Document:

Exhibit 10.1

                             SUBSCRIPTION AGREEMENT

     THIS  SUBSCRIPTION  AGREEMENT  (this "Agreement"), dated as of October ___,
2004, is by and among FTS Group, Inc., a Nevada corporation (the "Company"), and
the subscribers identified and whose signatures appear on the signature pages to
this  Agreement  (each,  a  "Subscriber"  and, collectively, the "Subscribers").

     WHEREAS,  the  Company  is  offering  to  accredited investors in a private
placement  (the  "Offering")  made  in  reliance  upon  exemptions  from  the
registration  requirements  of the Securities Act of 1933, as amended (the "1933
Act"),  afforded  under  Sections 4(2) and 4(6) of the 1933 Act and Regulation D
promulgated  by  the  United  States  Securities  and  Exchange  Commission (the
"Commission")  under the 1933 Act, an aggregate of up to 25,000,000 units (each,
a "Unit"), each Unit consisting of (a) one share (each, a "Share") of the common
stock,  $.001  par value per share (the "Common Stock"), of the Company, (b) one
Class A Common Stock Purchase Warrant of the Company (each, a "Class A Warrant")
and (c) one Class B Common Stock Purchase Warrant of the Company (each, a "Class
B  Warrant," and with the Class A Warrants sometimes collectively referred to as
the  "Warrants"), at a per Unit price of $0.08 (the "Unit Purchase Price"), on a
"best  efforts,  no  minimum"  basis  through  Westor Online, Inc. the exclusive
placement  agent  (in  such  capacity,  the "Placement Agent") for the Offering;

     WHEREAS,  each  Class  A  Warrant  shall entitle its holder to purchase one
share  (each,  a "Class A Warrant Share") of Common Stock at a purchase price of
$0.12  (subject  to  adjustment),  have a term of three years, commencing on the
date of the Closing (as such term is hereinafter defined), and be evidenced by a
warrant  certificate  substantially  in  the  form attached as EXHIBIT A to this
Agreement;

     WHEREAS,  each  Class  B  Warrant  shall entitle its holder to purchase one
share  (each,  a "Class B Warrant Share") of Common Stock at a purchase price of
$0.08  (subject  to adjustment), have a term of 180 days, commencing on the date
on  which  the Commission shall declare effective a registration statement under
the  1933  Act  registering for resale the Shares included in the Units actually
sold  in  the Offering, the Class A Warrant Shares issuable upon exercise of the
Class  A  Warrants  included  in the Units actually sold in the Offering and the
Class  B  Warrant Shares issuable upon exercise of the Class B Warrants included
in  the Units actually sold in the Offering  (the "Registrable Securities"), and
be  evidenced  by  a  warrant  certificate substantially in the form attached as
EXHIBIT  B  to  this  Agreement;

     WHEREAS, all amounts representing subscriptions to purchase the Units shall
be  deposited  and  disbursed  pursuant  to and in accordance with the terms and
provisions  of  a  funds Escrow Agreement, substantially in the form attached as
EXHIBIT  C  to  this  Agreement  (the  "Escrow  Agreement");  and

     WHEREAS, each of the Subscribers desires to participate in the Offering and
purchase that number of Units as set forth on the Subscriber's signature page to
this  Agreement  and  the  Company  desires  to  accept  such  subscriptions.

     NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and  other
agreements  contained  in  this  Agreement  and  other  good  and  valuable
consideration,  receipt  of  which  is  hereby acknowledged, the Company and the
Subscribers  agree  as  follows:

     1.     Purchase  and  Sale  of  the Units.  Subject to the satisfaction (or
waiver)  of the conditions to Closing set forth in this Agreement and the Escrow
Agreement,  each  Subscriber  shall  purchase  the  number  of  Units  (for each
Subscriber,  the  "Subscriber's  Units") indicated on the Subscriber's signature
page  to  this Agreement, and the Company shall issue and sell to the Subscriber
the  Shares,  Class  A  Warrants  and  Class  B  Warrants comprising such Units.

     2.     Escrow  Arrangements;  Form  of  Payment.  Upon  execution  of  this
Agreement,  and  pursuant  to the terms of the Escrow Agreement, each Subscriber
shall  tender  in cash (or other immediately available funds) the aggregate Unit
Purchase  Price  for  the  Subscriber's Units.  Upon notice of the tender of the
aggregate  Unit  Purchase  Price  for  the  Subscriber's Units the Company shall
deliver  to  the  escrow  agent  under  the Escrow Agreement the Shares, Class A
Warrants  and  Class  B Warrants comprising the Subscriber's Units in accordance
with  the  terms  of  the  Escrow  Agreement.

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

          (a)  Information  on  Company.  The  Subscriber  has  been
furnished  with and has had access at the EDGAR Website of the Commission to the
Company's  Form  10-KSB  for  the year ended December 31, 2003 as filed with the
Commission,  together with all subsequently filed Forms 10-QSB, 8-K, and filings
made with the Commission available at the EDGAR website (hereinafter referred to
collectively  as  the  "Reports").  Copies  of the current form 10K and 10Q. The
Subscriber has been furnished with and has reviewed the risk factors relating to
an  investment  in  the  Company's  securities  annexed hereto as EXHIBIT E.  In
addition,  the  Subscriber  has  received in writing from the Company such other
information  concerning its operations, financial condition and other matters as
the Subscriber has requested in writing (such other information is collectively,
the  "Other  Written  Information"), has had an opportunity to ask questions and
receive  answers  from  the Company's management, and considered all factors the
Subscriber  deems  material  in deciding on the advisability of investing in the
Securities.

          (b)  Information  on  Subscriber. The Subscriber is and will be at the
time  of  the exercise of any of the Warrants, an "accredited investor", as such
term  is defined in paragraph (a) of Rule 501 of Regulation D promulgated by the
Commission  under the 1933 Act (a copy of which is annexed hereto as EXHIBIT F),
is  experienced  in  investments and business matters, has made investments of a
speculative  nature and has purchased securities of United States publicly-owned
companies  in  private placements in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as to
enable  the  Subscriber to utilize the information made available by the Company
to  evaluate the merits and risks of and to make an informed investment decision
with  respect  to  the  proposed  purchase,  which  represents  a  speculative
investment.  The  Subscriber has the authority and is duly and legally qualified
to  purchase and own the Securities.  The Subscriber is able to bear the risk of
such  investment for an indefinite period and to afford a complete loss thereof.
The  information set forth on the signature page hereto regarding the Subscriber
is  accurate  and  complete.

          (c)  Purchase  of  Units.  On  each  closing date, the Subscriber will
purchase  the  Units as principal for its own account and not with a view to any
distribution  thereof  and  no  one other than the Subscriber has any beneficial
interest  in  such  securities.

          (d)  Compliance  with  Securities  Act. The Subscriber understands and
agrees  that  the  Securities have not been registered under the 1933 Act or any
applicable  state  securities laws, by reason of their issuance in a transaction
that  does  not  require  registration  under the 1933 Act (based in part on the
accuracy  of the representations and warranties of Subscriber contained herein),
and  that  such  Securities  must  be  held  indefinitely  unless  a  subsequent
disposition  is registered under the 1933 Act or any applicable state securities
laws  or  is  exempt  from  such  registration.  In  any  event,  and subject to
compliance with applicable securities laws including the 1933 Act and Regulation
M,  the Subscriber may enter into hedging transactions with third parties, which
may in turn engage in short sales of the Securities in the course of hedging the
position  they  assume and the Subscriber may also enter into short positions or
other  derivative  transactions  relating to the Securities, or interests in the
Securities, and deliver the Securities, or interests in the Securities, to close
out  their  short  or  other  positions or otherwise settle short sales or other
transactions,  or loan or pledge the Securities, or interests in the Securities,
to  third  parties  that  in  turn  may  dispose  of  these  Securities.

          (e)  Shares  Legend.  The  Shares,  the Class A Warrant Shares and the
Class  B  Warrant  Shares  shall  bear  the  following  or  similar  legend:

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

          (f)  Warrants  Legend.  The  Warrants  shall  bear  the
following  or  similar  legend:

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

          (g)  Reserved.

         (h)  Authority;  Enforceability.  This  Agreement  and other agreements
delivered  together with this Agreement or in connection herewith have been duly
authorized,  executed  and delivered by the Subscriber and are valid and binding
agreements  enforceable  in  accordance with their terms, subject to bankruptcy,
insolvency,  fraudulent transfer, reorganization, moratorium and similar laws of
general  applicability  relating to or affecting creditors' rights generally and
to  general  principles  of  equity; and Subscriber has full corporate power and
authority  necessary  to enter into this Agreement and such other agreements and
to perform its obligations hereunder and under all other agreements entered into
by  the  Subscriber  relating  hereto.

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

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

        4.  Company  Representations  and  Warranties.  The  Company  represents
and  warrants  to  and  agrees  with  each  Subscriber  that:

          (a)  Due  Incorporation.  The  Company  and  each  of its subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws  of  the  respective  jurisdictions  of  their  incorporation  and have the
requisite corporate power to own their properties and to carry on their business
as  now  being  conducted.  The  Company  and  each  of its subsidiaries is duly
qualified  as  a  foreign  corporation to do business and is in good standing in
each  jurisdiction  where the nature of the business conducted or property owned
by  it  makes  such  qualification  necessary, other than those jurisdictions in
which  the failure to so qualify would not have a material adverse effect on the
business,  operations  or  financial  condition  of  the  Company.

          (b)  Outstanding  Stock.  All issued and outstanding shares of capital
stock  of  the Company and each of its subsidiaries has been duly authorized and
validly  issued  and  are  fully  paid  and  non-assessable.

