____________________

                         LocatePlus Holdings Corporation
                         -------------------------------
                              ____________________





     This offering consists of $750,000 of the Company's 5 Year Convertible
                         Debentures convertible into the
                             Company's Common Stock.



                              ____________________



                             SUBSCRIPTION AGREEMENT



                               ___________________

















<PAGE>

SUBSCRIPTION  PROCEDURES


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

     In  order to purchase Debentures, each subscriber must complete and execute
a  questionnaire  (the  "Questionnaire")  and  a  subscription  agreement  (the
"Subscription Agreement"). In addition, the Holder, as defined herein, must make
a  payment  for  the  amount  being  purchased  directly  to  the  Company.  All
subscriptions  are  subject  to acceptance by the Company, which shall not occur
until  the  Company  has  returned  the  signed  Company  Signature  Page.

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

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

     Payment  of  the  full subscription amount will be made by wire transfer by
Dutchess Private Equities Fund, LP (the "Holder") on or prior to the closing per
the  wire  instructions that will be established.  In the event of a termination
of  the  offering or the rejection of a subscription, subscription funds will be
returned  by  the  Company  without  interest  or  charges.











THE  SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN  RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE  TRANSFERRED  OR  RESOLD  EXCEPT  AS  PERMITTED  UNDER  SUCH LAWS PURSUANT TO
REGISTRATION  OR  AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS  OF  THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.
ANY  REPRESENTATION  TO  THE  CONTRARY  IS  UNLAWFUL.


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


To:     LocatePlus  Holdings  Corporation
        ---------------------------------

     This  Subscription  Agreement  is  made  between  LocatePlus  Holdings
                                                       --------------------
Corporation,  a  Delaware  corporation  (the  "Company"),  and  the  undersigned
           -
prospective  Holder  (the  "Holder") who is subscribing hereby for the Company's
convertible debentures (the "Debentures") on July 18, 2006. This subscription is
submitted  to  you  in  accordance  with and subject to the terms and conditions
described  in  this  Subscription Agreement, together with any Exhibits thereto,
relating to an offering (the "Offering") of Seven Hundred Fifty Thousand dollars
($750,000) of Debentures. The Offering is limited to accredited Investors and is
made  in  accordance  with  the  exemptions from registration provided for under
Section  4(2) of the 1933 Act and Rule 506 of Regulation D promulgated under the
1933  Act  ("Regulation  D").

     Contemporaneously  with  the  execution and delivery of this Agreement, the
parties  hereto  are  executing  and  delivering a Debenture Registration Rights
Agreement,  the  Debenture  Agreement,  Security Agreement and Warrant Agreement
(collectively,  the  "Transaction  Documents").

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

     (a)     The  closing shall be deemed to have occurred on July 13, 2006 (the
"Closing  Date"  or  a  "Closing").  The  Company shall pay twelve percent (12%)
annual coupon on the unpaid principal amount of this Debenture (the "Debenture")
at  such  times  and  in  such  amounts  as outlined in the Debenture Agreement.

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

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

     (d)   The  Holder  shall  fund  seven  hundred and fifty dollars ($750,000)
simultaneously on  the date the registration statement covering this Offering is
filed  with  the  United  States  Securities  and  Exchange  Commission ("SEC").

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


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

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

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

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

     (d)     The Holder will not sell, or otherwise dispose of the Debentures or
the  Common  Stock issued upon conversion of the Debentures without registration
under  the  1933  Act  or applicable state securities laws or compliance with an
exemption  therefrom  including  but  not  limited  to:  Rule  144A,  144  (k),
promulgated  under  the  Securities  Act of 1933 (herein after referred to as an
"Exemption").  The  Debentures  have  not  been registered under the 1933 Act or
under  the  securities laws of any state. Resales of the Common Stock underlying
the Debentures or issued in payment of accrued interest on the Debentures are to
be registered by the Company pursuant to the terms of the Debenture Registration
Rights  Agreement  incorporated  herein  and  made  a  part  hereof.

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

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

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

     If the Holder sends a Notice of Conversion (See Exhibit A attached hereto),
and  provided  a  registration  statement under the Securities Act of 1933 is in
effect  as  to  the sale, then in such event the Company shall have its transfer
agent  send  Holder  the  appropriate  number  of shares of Common Stock without
restrictive  legends  (other  than a legend referring to the resale registration
and  prospectus  delivery  requirements)  and  not  subject  to  stop  transfer
instructions.

