Exhibit
      10.1

     

    SUBSCRIPTION
      AGREEMENT

     

    THIS
      SUBSCRIPTION AGREEMENT
      (this
“Agreement”),
      dated
      as of December 18, 2007, by and among VoIP, Inc., a Texas corporation (the
      “Company”),
      and
      the subscribers identified on the signature page hereto (each a “Subscriber”
and
      collectively “Subscribers”).

     

    WHEREAS,
      the
      Company and the Subscribers are executing and delivering this Agreement in
      reliance upon an exemption from securities registration afforded by the
      provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation
      D”)
      as
      promulgated by the United States Securities and Exchange Commission (the
“Commission”)
      under
      the Securities Act of 1933, as amended (the “1933
      Act”).

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Subscribers, as provided herein,
      and the Subscribers, in the aggregate, shall purchase up to
      $3,010,347.60 
      (the
“Aggregate
      Principal Amount”)
      of
      principal amount of promissory notes of the Company (“Note”
or
      “Notes”),
      a
      form of which is annexed hereto as Exhibit
      A,
      convertible into shares of the Company’s Class A common stock, $0.001 par value
      (the “Common
      Stock”),
      at a
      per share conversion price set forth in the Note (“Conversion
      Price”);
      and
      up to 17,537,268 of $0.50 stated value of Series A Preferred Stock of the
      Company (“Preferred
      Stock”)
      which
      Preferred Stock shall be convertible into the Common Stock, subject to the
      rights and preferences described in the form of Certificate of Designation
      annexed hereto as Exhibit
      B
      for an
      aggregate purchase price of up to $2,617,693.57 (the “Aggregate
      Purchase Price”).
      The
      Notes, shares of Common Stock issuable upon conversion of the Notes (the
“Note
      Conversion Shares”),
      the
      Preferred Stock and the shares of Common Stock issuable upon conversion of
      the
      Preferred Stock (the “Preferred
      Conversion Shares”)
      (Note
      Conversion Shares and the Preferred Conversion Shares are collectively referred
      to herein as the “Shares”)
      are
      collectively referred to herein as the “Securities”;
      and

     

    WHEREAS,
      the
      aggregate proceeds of the sale of the Notes and the Preferred Stock contemplated
      hereby shall be held in escrow pending the closing of the transactions
      contemplated by this Agreement pursuant to the terms of a Funds Escrow Agreement
      to be executed by the parties substantially in the form attached hereto as
      Exhibit
      C
      (the
“Escrow
      Agreement”).

     

    WHEREAS,
      the
      monetary obligations arising under the Notes will be secured pursuant to a
      Security Agreement (the “Security Agreement”) among the Company, Barbara R.
      Mittman as Collateral Agent (the “Collateral
      Agent”)
      and
      the other signatories thereto (the “Secured
      Lenders”),
      of
      which the Subscriber herein are a subset. The Company, the Subscribers, Barbara
      R. Mittman and the Secured Lenders will enter into a intercreditor agreement
      (the “Intercreditor
      Agreement”)
      a
      form of
      which is annexed hereto as Exhibit
      D,
      a
      lockbox
      agreement (the “Loan
      Agreement”)
      a
      form of
      which is annexed hereto as Exhibit
      E,
      and a
      lockbox escrow agreement (the “Lockbox
      Escrow Agreement”)
      a form
      of which is annexed hereto as Exhibit
      F,
      to
      determine and describe the relative rights of the Subscribers and the Secured
      lenders. 

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and other agreements contained in this
      Agreement the Company and the Subscribers hereby agree as follows:

    


    1. Closing.
      Subject
      to the satisfaction or waiver of the terms and conditions of this Agreement,
      on
      the “Closing
      Date”
(as
      defined in Section 2 hereof), each Subscriber shall purchase and the Company
      shall sell to each Subscriber the Notes and the amount of Preferred Stock
      determined pursuant to Section 3 below. The Closing Date shall be the date
      that
      subscriber funds representing the net amount due the Company from the Purchase
      Price of the Offering is transmitted by wire transfer or otherwise to or for
      the
      benefit of the Company.


    
      
         

      

      
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    2. (a) Closing
      Dates.
      The
“Initial
      Closing Date”
shall
      be the date that the Initial Closing Principal Amount is transmitted by wire
      transfer or otherwise credited to or for the benefit of the Company. The
      consummation of the transactions contemplated herein shall take place at the
      offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York,
      New York 10176, upon the satisfaction or waiver of all conditions to closing
      set
      forth in this Agreement. Each of the Initial Closing Date, Second Closing Date
      (as defined in Section 1(c) below) and Third Closing Date (as defined in Section
      1(f) below) is referred to herein as a “Closing
      Date.”

    


    (b) Initial
      Closing.
      Subject
      to the satisfaction or waiver of the terms and conditions of this Agreement,
      on
      the Initial Closing Date, each Subscriber shall purchase and the Company shall
      sell to each Subscriber a Note in the principal amount set forth on the
      signature page hereto (each an “Initial
      Closing Note”),
      and
      Preferred Stock having the stated value as described in Section 3 of this
      Agreement (“Initial
      Closing Preferred Stock”).
      The
      principal amount of the Notes to be purchased by the Subscribers on the Initial
      Closing Date shall be One Million Six Hundred Twenty Thousand, One Hundred
      Seventy-Three Dollars and Eighty Cents ($1,620,173.80) (the “Initial
      Closing Principal Amount”).
      The
      Aggregate Purchase Price to be paid the Subscribers for the Initial Closing
      Notes and Initial Closing Preferred Stocks shall be One Million Four Hundred
      Eight Thousand Eight Hundred and Forty-Six Dollars and Seventy-Eight Cents
      ($1,408,846.78) (the “Initial
      Closing Purchase Price”).

    


    (c) Second
      Closing.
      The
“Second
      Closing”
which
      shall occur on or before the thirtieth (30th)
      calendar day after the Initial Closing Date (the “Second
      Closing Date”).
      Subject to the satisfaction or waiver of the conditions to the Second Closing,
      on the Second Closing Date, each Subscriber shall purchase and the Company
      shall
      sell to each Subscriber a Note in the principal amount set forth on the
      signature page hereto (each an “Second
      Closing Note”),
      and
      Preferred Stock as described in Section 3 of this Agreement (“Second
      Closing Preferred Stock”).
      The
      principal amount of the Notes to be purchased by the Subscribers on the Second
      Closing Date shall be Six Hundred Ninety-Five Thousand Eighty-Six Dollars and
      Ninety Cents ($695,086.90) (the “Second
      Closing Principal Amount”).
      The
      Aggregate Purchase Price to be paid the Subscribers for the Initial Closing
      Notes and Initial Closing Preferred Stocks shall be Six Hundred Four Thousand
      Four Hundred and Twenty-Three Dollars and Thirty-Nine Cents ($604,423.39) (the
      “Second
      Closing Purchase Price”).

    


    (d) Conditions
      to Second Closing.
      The
      occurrence of the Second Closing is expressly contingent on (i) the truth and
      accuracy, on the Second Closing Date of the representations and warranties
      of
      the Company and Subscriber contained in this Agreement except for changes that
      do not constitute a Material Adverse Effect (as defined in Section 5(a)), (ii)
      continued compliance with the covenants of the Company set forth in this
      Agreement, and (iii) the non-occurrence of any Event of Default (as defined
      in
      the Note and this Agreement) or an event that with the passage of time or the
      giving of notice could become an Event of Default.

     

    (e) Second
      Closing Deliveries.
      On the
      Second Closing Date, the Company will deliver a certificate (“Second
      Closing Certificate”)
      signed
      by its chief executive officer and chief financial officer (i) representing
      the
      truth and accuracy of all the representations and warranties made by the Company
      contained in this Agreement, as of the Initial Closing Date, and the Second
      Closing Date as if such representations and warranties were made and given
      on
      all such dates, except for changes that do not constitute a Material Adverse
      Effect, (ii) certifying that the information contained in the schedules and
      exhibits hereto is substantially accurate as of the Second Closing Date, except
      for changes that do not constitute a Material Adverse Effect, (iii) adopting
      and
      renewing the covenants and representations set forth in Sections 5, 8, 9, 10,
      11, and 12 of this Agreement in relation to the Second Closing Date, Second
      Closing Notes, and Second Closing Preferred Stock, (iv) certifying that an
      Event
      of Default or an event that with the passage of time or the giving of notice
      could become an Event of Default has not occurred. A legal opinion nearly
      identical to the legal opinion referred to in Section 6 of this Agreement shall
      be delivered to each Subscriber on the Second Closing Date in relation to the
      Company, Second Closing Notes and Second Closing Preferred Stock (“Second
      Closing Legal Opinion”).


    
      
         

      

      
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    (f) Third
      Closing.
      The
“Third
      Closing”
which
      shall occur on or before the before the thirtieth (30th)
      calendar day after the Second Closing Date (the “Third
      Closing Date”).
      Subject to the satisfaction or waiver of the conditions to Closing, on the
      Third
      Closing Date, each Subscriber shall purchase and the Company shall sell to
      each
      Subscriber a Note in the principal amount set forth on the signature page hereto
      (“Third
      Closing Notes”),
      and
      Preferred Stock as described in Section 3 of this Agreement (“Third
      Closing Preferred Stock”).
      The
      principal amount of the Notes to be purchased by the Subscribers on the Second
      Closing Date shall be Ninety-Five Thousand Eighty-Six Dollars and Ninety Cents
      ($695,086.90) (the “Third
      Closing Principal Amount”).
      The
      Aggregate Purchase Price to be paid the Subscribers for the Initial Closing
      Notes and Initial Closing Preferred Stocks shall be Six Hundred Four Thousand
      Four Hundred and Twenty-Three Dollars and Thirty-Nine Cents ($604,423.39) (the
      “Third
      Closing Purchase Price”).

    


    (g) Conditions
      to Third Closing.
      The
      occurrence of the Third Closing is expressly contingent on (i) the truth and
      accuracy, on the Third Closing Date of the representations and warranties of
      the
      Company and Subscriber contained in this Agreement except for changes that
      do
      not constitute a Material Adverse Effect (as defined in Section 5(a)), (ii)
      continued compliance with the covenants of the Company set forth in this
      Agreement, and (iii) the non-occurrence of any Event of Default (as defined
      in
      the Note and this Agreement) or an event that with the passage of time or the
      giving of notice could become an Event of Default.

     

    (h) Third
      Closing Deliveries.
      On the
      Third Closing Date, the Company will deliver a certificate (“Third
      Closing Certificate”)
      signed
      by its chief executive officer and chief financial officer (i) representing
      the
      truth and accuracy of all the representations and warranties made by the Company
      contained in this Agreement, as of the Initial Closing Date, the Second Closing
      Date and the Third Closing Date as if such representations and warranties were
      made and given on all such dates, except for changes that do not constitute
      a
      Material Adverse Effect, (ii) certifying that the information contained in
      the
      schedules and exhibits hereto is substantially accurate as of the Third Closing
      Date, except for changes that do not constitute a Material Adverse Effect,
      (iii)
      adopting and renewing the covenants and representations set forth in Sections
      5,
      8, 9, 10, 11, and 12 of this Agreement in relation to the Third Closing Date,
      Third Closing Notes, and Third Closing Preferred Stock, (iv) certifying that
      an
      Event of Default or an event that with the passage of time or the giving of
      notice could become an Event of Default has not occurred. A legal opinion nearly
      identical to the legal opinion referred to in Section 6 of this Agreement shall
      be delivered to each Subscriber at the Third Closing in relation to the Company,
      Third Closing Notes and Third Closing Preferred Stock (“Third
      Closing Legal Opinion”).

     

    3. Preferred
      Stock.
      Within
      two business days of the Initial Closing Date, the Company will submit for
      filing the Certificate of Designation for the Preferred Stock and will issue
      and
      deliver the First Closing Preferred Stock and Old Notes Preferred Stock within
      14 days of the Initial Closing Date. The timely filing of the Certificate of
      Designation and the timely issuance and delivery of the First Closing Preferred
      Stock and Old Notes Preferred Stock are material terms of this Agreement and
      failure to strictly comply with the terms of this Section 3 shall be an Event
      of
      Default under the Notes. On each subsequent Closing Date, the Company will
      issue
      and deliver Preferred Stock each Subscriber is entitled to as of that Closing
      Date. One share of Preferred Stock will be issued for each dollar of Principal
      Amount of the Notes being issued to each Subscriber (the “New
      Notes Preferred Stock”).
      Additionally each subscriber will be issued Preferred Stock in the amounts
      set
      forth on such Subscriber’s signature page (the “Old
      Notes Preferred Stock”).

    


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

     

    (a) Organization
      and Standing of the Subscriber.
      If the
      Subscriber is an entity, such Subscriber is a corporation, partnership or other
      entity duly incorporated or organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation or organization and
      has
      the requisite corporate power to own its assets and to carry on its
      business.


