Contract

EXHIBIT 10.26 SECURITIES PURCHASE AGREEMENTILINC COMMUNICATIONS, INC.JAMES M. POWERS, JR., PRESIDENT2999 NORTH 44TH STREET, SUITE 650PHOENIX, AZ 85016The undersigned investor (the “INVESTOR”) hereby confirms Investor’s agreementwith iLinc Communications, Inc. (“iLinc” or the “Company”) as follows:1. This Securities Purchase Agreement is made as of the date set forth belowbetween the Company and the Investor.2. The Company has authorized the sale and issuance of up to 5,400,000 shares(the “SHARES”) of the common stock of the Company, $0.001 par value per share(the “COMMON STOCK”), to certain investors in a private placement (the”OFFERING”).3. The Company and the Investor agree that the Investor will purchase from theCompany and the Company will issue and sell to the Investor 2,702,703 Shares ata purchase price of $0.37 per Share, for an aggregate purchase price of$1,000,000 (the “PURCHASE PRICE”), subject to the Terms and Conditions forPurchase of Shares attached hereto as Annex I and incorporated herein byreference as if fully set forth herein. Unless otherwise requested by theInvestor in Exhibit “A”, certificates representing the Shares purchased by theInvestor will be registered in the Investor’s name and address as set forthbelow.4. The Investor represents that, except as set forth below, (a) it has had noposition, office or other material relationship within the past three (3) yearswith the Company or its affiliates, (b) neither it, nor any group of which it isa member or to which it is related, beneficially owns (including the right toacquire or vote) any securities of the Company, and (c) it has no direct orindirect affiliation or association with any National Association of SecuritiesDealers, Inc. (“NASD”) member. Exceptions:None- ——————————————————————————— ——————————————————————————— ——————————————————————————— ——————————————————————————– (If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)Securities Purchase Agreement Page 1 of 12Please confirm that the foregoing correctly sets forth the agreement between usby signing in the space provided below for that purpose. DATED AS OF: June 6, 2006 Herald Investment Management Limited on behalf of Herald Investment Trust PLC By: /s/ Fraser Elms ————————————- Name: Fraser Elms Title: Fund Manager Herald Investment Management Ltd. Address: 10-11 Charterhouse Square ——————————– London, ECIM 6AX —————————————–AGREED AND ACCEPTED:iLinc Communications, Inc.By: /s/ James M. Powers, Jr. ———————————– Name: James M. Powers, Jr. Title: President [SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE]Securities Purchase Agreement – Subscription Letter Page 2 of 12 ANNEX I TERMS AND CONDITIONS FOR PURCHASE OF SHARES 1. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE. 1.1 PURCHASE AND SALE. At the Closing (as defined in Section2), the Company will sell to the Investor, and the Investor will purchase fromthe Company, upon the terms and subject to the conditions set forth herein, andat the Purchase Price, the number of Shares described in paragraph 3 of theSecurities Purchase Agreement attached hereto (collectively with this Annex Iand the other exhibits attached hereto, this “Agreement”). 1.2 OTHER INVESTORS. As part of the Offering, the Companyproposes to enter into Securities Purchase Agreements in the same form as thisAgreement with certain other investors (the “OTHER INVESTORS”), and the Companyexpects to complete sales of Shares to them. The Investor and the OtherInvestors are sometimes collectively referred to herein as the “INVESTORS,” andthis Agreement, the Registration Rights Agreement and the Securities PurchaseAgreements executed by the Other Investors are sometimes collectively referredto herein as the “AGREEMENTS.” The Company may accept executed Agreements fromInvestors for the purchase of Shares commencing upon the date on which theCompany provides the Investors with the proposed purchase price per Share andconcluding upon the date (the “SUBSCRIPTION DATE”) on which the Company hasnotified Canaccord Adams, Inc. (in its capacity as placement agent for theShares, the “PLACEMENT AGENT”) in writing that it will no longer acceptAgreements for the purchase of Shares in the Offering, but in no event shall theSubscription Date be later than JUNE 8, 2006. Each Investor must execute anddeliver a Securities Purchase Agreement and a Registration Rights Agreement andmust complete a Stock Certificate Questionnaire (in the form attached as Exhibit”A” hereto) and an Investor Questionnaire (in the form attached as Exhibit “B”hereto) in order to purchase Shares in the Offering. 1.3 PLACEMENT AGENT FEE. The Investor acknowledges that theCompany intends to pay to the Placement Agent a fee in respect of the sale ofShares to the Investor from the proceeds of the Offering. 2. DELIVERY OF THE SHARES AT CLOSING. The completion of the purchaseand sale of the Shares (the “CLOSING”) shall occur on a date specified by theCompany and the Placement Agent that is anticipated to be June 9, 2006 (the”CLOSING DATE”), but which date shall not be later than June 16, 2006 (the”OUTSIDE DATE”), and of which the Investors will be notified in writing inadvance by the Placement Agent. At the Closing, the Company shall deliver to theInvestor one or more stock certificates representing the number of Shares setforth in paragraph 3 of the Stock Purchase Agreement, each such certificate tobe registered in the name of the Investor or, if so indicated on the StockCertificate Questionnaire, in the name of a nominee designated by the Investor.In exchange for the delivery of the subscription agreements, the Investor shalldeliver the Purchase Price to the Placement Agent by wire transfer ofimmediately available funds pursuant to written instructions to be held inescrow pending closing of the Offering. On the Closing Date, the Company shallcause counsel to the Company to deliver to the Investors a legal opinion, datedthe Closing Date, substantially in the form attached hereto as Exhibit “C” (the”LEGAL OPINION”). The Company’s obligation to issue and sell the Shares to the Investorshall be subject to the following conditions, any one or more of which may bewaived by the Company: (a) prior receipt by the Company of an executed copy ofthis Securities Purchase Agreement; (b) completion of purchases and sales ofShares under the Agreements with the Other Investors; (c) the accuracy of therepresentations and warranties made by the Investor in this Agreement and theSecurities Purchase Agreement Page 3 of 12fulfillment of the obligations of the Investor to be fulfilled by it under thisAgreement on or prior to the Closing; and (d) the absence of any order, writ,injunction, judgment or decree that questions the validity of the Agreements orthe right of the Company or the Investor to enter into such Agreements or toconsummate the transactions contemplated hereby and thereby. The Investor’s obligation to purchase the Shares shall be subject tothe following conditions, any one or more of which may be waived by theInvestor: (a) the completion, execution and return of the completed SecuritiesPurchase Agreement (with exhibits thereto) by all Investors and the funding intoescrow of no less than one million dollars ($1,000,0000); (b) the delivery ofthe Legal Opinion to the Investor by counsel to the Company; (c) the accuracy ofthe representations and warranties made by the Company in this Agreement on theClosing Date; (c) the execution and delivery by the Company of the RegistrationRights Agreement, (d) the absence of any order, writ, injunction, judgment ordecree that questions the validity of the Agreements or the right of the Companyor the Investor to enter into such Agreements or to consummate the transactionscontemplated hereby and thereby; and (e) the delivery to the Investor by theSecretary or Assistant Secretary of the Company of a certificate stating thatthe conditions specified in this paragraph have been fulfilled. In the event that the Closing does not occur on or before the OutsideDate as a result of the Company’s failure to satisfy any of the conditions setforth above (and such condition has not been waived by the Investor), theCompany shall return any and all funds paid hereunder to the Investor no laterthan one Business Day following the Outside Date and the Investors shall have nofurther obligations hereunder. For purposes of this Agreement, “BUSINESS DAY”shall mean any day other than a Saturday, Sunday or other day on which the NewYork Stock Exchange are permitted or required by law to close. 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. Except asotherwise described in the Company’s Annual Report on Form 10-K for the yearended March 31, 2005 (and any amendments thereto filed at least two (2) BusinessDays prior to the Closing Date), Company’s most recent Quarterly Report on Form10-Q for the quarter ended December 31, 2005 (and any amendments thereto filedat least two (2) Business Days prior to the Closing Date), the Company’s ProxyStatement for its 2005 Annual Meeting of Shareholders, and any of the Company’sCurrent Reports on Form 8-K filed since December 31, 2005 (and any amendmentsthereto filed at least two (2) Business Days prior to the Closing Date) (allcollectively, the “SEC REPORTS”), the Company hereby represents and warrants to,and covenants with, the Investor as of the date hereof and the Closing Date, asfollows: 3.1 ORGANIZATION. The Company is duly incorporated and validlyexisting in good standing under the laws of the State of Delaware. The Companyhas full power and authority to own, operate and occupy its properties and toconduct its business as presently conducted and is registered or qualified to dobusiness and in good standing in each jurisdiction in which it owns property ortransacts business and where the failure to be so qualified would have amaterial adverse effect upon the Company and its subsidiaries as a whole or thebusiness, financial condition, properties, operations or assets of the Companyand its subsidiaries as a whole or the Company’s ability to perform itsobligations under the Agreements in all material respects (“MATERIAL ADVERSEEFFECT”), and no proceeding has been instituted in any such jurisdictionrevoking, limiting or curtailing, or seeking to revoke, limit or curtail, suchpower and authority or qualification. 3.2 DUE AUTHORIZATION. The Company has all requisite power andauthority to execute, deliver and perform its obligations under the Agreements.The execution and delivery of the Agreements, and the consummation by theCompany of the transactions contemplated hereby, have been duly authorized byall necessary corporate action and no further action on the part of the Companyor its Board of Directors or stockholders is required. The Agreements have beenvalidly executed and delivered by the Company and constitute legal, valid andSecurities Purchase Agreement Page 4 of 12binding agreements of the Company enforceable against the Company in accordancewith their terms, except to the extent (i) rights to indemnity and contributionmay be limited by state or federal securities laws or the public policyunderlying such laws, (ii) such enforceability may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or similar laws affectingcreditors’ and contracting parties’ rights generally and (iii) suchenforceability may be subject to general principles of equity (regardless ofwhether such enforceability is considered in a proceeding in equity or at law). 3.3 NO CONFLICT OR DEFAULT. The execution and delivery of theAgreements, the issuance and sale of the Shares to be sold by the Company underthe Agreements, the fulfillment of the terms of the Agreements and theconsummation of the transactions contemplated thereby will not: (A) result in aconflict with or constitute a material violation of, or material default (withthe passage of time or otherwise) under, (i) any bond, debenture, note, loanagreement or other evidence of indebtedness, or any material lease, or contractto which the Company is a party or by which the Company or their respectiveproperties are bound, (ii) the Certificate of Incorporation, by-laws or otherorganizational documents of the Company, as amended, or (iii) any law,administrative regulation, or existing order of any court or governmentalagency, or other authority binding upon the Company or the Company’s respectiveproperties; or, (B) result in the creation or imposition of any lien,encumbrance, claim, or security interest upon any of the material assets of theCompany or an acceleration of indebtedness pursuant to any obligation, agreementor condition contained in any material bond, debenture, note or any otherevidence of indebtedness or any material indenture, mortgage, deed of trust orany other agreement or instrument to which the Company is a party or by which itis bound or to which any of the property or assets of the Company is subject. Noconsent, approval, authorization or other order of, or registration,qualification or filing with, any regulatory body, administrative agency, orother governmental body is required for the execution and delivery of theAgreements by the Company and the valid issuance or sale of the Shares by theCompany pursuant to the Agreements, other than such as have been made orobtained, and except for any filings required to be made under federal or statesecurities laws. 3.4 CAPITALIZATION. The outstanding capital stock of theCompany is as described in the Company’s Quarterly Report on Form 10-Q for thethree month period ending December 31, 2005 and the private placement memorandumdated May 31, 2006 (the “Memorandum”) provided to Investor. The Company has notissued any capital stock since December 31, 2005, other than pursuant to thepurchase of shares under the Company’s employee stock option plan and theexercise of outstanding warrants or stock options, in each case as disclosed inthe Memorandum or the SEC Reports. The Shares to be sold pursuant to theAgreements have been duly authorized, and when issued and paid for in accordancewith the terms of the Agreements, will be duly and validly issued, fully paidand nonassessable, subject to no lien, claim or encumbrance (except for any suchlien, claim or encumbrance created, directly or indirectly, by the Investor).The outstanding shares of capital stock of the Company have been duly andvalidly issued and are fully paid and nonassessable, have been issued incompliance with the registration requirements of federal and state securitieslaws, and were not issued in violation of any preemptive rights or similarrights to subscribe for or purchase securities. The Company owns one hundredpercent of all of the outstanding capital stock of each of its subsidiaries,free and clear of all liens, claims and encumbrances. There are not (i) anyoutstanding preemptive rights, or (ii) any rights, warrants or options toacquire, or instruments convertible into or exchangeable for, any unissuedshares of capital stock or other equity interest in the Company not disclosed inthe SEC Reports or Memorandum, or (iii) any contract, commitment, agreement,understanding or arrangement of any kind to which the Company is a party thatwould provide for the issuance or sale of any capital stock of the Company, anysuch convertible or exchangeable securities or any such rights, warrants oroptions not disclosed in the SEC Reports or the Memorandum. There are noshareholders agreements, voting agreements or other similar agreements withrespect to the Common Stock to which the Company is a party.Securities Purchase Agreement Page 5 of 12 3.5 LEGAL PROCEEDINGS. There is no material legal orgovernmental proceeding pending, or to the knowledge of the Company, threatened,to which the Company is a party or of which the business or property of theCompany is subject that is required to be disclosed and that is not so disclosedin the SEC Reports. Other than the information disclosed in the SEC Reports, theCompany is not subject to any injunction, judgment, decree or order of anycourt, regulatory body, administrative agency or other government body. 3.6 NO VIOLATIONS. The Company is not in violation of itsCertificate of Incorporation, bylaws or other organizational documents, asamended. The Company is not in violation of any law, administrative regulation,ordinance or order of any court or governmental agency, arbitration panel orauthority applicable to the Company, which violation, individually or in theaggregate, is reasonably likely to have a Material Adverse Effect. The Companyis not in default (and there exists no condition which, with the passage of timeor otherwise, would constitute a default) in the performance of any bond,debenture, note or any other evidence of indebtedness or any indenture,mortgage, deed of trust or any other material agreement or instrument to whichthe Company is a party or by which the Company is bound, which such defaultwould have a Material Adverse Effect upon the Company. 