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NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

GLOBAL ENERGY, INC.

SECURED CONVERTIBLE DEBENTURE

Issuance Date: May 13, 2008 Original Principal Amount: $500,000 No. GEYI-1-5  

     FOR VALUE RECEIVED, GLOBAL ENERGY, INC., a Nevada corporation (the
"Company"), hereby promises to pay to the order of YA GLOBAL INVESTMENTS, L.P.
(FORMERLY, CORNELL CAPITAL PARTNERS, L.P.) or registered assigns (the "Holder")
the amount set out above as the Original Principal Amount (as reduced pursuant
to the terms hereof pursuant to redemption, conversion or otherwise, the
"Principal") when due, whether upon the Maturity Date (as defined below), on any
Installment Date with respect to the Installment Amount due on such Installment
Date (each, as defined herein), acceleration, redemption or otherwise (in each
case in accordance with the terms hereof) and to pay interest ("Interest") on
any outstanding Principal at the applicable Interest Rate from the date set out
above as the Issuance Date (the "Issuance Date") until the same becomes due and
payable, whether upon an Interest Date (as defined below), any Installment Date
or the Maturity Date or acceleration, conversion, redemption or otherwise (in
each case in accordance with the terms hereof). This Secured Convertible
Debenture (including all Secured Convertible Debentures issued in exchange,
transfer or replacement hereof, this "Debenture") is one of an issue of Secured
Convertible Debentures issued pursuant to the Securities Purchase Agreement
(collectively, the "Debentures" and such other Senior Convertible Debentures,
the "Other Debentures"). Certain capitalized terms used herein are defined in
Section 17.

     (1) GENERAL TERMS

          (a) Payment of Principal. On each Installment Date, the Company shall
pay to the Holder an amount equal to the Installment Amount due on such
Installment Date in accordance with Section 3. On the Maturity Date, the Company
shall pay to the Holder an amount in cash representing all outstanding
Principal, accrued and unpaid Interest. The "Maturity Date" shall be October 31,
2010, as may be extended at the option of the Holder (i) in

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the event that, and for so long as, an Event of Default (as defined below) shall
have occurred and be continuing on the Maturity Date (as may be extended
pursuant to this Section 1) or any event shall have occurred and be continuing
on the Maturity Date (as may be extended pursuant to this Section 1) that with
the passage of time and the failure to cure would result in an Event of Default.
Other than as specifically permitted by this Debenture, the Company may not
prepay or redeem any portion of the outstanding Principal without the prior
written consent of the Holder.

          (b) Interest. Interest shall accrue on the outstanding principal
balance hereof at an annual rate equal to ten percent (10%) (“Interest Rate”).
Interest shall be calculated on the basis of a 365-day year and the actual
number of days elapsed, to the extent permitted by applicable law. Interest
hereunder shall be paid on each Interest Payment Date and on the Maturity Date
(or sooner as provided herein) to the Holder or its assignee in whose name this
Debenture is registered on the records of the Company regarding registration and
transfers of Debentures at the option of the Company in cash, or, provided that
the Equity Conditions are then satisfied converted into Common Stock at the
Company Conversion Price as of the date paid.

          (c) Security. The Debenture is secured by a security interest in all
of the assets of the Company as evidenced by the security agreement dated July
6, 2007 (the “Security Agreement”).

     (2) EVENTS OF DEFAULT.

          (a) An “Event of Default”, wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

               (i) the Company's failure to pay to the Holder any amount of
Principal, Interest, or other amounts when and as due under this Debenture
(including, without limitation, the Company's failure to pay any redemption
payments or amounts hereunder) or any other Transaction Document;

               (ii) The Company or any subsidiary of the Company shall commence,
or there shall be commenced against the Company or any subsidiary of the Company
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Company or any subsidiary of the Company
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to the
Company or any subsidiary of the Company or there is commenced against the
Company or any subsidiary of the Company any such bankruptcy, insolvency or
other proceeding which remains undismissed for a period of 61 days; or the
Company or any subsidiary of the Company is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or proceeding is
entered; or the Company or any subsidiary of the Company suffers any appointment
of any custodian, private or court appointed receiver or the like for it or any
substantial part of its property which continues undischarged or unstayed for a
period of sixty one (61) days; or the Company or any subsidiary of the Company
makes a

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general assignment for the benefit of creditors; or the Company or any
subsidiary of the Company shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or the
Company or any subsidiary of the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its
debts; or the Company or any subsidiary of the Company shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Company
or any subsidiary of the Company for the purpose of effecting any of the
foregoing;

               (iii) The Company or any subsidiary of the Company shall default
in any of its obligations under any other debenture or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be secured or
evidenced any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of the Company or any subsidiary of the Company
in an amount exceeding $100,000, whether such indebtedness now exists or shall
hereafter be created and such default shall result in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise
become due and payable;

               (iv) If the Common Stock is quoted or listed for trading on any
of the following and it ceases to be so quoted or listed for trading and shall
not again be quoted or listed for trading on any Primary Market within five (5)
Trading Days of such delisting: (a) the American Stock Exchange, (b) New York
Stock Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, or
(e) the Nasdaq OTC Bulletin Board (“OTCBB”) (each, a “Primary Market”);

               (v) The Company or any subsidiary of the Company shall be a party
to any Change of Control Transaction (as defined in Section 6) unless in
connection with such Change of Control Transaction this Debenture is retired;

               (vi) The Company shall fail to file the Underlying Shares
Registration Statement with the Commission, or the Underlying Shares
Registration Statement shall not have been declared effective by the Commission,
in each case within thirty (30) days of the periods set forth in the
Registration Rights Agreement (“Registration Rights Agreement”) dated July 6,
2007 among the Company and each Buyer listed on Schedule I attached thereto, or,
while the Underlying Shares Registration Statement is required to be maintained
effective pursuant to the terms of the Investor Registration Rights Agreement,
the effectiveness of the Underlying Shares Registration Statement lapses for any
reason (including, without limitation, the issuance of a stop order) or is
unavailable to the Holder for sale of all of the Holder’s Registrable Securities
(as defined in the Investor Registration Rights Agreement) in accordance with
the terms of the Investor Registration Rights Agreement, and such lapse or
unavailability continues for a period of more than ten (10) consecutive Trading
Days or for more than an aggregate of twenty (20) days in any 365-day period
(which need not be consecutive);