    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (b) Authorization
      and Power.
      Each
      Subscriber has the requisite power and authority to enter into and perform
      this
      Agreement and to purchase the Notes and Preferred Stock being sold to it
      hereunder. The execution, delivery and performance of this Agreement by such
      Subscriber and the consummation by it of the transactions contemplated hereby
      and thereby have been duly authorized by all necessary corporate or partnership
      action, and no further consent or authorization of such Subscriber or its Board
      of Directors, stockholders, partners, members, as the case may be, is required.
      This Agreement has been duly authorized, executed and delivered by such
      Subscriber and constitutes, or shall constitute when executed and delivered,
      a
      valid and binding obligation of the Subscriber enforceable against the
      Subscriber in accordance with the terms thereof.

     

    (c) No
      Conflicts.
      The
      execution, delivery and performance of this Agreement and the consummation
      by
      such Subscriber of the transactions contemplated hereby or relating hereto
      do
      not and will not (i) result in a violation of such Subscriber’s charter
      documents or bylaws or other organizational documents or (ii) conflict with,
      or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of any agreement, indenture or
      instrument or obligation to which such Subscriber is a party or by which its
      properties or assets are bound, or result in a violation of any law, rule,
      or
      regulation, or any order, judgment or decree of any court or governmental agency
      applicable to such Subscriber or its properties (except for such conflicts,
      defaults and violations as would not, individually or in the aggregate, have
      a
      material adverse effect on such Subscriber). Such Subscriber is not required
      to
      obtain any consent, authorization or order of, or make any filing or
      registration with, any court or governmental agency in order for it to execute,
      deliver or perform any of its obligations under this Agreement or to purchase
      the Notes or acquire the Preferred Stock in accordance with the terms hereof,
      provided that for purposes of the representation made in this sentence, such
      Subscriber is assuming and relying upon the accuracy of the relevant
      representations and agreements of the Company herein.

    


    (d) Information
      on Company.
      The
      Subscriber has been furnished with or has had access at the EDGAR Website of
      the
      Commission to the Company's Form 10-KSB for the year ended December 31, 2006
      and
      all periodic reports and Form 8-Ks filed with the Commission thereafter, but
      not
      later than five business days before the Closing Date (hereinafter referred
      to
      as the "Reports").
      In
      addition, the Subscriber has received in writing from the Company such other
      information concerning its operations, financial condition and other matters
      as
      the Subscriber has requested in writing (such other information is collectively,
      the "Other
      Written Information"),
      and
      considered all factors the Subscriber deems material in deciding on the
      advisability of investing in the Securities.

     

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

     

    (f) Purchase
      of Notes and Preferred Stock.
      On the
      Closing Date, the Subscriber will purchase the Notes and Preferred as principal
      for its own account for investment only and not with a view toward, or for
      resale in connection with, the public sale or any distribution thereof, but
      Subscriber does not agree to hold the Notes and Preferred Stock for any minimum
      amount of time.


    
      
         

      

      
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    (g) Compliance
      with Securities Act.
      The
      Subscriber understands and agrees that the Securities have not been registered
      under the 1933 Act or any applicable state securities laws, by reason of their
      issuance in a transaction that does not require registration under the 1933
      Act
      (based in part on the accuracy of the representations and warranties of
      Subscriber contained herein), and that such Securities must be held indefinitely
      unless a subsequent disposition is registered under the 1933 Act or any
      applicable state securities laws or is exempt from such registration. For so
      long as Subscriber holds Notes, the Subscriber will not maintain a net short
      position in the Common Stock contrary to applicable rules and regulations.
      Notwithstanding anything to the contrary contained in this Agreement, such
      Subscriber may transfer (without restriction and without the need for an opinion
      of counsel) the Securities to its Affiliates (as defined below) provided that
      each such Affiliate is an “accredited investor” under Regulation D and such
      Affiliate agrees to be bound by the terms and conditions of this Agreement.
      For
      the purposes of this Agreement, an “Affiliate”
of
      any
      person or entity means any other person or entity directly or indirectly
      controlling, controlled by or under direct or indirect common control with
      such
      person or entity. Affiliate when employed in connection with the Company
      includes each Subsidiary [as defined in Section 5(a)] of the Company. For
      purposes of this definition, “control”
means
      the power to direct the management and policies of such person or firm, directly
      or indirectly, whether through the ownership of voting securities, by contract
      or otherwise.

     

    (h) Shares
      Legend.
      The
      Note Shares and the Preferred Shares shall bear the following or similar
      legend:

     

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

     

    (i) Preferred
      Stock Legend.
      The
      Preferred Stock shall bear the following 

     

    or
      similar legend:

     

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

    


    (j) Note
      Legend.
      The
      Note shall bear the following legend:

     

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

     

    (k) Communication
      of Offer.
      The
      offer to sell the Securities was directly communicated to the Subscriber by
      the
      Company. At no time was the Subscriber presented with or solicited by any
      leaflet, newspaper or magazine article, radio or television advertisement,
      or
      any other form of general advertising or solicited or invited to attend a
      promotional meeting otherwise than in connection and concurrently with such
      communicated offer.


    
      
         

      

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

    


    (m) No
      Governmental Review.
      Each
      Subscriber understands that no United States federal or state agency or any
      other governmental or state agency has passed on or made recommendations or
      endorsement of the Securities or the suitability of the investment in the
      Securities nor have such authorities passed upon or endorsed the merits of
      the
      offering of the Securities.

    


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

    


    (o) Survival.
      The
      foregoing representations and warranties shall survive the Closing Date until
      three years after the Closing Date.

     

    5. Company
      Representations and Warranties.
      The
      Company represents and warrants to and agrees with each Subscriber that except
      as set forth in the Reports and as otherwise qualified in the Transaction
      Documents:

     

    (a) Due
      Incorporation.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation and has the requisite
      corporate power to own its properties and to carry on its business is disclosed
      in the Reports.
      The
      Company is duly qualified as a foreign corporation to do business and is in
      good
      standing in each jurisdiction where the nature of the business conducted or
      property owned by it makes such qualification necessary, other than those
      jurisdictions in which the failure to so qualify would not have a Material
      Adverse Effect. For purpose of this Agreement, a “Material
      Adverse Effect”
shall
      mean a material adverse effect on the financial condition, results of
      operations, properties or business of the Company taken individually, or in
      the
      aggregate, as a whole. For purposes of this Agreement, “Subsidiary”
means,
      with respect to any entity at any date, any corporation, limited or general
      partnership, limited liability company, trust, estate, association, joint
      venture or other business entity) of which more than 50% of (i) the
      outstanding capital stock having (in the absence of contingencies) ordinary
      voting power to elect a majority of the board of directors or other managing
      body of such entity, (ii) in the case of a partnership or limited liability
      company, the interest in the capital or profits of such partnership or limited
      liability company or (iii) in the case of a trust, estate, association,
      joint venture or other entity, the beneficial interest in such trust, estate,
      association or other entity business is, at the time of determination, owned
      or
      controlled directly or indirectly through one or more intermediaries, by such
      entity. All the Company’s Subsidiaries as of the Closing Date are set forth on
Schedule
      5(a)
      hereto.


     

    (b) Outstanding
      Stock.
      All
      issued and outstanding shares of capital stock of the Company have been duly
      authorized and validly issued and are fully paid and nonassessable.

     

    
      
         

      

      
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    (c) Authority;
      Enforceability.
      This
      Agreement, the Notes, the Preferred Stock, the Certificate of Designation,
      the
      Conversion Agent Agreement, the Escrow Agreement, and any other agreements
      delivered together with this Agreement or in connection herewith (collectively
      “Transaction
      Documents”)
      have
      been duly authorized, executed and delivered by the Company and Subsidiaries
      (as
      the case may be) and are valid and binding agreements enforceable in accordance
      with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability relating
      to
      or affecting creditors’ rights generally and to general principles of equity.
      The Company and Subsidiaries have full corporate power and authority necessary
      to enter into and deliver the Transaction Documents and to perform their
      obligations thereunder.

     

    (d) Additional
      Issuances.
      There
      are no outstanding agreements or preemptive or similar rights affecting the
      Company's common stock or equity and no outstanding rights, warrants or options
      to acquire, or instruments convertible into or exchangeable for, or agreements
      or understandings with respect to the sale or issuance of any shares of common
      stock or equity of the Company or other equity interest in any of the
      Subsidiaries of the Company except as described on Schedule
      5(d) or
      as
      described in the Reports. The Common Stock of the Company on a fully diluted
      basis outstanding as of immediately preceding and following the Closing is
      set
      forth on Schedule
      5(d).

     

    (e) Consents.
      Except
      as described in Section 9(f), no consent, approval, authorization or order
      of
      any court, governmental agency or body or arbitrator having jurisdiction over
      the Company, or any of its Affiliates, any Principal Market (as defined in
      Section 9(b) of this Agreement), nor the Company’s shareholders is required for
      the execution by the Company of the Transaction Documents and compliance and
      performance by the Company of its obligations under the Transaction Documents,
      including, without limitation, the issuance and sale of the Securities, and
      all
      such consents will have been obtained by the Company prior to
      Closing. 

     

    (f) No
      Violation or Conflict.
      Assuming the representations and warranties of the Subscriber in Section 4
      are
      true and correct, and except as disclosed on Schedule
      5(f),
      neither
      the issuance and sale of the Securities nor the performance of the Company’s
      obligations under this Agreement and all other agreements entered into by the
      Company relating thereto by the Company will:

     

    (i) violate,
      conflict with, result in a breach of, or constitute a default (or an event
      which
      with the giving of notice or the lapse of time or both would be reasonably
      likely to constitute a default in any material respect) of a material nature
      under (A) the articles or certificate of incorporation other than as described
      on Schedule 5(f)(A), charter or bylaws of the Company, (B) any decree, judgment,
      order, law, treaty, rule, regulation or determination applicable to the Company
      of any court, governmental agency or body, or arbitrator having jurisdiction
      over the Company or over the properties or assets of the Company or any of
      its
      Affiliates, (C) the terms of any bond, debenture, note or any other evidence
      of
      indebtedness, or any agreement, stock option or other similar plan, indenture,
      lease, mortgage, deed of trust or other instrument to which the Company or
      any
      of its Affiliates is a party, by which the Company or any of its Affiliates
      is
      bound, or to which any of the properties of the Company or any of its Affiliates
      is subject other than as disclosed on Schedule 5 (f) (C), or (D) the terms
      of
      any “lock-up” or similar provision of any underwriting or similar agreement to
      which the Company, or any of its Affiliates is a party except the violation,
      conflict, breach, or default of which would not have a Material Adverse
      Effect;
      or

     

    (ii) result
      in
      the creation or imposition of any lien, charge or encumbrance upon the
      Securities or any of the assets of the Company or any of its Affiliates, except
      as contemplated herein; or

     

    (iii) other
      than as described on Schedule 5(f))(iii), result in the activation of any
      anti-dilution rights or a reset or repricing of any debt or security instrument
      of any other creditor or equity holder of the Company, nor result in the
      acceleration of the due date of any obligation of the Company; or

     

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


    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (g) The
      Securities.
      The
      Securities upon issuance:

     

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

    


    (ii) have
      been, or will be, duly and validly authorized and on the date of issuance of
      the
      Shares and upon conversion of the Preferred Stock, the Shares will be duly
      and
      validly issued, fully paid and nonassessable, or if registered pursuant to
      the
      1933 Act, and resold pursuant to an effective registration statement will be
      free trading and unrestricted, provided the Company has amended its certificate
      of incorporation (as such has previously amended and/or restated) to increase
      the number of shares of common or preferred stock it is authorized to issue
      or
      to effect a reverse split of its common stock and filed the Certificate of
      Designation with the Secretary of State of Texas;

     

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

     

    (iv) will
      not
      subject the holders thereof to personal liability by reason of being such
      holders, provided Subscriber’s representations herein are true and accurate and
      Subscriber take no actions or fail to take any actions required for their
      purchase of the Securities to be in compliance with all applicable laws and
      regulations; and

     

    (v) provided
      Subscriber’s representations herein are true and accurate, will have been issued
      in reliance upon an exemption from the registration requirements of and will
      not
      result in a violation of Section 5 under the 1933 Act.

     

    (h) Litigation.
      Except
      as disclosed on Schedule
      5(h),
      or in
      the Reports, there is no pending or threatened action, suit, proceeding or
      investigation before any court, governmental agency or body, or arbitrator
      having jurisdiction over the Company, or any of its Affiliates that would affect
      the execution by the Company or the performance by the Company of its
      obligations under the Transaction Documents. There is no pending, or, to the
      knowledge of the Company, basis for any, action, suit, proceeding or
      investigation before any court, governmental agency or body, or arbitrator
      having jurisdiction over the Company, or any of its Affiliates which litigation
      if adversely determined would have a Material Adverse Effect.

     

    (i) Reporting
      Company.
      Except
      as disclosed on Schedule
      5(i),
      the
      Company is a publicly-held company subject to reporting obligations pursuant
      to
      Section 13 of the Securities Exchange Act of 1934 (the “1934
      Act”)
      and
      has a
      class of common shares registered pursuant to Section 12(g) of the 1934 Act.
      Pursuant to the provisions of the 1934 Act, the Company has filed all reports
      and other materials required to be filed thereunder with the Commission during
      the preceding thirty-six months.

