Exhibit 10.1
 

____________________

ITALK, INC,
____________________

SUBSCRIPTION AGREEMENT

____________________

$300,000 Of The Company’s Two-Year Secured Debentures Convertible Into The
Company’s Common Stock.

___________________

 
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SUBSCRIPTION PROCEDURES
 
Convertible Debentures (the “Debentures”) of ITalk, Inc., a Nevada corporation
(the “Company”) are being offered pursuant to this Subscription Agreement (this
“Subscription Agreement”).  This offering is being made in accordance with the
exemptions from registration provided under Section 4(2) of the Securities Act
of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D
promulgated under the Securities Act.

In order to purchase Debentures, each Subscriber must complete and execute this
Subscription Agreement and the accompanying investor questionnaire (the
“Questionnaire”).  In addition, the Holder, as defined herein, must make a
payment for the amount being subscribed for hereunder directly to the
Company.  All subscriptions are subject to acceptance by the Company, which
shall not occur until the Company has returned the signed “Company Signature
Page”.

The Questionnaire is designed to enable the Holder to demonstrate the minimum
legal requirements under federal and state securities laws to purchase the
Debentures.  The Signature Page for the Questionnaire and the Subscription
Agreement contain representations relating to the subscription and should be
reviewed carefully by each subscriber.

If the Holder is a foreign person or foreign entity, the Holder may be subject
to a withholding tax equal to thirty percent (30%) of any dividends paid by the
Company.  In order to eliminate or reduce such withholding tax, the Holder must
submit a properly executed I.R.S. Form 4224 “Exemption from Withholding of Tax
on Income Effectively Connected with the Conduct of a Trade or Business in the
United States” or I.R.S. Form 1001 “Ownership Exemption or Reduced Trade
Certificate”, claiming exemption from withholding or eligibility for treaty
benefits in the form of a lower rate of withholding tax on interest or
dividends.

Payment of the full subscription amount will be made by wire transfer by
Dutchess Opportunity Fund, II, LP (the “Holder”) on or prior to the closing per
the wire instructions that will be established.  In the event of a termination
of the offering or the rejection of a subscription, subscription funds will be
returned by the Company without interest or charges.
 
SUBSCRIPTION AGREEMENT
 
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”)OR ANY STATE SECURITIES LAWS AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SUCH LAWS.  THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SUCH LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION
THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC” OR THE “COMMISSION”) OR ANY
OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
OFFERING MATERIALS.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

ITalk, Inc.

This Subscription Agreement is made between ITalk, Inc., a Nevada corporation
(the “Company”), and the undersigned prospective Holder (the “Holder”) who is
subscribing hereby for the Company’s secured convertible debentures (the
“Debentures”) on January 4, 2008.  This subscription is submitted to you in
accordance with and subject to the terms and conditions described in this
Subscription Agreement, together with any Exhibits hereto, relating to an
offering (the “Offering”) of Three Hundred Thousand dollars ($300,000) of the
Debentures.  The Offering is limited to accredited investors and is made in
accordance with the exemptions from registration provided for under Section 4(2)
of the Securities Act and Rule 506 of Regulation D promulgated under the
Securities Act (“Regulation D”).

Contemporaneously with the execution and delivery of this Subscription
Agreement, the parties hereto are executing and delivering a Warrant Agreement,
Security Agreement and Debenture, all of even date herewith (collectively with
the documents referenced in the foregoing documents, the “Transaction
Documents”).

1.           Subscription.

(a)   The closing shall be deemed to have occurred on October XX, 2013 (the
“Closing Date” or a “Closing”).

(b)           Upon receipt by the Company of the requisite payment for the
Debenture being purchased, the Debenture so purchased will be forwarded by the
Company to the Holder or its broker, as listed on the signature page, and the
name of the Holder will be registered on the Debenture transfer books of the
Company as the record owner of such Debentures.

 
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(c)           As long as the Holder owns the Debenture, the Holder shall have
the right, to change the terms for the balance of the Debenture it then holds,
to match the terms of any other offering of securities made by the Company.

(d)           The Holder shall fund (i) two hundred and fifty thousand dollars
($250,000) upon the Closing which shall go directly to the Company, minus any
closing costs due.

(e)           The Holder will be granted a security interest in all of the
Company's and its Subsidiaries' assets, currently owned or hereinafter acquired,
(as defined in Schedule 3(a) of this Subscription Agreement), as more fully set
forth in the Security Agreement.

2.   Representations And Warranties Of The Holder.
 
The Holder hereby represents and warrants to, and agrees with, the Company as
follows:
 
(a)    The Holder has been furnished with, and has carefully read the applicable
form of the Debenture and is familiar with and understands the terms of the
Offering.  With respect to tax and other economic considerations involved in his
investment, the Holder is not relying on the Company.  The Holder has carefully
considered and has, to the extent the Holder believes such discussion necessary,
discussed with the Holder's professional legal, tax, accounting and financial
advisors the suitability of an investment in the Company, by purchasing the
Debentures, for the Holder's particular tax and financial situation and has
determined that the investment being made by the Holder is a suitable investment
for the Holder.

(b)    The Holder acknowledges that all documents, records, and books pertaining
to this investment which the Holder has requested, have been made available for
inspection, or the Holder has had access thereto.

(c)    The Holder has had a reasonable opportunity to ask questions of and
receive answers from a person or persons acting on behalf of the Company
concerning the Offering, and if such opportunity was taken, then all such
questions have been answered to the full satisfaction of the Holder.

(d)           The Holder will not sell, or otherwise dispose of the Debentures
or the common stock of the Company, par value $0.001 per share (the “Common
Stock”) issued upon conversion of the Debentures without registration under the
Securities Act or applicable state securities laws or compliance with an
exemption therefrom including but not limited to Rule 144(b) and 144(k) under
the Securities Act (an “Exemption”).  The Debentures have not been registered
under the Securities Act or under the securities laws of any state.  Resales of
the Common Stock underlying the Debentures or issued in payment of accrued
interest on the Debentures are to be registered by the Company pursuant to the
terms of the Debenture Registration Rights Agreement incorporated herein and
made a part hereof.

(e)           The Holder recognizes that an investment in the Debentures
involves substantial risks, including loss of the entire amount of such
investment. Further, the Holder has carefully read and considered the schedules
attached hereto.

(f)           The Holder acknowledges that each certificate representing the
Debentures (and the shares of Common Stock issued upon conversion of the
Debentures, unless registered or with an Exemption) or in payment of interest on
the Debentures shall be stamped or otherwise imprinted with a legend
substantially in the following form:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR
ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(iii) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

If the Holder sends a Notice of Conversion (see Exhibit A attached hereto), and
a registration statement under the Securities Act is in effect as to the sale,
then in such event the Company shall have its transfer agent send Holder the
appropriate number of shares of Common Stock without restrictive legends (other
than a legend referring to the resale registration and prospectus delivery
requirements) and not subject to stop transfer instructions.

