in the schedules hereto, there is no
pending  or,  to  the  best  knowledge  of  the Company, basis for or threatened
action,  suit, proceeding or investigation before any court, governmental agency
or  body,  or  arbitrator  having  jurisdiction  over the Company, or any of its
Affiliates  which  litigation  if  adversely  determined  would  have a Material
Adverse  Effect.
(i)     Reporting  Company.  The  Company  is a publicly-held company subject to
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reporting  obligations pursuant to Section 13 of the 1934 Act and has a class of
common shares registered pursuant to Section 12(g) of the 1934 Act.  Pursuant to
the  provisions  of  the  1934  Act, the Company has filed all reports and other
materials  required  to  be  filed  thereunder  with  the  Commission during the
preceding  twelve  months.
(j)     No  Market Manipulation.  The Company and its Affiliates have not taken,
        -----------------------
and will not take, directly or indirectly, any action designed to, or that might
reasonably  be  expected to, cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Securities
or  affect  the  price  at  which  the  Securities  may  be  issued  or  resold.
(k)     Information  Concerning  Company.  The  Reports  contain  all  material
        --------------------------------
information  relating  to the Company and its operations and financial condition
as  of  their  respective  dates  which  information is required to be disclosed
therein.   Since  the  date of the financial statements included in the Reports,
and  except  as  modified  in  the Other Written Information or in the Schedules
hereto,  there  has  been  no  Material  Adverse Event relating to the Company's
business,  financial  condition  or  affairs  not  disclosed in the Reports. The
Reports  do 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  not  misleading  in  light  of the circumstances when made.
(l)     Stop  Transfer.  The  Company  will not issue any stop transfer order or
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other  order  impeding  the  sale,  resale or delivery of any of the Securities,
except as may be required by any applicable federal or state securities laws and
unless  contemporaneous  notice  of such instruction is given to the Subscriber.
(m)     Defaults.   The  Company  is  not  in  violation  of  its  articles  of
        --------
incorporation  or  bylaws.  Except as described on Schedule 5(q), the Company is
        -
(i)  not  in  default  under  or in violation of any other material agreement or
instrument  to  which  it is a party or by which it or any of its properties are
bound  or  affected,  which  default  or violation would have a Material Adverse
Effect,  (ii)  not in default with respect to any order of any court, arbitrator
or  governmental  body  or  subject  to  or  party  to any order of any court or
governmental  authority  arising out of any action, suit or proceeding under any
statute  or other law respecting antitrust, monopoly, restraint of trade, unfair
competition  or  similar  matters,  or  (iii)  to the Company's knowledge not in
violation of any statute, rule or regulation of any governmental authority which
violation  would  have  a  Material  Adverse  Effect.
(n)     No Integrated Offering.  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  cause the offer of the Securities pursuant to
this Agreement to be integrated with prior offerings by the Company for purposes
of  the  1933  Act or any applicable stockholder approval provisions, including,
without  limitation, under the rules and regulations of the Bulletin Board.  Nor
will  the  Company  or any of its Affiliates take any action or steps that would
cause  the  offer  or  issuance  of  the  Securities to be integrated with other
offerings.  The  Company  will  not  conduct  any  offering  other  than  the
transactions  contemplated  hereby  that  will  be  integrated with the offer or
issuance  of  the Securities, or which would impair the exemption relied upon in
this  Offering.
(o)     No  General  Solicitation.  Neither  the  Company,  nor  any  of  its
        -------------------------
Affiliates,  nor to its knowledge, any person acting on its or their behalf, has
        --
engaged  in  any form of general solicitation or general advertising (within the
meaning of Regulation D under the 1933 Act) in connection with the offer or sale
of  the  Securities.
(p)     Listing.  The  Common Stock is quoted on the Bulletin Board. The Company
        -------
has  not  received  any  oral  or  written  notice  that the Common Stock is not
eligible nor will become ineligible for quotation on the Bulletin Board nor that
the  Common  Stock  does  not meet all requirements for the continuation of such
quotation  and  the  Company  satisfies  all  the requirements for the continued
quotation  of  the  Common  Stock  on  the  Bulletin  Board.
(q)     No  Undisclosed  Liabilities.  The  Company  has  no  liabilities  or
        ----------------------------
obligations  which are material, individually or in the aggregate, which are not
        -
disclosed  in  the  Reports  and  Other  Written  Information,  other than those
incurred  in  the ordinary course of the Company's businesses since December 31,
2004  and  which, individually or in the aggregate, would reasonably be expected
to  have  a  Material  Adverse  Effect,  except  as  disclosed on Schedule 5(q).
(r)     No  Undisclosed  Events  or  Circumstances.  Since December 31, 2004, no
        ------------------------------------------
event  or circumstance has occurred or exists with respect to the Company or its
businesses,  properties,  operations  or  financial  condition,  that,  under
applicable  law,  rule or regulation, requires public disclosure or announcement
prior  to  the  date  hereof  by  the Company but which has not been so publicly
announced  or  disclosed  in  the  Reports.
(s)     Capitalization.  The  authorized  and  outstanding  capital stock of the
        --------------
Company as of the date of this Agreement and the Closing Date (not including the
     Securities)  are  set  forth  on  Schedule  5(d).  Except  as  set forth on
Schedule  5(d),  there  are  no  options,  warrants,  or rights to subscribe to,
securities, rights or obligations convertible into or exchangeable for or giving
any  right to subscribe for any shares of capital stock of the Company or any of
its  Subsidiaries.  All of the outstanding shares of Common Stock of the Company
have  been  duly  and  validly  authorized  and  issued  and  are fully paid and
nonassessable.
(t)     Dilution.   The  Company's  executive  officers and directors understand
        --------
the  nature  of the Securities being sold hereby and recognize that the issuance
of  the  Securities will have a potential dilutive effect on the equity holdings
of  other  holders  of  the  Company's equity or rights to receive equity of the
Company.  The board of directors of the Company has concluded, in its good faith
business  judgment  that the issuance of the Securities is in the best interests
of  the  Company.  The  Company specifically acknowledges that its obligation to
issue  the  Shares  upon  conversion  of  the Notes, and the Warrant Shares upon
exercise  of the Warrants is binding upon the Company and enforceable regardless
of  the  dilution  such  issuance  may  have on the ownership interests of other
shareholders  of  the  Company  or  parties  entitled  to  receive equity of the
Company.
(u)     No  Disagreements  with  Accountants  and  Lawyers.  There  are  no
        ---------------------------------------------------
disagreements  of  any kind presently existing, or reasonably anticipated by the
        ---
Company  to  arise, between the Company and the accountants and lawyers formerly
or  presently  employed by the Company, including but not limited to disputes or
conflicts  over  payment  owed  to  such  accountants  and  lawyers.

(v)     DTC  Status.   The  Company's transfer agent is a participant in and the
        -----------
Common  Stock  is eligible for transfer pursuant to the Depository Trust Company
Automated  Securities  Transfer  Program.

(w)     Investment  Company.   Neither  the  Company  nor  any  Affiliate  is an
        -------------------
"investment  company"  within the meaning of the Investment Company Act of 1940,
as  amended.

(x)     Subsidiary  Representations.   The  Company  makes  each  of  the
        ---------------------------
representations  contained  in  Sections 5(a), (b), (d), (f), (h), (k), (m), (q)
        ----
through (s), (u) and (w) of this Agreement, as same relate to each Subsidiary of
the  Company.

(y)     Company  Predecessor.   All  representations  made by or relating to the
        --------------------
Company  of  a historical or prospective nature and all undertaking described in
Sections  9(g)  through  9(l)  shall  relate  and  refer  to  the  Company,  its
predecessors,  and  the  Subsidiaries.

(z)     Correctness  of  Representations.  The  Company  represents  that  the
        --------------------------------
foregoing  representations  and  warranties  are true and correct as of the date
hereof  in all material respects, and, unless the Company otherwise notifies the
Subscribers prior to the Closing Date, shall be true and correct in all material
respects  as  of  the  Closing  Date.
     (AA)     Survival.  The  foregoing  representations  and  warranties  shall
              --------
survive  the  Closing  Date  for  a  period  of  three  years.
     6.     Regulation  D Offering.  The offer and issuance of the Securities to
            ----------------------
the  Subscribers  is  being made pursuant to the exemption from the registration
provisions  of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933
Act  and/or  Rule  506  of  Regulation D promulgated thereunder.  On the Closing
Date,  the  Company  will provide an opinion reasonably acceptable to Subscriber
from  the  Company's  legal  counsel opining on the availability of an exemption
from  registration under the 1933 Act as it relates to the offer and issuance of
the Securities and other matters reasonably requested by Subscribers.  A form of
the  legal opinion is annexed hereto as Exhibit E.  The Company will provide, at
the Company's expense, such other legal opinions in the future as are reasonably
necessary  for  the  issuance  and/or  resale  of the Common Stock issuable upon
conversion  of  the  Notes and exercise of the Warrants pursuant to an effective
registration  statement.

          7.1.     Conversion  of  Note.
                   --------------------

     (a)     Upon  the  conversion of a Note or part thereof, the Company shall,
at  its own cost and expense, take all necessary action, including obtaining and
delivering,  an  opinion  of counsel to assure that the Company's transfer agent
shall  issue  stock  certificates  in the name of Subscriber (or its nominee) or
such  other  persons as designated by Subscriber and in such denominations to be
specified  at  conversion  representing  the  number  of  shares of Common Stock
issuable  upon such conversion.  The Company warrants that no instructions other
than  these instructions have been or will be given to the transfer agent of the
Company's  Common  Stock  and  that, unless waived by the Subscriber, the Shares
will  be  free-trading,  and  freely transferable, and will not contain a legend
restricting  the resale or transferability of the Shares provided the Shares are
being  sold  pursuant to an effective registration statement covering the Shares
or  are  otherwise  exempt  from  registration.

     (b)     Subscriber  will  give notice of its decision to exercise its right
to  convert  the  Note,  interest,  any  sum  due  to  the  Subscriber under the
Transaction  Documents  including  Liquidated  Damages,  or  part  thereof  by
telecopying  an  executed and completed Notice of Conversion (a form of which is
annexed  as  Exhibit  A  to  the  Note)  to the Company via confirmed telecopier
transmission  or  otherwise  pursuant  to  Section 13(a) of this Agreement.  The
Subscriber  will  not  be required to surrender the Note until the Note has been
fully  converted  or  satisfied.  Each  date  on which a Notice of Conversion is
telecopied  to  the  Company  in  accordance with the provisions hereof shall be
deemed  a  Conversion  Date.  The  Company  will  itself  or cause the Company's
transfer  agent to transmit the Company's Common Stock certificates representing
the  Shares  issuable  upon conversion of the Note to the Subscriber via express
courier  for  receipt  by  such  Subscriber within three (3) business days after
receipt  by  the  Company  of the Notice of Conversion (such third day being the
"Delivery Date").  In the event the Shares are electronically transferable, then
delivery  of the Shares must be made by electronic transfer provided request for
                        ----
such  electronic transfer has been made by the Subscriber and the Subscriber has
complied  with all applicable securities laws in connection with the sale of the
Common  Stock,  including,  without  limitation,  the  prospectus  delivery
requirements.   A  Note  representing  the  balance of the Note not so converted
will  be  provided  by the Company to the Subscriber if requested by Subscriber,
provided the Subscriber delivers  the original Note to the Company. In the event
that  a  Subscriber  elects  not to surrender a Note for reissuance upon partial
payment or conversion, the Subscriber hereby indemnifies the Company against any
and  all  loss  or  damage  attributable  to a third-party claim in an amount in
excess  of  the  actual  amount  then  due  under  the  Note.

