EXHIBIT 4.1
                                FORM OF DEBENTURE


THIS  DEBENTURE HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS
AMENDED  AND MAY NOT BE PLEDGED,  SOLD,  ASSIGNED  OR  TRANSFERRED  UNLESS (i) A
REGISTRATION  STATEMENT WITH RESPECT  THERETO IS EFFECTIVE  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (ii) AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IS AVAILABLE.

                                Photoworks, Inc.

                       SUBORDINATED CONVERTIBLE DEBENTURE

$__________                                                       April 25, 2001
                                                             Seattle, Washington

         FOR  VALUE  RECEIVED,   PHOTOWORKS,   INC.,  a  Washington  corporation
("Payor"),  with its  principal  offices  at 1260  16th  Avenue  West,  Seattle,
promises to pay to the order of ______________________ or its assigns ("Holder")
the  principal  sum of $________,  with  interest on the  outstanding  principal
amount at the rate of 7% per annum  (computed  on the basis of a 360-day year of
twelve 30-day months).  Interest shall accrue from the date the advance is first
made and shall continue on the outstanding  principal  amount until paid in full
or the Debenture is converted in accordance with Section 3 hereof.  Interest and
principal  shall be payable at such address as Holder  shall  specify by written
notice or in the absence of such notice at the offices of Zesiger  Capital Group
LLC, 320 Park Avenue, 30th Floor, New York, New York 10022.

     1.  Debenture.  This  debenture  is one of a series  of  debentures  in the
original  aggregate  principal  amount of $2,499,750 (the  "Debentures")  issued
pursuant  to the  terms  of  that  certain  Subordinated  Convertible  Debenture
Purchase  Agreement,  dated as of April  25,  2001 (the  "Purchase  Agreement"),
between  the Payor and Holder and the other  purchasers  named  therein.  Unless
defined herein,  all capitalized  terms in this Debenture shall have the meaning
ascribed to them in the Purchase Agreement.

     2. Payments.

          (a) Form of Payment.  All payments of interest and principal  shall be
in lawful money of the United States of America in federal or other  immediately
available  funds. All payments shall be applied first to accrued  interest,  and
thereafter to principal.

          (b) Scheduled Payment.  Accrued interest under this Debenture shall be
due and  payable  by the  Payor in  semi-annual  installments  on July  15th and
January  15th of each  year and on the date of  payment  of any  portion  of the
outstanding  principal amount. The unpaid principal balance and accrued interest
shall be due and payable on April 25, 2006 (the "Maturity Date").

          (c) Prepayment.  Principal and accrued  interest on this Debenture may
be repaid,  in whole or in part, at any time following 30 days written notice to
the  Holder,  but only with the  written  consent  of the Holder and only to the
extent this  Debenture is not converted  prior to such payment.  Neither all nor
any  portion of the  outstanding  principal  amount of this  Debenture  shall be


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repaid unless  simultaneously  therewith an equal  percentage of the outstanding
principal  amount of all other  outstanding  Debentures  issued  pursuant to the
Purchase  Agreement  is also  prepaid  (except  Debentures  as to which the then
holder shall have refused to give such consent to repayment).

     3. Conversion.

          (a)  Holder  Voluntary  Conversion.   The  Holder  may,  in  its  sole
discretion,  at any time one year after the Effective  Date elect to convert all
of the outstanding  principal balance and all accrued and unpaid interest on the
Debenture  into such number of fully paid and  nonassessable  shares of Series B
Convertible  Preferred  Stock  (the  "Preferred  Stock")  of the  Company  as is
obtained by dividing (A) the outstanding  principal  balance of, and all accrued
and  unpaid  interest  on, the  Debenture  as of the date of  conversion  by (B)
$75.00.

          (b) Exercise of Conversion  Rights.  To convert the principal  balance
hereunder into shares of Preferred  Stock, the Holder shall deliver to the Payor
a written  notice of election  to exercise  the  Holder's  voluntary  conversion
rights  (the  "Voluntary  Conversion  Notice").  The  Payor  shall,  as  soon as
practicable  thereafter,  issue  and  deliver  to the  Holder a  certificate  or
certificates,  registered  in the  Holder's  name,  for the  number of shares of
Preferred  Stock  to which  the  Holder  shall be  entitled  by  virtue  of such
conversion (bearing such legends as are required by applicable state and federal
securities laws in the reasonable  opinion of counsel to Payor).  The conversion
of the  principal  balance (and accrued  interest)  shall be deemed to have been
made on the date that the Payor receives the Voluntary Conversion Notice and the
Holder shall be treated for all purposes as the record  holder of the  Preferred
Stock as of such date.  Upon full  conversion of this Debenture  pursuant to the
terms  hereof,  Payor shall be forever  released  from all its  obligations  and
liabilities under this Debenture.