               (vii) the Company's (A) failure to cure a Conversion Failure by
delivery of the required number of shares of Common Stock within five (5)
Business Days after the applicable Conversion Failure or (B) notice, written or
oral, to any holder of the Debentures,

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including by way of public announcement, at any time, of its intention not to
comply with a request for conversion of any Debentures into shares of Common
Stock that is tendered in accordance with the provisions of the Debentures,
other than pursuant to Section 4(c);

               (viii) The Company shall fail for any reason to deliver the
payment in cash pursuant to a Buy-In (as defined herein) within three (3)
Business Days after such payment is due;

               (ix) The Company shall fail to observe or perform any other
covenant, agreement or warranty contained in, or otherwise commit any breach or
default of any provision of this Debenture (except as may be covered by Section
2(a)(i) through 2(a)(vii) hereof) or any Transaction Document (as defined in
Section 16) which is not cured within the time prescribed.

               (x) any Event of Default (as defined in the Other Debentures)
occurs with respect to any Other Debentures.

          (b) During the time that any portion of this Debenture is outstanding,
if any Event of Default has occurred, the full unpaid Principal amount of this
Debenture, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become at the Holder's election, immediately due
and payable in cash; provided however, the Holder may request (but shall have no
obligation to request) payment of such amounts in Common Stock of the Company.
Furthermore, in addition to any other remedies, the Holder shall have the right
(but not the obligation) to convert this Debenture at any time after (x) an
Event of Default or (y) the Maturity Date at the Company Conversion Price. The
Holder need not provide and the Company hereby waives any presentment, demand,
protest or other notice of any kind, (other than required notice of conversion)
and the Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such declaration may be rescinded and
annulled by Holder at any time prior to payment hereunder. No such rescission or
annulment shall affect any subsequent Event of Default or impair any right
consequent thereon.

     (3) COMPANY INSTALLMENT CONVERSION OR REDEMPTION.

          (a) General. On each applicable Installment Date, the Company shall
pay to the Holder of this Debenture the Installment Amount due on such date by
converting such Installment Amount into shares of Common Stock of the Company,
provided that there is not then an Equity Conditions Failure, in accordance with
this Section 3 (a "Company Conversion"); provided, however, that the Company
may, at its option following notice to the Holder, redeem such Installment
Amount (a "Company Redemption") or by any combination of a Company Conversion
and a Company Redemption so long as all of the outstanding applicable
Installment Amount shall be converted and/or redeemed by the Company on the
applicable Installment Date, subject to the provisions of this Section 3. On or
prior to the date which is the fifth (5th) Trading Day prior to each Installment
Date (each, an "Installment Notice Due Date"), the Company shall deliver written
notice (each, a "Company Installment Notice"), to the Holder which Company
Installment Notice shall (i) either (A) confirm that the applicable Installment
Amount of the Holder’s Debenture shall be converted in whole pursuant to a
Company Conversion or (B) (1)

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state that the Company elects to redeem, or is required to redeem in accordance
with the provisions of the Debenture, in whole or in part, the applicable
Installment Amount pursuant to a Company Redemption and (2) specify the portion
(including Interest) which the Company elects or is required to redeem pursuant
to a Company Redemption (such amount to be redeemed, the "Company Redemption
Amount") and the portion (including Interest), if any, that the Company elects
to convert pursuant to a Company Conversion (such amount a "Company Conversion
Amount") which amounts when added together, must equal the applicable
Installment Amount and (ii) if the Installment Amount is to be paid, in whole or
in part, pursuant to a Company Conversion, certify that there is not then an
Equity Conditions Failure as of the date of the Company Installment Notice. Each
Company Installment Notice shall be irrevocable. If the Company does not timely
deliver a Company Installment Notice in accordance with this Section 3, then the
Company shall be deemed to have delivered an irrevocable Company Installment
Notice confirming a Company Conversion and shall be deemed to have certified
that there is not then an Equity Conditions Failure in connection with any such
conversion. The Company Conversion Amount (whether set forth in the Company
Installment Notice or by operation of this Section 3) shall be converted in
accordance with Section 3(b) and the Company Redemption Amount shall be paid in
accordance with Section 3(c).

          (b) Mechanics of Company Conversion. Subject to Section 3(d), if the
Company delivers a Company Installment Notice and elects, or is deemed to have
elected, in whole or in part, a Company Conversion in accordance with Section
3(a), then the applicable Company Conversion Amount, if any, which remains
outstanding as of the applicable Installment Date shall be converted as of the
applicable Installment Date by converting on such Installment Date such Company
Conversion Amount at the Company Conversion Price; provided that the Equity
Conditions are then satisfied (or waived in writing by the Holder) on such
Installment Date and that the Holder Pro Rata Amount of the Installment Volume
Limitation is not exceeded. If the Equity Conditions are not satisfied (or
waived in writing by the Holder) on such Installment Date or the Holder Pro Rata
Amount of the Installment Volume Limitation is exceeded (unless waived in
writing by the Holder), then at the option of the Holder designated in writing
to the Company, the Holder may require the Company to do any one or more of the
following: (i) the Company shall redeem all or any part of the unconverted
Company Conversion Amount designated by the Holder (such designated amount is
referred to as the "Unconverted Redemption Amount") and the Company shall pay to
the Holder within three (3) days of such Installment Date, by wire transfer of
immediately available funds, an amount in cash equal to such Unconverted
Redemption Amount, and/or (ii) the Company Conversion shall be null and void
with respect to all or any part of the unconverted Company Conversion Amount
designated by the Holder and the Holder shall be entitled to all the rights of a
holder of this Debenture with respect to such designated amount of the Company
Conversion Amount; provided, however, that the Conversion Price for such
unconverted Company Conversion Amount shall thereafter be adjusted to equal the
lesser of (A) the Company Conversion Price as in effect on the date on which the
Holder voided the Company Conversion and (B) the Company Conversion Price as in
effect on the date on which the Holder delivers a Conversion Notice relating
thereto. If the Company fails to redeem any Unconverted Redemption Amount by the
third (3rd) day following the applicable Installment Date, then the Holder shall
have all rights under this Debenture (including, without limitation, such
failure constituting an Event of Default). Notwithstanding anything to the
contrary in this Section 3(b), but subject to Section 4(c)(i), until the Company
delivers Common Stock representing the Company Conversion

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Amount to the Holder, the Company Conversion Amount may be converted by the
Holder into Common Stock pursuant to Section 4. In the event that the Holder
elects to convert the Company Conversion Amount prior to the applicable
Installment Date as set forth in the immediately preceding sentence, the Company
Conversion Amount so converted shall be deducted from the Installment Amounts
relating to the applicable Installment Dates as set forth in the applicable
Conversion Notice.

