EXHIBIT 4.2


THIS DEBENTURE AND THE SECURITIES  ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),
OR ANY STATE  SECURITIES LAW, AND NEITHER THEY NOR ANY INTERESTS  THEREIN MAY BE
OFFERED,  SOLD,  TRANSFERRED,  PLEDGED  OR  OTHERWISE  DISPOSED  OF UNLESS (i) A
REGISTRATION  STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS IS EFFECTIVE  AND CURRENT WITH REGARD  THERETO,  OR (ii) AN EXEMPTION  FROM
REGISTRATION  UNDER THE SECURITIES ACT AND APPLICABLE  STATE  SECURITIES LAWS IS
AVAILABLE  IN  CONNECTION  WITH  SUCH  OFFER,  SALE,  TRANSFER,  PLEDGE OR OTHER
DISPOSAL.

No. 1

                   8% CONVERTIBLE DEBENTURE DUE APRIL 15, 2003


         THIS 8% CONVERTIBLE  DEBENTURE is a duly authorized issue of Debentures
of HYCOMP,  INC., a corporation  organized under the laws of the Commonwealth of
Massachusetts  and having its principal  address at 67 Wall Street,  Suite 2411,
New York,  New York  10005 (the  "Company"),  designated  as its 8%  Convertible
Debenture due April 15, 2003 in an aggregate  principal amount not exceeding Two
Million United States Dollars (U.S. $2,000,000) (the "Debenture").

         FOR  VALUE  RECEIVED,  the  Company  promises  to pay to the  order  of
SIMMONDS  CAPITAL  LIMITED,  having an address at 580 Granite Court,  Pickering,
Ontario,  L1W-3Z2,  CANADA,  the holder hereof,  or its registered  assigns (the
"Holder"),  the  principal  sum of  Two  Million  United  States  Dollars  (U.S.
$2,000,000) on April 15, 2003 (the  "Maturity  Date") and to pay interest on the
principal  sum  outstanding  under the  Debenture,  at the rate of 8% per annum.
Payments  of  Two  Hundred  Thousand  United  States  Dollars  (U.S.   $200,000)
constituting  principal  and interest in arrears  shall be payable  quarterly on
October 15th, January 15th, April 15th and July 15th of each year, commencing on
October 15, 2000 (each such date, a "Quarterly Payment Date") with the remainder
outstanding  due on the Maturity Date.  Interest shall be calculated  based on a
360 day year with 12 months of 30 days each. Interest shall accrue from the most
recent date to which  interest  has been paid or, if no interest  has been paid,
from the date of  original  issuance  and shall  continue  until  the  following
Quarterly  Payment  Date.  The interest so payable will be paid to the person in
whose name the Debenture is  registered on the records of the Company  regarding
registration  and transfers of the Debentures (the "Debenture  Register") at the
close of  business  on the record date for  interest  payable on such  Quarterly
Payment Date. The record date for any interest  payment is the close of business
on the date fifteen days prior to the Quarterly  Payment Date,  unless such date
shall not be a business day, in which case on the next  preceding  business day.
The Company  shall be entitled to withhold  from all payments of interest on the
Debenture any amounts required to be withheld under the applicable provisions of


<PAGE>

the United  States or  Canadian  income tax laws as  evidenced  by an opinion of
counsel of the Company.

         The  principal  and  interest  of the  Debenture  are payable in United
States  Dollars at the address last  appearing on the Debenture  Register of the
Company as designated in writing by the Holder hereof from time to time.

         The Debenture is subject to the following additional provisions:

         1.       Definitions.  For purposes  hereof,  the following terms shall
have the following meanings:

                  "Common Stock" shall mean the common shares,  par value $0.01,
of the Company  and any other  security  into which such  common  stock shall be
converted or for which it shall be exchanged  pursuant to any  recapitalization,
reorganization, merger, consolidation, share exchange or similar transaction.

                  "Conversion  Notice"  shall  have  the  meaning  set  forth in
Paragraph 2(c)

                  "Conversion   Rate"  shall  have  the  meaning  set  forth  in
Paragraph 2(b).

                  "Equity  Offerings"  shall  mean the  issuance  or sale by the
Company  of any  Common  Stock  or  securities  which  are  convertible  into or
exchangeable  for Common Stock, or any warrants or other rights to subscribe for
or to purchase,  or any options for the  purchase  of,  Common Stock or any such
convertible or exchangeable  securities  (other than shares or options issued or
which may be issued pursuant to the Company's  employee or director option plans
or shares issued upon exercise of options, warrants or rights outstanding on the
Closing Date and listed in the Company's filings with the SEC).

                  "Event  of  Default"  shall  have  the  meaning  set  forth in
Paragraph 10.

                  "Holder  Conversion  Date" shall have the meaning set forth in
Paragraph 2(c)(i).

                  "Issue  Date" shall mean the date of original  issuance of the
Debenture.

                  "Market  Price"  shall  mean,  as of any  relevant  date,  the
closing  price per share of Common Stock on the  principal  United  States Stock
Exchange  (including  the Nasdaq Stock Market) on which the Common Stock is then
listed,  or, if the Common  Stock is not then listed on a stock  exchange but is
quoted on the Nasdaq Bulletin  Board,  the lowest price per share for the Common
Stock quoted thereon on such date.

                  "Outstanding  Amount" shall mean the principal sum outstanding
under the  Debenture  and all  accrued but unpaid  interest  thereon to the most
recent Quarterly Payment Date.

