Exhibit 10.4

                               PURCHASE AGREEMENT

         This Purchase  Agreement (this  "AGREEMENT") is dated as of December 7,
2005,  among  Epicus  Communications  Group,  Inc., a Florida  corporation  (the
"COMPANY"),  and the investors identified on the signature pages hereto (each an
"INVESTOR" and, collectively, the "INVESTORS").

         WHEREAS, the Company is the successor to Epicus  Communications  Group,
Inc.,  pursuant  to the Joint  Plan of  Reorganization  Under  Chapter 11 of the
Bankruptcy  Code (the "JOINT  PLAN"),  confirmed by an order (the  "CONFIRMATION
ORDER") issued by the United States  Bankruptcy Court for the Southern  District
of Florida (the "BANKRUPTCY  COURT") in the chapter 11 cases styled IN RE EPICUS
COMMUNICATIONS  GROUP,  INC.,  Chapter  11 Case No.  04-34915-BKC-PGH  and IN RE
EPICUS, INC., Chapter 11 Case No. 04-34916-BKC-PGH.

         WHEREAS,   Epicus  Communications  Group,  Inc.  and  its  wholly-owned
subsidiary, Epicus, Inc. (collectively, the "Debtors") filed their petitions for
relief under Chapter 11 of the United States Bankruptcy Code with the Bankruptcy
Court on October 25, 2004 (the "PETITION DATE").

         WHEREAS,  prior to the Petition Date, the Debtors  entered into certain
purchase  agreements  with the  Investors  for the  purchase and sale of secured
convertible notes and/or debentures (the "OLD DEBENTURES") and warrants pursuant
to  various  purchase  agreements,  registrations  rights  agreements,  security
agreements and related documents (the "OLD DEBENTURE DOCUMENTS").

         WHEREAS,  under the Joint Plan, the Old Debentures shall be reinstated,
pursuant to the terms and conditions of the Old Debenture  Documents,  as of the
Effective Date of the Joint Plan.

         WHEREAS,  in connection  with the Joint Plan,  subject to the terms and
conditions set forth in the Joint Plan and this  Agreement,  the Company desires
to borrow certain sums from each of the Investors and, in consideration  thereof
issue certain convertible notes and warrants to each of the Investors,  and each
Investor,  severally and not jointly,  desires to make a loan to the Company and
accept such notes and warrants  from the Company,  all pursuant to the terms set
forth herein.

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


<PAGE>

                                   ARTICLE I.
                                   DEFINITIONS

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

                  "ACTION" means any action, suit, inquiry, notice of violation,
proceeding   (including  any  partial   proceeding  such  as  a  deposition)  or
investigation pending or threatened in writing against or affecting the Company,
any  Subsidiary or any of their  respective  properties  before or by any court,
arbitrator,   governmental  or  administrative   agency,   regulatory  authority
(federal,  state,  county,  local or foreign),  stock market,  stock exchange or
trading facility.

                  "AFFILIATE"  means any Person  that,  directly  or  indirectly
through one or more  intermediaries,  controls or is  controlled  by or is under
common control with a Person, as such terms are used in and construed under Rule
144.

                  "BANKRUPTCY  EVENT" means any of the following events: (a) the
Company  or  any  Subsidiary   commences  a  proceeding  under  any  bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or  liquidation  or similar law of any  jurisdiction  relating to the
Company or any Subsidiary thereof; (b) there is commenced against the Company or
any Subsidiary any such case or proceeding that is not dismissed  within 60 days
after commencement;  (c) the Company or any Subsidiary is adjudicated by a court
of competent  jurisdiction insolvent or bankrupt or any order of relief or other
order  approving any such case or proceeding is entered;  (d) the Company or any
Subsidiary  suffers any  appointment  of any custodian or the like for it or any
substantial  part of its property  that is not  discharged  or stayed  within 60
days; (e) under  applicable  law the Company or any  Subsidiary  makes a general
assignment for the benefit of creditors; (f) the Company or any Subsidiary fails
to pay,  or states  that it is  unable  to pay or is  unable  to pay,  its debts
generally as they become due; (g) the Company or any Subsidiary  calls a meeting
of  its  creditors  with  a view  to  arranging  a  composition,  adjustment  or
restructuring of its debts; or (h) the Company or any Subsidiary,  by any act or
failure to act, expressly  indicates its consent to, approval of or acquiescence
in any of the  foregoing or takes any  corporate or other action for the purpose
of effecting any of the foregoing.

                  "BENEFIT  ARRANGEMENT"  means at any time an employee  benefit
plan  within  the  meaning  of  Section  3(3) of  ERISA  which  is not a Plan or
Multiemployer  Plan and which is  maintained  or  otherwise  contributed  by the
Company.

                  "BENEFIT   PLAN"  has  the   meaning   set  forth  in  Section
3.1(aa)(ii).

                  "BUSINESS DAY" means any day except  Saturday,  Sunday and any
day that is a federal legal holiday or a day on which  banking  institutions  in
the State of New York are  authorized  or required by law or other  governmental
action to close.

                  "CLOSING"  means the closing of the purchase and sale of Notes
and Warrants contemplated by Section 2.1.

                  "CLOSING  DATE" means the Business Day  immediately  following
the date on which all of the  conditions  set forth in Section 2.1(d) and 2.1(e)
have been satisfied, or such other date as the parties may agree.


                                       2
<PAGE>


                  "CODE" means the Internal Revenue Code of 1986, as amended.

                  "COMMISSION" means the Securities and Exchange Commission.

                  "COMMON  STOCK"  means the common  stock of the  Company,  par
value  $.001 per share,  and any  securities  into which such  common  stock may
hereafter be reclassified, converted or exchanged.

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

                  "COMPANY COUNSEL" means Furr & Cohen, P.A.

                  "CONTINGENT   LIABILITY"   means,   as  to  any  Person,   any
obligation,  contingent or otherwise,  of such Person guaranteeing or having the
economic effect of guaranteeing or agreeing to pay or become responsible for any
Debt or  obligation  of any other  Person in any  manner,  whether  directly  or
indirectly,  including without limitation any obligation of such Person,  direct
or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase  (or to advance or supply  funds for the
purchase of) any security for the payment of such Debt, (b) to purchase property
or services  for the purpose of assuring  the owner of such Debt of its payment,
or (c) to maintain the  solvency,  working  capital,  equity,  cash flow,  fixed
charge or other coverage ratio, or any other financial  condition of the primary
obligor so as to enable the  primary  obligor to pay any Debt or to comply  with
any agreement relating to any Debt or obligation.

                  "DEBT" of any Person means at any date,  without  duplication,
(i) all obligations of such Person for borrowed  money,  (ii) all obligations of
such Person evidenced by bonds, debentures,  notes, or other similar instruments
issued by such Person,  (iii) all obligations of such Person as lessee which (y)
are capitalized in accordance with GAAP or (z) arise pursuant to  sale-leaseback
transactions,  (iv) all  reimbursement  obligations of such Person in respect of
letters of credit or other similar  instruments,  (v) all Debt of others secured
by a Lien on any asset of such Person,  whether or not such Debt is otherwise an
obligation of such Person and (vi) all Debt of others guaranteed by such Person.

                  "DISCLOSURE  MATERIALS"  has the  meaning set forth in Section
3.1(h).

                  "EFFECTIVE   DATE"  means  the  date  that  the   Registration
Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.

                  "ELIGIBLE  MARKET"  means any of the New York Stock  Exchange,
American Stock Exchange, NASDAQ National Market or NASDAQ SmallCap Market.

                                       3
<PAGE>

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, as amended, or any successor statute.

                  "ERISA  GROUP" means the Company and each  Subsidiary  and all
members of a  controlled  group of  corporations  and all  trades or  businesses
(whether or not  incorporated)  under common  control  which,  together with the
Company or any Subsidiary, are treated as a single employer under the Code.

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

                  "GAAP" means U.S. generally accepted accounting principles.

                  "INTELLECTUAL  PROPERTY  RIGHTS"  has the meaning set forth in
Section 3.1(p).

                  "INVESTMENT AMOUNT" means, with respect to each Investor,  the
investment  amount  indicated  below  such  Investor's  signature  page  to this
Agreement.

                  "INVESTOR  DELIVERABLES"  has the meaning set forth in Section
2.1(c).

                  "INVESTOR PARTY" has the meaning set forth in Section 4.12.

                  "LIEN" means any lien, charge, encumbrance, security interest,
right of first refusal or other restrictions of any kind.

                  "LOSSES" has the meaning set forth in Section 4.12.

                  "MATERIAL  ADVERSE  EFFECT"  means any of (i) a  material  and
adverse effect on the legality,  validity or  enforceability  of any Transaction
Document,  (ii) a material  and  adverse  effect on the  results of  operations,
assets, prospects, business or condition (financial or otherwise) of the Company
and the Subsidiaries or (iii) an adverse  impairment to the Company's ability to
timely perform its obligations under any Transaction Document.

                  "NEW YORK COURTS" means the state and federal  courts  sitting
in the City of New York, Borough of Manhattan.

                  "NOTES"  means  the  secured   convertible   promissory  notes
issuable  by the Company to the  Investors  at Closing in the Form of EXHIBIT A,
due on the three year anniversary of the Closing Date.

                  "OUTSIDE DATE" means December 8, 2005.

                  "PBGC" means the Pension Benefit Guarantee  Corporation or any
entity succeeding to any or all of its functions under ERISA.

                  "PERMITTED  INDEBTEDNESS" has the meaning set forth in Section
5.3.

                                       4
<PAGE>

                  "PERMITTED  LIENS" means: (a) Liens for taxes,  assessments or
governmental  charges not  delinquent  or being  contested  in good faith and by
appropriate  proceedings and for which adequate reserves in accordance with GAAP
are  maintained on the books of the Company or the  applicable  Subsidiary;  (b)
Liens  arising  out  of  deposits  in  connection  with  workers'  compensation,
unemployment insurance,  old age pensions or other social security or retirement
benefits legislation; (c) deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases,  statutory obligations,
surety and appeal bonds,  and other  obligations  of like nature  arising in the
ordinary course of business of the Company or a Subsidiary; (d) Liens imposed by
law, such as mechanics', workers', materialmens',  carriers' or other like liens
arising in the ordinary course of business of the Company or a Subsidiary  which
secure  the  payment  of  obligations  which are not past due or which are being
diligently  contested  in good faith by  appropriate  proceedings  and for which
adequate  reserves in  accordance  with GAAP are  maintained on the books of the
Company or the  applicable  Subsidiary;  (e) Liens existing on the Closing Date,
and described on Schedule 3.1(o); (f) purchase money security interests or Liens
for the  purchase of fixed assets to be used in the business of the Company or a
Subsidiary,  securing  solely the fixed  assets so  purchased  and the  proceeds
thereof;  (g)  capitalized  leases  which do not violate any  provision  of this
Agreement;  (h) Liens of  commercial  depository  institutions,  arising  in the
ordinary  course of  business,  constituting  a statutory or common law right of
setoff against amounts on deposit with such institution;  and (i) rights of way,
zoning restrictions,  easements and similar encumbrances affecting the Company's
real property which do not materially interfere with the use of such property.

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

                  "PLAN" means at any time an employee pension plan benefit plan
which  is  covered  by  Title IV of ERISA  or  subject  to the  minimum  funding
standards under the Code and either (i) is maintained, or contributed to, by any
member of the ERISA group for employees of any member of the ERISA group or (ii)
has at any time within the preceding five years been maintained,  or contributed
to,  by any  Person  which  was at such  time a member  of the  ERISA  Group for
employees of any Person which was at such time a member of the ERISA group.

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

                  "REGISTRATION   STATEMENT"  means  a  registration   statement
meeting the  requirements  set forth in the  Registration  Rights  Agreement and
covering  the resale by the  Investors  of the  Underlying  Shares  and  Warrant
Shares.

                  "REGISTRATION  RIGHTS AGREEMENT" means the Registration Rights
Agreement,  dated as of the date of this  Agreement,  among the  Company and the
Investors, in the form of EXHIBIT B hereto.

                                       5
<PAGE>

                  "REQUIRED INVESTORS" means one or more Investors  representing
greater  than  50%  of  the  aggregate   principal  amount  of  all  Notes  then
outstanding.

