EXHIBIT 4.5

         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 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 OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SAID ACT.


                          SECURED CONVERTIBLE DEBENTURE

Louisville, Kentucky
February 12, 2003                                                        $57,500

     FOR VALUE RECEIVED, FULLCIRCLE REGISTRY, INC., a Nevada corporation
(hereinafter called the "Borrower"), hereby promises to pay to the order of AJW
PARTNERS, LLC or registered assigns (the "Holder") the sum of Fifty-Seven
Thousand, Five Hundred Dollars Dollars ($57,500), on February 12, 2004 (the
"Maturity Date"), and to pay interest on the unpaid principal balance hereof at
the rate of twelve percent (12%) per annum from February 12, 2003 (the "Issue
Date") until the same becomes due and payable, whether at maturity or upon
acceleration or by prepayment or otherwise. Any amount of principal or interest
on this Debenture which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date thereof until the same is paid
("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, at the option of the Holder, either quarterly on March 31,
June 30, September 30 and December 31 of each year beginning on March 31, 2003,
or at the time of conversion of the principal to which such interest relates in
accordance with Article I below. All payments due hereunder (to the extent not
converted into common stock, $.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 or, at the option of the Borrower, in
whole or in part, in shares of Common Stock of the Borrower valued at the then
applicable Conversion Price (as defined herein). 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 February
12, 2003, pursuant to which this Debenture was originally issued (the "Purchase
Agreement").
<PAGE>
     This Debenture is free from all taxes, liens, claims and encumbrances with
respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of shareholders of the Borrower and will not impose
personal liability upon the holder thereof. The obligations of the Borrower
under this Debenture shall be secured by that certain Security Agreement dated
by and between the Borrower and the Holder of even date herewith.

     The following terms shall apply to this Debenture:

     1. CONVERSION RIGHTS

          (a) Conversion Right. The Holder shall have the right from time to
     time, and at any time on or prior to the earlier of (i) the Maturity Date
     and (ii) the date of payment of the Default Amount (as defined in Article
     III) pursuant to Section 1.6(a) or Article III, the Optional Prepayment
     Amount (as defined in Section 5.1 or any payments pursuant to Section 1.7,
     each in respect of the remaining outstanding principal amount of this
     Debenture to convert all or any part of the outstanding and unpaid
     principal amount 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 (the "Conversion Price") determined as provided herein (a
     "Conversion"); provided, however, that 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 (1) 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 (2) 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 4.9% of the outstanding shares of Common
     Stock. For purposes of the proviso to the immediately preceding sentence,
     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 (1) of such proviso. The
     Holder of this Debenture may waive the limitations set forth herein by
     sixty-one (61) days written notice to the Company. The number of shares of
     Common Stock to be issued upon each conversion of this Debenture shall be
     determined by dividing the Conversion Amount (as defined below) by 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., New York, New York 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
<PAGE>
     preceding clauses (1) and/or (2) plus (4) at the Holder's option, any
     amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or
     pursuant to Section 2(c) of that certain Registration Rights Agreement,
     dated as of February 12, 2003, executed in connection with the initial
     issuance of this Debenture and the other Debentures issued on the Issue
     Date (the "Registration Rights Agreement").

          (b) Conversion Price.