                  "Person"  shall  mean  an  individual,  partnership,  venture,
unincorporated  association,   organization,   syndicate,  corporation,  limited
liability company, or other entity, trust

                                      -2-
<PAGE>


and trustee,  executor,  administrator or other legal or personal representative
or any government or any agency or political subdivision thereof.

                  "Quarterly  Payment  Date" shall have the meaning set forth in
the Preamble.

                  "Regulation D" shall mean  Regulation D promulgated  under the
Securities Act.

                  "SEC" shall mean the Securities and Exchange Commission.

                  "Securities  Act" shall mean the  Securities  Act of 1933,  as
amended.

         2.       Conversion.

            a. Holder's Right to Convert.  The Debenture shall be convertible at
any time and from time to time after the Issue Date, in whole or in part, at the
option of the Holder hereof,  into fully paid,  validly issued and nonassessable
shares of Common Stock.

            b.  Accrued  But Unpaid  Interest.  Notwithstanding  anything in the
Debenture to the contrary, the Outstanding Amount of the Debenture on any Holder
Conversion  Date shall  include,  without  limitation,  all  accrued  but unpaid
interest under the Debenture through such date.

            c. Conversion  Price for Holder  Converted  Shares.  The Outstanding
Amount of the Debenture shall be convertible  into the number of validly issued,
fully paid and non-assessable  shares of Common Stock determined by dividing the
aggregate amount of the Debenture being converted by $1.00, as adjusted pursuant
to Section 3.

         The number of shares of Common Stock into which the Outstanding  Amount
of the Debenture may be converted  pursuant to this paragraph is herein referred
to as the "Conversion Rate."

            d. i.  Mechanics of  Conversion  by Holder.  In order to convert the
Debenture  (in whole or in part) into shares of Common  Stock,  the Holder shall
surrender the Debenture,  duly endorsed,  to the Company, and shall give written
notice in the form of Exhibit A hereto (the "Conversion  Notice") to the Company
that the Holder elects to convert all or the portion of the  Outstanding  Amount
of the Debenture specified therein (with any such conversion being first applied
to accrued but unpaid interest and then to principal), which notice and election
shall be  irrevocable  by the Holder unless the Company shall default in or fail
to fulfill any or all of its  obligations  arising  hereunder  or  otherwise  by
reason of such notice or election, in which case, in addition to and not in lieu
of any and all other  rights and remedies to which the Holder may thereby be and
become entitled,  such notice and election, by further notice to the Company may
be revoked and  rescinded  at the  election of the Holder  exercised in its sole
discretion;  provided, however, that the Company shall not be obligated to issue
certificates  evidencing  the shares of Common Stock  issuable  upon  conversion
unless  the  Debenture  with  evidence  of the  principal  amount  hereof  to be
converted is delivered to the Company as provided above.  The effective date and
the time of the  conversion  shall be the close of business on the date that the
Conversion  Notice  is  actually  received  by the  Company  or,  if the date of
delivery is not a business day, the next succeeding business day.

                                      -3-
<PAGE>

               ii.  Issuance of  Certificates.  Following any Conversion  Notice
given by the Holder,  the Company shall cause the Company's  transfer  agent for
the Common Stock to issue and deliver as promptly as  practicable  to the Holder
or to its designee,  a certificate or  certificates  for the number of shares of
Common Stock to which the Holder shall be  entitled,  together  with a Debenture
for the principal  amount not submitted for conversion or forced to convert,  as
the case may be.  The person  entitled  to  receive  the shares of Common  Stock
issuable upon conversion  shall be treated for all purposes as the record holder
of such shares of Common Stock on the Holder Conversion Date.

         3.       Adjustment  of  Conversion   Rate.  The  number  and  kind  of
securities  issuable upon the  conversion of this  Debenture and the  Conversion
Rate shall be  subject to  adjustment  from time to time upon the  happening  of
certain  events,  in each  case  occurring  on and  after  the date  hereof,  as
hereinafter described.

                  a. Adjustment. The number and kind of securities issuable upon
the  conversion of this  Debenture and the  Conversion  Rate shall be subject to
adjustment as follows:

                  i.  In case  the  Company  shall  (1)  pay a  dividend  on its
outstanding Common Stock in shares of Common Stock or make a distribution to all
holders of its outstanding Common Stock in shares of Common Stock, (2) subdivide
its outstanding shares of Common Stock into a greater number of shares of Common
Stock, (3) combine its outstanding  shares of Common Stock into a smaller number
of shares of Common  Stock or (4)  issue by  reclassification  of its  shares of
Common   Stock   other   securities   of  the   Company   (including   any  such
reclassification  in  connection  with a  consolidation  or  merger in which the
Company is the  surviving  corporation),  the  number of shares of Common  Stock
issuable upon conversion  hereof  immediately prior thereto shall be adjusted so
that the Holder upon conversion hereof shall be entitled to receive the kind and
number of such shares of Common Stock or other  securities  of the Company which
it would have owned or have been  entitled to receive after the happening of any
of the events  described  above had this Debenture  been  converted  immediately
prior to the happening of such event or any record date with respect thereto. An
adjustment  made pursuant to this  paragraph  (i) shall become  effective on the
date of the dividend payment,  subdivision,  combination or issuance retroactive
to the record date with respect thereto, if any, for such event. Such adjustment
shall be made successively whenever such an issuance is made.