                  "REQUIRED   MINIMUM"  means,  as  of  any  date,  the  maximum
aggregate  number of shares of Common Stock then issued or potentially  issuable
in the  future  pursuant  to the  Transaction  Documents  that  the  Company  is
obligated  to issue,  whether  contingently  or  otherwise,  including,  without
limitation,  any Underlying Shares issuable upon conversion in full of all Notes
and Warrant Shares  (without  regard to any otherwise  applicable  conversion or
exercise  restrictions  contained  therein)  (assuming for such purpose that the
Conversion Price (as defined in the Notes) and the Exercise Price (as defined in
the Warrants) equal 50% of the Conversion  Price and Exercise Price in effect on
the Closing Date).

                  "RESTRICTED  PAYMENT" means,  with respect to any Person,  (a)
any direct or indirect distribution, dividend or other payment on account of any
equity  interest  in, or shares of capital  stock or other  securities  of, such
Person and (b) any management, consulting or other similar fees, or any interest
thereon,  payable by such Person to any affiliate of such Person (other than the
Company), or to any other Person other than an unrelated third party;  PROVIDED,
however,  that Restricted  Payments shall not include any arms length consulting
agreements  with  consultants  of the Company which are approved by the Board of
Directors of the Company.

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

                  "SEC REPORTS" has the meaning set forth in Section 3.1(h).

                  "SECURITIES"  means the Notes, the Warrants and the Underlying
Shares.

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

                  "SECURITY  AGREEMENT"  has the  meaning  set forth in  Section
2.1(b).

                  "SHORT SALES" include,  without limitation,  all "short sales"
as  defined  in Rule 3b-3 of the  Exchange  Act and Rule 200  promulgated  under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges,  forward sale contracts,  options,  puts, calls, short sales, swaps and
similar  arrangements  (including on a total return basis),  and sales and other
transactions through non-US broker dealers or foreign regulated brokers.

                  "STRATEGIC TRANSACTION" means a transaction or relationship in
which the  Company  issues  shares of Common  Stock or other  securities  of the
Company to a Person which is, itself or through its  Subsidiaries,  an operating
company in a business  synergistic with the business of the Company and in which
the Company receives  benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing  securities  primarily
for the purpose of raising  capital or to an entity  whose  primary  business is
investing in securities.

                                       6
<PAGE>

                  "SUBSEQUENT  PLACEMENT"  has the  meaning set forth in Section
4.4.

                  "SUBSEQUENT  PLACEMENT  NOTICE"  has the  meaning set forth in
Section 4.4.

                  "SUBSIDIARY" means any subsidiary of the Company.

                  "TRADING  DAY"  means (i) a day on which the  Common  Stock is
traded on a Trading Market (other than the OTC Bulletin  Board),  or (ii) if the
Common  Stock is not listed on a Trading  Market  (other  than the OTC  Bulletin
Board),  a day on which  the  Common  Stock is  traded  in the  over-the-counter
market,  as reported by the OTC Bulletin  Board, or (iii) if the Common Stock is
not quoted on any Trading  Market,  a day on which the Common Stock is quoted in
the  over-the-counter  market  as  reported  by the  National  Quotation  Bureau
Incorporated (or any similar  organization or agency succeeding to its functions
of reporting prices);  provided,  that in the event that the Common Stock is not
listed or quoted as set forth in (i),  (ii) and (iii)  hereof,  then Trading Day
shall mean a Business Day.

                  "TRADING  MARKET"  means  whichever  of  the  New  York  Stock
Exchange,  the American Stock Exchange,  the NASDAQ National Market,  the NASDAQ
SmallCap  Market or OTC  Bulletin  Board on which the Common  Stock is listed or
quoted for trading on the date in question.

                  "TRANSACTION  DOCUMENTS" means this Agreement,  the Notes, the
Registration Rights Agreement,  the Warrants,  the Security  Agreement,  and any
other  documents or  agreements  executed in  connection  with the  transactions
contemplated hereunder.

                  "UNDERLYING  SHARES" means,  collectively,  the Warrant Shares
and the shares of Common Stock issuable upon conversion of the Notes.

                  "VWAP" means, with respect to any date of  determination,  the
daily volume  weighted  average  price (as  reported by Bloomberg  using the VAP
function) of the Common Stock on such date of  determination,  or if there is no
such price on such date of determination, then the daily volume weighted average
price on the date nearest preceding such date.

                  "WARRANT" means the Common Stock purchase warrant, in the form
of EXHIBIT C, issuable to each Investor on the Closing Date.

                  "WARRANT  SHARES"  means the shares of Common  Stock  issuable
upon exercise of the Warrants.


                                       7
<PAGE>

                                  ARTICLE II.
                                PURCHASE AND SALE

         2.1 CLOSING.

         (a) Subject to the terms and conditions set forth in this Agreement, at
the Closing the Company shall issue and sell to each Investor, and each Investor
shall,  severally and not jointly,  purchase from the Company, the Notes and the
Warrants  representing such Investor's Investment Amount. The Closing shall take
place at the offices of Bryan Cave LLP, 1290 Avenue of the  Americas,  New York,
NY 10104 on the  Closing  Date or at such other  location or time as the parties
may agree.

         (b) At the Closing,  the Company shall deliver or cause to be delivered
to each Investor the following (the "COMPANY Deliverables"):

                  (i) Notes in the aggregate  principal amount of the Investment
Amount  indicated  below  such  Investor's  name on its  signature  page of this
Agreement, registered in the name of such Investor;

                  (ii)  Warrants,  registered  in the  name  of  such  Investor,
pursuant  to which such  Investor  shall have the right to acquire the number of
shares of Common Stock equal to [ ]% of the Underlying  Shares  issuable upon an
assumed  conversion of the Notes  issuable to such  Investor in accordance  with
Section  2.1(b)(i)  (without  regard to any  conversion  restrictions  contained
thereunder);

                  (iii) the legal  opinion of Company  Counsel,  in agreed form,
addressed to the Investors;

                  (iv) the Registration  Rights Agreement,  duly executed by the
Company;

                  (v) a security agreement, duly executed by the Company, in the
form  attached  hereto  as  EXHIBIT D (as  amended,  supplemented  or  otherwise
modified from time to time, the "SECURITY AGREEMENT");

                  (vi) a certificate  executed by a duly  authorized  officer of
the Company certifying that (i) all  representations  and warranties made by the
Company  and  information  furnished  by the  Company in any  schedules  to this
Agreement, are true and correct in all material respects as of the Closing Date,
(ii) all covenants,  agreements and obligations required by this Agreement to be
performed or complied with by the Company, prior to or at the Closing, have been
performed  or  complied  with  and  (iii)  the  items   referenced  in  Sections
2.1(d)(iv)-(vi) are true and correct as of the Closing Date;

                  (vii) lien and  record  search  reports in form and  substance
acceptable  to the Investors  showing that there are no Liens on the  collateral
security  granted  under the  Security  Agreement,  other than  Liens  expressly
permitted thereby; and

                  (viii)  any  other  documents  reasonably  requested  by  such
Investor.

                                       8
<PAGE>

         (c)  At the  Closing,  each  Investor  shall  deliver  or  cause  to be
delivered to the Company the following (the "INVESTOR DELIVERABLES"):

                  (i) the Investment Amount indicated below such Investor's name
on its  signature  page of this  Agreement,  in  United  States  dollars  and in
immediately  available  funds,  by wire  transfer  to an account  designated  in
writing by the Company for such purpose;

                  (ii) the Registration Rights Agreement,  duly executed by such
Investor; and

                  (iii) the Security Agreement, duly executed by such Investor.

         (d) CONDITIONS  PRECEDENT TO THE OBLIGATIONS OF AN INVESTOR TO PURCHASE
NOTES AND  WARRANTS.  The  obligation  of each  Investor  to  acquire  Notes and
Warrants and make loans at the Closing is subject to the  satisfaction or waiver
by such Investor, at or before the Closing, of each of the following conditions:

                  (i) JOINT PLAN CONFIRMATION.  The Confirmation  Order, in form
         and substance  acceptable to the  Investors,  shall have been issued by
the Bankruptcy  Court and there shall not be a stay or injunction in effect with
respect thereto.

                  (ii) REINSTATEMENT OF OLD DEBENTURES. The Old Debentures shall
have been  reinstated,  in accordance  with the terms and  conditions of the Old
Debenture Documents, pursuant to the Joint Plan and the Confirmation Order.

                  (iii) REPRESENTATIONS AND WARRANTIES.  The representations and
warranties of the Company  contained in the Transaction  Documents shall be true
and correct as of the date when made and as of the  Closing  Date as though made
on and as of such date;

                  (iv) PERFORMANCE. The Company shall have performed,  satisfied
and complied  with all  covenants,  agreements  and  conditions  required by the
Transaction  Documents to be  performed,  satisfied or complied with by it at or
prior to the Closing;

                  (v) OFFICER'S CERTIFICATE. The officer's certificate described
in Section 2.1(b)(vii) hereof shall have been delivered;

                 (vi) NO INJUNCTION.  No statute, rule,  regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or endorsed by any court or  governmental  authority  of  competent
jurisdiction  that  prohibits  the  consummation  of  any  of  the  transactions
contemplated by the Transaction Documents;

                  (vii) ADVERSE CHANGES.  Since the execution of this Agreement,
no  event  or  series  of  events  shall  have  occurred  that  has had or would
reasonably be expected to result in a Material Adverse Effect;

                                       9
<PAGE>

                  (viii) NO  SUSPENSIONS  OF TRADING IN COMMON  STOCK;  LISTING.
Trading in the Common Stock shall not have been  suspended by the  Commission or
any Trading Market  (except for any  suspensions of trading of not more than one
Trading Day solely to permit dissemination of material information regarding the
Company)  at any time since the date of  execution  of this  Agreement,  and the
Common  Stock shall have been at all times since such date listed for trading on
an Eligible Market; and

                  (ix) COMPANY  DELIVERABLES.  The Company shall have  delivered
the Closing Company Deliverables in accordance with Section 2.1(b).

         (e)  CONDITIONS  PRECEDENT  TO THE  OBLIGATIONS  OF THE COMPANY TO SELL
NOTES AND WARRANTS.  The obligation of the Company to sell Notes and Warrants at
the  Closing is  subject to the  satisfaction  or waiver by the  Company,  at or
before the Closing, of each of the following conditions:

                  (i)  REPRESENTATIONS  AND WARRANTIES.  The representations and
warranties of each Investor contained herein shall be true and correct as of the
date when made and as of the Closing Date as though made on and as of such date;

                  (ii)   PERFORMANCE.   Each  Investor  shall  have   performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions required by the Transaction Documents to be performed,  satisfied
or complied with by such Investor at or prior to the Closing;

                  (iii) NO INJUNCTION.  No statute, rule, regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or endorsed by any court or  governmental  authority  of  competent
jurisdiction  that  prohibits  the  consummation  of  any  of  the  transactions
contemplated by the Transaction Documents; and

                  (iv)   INVESTORS   DELIVERABLES.   Each  Investor  shall  have
delivered its Investor Deliverables in accordance with Section 2.1(c).

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

         3.1 REPRESENTATIONS  AND WARRANTIES OF THE COMPANY.  The Company hereby
makes the following representations and warranties to each Investor:

         (a)  SUBSIDIARIES.  The Company has no direct or indirect  Subsidiaries
other than as  specified  in SCHEDULE  3.1(A).  Except as  disclosed in SCHEDULE
3.1(A),  the Company owns,  directly or indirectly,  all of the capital stock of
each  Subsidiary  free and  clear of any and all  Liens  (other  than  Permitted
Liens),  and all the issued  and  outstanding  shares of  capital  stock of each
Subsidiary  are validly  issued and are fully paid,  non-assessable  and free of
preemptive and similar rights.

