EXHIBIT 10.4

                              ____________________

                             Xtreme Companies, Inc.
                             ----------------------
                              ____________________





      This offering consists of up to $50,000 of the Company's Convertible
                         Debentures convertible into the
                             Company's Common Stock.



                              ____________________



                             SUBSCRIPTION AGREEMENT


                               ___________________






<PAGE>

                             SUBSCRIPTION PROCEDURES


     Convertible  Debentures  of Xtreme Companies, Inc (the "Company") are being
offered  (the  "Debentures"). This offering is being made in accordance with the
exemptions  from  registration provided for under Section 4(2) of the Securities
Act  of  1933,  as  amended  (the  "1933  Act")  and  Rule  506  of Regulation D
promulgated  under  the  1933  Act.

     In  order to purchase Debentures, each subscriber must complete and execute
a  questionnaire  (the  "Questionnaire")  and  a  subscription  agreement  (the
"Subscription Agreement"). In addition, the subscriber must make a payment to an
escrow  fund,  if  available,  for the amount being purchased or directly to the
Purchaser.  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 Purchaser 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  you  are  a  foreign  person or foreign entity, you may be subject to a
withholding  tax equal to 30% of any dividends paid by the Company.  In order to
eliminate  or  reduce  such  withholding tax you 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  must  be  made by wire transfer to Dutchess Private Equities Fund,
LP (the "Purchaser") 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.




THE  SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, 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 SECURITIES AND EXCHANGE 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.


                             SUBSCRIPTION AGREEMENT
                             ----------------------


To:     Xtreme  Companies,  Inc.
        ------------------------

    This Subscription Agreement is made between Xtreme Companies, Inc., a Nevada
corporation,  (the  "Company"),  and  the  undersigned  prospective  purchaser
("Purchaser") who is subscribing hereby for the Company's convertible debentures
(the "Debentures"). 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 thereto, relating to an offering (the "Offering") of
up  to  $50,000  of Debentures. The Offering is limited to accredited Purchasers
and  is  made  in  accordance with the exemptions from registration provided for
under  Section  4(2)  of  the  1933 Act and Rule 506 of Regulation D promulgated
under  the  1933  Act  ("Regulation  D").

1.     SUBSCRIPTION.
       ------------

     (a)     The  Purchaser  hereby  irrevocably  subscribes  for  and agrees to
purchase  that  amount  of  Debentures  as stated on the signature page upon the
terms  set  forth  in this Subscription Agreement. The Debentures shall pay a 6%
cumulative  interest,  compounded  daily, payable in arrears at the time of each
conversion,  in cash or in common stock of the Company, $.001 par value ("Common
Stock"), at the Company's option.  If paid in Common Stock, the number of shares
of the Company's Common Stock to be received shall be determined by dividing the
amount of the accrued and unpaid interest by the conversion price as of the time
of  conversion  under the terms of the Debenture.  If the dividend is to be paid
in cash, the Company shall notify Purchaser on the Conversion Date and make such
payment  on  the  next  business  day.  The  Debentures are subject to automatic
conversion  at the end of five (5) years from the date of issuance at which time
all  Debentures outstanding will be automatically converted based upon the terms
set forth in the Debenture.  The closing shall be deemed to have occurred on the
date  funds,  less escrow fees, attorney fees and other amounts payable pursuant
to  the  Escrow  Agreement,  if  applicable,  are  received  by the Company (the
"Closing  Date").  The initial closing shall be held not later than the next day
after  execution  of  this  Agreement, the Registration Rights Agreement and the
Investment  Agreement.

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

     (c)     As  long  as  the Purchaser owns the Debenture, the Purchaser 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 Purchaser retains the right to choose legal council for preparation
and  filing  of  the  registration  statement  for  this  Debenture.

2.     REPRESENTATIONS  AND  WARRANTIES.
       --------------------------------
     The  Purchaser  hereby  represents  and  warrants  to, and agrees with, the
Company  as  follows:

     (a)     The  Purchaser  has been furnished with, and has carefully read the
applicable  form  of  Registration  Rights Agreement annexed hereto as Exhibit B
(the  "Registration  Rights  Agreement"),  and  the  Debenture annexed hereto as
Exhibit  C  and is familiar with and understands the terms of the Offering. With
            ---
respect to tax and other economic considerations involved in his investment, the
Purchaser  is not relying on the Company. The Purchaser has carefully considered
and  has,  to  the  extent  the  Purchaser  believes  such discussion necessary,
discussed  with  the  Purchaser  's  professional  legal,  tax,  accounting  and
financial  advisors  the  suitability  of  an  investment  in  the  Company,  by
purchasing  the  Debentures,  for  the Purchaser 's particular tax and financial
situation  and has determined that the investment being made by the Purchaser is
a  suitable  investment  for  the  Purchaser.