          (c) Mechanics of Company Redemption. If the Company elects a Company
Redemption in accordance with Section 3(a), then the Company Redemption Amount,
if any, which is to be paid to the Holder on the applicable Installment Date
shall be redeemed by the Company on such Installment Date, and the Company shall
pay to the Holder on such Installment Date, by wire transfer of immediately
available funds, in an amount in cash (the "Company Installment Redemption
Price") equal to the Principal portion of the Company Redemption Amount plus
accrued and unpaid Interest. If the Company fails to redeem the Company
Redemption Amount on the applicable Installment Date by payment of the Company
Installment Redemption Price on such date, then at the option of the Holder
designated in writing to the Company (any such designation, "Conversion Notice"
for purposes of this Debenture), the Holder may require the Company to convert
all or any part of the Company Redemption Amount into shares of Common Stock of
the Company at the Company Conversion Price. Conversions required by this
Section 3(c) shall be made in accordance with the provisions of Section 4(b).
Notwithstanding anything to the contrary in this Section 3(c), but subject to
Section 4(c)(i), until the Company Installment Redemption Price (together with
any interest thereon) is paid in full, the Company Redemption Amount (together
with any interest thereon) may be converted, in whole or in part, by the Holder
into Common Stock pursuant to Section 4. In the event the Holder elects to
convert all or any portion of the Company Redemption Amount prior to the
applicable Installment Date as set forth in the immediately preceding sentence,
the Company Redemption Amount so converted shall be deducted from the
Installment Amounts relating to the applicable Installment Dates as set forth in
the applicable Conversion Notice.

          (d) Deferred Installment Amount. Notwithstanding any provision of this
Section 3 to the contrary, the Holder may, at its option and in its sole
discretion, deliver a written notice to the Company at least two (2) days prior
to any Installment Notice Due Date electing to have the payment of all or any
portion of an Installment Amount payable on the next Installment Date deferred
to the Maturity Date. Any amount deferred to the Maturity Date pursuant to this
Section 3(d) shall continue to accrue Interest through the Maturity Date.

          (e) Cancellation of Installment Amount. Notwithstanding any provision
of this Section 3 to the contrary, in the event that the Volume Weighted Average
Price of the Common Stock equals or exceeds the applicable Conversion Price for
each of the five (5) consecutive Trading Days immediately preceding the
Installment Notice Due Date and no Event of Default has occurred then the
Installment Amount payable on such Installment Date shall be deferred to the
Maturity Date. Any amount deferred to the Maturity Date pursuant to this Section
3(e) shall continue to accrue Interest through the Maturity Date.

          (f) Company’s Additional Cash Redemption. The Company at its option
shall have the right to redeem (“Optional Redemption”) a portion or all amounts
outstanding under this Debenture in addition to any Installment Amount prior to
the Maturity

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Date provided that as of the date of the Holder’s receipt of a Redemption Notice
(as defined herein) (i) the Closing Bid Price is less than the Conversion Price,
(ii) the Underlying Shares Registration Statement is effective, and (iii) no
Event of Default has occurred. The Company shall pay an amount equal to the
principal amount being redeemed plus a redemption premium (“Redemption Premium”)
equal to twenty percent (20%) of the Principal amount being redeemed, and
accrued Interest, (collectively referred to as the “Company Additional
Redemption Amount”). In order to make a redemption pursuant to this Section, the
Company shall first provide written notice to the Holder of its intention to
make a redemption (the “Redemption Notice”) setting forth the amount of
Principal it desires to redeem. After receipt of the Redemption Notice the
Holder shall have three (3) Business Days to elect to convert all or any portion
of this Debenture, subject to the limitations set forth in Section 4(b). On the
fourth (4th) Business Day after the Redemption Notice, the Company shall deliver
to the Holder the Company Additional Redemption Amount with respect to the
Principal amount redeemed after giving effect to conversions effected during the
three (3) Business Day period.

     (4) CONVERSION OF DEBENTURE. This Debenture shall be convertible into
shares of the Company's Common Stock, on the terms and conditions set forth in
this Section 4.

          (a) Conversion Right. Subject to the provisions of Section 4(c), at
any time or times on or after the Issuance Date, the Holder shall be entitled to
convert any portion of the outstanding and unpaid Conversion Amount (as defined
below) into fully paid and nonassessable shares of Common Stock in accordance
with Section 4(b), at the Conversion Rate (as defined below). The number of
shares of Common Stock issuable upon conversion of any Conversion Amount
pursuant to this Section 4(a) shall be determined by dividing (x) such
Conversion Amount by (y) the Conversion Price (the "Conversion Rate"). The
Company shall not issue any fraction of a share of Common Stock upon any
conversion. If the issuance would result in the issuance of a fraction of a
share of Common Stock, the Company shall round such fraction of a share of
Common Stock up to the nearest whole share. The Company shall pay any and all
transfer, stamp and similar taxes that may be payable with respect to the
issuance and delivery of Common Stock upon conversion of any Conversion Amount.

               (i) "Conversion Amount" means the portion of the Principal and
accrued Interest to be converted, redeemed or otherwise with respect to which
this determination is being made.

               (ii) "Conversion Price" means, as of any Conversion Date (as
defined below) or other date of determination, $1.25, subject to adjustment as
provided herein.

          (b) Mechanics of Conversion.