     

    (j) No
      Market Manipulation.
      The
      Company and its Affiliates have not taken, and will not take, directly or
      indirectly, any action designed to, or that might reasonably be expected to,
      cause or result in stabilization or manipulation of the price of the Common
      Stock to
      facilitate the sale or resale of the Securities or affect the price at which
      the
      Securities may be issued or resold, provided, however, that this provision
      shall
      not prevent the Company from engaging in investor relations/public relations
      activities consistent with past practices.

     

    (k) Information
      Concerning Company.
      Except
      as disclosed on Schedule
      5(k),
      the
      Reports contain all material information relating to the Company and its
      operations and financial condition which is required to be disclosed by
      applicable securities laws, rules or regulations, as of their respective dates
      and all the information required to be disclosed therein. Since the last day
      of
      the fiscal year of the most recent audited financial statements included in
      the
      Reports (“Latest
      Financial Date”),
      and
      except as modified in the Other Written Information or in the Schedules hereto,
      there has been no Material Adverse Effect relating to the Company’s business,
      financial condition or affairs not disclosed in the Reports. The Reports do
      not
      contain any untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary to make the statements therein not
      misleading in light of the circumstances when made.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

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

     

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

     

    (n) Not
      an
      Integrated Offering.
      Neither
      the Company, nor any of its Affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offer of the Securities pursuant to this Agreement to be integrated with
      prior offerings by the Company for purposes of the 1933 Act or any applicable
      stockholder approval provisions, including, without limitation, under the rules
      and regulations of the OTC Bulletin Board (“Bulletin
      Board”)
      or any
      Principal Market which would impair the exemptions relied upon in this Offering
      or the Company’s ability to timely comply with its obligations hereunder. Nor
      will the Company or any of its Affiliates take any action or steps that would
      cause the offer or issuance of the Securities to be integrated with other
      offerings which would impair the exemptions relied upon in this Offering or
      the
      Company’s ability to timely comply with its obligations hereunder. The Company
      will not conduct any offering other than the transactions contemplated hereby
      that will be integrated with the offer or issuance of the Securities which
      would
      impair the exemptions relied upon in this Offering or the Company’s ability to
      timely comply with its obligations hereunder.

     

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

     

    (p) Listing.
      The
      Common Stock is quoted on the Bulletin Board under the symbol: VOIC.OB. The
      Company has not received any oral or written notice that the Common Stock is
      not
      eligible nor will become ineligible for quotation on the Bulletin Board nor
      that
      the Common Stock does not meet all requirements for the continuation of such
      quotation.

     

    (q) No
      Undisclosed Liabilities.
      The
      Company has no liabilities or obligations which are material, individually
      or in
      the aggregate, which are not disclosed in the Reports and Other Written
      Information, other than those incurred in the ordinary course of the Company’s
      businesses since the Latest Financial Date and which, individually or in the
      aggregate, would reasonably be expected to have a Material Adverse
      Effect,
      except
      as disclosed on Schedule
      5(q).

     

    (r) No
      Undisclosed Events or Circumstances.
      Except
      as disclosed on Schedule
      5(r),
      since
      the Latest Financial Date, no event or circumstance has occurred or exists
      with
      respect to the Company or its businesses, properties, operations or financial
      condition, that, under applicable law, rule or regulation, requires public
      disclosure or announcement prior to the date hereof by the Company but which
      has
      not been so publicly announced or disclosed in the Reports.

     

    (s) Capitalization.
      The
      authorized and outstanding capital stock of the Company as of the date of this
      Agreement and the Closing Date (not including the Securities) are set forth
      on
Schedule
      5(d).
      Except
      as set forth on Schedule
      5(d),
      there
      are no options, warrants, or rights to subscribe to, securities, rights or
      obligations convertible into or exchangeable for or giving any right to
      subscribe for any shares of capital stock of the Company. All of the outstanding
      shares of Common Stock of the Company have been duly and validly authorized
      and
      issued and are fully paid and nonassessable.


    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

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

     

    (u) No
      Disagreements with Accountants and Lawyers.
      Except
      as disclosed on Schedule
      5(u),
      there
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the Company and the accountants and lawyers
      formerly or presently employed by the Company, including but not limited to
      disputes or conflicts over payment owed to such accountants and lawyers, nor
      have there been any such disagreements during the two years prior to the Closing
      Date. 

    


    (v) DTC
      Status.
      The
      Company’s transfer agent is a participant in and the Common Stock is eligible
      for transfer pursuant to the Depository Trust Company Automated Securities
      Transfer Program. The name, address, telephone number, fax number, contact
      person and email address of the Company transfer agent is set forth on
Schedule
      5(v)
      hereto.

    


    (w) Investment
      Company.
      Neither
      the Company nor any Affiliate is an “investment company” within the meaning of
      the Investment Company Act of 1940, as amended.

    


    (x) Subsidiary
      Representations.
      The
      Company makes each of the representations contained in Sections 5(a), (b),
      (d),
      (e), (f), (h), (k), (m), (q), (r), (u) and (w) of this Agreement, as same relate
      to each Subsidiary of the Company, except as set forth on Schedule
      5(a).

    


    (y) Company
      Predecessor.
      All
      representations made by or relating to the Company of a historical or
      prospective nature and all undertakings described in Sections 9(g) through
      9(l)
      shall relate, apply and refer to the Company and its predecessors.

    


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

     

    (AA) Survival.
      The
      foregoing representations and warranties shall survive until three years after
      the Second Closing Date.

     

    6. Regulation
      D Offering.
      The
      offer and issuance of the Securities to the Subscribers is being made pursuant
      to the exemption from the registration provisions of the 1933 Act afforded
      by
      Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation
      D
      promulgated thereunder. On the Closing Date, the Company will provide an opinion
      reasonably acceptable to Subscribers from the Company’s legal counsel opining on
      the availability of an exemption from registration under the 1933 Act as it
      relates to the offer and issuance of the Securities and other matters reasonably
      requested by Subscribers. A form of the legal opinion is annexed hereto as
      Exhibit
      G.
      The
      Company will provide, at the Company’s expense, such other legal opinions in the
      future as are reasonably necessary for the issuance and resale of the Common
      Stock issuable upon conversion of the Notes and conversion of the Preferred
      Stock pursuant to an effective registration statement under the 1933 Act, Rule
      144 under the 1933 Act (“Rule
      144”),
      or an
      exemption from registration.


    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    


    7.1. Conversion
      of Note and Preferred Stock.

    


    (a) Upon
      the
      conversion of a note, interest, any sum due to the Subscriber under the
      Transaction Documents including Liquidated Damages, Preferred Stock, or part
      thereof, the Company shall, at its own cost and expense, take all necessary
      action, including obtaining and delivering, an opinion of counsel to assure
      that
      the Company's transfer agent shall issue stock certificates in the name of
      Subscriber (or its permitted nominee) or such other persons as designated by
      Subscriber and in such denominations to be specified at conversion representing
      the number of shares of Common Stock issuable upon such conversion. The Company
      warrants that no instructions other than these instructions have been or will
      be
      given to the transfer agent of the Company's Common Stock and that the
      certificates representing such shares shall contain no legend other than the
      usual 1933 Act restriction from transfer legend. If and when the Subscriber
      sells the Shares, assuming (i) a registration statement registering such shares
      under the 1933 Act is effective and the prospectus, as supplemented or amended,
      contained therein is current and (ii) the Subscriber confirms in writing to
      the
      transfer agent that the Subscriber has complied with the prospectus delivery
      requirements, the restrictive legend will be removed and the Shares will be
      free-trading, and freely transferable. In the event that the Shares are sold
      in
      a manner that complies with an exemption from registration, the Company will
      promptly instruct its counsel to issue to the transfer agent an opinion
      permitting removal of the legend (indefinitely, if pursuant to Rule 144(k)
      of
      the 1933 Act, or for 90 days if pursuant to the other provisions of Rule 144
      of
      the 1933 Act). 

    


    (b) Subscriber
      will give notice of its decision to exercise its right to convert the Note,
      Preferred Stock, interest, any sum due to the Subscriber under the Transaction
      Documents including Liquidated Damages, or part thereof by telecopying an
      executed and completed Notice
      of Conversion
      (a form
      of which is annexed as Exhibit
      A
      to the
      Note and the Certificate
      of Designation)
      to the
      Company via confirmed telecopier transmission or otherwise pursuant to Section
      13(a) of this Agreement. The Subscriber will not be
      required to surrender the Note
      until
      the Note or stock certificate representing the Preferred Stock, has been fully
      converted or satisfied. Each date on which a Notice of Conversion is telecopied
      to the Company in accordance with the provisions hereof shall be deemed a
Conversion
      Date.
      The
      Company will itself or cause the Company’s transfer agent to transmit the
      Company’s Common Stock certificates representing the Shares issuable upon
      conversion of the Note or the Preferred Stock to the Subscriber via express
      courier for receipt by such Subscriber within three (3) business days after
      receipt by the Company of the Notice of Conversion (such third day being the
      “Delivery
      Date”).
      A
      Note representing the balance of the Note or stock certificate representing
      the
      balance of the Preferred Stock not so converted will be provided by the Company
      to the Subscriber if requested by Subscriber, provided the Subscriber delivers
      the
      original Note or stock certificate to the Company. In the event that a
      Subscriber elects not to surrender a Note for reissuance upon partial payment
      or
      conversion, the Subscriber hereby indemnifies the Company against any and all
      loss or damage attributable to a third-party claim in an amount in excess of
      the
      actual amount then due under the Note or shares of Preferred Stock actually
      held. “Business
      day”
and
      “trading
      day”
as
      employed in the Transaction Documents is a day that the New York Stock Exchange
      is open for trading for three or more hours.

     

      (c) The
      Company understands that a delay in the delivery of the Shares in the form
      required pursuant to Section 7.1 hereof, or the Mandatory Redemption Amount
      described in Section 7.2 hereof, respectively after the Delivery Date or the
      Mandatory Redemption Payment Date (as hereinafter defined) could result in
      economic loss to the Subscriber. As compensation to the Subscriber for such
      loss, the Company agrees to pay (as liquidated damages and not as a penalty)
      to
      the Subscriber for late issuance of Shares in the form required pursuant to
      Section 7.1 hereof upon Conversion of the Note or
      the
      Preferred Stock
      in the
      amount of $100 per business day after the Delivery Date for each $10,000 (and
      proportionately for other amounts) of the amount being converted of the
      corresponding Shares which are not timely delivered. The Company shall pay
      any
      payments incurred under this Section in immediately available funds upon demand.
      Furthermore, in addition to any other remedies which may be available to the
      Subscriber, in the event that the Company fails for any reason to effect
      delivery of the Shares by the Delivery Date or make payment by the Mandatory
      Redemption Payment Date, the Subscriber may revoke all or part of the relevant
      Notice of Conversion or rescind all or part of the notice of Mandatory
      Redemption by delivery of a notice to such effect to the Company whereupon
      the
      Company and the Subscriber shall each be restored to their respective positions
      immediately prior to the delivery of such notice, except that the liquidated
      damages described above shall be payable through the date notice of revocation
      or rescission is given to the Company.


    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    


    (d) Within
      three (3) business days (such third business day being the “Unlegended Shares
      Delivery Date”) after the business day on which the Company has received (i) a
      notice that Shares or any other Common Stock held by a Subscriber have been
      sold
      pursuant to Rule 144 under the 1933 Act, (ii) a representation that the
      requirements of Rule 144, as applicable and if required, have been satisfied,
      and (iii) the original share certificates representing the shares of Common
      Stock that have been sold, and (iv) customary representation letters of the
      Subscriber and/or Subscriber’s broker regarding compliance with the requirements
      of Rule 144, the Company at its expense, (y) shall deliver, and shall cause
      legal counsel selected by the Company to deliver to its transfer agent (with
      copies to Subscriber) an appropriate instruction and opinion of such counsel,
      directing the delivery of shares of Common Stock without any legends including
      the legend set forth in Section 4(i) above, or pursuant to Rule 144 (the
“Unlegended Shares”); and (z) cause the transmission of the certificates
      representing the Unlegended Shares together with a legended certificate
      representing the balance of the submitted Shares certificate, if any, to the
      Subscriber at the address specified in the notice of sale, via express courier,
      by electronic transfer or otherwise on or before the Unlegended Shares Delivery
      Date. 

    


    (e) The
      Company understands that a delay in the delivery of the Unlegended Shares
      pursuant to Section 7.1(d) hereof later than two business days after the
      Unlegended Shares Delivery Date could result in economic loss to a Subscriber.
      As compensation to a Subscriber for such loss, the Company agrees to pay late
      payment fees (as liquidated damages and not as a penalty) to the Subscriber
      for
      late delivery of Unlegended Shares in the amount of $100 per business day after
      the Delivery Date for each $10,000 (and proportionately for other amounts)
      of
      purchase price of the Unlegended Shares subject to the delivery default. If
      during any 360 day period, the Company fails to deliver Unlegended Shares as
      required by this Agreement for an aggregate of thirty (30) days, then Subscriber
      or assignee holding Securities subject to such default may, at its option,
      require the Company to redeem all or any portion of the Shares subject to such
      default at a price per share equal to the greater of (i) 120%, or (ii) a
      fraction in which the numerator is the highest closing price during the
      aforedescribed thirty day period and the denominator of which is the lowest
      conversion
      price during such thirty day period, multiplied by the Purchase Price of such
      Common Stock and Shares (“Unlegended
      Redemption Amount”).
      The
      amount of the aforedescribed liquidated damages that have accrued or been paid
      for the ten day period prior to the receipt by the Subscriber of the Unlegended
      Redemption Amount shall be credited against the Unlegended Redemption Amount.
      Damages calculated pursuant to Section 7.1(c) and Section 7.1(e) for the same
      Shares and Unlegended Shares shall be calculated only under one such section
      at
      the Subscriber’s election.

