Exhibit 10.23

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



                          SECURED CONVERTIBLE DEBENTURE

Hempstead, New York
April 16, 2003                                                      $16,668

                  FOR  VALUE  RECEIVED,   TORBAY  HOLDINGS,   INC.,  a  Delaware
corporation  (hereinafter called the "Borrower"),  hereby promises to pay to the
order of AJW  Partners,  LLC or  registered  assigns (the  "Holder")  the sum of
Sixteen Thousand Six Hundred  Sixty-Eight  Dollars ($16,668),  on April 16, 2004
(the  "Maturity  Date"),  and to pay  interest on the unpaid  principal  balance
hereof at the rate of twelve  percent  (12%) per annum from April 16,  2003 (the
"Issue  Date") until the same  becomes due and  payable,  whether at maturity or
upon  acceleration  or by prepayment  or  otherwise.  Any amount of principal or
interest on this Debenture which is not paid when due shall bear interest at the
rate of fifteen percent (15%) per annum from the due date thereof until the same
is paid ("Default  Interest").  Interest  shall  commence  accruing on the issue
date,  shall be computed on the basis of a 365-day year and the actual number of
days elapsed and shall be payable, at the option of the Holder, either quarterly
on March 31, June 30,  September  30 and  December 31 of each year  beginning on
June 30,  2003,  or at the time of  conversion  of the  principal  to which such
interest  relates in accordance with Article I below. All payments due hereunder
(to the extent not converted into common stock,  $.0001 par value per share,  of
the Borrower (the "Common  Stock") in accordance with the terms hereof) shall be
made in lawful  money of the United  States of America  or, at the option of the
Holder, in whole or in part, in shares of Common Stock of the Borrower valued at
the then applicable  Conversion Price (as defined herein). All payments shall be
made at such  address as the Holder  shall  hereafter  give to the  Borrower  by
written  notice  made in  accordance  with  the  provisions  of this  Debenture.
Whenever any amount expressed to be due by the terms of this Debenture is due on
any day which is not a business  day, the same shall  instead be due on the next
succeeding day which is a business day and, in the case of any interest  payment
date  which  is not the  date on  which  this  Debenture  is paid in  full,  the
extension of the due date  thereof  shall not be taken into account for purposes
of  determining  the  amount  of  interest  due on  such  date.  As used in this
Debenture, the term "business day" shall mean any day other than a Saturday,


<PAGE>


Sunday or a day on which  commercial banks in the city of New York, New York are
authorized  or  required  by law or  executive  order  to  remain  closed.  Each
capitalized term used herein, and not otherwise defined,  shall have the meaning
ascribed thereto in that certain Securities Purchase Agreement,  dated April 16,
2003,  pursuant to which this  Debenture was  originally  issued (the  "Purchase
Agreement").

                  This  Debenture  is free from all  taxes,  liens,  claims  and
encumbrances  with  respect  to the issue  thereof  and shall not be  subject to
preemptive  rights or other similar rights of  stockholders  of the Borrower and
will not impose personal  liability upon the holder thereof.  The obligations of
the Borrower  under this  Debenture  shall be secured by that  certain  Security
Agreement  dated  by and  between  the  Borrower  and the  Holder  of even  date
herewith.

                  The following terms shall apply to this Debenture:

                          ARTICLE I. CONVERSION RIGHTS

     1.1 Conversion  Right.  Subject to the Stockholder  Approval (as defined in
Section  4(1) of the Purchase  Agreement),  the Holder shall have the right from
time to time,  and at any time on or prior to the  earlier  of (i) the  Maturity
Date and (ii) the date of payment of the  Default  Amount (as defined in Article
III) pursuant to Section 1.6(a) or Article III, the Optional  Prepayment  Amount
(as defined in Section 5.1 or any  payments  pursuant  to Section  1.7,  each in
respect of the  remaining  outstanding  principal  amount of this  Debenture  to
convert all or any part of the outstanding and unpaid  principal  amount of this
Debenture  into fully paid and  non-assessable  shares of Common Stock,  as such
Common Stock exists on the Issue Date,  or any shares of capital  stock or other
securities  of the  Borrower  into which such Common  Stock shall  hereafter  be
changed  or  reclassified  at the  conversion  price  (the  "Conversion  Price")
determined as provided herein (a "Conversion");  provided,  however,  that in no
event shall the Holder be entitled to convert any portion of this  Debenture  in
excess of that portion of this Debenture upon conversion of which the sum of (1)
the number of shares of Common  Stock  beneficially  owned by the Holder and its
affiliates  (other than shares of Common Stock which may be deemed  beneficially
owned through the ownership of the unconverted  portion of the Debentures or the
unexercised  or  unconverted  portion  of any  other  security  of the  Borrower
(including,  without limitation, the warrants issued by the Borrower pursuant to
the  Purchase  Agreement)  subject to a  limitation  on  conversion  or exercise
analogous to the limitations  contained  herein) and (2) the number of shares of
Common Stock  issuable upon the conversion of the portion of this Debenture with
respect to which the  determination  of this proviso is being made, would result
in  beneficial  ownership by the Holder and its  affiliates of more than 4.9% of
the  outstanding  shares of Common  Stock.  For  purposes  of the proviso to the
immediately  preceding  sentence,  beneficial  ownership  shall be determined in
accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended,  and  Regulations  13D-G  thereunder,  except as otherwise  provided in
clause  (1) of  such  proviso.  The  Holder  of this  Debenture  may  waive  the
limitations  set forth  herein by  sixty-one  (61)  days  written  notice to the
Company.  The number of shares of Common Stock to be issued upon each conversion
of this  Debenture  shall be  determined by dividing the  Conversion  Amount (as
defined  below) by the  applicable  Conversion  Price then in effect on the date
specified in the notice of conversion,  in the form attached hereto as Exhibit A
(the  "Notice  of  Conversion"),  delivered  to the  Borrower  by the  Holder in

