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Exhibit 10.1

YA GLOBAL INVESTMENTS, L.P.
101 Hudson Street, Suite 3700
Jersey City, NJ 07302

August 7, 2009

Global Energy, Inc.
Migdal Aviv
7 Abba Hillel Street
Ramat Gan, 52520
Israel
Attention: Asi Shalgi

Dear Mr. Shalgi:

        Reference is made to that certain Securities Purchase Agreement dated
July 6, 2007 (the “Securities Purchase Agreement”) between Global Energy, Inc.
(the “Company”) and YA Global Investments, L.P. (the “Buyer”) and the secured
convertible debentures (collectively, the “Existing Debentures”) and warrants
(the “Warrants”) issued thereunder. The Company and the Buyer have agreed to
make certain modifications to the rights and obligations of each party under the
Securities Purchase Agreement, Existing Debentures, and related documents and
instruments. For the purposes hereof the Securities Purchase Agreement, the
Existing Debentures, the Warrants, along with all security agreement, and other
documents and instruments executed in connection with the forgoing shall be
referred to herein as the “Transaction Documents.”

        The parties agree that the table below sets forth the correct amounts
outstanding under the Existing Debentures as of the date listed below:

Issuance Date

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Outstanding Principal
Amount

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Accrued and Unpaid Interest
(as of July 16, 2009)

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Total

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  July 6, 2007     $ 360,108   $ 69,582   $ 429,690   October 23, 2007   $
1,500,000   $ 207,856   $ 1,707,856   December 7, 2007   $ 1,000,000   $ 132,926
  $ 1,132,296   March 20, 2008   $ 500,000   $ 59,940   $ 559,940   May 13,
2008   $ 500,000   $ 56,553   $ 556,553   TOTAL     $ 3,860,108   $ 526,857   $
4,386,965  

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All capitalized terms not otherwise defined herein shall have the meaning
assigned to them in the Transaction Documents, as applicable.

        The Company is seeking to raise additional financing by issuing common
stock (the “Offering”) pursuant to the terms set forth hereto as Exhibit A (the
“Term Sheet”). This letter shall set forth the agreement between the parties
concerning the Offering and amendments and modifications to the Transaction
Documents.

1.       Acknowledgements. The Company hereby acknowledges, confirms and agrees
as follows:

  a. The Company is indebted to the Buyer under the Existing Debentures in the
principal amount along with all accrued and unpaid interest reflected above.
Such amounts owed, including without limitation all interest accruing thereon,
premiums, costs, expenses, and fees (collectively, the “Obligations”) now or
hereafter payable by the Company to the Buyer pursuant to the Transaction
Documents are unconditionally owing by the Company to the Buyer, without offset,
setoff, defense or counterclaim of any kind, nature or description whatsoever.

  b. That: (1) each of the Transaction Documents to which it is a party has been
duly executed and delivered to the Buyer by the Company, and each is in full
force and effect as of the date hereof, (2) the agreements and obligations of
the Company contained in such documents and in this Agreement constitute the
legal, valid and binding obligations of the Company, enforceable against it in
accordance with their respective terms, and to the Company’s knowledge, the
Company has no valid defense to the enforcement of such obligations, (3)  the
Buyer is and shall be entitled to the rights, remedies and benefits provided for
in the Transaction Documents and applicable law, without offset, setoff, defense
or counterclaim of any kind, nature or descriptions whatsoever, and (4) to the
Company’s knowledge, the Company has no claims, actions, cause of action, suits,
judgments, and demands whatsoever, in law, admiralty or equity, against the
Buyer or its affiliates, in respect of or in connection with the Transaction
Documents.

  c. The Buyer has not waived, is not by this Agreement waiving, and has no
intentions of waiving, any Events of Default which may be continuing on the date
hereof or any Events of Default which may occur after the date hereof, and the
Buyer has not agreed to forbear with respect to any of its rights or remedies
concerning any Events of Default which may have occurred or are continuing as of
the date hereof or which may occur after the date hereof.

  d. The Company hereby acknowledges, confirms and agrees that the Buyer has and
shall continue to have valid, enforceable and perfected first-priority liens
upon and security interests in the pledged property heretofore granted to the
Buyer pursuant to the Security Agreement dated July 6, 2007 between the Company
and the Buyer (the “Security Agreement”) or otherwise granted to or held by the
Buyer.