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

     (c)     The  Purchaser 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, all such questions
have  been  answered  to  the  full  satisfaction  of  the  Purchaser.

     (d)     The Purchaser will not sell, or otherwise dispose of the Debentures
or  the  Common  Stock  issued  upon  conversion  of  the  Debentures  without
registration  under  the  1933  Act  or  applicable  state  securities  laws  or
compliance with an exemption therefrom.  The Debentures have not been registered
under  the  1933  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  Registration Rights Agreement attached hereto as Exhibit B and incorporated
herein  and  made  a  part  hereof.

     (e)     The  Purchaser  recognizes  that  an  investment  in the Debentures
involves  substantial  risks,  including  loss  of  the  entire  amount  of such
investment.  Further,  the  Purchaser  has  carefully  read  and  considered the
schedule  entitled  Litigation  matters  attached  hereto  as  Schedule  3(h).

     (f)     The  Purchaser  acknowledges that each certificate representing the
Debentures  (and  the  shares  of  Common  Stock  issued  upon conversion of the
Debentures,  unless  registered)  or  in  payment of dividends 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  Purchaser sends a Notice of Conversion (See Exhibit A attached hereto),
and  provided  a  registration  statement under the Securities Act of 1933 is in
effect  as  to  the sale, then in such event the Company shall have its transfer
agent  send  Purchaser  the appropriate number of shares of Common Stock without
restrictive  legends  and  not  subject  to  stop  transfer  instructions.

     (g)     The Purchaser acknowledges and agrees that it shall not be entitled
to  seek any remedies with respect to the Offering from any party other than the
Company.

     (h)     If  this Subscription Agreement is executed and delivered on behalf
of  a  corporation:  (i) such corporation 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 instruments
(including,  without limitation, the Registration Rights Agreement) 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 is binding upon
such  corporation.

     (i)     The Purchaser 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.

      (j)     The Purchaser 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 1933
Act.  The  Purchaser has not offered or sold any portion of the Debentures being
acquired  nor  does  the  Purchaser  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 1933 Act provided,
however,  that by making the representations herein, Purchaser 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 1933 Act.
Purchaser  is  neither an underwriter of, nor a dealer in, the Debentures or the
Common  Stock  issuable upon conversion thereof or upon the payment of dividends
thereon and is not participating in the distribution or resale of the Debentures
or  the  Common  Stock  issuable  upon conversion or exercise thereof. Except as
provided  in the Registration Rights Agreement, the Company has no obligation to
register the Common Stock underlying Debentures and the Common Stock that may be
issued  in  lieu  of  cash  dividends.

     (k)     The  Purchaser  or the Purchaser's representatives, as the case may
be,  has such knowledge and experience in financial, tax and business matters so
as  to  enable  the  Purchaser  to utilize the information made available to the
Purchaser 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
represents  and  warrants  to  the  Purchaser  that:

     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. Each of the Company and its Subsidiaries is
duly  qualified  as a foreign corporation to do business and is in good standing
in  every  jurisdiction  in which its ownership of property or the nature of the
business  conducted  by  it  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, "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)below).

     b.     Authorization;  Enforcement; Compliance with Other Instruments.  (i)
            --------------------------------------------------------------
The  Company  has  the requisite corporate power and authority to enter into and
perform  this  Subscription Agreement, the Registration Rights Agreement and the
Investment  Agreement,  and  each  of  the  other agreements entered into by the
parties  hereto  in  connection  with  the  transactions  contemplated  by  this
Subscription Agreement (collectively, 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 50,000,000 shares of Common Stock, of which as of the
date  hereof,  approximately  31,651,230  shares  are  issued and outstanding, 0
shares  of  Preferred  Stock  of  which  none  are  issued  and  outstanding and
approximately  (as  of  September  8,  2003) shares of Common Stock are issuable
upon  the  exercise  of  options,  warrants  and conversion rights.  All of such
outstanding  shares  have been, or upon issuance will be, validly issued and are
fully  paid  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 1933 Act (except the
Registration  Rights  Agreement), (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 Purchaser, or the Purchaser 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 By-laws, as in effect on the date hereof (the
"BY-LAWS '), and the terms of all securities convertible into or exercisable for
Common  Stock and the material rights of the holders thereof in respect thereto.