     (c)     The  Company understands that a delay in the delivery of the Shares
in the form required pursuant to Section 7.1 hereof, or the Mandatory Redemption
Amount  described in Section 7.2 hereof, respectively after the Delivery Date or
the  Mandatory  Redemption Payment Date (as hereinafter defined) could result in
economic  loss  to  the  Subscriber.  As compensation to the Subscriber for such
loss,  the Company agrees to pay (as liquidated damages and not as a penalty) to
the  Subscriber  for  late  issuance  of Shares in the form required pursuant to
Section  7.1  hereof  upon  Conversion  of  the  Note  in the amount of $100 per
business  day  after the Delivery Date for each $10,000 of Note principal amount
being converted of the corresponding Shares which are not timely delivered.  The
Company  shall  pay  any  payments  incurred  under  this Section in immediately
available  funds  upon  demand.  Furthermore,  in addition to any other remedies
which  may  be  available to the Subscriber, in the event that the Company fails
for  any  reason  to  effect delivery of the Shares by the Delivery Date or make
payment  by  the  Mandatory  Redemption  Payment  Date,  the  Subscriber will be
entitled  to  revoke all or part of the relevant Notice of Conversion or rescind
all  or  part  of  the notice of Mandatory Redemption by delivery of a notice to
such  effect  to the Company whereupon the Company and the Subscriber shall each
be  restored  to their respective positions immediately prior to the delivery of
such notice, except that the liquidated damages described above shall be payable
through  the  date  notice  of revocation or rescission is given to the Company.

     (d)     Nothing  contained  herein or in any document referred to herein or
delivered  in  connection  herewith  shall be deemed to establish or require the
payment  of  a  rate  of  interest  or  other  charges  in excess of the maximum
permitted  by  applicable  law.  In  the  event  that  the  rate  of interest or
dividends  required  to  be  paid  or other charges hereunder exceed the maximum
permitted  by such law, any payments in excess of such maximum shall be credited
against  amounts  owed by the Company to the Subscriber and thus refunded to the
Company.

     7.2.     Mandatory  Redemption  at Subscriber's Election.  In the event the
              -----------------------------------------------
Company  is prohibited from issuing Shares, or fails to timely deliver Shares on
a  Delivery  Date,  or  upon  the  occurrence  of any other Event of Default (as
defined  in  the  Note  or  in  this  Agreement)  that  is  not cured during any
applicable  cure  period  and  an  additional  ten  days thereafter, then at the
Subscriber's  election, the Company must pay to the Subscriber ten (10) business
days  after  request  by  the Subscriber, at the Subscriber's election, a sum of
money  determined  by  (i) multiplying up to the outstanding principal amount of
the Note designated by the Subscriber by 115%, or (ii) multiplying the number of
Shares  otherwise  deliverable  upon  conversion  of an amount of Note principal
and/or  interest  designated  by the Subscriber (with the date of giving of such
designation  being a "Deemed Conversion Date") at the then Conversion Price that
would be in effect on the Deemed Conversion Date by the highest closing price of
the Common Stock on the Principal Market for the period commencing on the Deemed
Conversion  Date  until the day prior to the receipt of the Mandatory Redemption
Payment, whichever is greater, together with accrued but unpaid interest thereon
and  any  other  sums  arising  and  outstanding under the Transaction Documents
("Mandatory  Redemption  Payment").  The  Mandatory  Redemption  Payment must be
received  by  the  Subscriber  on  the same date as the Company Shares otherwise
deliverable  or within ten (10) business days after request, whichever is sooner
("Mandatory  Redemption Payment Date"). Upon receipt of the Mandatory Redemption
Payment,  the  corresponding Note principal and interest will be deemed paid and
no longer outstanding.  Liquidated damages calculated pursuant to Section 7.1(c)
hereof,  that  have  been paid or accrued for the twenty day period prior to the
actual  receipt  of  the Mandatory Redemption Payment by the Subscriber shall be
credited  against  the  Mandatory  Redemption  Payment  calculated  pursuant  to
subsections  (i)  and (ii) above of this Section 7.2.  In the event of a "Change
in Control" (as defined below), the Subscriber may demand, and the Company shall
pay,  a  Mandatory Redemption Payment equal to 115% of the outstanding principal
amount of the Note designated by the Subscriber together with accrued but unpaid
interest  thereon  and  any  other  sums  arising  and  outstanding  under  the
Transaction  Documents.  For  purposes  of this Section 7.2, "Change in Control"
shall  mean (i) the Company no longer having a class of shares publicly tradable
and  listed  on  a  Principal  Market, (ii) the Company becoming a Subsidiary of
another  entity  or merging into or with another entity, (iii) a majority of the
board  of  directors  of the Company as of the Closing Date no longer serving as
directors  of the Company, other than due to natural causes, (iv) if the holders
of  the Company's Common Stock as of the Closing Date beneficially owning at any
time  after  the  Closing Date less than thirty-five percent of the Common stock
owned  by  them on the Closing Date, or (v) the sale, lease, license or transfer
of  substantially  all  the  assets  of  the  Company  or  Subsidiaries.

          7.3.     Maximum  Conversion.  The Subscriber shall not be entitled to
                   -------------------
convert  on  a  Conversion  Date that amount of the Note in connection with that
number  of shares of Common Stock which would be in excess of the sum of (i) the
number  of  shares  of common stock beneficially owned by the Subscriber and its
Affiliates  on  a Conversion Date, and (ii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of  this  provision  is  being  made on a Conversion Date, which would result in
beneficial  ownership by the Subscriber and its Affiliates of more than 4.99% of
the  outstanding  shares of common stock of the Company on such Conversion Date.
For  the  purposes  of  the  provision  to  the  immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities  Exchange  Act  of 1934, as amended, and Regulation 13d-3 thereunder.
Subject  to  the  foregoing,  the  Subscriber  shall not be limited to aggregate
conversions of only 4.99% and aggregate conversions by the Subscriber may exceed
4.99%.  The  Subscriber  may  waive  the conversion limitation described in this
Section 7.3, in whole or in part, or increase the permitted beneficial ownership
amount  upon  and  effective  after 61 days prior written notice to the Company.
The  Subscriber  may  allocate  which  of  the  equity  of  the  Company  deemed
beneficially  owned  by  the  Subscriber  shall  be included in the 4.99% amount
described  above  and  which  shall be allocated to the excess above 4.99%.  The
Subscriber  is  solely  responsible  for  determining  its beneficial ownership.

     7.4.     Injunction Posting of Bond.  In the event a Subscriber shall elect
              --------------------------
to  convert  a Note or part thereof or exercise the Warrant in whole or in part,
the  Company  may not refuse conversion or exercise based on any claim that such
Subscriber  or  any  one  associated or affiliated with such Subscriber has been
engaged  in any violation of law, or for any other reason, unless, an injunction
from  a court, on notice, restraining and or enjoining conversion of all or part
of  such  Note or exercise of all or part of such Warrant shall have been sought
and  obtained  by  the Company  and the Company has posted a surety bond for the
benefit  of  such Subscriber in the amount of 120% of the amount of the Note, or
aggregate purchase price of the Warrant Shares which are sought to be subject to
the  injunction,  which  bond  shall  remain  in  effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to  such  Subscriber  to  the  extent  Subscriber  obtains  judgment.

          7.5.     Buy-In.  In  addition  to  any  other rights available to the
                   ------
Subscriber,  if  the  Company  fails  to  deliver  to the Subscriber such shares
issuable  upon  conversion of a Note by the Delivery Date and if after seven (7)
business  days  after  the  Delivery  Date  the Subscriber purchases (in an open
market  transaction  or  otherwise)  shares  of  Common  Stock  to  deliver  in
satisfaction  of  a  sale  by  such  Subscriber  of  the  Common Stock which the
Subscriber  was  entitled to receive upon such conversion (a "Buy-In"), then the
Company  shall  pay  in  cash  to  the  Subscriber  (in addition to any remedies
available  to  or  elected  by  the  Subscriber)  the  amount  by  which (A) the
Subscriber's  total purchase price (including brokerage commissions, if any) for
the  shares  of  Common  Stock  so purchased exceeds (B) the aggregate principal
and/or  interest  amount  of  the  Note for which such conversion was not timely
honored,  together  with  interest  thereon at a rate of 15% per annum, accruing
until such amount and any accrued interest thereon is paid in full (which amount
shall  be paid as liquidated damages and not as a penalty).  For example, if the
Subscriber  purchases  shares  of  Common Stock having a total purchase price of
$11,000  to cover a Buy-In with respect to an attempted conversion of $10,000 of
note  principal  and/or  interest,  the  Company  shall  be  required to pay the
Subscriber  $1,000,  plus  interest.  The  Subscriber  shall provide the Company
written  notice  indicating  the amounts payable to the Subscriber in respect of
the  Buy-In.

     7.6     Adjustments.   The  Conversion  Price,  Warrant  exercise price and
             ------------
amount  of  Shares  issuable  upon  conversion  of the Notes and exercise of the
Warrants  shall  be  equitably  adjusted  and  as  otherwise  described  in  the
Transaction  Documents.
     7.7.     Redemption.    The Note shall not be redeemable or callable except
              ----------
as  described  in  the  Note.  The Warrants shall not be callable or redeemable.