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

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

      (i)     The  Holder  is  purchasing the Debentures for its own account for
investment,  and  not  with  a  view  toward the resale or distribution thereof,
except pursuant to sales registered or exempted from registration under the 1933
Act.  The  Holder  has  not  offered or sold any portion of the Debentures being
acquired  nor  does  the  Holder  have  any  present  intention  of dividing the
Debentures with others or of selling, distributing or otherwise disposing of any
portion  of  the  Debentures either currently or after the passage of a fixed or
determinable  period  of  time  or  upon the occurrence or non-occurrence of any
predetermined  event  or  circumstance  in  violation  of the 1933 Act provided,
however, that by making the representations herein, the Holder does not agree to
hold  any  of the Debentures for any minimum or other specific term and reserves
the  right  to  dispose  of  the  Debentures  at  any time in accordance with or
pursuant  to  a  registration statement or an exemption under the 1933 Act.  The
Holder  is  neither  an  underwriter  of, nor a dealer in, the Debentures or the
Common  Stock  issuable  upon conversion thereof or upon the payment of interest
thereon and is not participating in the distribution or resale of the Debentures
or  the  Common  Stock  issuable  upon  conversion  or  exercise  thereof.

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

3.     REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.
       --------------------------------------------------

     Except  as  set  forth  in  the  Schedules  attached  hereto,  the  Company
represents  and  warrants  to  the  Holder  that:

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

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

     c.     Capitalization.  As of the date hereof, the authorized capital stock
            --------------
of the Company consists of 25,000,000 shares of Common Stock, of which as of the
date  hereof, approximately 6,683,289 shares are issued and outstanding.  All of
such  outstanding shares have been, or upon issuance will be, validly issued and
are  fully  paid  for  and  nonassessable.  Except as disclosed in Schedule 3(c)
which  is  attached hereto and made a part hereof (i) no shares of the Company's
capital  stock  are  subject to preemptive rights or any other similar rights or
any  liens  or encumbrances suffered or permitted by the Company, (ii) there are
no outstanding debt securities, (iii) there are no outstanding shares of capital
stock, options, warrants, scrip, rights to subscribe to, calls or commitments of
any  character whatsoever relating to, or securities or rights convertible into,
any  shares  of  capital  stock  of  the  Company or any of its Subsidiaries, or
contracts,  commitments,  understandings or arrangements by which the Company or
any  of  its  Subsidiaries  is or may become bound to issue additional shares of
capital  stock  of  the Company or any of its Subsidiaries or options, warrants,
scrip,  rights to subscribe to, calls or commitments of any character whatsoever
relating  to,  or  securities  or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, (iv) there are no agreements or
arrangements  under which the Company or any of its Subsidiaries is obligated to
register  the  sale of any of their securities under the 1933 Act (except the as
otherwise  set forth in the Transaction Documents), (v) there are no outstanding
securities  of  the  Company  or  any  of  its  Subsidiaries  which  contain any
redemption  or  similar  provisions,  and  there  are no contracts, commitments,
understandings  or  arrangements by which the Company or any of its Subsidiaries
is  or  may  become  bound  to  redeem  a  security of the Company or any of its
Subsidiaries,  (vi)  there  are  no  securities  or  instruments  containing
anti-dilution  or  similar  provisions that will be triggered by the issuance of
the  Securities  as  described in this Subscription Agreement, (vii) the Company
does  not  have  any  stock  appreciation  rights  or  "phantom  stock" plans or
agreements  or  any similar plan or agreement, and (viii) there is no dispute as
to  the  class  of  any  shares  of the Company's capital stock. The Company has
furnished to the Holder, or the Holder has had access through EDGAR to, true and
correct  copies  of the Company's Articles of Incorporation, as in effect on the
date  hereof (the "ARTICLES OF INCORPORATION"), and the Company's By-laws, as in
effect  on  the  date  hereof  (the  "BY-LAWS  ').