3.7 GOVERNMENTAL PERMITS, ETC. Each of the Company has allnecessary franchises, licenses, certificates and other authorizations from anyforeign, federal, state or local government or governmental agency, departmentor body that are currently necessary for the operation of the business of theCompany as currently conducted, except where the failure to currently possesssuch franchises, licenses, certificates and other authorizations is notreasonably likely to have a Material Adverse Effect. 3.8 INTELLECTUAL PROPERTY. (a) Except for matters which are not reasonablylikely to have a Material Adverse Effect, (i) each of the Company has ownershipof, or a license or other legal right to use, all patents, copyrights, tradesecrets, trademarks, customer lists, designs, manufacturing or other processes,computer software, systems, data compilation, research results or otherproprietary rights used in the business of the Company (collectively,”INTELLECTUAL PROPERTY”) and (ii) all of the Intellectual Property owned by theCompany consisting of patents, registered trademarks and registered copyrightshave been duly registered in, filed in or issued by the United States Patent andTrademark Office, the United States Register of Copyrights or the correspondingoffices of other jurisdictions and have been maintained and renewed inaccordance with all applicable provisions of law and administrative regulationsin the United States and/or such other jurisdictions. (b) Except for matters which are not reasonablylikely to have a Material Adverse Effect, all material licenses or othermaterial agreements under which (i) the Company employs rights in IntellectualProperty, or (ii) the Company has granted rights to others in IntellectualProperty owned or licensed by the Company are in full force and effect, andthere is no default by the Company with respect thereto. (c) The Company believes that it has taken all stepsreasonably required in accordance with sound business practice and businessjudgment to establish and preserve the ownership of the Company’s materialIntellectual Property. (d) Except for matters which are not reasonablylikely to have a Material Adverse Effect, to the knowledge of the Company, (i)the present business, activities and products of the Company do not infringe anyintellectual property of any other person; (ii) neither the Company is makingunauthorized use of any confidential information or trade secrets of any person;Securities Purchase Agreement Page 6 of 12and (iii) the activities of any of the employees of the Company, acting onbehalf of the Company, do not materially violate any agreements or arrangementsrelated to confidential information or trade secrets of third parties. (e) Except for matters which are not reasonablylikely to have a Material Adverse Effect, and except as disclosed in the SECReports, no proceedings are pending, or to the knowledge of the Company,threatened, which challenge the rights of the Company to the use the Company’sIntellectual Property. 3.9 FINANCIAL STATEMENTS. The financial statements of theCompany and the related notes contained in the SEC Reports present fairly andaccurately in all material respects the financial position of the Company as ofthe dates therein indicated, and the results of its operations, cash flows andthe changes in shareholders’ equity for the periods therein specified, subject,in the case of unaudited financial statements for interim periods, to normalyear-end audit adjustments. Such financial statements (including the relatednotes) have been prepared in accordance with generally accepted accountingprinciples applied on a consistent basis at the times and throughout the periodstherein specified, except that unaudited financial statements may not containall footnotes required by generally accepted accounting principles. 3.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in theSEC Reports or in any press releases issued by the Company prior to the ClosingDate, there has not been (i) an event, circumstance or change that has had or isreasonably likely to have a Material Adverse Effect upon the Company, (ii) anyobligation incurred by the Company that is material to the Company, (iii) anydividend or distribution of any kind declared, paid or made on the capital stockof the Company, or (iv) any loss or damage (whether or not insured) to thephysical property of the Company which has had a Material Adverse Effect. 3.11 AMEX COMPLIANCE. The Company’s Common Stock is registeredpursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended(the “EXCHANGE ACT”), and is listed on the American Stock Exchange (the “AMEX”),and the Company has taken no action intended to, or which to its knowledge couldhave the effect of, terminating the registration of the Common Stock under theExchange Act or delisting the Common Stock from the Amex. The issuance of theShares does not require shareholder approval, including, without limitation,pursuant to Section 713 of the Amex Company Guide. 3.12 REPORTING STATUS. The Company has timely made all filingsrequired under the Exchange Act during the twelve (12) months preceding the dateof this Agreement, and all of those documents complied in all material respectswith the SEC’s requirements as of their respective filing dates, and theinformation contained therein as of the respective dates thereof did not containan untrue statement of a material fact or omit to state a material fact requiredto be stated therein or necessary to make the statements therein in light of thecircumstances under which they were made not misleading. The Company iscurrently eligible to register the resale of Common Stock by the Investorspursuant to a registration statement on Form S-3 under the Securities Act (the”REGISTRATION STATEMENT”). 3.13 NO MANIPULATION; DISCLOSURE OF INFORMATION. The Companyhas not taken and will not take any action designed to or that might reasonablybe expected to cause or result in an unlawful manipulation of the price of theCommon Stock to facilitate the sale or resale of the Shares. The Company has notdisclosed any material non-public information to the Investors.Securities Purchase Agreement Page 7 of 12 3.14 ACCOUNTANTS. Epstein Weber & Conover, PLC, who expressedtheir opinion with respect to the consolidated financial statements to beincorporated by reference from the Company’s Annual Report on Form 10-K for theyear ended March 31, 2005 into the Registration Statement and the prospectuswhich forms a part thereof (the “PROSPECTUS”), have advised the Company thatthey are, and to the knowledge of the Company they are, independent accountantsas required by the Securities Act and the rules and regulations promulgatedthereunder. 3.15 CONTRACTS. Except for matters which are not reasonablylikely to have a Material Adverse Effect and those contracts that aresubstantially or fully performed or expired by their terms, the contracts listedas exhibits to or described in the SEC Reports that are material to the Companyand all amendments thereto, are in full force and effect on the date hereof, andneither the Company nor, to the Company’s knowledge, any other party to suchcontracts is in breach of or default under any of such contracts. 3.16 TAXES. Except for tax matters which are not reasonablylikely to have a Material Adverse Effect, each of the Company and each of itsSubsidiaries has filed all necessary federal, state and foreign income andfranchise tax returns and has paid or accrued all taxes shown as due thereon. 3.17 TRANSFER TAXES. On the Closing Date, all stock transferor other taxes (other than income taxes) which are required to be paid inconnection with the sale and transfer of the Shares hereunder will be, or willhave been, fully paid or provided for by the Company and the Company will havecomplied with all laws imposing such taxes. 3.18 INVESTMENT COMPANY. The Company is not an “investmentcompany” or an “affiliated person” of, or “promoter” or “principal underwriter”for an investment company, within the meaning of the Investment Company Act of1940, as amended, and will not be deemed an “investment company” as a result ofthe transactions contemplated by this Agreement. 3.19 INSURANCE. The Company maintains insurance of the typesand in the amounts that the Company reasonably believes is adequate for itsbusinesses, including, but not limited to, insurance covering real and personalproperty owned or leased by the Company against theft, damage, destruction, actsof vandalism and all other risks customarily insured against by similarlysituated companies, all of which insurance is in full force and effect. 3.20 OFFERING PROHIBITIONS. Neither the Company nor any personacting on its behalf or at its direction has in the past or will in the futuretake any action to sell, offer for sale or solicit offers to buy any securitiesof the Company which would bring the offer or sale of the Shares as contemplatedby this Agreement within the provisions of Section 5 of the Securities Act. 3.21 LISTING. The Company shall comply with all requirementswith respect to the issuance of the Shares and the listing thereof on Amex. 3.22 RELATED PARTY TRANSACTIONS. Other than described in theSEC Reports, to the knowledge of the Company, no transaction has occurredbetween or among the Company or any of its affiliates, officers or directors orany affiliate or affiliates of any such officer or director that with thepassage of time are reasonably likely be required to be disclosed pursuant toSection 13, 14 or 15(d) of the Exchange Act.Securities Purchase Agreement Page 8 of 12 3.23 BOOKS AND RECORDS. The books, records and accounts of theCompany accurately and fairly reflect, in reasonable detail, the transactionsin, and dispositions of, the assets of, and the operations of, the Company. TheCompany maintains a system of internal accounting controls sufficient to providereasonable assurances that (i) transactions are executed in accordance withmanagement’s general or specific authorizations, (ii) transactions are recordedas necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles and to maintain asset accountability,(iii) access to assets is permitted only in accordance with management’s generalor specific authorization and (iv) the recorded accountability for assets iscompared with the existing assets at reasonable intervals and appropriate actionis taken with respect to any differences. 3.24 ADDITIONAL CONTINGENT CONSIDERATION. The Company expectsthat with the funding of the Offering and the additional capital providedthereby, that the Company’s auditor will not express doubt about the company’sability to continue as a going concern (i.e. provided a so-called “CleanOpinion”). However, should the auditor again express such doubt and not providea Clean Opinion despite the additional capital as a part of the annual reportfor the fiscal year ending March 31, 2006 on Form 10-K, then the Company willissue to Investors additional cash consideration (“Additional Consideration”)equal to five percent (5.000%) of the gross proceeds. By way of example, shouldthe Company raise $2,000,000, and the Company’s auditor not provide a CleanOpinion, then iLinc will owe to Investors $100,000, with such AdditionalConsideration, if due, paid to within fifteen (15) days of the filing of theCompany’s Form 10-K in which the opinion expressing doubt is included. Providedhowever, that should the auditor issue an opinion that is a Clean Opinion thenthe obligation to provide Contingent Consideration under this Section 3.24 shallforever expire without further obligation to Investors. 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR. 4.1 INVESTOR KNOWLEDGE AND STATUS. The Investor represents andwarrants to, and covenants with, the Company that: (i) the Investor is an”accredited investor” as defined in Regulation D under the Securities Act, isknowledgeable, sophisticated and experienced in making, and is qualified to makedecisions with respect to, investments in securities presenting an investmentdecision similar to that involved in the purchase of the Shares, and hasrequested, received, reviewed and considered all information it deemed relevantin making an informed decision to purchase the Shares; (ii) the Investorunderstands that the Shares are “restricted securities” and have not beenregistered under the Securities Act and is acquiring the number of Shares setforth in paragraph 3 of the Securities Purchase Agreement in the ordinary courseof its business and for its own account for investment only, has no presentintention of distributing any of such Shares and has no arrangement orunderstanding with any other persons regarding the distribution of such Shares(this representation and warranty not limiting the Investor’s right to sellShares pursuant to a Registration Statement filed under the Registration RightsAgreement or otherwise, or other than with respect to any claim arising out of abreach of this representation and warranty, the Investor’s right toindemnification under Section 3 of the Registration Rights Agreement); (iii) theInvestor will not, directly or indirectly, offer, sell, pledge, transfer orotherwise dispose of (or solicit any offers to buy, purchase or otherwiseacquire or take a pledge of) any of the Shares except in compliance with theSecurities Act, applicable state securities laws and the respective rules andregulations promulgated thereunder; (iv) the Investor has answered all questionsin paragraph 4 of the Securities Purchase Agreement and the InvestorQuestionnaire attached hereto as Exhibit B for use in preparation of theRegistration Statement and the answers thereto are true and correct as of thedate hereof and will be true and correct as of the Closing Date; (v) theInvestor will notify the Company promptly of any change in any of suchinformation until such time as the Investor has sold all of its Shares or untilthe Company is no longer required to keep the Registration Statement effective;and (vi) the Investor has, in connection with its decision to purchase thenumber of Shares set forth in paragraph 3 of the Securities Purchase Agreement,relied upon the representations and warranties of the Company contained hereinSecurities Purchase Agreement Page 9 of 12and the information contained in the SEC Reports. The Investor understands thatthe issuance of the Shares to the Investor has not been registered under theSecurities Act, or registered or qualified under any state securities law, inreliance on specific exemptions therefrom, which exemptions may depend upon,among other things, the representations made by the Investor in this Agreement.No person (including without limitation the Placement Agent) is authorized bythe Company to provide any representation that is inconsistent with or inaddition to those contained herein or in the SEC Reports, and the Investoracknowledges that it has not received or relied on any such representations. 