               (i) Calculation of Conversion Price. The Conversion Price shall
          be the lesser of (i) the Variable Conversion Price (as defined herein)
          and (ii) the Fixed Conversion Price (as defined herein) (subject, in
          each case, to equitable adjustments for stock splits, stock dividends
          or rights offerings by the Borrower relating to the Borrower's
          securities or the securities of any subsidiary of the Borrower,
          combinations, recapitalization, reclassifications, extraordinary
          distributions and similar events). The "Variable Conversion Price"
          shall mean the Applicable Percentage (as defined herein) multiplied by
          the Market Price (as defined herein). "Market Price" means the average
          of the lowest three (3) Trading Prices (as defined below) for the
          Common Stock during the twenty (20) Trading Day period ending one
          Trading Day prior to the date the Conversion Notice is sent by the
          Holder to the Borrower via facsimile (the "Conversion Date"). "Trading
          Price" means, for any security as of any date, the intraday trading
          price on the Over-the-Counter Bulletin Board (the "OTCBB") as reported
          by a reliable reporting service mutually acceptable to and hereafter
          designated by Holders of a majority in interest of the Debentures and
          the Borrower or, if the OTCBB is not the principal trading market for
          such security, the intraday trading price of such security on the
          principal securities exchange or trading market where such security is
          listed or traded or, if no intraday trading price of such security is
          available in any of the foregoing manners, the average of the intraday
          trading prices of any market makers for such security that are listed
          in the "pink sheets" by the National Quotation Bureau, Inc. If the
          Trading Price cannot be calculated for such security on such date in
          the manner provided above, the Trading Price shall be the fair market
          value as mutually determined by the Borrower and the holders of a
          majority in interest of the Debentures being converted for which the
          calculation of the Trading Price is required in order to determine the
          Conversion Price of such Debentures. "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. "Applicable Percentage" shall
          mean 50.0%. The "Fixed Conversion Price" shall mean $.75.

               (ii) Conversion Price During Major Announcements. Notwithstanding
          anything contained in Section 1.2(a) to the contrary, in the event the
          Borrower (i) makes a public announcement that it intends to
          consolidate or merge with any other corporation (other than a merger
          in which the Borrower is the surviving or continuing corporation and
          its capital stock is unchanged) or sell or transfer all or
          substantially all of the assets of the Borrower or (ii) any person,
          group or entity (including the Borrower) publicly announces a tender
          offer to purchase 50% or more of the Borrower's Common Stock (or any
<PAGE>
          other takeover scheme) (the date of the announcement referred to in
          clause (i) or (ii) is hereinafter referred to as the "Announcement
          Date"), then the Conversion Price shall, effective upon the
          Announcement Date and continuing through the Adjusted Conversion Price
          Termination Date (as defined below), be equal to the lower of (x) the
          Conversion Price which would have been applicable for a Conversion
          occurring on the Announcement Date and (y) the Conversion Price that
          would otherwise be in effect. From and after the Adjusted Conversion
          Price Termination Date, the Conversion Price shall be determined as
          set forth in this Section 1.2(a). For purposes hereof, "Adjusted
          Conversion Price Termination Date" shall mean, with respect to any
          proposed transaction or tender offer (or takeover scheme) for which a
          public announcement as contemplated by this Section 1.2(b) has been
          made, the date upon which the Borrower (in the case of clause (i)
          above) or the person, group or entity (in the case of clause (ii)
          above) consummates or publicly announces the termination or
          abandonment of the proposed transaction or tender offer (or takeover
          scheme) which caused this Section 1.2(b) to become operative.

          (c) 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 Borrower is required at all times to have
     authorized and reserved two times the number of shares that is actually
     issuable upon full conversion of the Debentures (based on the Conversion
     Price of the Debentures or the Exercise Price of the Warrants in effect
     from time to time) (the "Reserved Amount"). The Reserved Amount shall be
     increased from time to time in accordance with the Borrower's obligations
     pursuant to Section 4(h) of the Purchase Agreement. The Borrower represents
     that upon issuance, such shares will be duly and validly issued, fully paid
     and non-assessable. In addition, 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.