          8.     Finder/Legal  Fees.
                 -------------------
          (a)     Finder's  Fee.   The  Company  on  the  one  hand,  and  each
                  --------------
Subscriber  (for  himself  only) on the other hand, agree to indemnify the other
against  and hold the other harmless from any and all liabilities to any persons
claiming brokerage commissions or finder's fees on account of services purported
to  have  been  rendered  on behalf of the indemnifying party in connection with
this  Agreement  or the transactions contemplated hereby and arising out of such
party's  actions.  The  Company  represents  that  there  are  no  other parties
entitled  to  receive  fees, commissions, or similar payments in connection with
the  Offering.
     (b)     Legal  Fees.   The  Company shall pay to Grushko & Mittman, P.C., a
             -----------
fee  of  $20,000  ("Legal  Fees")  as reimbursement for services rendered to the
Subscribers  in  connection with this Agreement and the purchase and sale of the
Notes,  and  Warrants  (the  "Offering")  and  acting  as  Escrow  Agent for the
Offering.  The  Legal Fees will be payable on the Closing Date out of funds held
pursuant to the Escrow Agreement.  Grushko & Mittman, P.C. will be reimbursed at
the  Closing  Date  for  all  UCC  search  and  filing  fees.
9.     Covenants  of  the  Company.  The  Company  covenants and agrees with the
       ---------------------------
Subscribers  as  follows:
     (a)     Stop  Orders.  The  Company  will advise the Subscribers within two
             ------------
hours  after  it  receives  notice  of  issuance  by  the  Commission, any state
securities  commission or any other regulatory authority of any stop order or of
any  order  preventing  or  suspending  any  offering  of  any securities of the
Company,  or  of  the suspension of the qualification of the Common Stock of the
Company  for  offering  or  sale  in  any jurisdiction, or the initiation of any
proceeding  for  any  such  purpose.
(b)     Listing.  The  Company  shall  promptly secure the listing of the Shares
        -------
and  the Warrant Shares upon each national securities exchange, or electronic or
automated  quotation  system  upon which they are or become eligible for listing
and  shall  maintain  such  listing  so  long  as  any  Notes  or  Warrants  are
outstanding.  The  Company  will maintain the listing of its Common Stock on the
American  Stock Exchange, Nasdaq SmallCap Market, Nasdaq National Market System,
Bulletin Board, or New York Stock Exchange (whichever of the foregoing is at the
time  the  principal  trading  exchange  or  market  for  the  Common Stock (the
"Principal  Market")),  and  will  comply  in  all  respects  with the Company's
reporting,  filing  and  other  obligations  under  the  bylaws  or rules of the
Principal Market, as applicable. The Company will provide the Subscribers copies
of  all  notices  it receives notifying the Company of the threatened and actual
delisting of the Common Stock from any Principal Market.  As of the date of this
Agreement  and the Closing Date, the Bulletin Board is and will be the Principal
Market.
(c)     Market  Regulations.  The  Company  shall  notify  the  Commission,  the
        -------------------
Principal  Market  and  applicable  state  authorities, in accordance with their
requirements, of the transactions contemplated by this Agreement, and shall take
all  other  necessary action and proceedings as may be required and permitted by
applicable  law,  rule  and  regulation, for the legal and valid issuance of the
Securities to the Subscribers and promptly provide copies thereof to Subscriber.
(d)     Filing  Requirements.  From  the  date  of  this Agreement and until the
        --------------------
sooner  of  (i)  three  (3)  years after the Closing Date, or (ii) until all the
Shares and Warrant Shares have been resold or transferred by all the Subscribers
pursuant  to  the Registration Statement or pursuant to Rule 144, without regard
to volume limitation, the Company will (A) cause its Common Stock to continue to
be  registered  under  Section 12(b) or 12(g) of the 1934 Act, (B) comply in all
respects  with  its  reporting  and  filing  obligations under the 1934 Act, (C)
comply  with  all reporting requirements that are applicable to an issuer with a
class  of  shares registered pursuant to Section 12(b) or 12(g) of the 1934 Act,
as  applicable,  and  (D)  comply  with  all  filing requirements related to any
registration  statement  filed pursuant to this Agreement.  The Company will use
its  best  efforts  not  to take any action or file any document (whether or not
permitted  by the 1933 Act or the 1934 Act or the rules thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations under said acts until three (3) years after the Closing Date.  Until
the  earlier  of the resale of the Shares, and Warrant Shares by each Subscriber
or  until  three  (3)  years after the Warrants have been exercised, the Company
will  use  its  best  efforts to continue the listing or quotation of the Common
Stock  on  a Principal Market and will comply in all respects with the Company's
reporting,  filing  and  other  obligations  under  the  bylaws  or rules of the
Principal  Market.  The  Company  agrees to timely file a Form D with respect to
the  Securities  if required under Regulation D and to provide a copy thereof to
each  Subscriber  promptly  after  such  filing.
     (e)     Use  of Proceeds.  The proceeds of the Offering must be employed by
             ----------------
the  Company  for the purposes set forth on Schedule 9(e) hereto.  Except as set
forth  on  Schedule  9(e),  the  Purchase Price may not and will not be used for
accrued  and  unpaid officer and director salaries, payment of financing related
debt,  redemption  of outstanding notes or equity instruments of the Company nor
non-trade  obligations  outstanding  on  the  Closing  Date.
     (f)     Reservation.   Prior to the Closing Date, the Company undertakes to
             -----------
reserve,  pro  rata,  on  behalf  of  each holder of a Note or Warrant, from its
          ---  ----
authorized  but  unissued common stock not less than 37,000,000 shares of Common
Stock  and  100%  of  the  Common  Shares issuable upon conversion of the Notes.
After the Reservation Approval (as described in Section 9(r) of this Agreement),
the  Company  will  reserve  pro-rata  on  behalf  of  the  Subscribers from its
authorized  but unissued Common Stock a number of common shares equal to 200% of
the  amount  of Common Stock necessary to allow each holder of a Note to be able
to  convert  all  such  outstanding Notes and interest and reserve the amount of
Warrant  Shares  issuable  upon  exercise  of  the  Warrants.   Failure  to have
sufficient  shares  reserved  pursuant  to  this  Section  9(f)  for  three  (3)
consecutive  business days or ten (10) days in the aggregate shall be a material
default  of  the  Company's  obligations  under  this  Agreement and an Event of
Default  under  the  Note.
(g)     Taxes.  From  the  date  of  this  Agreement and until the sooner of (i)
        -----
three  (3)  years  after  the  Closing  Date,  or (ii) until all the Shares, and
Warrant  Shares  have been resold or transferred by all the Subscribers pursuant
to  the Registration Statement or pursuant to Rule 144, without regard to volume
limitations,  the  Company  will promptly pay and discharge, or cause to be paid
and  discharged,  when  due  and  payable,  all  lawful  taxes,  assessments and
governmental  charges  or  levies  imposed upon the income, profits, property or
business  of  the  Company;  provided,  however,  that any such tax, assessment,
charge  or  levy  need  not  be  paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall have
set  aside  on  its  books adequate reserves with respect thereto, and provided,
further,  that  the  Company  will  pay  all such taxes, assessments, charges or
levies  forthwith  upon  the  commencement  of proceedings to foreclose any lien
which  may  have  attached  as  security  therefore.
(h)     Insurance.  From  the date of this Agreement and until the sooner of (i)
        ---------
three  (3)  years  after  the  Closing  Date,  or (ii) until all the Shares, and
Warrant  Shares  have been resold or transferred by all the Subscribers pursuant
to  the Registration Statement or pursuant to Rule 144, without regard to volume
limitations,  the  Company  will  keep  its  assets  which  are  of an insurable
character  insured  by  financially sound and reputable insurers against loss or
damage  by  fire,  explosion  and  other  risks  customarily  insured against by
companies  in  the  Company's line of business, in amounts sufficient to prevent
the  Company  from  becoming  a  co-insurer, and the Company will maintain, with
financially  sound  and  reputable insurers, insurance against other hazards and
risks  and  liability  to  persons  and property to the extent and in the manner
customary  for  companies  in  similar  businesses similarly situated and to the
extent  available  on  commercially  reasonable  terms.
(i)     Books and Records.  From the date of this Agreement and until the sooner
        ------------------
of (i) three (3) years after the Closing Date, or (ii) until all the Shares, and
Warrant  Shares  have been resold or transferred by all the Subscribers pursuant
to  the Registration Statement or pursuant to Rule 144, without regard to volume
limitations,  the  Company  will keep true records and books of account in which
full,  true  and correct entries will be made of all dealings or transactions in
relation  to  its  business  and  affairs  in accordance with generally accepted
accounting  principles  applied  on  a  consistent  basis.
(j)     Governmental  Authorities.   From  the  date of this Agreement and until
        --------------------------
the  sooner of (i) three (3) years after the Closing Date, or (ii) until all the
Shares,  and  Warrant  Shares  have  been  resold  or  transferred  by  all  the
Subscribers  pursuant  to  the  Registration  Statement or pursuant to Rule 144,
without regard to volume limitations, the Company shall duly observe and conform
in  all  material respects to all valid requirements of governmental authorities
relating  to  the  conduct  of  its  business  or  to  its properties or assets.
(k)     Intellectual  Property.  From  the  date of this Agreement and until the
        ----------------------
sooner  of  (i)  three  (3)  years after the Closing Date, or (ii) until all the
Shares,  and  Warrant  Shares  have  been  resold  or  transferred  by  all  the
Subscribers  pursuant  to  the  Registration  Statement or pursuant to Rule 144,
without  regard  to volume limitations, the Company shall maintain in full force
and  effect  its corporate existence, rights and franchises and all licenses and
other  rights  to  use  intellectual  property  owned  or  possessed  by  it and
reasonably  deemed  to  be  necessary  to  the  conduct  of  its  business.
(l)     Properties.  From the date of this Agreement and until the sooner of (i)
        -----------
three  (3)  years  after  the  Closing  Date,  or (ii) until all the Shares, and
Warrant  Shares  have been resold or transferred by all the Subscribers pursuant
to  the  Registration  Statement  (as  defined  in  Section  11.1(iv) hereof) or
pursuant  to  Rule  144,  without regard to volume limitations, the Company will
keep its properties in good repair, working order and condition, reasonable wear
and  tear excepted, and from time to time make all necessary and proper repairs,
renewals, replacements, additions and improvements thereto; and the Company will
at  all times comply with each provision of all leases to which it is a party or
under  which  it  occupies  property  if  the  breach  of  such  provision could
reasonably  be  expected  to  have  a  Material  Adverse  Effect.
(m)     Confidentiality/Public  Announcement.  From  the  date of this Agreement
        -------------------------------------
and  until  the  sooner  of  (i) three (3) years after the Closing Date, or (ii)
until  all the Shares, and Warrant Shares have been resold or transferred by all
the  Subscribers pursuant to the Registration Statement or pursuant to Rule 144,
without  regard  to  volume  limitations,  the  Company  agrees  that  except in
connection  with  a Form 8-K or the Registration Statement, it will not disclose
publicly or privately the identity of the Subscribers unless expressly agreed to
in  writing  by a Subscriber or only to the extent required by law and then only
upon  two  days  prior  notice  to  Subscriber.  In any event and subject to the
foregoing,  the  Company  shall  file  a  Form 8-K or make a public announcement
describing  the Offering not later than the first business day after the Closing
Date.  In  the  Form  8-K  or public announcement, the Company will specifically
disclose  the  amount of common stock outstanding immediately after the Closing.
A  form  of  the  proposed  Form  8-K  or  public announcement to be employed in
connection  with  the  Offering  is  annexed  hereto  as  Exhibit  F.
          (n)     Further  Registration  Statements.   Except for a registration
                  ----------------------------------
statement  filed  on  behalf  of  the Subscribers pursuant to Section 11 of this
Agreement  the  Company  will  not file any registration statements or amend any
already  filed  registration  statement,  including but not limited to Form S-8,
with  the Commission or with state regulatory authorities without the consent of
the  Subscriber  until  the  sooner of (i) the Registration Statement shall have
been  current  and  available  for  use  in  connection  with  the resale of the
Registrable  Securities (as defined in Section 11.1(i) for a period of 180 days,
or  (ii) until all the Shares and Warrant Shares have been resold or transferred
by  the  Subscribers pursuant to the Registration Statement or Rule 144, without
regard  to volume limitations ("Exclusion Period"). The Exclusion Period will be
tolled  during  the  pendency  of  an  Event  of Default as defined in the Note.
     (o)     Blackout.    The  Company  undertakes  and covenants that until the
             ---------
end  of  the  Exclusion Period, the Company will not enter into any acquisition,
merger,  exchange  or  sale  or  other transaction that could have the effect of
delaying  the  effectiveness of any pending registration statement or causing an
already  effective  registration  statement to no longer be effective or current
for  a  period  twenty  (20)  or  more  days,  except  for the pending potential
acquisition  of  See  World  Satellite.
     (p)     Non-Public  Information.  The  Company  covenants  and  agrees that
             -----------------------
neither it nor any other person acting on its behalf will provide any Subscriber
or  its  agents  or  counsel  with  any  information  that  the Company believes
constitutes  material  non-public  information,  unless  prior  thereto  such
Subscriber  shall  have  agreed  in  writing  to  receive such information.  The
Company  understands  and  confirms that each Subscriber shall be relying on the
foregoing  representations  in  effecting  transactions  in  securities  of  the
Company.
     (q)     Limited  Standstill.   The  Company will deliver to the Subscribers
             -------------------
on  or  before  the  Closing  Date  and  enforce  the  provisions of irrevocable
standstill  agreements  ("Limited  Standstill  Agreements")  in the form annexed
hereto  as  Exhibit  G,  with  the  parties  identified on Schedule 9(q) hereto.
     (r)     Shareholder  Approval.   The  Company  and  Subscribers  agree that
             ---------------------
until  the Company obtains shareholder approval of an increase in the authorized
Common Stock of the Company to not less than 750,000,000 Shares of Common Stock,
files an amendment to the Company's Articles of Incorporation and  reserves  40%
of the amount of shares of Common Stock necessary to allow the conversion of the
entire  Note  principal  and  interest  that  may accrue thereon and 100% of the
Common  Stock issuable upon exercise of all of the Warrants issued in connection
with this Agreement (collectively such shares of Common Stock being the "Reserve
Amount"  and  the  shareholder  approval,  amendment  and  reservation being the
"Reservation"),  each  Subscriber  may  not  convert  the  Note nor exercise any
Warrants in excess of each Subscriber's pro rata portion of 36,000,000 shares of
Common Stock.  Each Subscriber's pro rata portion is equal to the Note principal
purchased by such Subscriber divided by the aggregate Note principal sold in the
Offering.  The Company undertakes to file a preliminary proxy statement with the
Commission  for  a  meeting  of  the  Company's  shareholders  relating  to  the
Reservation  not  later than ten (10) days after the Closing Date ("Proxy Filing
Date").   The  Company  covenants  to  use  its  best  efforts  to  obtain  the
Reservation  not later than fifty (50) days after the Closing Date ("Reservation
Date").  Failure  to  file  the  preliminary proxy on or before the Proxy Filing
Date  or  to  obtain  the  Reservation on or before the Reservation Date (each a
"Reservation  Default")  is  an  Event  of  Default  under  the  Note  for which
liquidated  damages  will accrue at the rate of two percent (2%) for each thirty
(30)  days,  or pro rata portion thereof during the pendency of such Reservation
Default.  Liquidated  damages  for a Reservation Default that accrue at the same
time  as  a  Non-Registration Event (as defined in Section 11.4 hereof) shall be
limited  to  the  greater  of  the  amount  of  such  damages  which may accrue.