4.2 TRANSFER OF SHARES. The Investor agrees that it will notmake any sale, transfer or other disposition of the Shares (a “DISPOSITION”)other than Dispositions that are made pursuant to the Registration Statement incompliance with any applicable prospectus delivery requirements or that areexempt from registration under the Securities Act. Investor has not taken andwill not take any action designed to or that might reasonably be expected tocause or result in manipulation of the price of the Common Stock to facilitatethe subscription to, or the sale or resale of the Shares. The Company has notdisclosed any material non-public information to the Investors. 4.3 POWER AND AUTHORITY. The Investor represents and warrantsto the Company that (i) the Investor has full right, power, authority andcapacity to enter into this Agreement and to consummate the transactionscontemplated hereby and has taken all necessary action to authorize theexecution, delivery and performance of this Agreement, and (ii) this Agreementconstitutes a valid and binding obligation of the Investor enforceable againstthe Investor in accordance with its terms, except to the extent (i) rights toindemnity and contribution may be limited by state or federal securities laws orthe public policy underlying such laws, (ii) such enforceability may be limitedby applicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting creditors’ and contracting parties’ rights generally and (iii) suchenforceability may be subject to general principles of equity (regardless ofwhether such enforceability is considered in a proceeding in equity or at law). 4.4 NO SHORT POSITION. The Investor has not prior to theClosing Date, and will not for the one (1) year period beginning with theClosing Date, established any hedge or other position in the Common Stock thatis issued and outstanding, and that is designed to or could reasonably beexpected to lead to or result in a sale, transfer or other disposition by theInvestor or any other person or entity under the control or direction ofInvestor. For purposes hereof, a “hedge or other position” would include,without limitation, effecting any short sale or having in effect any shortposition (whether or not such sale or position is against the box and regardlessof when such position was entered into) or any purchase, sale or grant of anyright (including, without limitation, any put or call option) with respect tothe Common Stock or with respect to any security (other than a broad-basedmarket basket or index) that includes, relates to or derives any significantpart of its value from the Common Stock. 4.5 NO INVESTMENT, TAX OR LEGAL ADVICE. The Investorunderstands that nothing in the SEC Reports, this Agreement, or any othermaterials presented to the Investor in connection with the purchase and sale ofthe Shares constitutes legal, tax or investment advice. The Investor hasconsulted such legal, tax and investment advisors as it, in its sole discretion,has deemed necessary or appropriate in connection with its purchase of Shares. 4.6 ACKNOWLEDGMENTS REGARDING PLACEMENT AGENT. The Investoracknowledges that the Placement Agent has acted solely as placement agent forthe Company in connection with the Offering of the Shares by the Company, andthat the Placement Agent has made no representation or warranty whatsoever withrespect to the accuracy or completeness of information, data or other relateddisclosure material that has been provided to the Investor. The Investor furtheracknowledges that in making its decision to enter into this Agreement andpurchase the Shares, it has relied on its own examination of the Company and theterms of, and consequences of holding, the Shares. The Investor furtherSecurities Purchase Agreement Page 10 of 12acknowledges that the provisions of this Section 4.7 are for the benefit of, andmay be enforced by, the Placement Agent. Investor has not received any generalsolicitation or advertising regarding the Offering and Investor has not beenfurnished with any oral or written representation or information in connectionwith the Offering which is not contained in the SEC Reports or set forth in theMemorandum. 4.7 ADDITIONAL ACKNOWLEDGEMENT. Investor has thoroughlyreviewed and the SEC Reports and the Memorandum (the “Disclosure Documents”)prior to making this investment. Investor has been granted a reasonable timeprior to the date hereof during which we have had the opportunity to obtain suchadditional information as Investor deems necessary to permit Investor to make aninformed decision with respect to the purchase of the Common Stock. Afterexamination of the SEC Reports and other information available, Investor isfully aware of the business prospects, financial condition, risks associatedwith investment and the operating history relating to the Company, and thereforein subscribing for the purchase of the Shares, Investor is not relying upon anyinformation other than information contained in the Disclosure Documents. TheInvestor acknowledges that it has independently evaluated the merits of thetransactions contemplated by this Agreement, that it has independentlydetermined to enter into the transactions contemplated hereby, that it is notrelying on any advice from or evaluation by any Other Investor, and that it isnot acting in concert with any Other Investor in making its purchase of theShares hereunder. The Investor and, to its knowledge, the Company acknowledgethat the Investors have not taken any actions that would deem the Investors tobe members of a “group” for purposes of Section 13(d) of the Exchange Act. 5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.Notwithstanding any investigation made by any party to this Agreement or by thePlacement Agent, all covenants, agreements, representations and warranties madeby the Company and the Investor herein shall survive the execution of thisAgreement, the delivery to the Investor of the Shares being purchased and thepayment therefor, and a party’s reliance on such representations and warrantiesshall not be affected by any investigation made by such party or any informationdeveloped thereby. 6. REGISTRATION OF SHARES; PUBLIC STATEMENTS. 6.1 In connection with the purchase and sale of the Shares bythe Investors contemplated hereby, the Company has entered into a RegistrationRights Agreement with each Investor providing for the filing by the Company of aRegistration Statement on Form S-3 to enable the resale of the Shares by theInvestors from time to time. 6.2 The Company agrees to disclose on a Current Report on Form8-K the existence of the Offering and the material terms, thereof, includingpricing, within four (4) days after the Closing. The Company will not issue anypublic statement, press release or any other public disclosure listing theInvestor as one of the purchasers of the Shares without the Investor’s priorreview of the statement and prior consent thereto, except as may be required byapplicable law or rules of any exchange on which the Company’s securities arelisted. 7. NOTICES. All notices, requests, consents and other communicationshereunder shall be in writing, shall be delivered (A) if within the UnitedStates, by first-class registered or certified airmail, or nationally recognizedovernight express courier, postage prepaid, or by facsimile, or (B) if fromoutside the United States, by International Federal Express (or comparableservice) or facsimile, and shall be deemed given (i) if delivered by first-classregistered or certified mail domestic, upon the Business Day received, (ii) ifdelivered by nationally recognized overnight carrier, one (1) Business Day aftertimely delivery to such carrier, (iii) if delivered by International FederalExpress (or comparable service), two (2) Business Days after timely delivery toSecurities Purchase Agreement Page 11 of 12such carrier, (iv) if delivered by facsimile, upon electric confirmation ofreceipt and shall be addressed as follows, or to such other address or addressesas may have been furnished in writing by a party to another party pursuant tothis paragraph: (a) if to the Company, to: iLinc Communications, Inc. 2999 North 44th Street, Suite 650 Phoenix, AZ 85016 Attention: James L. Dunn, Jr. Telephone: 602-952-1200 Fax: 602-952-1200 with a copy to: Jackson Walker, LLP 901 Main Street, Suite 6000 Dallas, TX 75202 Attention: James Ryan III Telephone: (516) 433-1200 Fax: (214) 661-6688 (b) if to the Investor, at its address on thesignature page to the Stock Purchase Agreement. 8. AMENDMENTS; WAIVER. This Agreement may not be modified or amendedexcept pursuant to an instrument in writing signed by the Company and theInvestor. Any waiver of a provision of this Agreement must be in writing andexecuted by the party against whom enforcement of such waiver is sought. 9. HEADINGS. The headings of the various sections of this Agreementhave been inserted for convenience of reference only and shall not be deemed tobe part of this Agreement. 10. ENTIRE AGREEMENT; SEVERABILITY. This Agreement sets forth theentire agreement and understanding of the parties relating to the subject matterhereof and supersedes all prior and contemporaneous agreements, negotiations andunderstandings between the parties, both oral and written relating to thesubject matter hereof. If any provision contained in this Agreement isdetermined to be invalid, illegal or unenforceable in any respect, the validity,legality and enforceability of the remaining provisions contained herein shallnot in any way be affected or impaired thereby. 11. GOVERNING LAW. This Agreement shall be governed by, and construedin accordance with, the internal laws of the State of New York, without givingeffect to the principles of conflicts of law. 12. COUNTERPARTS. This Agreement may be executed in two or morecounterparts, each of which shall constitute an original, but all of which, whentaken together, shall constitute but one instrument, and shall become effectivewhen one or more counterparts have been signed by each party hereto anddelivered to the other parties.Securities Purchase Agreement Page 12 of 12 SECURITIES PURCHASE AGREEMENTILINC COMMUNICATIONS, INC.JAMES M. POWERS, JR., PRESIDENT2999 NORTH 44TH STREET, SUITE 650PHOENIX, AZ 85016The undersigned investor (the “INVESTOR”) hereby confirms Investor’s agreementwith iLinc Communications, Inc. (“iLinc” or the “Company”) as follows:1. This Securities Purchase Agreement is made as of the date set forth belowbetween the Company and the Investor.2. The Company has authorized the sale and issuance of up to 5,400,000 shares(the “SHARES”) of the common stock of the Company, $0.001 par value per share(the “COMMON STOCK”), to certain investors in a private placement (the”OFFERING”).3. The Company and the Investor agree that the Investor will purchase from theCompany and the Company will issue and sell to the Investor 1,621,621 Shares ata purchase price of $0.37 per Share, for an aggregate purchase price of $600,000(the “PURCHASE PRICE”), subject to the Terms and Conditions for Purchase ofShares attached hereto as Annex I and incorporated herein by reference as iffully set forth herein. Unless otherwise requested by the Investor in Exhibit”A”, certificates representing the Shares purchased by the Investor will beregistered in the Investor’s name and address as set forth below.4. The Investor represents that, except as set forth below, (a) it has had noposition, office or other material relationship within the past three (3) yearswith the Company or its affiliates, (b) neither it, nor any group of which it isa member or to which it is related, beneficially owns (including the right toacquire or vote) any securities of the Company, and (c) it has no direct orindirect affiliation or association with any National Association of SecuritiesDealers, Inc. (“NASD”) member. Exceptions:None- ——————————————————————————— ——————————————————————————— ——————————————————————————— ——————————————————————————– (If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)Securities Purchase Agreement Page 1 of 12Please confirm that the foregoing correctly sets forth the agreement between usby signing in the space provided below for that purpose. DATED AS OF: June 8, 2006 Sophrosyne Technology Fund Ltd. ———————————————– By: /s/ Benjamin James Taylor ——————————————- Name: Benjamin James Taylor Title: Director Address: Ogier Fiduciary Services (Cayman) Ltd. ————————————– Queensgate House, South Church St. —————————————– P.O. Box 1234 GT, Grand Cayman —————————————–AGREED AND ACCEPTED:iLinc Communications, Inc.By: /s/ James M. Powers, Jr. ———————————– Name: James M. Powers, Jr. Title: President [SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE]Securities Purchase Agreement – Subscription Letter Page 2 of 12 ANNEX I TERMS AND CONDITIONS FOR PURCHASE OF SHARES 1. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE. 1.1 PURCHASE AND SALE. At the Closing (as defined in Section2), the Company will sell to the Investor, and the Investor will purchase fromthe Company, upon the terms and subject to the conditions set forth herein, andat the Purchase Price, the number of Shares described in paragraph 3 of theSecurities Purchase Agreement attached hereto (collectively with this Annex Iand the other exhibits attached hereto, this “Agreement”). 1.2 OTHER INVESTORS. As part of the Offering, the Companyproposes to enter into Securities Purchase Agreements in the same form as thisAgreement with certain other investors (the “OTHER INVESTORS”), and the Companyexpects to complete sales of Shares to them. The Investor and the OtherInvestors are sometimes collectively referred to herein as the “INVESTORS,” andthis Agreement, the Registration Rights Agreement and the Securities PurchaseAgreements executed by the Other Investors are sometimes collectively referredto herein as the “AGREEMENTS.” The Company may accept executed Agreements fromInvestors for the purchase of Shares commencing upon the date on which theCompany provides the Investors with the proposed purchase price per Share andconcluding upon the date (the “SUBSCRIPTION DATE”) on which the Company hasnotified Canaccord Adams, Inc. (in its capacity as placement agent for theShares, the “PLACEMENT AGENT”) in writing that it will no longer acceptAgreements for the purchase of Shares in the Offering, but in no event shall theSubscription Date be later than JUNE 8, 2006. Each Investor must execute anddeliver a Securities Purchase Agreement and a Registration Rights Agreement andmust complete a Stock Certificate Questionnaire (in the form attached as Exhibit”A” hereto) and an Investor Questionnaire (in the form attached as Exhibit “B”hereto) in order to purchase Shares in the Offering. 1.3 PLACEMENT AGENT FEE. The Investor acknowledges that theCompany intends to pay to the Placement Agent a fee in respect of the sale ofShares to the Investor from the proceeds of the Offering. 