          (c) Fractional  Shares. The Payor shall not issue fractional shares of
Preferred Stock upon exercise of the voluntary conversion rights, and the number
of shares of  Preferred  Stock to be issued  shall be rounded up to the  nearest
whole share.

          (d) Issuance of Preferred  Stock. The Payor shall not issue any shares
of Preferred  Stock to any person except Holders of Debentures who convert their
Debentures into Preferred Stock in accordance with this Section 3.

     4.  Subordination.  This Debenture and the payments of principal,  interest
and all other amounts that may become due under this  Debenture are  subordinate
and junior in right of  payment,  in the manner and to the extent  provided in a
Subordination  Agreement  dated April 25,  2001  between  Imperial  Bank and the
Holder and the other holders of Debentures,  to the principal of and premium, if
any, and interest on all indebtedness of Payor now existing or hereafter arising
under that certain Credit  Agreement,  dated December 20, 2000 between Payor and
Imperial Bank, or any amendment, refinancing or replacement of such indebtedness
by Imperial Bank but only if such amendment, refinancing or replacement does not
(a) increase the maximum amount of  indebtedness  permitted to be outstanding to
an amount in excess of  $10,000,000  or (b)  expressly  prohibit  or require any
additional  delay  of  payments  under  this  Debenture.   Notwithstanding   the
foregoing,  Payor shall continue to make all principal and interest  payments as


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provided  herein  when and to the extent  not  prohibited  by the  Subordination
Agreement  and in any event as long as no event of default has  occurred  and is
continuing under the terms of any note or other agreement or instrument relating
to the indebtedness under the Credit Agreement.

     5. Events of Default.  The  occurrence  of any one or more of the following
events (herein called "Events of Default") shall constitute a default  hereunder
and under the Purchase Agreement:

          (a) The Payor  defaults in the payment of any  principal,  interest or
other  obligation  involving the payment of money under this  Debenture and such
default  continues  for more  than  five (5)  business  days  after the due date
thereof; or

          (b) The Payor  defaults in the  performance  of any other  covenant or
obligation under this Debenture or the Purchase  Agreement or Rights  Agreement,
and such default  continues  for more than 10 business days after the Holder has
given notice of such default to the Payor; or

          (c) Any  representation or warranty made in the Purchase  Agreement by
Payor shall prove to have been false or misleading in any material respect as of
the Closing date under the Purchase Agreement; or

          (d)  Payor  or any of  the  Subsidiaries  defaults  under  the  Credit
Agreement or any other agreement or instrument relating to indebtedness of Payor
or any Subsidiary for money borrowed or any capital lease;

          (e) The Payor shall make an  assignment  for the benefit of creditors,
or shall admit in writing its  inability to pay its debts as they become due, or
shall file a voluntary  petition in  bankruptcy,  or shall file any  petition or
answer  seeking  for  itself  any  reorganization,   arrangement,   composition,
readjustment,  liquidation,  dissolution  or similar relief under any present or
future bankruptcy or other statute, law or regulation,  or shall seek or consent
to or acquiesce in the  appointment of any trustee,  receiver,  or liquidator of
the  Payor or of all or any  substantial  part  (i.e.,  33-1/3%  or more) of the
properties of the Payor; or the Payor or its directors or majority  shareholders
shall take any action initiating the dissolution or liquidation of the Payor; or

          (f) Sixty (60) days shall have expired  after the  commencement  of an
action by or against the Payor seeking reorganization, arrangement, composition,
readjustment,  liquidation,  dissolution  or similar relief under any present or
future bankruptcy or other statute, law or regulation, without such action being
dismissed or all orders or  proceedings  thereunder  affecting the operations or
the  business  of the  Payor  being  stayed;  or a stay  of any  such  order  or
proceedings  shall thereafter be set aside and the action setting it aside shall
not be timely  appealed;  or the Payor  shall file any answer  admitting  or not
contesting the material allegations of a petition filed against the Payor in any
such proceedings; or the court in which such proceedings are pending shall enter
a decree or order granting the relief sought in any such proceedings; or


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          (g) Sixty (60) days shall have expired after the appointment,  without
the consent or acquiescence of the Payor, of any trustee, receiver or liquidator
of the Payor or of all or any  substantial  part of the  properties of the Payor
without such appointment being vacated.