               (i) Optional Conversion. To convert any Conversion Amount into
shares of Common Stock on any date (a "Conversion Date"), the Holder shall (A)
transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59
p.m., New York Time, on such date, a copy of an executed notice of conversion in
the form attached hereto as Exhibit I (the "Conversion Notice") to the Company
and (B) if required by Section 4(b)(iv), surrender this Debenture to a
nationally recognized overnight delivery service for delivery to the Company (or

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an indemnification undertaking reasonably satisfactory to the Company with
respect to this Debenture in the case of its loss, theft or destruction). On or
before the third Business Day following the date of receipt of a Conversion
Notice (the "Share Delivery Date"), the Company shall (X) if legends are not
required to be placed on certificates of Common Stock pursuant to the Securities
Purchase Agreement and provided that the Transfer Agent is participating in the
Depository Trust Company's ("DTC") Fast Automated Securities Transfer Program,
credit such aggregate number of shares of Common Stock to which the Holder shall
be entitled to the Holder's or its designee's balance account with DTC through
its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue
and deliver to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled which certificates shall
not bear any restrictive legends unless required pursuant to Section 2(g) of the
Securities Purchase Agreement. If this Debenture is physically surrendered for
conversion and the outstanding Principal of this Debenture is greater than the
Principal portion of the Conversion Amount being converted, then the Company
shall as soon as practicable and in no event later than three (3) Business Days
after receipt of this Debenture and at its own expense, issue and deliver to the
holder a new Debenture representing the outstanding Principal not converted. The
Person or Persons entitled to receive the shares of Common Stock issuable upon a
conversion of this Debenture shall be treated for all purposes as the record
holder or holders of such shares of Common Stock upon the transmission of a
Conversion Notice.

               (ii) Company's Failure to Timely Convert. If within three (3)
Trading Days after the Company's receipt of the facsimile copy of a Conversion
Notice the Company shall fail to issue and deliver a certificate to the Holder
or credit the Holder's balance account with DTC for the number of shares of
Common Stock to which the Holder is entitled upon such holder's conversion of
any Conversion Amount (a "Conversion Failure"), and if on or after such Trading
Day the Holder purchases (in an open market transaction or otherwise) Common
Stock to deliver in satisfaction of a sale by the Holder of Common Stock
issuable upon such conversion that the Holder anticipated receiving from the
Company (a "Buy-In"), then the Company shall, within three (3) Business Days
after the Holder's request and in the Holder's discretion, either (i) pay cash
to the Holder in an amount equal to the Holder's total purchase price (including
brokerage commissions and other out of pocket expenses, if any) for the shares
of Common Stock so purchased (the "Buy-In Price"), at which point the Company's
obligation to deliver such certificate (and to issue such Common Stock) shall
terminate, or (ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such Common Stock and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Closing Bid
Price on the Conversion Date.

               (iii) Book-Entry. Notwithstanding anything to the contrary set
forth herein, upon conversion of any portion of this Debenture in accordance
with the terms hereof, the Holder shall not be required to physically surrender
this Debenture to the Company unless (A) the full Conversion Amount represented
by this Debenture is being converted or (B) the Holder has provided the Company
with prior written notice (which notice may be included in a Conversion Notice)
requesting reissuance of this Debenture upon physical surrender of this
Debenture. The Holder and the Company shall maintain records showing the
Principal and

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Interest converted and the dates of such conversions or shall use such other
method, reasonably satisfactory to the Holder and the Company, so as not to
require physical surrender of this Debenture upon conversion.

          (c) Limitations on Conversions.

               (i) Beneficial Ownership. The Company shall not effect any
conversions of this Debenture and the Holder shall not have the right to convert
any portion of this Debenture or receive shares of Common Stock as payment of
interest hereunder to the extent that after giving effect to such conversion or
receipt of such interest payment, the Holder, together with any affiliate
thereof, would beneficially own (as determined in accordance with Section 13(d)
of the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of
the number of shares of Common Stock outstanding immediately after giving effect
to such conversion or receipt of shares as payment of interest. Since the Holder
will not be obligated to report to the Company the number of shares of Common
Stock it may hold at the time of a conversion hereunder, unless the conversion
at issue would result in the issuance of shares of Common Stock in excess of
4.99% of the then outstanding shares of Common Stock without regard to any other
shares which may be beneficially owned by the Holder or an affiliate thereof,
the Holder shall have the authority and obligation to determine whether the
restriction contained in this Section will limit any particular conversion
hereunder and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the
principal amount of this Debenture is convertible shall be the responsibility
and obligation of the Holder. If the Holder has delivered a Conversion Notice
for a principal amount of this Debenture that, without regard to any other
shares that the Holder or its affiliates may beneficially own, would result in
the issuance in excess of the permitted amount hereunder, the Company shall
notify the Holder of this fact and shall honor the conversion for the maximum
principal amount permitted to be converted on such Conversion Date in accordance
with Section 4(a) and, any principal amount tendered for conversion in excess of
the permitted amount hereunder shall remain outstanding under this Debenture.
The provisions of this Section may be waived by a Holder (but only as to itself
and not to any other Holder) upon not less than 65 days prior notice to the
Company. Other Holders shall be unaffected by any such waiver.

          (d) Other Provisions.

               (i) The Company shall at all times reserve and keep available out
of its authorized Common Stock the full number of shares of Common Stock
issuable upon conversion of all outstanding amounts under this Debenture; and
within three (3) Business Days following the receipt by the Company of a
Holder's notice that such minimum number of Underlying Shares is not so
reserved, the Company shall promptly reserve a sufficient number of shares of
Common Stock to comply with such requirement.

               (ii) All calculations under this Section 4 shall be rounded to
the nearest $0.0001 or whole share.

               (iii) The Company covenants that it will at all times reserve and
keep available out of its authorized and unissued shares of Common Stock solely
for the purpose of issuance upon conversion of this Debenture and payment of
interest on this Debenture, each as

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herein provided, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holder, not less than such number of
shares of the Common Stock as shall (subject to any additional requirements of
the Company as to reservation of such shares set forth in this Debenture or in
the Transaction Documents) be issuable (taking into account the adjustments and
restrictions set forth herein) upon the conversion of the outstanding principal
amount of this Debenture and payment of interest hereunder. The Company
covenants that all shares of Common Stock that shall be so issuable shall, upon
issue, be duly and validly authorized, issued and fully paid, nonassessable and,
if the Underlying Shares Registration Statement has been declared effective
under the Securities Act, registered for public sale in accordance with such
Underlying Shares Registration Statement.