(g)           If this Subscription Agreement is executed and delivered on behalf
of a corporation or legal entity other than a natural person: (i) such
corporation or other entity has the full legal right and power and all authority
and approval required (a) to execute and deliver, or authorize execution and
delivery of this Subscription Agreement and all other Transaction Documents
executed and delivered by or on behalf of such corporation in connection with
the purchase of the Debentures, and (b) to purchase and hold the Debentures; and
(ii) the signature of the party signing on behalf of such corporation or entity
is binding upon such corporation.

(h)           The Holder is not subscribing for the Debentures as a result of,
or pursuant to, any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or meeting, or any other general
solicitation.

 
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 (i)           The Holder is purchasing the Debentures for its own account for
investment, and not with a view toward the resale or distribution thereof,
except pursuant to sales registered or exempted from registration under the
Securities Act.  The Holder has not offered or sold any portion of the
Debentures being acquired nor does the Holder have any present intention of
dividing the Debentures with others or of selling, distributing or otherwise
disposing of any portion of the Debentures either currently or after the passage
of a fixed or determinable period of time or upon the occurrence or
non-occurrence of any predetermined event or circumstance in violation of the
Securities Act provided, however, that by making the representations herein, the
Holder does not agree to hold any of the Debentures for any minimum or other
specific term and reserves the right to dispose of the Debentures at any time in
accordance with or pursuant to a registration statement or an exemption under
the Securities Act.  The Holder is neither an underwriter of, nor a dealer in,
the Debentures or the Common Stock issuable upon conversion thereof or upon the
payment of interest thereon and is not participating in the distribution or
resale of the Debentures or the Common Stock issuable upon conversion or
exercise thereof.  Notwithstanding anything in this Section to the contrary, the
Holder reserves the right to pledge any of the Debenture for margin purposes and
dispose of the Debentures at any time in accordance with federal and state
securities laws applicable to such dispositions.

(j)           The Holder or the Holder's representatives, as the case may be,
has such knowledge and experience in financial, tax and business matters so as
to enable the Holder to utilize the information made available to the Holder in
connection with the Offering to evaluate the merits and risks of an investment
in the Debentures and to make an informed investment decision with respect
thereto.

3.   Representations And Warranties Of The Company.

Except as set forth in the Schedules attached hereto, the Company hereby
represents and warrants to, and agrees with the Holder, as follows:

a.           Organization and Qualification.  The Company and its “Subsidiaries”
(which for purposes of this Subscription Agreement means any entity in which the
Company, directly or indirectly, owns capital stock or holds an equity or
similar interest) (a complete list of which is set forth in Schedule 3(a)) are
corporations duly organized and validly existing in good standing under the laws
of the respective jurisdictions of their incorporation, and have the requisite
corporate power and authorization to own their properties and to carry on their
business as now being conducted.  Both the Company and its Subsidiaries are duly
qualified to do business and are in good standing in every jurisdiction in which
their ownership of property or the nature of the business conducted by them
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse
Effect.  As used in this Subscription Agreement, the term “Material Adverse
Effect” means any material adverse effect on the business, properties, assets,
operations, results of operations, financial condition or prospects of the
Company and its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements and instruments to be entered into in
connection herewith, or on the authority or ability of the Company to perform
its obligations under the Transaction Documents (as defined in Section 3.b
hereof).

b.           Authorization; Enforcement; Compliance with Other Instruments.  (i)
The Company has the requisite corporate power and authority to enter into and
perform its obligations under the Transaction Documents, and to issue the
Debentures in accordance with the terms hereof and thereof, (ii) the execution
and delivery of the Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby, including without
limitation the reservation for issuance and the issuance of the Debentures
pursuant to this Subscription Agreement, have been duly and validly authorized
by the Company's Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors, or its shareholders, (iii) the
Transaction Documents have been duly and validly executed and delivered by the
Company, and (iv) the Transaction Documents constitute the valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors' rights and remedies.

c.           Capitalization.  As of the date hereof, the authorized capital
stock of the Company consists of 1,875,000,000 shares of Common Stock, of which
as of the date hereof, approximately 43,000,000 shares are issued and
outstanding.  All of such outstanding shares have been, or upon issuance will
be, validly issued and are fully paid for and nonassessable.  Except as
disclosed in Schedule 3(c), which is attached hereto and made a part hereof, (i)
no shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding debt securities, (iii) there are no
outstanding shares of capital stock, options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act (except the as otherwise set forth in
the Transaction Documents), (v) there are no outstanding securities of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities as described in this
Subscription Agreement, (vii) the Company does not have any stock appreciation
rights or "phantom stock" plans or agreements or any similar plan or agreement,
and (viii) there is no dispute as to the class of any shares of the Company's
capital stock.  The Company has furnished to the Holder, or the Holder has had
access through EDGAR to, true and correct copies of the Company's Articles of
Incorporation, as in effect on the date hereof (the “Articles Of
Incorporation”), and the Company's Bylaws, as in effect on the date hereof (the
“Bylaws”).

 
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d.           Issuance of Debentures. A sufficient number of Debentures issuable
pursuant to this Subscription Agreement, but not more than four and ninety-nine
one hundredths percent (4.99%) of the shares of Common Stock outstanding as of
the date hereof (if, and only if, the Company becomes listed on Nasdaq or the
American Stock Exchange), has been duly authorized and reserved for issuance
pursuant to this Subscription Agreement.  Upon issuance in accordance with this
Subscription Agreement, the Debentures will be validly issued, fully paid for
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof. In the event the Company cannot register a sufficient number of
shares of Common Stock, due to the remaining number of authorized shares of
Common Stock being insufficient, the Company will use its best efforts to
register the maximum number of shares it can based on the remaining balance of
authorized shares and will use its best efforts to increase the number of its
authorized shares as soon as reasonably practicable.