          (c)  Authority;  Enforceability.  This  Agreement,  the  Shares,  the
Warrants,  the Escrow Agreement and any other agreements delivered together with
this  Agreement or in connection herewith (collectively "Transaction Documents")
have  been  duly authorized, executed and delivered by the Company and are valid
and  binding  agreements  enforceable in accordance with their terms, subject to
bankruptcy,  insolvency,  fraudulent  transfer,  reorganization,  moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally  and  to  general principles of equity. The Company has full corporate
power  and  authority  necessary  to  enter  into  and  deliver  the Transaction
Documents  and  to  perform  its  obligations.

          (d)  Additional  Issuances.  There  are  no  outstanding agreements or
preemptive  or similar rights affecting the Company's common stock or equity and
no  outstanding  rights,  warrants  or  options  to  acquire,  or  instruments
convertible  into  or  exchangeable  for,  or  agreements or understandings with
respect  to  the sale or issuance of any shares of common stock or equity of the
Company  or  other  equity  interest  in  any of the subsidiaries of the Company
except  as  described  on  Schedule  5(d),  or  the  Reports.

          (e)  Consents.  No  consent,  approval,  authorization or order of any
court,  governmental  agency  or body or arbitrator having jurisdiction over the
Company,  or  any  of  its affiliates, the American Stock Exchange, the National
Association  of  Securities  Dealers,  Inc.,  Nasdaq,  SmallCap  Market, the OTC
Bulletin Board ("Bulletin Board") nor the Company's shareholders is required for
the  execution by the Company of the Transaction Documents and compliance by the
Company  of  its obligations under the Transaction Documents, including, without
limitation,  the issuance and sale of the Securities, and the performance of the
Company's  obligations  under  the  Transaction  Documents.

          (f)  No  Violation  or  Conflict.  Assuming  the  representations  and
warranties  of  the  Subscribers  in Section 3 are true and correct, neither the
issuance  and  sale  of  the  Securities  nor  the  performance of the Company's
obligations  under  this  Agreement and all other agreements entered into by the
Company  relating  thereto  by  the  Company  will:

          (i)  Violate,  conflict  with,  result in a breach of, or constitute a
default  (or  an  event  which with the giving of notice or the lapse of time or
both  would be reasonably likely to constitute a default) under (A) the articles
or  certificate  of  incorporation, charter or bylaws of the Company, (B) to the
Company's  knowledge, any decree, judgment, order, law, treaty, rule, regulation
or  determination applicable to the Company of any court, governmental agency or
body,  or  arbitrator  having  jurisdiction  over  the  Company  or  any  of its
subsidiaries  or  over  the  properties  or  assets of the Company or any of its
affiliates,  (C) the terms of any bond, debenture, note or any other evidence of
indebtedness,  or any agreement, stock option or other  similar plan, indenture,
lease,  mortgage,  deed of trust or other instrument to which the Company or any
of its affiliates or subsidiaries is a party, by which the Company or any of its
affiliates  or  subsidiaries  is bound, or to which any of the properties of the
Company or any of its affiliates or subsidiaries is subject, or (D) the terms of
any  "lock-up"  or similar provision of any underwriting or similar agreement to
which  the  Company,  or any of its affiliates or subsidiaries is a party except
the  violation,  conflict, breach, or default of which would not have a material
adverse  effect  on  the  Company;  or

          (ii)  result  in  the  creation  or  imposition of any lien, charge or
encumbrance  upon  the  Securities  or  any  of  the  assets of the Company, its
subsidiaries  or  any  of  its  affiliates;  or

          (iii)  result in the activation of any anti-dilution rights or a reset
or  repricing of any debt or security instrument of any other creditor or equity
holder  of  the  Company,  nor result in the acceleration of the due date of any
obligation  of  the  Company;  or

          (iv) result in the activation of any piggy-back registration rights of
any  person  or  entity holding securities of the Company or having the right to
receive  securities  of  the  Company.

          (g)  The  Securities.  The  Securities  upon  issuance:

          (i)  are, or will be, free and clear of any security interests, liens,
claims  or  other  encumbrances, subject to restrictions upon transfer under the
1933  Act  and  any  applicable  state  securities  laws;

          (ii)  have  been,  or  will be, duly and validly authorized and on the
date  of  issuance  of the Shares and upon exercise of the Warrants, the Shares,
the  Class  A  Warrant  Shares  and  the Class B Warrant Shares will be duly and
validly issued, fully paid and non-assessable (and if registered pursuant to the
1933  Act,  and  resold  pursuant to an effective registration statement will be
free  trading  and unrestricted, provided that each Subscriber complies with the
prospectus  delivery  requirements  of  the  1933  Act);

          (iii) will not have been issued or sold in violation of any preemptive
or  other  similar  rights  of the holders of any securities of the Company; and

          (iv)  will  not  subject  the holders thereof to personal liability by
reason  of  being  such  holders.

          (h)  Litigation.  There is no pending or, to the best knowledge of the
Company,  threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or  any  of its affiliates that would affect the execution by the Company or the
performance  by  the  Company  of  its obligations under this Agreement, and all
other  agreements  entered  into  by  the  Company  relating  hereto.  Except as
disclosed  in  the Reports, there is no pending or, to the best knowledge of the
Company,  basis  for  or  threatened  action,  suit, proceeding or investigation
before any court, governmental agency or body, or arbitrator having jurisdiction
over  the  Company,  or  any  of  its  affiliates  which litigation if adversely
determined  could  have  a  material  adverse  effect  on  the  Company.

          (i)  Reporting Company. The Company is a publicly-held company subject
to  reporting  obligations pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended (the "1934 Act") and has a class of common shares registered
pursuant  to  Section  12(g) of the 1934 Act.  Pursuant to the provisions of the
1934  Act, the Company has timely filed all reports and other materials required
to  be  filed thereunder with the Commission during the preceding twelve months.

          (j)  No  Market  Manipulation. The Company has not taken, and will not
take,  directly  or indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or manipulation of the price of
the  common  stock  of  the  Company  to  facilitate  the  sale or resale of the
Securities  or affect the price at which the Securities may be issued or resold.

          (k)  Information  Concerning Company. The Reports contain all material
information  relating  to the Company and its operations and financial condition
as  of  their  respective  dates  which  information is required to be disclosed
therein. Since the date of the financial statements included in the Reports, and
except  as modified in the Other Written Information or in the Schedules hereto,
there  has  been no material adverse change in the Company's business, financial
condition  or  affairs not disclosed in the Reports.  The Reports do not contain
any  untrue  statement  of  a  material  fact  or  omit to state a material fact
required  to  be  stated therein or necessary to make the statements therein not
misleading  in  light  of  the  circumstances  when  made.

          (l)  Stop  Transfer.  The  Securities, when issued, will be restricted
securities.  The  Company  will not issue any stop transfer order or other order
impeding the sale, resale or delivery of any of the Securities, except as may be
required  by  any  applicable  federal  or  state  securities  laws  and  unless
contemporaneous  notice  of  such  instruction  is  given  to  the  Subscriber.

          (m)  Defaults.  The  Company  is  not  in  violation  of  its articles
of  incorporation  or  bylaws.  The  Company  is  (i) not in default under or in
violation  of  any other material agreement or instrument to which it is a party
or  by which it or any of its properties are bound or affected, which default or
violation  would  have  a  material  adverse  effect on the Company, (ii) not in
default  with respect to any order of any court, arbitrator or governmental body
or  subject  to  or  party  to  any order of any court or governmental authority
arising  out  of  any  action, suit or proceeding under any statute or other law
respecting  antitrust,  monopoly,  restraint  of  trade,  unfair  competition or
similar matters, or (iii) to its knowledge not in violation of any statute, rule
or  regulation  of  any  governmental  authority  which  violation  would have a
material  adverse  effect  on  the  Company.

          (n)  No  Integrated  Offering.  Neither  the  Company,  nor any of its
affiliates,  nor  any  person  acting  on  its  or their behalf, has directly or
indirectly  made  any offers or sales of any security or solicited any offers to
buy  any  security  under  circumstances  that  would  cause  the  offer  of the
Securities  pursuant  to this Agreement to be integrated with prior offerings by
the  Company for purposes of the 1933 Act or any applicable stockholder approval
provisions,  including,  without  limitation, under the rules and regulations of
the  Bulletin  Board.  Nor  will  the  Company  or  any  of  its  affiliates  or
subsidiaries  take  any  action  or  steps  that  would  cause  the offer of the
Securities  to  be integrated with other offerings. The Company will not conduct
any  offering  other  than  the  transactions  contemplated  hereby that will be
integrated  with  the  offer  or  issuance  of  the  Securities.

          (o)  No  General  Solicitation.  Neither  the  Company, nor any of its
affiliates,  nor to its knowledge, any person acting on its or their behalf, has
engaged  in  any form of general solicitation or general advertising (within the
meaning of Regulation D under the 1933 Act) in connection with the offer or sale
of  the  Securities.

          (p)  Listing.  The  Company's  Common  Stock is quoted on the Bulletin
Board.  The  Company has not received any oral or written notice that its Common
Stock  is  not eligible nor will become ineligible for quotation on the Bulletin
Board  nor  that  its  common  stock  does  not  meet  all  requirements for the
continuation  of  such quotation and the Company satisfies and as of the Closing
Date,  the Company will satisfy all the requirements for the continued quotation
of  its  Common  Stock  on  the  Bulletin  Board.

          (q)  No  Undisclosed  Liabilities.  The  Company has no liabilities or
obligations  which are material, individually or in the aggregate, which are not
disclosed  in  the  Reports  and  Other  Written  Information,  other than those
incurred  in  the ordinary course of the Company's businesses since December 31,
2003  and  which, individually or in the aggregate, would reasonably be expected
to  have  a  material adverse effect on the Company's financial condition, other
than  as  set  forth  in  Schedule  5(q).

