Exhibit 4.1

                                                                       EXHIBIT A

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THIS  SECURITY AND THE  SECURITIES  ISSUABLE  UPON  CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: February __, 2006
Original Conversion Price (subject to adjustment herein): $0.17

                                                                $---------------


                        7% SECURED CONVERTIBLE DEBENTURE
                              DUE FEBRUARY __, 2009

            THIS 7%  SECURED  CONVERTIBLE  DEBENTURE  is one of a series of duly
authorized and issued 7%  Convertible  Debentures of Secured  Services,  Inc., a
Delaware  corporation,  having a principal  place of business at 11490  Commerce
Park Drive, Suite 240, Reston, Virginia 20191 (the "COMPANY"), designated as its
7% Secured Convertible Debenture, due February___, 2009 (the "DEBENTURE(S)").

            FOR   VALUE   RECEIVED,    the   Company    promises   to   pay   to
________________________ or its registered assigns (the "HOLDER"), or shall have
paid pursuant to the terms hereunder,  the principal sum of  $_______________ by
February  ___,  2009,  or such  earlier date as the  Debentures  are required or
permitted to be repaid as provided  hereunder (the "MATURITY DATE"),  and to pay
interest  to the  Holder  on the  aggregate  unconverted  and  then  outstanding
principal  amount of this Debenture in accordance  with the  provisions  hereof.
This Debenture is subject to the following additional provisions:

            SECTION 1.  DEFINITIONS. For the purposes hereof, in addition to the
terms defined  elsewhere in this Debenture:  (a) capitalized terms not otherwise
defined herein have the meanings given to such terms in the Purchase  Agreement,
and (b) the following terms shall have the following meanings:

                                       1
<PAGE>

                        "ALTERNATE  CONSIDERATION"  shall have the  meaning  set
            forth in Section 5(d).

                        "BASE CONVERSION PRICE" shall have the meaning set forth
            in Section 5(b).

                        "BUSINESS DAY" means any day except Saturday, Sunday and
            any day which shall be a federal  legal holiday in the United States
            or a day on which banking  institutions in the State of New York are
            authorized or required by law or other government action to close.

                        "BUY-IN"  shall  have the  meaning  set forth in Section
            4(d)(v).

                        "CHANGE OF  CONTROL  TRANSACTION"  means the  occurrence
            after the date  hereof of any of (i) an  acquisition  after the date
            hereof by an  individual or legal entity or "group" (as described in
            Rule  13d-5(b)(1)  promulgated  under the Exchange Act) of effective
            control  (whether  through legal or beneficial  ownership of capital
            stock of the Company,  by contract or otherwise) of in excess of 40%
            of the voting securities of the Company,  or (ii) the Company merges
            into or  consolidates  with any other  Person,  or any Person merges
            into or  consolidates  with the Company and,  after giving effect to
            such transaction,  the stockholders of the Company immediately prior
            to such  transaction own less than 60% of the aggregate voting power
            of the Company or the successor entity of such transaction, or (iii)
            the  Company  sells or  transfers  its  assets,  as an  entirety  or
            substantially as an entirety, to another Person and the stockholders
            of the Company  immediately  prior to such transaction own less than
            60%  of  the  aggregate   voting  power  of  the  acquiring   entity
            immediately after the transaction, (iv) a replacement at one time or
            within a three year  period of more than  one-half of the members of
            the Company's board of directors which is not approved by a majority
            of those  individuals  who are members of the board of  directors on
            the date hereof (or by those  individuals who are serving as members
            of the board of directors on any date whose  nomination to the board
            of directors  was approved by a majority of the members of the board
            of  directors  who  are  members  on the  date  hereof),  or (v) the
            execution  by the Company of an  agreement to which the Company is a
            party or by which it is bound,  providing  for any of the events set
            forth above in (i) through (iv).

                        "COMMON STOCK" means the common stock,  par value $.0001
            per share, of the Company and stock of any other class of securities
            into which such  securities may hereafter have been  reclassified or
            changed into.

                        "CONVERSION  DATE"  shall have the  meaning set forth in
            Section 4(a).

                        "CONVERSION  PRICE"  shall have the meaning set forth in
            Section 4(b).

                        "CONVERSION  SHARES"  means the  shares of Common  Stock
            issuable upon conversion of this Debenture or as payment of interest
            in accordance with the terms.

                                       2
<PAGE>

                        "DEBENTURE REGISTER" shall have the meaning set forth in
            Section 2(c).

                        "DILUTIVE  ISSUANCE" shall have the meaning set forth in
            Section 5(b).

                        "DILUTIVE  ISSUANCE  NOTICE"  shall have the meaning set
            forth in Section 5(b).

                        "EFFECTIVENESS  PERIOD"  shall have the meaning given to
            such term in the Registration Rights Agreement.

                        "EQUITY  CONDITIONS"  shall  mean,  during the period in
            question,  (i) the Company  shall have duly honored all  conversions
            and redemptions  scheduled to occur or occurring by virtue of one or
            more  Notice  of  Conversions  of  the  Holder,  if  any,  (ii)  all
            liquidated  damages and other amounts owing to the Holder in respect
            of this Debenture shall have been paid;  (iii) there is an effective
            Registration  Statement pursuant to which the Holder is permitted to
            utilize  the  prospectus  thereunder  to  resell  all of the  shares
            issuable  pursuant  to the  Transaction  Documents  (and the Company
            believes,  in good  faith,  that such  effectiveness  will  continue
            uninterrupted for the foreseeable future),  (iv) the Common Stock is
            trading  on the  Trading  Market  and  all of  the  shares  issuable
            pursuant to the  Transaction  Documents  are listed for trading on a
            Trading  Market  (and the  Company  believes,  in good  faith,  that
            trading  of the  Common  Stock on a  Trading  Market  will  continue
            uninterrupted for the foreseeable future), (v) there is a sufficient
            number of authorized but unissued and otherwise unreserved shares of
            Common Stock for the issuance of all of the shares issuable pursuant
            to the Transaction  Documents,  (vi) there is then existing no Event
            of Default or event which, with the passage of time or the giving of
            notice, would constitute an Event of Default,  (vii) the issuance of
            the  shares  in  question  to  the  Holder  would  not  violate  the
            limitations   set  forth  in  Section  4(c)  and  (viii)  no  public
            announcement  of a  pending  or  proposed  Fundamental  Transaction,
            Change  of  Control  Transaction  or  acquisition   transaction  has
            occurred that has not been consummated.

                        "EVENT OF  DEFAULT"  shall have the meaning set forth in
            Section 8.

                        "EXCHANGE  ACT"  means the  Securities  Exchange  Act of
            1934,  as  amended,  and  the  rules  and  regulations   promulgated
            thereunder.

                        "FUNDAMENTAL  TRANSACTION"  shall have the  meaning  set
            forth in Section 5(e).

                        "INTEREST  CONVERSION  RATE"  means 90% of the lesser of
            (a) the average of the 20 VWAPs  immediately prior to the applicable
            Interest Payment Date or (b) the average of the 20 VWAPs immediately
            prior to the date the applicable  interest payment shares are issued
            and delivered if after the Interest Payment Date.

                        "INTEREST PAYMENT DATE" shall have the meaning set forth
            in Section 2(a).

                        "LATE  FEES" shall have the meaning set forth in Section
            2(d).

                                       3
<PAGE>

                        "MANDATORY  PREPAYMENT  AMOUNT" for any Debentures shall
            equal  the sum of (i) the  greater  of:  (A)  130% of the  principal
            amount of  Debentures  to be  prepaid,  plus all  accrued and unpaid
            interest  thereon,  or (B) the principal  amount of Debentures to be
            prepaid, plus all other accrued and unpaid interest hereon,  divided
            by the  Conversion  Price on (x) the date the  Mandatory  Prepayment
            Amount is demanded or  otherwise  due or (y) the date the  Mandatory
            Prepayment Amount is paid in full, whichever is less,  multiplied by
            the VWAP on (x) the date the Mandatory Prepayment Amount is demanded
            or otherwise due or (y) the date the Mandatory  Prepayment Amount is
            paid in full,  whichever  is  greater,  and (ii) all other  amounts,
            costs,  expenses  and  liquidated  damages  due in  respect  of such
            Debentures.

                        "NEW YORK  COURTS"  shall have the  meaning set forth in
            Section 9(d).

                        "NOTICE OF CONVERSION"  shall have the meaning set forth
            in Section 4(a).

                        "ORIGINAL  ISSUE  DATE" shall mean the date of the first
            issuance of the Debentures  regardless of the number of transfers of
            any Debenture and regardless of the number of instruments  which may
            be issued to evidence such Debenture.

                        "PERMITTED INDEBTEDNESS" shall mean (a) the Indebtedness
            (as  such  term  is  defined  in  Section  3.1(aa)  of the  Purchase
            Agreement)  existing  on the  Original  Issue  Date and set forth on
            SCHEDULE  3.1(aa)  attached  to  the  Purchase   Agreement  and  (b)
            Indebtedness incurred by the Company that does not mature or require
            payments  of  principal  prior to the four year  anniversary  of the
            Original  Issue Date and is made  expressly  subordinate in right of
            payment  to  the  Indebtedness  evidenced  by  this  Debenture,   as
            reflected  in a  written  agreement  acceptable  to the  Holder  and
            approved by the Holder in writing.