                                       10
<PAGE>

         (b) ORGANIZATION AND QUALIFICATION. The Company and each Subsidiary are
duly incorporated or otherwise organized,  validly existing and in good standing
under the laws of the  jurisdiction of its  incorporation  or  organization  (as
applicable),  with  the  requisite  power  and  authority  to own  and  use  its
properties  and  assets and to carry on its  business  as  currently  conducted.
Neither the Company nor any  Subsidiary is in violation of any of the provisions
of its  respective  certificate  or articles of  incorporation,  bylaws or other
organizational  or charter  documents.  The Company and each Subsidiary are duly
qualified to conduct its  respective  businesses  and are in good  standing as a
foreign  corporation or other entity in each jurisdiction in which the nature of
the  business  conducted  or  property  owned  by it  makes  such  qualification
necessary,  except where the failure to be so qualified or in good standing,  as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

         (c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite corporate
power and  authority,  and is  authorized,  pursuant  to the Joint  Plan and the
Confirmation   Order,   to  enter  into  and  to  consummate  the   transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations  thereunder.  The execution and delivery of each of the  Transaction
Documents  by  the  Company  and  the  consummation  by it of  the  transactions
contemplated  thereby have been duly  authorized by all necessary  action on the
part of the  Company  and no  further  action  is  required  by the  Company  in
connection therewith.  Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when  delivered in accordance  with
the terms  hereof,  will  constitute  the valid and  binding  obligation  of the
Company  enforceable against the Company in accordance with its terms, except as
such  enforceability  may  be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting  generally the  enforcement of,  creditors'  rights and remedies or by
other equitable principles of general application.

         (d) NO  CONFLICTS.  The  execution,  delivery  and  performance  of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated  thereby  do not and  will not (i)  conflict  with or
violate any  provision  of the  Company's  or any  Subsidiary's  certificate  or
articles of incorporation,  bylaws or other organizational or charter documents,
or (ii) conflict  with, or constitute a default (or an event that with notice or
lapse of time or both  would  become a  default)  under,  or give to others  any
rights of termination,  amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument  (evidencing  a Company or  Subsidiary  debt or  otherwise)  or other
understanding  to which the Company or any Subsidiary is a party or by which any
property  or asset of the Company or any  Subsidiary  is bound or  affected,  or
(iii)  result in a violation  of any law,  rule,  regulation,  order,  judgment,
injunction,  decree or other restriction of any court or governmental  authority
to which the Company or a  Subsidiary  is subject  (including  federal and state
securities  laws and  regulations),  or by which  any  property  or asset of the
Company  or a  Subsidiary  is bound or  affected;  except in the case of each of
clauses (ii) and (iii),  such as could not,  individually  or in the  aggregate,
have or reasonably be expected to result in a Material Adverse Effect.  Payments
of cash on account of principal of or interest  under the Notes,  upon any Event
of  Default  under  the  Notes,  as a result  of  liquidated  damages  under any
Transaction  Document  or upon a Buy-In  under and as such term is  defined in a
Warrant will not require the consent of, any payment to, or the springing of any
Lien in favor of any lender to or  creditor  of the  Company  or any  Subsidiary
(under a credit facility,  loan agreement or otherwise) and will not result in a
default under any such credit facilities, loans or other agreements.

                                       11
<PAGE>

         (e)  FILINGS,  CONSENTS AND  APPROVALS.  The Company is not required to
obtain any consent,  waiver,  authorization  or order of, give any notice to, or
make any filing or registration  with, any court or other federal,  state, local
or  other  governmental  authority  or  other  Person  in  connection  with  the
execution, delivery and performance by the Company of the Transaction Documents,
other  than (i) the  filing  with  the  Commission  of one or more  Registration
Statements in accordance with the requirements  Registration  Rights  Agreement,
(ii) filings  required by state securities laws, (iii) the filing of a Notice of
Sale of  Securities  on Form D with the  Commission  under  Regulation  D of the
Securities  Act (iv) the filings  required in  accordance  with  Section 4.7 and
4.10,  and (iv) those that have been made or obtained  prior to the date of this
Agreement.

         (f)  ISSUANCE  OF  THE  SECURITIES.   The  Securities  have  been  duly
authorized  and,  when issued and paid for in  accordance  with the  Transaction
Documents,  will be duly and validly issued, fully paid and nonassessable,  free
and clear of all  Liens.  The  Company  has  reserved  from its duly  authorized
capital stock a number of shares of Common Stock issuable upon conversion of the
Notes and upon  exercise  of the  Warrants  to be issued at the  Closing,  which
number of reserved shares is not less than the Required Minimum calculated as of
the date hereof.

         (g)  CAPITALIZATION.  The number of shares and type of all  authorized,
issued and  outstanding  capital stock of the Company,  and all shares of Common
Stock  reserved for issuance  under the Company's  various  option and incentive
plans, is specified in the SEC Reports.  Except as specified in the SEC Reports,
no securities of the Company are entitled to preemptive or similar  rights,  and
no  Person  has  any  right  of  first  refusal,   preemptive  right,  right  of
participation,   or  any  similar  right  to  participate  in  the  transactions
contemplated  by the  Transaction  Documents.  Except  as  specified  in the SEC
Reports, there are no outstanding options,  warrants,  scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments,  understandings  or  arrangements  by  which  the  Company  or  any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights  convertible or  exchangeable  into shares of Common Stock.
The issue and sale of the Securities  will not,  immediately or with the passage
of  time,  obligate  the  Company  to  issue  shares  of  Common  Stock or other
securities  to any Person  (other than the  Investors)  and will not result in a
right of any holder of Company  securities to adjust the  exercise,  conversion,
exchange or reset price under such securities.

                                       12
<PAGE>

         (h) SEC  REPORTS;  FINANCIAL  STATEMENTS.  The  Company  has  filed all
reports,  forms  or other  information  required  to be  filed  by it under  the
Securities  Act and the Exchange  Act,  including  pursuant to Section  13(a) or
15(d) thereof,  for the twelve months preceding the date hereof (or such shorter
period as the Company was required by law to file such reports)  (the  foregoing
materials  being  collectively  referred  to  herein as the "SEC  REPORTS"  and,
together  with  the  Schedules  to this  Agreement  (if  any),  the  "DISCLOSURE
MATERIALS") on a timely basis or has timely filed a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension.  As of  their  respective  dates,  the SEC  Reports  complied  in all
material  respects with the  requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder,  and
none of the SEC  Reports,  when  filed,  contained  any  untrue  statement  of a
material fact or omitted to state a material fact required to be stated  therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances  under  which  they  were  made,  not  misleading.  The  financial
statements  of the Company  included in the SEC Reports  comply in all  material
respects with applicable  accounting  requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing.  Such
financial  statements  have been prepared in  accordance  with GAAP applied on a
consistent  basis  during  the  periods  involved,  except  as may be  otherwise
specified in such financial  statements or the notes thereto, and fairly present
in all  material  respects  the  financial  position  of  the  Company  and  its
consolidated  Subsidiaries  as of and for the dates  thereof  and the results of
operations  and cash flows for the periods then ended,  subject,  in the case of
unaudited statements,  to normal,  immaterial,  year-end audit adjustments.  For
purposes of this Agreement,  any reports, forms or other information provided to
the Commission whether by filing, furnishing or otherwise providing, is included
in the term "filed" (or any derivations thereof).

         (i) PRESS  RELEASES.  The press  releases  disseminated  by the Company
during the twelve months  preceding the date of this Agreement  taken as a whole
do not  contain  any  untrue  statement  of a  material  fact or omit to state a
material  fact  required to be stated  therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made and
when made, not misleading.

         (j) MATERIAL  CHANGES.  Since the date of the latest audited  financial
statements included within the SEC Reports,  except as specifically disclosed in
the SEC Reports or in the Disclosure Statement or other documents filed with the
Bankruptcy Court in connection with the Joint Plan, (i) there has been no event,
occurrence or development  that has had or that could  reasonably be expected to
result in a Material  Adverse  Effect,  (ii) the  Company has not  incurred  any
liabilities  (contingent or otherwise)  other than (A) trade  payables,  accrued
expenses  and other  liabilities  incurred  in the  ordinary  course of business
consistent with past practice and (B) liabilities (not to exceed  [$50,000]) not
required to be reflected in the Company's financial  statements pursuant to GAAP
or required  to be  disclosed  in filings  made with the  Commission,  (iii) the
Company  has not  altered  its  method  of  accounting  or the  identity  of its
auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements  to purchase or redeem any shares of its capital  stock,  and (v) the
Company  has not  issued any  equity  securities  to any  officer,  director  or
Affiliate, except pursuant to existing Company stock option plans and consistent
with past practice.  The Company does not have pending before the Commission any
request for confidential treatment of information.

                                       13
<PAGE>

         (k)  LITIGATION.  There is no Action  which (i)  adversely  affects  or
challenges the legality,  validity or  enforceability  of any of the Transaction
Documents or the Securities or (ii) except as specifically  disclosed in the SEC
Reports  or in the  Disclosure  Statement  or  other  documents  filed  with the
Bankruptcy  Court in  connection  with the Joint Plan,  would,  if there were an
unfavorable  decision,  individually or in the aggregate,  have or reasonably be
expected  to result in a Material  Adverse  Effect.  Neither the Company nor any
Subsidiary,  nor any  director  or officer  thereof  (in his or her  capacity as
such),  is or has been the subject of any Action  involving a claim of violation
of or liability  under federal or state  securities laws or a claim of breach of
fiduciary duty,  except as  specifically  disclosed in the SEC Reports or in the
Disclosure  Statement  or other  documents  filed with the  Bankruptcy  Court in
connection with the Joint Plan.  There has not been, and to the knowledge of the
Company,  there is not pending any investigation by the Commission involving the
Company or any  current or former  director or officer of the Company (in his or
her  capacity as such).  The  Commission  has not issued any stop order or other
order suspending the  effectiveness  of any registration  statement filed by the
Company or any Subsidiary under the Exchange Act or the Securities Act.

         (l) LABOR  RELATIONS.  No  material  labor  dispute  exists  or, to the
knowledge of the Company,  is imminent  with respect to any of the  employees of
the Company.

         (m)  COMPLIANCE.  Neither  the  Company  nor any  Subsidiary  (i) is in
default  under or in violation  of (and no event has occurred  that has not been
waived that, with notice or lapse of time or both,  would result in a default by
the Company or any  Subsidiary  under),  nor has the  Company or any  Subsidiary
received  notice  of a  claim  that  it is in  default  under  or  that it is in
violation of, any indenture,  loan or credit agreement or any other agreement or
instrument  to which it is a party  or by which it or any of its  properties  is
bound  (whether or not such default or violation  has been  waived),  (ii) is in
violation of any order of any court,  arbitrator or governmental  body, or (iii)
is or  has  been  in  violation  of  any  statute,  rule  or  regulation  of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection,  occupational health
and safety, product quality and safety and employment and labor matters,  except
in each case as could not, individually or in the aggregate,  have or reasonably
be expected to result in a Material Adverse Effect. The Company is in compliance
with all effective  requirements of the  Sarbanes-Oxley Act of 2002, as amended,
and the rules and  regulations  thereunder,  that are  applicable  to it, except
where such noncompliance could not have or reasonably be expected to result in a
Material Adverse Effect.

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

                                       14
<PAGE>

         (o) TITLE TO ASSETS.  The  Company and the  Subsidiaries  have good and
marketable  title in fee  simple  to all  real  property  owned by them  that is
material to their respective businesses and good and valid title in all personal
property owned by them that is material to their respective businesses,  in each
case free and clear of all Liens,  except for Permitted  Liens and Liens that do
not materially affect the value of such property and do not materially interfere
with the use made and  proposed  to be made of such  property by the Company and
the  Subsidiaries.  Any real  property  and  facilities  held under lease by the
Company  and the  Subsidiaries  are held by them  under  valid,  subsisting  and
enforceable  leases of which the Company and the Subsidiaries are in compliance,
except as could not,  individually  or in the  aggregate,  have or reasonably be
expected to result in a Material Adverse Effect.

         (p) PATENTS AND TRADEMARKS.  The Company and the Subsidiaries  have, or
have rights to use,  all patents,  patent  applications,  trademarks,  trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights  that  are  necessary  or  material  for  use in  connection  with  their
respective  businesses  as described in the SEC Reports and which the failure to
so have could,  individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect (collectively, the "INTELLECTUAL PROPERTY
RIGHTS").  Neither the Company nor any  Subsidiary has received a written notice
that the  Intellectual  Property  Rights used by the  Company or any  Subsidiary
violates or infringes upon the rights of any Person.  Except as set forth in the
SEC Reports or in the  Disclosure  Statement or other  documents  filed with the
Bankruptcy  Court in  connection  with the Joint Plan,  to the  knowledge of the
Company,  all such Intellectual  Property Rights are enforceable and there is no
existing  infringement  by another  Person of any of the  Intellectual  Property
Rights.