2. DELIVERY OF THE SHARES AT CLOSING. The completion of the purchaseand sale of the Shares (the “CLOSING”) shall occur on a date specified by theCompany and the Placement Agent that is anticipated to be June 9, 2006 (the”CLOSING DATE”), but which date shall not be later than June 16, 2006 (the”OUTSIDE DATE”), and of which the Investors will be notified in writing inadvance by the Placement Agent. At the Closing, the Company shall deliver to theInvestor one or more stock certificates representing the number of Shares setforth in paragraph 3 of the Stock Purchase Agreement, each such certificate tobe registered in the name of the Investor or, if so indicated on the StockCertificate Questionnaire, in the name of a nominee designated by the Investor.In exchange for the delivery of the subscription agreements, the Investor shalldeliver the Purchase Price to the Placement Agent by wire transfer ofimmediately available funds pursuant to written instructions to be held inescrow pending closing of the Offering. On the Closing Date, the Company shallcause counsel to the Company to deliver to the Investors a legal opinion, datedthe Closing Date, substantially in the form attached hereto as Exhibit “C” (the”LEGAL OPINION”). The Company’s obligation to issue and sell the Shares to the Investorshall be subject to the following conditions, any one or more of which may bewaived by the Company: (a) prior receipt by the Company of an executed copy ofthis Securities Purchase Agreement; (b) completion of purchases and sales ofShares under the Agreements with the Other Investors; (c) the accuracy of therepresentations and warranties made by the Investor in this Agreement and theSecurities Purchase Agreement Page 3 of 12fulfillment of the obligations of the Investor to be fulfilled by it under thisAgreement on or prior to the Closing; and (d) the absence of any order, writ,injunction, judgment or decree that questions the validity of the Agreements orthe right of the Company or the Investor to enter into such Agreements or toconsummate the transactions contemplated hereby and thereby. The Investor’s obligation to purchase the Shares shall be subject tothe following conditions, any one or more of which may be waived by theInvestor: (a) the completion, execution and return of the completed SecuritiesPurchase Agreement (with exhibits thereto) by all Investors and the funding intoescrow of no less than one million dollars ($1,000,0000); (b) the delivery ofthe Legal Opinion to the Investor by counsel to the Company; (c) the accuracy ofthe representations and warranties made by the Company in this Agreement on theClosing Date; (c) the execution and delivery by the Company of the RegistrationRights Agreement, (d) the absence of any order, writ, injunction, judgment ordecree that questions the validity of the Agreements or the right of the Companyor the Investor to enter into such Agreements or to consummate the transactionscontemplated hereby and thereby; and (e) the delivery to the Investor by theSecretary or Assistant Secretary of the Company of a certificate stating thatthe conditions specified in this paragraph have been fulfilled. In the event that the Closing does not occur on or before the OutsideDate as a result of the Company’s failure to satisfy any of the conditions setforth above (and such condition has not been waived by the Investor), theCompany shall return any and all funds paid hereunder to the Investor no laterthan one Business Day following the Outside Date and the Investors shall have nofurther obligations hereunder. For purposes of this Agreement, “BUSINESS DAY”shall mean any day other than a Saturday, Sunday or other day on which the NewYork Stock Exchange are permitted or required by law to close. 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. Except asotherwise described in the Company’s Annual Report on Form 10-K for the yearended March 31, 2005 (and any amendments thereto filed at least two (2) BusinessDays prior to the Closing Date), Company’s most recent Quarterly Report on Form10-Q for the quarter ended December 31, 2005 (and any amendments thereto filedat least two (2) Business Days prior to the Closing Date), the Company’s ProxyStatement for its 2005 Annual Meeting of Shareholders, and any of the Company’sCurrent Reports on Form 8-K filed since December 31, 2005 (and any amendmentsthereto filed at least two (2) Business Days prior to the Closing Date) (allcollectively, the “SEC REPORTS”), the Company hereby represents and warrants to,and covenants with, the Investor as of the date hereof and the Closing Date, asfollows: 3.1 ORGANIZATION. The Company is duly incorporated and validlyexisting in good standing under the laws of the State of Delaware. The Companyhas full power and authority to own, operate and occupy its properties and toconduct its business as presently conducted and is registered or qualified to dobusiness and in good standing in each jurisdiction in which it owns property ortransacts business and where the failure to be so qualified would have amaterial adverse effect upon the Company and its subsidiaries as a whole or thebusiness, financial condition, properties, operations or assets of the Companyand its subsidiaries as a whole or the Company’s ability to perform itsobligations under the Agreements in all material respects (“MATERIAL ADVERSEEFFECT”), and no proceeding has been instituted in any such jurisdictionrevoking, limiting or curtailing, or seeking to revoke, limit or curtail, suchpower and authority or qualification. 3.2 DUE AUTHORIZATION. The Company has all requisite power andauthority to execute, deliver and perform its obligations under the Agreements.The execution and delivery of the Agreements, and the consummation by theCompany of the transactions contemplated hereby, have been duly authorized byall necessary corporate action and no further action on the part of the Companyor its Board of Directors or stockholders is required. The Agreements have beenvalidly executed and delivered by the Company and constitute legal, valid andSecurities Purchase Agreement Page 4 of 12binding agreements of the Company enforceable against the Company in accordancewith their terms, except to the extent (i) rights to indemnity and contributionmay be limited by state or federal securities laws or the public policyunderlying such laws, (ii) such enforceability may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or similar laws affectingcreditors’ and contracting parties’ rights generally and (iii) suchenforceability may be subject to general principles of equity (regardless ofwhether such enforceability is considered in a proceeding in equity or at law). 3.3 NO CONFLICT OR DEFAULT. The execution and delivery of theAgreements, the issuance and sale of the Shares to be sold by the Company underthe Agreements, the fulfillment of the terms of the Agreements and theconsummation of the transactions contemplated thereby will not: (A) result in aconflict with or constitute a material violation of, or material default (withthe passage of time or otherwise) under, (i) any bond, debenture, note, loanagreement or other evidence of indebtedness, or any material lease, or contractto which the Company is a party or by which the Company or their respectiveproperties are bound, (ii) the Certificate of Incorporation, by-laws or otherorganizational documents of the Company, as amended, or (iii) any law,administrative regulation, or existing order of any court or governmentalagency, or other authority binding upon the Company or the Company’s respectiveproperties; or, (B) result in the creation or imposition of any lien,encumbrance, claim, or security interest upon any of the material assets of theCompany or an acceleration of indebtedness pursuant to any obligation, agreementor condition contained in any material bond, debenture, note or any otherevidence of indebtedness or any material indenture, mortgage, deed of trust orany other agreement or instrument to which the Company is a party or by which itis bound or to which any of the property or assets of the Company is subject. Noconsent, approval, authorization or other order of, or registration,qualification or filing with, any regulatory body, administrative agency, orother governmental body is required for the execution and delivery of theAgreements by the Company and the valid issuance or sale of the Shares by theCompany pursuant to the Agreements, other than such as have been made orobtained, and except for any filings required to be made under federal or statesecurities laws. 3.4 CAPITALIZATION. The outstanding capital stock of theCompany is as described in the Company’s Quarterly Report on Form 10-Q for thethree month period ending December 31, 2005 and the private placement memorandumdated May 31, 2006 (the “Memorandum”) provided to Investor. The Company has notissued any capital stock since December 31, 2005, other than pursuant to thepurchase of shares under the Company’s employee stock option plan and theexercise of outstanding warrants or stock options, in each case as disclosed inthe Memorandum or the SEC Reports. The Shares to be sold pursuant to theAgreements have been duly authorized, and when issued and paid for in accordancewith the terms of the Agreements, will be duly and validly issued, fully paidand nonassessable, subject to no lien, claim or encumbrance (except for any suchlien, claim or encumbrance created, directly or indirectly, by the Investor).The outstanding shares of capital stock of the Company have been duly andvalidly issued and are fully paid and nonassessable, have been issued incompliance with the registration requirements of federal and state securitieslaws, and were not issued in violation of any preemptive rights or similarrights to subscribe for or purchase securities. The Company owns one hundredpercent of all of the outstanding capital stock of each of its subsidiaries,free and clear of all liens, claims and encumbrances. There are not (i) anyoutstanding preemptive rights, or (ii) any rights, warrants or options toacquire, or instruments convertible into or exchangeable for, any unissuedshares of capital stock or other equity interest in the Company not disclosed inthe SEC Reports or Memorandum, or (iii) any contract, commitment, agreement,understanding or arrangement of any kind to which the Company is a party thatwould provide for the issuance or sale of any capital stock of the Company, anysuch convertible or exchangeable securities or any such rights, warrants oroptions not disclosed in the SEC Reports or the Memorandum. There are noshareholders agreements, voting agreements or other similar agreements withrespect to the Common Stock to which the Company is a party.Securities Purchase Agreement Page 5 of 12 3.5 LEGAL PROCEEDINGS. There is no material legal orgovernmental proceeding pending, or to the knowledge of the Company, threatened,to which the Company is a party or of which the business or property of theCompany is subject that is required to be disclosed and that is not so disclosedin the SEC Reports. Other than the information disclosed in the SEC Reports, theCompany is not subject to any injunction, judgment, decree or order of anycourt, regulatory body, administrative agency or other government body. 3.6 NO VIOLATIONS. The Company is not in violation of itsCertificate of Incorporation, bylaws or other organizational documents, asamended. The Company is not in violation of any law, administrative regulation,ordinance or order of any court or governmental agency, arbitration panel orauthority applicable to the Company, which violation, individually or in theaggregate, is reasonably likely to have a Material Adverse Effect. The Companyis not in default (and there exists no condition which, with the passage of timeor otherwise, would constitute a default) in the performance of any bond,debenture, note or any other evidence of indebtedness or any indenture,mortgage, deed of trust or any other material agreement or instrument to whichthe Company is a party or by which the Company is bound, which such defaultwould have a Material Adverse Effect upon the Company. 3.7 GOVERNMENTAL PERMITS, ETC. Each of the Company has allnecessary franchises, licenses, certificates and other authorizations from anyforeign, federal, state or local government or governmental agency, departmentor body that are currently necessary for the operation of the business of theCompany as currently conducted, except where the failure to currently possesssuch franchises, licenses, certificates and other authorizations is notreasonably likely to have a Material Adverse Effect. 3.8 INTELLECTUAL PROPERTY. (a) Except for matters which are not reasonablylikely to have a Material Adverse Effect, (i) each of the Company has ownershipof, or a license or other legal right to use, all patents, copyrights, tradesecrets, trademarks, customer lists, designs, manufacturing or other processes,computer software, systems, data compilation, research results or otherproprietary rights used in the business of the Company (collectively,”INTELLECTUAL PROPERTY”) and (ii) all of the Intellectual Property owned by theCompany consisting of patents, registered trademarks and registered copyrightshave been duly registered in, filed in or issued by the United States Patent andTrademark Office, the United States Register of Copyrights or the correspondingoffices of other jurisdictions and have been maintained and renewed inaccordance with all applicable provisions of law and administrative regulationsin the United States and/or such other jurisdictions. (b) Except for matters which are not reasonablylikely to have a Material Adverse Effect, all material licenses or othermaterial agreements under which (i) the Company employs rights in IntellectualProperty, or (ii) the Company has granted rights to others in IntellectualProperty owned or licensed by the Company are in full force and effect, andthere is no default by the Company with respect thereto. (c) The Company believes that it has taken all stepsreasonably required in accordance with sound business practice and businessjudgment to establish and preserve the ownership of the Company’s materialIntellectual Property. (d) Except for matters which are not reasonablylikely to have a Material Adverse Effect, to the knowledge of the Company, (i)the present business, activities and products of the Company do not infringe anyintellectual property of any other person; (ii) neither the Company is makingunauthorized use of any confidential information or trade secrets of any person;Securities Purchase Agreement Page 6 of 12and (iii) the activities of any of the employees of the Company, acting onbehalf of the Company, do not materially violate any agreements or arrangementsrelated to confidential information or trade secrets of third parties. (e) Except for matters which are not reasonablylikely to have a Material Adverse Effect, and except as disclosed in the SECReports, no proceedings are pending, or to the knowledge of the Company,threatened, which challenge the rights of the Company to the use the Company’sIntellectual Property. 3.9 FINANCIAL STATEMENTS. The financial statements of theCompany and the related notes contained in the SEC Reports present fairly andaccurately in all material respects the financial position of the Company as ofthe dates therein indicated, and the results of its operations, cash flows andthe changes in shareholders’ equity for the periods therein specified, subject,in the case of unaudited financial statements for interim periods, to normalyear-end audit adjustments. Such financial statements (including the relatednotes) have been prepared in accordance with generally accepted accountingprinciples applied on a consistent basis at the times and throughout the periodstherein specified, except that unaudited financial statements may not containall footnotes required by generally accepted accounting principles. 3.