ex-10_1.htm


    Exhibit
      10.1

     

    


     

    SECURITIES
      PURCHASE AGREEMENT

     

    


     

    SECURITIES
      PURCHASE AGREEMENT (this “Agreement”), dated as of September 13, 2007, by and
      among Juniper Group, Inc. a Nevada corporation, with headquarters located at
      20283 State Road, Suite 400, Boca Raton, Florida 33498 (the “Company”), and each
      of the purchasers set forth on the signature pages hereto (the
“Buyers”).

     

    WHEREAS:

     

    A.  The
      Company and the Buyers are executing and delivering this Agreement in reliance
      upon the exemption from securities registration afforded by the rules and
      regulations as promulgated by the United States Securities and Exchange
      Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
      Act”);

     

    B.  Buyers
      desire to purchase and the Company desires to issue and sell, upon the terms
      and
      conditions set forth in this Agreement (i) 8% convertible debentures of the
      Company, in the form attached hereto as Exhibit “A”, in the aggregate principal
      amount of Six Hundred Thousand Dollars ($600,000) (together with any
      debenture(s) issued in replacement thereof or as a dividend thereon or otherwise
      with respect thereto in accordance with the terms thereof, the “Debentures”),
      convertible into shares of common stock, par value $.001 per share, of the
      Company (the “Common Stock”), upon the terms and subject to the limitations and
      conditions set forth in such Debentures and (ii) warrants, in the form attached
      hereto as Exhibit “B”, to purchase 20,000,000 shares of Common Stock (the
“Warrants”).

     

    C.  Each
      Buyer wishes to purchase, upon the terms and conditions stated in this
      Agreement, such principal amount of Debentures and number of Warrants as is
      set
      forth immediately below its name on the signature pages hereto; and

     

    D.  Contemporaneous
      with the execution and delivery of this Agreement, the parties hereto are
      executing and delivering a Registration Rights Agreement, in the form attached
      hereto as Exhibit “C” (the “Registration Rights Agreement”), pursuant to which
      the Company has agreed to provide certain registration rights under the 1933
      Act
      and the rules and regulations promulgated thereunder, and applicable state
      securities laws.

     

    NOW
      THEREFORE, the Company and each of the Buyers severally (and not jointly) hereby
      agree as follows:

     

    1.  PURCHASE
      AND SALE OF DEBENTURES AND WARRANTS.

     

    a.  Purchase
      of Debentures and Warrants.  On the Closing Date (as defined
      below), the Company shall issue and sell to each Buyer and each Buyer severally
      agrees to purchase from the Company such principal amount of Debentures and
      number of Warrants as is set forth immediately below such Buyer’s name on the
      signature pages hereto.

     

    b.  Form
      of Payment.  On the Closing Date (as defined below), (i) each
      Buyer shall pay the purchase price for the Debentures and the Warrants to be
      issued and sold to it at the Closing (as defined below) (the “Purchase Price”)
      by wire transfer of immediately available funds to the Company, in accordance
      with the Company’s written wiring instructions, against delivery of the
      Debentures in the principal amount equal to the Purchase Price and the number
      of
      Warrants as is set forth immediately below such Buyer’s name on the signature
      pages hereto, and (ii) the Company shall deliver such Debentures and Warrants
      duly executed on behalf of the Company, to such Buyer, against delivery of
      such
      Purchase Price.

     

    c.  Closing
      Date.  Subject to the satisfaction (or written waiver) of the
      conditions thereto set forth in Section 6 and Section 7 below, the date and
      time
      of the issuance and sale of the Debentures and the Warrants pursuant to this
      Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on
      September 13, 2007, or such other mutually agreed upon time.  The
      closing of the transactions contemplated by this Agreement (the “Closing”) shall
      occur on the Closing Date at such location as may be agreed to by the
      parties.

     

    2.  BUYERS’
      REPRESENTATIONS AND WARRANTIES.  Each Buyer severally (and not
      jointly) represents and warrants to the Company solely as to such Buyer
      that:

     

    a.  Investment
      Purpose.  As of the date hereof, the Buyer is purchasing the
      Debentures and the shares of Common Stock issuable upon conversion of or
      otherwise pursuant to the Debentures (including, without limitation, such
      additional shares of Common Stock, if any, as are issuable (i) on account of
      interest on the Debentures, (ii) as a result of the events described in Sections
      1.3 and 1.4(g) of the Debentures and Section 2(c) of the Registration Rights
      Agreement or (iii) in payment of the Standard Liquidated Damages Amount (as
      defined in Section 2(f) below) pursuant to this Agreement, such shares of Common
      Stock being collectively referred to herein as the “Conversion Shares”) and the
      Warrants and the shares of Common Stock issuable upon exercise thereof (the
      “Warrant Shares” and, collectively with the Debentures, Warrants and Conversion
      Shares, the “Securities”) for its own account and not with a present view
      towards the public sale or distribution thereof, except pursuant to sales
      registered or exempted from registration under the 1933 Act; provided,
however, that by making the representations herein, the Buyer does
      not
      agree to hold any of the Securities for any minimum or other specific term
      and
      reserves the right to dispose of the Securities at any time in accordance with
      or pursuant to a registration statement or an exemption under the 1933
      Act.

     

    b.  Accredited
      Investor Status.  The Buyer is an “accredited investor” as that
      term is defined in Rule 501(a) of Regulation D (an “Accredited
      Investor”).

     

    c.  Reliance
      on Exemptions.  The Buyer understands that the Securities are
      being offered and sold to it in reliance upon specific exemptions from the
      registration requirements of United States federal and state securities laws
      and
      that the Company is relying upon the truth and accuracy of, and the Buyer’s
      compliance with, the representations, warranties, agreements, acknowledgments
      and understandings of the Buyer set forth herein in order to determine the
      availability of such exemptions and the eligibility of the Buyer to acquire
      the
      Securities.

     

    d.  Information.  The
      Buyer and its advisors, if any, have been, and for so long as the Debentures
      and
      Warrants remain outstanding will continue to be, furnished with all materials
      relating to the business, finances and operations of the Company and materials
      relating to the offer and sale of the Securities which have been requested
      by
      the Buyer or its advisors.  The Buyer and its advisors, if any, have
      been, and for so long as the Debentures and Warrants remain outstanding will
      continue to be, afforded the opportunity to ask questions of the
      Company.  Notwithstanding the foregoing, the Company has not disclosed
      to the Buyer any material nonpublic information and will not disclose such
      information unless such information is disclosed to the public prior to or
      promptly following such disclosure to the Buyer.  Neither such
      inquiries nor any other due diligence investigation conducted by Buyer or any
      of
      its advisors or representatives shall modify, amend or affect Buyer’s right to
      rely on the Company’s representations and warranties contained in Section 3
      below.  The Buyer understands that its investment in the Securities
      involves a significant degree of risk.

     

    e.  Governmental
      Review.  The Buyer understands that no United States federal or
      state agency or any other government or governmental agency has passed upon
      or
      made any recommendation or endorsement of the Securities.

     

