THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE"ACT") OR APPLICABLE STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN
OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
COUNSEL TO THE BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

Original Issue Date: May ____, 2008

Initial Conversion Price (subject to adjustment herein): $0.25

CONVERTIBLE DEBENTURE
DUE APRIL 30, 2010

     FOR VALUE RECEIVED, UNIVERSAL ENERGY CORP., a Delaware corporation
(hereinafter called the "Borrower" or “Company”), hereby promises to pay to the
order of ________________
., a
___________________
Company or its registered assigns (the "Holder") the sum of
________
Million U.S. Dollars (U.S. $
__________
), on April 30, 2010 (the "Maturity Date"), or such earlier date as this
Debenture is required or permitted to be repaid as provided hereunder, and to
pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Debenture in accordance with the provisions hereof.
This Convertible Debenture (including all Convertible Debentures issued in
exchange, transfer or replacement hereof, this "Debenture") is one of an issue
of Convertible Debentures issued pursuant to the Securities Purchase Agreement
(as defined in Section 1 below) on the Closing Date (collectively, the
"Debentures" and such other Convertible Debentures, the "Other Debentures").

     This Debenture may not be prepaid by the Borrower except as otherwise
expressly provided herein. All payments due hereunder (to the extent not
converted into Common Stock, par value $0.0001 per share, of the Borrower (the
"Common Stock") in accordance with the terms hereof) shall be made in lawful
money of the United States of America provided that, to the extent that any
accrued Interest has not been paid when due, at the option of the Holder, in
whole or in part, such accrued and unpaid Interest may, upon written notice to
the Borrower, be added to the principal amount of this Debenture, in which event
Interest shall accrue thereon in accordance with the terms of this Debenture and
such additional principal amount shall be convertible into Common Stock in
accordance with the terms of this Debenture. All payments shall be made at the
address of the Holder as set forth in the Securities Purchase Agreement (as
defined in Section 1 below) or at such address as the Holder shall hereafter
give to the Borrower by written notice made in accordance with the provisions of
this Debenture. Whenever any amount expressed to be due by the terms of this
Debenture is due on any day which is not a Business Day (as defined below), the
same shall instead be due on the next succeeding day which is a Business Day.

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This Debenture is subject to the following additional provisions:

     Section 1. Certain Definitions. Capitalized terms used and not otherwise
defined herein that are defined in that certain Securities Purchase Agreement,
of date even herewith, pursuant to which the Debenture was originally issued
(the "Securities Purchase Agreement" or the “Purchase Agreement”), shall have
the meanings given such terms in the Securities Purchase Agreement. For the
purposes hereof, the following terms shall have the following meanings:

     “1933 Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated hereunder.

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

     “Bankruptcy Event” means any of the following events: (a) the Company or
any Significant Subsidiary (as such term is defined in Rule 1-02(w) of
Regulation S-X) thereof commences a case or other proceeding under any
bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
relating to the Company or any Significant Subsidiary thereof; (b) there is
commenced against the Company or any Significant Subsidiary thereof any such
case or proceeding that is not dismissed within 60 days after commencement; (c)
the Company or any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such case or
proceeding is entered; (d) the Company or any Significant Subsidiary thereof
suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days
after such appointment; (e) the Company or any Significant Subsidiary thereof
makes a general assignment for the benefit of creditors; (f) the Company or any
Significant Subsidiary thereof calls a meeting of its creditors with a view to
arranging a composition, adjustment or restructuring of its debts; or (g) the
Company or any Significant Subsidiary thereof, by any act or failure to act,
expressly indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.

     "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in the City of New York, New York are authorized or
required by law or executive order to remain closed.

     “Buyer(s)” shall have the meaning ascribed to it in the Securities Purchase
Agreement.

     “Closing Date” means the Trading Day when (i) all of the Holder’s
Transaction Documents have been executed and delivered by the applicable parties
thereto, (ii) all conditions precedent to (a) each Holder’s obligations to pay
the Subscription Amount and (b) the Company’s obligations to deliver the
Securities have been satisfied or waived, and

2

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(iii) Holder shall have delivered the purchase price for the Debenture to the
Company in accordance with the Securities Purchase Agreement.

     "Closing Bid Price," as of any date, means the last bid price of the Common
Stock on the Principal Market as reported by Bloomberg or, if the principal
market is not the principal trading market for such security, the last bid price
of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, Inc., or if no last
bid price of such security is available on the Principal Market for such
security or in any of the foregoing manners, the average of the bid prices of
any market makers for such security that are listed in the "pink sheets" by the
National Quotation Bureau, Inc. If the Closing Bid Price cannot be calculated
for such security on such date in the manner provided above, the Closing Bid
Price shall be the fair market value as mutually determined by the Company and
the Holder.

     "Closing Price," as of any date, means the last sale price of the Common
Stock on the Principal Market as reported by Bloomberg or, if the principal
market is not the principal trading market for such security, the last sale
price of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by Bloomberg, Inc., or if no
last sale price of such security is available on the Principal Market for such
security or in any of the foregoing manners, the average of the bid prices of
any market makers for such security that are listed in the "pink sheets" by the
National Quotation Bureau, Inc. If the Closing Price cannot be calculated for
such security on such date in the manner provided above, the Closing Price shall
be the fair market value as mutually determined by the Company and the Holder.

“Commission” means the Securities and Exchange Commission.

     “Common Stock Equivalents” shall have the meaning ascribed to it in the
Securities Purchase Agreement.

"Conversion Amount" shall have the meaning set forth in Section 3(a)(iv)

below.

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

     "Debentures" shall be deemed to refer to this Debenture, as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, all other convertible debentures issued pursuant to the Securities
Purchase Agreement and all convertible debentures issued in replacement hereof
or thereof or otherwise with respect hereto or thereto.

“Default Conversion Sum” shall have the meaning set forth in Section 11(a)

below.

3

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     “Effective Date” shall mean the date that the initial Registration
Statement that the Company is required to file pursuant to the Registration
Rights Agreement has been declared effective by the Securities and Exchange
Commission.

     "Eligible Market" shall have the meaning ascribed to it in the Securities
Purchase Agreement by and between the Company and the Holder.

     “Equity Payment Conditions” shall mean, during each Trading Day of the
period in question, (i) the Company shall have duly honored all Conversions
scheduled to occur or occurring by virtue of one or more Notices of Conversion,
if any, (ii) all Required Cash Payments (as defined in Section 10(a) below)
shall have been paid; (iii) no (A) Events of Default or (B) event that with the
passage of time or giving of notice would constitute an Event of Default, have
occurred that have not been cured, (iv) there is an effective Registration
Statement pursuant to which the Holder is permitted to utilize the prospectus
thereunder to resell all of the Conversion Shares, Warrant Shares and other
shares issued or issuable pursuant to the Transaction Documents (and the Company
believes, in good faith, that such effectiveness will continue uninterrupted for
the foreseeable future or such shares may be resold, without restriction,
pursuant to Rule 144(k)), (v) the Common Stock is trading on an Eligible Market
and all of the shares issuable pursuant to the Transaction Documents are listed
for trading on an Eligible Market (and the Company believes, in good faith, that
trading of the Common Stock on a Principal Market will continue uninterrupted
for the foreseeable future), (vi) such issuance would be permitted in full
without violating Section 3(a)(ii) hereof or the rules or regulations of the
Eligible Market on which such shares are listed or quoted, (vii) there is a
sufficient number of authorized but unissued and otherwise unreserved shares of
Common Stock for the issuance of all of the shares issuable pursuant to the
Transaction Documents, (viii) the Company shall not have been a party to a Major
Transaction and there shall not have occurred the public announcement of a
pending, proposed or intended Major Transaction which has not been abandoned,
terminated or consummated, (ix) all of the shares issued or issuable pursuant to
the transaction proposed would not violate the Beneficial Ownership Limitation,
and (x) the average daily trading dollar volume of the Common Stock for each
three consecutive Trading Days throughout such period exceeds $100,000.

     “Filing Deadline” shall have the meaning ascribed to it in the Registration
Rights Agreement.

     “Holders” shall mean the Holder, and the holders of Other Debentures issued
pursuant to the Securities Purchase Agreement.

     "Indebtedness" shall have the meaning ascribed to it in the Securities
Purchase Agreement.

     “Indebtedness Lock-Up Exceptions” means (a) Indebtedness evidenced by the
Debentures or issuances to the Holders as contemplated by the Transaction
Documents; (b) the Indebtedness existing on the Original Issue Date as set forth
on Schedule 3.1(mm)

4

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attached to the Securities Purchase Agreement, provided that the principal
amount thereof is not increased or the terms thereof are not otherwise amended
or modified after the Closing Date; and (c) Indebtedness to trade creditors
incurred in the ordinary course of business. For purposes of clarification, it
is expressly agreed and understood that the classification of Indebtedness as an
“Indebtedness Lock-Up Exception” does not cause such Indebtedness to be exempted
from the Subsequent Issuance Adjustments (as defined in Section 6(a) below and
as defined in the Warrants), the prohibition against the issuance of Variable
Equity Securities (as defined in Section 4(e)(ii) of the Securities Purchase
Agreement), the Buyer’s Rights of Participation (as defined in Section 4(e)(iii)
of the Securities Purchase Agreement) or from any other provisions of the
Transaction Documents, except that the Indebtedness Lock-Up Exceptions do
constitute an exception to the Indebtedness Negative Covenant specified in
Section 9(d) hereof.

“Interest” shall heave the meaning set forth in Section 2 below.

     “Interest Share Conversion Price” shall mean the lower of $0.25 or the
average of the three (3) lowest Closing Bid Prices of the Common Stock over the
twenty (20) Trading Day period ending on the Trading Day immediately preceding
the applicable Interest Payment Date.

“Issuable Shares” shall heave the meaning set forth in Section 3(a)(iii) below.

     "Market Price," as of any date, means the Volume Weighted Average Price (as
defined herein) of the Common Stock during the five (5) consecutive Trading Day
period immediately preceding the date in question.

“Mandatory Redemption Premium” shall mean 125%.

     "Maximum Monthly Interest Share Amount" means 20% of the aggregate dollar
trading volume (as reported on Bloomberg) of the Common Stock on the Principal
Market over the twenty (20) consecutive Trading Day period immediately prior to
the applicable Interest Payment Date.

     “Ongoing Share Reservation Requirement” shall have the meaning ascribed to
it in the Securities Purchase Agreement.

     "Options" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

     “Original Issue Date” shall mean the date of the first issuance of any
Debenture regardless of the number of transfers of any particular Debenture.

     "Parent Entity" of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common stock or equivalent equity
security is quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity,

5

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the Person or Parent Entity with the largest public market capitalization as of
the date of consummation of the Fundamental Transaction.

     “Permitted Liens” shall have the meaning ascribed to it in the Securities
Purchase Agreement.