          If, at any time a Holder of this Debenture submits a Notice of
     Conversion, and the Borrower does not have sufficient authorized but
     unissued shares of Common Stock available to effect such conversion in
     accordance with the provisions of this Article I (a "Conversion Default"),
     subject to Section 4.8, the Borrower shall issue to the Holder all of the
     shares of Common Stock which are then available to effect such conversion.
     The portion of this Debenture which the Holder included in its Conversion
     Notice and which exceeds the amount which is then convertible into
     available shares of Common Stock (the "Excess Amount") shall,
     notwithstanding anything to the contrary contained herein, not be
     convertible into Common Stock in accordance with the terms hereof until
     (and at the Holder's option at any time after) the date additional shares
     of Common Stock are authorized by the Borrower to permit such conversion,
<PAGE>
     at which time the Conversion Price in respect thereof shall be the lesser
     of (i) the Conversion Price on the Conversion Default Date (as defined
     below) and (ii) the Conversion Price on the Conversion Date thereafter
     elected by the Holder in respect thereof. In addition, the Borrower shall
     pay to the Holder payments ("Conversion Default Payments") for a Conversion
     Default in the amount of (x) the sum of (1) the then outstanding principal
     amount of this Debenture plus (2) accrued and unpaid interest on the unpaid
     principal amount of this Debenture through the Authorization Date (as
     defined below) plus (3) Default Interest, if any, on the amounts referred
     to in clauses (1) and/or (2), multiplied by (y) .24, multiplied by (z)
     (N/365), where N = the number of days from the day the holder submits a
     Notice of Conversion giving rise to a Conversion Default (the "Conversion
     Default Date") to the date (the "Authorization Date") that the Borrower
     authorizes a sufficient number of shares of Common Stock to effect
     conversion of the full outstanding principal balance of this Debenture. The
     Borrower shall use its best efforts to authorize a sufficient number of
     shares of Common Stock as soon as practicable following the earlier of (i)
     such time that the Holder notifies the Borrower or that the Borrower
     otherwise becomes aware that there are or likely will be insufficient
     authorized and unissued shares to allow full conversion thereof and (ii) a
     Conversion Default. The Borrower shall send notice to the Holder of the
     authorization of additional shares of Common Stock, the Authorization Date
     and the amount of Holder's accrued Conversion Default Payments. The accrued
     Conversion Default Payments for each calendar month shall be paid in cash
     or shall be convertible into Common Stock (at such time as there are
     sufficient authorized shares of Common Stock) at the applicable Conversion
     Price, at the Holder's option, as follows:

               (i) In the event Holder elects to take such payment in cash, cash
          payment shall be made to Holder by the fifth (5th) day of the month
          following the month in which it has accrued; and

               (ii) In the event Holder elects to take such payment in Common
          Stock, the Holder may convert such payment amount into Common Stock at
          the Conversion Price (as in effect at the time of conversion) at any
          time after the fifth day of the month following the month in which it
          has accrued in accordance with the terms of this Article I (so long as
          there is then a sufficient number of authorized shares of Common
          Stock).

          The Holder's election shall be made in writing to the Borrower at any
     time prior to 6:00 p.m., New York, New York time, on the third day of the
     month following the month in which Conversion Default payments have
     accrued. If no election is made, the Holder shall be deemed to have elected
     to receive cash. Nothing herein shall limit the Holder's right to pursue
     actual damages (to the extent in excess of the Conversion Default Payments)
     for the Borrower's failure to maintain a sufficient number of authorized
     shares of Common Stock, and each holder shall have the right to pursue all
     remedies available at law or in equity (including degree of specific
     performance and/or injunctive relief).

          (d) Method of Conversion.

               (i) 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 (A) 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., New York, New York time) and (B) subject to Section 1.4(b),
          surrendering this Debenture at the principal office of the Borrower.
<PAGE>
               (ii) 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 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.

               (iii) Payment of Taxes. The Borrower shall not be required to pay
          any tax which may be payable in respect of any transfer involved in
          the issue and delivery of shares of Common Stock or other securities
          or property on conversion of this Debenture in a name other than that
          of the Holder (or in street name), and the Borrower shall not be
          required to issue or deliver any such shares or other securities or
          property unless and until the person or persons (other than the Holder
          or the custodian in whose street name such shares are to be held for
          the Holder's account) requesting the issuance thereof shall have paid
          to the Borrower the amount of any such tax or shall have established
          to the satisfaction of the Borrower that such tax has been paid.

               (iv) 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
          (including, without limitation, in accordance with the requirements of
          Section 2(g) of the Purchase Agreement that certificates for shares of
          Common Stock issued on or after the effective date of the Registration
          Statement upon conversion of this Debenture shall not bear any
          restrictive legend).