    f.  Transfer
      or Re-sale.  The Buyer understands that (i) except as provided in
      the Registration Rights Agreement, the sale or re-sale of the Securities has
      not
      been and is not being registered under the 1933 Act or any applicable state
      securities laws, and the Securities may not be transferred unless (a) the
      Securities are sold pursuant to an effective registration statement under the
      1933 Act, (b) the Buyer shall have delivered to the Company an opinion of
      counsel that shall be in form, substance and scope customary for opinions of
      counsel in comparable transactions to the effect that the Securities to be
      sold
      or transferred may be sold or transferred pursuant to an exemption from such
      registration, which opinion shall be accepted by the Company, (c) the Securities
      are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated
      under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees
      to sell or otherwise transfer the Securities only in accordance with this
      Section 2(f) and who is an Accredited Investor, (d) the Securities are sold
      pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation
      S
      under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall
      have delivered to the Company an opinion of counsel that shall be in form,
      substance and scope customary for opinions of counsel in corporate transactions,
      which opinion shall be accepted by the Company; (ii) any sale of such Securities
      made in reliance on Rule 144 may be made only in accordance with the terms
      of
      said Rule and further, if said Rule is not applicable, any re-sale of such
      Securities under circumstances in which the seller (or the person through whom
      the sale is made) may be deemed to be an underwriter (as that term is defined
      in
      the 1933 Act) may require compliance with some other exemption under the 1933
      Act or the rules and regulations of the SEC thereunder; and (iii) neither the
      Company nor any other person is under any obligation to register such Securities
      under the 1933 Act or any state securities laws or to comply with the terms
      and
      conditions of any exemption thereunder (in each case, other than pursuant to
      the
      Registration Rights Agreement).  Notwithstanding the foregoing or
      anything else contained herein to the contrary, the Securities may be pledged
      as
      collateral in connection with a bonafide margin account or other
      lending arrangement.  In the event that the Company does not accept
      the opinion of counsel provided by the Buyer with respect to the transfer of
      Securities pursuant to an exemption from registration, such as Rule 144 or
      Regulation S, within three (3) business days of delivery of the opinion to
      the
      Company, the Company shall pay to the Buyer liquidated damages of three percent
      (3%) of the outstanding amount of the Debentures per month plus accrued and
      unpaid interest on the Debentures, prorated for partial months, in cash or
      shares at the option of the Company (“Standard Liquidated Damages
      Amount”).  If the Company elects to pay the Standard Liquidated
      Damages Amount in shares of Common Stock, such shares shall be issued at the
      Conversion Price at the time of payment. Notwithstanding anything herein to
      the
      contrary, in the event the Company has to pay the Standards Liquidated Damages
      Amount pursuant to any provision of this Agreement, the Buyers shall first
      have
      to give the Company advance written notice of such breach and in such event,
      the
      Company shall have 30 days from the receipt of such notice to cure such breach
      before the Standard Liquidated Damages Amount shall be due and payable to the
      Buyers.

     

    g.  Legends.  The
      Buyer understands that the Debentures and the Warrants and, until such time
      as
      the Conversion Shares and Warrant Shares have been registered under the 1933
      Act
      as contemplated by the Registration Rights Agreement or otherwise may be sold
      pursuant to Rule 144 or Regulation S without any restriction as to the number
      of
      securities as of a particular date that can then be immediately sold, the
      Conversion Shares and Warrant Shares may bear a restrictive legend in
      substantially the following form (and a stop-transfer order may be placed
      against transfer of the certificates for such Securities):

     

    “The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933, as amended.  The securities may not be sold,
      transferred or assigned in the absence of an effective registration statement
      for the securities under said Act, or an opinion of counsel, in form, substance
      and scope customary for opinions of counsel in comparable transactions, that
      registration is not required under said Act or unless sold pursuant to Rule
      144
      or Regulation S under said Act.”

     

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of any Security upon which it
      is
      stamped, if, unless otherwise required by applicable state securities laws,
      (a)
      such Security is registered for sale under an effective registration statement
      filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or
      Regulation S without any restriction as to the number of securities as of a
      particular date that can then be immediately sold, or (b) such holder provides
      the Company with an opinion of counsel, in form, substance and scope customary
      for opinions of counsel in comparable transactions, to the effect that a public
      sale or transfer of such Security may be made without registration under the
      1933 Act, which opinion shall be accepted by the Company so that the sale or
      transfer is effected or (c) such holder provides the Company with reasonable
      assurances that such Security can be sold pursuant to Rule 144 or Regulation
      S.  The Buyer agrees to sell all Securities, including those
      represented by a certificate(s) from which the legend has been removed, in
      compliance with applicable prospectus delivery requirements, if
      any.

     

    h.  Authorization;
      Enforcement. This Agreement and the Registration Rights Agreement have been
      duly and validly authorized.  This Agreement has been duly executed
      and delivered on behalf of the Buyer, and this Agreement constitutes, and upon
      execution and delivery by the Buyer of the Registration Rights Agreement, such
      agreement will constitute, valid and binding agreements of the Buyer enforceable
      in accordance with their terms.

     

    i.  Residency.  The
      Buyer is a resident of the jurisdiction set forth immediately below such Buyer’s
      name on the signature pages hereto.

     

    3.  REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.  The Company represents and
      warrants to each Buyer that:

     

    a.  Organization
      and Qualification.  The Company and each of its Subsidiaries (as
      defined below), if any, is a corporation duly organized, validly existing and
      in
      good standing under the laws of the jurisdiction in which it is incorporated,
      with full power and authority (corporate and other) to own, lease, use and
      operate its properties and to carry on its business as and where now owned,
      leased, used, operated and conducted.  Schedule 3(a) sets forth a list
      of all of the Subsidiaries of the Company and the jurisdiction in which each
      is
      incorporated.  The Company and each of its Subsidiaries is duly
      qualified as a foreign corporation to do business and is in good standing in
      every jurisdiction in which its ownership or use of property or the nature
      of
      the business conducted by it makes such qualification necessary except where
      the
      failure to be so qualified or in good standing would not have a Material Adverse
      Effect.  “Material Adverse Effect” means any material adverse effect
      on the business, operations, assets, financial condition or prospects of the
      Company or its Subsidiaries, if any, taken as a whole, or on the transactions
      contemplated hereby or by the agreements or instruments to be entered into
      in
      connection herewith.  “Subsidiaries” means any corporation or other
      organization, whether incorporated or unincorporated, in which the Company
      owns,
      directly or indirectly, any equity or other ownership interest.

     

    b.  Authorization;
      Enforcement.  (i) The Company has all requisite corporate power
      and authority to enter into and perform this Agreement, the Registration Rights
      Agreement, the Debentures and the Warrants and to consummate the transactions
      contemplated hereby and thereby and to issue the Securities, in accordance
      with
      the terms hereof and thereof, (ii) the execution and delivery of this Agreement,
      the Registration Rights Agreement, the Debentures and the Warrants by the
      Company and the consummation by it of the transactions contemplated hereby
      and
      thereby (including without limitation, the issuance of the Debentures and the
      Warrants and the issuance and reservation for issuance of the Conversion Shares
      and Warrant Shares issuable upon conversion or exercise thereof) have been
      duly
      authorized by the Company’s Board of Directors and no further consent or
      authorization of the Company, its Board of Directors, or its shareholders is
      required, (iii) this Agreement has been duly executed and delivered by the
      Company by its authorized representative, and such authorized representative
      is
      the true and official representative with authority to sign this Agreement
      and
      the other documents executed in connection herewith and bind the Company
      accordingly, and (iv) this Agreement constitutes, and upon execution and
      delivery by the Company of the Registration Rights Agreement, the Debentures
      and
      the Warrants, each of such instruments will constitute, a legal, valid and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms.

     

    c.  Capitalization.  As
      of the date hereof, the authorized capital stock of the Company consists of
      (i)
      750,000,000 shares of Common Stock, of which 30,646,421 shares are issued and
      outstanding, no shares are reserved for issuance pursuant to the Company’s stock
      option plans, 4,190,000 shares are reserved for issuance pursuant to securities
      (other than the Debentures and the Warrants) exercisable for, or convertible
      into or exchangeable for shares of Common Stock and, subject to obtaining
      Stockholder Approval (as defined in Section 4(k)), 65,823,530 shares are
      reserved for issuance upon conversion of the Debentures and the Additional
      Debentures (as defined in Section 4(m)) and exercise of the Warrants and the
      Additional Warrants (as defined in Section 4(m)); and (ii) 875,000 shares
      of preferred stock, of which 25,357 shares are issued and
      outstanding.  All of such outstanding shares of capital stock are, or
      upon issuance will be, duly authorized, validly issued, fully paid and
      nonassessable.  No shares of capital stock of the Company are subject
      to preemptive rights or any other similar rights of the shareholders of the
      Company or any liens or encumbrances imposed through the actions or failure
      to
      act of the Company.  Except as disclosed in Schedule 3(c), as of the
      effective date of this Agreement, (i) there are no outstanding options,
      warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
      agreements, understandings, claims or other commitments or rights of any
      character whatsoever relating to, or securities or rights convertible into
      or
      exchangeable for any shares of capital stock of the Company or any of its
      Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
      is
      or may become bound to issue additional shares of capital stock of the Company
      or any of its Subsidiaries, (ii) there are no agreements or arrangements under
      which the Company or any of its Subsidiaries is obligated to register the sale
      of any of its or their securities under the 1933 Act (except the Registration
      Rights Agreement) and (iii) there are no anti-dilution or price adjustment
      provisions contained in any security issued by the Company (or in any agreement
      providing rights to security holders) that will be triggered by the issuance
      of
      the Debentures, the Warrants, the Conversion Shares or Warrant
      Shares.  The Company has furnished to the Buyer true and correct
      copies of the Company’s Articles of Incorporation as in effect on the date
      hereof (“Articles of Incorporation”), the Company’s By-laws, as in effect on the
      date hereof (the “By-laws”), and the terms of all securities convertible into or
      exercisable for Common Stock of the Company and the material rights of the
      holders thereof in respect thereto.  The Company shall provide the
      Buyer with a written update of this representation signed by the Company’s Chief
      Executive or Chief Financial Officer on behalf of the Company as of the Closing
      Date.