10.     Covenants  of  the  Company  and  Subscriber  Regarding Indemnification.
        ------------------------------------------------------------------------
     (a)     The  Company  agrees  to  indemnify,  hold  harmless, reimburse and
defend  the  Subscribers,  the  Subscribers'  officers,  directors,  agents,
Affiliates,  control  persons,  and  principal  shareholders, against any claim,
cost, expense, liability, obligation, loss or damage (including reasonable legal
fees)  of  any  nature,  incurred  by or imposed upon the Subscriber or any such
person  which  results,  arises  out  of  or  is  based  upon  (i)  any material
misrepresentation  by  Company  or  breach  of  any  warranty by Company in this
Agreement  or  in  any Exhibits or Schedules attached hereto, or other agreement
delivered  pursuant  hereto;  or  (ii)  after  any applicable notice and/or cure
periods,  any breach or default in performance by the Company of any covenant or
undertaking  to  be  performed  by the Company hereunder, or any other agreement
entered  into  by  the  Company  and  Subscriber  relating  hereto.
(b)     Each Subscriber agrees to indemnify, hold harmless, reimburse and defend
the  Company  and each of the Company's officers, directors, agents, Affiliates,
control persons against any claim, cost, expense, liability, obligation, loss or
damage  (including  reasonable legal fees) of any nature, incurred by or imposed
upon  the  Company  or  any such person which results, arises out of or is based
upon  (i) any material misrepresentation by such Subscriber in this Agreement or
in  any  Exhibits  or  Schedules  attached  hereto, or other agreement delivered
pursuant  hereto;  or  (ii) after any applicable notice and/or cure periods, any
breach  or  default  in  performance  by  such  Subscriber  of  any  covenant or
undertaking to be performed by such Subscriber hereunder, or any other agreement
entered  into  by  the  Company  and  Subscribers,  relating  hereto.
(c)     In no event shall the liability of any Subscriber or permitted successor
hereunder  or  under  any  Transaction  Document or other agreement delivered in
connection  herewith  be  greater  in  amount  than the dollar amount of the net
proceeds  actually  received  by  such  Subscriber  upon the sale of Registrable
Securities  (as  defined  herein).
  (d)     The  procedures  set  forth  in  Section  11.6  shall  apply  to  the
indemnification  set  forth  in  Sections  10(a)  and  10(b)  above.
     11.1.     Registration  Rights.  The  Company  hereby  grants the following
               --------------------
registration  rights  to  holders  of  the  Securities.
     (i)     On  one occasion, for a period commencing one hundred and six (106)
days  after the Closing Date, but not later than two (2) years after the Closing
Date ("Request Date"), upon a written request therefor from any record holder or
holders  of  more  than 50% of the Shares issued and issuable upon conversion of
the  Notes and Warrant Shares actually issued upon exercise of the Warrants, the
Company  shall  prepare  and  file  with the Commission a registration statement
under  the  1933 Act registering the Shares issuable upon conversion of all sums
due  under  the  Notes and Warrant Shares issuable upon exercise of the Warrants
and  the  Initial  Shares  (collectively "Registrable Securities") which are the
subject  of  such  request for unrestricted public resale by the holder thereof.
From  the  Closing  Date  until  the Reservation (as defined in this Agreement),
Registrable  Securities  shall  mean  the Initial Shares of the Company's Common
Stock  and  100% of the Shares issuable upon conversion of the Notes.  Following
the  Reservation,  Registrable Securities shall mean 200% of all Shares issuable
upon  conversion  of  the Notes and 100% of all Shares issuable upon exercise of
the  Warrants.  For  purposes  of  Sections  11.1(i)  and  11.1(ii), Registrable
Securities  shall  not include Securities (A) which are registered for resale in
an  effective registration statement, (B) included for registration in a pending
registration  statement, or  (C) which have been issued without further transfer
restrictions  after  a sale or transfer pursuant to Rule 144 under the 1933 Act.
Upon the receipt of such request, the Company shall promptly give written notice
to all other record holders of the Registrable Securities that such registration
statement  is  to  be  filed  and  shall  include in such registration statement
Registrable  Securities  for  which  it has received written requests within ten
(10)  days  after  the Company gives such written notice.  Such other requesting
record holders shall be deemed to have exercised their demand registration right
under  this  Section  11.1(i).
(ii)     If  the  Company at any time proposes to register any of its securities
under  the  1933  Act for sale to the public, whether for its own account or for
the  account  of  other  security  holders  or  both,  except  with  respect  to
registration  statements  on  Forms  S-4,  S-8 or another form not available for
registering  the  Registrable  Securities  for  sale to the public, provided the
Registrable  Securities  are  not  otherwise  registered  for  resale  by  the
Subscribers or Holder pursuant to an effective registration statement, each such
time it will give at least fifteen (15) days' prior written notice to the record
holder of the Registrable Securities of its intention so to do. Upon the written
request  of  the  holder, received by the Company within ten (10) days after the
giving  of  any  such  notice by the Company, to register any of the Registrable
Securities  not  previously  registered, the Company will cause such Registrable
Securities  as to which registration shall have been so requested to be included
with  the  securities to be covered by the registration statement proposed to be
filed  by  the  Company,  all to the extent required to permit the sale or other
disposition  of  the  Registrable Securities so registered by the holder of such
Registrable  Securities  (the  "Seller"  or  "Sellers").  In  the event that any
registration pursuant to this Section 11.1(ii) shall be, in whole or in part, an
underwritten  public  offering  of  common  stock  of the Company, the number of
shares  of  Registrable Securities to be included in such an underwriting may be
reduced  by  the  managing underwriter if and to the extent that the Company and
the  underwriter  shall  reasonably  be of the opinion that such inclusion would
adversely  affect  the  marketing  of  the  securities to be sold by the Company
therein;  provided, however, that the Company shall notify the Seller in writing
of any such reduction. Notwithstanding the foregoing provisions, or Section 11.4
hereof,  the Company may withdraw or delay or suffer a delay of any registration
statement  referred  to  in  this Section 11.1(ii) without thereby incurring any
liability  to  the  Seller.
(iii)     If,  at  the  time any written request for registration is received by
the  Company  pursuant to Section 11.1(i), the Company has determined to proceed
with  the  actual  preparation  and filing of a registration statement under the
1933  Act  in connection with the proposed offer and sale for cash of any of its
securities for the Company's own account and the Company actually does file such
other  registration statement, such written request shall be deemed to have been
given  pursuant  to Section 11.1(ii) rather than Section 11.1(i), and the rights
of  the  holders of Registrable Securities covered by such written request shall
be  governed  by  Section  11.1(ii).
(iv)     The  Company  shall  file  with  the Commission a Form SB-2 or Form S-3
registration  statement  (the "Registration Statement") (or such other form that
it  is  eligible  to  use)  in  order to register the Registrable Securities for
resale  and  distribution  under  the  1933 Act) not later than thirty (30) days
after  the  date  of  this  Agreement  (the  "Filing  Date"), and cause it to be
declared  effective  not  later than one hundred and twenty (120) days after the
date  of  this  Agreement (the "Effective Date").  The Company will register not
less  than a number of shares of Common Stock in the aforedescribed registration
statement  that  is  equal to 100% of the Shares issuable upon conversion of the
Notes  and  all  of  the  Initial  Shares.  The  Registrable Securities shall be
reserved  and  set  aside  exclusively  for  the  benefit of each Subscriber and
Warrant  holder, pro rata, and not issued, employed or reserved for anyone other
                 --- ----
than  each  such Subscriber and Warrant holder.  The Registration Statement will
immediately be amended or additional registration statements will be immediately
filed  by the Company as necessary to register additional shares of Common Stock
to  allow  the  public  resale  of  all Common Stock included in and issuable by
virtue of the Registrable Securities including but not limited to a registration
statement that must be filed not later than 270 days after the Closing Date with
respect  to  the  Registrable  Securities  not  included  in  a previously filed
registration  statement ("Second Filing Date").   Without the written consent of
the  Subscriber,  no  securities  of  the  Company  other  than  the Registrable
Securities  will  be  included  in  any registration statement described in this
Section  11.1(iv),  except  as  described  on Schedule 11.1, hereto. It shall be
deemed  a  Non-Registration Event if at any time after the date the Registration
Statement is declared effective by the Commission the Company has registered for
unrestricted  resale  on behalf of a Subscriber fewer than 100% of the amount of
Common  Shares issuable upon full conversion of all sums due under the Notes and
100%  of  the  Warrant  Shares  issuable  upon  exercise  of  the  Warrants.
     11.2.     Registration  Procedures. If and whenever the Company is required
               ------------------------
by  the  provisions  of  Section  11.1(i),  11.1(ii),  or  (iv)  to  effect  the
registration of any Registrable Securities under the 1933 Act, the Company will,
as  expeditiously  as  possible:
     (a)     subject  to  the  timelines provided in this Agreement, prepare and
file  with  the Commission a registration statement required by Section 11, with
respect  to  such securities and use its best efforts to cause such registration
statement  to  become  and  remain  effective for the period of the distribution
contemplated  thereby  (determined  as herein provided), promptly provide to the
holders  of  the  Registrable  Securities  copies  of all filings and Commission
letters of comment and notify Subscribers (by telecopier and by e-mail addresses
provided by Subscribers) and Grushko & Mittman, P.C. (by telecopier and by email
to Counslers@aol.com) on or before 3:00 PM EST on the next business day that the
   -----------------
Company  receives  notice  that (i) the Commission has no comments or no further
comments  on the Registration Statement, and (ii) the registration statement has
been  declared  effective  (failure to timely provide notice as required by this
Section  11.2(a)  shall  be a material breach of the Company's obligation and an
Event of Default as defined in the Notes and a Non-Registration Event as defined
in  Section  11.4  of  this  Agreement);
(b)     prepare  and file with the Commission such amendments and supplements to
such  registration  statement and the prospectus used in connection therewith as
may  be  necessary  to  keep  such  registration  statement effective until such
registration statement has been effective for a period of three (3) years or the
Subscribers  can  sell their securities pursuant to Rule 144(k), and comply with
the  provisions  of  the  1933 Act with respect to the disposition of all of the
Registrable Securities covered by such registration statement in accordance with
the  Sellers'  intended  method  of  disposition  set forth in such registration
statement  for  such  period;
(c)     make  available to the Sellers, at the Company's expense, such number of
copies  of  the  registration  statement  and  the  prospectus  included therein
(including  each  preliminary prospectus) as such persons reasonably may request
in  order  to  facilitate the public sale or their disposition of the securities
covered  by  such  registration  statement;
(d)     use  its commercially reasonable best efforts to register or qualify the
Registrable  Securities  covered  by  such  registration  statement  under  the
securities  or "blue sky" laws of New York and such jurisdictions as the Sellers
shall  request in writing, provided, however, that the Company shall not for any
such  purpose be required to qualify generally to transact business as a foreign
corporation  in  any  jurisdiction where it is not so qualified or to consent to
general  service  of  process  in  any  such  jurisdiction;
(e)     if  applicable,  list  the  Registrable  Securities  covered  by  such
registration statement with any securities exchange on which the Common Stock of
the  Company  is  then  listed;
(f)     notify  the Subscribers within two hours of the Company's becoming aware
that  a  prospectus  relating thereto is required to be delivered under the 1933
Act,  of  the  happening  of  any  event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as then
in  effect,  includes an untrue statement of a material fact or omits to state a
material  fact required to be stated therein or necessary to make the statements
therein  not  misleading  in  light  of the circumstances then existing or which
becomes  subject  to  a Commission, state or other governmental order suspending
the  effectiveness of the registration statement covering any of the Shares; and
(g)     provided  same  would not be in violation of the provision of Regulation
FD  under  the  1934 Act, make available for inspection by the Sellers,  and any
attorney,  accountant  or other agent retained by the Seller or underwriter, all
publicly  available,  non-confidential  financial  and  other records, pertinent
corporate  documents  and  properties  of  the  Company, and cause the Company's
officers,  directors  and  employees  to  supply  all  publicly  available,
non-confidential  information  reasonably  requested  by  the  seller, attorney,
accountant  or  agent  in  connection  with  such  registration  statement.
     11.3.     Provision  of  Documents.  In  connection  with each registration
               ------------------------
described in this Section 11, each Seller will furnish to the Company in writing
such  information  and  representation  letters  with  respect to itself and the
proposed  distribution by it as reasonably shall be necessary in order to assure
compliance  with  federal  and  applicable  state  securities  laws.
11.4.     Non-Registration  Events.  The  Company and the Subscribers agree that
          ------------------------
the  Sellers  will  suffer damages if any registration statement is not filed by
the required Filing Date or Second Filing Date and not declared effective by the
Commission  by the Effective Date, and any registration statement required under
Section  11.1(i)  or  11.1(ii) is not filed within 60 days after written request
and declared effective by the Commission within 120 days after such request, and
maintained  in the manner and within the time periods contemplated by Section 11
hereof,  and  it  would  not be feasible to ascertain the extent of such damages
with  precision.  Accordingly, if (A) any registration statement is not filed on
or before the required Filing Date or the Second Filing Date, as applicable, (B)
is  not declared effective on or before the Effective Date, (C) the registration
statement is not declared effective within three (3) business days after receipt
by  the  Company  or  its  attorneys of a written or oral communication from the
Commission  that  the  registration  statement  will not be reviewed or that the
Commission  has no further comments, (D) if the registration statement described
in  Sections  11.1(i) or 11.1(ii) is not filed within 60 days after such written
request,  or  is  not  declared  effective  within  120  days after such written
request,  or  (E)  any  registration  statement  described  in Sections 11.1(i),
11.1(ii)  or 11.1(iv) is filed and declared effective but shall thereafter cease
to be effective (without being succeeded within fifteen (15) business days by an
effective  replacement  or  amended registration statement) for a period of time
which shall exceed 20 days in the aggregate per year (defined as a period of 365
days  commencing  on  the date the registration statement is declared effective)
(each  such event referred to in clauses (A) through (E) of this Section 11.4 is
referred  to  herein  as  a  "Non-Registration  Event"),  then the Company shall
deliver  to  the  holder  of  Registrable  Securities, as Liquidated Damages, an
amount  equal  to  one  and one-half percent (1.5%) for each thirty (30) days or
part  thereof,  thereafter  of  the  Purchase  Price  of  the  Notes  remaining
unconverted  and  purchase  price  of Shares issued upon conversion of the Notes
owned of record by such holder which are subject to such Non-Registration Event.
The  Company  must  pay  the Liquidated Damages in cash.  The Liquidated Damages
must  be  paid within ten (10) days after the end of each thirty (30) day period
or  shorter part thereof for which Liquidated Damages are payable.  In the event
a  registration  statement is filed by the Filing Date but is withdrawn prior to
being  declared  effective  by  the Commission, then such Registration Statement
will  be  deemed  to  have not been filed unless a new Registration Statement is
filed  within  three  business days.  All oral or written comments received from
the  Commission  relating  to  the registration statement must be satisfactorily
responded  to  within  fifteen  (15)  days  after  receipt  of comments from the
Commission.  Failure  to  timely  respond  to  Commission  comments  is  a
Non-Registration  Event for which Liquidated Damages shall accrue and be payable
by  the  Company  to  the holders of Registrable Securities at the same rate set
forth  above.  Notwithstanding the foregoing, the Company shall not be liable to
the  Subscriber  under this Section 11.4 for any events or delays occurring as a
consequence  of  the  acts  or  omissions  of  the  Subscribers  contrary to the
obligations  undertaken  by  Subscribers  in  this  Agreement.
11.5.     Expenses.  All  expenses  incurred  by  the  Company in complying with
          --------
Section  11,  including,  without  limitation, all registration and filing fees,
printing  expenses,  fees  and  disbursements  of counsel and independent public
accountants  for  the  Company,  fees and expenses (including reasonable counsel
fees)  incurred in connection with complying with state securities or "blue sky"
laws,  fees  of  the  National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, costs of insurance and fee of one
counsel  for  all  Sellers  are called "Registration Expenses." All underwriting
discounts  and  selling  commissions  applicable  to  the  sale  of  Registrable
Securities,  including  any fees and disbursements of one counsel to the Seller,
are  called  "Selling Expenses."  The Company will pay all Registration Expenses
in  connection  with  the  registration  statement  under  Section  11.  Selling
Expenses  in  connection with each registration statement under Section 11 shall
be borne by the Seller and may be apportioned among the Sellers in proportion to
the  number  of  shares sold by the Seller relative to the number of shares sold
under  such  registration  statement  or  as  all  Sellers thereunder may agree.
11.6.     Indemnification  and  Contribution.
          ----------------------------------
     (a)     In  the event of a registration of any Registrable Securities under
the  1933  Act pursuant to Section 11, the Company will, to the extent permitted
by law, indemnify and hold harmless the Seller, each officer of the Seller, each
director  of  the  Seller,  each  underwriter  of  such  Registrable  Securities
thereunder  and  each  other  person,  if  any,  who  controls  such  Seller  or
underwriter  within  the  meaning  of  the 1933 Act, against any losses, claims,
damages  or  liabilities,  joint  or  several,  to  which  the  Seller,  or such
underwriter  or  controlling  person  may  become  subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect  thereof) arise out of or are based upon any untrue statement or alleged
untrue  statement  of  any material fact contained in any registration statement
under  which  such  Registrable  Securities  was  registered  under the 1933 Act
pursuant to Section 11, any preliminary prospectus or final prospectus contained
therein,  or  any  amendment or supplement thereof, or arise out of or are based
upon  the omission or alleged omission to state therein a material fact required
to  be stated therein or necessary to make the statements therein not misleading
in  light  of the circumstances when made, and will subject to the provisions of
Section  11.6(c)  reimburse  the  Seller,  each  such  underwriter and each such
controlling  person  for any legal or other expenses reasonably incurred by them
in  connection  with  investigating  or  defending any such loss, claim, damage,
liability  or action; provided, however, that the Company shall not be liable to
the Seller to the extent that any such damages arise out of or are based upon an
untrue  statement  or  omission  made  in  any preliminary prospectus if (i) the
Seller failed to send or deliver a copy of the final prospectus delivered by the
Company  to  the Seller with or prior to the delivery of written confirmation of
the sale by the Seller to the person asserting the claim from which such damages
arise,  (ii)  the final prospectus would have corrected such untrue statement or
alleged  untrue  statement or such omission or alleged omission, or (iii) to the
extent  that any such loss, claim, damage or liability arises out of or is based
upon  an  untrue  statement  or  alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Seller, or
any such controlling person in writing specifically for use in such registration
statement  or  prospectus.
(b)     In  the  event  of  a  registration of any of the Registrable Securities
under the 1933 Act pursuant to Section 11, each Seller severally but not jointly
will,  to  the extent permitted by law, indemnify and hold harmless the Company,
and each person, if any, who controls the Company within the meaning of the 1933
Act,  each  officer  of  the  Company who signs the registration statement, each
director  of  the  Company,  each  underwriter  and each person who controls any
underwriter  within  the  meaning  of  the 1933 Act, against all losses, claims,
damages  or liabilities, joint or several, to which the Company or such officer,
director,  underwriter  or  controlling person may become subject under the 1933
Act  or  otherwise,  insofar  as such losses, claims, damages or liabilities (or
actions  in respect thereof) arise out of or are based upon any untrue statement
or  alleged  untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the 1933
Act  pursuant  to  Section  11,  any  preliminary prospectus or final prospectus
contained  therein,  or  any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required  to  be  stated therein or necessary to make the statements therein not
misleading,  and  will  reimburse  the  Company and each such officer, director,
underwriter  and  controlling  person for any legal or other expenses reasonably
incurred  by  them  in connection with investigating or defending any such loss,
claim,  damage,  liability or action, provided, however, that the Seller will be
liable  hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged  untrue  statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such Seller, as such, furnished
in  writing  to  the  Company  by  such  Seller  specifically  for  use  in such
registration  statement  or prospectus, and provided, further, however, that the
liability  of the Seller hereunder shall be limited to the net proceeds actually
received  by  the Seller from the sale of Registrable Securities covered by such
registration  statement.
(c)     Promptly  after  receipt  by an indemnified party hereunder of notice of
the  commencement  of  any  action,  such indemnified party shall, if a claim in
respect  thereof  is to be made against the indemnifying party hereunder, notify
the  indemnifying  party  in  writing thereof, but the omission so to notify the
indemnifying  party shall not relieve it from any liability which it may have to
such  indemnified  party  other  than  under this Section 11.6(c) and shall only
relieve  it from any liability which it may have to such indemnified party under
this  Section  11.6(c),  except  and  only if and to the extent the indemnifying
party  is  prejudiced by such omission. In case any such action shall be brought
against  any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and,  to  the  extent it shall wish, to assume and undertake the defense thereof
with  counsel satisfactory to such indemnified party, and, after notice from the
indemnifying  party  to  such indemnified party of its election so to assume and
undertake  the  defense  thereof,  the indemnifying party shall not be liable to
such  indemnified  party  under  this  Section  11.6(c)  for  any legal expenses
subsequently  incurred  by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so  selected,  provided,  however,  that,  if  the defendants in any such action
include  both  the  indemnified  party  and  the  indemnifying  party  and  the
indemnified  party  shall have reasonably concluded that there may be reasonable
defenses  available  to  it  which  are  different  from  or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably  may  be  deemed  to  conflict with the interests of the indemnifying
party,  the  indemnified parties, as a group, shall have the right to select one
separate  counsel and to assume such legal defenses and otherwise to participate
in  the  defense  of  such action, with the reasonable expenses and fees of such
separate  counsel  and  other  expenses  related  to  such  participation  to be
reimbursed  by  the  indemnifying  party  as  incurred.
(d)     In  order to provide for just and equitable contribution in the event of
joint  liability under the 1933 Act in any case in which either (i) a Seller, or
any  controlling  person of a Seller, makes a claim for indemnification pursuant
to  this  Section  11.6 but it is judicially determined (by the entry of a final
judgment  or  decree  by a court of competent jurisdiction and the expiration of
time  to  appeal  or  the  denial  of  the  last  right  of  appeal)  that  such
indemnification  may  not be enforced in such case notwithstanding the fact that
this  Section  11.6  provides  for  indemnification  in  such  case,  or  (ii)
contribution  under  the  1933  Act may be required on the part of the Seller or
controlling  person  of the Seller in circumstances for which indemnification is
not  provided  under this Section 11.6; then, and in each such case, the Company
and  the  Seller  will  contribute  to  the aggregate losses, claims, damages or
liabilities  to  which  they  may be subject (after contribution from others) in
such  proportion  so  that  the  Seller  is  responsible  only  for  the portion
represented  by  the percentage that the public offering price of its securities
offered  by the registration statement bears to the public offering price of all
securities  offered  by such registration statement, provided, however, that, in
any  such  case, (y) the Seller will not be required to contribute any amount in
excess  of  the public offering price of all such securities sold by it pursuant
to such registration statement; and (z) no person or entity guilty of fraudulent
misrepresentation  (within the meaning of Section 11(f) of the 1933 Act) will be
entitled  to  contribution  from any person or entity who was not guilty of such
fraudulent  misrepresentation.
     11.7.     Delivery  of  Unlegended  Shares.
               --------------------------------
     (a)     Within  three  (3) business days (such third business day being the
"Unlegended  Shares  Delivery Date") after the business day on which the Company
has received (i) a notice that Shares, or Warrant Shares have been sold pursuant
to  the  Registration  Statement  or  Rule  144  under  the  1933  Act,  (ii)  a
representation that the prospectus delivery requirements, or the requirements of
Rule  144,  as  applicable  and  if required, have been satisfied, and (iii) the
original  share  certificates  representing the shares of Common Stock that have
been  sold,  and  (iv)  in  the  case  of  sales  under  Rule  144,  customary
representation  letters  of  the Subscriber and/or Subscriber's broker regarding
compliance  with  the  requirements of Rule 144, the Company at its expense, (y)
shall  deliver, and shall cause legal counsel selected by the Company to deliver
to its transfer agent (with copies to Subscriber) an appropriate instruction and
opinion  of  such  counsel,  directing  the  delivery  of shares of Common Stock
without  any  legends  including  the  legend  set  forth in Section 4(h) above,
reissuable  pursuant  to  any  effective  and  current  Registration  Statement
described in Section 11 of this Agreement or pursuant to Rule 144 under the 1933
Act  (the  "Unlegended  Shares");  and  (z)  cause  the  transmission  of  the
certificates  representing  the  Unlegended  Shares  together  with  a  legended
certificate  representing  the balance of the submitted certificates, if any, to
the  Subscriber  at  the  address  specified  in the notice of sale, via express
courier,  by electronic transfer or otherwise on or before the Unlegended Shares
Delivery  Date.  Transfer  fees  shall  be  the  responsibility  of  the Seller.
(b)     In  lieu of delivering physical certificates representing the Unlegended
Shares, if the Company's transfer agent is participating in the Depository Trust
Company  ("DTC")  Fast  Automated Securities Transfer program, upon request of a
Subscriber,  so  long  as the certificates therefor do not bear a legend and the
Subscriber  is  not  obligated to return such certificate for the placement of a
legend  thereon,  the  Company  shall cause its transfer agent to electronically
transmit  the  Unlegended  Shares by crediting the account of Subscriber's prime
Broker  with  DTC  through its Deposit Withdrawal Agent Commission system.  Such
delivery  must  be  made  on  or  before  the  Unlegended  Shares Delivery Date.