                  ii. In case the Company shall distribute to all holders of its
outstanding  Common Stock evidences of its  indebtedness or assets or securities
other than such Common Stock (excluding  regular cash dividends and dividends or
distributions  referred  to in  paragraph  (i)  above)  or  rights,  options  or
warrants,  or convertible or  exchangeable  securities,  containing the right to
subscribe for or purchase  shares of Common Stock,  then in each case the number
of  shares of Common  Stock  thereafter  issuable  upon the  conversion  of this
Debenture shall be determined by multiplying the number of such shares of Common
Stock theretofore  issuable upon the conversion of this Debenture by a fraction,
of which  the  numerator  shall be the then  current  market  price per share of
Common Stock (as determined in accordance with paragraph  (iv)(3)  below),  less
the then fair value per share of outstanding  Common Stock (as determined by the
Board of  Directors  of the  Company,  whose good faith  determination  shall be
conclusive)  of  the  evidences  of   indebtedness,   assets  or  securities  so
distributed or of such rights,  options or warrants,  or of such  convertible or
exchangeable securities,  and of which the denominator shall

                                      -4-
<PAGE>

be the then  current  market price per share of Common Stock on the date of such
distribution.  Such  adjustment  shall be made  successively  whenever  any such
distribution  is made,  and shall become  effective on the date of  distribution
retroactive to the record date for the determination of stockholders entitled to
receive such  distribution.  No further  adjustment shall be made for the actual
issuance  of Common  Stock upon the  conversion,  exercise  or  exchange  of any
rights, options, warrants or other securities in respect of which adjustment has
been made pursuant to this paragraph (b).

                  iii.  After the Common  Shares are first  traded on a national
securities  exchange  (including the Nasdaq Stock  Market),  in case the Company
shall  issue  shares of Common  Stock (or  rights,  options,  warrants  or other
securities  convertible  into or exercisable or  exchangeable  for Common Stock)
(excluding  (1)  shares of Common  Stock  issued in or as a result of any of the
transactions  described  in  paragraph  (i) or (ii) above,  (2) shares of Common
Stock issuable upon exercise of stock options or similar rights granted or to be
granted to  directors,  employees,  consultants,  contractors  or other  agents,
representatives  or  professionals  of the Company pursuant to a stock option or
similar plan approved by the  stockholders of the Company,  (3) shares of Common
Stock issued to directors,  employees,  consultants,  contractors,  licensees or
other agents,  representatives  or  professionals of the Company pursuant to any
compensation plan or agreement approved by the stockholders of the Company,  (4)
shares of Common  Stock issued  pursuant to a dividend or interest  reinvestment
plan,  or (5) shares of Common Stock issued in a public  offering at a price per
share that is not less than 95% of the then current market price) at a price per
share below the then current market price,  then in each such case the number of
shares of Common Stock thereafter issuable upon the conversion of this Debenture
shall be  determined  by  multiplying  the  number of  shares  of  Common  Stock
theretofore purchasable upon the conversion of this Debenture by a fraction, the
numerator  of which shall be an amount  equal to the sum of (X) the total number
of shares of Common Stock  outstanding  immediately  prior to such issuance plus
(Y) the number of shares  which the  aggregate  consideration  received for such
issuance  would  purchase at the current  market price per share of Common Stock
(as determined in accordance  with paragraph  (iv)(3) below) at such record date
and the  denominator  of which  shall be the  number of  shares of Common  Stock
outstanding  on the date of such issuance  (including the shares of Common Stock
issued on the date of such issuance).

                  iv. (1) For the  purposes of  paragraph  (iii)  above,  if the
Company shall issue any security,  option, warrant or other right which directly
or  indirectly  may be converted  into or  exercised or exchanged  for shares of
Common Stock, the Common Stock issuable upon conversion, exercise or exchange of
such  securities or rights shall  thereupon be deemed to have been issued and to
be  outstanding,  and the  relevant  price  per  share of  Common  Stock and the
consideration  received by the Company upon conversion,  exercise or exchange of
such   securities  or  rights  shall  be  deemed  to  include  the  sum  of  the
consideration  received  for the issuance of such  securities  or rights and the
minimum  additional  consideration  payable  upon the  conversion,  exercise  or
exchange of such securities or rights.  No further  adjustment shall be made for
the actual issuance of Common Stock upon the conversion, exercise or exchange of
any such security or right.

                      (2) For purposes of paragraph  (iii) above,  the following
shall also be  applicable:  In case the Company shall issue shares of its Common
Stock for a  consideration  wholly or partly other than cash,  the amount of the
consideration  other than cash received by the

                                      -5-
<PAGE>


Company shall be deemed to be the fair value of such consideration as determined
in good faith by the Board of Directors of the Company.  Consideration  received
by the Company for issuance of its Common Stock shall be determined in all cases
without  deduction  therefrom  of  any  expenses,  underwriting  commissions  or
concessions incurred in connection therewith.