         (q) INSURANCE. The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the  businesses in which the Company and
the Subsidiaries are engaged.  The Company has no reason to believe that it will
not be able to renew its and the Subsidiaries'  existing  insurance  coverage as
and when such  coverage  expires  or to obtain  similar  coverage  from  similar
insurers as may be necessary to continue its business on terms  consistent  with
market for the Company's and such Subsidiaries' respective lines of business.

         (r) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES.  Except as set forth in
the SEC  Reports,  none of the  officers or directors of the Company and, to the
knowledge  of the Company,  none of the  employees of the Company is presently a
party to any  transaction  with the  Company or any  Subsidiary  (other than for
services  as  employees,  officers  and  directors),   including  any  contract,
agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer,  director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

                                       15
<PAGE>

         (s)  INTERNAL  ACCOUNTING  CONTROLS.  The Company and the  Subsidiaries
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurance  that (i)  transactions  are executed in  accordance  with
management's general or specific authorizations,  (ii) transactions are recorded
as necessary to permit  preparation of financial  statements in conformity  with
GAAP and to maintain asset  accountability,  (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the recorded  accountability  for assets is compared with the existing assets at
reasonable  intervals  and  appropriate  action  is taken  with  respect  to any
differences.  The Company has established disclosure controls and procedures (as
defined in  Exchange  Act Rules  13a-15(e)  and  15d-15(e))  for the Company and
designed  such  disclosure  controls  and  procedures  to ensure  that  material
information relating to the Company,  including its Subsidiaries,  is made known
to the certifying officers by others within those entities,  particularly during
the period in which the Company's Form 10-KSB or 10-QSB,  as the case may be, is
being   prepared.   The  Company's   certifying   officers  have  evaluated  the
effectiveness  of the Company's  controls and procedures in accordance with Item
307 of  Regulation  S-K under the Exchange Act for the  Company's  most recently
ended fiscal quarter or fiscal year-end (such date, the "EVALUATION  DATE"). The
Company  presented  in its most  recently  filed Form  10-KSB or Form 10-QSB the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures  based on their  evaluations as of the Evaluation  Date.
Since the Evaluation Date, there have been no changes in the Company's  internal
controls  that would be  required  to be  disclosed  pursuant  to Item 308(c) of
Regulation S-K under the Exchange Act or, to the Company's  knowledge,  in other
factors that could  reasonably be expected to have a Material  Adverse Effect on
the Company's internal controls.

         (t) SOLVENCY. Based on the financial condition of the Company as of the
Closing Date at issue (and assuming that such Closing shall have occurred),  (i)
the Company's  fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company's  existing  debts and other
liabilities  (including known contingent  liabilities) as they mature;  (ii) the
Company's  assets do not constitute  unreasonably  small capital to carry on its
business  for the  current  fiscal year as now  conducted  and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements  of the business  conducted by the Company,  and projected  capital
requirements and capital  availability  thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets,  after taking into account all anticipated  uses of
the cash,  would be  sufficient  to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Company has no current  intention
to incur debts beyond its ability to pay such debts as they mature  (taking into
account  the  timing  and  amounts of cash to be payable on or in respect of its
debt).

         (u) CERTAIN FEES. No brokerage or finder's fees or  commissions  are or
will be payable by the Company to any broker,  financial  advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the  transactions  contemplated by this  Agreement.  The Investors shall have no
obligation  with respect to any fees or with  respect to any claims  (other than
such fees or  commissions  owed by a Investor  pursuant  to  written  agreements
executed  by  such  Investor  which  fees  or  commissions  shall  be  the  sole
responsibility  of such Investor) made by or on behalf of other Persons for fees
of a type  contemplated  in this Section that may be due in connection  with the
transactions contemplated by this Agreement.

                                       16
<PAGE>

         (v)  CERTAIN  REGISTRATION  MATTERS.   Assuming  the  accuracy  of  the
Investors'  representations and warranties set forth in Section  3.2(b)-(e),  no
registration  under the Securities Act is required for the offer and sale of the
Securities by the Company to the Investors under the Transaction Documents.  The
Company is eligible to register the resale of its Common Stock for resale by the
Investors under Form SB-2 promulgated  under the Securities Act. The Company has
not granted or agreed to grant to any Person any rights (including  "piggy-back"
registration  rights) to have any securities of the Company  registered with the
Commission or any other  governmental  authority that have not been satisfied or
exercised.

         (w) LISTING AND  MAINTENANCE  REQUIREMENTS.  Except as specified in the
SEC Reports,  the Company has not, in the two years  preceding  the date hereof,
received notice from any Trading Market to the effect that the Company is not in
compliance with the listing or maintenance requirements thereof. The Company is,
and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with the listing and maintenance requirements for continued
listing of the Common  Stock on the Trading  Market on which the Common Stock is
currently  listed or quoted.  The issuance and sale of the Securities  under the
Transaction  Documents  does not  contravene  the rules and  regulations  of the
Trading Market on which the Common Stock is currently  listed or quoted,  and no
approval of the  shareholders  of the  Company  thereunder  is required  for the
Company to issue and deliver to the Investors  the  Securities  contemplated  by
Transaction Documents.

         (x) INVESTMENT COMPANY. The Company is not, and is not an Affiliate of,
and immediately  following Closing will not have become, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.

         (y)  APPLICATION  OF  TAKEOVER  PROTECTIONS.  The Company has taken all
necessary  action,  if any, in order to render  inapplicable  any control  share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
Certificate of Incorporation  (or similar charter  documents) or the laws of its
state of  incorporation  that is or could become  applicable to the Investors or
shareholders  of the  Company  prior  to any  Closing  Date as a  result  of the
Investors and the Company  fulfilling  their  obligations  or  exercising  their
rights  under  the  Transaction  Documents,  including  without  limitation  the
Company's  issuance  of the  Securities  and  the  Investors'  ownership  of the
Securities.

         (z) NO ADDITIONAL  AGREEMENTS.  The Company does not have any agreement
or understanding with any Investor with respect to the transactions contemplated
by the  Transaction  Documents  other  than  as  specified  in  the  Transaction
Documents.

                                       17
<PAGE>

         (aa)  COMPLIANCE  WITH  ERISA.  (i) Each  member of the ERISA Group has
fulfilled its obligations  under the minimum funding  standards of ERISA and the
Code with respect to each Plan and is in  compliance  in all  material  respects
with the presently  applicable  provisions of ERISA and the Code with respect to
each Plan.  No member of the ERISA  Group has (i) sought a waiver of the minimum
funding  standard  under  Section  412 of the Code in respect of any Plan,  (ii)
failed to make any required contribution or payment to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan
or Benefit Arrangement,  which has resulted or could result in the imposition of
a Lien or the  posting of a bond or other  security  under  ERISA or the Code or
(iii)  incurred any liability  under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA.

                  (ii) The  benefit  plans not  covered  under  clause (a) above
(including profit sharing,  deferred compensation,  stock option, employee stock
purchase,  bonus,  retirement,  health  or  insurance  plans,  collectively  the
"BENEFIT  PLANS")  relating to the employees of the Company are duly  registered
where required by, and are in good standing in all material  respects under, all
applicable laws. All required  employer and employee  contributions and premiums
under the Benefit Plans to the date hereof have been made, the  respective  fund
or funds  established  under the  Benefit  Plans are funded in  accordance  with
applicable laws, and no past service funding liabilities exist thereunder.

                  (iii) No Benefit Plans have any unfunded  liabilities,  either
on a "going concern" or "winding up" basis and determined in accordance with all
applicable  laws and actuarial  practices and using  actuarial  assumptions  and
methods that are reasonable in the  circumstances.  No event has occurred and no
condition  exists with  respect to any Benefit  Plans that has resulted or could
reasonably  be expected to result in any  pension  plan having its  registration
revoked or wound up (in whole or in part) or  refused  for the  purposes  of any
applicable laws or being placed under the administration of any relevant pension
benefits  regulatory  authority or being  required to pay any taxes or penalties
(in any material amounts) under any applicable laws.

         (bb) TAXES.  All United States  federal,  state,  county,  municipality
local  or  foreign  income  tax  returns  and all  other  material  tax  returns
(including  foreign tax returns)  which are required to be filed by or on behalf
of the Company and each  Subsidiary  have been filed and all material  taxes due
pursuant to such returns or pursuant to any  assessment  received by the Company
and each Subsidiary have been paid except those being disputed in good faith and
for which adequate  reserves have been  established.  The charges,  accruals and
reserves on the books of the Company and each  Subsidiary in respect of taxes or
other governmental charges have been established in accordance with GAAP.

         (cc) ABSENCE OF ANY  UNDISCLOSED  LIABILITIES OR CAPITAL CALLS.  Except
for  litigation  described in the SEC Reports,  there are no  liabilities of the
Company or any Subsidiary of any kind whatsoever,  whether accrued,  contingent,
absolute,  determined,  determinable  or  otherwise,  and  there is no  existing
condition,  situation or set of circumstances which could reasonably be expected
to result in such a liability,  other than (i) those liabilities provided for in
the Company's financial statements and (ii) other undisclosed liabilities which,
individually  or in the aggregate,  could not have, or reasonably be expected to
result in, a Material Adverse Effect.

                                       18
<PAGE>

         (dd) SECURED  INDEBTEDNESS.  As of each Closing Date, other than as set
forth in SCHEDULE 3.1(DD), the Company has no Debt that is secured by any Lien.

         (ee) SENIORITY.  As of the date of this Agreement,  except as set forth
on SCHEDULE  3.1(EE),  no  indebtedness of the Company is senior to the Notes in
right of  payment,  whether  with  respect to interest  or upon  liquidation  or
dissolution, or otherwise.

         (ff)  DISCLOSURE.  The Company  confirms that neither it nor any Person
acting on its behalf has  provided  any  Investor  or its  respective  agents or
counsel with any information  that the Company  believes  constitutes  material,
non-public information except insofar as the existence and terms of the proposed
transactions hereunder may constitute such information.  The Company understands
and confirms that the Investors will rely on the foregoing  representations  and
covenants in effecting transactions in securities of the Company. All disclosure
provided  to  the  Investors  regarding  the  Company,   its  business  and  the
transactions  contemplated  hereby,  furnished  by or on behalf  of the  Company
(including  the  Company's  representations  and  warranties  set  forth in this
Agreement) are true and correct in all material  respects and do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the  statements  made  therein,  in light of the  circumstances
under which they were made, not misleading.

         3.2  REPRESENTATIONS  AND  WARRANTIES OF THE  INVESTORS.  Each Investor
hereby,  for itself and for no other  Investor,  represents  and warrants to the
Company as follows:

         (a) ORGANIZATION; AUTHORITY. Such Investor is an entity duly organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization with the requisite  corporate or partnership power and authority to
enter into and to consummate  the  transactions  contemplated  by the applicable
Transaction Documents and otherwise to carry out its obligations thereunder. The
execution,  delivery  and  performance  by  such  Investor  of the  transactions
contemplated  by this  Agreement  have been  duly  authorized  by all  necessary
corporate or, if such Investor is not a corporation,  such partnership,  limited
liability company or other applicable like action, on the part of such Investor.
Each of this  Agreement,  the  Registration  Rights  Agreement  and the Security
Agreement has been duly executed by such  Investor,  and when  delivered by such
Investor in accordance with terms hereof,  will constitute the valid and legally
binding obligation of such Investor,  enforceable  against it in accordance with
its  terms,   except  as  such  enforceability  may  be  limited  by  applicable
bankruptcy, insolvency, reorganization,  moratorium, liquidation or similar laws
relating to, or affecting  generally the enforcement of,  creditors'  rights and
remedies or by other equitable principles of general application.