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in theSEC Reports or in any press releases issued by the Company prior to the ClosingDate, there has not been (i) an event, circumstance or change that has had or isreasonably likely to have a Material Adverse Effect upon the Company, (ii) anyobligation incurred by the Company that is material to the Company, (iii) anydividend or distribution of any kind declared, paid or made on the capital stockof the Company, or (iv) any loss or damage (whether or not insured) to thephysical property of the Company which has had a Material Adverse Effect. 3.11 AMEX COMPLIANCE. The Company’s Common Stock is registeredpursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended(the “EXCHANGE ACT”), and is listed on the American Stock Exchange (the “AMEX”),and the Company has taken no action intended to, or which to its knowledge couldhave the effect of, terminating the registration of the Common Stock under theExchange Act or delisting the Common Stock from the Amex. The issuance of theShares does not require shareholder approval, including, without limitation,pursuant to Section 713 of the Amex Company Guide. 3.12 REPORTING STATUS. The Company has timely made all filingsrequired under the Exchange Act during the twelve (12) months preceding the dateof this Agreement, and all of those documents complied in all material respectswith the SEC’s requirements as of their respective filing dates, and theinformation contained therein as of the respective dates thereof did not containan untrue statement of a material fact or omit to state a material fact requiredto be stated therein or necessary to make the statements therein in light of thecircumstances under which they were made not misleading. The Company iscurrently eligible to register the resale of Common Stock by the Investorspursuant to a registration statement on Form S-3 under the Securities Act (the”REGISTRATION STATEMENT”). 3.13 NO MANIPULATION; DISCLOSURE OF INFORMATION. The Companyhas not taken and will not take any action designed to or that might reasonablybe expected to cause or result in an unlawful manipulation of the price of theCommon Stock to facilitate the sale or resale of the Shares. The Company has notdisclosed any material non-public information to the Investors.Securities Purchase Agreement Page 7 of 12 3.14 ACCOUNTANTS. Epstein Weber & Conover, PLC, who expressedtheir opinion with respect to the consolidated financial statements to beincorporated by reference from the Company’s Annual Report on Form 10-K for theyear ended March 31, 2005 into the Registration Statement and the prospectuswhich forms a part thereof (the “PROSPECTUS”), have advised the Company thatthey are, and to the knowledge of the Company they are, independent accountantsas required by the Securities Act and the rules and regulations promulgatedthereunder. 3.15 CONTRACTS. Except for matters which are not reasonablylikely to have a Material Adverse Effect and those contracts that aresubstantially or fully performed or expired by their terms, the contracts listedas exhibits to or described in the SEC Reports that are material to the Companyand all amendments thereto, are in full force and effect on the date hereof, andneither the Company nor, to the Company’s knowledge, any other party to suchcontracts is in breach of or default under any of such contracts. 3.16 TAXES. Except for tax matters which are not reasonablylikely to have a Material Adverse Effect, each of the Company and each of itsSubsidiaries has filed all necessary federal, state and foreign income andfranchise tax returns and has paid or accrued all taxes shown as due thereon. 3.17 TRANSFER TAXES. On the Closing Date, all stock transferor other taxes (other than income taxes) which are required to be paid inconnection with the sale and transfer of the Shares hereunder will be, or willhave been, fully paid or provided for by the Company and the Company will havecomplied with all laws imposing such taxes. 3.18 INVESTMENT COMPANY. The Company is not an “investmentcompany” or an “affiliated person” of, or “promoter” or “principal underwriter”for an investment company, within the meaning of the Investment Company Act of1940, as amended, and will not be deemed an “investment company” as a result ofthe transactions contemplated by this Agreement. 3.19 INSURANCE. The Company maintains insurance of the typesand in the amounts that the Company reasonably believes is adequate for itsbusinesses, including, but not limited to, insurance covering real and personalproperty owned or leased by the Company against theft, damage, destruction, actsof vandalism and all other risks customarily insured against by similarlysituated companies, all of which insurance is in full force and effect. 3.20 OFFERING PROHIBITIONS. Neither the Company nor any personacting on its behalf or at its direction has in the past or will in the futuretake any action to sell, offer for sale or solicit offers to buy any securitiesof the Company which would bring the offer or sale of the Shares as contemplatedby this Agreement within the provisions of Section 5 of the Securities Act. 3.21 LISTING. The Company shall comply with all requirementswith respect to the issuance of the Shares and the listing thereof on Amex. 3.22 RELATED PARTY TRANSACTIONS. Other than described in theSEC Reports, to the knowledge of the Company, no transaction has occurredbetween or among the Company or any of its affiliates, officers or directors orany affiliate or affiliates of any such officer or director that with thepassage of time are reasonably likely be required to be disclosed pursuant toSection 13, 14 or 15(d) of the Exchange Act.Securities Purchase Agreement Page 8 of 12 3.23 BOOKS AND RECORDS. The books, records and accounts of theCompany accurately and fairly reflect, in reasonable detail, the transactionsin, and dispositions of, the assets of, and the operations of, the Company. TheCompany maintains a system of internal accounting controls sufficient to providereasonable assurances that (i) transactions are executed in accordance withmanagement’s general or specific authorizations, (ii) transactions are recordedas necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles and to maintain asset accountability,(iii) access to assets is permitted only in accordance with management’s generalor specific authorization and (iv) the recorded accountability for assets iscompared with the existing assets at reasonable intervals and appropriate actionis taken with respect to any differences. 3.24 ADDITIONAL CONTINGENT CONSIDERATION. The Company expectsthat with the funding of the Offering and the additional capital providedthereby, that the Company’s auditor will not express doubt about the company’sability to continue as a going concern (i.e. provided a so-called “CleanOpinion”). However, should the auditor again express such doubt and not providea Clean Opinion despite the additional capital as a part of the annual reportfor the fiscal year ending March 31, 2006 on Form 10-K, then the Company willissue to Investors additional cash consideration (“Additional Consideration”)equal to five percent (5.000%) of the gross proceeds. By way of example, shouldthe Company raise $2,000,000, and the Company’s auditor not provide a CleanOpinion, then iLinc will owe to Investors $100,000, with such AdditionalConsideration, if due, paid to within fifteen (15) days of the filing of theCompany’s Form 10-K in which the opinion expressing doubt is included. Providedhowever, that should the auditor issue an opinion that is a Clean Opinion thenthe obligation to provide Contingent Consideration under this Section 3.24 shallforever expire without further obligation to Investors. 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR. 4.1 INVESTOR KNOWLEDGE AND STATUS. The Investor represents andwarrants to, and covenants with, the Company that: (i) the Investor is an”accredited investor” as defined in Regulation D under the Securities Act, isknowledgeable, sophisticated and experienced in making, and is qualified to makedecisions with respect to, investments in securities presenting an investmentdecision similar to that involved in the purchase of the Shares, and hasrequested, received, reviewed and considered all information it deemed relevantin making an informed decision to purchase the Shares; (ii) the Investorunderstands that the Shares are “restricted securities” and have not beenregistered under the Securities Act and is acquiring the number of Shares setforth in paragraph 3 of the Securities Purchase Agreement in the ordinary courseof its business and for its own account for investment only, has no presentintention of distributing any of such Shares and has no arrangement orunderstanding with any other persons regarding the distribution of such Shares(this representation and warranty not limiting the Investor’s right to sellShares pursuant to a Registration Statement filed under the Registration RightsAgreement or otherwise, or other than with respect to any claim arising out of abreach of this representation and warranty, the Investor’s right toindemnification under Section 3 of the Registration Rights Agreement); (iii) theInvestor will not, directly or indirectly, offer, sell, pledge, transfer orotherwise dispose of (or solicit any offers to buy, purchase or otherwiseacquire or take a pledge of) any of the Shares except in compliance with theSecurities Act, applicable state securities laws and the respective rules andregulations promulgated thereunder; (iv) the Investor has answered all questionsin paragraph 4 of the Securities Purchase Agreement and the InvestorQuestionnaire attached hereto as Exhibit B for use in preparation of theRegistration Statement and the answers thereto are true and correct as of thedate hereof and will be true and correct as of the Closing Date; (v) theInvestor will notify the Company promptly of any change in any of suchinformation until such time as the Investor has sold all of its Shares or untilthe Company is no longer required to keep the Registration Statement effective;and (vi) the Investor has, in connection with its decision to purchase thenumber of Shares set forth in paragraph 3 of the Securities Purchase Agreement,relied upon the representations and warranties of the Company contained hereinSecurities Purchase Agreement Page 9 of 12and the information contained in the SEC Reports. The Investor understands thatthe issuance of the Shares to the Investor has not been registered under theSecurities Act, or registered or qualified under any state securities law, inreliance on specific exemptions therefrom, which exemptions may depend upon,among other things, the representations made by the Investor in this Agreement.No person (including without limitation the Placement Agent) is authorized bythe Company to provide any representation that is inconsistent with or inaddition to those contained herein or in the SEC Reports, and the Investoracknowledges that it has not received or relied on any such representations. 4.2 TRANSFER OF SHARES. The Investor agrees that it will notmake any sale, transfer or other disposition of the Shares (a “DISPOSITION”)other than Dispositions that are made pursuant to the Registration Statement incompliance with any applicable prospectus delivery requirements or that areexempt from registration under the Securities Act. Investor has not taken andwill not take any action designed to or that might reasonably be expected tocause or result in manipulation of the price of the Common Stock to facilitatethe subscription to, or the sale or resale of the Shares. The Company has notdisclosed any material non-public information to the Investors. 4.3 POWER AND AUTHORITY. The Investor represents and warrantsto the Company that (i) the Investor has full right, power, authority andcapacity to enter into this Agreement and to consummate the transactionscontemplated hereby and has taken all necessary action to authorize theexecution, delivery and performance of this Agreement, and (ii) this Agreementconstitutes a valid and binding obligation of the Investor enforceable againstthe Investor in accordance with its terms, except to the extent (i) rights toindemnity and contribution may be limited by state or federal securities laws orthe public policy underlying such laws, (ii) such enforceability may be limitedby applicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting creditors’ and contracting parties’ rights generally and (iii) suchenforceability may be subject to general principles of equity (regardless ofwhether such enforceability is considered in a proceeding in equity or at law). 4.4 NO SHORT POSITION. The Investor has not prior to theClosing Date, and will not for the one (1) year period beginning with theClosing Date, established any hedge or other position in the Common Stock thatis issued and outstanding, and that is designed to or could reasonably beexpected to lead to or result in a sale, transfer or other disposition by theInvestor or any other person or entity under the control or direction ofInvestor. For purposes hereof, a “hedge or other position” would include,without limitation, effecting any short sale or having in effect any shortposition (whether or not such sale or position is against the box and regardlessof when such position was entered into) or any purchase, sale or grant of anyright (including, without limitation, any put or call option) with respect tothe Common Stock or with respect to any security (other than a broad-basedmarket basket or index) that includes, relates to or derives any significantpart of its value from the Common Stock. 4.5 NO INVESTMENT, TAX OR LEGAL ADVICE. The Investorunderstands that nothing in the SEC Reports, this Agreement, or any othermaterials presented to the Investor in connection with the purchase and sale ofthe Shares constitutes legal, tax or investment advice. The Investor hasconsulted such legal, tax and investment advisors as it, in its sole discretion,has deemed necessary or appropriate in connection with its purchase of Shares. 4.6 ACKNOWLEDGMENTS REGARDING PLACEMENT AGENT. The Investoracknowledges that the Placement Agent has acted solely as placement agent forthe Company in connection with the Offering of the Shares by the Company, andthat the Placement Agent has made no representation or warranty whatsoever withrespect to the accuracy or completeness of information, data or other relateddisclosure material that has been provided to the Investor. The Investor furtheracknowledges that in making its decision to enter into this Agreement andpurchase the Shares, it has relied on its own examination of the Company and theterms of, and consequences of holding, the Shares. The Investor furtherSecurities Purchase Agreement Page 10 of 12acknowledges that the provisions of this Section 4.7 are for the benefit of, andmay be enforced by, the Placement Agent. Investor has not received any generalsolicitation or advertising regarding the Offering and Investor has not beenfurnished with any oral or written representation or information in connectionwith the Offering which is not contained in the SEC Reports or set forth in theMemorandum. 