     (c)     The  Company  understands  that  a  delay  in  the  delivery of the
Unlegended Shares pursuant to Section 11 hereof later than the Unlegended Shares
Delivery Date could result in economic loss to a Subscriber.  As compensation to
a  Subscriber  for  such  loss,  the Company agrees to pay late payment fees (as
liquidated  damages and not as a penalty) to the Subscriber for late delivery of
Unlegended Shares in the amount of $100 per business day after the Delivery Date
for  each  $10,000  of  purchase  price  of the Unlegended Shares subject to the
delivery  default.  If  during  any 360 day period, the Company fails to deliver
Unlegended  Shares  as  required by this Section 11.7 for an aggregate of thirty
(30)  days,  then each Subscriber or assignee holding Securities subject to such
default  may, at its option, require the Company to redeem all or any portion of
the  Shares,  and  Warrant  Shares  subject to such default at a price per share
equal  to 115% of the purchase price or value described in Section 12(e) hereof,
of such Shares, and Warrant Shares ("Unlegended Redemption Amount").  The amount
of  the aforedescribed liquidated damages that have accrued or been paid for the
twenty  day  period  prior  to  the  receipt by the Subscriber of the Unlegended
Redemption  Amount  shall  be credited against the Unlegended Redemption Amount.
The  Company  shall  pay any payments incurred under this Section in immediately
available  funds  upon  demand.

