<PAGE>
EXHIBIT 10.49


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNLESS SOLD PURSUANT TO RULE
144 OR REGULATION S UNDER THE ACT.

                              CONVERTIBLE DEBENTURE

Irvine, California
January 14, 2005                                          $_____________________

                  FOR VALUE RECEIVED, VISIJET, INC., a Delaware corporation
(hereinafter called the "BORROWER"), hereby promises to pay to the order of
_____________________________________or registered assigns (the "HOLDER") the
sum of _______________________________Dollars ($____________________), on
January 14, 2015 (the "MATURITY Date"), and to pay interest on the unpaid
principal balance hereof at the lesser of (a) the rate of eight percent (8%) per
annum or (b) the Maximum Rate (as defined below), from January 14, 2005, (the
"ISSUE DATE") until the same becomes due and payable, whether at maturity or
upon acceleration or by prepayment or otherwise. During any period any Event of
Default (as defined herein) has occurred and is continuing, any amount of
principal and accrued but unpaid interest on this Debenture shall bear interest
at the Maximum Rate ("DEFAULT INTEREST"). During any period any Event of Default
(as defined herein) has occurred and is continuing, any amount of principal and
accrued but unpaid interest on this Debenture shall bear interest at the rate of
twenty percent (20%) per annum ("DEFAULT INTEREST"). Interest shall commence
accruing on the Issue Date, shall be computed on the basis of a 365-day year and
the actual number of days elapsed and shall be payable quarterly on March 31,
June 30, September 30 and December 31 of each year beginning on March 31, 2005.
All payments due hereunder (to the extent not converted into common stock,
$0.001 par value 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. All payments shall be made 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, 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. As used in this Debenture, the term "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. Each capitalized term used herein, and not otherwise defined,
shall have the meaning ascribed thereto in that certain Securities Purchase
Agreement, dated January 14, 2005, pursuant to which this Debenture was
originally issued (the "PURCHASE AGREEMENT"). This Debenture is subject to the
Amended and Restated Security Agreement, dated January 14, 2005 (the "SECURITY
AGREEMENT"), referred to in the Purchase Agreement.

                  As used herein, "MAXIMUM RATE" means with respect to the
holder hereof, the maximum non-usurious rate of interest which, under all legal
requirements, such holder is permitted to contract for, charge, take, reserve,
or receive on this Debenture. If the laws of the State of Texas are applicable
for purposes of determining the "Maximum Rate," then such term means the "weekly
ceiling" from time to time in effect under Texas Finance Code ss.303.001, as
amended, as limited by Texas Finance Code ss.303.009.


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<PAGE>

         The following terms shall apply to this Debenture:

                          ARTICLE I. CONVERSION RIGHTS

         1.1 CONVERSION RIGHTS.

                  (a) GENERAL. The Holder shall have the right from time to
time, and at any time, except as otherwise provided herein, to convert all or
any part of the outstanding and unpaid principal amount and accrued but unpaid
interest of this Debenture into fully paid and non-assessable shares of Common
Stock, as such Common Stock exists on the Issue Date, or any shares of capital
stock or other securities of the Borrower into which such Common Stock shall
hereafter be changed or reclassified at the Conversion Price (as defined
herein).

                  (b) CONVERSION AMOUNT. The number of shares of Common Stock to
be issued upon each conversion of this Debenture shall be equal to (i) the
Conversion Amount (as defined below) divided by (ii) the applicable Conversion
Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the "NOTICE OF CONVERSION"), delivered to the
Borrower by the Holder in accordance with Section 1.4 below; provided that the
Notice of Conversion is submitted by facsimile (or by other means resulting in,
or reasonably expected to result in, notice) to the Borrower before 6:00 p.m.,
Dallas, Texas time on such conversion date (the "CONVERSION DATE"). The term
"CONVERSION AMOUNT" means, with respect to any conversion of this Debenture, the
sum of (1) the principal amount of this Debenture to be converted in such
conversion plus (2) accrued and unpaid interest, if any, on such principal
amount at the interest rates provided in this Debenture to the Conversion Date
plus (3) Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2).