    


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

    


    (g) Nothing
      contained herein or in any document referred to herein or delivered in
      connection herewith shall be deemed to establish or require the payment of
      a
      rate of interest or other charges in excess of the maximum permitted by
      applicable law. In the event that the rate of interest or dividends required
      to
      be paid or other charges hereunder exceed the maximum permitted by such law,
      any
      payments in excess of such maximum shall be credited against amounts owed by
      the
      Company to the Subscriber and thus refunded to the Company.

    


    (h)  The
      Company shall pay all damages payable pursuant to Section 7 hereof and all
      other
      liquidated damages and payments in immediately available funds upon
      demand.


    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    


    7.2. Mandatory
      Redemption at Subscriber’s Election.
      In the
      event the Company is prohibited from issuing Shares, or fails to timely deliver
      Shares on a Delivery Date, or upon the occurrence of any other Event of Default
      (as defined in the Note or in this Agreement) that is not cured during any
      applicable cure period and an additional ten days thereafter, then at the
      Subscriber's election, the Company must pay to the Subscriber ten (10) business
      days after request by the Subscriber, at the Subscriber’s election, a sum of
      money determined by (i) multiplying up to the outstanding principal amount
      of
      the Note designated by the Subscriber by 115%, or (ii) multiplying the number
      of
      Shares otherwise deliverable upon conversion of an amount of Note principal
      and/or interest designated by the Subscriber (with the date of giving of such
      designation being a “Deemed
      Conversion Date”)
      at the
      then Conversion Price that would be in effect on the Deemed Conversion Date
      by
      the highest closing price of the Common Stock on the Principal Market for the
      period commencing on the Deemed Conversion Date until the day prior to the
      receipt of the Mandatory Redemption Payment, whichever is greater, together
      with
      accrued but unpaid interest thereon and any other sums arising and outstanding
      under the Transaction Documents ("Mandatory
      Redemption Payment").
      The
      Mandatory Redemption Payment must be received by the Subscriber on the same
      date
      as the Company Shares otherwise deliverable or within ten (10) business days
      after request, whichever is sooner ("Mandatory
      Redemption Payment Date").
      Upon
      receipt of the Mandatory Redemption Payment, the corresponding Note principal
      and interest will be deemed paid and no longer outstanding. Liquidated damages
      calculated pursuant to Section 7.1(c) hereof, that have been paid or accrued
      for
      the twenty day period prior to the actual receipt of the Mandatory Redemption
      Payment by the Subscriber shall be credited against the Mandatory Redemption
      Payment calculated pursuant to subsections (i) and (ii) above of this Section
      7.2. In the event of a “Change
      in Control”
(as
      defined below), the Subscriber may demand, and the Company shall pay, a
      Mandatory Redemption Payment equal to 115% of the outstanding principal amount
      of the Note designated by the Subscriber together with accrued but unpaid
      interest thereon and any other sums arising and outstanding under the
      Transaction Documents. For purposes of this Section 7.2, “Change
      in Control”
shall
      mean (i) the Company no longer having a class of shares publicly tradable and
      listed on a Principal Market, (ii) the Company becoming a Subsidiary of another
      entity or merging into or with another entity, (iii) a majority of the board
      of
      directors of the Company as of the Closing Date no longer serving as directors
      of the Company except for the addition or replacement of up to six directors,
      other than due to natural causes, (iv) if the holders of the Company’s Common
      Stock as of the Closing Date beneficially owning at any time after the Closing
      Date less than thirty-five percent of the Common stock owned by them on the
      Closing Date, or (v) the sale, lease, license or transfer of substantially
      all
      the assets of the Company or Subsidiaries.

    


    7.3. Maximum
      Conversion.
      The
      Subscriber shall not be entitled to convert on a Conversion Date that amount
      of
      the Note or the Preferred Stock in connection with that number of shares of
      Common Stock which would be in excess of the sum of (i) the number of shares
      of
      common stock beneficially owned by the Subscriber and its Affiliates on a
      Conversion Date, and (ii) the number of shares of Common Stock issuable upon
      the
      conversion of the Note or the Preferred Stock with respect to which the
      determination of this provision is being made on a Conversion Date, which would
      result in beneficial ownership by the Subscriber and its Affiliates of more
      than
      4.99% of the outstanding shares of common stock of the Company on such
      Conversion Date. Beneficial ownership shall be determined in accordance with
      Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
      13d-3 thereunder. Subject to the foregoing, the Subscriber shall not be limited
      to aggregate conversions of only 4.99% and aggregate conversions by the
      Subscriber may exceed 4.99%. The Subscriber may waive the conversion limitation
      described in this Section 7.3, in whole or in part, upon and effective after
      61
      days prior written notice to the Company to increase such percentage to up
      to
      9.99%. The Subscriber may decide whether to convert a Note or the Preferred
      Stock to achieve an actual 4.99% or up to 9.99% ownership position as described
      above.

    


    7.4. Injunction
      Posting of Bond.
      In the
      event a Subscriber shall elect to convert a the Preferred Stock Note or part
      thereof or request the delivery of Unlegended Shares pursuant to the terms
      of
      this Agreement, the Company may not refuse conversion, exercise or delivery
      based on any claim that such Subscriber or any one associated or affiliated
      with
      such Subscriber has been engaged in any violation of law, or for any other
      reason, unless, an injunction from a court, on notice, restraining and or
      enjoining conversion of all or part of such Note or Preferred Stock, or delivery
      of Unlegended Shares shall have been sought and obtained by the
      Company
      or at
      the Company’s request or with the Company’s assistance, and
      the
      Company has posted a surety bond for the benefit of such Subscriber in the
      amount of 120% of the outstanding principal and interest of the Note, or
      aggregate purchase price of the Shares and Unlegended Shares which are sought
      to
      be subject to the injunction, which bond shall remain in effect until the
      completion of arbitration/litigation of the dispute and the proceeds of which
      shall be payable to such Subscriber to the extent Subscriber obtains judgment
      in
      Subscriber’s favor.


    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    


    7.5. Buy-In.
      In
      addition to any other rights available to the Subscriber, if the Company fails
      to deliver to the Subscriber Shares issuable upon conversion of a Note or the
      Preferred Stock by the Delivery Date (as defined herein) or fails to deliver
      Unlegended Shares by the Unlegended Shares Delivery Date and if after seven
      (7)
      business days after such date the Subscriber or a broker on the Subscriber’s
      behalf, purchases (in an open market transaction or otherwise) shares of Common
      Stock to deliver in satisfaction of a sale by such Subscriber of the Common
      Stock which the Subscriber was entitled to receive upon such conversion (a
      "Buy-In"),
      then
      the Company shall pay in cash to the Subscriber (in addition to any remedies
      available to or elected by the Subscriber) the amount by which (A) the
      Subscriber's total purchase price (including brokerage commissions, if any)
      for
      the shares of Common Stock so purchased exceeds (B) the aggregate principal
      and/or interest amount of the Note for which such conversion, exercise or
      required delivery was not timely honored,
      together with interest thereon at a rate of 15% per annum, accruing until such
      amount and any accrued interest thereon is paid in full (which amount shall
      be
      paid as liquidated damages and not as a penalty). For
      example, if the Subscriber purchases shares of Common Stock having a total
      purchase price of $11,000 to cover a Buy-In with respect to an attempted
      conversion of $10,000 of note principal and/or interest or the Preferred Stock
      having an aggregate purchase price of $10,000, or Unlegended Shares having
      an
      aggregate purchase price of $10,000, then the Company shall be required to
      pay
      the Subscriber $1,000,
      plus interest. The
      Subscriber shall provide the Company written notice indicating the amounts
      payable to the Subscriber in respect of the Buy-In.

    


    7.6. Adjustments.
      The
      Conversion Price, and amount of Shares issuable upon conversion of the Notes
      or
      the Preferred Stock shall be adjusted as described in this Agreement, the Notes
      and Certificate
      of Designation.

     

    7.7. Redemption.
      The
      Note and the Preferred Stock shall not be redeemable or mandatorily convertible
      except as described in the Note and Certificate
      of Designation.
      

    


    8. Finder/Legal
      Fees.

     

    (a) Finder’s
      Fee.
      The
      Company on the one hand, and each Subscriber (for himself only) on the other
      hand, agree to indemnify the other against and hold the other harmless from
      any
      and all liabilities to any persons claiming brokerage commissions or finder’s
      fees on account of services purported to have been rendered on behalf of the
      indemnifying party in connection with this Agreement or the transactions
      contemplated hereby and arising out of such party’s actions. The Company
      represents that there are no other parties entitled to receive fees,
      commissions, or similar payments in connection with the Offering except as
      described in Section 8(b) below.

     

    (b)  Legal
      Fees.
      The
      Company shall pay to Grushko & Mittman, P.C., a fee of $55,000
      (“Legal
      Fees”)
      as
      reimbursement for services rendered to the Subscriber in connection with this
      Agreement and the purchase and sale of the Notes, and Preferred Stock (the
      “Offering”)
      and
      acting as Escrow Agent for the Offering. The Legal Fees will be payable on
      the
      Closing Date out of funds held pursuant to the Funds Escrow Agreement. Grushko
      & Mittman, P.C. will be reimbursed on the Closing Date for all UCC search
      and filing fees, if any.

    


    (c)  Restructuring
      Fee.
      Bristol
      Capital LLC is receiving a note in the principal amount of $30,000 identical
      in
      all terms to the Notes being issued to the Subscribers as payment for its fees
      in association with its services rendered to the Company in restructuring the
      finances of the Company.


    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

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

     

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

     

    (b) Listing.
      The
      Company shall promptly secure the listing of the Shares upon each national
      securities exchange, or electronic or automated quotation system upon which
      they
      are or become listed and shall use commercially reasonable efforts to maintain
      such listing so long as any Notes or Preferred Stock are outstanding. The
      Company will maintain the listing of its Common Stock on the American Stock
      Exchange, Nasdaq Capital Market, Nasdaq National Market System, Bulletin Board,
      or New York Stock Exchange (whichever of the foregoing is at the time the
      principal trading exchange or market for the Common Stock (the “Principal
      Market”)),
      and
      will comply in all respects with the Company’s reporting, filing and other
      obligations under the bylaws or rules of the Principal Market, as applicable.
      The Company will provide the Subscribers copies of all notices it receives
      notifying the Company of the threatened and actual delisting of the Common
      Stock
      from any Principal Market. As of the date of this Agreement, the Bulletin Board
      is the Principal Market.

     

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

     

    (d) Filing
      Requirements.
      From
      the date of this Agreement and until the later of (i) two (2) years after the
      Closing Date, or (ii) until all the Shares have been resold or transferred
      by
      all the Subscribers pursuant to an effective registration statement (the
“Registration Statement”)or pursuant to Rule 144, without regard to volume
      limitations, the Company will (A) cause its Common Stock to continue to be
      registered under Section 12(b) or 12(g) of the 1934 Act, (B) comply in all
      respects with its reporting and filing obligations under the 1934 Act and (C)
      voluntarily comply with all reporting requirements that are applicable to an
      issuer with a class of shares registered pursuant to Section 12(g) of the 1934
      Act, if Company is not subject to such reporting requirements. The Company
      will
      use its commercially reasonable efforts not to take any action or file any
      document (whether or not permitted by the 1933 Act or the 1934 Act or the rules
      thereunder) to terminate or suspend such registration or to terminate or suspend
      its reporting and filing obligations under said acts until two (2) years after
      the Closing Date. Until the earlier of the resale of the Shares by each
      Subscriber or two (2) years after the Closing Date, the Company will use its
      commercially reasonable efforts to continue the listing or quotation of the
      Common Stock on a Principal Market and will comply in all respects with the
      Company’s reporting, filing and other obligations under the bylaws or rules of
      the Principal Market; provided that the Company shall not be required to
      consummate a reverse stock split in order to comply with the foregoing covenant.
      The Company agrees to timely file a Form D with respect to the Securities if
      required under Regulation D and to provide a copy thereof to Subscriber promptly
      after such filing.

     

    (e) Use
      of
      Proceeds.
      The
      proceeds of the Offering will be employed by the Company for the purposes set
      forth on Schedule
      9(e)
      hereto.
      Except as set forth on Schedule
      9(e),
      the
      Purchase Price may not and will not be used for accrued and unpaid officer
      and
      director salaries, payment of financing related debt, redemption of outstanding
      notes or equity instruments of the Company, litigation related expenses or
      settlements, brokerage fees, nor non-trade obligations outstanding on the
      Closing Date.