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

     e.     No  Conflicts.  The  execution,  delivery  and  performance  of  the
            -------------
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated hereby and thereby will not (i) result in a violation
of  the  Articles of Incorporation, any Certificate of Designations, Preferences
and  Rights  of  any outstanding series of preferred stock of the Company or the
By-laws  or  (ii)  conflict  with, or constitute a material default (or an event
which  with  notice  or  lapse  of time or both would become a material default)
under,  or  give to others any rights of termination, amendment, acceleration or
cancellation  of,  any  material  agreement,  contract,  indenture  mortgage,
indebtedness  or instrument to which the Company or any of its Subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree,  including  United  States  federal  and  state  securities  laws  and
regulations  and  the rules and regulations of the principal securities exchange
or  trading market on which the Common Stock is traded or listed (the "Principal
Market"),  applicable  to the Company or any of its Subsidiaries or by which any
property  or  asset  of  the  Company  or  any  of  its Subsidiaries is bound or
affected.  Except  as  disclosed  in  Schedule 3(e), neither the Company nor its
Subsidiaries  is  in violation of any term of, or in default under, the Articles
of Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding  series  of  preferred  stock of the Company or the By-laws or their
organizational  charter  or  by-laws,  respectively, or any contract, agreement,
mortgage,  indebtedness, indenture, instrument, judgment, decree or order or any
statute,  rule  or  regulation  applicable  to  the Company or its Subsidiaries,
except  for  possible  conflicts,  defaults,  terminations,  amendments,
accelerations,  cancellations  and  violations that would not individually or in
the  aggregate  have  a Material Adverse Effect. The business of the Company and
its  Subsidiaries  is  not  being  conducted,  and  shall  not  be conducted, in
violation  of  any  law,  statute,  ordinance,  rule, order or regulation of any
governmental  authority  or  agency,  regulatory  or  self-regulatory agency, or
court,  except  for  possible  violations  the  sanctions  for  which  either
individually  or  in  the  aggregate  would  not have a Material Adverse Effect.
Except  as  specifically  contemplated  by  this  Subscription  Agreement and as
required  under the 1933 Act, the Company is not required to obtain any consent,
authorization,  permit  or  order of, or make any filing or registration (except
the filing of a registration statement)  with, any court, governmental authority
or  agency,  regulatory  or self-regulatory agency or other third party in order
for  it  to  execute,  deliver  or  perform  any  of  its  obligations under, or
contemplated  by,  the Transaction Documents in accordance with the terms hereof
or  thereof.  All  consents,  authorizations,  permits,  orders,  filings  and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have  been obtained or effected on or prior to the date hereof and are
in  full force and effect as of the date hereof. Except as disclosed in Schedule
3(e), the Company and its Subsidiaries are unaware of any facts or circumstances
which  might give rise to any of the foregoing. The Company is not, and will not
be,  in  violation  of  the  listing  requirements of the Principal Market as in
effect  on  the date hereof and on each of the Closing Dates and is not aware of
any  facts  which  would reasonably lead to delisting of the Common Stock by the
Principal  Market  in  the  foreseeable  future.

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

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

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

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

     j.     Intentionally  omitted.

     k.     Employee Relations.  Neither the Company nor any of its Subsidiaries
            ------------------
is  involved  in any union labor dispute nor, to the knowledge of the Company or
any of its Subsidiaries, is any such dispute threatened. Neither the Company nor
any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company  and  its  Subsidiaries  believe that relations with their employees are
good.  No  executive  officer  (as  defined  in Rule 501(f) of the 1933 Act) has
notified  the Company that such officer intends to leave the Company's employ or
otherwise  terminate  such  officer's  employment  with  the  Company.

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

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

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

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

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

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

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

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

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

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

     v.   Additional Financings. The Company shall not, directly nor indirectly,
          ---------------------
without  the  prior written consent of the Holder, offer, sell, grant any option
to  purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option  to  purchase or other disposition) any of its Common Stock or securities
convertible  into  Common  Stock,  or file any registration statement, including
those  on Form S-8 for any securities (a "SUBSEQUENT FINANCING"), in either case
ending  on  the earlier to occur of (i) 360 (three hundred and sixty) days after
the  effective  date of the registration statement covering resale of the shares
of  Common  Stock  underlying  the Debentures (the "Effective Date") or (ii) the
date  on which the full Face Amount, accrued interest and penalties, if any,  on
the  Debentures have been paid ("Lock Up Period"), as set forth in the Debenture
Agreement.

During the twelve (12) month period following Effective Date, or if there is any
outstanding  balance on the Debentures, the Holder shall retain a first right of
refusal  for any additional financings.  The Company must submit to the Holder a
duly authorized term sheet of the financing and the Holder may elect, in writing
within five (5) business days, to exercise its right to finance the Company upon
the  same terms and conditions, as set forth in the Debenture Agreement.  In the
event  the  Holder does not elect to complete such financing within such period,
the  Company  may  proceed  with  the proposed third-party financing on the same
terms  and  conditions  as  contained  in  the  notice  to  Holder.