               (v) Obligation of Borrower to Deliver Common Stock. Upon receipt
          by 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

<PAGE>
          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., New York, New York time, on such date.

               (vi) 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.

               (vii) 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 issuable upon conversion of this
          Debenture is more than two (2) days after the Deadline (other than a
          failure due to the circumstances described in Section 1.3 above, which
          failure shall be governed by such Section) the Borrower shall pay to
          the Holder $2,000 per day in cash, for each day beyond the Deadline
          that the Borrower fails to deliver such Common Stock. Such cash amount
          shall be paid to Holder by the fifth day of the month following the
          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.

          (e) Concerning the Shares. 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"
<PAGE>
     (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 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."

          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.
     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.

          (f) Effect of Certain Events.

               (i) 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 (as defined in Article III) pursuant to which the
<PAGE>
          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.

               (ii) 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 shareholders 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) 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.

               (iii) 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 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.

               (iv) 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
<PAGE>
          or for a consideration per share (before deduction of reasonable
          expenses or commissions or underwriting discounts or allowances in
          connection therewith) less than the Fixed 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 Fixed 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.

               The Borrower shall be deemed to have issued or sold shares of
          Common Stock 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 Fixed Conversion
          Price then in effect, then the Fixed Conversion Price shall be equal
          to 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.

               Additionally, the Borrower shall be deemed to have issued or sold
          shares of Common Stock 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 Fixed Conversion Price then in
          effect, then the Fixed Conversion Price shall be equal to 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 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 Fixed Conversion Price will be made upon the
          actual issuance of such Common Stock upon conversion or exchange of
          such Convertible Securities.

               (v) Purchase Rights. If, at any time when any Debentures are
          issued and outstanding, the Borrower issues any convertible securities
          or rights to purchase stock, warrants, securities or other property
<PAGE>
          (the "Purchase Rights") pro rata to the record holders of any class of
          Common Stock, then the Holder of this Debenture will be entitled to
          acquire, upon the terms applicable to such Purchase Rights, the
          aggregate Purchase Rights which such Holder could have acquired if
          such Holder had held the number of shares of Common Stock acquirable
          upon complete conversion of this Debenture (without regard to any
          limitations on conversion contained herein) immediately before the
          date on which a record is taken for the grant, issuance or sale of
          such Purchase Rights or, if no such record is taken, the date as of
          which the record holders of Common Stock are to be determined for the
          grant, issue or sale of such Purchase Rights.

               (vi) 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 of 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.

          (g) Trading Market Limitations. Unless permitted by the applicable
     rules and regulations of the principal securities market on which the
     Common Stock is then listed or traded, in no event shall the Borrower issue
     upon conversion of or otherwise pursuant to this Debenture and the other
     Debentures issued pursuant to the Purchase Agreement more than the maximum
     number of shares of Common Stock that the Borrower can issue pursuant to
     any rule of the principal United States securities market on which the
     Common Stock is then traded (the "Maximum Share Amount"), which, as of the
     Issue Date shall be 4,478,965 shares (19.99% of the total shares
     outstanding on the Issue Date), subject to equitable adjustment from time
     to time for stock splits, stock dividends, combinations, capital
     reorganizations and similar events relating to the Common Stock occurring
     after the date hereof. Once the Maximum Share Amount has been issued (the
     date of which is hereinafter referred to as the "Maximum Conversion Date"),
     if the Borrower fails to eliminate any prohibitions under applicable law or
     the rules or regulations of any stock exchange, interdealer quotation
     system or other self-regulatory organization with jurisdiction over the
     Borrower or any of its securities on the Borrower's ability to issue shares
     of Common Stock in excess of the Maximum Share Amount (a "Trading Market
     Prepayment Event"), in lieu of any further right to convert this Debenture,
     and in full satisfaction of the Borrower's obligations under this
     Debenture, the Borrower shall pay to the Holder, within fifteen (15)
     business days of the Maximum Conversion Date (the "Trading Market
     Prepayment Date"), an amount equal to 130% times the sum of (a) the then
     outstanding principal amount of this Debenture immediately following the
     Maximum Conversion Date, plus (b) accrued and unpaid interest on the unpaid
     principal amount of this Debenture to the Trading Market Prepayment Date,
     plus (c) Default Interest, if any, on the amounts referred to in clause (a)
     and/or (b) above, plus (d) any optional amounts that may be added thereto
     at the Maximum Conversion Date by the Holder in accordance with the terms
     hereof (the then outstanding principal amount of this Debenture immediately
     following the Maximum Conversion Date, plus the amounts referred to in
     clauses (b), (c) and (d) above shall collectively be referred to as the
     "Remaining Convertible Amount"). With respect to each Holder of Debentures,
     the Maximum Share Amount shall refer to such Holder's pro rata share
     thereof determined in accordance with Section 4.8 below. In the event that
     the sum of (x) the aggregate number of shares of Common Stock issued upon
     conversion of this Debenture and the other Debentures issued pursuant to
     the Purchase Agreement plus (y) the aggregate number of shares of Common
     Stock that remain issuable upon conversion of this Debenture and the other