e.           No Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the Articles of Incorporation, any Certificate of Designations, Preferences
and Rights of any outstanding series of preferred stock of the Company or the
Bylaws or (ii) conflict with, or constitute a material default (or an event
which with notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, contract, indenture mortgage,
indebtedness or instrument to which the Company or any of its Subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree, including United States federal and state securities laws and
regulations and the rules and regulations of the principal securities exchange
or trading market on which the Common Stock is traded or listed (the “Principal
Market”), applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected. Except as disclosed in Schedule 3(e), neither the Company nor its
Subsidiaries is in violation of any term of, or in default under, the Articles
of Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the Bylaws or their
organizational charter or bylaws, respectively, or any contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations that would not individually or in
the aggregate have a Material Adverse Effect. The business of the Company and
its Subsidiaries is not being conducted, and shall not be conducted, in
violation of any law, statute, ordinance, rule, order or regulation of any
governmental authority or agency, regulatory or self-regulatory agency, or
court, except for possible violations the sanctions for which either
individually or in the aggregate would not have a Material Adverse
Effect.  Except as specifically contemplated by this Subscription Agreement and
as required under the Securities Act, the Company is not required to obtain any
consent, authorization, permit or order of, or make any filing or registration
(except the filing of a registration statement)  with, any court, governmental
authority or agency, regulatory or self-regulatory agency or other third party
in order for it to execute, deliver or perform any of its obligations under, or
contemplated by, the Transaction Documents in accordance with the terms hereof
or thereof. All consents, authorizations, permits, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof and are
in full force and effect as of the date hereof. Except as disclosed in Schedule
3(e), the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company is not, and will not
be, in violation of the listing requirements of the Principal Market as in
effect on the date hereof and on each of the Closing Dates and is not aware of
any facts which would reasonably lead to delisting of the Common Stock by the
Principal Market in the foreseeable future.

f.           SEC Documents; Financial Statements.  The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Securities and
Exchange Act of 1934, as amended (“Exchange Act”) (all of the foregoing filed
since the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”).  The Company has delivered to
the Holder or its representatives, or they have had access through EDGAR, to
true and complete copies of the SEC Documents.  As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, and are not misleading. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other written information provided by or on behalf of the
Company to the Holder which is not included in the SEC Documents, including,
without limitation, information referred to in Section 3.d. hereof, contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstance under
which they are or were made, and are not misleading.

g.           Absence of Certain Changes.  Except as disclosed in Schedule 3.g or
the SEC Documents filed at least thirty (30) days prior to the date hereof,
there has been no change or development in the business, properties, assets,
operations, financial condition, results of operations or prospects of the
Company or its Subsidiaries which has had or reasonably could have a Material
Adverse Effect.  The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy law nor
does the Company or its Subsidiaries have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings.

h.           Absence of Litigation.  Except as set forth in the Company’s SEC
filings, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending or, to the knowledge of the executive officers of Company or any
of its Subsidiaries, threatened against or affecting the Company, the Common
Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, in
which an adverse decision could have a Material Adverse Effect.

 
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i.           Acknowledgment Regarding the Purchase of Debentures.  The Company
acknowledges and agrees that the Holder is acting solely in the capacity of an
arm's-length investor with respect to the Transaction Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges
that the Holder is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by the Holder
or any of its respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to the Holder's purchase of the Debentures. The Company
further represents to the Holder that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

j.           Intentionally omitted.

k.           Employee Relations.  Neither the Company nor any of its
Subsidiaries is involved in any union labor dispute nor, to the knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened. Neither the
Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that relations with
their employees are good. No executive officer (as defined in Rule 501(f) under
the Securities Act) has notified the Company that such officer intends to leave
the Company's employ or otherwise terminate such officer's employment with the
Company.

l.           Intellectual Property Rights.  All patents, patent applications,
trademark registrations and applications for trademark registration held by the
Company are owned free and clear of all mortgages, liens, charges or
encumbrances whatsoever.  No licenses have been granted with respect to these
items and the Company and its Subsidiaries do not have any knowledge of any
infringement by the Company or its Subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of
others, and, except as set forth on Schedule 3.l., there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company or its Subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service mark registrations, trade secret or other infringement;
and the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.  The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual property.

m.           Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses, and (iii) are in compliance with all terms and
conditions of any such permit, license or approval where, in each of the three
foregoing cases, the failure to so comply would have, individually or in the
aggregate, a Material Adverse Effect.

n.           Title.  The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in Schedule 3.n. or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any of its
Subsidiaries.  Any real property and facilities held under lease by the Company
or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

o.           Insurance.  The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged.  Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

p.           Regulatory Permits.  The Company and its Subsidiaries have in full
force and effect all certificates, approvals, authorizations and permits from
the appropriate federal, state, local or foreign regulatory authorities and
comparable foreign regulatory agencies, necessary to own, lease or operate their
respective properties and assets and conduct their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
approval, authorization or permit, except for such certificates, approvals,
authorizations or permits which if not obtained, or such revocations or
modifications which, would not have a Material Adverse Effect.

q.           Internal Accounting Controls.  The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

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

s.           Tax Status. The Company has filed all federal and state income tax
returns, as required and the Company and each of its Subsidiaries has made or
filed all United States federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is
subject.  The Company represents that there are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.

t.           Certain Transactions.  Except as set forth in the SEC Documents
filed at least ten days prior to the date hereof and except for arm's-length
transactions pursuant to which the Company makes payments in the ordinary course
of business upon terms no less favorable than the Company could obtain from
third parties and other than the grant of stock options disclosed on Schedule
3.c. none of the officers, directors, or employees of the Company is presently a
party to any transaction with the Company or any of its Subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

u.           Dilutive Effect.  The Company understands and acknowledges that the
number of shares of Common Stock issuable upon purchases pursuant to this
Subscription Agreement will increase in certain circumstances including, but not
necessarily limited to, the circumstance wherein the trading price of the Common
Stock declines following the effective date of the registration statement
covering the Common Stock underlying the Debentures (the “Effective Date”).  The
Company’s executive officers and directors have studied and fully understand the
nature of the transactions contemplated by this Subscription Agreement and
recognize that they have a potential dilutive effect.  The board of directors of
the Company has concluded, in its good faith business judgment that such
issuance is in the best interests of the Company.  The Company specifically
acknowledges that, subject to such limitations as are expressly set forth in the
Transaction Documents, its obligation to issue shares of Common Stock upon
purchases pursuant to this Subscription Agreement is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.

v.   Additional Financings. The Company shall not, directly nor indirectly,
without the prior written consent of the Holder, offer, sell, grant any option
to purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition) any of its Common Stock or securities
convertible into Common Stock, or file any registration statement, including
those on Form S-8 for any securities (a “Subsequent Financing”), in either case
ending on the date on which the full Face Amount and penalties, if any,  on the
Debentures have been paid (“Lock Up Period”), as set forth in the Debenture.

If there is any outstanding balance on the Debentures, the Holder shall retain a
first right of refusal for any additional financings.  The Company must submit
to the Holder a duly authorized term sheet of the financing and the Holder may
elect, in writing within five (5) business days, to exercise its right to
finance the Company upon the same terms and conditions, as set forth in the
Debenture.  In the event the Holder does not elect to complete such financing
within such period, the Company may proceed with the proposed third-party
financing on the same terms and conditions as contained in the notice to Holder.