                      (3) For the  purpose of any  computation  under  paragraph
(ii) or (iii) of this  Section,  the "current  market price per share" of Common
Stock at any date  shall be the  average  of the  daily  closing  prices  for 20
consecutive  trading  days  commencing  30 trading  days before the date of such
computation.  The "closing  price" for each day shall be the last such  reported
sales price  regular way or, in case no such  reported  sale takes place on such
day, the average of the closing bid and asked  prices  regular way for such day,
in each case on the principal national  securities  exchange on which the shares
of Common  Stock are listed or admitted to trading or, if not listed or admitted
to trading, the average of the high bid and low asked prices of the Common Stock
in the  over-the-counter  market as reported by NASDAQ or any comparable system.
In the absence of one or more such  quotations,  the Board of  Directors  of the
Company shall in good faith  determine the current  market price on the basis of
such  quotations  or formula as it considers  appropriate,  which  determination
shall be conclusive.

                  v. In any case in which this Section 3 shall  require that any
adjustment in the number of shares of Common Stock  issuable upon  conversion of
this  Debenture be made  effective as of  immediately  after a record date for a
specified  event,  the Company may elect to defer  until the  occurrence  of the
event the issuing to the Holder of shares of Common Stock or other capital stock
of the Company  issuable upon the conversion over and above the shares of Common
Stock or other capital stock of the Company issuable upon the conversion of this
Debenture prior to such adjustment;  provided,  however,  that the Company shall
deliver to the Holder a due bill or other appropriate  instrument evidencing the
Holder's  right to receive such  additional  shares upon the  occurrence  of the
event requiring such adjustment.

                  vi. No  adjustment  in the  number  of shares of Common  Stock
issuable  hereunder shall be required  unless such  adjustment  would require an
increase or  decrease  of at least one  percent  (1%) in the number of shares of
Common Stock issuable upon the conversion of this Debenture;  provided, however,
that any adjustments  which by reason of this paragraph (vi) are not required to
be made  shall be carried  forward  and taken  into  account  in any  subsequent
adjustment. All calculations shall be made to the nearest one one-hundredth of a
share.

                  vii.  No  adjustment  in the number of shares of Common  Stock
issuable upon  conversion of this Debenture need be made under paragraph (ii) of
this  Section if the  Company  issues or  distributes  to the Holder the rights,
options,  warrants,   convertible  or  exchangeable  securities,   evidences  of
indebtedness  or assets referred to in those  paragraphs  which the Holder would
have been  entitled to receive had the  Debenture  been  converted  prior to the
happening of such event or the record date with respect  thereto.  No adjustment
need be made for a change in the par value of the Common Stock.

                  viii.  For the  purpose  of this  subsection  3(a),  the  term
"shares of Common  Stock",  shall mean (A) the class of stock  designated as the
Common Stock of the Company, par value $.01 per share, or (B) any other class of
stock resulting from successive changes or  reclassifications of such respective
classes of shares  consisting  solely of changes in par value, or

                                      -6-
<PAGE>


from par value to no par value,  or from no par value to par value. In the event
that at any time,  as a result  of an  adjustment  made  pursuant  to  paragraph
3(a)(i)  above,  the  Holder  shall  become  entitled  upon  conversion  to  any
securities  other than  shares of Common  Stock,  thereafter  the number of such
other  securities  so  issuable  upon  conversion  of  this  Debenture  and  the
Conversion Rate of such  securities  shall be subject to adjustment from time to
time in a  manner  and on terms  as  nearly  equivalent  as  practicable  to the
provisions  with respect to the shares of Common Stock  contained in  paragraphs
(i) through (vii),  inclusive,  above,  and the  provisions of subsections  3(b)
through 3(f), inclusive, with respect to the shares of Common Stock, shall apply
on like terms to any such other securities.

                  b.  Notice of  Adjustment.  Whenever  the  number of shares of
Common Stock issuable upon  conversion of this Debenture or the Conversion  Rate
of such shares is adjusted, as herein provided,  the Company shall promptly mail
by first class,  postage  prepaid,  to the Holder  notice of such  adjustment or
adjustments.

                  c.  No  Adjustment  for  Dividends.   Except  as  provided  in
subsection  3(a), no adjustment in respect of any dividends or other payments or
distributions  made to holders of  securities  shall be made  during the term of
this Debenture or upon the conversion of this Debenture.

                  d.    Preservation   of   Conversion   Rights   upon   Merger,
Consolidation,  etc. In case of any  consolidation of the Company with or merger
of the Company  with or into another  entity  (whether or not the Company is the
surviving  corporation)  or in case of any sale,  transfer  or lease to  another
entity of all or substantially  all the property of the Company,  the Company or
such successor or purchasing  corporation,  as the case may be, shall execute an
agreement  that the Holder shall have the right  thereafter  upon  conversion of
this Debenture at the Conversion Rate in effect immediately prior to such action
to be issued the kind and amount of securities, cash and property which it would
have  owned or have  been  entitled  to  receive  after  the  happening  of such
consolidation, merger, sale, transfer or lease had this Debenture been converted
immediately  prior to such action.  Upon the execution of such  agreement,  this
Debenture shall be convertible only for such securities,  cash and property. The
Company  shall  furnish  to the  Holder  notice  of the  execution  of any  such
agreement.  Such  agreement  shall  provide for  adjustments,  which shall be as
nearly equivalent as may be practicable to the adjustments  provided for in this
Section 3. The  provisions  of this  subsection  3(d) shall  similarly  apply to
successive consolidations, mergers, sales, transfers or leases.

                  e. Other  Adjustment.  If any event  occurs as to which in the
reasonable  opinion of the Holder,  in good faith,  the other provisions of this
Section 3 are not  strictly  applicable  but the lack of any  adjustment  of the
Conversion Rate or of the number or kind of securities  issuable upon conversion
of this  Debenture  would not in the  opinion of the Holder  fairly  protect the
rights of the Holder in accordance  with the basic intent and principles of such
provisions, or if strictly applicable would not fairly protect the rights of the
Holder in accordance  with the basic intent and  principles of such  provisions,
then the Holder may appoint a firm of independent  certified public  accountants
of recognized  national  standing (which may be the independent  auditors of the
Company),  which shall give their  opinion  upon the  necessity  and form of any
required  adjustment to the number of shares  issuable  upon  conversion of this
Debenture and the Conversion  Rate, on a basis  consistent with the basic intent
and principles

                                      -7-
<PAGE>

established  in the other  provisions  of this  Section 3 necessary to preserve,
without  dilution,  the  exercise  rights of the  Holder.  Upon  receipt of such
opinion, the Company shall forthwith make the adjustments described therein.