                        "PERMITTED   LIEN"   shall  mean  the   individual   and
            collective  reference  to  the  following:   (a)  Liens  for  taxes,
            assessments and other governmental  charges or levies not yet due or
            Liens for  taxes,  assessments  and other  governmental  charges  or
            levies being contested in good faith and by appropriate  proceedings
            for which  adequate  reserves  (in the good  faith  judgment  of the
            management of the Company) have been  established in accordance with
            GAAP  and (b)  Liens  imposed  by law  which  were  incurred  in the
            ordinary course of business,  such as carriers',  warehousemen's and
            mechanics'  Liens,  statutory  landlords'  Liens,  and other similar
            Liens arising in the ordinary  course of business,  and (x) which do
            not  individually  or in the aggregate  materially  detract from the
            value of such  property  or  assets  or  materially  impair  the use
            thereof in the  operation  of the  business  of the  Company and its
            consolidated  Subsidiaries  or (y) which are being contested in good
            faith by appropriate proceedings,  which proceedings have the effect
            of  preventing  the  forfeiture  or sale of the  property  or  asset
            subject to such Lien.

                        "PERSON"  means  a  corporation,   an   association,   a
            partnership,  organization,  a business, an individual, a government
            or political subdivision thereof or a governmental agency.

                                       4
<PAGE>

                        "PURCHASE   AGREEMENT"  means  the  Securities  Purchase
            Agreement,  dated as of  February  __, 2006 to which the Company and
            the   original   Holder  are  parties,   as  amended,   modified  or
            supplemented from time to time in accordance with its terms.

                        "REGISTRATION  RIGHTS  AGREEMENT" means the Registration
            Rights Agreement, dated as of the date of the Purchase Agreement, to
            which the Company and the original  Holder are parties,  as amended,
            modified or  supplemented  from time to time in accordance  with its
            terms.

                        "REGISTRATION  STATEMENT" means a registration statement
            meeting  the  requirements  set  forth  in the  Registration  Rights
            Agreement,  covering among other things the resale of the Conversion
            Shares and naming the Holder as a "selling stockholder" thereunder.

                        "SECURITIES  ACT" means the  Securities  Act of 1933, as
            amended, and the rules and regulations promulgated thereunder.

                        "SUBSIDIARY"  shall have the meaning  given to such term
            in the Purchase Agreement.

                        "TRADING   MARKET"  means  the   following   markets  or
            exchanges  on which the Common Stock is listed or quoted for trading
            on the date in question:  the Nasdaq SmallCap  Market,  the American
            Stock  Exchange,  the New York Stock  Exchange,  the Nasdaq National
            Market or the OTC Bulletin Board.

                        "TRANSACTION DOCUMENTS" shall have the meaning set forth
            in the Purchase Agreement.

                        "VWAP" means,  for any date, the price determined by the
            first of the following clauses that applies: (a) if the Common Stock
            is then  listed  or quoted on a  Trading  Market,  the daily  volume
            weighted  average  price of the  Common  Stock for such date (or the
            nearest  preceding  date) on the Trading  Market on which the Common
            Stock is then listed or quoted as reported  by  Bloomberg  Financial
            L.P.  (based on a Trading  Day from 9:30 a.m.  Eastern  Time to 4:02
            p.m.  Eastern Time);  (b) if the OTC Bulletin Board is not a Trading
            Market,  the volume  weighted  average price of the Common Stock for
            such date (or the nearest preceding date) on the OTC Bulletin Board;
            (c) if the  Common  Stock is not then  listed  or  quoted on the OTC
            Bulletin  Board and if prices for the Common Stock are then reported
            in the "Pink  Sheets"  published by Pink  Sheets,  LLC (or a similar
            organization  or agency  succeeding  to its  functions  of reporting
            prices),  the most recent bid price per share of the Common Stock so
            reported;  or (d) in all other  cases,  the fair  market  value of a
            share of Common  Stock as  determined  by an  independent  appraiser
            selected in good faith by the Holder and  reasonably  acceptable  to
            the Company.

                                       5
<PAGE>

            SECTION 2.   INTEREST.

                        a)          PAYMENT  OF  INTEREST  IN CASH OR KIND.  The
            Company   shall  pay  interest  to  the  Holder  on  the   aggregate
            unconverted and then outstanding  principal amount of this Debenture
            at the rate of 7% per annum, payable quarterly on March 31, June 30,
            September 30 and December 31, beginning on the first such date after
            the  Original  Issue  Date,  on  each  Conversion  Date  (as to that
            principal  amount then being  converted),  and on the Maturity  Date
            (except  that,  if any such date is not a  Business  Day,  then such
            payment shall be due on the next succeeding Business Day) (each such
            date,  an  "INTEREST  PAYMENT  DATE"),  in cash or duly  authorized,
            validly issued, fully paid and non-assessable shares of Common Stock
            at the  Interest  Conversion  Rate (the amount to be paid in shares,
            the "INTEREST SHARE AMOUNT"),  or a combination  thereof;  PROVIDED,
            HOWEVER,  that (i) payment in shares of Common  Stock may only occur
            if during the 20 Trading Days  immediately  prior to the  applicable
            Interest Payment Date (the "INTEREST NOTICE PERIOD") and through and
            including  the date such  shares of Common  Stock are  issued to the
            Holder all of the Equity  Conditions have been met (unless waived by
            the Holder in writing), (ii) the Company shall have given the Holder
            notice in accordance  with the notice  requirements  set forth below
            and (iii) as to such Interest  Payment Date,  prior to such Interest
            Notice  Period  (but  not  more  than 5  Trading  Days  prior to the
            commencement of such Interest Notice Period), the Company shall have
            delivered to the Holder's  account with The Depository Trust Company
            a number  of  shares  of Common  Stock to be  applied  against  such
            Interest  Share Amount  equal to the quotient of (x) the  applicable
            Interest Share Amount divided by (y) the then Conversion  Price (the
            "INTEREST CONVERSION SHARES").

                        b)          COMPANY'S  ELECTION TO PAY INTEREST IN KIND.
            Subject to the terms and conditions  herein, the decision whether to
            pay interest hereunder in cash or shares of Common Stock shall be at
            the  discretion  of the Company.  Prior to the  commencement  of any
            Interest  Notice  Period,  the Company shall deliver to the Holder a
            written  notice of its  election to pay  interest  hereunder  on the
            applicable  Interest  Payment Date either in cash,  shares of Common
            Stock or a combination  thereof and the Interest  Share Amount as to
            the applicable  Interest Payment Date, provided that the Company may
            indicate in such notice that the  election  contained in such notice
            shall apply to future  Interest  Payment  Dates  until  revised by a
            subsequent notice.  During any Interest Notice Period, the Company's
            election   (whether   specific  to  an  Interest   Payment  Date  or
            continuous)  shall be irrevocable as to such Interest  Payment Date.
            Subject to the aforementioned conditions,  failure to timely provide
            such  written  notice  shall be deemed an election by the Company to
            pay the interest on such Interest  Payment Date in cash. At any time
            the Company  delivers a notice to the Holder of its  election to pay
            the  interest in shares of Common  Stock,  the Company  shall timely
            file a prospectus  supplement  pursuant to Rule 424 disclosing  such
            election.  The aggregate  number of shares of Common Stock otherwise
            issuable to the Holder on an Interest  Payment Date shall be reduced
            by the number of Interest Conversion Shares previously issued to the
            Holder in connection with such Interest Payment Date.

                        c)          INTEREST  CALCULATIONS.  Interest  shall  be
            calculated  on the basis of a 360-day  year and shall  accrue  daily
            commencing  on the Original  Issue Date until payment in full of the
            principal  sum,  together  with all  accrued  and  unpaid  interest,
            liquidated damages

                                       6
<PAGE>

            and other  amounts  which may become due  hereunder,  has been made.
            Payment  of  interest  in  shares of Common  Stock  (other  than the
            Interest  Conversion  Shares  issued  prior  to an  Interest  Notice
            Period) shall  otherwise  occur pursuant to Section  4(d)(ii) herein
            and,  solely for purposes of the payment of interest in shares,  the
            Interest Payment Date shall be deemed the Conversion Date.  Interest
            shall  cease  to  accrue  with  respect  to  any  principal   amount
            converted,   provided  that  the  Company   actually   delivers  the
            Conversion  Shares  within  the  time  period  required  by  Section
            4(d)(ii).  Interest  hereunder  will be paid to the  Person in whose
            name this  Debenture  is  registered  on the  records of the Company
            regarding   registration   and  transfers  of  this  Debenture  (the
            "DEBENTURE  REGISTER").  Except as otherwise  provided herein, if at
            any time the Company pays  interest  partially in cash and partially
            in shares of Common  Stock to the  holders of the  Debentures,  then
            such payment shall be  distributed  ratably among the holders of the
            then-outstanding  Debentures based on their (or their predecessor's)
            initial purchases of Debentures pursuant to the Purchase Agreement.

                        d)          LATE FEE.  All  overdue  accrued  and unpaid
            interest to be paid hereunder shall entail a late fee at an interest
            rate  equal  to the  lesser  of 18% per  annum or the  maximum  rate
            permitted by  applicable  law ("LATE FEES") which shall accrue daily
            from the date such interest is due  hereunder  through and including
            the  date  of  payment  in  full.  Notwithstanding  anything  to the
            contrary  contained  herein,  if on any  Interest  Payment  Date the
            Company has  elected to pay  accrued  interest in the form of Common
            Stock but the Company is not able to pay accrued  interest in Common
            Stock  because it fails to satisfy  the  conditions  for  payment in
            Common Stock set forth above, then, at the option of the Holder, the
            Company,  in  lieu of  delivering  either  shares  of  Common  Stock
            pursuant  to  this  Section  2 or  paying  the  regularly  scheduled
            interest payment in cash,  shall deliver,  within three Trading Days
            of each applicable Interest Payment Date, an amount in cash equal to
            the  product of (x) the number of shares of Common  Stock  otherwise
            deliverable to the Holder in connection with the payment of interest
            due on such Interest Payment Date multiplied by (y) the highest VWAP
            during the period commencing on the Interest Payment Date and ending
            on the  Trading Day prior to the date such  payment is made.  If any
            Interest  Conversion  Shares are issued to the Holder in  connection
            with  an  Interest  Payment  Date  and are not  applied  against  an
            Interest Share Amount,  then the Holder shall  promptly  return such
            excess shares to the Company.