    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (f) Reservation.
      As
      soon
      as practicable after the Company has amended its certificate of incorporation
      to
      increase its common stock and/or preferred stock or to effect a reverse split
      of
      its common stock, the Company shall reserve not less than 375,000,000 shares
      of
      its authorized but unissued common stock. Not later than April 16, 2008, the
      Company will reserve on behalf of the Subscribers from its authorized but
      unissued Common Stock a number of common shares equal to 120% of the amount
      of
      Common Stock necessary to allow each holder of a Note to be able to convert
      all
      such outstanding Notes and Preferred Stock. Failure to have sufficient shares
      reserved pursuant to this Section 9(f) for three (3) consecutive business days
      or ten (10) days in the aggregate shall be a material default of the Company’s
      obligations under this Agreement and an Event of Default under the
      Note.

     

    (g) Taxes.
      From
      the date of this Agreement and until the conversion or satisfaction of the
      Note,
      in its entirety, the Company will promptly pay and discharge, or cause to be
      paid and discharged, when due and payable, all lawful taxes, assessments and
      governmental charges or levies imposed upon the income, profits, property or
      business of the Company; provided, however, that any such tax, assessment,
      charge or levy need not be paid if the validity thereof shall currently be
      contested in good faith by appropriate proceedings and if the Company shall
      have
      set aside on its books adequate reserves with respect thereto, and provided,
      further, that the Company will pay all such taxes, assessments, charges or
      levies forthwith upon the commencement of proceedings to foreclose any lien
      which may have attached as security therefore.

     

    (h) Insurance.
      From
      the date of this Agreement and until the conversion or satisfaction of the
      Note,
      in its entirety, the Company will keep its assets which are of an insurable
      character insured by financially sound and reputable insurers against loss
      or
      damage by fire, explosion and other risks customarily insured against by
      companies in the Company’s line of business, in amounts sufficient to prevent
      the Company from becoming a co-insurer and not in any event less than one
      hundred percent (100%) of the insurable value of the property insured less
      reasonable deductible amounts; and the Company will maintain, with financially
      sound and reputable insurers, insurance against other hazards and risks and
      liability to persons and property to the extent and in the manner customary
      for
      companies in similar businesses similarly situated and to the extent available
      on commercially reasonable terms.

     

    (i) Books
      and Records.
      From the
      date of this Agreement and until the conversion or satisfaction of the Note,
      in
      its entirety, the Company will keep true records and books of account in which
      full, true and correct entries will be made of all dealings or transactions
      in
      relation to its business and affairs in accordance with generally accepted
      accounting principles applied on a consistent basis.

     

    (j) Governmental
      Authorities.
      From the
      date of this Agreement and until the conversion or satisfaction of the Note,
      in
      its entirety, the Company shall duly observe and conform in all material
      respects to all valid requirements of governmental authorities relating to
      the
      conduct of its business or to its properties or assets.

     

    (k) Intellectual
      Property.
      From
      the date of this Agreement and until the conversion or satisfaction of the
      Note
      and conversion of the Preferred Stock, in its entirety, the Company shall
      maintain in full force and effect its corporate existence, rights and franchises
      and all licenses and other rights to use intellectual property owned or
      possessed by it and reasonably deemed to be necessary to the conduct of its
      business, unless it is sold for value.

     

    (l) Properties.
      From the
      date of this Agreement and until the conversion or satisfaction of the Note,
      in
      its entirety, and conversion of the Preferred Stock the Company will keep its
      properties in good repair, working order and condition, reasonable wear and
      tear
      excepted, and from time to time make all necessary and proper repairs, renewals,
      replacements, additions and improvements thereto; and the Company will at all
      times comply with each provision of all leases to which it is a party or under
      which it occupies property if the breach of such provision could reasonably
      be
      expected to have a Material Adverse Effect.


    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    (m) Confidentiality/Public
      Announcement.
      From the
      date of this Agreement and until the sooner of (i) two (2) years after the
      Closing Date, or (ii) until all the Shares have been resold or transferred
      by
      all the Subscribers pursuant to the Registration Statement or pursuant to Rule
      144, without regard to volume limitations, the Company agrees that except in
      connection with a Form 8-K or the Registration Statement or as otherwise
      required in any other Commission filing, it will not disclose publicly or
      privately the identity of the Subscribers unless expressly agreed to in writing
      by a Subscriber, only to the extent required by law and then only upon five
      days
      prior notice to Subscribers. In any event and subject to the foregoing, the
      Company shall file
      a
      Form 8-K or make a public announcement describing the Offering not later than
      the second business day after the Closing Date. In the Form 8-K or public
      announcement, the Company will specifically disclose the amount of common stock
      outstanding immediately after the Closing. A form of the proposed Form 8-K
      or
      public announcement to be employed in connection with the Closing is annexed
      hereto as Exhibit
      H.

     

    (n) Non-Public
      Information.
      The
      Company covenants and agrees that neither it nor any other person acting on
      its
      behalf will provide any Subscriber or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Subscriber shall have agreed in writing to receive such
      information. The Company understands and confirms that each Subscriber shall
      be
      relying on the foregoing representations in effecting transactions in securities
      of the Company.

    


    (o) Offering
      Restrictions.
      Until
      the expiration of the “Exclusion
      Period”,
      which
      shall be defined as the sooner of (i) one year from the date of this Agreement,
      or (ii) until all the Shares have been resold or transferred by the Subscribers
      pursuant to the Registration Statement or Rule 144, without regard to volume
      limitations, or at any time during the pendency of an Event of Default, except
      for the Excepted Issuances, the Company will not enter into an agreement to
      nor
      issue any equity, convertible debt or other securities convertible into common
      stock or equity of the Company nor modify any of the foregoing which may be
      outstanding at anytime, without the prior written consent of a majority of
      the
      Subscribers, which consent may be withheld for any reason. For so long as the
      Notes and Preferred Stock are outstanding, except for the Excepted Issuances,
      the Company will not enter into any equity line of credit or similar agreement,
      nor issue nor agree to issue any floating or variable priced equity linked
      instruments nor any of the foregoing or equity with price reset rights.
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
      Subscribers. No other plan will be adopted nor may any options or equity not
      included in such plan be issued for so long as any sum is outstanding under
      the
      Note.

    


    (p) Additional
      Negative Covenants.
      So long
      as at least twenty-five (25%) of the principal amount of the Notes issued by
      the
      Company pursuant to the Subscription Agreement entered into by the Company
      on or
      about the date of this Agreement is outstanding or at any time during the
      pendency of an Event of Default (as defined in the Note), which has not bee
      cured or waived, except as described on Schedule 9(p) without the consent of
      the
      Subscriber, the Company will not and will not permit any of its Subsidiaries
      to
      directly or indirectly:

    


    (i) create,
      incur, assume or suffer to exist any pledge, hypothecation, assignment, deposit
      arrangement, lien, charge, claim, security interest, security title, mortgage,
      security deed or deed of trust, easement or encumbrance, or preference, priority
      or other security agreement or preferential arrangement of any kind or nature
      whatsoever (including any lease or title retention agreement, any financing
      lease having substantially the same economic effect as any of the foregoing,
      and
      the filing of, or agreement to give, any financing statement perfecting a
      security interest under the Uniform Commercial Code or comparable law of any
      jurisdiction) (each, a “Lien”)
      upon
      any of its property, whether now owned or hereafter acquired except for (i)
      the
      Excepted Issuances (as defined in Section 12(a) hereof), (ii) (a) Liens imposed
      by law for taxes that are not yet due or are being contested in good faith
      and
      for which adequate reserves have been established in accordance with generally
      accepted accounting principles; (b) carriers’, warehousemen’s, mechanics’,
      material men’s, repairmen’s and other like Liens imposed by law, arising in the
      ordinary course of business and securing obligations that are not overdue by
      more than 30 days or that are being contested in good faith and by appropriate
      proceedings; (c) pledges and deposits made in the ordinary course of business
      in
      compliance with workers’ compensation, unemployment insurance and other social
      security laws or regulations; (d) deposits to secure the performance of bids,
      trade contracts, leases, statutory obligations, surety and appeal bonds,
      performance bonds and other obligations of a like nature, in each case in the
      ordinary course of business; (e) Liens created with respect to the financing
      of
      the purchase of new property in the ordinary course of the Company’s business up
      to the amount of the purchase price of such property, or (f) easements, zoning
      restrictions, rights-of-way and similar encumbrances on real property imposed
      by
      law or arising in the ordinary course of business that do not secure any
      monetary obligations and do not materially detract from the value of the
      affected property (each of (a) through (f), a “Permitted
      Lien”)
      and
      (iii) indebtedness for borrowed money which is not senior or pari passu in
      right
      of payment to the payment of the Notes;


    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    


         (ii) amend
      its
      certificate of incorporation, bylaws or its charter documents other than to
      increase the number of shares of common and/or preferred stock that it is
      authorized to issue and file certificates of designations to designations for
      its preferred stock or to effect a reverse split of common stock so as to
      adversely affect any rights of the Subscribers;

    


    (iii) repay,
      repurchase or offer to repay, repurchase or otherwise acquire or make any
      dividend or distribution in respect of any of its Common Stock, preferred stock,
      or other equity securities other than to the extent permitted or required under
      the Transaction Documents;

    


    (iv) prepay
      any financing related debt obligations; or

    


    (v) engage
      in
      any transactions with any officer, director, employee or any Affiliate of the
      Company, including any contract, agreement or other arrangement providing for
      the furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the knowledge of the Company, any entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner, in each case in excess of $20,000
      other than (i) for payment of salary or consulting fees for services rendered,
      (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
      for
      other employee benefits, including stock option agreements under any stock
      option plan of the Company.

     

    (q) Seniority.
      Except
      for Permitted Liens and as otherwise provided for herein, until the Notes are
      fully satisfied or converted, the Company shall not grant nor allow any security
      interest to be taken in the assets of the Company or any Subsidiary; nor issue
      any debt, equity or other instrument which would give the holder thereof
      directly or indirectly, a right in any assets of the Company or any Subsidiary,
      superior to any right of the holder of a Note in or to such assets.

    


    (r) Notices.
      For so
      long as the Subscribers hold any Securities, the Company will maintain a United
      States address and United States fax number for notices purposes under the
      Transaction Documents.

     

    (s) Lockup.
      The
      Company will deliver to the Subscribers on or before the Closing Date and
      enforce the provisions of an irrevocable lockup agreement (“Lockup
      Agreement”)
      in the
      form annexed hereto as Exhibit
      I,
      with
      the persons identified on Schedule
      9(s).

    


    (t) [Left
      intentionally blank]

    


    (v) [Left
      intentionally blank]

    


    (w) Research
      and Development. The
      Company will suspend all research and development projects and expenditure
      until
      the Company achieves profitability and cash flow positive result for three
      (3)
      consecutive months. Schedule
      9(w)
      shows
      how the breakeven will be calculated. 

    


    (x) Overhead
      Reduction. The
      Company has terminated either prior to or as of the date of this Agreement,
      four
      employees. The terminated employees are identified on Schedule
      9(x).

    


    (y) Patent
      Protection.
      The
      Company undertakes to hire Byron Ball, Esq. to litigate all patent issues
      affecting the Company.

    


    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    (z) Guarantees. As
      further security the Company will arrange for Anthony Cataldo to guaranty the
      obligations of the Company to the Subscribers up to $65,000. Copies of the
      guarantees (“Guarantees”)
      are
      attached hereto as Exhibit
      K.

    


    (aa) [Left
      intentionally blank]

    


    (bb) Code.
      On or
      prior to the Initial Closing Date the Company will deliver to the Collateral
      Agent the code for all its proprietary software.

    


    (cc) DTC
      and NOBU.
      Upon
      request by a Subscriber the Company will provide weekly DTC and NOBU lists
      to
      such Subscriber.

    


    (dd) Conversion
      Agents.
      The
      Company hereby undertakes to take reasonable efforts after initial closing
      to
      have the Conversion Agency Agreement (the "Agreement") executed by its
      transfer agent, American Stock Transfer & Trust Company ("AST").  If
      AST will not execute the Agreement, the Company shall seek to engage another
      transfer agent who will execute the Agreement; provided however, that
      if the Company's reasonable post-closing efforts to engage a suitable
      transfer agent who will execute the Agreement fails to result in full execution
      of the Agreement by a transfer agent reasonably acceptable to the company,
      such
      failure shall not constitute a default of the Agreement or other Transaction
      Documents. 
      

    


    (ee) Outstanding
      Obligations. All the past due accounts payable, notes and any other obligations
      of the Company are listed on Schedule
      9(ee).

    


    (ff) Executive
      Waivers.
      The
      Company will deliver to the Subscribers on or before the Initial
      Closing
      Date and enforce the provisions of a default waiver (“Default
      Waiver”)
      in the
      form annexed hereto as Exhibit
      N,
      with
      the persons identified on Schedule
      9(ff) such
      person being all the executives of the Company.