<PAGE>
     Debentures issued pursuant to the Purchase Agreement, represents at least
     one hundred percent (100%) of the Maximum Share Amount (the "Triggering
     Event"), the Borrower will use its best efforts to seek and obtain
     Shareholder Approval (or obtain such other relief as will allow conversions
     hereunder in excess of the Maximum Share Amount) as soon as practicable
     following the Triggering Event and before the Maximum Conversion Date. As
     used herein, "Shareholder Approval" means approval by the shareholders of
     the Borrower to authorize the issuance of the full number of shares of
     Common Stock which would be issuable upon full conversion of the then
     outstanding Debentures but for the Maximum Share Amount.

          (h) Status as Shareholder. 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 or Maximum Share 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 tenth (10th) business day after the expiration of the Deadline with
     respect to a conversion of any portion of this Debenture for any reason,
     then (unless the Holder otherwise elects to retain its status as a holder
     of Common Stock by so notifying the Borrower) the Holder shall regain the
     rights of a Holder of this Debenture with respect to such unconverted
     portions of this Debenture and the Borrower shall, as soon as practicable,
     return such unconverted 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 (including, without limitation, (i)
     the right to receive Conversion Default Payments pursuant to Section 1.3 to
     the extent required thereby for such Conversion Default and any subsequent
     Conversion Default and (ii) the right to have the Conversion Price with
     respect to subsequent conversions determined in accordance with Section
     1.3) for the Borrower's failure to convert this Debenture.
<PAGE>
     2. CERTAIN COVENANTS

          (a) Distributions on Capital Stock. So long as the Borrower shall have
     any obligation under this Debenture, the Borrower shall not without the
     Holder's written consent (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.

          (b) Restriction on Stock Repurchases. So long as the Borrower shall
     have any obligation under this Debenture, the Borrower shall not without
     the Holder's written consent 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.

          (c) Borrowings. So long as the Borrower shall have any obligation
     under this Debenture, the Borrower shall not, without the Holder's written
     consent, 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.

          (d) Sale of Assets. So long as the Borrower shall have any obligation
     under this Debenture, the Borrower shall not, without the Holder's written
     consent, 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.

          (e) Advances and Loans. So long as the Borrower shall have any
     obligation under this Debenture, the Borrower shall not, without the
     Holder's written consent, 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 date hereof and which the Borrower has informed Holder in writing
     prior to the date hereof, (b) made in the ordinary course of business or
     (c) not in excess of $50,000.

          (f) Contingent Liabilities. So long as the Borrower shall have any
     obligation under this Debenture, the Borrower shall not, without the
     Holder's written consent, 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 date hereof and which the Borrower has informed Holder in writing prior
     to the date hereof, and (b) similar transactions in the ordinary course of
     business.
<PAGE>
     3. EVENTS OF DEFAULT

     If any of the following events of default (each, an "Event of Default")
shall occur:

          (a) Failure to Pay Principal or Interest. The Borrower fails to pay
     the principal hereof or interest thereon when due on this Debenture,
     whether at maturity, upon a Trading Market Prepayment Event pursuant to
     Section 1.7, upon acceleration or otherwise.