         4.       Fractional  Shares.  No  fractional  shares of Common Stock or
scrip  representing   fractional  shares  of  Common  Stock  shall  be  issuable
hereunder.  The  number of shares of Common  Stock  that are  issuable  upon any
conversion shall be rounded up or down to the nearest whole share.

         5.       Reservation of Stock Issuable Upon Conversion.

                  a. Reservation  Requirement.  The Company has reserved and the
Company  shall  continue to reserve  and keep  available  at all times,  free of
preemptive  rights,  shares of Common  Stock for the  purpose  of  enabling  the
Company to  satisfy  any  obligation  to issue  shares of its Common  Stock upon
conversion of the Debenture. The number of shares so reserved shall be increased
or decreased  proportionally to reflect stock splits,  stock dividends and other
distributions.  In the event  that the  number of  shares so  reserved  shall be
insufficient  for issuance  upon  conversion of the  Debenture  (without  giving
effect to any applicable conversion restrictions), or if the Holder would at any
time upon  conversion  of the Debenture be entitled to the issuance of shares of
Common  Stock in excess of the  limitation  in Paragraph  5(b)  herein,  then in
either case, upon receipt by the Company of notice from the Holder,  the Company
shall use its best  efforts  and all due  diligence  to  increase  the number of
shares  so  reserved  (without  giving  effect  to  any  applicable   conversion
restrictions)  to cure all such  deficiencies  and, if necessary,  to obtain the
approval by its shareholders therefor.

                  b.  Conversion  Deficiency.  If, upon  receipt of a Conversion
Notice,  the Company does not have a sufficient number of shares of Common Stock
available  to satisfy  the  Company's  obligations  to issue  Common  Stock upon
conversion of the Debenture the Company shall promptly notify the Holder and the
Holder shall have the right to demand from the Company  immediate  redemption of
any portion of the  Debenture  with respect to which the Company does not have a
sufficient number of shares available to satisfy such conversion obligations, in
cash at the Redemption  Price  pursuant to Paragraph 3(b) hereof;  provided that
this  Paragraph  5(b) shall not apply  until the first  anniversary  date of the
issuance of the Debenture.

         6.       Holder's   Acknowledgements.   Holder  acknowledges,   agrees,
represents and warrants as follows:

                  a. The Debenture  will not be registered  under the Securities
Act, or any state securities laws, and will be issued in reliance upon available
exemptions  from  registration.  The Debenture may not be sold,  transferred  or
assigned by the Holder, in whole or in part,  without the consent of the Company
except  in  accordance  with  the  terms  described  herein.  The  Common  Stock
receivable  upon  conversion  hereof may not be sold,  transferred,  assigned or
otherwise disposed of without an effective  registration  statement covering the
Common Stock under the Securities Act and any applicable  state securities laws,
or an opinion of counsel  satisfactory  to the Company that  registration is not
required under the Securities Act and applicable state securities laws.

                                      -8-
<PAGE>

                  b.  Because  of  the  restrictions  imposed  by law  upon  the
transfer  and resale of such  Common  Stock,  the Holder may be required to hold
such  shares of  Common  Stock for an  extended  period of time or  indefinitely
unless such shares are  subsequently  registered  under the  Securities  Act and
applicable  state  securities  laws, or an exemption from such  registration  is
available.

                  c. A legend  in  substantially  the  following  form  shall be
placed on the  certificates for shares of Common Stock purchased upon conversion
of the Debenture:

                                    THE    SECURITIES    REPRESENTED   BY   THIS
                  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
                  OF 1933, AS AMENDED (THE "ACT"),  OR ANY STATE SECURITIES LAWS
                  AND NEITHER SUCH  SECURITIES  NOR ANY INTEREST  THEREIN MAY BE
                  OFFERED, SOLD,  TRANSFERRED,  PLEDGED OR OTHERWISE DISPOSED OF
                  UNLESS  (1)  A  REGISTRATION   STATEMENT  UNDER  THE  ACT  AND
                  APPLICABLE STATE SECURITIES LAWS IS EFFECTIVE AND CURRENT WITH
                  RESPECT THERETO,  OR (2) AN EXEMPTION FROM REGISTRATION  UNDER
                  THE ACT AND APPLICABLE  STATE  SECURITIES LAWS IS AVAILABLE IN
                  CONNECTION WITH SUCH OFFER,  SALE,  TRANSFER,  PLEDGE OR OTHER
                  DISPOSAL AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
                  HOLDER OF SUCH  SECURITIES,  WHICH  COUNSEL  AND  OPINION  ARE
                  REASONABLY  SATISFACTORY  TO  THE  COMPANY,  TO  SUCH  EFFECT.
                  HEDGING TRANSACTIONS  INVOLVING THE SECURITIES  REPRESENTED BY
                  THIS  CERTIFICATE  MAY NOT BE CONDUCTED  UNLESS IN  COMPLIANCE
                  WITH THE SECURITIES ACT.