4.7 ADDITIONAL ACKNOWLEDGEMENT. Investor has thoroughlyreviewed and the SEC Reports and the Memorandum (the “Disclosure Documents”)prior to making this investment. Investor has been granted a reasonable timeprior to the date hereof during which we have had the opportunity to obtain suchadditional information as Investor deems necessary to permit Investor to make aninformed decision with respect to the purchase of the Common Stock. Afterexamination of the SEC Reports and other information available, Investor isfully aware of the business prospects, financial condition, risks associatedwith investment and the operating history relating to the Company, and thereforein subscribing for the purchase of the Shares, Investor is not relying upon anyinformation other than information contained in the Disclosure Documents. TheInvestor acknowledges that it has independently evaluated the merits of thetransactions contemplated by this Agreement, that it has independentlydetermined to enter into the transactions contemplated hereby, that it is notrelying on any advice from or evaluation by any Other Investor, and that it isnot acting in concert with any Other Investor in making its purchase of theShares hereunder. The Investor and, to its knowledge, the Company acknowledgethat the Investors have not taken any actions that would deem the Investors tobe members of a “group” for purposes of Section 13(d) of the Exchange Act. 5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.Notwithstanding any investigation made by any party to this Agreement or by thePlacement Agent, all covenants, agreements, representations and warranties madeby the Company and the Investor herein shall survive the execution of thisAgreement, the delivery to the Investor of the Shares being purchased and thepayment therefor, and a party’s reliance on such representations and warrantiesshall not be affected by any investigation made by such party or any informationdeveloped thereby. 6. REGISTRATION OF SHARES; PUBLIC STATEMENTS. 6.1 In connection with the purchase and sale of the Shares bythe Investors contemplated hereby, the Company has entered into a RegistrationRights Agreement with each Investor providing for the filing by the Company of aRegistration Statement on Form S-3 to enable the resale of the Shares by theInvestors from time to time. 6.2 The Company agrees to disclose on a Current Report on Form8-K the existence of the Offering and the material terms, thereof, includingpricing, within four (4) days after the Closing. The Company will not issue anypublic statement, press release or any other public disclosure listing theInvestor as one of the purchasers of the Shares without the Investor’s priorreview of the statement and prior consent thereto, except as may be required byapplicable law or rules of any exchange on which the Company’s securities arelisted. 7. NOTICES. All notices, requests, consents and other communicationshereunder shall be in writing, shall be delivered (A) if within the UnitedStates, by first-class registered or certified airmail, or nationally recognizedovernight express courier, postage prepaid, or by facsimile, or (B) if fromoutside the United States, by International Federal Express (or comparableservice) or facsimile, and shall be deemed given (i) if delivered by first-classregistered or certified mail domestic, upon the Business Day received, (ii) ifdelivered by nationally recognized overnight carrier, one (1) Business Day aftertimely delivery to such carrier, (iii) if delivered by International FederalExpress (or comparable service), two (2) Business Days after timely delivery toSecurities Purchase Agreement Page 11 of 12such carrier, (iv) if delivered by facsimile, upon electric confirmation ofreceipt and shall be addressed as follows, or to such other address or addressesas may have been furnished in writing by a party to another party pursuant tothis paragraph: (a) if to the Company, to: iLinc Communications, Inc. 2999 North 44th Street, Suite 650 Phoenix, AZ 85016 Attention: James L. Dunn, Jr. Telephone: 602-952-1200 Fax: 602-952-1200 with a copy to: Jackson Walker, LLP 901 Main Street, Suite 6000 Dallas, TX 75202 Attention: James Ryan III Telephone: (516) 433-1200 Fax: (214) 661-6688 (b) if to the Investor, at its address on thesignature page to the Stock Purchase Agreement. 8. AMENDMENTS; WAIVER. This Agreement may not be modified or amendedexcept pursuant to an instrument in writing signed by the Company and theInvestor. Any waiver of a provision of this Agreement must be in writing andexecuted by the party against whom enforcement of such waiver is sought. 9. HEADINGS. The headings of the various sections of this Agreementhave been inserted for convenience of reference only and shall not be deemed tobe part of this Agreement. 10. ENTIRE AGREEMENT; SEVERABILITY. This Agreement sets forth theentire agreement and understanding of the parties relating to the subject matterhereof and supersedes all prior and contemporaneous agreements, negotiations andunderstandings between the parties, both oral and written relating to thesubject matter hereof. If any provision contained in this Agreement isdetermined to be invalid, illegal or unenforceable in any respect, the validity,legality and enforceability of the remaining provisions contained herein shallnot in any way be affected or impaired thereby. 11. GOVERNING LAW. This Agreement shall be governed by, and construedin accordance with, the internal laws of the State of New York, without givingeffect to the principles of conflicts of law. 12. COUNTERPARTS. This Agreement may be executed in two or morecounterparts, each of which shall constitute an original, but all of which, whentaken together, shall constitute but one instrument, and shall become effectivewhen one or more counterparts have been signed by each party hereto anddelivered to the other parties.Securities Purchase Agreement Page 12 of 12 SECURITIES PURCHASE AGREEMENTILINC COMMUNICATIONS, INC.JAMES M. POWERS, JR., PRESIDENT2999 NORTH 44TH STREET, SUITE 650PHOENIX, AZ 85016The undersigned investor (the “INVESTOR”) hereby confirms Investor’s agreementwith iLinc Communications, Inc. (“iLinc” or the “Company”) as follows:1. This Securities Purchase Agreement is made as of the date set forth belowbetween the Company and the Investor.2. The Company has authorized the sale and issuance of up to 5,400,000 shares(the “SHARES”) of the common stock of the Company, $0.001 par value per share(the “COMMON STOCK”), to certain investors in a private placement (the”OFFERING”).3. The Company and the Investor agree that the Investor will purchase from theCompany and the Company will issue and sell to the Investor 1,081,081 Shares ata purchase price of $0.37 per Share, for an aggregate purchase price of $400,000(the “PURCHASE PRICE”), subject to the Terms and Conditions for Purchase ofShares attached hereto as Annex I and incorporated herein by reference as iffully set forth herein. Unless otherwise requested by the Investor in Exhibit”A”, certificates representing the Shares purchased by the Investor will beregistered in the Investor’s name and address as set forth below.4. The Investor represents that, except as set forth below, (a) it has had noposition, office or other material relationship within the past three (3) yearswith the Company or its affiliates, (b) neither it, nor any group of which it isa member or to which it is related, beneficially owns (including the right toacquire or vote) any securities of the Company, and (c) it has no direct orindirect affiliation or association with any National Association of SecuritiesDealers, Inc. (“NASD”) member. Exceptions:None- ——————————————————————————— ——————————————————————————— ——————————————————————————— ——————————————————————————– (If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)Securities Purchase Agreement Page 1 of 12Please confirm that the foregoing correctly sets forth the agreement between usby signing in the space provided below for that purpose. DATED AS OF: June 8, 2006 Benjamin James Taylor and Diane Wong Shoda ——————————————— By: /s/ Benjamin James Taylor —————————————– Name: Benjamin James Taylor, individually By: /s/ Diane Wong Shoda —————————————– Name: Diane Wong Shoda, individually Address: 54 E. Allendale Avenue ———————————— Allendale, NJ 07401 ———————————————AGREED AND ACCEPTED:iLinc Communications, Inc.By: /s/ James M. Powers, Jr. ———————————– Name: James M. Powers, Jr. Title: President [SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE]Securities Purchase Agreement – Subscription Letter Page 2 of 12 ANNEX I TERMS AND CONDITIONS FOR PURCHASE OF SHARES 1. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE. 1.1 PURCHASE AND SALE. At the Closing (as defined in Section2), the Company will sell to the Investor, and the Investor will purchase fromthe Company, upon the terms and subject to the conditions set forth herein, andat the Purchase Price, the number of Shares described in paragraph 3 of theSecurities Purchase Agreement attached hereto (collectively with this Annex Iand the other exhibits attached hereto, this “Agreement”). 1.2 OTHER INVESTORS. As part of the Offering, the Companyproposes to enter into Securities Purchase Agreements in the same form as thisAgreement with certain other investors (the “OTHER INVESTORS”), and the Companyexpects to complete sales of Shares to them. The Investor and the OtherInvestors are sometimes collectively referred to herein as the “INVESTORS,” andthis Agreement, the Registration Rights Agreement and the Securities PurchaseAgreements executed by the Other Investors are sometimes collectively referredto herein as the “AGREEMENTS.” The Company may accept executed Agreements fromInvestors for the purchase of Shares commencing upon the date on which theCompany provides the Investors with the proposed purchase price per Share andconcluding upon the date (the “SUBSCRIPTION DATE”) on which the Company hasnotified Canaccord Adams, Inc. (in its capacity as placement agent for theShares, the “PLACEMENT AGENT”) in writing that it will no longer acceptAgreements for the purchase of Shares in the Offering, but in no event shall theSubscription Date be later than JUNE 8, 2006. Each Investor must execute anddeliver a Securities Purchase Agreement and a Registration Rights Agreement andmust complete a Stock Certificate Questionnaire (in the form attached as Exhibit”A” hereto) and an Investor Questionnaire (in the form attached as Exhibit “B”hereto) in order to purchase Shares in the Offering. 1.3 PLACEMENT AGENT FEE. The Investor acknowledges that theCompany intends to pay to the Placement Agent a fee in respect of the sale ofShares to the Investor from the proceeds of the Offering. 2. DELIVERY OF THE SHARES AT CLOSING. The completion of the purchaseand sale of the Shares (the “CLOSING”) shall occur on a date specified by theCompany and the Placement Agent that is anticipated to be June 9, 2006 (the”CLOSING DATE”), but which date shall not be later than June 16, 2006 (the”OUTSIDE DATE”), and of which the Investors will be notified in writing inadvance by the Placement Agent. At the Closing, the Company shall deliver to theInvestor one or more stock certificates representing the number of Shares setforth in paragraph 3 of the Stock Purchase Agreement, each such certificate tobe registered in the name of the Investor or, if so indicated on the StockCertificate Questionnaire, in the name of a nominee designated by the Investor.In exchange for the delivery of the subscription agreements, the Investor shalldeliver the Purchase Price to the Placement Agent by wire transfer ofimmediately available funds pursuant to written instructions to be held inescrow pending closing of the Offering. On the Closing Date, the Company shallcause counsel to the Company to deliver to the Investors a legal opinion, datedthe Closing Date, substantially in the form attached hereto as Exhibit “C” (the”LEGAL OPINION”). The Company’s obligation to issue and sell the Shares to the Investorshall be subject to the following conditions, any one or more of which may bewaived by the Company: (a) prior receipt by the Company of an executed copy ofthis Securities Purchase Agreement; (b) completion of purchases and sales ofShares under the Agreements with the Other Investors; (c) the accuracy of therepresentations and warranties made by the Investor in this Agreement and theSecurities Purchase Agreement Page 3 of 12fulfillment of the obligations of the Investor to be fulfilled by it under thisAgreement on or prior to the Closing; and (d) the absence of any order, writ,injunction, judgment or decree that questions the validity of the Agreements orthe right of the Company or the Investor to enter into such Agreements or toconsummate the transactions contemplated hereby and thereby. The Investor’s obligation to purchase the Shares shall be subject tothe following conditions, any one or more of which may be waived by theInvestor: (a) the completion, execution and return of the completed SecuritiesPurchase Agreement (with exhibits thereto) by all Investors and the funding intoescrow of no less than one million dollars ($1,000,0000); (b) the delivery ofthe Legal Opinion to the Investor by counsel to the Company; (c) the accuracy ofthe representations and warranties made by the Company in this Agreement on theClosing Date; (c) the execution and delivery by the Company of the RegistrationRights Agreement, (d) the absence of any order, writ, injunction, judgment ordecree that questions the validity of the Agreements or the right of the Companyor the Investor to enter into such Agreements or to consummate the transactionscontemplated hereby and thereby; and (e) the delivery to the Investor by theSecretary or Assistant Secretary of the Company of a certificate stating thatthe conditions specified in this paragraph have been fulfilled. In the event that the Closing does not occur on or before the OutsideDate as a result of the Company’s failure to satisfy any of the conditions setforth above (and such condition has not been waived by the Investor), theCompany shall return any and all funds paid hereunder to the Investor no laterthan one Business Day following the Outside Date and the Investors shall have nofurther obligations hereunder. For purposes of this Agreement, “BUSINESS DAY”shall mean any day other than a Saturday, Sunday or other day on which the NewYork Stock Exchange are permitted or required by law to close. 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. Except asotherwise described in the Company’s Annual Report on Form 10-K for the yearended March 31, 2005 (and any amendments thereto filed at least two (2) BusinessDays prior to the Closing Date), Company’s most recent Quarterly Report on Form10-Q for the quarter ended December 31, 2005 (and any amendments thereto filedat least two (2) Business Days prior to the Closing Date), the Company’s ProxyStatement for its 2005 Annual Meeting of Shareholders, and any of the Company’sCurrent Reports on Form 8-K filed since December 31, 2005 (and any amendmentsthereto filed at least two (2) Business Days prior to the Closing Date) (allcollectively, the “SEC REPORTS”), the Company hereby represents and warrants to,and covenants with, the Investor as of the date hereof and the Closing Date, asfollows: 3.1 ORGANIZATION. The Company is duly incorporated and validlyexisting in good standing under the laws of the State of Delaware. The Companyhas full power and authority to own, operate and occupy its properties and toconduct its business as presently conducted and is registered or qualified to dobusiness and in good standing in each jurisdiction in which it owns property ortransacts business and where the failure to be so qualified would have amaterial adverse effect upon the Company and its subsidiaries as a whole or thebusiness, financial condition, properties, operations or assets of the Companyand its subsidiaries as a whole or the Company’s ability to perform itsobligations under the Agreements in all material respects (“MATERIAL ADVERSEEFFECT”), and no proceeding has been instituted in any such jurisdictionrevoking, limiting or curtailing, or seeking to revoke, limit or curtail, suchpower and authority or qualification. 