     "Person" means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

     “Principal Market” shall have the meaning ascribed to it in the Securities
Purchase Agreement by and between the Company and the Holder.

     “Redemption” shall mean any redemption of the Debenture hereunder,
including but not limited to a Redemption Upon Major Transaction, a Mandatory
Redemption, and an Automatic Redemption.

     “Redemption Amount” shall mean any amount that is payable to the Holder
pursuant to a Redemption.

     “Redemption Date” shall mean the date of any Redemption of the Debenture
hereunder.

     “Registration Rights Agreement” shall have the meaning ascribed to it in
the Securities Purchase Agreement.

     “Registration Statement(s)” shall have the meaning ascribed to it in the
Registration Rights Agreement.

“Required Cash Payment” shall have the meaning set forth in Section 10(a)

below.

     “Required Holders” shall mean Holders holding at least two-thirds (2/3) of
the then outstanding principal amount of Debentures.

     “Shares” shall mean the shares of Common Stock issuable upon Conversion of
the Debentures.

     “Subscription Amount” shall mean, as to each Buyer, the amount to be paid
for the Debenture purchased pursuant to the Securities Purchase Agreement as
specified in Section 10 of the Securities Purchase Agreement, in United States
Dollars and in immediately available funds.

     “Subsidiaries” shall have the meaning ascribed to it in the Securities
Purchase Agreement.

6

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     "Trading Day" shall mean any day on which the Common Sock is traded for any
period on the PRINCIPAL MARKET, or on the principal securities exchange or other
securities market on which the Common Stock is then being traded.

     “Transaction Documents” shall have the meaning ascribed to it in the
Securities Purchase Agreement.

     “Variable Equity Securities” shall have the meaning ascribed to it in the
Securities Purchase Agreement.

     The "Volume Weighted Average Price" or “VWAP” for any security as of any
date means the volume weighted average sale price on the Principal Market, as
reported by, or as calculated based upon data reported by, Bloomberg Financial
Markets or an equivalent, reliable reporting service mutually acceptable to and
hereafter designated by holders of a majority in interest of the Debentures and
the Company ("BLOOMBERG") or, if no volume weighted average sale price is
reported for such security, then the last closing trade price of such security
as reported by Bloomberg, or, if no last closing trade price is reported for
such security by Bloomberg, the average of the closing trade prices of any
market makers for such security that are listed in the "pink sheets" by the
National Quotation Bureau, Inc. If the Volume Weighted Average Price is to be
determined over a period of more than one Trading Day, then “Volume Weighted
Average Price” for the period shall mean the volume weighted average of the
daily Volume Weighted Average Prices, determined as set forth above, for each
Business Day during the period. If the volume weighted average price cannot be
calculated for such security on such date in the manner provided above, the
volume weighted average price shall be the fair market value as mutually
determined by the Company and the holders of a majority in interest of the
Debentures being converted for which the calculation of the volume weighted
average price is required in order to determine the Conversion Price of such
Debentures.

     “Warrant” shall have the meaning ascribed to it in the Securities Purchase
Agreement.

“Warrant Shares” shall have the meaning ascribed to it in the Warrant.

     Section 2. Interest. The Company shall pay interest (“Interest”) to the
Holder on the aggregate unconverted and then outstanding principal amount of
this Debenture at the rate of eight percent (8%) per annum (the “Interest Rate”)
from the Original Issue Date (as defined herein) until the same becomes due and
payable, whether at maturity or upon acceleration or otherwise. Interest shall
commence accruing on the Original Issue Date, shall be computed on the basis of
a 365-day year and the actual number of days elapsed and shall be payable
monthly (as further described below), in cash or, to the extent not yet paid, at
maturity or upon acceleration in accordance with the terms hereof. Payments of
Interest shall be due and payable monthly, in arrears, on the first Business Day
of each month after the Original Issue Date, (in each case, if not a Business
Day, then on the next Business Day) occurring after the Original Issue Date,
(ii) on each Conversion Date (as defined in Section 3(d))(as to that principal
amount then

7

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being converted), (iii) on each Redemption Date, and (iv) on the Maturity Date
(as defined above) (each such date, an “Interest Payment Date”). Upon five (5)
Trading Days advance written notice to the Holder, provided that the Equity
Payment Conditions (as defined in Section 1 above) have been met on each of the
twenty (20) Trading Days immediately preceding the date of payment of Interest
Payment Shares (as defined below) and provided that Interest is paid timely, the
Company may pay the Interest payable on this Debenture with registered,
free-trading shares of Common Stock (as defined below)(“Interest Payment
Shares”) with an attributed value per share equal to the Interest Share
Conversion Price as determined on the Interest Payment Date that such Interest
is due to be paid hereunder (the “Interest Conversion Price”), or, if such
shares are paid late, as calculated on the date that such Interest Payment
Shares are delivered to the Holder, whichever is less. Notwithstanding the
above, the Company may not issue a number of shares of Common Stock in excess of
the Maximum Monthly Interest Share Amount toward the payment of Interest, as to
all outstanding Debentures, in the aggregate, during any rolling twenty (20)
Trading Day period (the “Share Payment Restriction”).

     Notwithstanding anything herein to the contrary herein, the Company shall
not be entitled to pay Interest in shares of Common Stock if, and to the extent
that, in the sole determination of the Holder, the issuance of such shares of
Common Stock would cause the Beneficial Ownership Limitation of Section 3(a)(ii)
to be exceeded. In the event the Company provides notice of its intention to pay
interest in shares of Common Stock and because of the Beneficial Ownership
Limitation it is unable to issue such shares of Common Stock to the Holder, the
Holder, upon the Company’s written request, must promptly provide documentation
to the Company demonstrating that the Beneficial Ownership Limitation would be
exceeded by payment of Interest in shares of Common Stock.

Section 3.    Conversion.  (a)    Conversion Right. 

     (i) Conversion Timing and Amount. Subject to the limitations on Conversion
contained herein, the record Holder of this Debenture shall have the right (a
“Conversion Right”) from time to time, and at any time on or after the Original
Issue Date hereof to convert any of all of the Debentures (plus any accrued and
unpaid Interest, and other Required Cash Payments) into fully paid and
non-assessable shares of Common Stock, or any shares of capital stock or other
securities of the Company into which such Common Stock shall hereafter be
changed or reclassified, at the Conversion Price (as defined in Section 3(b)
below, subject to adjustment as provided herein) determined as provided herein
(a "Conversion"). The Conversion Rights set forth in this Section 3 shall remain
in full force and effect immediately from the Original Issue Date until the
Debenture is paid in full regardless of the occurrence of an Event of Default.

     (ii) Limitation On Conversion. Notwithstanding the above, in no event shall
the Holder be entitled to convert any portion of this Debenture in excess of

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that portion of this Debenture upon Conversion of which (nor shall the Company
be permitted to pay Interest in shares of Common Stock to the extent that) the
sum of (1) the number of shares of Common Stock beneficially owned by the Holder
and any applicable affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unconverted portion of
the Debenture, the unexercised Warrants or the unexercised or unconverted
portion of any other security of the Company subject to a limitation on
Conversion or exercise analogous to the limitations contained herein)(the
“Beneficially Owned Shares”) and (2) the number of shares of Common Stock
issuable upon the Conversion of the portion of the Debenture with respect to
which the determination of this proviso is being made or upon the payment of
Interest in shares of Common Stock with respect to which the determination of
this proviso is being made, would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% (the “Maximum Percentage”) of the number
of shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon conversion of this Debenture
held by the Holder (the “Beneficial Ownership Limitation”). For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined by the Holder in accordance with Section 13(d) of the Exchange Act
and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of
such proviso in the immediately preceding sentence, and PROVIDED THAT the
Beneficial Ownership Limitation shall be conclusively satisfied if the
applicable Notice of Conversion includes a signed representation by the Holder,
if requested by the Company, that the issuance of the shares in such Notice of
Conversion will not violate the Beneficial Ownership Limitation, and the Company
shall not be entitled to require additional documentation of such satisfaction.

     The parties agree that, in the event that the Company receives any tender
offer or any offer to enter into a merger with another entity whereby the
Company shall not be the surviving entity (an “Offer”), in the event of a Forced
Conversion by the Company in accordance with Section 3(i) hereof, or in the
event that Default Shares are being issued to the Holder pursuant to Section 11
hereof, then the Maximum Percentage shall be automatically increased immediately
after such Offer to read “9.99%” each place that “4.99%” occurs in the first
paragraph of this Section 3(a)(ii) above. Notwithstanding the above, Holder
shall retain the option to either exercise or not exercise its option(s) to
acquire Common Stock pursuant to the terms hereof after an Offer. The Beneficial
Ownership Limitation provisions of this Section 3(a)(ii) may be waived by such
Holder, at the election of such Holder, upon not less than 61 days’ prior notice
to the Company, to change the Maximum Percentage to any other percentage not
less than 4.99% and not in excess of 9.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock upon conversion of this Debenture held by the Holder and the
provisions of this Section 3(a)(ii) shall continue to apply. Any such increase
or decrease to the Maximum Amount will apply only to the Holder and not to any
other holder of Debentures. Upon such a change by a Holder of the Beneficial
Ownership Limitation from such 4.99% limitation to such 9.99% limitation, the
Beneficial Ownership Limitation may not be further waived by such Holder,
provided that, if an Event of Default occurs, thereafter the Beneficial
Ownership Limitation provisions of this Section 3(a)(ii) may be waived by

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such Holder, at the election of such Holder, upon not less than 61 days’ prior
notice to the Company, to change the Maximum Percentage to any other percentage
not less than 4.99% (and not limited to 9.99%) of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock upon conversion of this Debenture held by the Holder and
the provisions of this Section 3(a)(ii) shall continue to apply. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this Section 3(ii) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such
limitation.

     (iii) Maximum Exercise of Rights. In the event the Holder notifies the
Company that the exercise of the rights described in this Section 3 or the
issuance of Interim Conversion Shares (as defined in Section 3(e)(iii) hereof),
Payment Shares (as defined in the Securities Purchase Agreement) or other shares
of Common Stock issuable to the Holder under the terms of the Transaction
Documents (collectively, “Issuable Shares”) would result in the issuance of an
amount of Common Stock that would exceed the maximum amount that may be issued
to a Holder calculated in the manner described in Section 3(a)(ii) of this
Agreement, then the issuance of such additional shares of Common Stock to such
Holder will be deferred in whole or in part until such time as such Holder is
able to beneficially own such Common Stock without exceeding the maximum amount
calculated in the manner described in Section 3(a)(ii) of this Agreement. The
determination of when such Common Stock may be issued without violating the
Beneficial Ownership Limitations shall be made by each Holder as to only such
Holder.