         (b)  INVESTMENT  INTENT.  Such Investor is acquiring the  Securities as
principal for its own account for  investment  purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof, without
prejudice,  however,  to such Investor's right at all times to sell or otherwise
dispose of all or any part of such  Securities  in  compliance  with  applicable
federal  and  state  securities  laws.  Subject  to  the  immediately  preceding
sentence,  nothing contained herein shall be deemed a representation or warranty
by such Investor to hold the Securities for any period of time. Such Investor is
acquiring the Securities hereunder in the ordinary course of its business.  Such
Investor does not have any agreement or  understanding,  directly or indirectly,
with any Person to distribute any of the Securities.


                                       19
<PAGE>


         (c)  INVESTOR  STATUS.  At the  time  such  Investor  was  offered  the
Securities,  it was, and at the date hereof it is, an  "accredited  investor" as
defined  in Rule  501(a)  under  the  Securities  Act.  Such  Investor  is not a
registered broker-dealer under Section 15 of the Exchange Act.

         (d)  GENERAL   SOLICITATION.   Such  Investor  is  not  purchasing  the
Securities  as  a  result  of  any  advertisement,   article,  notice  or  other
communication  regarding the Securities published in any newspaper,  magazine or
similar media or broadcast over  television or radio or presented at any seminar
or any other general solicitation or general advertisement.

         (e)  ACCESS TO  INFORMATION.  Such  Investor  acknowledges  that it has
reviewed the Disclosure  Materials and has been afforded (i) the  opportunity to
ask such questions as it has deemed  necessary of, and to receive  answers from,
representatives  of the  Company  concerning  the  terms and  conditions  of the
offering  of the  Securities  and the  merits  and  risks  of  investing  in the
Securities;  (ii) access to information  about the Company and the  Subsidiaries
and their  respective  financial  condition,  results of  operations,  business,
properties,  management  and  prospects  sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is  necessary  to make an  informed  investment  decision  with  respect  to the
investment.  Neither such inquiries nor any other investigation  conducted by or
on behalf of such Investor or its representatives or counsel shall modify, amend
or affect such Investor's right to rely on the truth,  accuracy and completeness
of the  Disclosure  Materials and the Company's  representations  and warranties
contained in the Transaction Documents.

         (f) CERTAIN  TRADING  ACTIVITIES.  Such  Investor  has not  directly or
indirectly,  nor  has  any  Person  acting  on  behalf  of or  pursuant  to  any
understanding with such Investor,  engaged in any transactions in the securities
of the Company (including,  without  limitations,  any Short Sales involving the
Company's  securities)  since  the  earlier  to occur of (1) the time  that such
Investor was first  contacted by the Company or placement  agent  engaged by the
Company regarding an investment in the Company and (2) the 20th day prior to the
time that the transactions contemplated by this Agreement are publicly disclosed
by the Company. Such Investor covenants that neither it nor any Person acting on
its  behalf  or  pursuant  to any  understanding  with  it  will  engage  in any
transactions in the securities of the Company  (including  Short Sales) prior to
the time that the  transactions  contemplated  by this  Agreement  are  publicly
disclosed.  Notwithstanding the foregoing,  in the case of an Investor that is a
multi-managed  investment  vehicle whereby  separate  portfolio  managers manage
separate portions of such Investor's  assets and the portfolio  managers have no
actual  knowledge of the  investment  decisions  made by the portfolio  managers
managing other portions of such Investor's  assets, the representation set forth
above  shall  only apply with  respect to the  portion of assets  managed by the
portfolio  manager that made the investment  decision to purchase the Securities
covered by this Agreement.

                                       20
<PAGE>

         (g) INDEPENDENT  INVESTMENT  DECISION.  Such Investor has independently
evaluated  the merits of its  decision to purchase  Securities  pursuant to this
Agreement,  and such  Investor  confirms that it has not relied on the advice of
any other Investor's business and/or legal counsel in making such decision.

         The Company  acknowledges and agrees that no Investor has made or makes
any representations or warranties with respect to the transactions  contemplated
hereby other than those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

         4.1 (a) The Securities may only be disposed of in compliance with state
and federal  securities  laws. In connection with any transfer of the Securities
other than pursuant to an effective registration  statement,  to the Company, to
an Affiliate of an Investor or in connection  with a pledge as  contemplated  in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and substance
of which opinion shall be reasonably  satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred  Securities
under the Securities Act.

         (b)  Certificates  evidencing the Securities will contain the following
legend, until such time as they are not required under Section 4.1(c):

                  [NEITHER THESE  SECURITIES  NOR THE  SECURITIES  ISSUABLE UPON
                  CONVERSION   OR  EXERCISE  OF  THESE   SECURITIES   HAVE  BEEN
                  REGISTERED]  [THESE  SECURITIES HAVE NOT BEEN REGISTERED] WITH
                  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE  SECURITIES
                  COMMISSION  OF ANY STATE IN RELIANCE  UPON AN  EXEMPTION  FROM
                  REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                  "SECURITIES  ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED OR
                  SOLD EXCEPT  PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT
                  UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
                  FROM,  OR IN A  TRANSACTION  NOT SUBJECT TO, THE  REGISTRATION
                  REQUIREMENTS  OF THE  SECURITIES  ACT AND IN  ACCORDANCE  WITH
                  APPLICABLE  STATE  SECURITIES  LAWS  AS  EVIDENCED  BY A LEGAL
                  OPINION OF  COUNSEL  TO THE  TRANSFEROR  TO SUCH  EFFECT,  THE
                  SUBSTANCE  OF WHICH  SHALL  BE  REASONABLY  ACCEPTABLE  TO THE
                  COMPANY.  [THESE  SECURITIES AND THE SECURITIES  ISSUABLE UPON
                  CONVERSION OR EXERCISE OF THESE SECURITIES] [THESE SECURITIES]
                  MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT
                  SECURED BY SUCH SECURITIES.

                                       21
<PAGE>

         The Company  acknowledges  and agrees that an Investor may from time to
time pledge,  and/or grant a security  interest in some or all of the Securities
pursuant to a bona fide margin  agreement in connection  with a bona fide margin
account  and, if required  under the terms of such  agreement  or account,  such
Investor may transfer  pledged or secured  Securities to the pledgees or secured
parties.  Such a pledge or transfer  would not be subject to approval or consent
of the Company and no legal  opinion of legal  counsel to the  pledgee,  secured
party or pledgor shall be required in connection with the pledge, but such legal
opinion may be required  in  connection  with a  subsequent  transfer  following
default by the Investor transferee of the pledge. No notice shall be required of
such pledge. At the appropriate Investor's expense, the Company will execute and
deliver  such  reasonable  documentation  as  a  pledgee  or  secured  party  of
Securities may reasonably request in connection with a pledge or transfer of the
Securities  including  the  preparation  and filing of any  required  prospectus
supplement  under  Rule  424(b)(3)  of the  Securities  Act or other  applicable
provision  of the  Securities  Act to  appropriately  amend the list of  selling
stockholders thereunder.

         (c) Certificates  evidencing Underlying Shares and Warrant Shares shall
not contain any legend  (including the legend set forth in Section 4.1(b)):  (i)
while a registration  statement (including the Registration  Statement) covering
such Underlying Shares or Warrant Shares is then effective,  or (ii) following a
sale  or  transfer  of  such  Securities  pursuant  to Rule  144  (assuming  the
transferor is not an Affiliate of the Company),  or (iii) while such  Securities
are eligible  for sale under Rule 144(k).  The Company may not make any notation
on its records or give  instructions  to any transfer  agent of the Company that
enlarge the  restrictions  on transfer  set forth in this  Section.  The Company
agrees  that  it  shall,  within  three  Trading  Days  following  such  time as
restrictive legends would not then be required under this Section 4.1(c),  issue
and deliver to such Investor  certificates that are free of restrictive  legends
representing  Underlying  Shares or Warrant  Shares in replacement of Underlying
Shares or Warrant Shares previously issued with restrictive legends.

         4.2  FURNISHING  OF  INFORMATION.  As long  as any  Investor  owns  the
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the  Company  after  the date  hereof  pursuant  to the
Exchange  Act. As long as any Investor  owns  Securities,  if the Company is not
required to file reports  pursuant to such laws,  it will prepare and furnish to
the Investors and make  publicly  available in accordance  with Rule 144(c) such
information as is required for the Investors to sell the  Underlying  Shares and
Warrant Shares under Rule 144. The Company  further  covenants that it will take
such further action as any holder of Securities may reasonably  request,  all to
the  extent  required  from  time to time to  enable  such  Person  to sell  the
Underlying Shares and Warrant Shares without  registration  under the Securities
Act within the limitation of the exemptions provided by Rule 144.

                                       22
<PAGE>

         4.3  LISTING OF  SECURITIES.  The  Company  agrees,  (i) if the Company
applies to have the Common Stock  traded on any other  Trading  Market,  it will
include in such application the Underlying  Shares and Warrant Shares,  and will
take such other action as is  necessary  or  desirable  to cause the  Underlying
Shares and Warrant  Shares to be listed on such other Trading Market as promptly
as possible,  and (ii) it will take all action reasonably  necessary to continue
the listing and trading of its Common Stock on a Trading  Market and will comply
in all  material  respects  with  the  Company's  reporting,  filing  and  other
obligations under the bylaws or rules of the Trading Market.

         4.4 SUBSEQUENT SECURITIES OFFERINGS.

         (a)  During  such time as an  Investor  holds any  principal  amount of
Notes, in the event the Company,  directly or indirectly,  offers, sells, grants
any option to purchase,  or otherwise disposes of (or announces any offer, sale,
grant or any option to purchase or other  disposition  of any of Common Stock or
Common  Stock  Equivalents  or any of its  Subsidiaries'  equity or Common Stock
Equivalents (such offer, sale, grant, disposition or announcement being referred
to as  "SUBSEQUENT  PLACEMENT"),  the Company  shall  deliver to each Investor a
written  notice  (each,  a  "SUBSEQUENT  PLACEMENT  NOTICE") of its intention to
effect such Subsequent  Placement,  which specifies in reasonable  detail all of
the material terms of such Subsequent Placement, the amount of proceeds intended
to be raised  thereunder,  the names of the investors  (including the investment
manager of such  investors,  if any) and the  investment  bankers with whom such
Subsequent Placement is proposed to be effected,  and attached to which shall be
a term sheet or similar document.  Each Investor shall have until 6:30 p.m. (New
York City time) on the fifth  Trading  Day after its  respective  receipt of the
Subsequent  Placement  Notice to notify  Company of its  intention  to  provide,
subject to completion of mutually acceptable documentation,  in all or a portion
of such  financing  on the same terms as set forth in the  Subsequent  Placement
Notice.  In the event  that the  Investors  do not timely  elect to provide  the
entire  financing  subject to the  Subsequent  Placement  Notice and the Company
shall not have  consummated  the portion of the  Subsequent  Placement for which
such  elections  shall not have  been so made on the  terms  and to the  Persons
specified  in the  Subsequent  Placement  Notice  within 30 days  following  the
expiration of the time to so elect, the Company shall provide each Investor with
a second Subsequent Placement Notice and each Investor will again have the right
of first  refusal set forth in this Section.  If the  Investors  indicate in the
aggregate a willingness  to provide  financing in excess of the amount set forth
in the  Subsequent  Placement  Notice,  then each  Investor  will be entitled to
provide financing  pursuant to such Subsequent  Placement Notice up to an amount
of all such proceeds equal to such Investor's pro rata portion of all Investment
Amounts hereunder.

         (b) The Company's obligations under this Section 4.4 shall not apply to
any grant or issuance by the Company of any of the  following:  (i) the issuance
of securities  upon the exercise or  conversion of any Common Stock  Equivalents
issued by the Company prior to the date of this Agreement (but will apply to any
amendments, modifications and reissuances thereof), (ii) the grant of options or
warrants,  or the issuance of additional  securities,  under any duly authorized
Company stock option,  restricted  stock plan or stock purchase plan whether now
existing or approved by the Company and its  stockholders in the future (but not
as to any  amendments  or other  modifications  to the  number of  Common  Stock
issuable  thereunder,  the terms set forth  therein,  or the exercise  price set
forth therein, unless such amendments or other modifications are approved by the
Company's  stockholders),  or (iii) the  issuance  of Common  Stock  Equivalents
pursuant to a Strategic Transaction. 4.5 ACKNOWLEDGMENT OF DILUTION. The Company
acknowledges that the issuance of Underlying Shares upon conversion of Notes and
Warrant  Shares  upon  exercise  of  Warrants  will  result in  dilution  of the
outstanding  shares of Common  Stock,  which  dilution may be  substantial.  The
Company further  acknowledges that its obligation to honor conversions under the
Notes is  unconditional  and  absolute  and not subject to any right of set off,
counterclaim,  delay or reduction, regardless of the effect of any such dilution
or any claim that the Company may have against any Investor.