          (r)  No  Undisclosed Events or Circumstances. Since December 31, 2003,
no  event  or circumstance has occurred or exists with respect to the Company or
its  businesses,  properties,  operations  or  financial  condition, that, under
applicable  law,  rule or regulation, requires public disclosure or announcement
prior  to  the  date  hereof  by  the Company but which has not been so publicly
announced  or  disclosed  in  the  Reports.

          (s)  Capitalization.  The  authorized and outstanding capital stock of
the  Company  as  of the date of this Agreement and the Initial Closing Date are
set forth on Schedule 5(s). Except as set forth in the Reports and Other Written
Information  and  Schedule  5(d),  there  are no options, warrants, or rights to
subscribe to, securities, rights or obligations convertible into or exchangeable
for  or  giving  any  right  to subscribe for any shares of capital stock of the
Company.  All of the outstanding shares of Common Stock of the Company have been
duly  and  validly  authorized  and issued and are fully paid and nonassessable.

         (t)  Dilution.  The  Company's  executive  officers  and  directors
understand the nature of the Securities being sold hereby and recognize that the
issuance  of  the Securities will have a potential dilutive effect on the equity
holdings of other holders of the Company's equity or rights to receive equity of
the  Company.  The  board of directors of the Company has concluded, in its good
faith  business  judgment,  that  the  issuance of the Securities is in the best
interests  of  the  Company.  The  Company  specifically  acknowledges  that its
obligation  to  issue the Securities is binding upon the Company and enforceable
regardless  of the dilution such issuance may have on the ownership interests of
other  shareholders  of the Company or parties entitled to receive equity of the
Company.

          (u)  No  Disagreements  with  Accountants  and  Lawyers.  There are no
disagreements  of  any kind presently existing, or reasonably anticipated by the
Company  to  arise, between the Company and the accountants and lawyers formerly
or  presently  employed by the Company, including but not limited to disputes or
conflicts  over  payment  owed  to  such  accountants  and  lawyers.

          (v)  Investment  Company.  The Company is not, and is not an Affiliate
(as  defined  in Rule 405 under the 1933 Act) of, an "investment company" within
the  meaning  of  the  Investment  Company  Act  of  1940,  as  amended.

          (w)  Correctness  of  Representations. The Company represents that the
foregoing  representations  and  warranties  are true and correct as of the date
hereof  in all material respects, and, unless the Company otherwise notifies the
Subscribers prior to the Closing Date, shall be true and correct in all material
respects  as  of  the  Closing  Date.

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

        5.  Regulation  D  Offering.  The  offer  and  issuance  of  the
Securities  to  the  Subscribers  is  being  made  pursuant  to  the  exemption
from  the  registration  provisions  of  the  1933  Act  afforded  by  Section
4(2)  or  Section  4(6)  of  the  1933  Act  and/or  Rule  506  of  Regulation D
promulgated  thereunder.  On  the  Closing  Date,  the  Company  will provide an
opinion  reasonably  acceptable  to  Subscriber from the Company's legal counsel
opining on the availability of an exemption from registration under the 1933 Act
as  it  relates  to  the  offer and issuance of the Securities and other matters
reasonably  requested  by  Subscribers.  A  form of the legal opinion is annexed
hereto  as  EXHIBIT G.  The Company will provide, at the Company's expense, such
other legal opinions in the future as are reasonably necessary for the resale of
the Shares and exercise of the Warrants and resale of the Class A Warrant Shares
and  the  Class  B  Warrant  Shares.

        6.  Legal  Fees.  The  Company  will  pay  to  the  Placement  Agent  a
non-refundable,  one-time  fee of $30,000 for the Placement Agent's legal costs,
and  due  diligence ("Legal Fees"). The Legal Fees will be payable solely out of
funds  held  in  escrow.  Any  fees incurred by the Placement Agent in excess of
$30,000  will  be  the  sole  responsibility  of  the  Placement  Agent.

        7.  Placement  Agent.  The  Company on the one hand, and each Subscriber
(for  himself  only)  on  the  other  hand, agree to indemnify the other and the
Placement Agent against and hold the other and the Placement Agent harmless from
any  and  all  liabilities  to  any  persons  claiming  brokerage commissions or
finder's fees other than the Placement Agent on account of services purported to
have  been  rendered on behalf of the indemnifying party in connection with this
Agreement  or  the  transactions  contemplated  hereby  and  arising out of such
party's  actions.  Anything  to  the contrary in this Agreement notwithstanding,
each  Subscriber  is  providing  indemnification  only for such Subscriber's own
actions  and  not  for  any  action  of  any other Subscriber. Each Subscriber's
liability  hereunder  is  several  and  not  joint.  The  Company  shall pay the
Placement  Agent a fee payable as follows: (i) a cash portion, paid directly out
of funds held pursuant to the Escrow Agreement equal to 10% of the funds raised;
and (ii) warrants to purchase, at a an initial exercise price per share of $.096
per  share,  that  number  of  shares  of  Common  Stock (the "Placement Agent's
Shares")  equal to 10% of the number of Units actually sold in the Offering (the
"Placement Agent's Warrants", and together with the cash portion, the "Placement
Agent's  Fees").  The  Placement  Agent's Fees shall be paid simultaneously with
the  release  of  proceeds and securities pursuant to the Escrow Agreement.  The
Company  represents  that  there  are no other parties entitled to receive fees,
commissions,  or  similar  payments  in  connection with the Offering except the
Placement  Agent  and  the  Company's  attorneys.

        8.  Covenants  of  the  Company.  The  Company covenants and agrees with
the  Subscribers  as  follows:

          (a)  Stop  Orders.  The  Company will advise the Subscribers, promptly
after  it  receives  notice  of issuance by the Commission, any state securities
commission  or  any other regulatory authority of any stop order or of any order
preventing  or  suspending  any offering of any securities of the Company, or of
the  suspension  of  the  qualification  of  the Common Stock of the Company for
offering  or  sale  in any jurisdiction, or the initiation of any proceeding for
any  such  purpose.

          (b)  Listing.  The  Company  shall  promptly secure the listing of the
Registrable  Securities  upon  each  national  securities exchange, or automated
quotation  system upon which they are or become eligible for listing (subject to
official  notice  of  issuance)  and  shall maintain such listing so long as any
Warrants  are  outstanding.  The Company will maintain the listing of its Common
Stock  on  the  American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National
Market  System,  Bulletin  Board,  or  New York Stock Exchange (whichever of the
foregoing is at the time the principal trading exchange or market for the Common
Stock  (the  "Principal  Market")),  and  will  comply  in all respects with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
the  Principal  Market,  as applicable. The Company will provide the Subscribers
copies  of  all  notices it receives notifying the Company of the threatened and
actual de-listing of the Common Stock from any Principal Market.  As of the date
of  this  Agreement  and the Closing Date, the Bulletin Board is and will be the
Principal  Market.

          (c)  Market  Regulations.  The  Company  shall  notify the Commission,
the  Principal Market and applicable state authorities, in accordance with their
requirements, of the transactions contemplated by this Agreement, and shall take
all  other  necessary action and proceedings as may be required and permitted by
applicable  law,  rule  and  regulation, for the legal and valid issuance of the
Securities to the Subscribers and promptly provide copies thereof to Subscriber.

          (d)  Reporting  Requirements.  From  the  date  of  this
Agreement  and  until  the  sooner  of  (i)  two  (2)  years  after  the Closing
Date,  or  (ii)  until  all  the  Registrable  Securities  have  been  resold or
transferred  by  all  the  Subscribers pursuant to the Registration Statement or
pursuant  to Rule 144, without regard to volume limitation, the Company will (v)
cause its Common Stock to continue to be registered under Section 12(b) or 12(g)
of  the  1934  Act,  (x)  comply  in  all respects with its reporting and filing
obligations  under the 1934 Act, (y) comply with all reporting requirements that
are  applicable  to  an  issuer  with  a  class of shares registered pursuant to
Section  12(b)  or 12(g) of the 1934 Act, as applicable, and (z) comply with all
requirements  related  to  any  registration  statement  filed  pursuant to this
Agreement.  The  Company  will not take any action or file any document (whether
or  not  permitted  by  the 1933 Act or the 1934 Act or the rules thereunder) to
terminate  or suspend such registration or to terminate or suspend its reporting
and  filing  obligations  under  said acts until two (2) years after the Closing
Date.  Until  the  earlier  of  the resale of the Registrable Securities by each
Subscriber or at least two (2) years after the Warrants have been exercised, the
Company  will  use  its best efforts to continue the listing or quotation of the
Common Stock on the Principal Market or other market with the reasonable consent
of Subscribers holding a majority of the Registrable Securities, and will comply
in all respects with the Company's reporting, filing and other obligations under
the  bylaws or rules of the Principal Market.  The Company agrees to file a Form
D with respect to the Securities as required under Regulation D and to provide a
copy  thereof  to  each  Subscriber  promptly  after  such  filing.

          (e) Use of Proceeds. The Company undertakes to use the proceeds of the
Subscribers'  funds  for  working  capital,  acquisitions  and general corporate
purposes.

          (f)  Reservation.  The  Company  undertakes  to  reserve,
pro  rata  on  behalf  of each Subscriber and holder of the Shares and Warrants,
from  its  authorized  but  unissued  Common Stock, a number of shares of Common
Stock  equal  to the amount of Class A Warrant Shares and Class B Warrant Shares
issuable  upon  exercise  of  the  Class  A  Warrants  and the Class B Warrants.
Failure  to  have  sufficient  shares reserved pursuant to this Section 8(f) for
three (3) consecutive business days or ten (10) days in the aggregate shall be a
material  default  of  the  Company's  obligations  under  this  Agreement.