     

    10. Covenants
      of the Company and Subscribers Regarding Indemnification.

     

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

     

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

     

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


    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (d) The
      procedures set forth in Section 11.1 shall apply to the indemnification set
      forth in Sections 10(a) and 10(b) above.

     

    11.1. Indemnification
      and Contribution.

     

    (a) In
      the
      event of a registration of any Securities under the 1933 Act, the Company will,
      to the extent permitted by law, indemnify and hold harmless the Seller, each
      officer of the Seller, each director of the Seller, each underwriter of such
      Securities thereunder and each other person, if any, who controls such Seller
      or
      underwriter within the meaning of the 1933 Act, against any losses, claims,
      damages or liabilities, joint or several, to which the Seller, or such
      underwriter or controlling person may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any registration statement
      under which such Securities was registered under the 1933 Act pursuant to
      Section 11, any preliminary prospectus or final prospectus contained therein,
      or
      any amendment or supplement thereof, or arise out of or are based upon the
      omission or alleged omission to state therein a material fact required to be
      stated therein or necessary to make the statements therein not misleading in
      light of the circumstances when made, and will subject to the provisions of
      Section 11.1(c) reimburse the Seller, each such underwriter and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action; provided, however, that the Company shall not be liable
      to
      the Seller to the extent that any such damages arise out of or are based upon
      an
      untrue statement or omission made in any preliminary prospectus if (i) the
      Seller failed to send or deliver a copy of the final prospectus delivered by
      the
      Company to the Seller with or prior to the delivery of written confirmation
      of
      the sale by the Seller to the person asserting the claim from which such damages
      arise, (ii) the final prospectus would have corrected such untrue statement
      or
      alleged untrue statement or such omission or alleged omission, or (iii) to
      the
      extent that any such loss, claim, damage or liability arises out of or is based
      upon an untrue statement or alleged untrue statement or omission or alleged
      omission so made in conformity with information furnished by any such Seller,
      or
      any such controlling person in writing specifically for use in such registration
      statement or prospectus. 

     

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


    
      
         

      

      
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    (c) Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to such indemnified party other
      than under this Section 11.1(c) and shall only relieve it from any liability
      which it may have to such indemnified party under this Section 11.1(c), except
      and only if and to the extent the indemnifying party is prejudiced by such
      omission. In case any such action shall be brought against any indemnified
      party
      and it shall notify the indemnifying party of the commencement thereof, the
      indemnifying party shall be entitled to participate in and, to the extent it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such indemnified party, and, after notice from the indemnifying
      party to such indemnified party of its election so to assume and undertake
      the
      defense thereof, the indemnifying party shall not be liable to such indemnified
      party under this Section 11.1(c) for any legal expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof other than
      reasonable costs of investigation and of liaison with counsel so selected,
      provided, however, that, if the defendants in any such action include both
      the
      indemnified party and the indemnifying party and the indemnified party shall
      have reasonably concluded that there may be reasonable defenses available to
      it
      which are different from or additional to those available to the indemnifying
      party or if the interests of the indemnified party reasonably may be deemed
      to
      conflict with the interests of the indemnifying party, the indemnified parties,
      as a group, shall have the right to select one separate counsel and to assume
      such legal defenses and otherwise to participate in the defense of such action,
      with the reasonable expenses and fees of such separate counsel and other
      expenses related to such participation to be reimbursed by the indemnifying
      party as incurred.

     

    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the 1933 Act in any case in which either (i) a Seller, or any controlling
      person of a Seller, makes a claim for indemnification pursuant to this Section
      11.1 but it is judicially determined (by the entry of a final judgment or decree
      by a court of competent jurisdiction and the expiration of time to appeal or
      the
      denial of the last right of appeal) that such indemnification may not be
      enforced in such case notwithstanding the fact that this Section 11.1 provides
      for indemnification in such case, or (ii) contribution under the 1933 Act may
      be
      required on the part of the Seller or controlling person of the Seller in
      circumstances for which indemnification is not provided under this Section
      11.1;
      then, and in each such case, the Company and the Seller will contribute to
      the
      aggregate losses, claims, damages or liabilities to which they may be subject
      (after contribution from others) in such proportion so that the Seller is
      responsible only for the portion represented by the percentage that the public
      offering price of its securities offered by the registration statement bears
      to
      the public offering price of all securities offered by such registration
      statement, provided, however, that, in any such case, (y) the Seller will not
      be
      required to contribute any amount in excess of the public offering price of
      all
      such securities sold by it pursuant to such registration statement; and (z)
      no
      person or entity guilty of fraudulent misrepresentation (within the meaning
      of
      Section 11(f) of the 1933 Act) will be entitled to contribution from any person
      or entity who was not guilty of such fraudulent misrepresentation.

     

    11.2 Delivery
      of Unlegended Shares.

     

    (a) Within
      three (3) business days (such third business day being the “Unlegended
      Shares Delivery Date”)
      after
      the business day on which the Company has received (i) a notice that Shares
      or
      any other Common Stock held by a Subscriber have been sold pursuant to the
      Registration Statement or Rule 144 under the 1933 Act provided it has enough
      authorized common and or preferred stock, (ii) a representation that the
      prospectus delivery requirements, or the requirements of Rule 144, as applicable
      and if required, have been satisfied, and (iii) the original share certificates
      representing the shares of Common Stock that have been sold, and (iv) in the
      case of sales under Rule 144, customary representation letters of the Subscriber
      and/or Subscriber’s broker regarding compliance with the requirements of Rule
      144, the Company at its expense, (y) shall deliver, and shall cause legal
      counsel selected by the Company to deliver to its transfer agent (with copies
      to
      Subscriber) an appropriate instruction and opinion of such counsel, directing
      the delivery of shares of Common Stock without any legends including the legend
      set forth in Section 4(i)
      above,
      reissuable pursuant to any effective and current Registration Statement or
      pursuant to Rule 144 under the 1933 Act (the “Unlegended
      Shares”);
      and
      (z) cause the transmission of the certificates representing the Unlegended
      Shares together with a legended certificate representing the balance of the
      submitted Shares certificate, if any, to the Subscriber at the address specified
      in the notice of sale, via express courier, by electronic transfer or otherwise
      on or before the Unlegended Shares Delivery Date. 


    
      
         

      

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

    


    (c) The
      Company understands that a delay in the delivery of the Unlegended Shares
      pursuant to Section 11 hereof later than two business days after the Unlegended
      Shares Delivery Date could result in economic loss to a Subscriber. As
      compensation to a Subscriber for such loss, the Company agrees to pay late
      payment fees (as liquidated damages and not as a penalty) to the Subscriber
      for
      late delivery of Unlegended Shares in the amount of $100 per business day after
      the Delivery Date for each $10,000 of purchase price of the Unlegended Shares
      subject to the delivery default. If during any 360 day period, the Company
      fails
      to deliver Unlegended Shares as required by this Section 11.7 for an aggregate
      of thirty (30) days, then Subscriber or assignee holding Securities subject
      to
      such default may, at its option, require the Company to redeem all or any
      portion of the Shares subject to such default at a price per share equal to
      the
      greater of (i) 120%, or (ii) a fraction in which the numerator is the highest
      closing price during the aforedescribed thirty day period and the denominator
      of
      which is the lowest conversion price during such thirty day period, multiplied
      by the Purchase Price of such Common Stock and Shares (“Unlegended
      Redemption Amount”).
      The
      amount of the aforedescribed liquidated damages that have accrued or been paid
      for the ten day period prior to the receipt by the Subscriber of the Unlegended
      Redemption Amount shall be credited against the Unlegended Redemption Amount.
      The Company shall pay any payments incurred under this Section in immediately
      available funds upon demand.

    


    (d) In
      addition to any other rights available to a Subscriber, if the Company fails
      to
      deliver to a Subscriber Unlegended Shares as required pursuant to this
      Agreement, within seven (7) business days after the Unlegended Shares Delivery
      Date and the Subscriber or a broker on the Subscriber’s behalf, purchases (in an
      open market transaction or otherwise) shares of common stock to deliver in
      satisfaction of a sale by such Subscriber of the shares of Common Stock which
      the Subscriber was entitled to receive from the Company (a "Buy-In"),
      then
      the Company shall pay in cash to the Subscriber (in addition to any remedies
      available to or elected by the Subscriber) the amount by which (A) the
      Subscriber's total purchase price (including brokerage commissions, if any)
      for
      the shares of common stock so purchased exceeds (B) the aggregate purchase
      price
      of the shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares  together
      with interest thereon at a rate of 15% per annum, accruing until such amount
      and
      any accrued interest thereon is paid in full (which amount shall be paid as
      liquidated damages and not as a penalty). For
      example, if a Subscriber purchases shares of Common Stock having a total
      purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
      price of shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares, the Company shall be required to pay the Subscriber
      $1,000,
      plus interest. The
      Subscriber shall provide the Company written notice indicating the amounts
      payable to the Subscriber in respect of the Buy-In.

    


    (e) In
      the
      event a Subscriber shall request delivery of Unlegended Shares as described
      in
      Section 11.7 and the Company is required to deliver such Unlegended Shares
      pursuant to Section 11.7, the Company may not refuse to deliver Unlegended
      Shares based on any claim that such Subscriber or any one associated or
      affiliated with such Subscriber has been engaged in any violation of law, or
      for
      any other reason, unless, an injunction or temporary restraining order from
      a
      court, on notice, restraining and or enjoining delivery of such Unlegended
      Shares shall have been sought and obtained by the Company or at the Company’s
      request or with the Company’s assistance,
      and the
      Company has posted a surety bond for the benefit of such Subscriber in the
      amount of 120% of the amount of the aggregate purchase price of the Common
      Stock
      and Shares which are subject to the injunction or temporary restraining order,
      which bond shall remain in effect until the completion of arbitration/litigation
      of the dispute and the proceeds of which shall be payable to such Subscriber
      to
      the extent Subscriber obtains judgment in Subscriber’s favor.


    
      
         

      

      
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    12. Additional
      Agreements.

    


    (a) Issuance
      of other Securities.
      Other
      than with respect to the Excepted Issuances , and subject and subordinate to
      similar rights granted by the Company prior to the Closing Date, until the
      Notes
      are no longer outstanding, the Company will not issue any of its Common Stock
      or
      other securities or debt obligations, or instruments convertible into or
      exchangeable for Common Stock without the consent of the Subscribers, except
      in
      connection with (i) full or partial consideration in connection with a strategic
      merger, acquisition, consolidation or purchase of substantially all of the
      securities or assets of corporation or other entity which holders of such
      securities or debt are not at any time granted registration rights, (ii)
      the
      Company’s issuance of securities in connection with strategic license agreements
      and other partnering arrangements so long as such issuances are not for the
      purpose of raising capital and which
      holders of such securities or debt are not at any time granted registration
      rights,
      (iii)
      the Company’s issuance of Common Stock or the issuances or grants of options to
      purchase Common Stock pursuant to stock option plans and employee, director
      or
      consultant stock purchase plans described on Schedule
      5(d)
      hereto
      at prices equal to or higher than the closing price of the Common Stock on
      the
      issue date of any of the foregoing, (iv) as a result of the or conversion of
      Notes or
      the
      Preferred Stock
      which
      are granted or issued pursuant to this Agreement or that have been issued prior
      to the Closing Date, the issuance of which has been disclosed in a Report filed
      not less than five (5) days prior to the Closing Date, (v) the payment of any
      interest on the Notes and liquidated damages or other damages pursuant to the
      Transaction Documents or other securities instruments that have been issued
      prior to the Closing Date, the issuance of which has been disclosed in a Report
      filed not less than five days prior to the Closing Date, and (vi) the issuances
      listed on Schedule
      12(a) (collectively
      the foregoing are “Excepted
      Issuances”).
      The
      aggregate amount of Common Stock that may be issued as Excepted Issuances under
      items 12(a)(i), (ii) and (iii) may not exceed 1,000,000 shares of Common Stock.
      The Excepted Issuances may be modified as to all Subscribers with the consent
      of
      the Subscriber. The Subscriber who exercise their rights pursuant to this
      Section 12(a) shall have the right during the seven (7) business days following
      receipt of the notice to purchase in the aggregate such offered convertible
      debt
      instruments or other securities in accordance with the terms and conditions
      set
      forth in the notice of sale in the same proportion to each other as their
      purchase of Notes in the Offering. In the case of Common stock or equity of
      the
      Company convertible, exercisable or exchangeable for Common Stock, the
      Subscriber may purchase an amount equal to the aggregate purchase prices of
      all
      of the debt or equity of the Company ever purchased by such Subscriber pursuant
      to a Subscription Agreement or conversion of a Preferred Stock. In the event
      such terms and conditions are modified during the notice period, the Subscriber
      shall be given prompt notice of such modification and shall have the right
      during the seven (7) business days following the notice of modification to
      exercise such right. 