               (iv) Nothing herein shall limit a Holder's right to pursue actual
damages or declare an Event of Default pursuant to Section 2 herein for the
Company 's failure to deliver certificates representing shares of Common Stock
upon conversion within the period specified herein and such Holder shall have
the right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief,
in each case without the need to post a bond or provide other security. The
exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

     (5) Adjustments to Conversion Price

          (a) Adjustment of Conversion Price upon Issuance of Common Stock. If
the Company, at any time while this Debenture is outstanding, issues or sells,
or in accordance with this Section 5(a) is deemed to have issued or sold, any
shares of Common Stock, excluding shares of Common Stock deemed to have been
issued or sold by the Company in connection with any Excluded Securities, for a
consideration per share (the “New Issuance Price”) less than a price equal to
the Conversion Price in effect immediately prior to such issue or sale (such
price the "Applicable Price") (the foregoing a "Dilutive Issuance"), then
immediately after such Dilutive Issuance the Conversion Price then in effect
shall be reduced to an amount equal to the New Issuance Price. For purposes of
determining the adjusted Conversion Price under this Section 5(a), the following
shall be applicable:

               (i) Issuance of Options. If the Company in any manner grants or
sells any Options and the lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon conversion or
exchange or exercise of any Convertible Securities issuable upon exercise of
such Option is less than the Applicable Price, then such share of Common Stock
shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section, the "lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange or exercise of any Convertible Securities issuable upon
exercise of such Option" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon granting or sale of the Option, upon exercise of
the Option and upon conversion or exchange or exercise of any Convertible
Security issuable upon exercise of such Option. No further adjustment of the
Conversion Price shall be made upon the actual issuance of such share of Common
Stock or of such Convertible Securities

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upon the exercise of such Options or upon the actual issuance of such Common
Stock upon conversion or exchange or exercise of such Convertible Securities.

               (ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities and the lowest price per share
for which one share of Common Stock is issuable upon such conversion or exchange
or exercise thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for
such price per share. For the purposes of this Section, the "lowest price per
share for which one share of Common Stock is issuable upon such conversion or
exchange or exercise" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the issuance or sale of the Convertible Security
and upon the conversion or exchange or exercise of such Convertible Security. No
further adjustment of the Conversion Price shall be made upon the actual
issuance of such share of Common Stock upon conversion or exchange or exercise
of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment
of the Conversion Price had been or are to be made pursuant to other provisions
of this Section, no further adjustment of the Conversion Price shall be made by
reason of such issue or sale.

               (iii) Change in Option Price or Rate of Conversion. If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exchange or exercise of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exchangeable or exercisable for Common Stock changes at any time, the
Conversion Price in effect at the time of such change shall be adjusted to the
Conversion Price which would have been in effect at such time had such Options
or Convertible Securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold. For purposes of this Section, if the terms of
any Option or Convertible Security that was outstanding as of the Issuance Date
are changed in the manner described in the immediately preceding sentence, then
such Option or Convertible Security and the Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such change. No adjustment shall be made if such adjustment would
result in an increase of the Conversion Price then in effect.

               (iv) Calculation of Consideration Received. In case any Option is
issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for the difference of (x) the aggregate fair
market value of such Options and other securities issued or sold in such
integrated transaction, less (y) the fair market value of the securities other
than such Option, issued or sold in such transaction and the other securities
issued or sold in such integrated transaction will be deemed to have been issued
or sold for the balance of the consideration received by the Company. If any
Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be
deemed to be the gross amount raised by the Company; provided, however, that
such gross amount is not greater than 110% of the net amount received by the
Company therefor. If any

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Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company will be the fair value of such consideration, except
where such consideration consists of securities, in which case the amount of
consideration received by the Company will be the Closing Bid Price of such
securities on the date of receipt. If any Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring
valuation (the "Valuation Event"), the fair value of such consideration will be
determined within five (5) Business Days after the tenth (10th) day following
the Valuation Event by an independent, reputable appraiser jointly selected by
the Company and the Holder. The determination of such appraiser shall be deemed
binding upon all parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company.

               (v) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or
sale of the Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.

          (b) Adjustment of Conversion Price upon Subdivision or Combination of
Common Stock. If the Company, at any time while this Debenture is outstanding,
shall (a) pay a stock dividend or otherwise make a distribution or distributions
on shares of its Common Stock or any other equity or equity equivalent
securities payable in shares of Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (d) issue by reclassification of shares of the Common Stock any
shares of capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

          (c) Purchase Rights. If at any time the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "Purchase Rights"), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of this
Debenture

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(without taking into account any limitations or restrictions on the
convertibility of this Debenture) immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

          (d) Other Events. If any event occurs of the type contemplated by the
provisions of this Section 4 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
Board of Directors will make an appropriate adjustment in the Conversion Price
so as to protect the rights of the Holder under this Debenture; provided that no
such adjustment will increase the Conversion Price as otherwise determined
pursuant to this Section 5.

          (e) Other Corporate Events. In addition to and not in substitution for
any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to
receive securities or other assets with respect to or in exchange for shares of
Common Stock (a "Corporate Event"), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon a
conversion of this Debenture, at the Holder's option, (i) in addition to the
shares of Common Stock receivable upon such conversion, such securities or other
assets to which the Holder would have been entitled with respect to such shares
of Common Stock had such shares of Common Stock been held by the Holder upon the
consummation of such Corporate Event (without taking into account any
limitations or restrictions on the convertibility of this Debenture) or (ii) in
lieu of the shares of Common Stock otherwise receivable upon such conversion,
such securities or other assets received by the holders of shares of Common
Stock in connection with the consummation of such Corporate Event in such
amounts as the Holder would have been entitled to receive had this Debenture
initially been issued with conversion rights for the form of such consideration
(as opposed to shares of Common Stock) at a conversion rate for such
consideration commensurate with the Conversion Rate. Provision made pursuant to
the preceding sentence shall be in a form and substance satisfactory to the
Required Holders. The provisions of this Section shall apply similarly and
equally to successive Corporate Events and shall be applied without regard to
any limitations on the conversion or redemption of this Debenture.