          (g) Taxes. From the date of this Agreement and until the sooner of (i)
two  (2)  years  after  the  Closing  Date,  or  (ii)  until all the Registrable
Securities  have  been  resold or transferred by all the Subscribers pursuant to
the  Registration  Statement  or  pursuant to Rule 144, without regard to volume
limitations,  the  Company  will promptly pay and discharge, or cause to be paid
and  discharged,  when  due  and  payable,  all  lawful  taxes,  assessments and
governmental  charges  or  levies  imposed upon the income, profits, property or
business  of  the  Company;  provided,  however,  that any such tax, assessment,
charge  or  levy  need  not  be  paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall have
set  aside  on  its  books adequate reserves with respect thereto, and provided,
further,  that  the  Company  will  pay  all such taxes, assessments, charges or
levies  forthwith  upon  the  commencement  of proceedings to foreclose any lien
which  may  have  attached  as  security  therefore.

          (h) Insurance. From the date of this Agreement and until the sooner of
(i)  two  (2)  years  after  the Closing Date, or (ii) until all the Registrable
Securities  have  been  resold or transferred by all the Subscribers pursuant to
the  Registration  Statement  or  pursuant to Rule 144, without regard to volume
limitations,  the  Company  will  keep  its  assets  which  are  of an insurable
character  insured  by  financially sound and reputable insurers against loss or
damage  by  fire,  explosion  and  other  risks  customarily  insured against by
companies  in  the  Company's line of business, in amounts sufficient to prevent
the  Company  from  becoming a co-insurer and not in any event less than 100% of
the insurable value of the property insured; and the Company will maintain, with
financially  sound  and  reputable insurers, insurance against other hazards and
risks  and  liability  to  persons  and property to the extent and in the manner
customary  for  companies  in  similar  businesses similarly situated and to the
extent  available  on  commercially  reasonable  terms.

          (i)  Books  and Records. From the date of this Agreement and until the
sooner  of  (i)  two  (2)  years  after  the Closing Date, or (ii) until all the
Registrable  Securities  have  been resold or transferred by all the Subscribers
pursuant  to  the Registration Statement or pursuant to Rule 144, without regard
to  volume  limitations, the Company will keep true records and books of account
in  which  full,  true  and  correct  entries  will  be  made of all dealings or
transactions  in  relation  to  its  business  and  affairs  in  accordance with
generally  accepted  accounting  principles  applied  on  a  consistent  basis.

          (j)  Governmental  Authorities.  From  the  date of this Agreement and
until  the sooner of (i) two (2) years after the Closing Date, or (ii) until all
the  Registrable  Securities  have  been  resold  or  transferred  by  all  the
Subscribers  pursuant  to  the  Registration  Statement or pursuant to Rule 144,
without regard to volume limitations, the Company shall duly observe and conform
in  all  material respects to all valid requirements of governmental authorities
relating  to  the  conduct  of  its  business  or  to  its properties or assets.

          (k)  Intellectual  Property. From the date of this Agreement and until
the  sooner  of  (i) two (2) years after the Closing Date, or (ii) until all the
Registrable  Securities  have  been resold or transferred by all the Subscribers
pursuant  to  the Registration Statement or pursuant to Rule 144, without regard
to  volume  limitations, the Company shall maintain in full force and effect its
corporate  existence, rights and franchises and all licenses and other rights to
use  intellectual  property owned or possessed by it and reasonably deemed to be
necessary  to  the  conduct  of  its  business.

          (l)  Properties.  From  the  date  of  this  Agreement  and  until the
sooner  of  (i)  two  (2)  years  after  the Closing Date, or (ii) until all the
Registrable  Securities  have  been resold or transferred by all the Subscribers
pursuant  to  the Registration Statement or pursuant to Rule 144, without regard
to  volume  limitation,  the  Company  will  keep its properties in good repair,
working order and condition, reasonable wear and tear excepted, and from time to
time  make  all  necessary and proper repairs, renewals, replacements, additions
and  improvements  thereto;  and  the Company will at all times comply with each
provision  of  all  leases  to  which  it  is a party or under which it occupies
property  if the breach of such provision could reasonably be expected to have a
material  adverse  effect.

          (m)  Confidentiality/Public  Announcement.  From  the  date  of  this
Agreement  and  until the sooner of (i) two (2) years after the Closing Date, or
(ii) until all the Registrable Securities have been resold or transferred by all
the  Subscribers pursuant to the Registration Statement or pursuant to Rule 144,
without  regard  to  volume  limitations  except as required in the Registration
Statement,  the  Company  agrees that it will not disclose publicly or privately
the  identity  of  the  Subscribers  unless  expressly agreed to in writing by a
Subscriber  or  only to the extent required by law.  In any event and subject to
the  foregoing,  the  Company  undertakes  to  file  a Form 8-K or make a public
announcement  describing  the  Offering not later than the Closing Date.  In the
Form  8-K  or  public  announcement,  the Company will specifically disclose the
amount  of  Common  Stock  outstanding  immediately  after  the  Closing.

          (n)  Credit  Line.  For  3  months  following  effectiveness  of  the
Registration  Statement  described in Section 11, the Company will not exercise,
access,  employ  or  drawdown,  directly  or indirectly an equity line of credit
available  to  the  Company  from Dutchess Capital Management, LLC, which equity
line  of  credit  is  described  in the Company's Registration Statement on Form
SB-2,  File  No.  333-112283.

        9.  Covenants  of  the  Company  and  Subscriber  Regarding
Indemnification.

          (a)  The  Company  agrees  to  indemnify, hold harmless, reimburse and
defend  the  Subscribers,  the  Subscribers'  officers,  directors,  agents,
affiliates,  control  persons,  and  principal  shareholders, against any claim,
cost, expense, liability, obligation, loss or damage (including reasonable legal
fees)  of  any  nature,  incurred  by or imposed upon the Subscriber or any such
person  which  results,  arises  out  of  or  is  based  upon  (i)  any material
misrepresentation  by  Company  or  breach  of  any  warranty by Company in this
Agreement  or  in  any Exhibits or Schedules attached hereto, or other agreement
delivered  pursuant  hereto;  or  (ii)  after  any applicable notice and/or cure
periods,  any breach or default in performance by the Company of any covenant or
undertaking  to  be  performed  by the Company hereunder, or any other agreement
entered  into  by  the  Company  and  Subscriber  relating  hereto.

          (b)  Each Subscriber agrees to indemnify, hold harmless, reimburse and
defend  the  Company  and  each  of  the  Company's officers, directors, agents,
affiliates,  control  persons  against  any  claim,  cost,  expense,  liability,
obligation,  loss  or  damage  (including  reasonable legal fees) of any nature,
incurred by or imposed upon the Company or any such person which results, arises
out of or is based upon (i) any material misrepresentation by such Subscriber in
this  Agreement  or  in  any  Exhibits  or  Schedules  attached hereto, or other
agreement  delivered pursuant hereto; or (ii) after any applicable notice and/or
cure  periods,  any  breach  or default in performance by such Subscriber of any
covenant  or  undertaking  to  be performed by such Subscriber hereunder, or any
other  agreement  entered  into  by  the Company and Subscribes relating hereto.

          (c)  In  no  event  shall the liability of any Subscriber or permitted
successor  hereunder  or  under  any  other  agreement  delivered  in connection
herewith  be  greater  in  amount  than  the  dollar  amount of the net proceeds
actually received by such Subscriber upon the sale of Registrable Securities (as
defined  herein).

          (d)  The  procedures  set  forth  in  Section  10.6  shall
apply  to  the  indemnifications  set  forth  in  Sections  9(a) and 9(b) above.

10.     Registration  Rights.
        --------------------
     10.1.     Registration  Rights.  When  the  Placement  Agent  has  raised a
               --------------------
minimum  of  $500,000,  the  Seller  will  require  the Company to file with the
Commission  not  later  than  fifteen  (15)  business  days after the Seller has
notified  the  Company in writing of its intent to require Registration pursuant
to  this  Section  10  (the  "Filing  Date"), and cause to be declared effective
within  one  hundred  and five (105) days after the Closing Date (the "Effective
Date"),  a  Form  SB-2 registration statement (the "Registration Statement") (or
such other form that it is eligible to use) in order to register the Registrable
Securities  for  resale  and  distribution under the 1933 Act.  The Company will
register  not less than a number of shares of Common Stock in the aforedescribed
registration  statement  that  is  equal  to  all  of the Registrable Securities
issuable  pursuant  to  this  Agreement.  The  Registrable  Securities  shall be
available  for  the  benefit  of  each  Subscriber,  pro  rata,  at  the time of
                                                     ---  ----
conversion.  If  the Placement Agent raises less than $500,000, the Company may,
but  will  not  be obligated to, file a Registration Statement.  The Subscribers
and  their  permitted transferees and assigns may be referred to in this Section
10  as  "Sellers."