     

    d.  Issuance
      of Shares.  Subject to obtaining Stockholder Approval (as defined
      in Section 4(k)), the Conversion Shares and Warrant Shares are duly authorized
      and reserved for issuance and, upon conversion of the Debentures and exercise
      of
      the Warrants in accordance with their respective terms, will be validly issued,
      fully paid and non-assessable, and free from all taxes, liens, claims and
      encumbrances with respect to the issue thereof and shall not be subject to
      preemptive rights or other similar rights of shareholders of the Company and
      will not impose personal liability upon the holder thereof.

     

    e.  Acknowledgment
      of Dilution.  The Company understands and acknowledges the
      potentially dilutive effect to the Common Stock upon the issuance of the
      Conversion Shares and Warrant Shares upon conversion of the Debenture or
      exercise of the Warrants.  The Company further acknowledges that its
      obligation to issue Conversion Shares and Warrant Shares upon conversion of
      the
      Debentures or exercise of the Warrants in accordance with this Agreement, the
      Debentures and the Warrants is absolute and unconditional regardless of the
      dilutive effect that such issuance may have on the ownership interests of other
      shareholders of the Company.

     

    f.  No
      Conflicts.  Subject to obtaining Stockholder Approval (as defined
      in Section 4(k)), the execution, delivery and performance of this Agreement,
      the
      Registration Rights Agreement, the Debentures and the Warrants by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby (including, without limitation, the issuance and reservation for
      issuance of the Conversion Shares and Warrant Shares) will not (i) conflict
      with
      or result in a violation of any provision of the Articles of Incorporation
      or
      By-laws or (ii) violate or conflict with, or result in a breach of any provision
      of, or constitute a default (or an event which with notice or lapse of time
      or
      both could become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, indenture, patent,
      patent license or instrument to which the Company or any of its Subsidiaries
      is
      a party, or (iii) to the Company’s knowledge, result in a violation of any law,
      rule, regulation, order, judgment or decree (including federal and state
      securities laws and regulations and regulations of any self-regulatory
      organizations to which the Company or its securities are subject) applicable
      to
      the Company or any of its Subsidiaries or by which any property or asset of
      the
      Company or any of its Subsidiaries is bound or affected (except for such
      conflicts, defaults, terminations, amendments, accelerations, cancellations
      and
      violations as would not, individually or in the aggregate, have a Material
      Adverse Effect).  Neither the Company nor any of its Subsidiaries is
      in violation of its Articles of Incorporation, By-laws or other organizational
      documents and neither the Company nor any of its Subsidiaries is in default
      (and
      no event has occurred which with notice or lapse of time or both could put
      the
      Company or any of its Subsidiaries in default) under, and neither the Company
      nor any of its Subsidiaries has taken any action or failed to take any action
      that would give to others any rights of termination, amendment, acceleration
      or
      cancellation of, any agreement, indenture or instrument to which the Company
      or
      any of its Subsidiaries is a party or by which any property or assets of the
      Company or any of its Subsidiaries is bound or affected, except for possible
      defaults as would not, individually or in the aggregate, have a Material Adverse
      Effect. The businesses of the Company and its Subsidiaries, if any, are not
      being conducted, and shall not be conducted so long as a Buyer owns any of
      the
      Securities, in violation of any law, ordinance or regulation of any governmental
      entity.  Except as specifically contemplated by this Agreement and as
      required under the 1933 Act and any applicable state securities laws, the
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court, governmental agency, regulatory
      agency, self regulatory organization or stock market or any third party in
      order
      for it to execute, deliver or perform any of its obligations under this
      Agreement, the Registration Rights Agreement, the Debentures or the Warrants
      in
      accordance with the terms hereof or thereof or to issue and sell the Debentures
      and Warrants in accordance with the terms hereof and to issue the Conversion
      Shares upon conversion of the Debentures and the Warrant Shares upon exercise
      of
      the Warrants.  Except as disclosed in Schedule 3(f), all consents,
      authorizations, orders, filings and registrations which the Company is required
      to obtain pursuant to the preceding sentence have been obtained or effected
      on
      or prior to the date hereof.  The Company is not in violation of the
      listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and
      does not reasonably anticipate that the Common Stock will be delisted by the
      OTCBB in the foreseeable future.  The Company and its Subsidiaries are
      unaware of any facts or circumstances which might give rise to any of the
      foregoing.

     

    g.  SEC
      Documents; Financial Statements.  Except as disclosed in Schedule
      3(g), the Company has timely filed all reports, schedules, forms, statements
      and
      other documents required to be filed by it with the SEC pursuant to the
      reporting requirements of the Securities Exchange Act of 1934, as amended (the
      “1934 Act”) (all of the foregoing filed prior to the date hereof and all
      exhibits included therein and financial statements and schedules thereto and
      documents (other than exhibits to such documents) incorporated by reference
      therein, being hereinafter referred to herein as the “SEC
      Documents”).  As of their respective dates, the SEC Documents complied
      in all material respects with the requirements of the 1934 Act and the rules
      and
      regulations of the SEC promulgated thereunder applicable to the SEC Documents,
      and none of the SEC Documents, at the time they were filed with the SEC,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading.  None of the statements made in any such SEC Documents is,
      or has been, required to be amended or updated under applicable law (except
      for
      such statements as have been amended or updated in subsequent filings prior
      the
      date hereof).  As of their respective dates, the financial statements
      of the Company included in the SEC Documents complied as to form in all material
      respects with applicable accounting requirements and the published rules and
      regulations of the SEC with respect thereto.  Such financial
      statements have been prepared in accordance with United States generally
      accepted accounting principles, consistently applied, during the periods
      involved (except (i) as may be otherwise indicated in such financial statements
      or the notes thereto, or (ii) in the case of unaudited interim statements,
      to
      the extent they may not include footnotes or may be condensed or summary
      statements) and fairly present in all material respects the consolidated
      financial position of the Company and its consolidated Subsidiaries as of the
      dates thereof and the consolidated results of their operations and cash flows
      for the periods then ended (subject, in the case of unaudited statements, to
      normal year-end audit adjustments).  Except as set forth in the
      financial statements of the Company included in the SEC Documents, the Company
      has no liabilities, contingent or otherwise, other than (i) liabilities incurred
      in the ordinary course of business subsequent to September 30, 2005 and (ii)
      obligations under contracts and commitments incurred in the ordinary course
      of
      business and not required under generally accepted accounting principles to
      be
      reflected in such financial statements, which, individually or in the aggregate,
      are not material to the financial condition or operating results of the
      Company.

     

    h.  Absence
      of Certain Changes.  Except as set forth on Schedule 3(h), since
      September 30, 2005, there has been no material adverse change and no material
      adverse development in the assets, liabilities, business, properties,
      operations, financial condition, results of operations or prospects of the
      Company or any of its Subsidiaries.

     

    i.  Absence
      of Litigation.  There is no action, suit, claim, proceeding,
      inquiry or investigation before or by any court, public board, government
      agency, self-regulatory organization or body pending or, to the knowledge of
      the
      Company or any of its Subsidiaries, threatened against or affecting the Company
      or any of its Subsidiaries, or their officers or directors in their capacity
      as
      such, that could have a Material Adverse Effect.  Schedule 3(i)
      contains a complete list and summary description of any pending or, to the
      knowledge of the Company, threatened proceeding against or affecting the Company
      or any of its Subsidiaries, without regard to whether it would have a Material
      Adverse Effect.  The Company and its Subsidiaries are unaware of any
      facts or circumstances which might give rise to any of the
      foregoing.