                  (c) CONVERSION LIMIT. In no event shall the Holder be entitled
to convert any portion of this Debenture in excess of that portion of this
Debenture upon conversion of which the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Debentures or the unexercised or unconverted portion
of any other security of the Borrower (including, without limitation, the
warrants issued by the Borrower pursuant to the Purchase Agreement) subject to a
limitation on conversion or exercise analogous to the limitations contained
herein) and (ii) the number of shares of Common Stock issuable upon the
conversion of the portion of this Debenture 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 4.9999% of the
outstanding shares of Common Stock. For purposes of this Section 1.1(c),
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
except as otherwise provided in clause (i) above. The Holder may waive the
provisions of this Section 1.1(c) as to itself (and solely as to itself) (i)
upon not less than 75 days prior notice to the Borrower, and the provisions of
this Section 1.1(c) shall continue to apply until such 75th day (or such later
date as may be specified in such notice of waiver) or (ii) upon the occurrence
of any event under Section 1.6(b). No conversion in violation of Section 1.1(c),
but otherwise in accordance with this Debenture, shall affect the status of the
Common Stock issued upon such conversion as validly issued, fully-paid and
nonassessable.

         1.2 CONVERSION PRICE.

                  (a) CALCULATION OF CONVERSION PRICE. The Conversion Price
shall mean thirty-five cents ($0.35), subject to adjustment as provided herein.


                                       2
<PAGE>

                  (b) MARKET PRICE. The term "MARKET PRICE" means, as of any
date, (i) the average of the last reported sale prices for the shares of Common
Stock on the OTCBB for the five (5) Trading Days immediately preceding such date
as reported by Bloomberg, or (ii) if the OTCBB is not the principal trading
market for the shares of Common Stock, the average of the last reported sale
prices on the principal trading market for the Common Stock during the same
period as reported by Bloomberg, or (iii) if market value cannot be calculated
as of such date on any of the foregoing bases, the Market Price shall be the
fair market value as reasonably determined in good faith by (x) the Board of
Directors of the Borrower or, (y) at the option of a majority-in-interest of the
holders of the outstanding Debentures by an independent investment bank of
nationally recognized standing in the valuation of businesses similar to the
business of the Borrower. The manner of determining the Market Price of the
Common Stock set forth in the foregoing definition shall apply with respect to
any other security in respect of which a determination as to market value must
be made hereunder.

                  (c) TRADING DAY. The term "TRADING DAY" shall mean any day on
which the Common Stock is traded for any period on the OTCBB, or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded.

         1.3 AUTHORIZED SHARES. The Borrower covenants that during the period
the conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Debenture and the other Debentures issued pursuant to the Purchase
Agreement (the "RESERVED AMOUNT"). If the Borrower 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 Debentures shall be convertible at the then
current Conversion Price, the Borrower 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 Debentures. The Borrower (i) acknowledges that it
has irrevocably instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture, and (ii) agrees that
its issuance of this Debenture shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Debenture.

         1.4 METHOD OF CONVERSION.

                  (a) MECHANICS OF CONVERSION. Subject to Section 1.1, this
Debenture may be converted by the Holder in whole or in part at any time from
time to time after the Issue Date, by (i) submitting to the Borrower a Notice of
Conversion (by facsimile or other reasonable means of communication dispatched
on the Conversion Date prior to 6:00 p.m., Dallas, Texas time) and (ii) subject
to Section 1.4(b), surrendering this Debenture at the principal office of the
Borrower.

                  (b) SURRENDER OF DEBENTURE UPON CONVERSION. 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 this Debenture to the Borrower unless the entire unpaid principal
amount of this Debenture is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, 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 Borrower shall be controlling and determinative in the
absence of manifest error. Notwithstanding the foregoing, if any portion of this
Debenture is converted as aforesaid, the Holder may not transfer this Debenture
unless the Holder first physically surrenders this Debenture to the Borrower,
whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Debenture of like tenor, registered as the Holder (upon payment by


                                       3
<PAGE>

the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Debenture. The Holder
and any assignee, by acceptance of this Debenture, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion
of this Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

                  (c) DELIVERY OF COMMON STOCK UPON CONVERSION. Upon receipt by
the Borrower from the Holder of a facsimile transmission (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Debenture) (such second
business day being hereinafter referred to as the "DEADLINE") in accordance with
the terms hereof and the Purchase Agreement.

                  (d) OBLIGATION OF BORROWER TO DELIVER COMMON STOCK. Upon
delivery by the Holder to the Borrower of a Notice of Conversion, the Holder
shall be deemed to be the holder of record of the Common Stock issuable upon
such conversion, the outstanding principal amount and the amount of accrued and
unpaid interest on this Debenture shall be reduced to reflect such conversion,
and, unless the Borrower defaults on its obligations under this Article I, 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. If the
Holder shall have given a Notice of Conversion as provided herein, the
Borrower's obligation to issue and deliver the certificates for Common Stock
shall be absolute and unconditional, irrespective of the absence of any action
by the Holder to enforce the same, any waiver or consent with respect to any
provision thereof, the recovery of any judgment against any person or any action
to enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any other
circumstance which might otherwise limit such obligation of the Borrower to the
Holder in connection with such conversion. The Conversion Date specified in the
Notice of Conversion shall be the Conversion Date so long as the Notice of
Conversion is received by the Borrower before 6:00 p.m., Dallas, Texas time, on
such date.