                        e)          PREPAYMENT. Except as otherwise set forth in
            this  Debenture,  the  Company  may not  prepay  any  portion of the
            principal amount of this Debenture without the prior written consent
            of the Holder.

            SECTION 3.  REGISTRATION OF TRANSFERS AND EXCHANGES.

                        a)          DIFFERENT  DENOMINATIONS.  This Debenture is
            exchangeable  for an equal aggregate  principal amount of Debentures
            of different  authorized  denominations,  as requested by the Holder
            surrendering  the  same.  No  service  charge  will be made for such
            registration of transfer or exchange.

                                       7
<PAGE>

                        b)          INVESTMENT  REPRESENTATIONS.  This Debenture
            has been issued subject to certain investment representations of the
            original  Holder  set  forth in the  Purchase  Agreement  and may be
            transferred  or  exchanged  only in  compliance  with  the  Purchase
            Agreement  and  applicable  federal  and state  securities  laws and
            regulations.

                        c)          RELIANCE ON DEBENTURE REGISTER. Prior to due
            presentment  to the Company  for  transfer  of this  Debenture,  the
            Company  and any agent of the  Company may treat the Person in whose
            name this Debenture is duly registered on the Debenture  Register as
            the owner  hereof  for the  purpose of  receiving  payment as herein
            provided and for all other  purposes,  whether or not this Debenture
            is  overdue,  and  neither  the  Company nor any such agent shall be
            affected by notice to the contrary.

            SECTION 4. CONVERSION.

                        a)          VOLUNTARY CONVERSION.  At any time after the
            Original Issue Date until this  Debenture is no longer  outstanding,
            this Debenture  shall be convertible  into shares of Common Stock at
            the option of the  Holder,  in whole or in part at any time and from
            time to time (subject to the  limitations on conversion set forth in
            Section  4(c)  hereof).  The  Holder  shall  effect  conversions  by
            delivering to the Company the form of Notice of Conversion  attached
            hereto as ANNEX A (a "NOTICE OF CONVERSION"), specifying therein the
            principal  amount of this  Debenture to be converted and the date on
            which such conversion is to be effected (a "CONVERSION DATE"). If no
            Conversion  Date  is  specified  in  a  Notice  of  Conversion,  the
            Conversion  Date shall be the date that such Notice of Conversion is
            provided  hereunder.  To effect  conversions  hereunder,  the Holder
            shall not be required to physically  surrender this Debenture to the
            Company  unless the entire  principal  amount of this Debenture plus
            all  accrued  and unpaid  interest  thereon  has been so  converted.
            Conversions   hereunder  shall  have  the  effect  of  lowering  the
            outstanding principal amount of this Debenture in an amount equal to
            the applicable conversion. The Holder and the Company shall maintain
            records showing the principal  amount converted and the date of such
            conversions.  The Company  shall deliver any objection to any Notice
            of  Conversion  within 1 Business Day of receipt of such notice.  In
            the event of any dispute or  discrepancy,  the records of the Holder
            shall be controlling  and  determinative  in the absence of manifest
            error. 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 may be
            less than the amount stated on the face hereof.

                        b)          CONVERSION  PRICE.  The conversion  price in
            effect on any  Conversion  Date shall be equal to $0.17  (subject to
            adjustment herein)(the "CONVERSION PRICE").

                        c)          CONVERSION LIMITATIONS.

                                    i.          The Company shall not effect any
                        conversion  of this  Debenture,  and a Holder  shall not
                        have the right to convert any portion of this  Debenture
                        to  the  extent  that  after   giving   effect  to  such
                        conversion, such Holder (together with

                                       8
<PAGE>

                        such Holder's affiliates, and any other person or entity
                        acting as a group  together  with such  Holder or any of
                        such   Holder's   affiliates),   as  set  forth  on  the
                        applicable Notice of Conversion,  would beneficially own
                        in excess of the  Beneficial  Ownership  Limitation  (as
                        defined below). For purposes of the foregoing  sentence,
                        the number of shares of Common Stock  beneficially owned
                        by such  Holder and its  affiliates  shall  include  the
                        number  of  shares  of  Common   Stock   issuable   upon
                        conversion of this  Debenture  with respect to which the
                        determination  of such sentence is being made, but shall
                        exclude the number of shares of Common Stock which would
                        be  issuable  upon  (A)  conversion  of  the  remaining,
                        nonconverted   principal   amount   of  this   Debenture
                        beneficially   owned  by  such  Holder  or  any  of  its
                        affiliates   and  (B)  exercise  or  conversion  of  the
                        unexercised  or   nonconverted   portion  of  any  other
                        securities   of   the   Company   (including,    without
                        limitation,   any  other  Debentures  or  the  Warrants)
                        subject  to  a  limitation  on  conversion  or  exercise
                        analogous   to   the   limitation    contained    herein
                        beneficially   owned  by  such  Holder  or  any  of  its
                        affiliates.   Except  as  set  forth  in  the  preceding
                        sentence,  for purposes of this Section 4(c), beneficial
                        ownership shall be calculated in accordance with Section
                        13(d) of the Exchange Act and the rules and  regulations
                        promulgated   thereunder.   To  the   extent   that  the
                        limitation  contained in this Section 4(c) applies,  the
                        determination  of whether this  Debenture is convertible
                        (in  relation to other  securities  owned by such Holder
                        together  with any  affiliates)  and of which amounts of
                        this  Debenture  are  convertible  shall  be in the sole
                        discretion  of  such  Holder,  and the  submission  of a
                        Notice of Conversion shall be deemed to be such Holder's
                        determination of whether this Debenture may be converted
                        (in relation to other  securities  owned by such Holder)
                        and which amounts of this Debenture are convertible,  in
                        each  case   subject   to  such   aggregate   percentage
                        limitations. To ensure compliance with this restriction,
                        each Holder will be deemed to  represent  to the Company
                        each time it delivers a Notice of  Conversion  that such
                        Notice of Conversion  has not violated the  restrictions
                        set forth in this  paragraph  and the Company shall have
                        no  obligation to verify or confirm the accuracy of such
                        determination.  In addition,  a determination  as to any
                        group status as  contemplated  above shall be determined
                        in accordance with Section 13(d) of the Exchange Act and
                        the rules and regulations  promulgated  thereunder.  For
                        purposes of this Section 4(c), in determining the number
                        of outstanding shares of Common Stock, a Holder may rely
                        on the number of  outstanding  shares of Common Stock as
                        reflected in the most recent of the  following:  (A) the
                        Company's most recent Form 10-QSB or Form 10-KSB, as the
                        case may be, (B) a more recent  public  announcement  by
                        the  Company or (C) any other  notice by the  Company or
                        the Company's transfer agent setting forth the number of
                        shares of Common Stock outstanding.  Upon the written or
                        oral request of a Holder,  the Company  shall within two
                        Trading  Days  confirm  orally  and in  writing  to such
                        Holder  the  number  of  shares  of  Common  Stock  then
                        outstanding.  In any case,  the  number  of  outstanding
                        shares of Common Stock shall be determined  after giving
                        effect to the  conversion  or exercise of  securities of
                        the Company, including this Debenture, by such Holder or
                        its affiliates since the date as of which such number of
                        outstanding shares of Common Stock was reported.

                                       9
<PAGE>

                        The "Beneficial  Ownership Limitation" shall be 4.99% of
                        the  number of shares of the  Common  Stock  outstanding
                        immediately  after  giving  effect  to the  issuance  of
                        shares of Common Stock issuable upon  conversion of this
                        Debenture held by the Holder.  The Beneficial  Ownership
                        Limitation provisions of this Section 4(c) may be waived
                        by such Holder, at the election of such Holder, upon not
                        less than 61 days' prior notice to the Company to change
                        the  Beneficial  Ownership  Limitation  to  9.99% of the
                        number  of  shares  of  the  Common  Stock   outstanding
                        immediately  after  giving  effect  to the  issuance  of
                        shares of Common Stock upon conversion of this Debenture
                        held by the Holder,  and the  provisions of this Section
                        4(c) shall  continue  to apply.  Upon such a change by a
                        Holder of the Beneficial  Ownership Limitation from such
                        4.99%   limitation   to  such  9.99%   limitation,   the
                        Beneficial  Ownership  Limitation  may not be  waived by
                        such Holder.  The provisions of this paragraph  shall be
                        implemented  in  a  manner   otherwise  than  in  strict
                        conformity  with  the  terms  of  this  Section  4(c) to
                        correct this paragraph (or any portion hereof) which may
                        be   defective   or   inconsistent   with  the  intended
                        Beneficial  Ownership  Limitation herein contained or to
                        make  changes or  supplements  necessary or desirable to
                        properly give effect to such limitation. The limitations
                        contained in this  paragraph  shall apply to a successor
                        holder of this Debenture.