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

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

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

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

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

z.  Investment Company.  Neither the Company nor any Affiliate is an "investment
    -------------------
company"  within  the  meaning  of  the  Investment  Company  Act  of  1940.

aa.  Company  Predecessor.All representations made by or relating to the Company
     ---------------------
of  a  historical  nature  and all undertaking described herein shall relate and
refer  to  the  Company,  its  predecessors,  and  the  Subsidiaries.

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

4.     COVENANTS  OF  THE  COMPANY
       ---------------------------

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

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

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

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

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

     f.     Financial  Information.  The Company agrees to make available to the
            ----------------------
Holder  via  EDGAR  or other electronic means the following: (i) within five (5)
business  days  after  the  filing  thereof  with  the SEC, a copy of its Annual
Reports  on  Form  10-KSB,  its  Quarterly  Reports  on Form 10-QSB, any Current
Reports on Form 8-K and any Registration Statements or amendments filed pursuant
to  the  1933 Act; (ii) on the same day as the release thereof, facsimile copies
of  all  press  releases issued by the Company or any of its Subsidiaries, (iii)
copies  of  any  notices  and  other  information made available or given to the
shareholders  of  the  Company  generally,  contemporaneously  with  the  making
available or giving thereof to the shareholders and (iv) within two (2) calendar
days  of filing or delivery thereof, copies of all documents filed with, and all
correspondence sent to, the Principal Market, any securities exchange or market,
or  the  National  Association  of  Securities  Dealers,  Inc.

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

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

     i.     Transactions  With Affiliates.  During the Lock-Up Period, set forth
            -----------------------------
in  Section  3  (v),  the  Company  shall  not,  and  shall  cause  each  of its
Subsidiaries  not  to,  enter  into,  amend, modify or supplement, or permit any
Subsidiary  to  enter  into,  amend,  modify  or  supplement,  any  agreement,
transaction,  commitment  or  arrangement  with  any  of its or any Subsidiary's
officers,  directors,  persons who were officers or directors at any time during
the  previous  two years, shareholders who beneficially own five percent (5%) or
more of the Common Stock, or affiliates or with any individual related by blood,
marriage or adoption to any such individual or with any entity in which any such
entity  or individual owns a five percent (5%) or more beneficial interest (each
a  "RELATED  PARTY")  during  the  Lock  Up  Period;  except  for  (i) customary
employment  arrangements  and  benefit  programs  on reasonable terms (including
changes  currently  under  discussion  with  the  Company's  Board  of Directors
concerning  the  compensation,  to  be  payable in stock, of the Chairman of the
Board),  (ii)  any  agreement,  transaction,  commitment  or  arrangement  on an
arms-length  basis  on  terms no less favorable than terms which would have been
obtainable  from a person other than such Related Party, or (iii) any agreement,
transaction,  commitment  or  arrangement which is approved by a majority of the
disinterested directors of the Company. For purposes hereof, any director who is
also  an  officer of the Company or any Subsidiary of the Company shall not be a
disinterested  director  with  respect  to  any  such  agreement,  transaction,
commitment  or  arrangement. "AFFILIATE" for purposes hereof means, with respect
to  any person or entity, another person or entity that, directly or indirectly,
(i)  has  a  five percent (5%) or more equity interest in that person or entity,
(ii)  has five percent (5%) or more common ownership with that person or entity,
(iii)  controls  that  person or entity, or (iv) shares common control with that
person  or  entity.  "CONTROL"  or  "CONTROLS"  for purposes hereof means that a
person  or  entity  has  the power, direct or indirect, to conduct or govern the
policies  of  another  person  or  entity.

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

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

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

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

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

5.     OPINION  LETTER/BOARD  RESOLUTION
       ---------------------------------

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

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

6.     DELIVERY  INSTRUCTIONS;  FEES
       -----------------------------

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

7.     UNDERSTANDINGS.
       --------------

     The  Holder  understands,  acknowledges  and  agrees  as  follows:

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

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

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

     d.     The Offering is intended to be exempt from registration by virtue of
Section  4(2)  of  the  1933  Act and the provisions of Regulation D thereunder,
which  is  in  part  dependent  upon the truth, completeness and accuracy of the
statements  made  by  the  undersigned  herein  and  in  the  Questionnaire.

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

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

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

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

9.     MISCELLANEOUS.
       -------------

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

If  to  the  Company:

James  C.  Fields
LocatePLUS  Holdings  Corporation
100  Cummings  Center  #235M
Beverly,  MA  01915
Telephone:  978-921-2727
Facsimile:  978-524-8887

If  to  the  Holder:

     At  the  address  listed  in  the  Questionnaire.