     (d)     In  addition  to any other rights available to a Subscriber, if the
Company  fails to deliver to a Subscriber Unlegended Shares as required pursuant
to  this  Agreement,  within seven (7) business days after the Unlegended Shares
Delivery  Date  and  the  Subscriber purchases (in an open market transaction or
otherwise)  shares  of common stock to deliver in satisfaction of a sale by such
Subscriber  of  the  shares of Common Stock which the Subscriber was entitled to
receive from the Company (a "Buy-In"), then the Company shall pay in cash to the
Subscriber  (in  addition  to  any  remedies  available  to  or  elected  by the
Subscriber)  the  amount  by  which  (A)  the  Subscriber's total purchase price
(including  brokerage  commissions,  if  any)  for the shares of common stock so
purchased exceeds (B) the aggregate purchase price of the shares of Common Stock
delivered  to  the  Company  for  reissuance as Unlegended Shares  together with
interest  thereon at a rate of 15% per annum, accruing until such amount and any
accrued  interest  thereon  is  paid  in  full  (which  amount  shall be paid as
liquidated  damages  and  not  as  a  penalty).  For  example,  if  a Subscriber
purchases  shares  of  Common  Stock having a total purchase price of $11,000 to
cover  a  Buy-In  with  respect to $10,000 of purchase price of shares of Common
Stock  delivered to the Company for reissuance as Unlegended Shares, the Company
shall  be  required  to pay the Subscriber $1,000, plus interest. The Subscriber
shall  provide  the Company written notice indicating the amounts payable to the
Subscriber  in  respect  of  the  Buy-In.