     d.     Issuance  of  Debentures.     A  sufficient  number  of  Debentures
            ------------------------
issuable  pursuant  to  this Subscription Agreement, but not more than 19.99% of
the  shares  of  Common  Stock outstanding as of the date hereof (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 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
By-laws  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 By-laws or their
organizational  charter  or  by-laws,  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 1933 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.  Since August 14th, 2003, the
            -------------------------------------
Company  has filed all reports, schedules, forms, statements and other documents
required  to  be filed by it with the Securities and Exchange Commission ("SEC")
pursuant  to  the  reporting requirements of the  Securities and Exchange Act of
1934  ("1934  Act") (all of the foregoing filed prior to the date hereof and all
exhibits  included  therein  and  financial statements and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the
"SEC  DOCUMENTS").  The  Company  has  delivered  to  the  Purchaser  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 1934 Act and the
rules  and  regulations  of the SEC promulgated thereunder applicable to the SEC
Documents,  and  none of the SEC Documents, at the time they were filed with the
SEC,  contained  any  untrue  statement of a material fact or omitted to state a
material  fact required to be stated therein or necessary to make the statements
therein,  in  light  of  the  circumstances  under  which  they  were  made, 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 Purchaser which is not included in the SEC Documents, including,
without limitation, information referred to in Section 3(d) of this Subscription
Agreement,  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,  not  misleading.

     g.     Absence of Certain Changes.  Except as disclosed in Schedule 3(g) or
            --------------------------
the  SEC  Documents filed at least five (5) days prior to the date hereof, since
December  31,  2002,  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.

     i.     Acknowledgment  Regarding  the  Purchase of Debentures.  The Company
            ------------------------------------------------------
acknowledges  and  agrees that the Purchaser is acting solely in the capacity of
arm's  length  Purchaser  with  respect  to  the  Transaction  Documents and the
transactions  contemplated  hereby and thereby. The Company further acknowledges
that  the  Purchaser  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
Purchaser  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 Purchaser's purchase of the Debentures. The Company
further  represents  to  the Purchaser 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) of the 1933 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  properties.

     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.

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

     s.     Tax  Status.  The  Company's  consolidated  2002  federal income tax
            -----------
return,  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 (unless and
only  to  the extent that the Company and each of its Subsidiaries has set aside
on  its  books  provisions reasonably adequate for the payment of all unpaid and
unreported  taxes) and has paid all taxes and other governmental assessments and
charges  that  are  material  in  amount,  shown or determined to be due on such
returns,  reports  and  declarations, except those being contested in good faith
and  has set aside on its books provision reasonably adequate for the payment of
all  taxes  for periods subsequent to the periods to which such returns, reports
or declarations apply. Except for unpaid federal withholding taxes, 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 on Schedule 3(t) and 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  Dutchess Private Equities Fund, L.P.,
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")  for  a  period  of  180 days after the Effective Date.

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  Purchaser.

     c.     Reporting  Status.  Until  the  earlier  of  (i)  the  date that the
            -----------------
Purchaser  may  sell  all  of  the  Common  Stock underlying the shares acquired
pursuant  to  this  Subscription  Agreement without restriction pursuant to Rule
144(k)  promulgated  under the 1933 Act (or successor thereto), or (ii) the date
on  which  the  Purchaser  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  1934 Act, and the Company shall not terminate its status as a
reporting  company  under  the  1934  Act.

     d.     Use of Proceeds.  The Company will use the proceeds from the sale of
            ---------------
the  Debentures exclusively for auditing, legal and other expenses associated in
connection with the Company's current 10K filing due March 31, 2003. The Company
represents  that the proceeds shall be sufficient to cover all costs required to
file  its  10K  with  the  SEC.  Once those obligations have been satisfied, any
remaining  balance  may  be  used  for  general  corporate  purposes.

     e.     Financial  Information.  The Company agrees to make available to the
            ----------------------
Purchaser 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  1933 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.

     f.     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. If the Purchaser feels that there is
not  enough shares registered they have the right to have the company issue more
shares.

     g.     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
Purchaser  and  the  Company agree otherwise, and the Company shall use its best
efforts  to  promptly  make  application  for  listing on the new Bulletin Board
Exchange  not  later  than  ninety (90) calendar days after the date the Company
receives  its  application  in  the  mail.  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
Purchaser  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.

     h.     Transactions  With  Affiliates.  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 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  5% or more beneficial interest (each a "RELATED
PARTY"),  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 5% or more equity interest in
that  person or entity, (ii) has 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.

     i.     Intentionally  deleted.
            -----------------------

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

     k.     Notice  of Certain Events Affecting Registration.  The Company shall
promptly  notify Purchaser 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 Purchaser any such supplement or amendment to
the  related  prospectus.