     (iv) Calculation of Conversion Amount. The number of shares of Common Stock
to be issued upon each Conversion of this Debenture shall be determined by
dividing the Conversion Amount (as defined herein) by the applicable Conversion
Price. The term "Conversion Amount" means, with respect to any Conversion of the
Debenture, the sum of (1) the principal amount of the Debenture to be converted
in such Conversion, PLUS (2) all accrued and unpaid Interest thereon for the
period beginning on the Original Issue Date and ending on the Conversion Date
(as defined in Section 3(d) hereof), PLUS (3) at the Holder's option, any other
Required Cash Payment owed to the Holder.

     (b) Conversion Price. The "Conversion Price" shall initially equal the
lesser of (i) $0.25 (subject to resets and adjustments pursuant to the terms of
this Debenture and subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Company relating to the Company's
securities or the securities of any Subsidiary of the Company, combinations,
recapitalization, reclassifications, extraordinary distributions and similar
events) (the “Fixed Conversion Price”) or (ii) 80% of the average of the three
(3) lowest Closing Bid Prices of the Common Stock over the twenty (20) Trading
Day period ending on the Trading Day immediately preceding the applicable
Conversion Date .

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(c)      Reservation of Shares.     (i) Increase and Maintenance of Authorized
and Reserved  

Amount. The Company represents that the aggregate number of its authorized
shares of Common Stock is at least 250,000,000 shares and covenants that it will
initially reserve (the “Initial Share Reservation”) from its authorized and
unissued Common Stock a number of shares of Common Stock equal to at least 150%
of the initial principal amount of this Debenture, divided by the Conversion
Price in effect on the Original Issue Date of this Debenture, free from
preemptive rights, to provide for the issuance of Common Stock upon the
Conversion of this Debenture. Company further covenants that, beginning on the
Original Issue Date hereof, and continuing until all of the Debentures have been
converted, redeemed or otherwise satisfied in accordance with their terms, the
Company will reserve from its authorized and unissued Common Stock a sufficient
number of shares (the “Required Debenture Reserve Amount”), free from preemptive
rights, equal to 150% of the number of shares as shall from time to time be
necessary to provide for the issuance of Common Stock upon the full Conversion
of all of the Debentures (without regard to any limitations on conversions). The
Company represents that upon issuance, such Shares will be duly and validly
issued, fully paid and non-assessable. In addition, if the Company shall issue
any securities or make any change to its capital structure which would change
the number of shares of Common Stock into which the Debenture shall be
convertible at the then applicable Conversion Price, or if the Conversion Price
shall be adjusted, the Company shall at the same time make proper provision so
that thereafter there shall be a sufficient number of shares of Common Stock
authorized and reserved, free from preemptive rights, for Conversion of the
outstanding portion of this Debenture.

      (ii) Insufficient Authorized Shares. If at any time while any of the Notes
remain outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for
issuance upon conversion of the Debentures and exercise of the Warrants at least
a number of shares of Common Stock equal to the Required Reserve Amount (an
"Authorized Share Failure"), then the Company shall immediately take all action
necessary to increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount
for the Notes and Warrants then outstanding. Without limiting the generality of
the foregoing sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a
meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its best
efforts to solicit its stockholders' approval of such increase in authorized
shares of Common Stock and to cause its board of directors to recommend to the
stockholders that they approve such proposal.

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     The Company shall use its best efforts to authorize and reserve a
sufficient number of shares of Common Stock as soon as practicable following the
earlier of (i) such time that the Holder notifies the Company or that the
Company otherwise becomes aware that there are or likely will be insufficient
authorized, reserved and unissued shares to allow full Conversion of the
outstanding amount of the Debenture and full exercise of the outstanding amount
of Holder’s Warrants, based upon the Holder’s Reserved Share Allocation (as
defined below) (as defined below). The Company shall send notice to the Holder
of the authorization of additional shares of Common Stock, the Authorization
Date.

     (iii) Allocations of Reserve Amount. The initial number of shares of Common
Stock authorized and reserved for conversions of the Debentures and exercise of
the Warrants and each increase in the number of shares so reserved
(collectively, the “Actual Reserved Amount”) shall be allocated pro rata among
the holders (the "Reserved Share Allocation") of the Debentures based on the
aggregate number of Shares into which all of the Holder’s outstanding Debenture
would be convertible and into which all of Holder’s outstanding Warrants would
be exercisable at the time of the increase (collectively, the “Fully Diluted
Holdings”). In the event a holder shall sell or otherwise transfer such Holder’s
Debenture, each transferee shall immediately be allocated a pro rata portion of
such transferor’s Reserved Share Allocation. Any portion of the Reserved Share
Allocation which remains allocated to any Person or entity which does not hold
any Debenture shall be allocated to the remaining holders of Debentures, pro
rata based on the Holder’s Fully Diluted Holdings at the time of such
allocation.

  (d) Method of Conversion.

     (i) Mechanics of Conversion. Subject to Section 3(a) and the other
provisions of this Debenture, this Debenture may be converted into Common Stock
by the Holder in whole or in part at any time and from time to time after the
Original Issue Date, by (A) submitting to the Company a duly executed notice of
Conversion in the form attached hereto as Exhibit A ("Notice of Conversion") by
facsimile dispatched prior to Midnight, New York City time (the "Conversion
Notice Deadline") on the date specified therein as the Conversion Date (as
defined herein) (or by other means resulting in written notice to the Company on
the date specified therein as the Conversion Date) to the office of the Company;
which notice shall specify the principal amount of this Debenture to be
converted (plus the dollar amount of any accrued but unpaid Interest and other
Required Cash Payments that the Holder elects to convert into Common Stock), the
applicable Conversion Price, and the number of shares of Common Stock issuable
upon such Conversion; and (B) subject to Section 3(d)(vii), surrendering the
Debenture at the principal office of the Company.

     (ii) Conversion Date. The "Conversion Date" shall be the date specified in
the Notice of Conversion, provided that the Notice of Conversion is submitted by
facsimile (or by other means resulting in, or reasonably expected to result in,
written notice) to the Company or its transfer agent (“Transfer Agent”) before

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Midnight, New York City time, on the date so specified, otherwise the Conversion
Date shall be the date that the Notice of Conversion (or a facsimile thereof) is
first received by the Company or its Transfer Agent. The Person or Persons
entitled to receive the shares of Common Stock issuable upon Conversion shall be
treated for all purposes as the record holder or holders of such securities as
of the Conversion Date.

     (iii) Delivery of Common Stock Upon Conversion. Upon submission of a Notice
of Conversion, the Company shall, by no later than the third (3rd) Business Day
after the Conversion Date (the "Conversion Shares Delivery Deadline"), issue and
deliver (or cause its Transfer Agent so to issue and deliver) in accordance with
the terms hereof and the Securities Purchase Agreement to or upon the order of
the Holder that number of shares of Common Stock (“Conversion Shares”) for the
principal amount of this Debenture (plus the dollar amount of any accrued but
unpaid Interest and other Required Cash Payments that the Holder elects to
convert into Common Stock) converted as shall be determined in accordance
herewith. Upon the Conversion of this Debenture, the Company shall, at its own
cost and expense, take all necessary action, including obtaining and delivering
an opinion of counsel to assure that the Company's Transfer Agent shall issue
stock certificates in the name of Holder (or its nominee) or such other Persons
as designated by Holder and in such denominations to be specified at Conversion
representing the number of shares of Common Stock issuable upon such Conversion.
The Company warrants that no instructions other than these instructions have
been or will be given to the Transfer Agent of the Common Stock and that the
Shares will be free-trading, and freely transferable, and will not contain a
legend restricting the resale or transferability of the Shares provided the
Shares are being sold pursuant to an effective registration statement covering
the Shares or are otherwise exempt from registration.

     (iv) Delivery Failure; Revocation of Conversion. In addition to any other
remedies which may be available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Conversion Shares by the
Conversion Shares Delivery Deadline, or fails to effect delivery of Default
Shares by the Default Share Delivery Deadline (as defined in Section 11 hereof)
(each, a “Delivery Failure”), the Holder, at its option, will be entitled to
revoke all or part of the relevant Notice of Conversion (a “Conversion
Revocation”) or rescind all or part of a Default Conversion Notice (as defined
in Section 11) (a “Default Conversion Revocation”) or rescind all or part of a
Major Transaction Conversion Notice (as defined in Section 4) (a “Major
Transaction Conversion Revocation”) or rescind all or part of the notice of
Redemption, including but not limited to a notice of Mandatory Redemption (a
“Redemption Revocation”), as applicable, by delivery of a notice to such effect
to the Company whereupon the Holder shall regain the rights of a Holder of this
Debenture with respect to such unconverted portions of this Debenture and the
Company and the Holder shall each be restored to their respective positions
immediately prior to the delivery of such notice.

     (v) Obligation of Company to Deliver Common Stock. Upon receipt by the
Company of a Notice of Conversion, the Holder shall be deemed to be the holder
of record of the Common Stock issuable upon such Conversion, and, except as

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otherwise provided in this Debenture, unless the Company defaults on its
obligations hereunder, all rights with respect to the portion of this Debenture
being so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided, on
such Conversion. The provisions of this subsection are subject to the provisions
of Section 3(d)(iv) hereof.

     (vi) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Conversion, or Upon Submission for Legend Removal. In addition to any other
rights available to the Holder, if the Company fails for any reason to deliver
to the Holder such certificate or certificates (without legends, if the
Unrestricted Conditions have been met) by the Conversion Shares Deliver Deadline
pursuant to Section 3(d)(iii), or if at any time the Holder submits shares of
Common Stock for legend removal when the Unrestricted Conditions have been met,
and the Company fails to deliver or cause to be delivered to such Holder a
certificate representing such shares that is free from all restrictive and other
legends by the applicable Legend Removal Date,1 and if after such Conversion
Shares Deliver Deadline or Legend Removal Date, as applicable, the Holder is
required by its brokerage firm to purchase (in an open market transaction or
otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by such Holder of the Conversion
Shares which the Holder was entitled to receive upon the conversion relating to
such Conversion Shares Deliver Deadline or Legend Removal Date, as applicable2
(each, a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in
addition to any other remedies available to or elected by the Holder) the amount
by which (x) the Holder’s total purchase price (including any brokerage
commissions) for the Common Stock so purchased exceeds (y) the product of (1)
the aggregate number of shares of Common Stock that such Holder was entitled to
receive from the conversion at issue multiplied by (2) the actual sale price at
which the sell order giving rise to such purchase obligation was executed
(including any brokerage commissions) and (B) at the option of the Holder, if
applicable, either reinstate (or if necessary, reissue) the portion of the
Debenture for which such conversion was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued if the Company had
timely complied with its delivery requirements under Section 3(d)(iii). For
example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted conversion of the
Debenture with respect to which the actual sale price of the Conversion Shares
(including any brokerage commissions) giving rise to such purchase obligation
was a total of $10,000 under clause (A) of the immediately preceding sentence,
the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of the Debenture as required pursuant to
the terms hereof.