          (f) Whenever the Conversion Price is adjusted pursuant to Section 5
hereof, the Company shall promptly mail to the Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.

          (g) In case of any (1) merger or consolidation of the Company or any
subsidiary of the Company with or into another Person, or (2) sale by the
Company or any subsidiary of the Company of more than one-half of the assets of
the Company in one or a series of related transactions, a Holder shall have the
right to (A) exercise any rights under Section 2(b), (B) convert the aggregate
amount of this Debenture then outstanding into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be entitled upon such event or series of related events to receive such amount
of securities, cash and

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property as the shares of Common Stock into which such aggregate principal
amount of this Debenture could have been converted immediately prior to such
merger, consolidation or sales would have been entitled, or (C) in the case of a
merger or consolidation, require the surviving entity to issue to the Holder a
convertible Debenture with a principal amount equal to the aggregate principal
amount of this Debenture then held by such Holder, plus all accrued and unpaid
interest and other amounts owing thereon, which such newly issued convertible
Debenture shall have terms identical (including with respect to conversion) to
the terms of this Debenture, and shall be entitled to all of the rights and
privileges of the Holder of this Debenture set forth herein and the agreements
pursuant to which this Debentures were issued. In the case of clause (C), the
conversion price applicable for the newly issued shares of convertible preferred
stock or convertible Debentures shall be based upon the amount of securities,
cash and property that each share of Common Stock would receive in such
transaction and the Conversion Price in effect immediately prior to the
effectiveness or closing date for such transaction. The terms of any such
merger, sale or consolidation shall include such terms so as to continue to give
the Holder the right to receive the securities, cash and property set forth in
this Section upon any conversion or redemption following such event. This
provision shall similarly apply to successive such events.

     (6) REISSUANCE OF THIS DEBENTURE.

          (a) Transfer. If this Debenture is to be transferred, the Holder shall
surrender this Debenture to the Company, whereupon the Company will, subject to
the satisfaction of the transfer provisions of the Securities Purchase
Agreement, forthwith issue and deliver upon the order of the Holder a new
Debenture (in accordance with Section 6(d)), registered in the name of the
registered transferee or assignee, representing the outstanding Principal being
transferred by the Holder and, if less then the entire outstanding Principal is
being transferred, a new Debenture (in accordance with Section 6(d)) to the
Holder representing the outstanding Principal not being transferred. The Holder
and any assignee, by acceptance of this Debenture, acknowledge and agree that,
by reason of the provisions of Section 4(b)(iii) following conversion or
redemption of any portion of this Debenture, the outstanding Principal
represented by this Debenture may be less than the Principal stated on the face
of this Debenture.

          (b) Lost, Stolen or Mutilated Debenture. Upon receipt by the Company
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Debenture, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation
of this Debenture, the Company shall execute and deliver to the Holder a new
Debenture (in accordance with Section 6(d)) representing the outstanding
Principal.

          (c) Debenture Exchangeable for Different Denominations. This Debenture
is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Debenture or Debentures (in accordance with Section
6(d)) representing in the aggregate the outstanding Principal of this Debenture,
and each such new Debenture will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.

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          (d) Issuance of New Debentures. Whenever the Company is required to
issue a new Debenture pursuant to the terms of this Debenture, such new
Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent,
as indicated on the face of such new Debenture, the Principal remaining
outstanding (or in the case of a new Debenture being issued pursuant to Section
6(a) or Section 6(c), the Principal designated by the Holder which, when added
to the principal represented by the other new Debentures issued in connection
with such issuance, does not exceed the Principal remaining outstanding under
this Debenture immediately prior to such issuance of new Debentures), (iii)
shall have an issuance date, as indicated on the face of such new Debenture,
which is the same as the Issuance Date of this Debenture, (iv) shall have the
same rights and conditions as this Debenture, and (v) shall represent accrued
and unpaid Interest from the Issuance Date.

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

If to the Company, to: Migdal Aviv   7 Abba Hilel Street   Ramat Gan, 52520  
Israel     Telephone:        011 972 3 5913952   Facsimile:        011 +972 9
955 0454       With a copy to: Clark Wilson LLP   800 – 885 West Georgia Street
  Vancouver, BC Canada   V6M 3R9     Attention: Bernard Pinsky   Telephone:
604.687.5700   Facsimile: 604.687.6314             If to the Holder: YA Global
Investments, L.P.   101 Hudson Street, Suite 3700   Jersey City, NJ 07303  
Attention:        Mark Angelo   Telephone:        (201) 985-8300

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With a copy to: David Gonzalez, Esq.   101 Hudson Street – Suite 3700   Jersey
City, NJ 07302   Telephone: (201) 985-8300   Facsimile: (201) 985-8266

     or at such other address and/or facsimile number and/or to the attention of
such other person as the recipient party has specified by written notice given
to each other party three (3) Business Days prior to the effectiveness of such
change. Written confirmation of receipt (i) given by the recipient of such
notice, consent, waiver or other communication, (ii) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (iii) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

     (8) Except as expressly provided herein, no provision of this Debenture
shall alter or impair the obligations of the Company, which are absolute and
unconditional, to pay the principal of, interest and other charges (if any) on,
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed. This Debenture is a direct obligation of the Company. As long as
this Debenture is outstanding, the Company shall not and shall cause their
subsidiaries not to, without the consent of the Holder, (i) amend its
certificate of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder; (ii) repay, repurchase or offer to
repay, repurchase or otherwise acquire shares of its Common Stock or other
equity securities other than as to the Underlying Shares to the extent permitted
or required under the Transaction Documents; or (iii) enter into any agreement
with respect to any of the foregoing.

     (9) This Debenture shall not entitle the Holder to any of the rights of a
stockholder of the Company, including without limitation, the right to vote, to
receive dividends and other distributions, or to receive any notice of, or to
attend, meetings of stockholders or any other proceedings of the Company, unless
and to the extent converted into shares of Common Stock in accordance with the
terms hereof.