     

    j.  Patents,
      Copyrights, etc.  The Company and each of its Subsidiaries owns or
      possesses the requisite licenses or rights to use all patents, patent
      applications, patent rights, inventions, know-how, trade secrets, trademarks,
      trademark applications, service marks, service names, trade names and copyrights
      (“Intellectual Property”) necessary to enable it to conduct its business as now
      operated (and, except as set forth in Schedule 3(j) hereof, to the best of
      the
      Company’s knowledge, as presently contemplated to be operated in the future);
      there is no claim or action by any person pertaining to, or proceeding pending,
      or to the Company’s knowledge threatened, which challenges the right of the
      Company or of a Subsidiary with respect to any Intellectual Property necessary
      to enable it to conduct its business as now operated (and, except as set forth
      in Schedule 3(j) hereof, to the best of the Company’s knowledge, as presently
      contemplated to be operated in the future); to the best of the Company’s
      knowledge, the Company’s or its Subsidiaries’ current and intended products,
      services and processes do not infringe on any Intellectual Property or other
      rights held by any person; and the Company is unaware of any facts or
      circumstances which might give rise to any of the foregoing.  The
      Company and each of its Subsidiaries have taken reasonable security measures
      to
      protect the secrecy, confidentiality and value of their Intellectual
      Property.

     

    k.  No
      Materially Adverse Contracts, Etc.  Neither the Company nor any of
      its Subsidiaries is subject to any charter, corporate or other legal
      restriction, or any judgment, decree, order, rule or regulation which in the
      judgment of the Company’s officers has or is expected in the future to have a
      Material Adverse Effect.  Neither the Company nor any of its
      Subsidiaries is a party to any contract or agreement which in the judgment
      of
      the Company’s officers has or is expected to have a Material Adverse
      Effect.

     

    l.  Tax
      Status.  Except as set forth on Schedule 3(l), the Company and
      each of its Subsidiaries has made or filed all federal, state and foreign income
      and all other tax returns, reports and declarations required by any jurisdiction
      to which it is subject (unless and only to the extent that the Company and
      each
      of its Subsidiaries has set aside on its books provisions reasonably adequate
      for the payment of all unpaid and unreported taxes) and has paid all taxes
      and
      other governmental assessments and charges that are material in amount, shown
      or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and has set aside on its books provisions
      reasonably adequate for the payment of all taxes for periods subsequent to
      the
      periods to which such returns, reports or declarations apply.  There
      are no unpaid taxes in any material amount claimed to be due by the taxing
      authority of any jurisdiction, and the officers of the Company know of no basis
      for any such claim.  The Company has not executed a waiver with
      respect to the statute of limitations relating to the assessment or collection
      of any foreign, federal, state or local tax.  Except as set forth on
      Schedule 3(l), none of the Company’s tax returns is presently being audited by
      any taxing authority.

     

    m.  Certain
      Transactions.  Except as set forth on Schedule 3(m) and except for
      arm’s length transactions pursuant to which the Company or any of its
      Subsidiaries makes payments in the ordinary course of business upon terms no
      less favorable than the Company or any of its Subsidiaries could obtain from
      third parties, none of the officers, directors, or employees of the Company
      is
      presently a party to any transaction with the Company or any of its Subsidiaries
      (other than for services as employees, officers and directors), including any
      contract, agreement or other arrangement providing for the furnishing of
      services to or by, providing for rental of real or personal property to or
      from,
      or otherwise requiring payments to or from any officer, director or such
      employee or, to the knowledge of the Company, any corporation, partnership,
      trust or other entity in which any officer, director, or any such employee
      has a
      substantial interest or is an officer, director, trustee or
      partner.

     

    n.  Disclosure.  All
      information relating to or concerning the Company or any of its Subsidiaries
      set
      forth in this Agreement and provided to the Buyers pursuant to Section 2(d)
      hereof and otherwise in connection with the transactions contemplated hereby
      is
      true and correct in all material respects and the Company has not omitted to
      state any material fact necessary in order to make the statements made herein
      or
      therein, in light of the circumstances under which they were made, not
      misleading.  No event or circumstance has occurred or exists with
      respect to the Company or any of its Subsidiaries or its or their business,
      properties, prospects, operations or financial conditions, which, under
      applicable law, rule or regulation, requires public disclosure or announcement
      by the Company but which has not been so publicly announced or disclosed
      (assuming for this purpose that the Company’s reports filed under the 1934 Act
      are being incorporated into an effective registration statement filed by the
      Company under the 1933 Act).

     

    o.  Acknowledgment
      Regarding Buyers’ Purchase of Securities.  The Company
      acknowledges and agrees that the Buyers are acting solely in the capacity of
      arm’s length purchasers with respect to this Agreement and the transactions
      contemplated hereby.  The Company further acknowledges that no Buyer
      is acting as a financial advisor or fiduciary of the Company (or in any similar
      capacity) with respect to this Agreement and the transactions contemplated
      hereby and any statement made by any Buyer or any of their respective
      representatives or agents in connection with this Agreement and the transactions
      contemplated hereby is not advice or a recommendation and is merely incidental
      to the Buyers’ purchase of the Securities.  The Company further
      represents to each Buyer that the Company’s decision to enter into this
      Agreement has been based solely on the independent evaluation of the Company
      and
      its representatives.

     

    p.  No
      Integrated Offering.  Neither the Company, nor any of its
      affiliates, nor any person acting on its or their behalf, has directly or
      indirectly made any offers or sales in any security or solicited any offers
      to
      buy any security under circumstances that would require registration under
      the
      1933 Act of the issuance of the Securities to the Buyers.  The
      issuance of the Securities to the Buyers will not be integrated with any other
      issuance of the Company’s securities (past, current or future) for purposes of
      any shareholder approval provisions applicable to the Company or its
      securities.

     

    q.  No
      Brokers.  The Company has taken no action which would give rise to
      any claim by any person for brokerage commissions, transaction fees or similar
      payments relating to this Agreement or the transactions contemplated
      hereby.

     

    r.  Permits;
      Compliance.  The Company and each of its Subsidiaries is in
      possession of all franchises, grants, authorizations, licenses, permits,
      easements, variances, exemptions, consents, certificates, approvals and orders
      necessary to own, lease and operate its properties and to carry on its business
      as it is now being conducted (collectively, the “Company Permits”), and there is
      no action pending or, to the knowledge of the Company, threatened regarding
      suspension or cancellation of any of the Company Permits.  Neither the
      Company nor any of its Subsidiaries is in conflict with, or in default or
      violation of, any of the Company Permits, except for any such conflicts,
      defaults or violations which, individually or in the aggregate, would not
      reasonably be expected to have a Material Adverse Effect.  Since
      September 30, 2005, neither the Company nor any of its Subsidiaries has received
      any notification with respect to possible conflicts, defaults or violations
      of
      applicable laws, except for notices relating to possible conflicts, defaults
      or
      violations, which conflicts, defaults or violations would not have a Material
      Adverse Effect.

     

    s.  Environmental
      Matters.

     

    (i)  Except
      as set forth in Schedule 3(s), there are, to the Company’s knowledge, with
      respect to the Company or any of its Subsidiaries or any predecessor of the
      Company, no past or present violations of Environmental Laws (as defined below),
      releases of any material into the environment, actions, activities,
      circumstances, conditions, events, incidents, or contractual obligations which
      may give rise to any common law environmental liability or any liability under
      the Comprehensive Environmental Response, Compensation and Liability Act of
      1980
      or similar federal, state, local or foreign laws and neither the Company nor
      any
      of its Subsidiaries has received any notice with respect to any of the
      foregoing, nor is any action pending or, to the Company’s knowledge, threatened
      in connection with any of the foregoing.  The term “Environmental
      Laws” means all federal, state, local or foreign laws relating to pollution or
      protection of human health or the environment (including, without limitation,
      ambient air, surface water, groundwater, land surface or subsurface strata),
      including, without limitation, laws relating to emissions, discharges, releases
      or threatened releases of chemicals, pollutants contaminants, or toxic or
      hazardous substances or wastes (collectively, “Hazardous Materials”) into the
      environment, or otherwise relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of Hazardous Materials,
      as well as all authorizations, codes, decrees, demands or demand letters,
      injunctions, judgments, licenses, notices or notice letters, orders, permits,
      plans or regulations issued, entered, promulgated or approved
      thereunder.