    


    (b) Favored
      Nations Provision.
      Other
      than in connection with the Excepted Issuances, if at any time Notes
or
      the
      Preferred Stock
      are
      outstanding, the Company shall offer, issue or agree 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) to any person or entity
      at
      a price per share or conversion or exercise price per share which shall be
      less
      than the Conversion Price in respect of the Shares, without the consent of
      Subscriber holding Notes, Shares, or Preferred
      Stock,
      then
      the Company shall issue, for each such occasion, additional shares of Common
      Stock to Subscriber so that the average per share purchase price of the shares
      of Common Stock issued to the Subscriber (of only the Common Stock or Preferred
      Conversion Shares still owned by the Subscriber) is equal to such other lower
      price per share and the Conversion Price shall automatically be reduced to
      such
      lower price. The average Purchase Price of the Shares shall be calculated
      separately for the Note Shares and Preferred Shares. The foregoing calculation
      and issuance shall be made separately for Shares received upon conversion and
      separately for Preferred Stock Shares. The delivery to the Subscriber of the
      additional shares of Common Stock shall be not later than the closing date
      of
      the transaction giving rise to the requirement to issue additional shares of
      Common Stock. For purposes of the issuance and adjustment described in this
      paragraph, the issuance of any security of the Company carrying the right to
      convert such security into shares of Common Stock or of any warrant, right
      or
      option to purchase Common Stock shall result in the issuance of the additional
      shares of Common Stock upon the sooner of the agreement to or actual issuance
      of
      such convertible security, warrant, right or option and again at any time upon
      any subsequent issuances of shares of Common Stock upon exercise of such
      conversion or purchase rights if such issuance is at a price lower than the
      Conversion Price or in effect upon such issuance. The rights of the Subscriber
      set forth in this Section 12 are in addition to any other rights the Subscriber
      has pursuant to this Agreement, the Note, any Transaction Document, and any
      other agreement referred to or entered into in connection herewith. The
      Subscriber is also given the right to elect to substitute any term or terms
      of
      any other offering in connection with which the Subscriber has rights as
      described in Section 12(a), for any term or terms of the Offering in connection
      with Securities owned by Subscriber as of the date the notice described in
      Section 12(a) is required to be given to Subscriber.


    
      
         

      

      
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    (c) Maximum
      Exercise of Rights.
      In the
      event the exercise of the rights described in Section 12(a) or
      12(b)
      would or could result in the issuance of an amount of common stock of the
      Company that would exceed the maximum amount that may be issued to a Subscriber
      calculated in the manner described in Section 7.3 of this 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
      applicable maximum amount set forth calculated in the manner described in
      Section 7.3 of this Agreement. The determination of when such common stock
      may
      be issued shall be made by Subscriber as to only such Subscriber.

     

    13. Security
      Interest.
      On or
      about July 5, 2005, January 6, 2006, February 2, 2006, the October Subscription
      Agreements, February 16, 2007, and September 12, 2007, the Subscribers were
      granted a security interest in assets of the Company and Subsidiaries (as
      defined in Section 5(a) of this Agreement), including ownership of the
      Subsidiaries. The security interest was memorialized in Security Agreements.
      Each Subsidiary executed and delivered to the Subscribers a form of Guaranty.
      The Company and Subsidiaries will execute such other agreements, documents
      and
      financing statements reasonably requested by Subscribers to affirm such security
      agreement, which will be filed at the Company’s expense with such jurisdictions,
      states and counties designated by the Subscribers. The
      Company and Subsidiaries will also execute all such documents reasonably
      necessary in the opinion of Subscribers to memorialize and further protect
      the
      security interest described herein. The Subscribers appointed a Collateral
      Agent
      to represent them collectively in connection with the security interest. The
      appointment was pursuant to a Collateral Agent Agreement. The Notes and all
      sums
      due under the Notes and the Transaction Documents (as defined in Section 5(c)
      above) are included in the term “Obligations”
as
      defined in the Security Agreements and are secured by the Collateral (as defined
      in the Security Agreements) in the same manner and having the same priority
      as
      granted to the Subscribers pursuant to the Security Agreements. The Subsidiaries
      by signing this Agreement consent and agree that the Guarantees provided by
      them
      on or about January 6, 2006, include as guaranteed obligations all sums which
      may become due to the Subscribers under the Transaction Documents (as defined
      in
      Section 5(c)). The Company and Subscribers agree that Schedule
      13
      hereto
      sets forth as of the date stated therein, the principal and interest outstanding
      on Notes issued by the Company to the Subscribers which are included as
“Obligations”
under
      various “Security Agreements” to which the Company and Subscribers are parties.
      Such “Obligations”
include
      additional amounts as described in the documents and other agreements entered
      into in connection with such “Obligations”.
      The
      Subscribers agree that their interests in all Obligations are pari passu in
      proportion to their specific Obligation amounts and of equal priority with
      each
      other. The Subscribers, Company, and Subsidiaries agree that the Collateral
      Agent Agreement dated as of February 2, 2006 is the Collateral Agent Agreement
      which shall govern the rights and obligations of the Subscribers in connection
      with the Obligations and shall remain in full force and effect except as
      modified in this Agreement. The Subscribers agree that for so long as any
      Obligations relating to the Obligations as set forth on Schedule
      13
      hereto
      and other sums which may become Obligations which derive from such stated
      Obligations (“Schedule
      13 Obligations”),
      remain outstanding, “Majority
      In Interest”
as
      employed in the Collateral Agent Agreement shall relate only to holders of
      such
      described Obligations. After such Schedule
      13
      Obligations are no longer outstanding, Majority In Interest shall be determined
      among the holders of all other Obligations. As employed in this Agreement,
      “Subscribers”
      includes assignees of a Subscriber who by their signature on the signature
      pages
      hereto are deemed to be and become parties to the Security Agreements and
      Collateral Agent Agreement and become beneficiaries of all the rights and
      benefits of the other Subscribers and assume the corresponding obligations,
      and
      assignors who hold any portion of the Obligations. Not withstanding anything
      to
      the contrary in any agreement or document to which the Company and the Secured
      lenders are parties the relative rights of the Secured lender in the assets
      of
      the Company shall be decided in accordance with the terms of the increditor
      agreements dated September 12, 2007 and the Intercreditor Agreement of the
      same
      date as this Agreement.


    
      
         

      

      
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    14. Miscellaneous.

     

    (a) Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Company, to: VoIP,
      Inc., 151 So. Wymore Road, Suite 3000, Altamonte Springs, FL 32714, Attn:
      Anthony Cataldo, CEO, telecopier: (407) 389-3233, with a copy by telecopier
      only
      to: Sichenzia
      Ross Friedman Ference LLP, 61 Broadway, 32nd
      Floor,
      New York, NY 10006, Attn: Marc Ross, Esq., telecopier:
      (212) 930-9725, and (ii) if to the Subscribers, to: the one or more addresses
      and telecopier numbers indicated on the signature pages hereto, with an
      additional copy by telecopier only to: Grushko & Mittman, P.C., 551 Fifth
      Avenue, Suite 1601, New York, New York 10176, telecopier number: (212)
      697-3575.

     

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

     

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

     

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


    
      
         

      

      
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    (e) Specific
      Enforcement, Consent to Jurisdiction.
      To the
      extent permitted by law, the Company and Subscribers acknowledge and agree
      that
      irreparable damage would occur in the event that any of the provisions of this
      Agreement were not performed in accordance with their specific terms or were
      otherwise breached. It is accordingly agreed that the parties shall be entitled
      to one or more preliminary and final injunctions to prevent or cure breaches
      of
      the provisions of this Agreement and to enforce specifically the terms and
      provisions hereof, this being in addition to any other remedy to which any
      of
      them may be entitled by law or equity. Subject to Section 14(d) hereof, each
      of
      the Company, Subscribers and any signator hereto in his personal capacity hereby
      waives, and agrees not to assert in any such suit, action or proceeding, any
      claim that it is not personally subject to the jurisdiction in New York of
      such
      court, that the suit, action or proceeding is brought in an inconvenient forum
      or that the venue of the suit, action or proceeding is improper. Nothing in
      this
      Section shall affect or limit any right to serve process in any other manner
      permitted by law.

     

    (f) Independent
      Nature of Subscriber.  
        The
      Company acknowledges that the obligations of Subscriber under the Transaction
      Documents are several and not joint with the obligations of any other
      Subscriber, and no Subscriber shall be responsible in any way for the
      performance of the obligations of any other Subscriber under the Transaction
      Documents. The
      Company acknowledges that Subscriber has represented that the decision of
      Subscriber to purchase Securities has been made by such Subscriber independently
      of any other Subscriber and independently of any information, materials,
      statements or opinions as to the business, affairs, operations, assets,
      properties, liabilities, results of operations, condition (financial or
      otherwise) or prospects of the Company which may have been made or given by
      any
      other Subscriber or by any agent or employee of any other Subscriber, and no
      Subscriber or any of its agents or employees shall have any liability to any
      Subscriber (or any other person) relating to or arising from any such
      information, materials, statements or opinions.  The
      Company acknowledges that nothing contained in any Transaction Document, and
      no
      action taken by any Subscriber pursuant hereto or thereto (including, but not
      limited to, the (i) inclusion of a Subscriber in the Registration Statement
      and
      (ii) review by, and consent to, such Registration Statement by a Subscriber)
      shall be deemed to constitute the Subscriber as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Subscriber are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction Documents. 
The Company acknowledges that Subscriber shall be entitled to independently
      protect and enforce its rights, including without limitation, the rights arising
      out of the Transaction Documents, and it shall not be necessary for
      any other Subscriber to be joined as an additional party in any proceeding
      for
      such purpose.  The Company acknowledges that it has elected to provide all
      Subscriber with the same terms and Transaction Documents for the convenience
      of
      the Company and not because Company was required or requested to do so by the
      Subscriber. The Company acknowledges that the Aggregate Purchase Price is being
      delivered and paid in its current form at the request of the Company and not
      because of any request by the Subscribers.  The Company acknowledges that
      such procedure with respect to the Transaction Documents in no way creates
      a
      presumption that the Subscriber are in any way acting in concert or as a group
      with respect to the Transaction Documents or the transactions
      contemplated thereby.

     

    (f) Damages.
      In the
      event the Subscriber is entitled to receive any liquidated damages pursuant
      to
      the Transaction Documents, the Subscriber may elect to receive the greater
      of
      actual damages or such liquidated damages.

     

    (g) Consent.
      As used
      in the Agreement, “consent of the Subscriber” or similar language means the
      consent of holders of not less than 65% of the total of the Shares issued and
      issuable upon conversion of outstanding Notes owned by Subscriber on the date
      consent is requested.

     

    (h) Equal
      Treatment.
      No
      consideration shall be offered or paid to any person to amend or consent to
      a
      waiver or modification of any provision of the Transaction Documents unless
      the
      same consideration is also offered and paid to all the Subscriber and their
      permitted successors and assigns.


    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (A)

    


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

    

      
        	 	
                VOIP,
                  INC.

              
	 	
                a
                  Texas corporation

              
	 	 
	 	 
	 	
                By:_________________________________

              
	 	 	
                Name:

              
	 	 	
                Title:

              
	 	 	 
	 	 	
                Dated:
                  December 18, 2007

              


      

    

     

    

      
        	
                Subscriber

              	
                First Closing

                Purchase Price

              	
                First Closing

                Principal Amount

              	
                First Closing

                New Note

                Preferred Stock

              	
                Old Note

                Preferred Stock

              
	
                Name
                  of Subscriber:

                Alpha
                  Capital Anstalt

                 

                Address:

                Pradafant
                  7

                9490
                  Furstentums

                Vaduz,
                  Lichtenstein

                 

                Fax
                  Number:

                ***

                 

                TIN
                  (if applicable)___________

                 

                __________________________

                (signature)

                By:
                  

                Its: 

              	
                 $305,702.53

              	
                $351,557.91 

              	
                305,703

              	
                3,396,695 

              
	
                Second
                  Closing

                Purchase
                  Price

              	
                Second
                  Closing

                Principal
                  Amount

              	
                Second
                  Closing

                New
                  Note Preferred Stock

              	 
	
                 $152,851.27

              	
                 $175,778.96 

              	
                 152,851

              	 
	
                Third
                  Closing

                Purchase
                  Price

              	
                Third
                  Closing

                Principal
                  Amount

              	
                Third
                  Closing

                New
                  Note Preferred Stock

              	 
	
                 $152,851.27

                 

                 

                 

                 

              	
                 $175,778.96 

                 

                 

                 

                 

              	
                 152,851

                 

                 

                 

                 

              	 


      

    

    
      

        
          
             

          

          
            27

            
              

            

          

          
             

          

        

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (B)

    


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

    

      
        	 	
                VOIP,
                  INC.

              
	 	
                a
                  Texas corporation

              
	 	 
	 	 
	 	
                By:_________________________________

              
	 	 	
                Name:

              
	 	 	
                Title:

              
	 	 	 
	 	 	
                Dated:
                  December 18, 2007

              


      

    

     

    


    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Brio
                Capital, L.P.

               

              Address:

              523
                Albermale Road

              Cedarhurst,
                NY 11516

               

              Fax
                Number:

              ***

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:
                

              Its:

            	
               $20,332.82

            	
               $23,382.74

            	
               20,333

            	
               225,920

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
               $10,166.41

            	
              $11,691.37 

            	
               10,166

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
              $10,166.41

               

               

               

            	
               $11,691.37

               

               

               

            	
               10,166

               

               

               

            	 


    

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (C)

    


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

    

      
        	 	
                VOIP,
                  INC.