 If at any time while the Debenture are outstanding, if the Company issues or
agrees to issue any Common Stock or securities convertible into or exercisable
for shares of Common Stock (or modify any of the foregoing which may be
outstanding prior to the execution of this Agreement) to any person or entity at
a price per share or conversion or exercise price per share less than the
Conversion Price, with or without the consent of the Holder, the Conversion
Price shall automatically be reduced to a price twenty percent (20%) lower than
the price of the new issuance.  Additionally, if the Company shall issue or
agree to issue any of the aforementioned securities to any person, firm or
corporation at terms deemed by the Holder to be more favorable to the other
person or entity than the terms or conditions of this Offering, then the Holder
is granted the right, at its election, to modify any term of this Offering to
match any more favorable term provided by the Company to such person or
entity.  The rights of the Holder in this Section are in addition to any other
right the Holder has pursuant to this Subscription Agreement and the Transaction
Documents.

In the event the exercise of the rights described in the preceding paragraph
would result in the issuance of an amount of Common Stock of the Company that
would exceed the maximum amount that may be issued to the Holder calculated in
the manner described in Section 3.d. of this Subscription Agreement, then the
issuance of such additional shares of Common Stock of the Company to such
Subscriber will be deferred in whole or in part until such time as such
Subscriber is able to beneficially own such Common Stock without exceeding the
maximum amount set forth calculated in the manner described in Section 3.d. of
this Subscription Agreement.  The determination of when such Common Stock may be
issued shall be made by the Holder.

w.   Sarbanes-Oxley Compliance.   The Company hereby acknowledges that they are
current with the requirement of Sarbanes-Oxley Act of 2002 (“SOX”), and will
remain compliant with SOX and its rules and regulations for reporting
requirements in the time frame required by SOX, and any updates to deadlines
imposed by SOX.

 
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x.   Code of Ethics.  The Company has adopted a Code of Ethics and has filed the
Code with the SEC.

y.   No Disagreements with Accountants, Auditors 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, auditors and lawyers
formerly or presently used by the Company, including but not limited to disputes
or conflicts over payment owed to such accountants, auditors or lawyers.

z.   Investment Company.  Neither the Company nor any Affiliate is an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
 
aa.   Company Predecessor. All representations made by or relating to the
Company of a historical nature and all undertaking described herein shall relate
and refer to the Company, its predecessors, and the Subsidiaries.

bb.   Option Plan Restrictions.  The only officer, director, employee and
consultant stock option or stock incentive plan currently in effect or
contemplated by the Company has been submitted to the Holder or is described in
past filings with the SEC.  No other plan will be adopted nor may any options or
equity not included in such plan be issued until after the Debenture is paid in
full.

4.   Covenants Of The Company.

a.           Best Efforts.  The Company shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in this
Subscription Agreement.

b.           Blue Sky.  The Company shall, at its sole cost and expense, make
all filings and reports relating to the offer and sale of the Debentures and the
Common Stock underlying the Debentures as required under the applicable
securities or “Blue Sky” laws of such states of the United States as specified
by the Holder or as required by law.

c.           Reporting Status.  Until the earlier of (i) the date that the
Holder may sell all of the Common Stock underlying the Debentures acquired
pursuant to this Subscription Agreement without restriction pursuant to Rule
144(k) under the Securities Act, or (ii) the date on which the Holder shall have
sold all the Common Stock underlying the Debentures, the Company shall file all
reports required to be filed with the SEC pursuant to the Exchange Act, and the
Company shall not terminate its status as a reporting company under the Exchange
Act.

d.           Use of Proceeds.  The Company shall use the entire proceeds from
the Debenture exclusively to further the growth and interest of the
Company.  Any other use of the funds contemplated herein, shall be considered a
breach of contract and an event of Default.

e.           Conditions to Closing.  The Company shall sign and be in compliance
with the Transaction Documents with the Holder.

f.           Financial Information.  The Company agrees to make available to the
Holder via EDGAR or other electronic means the following: (i) within five (5)
business days after the filing thereof with the SEC, a copy of its Annual
Reports on Form 10-KSB, its Quarterly Reports on Form 10-QSB, any Current
Reports on Form 8-K and any registration statements or amendments filed pursuant
to the Securities Act; (ii) on the same day as the release thereof, facsimile
copies of all press releases issued by the Company or any of its Subsidiaries,
(iii) copies of any notices and other information made available or given to the
shareholders of the Company generally, contemporaneously with the making
available or giving thereof to the shareholders and (iv) within two (2) calendar
days of filing or delivery thereof, copies of all documents filed with, and all
correspondence sent to, the Principal Market, any securities exchange or market,
or the National Association of Securities Dealers, Inc. (the “NASD”)

g.           Reservation of Common Stock.  Subject to the following sentence,
the Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, a sufficient number of shares of Common
Stock to provide for the issuance of the Common Stock underlying the
Debentures.  In the event that the Company determines that it does not have a
sufficient number of authorized shares of Common Stock to reserve and keep
available for issuance, the Company shall use its best efforts to increase the
number of authorized shares of Common Stock by seeking shareholder approval for
the authorization of such additional shares.  The Holder shall have the right to
reasonably determine the amount of shares to be re-registered such as are
necessary to satisfy the terms of the Agreement.

h.           Listing.  The Company shall promptly secure the listing of all of
the Common Stock underlying the Debentures upon the Principal Market and each
other national securities exchange and automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, such listing.  The Company shall maintain the
Common Stock's authorization for quotation on the Principal Market, unless the
Holder and the Company agree otherwise.  Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market
(excluding suspensions of not more than one trading day resulting from business
announcements by the Company).  The Company shall promptly provide to the Holder
copies of any notices it receives from the Principal Market regarding the
continued eligibility of the Common Stock for listing on such automated
quotation system or securities exchange.  The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section.