     

    (ii)  Other
      than those that are or were stored, used or disposed of in compliance with
      applicable law, no Hazardous Materials are contained on or about any real
      property currently owned, leased or used by the Company or any of its
      Subsidiaries, and no Hazardous Materials were released on or about any real
      property previously owned, leased or used by the Company or any of its
      Subsidiaries during the period the property was owned, leased or used by the
      Company or any of its Subsidiaries, except in the normal course of the Company’s
      or any of its Subsidiaries’ business.

     

    (iii)  Except
      as set forth in Schedule 3(s), there are no underground storage tanks on or
      under any real property owned, leased or used by the Company or any of its
      Subsidiaries that are not in compliance with applicable law.

     

    t.  Title
      to Property.  The Company and its Subsidiaries have good and
      marketable title in fee simple to all real property and good and marketable
      title to all personal property owned by them which is material to the business
      of the Company and its Subsidiaries, in each case free and clear of all liens,
      encumbrances and defects except such as are described in Schedule 3(t) or such
      as would not have a Material Adverse Effect.  Any real property and
      facilities held under lease by the Company and its Subsidiaries are held by
      them
      under valid, subsisting and enforceable leases with such exceptions as would
      not
      have a Material Adverse Effect.

     

    u.  Insurance.  Except
      as set forth in Schedule 3(u), the Company and each of its Subsidiaries are
      insured by insurers of recognized financial responsibility against such losses
      and risks and in such amounts as management of the Company believes to be
      prudent and customary in the businesses in which the Company and its
      Subsidiaries are engaged.  Neither the Company nor any such Subsidiary
      has any reason to believe that it will not be able to renew its existing
      insurance coverage as and when such coverage expires or to obtain similar
      coverage from similar insurers as may be necessary to continue its business
      at a
      cost that would not have a Material Adverse Effect.  The Company has
      provided to Buyer true and correct copies of all policies relating to directors’
and officers’ liability coverage, errors and omissions coverage, and commercial
      general liability coverage.

     

    v.  Internal
      Accounting Controls.  The Company and each of its Subsidiaries
      maintain a system of internal accounting controls sufficient, in the judgment
      of
      the Company’s board of directors, to provide reasonable assurance that (i)
      transactions are executed in accordance with management’s general or specific
      authorizations, (ii) transactions are recorded as necessary to permit
      preparation of financial statements in conformity with generally accepted
      accounting principles 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.

     

    w.  Foreign
      Corrupt Practices.  Neither the Company, nor any of its
      Subsidiaries, nor any director, officer, agent, employee or other person acting
      on behalf of the Company or any Subsidiary has, in the course of his actions
      for, or on behalf of, the Company, used any corporate funds for any unlawful
      contribution, gift, entertainment or other unlawful expenses relating to
      political activity; made any direct or indirect unlawful payment to any foreign
      or domestic government official or employee from corporate funds; violated
      or is
      in violation of any provision of the U.S. Foreign Corrupt Practices Act of
      1977,
      as amended, or made any bribe, rebate, payoff, influence payment, kickback
      or
      other unlawful payment to any foreign or domestic government official or
      employee.

     

    x.  Solvency.  Except
      as provided on Schedule 3(x), the Company (after giving effect to the
      transactions contemplated by this Agreement) is solvent (i.e., its assets
      have a fair market value in excess of the amount required to pay its probable
      liabilities on its existing debts as they become absolute and matured) and
      currently the Company has no information that would lead it to reasonably
      conclude that the Company would not, after giving effect to the transaction
      contemplated by this Agreement, have the ability to, nor does it intend to
      take
      any action that would impair its ability to, pay its debts from time to time
      incurred in connection therewith as such debts mature.  Except as
      provided on Schedule 3(x), the Company did not receive a qualified opinion
      from
      its auditors with respect to its most recent fiscal year end and, after giving
      effect to the transactions contemplated by this Agreement, does not anticipate
      or know of any basis upon which its auditors might issue a qualified opinion
      in
      respect of its current fiscal year.

     

    y.  No
      Investment Company.  The Company is not, and upon the issuance and
      sale of the Securities as contemplated by this Agreement will not be an
“investment company” required to be registered under the Investment Company Act
      of 1940 (an “Investment Company”).  The Company is not controlled by
      an Investment Company.

     

    z.  Breach
      of Representations and Warranties by the Company.  If the Company
      breaches any of the representations or warranties set forth in this Section
      3,
      and in addition to any other remedies available to the Buyers pursuant to this
      Agreement, the Company shall pay to the Buyer the Standard Liquidated Damages
      Amount in cash or in shares of Common Stock at the option of the Company, until
      such breach is cured.  If the Company elects to pay the Standard
      Liquidated Damages Amounts in shares of Common Stock, such shares shall be
      issued at the Conversion Price at the time of payment.

     

    4.  COVENANTS.

     

    a.  Best
      Efforts.  The parties shall use their best efforts to satisfy
      timely each of the conditions described in Section 6 and 7 of this
      Agreement.

     

    b.  Form
      D; Blue Sky Laws.  The Company agrees to file a Form D with
      respect to the Securities as required under Regulation D and to provide a copy
      thereof to each Buyer promptly after such filing.  The Company shall,
      on or before the Closing Date, take such action as the Company shall reasonably
      determine is necessary to qualify the Securities for sale to the Buyers at
      the
      applicable closing pursuant to this Agreement under applicable securities or
      “blue sky” laws of the states of the United States (or to obtain an exemption
      from such qualification), and shall provide evidence of any such action so
      taken
      to each Buyer on or prior to the Closing Date.

     

    c.  Reporting
      Status; Eligibility to Use Form S-3, SB-2 or Form

     

    S-1. The
      Company’s Common Stock is registered under Section 12(g) of the 1934 Act. The
      Company represents and warrants that it meets the requirements for the use
      of
      Form S-3 (or if the Company is not eligible for the use of Form S-3 as of the
      Filing Date (as defined in the Registration Rights Agreement), the Company
      may
      use the form of registration for which it is eligible at that time) for
      registration of the sale by the Buyer of the Registrable Securities (as defined
      in the Registration Rights Agreement).  So long as the Buyer
      beneficially owns any of the Securities, the Company shall timely file all
      reports required to be filed with the SEC pursuant to the 1934 Act, and the
      Company shall not terminate its status as an issuer required to file reports
      under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
      would permit such termination.  The Company further agrees to file all
      reports required to be filed by the Company with the SEC in a timely manner
      so
      as to become eligible, and thereafter to maintain its eligibility, for the
      use
      of Form S-3.  The Company shall issue a press release describing the
      material terms of the transaction contemplated hereby as soon as practicable
      following the Closing Date but in no event more than two (2) business days
      of
      the Closing Date, which press release shall be subject to prior review by the
      Buyers.  The Company agrees that such press release shall not disclose
      the name of the Buyers unless expressly consented to in writing by the Buyers
      or
      unless required by applicable law or regulation, and then only to the extent
      of
      such requirement.

     

    d.  Use
      of Proceeds.  The Company shall use the proceeds from the sale of
      the Debentures and the Warrants in the manner set forth in Schedule 4(d)
      attached hereto and made a part hereof and shall not, directly or indirectly,
      use such proceeds for any loan to or investment in any other corporation,
      partnership, enterprise or other person (except in connection with its currently
      existing direct or indirect Subsidiaries)