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2.        The Offering. The Buyer hereby consents to the Company conducting and
closing on the Offering in accordance with the terms set forth in the Term
Sheet, provided however, that such consent shall not be effective until the
satisfaction, waiver or deferral of each of the following conditions and written
notice from the Buyer confirming the satisfaction of such conditions (such date
of notice of satisfaction shall be referred to as the Effective Date):

  a. The gross proceeds of the Offering are at least $650,000 (“Minimum Offering
Amount”);

  b. The Company closes on the Minimum Offering Amount on or before September 3,
2009, unless extended in writing by the Buyer (the “Closing Deadline”);

  c. The Company shall have issued and delivered to the Buyer the Amended and
Restated Debenture (as defined below) in exchange for the surrender of the
Existing Debentures, to be effective as of the Effective Date;

  d. The Company shall provide a cash flow projection budget (the “Budget”) in a
form acceptable to the Buyer, which Budget shall demonstrate that the proceeds
from the Offering will be sufficient to fund the Company’s operations for a
period of at least 12 months from the Effective Date;

  e. The Company shall have made cash payments under the Existing Debentures in
an amount greater than or equal to $50,000 since April 1, 2009, of which $20,000
has been paid and the remaining $30,000 shall be paid on or prior to the
Effective Date. The Company may satisfy this condition by paying the remaining
balance directly out of the proceeds of the Offering; and

  f. The Company shall have received a written notice from YA Global confirming
that all of the conditions set forth above have been satisfied.

3.        Agreements Effective upon Effective Date. The Buyer and the Company
hereby agree to the following, provided however, that the agreements contained
in this section shall only become effective upon the Effective Date:

  a. Amended Debenture. On the Effective Date the Company shall issue to the
Buyer an amended and restated convertible debenture (the “Amended and Restated
Debenture”) in the form attached hereto as “Exhibit B” in the principal amount
equal to the outstanding principal amount and accrued and unpaid interest under
the Existing Debentures as of the Effective Date. The Amended and Restated
Debenture shall be issued solely in exchange for the surrender of the Existing
Debentures. When issued in accordance with this Agreement, the Amended and
Restated Debenture shall amend, replace, and supersede each of the Existing
Debentures and consolidate all amounts owed under such Existing Debentures and
the Buyer shall return the Existing Debentures to the Company. The Amended and
Restated Debenture shall modify the Existing Debentures as follows: s

  i. Payments. All payment by the Company under the Existing Debentures will be
suspended pursuant to the Amended and Restated Debenture for a period of one
year from the Effective Date. Monthly payments in the amount of $225,000 each
shall resume on the first day of the month preceding the month in which the
one-year anniversary of the Effective Date occurs.

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  ii. Redemption. The Company shall have the option to redeem up to $3,000,000
of the outstanding principal and unpaid interest owed the Existing Debentures at
any time with 15 days prior written notice to the Buyer at a redemption price
equal to 115% of the amount being redeemed in accordance with the Amended and
Restated Debenture.

  iii. Conversion Price. The Conversion Price of the Existing Debentures shall
be reduced to the effective price of the Common Stock issued in connection with
the Offering.

  b. Warrants. The exercise price of the Warrants shall be reduced to the
effective price of the Common Stock issued in connection with the Offering. The
number of shares underlying the Warrants shall not be changed, provided that
warrants or other Common Stock purchase rights are not issued in connection with
the Offering. If any warrants or other Common Stock purchase rights are issued
in connection with the Offering then the Company shall issue new warrants to the
Buyer such that the proportion of warrant shares to the amount of the Buyer’s
initial investment is equal to proportion of warrant shares to the amount of the
new investment in the Offering. Any such new warrants shall have an exercise
price equal to the price of the Common Stock issued in connection with the
Offering.

  c. Rule 144 Tacking Period. The Company represents, warrants, and agrees the
Amended and Restated Debenture is being issued solely in exchange for the
Existing Debentures and that for the purposes of Rule 144, the Amended and
Restated Debenture shall be deemed to have been acquired at the same time as the
surrendered Existing Debentures, which are the dates referenced next to each of
the Existing Debentures in the table above, in all cases is prior to one year
from the date hereof.

  d. Buyer’s Lock up Provision. During any calendar month beginning with the
month in which the Effective Date occurs and ending with the calendar month
preceding the month in which the one-year anniversary of the Effective Date
occurs, except for Excluded Sales (as defined below), the Buyer shall not sell
shares of Common Stock for gross proceeds (measured by the quantity of shares
sold multiplied by the sales price) of greater than (a) $50,000, or (b) 20% of
the aggregate dollar traded volume traded during the preceding calendar month
(as measured by multiplying the total volume traded in such month by the average
price during such month according to Bloomberg LP). For the purposes hereof the
term “Excluded Sales” shall mean any sales by the Buyer at a price of five cents
($0.05) or more.