     10.2.     Registration  Procedures. If and whenever the Company is required
               ------------------------
by  the provisions of Section 10.1 to effect the registration of any Registrable
Securities  under  the 1933 Act, the Company will, as expeditiously as possible:

     (a)     subject  to  the  timelines provided in this Agreement, prepare and
file  with  the Commission a registration statement required by Section 10, with
respect  to  such securities and use its best efforts to cause such registration
statement  to  become  and  remain  effective for the period of the distribution
contemplated  thereby (determined as herein provided), and make available to the
holders  of Registrable Securities  copies of all filings and Commission letters
of  comment;

     (b)     prepare  and  file  with  the  Commission  such  amendments  and
supplements to such registration statement and the prospectus used in connection
therewith  as  may  be  necessary  to keep such registration statement effective
until  such  registration  statement  has been effective for a period of two (2)
years,  and  comply  with  the  provisions  of  the 1933 Act with respect to the
disposition  of  all  of the Registrable Securities covered by such registration
statement  in  accordance  with  the Sellers' intended method of disposition set
forth  in  such  registration  statement  for  such  period;

     (c) make available to the Sellers, at the Company's expense, such number of
copies  of  the  registration  statement  and  the  prospectus  included therein
(including  each  preliminary prospectus) as such persons reasonably may request
in  order  to  facilitate the public sale or their disposition of the securities
covered  by  such  registration  statement;

     (d)     use  its  best  efforts  to  register  or  qualify  the  Sellers'
Registrable  Securities  covered  by  such  registration  statement  under  the
securities or "blue sky" laws of such jurisdictions as the Sellers shall request
in  writing,  provided, however, that the Company shall not for any such purpose
be  required  to qualify generally to transact business as a foreign corporation
in  any  jurisdiction  where  it  is  not  so qualified or to consent to general
service  of  process  in  any  such  jurisdiction;

     (e)     if  applicable,  list  the  Registrable  Securities covered by such
registration statement with any securities exchange on which the Common Stock of
the  Company  is  then  listed;

     (f)  immediately  notify  the Sellers when a prospectus relating thereto is
required  to  be  delivered under the 1933 Act, of the happening of any event of
which the Company has knowledge as a result of which the prospectus contained in
such  registration statement, as then in effect, includes an untrue statement of
a  material fact or omits to state a material fact required to be stated therein
or  necessary  to  make  the  statements  therein not misleading in light of the
circumstances  then  existing;  and

     (g)  provided same would not be in violation of the provision of Regulation
FD  under  the  1934  Act, make available for inspection by the Sellers, and any
attorney,  accountant  or  other  agent  reasonably  retained by the Seller, all
publicly  available,  non-confidential  financial  and  other records, pertinent
corporate  documents  and  properties  of  the  Company, and cause the Company's
officers,  directors  and  employees  to  supply  all  publicly  available,
non-confidential  information  reasonably  requested  by  the  seller, attorney,
accountant  or  agent  in  connection  with  such registration statement. If any
Seller,  or its agents, request non-public, material information, Seller and its
agents  agree  to  keep  such  information confidential and not to trade on such
information.

     10.3.     Provision  of  Documents.  In  connection  with each registration
               ------------------------
described in this Section 10, each Seller will furnish to the Company in writing
such  information  and  representation  letters  with  respect to itself and the
proposed  distribution  by  it  in  order  to assure compliance with federal and
applicable  state  securities  laws.

     10.4.     Non-Registration  Events.  The  Company and the Subscribers agree
               ------------------------
that  the Sellers will suffer damages if the Registration Statement is not filed
by the Filing Date and not declared effective by the Commission by the Effective
Date  and  maintained  in the manner and within the time periods contemplated by
Section  10 hereof, and it would not be feasible to ascertain the extent of such
damages  with  precision.  Accordingly,  if  the Placement Agent raises at least
$500,000 and (i) the Registration Statement is not filed on or before the Filing
Date or is not declared effective on or before the sooner of the Effective Date,
or within three (3) business days of receipt by the Company of a written or oral
communication  from  the  Commission that the Registration Statement will not be
reviewed  or  that  the  Commission  has  no  further  comments,  (ii)  or  the
registration  statement  is  filed  and  declared effective but shall thereafter
cease  to be effective (without being succeeded within ten (10) business days by
an effective replacement or amended registration statement) for a period of time
which shall exceed 30 days in the aggregate per year (defined as a period of 365
days commencing on the date the Registration Statement is declared effective) or
more  than 20 consecutive days (each such event referred to in clauses (i), (ii)
and  (iii)  of  this  Section  10.4 is referred to herein as a "Non-Registration
Event"), then the Company shall deliver to the holder of Registrable Securities,
as  Liquidated Damages, an amount equal to two percent (2%) for each thirty days
or  part thereof of the Purchase Price of the Shares and actually paid "Purchase
Price"  (as  defined  in  the  Warrants)  of  Class A Warrant Shares and Class B
Warrant  Shares issued or issuable upon actual exercise of the Warrants, for the
Registrable  Securities  owned  of  record  by  such holder as of and during the
pendency  of  such  Non-Registration  Event  which  are  subject  to  such
Non-Registration  Event.  In  the  alternative, the Company may elect to pay the
cash  Liquidated  Damages by delivery of free-trading, unrestricted Common Stock
valued  at  fifty percent (50%) of the closing bid price of the Company's Common
Stock  for  each  trading  day  for  which  each Liquidated Damages is due.  For
non-trading  days, the valuation of Common Stock to be delivered in lieu of cash
Liquidated  Damages  shall be determined based upon the closing bid price of the
Common  Stock  on  the  next  succeeding trading day.  Such Common Stock must be
delivered  on  the  same day that the cash Liquidated Damages would otherwise be
payable.  The  Company  must  pay the Liquidated Damages in cash within ten (10)
days  after  the  end of each thirty (30) day period or shorter part thereof for
which  Liquidated Damages are payable.  In the event a Registration Statement is
filed  by  the Filing Date but is withdrawn prior to being declared effective by
the Commission, then such Registration Statement will be deemed to have not been
declared  effective.

     10.5.  Expenses.  All  expenses  incurred  by the Company in complying with
            -------- Section 10, including, without limitation, all registration
and  filing  fees,  reasonable  printing  expenses  not to exceed $500, fees and
disbursements  of  counsel  and  independent public accountants for the Company,
fees  and  expenses  (including  reasonable counsel fees) incurred in connection
with  complying  with  state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and  registrars  and  costs of insurance are called "Registration Expenses." All
underwriting  discounts  and  selling  commissions  applicable  to  the  sale of
Registrable  Securities,  including any fees and disbursements of any additional
counsel  to  the Seller, are called "Selling Expenses." The Company will pay all
Registration  Expenses  in  connection  with  the  registration  statement under
Section  10.  Selling  Expenses  in  connection with each registration statement
under  Section  10 shall be borne by the Seller and may be apportioned among the
Sellers in proportion to the number of shares sold by the Seller relative to the
number  of  shares  sold  under  such  registration  statement or as all Sellers
thereunder  may  agree.

        10.6.  Indemnification  and  Contribution.

     (a)  In the event of a registration of any Registrable Securities under the
1933  Act  pursuant  to Section 10, the Company will, to the extent permitted by
law,  indemnify  and  hold harmless the Seller, each officer of the Seller, each
director  of  the  Seller,  each  underwriter  of  such  Registrable  Securities
thereunder  and  each  other  person,  if  any,  who  controls  such  Seller  or
underwriter  within  the  meaning  of  the 1933 Act, against any losses, claims,
damages  or  liabilities,  joint  or  several,  to  which  the  Seller,  or such
underwriter  or  controlling  person  may  become  subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect  thereof) arise out of or are based upon any untrue statement or alleged
untrue  statement  of  any material fact contained in any registration statement
under  which  such  Registrable  Securities  was  registered  under the 1933 Act
pursuant to Section 10, any preliminary prospectus or final prospectus contained
therein,  or  any  amendment or supplement thereof, or arise out of or are based
upon  the omission or alleged omission to state therein a material fact required
to  be stated therein or necessary to make the statements therein not misleading
in  light  of the circumstances when made, and will subject to the provisions of
Section  10.6(c)  reimburse  the  Seller,  each  such  underwriter and each such
controlling  person  for any legal or other expenses reasonably incurred by them
in  connection  with  investigating  or  defending any such loss, claim, damage,
liability  or action; provided, however, that the Company shall not be liable to
the Seller to the extent that any such damages arise out of or are based upon an
untrue  statement  or  omission  made  in  any preliminary prospectus if (i) the
Seller failed to send or deliver a copy of the final prospectus delivered by the
Company  to  the Seller with or prior to the delivery of written confirmation of
the sale by the Seller to the person asserting the claim from which such damages
arise,  (ii)  the final prospectus would have corrected such untrue statement or
alleged  untrue  statement or such omission or alleged omission, or (iii) to the
extent  that any such loss, claim, damage or liability arises out of or is based
upon  an  untrue  statement  or  alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Seller, or
any such controlling person in writing specifically for use in such registration
statement  or  prospectus.

     (b)  In  the  event  of a registration of any of the Registrable Securities
under the 1933 Act pursuant to Section 10, each Seller severally but not jointly
will,  to  the extent permitted by law, indemnify and hold harmless the Company,
and each person, if any, who controls the Company within the meaning of the 1933
Act,  each  officer  of  the  Company who signs the registration statement, each
director  of  the  Company,  each  underwriter  and each person who controls any
underwriter  within  the  meaning  of  the 1933 Act, against all losses, claims,
damages  or liabilities, joint or several, to which the Company or such officer,
director,  underwriter  or  controlling person may become subject under the 1933
Act  or  otherwise,  insofar  as such losses, claims, damages or liabilities (or
actions  in respect thereof) arise out of or are based upon any untrue statement
or  alleged  untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the 1933
Act  pursuant  to  Section  10,  any  preliminary prospectus or final prospectus
contained  therein,  or  any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required  to  be  stated therein or necessary to make the statements therein not
misleading,  and  will  reimburse  the  Company and each such officer, director,
underwriter  and  controlling  person for any legal or other expenses reasonably
incurred  by  them  in connection with investigating or defending any such loss,
claim,  damage,  liability or action, provided, however, that the Seller will be
liable  hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged  untrue  statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such Seller, as such, furnished
in  writing  to  the  Company  by  such  Seller  specifically  for  use  in such
registration  statement  or prospectus, and provided, further, however, that the
liability  of the Seller hereunder shall be limited to the net proceeds actually
received  by  the Seller from the sale of Registrable Securities covered by such
registration  statement.