3.2 DUE AUTHORIZATION. The Company has all requisite power andauthority to execute, deliver and perform its obligations under the Agreements.The execution and delivery of the Agreements, and the consummation by theCompany of the transactions contemplated hereby, have been duly authorized byall necessary corporate action and no further action on the part of the Companyor its Board of Directors or stockholders is required. The Agreements have beenvalidly executed and delivered by the Company and constitute legal, valid andSecurities Purchase Agreement Page 4 of 12binding agreements of the Company enforceable against the Company in accordancewith their terms, except to the extent (i) rights to indemnity and contributionmay be limited by state or federal securities laws or the public policyunderlying such laws, (ii) such enforceability may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or similar laws affectingcreditors’ and contracting parties’ rights generally and (iii) suchenforceability may be subject to general principles of equity (regardless ofwhether such enforceability is considered in a proceeding in equity or at law). 3.3 NO CONFLICT OR DEFAULT. The execution and delivery of theAgreements, the issuance and sale of the Shares to be sold by the Company underthe Agreements, the fulfillment of the terms of the Agreements and theconsummation of the transactions contemplated thereby will not: (A) result in aconflict with or constitute a material violation of, or material default (withthe passage of time or otherwise) under, (i) any bond, debenture, note, loanagreement or other evidence of indebtedness, or any material lease, or contractto which the Company is a party or by which the Company or their respectiveproperties are bound, (ii) the Certificate of Incorporation, by-laws or otherorganizational documents of the Company, as amended, or (iii) any law,administrative regulation, or existing order of any court or governmentalagency, or other authority binding upon the Company or the Company’s respectiveproperties; or, (B) result in the creation or imposition of any lien,encumbrance, claim, or security interest upon any of the material assets of theCompany or an acceleration of indebtedness pursuant to any obligation, agreementor condition contained in any material bond, debenture, note or any otherevidence of indebtedness or any material indenture, mortgage, deed of trust orany other agreement or instrument to which the Company is a party or by which itis bound or to which any of the property or assets of the Company is subject. Noconsent, approval, authorization or other order of, or registration,qualification or filing with, any regulatory body, administrative agency, orother governmental body is required for the execution and delivery of theAgreements by the Company and the valid issuance or sale of the Shares by theCompany pursuant to the Agreements, other than such as have been made orobtained, and except for any filings required to be made under federal or statesecurities laws. 3.4 CAPITALIZATION. The outstanding capital stock of theCompany is as described in the Company’s Quarterly Report on Form 10-Q for thethree month period ending December 31, 2005 and the private placement memorandumdated May 31, 2006 (the “Memorandum”) provided to Investor. The Company has notissued any capital stock since December 31, 2005, other than pursuant to thepurchase of shares under the Company’s employee stock option plan and theexercise of outstanding warrants or stock options, in each case as disclosed inthe Memorandum or the SEC Reports. The Shares to be sold pursuant to theAgreements have been duly authorized, and when issued and paid for in accordancewith the terms of the Agreements, will be duly and validly issued, fully paidand nonassessable, subject to no lien, claim or encumbrance (except for any suchlien, claim or encumbrance created, directly or indirectly, by the Investor).The outstanding shares of capital stock of the Company have been duly andvalidly issued and are fully paid and nonassessable, have been issued incompliance with the registration requirements of federal and state securitieslaws, and were not issued in violation of any preemptive rights or similarrights to subscribe for or purchase securities. The Company owns one hundredpercent of all of the outstanding capital stock of each of its subsidiaries,free and clear of all liens, claims and encumbrances. There are not (i) anyoutstanding preemptive rights, or (ii) any rights, warrants or options toacquire, or instruments convertible into or exchangeable for, any unissuedshares of capital stock or other equity interest in the Company not disclosed inthe SEC Reports or Memorandum, or (iii) any contract, commitment, agreement,understanding or arrangement of any kind to which the Company is a party thatwould provide for the issuance or sale of any capital stock of the Company, anysuch convertible or exchangeable securities or any such rights, warrants oroptions not disclosed in the SEC Reports or the Memorandum. There are noshareholders agreements, voting agreements or other similar agreements withrespect to the Common Stock to which the Company is a party.Securities Purchase Agreement Page 5 of 12 3.5 LEGAL PROCEEDINGS. There is no material legal orgovernmental proceeding pending, or to the knowledge of the Company, threatened,to which the Company is a party or of which the business or property of theCompany is subject that is required to be disclosed and that is not so disclosedin the SEC Reports. Other than the information disclosed in the SEC Reports, theCompany is not subject to any injunction, judgment, decree or order of anycourt, regulatory body, administrative agency or other government body. 3.6 NO VIOLATIONS. The Company is not in violation of itsCertificate of Incorporation, bylaws or other organizational documents, asamended. The Company is not in violation of any law, administrative regulation,ordinance or order of any court or governmental agency, arbitration panel orauthority applicable to the Company, which violation, individually or in theaggregate, is reasonably likely to have a Material Adverse Effect. The Companyis not in default (and there exists no condition which, with the passage of timeor otherwise, would constitute a default) in the performance of any bond,debenture, note or any other evidence of indebtedness or any indenture,mortgage, deed of trust or any other material agreement or instrument to whichthe Company is a party or by which the Company is bound, which such defaultwould have a Material Adverse Effect upon the Company. 3.7 GOVERNMENTAL PERMITS, ETC. Each of the Company has allnecessary franchises, licenses, certificates and other authorizations from anyforeign, federal, state or local government or governmental agency, departmentor body that are currently necessary for the operation of the business of theCompany as currently conducted, except where the failure to currently possesssuch franchises, licenses, certificates and other authorizations is notreasonably likely to have a Material Adverse Effect. 3.8 INTELLECTUAL PROPERTY. (a) Except for matters which are not reasonablylikely to have a Material Adverse Effect, (i) each of the Company has ownershipof, or a license or other legal right to use, all patents, copyrights, tradesecrets, trademarks, customer lists, designs, manufacturing or other processes,computer software, systems, data compilation, research results or otherproprietary rights used in the business of the Company (collectively,”INTELLECTUAL PROPERTY”) and (ii) all of the Intellectual Property owned by theCompany consisting of patents, registered trademarks and registered copyrightshave been duly registered in, filed in or issued by the United States Patent andTrademark Office, the United States Register of Copyrights or the correspondingoffices of other jurisdictions and have been maintained and renewed inaccordance with all applicable provisions of law and administrative regulationsin the United States and/or such other jurisdictions. (b) Except for matters which are not reasonablylikely to have a Material Adverse Effect, all material licenses or othermaterial agreements under which (i) the Company employs rights in IntellectualProperty, or (ii) the Company has granted rights to others in IntellectualProperty owned or licensed by the Company are in full force and effect, andthere is no default by the Company with respect thereto. (c) The Company believes that it has taken all stepsreasonably required in accordance with sound business practice and businessjudgment to establish and preserve the ownership of the Company’s materialIntellectual Property. (d) Except for matters which are not reasonablylikely to have a Material Adverse Effect, to the knowledge of the Company, (i)the present business, activities and products of the Company do not infringe anyintellectual property of any other person; (ii) neither the Company is makingunauthorized use of any confidential information or trade secrets of any person;Securities Purchase Agreement Page 6 of 12and (iii) the activities of any of the employees of the Company, acting onbehalf of the Company, do not materially violate any agreements or arrangementsrelated to confidential information or trade secrets of third parties. (e) Except for matters which are not reasonablylikely to have a Material Adverse Effect, and except as disclosed in the SECReports, no proceedings are pending, or to the knowledge of the Company,threatened, which challenge the rights of the Company to the use the Company’sIntellectual Property. 3.9 FINANCIAL STATEMENTS. The financial statements of theCompany and the related notes contained in the SEC Reports present fairly andaccurately in all material respects the financial position of the Company as ofthe dates therein indicated, and the results of its operations, cash flows andthe changes in shareholders’ equity for the periods therein specified, subject,in the case of unaudited financial statements for interim periods, to normalyear-end audit adjustments. Such financial statements (including the relatednotes) have been prepared in accordance with generally accepted accountingprinciples applied on a consistent basis at the times and throughout the periodstherein specified, except that unaudited financial statements may not containall footnotes required by generally accepted accounting principles. 3.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in theSEC Reports or in any press releases issued by the Company prior to the ClosingDate, there has not been (i) an event, circumstance or change that has had or isreasonably likely to have a Material Adverse Effect upon the Company, (ii) anyobligation incurred by the Company that is material to the Company, (iii) anydividend or distribution of any kind declared, paid or made on the capital stockof the Company, or (iv) any loss or damage (whether or not insured) to thephysical property of the Company which has had a Material Adverse Effect. 3.11 AMEX COMPLIANCE. The Company’s Common Stock is registeredpursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended(the “EXCHANGE ACT”), and is listed on the American Stock Exchange (the “AMEX”),and the Company has taken no action intended to, or which to its knowledge couldhave the effect of, terminating the registration of the Common Stock under theExchange Act or delisting the Common Stock from the Amex. The issuance of theShares does not require shareholder approval, including, without limitation,pursuant to Section 713 of the Amex Company Guide. 3.12 REPORTING STATUS. The Company has timely made all filingsrequired under the Exchange Act during the twelve (12) months preceding the dateof this Agreement, and all of those documents complied in all material respectswith the SEC’s requirements as of their respective filing dates, and theinformation contained therein as of the respective dates thereof did not containan untrue statement of a material fact or omit to state a material fact requiredto be stated therein or necessary to make the statements therein in light of thecircumstances under which they were made not misleading. The Company iscurrently eligible to register the resale of Common Stock by the Investorspursuant to a registration statement on Form S-3 under the Securities Act (the”REGISTRATION STATEMENT”). 3.13 NO MANIPULATION; DISCLOSURE OF INFORMATION. The Companyhas not taken and will not take any action designed to or that might reasonablybe expected to cause or result in an unlawful manipulation of the price of theCommon Stock to facilitate the sale or resale of the Shares. The Company has notdisclosed any material non-public information to the Investors.Securities Purchase Agreement Page 7 of 12 3.14 ACCOUNTANTS. Epstein Weber & Conover, PLC, who expressedtheir opinion with respect to the consolidated financial statements to beincorporated by reference from the Company’s Annual Report on Form 10-K for theyear ended March 31, 2005 into the Registration Statement and the prospectuswhich forms a part thereof (the “PROSPECTUS”), have advised the Company thatthey are, and to the knowledge of the Company they are, independent accountantsas required by the Securities Act and the rules and regulations promulgatedthereunder. 3.15 CONTRACTS. Except for matters which are not reasonablylikely to have a Material Adverse Effect and those contracts that aresubstantially or fully performed or expired by their terms, the contracts listedas exhibits to or described in the SEC Reports that are material to the Companyand all amendments thereto, are in full force and effect on the date hereof, andneither the Company nor, to the Company’s knowledge, any other party to suchcontracts is in breach of or default under any of such contracts. 3.16 TAXES. Except for tax matters which are not reasonablylikely to have a Material Adverse Effect, each of the Company and each of itsSubsidiaries has filed all necessary federal, state and foreign income andfranchise tax returns and has paid or accrued all taxes shown as due thereon. 3.17 TRANSFER TAXES. On the Closing Date, all stock transferor other taxes (other than income taxes) which are required to be paid inconnection with the sale and transfer of the Shares hereunder will be, or willhave been, fully paid or provided for by the Company and the Company will havecomplied with all laws imposing such taxes. 3.18 INVESTMENT COMPANY. The Company is not an “investmentcompany” or an “affiliated person” of, or “promoter” or “principal underwriter”for an investment company, within the meaning of the Investment Company Act of1940, as amended, and will not be deemed an “investment company” as a result ofthe transactions contemplated by this Agreement. 3.19 INSURANCE. The Company maintains insurance of the typesand in the amounts that the Company reasonably believes is adequate for itsbusinesses, including, but not limited to, insurance covering real and personalproperty owned or leased by the Company against theft, damage, destruction, actsof vandalism and all other risks customarily insured against by similarlysituated companies, all of which insurance is in full force and effect. 