                  d. The  Debenture  and the shares of Common  Stock  receivable
upon conversion thereof are being acquired for its own account, not as a nominee
or agent for any other Person,  and without a view to the distribution or resale
of such shares or any interest therein in violation of the Securities Act.

                  e. The Holder is an "accredited  investor"  within the meaning
of Rule  501(a)  under  Regulation  D, as  presently  in  effect,  and has  such
knowledge and  experience in financial and business  matters so as to be capable
of evaluating the merits and risks of an investment in the Common Stock, and the
Holder is capable of bearing the economic  risks of such  investment and is able
to bear the complete loss of an investment in the Common Stock.

                  f. The execution,  delivery,  and performance of the Debenture
is within its powers  (corporate or otherwise)  and has been duly  authorized by
all requisite action (corporate or otherwise) and that the Debenture constitutes
the legal, valid and binding obligation of the Holder,  enforceable  against the
Holder  in  accordance  with  its  terms  subject,  as  to  enforceability,

                                      -9-
<PAGE>

to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other laws of general  applicability  affecting  the rights of creditors  and to
general principles of equity.

                  g. The Holder's principal place of business is in the state or
other jurisdiction so designated in Section 16(a) herein.

                  h. The Holder  has  received  all  documents  and  information
relating to an investment in the Debenture and the Common Stock  requested by or
on behalf of the Holder,  including such information  relating to the Company as
the  Holder  has  deemed  appropriate  in  making a  decision  to  invest in the
Debenture and the Common Stock.

         7.       Obligations  Absolute.  No provision of the  Debenture,  other
than those provisions relating to the conversion of the Debenture shall alter or
impair the obligation of the Company,  which is absolute and  unconditional,  to
pay the  principal  of, and  interest on, the  Debenture at the time,  place and
rate, and in the manner, herein prescribed.

         8.       Waivers of Demand,  Etc. The Company hereby  expressly  waives
demand and presentment  for payment,  notice of nonpayment,  protest,  notice of
protest,  notice of dishonor,  notice of intent to  accelerate,  prior notice of
bringing of suit and  diligence in taking any action to collect  amounts  called
for hereunder and will be directly and primarily  liable for the payments of all
sums owing and to be owing hereon,  regardless of and without any notice (except
as  required  by law),  diligence,  act or  omission  as or with  respect to the
collection of any amount called for hereunder.

         9.       Replacement  Debentures.   Upon  receipt  by  the  Company  of
evidence  reasonably  satisfactory  to it of the  loss,  theft,  destruction  or
mutilation of the Debenture, and, in the case of loss, theft or destruction,  of
indemnity or security  reasonably  satisfactory to it, and  reimbursement to the
Company of all reasonable expenses  incidental  thereto,  and upon surrender and
cancellation of the Debenture, if mutilated, the Company will make and deliver a
replacement  Debenture of like tenor, in lieu of the Debenture.  Further, if the
Holder  exercises the  conversion  rights  granted  hereunder in part but not in
whole,  the  Company  agrees  that it will  deliver to the Holder a  replacement
Debenture  which will entitle the Holder  thereof to convert the Debenture  into
the number of shares of Common  Stock that remain as yet  unconverted  under the
Debenture on the terms and conditions set forth herein.

         10.      Defaults.  If one or more of the following events  hereinafter
called "Events of Default") shall occur:

                  a.       The  Company  shall  fail to  make  any  payments  of
                           principal or interest when due under the Debenture or
                           upon  redemption of the Debenture when due or fail to
                           issue shares of Common Stock upon  conversion  of the
                           Debenture (other than in accordance with the terms of
                           the  Debenture),  and  such  failure  shall  continue
                           uncured for a period of five (5) business  days after
                           notice from the Holder of such failure; or

                  b.       The  Company  shall fail to  perform  or observe  any
                           other covenant, term, provision, condition, agreement
                           or obligation of the Company under the

                                      -10-
<PAGE>

                           Debenture,  and such failure shall  continue  uncured
                           for a period  of  twenty  (20)  business  days  after
                           notice from the Holder of such failure; or

                  c.       The Company shall (i) become insolvent; (ii) admit in
                           writing its  inability to pay its debts  generally as
                           they mature;  (iii) make a general assignment for the
                           benefit of creditors or commence  proceedings for its
                           dissolution;  or (iv)  apply  for or  consent  to the
                           appointment of a trustee,  liquidator or receiver for
                           it or  for a  substantial  part  of its  property  or
                           business; or

                  d.       A trustee,  liquidator or receiver shall be appointed
                           for  the  Company  or for a  substantial  part of its
                           property  or  business  without its consent and shall
                           not be  discharged  within sixty (60) days after such
                           appointment; or

                  e.       Any  governmental  agency or any  court of  competent
                           jurisdiction  shall assume  custody or control of the
                           whole or any substantial portion of the properties or
                           assets of the  Company  and  shall  not be  dismissed
                           within sixty (60) days thereafter; or

                  f.       Bankruptcy, reorganization, insolvency or liquidation
                           proceedings or other proceedings, or relief under any
                           bankruptcy  law or any law for the  relief  of  debt,
                           shall be instituted by or against the Company and, if
                           instituted   against  the   Company,   shall  not  be
                           dismissed   within   sixty   (60)  days   after  such
                           institution,  or the  Company  shall by any action or
                           answer  approve of,  consent to, or  acquiesce in any
                           such proceedings or admit to any material allegations
                           of, or default in answering a petition  filed in, any
                           such proceeding;

then, or at any time thereafter prior to the date on which all continuing Events
of Default have been cured,  and in each and every such case,  unless such Event
of Default  shall have been waived in writing by the Holder  (which waiver shall
not be deemed to be a waiver of any  subsequent  default)  at the  option of the
Holder and in the  Holder's  sole  discretion,  the Holder may, by notice to the
Company declare the Debenture  immediately  due and payable,  and the Holder may
immediately,  and without expiration of any period of grace, enforce any and all
of the  Holder's  rights and  remedies  provided  herein or any other  rights or
remedies afforded by law.