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     (vii) Surrender of Debenture Upon Conversion; Book-Entry. Notwithstanding
anything to the contrary set forth herein, upon Conversion of this Debenture in
accordance with the terms hereof, the Holder shall not be required to physically
surrender the Debenture to the Company unless all of this Debenture is
converted, in which case such Holder shall deliver the Debenture being converted
to the Company promptly following the Conversion Date at issue. The Holder and
the Company shall maintain records showing the amount of this Debenture that is
so 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 each such Conversion. In the event of
any dispute or discrepancy, such records of the Company shall be controlling and
determinative in the absence of manifest error.

     (viii) No Fractional Shares. If any Conversion of this Debenture would
result in a fractional share of Common Stock or the right to acquire a
fractional share of Common Stock, such fractional share shall be disregarded and
the number of shares of Common Stock issuable upon Conversion of this Debenture
shall be the next higher number of shares.

     (ix) Lost or Stolen Debentures. Upon receipt by the Company of evidence of
the loss, theft, destruction or mutilation of a Debenture, and (in the case of
loss, theft or destruction) of indemnity reasonably satisfactory to the Company,
and upon surrender and cancellation of the Debenture, if mutilated, the Company
shall execute and deliver a new Debenture of like tenor and date.

(e) Legends.

(i) Restrictive Legends.

The Holder understands that the

Debentures and, until such time as Conversion Shares and any other Issued Common
Shares (as defined in the Securities Purchase Agreement) have been registered
under the 1933 Act as contemplated by the Registration Rights Agreement or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
the Conversion Shares and any other Issued Common Shares may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Securities):

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN
OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
COUNSEL TO THE

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COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT."

     (ii) Removal of Legends. The Company will issue and deliver the Conversion
Shares without restrictive legends (including the legend set forth above in this
Section 3(e)), and will remove any restrictive legends on any Conversion Shares
that contain restrictive legends (including the legend set forth above in this
Section 3(e)), in each case when and as required under Section 6(a) of the
Securities Purchase Agreement. The Holder agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been
removed, in compliance with applicable prospectus delivery requirements, if any.

     (f) DTC Delivery. In lieu of delivering physical certificates representing
the unlegended shares of Common Stock (the “Unlegended Shares”), provided the
Holder’s Transfer Agent is participating in the Depository Trust Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon request of the Holder,
so long as the certificates therefor are not required to bear a legend and the
Holder is not obligated to return such certificate for the placement of a legend
thereon, the Company shall cause its Transfer Agent to electronically transmit
the Unlegended Shares to the Holder by crediting the account of the Holder's
prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC")
system. The time periods for delivery and penalties described herein shall
likewise apply to the electronic transmittals described herein.

     (g) Status as Shareholder. Upon submission of a Notice of Conversion by a
Holder, (i) the portion of the Debenture covered thereby (other than the portion
, if any, pursuant to the Conversion of which shares cannot be issued because
their issuance would exceed such Holder's allocated portion of the Required
Reserve Amount) shall be deemed converted into shares of Common Stock and (ii)
the Holder's rights as a Holder of such converted portion of this Debenture
shall cease and terminate, excepting only the right to receive certificates for
such shares of Common Stock and to any other remedies provided herein or in the
Transaction Documents or otherwise available at law or in equity to such Holder
because of a failure by the Company to comply with the terms of this Debenture,
including but not limited to the remedies provided in Section 3(d)(iv), Section
14 and Section 11 hereof. Notwithstanding the foregoing, if a Holder initiates a
Conversion Revocation, a Default Conversion Revocation or a Redemption
Revocation pursuant to Section 3(d)(iv) hereof, the Holder shall regain the
rights of a Holder of this Debenture with respect to such unconverted portion of
this Debenture as specified in Section 3(d)(iv) and the Company shall, as soon
as practicable, return such unconverted portion of this Debenture to the Holder
or, if the Debenture has not been surrendered, adjust its records to reflect
that such portion of the Debenture has not been converted. In all cases, the
Holder shall retain all of its rights and remedies (including, without
limitation, the right to receive the Default Amount pursuant to Section 11 to
the extent required thereby) for the Company's failure to convert this
Debenture.

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     (h) Pro Rata Conversion. In the event that the Company receives a
Conversion Notice from more than one holder of Debentures for the same
Conversion Date and the Company can convert some, but not all, of such portions
of the Debentures submitted for conversion, the Company shall convert from each
holder of Debentures electing to have Debentures converted on such date a pro
rata amount of such holder's portion of its Debentures submitted for conversion
based on the principal amount of Debentures submitted for conversion on such
date by such holder relative to the aggregate principal amount of all Debentures
submitted for conversion on such date.

     (i) Forced Conversion. Anytime after the Effective Date, if for each of any
twenty (20) consecutive Trading Days (i) the Equity Payment Conditions have all
been met for each such Trading, and (ii) the Market Price of the Common Stock
for each such Trading Day exceeds 300% of the Initial Conversion Price for this
Debenture, then the Company may provide to the Holders a twenty (20) Trading Day
advance notice (an “Advance Forced Conversion Notice”) to all Holders notifying
the Holders that the Company has elected to force each Holder to convert all or
a specified portion of the Debenture held by such Holders on the date that is
twenty (20) Trading Days after the date of such advance notice (the “Target
Forced Conversion Date”). If the Equity Payment Conditions are met during each
Trading Day of the twenty (20) consecutive Trading Day period immediately
preceding the Target Forced Conversion Date (the “Forced Conversion Threshold
Period”) and the Closing Price for the Common Stock exceeds 300% of the Initial
Conversion Price for this Debenture during each day of the Forced Conversion
Threshold Period, then the Debenture shall be deemed automatically converted as
of the Target Forced Conversion Date to the extent set forth in the Advance
Forced Conversion Notice (a “Forced Conversion”). The Company shall, within
three (3) Business Days after the Target Forced Conversion Date (the "Delivery
Period"), issue and deliver (or cause its Transfer Agent so to issue and
deliver) in accordance with the terms hereof and the Securities Purchase
Agreement to or upon the order of the Holder that number of shares of Common
Stock (“Conversion Shares”) for the principal amount of this Debenture for which
Conversion was forced (plus the dollar amount of any accrued but unpaid
Interest) as shall be determined in accordance herewith. In the event of a
Forced Conversion, the Holder shall promptly deliver the Debenture for which
Conversion was forced to the Company, if and to the extent required under
Section 3(d)(vii) hereof.

     Notwithstanding the above, if any one or more of the Equity Payment
Conditions are not met, or if the Closing Price for the Common Stock does not
exceed 300% of the Initial Conversion Price, on any Trading Day during the
Forced Conversion Threshold Period, then the Company shall not be entitled to
force Conversion of the portion of the Debenture described in the Advance Forced
Conversion Notice. Any Advance Forced Conversion Notices shall be applied
ratably to all of the Holders in proportion to each Holder’s initial purchases
of Debentures pursuant to the Securities Purchase Agreement, provided that any
voluntary Conversions by a Holder during the Forced Conversion Threshold Period
shall be applied against such Holder’s pro-rata allocation thereby decreasing
the aggregate amount forcibly converted hereunder.

Notwithstanding anything herein to the contrary herein, an Advance

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Forced Conversion Notice shall be void and of no effect to the extent that, in
the sole determination of the Holder, the forced Conversion would cause the
Beneficial Ownership Limitation to be exceeded. In the event the Company issues
an Advance Forced Conversion Notice and because of the Beneficial Ownership
Limitation it is unable to force the Holders to convert all of the Debenture, as
to any portion of the Debenture outstanding, (i) the Holder, upon the Company’s
written request, must promptly provide documentation to the Company
demonstrating that the Beneficial Ownership Limitation would be exceeded by such
forced conversion and (ii) the Company shall not have the right to issue another
Forced Conversion Notice for at least 30 days and at such time all conditions
hereunder must again be met, including the pricing condition and the Equity
Payment Conditions.

     Section 4. Rights Upon Major Transaction or Change of Entity Transaction.

  (a) Definitions. For purposes hereof,

     “Change of Entity Transaction” means (i) a consolidation, merger, exchange
of shares, recapitalization, reorganization, business combination or other
similar event, (A) following which the holders of Common Stock immediately
preceding such consolidation, merger, combination or event either (1) no longer
hold a majority of the shares of Common Stock of the Company or (2) no longer
have the ability to elect the board of directors of the Company or (B) as a
result of which shares of Common Stock shall be changed into (or the shares of
Common Stock become entitled to receive) the same or a different number of
shares of the same or another class or classes of stock or securities of the
Company or another entity.

     “Sufficient Trading Characteristics” shall mean that the average daily
dollar trading volume of the common stock of such entity on its primary exchange
or market is equal to or in excess of $100,000 for the 90th through the 31st day
prior to the public announcement of such transaction.

     “Permissible Change of Entity Transaction” shall mean a Change of Entity
Transaction where the Successor Entity (as defined below) (A) is a publicly
traded Company whose common stock is quoted on or listed for trading on an
Eligible Market, (B) has Sufficient Trading Characteristics (as defined below)
and (C) meets the Assumption Requirements (as required in Section 4(b) below),
or any other Change of Entity Transaction with respect to which the Holder
provides the Company with a Major Transaction Approval Notice (as defined in
subsection (d) immediately below).

     “Impermissible Change of Entity Transaction” shall mean a Change of Entity
Transaction which does not qualify as a Permissible

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  Change of Entity Transaction.

“Major Transaction” means

(i)      an Impermissible Change of Entity Transaction; and   (ii)      the sale
or transfer of more than 40%, in the aggregate, of  

the properties or assets of the Company to another Person or Persons in any
rolling 12 month period (an “Asset Sale”); and

     (iii) a purchase, tender or exchange offer made to and accepted by the
holders of more than the 50% of the outstanding shares of Common Stock.