 
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i.           Transactions With Affiliates.  During the Lock Up Period, the
Company shall not, and shall cause each of its Subsidiaries not to, enter into,
amend, modify or supplement, or permit any Subsidiary to enter into, amend,
modify or supplement, any agreement, transaction, commitment or arrangement with
any of its or any Subsidiary's officers, directors, persons who were officers or
directors at any time during the previous two years, shareholders who
beneficially own five percent (5%) or more of the Common Stock, or affiliates or
with any individual related by blood, marriage or adoption to any such
individual or with any entity in which any such entity or individual owns a five
percent (5%) or more beneficial interest (each a “Related Party”) during the
Lock Up Period; except for (i) customary employment arrangements and benefit
programs on reasonable terms (including changes currently under discussion with
the Company's Board of Directors concerning the compensation, to be payable in
stock, of the Chairman of the Board), (ii) any agreement, transaction,
commitment or arrangement on an arms-length basis on terms no less favorable
than terms which would have been obtainable from a person other than such
Related Party, or (iii) any agreement, transaction, commitment or arrangement
which is approved by a majority of the disinterested directors of the Company.
For purposes hereof, any director who is also an officer of the Company or any
Subsidiary of the Company shall not be a disinterested director with respect to
any such agreement, transaction, commitment or arrangement.  “Affiliate” for
purposes hereof means, with respect to any person or entity, another person or
entity that, directly or indirectly, (i) has a five percent (5%) or more equity
interest in that person or entity, (ii) has five percent (5%) or more common
ownership with that person or entity, (iii) controls that person or entity, or
(iv) shares common control with that person or entity.  “Control” or “Controls”
for purposes hereof means that a person or entity has the power, direct or
indirect, to conduct or govern the policies of another person or entity.

j.           Corporate Existence.  The Company shall use its commercially
reasonable best efforts to preserve and continue the corporate existence of the
Company.

k.           Notice of Certain Events Affecting Registration.  The Company shall
promptly notify Holder upon the occurrence of any of the following events in
respect of a registration statement or related prospectus covering the Common
Stock underlying the Debentures: (i) receipt of any request for additional
information by the SEC or any other federal or state governmental authority
during the period of effectiveness of the registration statement for amendments
or supplements to the registration statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of any registration statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Common Stock underlying the Debentures for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in such
registration statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the registration statement, related
prospectus or documents so that, in the case of a registration statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the registration statement would be appropriate, and the Company
shall promptly make available to the Holder any such supplement or amendment to
the related prospectus.

l.           Indemnification.  In consideration of the Holder’s execution and
delivery of this Agreement and the Debenture Registration Rights Agreement and
acquiring the Debentures hereunder and in addition to all of the Company's other
obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless the Holder and all of its shareholders, officers,
directors, employees and direct or indirect investors and any of the foregoing
person's agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(ii) any breach of any covenant, agreement or obligation of the Company
contained in the Transaction Documents or any other certificate, instrument or
document  contemplated hereby or thereby, (iii) any cause of action, suit or
claim brought or made against such Indemnitee by a third party and arising out
of or resulting from the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (iv) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Debentures, (v) the status of the Holder as an investor in the Company,
except, in the case of any of such clauses, insofar as any such Indemnified
Liability was attributable to gross negligence, willful misconduct or any
illegal activity on the part of Holder and, in the case of clause, (v) only,
insofar as any such Indemnified Liability was attributable to an untrue
statement, alleged untrue statement, omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Holder which is specifically intended by the Holder for use in
the preparation of any Registration Statement, preliminary prospectus or
prospectus.  To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.  The indemnity provisions contained herein
shall be in addition to any cause of action or similar rights the Holder may
have, and any liabilities to which the Holder may be subject.  Notwithstanding
the foregoing, the Company shall have no indemnification responsibility in the
event Holder fails to timely notify the Company of a claim or potential claim
for which indemnification is sought, but only to the extent the Company is
prejudiced thereby.  The Company shall have the right to control the defense of
any such claim and the Holder shall not consent to any settlement of any such
claim without the prior written consent of the Company (which shall not be
unreasonably withheld or delayed).  The Holder shall provide indemnification
comparable in scope and coverage to the Company and corresponding related
persons in respect of any Indemnified Liability if and to the extent
attributable to gross negligence, willful misconduct or any illegal activity on
the part of the Holder, and shall be obligated to reimburse the Company and such
persons to the same extent as the Company’s reimbursement obligations under
Section 4.m. hereof.

 
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m.           Reimbursement.  If (i) the Holder, other than by reason of its
gross negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by any shareholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Documents, or if the Holder is impleaded in any
such action, proceeding or investigation by any person, or (ii) the Holder,
other than by reason of its gross negligence or willful misconduct or by reason
of its trading of the Common Stock in a manner that is  illegal under the
federal securities laws, becomes involved in any capacity in any action,
proceeding or investigation brought by the SEC against or involving the Company
or in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Documents, or if the Holder is impleaded in any
such action, proceeding or investigation by any person, then in any such case,
the Company will reimburse the Holder for its reasonable legal and other
expenses (including the cost of any investigation and preparation) incurred in
connection therewith, as such expenses are incurred.  In addition, other than
with respect to any matter in which the Holder is a named party, the Company
will pay to the Holder the charges, as reasonably determined by the Holder, for
the time of any officers or employees of the Holder devoted to appearing and
preparing to appear as witnesses, assisting in preparation for hearings, trials
or pretrial matters, or otherwise with respect to inquiries, hearing, trials,
and other proceedings relating to the subject matter of this Subscription
Agreement. The reimbursement obligations of the Company under this Section shall
be in addition to any liability which the Company may otherwise have, shall
extend upon the same terms and conditions to any affiliates of Holder that are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees, attorneys, accountants, auditors and controlling
persons (if any), as the case may be, of Holder and any such affiliate, and
shall be binding upon and inure to the benefit of any successors of the Company,
Holder and any such affiliate and any such person.

n.           Transfer Agent.  The Company covenants and agrees that, in the
event that the Company's agency relationship with the transfer agent should be
terminated for any reason prior to the Maturity Date (as defined in the
Debenture), and the Company shall immediately appoint a new transfer agent.  The
Company shall be up to date with all payments to the transfer agent, and
continue to pay transfer agent as outlined in the Irrevocable Transfer Agent
Agreement.

5.           Opinion Letter/Board Resolution.

Prior to or on the Closing Date, the Company shall deliver to the Holder an
opinion letter signed by counsel for the Company in the form attached hereto as
Exhibit D.

If so requested by the Holder, the Company shall instruct counsel to write a
Rule 144 opinion letter provided the necessary paperwork has been submitted and
the Exemption applies (as defined herein).  If the Company’s counsel fails to
provide a Rule 144 opinion letter within three (3) days, then the Company shall:
(a) pay the Investor’s counsel to write said Rule 144 opinion letter; and (b)
instruct the designated transfer agent to accept and rely upon the Rule 144
Opinion letter attached hereto as Exhibit E.  Also, prior to or on the Closing
Date,  the Company shall deliver to the Holder a signed Board Resolution
authorizing this Offering, which shall be attached hereto as Exhibit F.

6.           Delivery Instructions;
Fees.                                                      

The Debentures being purchased hereunder shall be delivered to the Holder on the
Closing Date at which time funds will be wired to the Company and the Debentures
will be delivered to the Holder, per the Holder’s instructions.