         11.      Savings Clause. In case any provision of the Debenture is held
by a court of  competent  jurisdiction  to be  excessive  in scope or  otherwise
invalid or  unenforceable,  such provision shall be adjusted rather than voided,
if possible,  so that it is enforceable to the maximum extent possible,  and the
validity and  enforceability  of the remaining  provisions of the Debenture will
not in any way be materially affected or impaired thereby.

         12.      Entire Agreement. The Debenture and the agreements referred to
in the  Debenture  constitute  the full and entire  understanding  and agreement
between the Company and the Holder with respect to the subject  hereof.  Neither
the  Debenture  nor any  term  hereof  may be  amended,  waived,  discharged  or
terminated  other than by a written  instrument  signed by the  Company  and the
Holder.

                                      -11-
<PAGE>

         13.      Transfer,  Assignment  Etc.  The Holder may transfer or assign
the  Debenture or any interest  herein;  provided,  however,  that it shall be a
condition of such  transfer or  assignment  (other than a transfer or assignment
pursuant to an effective  registration  statement)  that the Holder  furnish the
Company in advance with an opinion of counsel, in form and substance  reasonably
acceptable  to the Company,  to the effect that such  transfer or  assignment is
exempt  from  the  registration   requirements  under  the  Securities  Act  and
applicable  state  securities  laws.  The  Debenture  shall be binding  upon the
Company and its  successors and shall inure to the benefit of the Holder and its
successors and assigns.  Prior to due presentment for transfer of the Debenture,
the Company may treat the person in whose name the Debenture is duly  registered
on the  Company's  Debenture  Register  as the owner  hereof for the  purpose of
receiving payment as herein provided and all other purposes,  whether or not the
Debenture is then  overdue,  and the Company  shall not be affected by notice to
the contrary.

         14.      No Waiver.  No failure on the part of the Holder to  exercise,
and no delay in exercising,  any right,  remedy or power hereunder shall operate
as a waiver thereof,  nor shall any single or partial  exercise by the Holder of
any right,  remedy or power  hereunder  preclude any other or future exercise of
any other right,  remedy or power. Each and every right,  remedy or power hereby
granted  to the  Holder  or  allowed  it by  law or  other  agreement  shall  be
cumulative  and not  exclusive of any other,  and may be exercised by the Holder
from time to time.

         15.      No  Rights  as  Shareholders;   Notices  to  Holders.  Nothing
contained in this Debenture shall be construed as conferring upon the Holder the
right to vote or to receive  dividends  or to consent or to receive  notice as a
shareholder  in respect of any  meeting of  shareholders  of the Company for the
election of the directors of the Company or any matter, or any rights whatsoever
as a  shareholder  of the  Company.  If,  however,  at  any  time  prior  to the
expiration of this  Debenture  and prior to its  exercise,  any of the following
events shall occur:

                  (a) the Company shall declare any dividend  payable in cash or
         in any  securities  upon  its  shares  of  Common  Stock  or  make  any
         distribution to the holders of its shares of Common Stock;

                  (b) the  Company  shall  offer to all holders of its shares of
         Common  Stock  any  additional  shares of  Common  Stock or  securities
         convertible  into or  exchangeable  for  shares of Common  Stock or any
         right to subscribe for or purchase any thereof; or

                  (c) a  dissolution,  liquidation  or winding up of the Company
         (other than in connection with a consolidation,  merger, sale, transfer
         or  lease  of all or  substantially  all of its  property,  assets  and
         business as an entirety) shall be proposed;

then in any one or more of said  events the  Company  shall  give  notice to the
Holder  as  provided  in  Section  16(a)  hereof,  such  giving  of notice to be
completed  at  least  10  days  prior  to the  record  date  in the  event  of a
transaction  described  in clause  (a)  above and at least 20 days  prior to the
record date in the case of a transaction  referred to in clause (b) or (c) above
fixed as a  record  date or the  date of  closing  the  transfer  books  for the
determination of the shareholders  entitled to such dividend,  distribution,  or
subscription  rights, or for the  determination of the shareholders  entitled to
vote on such proposed dissolution,  liquidation or winding up. Such notice shall
specify such record date or the date of closing the transfer  books, as the case
may be.  Failure to mail or

                                      -12-
<PAGE>

receive such notice or any defect  therein or in the mailing  thereof  shall not
affect  the  validity  of any action  taken in  connection  with such  dividend,
distribution or subscription rights, or such proposed  dissolution,  liquidation
or winding up.