     l.  Indemnification.  In  consideration  of  the  Purchaser's execution and
         ----------------
delivery  of  the  this  Agreement  and  the  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  Purchaser  and  all  of their shareholders,
officers,  directors, employees and direct or indirect Purchasers 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  or  (v)  the status of the Purchaser as an Purchaser in the
Company,  except insofar as any such untrue statement, alleged untrue statement,
omission  or  alleged  omission  is made in reliance upon and in conformity with
written  information  furnished  to  the  Company  by  the  Purchaser  which  is
specifically  intended  by  the Purchaser for use in the preparation of any such
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 Purchaser may have, and any liabilities to which
the  Purchaser  may  be  subject.

     m.     Reimbursement.  If  (i) Purchaser, 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 Purchaser is impleaded in any
such action, proceeding or investigation by any person, or (ii) Purchaser, 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 Purchaser is impleaded in any
such  action,  proceeding or investigation by any person, then in any such case,
the Company will reimburse Purchaser 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  Purchaser  is a named party, the Company will pay to
Purchaser  the  charges,  as reasonably determined by Purchaser, for the time of
any  officers  or  employees  of Purchaser 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 Purchaser 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 Purchaser and any such affiliate, and shall be binding upon
and  inure  to  the  benefit of any successors of the Company, Purchaser and any
such  affiliate  and  any  such  person.

5.     LIMITATION  ON  AMOUNT  OF  CONVERSION  AND  OWNERSHIP.
       ------------------------------------------------------

          Notwithstanding  anything  to  the  contrary  in this Agreement, in no
event  shall  the  Purchaser be entitled to convert any of the Debentures to the
extent that, after such conversion, that number of shares of Common Stock, which
when  added  to the sum of the number of Debentures beneficially owned, (as such
term  is  defined under Section 13(d)  and Rule 13d-3 of the Securities Exchange
Act  of  1934  (the  "1934  ACT")),  by the Purchaser, would exceed 4.99% of the
number  of  shares  of  Common Stock outstanding on the Conversion Date (as that
term  is  defined  in  the  Debenture),  as  determined  in accordance with Rule
13d-1(j) of the 1934 Act. In no event shall the Purchaser purchase shares of the
Common  Stock  other  than  pursuant  to  this  Subscription  Agreement  and the
Debenture  until  such  date as the Purchaser has fully converted the Debentures
into  Common  Stock.

6.     OPINION  LETTER/BOARD  RESOLUTION
       ---------------------------------

     Prior  to or on the Closing Date the Company shall deliver to the Purchaser
an  opinion letter signed by counsel for the Company in the form attached hereto
as  Exhibit  D.  Also, prior to or on the Closing Date the Company shall deliver
to  the  Purchaser  a  signed  Board Resolution authorizing this Offering, which
shall  be  attached  hereto  as  Exhibit  E.

7.     DELIVERY  INSTRUCTIONS;  FEES
       -----------------------------

     The  Debentures  being  purchased  hereunder shall be delivered to Dutchess
Private  Equities  Fund,  L.P.,  on  the  Closing Date at which time funds (less
escrow fees, attorneys fees and those amount payable pursuant to the Term Sheet)
will  be  wired  to  the  Company  and  the  Debentures will be delivered to the
Purchaser,  per  the  Purchaser's  instructions.

8.     UNDERSTANDINGS.
       --------------

     The  undersigned  understands,  acknowledges and agrees with the Company as
follows:

FOR  ALL  SUBSCRIBERS:

     a.     This  Subscription  may  be  rejected,  in  whole or in part, by the
Company  in its sole and absolute discretion at any time before the date set for
closing  unless  the Company has given notice of acceptance of the undersigned's
subscription  by  signing  this  Subscription  Agreement  and  delivering  it to
Purchaser.

     b.     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.

     c.     The  representations,  warranties  and agreements of the undersigned
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.

     d.     In  making an investment decision, purchasers must rely on their 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.

     e.     The Offering is intended to be exempt from registration by virtue of
Section  4(2)  of  the  1933  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.

     f.     It  is  understood  that  in  order not to jeopardize the Offering's
exempt status under Section 4(2) of the 1933 Act and Regulation D, any purchaser
may, at a minimum, be required to fulfill the Purchaser suitability requirements
thereunder.

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

9.     DISPUTES  SUBJECT  TO  ARBITRATION  GOVERNED  BY  MASSACHUSETTS  LAW
       --------------------------------------------------------------------

     a.     All  disputes  arising under this 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 agreement
will  submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("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 agreement will challenge the jurisdiction or venue provisions as
provided  in  this  section.