                  (e) DELIVERY OF COMMON STOCK BY ELECTRONIC TRANSFER. In lieu
of delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.

                  (f) FAILURE TO DELIVER COMMON STOCK PRIOR TO DEADLINE. Without
in any way limiting the Holder's right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of
the Common Stock (including without a restrictive legend as required under
Section 1.5(b) herein) issuable upon conversion of this Debenture is more than
two (2) business days after the Deadline Borrower shall pay to such Holder, in
cash, as liquidated damages and not as a penalty, for each $1,000 of principal
amount being converted, $10 per business day (increasing to $20 per business day
after 5 business days after such damages begin to accrue) for each business day
after such second business day until such certificates are delivered. Such cash
amount shall be paid to Holder by the fifth (5th) day of the month following the


                                       4
<PAGE>

month in which it has accrued or, at the option of the Holder (by written notice
to the Borrower by the first day of the month following the month in which it
has accrued), shall 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.

         1.5 CONCERNING THE SHARES.

                  (a) LEGEND. The shares of Common Stock issuable upon
conversion of this Debenture may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("RULE 144") or (iv)
such shares are transferred to an "affiliate" (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in the
Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and
subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Debenture have been
registered under the Act as contemplated by the Amended and Restated
Registration Rights Agreement, dated January 14, 2005, referred to in the
Purchase Agreement (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, each certificate for
shares of Common Stock issuable upon conversion of this Debenture that has not
been so included in an effective registration statement or that has not been
sold pursuant to an effective registration statement or an exemption that
permits removal of the legend, shall bear a legend substantially in the
following form, as appropriate:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 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 CUSTOMARY FOR OPINIONS OF
         COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED
         UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER
         SAID ACT."

                  (b) REMOVAL OF LEGEND. The legend set forth above shall be
removed and the Borrower shall issue to the Holder a new certificate therefor
free of any transfer legend if (i) the Borrower or its transfer agent shall have
received an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Common Stock may be made without registration under the Act
and the shares are so sold or transferred, (ii) such Holder provides the
Borrower or its transfer agent with reasonable assurances that the Common Stock
issuable upon conversion of this Debenture (to the extent such securities are
deemed to have been acquired on the same date) can be sold pursuant to Rule 144
or (iii) in the case of the Common Stock issuable upon conversion of this
Debenture, such security is registered for sale by the Holder under an effective
registration statement filed under the Act 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 Borrower shall cause its
counsel to issue a legal opinion to the Borrower's transfer agent promptly after
the effective date of any registration statement under the Act registering the


                                       5
<PAGE>

resale of the Common Stock issuable upon conversion of the Debentures if
required by the Borrower's transfer agent to effect the removal of the legend
hereunder. Nothing in this Debenture shall (i) limit the Borrower's obligation
under the Registration Rights Agreement or (ii) affect in any way the Holder's
obligations to comply with applicable prospectus delivery requirements upon the
resale of the securities referred to herein.

         1.6 EFFECT OF CERTAIN EVENTS.

                  (a) EFFECT OF MERGER, CONSOLIDATION, ETC. At the option of the
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or
series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either: (i) be deemed to be
an Event of Default under Section 3.4 pursuant to which the Borrower shall be
required to pay to the Holder upon the consummation of and as a condition to
such transaction an amount equal to the Default Amount (as defined in Article
III) or (ii) be treated pursuant to Section 1.6(b) hereof. "PERSON" shall mean
any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

                  (b) ADJUSTMENT DUE TO MERGER, CONSOLIDATION, ETC. If, at any
time when this Debenture is issued and outstanding and prior to conversion of
all of the Debentures, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result of
which shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Debenture
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
stockholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Debenture notwithstanding Section
1.1(c)) and (b) the resulting successor or acquiring entity (if not the
Borrower) assumes by written instrument the obligations of this Section 1.6(b).
The above provisions shall similarly apply to successive consolidations,
mergers, sales, transfers or share exchanges.

                  (c) ADJUSTMENT DUE TO DISTRIBUTION. If the Borrower shall
declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of
capital or otherwise (including any dividend or distribution to the Borrower's
shareholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (i.e., a spin-off)) (a "DISTRIBUTION"), then the Holder of this
Debenture shall be entitled, upon any conversion of this Debenture after the
date of record for determining shareholders entitled to such Distribution, to


                                       6
<PAGE>

receive the amount of such assets which would have been payable to the Holder
with respect to the shares of Common Stock issuable upon such conversion had
such Holder been the holder of such shares of Common Stock on the record date
for the determination of shareholders entitled to such Distribution.