                                    ii.         Until the Company  has  obtained
                        Authorized  Share  Approval,  the  Company may not issue
                        upon  conversion of this Debenture a number of shares of
                        Common Stock which,  when  aggregated with any shares of
                        Common Stock issued  prior to such  Conversion  Date (A)
                        pursuant  to  any  Debentures  issued  pursuant  to  the
                        Purchase  Agreement  and (B)  pursuant  to any  Warrants
                        issued pursuant to the Purchase Agreement,  would exceed
                        1,000,000 shares of Common Stock  ("ISSUABLE  MAXIMUM").
                        Each  Holder  shall  be  entitled  to a  portion  of the
                        Issuable  Maximum  equal  to the  quotient  obtained  by
                        dividing  (x)  the  aggregate  principal  amount  of the
                        Debenture(s)  issued  and  sold  to such  Holder  on the
                        Original  Issue  Date  by (y)  the  aggregate  principal
                        amount of all Debentures  issued and sold by the Company
                        on the  Original  Issue  Date.  If any  Holder  shall no
                        longer  hold  the   Debenture(s),   then  such  Holder's
                        remaining  portion  of the  Issuable  Maximum  shall  be
                        allocated  pro-rata among the remaining  Holders.  If on
                        any Conversion Date: (1) the applicable Conversion Price
                        then in  effect is such that the  shares  issuable  upon
                        conversion  in full of all then  outstanding  Debentures
                        would exceed the Issuable  Maximum,  and (2) the Company
                        has not previously  obtained  Authorized Share Approval,
                        then the Company shall issue to the Holder  requesting a
                        conversion  a number of shares of Common  Stock equal to
                        such   Holder's   pro-rata   portion   (which  shall  be
                        calculated pursuant to the terms hereof) of the Issuable
                        Maximum  and,  with  respect  to  the  remainder  of the
                        aggregate principal amount of the Debentures  (including
                        any  interest)  then  held by such  Holder  for  which a
                        conversion in accordance with the applicable  Conversion
                        Price  would  result in an  issuance of shares of Common
                        Stock in excess of such Holder's pro-rata portion (which
                        shall be calculated pursuant to the terms hereof) of the
                        Issuable Maximum (the "EXCESS  PRINCIPAL"),  the Company
                        shall  be  prohibited   from   converting   such  Excess
                        Principal, and shall notify the Holder of

                                       10
<PAGE>

                        the reason therefore. This Debenture shall thereafter be
                        unconvertible to such extent until and unless Authorized
                        Share  Approval  is  subsequently   obtained,  but  this
                        Debenture  shall  otherwise  remain  in full  force  and
                        effect.





                        d)          MECHANICS OF CONVERSION

                                    i.          CONVERSION  SHARES ISSUABLE UPON
                        CONVERSION OF PRINCIPAL AMOUNT.  The number of shares of
                        Common Stock issuable upon a conversion  hereunder shall
                        be determined  by the quotient  obtained by dividing (x)
                        the outstanding principal amount of this Debenture to be
                        converted by (y) the Conversion Price. i.

                                    ii.         DELIVERY  OF  CERTIFICATE   UPON
                        CONVERSION.  Not later than three Trading Days after any
                        Conversion Date, the Company will deliver or cause to be
                        delivered   to  the   Holder   (A)  a   certificate   or
                        certificates  representing  the Conversion  Shares which
                        shall  be  free  of  restrictive   legends  and  trading
                        restrictions  (other than those required by the Purchase
                        Agreement)  representing  the number of shares of Common
                        Stock being  acquired upon the  conversion of Debentures
                        (including,  if so timely elected by the Company, shares
                        of Common  Stock  representing  the  payment  of accrued
                        interest)  and (B) a bank check in the amount of accrued
                        and unpaid  interest  (if the Company is required to pay
                        accrued   interest  in  cash).  The  Company  shall,  if
                        available  and if allowed  under  applicable  securities
                        laws, use its best efforts to deliver any certificate or
                        certificates  required  to be  delivered  by the Company
                        under this Section electronically through the Depository
                        Trust  Corporation  or  another   established   clearing
                        corporation performing similar functions.

                                    iii.        FAILURE TO DELIVER CERTIFICATES.
                        If  in  the  case  of  any  Notice  of  Conversion  such
                        certificate or  certificates  are not delivered to or as
                        directed by the  applicable  Holder by the fifth Trading
                        Day  after  a  Conversion  Date,  the  Holder  shall  be
                        entitled by written notice to the Company at any time on
                        or  before   its   receipt   of  such   certificate   or
                        certificates thereafter,  to rescind such conversion, in
                        which event the  Company  shall  immediately  return the
                        certificates  representing  the principal amount of this
                        Debenture tendered for conversion.

                                    iv.         OBLIGATION   ABSOLUTE;   PARTIAL
                        LIQUIDATED  DAMAGES. If the Company fails for any reason
                        to   deliver   to  the  Holder   such   certificate   or
                        certificates  pursuant to Section  4(d)(ii) by the third
                        Trading Day after the Conversion Date, the Company shall
                        pay to such Holder,  in cash, as liquidated  damages and
                        not as a penalty,  for each $2,000 of  principal  amount
                        being converted,  $10 per Trading Day (increasing to $20
                        per Trading Day after 5 Trading Days after such damages

                                       11
<PAGE>

                        begin to accrue)  for each  Trading Day after such fifth
                        Trading Day until such  certificates are delivered.  The
                        Company's   obligations   to  issue  and   deliver   the
                        Conversion  Shares upon  conversion of this Debenture in
                        accordance  with  the  terms  hereof  are  absolute  and
                        unconditional, irrespective of any action or inaction by
                        the  Holder to enforce  the same,  any waiver or consent
                        with respect to any  provision  hereof,  the recovery of
                        any judgment against any Person or any action to enforce
                        the  same,  or  any  setoff,  counterclaim,  recoupment,
                        limitation  or  termination,  or any  breach or  alleged
                        breach  by  the  Holder  or  any  other  Person  of  any
                        obligation  to the Company or any  violation  or alleged
                        violation of law by the Holder or any other person,  and
                        irrespective  of  any  other  circumstance  which  might
                        otherwise  limit such  obligation  of the Company to the
                        Holder  in   connection   with  the   issuance  of  such
                        Conversion  Shares;  PROVIDED,  HOWEVER,  such  delivery
                        shall not operate as a waiver by the Company of any such
                        action the Company may have  against the Holder.  In the
                        event  the  Holder  of this  Debenture  shall  elect  to
                        convert any or all of the outstanding  principal  amount
                        hereof,  the Company may not refuse  conversion based on
                        any  claim  that the  Holder  or any one  associated  or
                        affiliated  with  the  Holder  has been  engaged  in any
                        violation  of law,  agreement  or for any other  reason,
                        unless,   an  injunction   from  a  court,   on  notice,
                        restraining  and or enjoining  conversion of all or part
                        of this  Debenture  shall have been sought and  obtained
                        and the  Company  posts a surety bond for the benefit of
                        the Holder in the amount of 150% of the principal amount
                        of this Debenture  outstanding,  which is subject to the
                        injunction,  which bond shall remain in effect until the
                        completion of  arbitration/litigation of the dispute and
                        the proceeds of which shall be payable to such Holder to
                        the extent it  obtains  judgment.  In the  absence of an
                        injunction  precluding the same, the Company shall issue
                        Conversion  Shares  or,  if  applicable,  cash,  upon  a
                        properly noticed conversion.  Nothing herein shall limit
                        a Holder's  right to pursue actual damages or declare an
                        Event of  Default  pursuant  to Section 8 herein for the
                        Company's  failure to deliver  Conversion  Shares within
                        the period  specified  herein and such Holder shall have
                        the right to pursue all remedies  available to it at law
                        or in equity including,  without limitation, a decree of
                        specific   performance  and/or  injunctive  relief.  The
                        exercise  of any such  rights  shall  not  prohibit  the
                        Holder from seeking to enforce  damages  pursuant to any
                        other Section hereof or under applicable law.

                                    v.          COMPENSATION   FOR   BUY-IN   ON
                        FAILURE TO TIMELY DELIVER  CERTIFICATES UPON CONVERSION.
                        In addition to any other rights available to the Holder,
                        if the  Company  fails for any  reason to deliver to the
                        Holder  such  certificate  or  certificates  pursuant to
                        Section  4(d)(ii)  by the  fifth  Trading  Day after the
                        Conversion Date, and if after such fifth Trading Day the
                        Holder is required by its brokerage firm to purchase (in
                        an open market transaction or otherwise) Common Stock to
                        deliver in  satisfaction of a sale by such Holder of the
                        Conversion Shares which the Holder anticipated receiving
                        upon such  conversion  (a  "BUY-IN"),  then the  Company
                        shall (A) pay in cash to the Holder (in  addition to any
                        remedies  available  to or  elected by the  Holder)  the
                        amount by which (x) the Holder's total

                                       12
<PAGE>

                        purchase price (including brokerage commissions, if any)
                        for  the  Common  Stock  so  purchased  exceeds  (y) the
                        product of (1) the aggregate  number of shares of Common
                        Stock that such Holder  anticipated  receiving  from the
                        conversion  at issue  multiplied  by (2) the actual sale
                        price  of the  Common  Stock  at the  time  of the  sale
                        (including brokerage commissions, if any) giving rise to
                        such  purchase  obligation  and (B) at the option of the
                        Holder,  either reissue (if surrendered)  this Debenture
                        in a principal  amount equal to the principal  amount of
                        the  attempted  conversion  or deliver to the Holder the
                        number of shares of Common  Stock  that  would have been
                        issued had the Company timely complied with its delivery
                        requirements under Section 4(d)(ii). For example, if the
                        Holder  purchases  Common Stock having a total  purchase
                        price of  $11,000 to cover a Buy-In  with  respect to an
                        attempted  conversion of this  Debenture with respect to
                        which the actual sale price of the Conversion  Shares at
                        the time of the sale (including  brokerage  commissions,
                        if any) giving rise to such  purchase  obligation  was a
                        total of $10,000  under  clause  (A) of the  immediately
                        preceding sentence, the Company shall be required to pay
                        the Holder $1,000.  The Holder shall provide the Company
                        written  notice  indicating  the amounts  payable to the
                        Holder  in  respect  of  the   Buy-In.   Notwithstanding
                        anything  contained herein to the contrary,  if a Holder
                        requires  the  Company  to make  payment in respect of a
                        Buy-In for the  failure to timely  deliver  certificates
                        hereunder  and the  Company  timely  pays  in full  such
                        payment,  the Company  shall not be required to pay such
                        Holder  liquidated  damages  under  Section  4(d)(iv) in
                        respect of the certificates resulting in such Buy-In.