                                       23
<PAGE>

         4.6 INTEGRATION.  The Company shall not, and shall use its best efforts
to ensure  that no  Affiliate  of the  Company  shall,  sell,  offer for sale or
solicit  offers to buy or  otherwise  negotiate  in respect of any  security (as
defined in Section 2 of the  Securities  Act) that would be integrated  with the
offer or sale of the Securities in a manner that would require the  registration
under the Securities Act of the sale of the Securities to the Investors, or that
would be integrated with the offer or sale of the Securities for purposes of the
rules and  regulations  of any  Trading  Market in a manner  that would  require
stockholder approval of the sale of the Securities to the Investors.

         4.7  RESERVATION  OF SHARES.  The Company shall maintain a reserve from
its duly  authorized  shares  of  Common  Stock to  comply  with its  conversion
obligations  under the Notes.  If on any date the Company would be, if notice of
conversion were to be delivered on such date,  precluded from issuing the number
of (i) Underlying  Shares,  as the case may be, issuable upon conversion in full
of the Notes or (ii) Warrant Shares,  as the case may be, issuable upon exercise
in full of the Warrants,  due to the  unavailability  of a sufficient  number of
authorized  but unissued or reserved  shares of Common Stock,  then the Board of
Directors of the Company shall promptly  prepare and mail to the stockholders of
the  Company  proxy   materials  or  other   applicable   materials   requesting
authorization  to amend the  Company's  certificate  of  incorporation  or other
organizational  document to increase  the number of shares of Common Stock which
the Company is authorized  to issue so as to provide  enough shares for issuance
of the Underlying Shares and Warrant Shares. In connection therewith,  the Board
of Directors shall (a) adopt proper resolutions  authorizing such increase,  (b)
recommend  to and  otherwise  use its best  efforts to promptly  and duly obtain
stockholder  approval to carry out such  resolutions (and hold a special meeting
of the stockholders as soon as practicable,  but in any event not later than the
60th day after delivery of the proxy or other applicable  materials  relating to
such meeting) and (c) within five Business  Days of obtaining  such  stockholder
authorization,  file an  appropriate  amendment to the Company's  certificate of
incorporation or other organizational document to evidence such increase.

         4.8 CONVERSION  PROCEDURES.  The form of Conversion  Notice included in
and as defined in the Notes sets forth the totality of the  procedures  required
by the  Investors  in order to  convert  the  Notes.  The  Company  shall  honor
conversions of the Notes and shall deliver  Underlying Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.

                                       24
<PAGE>

         4.9 SUBSEQUENT  REGISTRATIONS.  Other than pursuant to the Registration
Statement,   prior  to  the  Effective  Date,  the  Company  may  not  file  any
registration statement with the Commission with respect to any securities of the
Company  other  than  registration  statements  on Form S-8  promulgated  by the
Commission.

         4.10 SECURITIES LAWS DISCLOSURE; PUBLICITY. By 9:00 a.m. (New York City
time) on the Trading Day following the execution of this Agreement,  and by 9:00
a.m. (New York City time) on the Trading Day  following  the Closing  Date,  the
Company shall issue press releases in forms approved by the Investors disclosing
the transactions contemplated hereby. On the Trading Day following the execution
of this  Agreement the Company will file a Current Report on Form 8-K disclosing
the material terms of the Transaction  Documents (and attach as exhibits thereto
the  Transaction  Documents),  and on the Trading Day following the Closing Date
the Company will file an additional  Current  Report on Form 8-K to disclose the
Closing.  In addition,  the Company will make such other  filings and notices in
the manner and time required by the  Commission  and the Trading Market on which
the Common Stock is listed. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Investor,  or include the name of any Investor
in any filing with the Commission (other than the Registration Statement and any
exhibits  to filings  made in respect of this  transaction  in  accordance  with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market,  without the prior written  consent of such Investor,  except to
the extent such disclosure is required by law or Trading Market regulations.

         4.11 LIMITATION ON ISSUANCE OF FUTURE PRICED SECURITIES. During the six
months  following  the Closing  Date,  the  Company  shall not issue any "Future
Priced Securities" as such term is described by NASD IM-4350-1.

         4.12  INDEMNIFICATION  OF  INVESTORS.  In  addition  to  the  indemnity
provided in the Registration  Rights  Agreement,  the Company will indemnify and
hold the  Investors  and  their  directors,  officers,  shareholders,  partners,
employees  and agents  (each,  an "INVESTOR  PARTY")  harmless  from any and all
losses,  liabilities,  obligations,  claims,  contingencies,  damages, costs and
expenses, including all judgments, amounts paid in settlements,  court costs and
reasonable attorneys' fees and costs of investigation  (collectively,  "Losses")
that any such  Investor  Party may suffer or incur as a result of or relating to
any  misrepresentation,  breach or inaccuracy of any  representation,  warranty,
covenant  or  agreement  made by the  Company in any  Transaction  Document.  In
addition to the indemnity  contained  herein,  the Company will  reimburse  each
Investor Party for its reasonable  legal and other expenses  (including the cost
of any investigation,  preparation and travel in connection  therewith) incurred
in connection therewith, as such expenses are incurred.

                                       25
<PAGE>

         4.13  NON-PUBLIC  INFORMATION.  The Company  covenants  and agrees that
neither it nor any other  Person  acting on its behalf will provide any Investor
or its  agents  or  counsel  with  any  information  that the  Company  believes
constitutes material non-public information,  unless prior thereto such Investor
shall have executed a written agreement regarding the confidentiality and use of
such information.

         4.14 USE OF PROCEEDS.  The Company  will use the net proceeds  from the
sale of the  Securities  hereunder  only for  working  capital  purposes  and to
satisfy the Company's obligations under the Joint Plan.

         4.15 PAYMENT OF CASH DIVIDEND.  The Company  agrees,  so long as any of
the Notes are  outstanding,  not to declare,  pay or make any  provision for any
cash dividend or  distribution  with respect to the Common Stock of the Company,
without first obtaining the approval of the Required Investors.

         4.16 EXISTENCE;  CONDUCT OF BUSINESS.  The Company will, and will cause
each of the  Subsidiaries  to, do or cause to be done all  things  necessary  to
preserve,  renew and keep in full force and effect its legal  existence  and the
rights, licenses,  permits, privileges and franchises material to the conduct of
its  business,  PROVIDED,  that the  foregoing  shall not prohibit (a) any sale,
lease,  transfer or other  disposition  permitted by this Agreement,  or (b) any
merger of (i) any domestic Subsidiary with any other domestic  Subsidiary,  (ii)
any  domestic  Subsidiary  with and  into the  Company,  or  (iii)  any  foreign
Subsidiary with any other foreign Subsidiary.

                                   ARTICLE V.
                               NEGATIVE COVENANTS

         The Company  hereby  agrees that,  from and after the date hereof until
the date  that the Notes  have  either  been  repaid  in their  entirety  and/or
converted  entirely into Common Stock,  the Company shall be bound  according to
the  restrictions set forth in each of the following  negative  covenants unless
any such restriction shall have been expressly waived in writing by the Required
Investors:

         5.1 RESTRICTIONS ON CERTAIN AMENDMENTS.  The Company will not amend the
rights and privileges granted under the Notes, to adversely affect the rights or
privileges granted under the Notes.

         5.2  RESTRICTED  PAYMENT.  The  Company  shall not make any  Restricted
Payment.

         5.3 DEBT.  The Company shall not create,  incur,  assume,  become or be
liable in any manner in  respect  of, or suffer to exist,  any Debt,  except (a)
Debt in  existence on the date hereof,  as shown on Schedule  5.3(a),  (b) trade
payables  incurred and paid in the ordinary  course of business,  (c) Contingent
Liabilities in existence on the date hereof,  as shown on Schedule  5.3(c),  and
(d)  Contingent   Liabilities  resulting  from  the  endorsement  of  negotiable
instruments for collection in the ordinary course of business  (collectively (a)
through (d) shall be referred to as the "PERMITTED INDEBTEDNESS").

                                       26
<PAGE>

         5.4  LIENS.  The  Company  shall not create or suffer to exist any Lien
upon any of its properties,  except (a) Liens created by the Security Agreement,
(b)  Liens in  existence  on the date  hereof,  as  disclosed  herein,  (c) tax,
mechanics',  materialmen's,  warehousemen's,  laborer's  and  landlord and other
similar Liens relating to amounts that are not yet due and payable,  or that are
being  contested in good faith by  appropriate  proceedings,  for which adequate
reserves have been  established,  (d) Liens  incurred in the ordinary  course of
business in connection  with worker's  compensation,  unemployment  insurance or
similar legislation and (e) Liens to secure the Permitted Indebtedness, provided
that (x) any  Lien  securing  any  purchase  money  financing  shall be  created
substantially  simultaneously  with the  acquisition  of such  fixed or  capital
asset,  (y) such Liens do not at any time  encumber any property  other than the
property  that is the  subject  of the  purchase  money  financing,  and (z) the
principal  amount of Debt secured by any such purchase money  financing shall at
no time exceed one hundred percent (100%) of the original purchase price of such
property at the time it was  acquired.  Except as provided in this  Section 5.4,
the Company shall not hereafter agree with any Person (other than the Investors)
to grant a Lien on any of its  assets  or to  permit  the  pledge  of any of its
equity interests.

         5.5 AMENDMENT OF ORGANIZATIONAL DOCUMENTS. The Company shall not permit
any  amendment to its articles of  incorporation  so as to adversely  affect the
rights or privileges granted under the Notes.

         5.6  SALE  AND  LEASEBACK.   The  Company  shall  not  enter  into  any
arrangement  whereby it sells or  transfers  any of its assets,  and  thereafter
rents or leases such assets.

         5.7  BUSINESS.  The Company shall not change the nature of its business
as now conducted (as described in the SEC Reports).

         5.8 TRANSACTIONS  WITH AFFILIATES.  The Company shall not,  directly or
indirectly, pay any funds to or for the account of, make any investment (whether
by acquisition of stock or indebtedness, by loan, advance, transfer of property,
guarantee  or  other  agreement  to  pay,  purchase  or  service,   directly  or
indirectly,  any Debt, or  otherwise)  in,  lease,  sell,  transfer or otherwise
dispose of any assets, tangible or intangible,  to, or participate in, or effect
any  transaction  in  connection  with  any  joint  enterprise  or  other  joint
arrangement  with, any Affiliate,  except, on terms no less favorable than terms
that could be obtained by the Company  from a Person that is not an Affiliate of
the Company upon negotiation at arms' length, as determined in good faith by the
Board;  PROVIDED  that no  determination  of the  Board  of  Directors  shall be
required  with  respect to any such  transactions  entered  into in the ordinary
course of business.

         5.9  LIMITATION ON  RESTRICTIONS.  The Company shall not enter into, or
suffer to exist,  any  agreement  with any Person which  prohibits or limits the
ability  of the  Company  to (a) pay  Debt  owed  to the  Investors,  except  as
expressly permitted by the Security Agreement, (b) make loans or advances to the
Company or (c) transfer any of its properties or assets to the Company.

                                       27
<PAGE>

                                  ARTICLE VI.
                                  MISCELLANEOUS

         6.1 FEES AND EXPENSES.  At the Closing,  the Company shall pay to Bryan
Cave LLP Four Hundred  Twenty-Five  Thousand  Dollars  ($425,000.00)  as partial
reimbursement  of Investors for their  respective  legal fees in the approximate
total amount of Five Hundred  Seventy-Five  Thousand  Dollars  ($575,000.00)  in
connection with the Transaction  Documents,  it being understood that Bryan Cave
LLP has only rendered  legal advice to Investors,  and not to the Company or any
other Investor in connection with the transactions contemplated hereby, and that
each of the Company and the other  Investors  has relied for such matters on the
advice of its own  respective  counsel.  Except as specified in the  immediately
preceding sentence,  each party shall pay the fees and expenses of its advisers,
counsel,  accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation,  preparation, execution, delivery and
performance of the  Transaction  Documents.  The Company shall pay all stamp and
other taxes and duties levied in connection with the sale of the Notes.