                  (d) ADJUSTMENT DUE TO DILUTIVE ISSUANCE. If, at any time when
any Debentures are issued and outstanding, the Borrower issues or sells, or in
accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Conversion Price
in effect on the date of such issuance (or deemed issuance) of such shares of
Common Stock (a "DILUTIVE ISSUANCE"), then immediately upon the Dilutive
Issuance, the Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance. No
adjustment to the Conversion Price shall have the effect of increasing the
Conversion Price above the Conversion Price in effect immediately prior to such
adjustment.

                  (e) EFFECT ON CONVERSION PRICE OF CERTAIN EVENTS. For purposes
of determining the adjusted Conversion Price under Section 1.6(d) hereof, the
following will be applicable:

                           (i) ISSUANCE OF RIGHTS OR OPTIONS. If the Borrower in
any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("CONVERTIBLE
SECURITIES") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "OPTIONS") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Conversion Price on the date of issuance or grant of such
Options, then the maximum total number of shares of Common Stock issuable upon
the exercise of all such Options will, as of the date of the issuance or grant
of such Options, be deemed to be outstanding and to have been issued and sold by
the Borrower for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Borrower as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Borrower upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Conversion Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

                           (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the
Borrower in any manner issues or sells any Convertible Securities, whether or
not immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Conversion Price on the date
of issuance, then the maximum total number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities will, as of
the date of the issuance of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Borrower for such price per
share. For the purposes of the preceding sentence, the "price per share for
which Common Stock is issuable upon such conversion or exchange" is determined
by dividing (i) the total amount, if any, received or receivable by the Borrower
as consideration for the issuance or sale of all such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any, payable


                                       7
<PAGE>

to the Borrower upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities. No further adjustment to the
Conversion Price will be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.

                           (iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If
there is a change at any time in (i) the amount of additional consideration
payable to the Borrower upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Borrower upon the conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Conversion Price in effect at the time of such change will be
readjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.

                           (iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED
CONVERTIBLE SECURITIES. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to convert or exchange such Convertible Securities shall have expired
or terminated, the Conversion Price then in effect will be readjusted to the
Conversion Price which would have been in effect at the time of such expiration
or termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination (other than in
respect of the actual number of shares of Common Stock issued upon exercise or
conversion thereof), never been issued.

                           (v) CALCULATION OF CONSIDERATION RECEIVED. If any
Common Stock, Options or Convertible Securities are issued, granted or sold for
cash, the consideration received therefor for purposes of this Debenture will be
the amount received by the Borrower therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Borrower in connection with such issuance, grant or
sale. In case any Common Stock, Options or Convertible Securities are issued or
sold for a consideration part or all of which shall be other than cash, the
amount of the consideration other than cash received by the Borrower will be the
fair value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Borrower
will be the Market Price thereof as of the date of receipt. In case any Common
Stock, Options or Convertible Securities are issued in connection with any
acquisition, merger or consolidation in which the Borrower is the surviving
corporation, the amount of consideration therefor will be deemed to be the fair
value of such portion of the net assets and business of the non-surviving
corporation as is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration other than
cash or securities will be determined in good faith by the Board of Directors of
the Borrower.

                           (vi) EXCEPTIONS TO ADJUSTMENT OF CONVERSION PRICE. No
adjustment to the Conversion Price will be made (i) upon the exercise of any
warrants, options or convertible securities granted, issued and outstanding on
the date of issuance of this Debenture or (ii) upon the conversion of the
Debentures.

                  (f) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the
Borrower 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
such date of record for effecting such subdivision, the Conversion Price in
effect immediately prior to such subdivision will be proportionately reduced. If


                                       8
<PAGE>

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

                  (g) NOTICE OF ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense, shall promptly
compute such adjustment or readjustment and prepare and furnish to the Holder a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Borrower
shall, upon the written request at any time of the Holder, furnish to such
Holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other securities or property which at
the time would be received upon conversion of the Debenture.