          (b) 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 (for a period of at least sixty (60) days, if such failure is
     solely as a result of the circumstances governed by Section 1.3 and the
     Borrower is using its best efforts to authorize a sufficient number of
     shares of Common Stock as soon as practicable), 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 the Registration Rights Agreement, 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.

          (c) Failure to Timely File Registration or Effect Registration. The
     Borrower fails to file the Registration Statement within forty-five (45)
     days following the Closing Date (as defined in the Purchase Agreement) or
     obtain effectiveness with the Securities and Exchange Commission of the
     Registration Statement within one hundred twenty (120) days following the
     Closing Date (as defined in the Purchase Agreement) 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;

          (d) Breach of Covenants. The Borrower breaches any material covenant
     or other material term or condition contained in Sections 1.3, 1.6 or 1.7
     of this Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the
     Purchase Agreement and such breach continues for a period of ten (10) days
     after written notice thereof to the Borrower from the Holder;

          (e) 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;
<PAGE>
          (f) 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;

          (g) 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
     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;

          (h) 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; or

          (i) 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;

          (j) 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 a majority 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"), and 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) 130% times 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 Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
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 (a)
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 lowest applicable 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 (b) the highest Closing 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

<PAGE>
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.

     4. MISCELLANEOUS

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

          (b) Notices. Any notice herein required or permitted to be given shall
     be in writing and may be personally served or delivered by courier or sent
     by United States mail and shall be deemed to have been given upon receipt
     if personally served (which shall include telephone line facsimile
     transmission) or sent by courier or 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 500 West Jefferson Street, PNC Plaza, Suite 2310,
     Louisville, KY 40202, facsimile number: 502-540-5879. Both the Holder and
     the Borrower may change the address for service by service of written
     notice to the other as herein provided.

          (c) 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.

          (d) 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.

          (e) 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.

          (f) Governing Law. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND
     CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
     TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT

<PAGE>
     REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS
     TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED
     IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS
     DEBENTURE, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
     TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE
     THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
     PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY
     MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
     SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING
     HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER
     MANNER PERMITTED BY LAW. BOTH 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. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING
     UNDER THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES,
     INCLUDING ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION
     WITH SUCH DISPUTE.

          (g) 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.

          (h) Allocations of Maximum Share Amount and Reserved Amount. The
     Maximum Share Amount and Reserved Amount shall be allocated pro rata among
     the Holders of Debentures based on the principal amount of such Debentures
     issued to each Holder. Each increase to the Maximum Share Amount and
     Reserved Amount shall be allocated pro rata among the Holders of Debentures
     based on the principal amount of such Debentures held by each Holder at the
     time of the increase in the Maximum Share Amount or Reserved Amount. In the
     event a Holder shall sell or otherwise transfer any of such Holder's
     Debentures, each transferee shall be allocated a pro rata portion of such
     transferor's Maximum Share Amount and Reserved Amount. Any portion of the
     Maximum Share Amount or Reserved Amount which remains allocated to any
     person or entity which does not hold any Debentures shall be allocated to
     the remaining Holders of Debentures, pro rata based on the principal amount
     of such Debentures then held by such Holders.
<PAGE>
          (i) Damages Shares. The shares of Common Stock that may be issuable to
     the Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to
     Section 2(c) of the Registration Rights Agreement ("Damages Shares") shall
     be treated as Common Stock issuable upon conversion of this Debenture for
     all purposes hereof and shall be subject to all of the limitations and
     afforded all of the rights of the other shares of Common Stock issuable
     hereunder, including without limitation, the right to be included in the
     Registration Statement filed pursuant to the Registration Rights Agreement.
     For purposes of calculating interest payable on the outstanding principal
     amount hereof, except as otherwise provided herein, amounts convertible
     into Damages Shares ("Damages Amounts") shall not bear interest but must be
     converted prior to the conversion of any outstanding principal amount
     hereof, until the outstanding Damages Amounts is zero.