     (b) Assumption Upon Permissible Change of Entity Transaction. The Company
shall not, so long as any of the Debentures remain outstanding, enter into or be
party to a Change of Entity Transaction unless any Person purchasing the
Company’s assets or Common Stock, or any successor entity resulting from such
Change of Entity Transaction (in each case, a “Successor Entity”), assumes (an
“Assumption”) in writing all of the obligations of the Company under the
Debenture and the other Transaction Documents in accordance with the provisions
of this Section 4(b) pursuant to written agreements in form and substance
satisfactory to the Required Holders and approved by the Required Holders prior
to such Change of Entity Transaction, including agreements to deliver to each
holder of Debentures in exchange for such Debentures a security of the Successor
Entity evidenced by a written instrument substantially similar in form and
substance to the Debenture, including, without limitation, having a principal
amount and interest rate equal to the principal amount and Interest rate of the
Debentures held by such holder, having similar conversion rights as the
Debentures (including but not limited to a similar Conversion Price and similar
Conversion Price adjustment provisions) and having similar priority to the
Debentures, and satisfactory to the Required Holders. Upon the occurrence of any
Change of Entity Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Change of Entity
Transaction, the provisions of the Debenture referring to the "Company" shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under the
Debenture with the same effect as if such Successor Entity had been named as the
Company herein. Upon consummation of a Change of Entity Transaction, the
Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon conversion or redemption of the Debentures at any time after the
consummation of the Change of Entity Transaction, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property) issuable upon
the conversion of the Debentures prior to such Change of Entity Transaction,
such shares of publicly traded common stock (or their equivalent) of the
Successor Entity, as adjusted in accordance with the provisions of the
Debenture. The provisions of this Section shall apply similarly and equally to
successive Change of Entity Transactions and shall be applied without regard to
any limitations on the conversion of the Debenture. The requirements of this
Section 4(b) are referred to herein

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as the “Assumption Requirements.”

     (c) Notice of Transaction. At least thirty (30) days prior to the
consummation of a Major Transaction or Change of Entity Transaction, but not
prior to the public announcement of such transaction, the Company shall deliver
written notice thereof via facsimile and overnight courier to the Holder (a "
Transaction Notice"), which notice shall specify the nature and terms of the
proposed transaction (including notice of whether or not such transaction
constitutes a Major Transaction) and nature of the Successor Entity (if any).

     (d) Redemption Right Upon Major Transaction. If the Company proposes to
enter into a Major Transaction, then, unless otherwise notified by the Holder in
writing (a “Major Transaction Approval Notice”) prior to the consummation of
such Major Transaction, the Company shall redeem (a “Redemption Upon Major
Transaction”) all or any portion of its Debentures by delivering written notice
thereof ("Major Transaction Redemption Notice") to the Company, which Major
Transaction Redemption Notice shall indicate the aggregate principal amount of
Debentures (the “Redemption Principal Amount”) that the Holder is electing to be
redeemed. The Debentures subject to redemption pursuant to this Section 4(d)
shall be redeemed by the Company in cash at a price (the "Major Transaction
Redemption Price") equal to the greater of:

(i) the product of (A) the sum of the Redemption Principal Amount being redeemed
and any accrued and unpaid Interest with respect to such Redemption Principal
Amount, and any other Required Cash Payments (such amounts in addition to the
Redemption Principal Amount are referred to herein as the “Supplementary
Amounts”), and (B) the quotient determined by dividing (x) the greater of (I)
the Market Price of the Common Stock immediately following the public
announcement of such proposed Major Transaction and (II) the Market Price on the
date that the Major Transaction Redemption Price is paid to the Holder, by (y)
the Conversion Price,

  and

(ii) the sum of (A) the Redemption Principal Amount being redeemed, plus (B) the
Supplementary Amounts.

     (e) Escrow; Payment of Major Transaction Redemption Price. Following the
receipt of a Major Transaction Redemption Notice from the Holder, the Company
shall not effect a Major Transaction unless it shall first place, or shall cause
the Successor Entity to place, into an escrow account with an independent escrow
agent, at least three (3) Business Days prior to the closing the Major
Transaction (the “Major Transaction Escrow Deadline”), an amount equal to the
Major Transaction Redemption Price. Concurrently upon closing of any Major
Transaction, the Company shall pay or shall

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instruct the escrow agent to pay the Major Transaction Redemption Price to the
Holder, which payment shall constitute a Redemption Upon Major Transaction of
the Debenture.

     (f) Injunction. Following the receipt of a Major Transaction Redemption
Notice from the Holder, in the event that the Company attempts to consummate a
Major Transaction without placing the Major Transaction Redemption Price in
escrow in accordance with subsection (e) above or without payment of the Major
Transaction Redemption Price to the Holder upon consummation of such Major
Transaction, the Buyer shall have the right to apply for an injunction in any
state or federal courts sitting in the City of New York, borough of Manhattan to
prevent the closing of such Major Transaction until the Major Transaction
Redemption Price is paid to the Holder, in full.

     (g) Mechanics of Redemptions Upon Major Transactions. Redemptions required
by this Section 4 shall be made in accordance with the provisions of Section 12
and shall have priority to payments to shareholders in connection with a Major
Transaction. To the extent redemptions required by this Section 4(g) are deemed
or determined by a court of competent jurisdiction to be prepayments of the
Debenture by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 4, until
the Major Transaction Redemption Price (together with any Supplementary Amounts
thereon) is paid in full, the Redemption Principal Amount submitted for
redemption under this Section and the Supplementary Amounts may be converted (a
“Major Transaction Conversion”), in whole or in part, by the Holder into shares
of Common Stock upon written notice (“Major Transaction Conversion Notice”) to
the Company (or the Successor Entity, if applicable), or in the event the
Conversion Date is after the consummation of a Change of Entity Transaction (as
defined above), into shares of publicly traded common stock (or their
equivalent) of the Successor Entity pursuant to Section 4(b). Unless otherwise
indicated by the Holder in the applicable Notice of Conversion, any principal
amount of this Debenture converted during the period from the date of the Major
Transaction Redemption Notice until the date the Major Transaction Redemption
Price is paid in full shall be considered to be a conversion (instead of a
Redemption) of a portion of the Debenture that would have been subject to such
Redemption, and any amounts of this Debenture converted from time to time during
such period shall converted in full into Common Stock at the Conversion Price
then in effect, and the dollar amount so converted into Common Stock shall be
deducted from the Redemption Principal Amount (as defined above) and any
Supplementary Amounts that are subject to such redemption. The parties hereto
agree that in the event of the Company's redemption of any portion of the
Debenture under Section 4(d), the Holder's damages would be uncertain and
difficult to estimate because of the parties' inability to predict future
interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for the Holder.

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  Section 5. Effect of Certain Events.

     (a) Participation. The Holder, as the holder of the Debenture, shall be
entitled to receive such dividends paid and distributions made to the holders of
Common Stock to the same extent as if the Holder had completely converted the
Debenture into Common Stock (without regard to any limitations on Conversion
herein or elsewhere and without regard to whether or not a sufficient number of
shares are authorized and reserved to effect any such exercise and issuance) and
had held such shares of Common Stock on the record date for such dividends and
distributions. Payments under the preceding sentence shall be made concurrently
with the dividend or distribution to the holders of Common Stock.

     (b) Voting Rights. The Holder shall obtain common shareholder voting rights
with respect to the number of shares of Common Stock held by the Holder plus the
number of shares of Common Stock issuable pursuant to Conversions of the
Debenture at any given time (subject to the Beneficial Ownership Limitations).

     (c) Rights Upon Issuance of Purchase Rights. If at any time the Company
grants, issues or sells any Options, Convertible Securities or rights to
purchase shares, warrants, securities or other property pro rata to the record
holders of any class of Common Shares (the “Purchase Rights”), then the Holders
will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such Holder could have acquired if such
Holder had held the number of Common Shares acquirable upon complete Conversion
of the Debenture (without taking into account any limitations or restrictions on
the convertibility of the 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
Shares are to be determined for the grant, issue or sale of such Purchase
Rights.

     Section 6. Certain Adjustments. The Conversion Price shall be subject to
adjustment from time to time as provided in this Section.

     (a) Adjustments to Conversion Price Due to Subsequent Equity Sales. If, at
any time while this Debenture is outstanding, the Company or any Subsidiary, as
applicable, sells or grants any option to purchase or sells or grants any right
to reprice, or otherwise disposes of or issues (or announces any sale, grant or
any option to purchase or other disposition), any Common Stock or Common Stock
Equivalents (including Common Stock or Common Stock Equivalents issued in
consideration for settlement or retirement of existing debt) entitling any
Person to acquire shares of Common Stock at an effective price per share that is
lower than the then Fixed Conversion Price (such lower price, the “Base
Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if
the holder of the Common Stock or Common Stock Equivalents so issued shall at
any time, whether by operation of purchase price adjustments (including but not
limited to Common Stock Equivalents that are entitled to price adjustments
analogous to these Subsequent Issuance Adjustments), reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which are

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issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share that is lower than the Fixed Conversion
Price, such issuance shall be deemed to have occurred for less than the Fixed
Conversion Price on such date of the Dilutive Issuance), regardless of whether
or not any such issuance or repricing of securities is conditioned upon
circumstances or events that may occur in the future, then the Fixed Conversion
Price shall be reduced (but not increased) to equal the lesser of (i) the Base
Conversion Price, or (ii) the Fixed Conversion Price in effect immediately prior
to such Dilutive Issuance. Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no
adjustment will be made under this Section 6(a) in respect of an Exempt
Issuance. If the Company issues or sells, or agrees to issue or sell, Variable
Equity Securities, despite the prohibition set forth in the Securities Purchase
Agreement, the Company shall be deemed to have issued Common Stock or Common
Stock Equivalents at the lowest possible conversion price at which such
securities may be converted or exercised. The adjustments required by this
Section 6(a) are referred to in the singular, a

“Subsequent Issuance Adjustment,” and collectively, the “Subsequent Issuance
Adjustments”). No adjustment shall be made hereunder if such adjustment would
result in an increase of the Conversion Price then in effect.

      (b) Subsequent Rights Offerings. If the Company, at any time prior to the
date that all of the Debentures have been converted, redeemed or otherwise
satisfied in accordance with their terms, shall issue rights, options or
warrants to all holders of Common Stock (and not to Holders) entitling them to
subscribe for or purchase shares of Common Stock at a price per share (the “Base
Rights Offering Price”) that is lower than the Conversion Price then in effect,
then the Conversion Price shall be reduced (but not increased) to the Base
Rights Offering Price. Such adjustment shall be made whenever such rights or
warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights,
options or warrants. No adjustment shall be made hereunder if such adjustment
would result in an increase of the Conversion Price then in effect.

     (c) Pro Rata Distributions. If the Company, at any time prior to the date
that all of the Debentures have been converted, redeemed or otherwise satisfied
in accordance with their terms, distributes to all holders of Common Stock (and
not to the Holders) evidences of its indebtedness or assets (including cash and
cash dividends) or rights or warrants to subscribe for or purchase any security
(other than the Common Stock, which shall be subject to Section 6(b)), then in
each such case the Conversion Price shall be adjusted by multiplying such
Conversion Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then fair market value at such record date of the portion
of such assets or evidence of indebtedness so distributed applicable to 1
outstanding share of the Common Stock as determined by the Board of Directors of
the Company in good faith. In either case the adjustments shall be described in
a statement delivered to the Holder describing the portion of assets or
evidences of indebtedness so distributed or such

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subscription rights applicable to 1 share of Common Stock. Such adjustment shall
be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

     (d) Subdivision or Combination of Common Stock. If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Conversion Price in effect
immediately prior to such subdivision will be proportionately reduced. If the
Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a smaller number of shares, then, after the date of
record for effecting such combination, the Conversion Price in effect
immediately prior to such combination will be proportionately increased.