         1.7 STATUS AS SHAREHOLDER.

                  (a) DEEMED OWNER; RESCISSION. Upon submission of a Notice of
Conversion by a Holder, (i) the shares covered thereby (other than the shares,
if any, which cannot be issued because their issuance would exceed such Holder's
allocated portion of the Reserved 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 remedies
provided herein or otherwise available at law or in equity to such Holder
because of a failure by the Borrower to comply with the terms of this Debenture.
Notwithstanding the foregoing, if a Holder has not received certificates for all
shares of Common Stock prior to the third (3rd) business day after the Deadline
with respect to a conversion of any portion of this Debenture for any reason,
then the Holder may elect at its option to regain the rights of a Holder of this
Debenture with respect to such attempted converted portions of this Debenture
and the Borrower shall, as soon as practicable, return such attempted converted
Debenture to the Holder or, if the Debenture has not been surrendered, adjust
its records to reflect that such portion of this Debenture has not been
converted. In all cases, the Holder shall retain all of its rights and remedies
for the Borrower's failure to convert this Debenture.

                  (b) COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY DELIVER
CERTIFICATES UPON CONVERSION. In addition to any other rights available to the
Holder, if the Borrower fails for any reason to deliver to the Holder such
certificate or certificates pursuant to Sections 1.4 and 1.5 by the third (3rd)
business day after the Deadline, and if after such third business day after the
Deadline the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by such Holder of Common Stock which the Holder anticipated receiving upon
such conversion (a "BUY-IN"), then the Borrower shall (i) pay in cash to the
Holder (in addition to any remedies available to or elected by the Holder) the
amount by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the Common Stock so purchased exceeds (y) the product
of (1) the aggregate number of shares of Common Stock that such Holder
anticipated receiving from the conversion at issue multiplied by (2) the actual
sale price of the Common Stock at the time of the sale (including brokerage
commissions, if any) giving rise to such purchase obligation and (ii) at the
option of the Holder, either reissue Debentures in principal amount equal to the
principal amount of the attempted conversion or deliver to the Holder the number
of shares of Common Stock that would have been issued had the Borrower timely
complied with its delivery requirements under Sections 1.4 and 1.5. The Holder
shall provide the Borrower written notice indicating the amounts payable to the
Holder in respect of the Buy-In.


                                       9
<PAGE>

                         ARTICLE II. CERTAIN COVENANTS

         2.1 DISTRIBUTIONS ON CAPITAL STOCK. So long as the Borrower shall have
any obligation under this Debenture, the Borrower shall not, without the written
consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, (a) 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 other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

         2.2 RESTRICTION ON STOCK REPURCHASES. So long as the Borrower shall
have any obligation under this Debenture, the Borrower shall not, without the
written consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, redeem, 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 Borrower or
any warrants, rights or options to purchase or acquire any such shares.

         2.3 BORROWINGS. So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the written consent of holders
of at least seventy-five percent (75%) of the then-outstanding principal amount
of Debentures issued pursuant to the Purchase Agreement, create, incur, assume
or suffer to exist any liability for borrowed money, except (a) borrowings in
existence or committed on the date hereof and of which the Borrower has informed
Holder in writing prior to the date hereof, (b) indebtedness to trade creditors
or financial institutions incurred in the ordinary course of business or (c)
borrowings, the proceeds of which shall be used to repay this Debenture.

         2.4 SALE OF ASSETS. So long as the Borrower shall have any obligation
under this Debenture, the Borrower shall not, without the written consent of
holders of at least seventy-five percent (75%) of the then-outstanding principal
amount of Debentures issued pursuant to the Purchase Agreement, sell, lease or
otherwise dispose of any significant portion of its assets outside the ordinary
course of business. Any consent to the disposition of any assets may be
conditioned on a specified use of the proceeds of disposition.

         2.5 ADVANCES AND LOANS. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the written
consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, lend money, give credit or make advances to any person, firm, joint
venture or corporation, including, without limitation, officers, directors,
employees, subsidiaries and affiliates of the Borrower, except loans, credits or
advances (a) in existence or committed on the Issue Date, (b) made in the
ordinary course of business or (c) not in excess of an aggregate of $50,000.

         2.6 CONTINGENT LIABILITIES. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the written
consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable upon the obligation of any person, firm, partnership,
joint venture or corporation, except by the endorsement of negotiable
instruments for deposit or collection and except assumptions, guarantees,
endorsements and contingencies (a) in existence or committed on the Issue Date,
or (b) made in the ordinary course of business.