     (10) No indebtedness of the Company is senior to this Debenture in right of
payment, whether with respect to interest, damages or upon liquidation or
dissolution or otherwise. Without the Holder’s consent, the Company will not and
will not permit any of their subsidiaries to, directly or indirectly, enter
into, create, incur, assume or suffer to exist any indebtedness of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits there from that is senior in
any respect to the obligations of the Company under this Debenture.

     (11) This Debenture shall be governed by and construed in accordance with
the laws of the State of New Jersey, without giving effect to conflicts of laws
thereof. Each of the parties consents to the jurisdiction of the Superior Courts
of the State of New Jersey sitting in

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Hudson County, New Jersey and the U.S. District Court for the District of New
Jersey sitting in Newark, New Jersey in connection with any dispute arising
under this Debenture and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on forum non conveniens to the
bringing of any such proceeding in such jurisdictions.

     (12) If the Company fails to strictly comply with the terms of this
Debenture, then the Company shall reimburse the Holder promptly for all fees,
costs and expenses, including, without limitation, attorneys’ fees and expenses
incurred by the Holder in any action in connection with this Debenture,
including, without limitation, those incurred: (i) during any workout, attempted
workout, and/or in connection with the rendering of legal advice as to the
Holder’s rights, remedies and obligations, (ii) collecting any sums which become
due to the Holder, (iii) defending or prosecuting any proceeding or any
counterclaim to any proceeding or appeal; or (iv) the protection, preservation
or enforcement of any rights or remedies of the Holder.

     (13) Any waiver by the Holder of a breach of any provision of this
Debenture shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Holder to insist upon strict adherence to any term
of this Debenture on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Debenture. Any waiver must be in writing.

     (14) If any provision of this Debenture is invalid, illegal or
unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder shall violate
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
The Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on this Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted.

     (15) Whenever any payment or other obligation hereunder shall be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day.

     (16) THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
TRANSACTION

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DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

     (17) CERTAIN DEFINITIONS For purposes of this Debenture, the following
terms shall have the following meanings:

          (a) “Approved Stock Plan” means a stock option plan that has been
approved by the Board of Directors of the Company, pursuant to which the
Company’s securities may be issued only to any employee, officer, or director
for services provided to the Company.

          (b) "Bloomberg" means Bloomberg Financial Markets.

          (c) “Business Day” means any day except Saturday, Sunday and any day
which shall be a federal legal holiday in the United States or a day on which
banking institutions are authorized or required by law or other government
action to close.

          (d) “Change of Control Transaction” means the occurrence of (a) an
acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of fifty percent
(50%) of the voting securities of the Company (except that the acquisition of
voting securities by the Holder or any other current holder of convertible
securities of the Company shall not constitute a Change of Control Transaction
for purposes hereof), (b) a replacement at one time or over time of more than
one-half of the members of the board of directors of the Company which is not
approved by a majority of those individuals who are members of the board of
directors on the date of such change (or by those individuals who are serving as
members of the board of directors on any date whose nomination to the board of
directors was approved by a majority of the members of the board of directors
who are members on the date of such change), (c) the merger, consolidation or
sale of fifty percent (50%) or more of the assets of the Company or any
subsidiary of the Company in one or a series of related transactions with or
into another entity that is not a related entity to the Company, provided
however in the event the Company seeks to consummate a merger, consolidation or
sale of fifty percent (50%) or more of the assets of the Company or any
subsidiary of the Company in one or a series of related transactions with or
into another entity that is a related entity to the Company the Company shall
obtain the prior written consent of the Holder, or (d) the execution by the
Company of an agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth above in (a), (b) or (c).

          (e) “Closing Bid Price” means the price per share in the last reported
trade of the Common Stock on a Primary Market or on the exchange which the
Common Stock is then listed as quoted by Bloomberg.

          (f) “Convertible Securities” means any stock or securities (other than
Options) directly or indirectly convertible into or exercisable or exchangeable
for Common Stock.

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          (g) “Commission” means the Securities and Exchange Commission.

          (h) “Common Stock” means the common stock, par value $.001, of the
Company and stock of any other class into which such shares may hereafter be
changed or reclassified.

          (i) "Company Conversion Price" means, the lower of (i) the applicable
Conversion Price and (ii) that price which shall be computed as ninety five
percent (95%) of the lowest Volume Weighted Average Price of the Common Stock
during the fifteen (15) consecutive Trading Days immediately preceding the
applicable Installment Date. All such determinations to be appropriately
adjusted for any stock split, stock dividend, stock combination or other similar
transaction.

          (j) "Equity Conditions" means that each of the following conditions is
satisfied: (i) on each day during the period beginning two (2) weeks prior to
the applicable date of determination and ending on and including the applicable
date of determination (the "Equity Conditions Measuring Period"), either (x) the
Underlying Shares Registration Statement filed pursuant to the Registration
Rights Agreement shall be effective and available for the resale of all
applicable shares of Common Stock to be issued in connection with the event
requiring determination or (y) all applicable shares of Common Stock to be
issued in connection with the event requiring determination shall be eligible
for sale without restriction and without the need for registration under any
applicable federal or state securities laws; (ii) on each day during the Equity
Conditions Measuring Period, the Common Stock is designated for quotation on the
Principal Market and shall not have been suspended from trading on such exchange
or market nor shall delisting or suspension by such exchange or market been
threatened or pending either (A) in writing by such exchange or market or (B) by
falling below the then effective minimum listing maintenance requirements of
such exchange or market; (iii) during the Equity Conditions Measuring Period,
the Company shall have delivered Conversion Shares upon conversion of the
Debentures to the Holder on a timely basis as set forth in Section 4(b)(ii)
hereof; (iv) any applicable shares of Common Stock to be issued in connection
with the event requiring determination may be issued in full without violating
Section 4(c) hereof and the rules or regulations of the Primary Market; (v)
during the Equity Conditions Measuring Period, there shall not have occurred
either (A) an Event of Default or (B) an event that with the passage of time or
giving of notice would constitute an Event of Default; and (vii) the Company
shall have no knowledge of any fact that would cause (x) the Registration
Statements required pursuant to the Registration Rights Agreement not to be
effective and available for the resale of all applicable shares of Common Stock
to be issued in connection with the event requiring determination or (y) any
applicable shares of Common Stock to be issued in connection with the event
requiring determination not to be eligible for sale without restriction and
without the need for registration under any applicable federal or state
securities laws.