     (e)     In  the  event  a  Subscriber  shall request delivery of Unlegended
Shares  as described in Section 11.7 and the Company is required to deliver such
Unlegended  Shares  pursuant  to  Section  11.7,  the  Company may not refuse to
deliver  Unlegended  Shares  based  on any claim that such Subscriber or any one
associated  or affiliated with such Subscriber has been engaged in any violation
of  law, or for any other reason, unless, an injunction or temporary restraining
order  from  a  court,  on notice, restraining and or enjoining delivery of such
Unlegended  Shares  or  exercise  of all or part of said Warrant shall have been
sought  and obtained and the Company has posted a surety bond for the benefit of
such  Subscriber  in  the amount of 120% of the amount of the aggregate purchase
price of the Common Stock and Warrant Shares which are subject to the injunction
or  temporary  restraining  order,  which  bond shall remain in effect until the
completion  of  arbitration/litigation  of the dispute and the proceeds of which
shall be payable to such Subscriber to the extent Subscriber obtains judgment in
Subscriber's  favor.

     12.     (a)     Right  of  First Refusal.  Until the Registration Statement
                     ------------------------
has  been  effective  for  the  public  unrestricted  resale  of the Registrable
Securities  for 270 days, the Subscribers shall be given not less than seven (7)
business  days  prior  written notice of any proposed sale by the Company of its
common  stock or other securities or debt obligations, except in connection with
(i)  as  a  result  of  the  exercise  of  options  or warrants or conversion of
convertible  Notes  or  amounts  which are granted, issued or accrue pursuant to
this  Agreement, (ii) as has been disclosed on Schedule 12(a) hereto, (iii) full
or partial consideration in connection with a strategic merger, consolidation or
purchase  of  substantially  all  of  the securities or assets of corporation or
other  entity,  (iv)  the  Company's  issuance  of securities in connection with
strategic  license  agreements and other partnering arrangements so long as such
issuances  are  not  for  the  purpose of raising capital, and (v) the Company's
issuance of Common Stock or the issuance or grants of options to purchase Common
Stock  pursuant  to  the Company's stock option plans, employment agreements and
employee  stock  purchase  plans  as  they  now exist, provided such options are
granted  with  exercise prices at least equal to the closing price of the Common
Stock  on the grant dates, which copies of such plans have been delivered to the
Subscribers  not later than three days before the Closing Date (collectively the
foregoing are "Excepted Issuances").   The Subscribers who exercise their rights
pursuant  to  this  Section  12(a)  shall  have  the  right during the seven (7)
business  days  following receipt of the notice to purchase in the aggregate all
such offered common stock, debt or other securities in accordance with the terms
and  conditions  set  forth in the notice of sale in the same proportion to each
other  as  their purchase of Notes in the Offering.  In the event such terms and
conditions are modified during the notice period, the Subscribers shall be given
prompt notice of such modification and shall have the right during the seven (7)
business  days  following  the  notice  of modification, whichever is longer, to
exercise  such  right.
     (b)     Offering  Restrictions.   Other  than the Excepted Issuances, until
             ----------------------
the  Actual  Effective  Date  and during the pendency of an Event of Default, or
when any compensatory or liquidated damages are accruing or are outstanding, the
Company  will  not  enter into an agreement to nor issue any equity, convertible
debt  or other securities convertible into common stock or equity of the Company
nor modify any of the foregoing which may be outstanding at anytime, without the
prior  written  consent of the Subscriber, which consent may be withheld for any
reason.  For so long as 40% of the Notes and/or Common Stock issued and issuable
upon  conversion  of  the  Notes  is  held by the Subscribers or their permitted
assigns,  the  Company  will not enter into any equity line of credit or similar
agreement,  nor  issue  or agree to issue any floating or variable priced equity
linked  instruments  nor any of the foregoing or equity with price reset rights.
     (c)     Favored  Nations Provision.   Except for the Excepted Issuances, if
             --------------------------
at  any  time  Notes  or  Warrants is outstanding, if the Company shall issue or
agree  to  issue  any common stock or securities convertible into or exercisable
for  shares  of  common  stock  (or  modify  any  of  the foregoing which may be
outstanding)  to  any  person  or  entity  at a price per share or conversion or
exercise  price  per  share  which  shall  be  less than the Conversion Price in
respect  of the Shares, or if less than the Warrant exercise price in respect of
the  Warrant  Shares,  without  the  consent  of  each Subscriber holding Notes,
Shares,  Warrants,  or Warrant Shares, the Conversion Price and Warrant Exercise
Price  shall  automatically  be  reduced  to  such  other lower price per share.
Additionally,  if  the  Company  shall,  issue  or  agree  to  issue  any of the
aforementioned  services  to  any person, firm or corporation at terms deemed by
Subscriber  to  be  more  favorable  to  the  other  investor  than the terms or
conditions  of this Offering, then Subscriber is granted the right to modify any
such  term  or  condition  of  the  Offering  to be the same as any such term or
condition of any subsequent offering.  The rights of the Subscriber set forth in
this  Section 12 are in addition to any other rights the Subscriber has pursuant
to  this  Agreement, the Note, any Transaction Document, and any other agreement
referred  to  or  entered  into  in  connection  herewith.
      (d)     Option  Plan  Restrictions.   The only officer, director, employee
              --------------------------
and  consultant  stock  option  or  stock  incentive plan currently in effect or
contemplated  by  the  Company  has  been  submitted  to  the  Subscribers or is
described  with  Reports.  No  other plan will be adopted nor may any options or
equity  not  included  in  such plan be issued until after the Exclusion Period.
(e)     Paid  In  Kind.   The Subscriber may demand that some or all of the sums
        --------------
payable  to the Subscriber pursuant to Sections 7.1(c), 7.2, 7.5, 11.4, 11.7(c),
11.7(d)  and  11.7(e) that are not paid within ten business days of the required
payment date be paid in shares of Common Stock valued at the Conversion Price in
effect  at  the  time  Subscriber  makes  such  demand  or,  at the Subscriber's
election,  at  such  other valuation described in the Transaction Documents.  In
addition to any other rights granted to the Subscriber herein, the Subscriber is
also  granted  the  registration  rights set forth in Section 11.1(ii) hereof in
relation  to  such shares of Common Stock and the Common Stock issuable pursuant
to  this Section 12(e).  For purposes only of determining any liquidated damages
pursuant  to  the  Transaction  Documents,  the  entire  Purchase Price shall be
allocated to the Notes and none to the Warrants; and the Warrant Shares shall be
valued  at  the  actual  exercise  price  thereof.
(f)     Maximum  Exercise  of  Rights.   In the event the exercise of the rights
        -----------------------------
described  in Sections 12(a), 12(c) and 12(e) would result in the issuance of an
amount  of common stock of the Company that would exceed the maximum amount that
may  be issued to a Subscriber calculated in the manner described in Section 7.3
of  this  Agreement, then the issuance of such additional shares of common stock
of  the  Company  to  such Subscriber will be deferred in whole or in part until
such  time  as  such  Subscriber  is  able to beneficially own such common stock
without  exceeding  the  maximum  amount  set  forth  calculated  in  the manner
described  in  Section  7.3  of  this Agreement.  The determination of when such
common  stock  may  be  issued  shall be made by each Subscriber as to only such
Subscriber.
     13.     Miscellaneous.
             -------------
     (a)     Notices.  All  notices, demands, requests, consents, approvals, and
             -------
other  communications  required  or permitted hereunder shall be in writing and,
unless  otherwise  specified  herein,  shall  be  (i)  personally  served,  (ii)
deposited  in  the  mail,  registered  or  certified,  return receipt requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as  set  forth below or to such other address as such party shall have specified
most  recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,  with  accurate  confirmation  generated  by  the
transmitting  facsimile  machine,  at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be  received),  or  the first business day following such delivery (if delivered
other  than  on a business day during normal business hours where such notice is
to  be received) or (b) on the second business day following the date of mailing
by  express  courier  service, fully prepaid, addressed to such address, or upon
actual  receipt of such mailing, whichever shall first occur.  The addresses for
such  communications  shall  be: (i) if to the Company, to: FTS Group Inc., 7610
West  Hillsborough  Avenue,  Tampa,  FL  33615,  Attn:  Scott  Gallagher,  CEO,
telecopier:  (813)  878-2337,  with  a  copy by telecopier only to: Amy Trombly,
Esq.,  Trombly  Business  Law,  1320 Centre Street, Suite 202, Newton Center, MA
02459,  Fax: (617) 243-0066, and (ii) if to the Subscribers, to: the one or more
addresses  and  telecopier numbers indicated on the signature pages hereto, with
an  additional  copy  by  telecopier only to: Grushko & Mittman, P.C., 551 Fifth
Avenue, Suite 1601, New York, New York 10176, telecopier number: (212) 697-3575.
(b)     Closing.  The consummation of the transactions contemplated herein shall
        -------
take  place  at  the offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite
1601,  New  York,  New  York  10176,  upon the satisfaction of all conditions to
Closing  set forth in this Agreement.  Each of the Closing Date and Closing Date
is  referred  to  as  a  "Closing  Date".
(c)     Entire  Agreement;  Assignment.  This  Agreement  and  other  documents
        ------------------------------
delivered  in  connection  herewith  represent  the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by  a writing executed by both parties.  Neither the Company nor the Subscribers
have  relied  on  any  representations  not  contained  or  referred  to in this
Agreement  and the documents delivered herewith.   No right or obligation of the
Company shall be assigned without prior notice to and the written consent of the
Subscribers.
(d)      Counterparts/Execution.  This  Agreement  may be executed in any number
        -----------------------
of  counterparts  and  by  the  different  signatories  hereto  on  separate
counterparts,  each of which, when so executed, shall be deemed an original, but
all  such  counterparts  shall constitute but one and the same instrument.  This
Agreement  may  be  executed  by  facsimile signature and delivered by facsimile
transmission.
(e)     Law  Governing  this Agreement.  This Agreement shall be governed by and
        ------------------------------
construed in accordance with the laws of the State of New York without regard to
conflicts  of  lawsprinciples  that  would  result  in  the  application  of the
substantive  laws  of  another jurisdiction.  Any action brought by either party
against  the  other  concerning  the transactions contemplated by this Agreement
shall  be  brought only in the state courts of New York or in the federal courts
located  in  the  state  of New York.  The parties and the individuals executing
this  Agreement  and  other  agreements  referred  to  herein  or  delivered  in
connection herewith on behalf of the Company agree to submit to the jurisdiction
of  such courts and waive trial by jury.  The prevailing party shall be entitled
to  recover  from  the other party its reasonable attorney's fees and costs.  In
the  event that any provision of this Agreement or any other agreement delivered
in  connection herewith is invalid or unenforceable under any applicable statute
or  rule  of  law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such
statute  or  rule  of  law.  Any  such  provision  which  may  prove  invalid or
unenforceable  under  any law shall not affect the validity or enforceability of
any  other  provision  of  any  agreement.
(f)     Specific  Enforcement,  Consent  to  Jurisdiction.  The  Company  and
        -------------------------------------------------
Subscriber  acknowledge  and  agree  that  irreparable damage would occur in the
event  that  any  of  the  provisions  of  this  Agreement were not performed in
accordance  with  their  specific  terms  or  were  otherwise  breached.  It  is
accordingly agreed that the parties shall be entitled to one or more preliminary
and  final  injunctions  to  prevent  or cure breaches of the provisions of this
Agreement  and  to  enforce  specifically  the terms and provisions hereof, this
being  in  addition  to any other remedy to which any of them may be entitled by
law or equity.  Subject to Section 13(e) hereof, each of the Company, Subscriber
and  any  signator hereto in his personal capacity hereby waives, and agrees not
to  assert  in  any  such  suit,  action or proceeding, any claim that it is not
personally subject to the jurisdiction in New York of such court, that the suit,
action  or  proceeding  is brought in an inconvenient forum or that the venue of
the  suit,  action  or  proceeding  is  improper.  Nothing in this Section shall
affect or limit any right to serve process in any other manner permitted by law.
(g)     Independent Nature of Subscribers.     The Company acknowledges that the
        ---------------------------------
obligations  of  each Subscriber under the Transaction Documents are several and
not  joint with the obligations of any other Subscriber, and no Subscriber shall
be  responsible  in  any way for the performance of the obligations of any other
Subscriber  under  the Transaction Documents. The Company acknowledges that each
Subscriber  has  represented  that  the  decision of each Subscriber to purchase
Securities  has  been  made  by  such  Subscriber  independently  of  any  other
Subscriber  and  independently  of  any  information,  materials,  statements or
opinions  as  to  the  business,  affairs,  operations,  assets,  properties,
liabilities,  results  of  operations,  condition  (financial  or  otherwise) or
prospects  of  the  Company  which  may  have  been  made  or given by any other
Subscriber  or  by  any  agent  or  employee  of  any  other  Subscriber, and no
Subscriber  or  any  of  its agents or employees shall have any liability to any
Subscriber  (or  any  other  person)  relating  to  or  arising  from  any  such
information,  materials,  statements or opinions.  The Company acknowledges that
nothing  contained  in  any  Transaction  Document,  and  no action taken by any
Subscriber  pursuant  hereto  or thereto (including, but not limited to, the (i)
inclusion  of a Subscriber in the Registration Statement and (ii) review by, and
consent  to,  such  Registration  Statement  by a Subscriber) shall be deemed to
constitute  the Subscribers as a partnership, an association, a joint venture or
any  other  kind  of entity, or create a presumption that the Subscribers are in
any  way acting in concert or as a group with respect to such obligations or the
transactions  contemplated  by  the  Transaction  Documents.  The  Company
acknowledges that each Subscriber shall be entitled to independently protect and
enforce  its rights, including without limitation, the rights arising out of the
Transaction Documents, and it shall not be necessary for any other Subscriber to
be  joined  as  an  additional  party  in  any proceeding for such purpose.  The
Company  acknowledges  that  it  has elected to provide all Subscribers with the
same  terms and Transaction Documents for the convenience of the Company and not
because  Company  was  required  or  requested to do so by the Subscribers.  The
Company  acknowledges  that  such  procedure  with  respect  to  the Transaction
Documents  in  no  way creates a presumption that the Subscribers are in any way
acting in concert or as a group with respect to the Transaction Documents or the
transactions  contemplated  thereby.
(h)     As  used  in  the  Agreement,  "consent  of  the Subscribers" or similar
language  means  the consent of holders of not less than 80% of the total of the
Shares  issued  and  issuable  upon  conversion  of  outstanding  Notes owned by
Subscribers  on  the  date  consent  is  requested.
(i)     No  consideration  shall  be  offered  or paid to any person to amend or
consent  to  a  waiver  or  modification  of  any  provision  of the Transaction
Documents  unless  the  same consideration is also offered to all the parties to
the  Transaction  Documents.
(j)     Thirty-seven  thousand  dollars ($37,000) of the Purchase Price shall be
allocated pro-rata among the Subscribers for the purchase of the Initial Shares.