                                       10
<PAGE>

                         ARTICLE III. EVENTS OF DEFAULT

         If any of the following events of default (each, an "EVENT OF DEFAULT")
shall occur:

         3.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails to pay (or
shall state in writing an intention not to pay or its inability to pay) the
principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon acceleration or otherwise, including, without limitation, Article
V hereof;

         3.2 CONVERSION AND THE SHARES. The Borrower fails to issue shares of
Common Stock to the Holder (or announces or threatens that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Debenture, fails to transfer or
cause its transfer agent to transfer (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Debenture as and when required by this
Debenture, or fails to remove any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Debenture as and when required by this Debenture or the Registration Rights
Agreement (or makes any announcement, statement or threat that it does not
intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any announcement, statement or threat not to
honor its obligations shall not be rescinded in writing) for ten (10) days after
the Borrower shall have been notified thereof in writing by the Holder;

         3.3 FAILURE TO TIMELY FILE REGISTRATION OR EFFECT REGISTRATION. The
Borrower fails to file a pre-effective amendment to the Registration Statement
on Form SB-2, SEC File Number 333-120449, (the "REGISTRATION STATEMENT") by
January 31, 2005 or obtain effectiveness with the Securities and Exchange
Commission of the Registration Statement (as amended) within ninety (90) days
following the Issue Date or such Registration Statement lapses in effect (or
sales cannot otherwise be made thereunder effective, whether by reason of the
Borrower's failure to amend or supplement the prospectus included therein in
accordance with the Registration Rights Agreement or otherwise) for more than
twenty (20) consecutive days or forty (40) days in any twelve month period after
the Registration Statement becomes effective;

         3.4 BREACH OF COVENANTS. The Borrower breaches any material covenant or
other material term or condition contained in this Debenture, the Purchase
Agreement, the Registration Rights Agreement or the Security Agreement and such
breach continues for a period of ten (10) days after written notice thereof to
the Borrower from the Holder;

         3.5 BREACH OF REPRESENTATIONS AND WARRANTIES. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this
Debenture, the Purchase Agreement or the Registration Rights Agreement;

         3.6 RECEIVER OR TRUSTEE. The Borrower or any subsidiary of the Borrower
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;

         3.7 JUDGMENTS. Any money judgment, writ or similar process shall be
entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $50,000, and shall remain


                                       11
<PAGE>

unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;

         3.8 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 Borrower or any
subsidiary of the Borrower;

         3.9 DELISTING OF COMMON STOCK. The Borrower shall fail to maintain the
listing of the Common Stock on at least one of the OTCBB or an equivalent
replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market,
the New York Stock Exchange, or the American Stock Exchange; or

         3.10 DEFAULT UNDER OTHER DEBENTURES. An Event of Default has occurred
and is continuing under any of the other Debentures issued pursuant to the
Purchase Agreement,

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the holders of seventy-five percent (75%) of the aggregate principal amount
of the outstanding Debentures issued pursuant to the Purchase Agreement
exercisable through the delivery of written notice to the Borrower by such
Holders (the "DEFAULT NOTICE"), or upon the occurrence of an Event of Default
specified in Section 3.6 or 3.8, the Debentures shall become immediately due and
payable and the Borrower shall pay to the Holder, in full satisfaction of its
obligations hereunder, an amount equal to the greater of (i) 125% MULTIPLIED BY
the SUM of (w) the then outstanding principal amount of this Debenture PLUS (x)
accrued and unpaid interest on the unpaid principal amount of this Debenture to
the date of payment (the "MANDATORY PREPAYMENT DATE") PLUS (y) Default Interest,
if any, on the amounts referred to in clauses (w) and/or (x) PLUS (z) any
amounts owed to the Holder pursuant to the Registration Rights Agreement (the
then outstanding principal amount of this Debenture to the date of payment PLUS
the amounts referred to in clauses (x), (y) and (z) shall collectively be known
as the "DEFAULT SUM") or (ii) the "parity value" of the Default Sum to be
prepaid, where parity value means (x) the highest number of shares of Common
Stock issuable upon conversion of or otherwise pursuant to such Default Sum in
accordance with Article I (treating the Trading Day immediately preceding the
Mandatory Prepayment Date as the "Conversion Date" for purposes of determining
the Conversion Price, unless the Default Event arises as a result of a breach in
respect of a specific Conversion Date in which case such Conversion Date shall
be the Conversion Date), MULTIPLIED BY (y) the highest Market Price for the
Common Stock during the period beginning on the date of first occurrence of the
Event of Default and ending one day prior to the Mandatory Prepayment Date (the
"DEFAULT AMOUNT") and 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 Borrower fails to pay the Default Amount within five (5) business
days of written notice that such amount is due and payable, then the Holder
shall have the right at any time, so long as the Borrower remains in default
(and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in lieu of the
Default Amount, the number of shares of Common Stock of the Borrower equal to
the Default Amount divided by the Conversion Price then in effect.

                           ARTICLE IV. MISCELLANEOUS

         4.1 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.


                                       12
<PAGE>

         4.2 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 three (3) 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 Borrower; and the address of the Borrower shall be 192 Technology
Drive, Suite Q, Irvine, California 92618, facsimile number: (949) 453-9652. Both
the Holder and the Borrower may change the address for service by service of
written notice to the other as herein provided.