                                    vi.         RESERVATION  OF SHARES  ISSUABLE
                        UPON CONVERSION.  The Company  covenants that it will at
                        all  times  reserve  and  keep   available  out  of  its
                        authorized  and  unissued  shares of Common Stock solely
                        for the  purpose of  issuance  upon  conversion  of this
                        Debenture  and payment of  interest  on this  Debenture,
                        each as herein provided,  free from preemptive rights or
                        any other actual  contingent  purchase rights of persons
                        other  than the  Holder  (and the other  holders  of the
                        Debentures),  not less than such number of shares of the
                        Common  Stock  as  shall   (subject  to  any  additional
                        requirements  of the Company as to  reservation  of such
                        shares set forth in the Purchase  Agreement) be issuable
                        (taking into account the adjustments and restrictions of
                        Section  5)  upon  the  conversion  of  the  outstanding
                        principal  amount  of  this  Debenture  and  payment  of
                        interest  hereunder.  The  Company  covenants  that  all
                        shares of Common Stock that shall be so issuable  shall,
                        upon issue, be duly and validly  authorized,  issued and
                        fully  paid,  nonassessable  and,  if  the  Registration
                        Statement is then effective  under the  Securities  Act,
                        registered  for  public  sale in  accordance  with  such
                        Registration Statement.

                                    vii.        FRACTIONAL   SHARES.    Upon   a
                        conversion  hereunder  the Company shall not be required
                        to issue stock  certificates  representing  fractions of
                        shares  of  the  Common  Stock,  but  may  if  otherwise
                        permitted, make a cash payment in

                                       13
<PAGE>

                        respect of any final  fraction  of a share  based on the
                        VWAP at such time.  If the  Company  elects  not,  or is
                        unable, to make such a cash payment, the Holder shall be
                        entitled to receive,  in lieu of the final fraction of a
                        share, one whole share of Common Stock.

                                    viii.       TRANSFER TAXES.  The issuance of
                        certificates   for  shares  of  the   Common   Stock  on
                        conversion  of this  Debenture  shall  be  made  without
                        charge to the Holder hereof for any documentary stamp or
                        similar  taxes  that may be  payable  in  respect of the
                        issue or delivery of such certificate, provided that the
                        Company shall not be required to pay any tax that may be
                        payable  in  respect  of any  transfer  involved  in the
                        issuance  and  delivery  of any  such  certificate  upon
                        conversion  in a name  other  than that of the Holder of
                        this Debenture so converted and the Company shall not be
                        required to issue or deliver such certificates unless or
                        until the  person or  persons  requesting  the  issuance
                        thereof  shall  have paid to the  Company  the amount of
                        such tax or shall have  established to the  satisfaction
                        of the Company that such tax has been paid.

            SECTION 5. CERTAIN ADJUSTMENTS.

                        a)          STOCK  DIVIDENDS  AND STOCK  SPLITS.  If the
            Company, at any time while this Debenture is outstanding: (A) pays a
            stock dividend or otherwise makes a distribution or distributions on
            shares of its Common Stock or any other equity or equity  equivalent
            securities  payable in shares of Common Stock (which,  for avoidance
            of doubt, shall not include any shares of Common Stock issued by the
            Company pursuant to this Debenture,  including as interest thereon),
            (B)  subdivides  outstanding  shares of Common  Stock  into a larger
            number of shares,  (C) combines  (including  by way of reverse stock
            split)  outstanding  shares of Common Stock into a smaller number of
            shares,  or (D) issues by  reclassification  of shares of the Common
            Stock  any  shares  of  capital  stock  of  the  Company,  then  the
            Conversion  Price  shall be  multiplied  by a fraction  of which the
            numerator  shall be the number of shares of Common Stock  (excluding
            treasury shares, if any) outstanding  immediately  before such event
            and of which the denominator shall be the number of shares of Common
            Stock outstanding  immediately after such event. Any adjustment made
            pursuant to this Section shall become  effective  immediately  after
            the record date for the  determination  of stockholders  entitled to
            receive such  dividend or  distribution  and shall become  effective
            immediately  after the effective  date in the case of a subdivision,
            combination or re-classification.

                        b)          SUBSEQUENT  EQUITY SALES.  If the Company or
            any  Subsidiary  thereof,  as  applicable,  at any time  while  this
            Debenture is  outstanding,  shall offer,  sell,  grant any option to
            purchase  or  offer,   sell  or  grant  any  right  to  reprice  its
            securities, or otherwise dispose of or issue (or announce any offer,
            sale,  grant or any option to  purchase  or other  disposition)  any
            Common Stock or Common  Stock  Equivalents  entitling  any Person to
            acquire shares of Common Stock, at an effective price per share less
            than  the  then  Conversion  Price  (such  lower  price,  the  "BASE
            CONVERSION PRICE" and such issuances

                                       14
<PAGE>

            collectively,  a "DILUTIVE ISSUANCE"), as adjusted hereunder (if the
            holder of the Common  Stock or Common  Stock  Equivalents  so issued
            shall  at  any  time,   whether  by  operation  of  purchase   price
            adjustments,  reset  provisions,  floating  conversion,  exercise or
            exchange prices or otherwise, or due to warrants,  options or rights
            per share  which is  issued in  connection  with such  issuance,  be
            entitled to receive shares of Common Stock at an effective price per
            share which is less than the Conversion  Price,  such issuance shall
            be deemed to have  occurred  for less than the  Conversion  Price on
            such date of the Dilutive Issuance), then the Conversion Price shall
            be reduced to equal the Base Conversion Price. Such adjustment shall
            be made whenever such Common Stock or Common Stock  Equivalents  are
            issued.  Notwithstanding  the foregoing,  no adjustment will be made
            under  this  Section  5(b) in  respect  of an Exempt  Issuance.  The
            Company  shall  notify  the  Holder in  writing,  no later  than the
            Business  Day  following  the issuance of any Common Stock or Common
            Stock Equivalents  subject to this section,  indicating  therein the
            applicable  issuance price, or of applicable  reset price,  exchange
            price,  conversion  price and other  pricing  terms (such notice the
            "DILUTIVE ISSUANCE NOTICE"). For purposes of clarification,  whether
            or not the Company  provides a Dilutive  Issuance Notice pursuant to
            this Section 5(b),  upon the  occurrence  of any Dilutive  Issuance,
            after the date of such  Dilutive  Issuance the Holder is entitled to
            receive a number of Conversion Shares based upon the Base Conversion
            Price regardless of whether the Holder accurately refers to the Base
            Conversion Price in the Notice of Conversion.

                        c)          PRO RATA  DISTRIBUTIONS.  If the Company, at
            any time while this Debenture is  outstanding,  shall  distribute to
            all  holders  of  Common  Stock  (and  not  to  the  holders  of the
            Debenture)  evidences of its indebtedness or assets  (including cash
            and cash  dividends)  or  rights or  warrants  to  subscribe  for or
            purchase any security,  then in each such case the Conversion  Price
            shall be adjusted by  multiplying  such  Conversion  Price in effect
            immediately  prior to the  record  date fixed for  determination  of
            stockholders  entitled to receive such distribution by a fraction of
            which the denominator  shall be the VWAP determined as of the record
            date mentioned  above, and of which the numerator shall be such VWAP
            on such record  date less the then fair market  value at such record
            date of the portion of such assets or  evidence of  indebtedness  so
            distributed  applicable to one outstanding share of the Common Stock
            as  determined  by the Board of Directors  in good faith.  In either
            case the adjustments  shall be described in a statement  provided to
            the Holder of the portion of assets or evidences of  indebtedness so
            distributed or such  subscription  rights applicable to one share of
            Common  Stock.  Such  adjustment  shall  be made  whenever  any such
            distribution is made and shall become  effective  immediately  after
            the record date mentioned above.

                        d)          SUBSEQUENT RIGHTS OFFERINGS. If the Company,
            at any time while the Debenture is outstanding,  shall issue rights,
            options  or  warrants  to all  holders  of Common  Stock (and not to
            Holders)  entitling  them to  subscribe  for or  purchase  shares of
            Common Stock at a price per share that is lower than the VWAP on the
            record date  referenced  below,  then the Conversion  Price shall be
            multiplied  by a  fraction  of which  the  denominator  shall be the
            number of shares of the Common Stock outstanding on the date

                                       15
<PAGE>

            of issuance of such rights or warrants plus the number of additional
            shares of Common Stock offered for subscription or purchase,  and of
            which the  numerator  shall be the  number  of shares of the  Common
            Stock outstanding on the date of issuance of such rights or warrants
            plus the number of shares which the aggregate  offering price of the
            total number of shares so offered (assuming  delivery to the Company
            in full of all  consideration  payable upon exercise of such rights,
            options or warrants)  would purchase at such VWAP.  Such  adjustment
            shall be made whenever such rights or warrants are issued, and shall
            become  effective   immediately   after  the  record  date  for  the
            determination  of  stockholders  entitled  to receive  such  rights,
            options or warrants.