     (c)  Promptly  after receipt by an indemnified party hereunder of notice of
the  commencement  of  any  action,  such indemnified party shall, if a claim in
respect  thereof  is to be made against the indemnifying party hereunder, notify
the  indemnifying  party  in  writing thereof, but the omission so to notify the
indemnifying  party shall not relieve it from any liability which it may have to
such  indemnified  party  other  than  under this Section 10.6(c) and shall only
relieve  it from any liability which it may have to such indemnified party under
this  Section  10.6(c),  except  and  only if and to the extent the indemnifying
party  is  prejudiced by such omission. In case any such action shall be brought
against  any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and,  to  the  extent it shall wish, to assume and undertake the defense thereof
with  counsel satisfactory to such indemnified party, and, after notice from the
indemnifying  party  to  such indemnified party of its election so to assume and
undertake  the  defense  thereof,  the indemnifying party shall not be liable to
such  indemnified  party  under  this  Section  10.6(c)  for  any legal expenses
subsequently  incurred  by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so  selected,  provided,  however,  that,  if  the defendants in any such action
include  both  the  indemnified  party  and  the  indemnifying  party  and  the
indemnified  party  shall have reasonably concluded that there may be reasonable
defenses  available  to  it  which  are  different  from  or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably  may  be  deemed  to  conflict with the interests of the indemnifying
party,  the  indemnified parties, as a group, shall have the right to select one
separate  counsel and to assume such legal defenses and otherwise to participate
in  the  defense  of  such action, with the reasonable expenses and fees of such
separate  counsel  and  other  expenses  related  to  such  participation  to be
reimbursed  by  the  indemnifying  party  as  incurred.

     (d) In order to provide for just and equitable contribution in the event of
joint  liability under the 1933 Act in any case in which either (i) a Seller, or
any  controlling  person of a Seller, makes a claim for indemnification pursuant
to  this  Section  10.6 but it is judicially determined (by the entry of a final
judgment  or  decree  by a court of competent jurisdiction and the expiration of
time  to  appeal  or  the  denial  of  the  last  right  of  appeal)  that  such
indemnification  may  not be enforced in such case notwithstanding the fact that
this  Section  10.6  provides  for  indemnification  in  such  case,  or  (ii)
contribution  under  the  1933  Act may be required on the part of the Seller or
controlling  person  of the Seller in circumstances for which indemnification is
not  provided  under this Section 10.6; then, and in each such case, the Company
and  the  Seller  will  contribute  to  the aggregate losses, claims, damages or
liabilities  to  which  they  may be subject (after contribution from others) in
such  proportion  so  that  the  Seller  is  responsible  only  for  the portion
represented  by  the percentage that the public offering price of its securities
offered  by the registration statement bears to the public offering price of all
securities  offered  by such registration statement, provided, however, that, in
any  such  case, (y) the Seller will not be required to contribute any amount in
excess  of  the  public  offering  price  of  all  such securities offered by it
pursuant  to  such registration statement; and (z) no person or entity guilty of
fraudulent  misrepresentation  (within  the meaning of Section 10(f) of the 1933
Act)  will  be  entitled  to  contribution from any person or entity who was not
guilty  of  such  fraudulent  misrepresentation.

        10.7.  Delivery  of  Unlegended  Shares.

     (a)  Within  three  (3)  business  days  (such  third  business  day,  the
"Unlegended  Shares  Delivery Date") after the business day on which the Company
has  received  (i)  a  notice  that Registrable Securities have been sold either
pursuant  to  the  Registration Statement or Rule 144 under the 1933 Act, (ii) a
representation that the prospectus delivery requirements, or the requirements of
Rule  144,  as  applicable,  have  been  satisfied, and (iii) the original share
certificates  representing  the  shares of Common Stock that have been sold, and
(iv) in the case of sales under Rule 144 customary representation letters of the
Subscriber and Subscriber's broker regarding compliance with the requirements of
Rule  144,  the Company at its expense, (y) shall deliver, and shall cause legal
counsel  selected  by the Company to deliver, to its transfer agent (with copies
to Subscriber) an appropriate instruction and opinion of such counsel, directing
the delivery of shares of Common Stock without any legends including the legends
set  forth  in  Sections 4(e) and 4(f) above, issuable pursuant to any effective
and  current registration statement described in Section 10 of this Agreement or
pursuant to Rule 144 under the 1933 Act (the "Unlegended Shares"); and (z) cause
the transmission of the certificates representing the Unlegended Shares together
with  a  legended  certificate  representing the balance of the unsold shares of
Common  Stock,  if any, to the Subscriber at the address specified in the notice
of  sale,  via express courier, by electronic transfer or otherwise on or before
the  Unlegended  Shares Delivery Date. Transfer fees shall be the responsibility
of  the  Seller.

     (b) In lieu of delivering physical certificates representing the Unlegended
Shares, if the Company's transfer agent is participating in the Depository Trust
Company  ("DTC")  Fast  Automated Securities Transfer program, upon request of a
Subscriber,  so  long  as the certificates therefor do not bear a legend and the
Subscriber  is  not  obligated to return such certificate for the placement of a
legend  thereon,  the  Company  shall cause its transfer agent to electronically
transmit  the  Unlegended  Shares by crediting the account of Subscriber's prime
Placement Agent with DTC through its Deposit Withdrawal Agent Commission system.
Such  delivery  must  be  made on or before the Unlegended Shares Delivery Date.

     (c)  The Company understands that a delay in the delivery of the Unlegended
Shares  pursuant to Section 10 hereof beyond the Unlegended Shares Delivery Date
could  result  in economic loss to a Subscriber. As compensation to a Subscriber
for  such  loss,  the  Company  agrees  to  pay late payment fees (as liquidated
damages  and not as a penalty) to the Subscriber for late delivery of Unlegended
Shares  in  the amount of $100 per business day after the Delivery Date for each
$10,000  of  purchase  price  of  the  Unlegended Shares subject to the delivery
default.  If  during any 360 day period, the Company fails to deliver Unlegended
Shares  as  required  by this Section 10.7 for an aggregate of thirty (30) days,
then each Subscriber or assignee holding Securities subject to such default may,
at  its  option,  require  the  Company  to  purchase  all or any portion of the
Registrable  Securities  subject  to  such default at a price per share equal to
130% of the Purchase Price of such Registrable Securities. The Company shall pay
any  payments  incurred  under  this Section in immediately available funds upon
demand.

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

     (e)  In  the event a Subscriber shall request delivery of Unlegended Shares
as  described  in  Section  10.7(a),  the  Company  may  not  refuse  to deliver
Unlegended  Shares based on any claim that such Subscriber or any one associated
or  affiliated with such Subscriber has been engaged in any violation of law, or
for  any other reason, unless, an injunction or temporary restraining order from
a  court,  on  notice,  restraining and or enjoining delivery of such Unlegended
Shares  or  exercise  of  all or part of said Warrant shall have been sought and
obtained  and  the  Company  has  posted  a  surety bond for the benefit of such
Subscriber  in  the amount of 130% of the amount of the aggregate purchase price
of  the  Registrable Securities which are subject to the injunction or temporary
restraining  order,  which  bond  shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to  such  Subscriber  to  the extent Subscriber obtains judgment in Subscriber's
favor.

     11.  Offering Restrictions. From the date of this Agreement until after the
Exclusion  Period,  except  in  connection  with  (i)  employee stock options or
compensation plans, (ii) as full or partial consideration in connection with any
merger,  consolidation  or  purchase  of  substantially all of the securities or
assets of any corporation or other entity, or (iii) as has been described in the
Reports  or  Other  Written  Information filed or delivered prior to the Closing
Date  (collectively "Excepted Issuances"), or the Offering, the Company will not
enter  into  any  agreement  to, nor issue any equity, convertible debt or other
securities  convertible  into  Common Stock without the prior written consent of
Subscribers  holding  a majority of the then outstanding Registrable Securities,
which  consent  may  be  withheld  for  any  reason.

        12.  Miscellaneous.

     (a) Notices. All notices, demands, requests, consents, approvals, and other
communications  required  or permitted hereunder shall be in writing and, unless
otherwise  specified  herein,  shall be (i) personally served, (ii) deposited in
the  mail,  registered  or certified, return receipt requested, postage prepaid,
(iii)  delivered  by reputable air courier service with charges prepaid, or (iv)
transmitted  by  hand  delivery,  telegram, or facsimile, addressed as set forth
below  or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given  hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile,  with  accurate  confirmation generated by the transmitting facsimile
machine,  at  the address or number designated below (if delivered on a business
day  during  normal  business hours where such notice is to be received), or the
first  business  day  following  such  delivery  (if  delivered  other than on a
business  day  during normal business hours where such notice is to be received)
or  (b)  on  the  second  business  day following the date of mailing by express
courier  service,  fully  prepaid,  addressed  to  such  address, or upon actual
receipt  of  such  mailing,  whichever shall first occur. The addresses for such
communications  shall  be:

(i)     If  to  the  Company,  to:
            FTS  Group,  Inc.
            1049c  Oxford  Valley  Road
            Levittown,  PA  19057
            Attn:  Scott  Gallagher,  CEO
            Telecopier:(215)  689-2789

        With  a  copy  to:
            Amy  Trombly,  Esq.
            1163  Walnut  Street,  Suite  7
            Newton,  MA  02461
            Telecopier:  (309)  406-1426

(ii)  If to the Subscribers, to the one or more addresses and telecopier numbers
indicated  on  the  signature  pages  hereto,  and

(iii)   If  to  the  Placement  Agent,  to:
            Westor  Online,  Inc.
            258  Genesee  Street,  Suite  601
            Utica,  NY  13502
            Attn:  Richard  Bach
            Telecopier:  (315)  733-0460

        With  a  copy  to:
            Kogan  &  Associates,  LLC
            39  Broadway,  Suite  2250
            New  York,  New  York  10006
            (212)  425-8200
            Attn:  Simon  Kogan
            Telecopier:  (212)  425-8200

      (b)  Closing.  The  consummation  of  the transactions contemplated herein
           -------
shall  take  place at the offices of the Company's counsel, Amy Trombly, located
at  1163  Walnut  Street,  Suite  7,  Newton,  Massachusetts  02461,  upon  the
satisfaction  of all conditions to Closing set forth in this Agreement ("Closing
Date").