         4.3 AMENDMENTS. This Debenture and any provision hereof may only be
amended by an instrument in writing signed by the Borrower and the Holder. The
term "DEBENTURE" and all reference thereto, as used throughout this instrument,
shall mean this instrument (and the other Debentures issued pursuant to the
Purchase Agreement) as originally executed, or if later amended or supplemented,
then as so amended or supplemented.

         4.4 ASSIGNABILITY. This Debenture shall be binding upon the Borrower
and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Debenture to the contrary, this Debenture may
be pledged as collateral in connection with a BONA FIDE margin account or other
lending arrangement.

         4.5 COST OF COLLECTION. If default is made in the payment of this
Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys' fees.

         4.6 GOVERNING LAW. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN DALLAS,
TEXAS WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. THE BORROWER IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. THE BORROWER FURTHER AGREES THAT
SERVICE OF PROCESS UPON IT MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT OR PROCEEDING.
NOTHING HEREIN SHALL AFFECT THE HOLDER'S RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW. THE PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT
IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.

         4.7 CERTAIN AMOUNTS. Whenever pursuant to this Debenture the Borrower
is required to pay an amount in excess of the outstanding principal amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower 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
Borrower 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 Borrower 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.


                                       13
<PAGE>

         4.8 ALLOCATIONS OF RESERVED AMOUNT. The Reserved Amount shall be
allocated pro rata among the Holder of this Debenture and the holders of the
other debentures issued pursuant to the Purchase Agreement based on the
principal amount of this Debenture and each such other debenture issued to the
Holder and each such holder. Each increase to the Reserved Amount shall be
allocated pro rata among the Holder and each such other holder based on the
principal amount of this Debenture and each such other debenture held by the
Holder and each such other holder at the time of the increase in the Reserved
Amount. In the event the Holder shall sell or otherwise transfer any portion of
this Debenture, each transferee shall be allocated a pro rata portion of the
Holder's Reserved Amount. Any portion of the Reserved Amount which remains
allocated to any person or entity which does not hold any portion of this
Debenture shall be allocated to the remaining holders of debentures, pro rata
based on the principal amount of such debentures then held by such holders.

         4.9 DENOMINATIONS. At the request of the Holder, upon surrender of this
Debenture, the Borrower shall promptly issue new Debentures in the aggregate
outstanding principal amount hereof, in the form hereof, in such denominations
of at least $50,000 as the Holder shall request.

         4.10 NOTICE OF CORPORATE EVENTS. Except as otherwise provided below,
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.
The Borrower shall provide the Holder with prior notification of any meeting of
the Borrower's stockholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its stockholders for the purpose of determining stockholders 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 stockholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower 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 Borrower 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
4.10.

         4.11 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Borrower covenants
that it shall not at any time insist upon, or plead, or in any manner whatsoever
claim, and shall resist any and all efforts to be compelled to take the benefit
or advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Borrower from paying all or any portion of the
principal of or interest on the Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may effect the
covenants or the performance of this Agreement; and the Borrower hereby
expressly waives all benefit or advantage of any such law and covenants that it
shall not hinder, delay or impede the execution of power herein granted to the
Holder but shall suffer and permit the execution of every such power as though
no such law had been enacted. All agreements between the Borrower and Holder,
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason or demand or
acceleration of the final maturity date of this Debenture or otherwise, shall
the interest contracted for, charged, received, paid or agreed to be paid to
holders exceed the Maximum Rate. Regardless of any provision contained in this


                                       14
<PAGE>

Debenture, the Security Agreement, the Purchase Agreement, or any other document
executed in connection therewith (collectively, the "LOAN DOCUMENTS"), Holder
shall never be entitled to receive, collect or apply as interest (whether termed
interest herein or deemed to be interest by operation of law or judicial
determination) on this Debenture any amount in excess of interest calculated at
the Maximum Rate, and, in the event that any Holder ever receives, collects or
applies as interest any such excess, the amount which would be excessive
interest shall be deemed to be a partial prepayment of principal and treated
hereunder as such; and, if the principal amount of this Debenture is paid in
full, any remaining excess shall forthwith be paid to Borrower. In determining
whether or not the interest paid or payable under any specific contingency
exceeds interest calculated at the Maximum Rate, Borrower and Lender shall, to
the maximum extent permitted under applicable law, (i) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest; (ii)
exclude voluntary prepayments and the effects thereof; and (iii) amortize,
prorate, allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of this Debenture.