10.     PURCHASER  SHARES
        -----------------

     As  an  additional  inducement  to  Purchaser,  the  Company  shall  issue
three-hundred thousand (300,000) Shares of its common stock to Purchaser.  These
Shares  shall  have  piggyback registration rights. The Purchaser's Shares shall
have  the  same  rights  and  privileges  as outlined in the Registration Rights
Agreement  with  the  Purchaser  for  the  Debenture.

11.     USE  OF  PROCEEDS

     The  Company  shall  use  the  proceeds  from  this  Debenture for expenses
incurred  with its "Merger" with Rockwell Power Systems, Inc.  ("Rockwell"). Any
other  use  of  the  funds  contemplated herein, shall be considered a breach of
contract  and  an  event  of  Default.

12.     CONDITIONS  TO  CLOSING

     The  Company  represents  that  its  Merger  with  Rockwell  has been fully
consummated  and  that  Rockwell  has  delivered  to  the  Company at the Merger
closing;  (i)  one  hundred  thousand  dollars  ($100,000)  in cash and (ii) one
hundred and fifty thousand dollars ($150,000) in the form of accounts receivable
from  the  New  York  Port  Authority.  The  Company  shall have also issued the
Purchaser  Shares  outlined  in  Article  14,  at  closing.

13.     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:

Xtreme  Companies,  Inc.
9116  COVERED  WAGON  DRIVE
LAS  VEGAS,  NV  89117
Telephone:
Facsimile:


If  to  the  Purchaser:

     At  the  address  listed  in  the  Questionnaire.



     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.

     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 Purchaser, 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  Agreement  shall  not  be  assignable.

     g.     This Subscription Agreement, together with Exhibits A, B, C, D and E
attached  hereto and made a part hereof, 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.

     h.     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.

          [BALANCE  OF  PAGE  INTENTIONALLY  LEFT  BLANK)


<PAGE>

<PAGE>
                              Xtreme Companies, Inc.
                                 SIGNATURE PAGE
                                 --------------

     Your  signature on this Signature Page evidences your agreement to be bound
by  the Questionnaire, Subscription Agreement and Registration Rights Agreement.

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

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




_______$50,000__________________                  10/1/03
Amount  of  Debentures  being  purchased                    Date


                                   By:  /s/ Douglas Leighton
                                             (Signature)

                                   Name:  Douglas Leighton
                                        (Please  Type  or  Print)

                                   Title: Managing Member to:
                                         Dutchess Capital Management, LLC
                                         General Partner to:
                                         Dutchess Private Equities Fund, LP
                                        (Please  Type  or  Print)






<PAGE>

                             COMPANY ACCEPTANCE PAGE
                             -----------------------


This  Subscription  Agreement  accepted  and  agreed
to  this  1 day  of  October,  2003.


Xtreme  Companies,  Inc.
By: /s/ Kevin Ryan
Kevin Ryan












                                    Exhibit A

                              NOTICE OF CONVERSION
                              --------------------

     (To be Executed by the Registered Owner in order to Convert Debenture)

     The  undersigned  hereby  irrevocably  elects,  as  of ________________, to
convert  $________________  of  its convertible debenture (the "Debenture") into
Common  Stock Xtreme Companies, 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  Private  Equities  Fund,  LP  _________________
                      --------------------------------------

Address______________312  Stuart  St,  3rd  Floor____________________________
                     --------------------------------------------------------


Phone_____617-960-3570_____________  Fax________617-960-3772___________
          ------------                          ------------





                    By:_______________________________________

<PAGE>
                                     ------
                                    EXHIBIT D
                                    ---------


Purchasers  of  [Company]  [Describe  Securities]          _______________, 2003


                         Re:     Xtreme Companies, Inc.

Ladies  and  Gentlemen:

     As  counsel to Xtreme Companies, 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
(including all Exhibits and Appendices thereto) (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.

     2.     The authorized capital stock of the Company  consists of -50,000,000
shares  of  Common  Stock,  .001 Stock, par value $________ per share; [describe
classes  if  applicable]

     3.     The  Common Stock is registered pursuant to Section 12(b) or Section
12(g)  of  the  Securities  Exchange Act of 1934, as amended and the Company has
timely filed all the material required to be filed pursuant to Sections 13(a) or
15(d)  of  such  Act  for  a period of at least twelve months preceding the date
hereof;

     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;

     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, 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.     To  the  best  of  our  knowledge, after due inquiry, 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 By-Laws, (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, after due inquiry, there is no pending
or threatened litigation, investigation or other proceedings against the Company
[except  as  described  in  Exhibit  A  hereto].

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

     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  Commonwealth  of  Massachusetts  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  Commonwealth  of  Massachusetts  .

     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:     _____________________





<PAGE>