                        e)          FUNDAMENTAL  TRANSACTION.  If,  at any  time
            while this  Debenture is  outstanding,  (A) the Company  effects any
            merger or  consolidation of the Company with or into another Person,
            (B) the Company effects any sale of all or substantially  all of its
            assets in one or a series of  related  transactions,  (C) any tender
            offer or exchange offer  (whether by the Company or another  Person)
            is completed pursuant to which holders of Common Stock are permitted
            to tender or exchange  their  shares for other  securities,  cash or
            property,  or (D) the Company  effects any  reclassification  of the
            Common Stock or any compulsory share exchange  pursuant to which the
            Common Stock is  effectively  converted  into or exchanged for other
            securities,  cash or  property  (in any such  case,  a  "FUNDAMENTAL
            TRANSACTION"),   then  upon  any   subsequent   conversion  of  this
            Debenture,  the  Holder  shall have the right to  receive,  for each
            Conversion  Share that would have been issuable upon such conversion
            immediately prior to the occurrence of such Fundamental Transaction,
            the same kind and amount of securities, cash or property as it would
            have  been   entitled  to  receive  upon  the   occurrence  of  such
            Fundamental  Transaction if it had been,  immediately  prior to such
            Fundamental  Transaction,  the  holder of one share of Common  Stock
            (the   "ALTERNATE   CONSIDERATION").   For   purposes  of  any  such
            conversion,  the  determination  of the  Conversion  Price  shall be
            appropriately  adjusted  to  apply to such  Alternate  Consideration
            based on the amount of Alternate  Consideration  issuable in respect
            of one share of Common Stock in such  Fundamental  Transaction,  and
            the Company shall apportion the Conversion Price among the Alternate
            Consideration in a reasonable  manner  reflecting the relative value
            of any  different  components  of the  Alternate  Consideration.  If
            holders of Common  Stock are given any choice as to the  securities,
            cash or property to be received in a Fundamental  Transaction,  then
            the  Holder  shall be  given  the same  choice  as to the  Alternate
            Consideration  it receives  upon any  conversion  of this  Debenture
            following such Fundamental  Transaction.  To the extent necessary to
            effectuate the foregoing provisions, any successor to the Company or
            surviving entity in such Fundamental  Transaction shall issue to the
            Holder a new debenture  consistent with the foregoing provisions and
            evidencing  the  Holder's  right  to  convert  such  debenture  into
            Alternate  Consideration.  The terms of any  agreement  pursuant  to
            which a  Fundamental  Transaction  is effected  shall  include terms
            requiring any such successor or surviving  entity to comply with the
            provisions of this  paragraph  (d) and insuring that this  Debenture
            (or any such replacement  security) will be similarly  adjusted upon
            any subsequent transaction analogous to a Fundamental Transaction.

                                       16
<PAGE>

                        f)          CALCULATIONS.  All  calculations  under this
            Section 5 shall be made to the nearest  cent or the nearest  1/100th
            of a share,  as the case may be. For purposes of this Section 5, the
            number of shares of Common Stock deemed to be issued and outstanding
            as of a given  date  shall be the sum of the  number  of  shares  of
            Common  Stock  (excluding   treasury  shares,  if  any)  issued  and
            outstanding.

                        g)          NOTICE TO THE HOLDER.

                                    i.          ADJUSTMENT TO CONVERSION  PRICE.
                        Whenever the  Conversion  Price is adjusted  pursuant to
                        any of this Section 5, the Company  shall  promptly mail
                        to each  Holder a notice  setting  forth the  Conversion
                        Price after such  adjustment  and setting  forth a brief
                        statement of the facts requiring such adjustment. If the
                        Company  issues a variable  rate  security,  despite the
                        prohibition  thereon  in  the  Purchase  Agreement,  the
                        Company  shall be deemed to have issued  Common Stock or
                        Common  Stock   Equivalents   at  the  lowest   possible
                        conversion  or exercise  price at which such  securities
                        may be  converted or exercised in the case of a Variable
                        Rate Transaction (as defined in the Purchase Agreement).

                                    ii.         NOTICE  TO ALLOW  CONVERSION  BY
                        HOLDER.  If (A) the Company shall declare a dividend (or
                        any other  distribution)  on the Common  Stock;  (B) the
                        Company  shall  declare  a  special   nonrecurring  cash
                        dividend on or a redemption of the Common Stock; (C) the
                        Company  shall  authorize the granting to all holders of
                        the Common Stock rights or warrants to subscribe  for or
                        purchase any shares of capital  stock of any class or of
                        any rights;  (D) the approval of any stockholders of the
                        Company  shall  be  required  in  connection   with  any
                        reclassification  of the Common Stock, any consolidation
                        or merger to which the  Company is a party,  any sale or
                        transfer  of all or  substantially  all of the assets of
                        the Company,  of any compulsory  share exchange  whereby
                        the Common  Stock is  converted  into other  securities,
                        cash or property;  (E) the Company  shall  authorize the
                        voluntary or  involuntary  dissolution,  liquidation  or
                        winding up of the affairs of the Company;  then, in each
                        case, the Company shall cause to be filed at each office
                        or agency  maintained  for the purpose of  conversion of
                        this  Debenture,  and  shall  cause to be  mailed to the
                        Holder at its last addresses as it shall appear upon the
                        stock books of the  Company,  at least 20 calendar  days
                        prior  to  the  applicable   record  or  effective  date
                        hereinafter  specified, a notice stating (x) the date on
                        which a record  is to be taken for the  purpose  of such
                        dividend, distribution,  redemption, rights or warrants,
                        or if a record is not to be taken,  the date as of which
                        the holders of the Common Stock of record to be entitled
                        to such dividend,  distributions,  redemption, rights or
                        warrants are to be  determined  or (y) the date on which
                        such  reclassification,   consolidation,  merger,  sale,
                        transfer  or  share   exchange  is  expected  to  become
                        effective  or  close,  and the  date as of  which  it is
                        expected  that  holders  of the  Common  Stock of record
                        shall be entitled to exchange their shares of the Common
                        Stock for securities, cash or other property deliverable
                        upon such reclassification, consolidation, merger, sale,
                        transfer or share exchange; PROVIDED,

                                       17
<PAGE>

                        that the  failure  to mail  such  notice  or any  defect
                        therein or in the mailing  thereof  shall not affect the
                        validity  of  the  corporate   action   required  to  be
                        specified  in such  notice.  The Holder is  entitled  to
                        convert  this   Debenture   during  the  20-day   period
                        commencing the date of such notice to the effective date
                        of the event triggering such notice.

            SECTION 6.  [RESERVED].

            SECTION 7.  NEGATIVE  COVENANTS.  So  long  as any  portion  of this
Debenture  is  outstanding,  the Company will not and will not permit any of its
Subsidiaries to directly or indirectly:

                        a)          other  than  Permitted  Indebtedness,  enter
            into,  create,  incur,  assume,  guarantee  or  suffer  to exist any
            indebtedness  for  borrowed  money of any  kind,  including  but not
            limited to, a  guarantee,  on or with respect to any of its property
            or assets now owned or hereafter acquired or any interest therein or
            any income or profits therefrom;

                        b)          other  than  Permitted  Liens,  enter  into,
            create,  incur,  assume or suffer to exist any liens of any kind, on
            or with  respect  to any of its  property  or  assets  now  owned or
            hereafter  acquired or any interest therein or any income or profits
            therefrom;

                        c)          amend  its  certificate  of   incorporation,
            bylaws or other  charter  documents  so as to  adversely  affect any
            rights of the Holder;

                        d)          repay,   repurchase   or  offer  to   repay,
            repurchase  or otherwise  acquire  more than a DE MINIMIS  number of
            shares of its Common Stock or Common Stock Equivalents other than as
            to the Conversion  Shares to the extent  permitted or required under
            the  Transaction   Documents  or  as  otherwise   permitted  by  the
            Transaction Documents;

                        e)          enter into any agreement with respect to any
            of the foregoing; or

                        f)          pay cash dividends or  distributions  on any
            equity securities of the Company.

            SECTION 8.  EVENTS OF DEFAULT.