          (j) 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.

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

          (l) 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 shareholders (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 shareholders for the purpose of
     determining shareholders who are entitled to receive payment of any
     dividend or other distribution, any right to subscribe for, purchase or
     otherwise acquire (including by way of merger, consolidation,
     reclassification or recapitalization) any share of any class or any other
     securities or property, or to receive any other right, or for the purpose
     of determining shareholders who are entitled to vote in connection with any
     proposed sale, lease or conveyance of all or substantially all of the
     assets of the 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
     4.12.

          (m) 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

<PAGE>
     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.

     5. OPTIONAL PREPAYMENT

          (a) Optional Prepayment. Notwithstanding anything to the contrary
     contained in this Article V, so long as (i) no Event of Default or Trading
     Market Prepayment Event shall have occurred and be continuing, (ii) the
     Borrower has a sufficient number of authorized shares of Common Stock
     reserved for issuance upon full conversion of the Debentures, then at any
     time after the Issue Date, and (iii) the common stock is trading below
     $1.00 per share the Borrower shall have the right, exercisable on not less
     than ten (10) Trading Days prior written notice to the Holders of the
     Debentures (which notice may not be sent to the Holders of the Debentures
     until the Borrower is permitted to prepay the Debentures pursuant to this
     Section 5.1), to prepay all of the outstanding Debentures in accordance
     with this Section 5.1. Any notice of prepayment hereunder (an "Optional
     Prepayment") shall be delivered to the Holders of the Debentures at their
     registered addresses appearing on the books and records of the Borrower and
     shall state (1) that the Borrower is exercising its right to prepay all of
     the Debentures issued on the Issue Date and (2) the date of prepayment (the
     "Optional Prepayment Notice"). On the date fixed for prepayment (the
     "Optional Prepayment Date"), the Borrower shall make payment of the
     Optional Prepayment Amount (as defined below) to or upon the order of the
     Holders as specified by the Holders in writing to the Borrower at least one
     (1) business day prior to the Optional Prepayment Date. If the Borrower
     exercises its right to prepay the Debentures, the Borrower shall make
     payment to the holders of an amount in cash (the "Optional Prepayment
     Amount") equal to either (i) 130% (for prepayments occurring within thirty
     (30) days of the Issue Date), (ii) 140% (for prepayments occurring between
     thirty-one (31) and sixty (60) days of the Issue Date) or (iii) 150% (for
     prepayments occurring after the sixtieth (60th) day following the Issue
     Date), 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 Optional Prepayment Date plus (y)
     Default Interest, if any, on the amounts referred to in clauses (w) and (x)
     plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
     hereof or pursuant to Section 2(c) of 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 "Optional Prepayment Sum"). Notwithstanding
     notice of an Optional Prepayment, the Holders shall at all times prior to
     the Optional Prepayment Date maintain the right to convert all or any
     portion of the Debentures in accordance with Article I and any portion of
     Debentures so converted after receipt of an Optional Prepayment Notice and
     prior to the Optional Prepayment Date set forth in such notice and payment
     of the aggregate Optional Prepayment Amount shall be deducted from the
     principal amount of Debentures which are otherwise subject to prepayment
     pursuant to such notice. If the Borrower delivers an Optional Prepayment
     Notice and fails to pay the Optional Prepayment Amount due to the Holders
     of the Debentures within two (2) business days following the Optional
     Prepayment Date, the Borrower shall forever forfeit its right to redeem the
     Debentures pursuant to this Section 5.1.

<PAGE>
                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>
     IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its
name by its duly authorized officer this 12th day of February, 2003.


                                                       FULLCIRCLE REGISTRY, INC.



                                              By: ______________________________
                                                         James A. Reskin
                                                         Chief Executive Officer


<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 $.001 per share ("Common Stock"), of FullCircle
Registry, Inc., a Nevada corporation (the "Borrower") according to the
conditions of the convertible debentures of the Borrower dated as of February
12, 2003 (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:____________________________________



<PAGE>
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.