     

    e.  Future
      Offerings.  Subject to the exceptions described below, the Company
      will not, without the prior written consent of a majority-in-interest of the
      Buyers, not to be unreasonably withheld, (A) negotiate or contract with any
      party to obtain additional equity financing (including debt financing with
      an
      equity component) that involves the issuance of convertible securities that
      are
      convertible into an indeterminate number of shares of Common Stock or (B) grant
      any registration rights in connection with any issuance of Common Stock or
      warrants during the period (the “Lock-up Period”) beginning on the Closing Date
      and ending on the later of (i) two hundred seventy (270) days from the Closing
      Date or (ii) one hundred eighty (180) days from the date the Registration
      Statement (as defined in the Registration Rights Agreement) is declared
      effective (plus any days in which sales cannot be made
      thereunder).  Notwithstanding the foregoing, the Company shall be
      permitted to obtain additional equity financing (including debt financing with
      an equity component) that does not involve the issuance of convertible
      securities that are convertible into an indeterminate number of shares of Common
      Stock and which involves the grant of registration rights, so long as such
      registration rights do not become effective or may not be invoked by the holder
      thereof for a period of at least 320 days from the Closing Date.  In
      addition, subject to the exceptions described below, the Company will not
      conduct any equity financing (including debt with an equity component) (“Future
      Offerings”) during the period beginning on the Closing Date and ending two (2)
      years after the end of the Lock-up Period unless it shall have first delivered
      to each Buyer, at least twenty (20) business days prior to the closing of such
      Future Offering, written notice describing the proposed Future Offering,
      including the terms and conditions thereof and proposed definitive documentation
      to be entered into in connection therewith, and providing each Buyer an option
      during the fifteen (15) day period following delivery of such notice to purchase
      its pro rata share (based on the ratio that the aggregate principal amount
      of
      Debentures purchased by it hereunder bears to the aggregate principal amount
      of
      Debentures purchased hereunder) of the securities being offered in the Future
      Offering on the same terms as contemplated by such Future Offering (the
      limitations referred to in this sentence and the preceding sentence are
      collectively referred to as the “Capital Raising Limitations”).  In the
      event the terms and conditions of a proposed Future Offering are amended in
      any
      respect after delivery of the notice to the Buyers concerning the proposed
      Future Offering, the Company shall deliver a new notice to each Buyer describing
      the amended terms and conditions of the proposed Future Offering and each Buyer
      thereafter shall have an option during the fifteen (15) day period following
      delivery of such new notice to purchase its pro rata share of the securities
      being offered on the same terms as contemplated by such proposed Future
      Offering, as amended.  The foregoing sentence shall apply to
      successive amendments to the terms and conditions of any proposed Future
      Offering.  The Capital Raising Limitations shall not apply to any
      transaction involving (i) issuances of securities in a firm commitment
      underwritten public offering (excluding a continuous offering pursuant to Rule
      415 under the 1933 Act) or (ii) issuances of securities as consideration for
      a
      merger, consolidation or purchase of assets, or in connection with any strategic
      partnership or joint venture (the primary purpose of which is not to raise
      equity capital), or in connection with the disposition or acquisition of a
      business, product or license by the Company.  The Capital Raising
      Limitations also shall not apply to the issuance of securities upon exercise
      or
      conversion of the Company’s options, warrants or other convertible securities
      outstanding as of the date hereof or to the grant of additional options or
      warrants, or the issuance of additional securities, under any Company stock
      option or restricted stock plan approved by the shareholders of the
      Company.

     

    f.  Expenses.  At
      the Closing, the Company shall reimburse Buyers for expenses incurred by them
      in
      connection with the negotiation, preparation, execution, delivery and
      performance of this Agreement and the other agreements to be executed in
      connection herewith (“Documents”), including, without limitation, attorneys’ and
      consultants’ fees and expenses, transfer agent fees, fees for stock quotation
      services, fees relating to any amendments or modifications of the Documents
      or
      any consents or waivers of provisions in the Documents, fees for the preparation
      of opinions of counsel, escrow fees, and costs of restructuring the transactions
      contemplated by the Documents.  When possible, the Company must pay
      these fees directly, otherwise the Company must make immediate payment for
      reimbursement to the Buyers for all fees and expenses immediately upon written
      notice by the Buyer or the submission of an invoice by the Buyer  If
      the Company fails to reimburse the Buyer in full within three (3) business
      days
      of the written notice or submission of invoice by the Buyer, the Company shall
      pay interest on the total amount of fees to be reimbursed at a rate of 15%
      per
      annum.

     

    g.  Financial
      Information.  The Company agrees to send the following reports to
      each Buyer until such Buyer transfers, assigns, or sells all of the Securities:
      (i) within ten (10) days after the filing with the SEC, a copy of its Annual
      Report on Form

     

    10-KSB
      its Quarterly Reports on Form 10-QSB and any Current Reports on Form 8-K; (ii)
      within one (1) day after release, copies of all press releases issued by the
      Company or any of its Subsidiaries; and (iii) contemporaneously with the making
      available or giving to the shareholders of the Company, copies of any notices
      or
      other information the Company makes available or gives to such
      shareholders.

     

    h.  Authorization
      and Reservation of Shares.  Subject to obtaining Stockholder
      Approval (as defined in Section 4(k)), the Company shall at all times have
      authorized, and reserved for the purpose of issuance, a sufficient number of
      shares of Common Stock to provide for the full conversion or exercise of the
      outstanding Debentures and Warrants and issuance of the Conversion Shares and
      Warrant Shares in connection therewith (based on the Conversion Price of the
      Debentures or Exercise Price of the Warrants in effect from time to time) and
      as
      otherwise required by the Debentures.  The Company shall not reduce
      the number of shares of Common Stock reserved for issuance upon conversion
      of
      Debentures and exercise of the Warrants without the consent of each
      Buyer.  The Company shall at all times maintain the number of shares
      of Common Stock so reserved for issuance at an amount (“Reserved Amount”) equal
      to no less than two (2) times the number that is then actually issuable upon
      full conversion of the Debentures and Additional Debentures and upon exercise
      of
      the Warrants and the Additional Warrants (based on the Conversion Price of
      the
      Debentures or the Exercise Price of the Warrants in effect from time to
      time).  If at any time the number of shares of Common Stock authorized
      and reserved for issuance (“Authorized and Reserved Shares”) is below the
      Reserved Amount, the Company will promptly take all corporate action necessary
      to authorize and reserve a sufficient number of shares, including, without
      limitation, calling a special meeting of shareholders to authorize additional
      shares to meet the Company’s obligations under this Section 4(h), in the case of
      an insufficient number of authorized shares, obtain shareholder approval of
      an
      increase in such authorized number of shares, and voting the management shares
      of the Company in favor of an increase in the authorized shares of the Company
      to ensure that the number of authorized shares is sufficient to meet the
      Reserved Amount.  If the Company fails to obtain such shareholder
      approval within thirty (30) days following the date on which the number of
      Reserved Amount exceeds the Authorized and Reserved Shares, the Company shall
      pay to the Borrower the Standard Liquidated Damages Amount, in cash or in shares
      of Common Stock at the option of the Buyer.  If the Buyer elects to be
      paid the Standard Liquidated Damages Amount in shares of Common Stock, such
      shares shall be issued at the Conversion Price at the time of
      payment.  In order to ensure that the Company has authorized a
      sufficient amount of shares to meet the Reserved Amount at all times, the
      Company must deliver to the Buyer at the end of every month a list detailing
      (1)
      the current amount of shares authorized by the Company and reserved for the
      Buyer; and (2) amount of shares issuable upon conversion of the Debentures
      and
      upon exercise of the Warrants and as payment of interest accrued on the
      Debentures for one year.  If the Company fails to provide such list
      within five (5) business days of the end of each month, the Company shall pay
      the Standard Liquidated Damages Amount, in cash or in shares of Common Stock
      at
      the option of the Buyer, until the list is delivered.  If the Buyer
      elects to be paid the Standard Liquidated Damages Amount in shares of Common
      Stock, such shares shall be issued at the Conversion Price at the time of
      payment.

     

    i.  Listing.  The
      Company shall promptly secure the listing of the Conversion Shares and Warrant
      Shares upon each national securities exchange or automated quotation system,
      if
      any, upon which shares of Common Stock are then listed (subject to official
      notice of issuance) and, so long as any Buyer owns any of the Securities, shall
      maintain, so long as any other shares of Common Stock shall be so listed, such
      listing of all Conversion Shares and Warrant Shares from time to time issuable
      upon conversion of the Debentures or exercise of the Warrants.  The
      Company will obtain and, so long as any Buyer owns any of the Securities,
      maintain the listing and trading of its Common Stock on the OTCBB or any
      equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the
      Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange
      (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all
      respects with the Company’s reporting, filing and other obligations under the
      bylaws or rules of the National Association of Securities Dealers (“NASD”) and
      such exchanges, as applicable.  The Company shall promptly provide to
      each Buyer copies of any notices it receives from the OTCBB and any other
      exchanges or quotation systems on which the Common Stock is then listed
      regarding the continued eligibility of the Common Stock for listing on such
      exchanges and quotation systems.

     

    j.  Corporate
      Existence.  So long as a Buyer beneficially owns any Debentures or
      Warrants, the Company shall maintain its corporate existence and shall not
      sell
      all or substantially all of the Company’s assets, except in the event of a
      merger or consolidation or sale of all or substantially all of the Company’s
      assets, where the surviving or successor entity in such transaction (i) assumes
      the Company’s obligations hereunder and under the agreements and instruments
      entered into in connection herewith and (ii) is a publicly traded corporation
      whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap,
      NYSE or AMEX.