                        a)          "EVENT OF  DEFAULT",  wherever  used herein,
            means any one of the  following  events  (whatever  the  reason  and
            whether  it  shall  be  voluntary  or  involuntary  or  effected  by
            operation of law or pursuant to any judgment, decree or order of any
            court,  or any order,  rule or regulation of any  administrative  or
            governmental body):

                                    i.          any  default  in the  payment of
                        (A)  the  principal  amount  of  any  Debenture,  or (B)
                        interest (including Late Fees) on, or liquidated damages
                        in respect of, any Debenture, as and when the same shall
                        become due and payable  (whether on a Conversion Date or
                        the Maturity Date or by acceleration or

                                       18
<PAGE>
                        otherwise)  which  default,  solely  in the  case  of an
                        interest  payment  or other  default  under  clause  (B)
                        above, is not cured, within 3 Trading Days;

                                    ii.         the   Company   shall   fail  to
                        observe  or  perform  any other  covenant  or  agreement
                        contained  in  this  Debenture  or any  other  Debenture
                        (other than a breach by the  Company of its  obligations
                        to deliver  shares of Common  Stock to the  Holder  upon
                        conversion  which  breach is  addressed  in clause  (xi)
                        below) which failure is not cured,  if possible to cure,
                        within the earlier to occur of (A) 5 Trading  Days after
                        notice  of such  default  sent by the  Holder  or by any
                        other  Holder and (B)10  Trading  Days after the Company
                        shall  become  or  should  have  become  aware  of  such
                        failure;

                                    iii.        a  default  or event of  default
                        (subject to any grace or cure period provided for in the
                        applicable  agreement,  document  or  instrument)  shall
                        occur under (A) any of the  Transaction  Documents other
                        than  the   Debentures,   or  (B)  any  other   material
                        agreement,  lease,  document or  instrument to which the
                        Company or any Subsidiary is bound;

                                    iv.         any  representation  or warranty
                        made herein, in any other Transaction Documents,  in any
                        written statement pursuant hereto or thereto,  or in any
                        other report, financial statement or certificate made or
                        delivered   to  the  Holder  or  any  other   holder  of
                        Debentures  shall be untrue or incorrect in any material
                        respect as of the date when made or deemed made;

                                    v.          (i)  the  Company  or any of its
                        Subsidiaries shall commence, or there shall be commenced
                        against the Company or any such Subsidiary, a case under
                        any applicable  bankruptcy or insolvency  laws as now or
                        hereafter  in effect or any  successor  thereto,  or the
                        Company or any Subsidiary commences any other proceeding
                        under any  reorganization,  arrangement,  adjustment  of
                        debt,  relief of  debtors,  dissolution,  insolvency  or
                        liquidation or similar law of any  jurisdiction  whether
                        now or  hereafter  in effect  relating to the Company or
                        any  Subsidiary  thereof  or  (ii)  there  is  commenced
                        against the Company or any  Subsidiary  thereof any such
                        bankruptcy, insolvency or other proceeding which remains
                        undismissed  for a  period  of 60  days;  or  (iii)  the
                        Company or any  Subsidiary  thereof is  adjudicated by a
                        court of competent  jurisdiction  insolvent or bankrupt;
                        or any order of relief or other order approving any such
                        case or  proceeding  is entered;  or (iv) the Company or
                        any Subsidiary  thereof  suffers any  appointment of any
                        custodian or the like for it or any substantial  part of
                        its property which  continues  undischarged  or unstayed
                        for a  period  of 60  days;  or (v) the  Company  or any
                        Subsidiary  thereof makes a general  assignment  for the
                        benefit of creditors;  or (vi) the Company shall fail to
                        pay,  or shall  state that it is unable to pay, or shall
                        be unable to pay,  its debts  generally  as they  become
                        due;  or (vii) the  Company  or any  Subsidiary  thereof
                        shall  call a meeting  of its  creditors  with a view to
                        arranging a composition,  adjustment or restructuring of
                        its debts; or (viii) the Company or any

                                       19
<PAGE>

                        Subsidiary  thereof  shall by any act or  failure to act
                        expressly  indicate  its  consent  to,  approval  of  or
                        acquiescence  in any  of  the  foregoing;  or  (ix)  any
                        corporate or other action is taken by the Company or any
                        Subsidiary  thereof for the purpose of effecting  any of
                        the foregoing;

                                    vi.         the  Company  or any  Subsidiary
                        shall  default  in  any  of its  obligations  under  any
                        mortgage, credit agreement or other facility,  indenture
                        agreement, factoring agreement or other instrument under
                        which  there  may be  issued,  or by which  there may be
                        secured or evidenced any indebtedness for borrowed money
                        or money due under any long term  leasing  or  factoring
                        arrangement  of  the  Company  in  an  amount  exceeding
                        $150,000,  whether such indebtedness now exists or shall
                        hereafter  be created and such  default  shall result in
                        such  indebtedness  becoming or being  declared  due and
                        payable  prior to the  date on which it would  otherwise
                        become due and payable;

                                    vii.        the  Common  Stock  shall not be
                        eligible  for  quotation  on or quoted for  trading on a
                        Trading  Market and shall not again be eligible  for and
                        quoted or listed for trading thereon within five Trading
                        Days;

                                    viii.       the Company  shall be a party to
                        any  Change  of  Control   Transaction   or  Fundamental
                        Transaction, shall agree to sell or dispose of all or in
                        excess of 40% of its assets in one or more  transactions
                        (whether or not such sale would  constitute  a Change of
                        Control  Transaction) or shall redeem or repurchase more
                        than a de minimis  number of its  outstanding  shares of
                        Common Stock or other equity  securities  of the Company
                        (other  than   redemptions  of  Conversion   Shares  and
                        repurchases  of shares of Common  Stock or other  equity
                        securities  of departing  officers and  directors of the
                        Company;  provided  such  repurchases  shall not  exceed
                        $100,000,  in  the  aggregate,   for  all  officers  and
                        directors during the term of this Debenture);

                                    ix.         a Registration  Statement  shall
                        not have been declared effective by the Commission on or
                        prior to the 180th calendar day after the Closing Date;

                                    x.          if,  during  the   Effectiveness
                        Period   (as   defined   in  the   Registration   Rights
                        Agreement),   the   effectiveness  of  the  Registration
                        Statement  lapses for any reason or the Holder shall not
                        be  permitted  to  resell  Registrable   Securities  (as
                        defined in the Registration  Rights Agreement) under the
                        Registration Statement, in either case, for more than 10
                        consecutive  Trading Days or 15 non-consecutive  Trading
                        Days during any 12 month period; PROVIDED, HOWEVER, that
                        in the event that the Company is  negotiating  a merger,
                        consolidation,   acquisition   or   sale   of   all   or
                        substantially all of its assets or a similar transaction
                        and in the  written  opinion of counsel to the  Company,
                        the  Registration  Statement,  would be  required  to be
                        amended   to   include   information   concerning   such
                        transactions   or  the  parties   thereto  that  is  not
                        available or may not be publicly  disclosed at the time,
                        the

                                       20
<PAGE>

                        Company shall be permitted an additional 10  consecutive
                        Trading Days during any 12 month period relating to such
                        an event;

                                    xi.         the  Company  shall fail for any
                        reason to deliver  certificates to a Holder prior to the
                        tenth  Trading Day after a Conversion  Date  pursuant to
                        and in accordance with Section 4(d) or the Company shall
                        provide notice to the Holder, including by way of public
                        announcement,  at  any  time,  of its  intention  not to
                        comply with requests for  conversions  of any Debentures
                        in accordance with the terms hereof; or

                                    xii.        The Company shall fail to obtain
                        Authorized  Share  Approval  within 150 calendar days of
                        the Closing Date.

                        b)          REMEDIES UPON EVENT OF DEFAULT. If any Event
            of Default  occurs,  the full  principal  amount of this  Debenture,
            together with  interest and other amounts owing in respect  thereof,
            to the date of acceleration  shall become, at the Holder's election,
            immediately  due and payable in cash.  The aggregate  amount payable
            upon an Event of Default shall be equal to the Mandatory  Prepayment
            Amount.  Commencing  5 days  after  the  occurrence  of any Event of
            Default that results in the eventual acceleration of this Debenture,
            the interest rate on this Debenture  shall accrue at the rate of 18%
            per annum, or such lower maximum amount of interest  permitted to be
            charged  under  applicable  law. All  Debentures  for which the full
            Mandatory  Prepayment  Amount  hereunder  shall  have  been  paid in
            accordance  herewith shall promptly be surrendered to or as directed
            by the Company.  The Holder need not provide and the Company  hereby
            waives any presentment, demand, protest or other notice of any kind,
            and the Holder may immediately  and without  expiration of any grace
            period enforce any and all of its rights and remedies  hereunder and
            all  other  remedies  available  to it under  applicable  law.  Such
            declaration  may be  rescinded  and  annulled  by Holder at any time
            prior to payment hereunder and the Holder shall have all rights as a
            Debenture  holder until such time, if any, as the full payment under
            this Section shall have been  received by it. No such  rescission or
            annulment shall affect any subsequent Event of Default or impair any
            right consequent thereon.

            SECTION 9.  MISCELLANEOUS.


                        a)          NOTICES.   Any  and  all  notices  or  other
            communications or deliveries to be provided by the Holder hereunder,
            including, without limitation, any Notice of Conversion, shall be in
            writing and delivered personally, by facsimile, sent by a nationally
            recognized  overnight courier service,  addressed to the Company, at
            the address set forth above, facsimile number (888) 445-4467,  ATTN:
            DALE  QUICK,  PRESIDENT  AND CHIEF  EXECUTIVE  OFFICER or such other
            address or  facsimile  number as the  Company  may  specify for such
            purposes by notice to the Holders  delivered in accordance with this
            Section.  Any and all notices or other  communications or deliveries
            to be  provided  by the  Company  hereunder  shall be in writing and
            delivered personally, by facsimile, sent by a

                                       21
<PAGE>

            nationally  recognized  overnight  courier service addressed to each
            Holder at the facsimile  telephone  number or address of such Holder
            appearing  on the  books  of the  Company,  or if no such  facsimile
            telephone  number or  address  appears,  at the  principal  place of
            business  of the  Holder.  Any  notice  or  other  communication  or
            deliveries  hereunder  shall be deemed  given and  effective  on the
            earliest  of (i)  the  date  of  transmission,  if  such  notice  or
            communication is delivered via facsimile at the facsimile  telephone
            number  specified in this Section  prior to 5:30 p.m. (New York City
            time), (ii) the date after the date of transmission,  if such notice
            or  communication  is  delivered  via  facsimile  at  the  facsimile
            telephone number specified in this Section later than 5:30 p.m. (New
            York City time) on any date and  earlier  than 11:59 p.m.  (New York
            City time) on such date, (iii) the second Business Day following the
            date of mailing, if sent by nationally  recognized overnight courier
            service,  or (iv)  upon  actual  receipt  by the  party to whom such
            notice is required to be given.