4.        Representations, Warranties, and Covenants or General Effect.

  a. Budget. The Company shall not exceed the total expenses listed on the
Budget by more than 5% in any individual month, or in the aggregate at any time.
The Company shall provide certified cash flow reports to the Buyer on the 1st
and 15th of each month which shall show actual results for each period that has
elapsed from the date hereof compared to the same period in the Budget. Any
violation of this covenant shall be deemed an event of default under the Amended
and Restated Debenture and the Transaction Documents.

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  b. Further Assurances. The Company shall, from and after the execution of this
agreement, execute and deliver to the Buyer any additional documents,
instruments, and agreements that the Buyer may require in order to correct any
document deficiencies, or to vest or perfect the security interest in the
collateral granted pursuant to the Security Agreement more securely in the Buyer
and/or to otherwise give effect to the terms and conditions of this agreement,
and hereby authorize the Buyer to file any financing statements (including
financing statements with a generic description of the collateral such as “all
assets”), and take any other normal and customary steps, the Buyer deems
necessary to perfect or evidence the Buyer’s security interests and liens in any
such collateral. The Company shall pledge to the Buyer its shares of capital
stock of Alphakat – Global Energy GmbH as required pursuant to the Security
Agreement. The Company shall also make all necessary filings in Israel required
to perfect and provide notice of the Buyer’s liens on the assets of Global Fuel
Israel, Ltd. and Global NRG Pacific Ltd. or provide the Buyer evidence that all
such filings have been made and recorded. The Buyer represents that the
perfection certificate attached hereto as Exhibit C is true, complete, and
correct as of the date hereof.

  c. Effect of this Agreement. Except as modified pursuant hereto, no other
changes or modifications to the Transaction Documents are intended or implied
and in all other respects such documents are hereby specifically ratified,
restated and confirmed by all parties hereto as of the effective date hereof.

  d. Each party shall pay all its own costs and expenses regarding the entering
of this Agreement. There are no other fees, charges or expenses other than as
set out herein and in the Existing Debentures and ancillary documents.

[SIGNATURE PAGE IMMEDIATELY TO FOLLOW]

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        IN WITNESS WHEREOF, this letter agreement is executed and delivered as
of the day and year first above written.

GLOBAL ENERGY, INC.

By: /s/ Asi Shlagi
——————————————
Asi Shlagi
Chief Executive Officer

YA GLOBAL INVESTMENTS, L.P.

By:   Yorkville Advisors, LLC
Its:   Investment Manager

By: /s/
——————————————
Name:
Title:

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EXHIBIT A

TERM SHEET

AMENDMENT OUTLINE

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GLOBAL ENERGY INC.

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Theamendment of YA Global Investments, L.P. (the “Investor”) will be confirmed
and finalized subject to the satisfaction of each of the following terms and
conditions:

Minimum Raise: Global Energy Inc ("GEYI" or the "Company") will raise a minimum
of $650,000 in new capital by the issuance of common stock of the Company or
bridge loans ("Financing").

Reset Prices: The existing conversion price and warrant strike prices on the
Investor's convertible debentures and warrants will be reset to the issue price
on the common stock issued in the Follow-on Financing (the "Reset Price"). No
new warrants or shares will be issued to the Investor as part of the reset,
except that if any warrants or other rights are issued in connection with the
Financing, the Company will issue new warrants or similar rights to the Investor
in the same proportion and at the same price.

Repayments: All payments by the Company under the Debentures will be suspended
for a period of 12 months from the close of the Financing, after which the
Company shall make full payment of the outstanding Debenture and accrued
interest amounts in accordance with the terms of Debentures.

  The Investor shall receive a payment of at least $50,000 in the aggregate
either from the proceeds of the sale of the Ethiopia business, or the Financing,
or a combination of the two.

Conversions: In the first 12 months following the Financing if the quoted share
price of the Company is 5 cents or less the Investor shall be restricted from
selling shares of common stock in excess of the greater of (a) $50,000 per
calendar month, or (b) 20% of the aggregate dollar trading volume of all shares
traded during the preceding calendar month.

Redemption: The Company shall have the option to redeem up to $3,000,000 of the
outstanding Debenture in cash on at least 15 days prior written notice to the
Investor. The Redemption premium shall be 15% and shall be paid upon Redemption
of any portion of the Debenture.

Budget/Burn: The Company shall provide a budget indicating that the proceeds of
the Financing will sustain the Company for at least 12 months.