7.           Understandings.

The Holder understands, acknowledges and agrees as follows:

a.           No U.S. federal or state agency or any agency of any other
jurisdiction has made any finding or determination as to the fairness of the
terms of the Offering for investment nor any recommendation or endorsement of
the Debentures or the Company.

b.           The representations, warranties and agreements of the Holder and
the Company contained herein shall be true and correct in all material respects
on and as of the date of the sale of the Debentures as if made on and as of such
date and shall survive the execution and delivery of this Subscription Agreement
and the purchase of the Debentures.

c.           In making an investment decision, the Holder is relying on its own
examination of the Company and the terms of the Offering, including the merits
and risks involved.  The shares have not been recommended by any federal or
state securities commission or regulatory authority.  Furthermore, the foregoing
authorities have not confirmed the accuracy or determined the adequacy of this
document.  Any representation to the contrary is a criminal offense.

 
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d.           The Offering is intended to be exempt from registration by virtue
of Section 4(2) of the Securities Act and the provisions of Regulation D
thereunder, which is in part dependent upon the truth, completeness and accuracy
of the statements made by the undersigned herein and in the Questionnaire.

e.           It is understood that in order not to jeopardize the Offering’s
exempt status under Section 4(2) of the Securities Act and Regulation D, the
Holder may, at a minimum, be required to fulfill the investor suitability
requirements thereunder.

f.           The shares may not be resold except as permitted under the
securities act and applicable state securities laws, pursuant to registration or
exemption therefrom.  Holder should be aware that they will be required to bear
the financial risks of this investment for an indefinite period of time.

8.   Disputes Subject To Arbitration Governed By Massachusetts Law.

a.           All disputes arising under this Subscription Agreement shall be
governed by and interpreted in accordance with the laws of the Commonwealth of
Massachusetts, without regard to principles of conflict of laws.  The parties to
this Subscription Agreement shall submit all disputes arising under this
Subscription Agreement to arbitration in Boston, Massachusetts before a single
arbitrator of the American Arbitration Association (the “AAA”).  The arbitrator
shall be selected by application of the rules of the AAA, or by mutual agreement
of the parties, except that such arbitrator shall be an attorney admitted to
practice law in the Commonwealth of Massachusetts.  No party to this
Subscription Agreement shall challenge the jurisdiction or venue provisions as
provided in this Section 8.  Nothing in this Section 8 shall limit the Holder's
right to seek and obtain an injunction for violation of the terms and conditions
of this Subscription Agreement.

9.           Miscellaneous.

a.           Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Subscription Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided a
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same.  The addresses and facsimile numbers
for such communications shall be:

If to the Company:                               ITalk,  Inc.
2400 W. Cypress Creek Road; #111
Fort Lauderdale, Florida 33309
Telephone: (877) 652-3834
Facsimile:______________

 
If to the Secured Party:                        Dutchess Capital Management, LLC
50 Commonwealth Ave, Suite 2
Boston, MA  02116
Attention: Douglas Leighton
Telephone: (617) 301-4700
Facsimile: (617) 249-0947

Each party shall provide five (5) business days prior notice to the other party
of any change in address, phone number or facsimile number.

b.    All pronouns and any variations thereof used herein shall be deemed to
refer to the masculine, feminine, impersonal, singular or plural, as the
identity of the person or persons may require.

 
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c.           Neither this Subscription Agreement nor any provision hereof shall
be waived, modified, changed, discharged, terminated, revoked or canceled,
except by an instrument in writing signed by the party effecting the same
against whom any change, discharge or termination is sought.

d.           Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
or sent by facsimile transmission:  (i) if to the Company, at it’s executive
offices, or (ii) if to the Holder, at the address for correspondence set forth
in the Questionnaire, or at such other address as may have been specified by
written notice given in accordance with this paragraph.

e.           This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the Commonwealth of
Massachusetts, as such laws are applied by Massachusetts courts to agreements
entered into, and to be performed in, Massachusetts by and between residents of
Massachusetts, and shall be binding upon the undersigned, the undersigned's
heirs, estate and legal representatives and shall inure to the benefit of the
Company and its successors.  If any provision of this Subscription Agreement is
invalid or unenforceable under any applicable statue or rule of law, then such
provisions shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law.  Any provision hereof that may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

f.           This Subscription Agreement shall not be assignable.

f.           This Subscription Agreement, together with Exhibit A through
Exhibit F and the Schedules attached hereto and made a part of this Subscription
Agreement by this reference, constitute 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 hereto.

g.           This Subscription Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one
instrument.  Execution and delivery of this Subscription Agreement by exchange
of facsimile copies bearing the facsimile signature of a party shall constitute
a valid and binding execution and delivery of this Subscription Agreement by
such party.  Such facsimile copies shall constitute enforceable original
documents.

h.           When in this Agreement or the Transaction Documents, reference is
made to any party, such reference shall be deemed to include the successors,
assigns, heirs and legal representatives of such party.  No party hereto may
transfer any rights under this Agreement or the Transaction Documents, unless
the transferee agrees to be bound by, and comply with all of the terms and
provision of this Agreement and the Transaction Documents, as if an original
signatory hereto on the date hereof.

i.           The Company hereby represent and warrants to the Holder that: (i)
it has voluntarily entered into this Subscription Agreement of its own freewill,
(ii) it is not entering into this Subscription Agreement under economic duress,
(iii) the terms of this Subscription Agreement are reasonable and fair to the
Company, and (iv) the Company has had independent legal counsel of its own
choosing review this Subscription Agreement, advise the Company with respect to
this Subscription Agreement, and represent the Company in connection with its
entering into this Subscription Agreement.

j.           Notwithstanding anything in this Subscription Agreement to the
contrary, the parties hereto hereby acknowledge and agree to the following: (i)
the Holder makes no representations or covenants that it will not engage in
trading in the securities of the Company; (ii) the Company shall, by 8:30 a.m.
Boston Time on the trading day following the date hereof, file a current report
on Form 8-K disclosing the material terms of the transactions contemplated
hereby and in the other Transaction Documents; (iii) the Company has not and
shall not provide material non-public information to the Holder unless prior
thereto the Holder shall have executed a written agreement regarding the
confidentiality and use of such information; and (iv) the Company understands
and confirms that the Holder will be relying on the acknowledgements set forth
in clauses (i) through (iii) above if the Holder effects any transactions in the
securities of the Company.

10.           Intentionally Omitted.

11.           Waiver.

The Holder's delay or failure at any time or times hereafter to require strict
performance by Company of any undertakings, agreements or covenants shall not
waiver, affect, or diminish any right of the Holder under this Agreement to
demand strict compliance and performance herewith. Any waiver by the Holder of
any Event of Default shall not waive or affect any other Event of Default,
whether such Event of Default is prior or subsequent thereto and whether of the
same or a different type. None of the undertakings, agreements and covenants of
the Company contained in this Agreement, and no Event of Default, shall be
deemed to have been waived by the Holder, nor may this Agreement be amended,
changed or modified, unless such waiver, amendment, change or modification is
evidenced by an instrument in writing specifying such waiver, amendment, change
or modification and signed by the Holder.