                        b)          ABSOLUTE  OBLIGATION.  Except  as  expressly
            provided  herein,  no  provision  of this  Debenture  shall alter or
            impair  the  obligation  of  the  Company,  which  is  absolute  and
            unconditional,  to pay the  principal  of,  interest and  liquidated
            damages (if any) on, this  Debenture at the time,  place,  and rate,
            and in the coin or currency, herein prescribed.  This Debenture is a
            direct debt  obligation of the Company.  This  Debenture  ranks PARI
            PASSU with all other  Debentures  now or hereafter  issued under the
            terms set forth herein.

                        c)          LOST  OR   MUTILATED   DEBENTURE.   If  this
            Debenture shall be mutilated, lost, stolen or destroyed, the Company
            shall execute and deliver, in exchange and substitution for and upon
            cancellation  of  a  mutilated  Debenture,  or  in  lieu  of  or  in
            substitution  for a  lost,  stolen  or  destroyed  Debenture,  a new
            Debenture for the principal  amount of this  Debenture so mutilated,
            lost,  stolen or destroyed but only upon receipt of evidence of such
            loss,  theft or destruction of such Debenture,  and of the ownership
            hereof, and indemnity, if requested,  all reasonably satisfactory to
            the Company.

                        d)          GOVERNING LAW. All questions  concerning the
            construction,  validity,  enforcement  and  interpretation  of  this
            Debenture  shall  be  governed  by and  construed  and  enforced  in
            accordance with the internal laws of the State of New York,  without
            regard to the  principles  of conflicts  of law thereof.  Each party
            agrees that all legal  proceedings  concerning the  interpretations,
            enforcement and defense of the  transactions  contemplated by any of
            the Transaction Documents (whether brought against a party hereto or
            its  respective  affiliates,   directors,  officers,   shareholders,
            employees  or agents)  shall be  commenced  in the state and federal
            courts  sitting in the City of New York,  Borough of Manhattan  (the
            "NEW YORK COURTS").  Each party hereto hereby irrevocably submits to
            the  exclusive   jurisdiction   of  the  New  York  Courts  for  the
            adjudication of any dispute  hereunder or in connection  herewith or
            with  any  transaction   contemplated  hereby  or  discussed  herein
            (including with respect to the enforcement of any of the Transaction
            Documents),  and hereby irrevocably waives, and agrees not to assert
            in  any  suit,  action  or  proceeding,  any  claim  that  it is not
            personally  subject to the  jurisdiction  of any such court, or such
            New  York  Courts  are  improper  or  inconvenient  venue  for  such
            proceeding.

                                       22
<PAGE>

            Each party hereby irrevocably waives personal service of process and
            consents  to  process  being  served  in any such  suit,  action  or
            proceeding  by mailing a copy  thereof via  registered  or certified
            mail or overnight delivery (with evidence of delivery) to such party
            at the address in effect for notices to it under this  Debenture and
            agrees  that  such  service  shall  constitute  good and  sufficient
            service of process  and notice  thereof.  Nothing  contained  herein
            shall be deemed to limit in any way any  right to serve  process  in
            any manner  permitted by law. Each party hereto  hereby  irrevocably
            waives,  to the fullest extent  permitted by applicable law, any and
            all right to trial by jury in any legal proceeding arising out of or
            relating to this Debenture or the transactions  contemplated hereby.
            If either party shall  commence an action or  proceeding  to enforce
            any provisions of this Debenture,  then the prevailing party in such
            action or proceeding  shall be reimbursed by the other party for its
            attorneys  fees and  other  costs  and  expenses  incurred  with the
            investigation,   preparation  and  prosecution  of  such  action  or
            proceeding.

                        e)          WAIVER.  Any  waiver by the  Company  or the
            Holder  of a breach of any  provision  of this  Debenture  shall not
            operate  as or be  construed  to be a waiver of any other  breach of
            such  provision  or of any  breach  of any other  provision  of this
            Debenture.  The  failure of the Company or the Holder to insist upon
            strict  adherence  to any  term  of  this  Debenture  on one or more
            occasions  shall not be considered a waiver or deprive that party of
            the right thereafter to insist upon strict adherence to that term or
            any other term of this Debenture. Any waiver must be in writing.

                        f)          SEVERABILITY.   If  any  provision  of  this
            Debenture is invalid, illegal or unenforceable,  the balance of this
            Debenture   shall  remain  in  effect,   and  if  any  provision  is
            inapplicable to any person or  circumstance,  it shall  nevertheless
            remain  applicable  to all other  persons and  circumstances.  If it
            shall be found that any interest or other amount deemed interest due
            hereunder  violates  applicable laws governing usury, the applicable
            rate of interest due  hereunder  shall  automatically  be lowered to
            equal the maximum permitted rate of interest.  The Company covenants
            (to the extent that it may  lawfully do so) that it shall not at any
            time insist upon,  plead, or in any manner  whatsoever claim or take
            the benefit or  advantage  of, any stay,  extension  or usury law or
            other law which would  prohibit  or forgive the Company  from paying
            all or any portion of the principal of or interest on this Debenture
            as  contemplated  herein,  wherever  enacted,  now  or at  any  time
            hereafter  in  force,  or which  may  affect  the  covenants  or the
            performance of this indenture, and the Company (to the extent it may
            lawfully do so) hereby expressly waives all benefits or advantage of
            any such law, and covenants  that it will not, by resort to any such
            law,  hinder,  delay or impeded the  execution  of any power  herein
            granted to the Holder,  but will suffer and permit the  execution of
            every such as though no such law has been enacted.

                        g)          NEXT BUSINESS  DAY.  Whenever any payment or
            other  obligation  hereunder  shall  be  due on a day  other  than a
            Business  Day,  such  payment  shall be made on the next  succeeding
            Business Day.

                                       23
<PAGE>

                        h)          HEADINGS.  The headings contained herein are
            for convenience only, do not constitute a part of this Debenture and
            shall not be deemed to limit or affect any of the provisions hereof.

                        i)          ASSUMPTION.  Any successor to the Company or
            surviving  entity in a Fundamental  Transaction  shall (i) assume in
            writing all of the  obligations  of the Company under this Debenture
            and the other Transaction  Documents  pursuant to written agreements
            in form and substance  satisfactory to the Holder (such approval not
            to be  unreasonably  withheld or delayed) prior to such  Fundamental
            Transaction  and (ii) to issue to the Holder a new debenture of such
            successor  entity  evidenced by a written  instrument  substantially
            similar in form and substance to this Debenture,  including, without
            limitation, having a principal amount and interest rate equal to the
            principal  amounts and the interest rates of the Debentures  held by
            the  Holder  and  having  similar  ranking  to this  Debenture,  and
            satisfactory to the Holder (any such approval not to be unreasonably
            withheld or  delayed).  The  provisions  of this  Section 9(i) shall
            apply similarly and equally to successive  Fundamental  Transactions
            and  shall be  applied  without  regard to any  limitations  of this
            Debenture.


                                   *********************


                                       24
<PAGE>

         IN WITNESS  WHEREOF,  the Company has caused this  Debenture to be duly
executed by a duly authorized officer as of the date first above indicated.


                                          SECURED SERVICES, INC.



                                          By:___________________________________
                                             Name:
                                             Title:



                                       25
<PAGE>

                                     ANNEX A

                              NOTICE OF CONVERSION



         The  undersigned  hereby  elects  to  convert  principal  under  the 7%
Convertible  Debenture of Secured  Services,  Inc., a Delaware  corporation (the
"COMPANY"),  due on February __, 2009,  into shares of common  stock,  par value
$0.0001  per  share  (the  "COMMON  STOCK"),  of the  Company  according  to the
conditions  hereof,  as of the date written below. If shares 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  and opinions as reasonably  requested by the Company in accordance
therewith.  No fee will be charged to the holder for any conversion,  except for
such transfer taxes, if any.

         By the delivery of this Notice of Conversion the undersigned represents
and  warrants to the Company  that its  ownership  of the Common  Stock does not
exceed the amounts  determined in accordance  with Section 13(d) of the Exchange
Act, specified under Section 4 of this Debenture.

         The  undersigned   agrees  to  comply  with  the  prospectus   delivery
requirements  under  the  applicable  securities  laws in  connection  with  any
transfer of the aforesaid shares of Common Stock.

Conversion calculations:

                     Date to Effect Conversion:

                     Principal Amount of Debenture to be Converted:

                     Payment of Interest in Common Stock __ yes  __ no
                              If yes,  $_____ of Interest Accrued on Account of
                              Conversion at Issue.

                     Number of shares of Common Stock to be issued:


                     Signature:

                     Name:

                     Address:



                                       26
<PAGE>

                                   SCHEDULE 1

                               CONVERSION SCHEDULE

The 7%  Convertible  Debentures  due on  February  __,  2009,  in the  aggregate
principal amount of $____________  issued by Secured Services,  Inc., a Delaware
corporation.  This Conversion Schedule reflects conversions made under Section 4
of the above referenced Debenture.

                                     Dated:


--------------------------------------------------------------------------------

                                          Aggregate
                                          Principal
                                           Amount
                                          Remaining
    Date of Conversion                   Subsequent to      Company Attest
   (or for first entry,     Amount of     Conversion
    Original Issue Date)   Conversion    (or original
                                          Principal
                                            Amount)
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