Expiry: The terms herein will expire at 5p.m. on April 8, 2009.

Non-Binding: These terms are for discussion purposes only, non-binding on the
parties, and subject to change. If final terms are reached they will be
documents by formal definitive documents setting forth the final agreed upon
terms.

SIGNATURE PAGE TO FOLLOW
GLOBAL ENERGY, INC.

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By: /s/ Shalgi Asi
——————————————
Name: Shalgi Asi
Title:   President

YA GLOBAL INVESTMENTS, L.P.
By: Yorkville Advisors, LLC
Its: Investment Manager

By: /s/ Gerald Eicke
——————————————
Name: Gerald Eicke
Title:   Managing Member

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EXHIBIT B

FORM OF AMENDED AND RESTATED DEBENTURE

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.

AMENDED AND RESTATED SECURED CONVERTIBLE DEBENTURE

Issuance Date: ______ __, 2009 Original Principal Amount: $4,___,___ No.
GEYI-1-6

This Amended and Restated Secured Convertible Debenture (including all secured
convertible debentures issued in exchange, transfer or replacement hereof, this
“Debenture”) is being issued pursuant to that certain letter agreement dated
July __, 2009 (the “Letter Agreement”) solely in exchange for the Existing
Debentures (as defined in the Letter Agreement) and shall amend, replace, and
supersede the Existing Debentures. The Existing Debentures were acquired by the
Holder, and fully paid for by the Holder, more than one year prior to the
Issuance Date of this Debenture.

        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 Debenture is issued in
exchange for the secured convertible debentures issued pursuant to the
Securities Purchase Agreement (the “Existing Debentures”). Certain capitalized
terms used herein are defined in Section 17.

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    (1)        GENERAL TERMS

    (a)        Interest, Installment Payments, Maturity. Interest shall accrue
on the outstanding principal balance hereof at an annual rate equal to twelve
percent (12%) (“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. 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 the terms and conditions of this Debenture. On the Maturity
Date, the Company shall pay to the Holder an amount in cash representing all
outstanding Principal and accrued and unpaid Interest. The “Maturity Date” shall
be October 31, 2010. The Maturity Date may be extended at the option of the
Holder in 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. Unless otherwise set forth in this
Debenture all payments received by the Holder hereunder shall be applied towards
amounts outstanding under this Debenture in the sole discretion of the Holder.

    (b)        Security. The Company agrees and acknowledges that its
obligations under this Debenture shall be secured by the pledge of certain
assets of the Company and its subsidiaries granted pursuant to the Security
Agreement dated July 6, 2007 in favor of the Holder (the “Security Agreement”)
and that the obligations under this Debenture are hereinafter expressly included
as part of the “Obligations” as such term is defined and used in 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 sixty one (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 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;

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    (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)        The Common Stock shall cease to be quoted or listed for trading
on a Primary Market for a period of five (5) consecutive Trading Days;

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

    (vii)        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;

    (viii)        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 which is not cured
within the time prescribed.

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    (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 that the Company has
failed to cure such Event of Default within five (5) Business Days after the
occurrence of the Event of Default, except with respect to an Event of Default
under Section 2(a)(iv)-(vii), which shall not have any additional cure period.
Furthermore, in addition to any other remedies, the Holder shall have the right
(but not the obligation) to convert this Debenture at the Company Conversion
Price at any time after (x) an Event of Default, provided Company has failed to
cure such Event of Default within five (5) Business Days after occurrence of the
Event of Default, or (y) the Maturity Date. 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). Holder may enforce any and all
of its rights and remedies hereunder and all other remedies available to it
under applicable law. Holder’s notice of exercise of its rights hereunder 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 perform 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) 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).

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    (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 by the Holder) on such Installment Date
and that the Installment Volume Limitation is not exceeded (unless waiver by the
Holder). If the Equity Conditions are not satisfied (or waived in writing by the
Holder) on such Installment Date or the Installment Volume Limitation is
exceeded (unless waived 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) Business Days of Company’s
receipt of Holder’s notice, 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.. If the Company
fails to redeem any Unconverted Redemption Amount by the third (3rd) Business
Day following receipt of notice from Holder instructing Company to repay such
Unconverted Redemption Amount, then the Holder shall have all rights under this
Debenture (including, without limitation, such failure constituting an Event of
Default).

    (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 repaid 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, an amount in cash (the “Company Installment Redemption Price”)
equal to the Company Redemption Amount. 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), 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.