     (c)  Entire  Agreement;  Assignment.  This  Agreement  and  other documents
delivered  in  connection  herewith  represent  the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by  a  writing executed by both parties. Neither the Company nor the Subscribers
have  relied  on  any  representations  not  contained  or  referred  to in this
Agreement and the documents delivered herewith. No right or obligation of either
party  shall  be  assigned by that party without prior notice to and the written
consent  of  the  other  party.

     (d) Counterparts/Execution. This Agreement may be executed in any number of
counterparts  and  by the different signatories hereto on separate counterparts,
each  of  which,  when  so  executed,  shall be deemed an original, but all such
counterparts  shall  constitute  but one and the same instrument. This Agreement
may  be executed by facsimile signature and delivered by facsimile transmission.

     (e)  Law  Governing this Agreement. This Agreement shall be governed by and
construed  in  accordance  with  the  laws  of the State of Pennsylvania without
regard  to  principles  of conflicts of laws. Any action brought by either party
against  the  other  concerning  the transactions contemplated by this Agreement
shall  be  brought  only  in  the state courts of Pennsylvania or in the federal
courts  located  in  the  state of Pennsylvania. The parties and the individuals
executing this Agreement and other agreements referred to herein or delivered in
connection herewith on behalf of the Company agree to submit to the jurisdiction
of  such  courts and waive trial by jury. The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and costs. In the
event  that  any provision of this Agreement or any other agreement delivered in
connection  herewith is invalid or unenforceable under any applicable statute or
rule  of law, then such provision shall be deemed inoperative to the extent that
it  may  conflict  therewith  and  shall be deemed modified to conform with such
statute  or  rule  of  law.  Any  such  provision  which  may  prove  invalid or
unenforceable  under  any law shall not affect the validity or enforceability of
any  other  provision  of  any  agreement.

     (f)  Specific  Enforcement,  Consent  to  Jurisdiction.  The  Company  and
Subscriber  acknowledge  and  agree  that  irreparable damage would occur in the
event  that  any  of  the  provisions  of  this  Agreement were not performed in
accordance  with  their  specific  terms  or  were  otherwise  breached.  It  is
accordingly  agreed  that  the  parties  shall  be  entitled to an injunction or
injunctions  to prevent or cure breaches of the provisions of this Agreement and
to  enforce specifically the terms and provisions hereof, this being in addition
to  any  other  remedy  to  which  any of them may be entitled by law or equity.
Subject  to  Section  13(e)  hereof,  each  of  the  Company, Subscriber and any
signatory  hereto  in  his  personal  capacity  hereby waives, and agrees not to
assert  in  any  such  suit,  action  or  proceeding,  any  claim that it is not
personally subject to the jurisdiction in New York of such court, that the suit,
action  or  proceeding  is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Nothing in this Section shall affect
or  limit  any  right  to  serve  process  in any other manner permitted by law.

     (g)  Independent  Nature  of  Subscribers'  Obligations  and  Rights.  The
obligations  of  each  Subscriber  hereunder  are several and not joint with the
obligations  of  any other Subscriber hereunder, and no such Subscriber shall be
responsible  in  any  way  for  the  performance of the obligations of any other
hereunder.

     (h)  Equitable  Adjustment.  The  Securities  and  the  purchase  prices of
Securities  shall  be  equitably  adjusted to offset the effect of stock splits,
stock  dividends,  and  distributions  of  property  or  equity interests of the
Company  to  its  shareholders.

                    SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

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

                                           FTS  GROUP,  INC.
                                           a  Nevada  corporation

                                           By:__________________________________
                                                Scott  Gallagher
                                                Chief  Executive  Officer

                                           Dated:  October  _____,  2004

SUBSCRIBER                     PURCHASE  PRICE                     UNITS

_____________________________
(Signature)
SUBSCRIBER

Address:

_______________________________________

_______________________________________

Social  Security  Number/Employer  Identification  Number:

_______________________________________

Telecopier/Facsimile  Number  for  Notices:

_______________________________________EX-10.1

Exhibit 10.1

March 22, 2005

Mr. W. Dave Brining

Executive Vice President – Marketing & Client Services

Max Re Ltd.

Max Re House

2 Front Street

Hamilton HM 11

Bermuda

Dear Dave:

Per your request, effective April 1, 2005, you will retire and your employment at Max Re Capital
Ltd. and Max Re Ltd. (collectively, the “Company”) will terminate. The Company may from time to
time ask you to attend industry conferences or business meetings during the next twenty-four
months, for which your reasonable travel expenses will be reimbursed. It is mutually agreed that
any attendance of such conferences by you will not alter the arrangements set forth herein. As of
the beginning of your retirement, you will no longer have authority to bind the Company and will
not represent to third parties that you have such authority or that you are an agent of the
Company. Further, you acknowledge that you are resigning from the board of directors of Max Re
Managers Ltd. and that you will no longer be, or represent to third parties that you are, an
authorized signatory of Grand Central Re Limited.

Salary and Benefits. Your current salary of $430,000 per annum will continue through March 31,
2007. It is mutually agreed that on March 31, 2005, your salary of $860,000 for the two year
period ending March 31, 2007 shall be deemed paid in full in advance and applied to the outstanding
loan obligation you owe to Max Re Capital Ltd., as described more fully below. Max Re Ltd. will
continue to pay your medical, disability and life insurance benefits as they currently exist
through The Argus Group (or any other carrier that the Company may use in offering such benefits to
its employees) until March 31, 2007. In addition, to the extent that the Company continues to
arrange access for employees to financial planning services of The Ayco Company, L.P. (“Ayco”) and
to the extent permitted by Ayco, you shall be permitted to access such services at the Company’s
negotiated rate through March 31, 2007; provided, however, that you will be responsible for all
fees incurred by you for such services and you shall arrange for Ayco to bill you directly for such
services. It is mutually agreed that, beginning April 1, 2005, you will not be entitled to any
other benefits.

In the event that you find other employment prior to March 31, 2007, you agree (i) to
reimburse the Company for the salary deemed paid to you by the Company for the period from the date
of commencement of your new employment and March 31, 2007, (ii) that Max Re Ltd. shall cease to pay
the medical, disability and life insurance benefit amounts and (iii) that you shall cease to have
access to the Company’s negotiated rates with Ayco.

In the event that the Company institutes a Company-wide retirement benefits program on or before
March 31, 2007, you will be entitled to participate in such program, subject to the terms,
conditions and limitations of such program.

Promissory Note. In accordance with the terms of the Promissory Note (the “Note”) dated March 31,
2000 that you executed in favor of Max Re Capital Ltd. (formerly known as and referenced in the
Note as Maximus Capital Holdings, Ltd.), you are required to pay the outstanding principal amount
and accrued interest on March 31, 2005. As of March 31, 2005, this will amount to an outstanding
obligation payable to Max Re Capital of $1,711,815. It is mutually agreed that the obligation will
be satisfied as follows: (x) your salary payable for the two year period commencing on April 1,
2005 and ending on March 31, 2007 (totaling $860,000) shall be applied against the outstanding
obligation on March 31, 2005; (y) your unfunded deferred compensation amount as of March 31, 2005
(totaling $81,200) shall be applied against the outstanding obligation on March 31, 2005; and (z)
$770,615 in cash will be paid to Max Re Capital Ltd. by wire transfer on or before March 31, 2005.
Further, it is agreed that, (i) on March 31, 2005, Max Re Capital Ltd. shall release to you, and
all rights thereto shall revert to you, the 133,333 common shares of Max Re Capital Ltd. held as
collateral pursuant to the Charge Agreement dated March 31, 2000 and (ii) your deferred
compensation account consisting only of cash holdings when the Company terminates your access to
such account. An accounting of the salary and outstanding loan is attached as Schedule A. You
hereby authorize the Company to apply your salary for the two-year period beginning on April 1,
2005 and ending on March 31, 2007 against such obligation amount on March 31, 2005. Further, you
authorize the Company to apply your total unfunded deferred compensation in the amount of $81,200
against your loan obligation. Further, you agree to remit $770,615 to Max Re Capital Ltd. on or
before March 31, 2005 to settle the remaining balance due after application of the salary and
unfunded deferred compensation amounts described above. Your repayment obligation under the Note
shall be satisfied upon the application of these amounts. It is agreed that all other provisions
of the Note shall remain in full force and effect in accordance with its terms.

Deferred Compensation Account. You hereby agree to convert your deferred compensation account to
all cash holdings prior to April 30, 2005. Max Re agrees to pay you the DC Amount Due (as defined
below) from such account within 10 business days following written notice to Jim Tees that you have
completed such conversion. Upon receipt of such notice, your access to the deferred compensation
account shall be terminated. For purposes of this paragraph, the DC Amount Due shall equal the
cash balance of the account held for your benefit at Charles Schwab after it is converted to all
cash holdings. It is mutually agreed that you will no longer have a deferred compensation account
as of April 1, 2005 and will receive no additional contribution from the Company.

Vesting and Exercisability of Awards. Warrants and options that have been granted to you and that
would otherwise vest before April 1, 2007 in accordance with the vesting schedules set forth in the
applicable agreements granting such awards shall continue to vest pursuant to such agreements until
March 31, 2007. You agree that all warrants and options that do not vest on or before April 1,
2007 shall terminate and be forfeited. The vested warrants and options will remain exercisable
until March 31, 2007. Notwithstanding any provision in the warrant or option agreements to the
contrary, it is mutually agreed that any and all of your warrants and options not exercised on or
before March 31, 2007 shall expire and be forfeited. Further, it is mutually agreed that the
“Reload” provisions of each of the option agreements between you and Max Re Capital Ltd. will
terminate and cease to have effect as of April 1, 2005.