     

    k.  Stockholder
      Approval.  The Company shall file a proxy or information statement
      with the SEC no later than January 31, 2006  and use its best efforts
      to obtain, on or before April 30, 2006, such approvals of the Company’s
      stockholders as may be required to issue all of the shares of Common Stock
      issuable upon conversion or exercise of, or otherwise with respect to, the
      Debentures and the Warrants in accordance with Nevada law and any applicable
      rules or regulations of the OTCBB and/or Nasdaq, either through a reverse stock
      split of the Common Stock or an increase in authorized capital (the “Stockholder
      Approval”).  The Company shall furnish to each Buyer and its legal
      counsel promptly (but in no event less than two (2) business days) before the
      same is filed with the SEC, one copy of the proxy or information statement
      and
      any amendment thereto, and shall deliver to each Buyer promptly each letter
      written by or on behalf of the Company to the SEC or the staff of the SEC,
      and
      each item of correspondence from the SEC or the staff of the SEC, in each case
      relating to such proxy or information statement (other than any portion thereof
      which contains information for which the Company has sought confidential
      treatment).  The Company will promptly (but in no event more than
      three (3) business days) respond to any and all comments received from the
      SEC
      (which comments shall promptly be made available to each Buyer).  The
      Company shall comply with the filing and disclosure requirements of Section
      14
      under the 1934 Act in connection with the Stockholder Approval.

     

    l.  No
      Integration.  The Company shall not make any offers or sales of
      any security (other than the Securities) under circumstances that would require
      registration of the Securities being offered or sold hereunder under the 1933
      Act or cause the offering of the Securities to be integrated with any other
      offering of securities by the Company for the purpose of any stockholder
      approval provision applicable to the Company or its securities.

     

    m.  Restriction
      on Short Sales. The Buyers agree that, so long as any of the Notes remain
      outstanding, but in no event less than two (2) years from the date hereof,
      the
      Buyers will not enter into or effect any “short sales” (as such term is defined
      in Rule 3b-3 of the 1934 Act) of the Common Stock or hedging transaction which
      establishes a net short position with respect to the Common Stock.

     

    n.  Breach
      of Covenants.  If the Company breaches any of the covenants set
      forth in this Section 4, and in addition to any other remedies available to
      the
      Buyers pursuant to this Agreement, the Company shall pay to the Buyers the
      Standard Liquidated Damages Amount, in cash or in shares of Common Stock at
      the
      option of the Company, until such breach is cured.  If the Company
      elects to pay the Standard Liquidated Damages Amount in shares, such shares
      shall be issued at the Conversion Price at the time of payment.

     

    5.  TRANSFER
      AGENT INSTRUCTIONS.  The Company shall issue irrevocable
      instructions to its transfer agent to issue certificates, registered in the
      name
      of each Buyer or its nominee, for the Conversion Shares and Warrant Shares
      in
      such amounts as specified from time to time by each Buyer to the Company upon
      conversion of the Debentures or exercise of the Warrants in accordance with
      the
      terms thereof (the “Irrevocable Transfer Agent Instructions”).  Prior
      to registration of the Conversion Shares and Warrant Shares under the 1933
      Act
      or the date on which the Conversion Shares and Warrant Shares may be sold
      pursuant to Rule 144 without any restriction as to the number of Securities
      as
      of a particular date that can then be immediately sold, all such certificates
      shall bear the restrictive legend specified in Section 2(g) of this
      Agreement.  The Company warrants that no instruction other than the
      Irrevocable Transfer Agent Instructions referred to in this Section 5, and
      stop
      transfer instructions to give effect to Section 2(f) hereof (in the case of
      the
      Conversion Shares and Warrant Shares, prior to registration of the Conversion
      Shares and Warrant Shares under the 1933 Act or the date on which the Conversion
      Shares and Warrant Shares may be sold pursuant to Rule 144 without any
      restriction as to the number of Securities as of a particular date that can
      then
      be immediately sold), will be given by the Company to its transfer agent and
      that the Securities shall otherwise be freely transferable on the books and
      records of the Company as and to the extent provided in this Agreement and
      the
      Registration Rights Agreement.  Nothing in this Section shall affect
      in any way the Buyer’s obligations and agreement set forth in Section 2(g)
      hereof to comply with all applicable prospectus delivery requirements, if any,
      upon re-sale of the Securities.  If a Buyer provides the Company with
      (i) an opinion of counsel in form, substance and scope customary for opinions
      in
      comparable transactions, to the effect that a public sale or transfer of such
      Securities may be made without registration under the 1933 Act and such sale
      or
      transfer is effected or (ii) the Buyer provides reasonable assurances that
      the
      Securities can be sold pursuant to Rule 144, the Company shall permit the
      transfer, and, in the case of the Conversion Shares and Warrant Shares, promptly
      instruct its transfer agent to issue one or more certificates, free from
      restrictive legend, in such name and in such denominations as specified by
      such
      Buyer.  The Company acknowledges that a breach by it of its
      obligations hereunder will cause irreparable harm to the Buyers, by vitiating
      the intent and purpose of the transactions contemplated
      hereby.  Accordingly, the Company acknowledges that the remedy at law
      for a breach of its obligations under this Section 5 may be inadequate and
      agrees, in the event of a breach or threatened breach by the Company of the
      provisions of this Section, that the Buyers shall be entitled, in addition
      to
      all other available remedies, to an injunction restraining any breach and
      requiring immediate transfer, without the necessity of showing economic loss
      and
      without any bond or other security being required.

     

    6.  CONDITIONS
      TO THE COMPANY’S OBLIGATION TO SELL.  The obligation of the
      Company hereunder to issue and sell the Debentures and Warrants to a Buyer
      at
      the Closing is subject to the satisfaction, at or before the Closing Date of
      each of the following conditions thereto, provided that these conditions are
      for
      the Company’s sole benefit and may be waived by the Company at any time in its
      sole discretion:

     

    a.  The
      applicable Buyer shall have executed this Agreement and the Registration Rights
      Agreement, and delivered the same to the Company.

     

    b.  The
      applicable Buyer shall have delivered the Purchase Price in accordance with
      Section 1(b) above.

     

    c.  The
      representations and warranties of the applicable Buyer shall be true and correct
      in all material respects as of the date when made and as of the Closing Date
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date), and the applicable Buyer shall have performed, satisfied
      and complied in all material respects with the covenants, agreements and
      conditions required by this Agreement to be performed, satisfied or complied
      with by the applicable Buyer at or prior to the Closing Date.

     

    d.  No
      litigation, statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by or
      in
      any court or governmental authority of competent jurisdiction or any
      self-regulatory organization having authority over the matters contemplated
      hereby which prohibits the consummation of any of the transactions contemplated
      by this Agreement.

     

    7.  CONDITIONS
      TO EACH BUYER’S OBLIGATION TO PURCHASE.  The obligation of each
      Buyer hereunder to purchase the Debentures and Warrants at the Closing is
      subject to the satisfaction, at or before the Closing Date of each of the
      following conditions, provided that these conditions are for such Buyer’s sole
      benefit and may be waived by such Buyer at any time in its sole
      discretion:

     

    a.  The
      Company shall have executed this Agreement and the Registration Rights
      Agreement, and delivered the same to the Buyer.

     

    b.  The
      Company shall have delivered to such Buyer duly executed Debentures (in such
      denominations as the Buyer shall request) and Warrants in accordance with
      Section 1(b) above.

     

    c.  The
      Irrevocable Transfer Agent Instructions, in form and substance satisfactory
      to a
      majority-in-interest of the Buyers, shall have been delivered to and
      acknowledged in writing by the Company’s Transfer Agent.

     

    d.  The
      representations and warranties of the Company shall be true and correct in
      all
      material respects as of the date when made and as of the Closing Date as though
      made at such time (except for representations and warranties that speak as
      of a
      specific date) and the Company shall have performed, satisfied and complied
      in
      all material respects with the covenants, agreements and conditions required
      by
      this Agreement to be performed, satisfied or complied with by the Company at
      or
      prior to the Closing Date.  The Buyer shall have received a
      certificate or certificates, executed by the chief executive officer of the
      Company, dated as of the Closing Date, to the foregoing effect and as to such
      other matters as may be reasonably requested by such Buyer including, but not
      limited to certificates with respect to the Company’s Articles of Incorporation,
      By-laws and Board of Directors’ resolutions relating to the transactions
      contemplated hereby.