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    (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, elect 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)        Company’s Additional Cash Redemption. The Company at its option
shall have the right to redeem (“Optional Redemption”) up to $3,000,000 of
outstanding Principal amount under the Debenture (less any amounts that have
been repaid, converted, or redeemed after the date Issuance Date of this
Debenture) in addition to any Installment Amount prior to the Maturity Date by
providing the Holder with at least five (5) days’ prior written notice and
provided that no Event of Default has occurred and is continuing on the
Redemption Notice date. The Company shall pay an amount equal to the Principal
amount being redeemed plus a redemption premium (“Redemption Premium”) equal to
fifteen percent (15%) of the Principal amount being redeemed, together with
accrued Interest (which shall not be subject to the Redemption Premium),
(collectively referred to as the “Company Additional Redemption Amount”). In
order to make an Optional 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 and the date of such redemption (which shall be at least 5 days from the
date of the Redemption Notice). After receipt of the Redemption Notice the
Holder shall have the right to elect to convert only the portion of this
Debenture that is outstanding and is not included in the Redemption Notice, and
subject to the limitations set forth in Section 4(c). On the redemption date set
forth in the Redemption Notice the Company shall deliver to the Holder the
Company Additional Redemption Amount. Notwithstanding anything to the contrary,
failure by the Company to pay the Company Additional Redemption Amount on the
date due shall be considered an Event of Default without any further passage of
time or cure period, and the Company acknowledges that the Holder may suffer
additional damages as a result of not being permitted to convert the amounts
subject to such redemption.

    (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.

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    (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, [$0.02]1, 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 electronic mail (with confirmation of receipt), or otherwise
deliver, for confirmed 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 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 Trading 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) Trading 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 or electronic 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 the 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.

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1 Insert price of common stock issued pursuant to the Offering.

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    (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 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, Sales.

    (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.

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    (ii)        Lock Up. During any calendar month beginning with the month of 2
______ 2009 and ending with, and including, the month of 3 _______ 2010, except
for Excluded Sales (as defined below), the Buyer shall not sell shares of Common
Stock for gross proceeds (measured by the quantity of shares sold multiplied by
the sales price) of greater than (a) $50,000, or (b) 20% of the aggregate dollar
traded volume traded during the preceding calendar month (as measured by
multiplying the total volume traded in such month by the average price during
such month according to Bloomberg LP). For the purposes hereof the term
“Excluded Sales” shall mean any sales by the Buyer at a price of five cents
($0.05) or more.

    (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 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.

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2 Insert Month of the Effective Date

3 Insert Month 12 months from the Effective Date. For purpose of clarity, if the
Effective Date was August 15, 2009, the first month would be August 2009 and the
last month would be July 2010.

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    (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 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.

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    (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 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.

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    (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 (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.

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    (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 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.

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    (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.

    (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.

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    (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: Pearl Cohen Zedek Latzer LLP.

  1500 Broadway, 12th Floor

  New York, NY10036

  Attention: Doron Latzer, Esq., Managing Partner

  Telephone: +1 (646) 878-0800

  Facsimile: +1 (646) 878-0801

If to the Holder: YA Global Investments, L.P.

  101 Hudson Street, Suite 3700

  Jersey City, NJ 07302

  Attention: Mark Angelo

  Telephone: (201) 985-8300

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.

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    (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 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.

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    (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 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.

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

    (g)        “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.

    (h)        “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 shall be appropriately
adjusted for any stock split, stock dividend, stock combination or other similar
transaction.

    (i)        “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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    (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 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.

    (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)        “Installment Amount” means with respect to any Installment Date,
the lesser of (A) $225,000 and (B) the total amount outstanding 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 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 or in exchange for the Debenture, 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.

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    (o)        “Installment Date” means 4 ________ 1, 2010, and continuing on
the first Business Day of each successive calendar month thereafter.

    (p)        “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.

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

    (r)        “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.

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

    (t)        “Primary Market” means any of (a) the NYSE Amex (b) the New York
Stock Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, or
(e) the Nasdaq OTC Bulletin Board;

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

    (v)        “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.

    (w)        “Trading Day” shall mean any day during which the Primary Market
for the Common Stock is open for business.

    (x)        “Transaction Documents” means the Letter Agreement, the
Securities Purchase Agreement and 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.

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4 Insert Month that is 12 months from the month of the Effective Date. For
example if the Effective Date is August 15, 2009, the date entered would be July
1, 2010.

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    (y)        “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.

    (z)        “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.

    (aa)        “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 during regular trading hours.

    (bb)        “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
——————————————
Asi Shalgi
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-1-6 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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EXHIBIT C

FORM OF PERFECTION CERTIFICATE

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