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

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

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

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

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

     e.     This  Agreement  shall  not  be  assignable.

     f.     This  Subscription Agreement, together with Exhibits A, B, C, D, and
E  attached  hereto  and  made  a  part  hereof, constitute the entire agreement
between  the parties hereto with respect to the subject matter hereof and may be
amended  only  by  a  writing  executed  by  both  parties  hereto.

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

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

10.  GOVERNMENTAL  CHANGES

     In  the  event that any rules, regulations, interpretations or Comments (as
defined  in  the  Debenture Registration Rights Agreement between the Holder and
the Company of this date) from the SEC hinder any operation of this Agreement or
the  underlying  Transaction  Documents, the Parties hereby agree that the terms
and  conditions shall be modified on similar terms within five (5) business days
of  such  notice.  Failure  for the Company to agree to on such new terms, shall
constitute  and  Event  of  Default  as  outlined  in Article 6 in the Debenture
Agreement  between  the  Company  and the Holder of this date, may elect to take
actions  as  outlined  in  the  Debenture.


11.  WAIVER.

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

12.  NO  ORAL  AGREEMENTS

     THIS WRITTEN AGREEMENT AND THE ACCOMPANYING TRANSACTION DOCUMENTS REPRESENT
THE  FINAL  AGREEEMENTS  BETWEEN  THE  COMPANY  AND  THE  HOLDER  AND MAY NOT BE
CONTRADICTED  BY  EVIDENCE  OF  PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL
AGREEMENTS  OF  THE  PARTIES;  THERE  ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.


          [BALANCE  OF  PAGE  INTENTIONALLY  LEFT  BLANK)


<PAGE>
LocatePlus  Holdings  Corporation
---------------------------------

QUESTIONNAIRE


     The information contained in this Questionnaire is being furnished in order
to  determine  whether the undersigned's subscription to purchase the Debentures
described  in  the  Subscription  Agreement  may  be  accepted.

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

     IN ADDITION TO SIGNING THE SIGNATURE PAGE, IF REQUESTED BY THE COMPANY, THE
UNDERSIGNED  MUST  COMPLETE  FORM  W-9.

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

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

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

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

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

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


               5.     The  undersigned  is:

     (a)     a  bank  as  defined  in  Section  3(a)(2)  of  the  1933  Act;  or

     (b)     a  savings  and loan association or other institution as defined in
Section 3(a)(5)(A) of the 1933 Act whether acting in its individual or fiduciary
capacity;  or

     (c)     a  broker  or  dealer registered pursuant to Section 15 of the 1934
Act;  or

     (d)     an  insurance  company as defined in Section 2(13) of the 1933 Act;
or

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

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

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

<PAGE>
II.     HOLDER  INFORMATION.

     Name  of  Entity  ___Dutchess  Private  Equities  Fund,  L.P._
                          -----------------------------------------

Person's  Name  Douglas  Leighton  Title:_Managing  Member
                -----------------         ----------------

     State  of  Organization  ____Delaware___________________
                              ------------

     Principal  Business  Address  ___50  Commonwealth  Ave__

     City,  State,  Zip  Code  ______Boston,  MA  02116__________
                                     ------------------

     Taxpayer  Identification  Number  _____________________

-     Phone  __617-301-4700________  Fax  ___617-249-0947___
               ------------               ---------------

     Send  Correspondence  to:
          ____________50  Commonweatlh  Ave,  Suite  2__________
     ____________Boston,  MA  02116____________________
     _______________________________________________



<PAGE>
LocatePlus  Holdings  Corporation
---------------------------------
SIGNATURE  PAGE
---------------

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

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

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



           $750,000                         July  18,  2006
______________________________          ________________________
Amount  of  Debentures  being  purchased                    Date


Dutchess  Private  Equities  Fund,  LP


     By:  /s/ Douglas  H.  Leighton
          (Signature)

Name:     Douglas  H.  Leighton
----------------------------------------------
(Please  Type  or  Print)

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



<PAGE>

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


This  Subscription  Agreement  accepted  and  agreed
to  this  18th  day  of  July,  2006.


By  LocatePlus Holdings Corporation and duly authorized to sign on behalf of the
-----------------------------------
Company:

By /s/ Jon R. Latorella
Jon  Latorella,  CEO


By /s/ James C. Fields
James  C  Fields,  CFO