     (e) Notice of Dilutive Issuances and Adjustments. The Company shall notify
the Holder in writing, no later than one (1) Business Day following any Dilutive
Issuance, indicating therein the applicable issuance price, or applicable reset
price, exchange price, conversion price, exercise price and other pricing terms
(such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this
Section 6(e), upon the occurrence of any Dilutive Issuance, the Holder is
entitled to receive a number of Conversion Shares based upon the Conversion
Price (as adjusted) on or after the date of such Dilutive Issuance, as
applicable, regardless of whether the Holder accurately refers to the Conversion
Price (as adjusted) in the Notice of Conversion. Whenever the Conversion Price
is adjusted pursuant to this Section 6 or otherwise, the Company shall promptly
mail to the Holder a notice (a “Conversion Price Adjustment Notice”) setting
forth the Conversion Price after such adjustment and setting forth a statement
of the facts requiring such adjustment. For purposes of clarification, whether
or not the Company provides a Conversion Price Adjustment Notice pursuant to
this Section 6(e), upon the occurrence of any event that leads to an adjustment
of the Conversion Price, the Holders are entitled to receive a number of
Conversion Shares based upon the new Conversion Price, as adjusted, for
Conversions occurring on or after the date of such adjustment, regardless of
whether a Holder accurately refers to the adjusted Conversion Price in the
Notice of Conversion.

     (f) Notice to Allow Conversion by Holder. If (i) the Company shall declare
a dividend (or any other distribution in whatever form) on the Common Stock,
(ii) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (iii) the Company shall authorize the granting
to all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (iv) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property or (v) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding

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up of the affairs of the Company, then, in each case, the Company shall cause to
be filed at each office or agency maintained for the purpose of conversion of
this Debenture, and shall cause to be delivered to the Holder at its last
address as it shall appear upon the Debenture Register, at least 20 calendar
days prior to the applicable record or effective date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if a record is
not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange,
provided that the failure to deliver such notice or any defect therein or in the
delivery thereof shall not affect the validity of the corporate action required
to be specified in such notice. The Holder is entitled to convert this Debenture
during the 20-day period commencing on the date of such notice through the
effective date of the event triggering such notice.

Section 7. Automatic Redemption at End of Term.

     (a) Automatic Redemption at End of Term. Any Debenture that has not been
submitted for Conversion into Common Stock and has not been subjected to a
Default Notice by midnight, New York City time, on the Maturity Date (the
“Automatic Redemption Date”), shall be automatically redeemed (“Automatic
Redemption”) for a redemption price, in cash, equal to the outstanding principal
amount of this Debenture, plus all accrued and unpaid Interest and other
Required Cash Payments (the “Automatic Redemption Amount”). The Automatic
Redemption Amount shall be due and payable within 5 Trading Days of the
Automatic Redemption Date.

  (b) Omitted

  Section 8. Priority.

     (a) Priority. The Debentures are junior and subordinate to the Company's
senior 8% secured convertible debentures issued in conjunction with the
September 2007 Financing and the Company’s 8% unsecured convertible debentures
issued in connection with the November 2007 Financing. All future debt issued by
the Company or any Subsidiary shall be subordinated and junior to the
Debentures. Neither the Company nor any Subsidiary shall, without the written
permission of the Holder, issue any other debt that is senior to, or pari passu
with, the Debentures. From the Original Issue Date of the Debentures through the
date that all of the Debentures have been paid in full or converted in full,
before entering into, or permitting any Subsidiary to enter into, any future
debt with a third party, the Company shall first obtain a subordination
agreement, satisfactory to Holder, from the proposed debt holder.

  (b) Not Used.

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     Section 9. Certain Negative Covenants; Misc. Without the prior written
consent of the Required Holders, until such time as less than 20% of the
Debentures remain Outstanding, the Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:

     (a) (i) pay, declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on shares of
capital stock or (ii) directly or indirectly or through any Subsidiary of the
Company make any other payment or distribution in respect of its capital stock.
For purposes hereof, each Debenture or any portion thereof shall be deemed to be
“Outstanding” until such time as it has been converted, redeemed or otherwise
satisfied in accordance with its terms.

     (b) redeem, repay, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any one transaction
or series of related transactions any shares of capital stock of the Company or
any warrants, rights or options to purchase or acquire any such shares, other
than as to the Conversion Shares or Warrant Shares as permitted under the
Transaction Documents.

     (c) by amendment of its charter documents, including but not limited to the
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Debenture, and will at all times in good faith carry out all of
the provisions of the Debenture and take all action as may be required to
protect the rights of the Holder of the Debenture.

     (d) other than securities issued in connection with an Indebtedness LockUp
Exception (as defined herein) and issuances to the Holders as contemplated by
the Transaction Documents, enter into, create, incur, assume, guarantee or
suffer to exist any indebtedness for borrowed money of any kind, including but
not limited to, a guarantee, 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
therefrom (the “Indebtedness Negative Covenant”);

     (e) other than Permitted Liens, enter into, create, incur, assume or suffer
to exist any mortgage, lien, pledge, charge, security interest or other
encumbrance upon or in any property or assets (including accounts and contract
rights) owned by the Company or any of its Subsidiaries (collectively, "Liens")
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 therefrom;

     (f) enter into any transaction with any Affiliate of the Company which
would be required to be disclosed in any public filing with the Commission that
is not approved by a two-thirds (2/3) majority of the disinterested board of
directors, except with respect to standard employment arrangements with officers
and directors and employees of the Company; or

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      (g) redeem, defease, repurchase, repay or make any payments in respect of,
by the payment of cash or cash equivalents (in whole or in part, whether by way
of open market purchases, tender offers, private transactions or otherwise), all
or any portion of any Indebtedness, whether by way of payment in respect of
principal of (or premium, if any) or interest on such Indebtedness, if at the
time such payment is due or is otherwise made or after giving effect to such
payment, an event constituting, or that with the passage of time and without
being cured would constitute, an Event of Default has occurred and is
continuing.

(h) enter into any agreement with respect to any of the foregoing.

  Section 10. Events of Default.

     Unless waived by the Required Holders, each of the following events shall
be considered to be an "Event Of Default":

     (a) Failure to Make Cash Payments When Due. The Company fails to pay (each,
a “Payment Failure”) any cash payments due to the Holder under the terms of this
Debenture when due under this Debenture, whether on an interest or dividend
payment due date, at maturity, upon mandatory prepayment, upon acceleration, or
upon any Redemption or otherwise or fails to pay any other cash payments that
are due and owing under this Debenture, a Warrant or any other Transaction
Document when due, including but not limited to all accrued and unpaid Interest
and Redemption Amounts (each cash payment referred to above is referred to as a
“Required Cash Payment”), and such Payment Failure continues for a period of
fifteen (15) days after the applicable due date; or

     (b) Conversion and Delivery of the Shares. The Company (i) fails to issue
and deliver shares of Common Stock to the Holder upon exercise by the Holder of
the Conversion Rights of the Holder in accordance with the terms of this
Debenture by the tenth (10th) Business Day after the Conversion Date, or (ii)
fails for a period of ten (10) Business days to transfer or cause its Transfer
Agent to transfer (electronically or in certificated form) any certificate for
shares of Common Stock issued or issuable to the Holder upon Conversion of the
Debenture as and when required by the terms of this Debenture or upon exercise
the Warrant as and when required by the terms of the Warrant; or

     (c) Failure to Effect and Maintain Registration. If (i) the Initial
Registration Statement (as defined in the Registration Rights Agreement) shall
not have been declared effective by the Commission on or prior to the 180th
calendar day after the Closing Date, or (ii) during the Registration Period (as
defined in the Registration Rights Agreement), either (A) the effectiveness of
the Registration Statement lapses for any reason or (B) the Holder shall not be
permitted to resell Registrable Securities (as defined in the Registration
Rights Agreement) under the Registration Statement for a period of more than 20
consecutive Trading Days or 30 non-consecutive Trading Days during any

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12 month period; provided, however, that if the Company is negotiating a merger,
consolidation, acquisition or sale of all or substantially all of its assets or
a similar transaction and, in the written opinion of counsel to the Company, the
Registration Statement would be required to be amended to include information
concerning such pending transaction(s) or the parties thereto which information
is not available or may not be publicly disclosed at the time, the Company shall
be permitted an additional 10 consecutive Trading Days during any 12 month
period pursuant to this Section 10(c)(ii), or (iii) the Company fails to file
any Registration Statement within 20 days of the date that such filing is
required under the Registration Rights Agreement, or (iv) the Company fails to
provide a commercially reasonable written response to any comments (“SEC
Comments”) to a Registration Statement submitted by the Commission within 20
days of the date that such SEC Comments are received by the Company; or

     (d) Receiver or Trustee. The Company or any Subsidiary of the Company shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed; or

     (e) Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Company or any
"significant Subsidiary" (as defined in Rule 1-02(w) of Regulation S-X
promulgated under the 1933 Act) of the Company, or the Company or any
Significant Subsidiary shall otherwise be subject to a Bankruptcy Event; or

     (f) Delisting of Common Stock. A Delisting Event (as defined below) occurs
and remains uncured for a period of 10 Trading days, where a “Delisting Event”
means that the Common Stock is not listed or traded with an Eligible Market; or

     (g) Failure to Authorize and Reserve Common Stock. The Holder's Reserved
Share Allocation is less than the number of shares of Common Stock that the
Holder would be entitled to receive upon a conversion of the full Conversion
Amount of this Debenture and upon an exercise in full of the Warrants held by
the Holder (without regard to any Beneficial Ownership Limitations on conversion
set forth in Section 3(a)(ii) or otherwise or any analogous provisions of the
Warrants), and such shortfall is not cured within ten (10) Business Days; or

     (h) Legend Removal Failure. A Legend Removal Failure (as defined below)
occurs and remains uncured for a period of ten (10) Business days, where “Legend
Removal Failure” means a failure by the Company to issue Conversion Shares,
Warrant Shares or Payment Shares without restrictive legends or to remove
restrictive legends from Conversion Shares, Warrant Shares or Payment Shares
when so required (or to withdraw any stop transfer instructions in respect
thereof), in each case pursuant to Section 3(e) hereof, Section 6 of the
Securities Purchase Agreement or otherwise pursuant to this Debenture, the
Securities Purchase Agreement or any of the other Transaction Documents; or

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     (i) Corporate Existence; Major Transaction. The Company has effected a
Major Transaction without paying the Major Transaction Redemption Price to the
Holder pursuant to Section 4(c) or, if the Holder did not elect a Redemption
Upon Major Transaction (if applicable), the Company has failed to meet the
Assumption Requirements of Section 4(b) prior to effecting a Change of Entity
Transaction; or

     (j) Breach of Securities Issuance Restrictions, Limited Issuances, Rights
of Participation or Securities Exchange Rights. A breach of any of Section
4(e)(i – v) of the Securities Purchase Agreement occurs; or

     (k) Impermissible Liens. The Company creates or suffers to exist any Lien
upon any of its properties, except for Permitted Liens; or

     (l) Failure to Comply With Dispute Resolution Procedures. The Company has
failed to comply in good faith with the Dispute Resolution Procedures (as
defined herein) or has failed to adjust the Conversion Price as required
hereunder following a Dilutive Issuance, or otherwise (after any applicable
Dispute Resolution Procedure required herein), and such failure continues for an
additional ten (10) days after the Holder provides written notice (a “Dispute
Resolution Procedure Demand”) to the Company that such performance by the
Company is required.