 
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12.           Governmental Changes.

In the event that any rules, regulations, oral or written interpretations or
Comments (as defined in the Debenture Registration Rights Agreement) from the
SEC, NASD, NYSE, NASDAQ or other governing or regulatory body, prohibit or
hinder any operation of this Subscription Agreement or the other Transaction
Documents, the parties hereto hereby agree that those specific terms and
conditions shall be negotiated in good faith on similar terms within five (5)
business days, and shall not alter, diminish or affect any other rights, duties,
obligations or covenants in Transaction Documents and that all terms and
conditions will remain in full force and effect except as is necessary to make
those specific terms and conditions comply with applicable rule, regulation,
interpretation or Comment.  Failure for the Company to agree to on such new
terms as necessary to achieve the intent of the original documents shall
constitute and Event of Default as outlined in Article 6 in the Debenture and
accordingly the Holder may elect to take actions as outlined in the Debenture
and the other Transaction Documents.

13.           No Oral Agreements.

This Subscription Agreement and the other Transaction Documents represent the
final definitive agreements between the Company and the Holder and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties; there are no unwritten oral agreements among the
parties.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK)

 
13

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ITALK, INC.

INVESTOR QUESTIONNAIRE

The information contained in this Investor Questionnaire (this “Questionnaire”)
is being furnished in order to determine whether the undersigned’s subscription
to purchase the Debentures described in the accompanying Subscription Agreement
may be accepted.

ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY.  The undersigned understands, however, that the Company may
present this Questionnaire to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the securities is exempt
from registration under the Securities Act of 1933, as amended (the “Securities
Act”).  Further, the undersigned understands that the offering is required to be
reported to the United States Securities and Exchange Commission (the “SEC” or
the “Commission”), and to various state securities and “blue sky” regulators.

IN ADDITION TO SIGNING THE SIGNATURE PAGE, IF REQUESTED BY ITALK, INC., A NEVADA
CORPORATION (THE “COMPANY”), THE UNDERSIGNED MUST COMPLETE FORM W-9.

I.           PLEASE CHECK EACH OF THE STATEMENTS BELOW THAT APPLIES.

o
1.
The undersigned: (a) has total assets in excess of $5,000,000; (b) was not
formed for the specific purpose of acquiring the securities; and (c) has its
principal place of business in ___________.

o
2.
The undersigned is a natural person whose individual net worth* or joint net
worth with his or her spouse exceeds $1,000,000.

o
3.
The undersigned is a natural person who had an individual income* in excess of
$200,000 in each of the two most recent years and who reasonably expects an
individual income in excess of $200,000 in the current year.  Such income is
solely that of the undersigned and excludes the income of the undersigned’s
spouse.

o
4.
The undersigned is a natural person who, together with his or her spouse, has
had a joint income* in excess of $300,000 in each of the two most recent years
and who reasonably expects a joint income in excess of $300,000 in the current
year.

*           For purposes of this Questionnaire, the term “net worth” means the
excess of total assets over total liabilities.  In determining “income”, an
investor should add to his or her adjusted gross income any amounts attributable
to tax-exempt income received, losses claimed as a limited partner in any
limited partnership, deductions claimed for depletion, contributions to IRA or
Keogh retirement plan, alimony payments and any amount by which income from
long-term capital gains has been reduced in arriving at adjusted gross income.

 
14

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5.           The undersigned is:

o
(a)
a bank as defined in Section 3(a)(2) of the Securities Act; or

o
(b)
a savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity; or

o
(c)
a broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”);  or

o
(d)
an insurance company as defined in Section 2(13) of the Securities Act; or

o
(e)
An investment company registered under the Investment Company Act of 1940 (the
“ICA”), as amended, or a business development company as defined in Section
2(a)(48) of the ICA; or

o
(f)
a small business investment company licensed by the U.S. Small Business
Administration under Section 301 (c) or (d) of the Small Business Investment Act
of 1958; or

þ
6.
The undersigned is an entity in which all of the equity owners are accredited
investors.

 
II.
HOLDER INFORMATION.

 
Name of Entity: Dutchess Opportunity Fund, II, LP

Person’s Name: Douglas Leighton, Managing Member

 
State of Organization: Delaware

 
Principal Business Address: 50 Commonwealth Ave., Suite 2

 
City, State, Zip Code: Boston, MA 02116

 
Taxpayer Identification Number: ___________

 
Phone: 617-301-4700   Fax: 617-249-0947

 
Send Correspondence to: Same as above

 
15

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ITALK, INC.

SIGNATURE PAGE

Your signature on this Signature Page evidences your agreement to be bound by
the accompanying Questionnaire and the Transaction Documents (as such term is
defined in the accompanying Subscription Agreement).

1.           The undersigned hereby represents that (a) the information
contained in the Questionnaire is complete and accurate and (b) the undersigned
will notify the Company immediately if any material change in any of the
information occurs prior to the acceptance of the undersigned’s subscription and
will promptly send the Company written confirmation of such change.

2.           The undersigned signatory hereby certifies that he/she has read and
understands the Transaction Documents, including the Subscription Agreement and
Questionnaire, and the representations made by the undersigned in said documents
are true and accurate.
 

 

$300,000   October 17, 2013   Amount of Debentures being purchased    Date      
   

 
     

DUTCHESS OPPORTUNITY FUND, II, LP

By:
_________________________                                                                                                           
Name: Douglas H. Leighton
Title: Director

 
 
16

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ITALK, INC.

COMPANY ACCEPTANCE PAGE

This Subscription Agreement accepted and agreed to this [17th day of June,
2007], by ITalk, Inc. and duly authorized to sign on behalf of the Company.

ITALK, INC.

By:                                                                 
Name: Dennis Alexander
Title: Chief Executive Officer

 
 
17

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LIST OF EXHIBITS
 
EXHIBIT A
Notice of Conversion
EXHIBIT B
Debenture Registration Rights Agreement
EXHIBIT C
Debenture
EXHIBIT D
Opinion of Company's Counsel
EXHIBIT E
Reliance on Opinion Letter
EXHIBIT F
Board Resolution

 
LIST OF SCHEDULES
 

Schedule 3.a Subsidiaries Schedule 3.c. Capitalization Schedule 3.e. Conflicts
Schedule 3.g.   Material Changes Schedule 3.h. Litigation Schedule 3.l.  
Intellectual Property Schedule 3.n. Liens Schedule 3.t. Certain Transactions

 
 
 
18

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EXHIBIT A

NOTICE OF CONVERSION

TO: ITALK CORP.