          (k) "Equity Conditions Failure" means that on any applicable date the
Equity Conditions have not been satisfied (or waived in writing by the Holder).

          (l) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

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          (m) “Excluded Securities” means, (a) shares issued or deemed to have
been issued by the Company pursuant to an Approved Stock Plan (b) shares of
Common Stock issued or deemed to be issued by the Company upon the conversion,
exchange or exercise of any right, option, obligation or security outstanding on
the date prior to date of the Securities Purchase Agreement, provided that the
terms of such right, option, obligation or security are not amended or otherwise
modified on or after the date of the Securities Purchase Agreement, and provided
that the conversion price, exchange price, exercise price or other purchase
price is not reduced, adjusted or otherwise modified and the number of shares of
Common Stock issued or issuable is not increased (whether by operation of, or in
accordance with, the relevant governing documents or otherwise) on or after the
date of the Securities Purchase Agreement, (c) shares issued in connection with
any acquisition by the Company, whether through an acquisition of stock or a
merger of any business, assets or technologies, leasing arrangement or any other
transaction the primary purpose of which is not to raise equity capital, and (d)
the shares of Common Stock issued or deemed to be issued by the Company upon
conversion of this Debenture.

          (n) "Holder Pro Rata Amount" means a fraction (i) the numerator of
which is the Original Principal Amount of this Debenture on the Issuance Date
and (ii) the denominator of which is the aggregate Purchase Price (as defined in
the Securities Purchase Agreement).

          (o) "Installment Amount" means with respect to any Installment Date,
the lesser of (A) the product of (i) $300,000, multiplied by (ii) Holder Pro
Rata Amount and (B) the Principal amount under this Debenture as of such
Installment Date, as any such Installment Amount may be reduced pursuant to the
terms of this Debenture, whether upon conversion, redemption or otherwise,
together with, in each case the sum of any accrued and unpaid Interest with
respect to such Principal amount. In the event the Holder shall sell or
otherwise transfer any portion of this Debenture, the transferee shall be
allocated a pro rata portion of the each unpaid Installment Amount hereunder. In
the event that the Holder is the holder of more than one Debenture of this
series of Secured Convertible Debentures issued pursuant to the Securities
Purchase Agreement, then the Holder shall have the right to allocate the any
Installment Amount due to it among the Debentures as it sees fit and shall
notify the Company of such allocation.

          (p) "Installment Date" means the first Business Day on or after July
31, 2008, and continuing on the first Business Day of each successive calendar
month thereafter.

          (q) "Installment Volume Limitation" means 15% of the aggregate dollar
trading volume (as reported on Bloomberg) of the Common Stock on the Principal
Market over the forty (40) consecutive Trading Day period ending on the Trading
Day immediately preceding the applicable Installment Notice Date.

          (r) “Interest Payment Date” shall mean the first Business Day on or
after each of: July 31, 2008, October 31, 2008, January 31, 2009, April 30,
2009, July 31, 2009, October 31, 2009, January 31, 2010, and April 30, 2010.

          (s) “Options” means any rights, warrants or options to subscribe for
or purchase shares of Common Stock or Convertible Securities.

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          (t) “Original Issue Date” means the date of the first issuance of this
Debenture regardless of the number of transfers and regardless of the number of
instruments, which may be issued to evidence such Debenture.

          (u) “Person” means a corporation, an association, a partnership,
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

          (v) “Securities Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

          (w) “Securities Purchase Agreement” means the Securities Purchase
Agreement dated July 6, 2007 by and among the Company and the Buyers listed on
Schedule I attached thereto.

          (x) “Trading Day” means a day on which the shares of Common Stock are
quoted on the OTCBB or quoted or traded on such Primary Market on which the
shares of Common Stock are then quoted or listed; provided, that in the event
that the shares of Common Stock are not listed or quoted, then Trading Day shall
mean a Business Day.

          (y) “Transaction Documents” means the Securities Purchase Agreement or
any other agreement delivered in connection with the Securities Purchase
Agreement, including, without limitation, the Security Agreement, the
Irrevocable Transfer Agent Instructions, and the Registration Rights Agreement.

          (z) “Underlying Shares” means the shares of Common Stock issuable upon
conversion of this Debenture or as payment of interest in accordance with the
terms hereof.

          (aa) “Underlying Shares Registration Statement” means a registration
statement meeting the requirements set forth in the Registration Rights
Agreement, covering among other things the resale of the Underlying Shares and
naming the Holder as a “selling stockholder” thereunder.

          (bb) "Volume Weighted Average Price" means, for any security as of any
date, the daily dollar volume-weighted average price for such security on the
Primary Market as reported by Bloomberg through its “Historical Prices – Px
Table with Average Daily Volume” functions, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg, the average of the
highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the "pink sheets" by Pink Sheets LLC.

          (cc) "Warrants" has the meaning ascribed to such term in the
Securities Purchase Agreement, and shall include all warrants issued in exchange
therefor or replacement thereof.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the Company has caused this Secured Convertible
Debenture to be duly executed by a duly authorized officer as of the date set
forth above.

  COMPANY:   GLOBAL ENERGY, INC.         By: /s/ Asi Shalgi   Name: Asi Shalgi  
Title: Chief Executive Officer

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EXHIBIT I
CONVERSION NOTICE

(To be executed by the Holder in order to Convert the Debenture)

TO:

     The undersigned hereby irrevocably elects to convert $ of the principal
amount of Debenture No.GEYI-1-5 into Shares of Common Stock of GLOBAL ENERGY,
INC., according to the conditions stated therein, as of the Conversion Date
written below.

Conversion Date:       Conversion Amount to be   converted: $     Conversion
Price: $     Number of shares of Common   Stock to be issued:       Amount of
Debenture   Unconverted: $

Please issue the shares of Common Stock in the following name and to the
following address: Issue to:

Authorized Signature:       Name:       Title:       Broker DTC Participant
Code:       Account Number:  

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