The restricted shares that were granted to you pursuant to the Restricted Stock Award Agreements
dated January 31, 2003, January 30, 2004 and February 7, 2005 will continue to vest on a pro rata
basis until March 31, 2007. Any unvested restricted shares as of April 1, 2007 will be terminated
and forfeited.

A summary of your awards and vesting is attached as Schedule B for reference.

It is mutually agreed that, to the extent necessary to give effect to the forgoing, those sections
of each of the applicable award agreements governing vesting and exercisability upon termination
shall be superceded and replaced by the vesting and exercisability terms of this letter agreement.
It is further agreed that all other provisions of the award agreements shall remain in full force
and effect in accordance with their respective terms.

No Severance. You agree that in consideration of structuring the termination and the related
payments and vesting set forth herein in accordance with your preferences that no further payments,
compensation or severance arrangements shall be due to you from the Company or its affiliates upon
your termination. It is mutually agreed that the terms of this letter agreement supercede and
replace any and all prior employment agreements between you and the Company and/or its affiliates.

No Compete. You agree that in consideration of structuring the termination and the related
payments and vesting set forth herein in accordance with your preferences that, until April 1,
2007, you will not seek employment with a competitor without first obtaining the written permission
of the Company. In the event such permission is granted and you become employed, the salary and
vesting set forth herein will be subject to recapture on a pro rata basis. To secure a potential
recapture pursuant to this provision, you agree that the Company may hold the restricted shares
granted on January 31, 2003, January 30, 2004 and February 7, 2005 until March 31, 2007 even though
such shares may become fully vested prior to such date. Further, until April 1, 2007, you will not
anywhere within the geographical areas in which the Company or any subsidiary is conducting their
business operations or providing services as of the April 1, 2005, pursue any Company or subsidiary
project known to you and which the Company or any subsidiary is actively pursuing, developing or
attempting to develop as of April 1, 2005 (or within six (6) months prior to such date) while the
Company is (or is contemplating actively) pursuing such project directly or indirectly, alone, in
association with or as a shareholder, principal, agent, partner, officer, director, employee or
consultant of any other organization. Until April 1, 2007, you will not solicit any officer,
employee or consultant of any of the Company or any subsidiary to leave the employ of any of the
Company or any subsidiary.

Trading Policy. It is mutually agreed that you will not trade in Max Re Capital Ltd. securities
prior to May 5, 2005. It is further agreed that after May 5, 2005, you will no longer be
restricted to trading only during the so-called “Trading Windows”; provided that you will remain
subject to all prohibitions against insider trading.

Confidential Information. On or before March 31, 2005, you will deliver to the Company all data,
lists, information, memoranda, documents and all other property belonging to the Company or
containing Confidential Information, including, among other things, that which relates to services
performed by you for the Company or any affiliate, or was created or obtained by you while
performing services for the Company or any affiliate or by virtue of your relationship with the
Company or any affiliate, except that you shall have no obligation to deliver to the Company your
rolodex, calendars and any documents containing your personal contacts or information. You shall
not, without the express prior written consent of the Company, disclose or divulge to any other
person or entity, or use or modify for use, directly or indirectly, in any way, for any person or
entity, any of the Company’s, any affiliate’s or any of their respective client’s Confidential
Information at any time. For purposes herein, “Confidential Information” shall mean any valuable,
competitively sensitive data and information related to the Company’s, any affiliate’s or any of
their respective client’s business including, without limitation Trade Secrets that are not
generally known by or readily available to such party’s competitors other than as a result of an
improper disclosure directly or indirectly by you. “Trade Secrets” shall mean information or data
of the Company, any affiliates or any of their respective clients including, but not limited to,
technical or non-technical data, financial information, programs, devices, methods, techniques,
drawings, processes, financial plans, product plans, or lists of actual or potential customers or
suppliers, that: (A) derive economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who can obtain economic
value from their disclosure or use; and (B) are the subject of efforts that are reasonable under
the circumstances to maintain their secrecy.

Non-Disparage. You acknowledge and agree that you will not defame or publicly criticize the
services, business, integrity, veracity or personal or professional reputation of the Company or
its officers, directors, partners, employees, affiliates or agents thereof in either a professional
or personal manner, except that the foregoing shall not limit normal competitive activities.

Release. In consideration of such payments and vesting, you, for yourself, your heirs, executors,
administrators, successors and assigns, agree to fully release and discharge the Company, its
officers, directors, employees, agents, insurers, subsidiaries, parents, affiliates, successors or
assigns from any and all actions, causes of action, claims (including with respect to any deferred
compensation), obligations, costs, losses, liabilities, damages and demands of whatsoever
character, whether or not known, suspected or claimed, which you have, through the date of this
letter, against the Company or its affiliates arising out of or in any way related to your
employment or termination of your employment. You understand that this release waives claims and
rights you may have under certain statutes, laws and regulations, if applicable, of any
jurisdiction (including, but not limited to, Bermuda) that in any way relates to your employment or
termination of employment and any and all amendments to any of same.

* * *

Please confirm your agreement with the foregoing by signing and returning to the undersigned the
duplicate copy of this letter enclosed herewith. In addition, please execute the enclosed
resignation letter with respect to the above mentioned directorship.

Very truly yours,

MAX RE CAPITAL LTD.

     

Peter A. Minton

Accepted and Agreed as of the date

first written above:

     

W. Dave Brining

1

April 1, 2005

Robert J. Cooney

Chairman, President & Chief Executive Officer

Max Re Managers Ltd.

Max Re House

2 Front Street

Hamilton HM 11

Bermuda

Dear Bob:

Effective April 1, 2005, I hereby resign from the Board of Directors of Max Re Managers Ltd.

Yours sincerely,

W. Dave Brining

2

Schedule A

	 	 	 	 	 	 	 	 	 
	W. Dave Brining	 	 	 	 	 	 	 	 
	Promissory Note Accounting Summary	 	 	 	 	 	 	 	 
	March 22, 2005	 	 	 	 	 	 	 	 
	Loan Amount Outstanding
	 	 	 	 	 	$	1,700,000	 
	Accrued and unpaid interest through March 31, 2005
	 	 	 	 	 	 	11,815	 
	Promissary Note Pay-off Amount
	 	 	 	 	 	 	1,711,815	 
	 
	 	 	 	 	 	 	 	 
	Agreed repayment provisions:
	 	 	 	 	 	 	 	 
	Salary offset
	 	 	860,000	 	 	 	 	 
	Unfunded deferred comp
	 	 	81,200	 	 	 	941,200	 
	 
	 	 	 	 	 	 	 	 
	Cash due on or before March 31, 2005
	 	 	 	 	 	$	770,615	 
	 
	 	 	 	 	 	 	 	 

3

Schedule B

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant Summary Report	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	W. Dave Brining	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	March 31, 2005	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant	 	Grant	 	Grant	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding	 	 	 	 	 	Vested	 	Unvested	 	 	 	 
	Date	 	Type	 	Price	 	Granted	 	Vested	 	Unvested	 	Exercisable	 	Exercised	 	as of March 31, 2007	 	 	 	 
	Warrants
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12/22/1999
	 	Non-Qualified             
	 	$	15.00		 		160,000		 		160,000		 		0		 		160,000		 		0		 		160,000		 		0		 	 	 	 
	6/29/2000
	 	Non-Qualified             
	 	$	15.00		 		240		 		240		 		0		 		240		 		0		 		240		 		0		 	 	 	 
	1/1/2001
	 	Non-Qualified             
	 	$	16.00		 		2,245		 		2,245		 		0		 		2,245		 		0		 		2,245		 		0		 	 	 	 
	5/22/2001
	 	Non-Qualified             
	 	$	18.00		 		4,167		 		4,167		 		834		 		3,333		 		0		 		4,167		 		0		 	 	 	 
	8/17/2001
	 	Non-Qualified             
	 	$	16.00		 		40,000		 		32,000		 		8,000		 		32,000		 		0		 		40,000		 		0		 	 	 	 
	Options
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1/1/2001
	 	Non-Qualified             
	 	$	16.00		 		50,000		 		50,000		 		0		 		50,000		 		0		 		50,000		 		0		 	 	 	 
	8/13/2001
	 	Non-Qualified             
	 	$	16.00		 		30,000		 		24,000		 		6,000		 		24,000		 		0		 		30,000		 		0		 	 	 	 
	1/1/2002
	 	Non-Qualified             
	 	$	15.66		 		50,000		 		40,000		 		10,000		 		40,000		 		0		 		50,000		 		0		 	 	 	 
	Restricted Stock
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1/1/2001
	 	Restricted	 	 	 	 	 		18,000		 		18,000		 		0		 		n/a		 		n/a		 		18,000		 		0		 	 	 	 
	1/31/2003
	 	Restricted	 	 	 	 	 		12,000		 		0		 		12,000		 		n/a		 		n/a		 		12,000		 		0		 	 	 	 
	1/30/2004
	 	Restricted	 	 	 	 	 		21,000		 		0		 		21,000		 		n/a		 		n/a		 		21,000		 		0		 	 	 	 
	2/7/2005
	 	Restricted	 	 	 	 	 		3,300		 		0		 		3,300		 		n/a		 		n/a		 		0		 		3,300		 		(a)	
	(a) — Subject to pro-rata vesting. Approximately 2,300 restricted shares may vest at March 31, 2007 and 1,000 restricted shares will be forfeited.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOTE: THIS SUMMARY REPORT IS FOR REFERENCE ONLY. THE ACTUAL GRANTS ARE DETERMINED BY THE AWARD AGREEMENTS.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]