Section 11. Mandatory Redemption; Posting of Bond.

     (a) Mandatory Redemption. If any Events of Default shall occur then, upon
the occurrence and during the continuation of any Event of Default, at the
option of the Holder, such option exercisable through the delivery of written
notice to the Company by such Holders (the "Default Notice"), the Debenture
shall become immediately due and payable and the Company shall pay to the Holder
(a “Mandatory Redemption”), in full satisfaction of its obligations hereunder,
an amount (such amount referred to herein as the "Default Amount" or the
“Mandatory Redemption Amount”) equal the greater of (i) and (ii) immediately
below:

     (i) the Mandatory Redemption Premium, multiplied by the sum (such sum of
(x), plus (y), plus (z) immediately below shall be referred to herein as the
"Default Conversion Sum") of

     (x) the aggregate outstanding principal amount of this Debenture, PLUS

     (y) all accrued and unpaid Interest thereon for the period beginning on the
Original Issue Date and ending on the date of payment of the Default Amount (the
"Default Payment Date"), PLUS

(z) all accrued and unpaid Required Cash Payments, if any,

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  and

     (ii) the Conversion Value of the Default Conversion Sum to be prepaid,
where ”Conversion Value” means

     (x) the Default Conversion Sum divided by the Conversion Price in effect on
the date that the Company pays the Default Amount;

  MULTIPLIED BY

     (y) the greater of (i) the Market Price (as defined herein) for the Common
Stock on the Default Notice Date or (ii) the Market Price on the date that the
Company pays the Default Amount.

     Five (5) Business Days after the Company’s receipt of the Holder’s Default
Notice (the “Default Amount Due Date”), the Default Amount, together with all
other amounts payable hereunder, shall immediately become due and payable, all
without demand, presentment or notice, all of which hereby are expressly waived,
together with all costs, including, without limitation, legal fees and expenses,
of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity.

     If the Company fails to pay the Default Amount by the Default Amount Due
Date, (i) the Conversion Price shall be permanently decreased (but not
increased)(each, a “Default Adjustment”) on the first Trading Day of each
calendar month thereafter (each a “Default Adjustment Date”) until the Default
Amount is paid in full, to a price equal to the lesser of (i) the Conversion
Price then in effect, or (ii) the lowest Market Price that has occurred on any
Default Adjustment Date since the date that the Event of Default began and (ii)
at any time thereafter, the Holder shall have the right at any time, and from
time to time, so long as the Company remains in default (and so long and to the
extent that there are sufficient authorized shares), to require the Company,
upon written notice (“Default Conversion Notice”) (which may be given one or
more times, from time to time anytime after the Default Amount Due Date), to
immediately issue, in lieu of all or any specified portion (the “Specified
Portion”) of the unpaid portion (the “Unpaid Portion”) of the Default Amount, a
number of shares (the “Default Shares”) of Common Stock, subject to the
Beneficial Ownership Limitation then in effect, equal to the Specified Portion
of the Default Amount divided by the Conversion Price in effect on the date such
shares are issued to the Holder, PROVIDED THAT, the Holder may require that such
payment of shares be made in one or more installments at such time and in such
amounts as Holder chooses. The Default shares are due within five (5) Business
Days of the date that the Holder delivers a Default Conversion Notice to the
Company (the

“Default Share Delivery Deadline”).

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     To the extent redemptions required by this Section 11 are deemed or
determined by a court of competent jurisdiction to be prepayments of the
Debenture by the Company, such redemptions shall be deemed to be voluntary
prepayments. If the Company is unable to redeem all of the Debenture submitted
for redemption, the Company shall redeem a pro rata amount from each Holder
based on the principal amount of the Debenture submitted for redemption by such
Holder relative to the total principal amount of Debentures submitted for
redemption by all Holders. The parties hereto agree that in the event of the
Company's redemption of any portion of the Note under this Section 11, the
Holder's damages would be uncertain and difficult to estimate because of the
parties' inability to predict future interest rates and the uncertainty of the
availability of a suitable substitute investment opportunity for the Holder.
Accordingly, any Mandatory Redemption Amount due under this Section 11 is
intended by the parties to be, and shall be deemed, a reasonable estimate of the
Holder's actual loss of its investment opportunity and not as a penalty.

     The Holder shall not be entitled to receive Default Shares on a given date
if and to the extent that such issuance would cause the Beneficial Ownership
Limitation then in effect to be exceeded. If and to the extent that the issuance
of Default Shares with respect to a given Specified Portion would result in the
a violation of the Beneficial Ownership Limitation, then that particular
Specified Portion shall be automatically reduced to a value that would cause the
number of Default Shares to be issued to equal the Maximum Percentage, and the
amount of such reduction shall be added back to the Unpaid Portion of the
Default Amount.

     Upon the payment in full of the Mandatory Redemption Amount, the Holder
shall promptly surrender this Debenture to or as directed by the Company (or, if
applicable, shall submit a signed notice that such Debenture has been lost,
stolen or destroyed). In connection with such acceleration described herein, the
Holder need not provide, and the Company hereby waives, any presentment, demand,
protest or other notice of any kind, 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
acceleration may be rescinded and annulled by Holder at any time prior to
payment hereunder and the Holder shall have all rights as a holder of the
Debenture until such time, if any, as the Holder receives full payment pursuant
to this Section 11. No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon.

     (b) Posting of Bond. In the event that any Event of Default occurs
hereunder or any Event of Default occurs under any of the Transaction Documents
(as defined in the Securities Purchase Agreement), then the Company may not
raise as a legal defense (in any Lawsuit, as defined below, or otherwise) or
justification to such Event of Default any claim that such Holder or anyone
associated or affiliated with such Holder has been engaged in any violation of
law, unless the Company has posted a surety bond (a “Surety Bond”) for the
benefit of such Holder in an amount equal to the aggregate Surety Bond Value (as
defined below) of all of the Holder’s Debenture and Warrants (the “Bond
Amount”), which Surety Bond shall remain in effect until the

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completion of litigation of the dispute and the proceeds of which shall be
payable to such Holder to the extent Holder obtains judgment.

     For purposes hereof, a “Lawsuit” shall mean any lawsuit, arbitration or
other dispute resolution filed by either party herein pertaining to any of the
Transaction Documents (as defined in the Securities Purchase Agreement).

     “Debenture Market Value” shall mean the outstanding principal amount of
this Debenture, plus any accrued and unpaid Interest, and other Required Cash
Payments, divided by the lowest Conversion Price in effect at any time during
the period between the applicable Event of Default and the filing of the Surety
Bond required by this subsection (the “Surety Bond Pricing Period”), all
multiplied by the highest Closing Price during the Surety Bond Pricing Period.

     “Surety Bond Value,” for each Debenture, shall mean 130% of the highest
Debenture Market Value (as defined above) of each of the Holder’s Debenture and
for each Warrant, shall mean 130% of the highest Black Scholes value (as defined
in Section 10(b) of the Warrants) of each of the Holder’s Warrants (where, in
each case, such highest market value represents the highest value determined
during the period from the date of the subject Event of Default through the
Trading Day preceding the date that such Surety Bond goes into effect).

     (c) Injunction and Posting of Bond. In the event that the Event of Default
referred to in subsection 11(b) above pertains to the Company’s failure to
deliver unlegended shares of Common Stock to the Holder pursuant to a Debenture
Conversion, Warrant Exercise, legend removal request, or otherwise, the Company
may not refuse such unlegended share delivery based on any claim that such
Holder or any one associated or affiliated with such Holder has been engaged in
any violation of law, unless an injunction from a court, on prior notice to
Holder, restraining and or enjoining Conversion of all or part of said Debenture
shall have been sought and obtained by the Company and the Company has posted a
Surety Bond for the benefit of such Holder in the amount of the Bond Amount (as
described above), which bond shall remain in effect until the completion of
litigation of the dispute and the proceeds of which shall be payable to such
Holder to the extent Holder obtains judgment.

     (d) Redemption by Other Holders. Upon the Company's receipt of notice from
any of the holders of the Other Debentures for redemption or repayment as a
result of an event or occurrence of an Event of Default or a Major Transaction
(each, an "Other Redemption Notice"), the Company shall immediately, but no
later than one (1) Business Day of its receipt thereof, forward to the Holder by
facsimile a copy of such notice. If the Company receives a Redemption Notice and
one or more Other Redemption Notices, during the seven (7) Business Day period
beginning on and including the date which is three (3) Business Days prior to
the Company's receipt of the Holder's Redemption Notice and ending on and
including the date which is three (3) Business Days after the Company's receipt
of the Holder's Redemption Notice and the Company is unable to redeem all
principal, interest and other amounts designated in such

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Redemption Notice and such Other Redemption Notices received during such seven
(7) Business Day period, then the Company shall redeem a pro rata amount from
each holder of the Debentures (including the Holder) based on the principal
amount of the Debentures submitted for redemption pursuant to such Redemption
Notice and such Other Redemption Notices received by the Company during such
seven (7) Business Day period.

Section 12.

Holder’s Redemptions.

     (a) Mechanics of Holder’s Redemptions. In the event that the Holder has
sent a Major Transaction Redemption Notice to the Company pursuant to Section
4(d) or a Default Notice pursuant to Section 11(a), respectively (each, a
“Redemption Notice”), the Holder shall promptly submit this Debenture to the
Company. In the event of a redemption of less than all of the outstanding
principal amount of this Debenture, the Company shall promptly cause to be
issued and delivered to the Holder a new Debenture representing the outstanding
principal amount which has not been redeemed.

     (b) Warrants Detachable. Neither a Forced Conversion, an MFN Exchange (as
defined in the Securities Purchase Agreement) nor any Redemption of the
Debenture shall have any effect on the Holder’s Warrants. The Warrants
constitute a separate, detachable security from the Debentures. Notwithstanding
any MFN Exchange, Forced Conversion or Redemption of the Debenture, the Holder
shall retain all of the outstanding Warrants which it received upon Closing, or
otherwise, that have not been exercised by the Holder or redeemed in accordance
with their terms.