         16.      Miscellaneous.

                  a. Unless otherwise  provided herein,  all notices,  requests,
demands  and other  communications  hereunder  shall be in writing  and shall be
deemed to have been duly given or made if (i) sent by  registered  or  certified
mail, return receipt requested, postage prepaid, (ii) hand delivered, (iii) sent
by prepaid overnight carrier, with a record of receipt or (iv) sent by facsimile
(with  confirmation  of receipt).  Each notice or other  communication  shall be
deemed to have been given on the date received. Copies of notices shall be sent:

To the Company at:                  HyComp, Inc.
                                    67 Wall Street, Suite 2411
                                    New York, New York  10005
                                    Attn: Chief Executive Officer

To the Holder at:                   Simmonds Capital Limited
                                    580 Granite Court
                                    Pickering, Ontario, L1W-3Z2, CANADA
                                    Attn: John G. Simmonds

                  b. Whenever the sense of the Debenture requires,  words in the
singular  shall be deemed to include the plural and words in the plural shall be
deemed to include the singular.  Paragraph headings are for convenience only and
shall not affect the meaning of this document.

         17.      Choice of Law and Venue:  Waiver of Jury Trial.  THE DEBENTURE
SHALL BE CONSTRUED  UNDER THE LAWS OF THE STATE OF NEW YORK,  WITHOUT  REGARD TO
PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW THEREOF.  The Company hereby (i)
irrevocably  submits to the jurisdiction of the United States District Court for
the Southern District of New York and the courts of the State of New York in the
Borough of Manhattan for the purposes of any suit, action or proceeding  arising
out of or relating to the Debenture and (ii) waives, and agrees not to assert in
any such suit, action or proceeding, any claim that it is not personally subject
to the  jurisdiction  of such  court,  that the suit,  action or  proceeding  is
brought  in an  inconvenient  forum or that the  venue of the  suit,  action  or
proceeding is improper. The Company consents to process being served in any such
suit,  action or  proceeding  by mailing a copy  thereof  to the  Company at the
address in effect for  notices to it under the  Debenture  and agrees  that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing  in this  paragraph  shall  affect or limit any right to serve
process in any other manner permitted by law.

         IN WITNESS  WHEREOF,  the Company has caused this instrument to be duly
executed as of October 14, 1999.


                                        HYCOMP, INC.


                                      -13-
<PAGE>


                                        By: /s/ Paul Hickey
                                           ---------------------------------
                                        Name:  Paul Hickey
                                        Title: Chairman and Chief Executive
                                               Officer

ATTEST:


_____________________________


                                      -14-
<PAGE>

                                    EXHIBIT A

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

                                CONVERSION NOTICE
                                       FOR
                  8% CONVERTIBLE DEBENTURES DUE APRIL 15, 2003

The undersigned, as Holder of the 8% Convertible Debenture Due April 15, 2003 of
HyComp,  Inc. (the  "Company"),  No. 1, in the outstanding  principal  amount of
U.S.$2,000,000   (the   "Debenture"),   hereby  irrevocably  elects  to  convert
U.S.$___________  of the outstanding  principal amount of the Debenture  accrued
but unpaid under the Debenture into shares of the common stock, par value $0.01,
of  the  Company  (the  "Common  Stock"),  according  to the  conditions  of the
Debenture as of the date this Conversion Notice is delivered to the Company. The
undersigned  hereby requests that share  certificates for the Common Stock to be
issued to the undersigned  pursuant to this Conversion  Notice, be issued in the
name of, and delivered to, the undersigned or its nominee as indicated below. If
shares are to be issued in the name of a nominee,  the undersigned  will pay all
transfer  taxes  payable  with  respect  thereto.  No fee will be charged to the
undersigned in respect of the conversion, except for transfer taxes, if any.

         The undersigned represents and warrants to the Company that:

                  (i) the shares of Common Stock received upon conversion hereby
         are being  acquired for its own account,  not as a nominee or agent for
         any other Person,  and without a view to the  distribution or resale of
         such shares or any interest therein in violation of the Securities Act;
         and

                  (ii) if the shares of Common Stock  received  upon  conversion
         hereby are to be issued in the name of a Person  other than the Holder,
         such record owner is acting solely as the nominee of the Holder; and

                  (iii) the undersigned is an "accredited  investor"  within the
         meaning of Rule 501(a) under Regulation D, as presently in effect,  and
         has such knowledge and experience in financial and business  matters so
         as to be capable of evaluating the merits and risks of an investment in
         the Common  Stock,  and the Holder is capable of bearing  the  economic
         risks of such  investment  and is able to bear the complete  loss of an
         investment in the Common Stock.

         The undersigned  further represents that the execution,  delivery,  and
performance  of this  Conversion  Notice  is within  its  powers  (corporate  or
otherwise) and has been duly  authorized by all requisite  action  (corporate or
otherwise) and that this  Conversion  Notice  constitutes  the legal,  valid and
binding obligation of the undersigned, enforceable against it in accordance with
its terms subject, as to enforceability,  to bankruptcy,  insolvency, fraudulent
conveyance,  reorganization,  moratorium and other laws of general applicability
affecting the rights of creditors and to general principles of equity.

                                      -15-
<PAGE>

         If the undersigned is an individual,  the undersigned's principal place
of residence is in the state or other jurisdiction so designated below his name,
and if the undersigned is not an individual,  the undersigned's  principal place
of business is in the state or other jurisdiction so designated below its name.

         The  undersigned  acknowledges  that it has received all  documents and
information  relating to an  investment  in the Common Stock  requested by or on
behalf of the undersigned, including such information relating to the Company as
the  undersigned  has deemed  appropriate  in making a decision to invest in the
Common Stock.

                                    NAME OF HOLDER_____________________________

                                            By:________________________________
                                            Print Name:
                                            Print Title:


                                            Print Address of Holder:

                                            ___________________________________

                                            ___________________________________

                                            Issue Common Stock to:______________

                                            at:_________________________________


                                      -16-