     

    e.  No
      litigation, statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by or
      in
      any court or governmental authority of competent jurisdiction or any
      self-regulatory organization having authority over the matters contemplated
      hereby which prohibits the consummation of any of the transactions contemplated
      by this Agreement.

     

    f.  No
      event shall have occurred which could reasonably be expected to have a Material
      Adverse Effect on the Company.

     

    g.  The
      Conversion Shares and Warrant Shares shall have been authorized for quotation
      on
      the OTCBB and trading in the Common Stock on the OTCBB shall not have been
      suspended by the SEC or the OTCBB.

     

    h.  The
      Buyer shall have received an opinion of the Company’s counsel, dated as of the
      Closing Date, in form, scope and substance reasonably satisfactory to the Buyer
      and in substantially the same form as Exhibit “D” attached hereto.

     

    i.  The
      Buyer shall have received an officer’s certificate described in Section 3(c)
      above, dated as of the Closing Date.

     

    8.  GOVERNING
      LAW; MISCELLANEOUS.

     

    a.  Governing
      Law.  THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED
      IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
      MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE
      PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO
      THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW
      YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE
      AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
      HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
      FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES
      FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL
      SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY
      IN
      ANY SUCH SUIT OR PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER
      PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
      LAW.  BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY
      SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
      JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL
      MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
      THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
      ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
      DISPUTE.

     

    b.  Counterparts;
      Signatures by Facsimile.  This Agreement may be executed in one or
      more counterparts, each of which shall be deemed an original but all of which
      shall constitute one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other
      party.  This Agreement, once executed by a party, may be delivered to
      the other party hereto by facsimile transmission of a copy of this Agreement
      bearing the signature of the party so delivering this Agreement.

     

    c.  Headings.  The
      headings of this Agreement are for convenience of reference only and shall
      not
      form part of, or affect the interpretation of, this Agreement.

     

    d.  Severability.  In
      the event that any provision of this Agreement is invalid or unenforceable
      under
      any applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law.  Any provision
      hereof which may prove invalid or unenforceable under any law shall not affect
      the validity or enforceability of any other provision hereof.

     

    e.  Entire
      Agreement; Amendments.  This Agreement and the instruments
      referenced herein contain the entire understanding of the parties with respect
      to the matters covered herein and therein and, except as specifically set forth
      herein or therein, neither the Company nor the Buyer makes any representation,
      warranty, covenant or undertaking with respect to such matters.  No
      provision of this Agreement may be waived or amended other than by an instrument
      in writing signed by the party to be charged with enforcement.

     

    f.  Notices.  Any
      notices required or permitted to be given under the terms of this Agreement
      shall be sent by certified or registered mail (return receipt requested) or
      delivered personally or by courier (including a recognized overnight delivery
      service) or by facsimile and shall be effective five days after being placed
      in
      the mail, if mailed by regular United States mail, or upon receipt, if delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile, in each case addressed to a party.  The addresses for
      such communications shall be:

     

    
      	
              If
                to the Company:

            	
              Juniper
                Group, Inc.

            


    

     

    
      	
               

            	
              20283
                State Road, Suite
                400                                                 Boca
                Raton, Florida 33498

            


    

     

    
      	
               

            	
              Attention:  Chief
                Executive Officer

            


    

     

    
      	
               

            	
              Telephone:  (561)
                482-9327

            


    

     

    
      	
               

            	
              Facsimile:
                (561) 482-9328

            


    

     

    With
      copies
      to:                        Sichenzia
      Ross Friedman Ference LLP

    1065
      Avenue of the Americas

    New
      York, NY  10018

    Attention:   Gregory
      Sichenzia, Esq.

    Telephone:  (212)
      930-9700

    Facsimile:   (212)
      930-9725

     

    If
      to a Buyer:  To the address set forth immediately below such Buyer’s
      name on the signature pages hereto.

     

    With
      copy
      to:               Ballard
      Spahr Andrews & Ingersoll, LLP

    1735
      Market Street

     

    51st
      Floor

     

    Philadelphia,
      Pennsylvania  19103

     

    Attention:  Gerald
      J. Guarcini, Esq.

     

    Telephone:  215-864-8625

     

    Facsimile:  215-864-8999

     

    Email:  guarcini@ballardspahr.com

     

    Each
      party shall provide notice to the other party of any change in
      address.

     

    g.  Successors
      and Assigns.  This Agreement shall be binding upon and inure to
      the benefit of the parties and their successors and assigns.  Neither
      the Company nor any Buyer shall assign this Agreement or any rights or
      obligations hereunder without the prior written consent of the other;
provided, however, that subject to Section 2(f), any Buyer
      may assign its rights hereunder to any person that purchases Securities in
      a
      private transaction from a Buyer or to any of its “affiliates,” as that term is
      defined under the 1934 Act, without the consent of the Company; and provided
      further, that the Buyers shall not assign this Agreement or any rights or
      obligations hereunder until the Registration Debentures and Registration
      Warrants are purchased by the Buyers.

     

    h.  Third
      Party Beneficiaries.  This Agreement is intended for the benefit
      of the parties hereto and their respective permitted successors and assigns,
      and
      is not for the benefit of, nor may any provision hereof be enforced by, any
      other person.

     

    i.  Survival.  The
      representations and warranties of the Company and the agreements and covenants
      set forth in Sections 3, 4, 5 and 8 shall survive the closing hereunder
      notwithstanding any due diligence investigation conducted by or on behalf of
      the
      Buyers.  The Company agrees to indemnify and hold harmless each of the
      Buyers and all their officers, directors, employees and agents for loss or
      damage arising as a result of or related to any breach or alleged breach by
      the
      Company of any of its representations, warranties and covenants set forth in
      Sections 3 and 4 hereof or any of its covenants and obligations under this
      Agreement or the Registration Rights Agreement, including advancement of
      expenses as they are incurred.

     

    j.  Publicity.  The
      Company and each of the Buyers shall have the right to review a reasonable
      period of time before issuance of any press releases, SEC, OTCBB or NASD
      filings, or any other public statements with respect to the transactions
      contemplated hereby; provided, however, that the Company shall be
      entitled, without the prior approval of each of the Buyers, to make any press
      release or SEC, OTCBB (or other applicable trading market) or NASD filings
      with
      respect to such transactions as is required by applicable law and regulations
      (although each of the Buyers shall be consulted by the Company in connection
      with any such press release prior to its release and shall be provided with
      a
      copy thereof and be given an opportunity to comment thereon).

     

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

     

    l.  No
      Strict Construction.  The language used in this Agreement will be
      deemed to be the language chosen by the parties to express their mutual intent,
      and no rules of strict construction will be applied against any
      party.

     

    m.  Remedies.  The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Buyers by vitiating the intent and purpose of the
      transaction contemplated hereby.  Accordingly, the Company
      acknowledges that the remedy at law for a breach of its obligations under this
      Agreement will be inadequate and agrees, in the event of a breach or threatened
      breach by the Company of the provisions of this Agreement, that the Buyers
      shall
      be entitled, in addition to all other available remedies at law or in equity,
      and in addition to the penalties assessable herein, to an injunction or
      injunctions restraining, preventing or curing any breach of this Agreement
      and
      to enforce specifically the terms and provisions hereof, without the necessity
      of showing economic loss and without any bond or other security being
      required.

     

    


     

    


     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

     

    IN
      WITNESS WHEREOF, the undersigned Buyers and the Company have caused this
      Agreement to be duly executed as of the date first above written.

     

    


    


    JUNIPER
      GROUP, INC.

    


    /s/Vlado P. Hreljanovic


    ________________________________

    Vlado
      P. Hreljanovic

    Chief
      Executive Officer

    


    


    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
      Debentures:                                                                       
$________

    Number
      of
      Warrants:                                                                                                             ________

    Aggregate
      Purchase
      Price:                                                                                                   $________

    


    AJW
      MASTER FUND, 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 Debentures: $_______

    Number
      of Warrants: _______

    Aggregate
      Purchase Price: $_______

    


    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:                  
$________