     Section 13. Dispute Resolution. In the case of a dispute as to the
determination of the Conversion Price or the arithmetic calculation of the
number of Conversion Shares issuable upon any conversion of this Debenture, the
Company shall promptly issue to the Holder the number of Conversion Shares that
are not disputed and resolve such dispute in accordance with this section. In
the case of a dispute as to the determination of the Closing Price, Closing Bid
Price or the Volume Weighted Average Price or the arithmetic calculation of the
Conversion Price, Conversion Price Adjustment, the amount of any Required Cash
Payment amount, Interest or dividend calculation, or any redemption price,
redemption amount, Default Amount or similar calculation, or the determination
of whether or not a Dilutive Issuance, any other event which would lead to an
adjustment or the Conversion Price, or any issuance of Variable Equity
Securities (as defined in the Securities Purchase Agreement) has occurred, the
Company shall submit the disputed determinations or arithmetic calculations via
facsimile within two (2) Business Days of receipt, or deemed receipt, of the
Conversion Notice, any redemption notice, Default Notice or other event giving
rise to such dispute, as the case may be, to the Holder. If the Holder and the
Company are unable to agree upon such determination or calculation within two
(2) Business Days of such disputed determination or arithmetic calculation being
submitted to the Holder, then the Company shall, within two (2) Business Days
submit via facsimile (a) the disputed determination of the Closing Price,
Closing Bid Price or the Volume Weighted Average Price to an independent,
reputable investment bank selected by the Company and approved by the Holder,
which approval shall not be

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unreasonably withheld, (b) the disputed arithmetic calculation of the Conversion
Price, Conversion Price Adjustment or any redemption price, redemption amount or
Default Amount to the Company’s independent, outside accountant or (c) the
disputed facts regarding the occurrence of a Dilutive Issuance, or issuance of
Variable Equity Securities (or any other matter mentioned above which is not
specifically required to be submitted to the investment bank or the accountant)
to an expert attorney from a nationally recognized outside law firm (having at
least 100 attorneys and having with no prior relationship with the Company)
selected by the Company and approved by the Lead Investor as defined in the
Securities Purchase Agreement). The Company, at the Company’s expense, shall
cause the investment bank, the accountant, the law firm, or other expert, as the
case may be, to perform the determinations or calculations and notify the
Company and the Holder of the results no later than five (5) Business Days from
the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error (collectively,
the “Dispute Resolution Procedures”).

Section 14.

Miscellaneous.

     (a) Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

     (b) Notices. Any notice herein required or permitted to be given shall be
in writing and may be personally served or delivered by courier or sent by
United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or five (5) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Company; and the address of the Company shall be Universal Energy
Corp., 30 Skyline Drive, Lake Mary, FL 32746; Phone: 800-975-2076; Fax:
800-805-4561. Both the Holder and the Company may change the address for service
by service of written notice to the other as herein provided. The Company shall
provide the Holder with prompt written notice of all actions taken pursuant to
this Debenture, including in reasonable detail a description of such action and
the reason therefore. Without limiting the generality of the foregoing, the
Company will give written notice to the Holder (i) immediately upon any
adjustment of the Conversion Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least twenty (20)
days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the Common Stock, (B) with
respect to any pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Major Transaction, dissolution or
liquidation, provided in each case that such information shall be made known to
the public prior to or in conjunction with such notice being provided to the
Holder.

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     (c) Payments. Whenever any payment of cash is to be made by the Company to
any Person pursuant to this Debenture or otherwise pursuant to the Transaction
Documents, such payment shall be made in lawful money of the United States of
America by a check drawn on the account of the Company and sent via overnight
courier service to such Person at such address as previously provided to the
Company in writing (which address, in the case of each of the Buyers, shall
initially be as set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement); provided that the Holder may elect to receive a payment of
cash via wire transfer of immediately available funds by providing the Company
with prior written notice setting out such request and the Holder's wire
transfer instructions. Whenever any amount expressed to be due by the terms of
this Debenture is due on any day which is not a Business Day, the same shall
instead be due on the next succeeding day which is a Business Day and, in the
case of any Interest Payment Date which is not the date on which this Debenture
is paid in full, the extension of the due date thereof shall not be taken into
account for purposes of determining the amount of Interest due on such date.

     (d) Amendments. Except as otherwise expressly provided herein, the
Debentures, the Other Debentures, and any provision hereof or thereof may only
be amended by an instrument in writing signed by the Company and the Required
Holders.

     (e) Assignability. This Debenture shall be binding upon the Company and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns.

     (f) Payment of Collection, Enforcement and Other Costs. If (i) this
Debenture is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding or the Holder otherwise
takes action to collect amounts due under this Debenture or to enforce the
provisions of this Debenture or (ii) there occurs any bankruptcy,
reorganization, receivership of the Company or other proceedings affecting
Company creditors' rights and involving a claim under this Debenture, then the
Company shall pay the costs incurred by the Holder for such collection,
enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys' fees
and disbursements.

     (g) Governing Law; Equitable Relief. All questions concerning the
construction, validity, enforcement and interpretation of this Debenture or the
Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and

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federal courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. The parties hereby waive all rights to a trial by jury.
If either party shall commence an action or proceeding to enforce any provisions
of the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

     (h) Certain Amounts. Whenever pursuant to this Debenture the Company is
required to pay an amount in excess of the principal amount of the outstanding
Debenture (or the portion thereof required to be paid at that time) plus accrued
and unpaid Interest (including but not limited to any Required Cash Payments),
the Company and the Holder agree that the actual damages to the Holder from the
receipt of cash payment on this Debenture may be difficult to determine and the
amount to be so paid by the Company represents stipulated damages and not a
penalty and is intended to compensate the Holder in part for loss of the
opportunity to convert this Debenture and to earn a return from the sale of
shares of Common Stock acquired upon Conversion of this Debenture at a price in
excess of the price paid for such Shares pursuant to this Debenture. The Company
and the Holder hereby agree that such amount of stipulated damages is not
plainly disproportionate to the possible loss to the Holder from the receipt of
a cash payment without the opportunity to convert this Debenture into shares of
Common Stock.

     (i) Rule 144 Hold Period. For purposes of Rule 144, it is intended,
understood and acknowledged that the Common Stock issuable upon Conversion of
this Debenture shall be deemed to have been acquired at the time the Debenture
was issued. Moreover, it is intended, understood and acknowledged that the
holding period for the Common Stock issuable upon Conversion of this Debenture
shall be deemed to have commenced on the date this Debenture was issued.

     (j) Purchase Agreement. By its acceptance of the Debenture, the Holder
agrees to be bound by the applicable terms of the Securities Purchase Agreement.

     (k) Notice of Corporate Events. Except as otherwise provided in this
Debenture, the Holder of this Debenture shall have no rights as a Holder of
Common Stock unless and only to the extent that it converts this Debenture into
Common Stock.

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The Company shall provide the Holder with prior notification of any meeting of
the Company's shareholders (and copies of proxy materials and other information
sent to shareholders). In the event the Company takes a record of its
shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Company or any proposed liquidation, dissolution or winding up of the
Company, the Company shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Company shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
17(l).

     (l) Remedies. The remedies provided in this Debenture shall be cumulative
and in addition to all other remedies available under this Debenture and the
other Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the
right of the Holder right to pursue actual damages for any failure by the
Company to comply with the terms of this Debenture or the Transaction Documents.
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder, by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Debenture will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Debenture or the other Transaction Documents,
that the Holder shall be entitled, in addition to all other available remedies
at law or in equity, to an injunction or injunctions restraining, preventing or
curing any breach of the Debenture and the other Transaction Documents and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being required.

     (m) Construction; Headings. This Debenture shall be deemed to be jointly
drafted by the Company and all the Purchasers and shall not be construed against
any person as the drafter hereof. The headings of this Debenture are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Debenture.

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     IN WITNESS WHEREOF, Company has caused the Debenture to be signed in its
name by its duly authorized officer this
_____
day of May, 2008.

COMPANY:

UNIVERSAL ENERGY CORP.

By:
__________________________________

Print Name:    Dyron M. Watford  Title:    Chairman and Chief Financial Officer 

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EXHIBIT A

NOTICE OF CONVERSION

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

The undersigned hereby irrevocably elects to convert $
__________
in principal amount of the Debenture (defined herein) into shares of Common
Stock, par value $0.0001 per share ("Common Stock"), of UNIVERSAL ENERGY CORP.
(the "Company"), plus:

 * $
   _________
   in accrued and unpaid Interest Payments, plus
 * $
   _________
   in other Required Cash Payments (specify):
   _____________

______________________________________________________
.

all according to the conditions of the convertible Debenture of the Company
dated as of May
_____
, 2008 (the "Debenture"), as of the date written below. If securities are to be
issued in the name of a Person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto and is delivering herewith
such certificates. No fee will be charged to the Holder for any Conversion,
except for transfer taxes, if any. By submitting this Notice of Conversion, the
Holder certifies that the issuance of the number of shares of Common Stock
requested hereby will not result in a violation of the Beneficial Ownership
Limitation.

     The Company shall electronically transmit the Common Stock issuable
pursuant to this Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC
Transfer").

Name of DTC Prime Broker:
______________________________
Account Number:
________________________________________

In lieu of receiving shares of Common Stock issuable pursuant to this Notice of
Conversion by way of a DWAC Transfer, the undersigned hereby requests that the
Company issue a certificate or certificates for the number of shares of Common
Stock set forth above (which numbers are based on the Holder's calculation
attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:

Name:
_________________________________________________

Address:
_______________________________________________

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon Conversion of the
Debenture shall be

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made pursuant to registration of the securities under the Securities Act of
1933, as amended (the "ACT"), or pursuant to an exemption from registration
under the Act.

(i) Date of Conversion:
_______________________________
Applicable Conversion Price:
________________________
Number of Shares of Common
______________________
Stock to be Issued Pursuant to (i):
____________________
Conversion of the Debenture:
_______________________

(ii) Conversion of accrued and unpaid Interest Payments, in accrued and unpaid
Required Cash Payments:
______________________________________________________________
.

Signature:
______________________________________________________
Name:
_________________________________________________________
Address:
_______________________________________________________

Upon Conversion of the Debenture in accordance with the terms thereof, the
Holder shall not be required to physically surrender the Debenture (or evidence
of loss, theft or destruction thereof) to the Company unless all of the
Debenture is converted, in which case such Holder shall deliver the Debenture
being converted to the Company promptly following the Conversion Date at issue.
The Company shall issue and deliver shares of Common Stock to an overnight
courier not later than the third Business Days following receipt of the Notice
of Conversion with respect to the Debenture(s) to be converted, and shall make
payments pursuant to the Debenture for the number of Business Days such issuance
and delivery is late.

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