         6.2 ENTIRE  AGREEMENT.  The  Transaction  Documents,  together with the
Exhibits and Schedules thereto,  contain the entire understanding of the parties
with respect to the subject  matter hereof and  supersede all prior  agreements,
understandings,  discussions and representations,  oral or written, with respect
to such  matters,  which the  parties  acknowledge  have been  merged  into such
documents, exhibits and schedules.

         6.3 NOTICES.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication  is delivered via  facsimile  (provided the sender
receives a  machine-generated  confirmation of successful  transmission)  at the
facsimile  number  specified in this Section  prior to 5:30 p.m.  (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or  communication  is delivered  via  facsimile at the  facsimile
number  specified  in this  Section on a day that is not a Trading  Day or later
than 5:30 p.m.  (New York City time) on any  Trading  Day,  (c) the  Trading Day
following the date of mailing, if sent by U.S. nationally  recognized  overnight
courier service,  or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and  communications  shall be
as follows:

         If to the Company:  Epicus Communications Group, Inc.
                             1750 Osceola Drive
                             West Palm Beach, FL  33409
                             Facsimile:  561-688-1533
                             Attention:  Chief Financial Officer

         With a copy to:     Furr & Cohen, P.A.
                             One Boca Place
                             Suite 337W
                             2255 Glades Road
                             Boca Raton, FL 33431
                             Facsimile:  561-338-7532
                             Attention:  Alvin S. Goldstein

         If to an Investor:  To the address set forth under such Investor's name
                             on the signature pages hereof;


                                       28
<PAGE>


or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

         6.4 AMENDMENTS;  WAIVERS; NO ADDITIONAL CONSIDERATION.  No provision of
this Agreement may be waived or amended except in a written instrument signed by
the Company and the Required Investors except that the conditions  precedent set
forth in  Sections  2.1(b) and 2.2(b) may only be waived by each  Investor to be
bound by such waiver.  No waiver of any default  with respect to any  provision,
condition or requirement  of this  Agreement  shall be deemed to be a continuing
waiver in the  future or a waiver of any  subsequent  default or a waiver of any
other  provision,  condition  or  requirement  hereof,  nor  shall  any delay or
omission of either  party to exercise any right  hereunder in any manner  impair
the exercise of any such right. No consideration shall be offered or paid to any
Investor to amend or consent to a waiver or modification of any provision of any
Transaction  Document  unless  the same  consideration  is also  offered  to all
Investors who then hold Notes.  Without the written  consent or the  affirmative
vote of each Investor of  Securities  affected  thereby,  an amendment or waiver
under this Section 6.4 may not:

                  (a) change the  maturity  of the  principal  amount of, or the
interest  payment date under, or the payment of liquidated  damages,  is due on,
any Note or Warrant;

                  (b) make any change that  impairs the  conversion  or exercise
rights of any Securities;

                  (c) reduce the Event  Equity Value under the Notes or amend or
modify  in any  manner  adverse  to the  Holders  of  Securities  the  Company's
obligation to make such payments;

                  (d) amend the definition of Required Investors;

                  (e) change the  currency of any amount owed or owing under the
Securities or any interest  thereon from U.S.  Dollars;

                           (f) impair  the right of any  Investor  to  institute
suit for the  enforcement  of any  payment  with  respect to, or  conversion  or
exercise of, any Security; or

                           (g)  modify the  provisions  of this  Section  6.4 or
Section 6.5.

                                       29
<PAGE>

         It shall not be necessary for the consent of the  Investors  under this
Section 6.4 to approve the  particular  form of any proposed  amendment,  but it
shall be sufficient if such consent approves the substance thereof.

         6.5 TERMINATION. This Agreement may be terminated prior to the Closing:

         (a) by written agreement of the Investors and the Company;

         (b) by the Company or an Investor (as to itself but no other  Investor)
upon written  notice to the other,  if the Closing shall not have taken place by
5:30 p.m. (New York City time) on the Outside Date; PROVIDED,  that the right to
terminate this Agreement under this Section 6.5(b) shall not be available to any
Person whose  failure to comply with its  obligations  under this  Agreement has
been the cause of or  resulted  in the  failure  of the  Closing  to occur on or
before such time.

         (c) by an Investor (as to itself but no other Investor) if it concludes
in good  faith  that  any of the  conditions  precedent  contained  in  Sections
2.1(d)(iv),  (v) or (vi)  shall  have been  breached  or shall not be capable of
being  satisfied  by the Outside  Date  despite the assumed  best efforts of the
Company.

         In the event of a  termination  pursuant to this  Section,  the Company
shall  promptly  notify  all  non-terminating  Investors  and  shall  pay to the
terminating  Investor(s) all of the fees and expenses incurred by such Investors
(including reasonable legal fees and expenses) in connection with this Agreement
and the  transactions  contemplated  by this Agreement  through the  termination
date.  Other than as to the foregoing  fees and expenses,  upon a termination in
accordance  with this Section 6.5, the Company and the  terminating  Investor(s)
shall not have any further  obligation  or liability  (including as arising from
such  termination)  to the other and no Investor  will have any liability to any
other under the Transaction Documents Investor as a result therefrom.

         6.6 CONSTRUCTION.  The headings herein are for convenience only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict  construction  will be applied against any party. This Agreement
shall be construed as if drafted  jointly by the parties,  and no presumption or
burden of proof shall arise favoring or  disfavoring  any party by virtue of the
authorship  of any  provisions  of  this  Agreement  or  any of the  Transaction
Documents.

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

                                       30
<PAGE>

         6.8 NO  THIRD-PARTY  BENEFICIARIES.  This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person,  except as otherwise set forth in Section 4.12 (as to each
Investor Party).

         6.9 GOVERNING LAW. All questions concerning the construction, validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
agrees that all  Proceedings  concerning the  interpretations,  enforcement  and
defense  of the  transactions  contemplated  by this  Agreement  and  any  other
Transaction  Documents (whether brought against a party hereto or its respective
Affiliates,  employees or agents) shall be commenced exclusively in the New York
Courts.   Each  party  hereto  hereby  irrevocably   submits  to  the  exclusive
jurisdiction  of the  New  York  Courts  for  the  adjudication  of any  dispute
hereunder or in connection herewith or with any transaction  contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction Documents),  and hereby irrevocably waives, and agrees not to assert
in  any  Proceeding,  any  claim  that  it is  not  personally  subject  to  the
jurisdiction  of any such New  York  Court,  or that  such  Proceeding  has been
commenced  in an  improper  or  inconvenient  forum.  Each party  hereto  hereby
irrevocably  waives  personal  service of process and consents to process  being
served in any such  Proceeding  by  mailing a copy  thereof  via  registered  or
certified  mail or overnight  delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve  process in any manner  permitted  by law.  Each  party  hereto  hereby
irrevocably  waives,  to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions  contemplated  hereby.  If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document,  then
the prevailing  party in such Proceeding  shall be reimbursed by the other party
for its reasonable  attorneys'  fees and other costs and expenses  incurred with
the investigation, preparation and prosecution of such Proceeding.

         6.10  SURVIVAL.   The  representations,   warranties,   agreements  and
covenants  contained  herein  shall  survive the Closing and the delivery of the
Securities.

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

                                       31
<PAGE>

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

         6.13 RESCISSION AND WITHDRAWAL RIGHT.  Notwithstanding  anything to the
contrary  contained in (and  without  limiting  any similar  provisions  of) the
Transaction Documents, whenever any Investor exercises a right, election, demand
or option under a Transaction  Document and the Company does not timely  perform
its related obligations within the periods therein provided,  then such Investor
may rescind or withdraw,  in its sole  discretion from time to time upon written
notice to the Company,  any relevant  notice,  demand or election in whole or in
part without prejudice to its future actions and rights.

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

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

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

         6.17  INDEPENDENT  NATURE OF  INVESTORS'  OBLIGATIONS  AND RIGHTS.  The
obligations of each Investor under any Transaction  Document are several and not
joint with the  obligations  of any other  Investor,  and no  Investor  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Investor  under any  Transaction  Document.  The  decision  of each  Investor to
purchase Securities pursuant to the Transaction  Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction  Document,  and no action  taken by any Investor  pursuant  thereto,
shall be deemed to constitute the Investors as a partnership,  an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Investors  are in any way acting in  concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Documents. Each
Investor  acknowledges  that no other  Investor  has  acted  as  agent  for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such  Investor  in  connection  with  monitoring  its
investment  in the  Securities  or enforcing  its rights  under the  Transaction
Documents.  Each Investor shall be entitled to independently protect and enforce
its  rights,  including  without  limitation  the  rights  arising  out of  this
Agreement  or  out of the  other  Transaction  Documents,  and it  shall  not be
necessary  for any other  Investor  to be joined as an  additional  party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a  transaction  with  multiple  Investors  and not  because it was  required  or
requested to do so by any Investor.

                                       32
<PAGE>

         6.18  LIMITATION OF LIABILITY.  Notwithstanding  anything herein to the
contrary,  the Company acknowledges and agrees that the liability of an Investor
arising directly or indirectly,  under any Transaction Document of any and every
nature  whatsoever shall be satisfied solely out of the assets of such Investor,
and that no trustee, officer, other investment vehicle or any other Affiliate of
such  Investor or any  investor,  shareholder  or holder of shares of beneficial
interest of such a Investor  shall be personally  liable for any  liabilities of
such Investor.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGES FOLLOW]




                                       33
<PAGE>




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

                        EPICUS COMMUNICATIONS GROUP, INC.


                             By:_______________________________________
                                  Name:
                                  Title:


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




                                       34
<PAGE>




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

                           AJW PARTNERS, LLC
                           By:  SMS Group, LLC

                           /s/ Corey S. Ribotsky
                           ------------------------------------
                           Corey S. Ribotsky
                           Manager


                           RESIDENCE:  Delaware

                           ADDRESS: 1044 Northern Boulevard
                           Suite 302
                           Roslyn, New York  11576
                           Facsimile:  (516) 739-7115
                           Telephone:  (516) 739-7110

                           AGGREGATE SUBSCRIPTION AMOUNT:

                           Aggregate Principal Amount of Notes:$________
                           Number of Warrants:  ________
                           Aggregate Purchase Price:$________



                                       35
<PAGE>




                           AJW OFFSHORE, LTD.
                           By:  First Street Manager II, LLC


                           /s/ Corey S. Ribotsky
                           --------------------------------
                           Corey S. Ribotsky
                           Manager


                           RESIDENCE:            Cayman Islands

                           ADDRESS: AJW Offshore, Ltd.
                           P.O. Box 32021 SMB
                           Grand Cayman, Cayman Island B.W.I.

                           AGGREGATE SUBSCRIPTION AMOUNT:

                           Aggregate Principal Amount of Notes: $_______
                           Number of Warrants:  _______
                           Aggregate Purchase Price:  $_______



                                       36
<PAGE>





                           AJW QUALIFIED PARTNERS, LLC
                           By:  AJW Manager, LLC

                           /s/  Corey S. Ribotsky
                           --------------------------------------
                           Corey S. Ribotsky
                           Manager



                           RESIDENCE:            New York

                           ADDRESS: 1044 Northern Boulevard
                           Suite 302
                           Roslyn, New York  11576
                           Facsimile:        (516) 739-7115
                           Telephone:        (516) 739-7110


                           AGGREGATE SUBSCRIPTION AMOUNT:

                           Aggregate Principal Amount of Notes: $________
                           Number of Warrants:  ________
                           Aggregate Purchase Price:  $________




                                       37
<PAGE>



                           NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                           By: First Street Manager II, LLP

                           /s/ Corey S. Ribotsky
                           --------------------------------------
                           Corey S. Ribotsky
                           Manager



                           RESIDENCE: New York

                           ADDRESS: 1044 Northern Boulevard
                           Suite 302
                           Roslyn, New York 11576
                           Facsimile: (516) 739-7115
                           Telephone: (516) 739-7110


                           AGGREGATE SUBSCRIPTION AMOUNT:

                           Aggregate Principal Amount of Notes: $______
                           Number of Warrants: ______
                           Aggregate Purchase Price: $______



                                       38
<PAGE>



                                    EXHIBITS



Exhibit A         Notes

Exhibit B         Registration Rights Agreement

Exhibit C         Warrant

Exhibit D         Security Agreement



                                    SCHEDULES

3.1(a) LIST OF SUBSIDIARIES.