                      [THIS SPACE INTENTIONALLY LEFT BLANK]


<PAGE>


                  SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A)
                  --------------------------------------------

     Please  acknowledge your acceptance of the foregoing Subscription Agreement
by  signing  and returning a copy to the undersigned whereupon it shall become a
binding  agreement  between  us.

     FTS  GROUP  INC.
a  Nevada  corporation


     By: /s/Scott Gallagher
         ------------------
     Name: Scott Gallagher
     Title: Chief Executive Officer

     Dated:  December  29,  2005

                         LIST OF EXHIBITS AND SCHEDULES
                         ------------------------------

     Exhibit  A1         Form  of  Class  A  Warrant
     Exhibit  A2         Form  of  Class  B  Warrant
     Exhibit  B          Escrow  Agreement
     Exhibit  C1         Security  Agreement  (Company)
     Exhibit  C2         Security  Agreement  (Subsidiary)
     Exhibit  D          Collateral  Agent  Agreement
     Exhibit  E          Form  of  Legal  Opinion
     Exhibit  F          Form  of  Public  Announcement  or  Form  8-K
     Exhibit  G          Form  of  Limited  Standstill  Agreement
     Schedule  5(a)      Subsidiaries
     Schedule  5(d)      Additional  Issuances  /  Capitalization
     Schedule  5(q)      Undisclosed  Liabilities
     Schedule  9(e)      Use  of  Proceeds
     Schedule  9(q)      Providers  of  Limited  Standstill  Agreements
     Schedule  11.1      Other  Securities  to  be  Registered
     Schedule  12(a)     Excepted  Issuances

<PAGE>
                                    EXHIBIT G

                          LIMITED STANDSTILL AGREEMENT

     This  AGREEMENT  (the  "Agreement")  is made as of the ___ day of December,
2005,  by  the  signatories  hereto  (each  a  "Holder"), in connection with his
ownership  of  shares  of  FTS Group Inc., a Nevada corporation (the "Company").

     NOW,  THEREFORE,  for  good and valuable consideration, the sufficiency and
receipt  of  which  consideration  are  hereby  acknowledged,  Holder  agrees as
follows:

     1.     Background.
            ----------

          a.     Holder  is  the beneficial owner of the amount of shares of the
Common  Stock,  $.001  par  value, of the Company ("Common Stock") and rights to
purchase  Common  Stock  designated  on  the  signature  page  hereto.

          b.     Holder  acknowledges  that the Company has entered into or will
enter  into  an agreement with each subscriber ("Subscription Agreement") to the
Company's secured convertible promissory notes and warrants (the "Subscribers"),
for the sale to the Subscribers of an aggregate of up to $1,896,551 of principal
amount  of  secured  convertible promissory notes and warrants (the "Offering").
Holder  understands  that,  as  a condition to proceeding with the Offering, the
Subscribers  have required, and the Company has agreed to assist the Subscribers
in  obtaining,  an  agreement  from  the  Holder  to  refrain  from  selling any
securities  of the Company from the date of the Subscription Agreement until the
Registration  Statement  described  in  Section  11.1(iv)  of  the  Subscription
Agreement  has  been  effective  for  180  days  (the  "Restriction  Period").

     2.     Share  Restriction.
            ------------------

          a.     Holder  hereby  agrees  that during the Restriction Period, the
Holder  will  not sell or otherwise dispose of any shares of Common Stock or any
options,  warrants  or  other  rights  to purchase shares of Common Stock or any
other  security of the Company which Holder owns or has a right to acquire as of
the  date hereof or acquires hereafter during the Restriction Period, other than
in  connection  with  an  offer  made  to all shareholders of the Company or any
merger,  consolidation  or  similar  transaction  involving the Company.  Holder
further agrees that the Company is authorized to and the Company agrees to place
"stop  orders" on its books to prevent any transfer of shares of Common Stock or
other  securities  of the Company held by Holder in violation of this Agreement.

          b.     Any  subsequent issuance to and/or acquisition of shares or the
right  to  acquire  shares  by  Holder will be subject to the provisions of this
Agreement.

          c.     Notwithstanding  the  foregoing  restrictions  on transfer, the
Holder  may,  at  any  time and from time to time during the Restriction Period,
transfer  the  Common  Stock  (i)  as  bona  fide  gifts or transfers by will or
intestacy,  (ii)  to  any  trust  for  the  direct  or  indirect  benefit of the
undersigned  or  the  immediate  family  of  the  Holder, provided that any such
transfer shall not involve a disposition for value, (iii) to a partnership which
is  the  general  partner  of  a  partnership  of  which the Holder is a general
partner,  provided,  that,  in  the  case  of  any gift or transfer described in
clauses  (i),  (ii)  or  (iii), each donee or transferee agrees in writing to be
bound  by  the  terms and conditions contained herein in the same manner as such
terms  and  conditions apply to the undersigned. For purposes hereof, "immediate
family"  means  any relationship by blood, marriage or adoption, not more remote
than  first  cousin.

     3.     Miscellaneous.
            -------------

          a.     At  any  time, and from time to time, after the signing of this
Agreement  Holder  will execute such additional instruments and take such action
as  may  be  reasonably requested by the Subscribers to carry out the intent and
purposes  of  this  Agreement.

          b.     This  Agreement  shall  be  governed, construed and enforced in
accordance with the laws of the State of New York without regard to conflicts of
laws  principles that would result in the application of the substantive laws of
another jurisdiction, except to the extent that the securities laws of the state
in  which  Holder resides and federal securities laws may apply.  Any proceeding
brought  to  enforce this Agreement may be brought exclusively in courts sitting
in  New  York  County,  New  York.

          c.     This Agreement contains the entire agreement of the Holder with
respect  to  the  subject  matter  hereof.

          d.     This  Agreement  shall  be  binding  upon  Holder,  its  legal
representatives,  successors  and  assigns.

          e.     This  Agreement  may  be  signed and delivered by facsimile and
such  facsimile  signed  and  delivered  shall  be  enforceable.

          f.     The  Company  agrees not to take any action or allow any act to
be  taken  which  would  be  inconsistent  with  this  Agreement.

          IN  WITNESS  WHEREOF, and intending to be legally bound hereby, Holder
has  executed  this  Agreement  as  of  the  day  and  year first above written.

                                   HOLDER:

                                   ________________________________
                                     (Signature  of  Holder)

                                   _________________________________
                                     (Print  Name  of  Holder)
                                   _________________________________
                                   Number  of  Shares  of  Common  Stock
                                   Beneficially  Owned

                                   COMPANY:

                                   FTS  GROUP  INC.


                                   By:______________________________

<PAGE>
Schedule  5(a)          Subsidiaries
FTS  Wireless
Schedule  5(d)          Additional  Issuances  /  Capitalization
Schedule  5(q)          Undisclosed  Liabilities
Schedule  9(e)          Use  of  Proceeds

The  potential  acquisition of See World Satellite.  The remainder of funds will
be  used  for general working capital or other purposes approved by the Board of
Directors.

Schedule  9(q)          Providers  of  Limited  Standstill  Agreements
Schedule  11.1          Other  Securities  to  be  Registered
360,000  shares  with  piggy  back  rights  for  Dutchess  Private Equities Fund