3.20 OFFERING PROHIBITIONS. Neither the Company nor any personacting on its behalf or at its direction has in the past or will in the futuretake any action to sell, offer for sale or solicit offers to buy any securitiesof the Company which would bring the offer or sale of the Shares as contemplatedby this Agreement within the provisions of Section 5 of the Securities Act. 3.21 LISTING. The Company shall comply with all requirementswith respect to the issuance of the Shares and the listing thereof on Amex. 3.22 RELATED PARTY TRANSACTIONS. Other than described in theSEC Reports, to the knowledge of the Company, no transaction has occurredbetween or among the Company or any of its affiliates, officers or directors orany affiliate or affiliates of any such officer or director that with thepassage of time are reasonably likely be required to be disclosed pursuant toSection 13, 14 or 15(d) of the Exchange Act.Securities Purchase Agreement Page 8 of 12 3.23 BOOKS AND RECORDS. The books, records and accounts of theCompany accurately and fairly reflect, in reasonable detail, the transactionsin, and dispositions of, the assets of, and the operations of, the Company. TheCompany maintains a system of internal accounting controls sufficient to providereasonable assurances that (i) transactions are executed in accordance withmanagement’s general or specific authorizations, (ii) transactions are recordedas necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles and to maintain asset accountability,(iii) access to assets is permitted only in accordance with management’s generalor specific authorization and (iv) the recorded accountability for assets iscompared with the existing assets at reasonable intervals and appropriate actionis taken with respect to any differences. 3.24 ADDITIONAL CONTINGENT CONSIDERATION. The Company expectsthat with the funding of the Offering and the additional capital providedthereby, that the Company’s auditor will not express doubt about the company’sability to continue as a going concern (i.e. provided a so-called “CleanOpinion”). However, should the auditor again express such doubt and not providea Clean Opinion despite the additional capital as a part of the annual reportfor the fiscal year ending March 31, 2006 on Form 10-K, then the Company willissue to Investors additional cash consideration (“Additional Consideration”)equal to five percent (5.000%) of the gross proceeds. By way of example, shouldthe Company raise $2,000,000, and the Company’s auditor not provide a CleanOpinion, then iLinc will owe to Investors $100,000, with such AdditionalConsideration, if due, paid to within fifteen (15) days of the filing of theCompany’s Form 10-K in which the opinion expressing doubt is included. Providedhowever, that should the auditor issue an opinion that is a Clean Opinion thenthe obligation to provide Contingent Consideration under this Section 3.24 shallforever expire without further obligation to Investors. 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR. 4.1 INVESTOR KNOWLEDGE AND STATUS. The Investor represents andwarrants to, and covenants with, the Company that: (i) the Investor is an”accredited investor” as defined in Regulation D under the Securities Act, isknowledgeable, sophisticated and experienced in making, and is qualified to makedecisions with respect to, investments in securities presenting an investmentdecision similar to that involved in the purchase of the Shares, and hasrequested, received, reviewed and considered all information it deemed relevantin making an informed decision to purchase the Shares; (ii) the Investorunderstands that the Shares are “restricted securities” and have not beenregistered under the Securities Act and is acquiring the number of Shares setforth in paragraph 3 of the Securities Purchase Agreement in the ordinary courseof its business and for its own account for investment only, has no presentintention of distributing any of such Shares and has no arrangement orunderstanding with any other persons regarding the distribution of such Shares(this representation and warranty not limiting the Investor’s right to sellShares pursuant to a Registration Statement filed under the Registration RightsAgreement or otherwise, or other than with respect to any claim arising out of abreach of this representation and warranty, the Investor’s right toindemnification under Section 3 of the Registration Rights Agreement); (iii) theInvestor will not, directly or indirectly, offer, sell, pledge, transfer orotherwise dispose of (or solicit any offers to buy, purchase or otherwiseacquire or take a pledge of) any of the Shares except in compliance with theSecurities Act, applicable state securities laws and the respective rules andregulations promulgated thereunder; (iv) the Investor has answered all questionsin paragraph 4 of the Securities Purchase Agreement and the InvestorQuestionnaire attached hereto as Exhibit B for use in preparation of theRegistration Statement and the answers thereto are true and correct as of thedate hereof and will be true and correct as of the Closing Date; (v) theInvestor will notify the Company promptly of any change in any of suchinformation until such time as the Investor has sold all of its Shares or untilthe Company is no longer required to keep the Registration Statement effective;and (vi) the Investor has, in connection with its decision to purchase thenumber of Shares set forth in paragraph 3 of the Securities Purchase Agreement,relied upon the representations and warranties of the Company contained hereinSecurities Purchase Agreement Page 9 of 12and the information contained in the SEC Reports. The Investor understands thatthe issuance of the Shares to the Investor has not been registered under theSecurities Act, or registered or qualified under any state securities law, inreliance on specific exemptions therefrom, which exemptions may depend upon,among other things, the representations made by the Investor in this Agreement.No person (including without limitation the Placement Agent) is authorized bythe Company to provide any representation that is inconsistent with or inaddition to those contained herein or in the SEC Reports, and the Investoracknowledges that it has not received or relied on any such representations. 4.2 TRANSFER OF SHARES. The Investor agrees that it will notmake any sale, transfer or other disposition of the Shares (a “DISPOSITION”)other than Dispositions that are made pursuant to the Registration Statement incompliance with any applicable prospectus delivery requirements or that areexempt from registration under the Securities Act. Investor has not taken andwill not take any action designed to or that might reasonably be expected tocause or result in manipulation of the price of the Common Stock to facilitatethe subscription to, or the sale or resale of the Shares. The Company has notdisclosed any material non-public information to the Investors. 4.3 POWER AND AUTHORITY. The Investor represents and warrantsto the Company that (i) the Investor has full right, power, authority andcapacity to enter into this Agreement and to consummate the transactionscontemplated hereby and has taken all necessary action to authorize theexecution, delivery and performance of this Agreement, and (ii) this Agreementconstitutes a valid and binding obligation of the Investor enforceable againstthe Investor in accordance with its terms, except to the extent (i) rights toindemnity and contribution may be limited by state or federal securities laws orthe public policy underlying such laws, (ii) such enforceability may be limitedby applicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting creditors’ and contracting parties’ rights generally and (iii) suchenforceability may be subject to general principles of equity (regardless ofwhether such enforceability is considered in a proceeding in equity or at law). 4.4 NO SHORT POSITION. The Investor has not prior to theClosing Date, and will not for the one (1) year period beginning with theClosing Date, established any hedge or other position in the Common Stock thatis issued and outstanding, and that is designed to or could reasonably beexpected to lead to or result in a sale, transfer or other disposition by theInvestor or any other person or entity under the control or direction ofInvestor. For purposes hereof, a “hedge or other position” would include,without limitation, effecting any short sale or having in effect any shortposition (whether or not such sale or position is against the box and regardlessof when such position was entered into) or any purchase, sale or grant of anyright (including, without limitation, any put or call option) with respect tothe Common Stock or with respect to any security (other than a broad-basedmarket basket or index) that includes, relates to or derives any significantpart of its value from the Common Stock. 4.5 NO INVESTMENT, TAX OR LEGAL ADVICE. The Investorunderstands that nothing in the SEC Reports, this Agreement, or any othermaterials presented to the Investor in connection with the purchase and sale ofthe Shares constitutes legal, tax or investment advice. The Investor hasconsulted such legal, tax and investment advisors as it, in its sole discretion,has deemed necessary or appropriate in connection with its purchase of Shares. 4.6 ACKNOWLEDGMENTS REGARDING PLACEMENT AGENT. The Investoracknowledges that the Placement Agent has acted solely as placement agent forthe Company in connection with the Offering of the Shares by the Company, andthat the Placement Agent has made no representation or warranty whatsoever withrespect to the accuracy or completeness of information, data or other relateddisclosure material that has been provided to the Investor. The Investor furtheracknowledges that in making its decision to enter into this Agreement andpurchase the Shares, it has relied on its own examination of the Company and theterms of, and consequences of holding, the Shares. The Investor furtherSecurities Purchase Agreement Page 10 of 12acknowledges that the provisions of this Section 4.7 are for the benefit of, andmay be enforced by, the Placement Agent. Investor has not received any generalsolicitation or advertising regarding the Offering and Investor has not beenfurnished with any oral or written representation or information in connectionwith the Offering which is not contained in the SEC Reports or set forth in theMemorandum. 4.7 ADDITIONAL ACKNOWLEDGEMENT. Investor has thoroughlyreviewed and the SEC Reports and the Memorandum (the “Disclosure Documents”)prior to making this investment. Investor has been granted a reasonable timeprior to the date hereof during which we have had the opportunity to obtain suchadditional information as Investor deems necessary to permit Investor to make aninformed decision with respect to the purchase of the Common Stock. Afterexamination of the SEC Reports and other information available, Investor isfully aware of the business prospects, financial condition, risks associatedwith investment and the operating history relating to the Company, and thereforein subscribing for the purchase of the Shares, Investor is not relying upon anyinformation other than information contained in the Disclosure Documents. TheInvestor acknowledges that it has independently evaluated the merits of thetransactions contemplated by this Agreement, that it has independentlydetermined to enter into the transactions contemplated hereby, that it is notrelying on any advice from or evaluation by any Other Investor, and that it isnot acting in concert with any Other Investor in making its purchase of theShares hereunder. The Investor and, to its knowledge, the Company acknowledgethat the Investors have not taken any actions that would deem the Investors tobe members of a “group” for purposes of Section 13(d) of the Exchange Act. 5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.Notwithstanding any investigation made by any party to this Agreement or by thePlacement Agent, all covenants, agreements, representations and warranties madeby the Company and the Investor herein shall survive the execution of thisAgreement, the delivery to the Investor of the Shares being purchased and thepayment therefor, and a party’s reliance on such representations and warrantiesshall not be affected by any investigation made by such party or any informationdeveloped thereby. 6. REGISTRATION OF SHARES; PUBLIC STATEMENTS. 6.1 In connection with the purchase and sale of the Shares bythe Investors contemplated hereby, the Company has entered into a RegistrationRights Agreement with each Investor providing for the filing by the Company of aRegistration Statement on Form S-3 to enable the resale of the Shares by theInvestors from time to time. 6.2 The Company agrees to disclose on a Current Report on Form8-K the existence of the Offering and the material terms, thereof, includingpricing, within four (4) days after the Closing. The Company will not issue anypublic statement, press release or any other public disclosure listing theInvestor as one of the purchasers of the Shares without the Investor’s priorreview of the statement and prior consent thereto, except as may be required byapplicable law or rules of any exchange on which the Company’s securities arelisted. 7. NOTICES. All notices, requests, consents and other communicationshereunder shall be in writing, shall be delivered (A) if within the UnitedStates, by first-class registered or certified airmail, or nationally recognizedovernight express courier, postage prepaid, or by facsimile, or (B) if fromoutside the United States, by International Federal Express (or comparableservice) or facsimile, and shall be deemed given (i) if delivered by first-classregistered or certified mail domestic, upon the Business Day received, (ii) ifdelivered by nationally recognized overnight carrier, one (1) Business Day aftertimely delivery to such carrier, (iii) if delivered by International FederalExpress (or comparable service), two (2) Business Days after timely delivery toSecurities Purchase Agreement Page 11 of 12such carrier, (iv) if delivered by facsimile, upon electric confirmation ofreceipt and shall be addressed as follows, or to such other address or addressesas may have been furnished in writing by a party to another party pursuant tothis paragraph: (a) if to the Company, to: iLinc Communications, Inc. 2999 North 44th Street, Suite 650 Phoenix, AZ 85016 Attention: James L. Dunn, Jr. Telephone: 602-952-1200 Fax: 602-952-1200 with a copy to: Jackson Walker, LLP 901 Main Street, Suite 6000 Dallas, TX 75202 Attention: James Ryan III Telephone: (516) 433-1200 Fax: (214) 661-6688 (b) if to the Investor, at its address on thesignature page to the Stock Purchase Agreement. 8. AMENDMENTS; WAIVER. This Agreement may not be modified or amendedexcept pursuant to an instrument in writing signed by the Company and theInvestor. Any waiver of a provision of this Agreement must be in writing andexecuted by the party against whom enforcement of such waiver is sought. 9. HEADINGS. The headings of the various sections of this Agreementhave been inserted for convenience of reference only and shall not be deemed tobe part of this Agreement. 10. ENTIRE AGREEMENT; SEVERABILITY. This Agreement sets forth theentire agreement and understanding of the parties relating to the subject matterhereof and supersedes all prior and contemporaneous agreements, negotiations andunderstandings between the parties, both oral and written relating to thesubject matter hereof. If any provision contained in this Agreement isdetermined to be invalid, illegal or unenforceable in any respect, the validity,legality and enforceability of the remaining provisions contained herein shallnot in any way be affected or impaired thereby. 11. GOVERNING LAW. This Agreement shall be governed by, and construedin accordance with, the internal laws of the State of New York, without givingeffect to the principles of conflicts of law. 12. COUNTERPARTS. This Agreement may be executed in two or morecounterparts, each of which shall constitute an original, but all of which, whentaken together, shall constitute but one instrument, and shall become effectivewhen one or more counterparts have been signed by each party hereto anddelivered to the other parties.Securities Purchase Agreement Page 12 of 12