     Payor  shall give Holder  prompt  (within 24 hours)  written  notice of any
event  which is or with  notice or  passage of time would be an Event of Default
hereunder.

     6. Remedies.

          (a)  Acceleration.  Upon an Event of Default described in clause 5(a),
(b), (c) or (d) and during the continuance thereof,  Holder shall have the right
by notice to Payor to accelerate the payment of the principal amount and accrued
interest  hereon by Payor hereunder so that all such amounts are immediately due
and payable.  Upon an Event of Default  described  in clause  5(e),  (f) or (g),
without any action on the part of the Holder  hereof,  the principal  amount and
accrued  interest on this Debenture  shall become  immediately  due and payable.
Upon an  acceleration  hereof,  Holder may enforce this Debenture by exercise of
the rights and remedies  granted to it by  applicable  law. No course of dealing
and no delay on the part of the Holder in exercising any right,  power or remedy
shall operate as a waiver thereof or otherwise prejudice Holder's rights, powers
or remedies.  No right,  power or remedy  conferred by this  Debenture  upon the
Holder shall be exclusive of any other right, power or remedy referred to herein
or now or hereafter available at law, in equity, by statute or otherwise.  Payor
shall pay all reasonable  attorneys'  fees and court costs incurred by Holder in
investigating  any event which could be an Event of Default  and  enforcing  and
collecting  the  amounts  due under  this  Debenture  as a result of an Event of
Default. Payor hereby waives demand, notice, presentment,  protest and notice of
dishonor.

          (b) Default Interest.  Every amount overdue under this Debenture shall
bear interest from and after the date on which such amount first became  overdue
at an annual rate of 12% per annum (the "Default Interest Rate").  Such interest
on overdue  amounts  under this  Debenture  shall be payable on demand and shall
accrue and be compounded annually until the obligation of the Payor with respect
to the payment of such  interest has been  discharged  (whether  before or after
judgment).

     7. Payor hereby waives demand, notice,  presentment,  protest and notice of
dishonor.  All payments by the Payor under this Debenture  shall be made without
set-off, defense or counterclaim and be free and clear and without any deduction
or  withholding  for any  taxes  or  fees of any  nature  whatever,  unless  the
obligation to make such deduction or withholding is imposed by law.

     8. The terms of this  Debenture  shall be construed in accordance  with the
laws of the  State of  Washington,  as  applied  to  contracts  entered  into by
Washington  residents within the State of Washington,  which contracts are to be
performed entirely within the State of Washington.

     9. Any term of this  Debenture  may be  amended  or  waived  only  with the
written consent of Payor and Holder.

     10. Payor agrees that Holder's  remedies at law in the event of any default


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or threatened  default by Payor in the  performance of or compliance with any of
the terms of this  Debenture  are not and will not be  adequate  to the  fullest
extent  permitted by law, and that such terms may be specifically  enforced by a
decree for the specific  performance of any agreement  contained herein or by an
injunction  against a violation of any of the terms hereof or otherwise  without
Holder having to prove actual damage or post any bond or other security.

     11. Notices. Any and all notices,  requests,  consents and demands required
or permitted to be given hereunder shall be in writing and shall be deemed given
and received upon personal delivery, or three (3) business days after deposit in
the United  States mail, by certified or registered  mail,  postage  prepaid and
addressed as follows:

         To Holder:                 c/o Zesiger Capital Group LLC
                                    320 Park Avenue, 30th floor
                                    New York, New York 10022
                                    Attn: Albert L. Zesiger

         To the Company:            Photoworks, Inc.
                                    1260 16th Avenue West
                                    Seattle, Washington 98119
                                    Attn: Howard Lee

or in the case of the Holder to such other  address as the Holder  hereof  shall
hereafter specify by similar notice.

         IN WITNESS  WHEREOF,  the Company has caused this  Debenture to be duly
executed by its  officers,  thereunto  duly  authorized  this 25th day of April,
2001.


                                            PHOTOWORKS, INC.
                                            a Washington corporation

                                            By:
                                                     ---------------------------
                                                     Howard Lee, Chief Executive
                                                     Officer and President
ATTEST:


------------------------------
Loran Cashmore Bond, Secretary






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