         4.12 REMEDIES. The Borrower 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
Borrower 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 Borrower of the provisions of this Debenture, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Debenture
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

         4.13 CERTAIN WAIVERS. Borrower and each surety, endorser, guarantor,
and other party ever liable for payment of any sums of money payable upon this
Debenture, jointly and severally waive presentment, demand, protest, notice of
protest and non payment or other notice of default, notice of acceleration, and
intention to accelerate, or other notice of any kind, and agree that their
liability under this Debenture shall not be affected by any renewal or extension
in the time of payment hereof, or in any indulgences, or by any release or
change in any security for the payment of this Debenture, and hereby consent to
any and all renewals, extensions, indulgences, releases, or changes, regardless
of the number of such renewals, extensions, indulgences, releases, or changes.

         4.14 ENTIRETY. THIS DEBENTURE AND ALL THE OTHER LOAN DOCUMENTS EMBODY
THE FINAL, ENTIRE AGREEMENT OF HOLDER AND BORROWER AND SUPERSEDE ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF HOLDER AND BORROWER. THERE ARE NO ORAL
AGREEMENTS BETWEEN HOLDER AND BORROWER.

                          ARTICLE V. REPURCHASE RIGHT

         5.1 REPURCHASE OF THE DEBENTURE AT THE OPTION OF THE HOLDER. This
Debenture shall be purchased by the Borrower, in whole or in part and from time
to time, at the option of the Holder (each the "REPURCHASE DATE"), at a purchase
price equal to 100% of the principal amount of this Debenture, plus accrued and
unpaid interest on this Debenture, to (but excluding) such Repurchase Date (the
"REPURCHASE PRICE"). The Borrower shall have the option to pay all or any
portion of the Repurchase Price in newly issued, fully paid and nonassessable
shares of Common Stock, with each share of Common Stock having a value equal to


                                       15
<PAGE>

the average Market Price of a share of Common Stock for each of the ten (10)
Trading Days immediately preceding the date on which the Repurchase Price is
paid; PROVIDED, HOWEVER, that the Borrower shall not have the right to issue any
shares of Common Stock pursuant to this Article V unless such shares of Common
Stock are then registered pursuant to a Registration Statement (as defined in
the Registration Rights Agreement) which is available for the resale of such
shares of Common Stock immediately upon issuance.

         5.2 REPURCHASE PROCEDURE. The Holder may exercise its rights under
Section 5.1, at any time and from time to time, on or after January 14, 2008, by
delivering to the Borrower (i) a written notice of repurchase (a "REPURCHASE
NOTICE") at any time prior to 5:00 p.m., Dallas, Texas time, on any business day
which is not less than ten (10) business days and not more than twenty (20)
business days of the applicable Repurchase Date stating the Repurchase Date and
the portion of the Debenture which the Holder will deliver to be purchased,
which portion must be in principal amounts of $1,000 or an integral multiple of
$1,000, and irrevocably agreeing that such principal amount of the Debenture
shall be purchased by the Borrower as of the Repurchase Date and (ii) this
Debenture. In the event that this Debenture is repurchased in part, upon
surrender of this Debenture, the Borrower shall execute and deliver to the
Holder a new Debenture equal in principal amount to the unpurchased portion of
the Debenture surrendered. Not later than five (5) business days prior to the
Repurchase Date, the Borrower shall give written notice to the Holder, which
notice shall specify, subject to the proviso in the last sentence of Section
5.1, the portions of the Repurchase Price payable in cash and/or shares of
Common Stock.


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<PAGE>

         IN WITNESS WHEREOF, the Borrower has caused this Debenture to be signed
in its name by its duly authorized officer this 14th day of January, 2005.


VISIJET, INC.



By:      ______________________________
         Randal A. Bailey
         President


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<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION
                    (To be Executed by the Registered Holder
                       in order to Convert the Debentures)

                  The undersigned hereby irrevocably elects to convert
$__________ principal amount of the Debenture (defined below) into shares of
common stock, par value $0.001 per share ("COMMON STOCK"), of VisiJet, Inc., a
Delaware corporation (the "BORROWER") according to the conditions of the
Convertible Debentures of the Borrower dated as of January 14, 2005 (the
"DEBENTURES"), 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. A copy of each Debenture is attached hereto (or
evidence of loss, theft or destruction thereof).

                  The Borrower 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 Borrower issue a certificate or certificates for the number of
shares of Common Stock set forth below (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 Debentures shall be 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.

Date of Conversion:_____________________________
Applicable Conversion Price:____________________
Number of Shares of Common Stock to be Issued Pursuant to
Conversion of the Debentures:___________________
Signature:______________________________________
Name:___________________________________________
Address:________________________________________

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.


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