3.1(dd)           SECURED INDEBTEDNESS.  The BellSouth Cure Claim
                  (as that term is defined in the Joint Plan).

3.1(ee)           SENIORITY.  The BellSouth Cure Claim
                  (as that term is defined in the Joint Plan).

5.3(a)            DEBT.  BellSouth  Cure Claim (as that term is
                  defined in the Joint Plan);
                  claims of the Investors under the Old Debentures.

5.3(c)            CONTINGENT LIABILITIES.


                                       39



<PAGE>

                        Epicus Communications Group, Inc.
                               1750 Osceola Drive
                            West Palm Beach, FL 33409
                                December 7, 2005

To the Undersigned Parties:

Re: Amended and Restated Purchase Agreement

Gentlemen:

This letter confirms certain agreements among Epicus Communications Group, Inc.,
a Florida corporation ("Epicus"), and certain investors identified below (the
"INVESTORS") in connection with the Purchase Agreement by and among Epicus and
the Investors (the "PURCHASE AGREEMENT") as approved by that certain Order of
the United States Bankruptcy Court, Southern District of Florida, West Palm
Beach Division dated September 30, 2005 (the "ORDER") which authorized the
Debtors' First Amended Joint Plan of Reorganization (the "PLAN").

The parties hereto acknowledge and agree that they intend to close the
transactions described in the Order and Purchase Agreement on or about December
7, 2005 (the "CLOSING"), however, the Purchase Agreement and the documents
described therein are to be amended and restated to encompass the terms provided
on the term sheet attached hereto as Exhibit A (such agreements collectively
referred to as the "AMENDED AND RESTATED Agreements"). Epicus and its officers
agree to use their best efforts to deliver fully executed versions of the
Amended and Restated Agreements no later than December 12, 2005. Until such
execution and delivery, the Investors will disburse only those amounts provided
for in the Plan. Upon execution and delivery of the Amended and Restated
Agreements, the Investors shall advance such sums as are required by the Amended
and Restated Agreements.

Further,  the Notes and  Debentures  signed on or about May 28, 2004 between the
Company and the Investors (the "Old  Debentures")  shall be amended and restated
to provide the following:

         1. To reflect the actual amount currently due and owing of
5,247,262.89;

         2. The conversion price shall be changed from a variable conversion
price to a fixed conversion at 47.5 cents per share;

         3. That such Notes and Debentures shall be guaranteed by Ocean Avenue
Advisors, LLC ("OAA") by a non-recourse personal guaranty which shall be secured
by a pledge of 100% of the common stock of Epicus owned by OAA and such pledge
shall provide that after the second year, on a quarterly basis, OAA will allowed
to sell such shares equal to the lesser of the following: a) the amount allowed
by applicable securities laws and b) such proportion of the shares that is equal
to the proportion of the total amount of cash or stock actually paid to the
Investors against the total obligations owed to the Investors under the Old
Debentures.

         4. Furthermore, Mr. Haryman's and Aptek's Communications Products
Inc.'s ("Aptek") shares shall be subject to a lock-up agreement with the
certificates being held in escrow by Bryan Cave, LLP. Mr. Haryman and Aptek will
be allowed, on a quarterly basis, to sell up to 36,000 shares collectively per
quarter, but only if the amount of shares proposed to be sold is in compliance
with all securities laws and the Company, Haryman and Aptek are in compliance
with all other agreements with the Investors.

         5. Furthermore, Thomas Donaldson's shares shall be subject to a lock-up
agreement with the certificates being held in escrow by Bryan Cave, LLP. Mr.
Donaldson will be allowed, on a quarterly basis, to sell up to 5,200 shares per
quarter, but only if the amount of shares proposed to be sold is in compliance
with all securities laws and the Company, and Donaldson are in compliance with
all other agreements with the Investors.

                   Remainder of Page Intentionally Left Blank

<PAGE>



Nothing contained herein shall limit or otherwise affect the rights or
obligations of the parties under the Purchase Agreement.

If you are in agreement with the foregoing, please execute this letter in the
space indicated.

                           Very truly yours,
                           EPICUS COMMUNICATIONS GROUP, INC.


                                    By: __________________________
                                    Name:
                                    Title:
Accepted and agreed to date first written above

AJW PARTNERS, LLC
By:  SMS Group, LLC

/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager

AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC

/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager

AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC

/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager


NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  First Street Manager II, LLP

/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager



<PAGE>



Accepted and agreed to date first written above

/s/ Gerard Haryman
______________________________________
Gerard Haryman, an individual


APTEK COMMUNICATIONS PRODUCTS INC.


By: /s/ Gerard Haryman
______________________________________
Gerard Haryman, President


OCEAN AVENUE ADVISORS, LLC

By: /s/ Ira Miller
______________________________________
Ira Miller, Member


/s/ Thomas Donaldson
______________________________________
Thomas Donaldson, an individual






<PAGE>



                              EPICUS COMMUNICATIONS

                            $ 3,750,000.00 INVESTMENT

                  PROPOSED TERM SHEET FOR AMENDED AND RESTATED

                        9% ASSET BACKED CONVERTIBLE NOTES

This final term sheet  constitutes the agreed upon terms between the parties and
is binding upon the undersigned.

Issuer                                    Epicus Communications

Instrument                    $3,750,000  9%  Convertible  Note due three  years
                              after issuance.

Conversion                    Price 40% of the  volume  weighted  average  price
                              (VWAP) of the company's  Common stock for the five
                              days immediately prior to closing.

Initial                       Market Price 100% of the volume  weighted  average
                              price (VWAP) of the company's Common stock for the
                              five days immediately prior to closing.

Term                          36 months

Interest                      9% maximum  interest  per annum  payable  monthly.
                              Interest  rate  resets  to zero  for  any  monthly
                              period in which the stock  price is  greater  than
                              125% of the Initial Market Price.

Principal                     Payment   Repayment   shall   be  in  cash  or  in
                              registered  shares of common  stock.  The  monthly
                              amortization shall commence 180 days after closing
                              according to a 30 month amortization  schedule. At
                              the  Company's  option,  the  Company may repay in
                              common stock at the  Conversion  Price,  otherwise
                              all payments must be in cash.

                              The  Investor  at its option may  convert the note
                              into  common  stock if the  market  price  for the
                              stock at the time of payment is above the  Initial
                              Market Price.

                              If the  Investor  converts  any stock prior to any
                              monthly  amortization  payment,  those conversions
                              will be credited toward the next monthly principal
                              amortization   and   interest   payment  due.  Any
                              conversions    above   the    monthly    principal
                              amortization  and interest payment due amount will
                              be credit towards future payments.

Warrants                      Investor  shall  receive  for  each  $1.00 of Note
                              investment   warrants  to  purchase  2  shares  of
                              Company  common  stock with an  exercise  price of
                              $.0027.  Warrant  terms shall  include a five year
                              term from date of issuance,  exercise  price equal
                              to 100% of the  initial  market  price per  share,
                              cashless  exercise  will  be  permitted  for  144k
                              tacking  purposes.  Warrants  are  callable by the
                              company if price of stock  exceeds 150% of initial
                              market  price.  Upon calling the warrants  company
                              must pay  investor  intrinsic  value of warrant at
                              time of call.  All existing  warrants reset to the
                              lesser of their strike price or the Initial Market
                              Price.


<PAGE>

Registration Rights           With respect to the $ 3,750,000  the Company shall
                              undertake  to register  pursuant to form SB-2 200%
                              of  the  Company   common  stock   underlying  the
                              convertible  note  and any  warrants  referred  to
                              herein with the SEC within 30 days of signature of
                              the definitive agreements and the effectiveness of
                              such  registration  shall  be  within  100 days of
                              signature.  Penalties  of  2% of  the  outstanding
                              principal balance (including accrued interest) per
                              month  shall  apply  if  the  registration  is not
                              effective  within the  allotted  time  frame.  The
                              penalty may be paid in cash or stock at the option
                              of  Investor,  stock to be priced at  average of 3
                              lowest intra-day  trading prices within 20 trading
                              days prior to penalty due date  discounted by 50%,
                              which due date  shall be on a monthly  basis.  All
                              shares for this transaction shall be segregated by
                              the  company  for  use in this  transaction  only.
                              Company  shall also provide  irrevocable  transfer
                              agent instructions.

Collateral                    The  company  shall  provide  a first  lien on all
                              assets of the Company.

Additional                    Penalties For default events,  minimum  redemption
                              of 130% x (outstanding principal + unpaid interest
                              + any default and penalty payments due);  Investor
                              can request payment in shares if Company unable to
                              pay.

Defaults                      Each month, if a default shall occur, then the new
                              Conversion  Price  shall  be  the  lesser  of  the
                              current  Conversion  Price  or 25%  of the  volume
                              weighted  average  price  (VWAP) of the  company's
                              Common  stock  for the  previous  five  days.  The
                              Investor  for  the  month  in  which  the  default
                              occurred  may freely  convert into Common Stock at
                              the new Conversion Price.

Call Premium                  Prepayment   available  at  130%   multiplied   by
                              outstanding principal plus unpaid interest is only
                              available as long as the stock price of the common
                              stock of the  Issuer  is at $3.00 or less.  If the
                              price of the common stock of the Issuer is greater
                              than $3.00 than the  company  can call these notes
                              by prepaying  the notes for  Intrinsic  Value plus
                              unpaid  interest.  Intrinsic  Value is computed by
                              outstanding  principal added to the product of the
                              number of shares  the notes are  convertible  into
                              and the difference between the price of the common
                              stock at the time of prepayment  multiplied by the
                              Conversion Price:

                              Unpaid Interest + Outstanding  Principal + (Number
                              of shares  underlying  convertible  note * (Market
                              Price at time of redemption - Conversion Price)

Additional Costs/Fees        -Audit Fees: (if the company has outstanding audit
                              expenses)
                              -Any outstanding  obligations owed by the Company,
                               will be paid out of proceeds.

            ALL COSTS/FEES TO BE DEDUCTED FROM FUNDS AS APPLICABLE.



<PAGE>

Previous Debentures           The   definitive    documentation    shall   amend
                              debentures previously issued by the Company to the
                              Investors such that the conversion  price for such
                              debentures  shall be  fixed  at 80% of the  volume
                              weighted  average  price  (VWAP) of the  company's
                              Common stock for the five days  immediately  prior
                              to closing.

Documentation                 The  definitive  documentation  shall contain such
                              additional    provisions,     including    without
                              limitation representations, warranties, covenants,
                              agreements  and  remedies,  as  the  Investor  may
                              reasonably request. Documents will include:
                               -Secured Convertible Note Instrument
                               -Registration Rights Agreement
                               -Secured Convertible Note Purchase Agreement
                               -Collateral Stock Pledge as collateral
                               -Irrevocable Transfer Agent Instructions
                               -Security Agreement (UCC), assets/receivables
                               -Opinion of Legal Counsel
                               -Subject to complete due diligence/and
                                Use of Proceeds
                               -Key Man Life Insurance required on all
                                Key Executives
                               -Application to American Stock Exchange
                               -Acceptable evidence of valuation of
                                Intellectual Property

Confidentiality                The Company agrees that it will not disclose, and
                               will not include in any public announcement,  the
                               name of the Investor,  unless expressly agreed to
                               by  the   Investor   or  unless  and  until  such
                               disclosure  is  required  by  law  or  applicable
                               regulation,  and then only to the  extent of such
                               requirement.
Governing Law and
Jurisdiction                   New York law, New York Courts

Accepted and Agreed:
EPICUS COMMUNICATIONS
____________________________________
By:
Title:


AJW PARTNERS, LLC
By:  SMS Group, LLC


/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager


AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC


/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager


AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC

/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager


NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  First Street Manager II, LLP

/s/ Corey S. Ribotsky
____________________________________
Corey S. Ribotsky
Manager