The undersigned hereby irrevocably elects, as of ________________, to convert
$________________ of its convertible debenture (the “Debenture”) into Common
Stock of ITalk, Inc. (the “Company”) according to the conditions set forth in
the Debenture issued by the Company.

Date of Conversion: ________________________________________________

Applicable Conversion Price: ________________________________________

Number of Debentures Issuable upon this Conversion: _______________________

Name(Print): Dutchess Opportunity Fund, II, LP

Address: 50 Commonwealth Ave, Boston, MA 02116

Phone: 617-301-4700              Fax: 617-249-0947

By:_______________________________________
 
 
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EXHIBIT D

OPINION OF COMPANY'S COUNSEL
 
___________ __, 200__

 
Dutchess Capital Management, II, LLC
50 Commonwealth Ave, Suite 2
Boston, MA  02116
Attention: Douglas Leighton

Re:           ITalk, Inc.

Ladies and Gentlemen:

As counsel to ITalk, Inc. (the “Company”), we are familiar with its Articles of
Incorporation and Bylaws and with the corporate proceedings taken by it in
connection with the proposed issuance and sale of convertible debentures (the
“Securities”) pursuant to the related Subscription Agreement and the other
Transaction Documents (as such term is defined in the Subscription Agreement)
(collectively the “Agreements”).

We have been furnished with copies, certified or otherwise identified to our
satisfaction, of the Agreements, and have examined such other documents,
agreements and records as we deemed necessary to render the opinions set forth
below.

In conducting our examination, we have assumed the following: (i) that each of
the Agreements has been executed by each of the parties thereto in the same form
as the forms which we have examined, (ii) the genuineness of all signatures, the
legal capacity of natural persons, the authenticity and accuracy of all
documents submitted to us as originals, and the conformity to originals of all
documents submitted to us as copies, (iii) that each of  the Agreements has been
duly and validly authorized, executed and delivered by the party or parties
thereto other than the Company, and (iv) that each of the Agreements constitutes
the valid and binding agreement of the party or parties thereto other than the
Company, enforceable against such party or parties in accordance with the
Agreements’ terms.

Based upon the subject to the foregoing, we are of the opinion that:

1.           The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, and has all
requisite corporate power and authority to own its properties and conduct its
business as presently conducted.

2.           The authorized capital stock of the Company  consists of ­_______
shares of Common Stock, $0.001 par value per share (“Common Stock”).

3.           To our knowledge, (i) the Company’s equity securities are not
registered under Section 12(b) or Section 12(g) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) and (ii) the Company is required to
file reports with the United States Securities and Exchange Commission (the
“SEC”) pursuant to Section 15(d) of the Exchange Act.;

4.           When duly countersigned by the Company’s transfer agent and
registrar, and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of the Agreements, the
Securities [and any Common Stock to be issued upon the conversion of the
Securities] as described in the Agreements represented thereby will be duly
authorized and validly issued, fully paid and nonassessable;

 
20

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5           The Company has the requisite corporate power and authority to enter
into the Subscription Agreement and to sell and deliver the Securities and the
Common Stock to be issued upon the conversion of the Securities as described in
the Agreements; each of the Agreements has been duly and validly authorized by
all necessary corporate action by the Company to our knowledge, no approval of
any governmental or other body is required for the execution and delivery of
each of the Agreements  by the Company or the consummation of the transactions
contemplated thereby; each of the Agreements has been duly and validly executed
and delivered by and on behalf of the Company, and is a valid and binding
agreement of the Company, enforceable in accordance with its terms, except as
enforceability may be limited by general equitable principles, public policy,
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws affecting creditors rights generally, and except as to compliance
with federal, state, and foreign securities laws, as to which no opinion is
expressed;

6.           Neither the execution, delivery and performance of the Subscription
Agreement and Securities by the Company and the performance of its obligations
thereunder do not and will not constitute a breach or violation of any of the
terms and provisions of, or constitute a default under or conflict with or
violate any provision of (i) the Company’s Certificate of Incorporation or
Bylaws, (ii) any indenture, mortgage, deed of trust, agreement or other
instrument to which the Company is party or by which it or any of its property
is bound, (iii) any applicable statute or regulation or as other, (iv) or any
judgment, decree or order of any court or governmental body having jurisdiction
over the Company or any of its property.

7.           To the best of our knowledge, there is no pending or threatened
litigation, investigation or other proceedings against the Company.

8.           The Company complies with the eligibility requirements for the use
of Form SB-2, under the Securities Act of 1933, as amended (the “Securities
Act”).

This opinion is rendered only with regard to the matters set out in the numbered
paragraphs above.  No other opinions are intended nor should they be
inferred.  This opinion is based solely upon the laws of the United States and
the State of [New York] and the Nevada General Corporation Law and does not
include an interpretation or statement concerning the laws of any other state or
jurisdiction.  Insofar as the enforceability of the Subscription Agreement and
Securities may be governed by the laws of other states, we have assumed that
such laws are identical in all respects to the laws of the State of [New York].

The opinions expressed herein are given to you solely for your use in connection
with the transaction contemplated by the Subscription Agreement and Securities
and may not be relied upon by any other person or entity or for any other
purpose without our prior consent.

Very truly yours,

By:   _____________________

 
 
21

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EXHIBIT E

[INSERT TRANSFER AGENT INFORMATION]

RE: Issuance of Common Stock

To Whom It May Concern:

Please use this letter as authorization to have the attached request for the
issuance of free trading shares, pursuant to paragraph Rule 144 of the
Securities Act, to Dutchess Opportunity Fund, II, LP which acquired the fully
paid, non-assessable securities.

The Company does hereby instruct [TRANSFER AGENT] to rely on the opinion for
resale of shares from Trombly Business Law or Thompson Hine, LLP.

The Company represents that Dutchess is not recognized as an affiliate of the
company.

Regards,

David Levy
Chief Executive Officer
iTalk, Inc.

 
22

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EXHIBIT F
BOARD RESOLUTIONS
 
 
 
 
 
 
 
 
 
 

 
 
23

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SCHEDULE 3.a.
 
SUBSIDIARIES

 

Name   State of Incorporation   EIN                    

 

 
24

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SCHEDULE 3.c.

CAPITALIZATION

 

 
25

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SCHEDULE 3.e.

CONFLICTS

 

 
26

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SCHEDULE 3.g.

 MATERIAL CHANGES

 

 
27

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SCHEDULE 3.h.

LITIGATION

[None, except as disclosed in the Company’s SEC Filings.]
 

 

 
28

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SCHEDULE 3.l.

INTELLECTUAL PROPERTY

[NONE]

 
29

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SCHEDULE 3.n.

LIENS

 
30

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SCHEDULE 3.t.

CERTAIN TRANSACTIONS

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 31

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