              
	 	
                a
                  Texas corporation

              
	 	 
	 	 
	 	
                By:_________________________________

              
	 	 	
                Name:

              
	 	 	
                Title:

              
	 	 	 
	 	 	
                Dated:
                  December 18, 2007

              


      

    

    
 

    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Bristol
                Investment Fund, Ltd.

               

              Address:

              c/o
                Bristol Capital Advisers, LLC

              10990
                Wilshire Boulevard, Suite 1410

              Los
                Angeles, California 90024

               

              Fax
                Number:

              ***

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:
                

            	
               $250,000.00

            	
               $287,500.00

            	
               250,000

            	
               1,673,042

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
              $25,000.00

            	
                $28,750.00

            	
               25,000

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
               $25,000.00 

               

               

               

               

               

               

            	
              $28,750.00

               

               

               

               

               

               

            	
               25,000

               

               

               

               

               

               

            	 


    

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (D)

    


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

    


    
      	 	
              VOIP,
                INC.

            
	 	
              a
                Texas corporation

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	 	
              Name:

            
	 	 	
              Title:

            
	 	 	 
	 	 	
              Dated:
                December 18, 2007

            


    

     

     

    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Centurion
                Microcap, L.P.

               

              Address:

              3014
                Avenue L

              Brooklyn,
                NY 11210

               

              Fax
                Number:

              ***

               

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:

            	
              $150,000.00

            	
               $172,500.00

            	
               150,000

            	
               1,668,309

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
               $75,000.00

            	
               $86,250.00

            	
                75,000

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
               $75,000.00

               

               

               

            	
              $86,250.00

               

               

               

            	
              75,000

               

               

               

            	 


    

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (E)

    


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

    


    
      	 	
              VOIP,
                INC.

            
	 	
              a
                Texas corporation

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 
	 	 	
              Dated:
                December 18, 2007

            


    

    
 

    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Chestnut
                Ridge Partners, L.P.

               

              Address:

              50
                Tice Boulevard

              Woodcliff
                Lake, NJ 07677

               

              Fax
                Number:

              ***

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:

            	
               $64,086.86

            	
               $73,699.88

            	
               64,087

            	
               712,076

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
                $32,043.43

            	
                $36,849.94

            	
                32,043

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
              $32,043.43

               

               

            	
              $36,849.94

               

               

            	
              32,043

               

               

            	 


    

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (F)

    


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

    


    VOIP,
      INC.

    a
      Texas
      corporation

    


    


    By:_________________________________

    Name:
      

    Title:
      

    


    Dated:
      December 18, 2007

    


    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              CMS
                Capital

               

              Address:

              9612
                Van Nuys Boulevard, Suite 108

              Panorama
                City, CA 91402

               

              Fax
                Number:

              ***
                

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:

            	
               $28,857.57

            	
               $33,186.20

            	
               28,858

            	
               320,640

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
               $14,428.78

            	
                $16,593.10

            	
               14,429

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
               $14,428.78

               

               

               

            	
              $16,593.10

               

               

               

            	
               14,429

               

               

               

            	 


    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (G)

    


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

    


    
      	 	
              VOIP,
                INC.

            
	 	
              a
                Texas corporation

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 
	 	 	
              Dated:
                December 18, 2007

            


    

     

    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Double
                U Master Fund, L.P.

               

              Address:

              c/o
                Navigator Management, Ltd.

              Harbor
                House, Waterfront Drive, P.O Box 972

              Road
                Town BVI

               

              Fax
                Number:

              ***

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:

            	
               $26,092.88

            	
               $30,006.82

            	
               26,093

            	
               289,921

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
               $13,046.44

            	
                $15,003.41

            	
               13,046 

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
               $13,046.44

               

               

               

               

               

            	
              $15,003.41

               

               

               

               

               

            	
              13,046

               

               

               

               

               

            	 


    

    



    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (H)

    


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

    


    
      	 	
              VOIP,
                INC.

            
	 	
              a
                Texas corporation

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 
	 	 	
              Dated:
                December 18, 2007

            


    

    


    


    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Ellis
                International Ltd.

               

              Address:

              53rd
                Street Urbanizacion Obarrio

              Swiss
                Tower, 16th
                Floor, Panama

              Republic
                of Panama

               

              Fax
                Number:

              ***

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:

            	
               $150,000.00

            	
               $172,500.00

            	
               150,000

            	
              1,671,488

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
                $75,000.00

            	
                $86,250.00

            	
              75,000

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
              $75,000.00

               

               

               

               

               

            	
              $86,250.00

               

               

               

               

               

            	
               75,000

               

               

               

               

               

            	 


    

    



    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (I)

    


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

    


    
      	 	
              VOIP,
                INC.

            
	 	
              a
                Texas corporation

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	 	
              Name:

            
	 	 	
              Title:

            
	 	 
	 	
                  Dated:
                December 18, 2007

            


    

    


    


    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Grushko
                & Mittman, P.C.

               

              Address:

              551
                Fifth Avenue, Suite 1601

              New
                York, New York 10176

               

              Fax
                Number:

              ***

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:

            	
               $5,402.42

            	
               $6,212.79

            	
               5,402

            	
               60,027

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
                $2,701.21

            	
                $3,106.39

            	
                2,701

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
                $2,701.21

               

               

            	
              $3,106.39

               

               

            	
              2,701

               

               

            	 


    

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (J)

    


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

    


    
      	 	
              VOIP,
                INC.

            
	 	
              a
                Texas corporation

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 
	 	 	
              Dated:
                December 18, 2007

            


    

     

    

      
        	
                Subscriber

              	
                First Closing

                Purchase Price

              	
                First Closing

                Principal Amount

              	
                First Closing

                New Note

                Preferred Stock

              	
                Old Note

                Preferred Stock

              
	
                Name
                  of Subscriber:

                Osher
                  Capital

                 

                Address:

                5
                  Sansberry Lane

                Spring
                  Valley, NY 10977

                 

                Fax
                  Number:

                ***

                 

                TIN
                  (if applicable)___________

                 

                __________________________

                (signature)

                By:

              	
                 $3,909.87

              	
                $4,496.35

              	
                3,910

              	
                43,443

              
	
                Second
                  Closing

                Purchase
                  Price

              	
                Second
                  Closing

                Principal
                  Amount

              	
                Second
                  Closing

                New
                  Note Preferred Stock

              	 
	
                   $1,954.94

              	
                $2,248.18

              	
                1,955

              	 
	
                Third
                  Closing

                Purchase
                  Price

              	
                Third
                  Closing

                Principal
                  Amount

              	
                Third
                  Closing

                New
                  Note Preferred Stock

              	 
	
                 $1,954.94

                 

                 

              	
                $2,248.18

                 

                 

              	
                1,955

                 

                 

              	 


      

    

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (K)

    


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

    


    
      	 	
              VOIP,
                INC.

            
	 	
              a
                Texas corporation

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 
	 	 	
              Dated:
                December 18, 2007

            


    

    


    


    
      	
              Subscriber

            	
              First Closing

              Purchase Price

            	
              First Closing

              Principal Amount

            	
              First Closing

              New Note

              Preferred Stock

            	
              Old Note

              Preferred Stock

            
	
              Name
                of Subscriber:

              Platinum
                Long Term Growth II, Inc. 

               

              Address:

              152
                West 57th
                Street

              New
                York, NY 10019

               

              Fax
                Number:

               

              TIN
                (if applicable)___________

               

              __________________________

              (signature)

              By:

            	
               $59,653.52

            	
               $68,601.55

            	
               59,654

            	
               662,817

            
	
              Second
                Closing

              Purchase
                Price

            	
              Second
                Closing

              Principal
                Amount

            	
              Second
                Closing

              New
                Note Preferred Stock

            	 
	
                $29,826.76

            	
               $34,300.78

            	
               29,827

            	 
	
              Third
                Closing

              Purchase
                Price

            	
              Third
                Closing

              Principal
                Amount

            	
              Third
                Closing

              New
                Note Preferred Stock

            	 
	
              $29,826.76

               

               

            	
               $34,300.78

               

               

            	
               29,827

               

               

            	 


    

    



    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (L)

    


    LEFT
      INTENTIONALL Y BLANK


    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (M)

    


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

    


    VOIP,
      INC.

    a
      Texas
      corporation

    


    


    By:_________________________________

    Name:
      

    Title:
      

    


    Dated:
      December 18, 2007

     

    

      
        	
                Subscriber

              	
                First Closing

                Purchase Price

              	
                First Closing

                Principal Amount

              	
                First Closing

                New Note

                Preferred Stock

              	
                Old Note

                Preferred Stock

              
	
                Name
                  of Subscriber:

                Whalehaven
                  Capital Fund Limited

                 

                Address:

                c/o
                  FWS Capital Ltd.

                3rd
                  Floor, 14 Par-Laville Road

                Hamilton,
                  Bermuda HM08

                 

                Fax
                  Number:

                ***

                 

                TIN
                  (if applicable)___________

                 

                __________________________

                (signature)

                By:

              	
                 $284,483.74

              	
                 $327,156.30

              	
                 284,484

              	
                 3,160,930

              
	
                Second
                  Closing

                Purchase
                  Price

              	
                Second
                  Closing

                Principal
                  Amount

              	
                Second
                  Closing

                New
                  Note Preferred Stock

              	 
	
                  $142,241.87

              	
                  $163,578.15

              	
                  142,242

              	 
	
                Third
                  Closing

                Purchase
                  Price

              	
                Third
                  Closing

                Principal
                  Amount

              	
                Third
                  Closing

                New
                  Note Preferred Stock

              	 
	
                  $142,241.87

                 

                 

                 

                 

              	
                  $163,578.15

                 

                 

                 

                 

              	
                  142,242

                 

                 

                 

                 

              	 



    


    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    


    LIST
      OF EXHIBITS AND SCHEDULES

     

    

      
        	 	
                Exhibit
                  A

              	
                Form
                  of Note

              
	 	 	 
	 	
                Exhibit
                  B

              	
                Certificate
                  of Designation

              
	 	 	 
	 	
                Exhibit
                  C

              	
                Escrow
                  Agreement

              
	 	 	 
	 	
                Exhibit
                  D

              	
                Intercreditor
                  Agreement

              
	 	 	 
	 	
                Exhibit
                  E

              	
                Loan
                  Agreement

              
	 	 	 
	 	
                Exhibit
                  F

              	
                Lockbox
                  Escrow Agreement

              
	 	 	 
	 	
                Exhibit
                  G

              	
                Form
                  of Legal Opinion

              
	 	 	 
	 	
                Exhibit
                  H

              	
                Form
                  of 8K

              
	 	 	 
	 	
                Exhibit
                  I

              	
                Lockup
                  Agreement

              
	 	 	 
	 	
                Exhibit
                  K

              	
                Guarantees

              
	 	 	 
	 	
                Exhibit
                  M

              	
                Conversion
                  Agent Agreement

              
	 	 	 
	 	
                Exhibit
                  N

              	
                Default
                  Waiver

              
	 	 	 
	 	
                Schedule
                  5(a)

              	
                Subsidiaries

              
	 	 	 
	 	
                Schedule
                  5(d)

              	
                Additional
                  Issuances / Capitalization

              
	 	 	 
	 	
                Schedule
                  5(f)

              	
                Conflicts

              
	 	 	 
	 	
                Schedule
                  5(h)

              	
                Litigation

              
	 	 	 
	 	
                Schedule
                  5(i)

              	
                Reporting
                  Company

              
	 	 	 
	 	
                Schedule
                  5(k)

              	
                Information
                  Concerning Company

              
	 	 	 
	 	
                Schedule
                  5(m)

              	
                Defaults

              
	 	 	 
	 	
                Schedule
                  5(q)

              	
                Undisclosed
                  Liabilities

              
	 	 	 
	 	
                Schedule
                  5(r)

              	
                Undisclosed
                  Events or Circumstances

              
	 	 	 
	 	
                Schedule
                  5(u)

              	
                Disagreements

              
	 	 	 
	 	
                Schedule
                  5(v)

              	
                Transfer
                  Agent

              
	 	 	 
	 	
                Schedule
                  9(e)

              	
                Use
                  of Proceeds

              
	 	 	 
	 	
                Schedule
                  9(s)

              	
                Person
                  signing a Lockup Agreement

              
	 	 	 
	 	
                Schedule
                  9(w)

              	
                Cash
                  Flow and Profitability Calculation

              
	 	 	 
	 	
                Schedule
                  9(x)

              	
                Terminated
                  Employees

              
	 	 	 
	 	
                Schedule
                  9(ee)

              	
                Past
                  due outstanding obligations

              
	 	 	 
	 	
                Schedule
                  9(ff)

              	
                Person
                  signing a Default Waiver

              
	 	 	 
	 	
                Schedule
                  12(a)

              	
                Excepted
                  Issuances

              
	 	 	 
	 	
                Schedule
                  13

              	
                Obligations

              


      

    

     

    
      
         

      

      
        40