                                       2
<PAGE>


accordance  with Section 1.4 below;  provided  that the Notice of  Conversion is
submitted by facsimile (or by other means  resulting in, or reasonably  expected
to result in, notice) to the Borrower  before 6:00 p.m., New York, New York time
on such conversion date (the "Conversion  Date").  The term "Conversion  Amount"
means,  with respect to any  conversion  of this  Debenture,  the sum of (1) the
principal  amount of this Debenture to be converted in such  conversion plus (2)
accrued and unpaid  interest,  if any, on such principal  amount at the interest
rates  provided  in this  Debenture  to the  Conversion  Date  plus (3)  Default
Interest,  if any,  on the  amounts  referred  to in the  immediately  preceding
clauses (1) and/or (2) plus (4) at the Holder's option,  any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
that certain Registration Rights Agreement, dated as of April 16, 2003, executed
in  connection  with  the  initial  issuance  of this  Debenture  and the  other
Debentures issued on the Issue Date (the "Registration Rights Agreement").

     1.2 Conversion Price.

     (a)  Calculation of Conversion  Price.  The  Conversion  Price shall be the
lesser of (i) the  Variable  Conversion  Price (as defined  herein) and (ii) the
Fixed Conversion Price (as defined herein) (subject,  in each case, to equitable
adjustments  for  stock  splits,  stock  dividends  or rights  offerings  by the
Borrower  relating  to  the  Borrower's  securities  or  the  securities  of any
subsidiary of the Borrower, combinations,  recapitalization,  reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean the  Applicable  Percentage  (as defined  herein)  multiplied  by the
Market Price (as defined herein). "Market Price" means the average of the lowest
three (3) Trading  Prices (as  defined  below) for the Common  Stock  during the
twenty  (20)  Trading  Day period  ending one  Trading Day prior to the date the
Conversion  Notice is sent by the  Holder to the  Borrower  via  facsimile  (the
"Conversion Date").  "Trading Price" means, for any security as of any date, the
intraday trading price on the  Over-the-Counter  Bulletin Board (the "OTCBB") as
reported by a reliable  reporting  service mutually  acceptable to and hereafter
designated  by Holders of a  majority  in  interest  of the  Debentures  and the
Borrower or, if the OTCBB is not the principal trading market for such security,
the intraday trading price of such security on the principal securities exchange
or trading  market  where such  security  is listed or traded or, if no intraday
trading price of such security is available in any of the foregoing manners, the
average of the intraday  trading  prices of any market  makers for such security
that are listed in the "pink sheets" by the National  Quotation Bureau,  Inc. If
the Trading  Price cannot be  calculated  for such  security on such date in the
manner  provided  above,  the Trading  Price  shall be the fair market  value as
mutually determined by the Borrower and the holders of a majority in interest of
the Debentures being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Debentures. "Trading
Day"  shall mean any day on which the Common  Stock is  actually  traded for any
period on the OTCBB, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.  "Applicable  Percentage"
shall mean 50.0%. The "Fixed Conversion Price" shall mean $.05.

     (b) Conversion Price During Major Announcements.  Notwithstanding  anything
contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes
a public  announcement  that it intends to  consolidate  or merge with any other
corporation  (other  than a merger in which the  Borrower  is the  surviving  or
continuing  corporation  and its capital stock is unchanged) or sell or transfer
all or substantially all of the assets of the Borrower or (ii) any


                                       3

<PAGE>


person,  group or entity  (including the Borrower)  publicly  announces a tender
offer to  purchase  50% or more of the  Borrower's  Common  Stock  (or any other
takeover scheme) (the date of the announcement referred to in clause (i) or (ii)
is  hereinafter  referred to as the  "Announcement  Date"),  then the Conversion
Price shall,  effective upon the  Announcement  Date and continuing  through the
Adjusted  Conversion Price  Termination Date (as defined below), be equal to the
lower of (x) the  Conversion  Price  which  would  have  been  applicable  for a
Conversion  occurring on the Announcement Date and (y) the Conversion Price that
would  otherwise  be in effect.  From and after the  Adjusted  Conversion  Price
Termination  Date, the Conversion Price shall be determined as set forth in this
Section 1.2(a).  For purposes hereof,  "Adjusted  Conversion  Price  Termination
Date" shall mean,  with respect to any proposed  transaction or tender offer (or
takeover scheme) for which a public announcement as contemplated by this Section
1.2(b) has been made,  the date upon which the  Borrower  (in the case of clause
(i) above) or the  person,  group or entity (in the case of clause  (ii)  above)
consummates or publicly announces the termination or abandonment of the proposed
transaction  or tender  offer (or  takeover  scheme)  which  caused this Section
1.2(b) to become operative.

     1.3 Authorized Shares.  Subject to the Stockholder  Approval (as defined in
Section 4(1) of the Purchase Agreement),  the Borrower covenants that during the
period  the  conversion  right  exists,  the  Borrower  will  reserve  from  its
authorized and unissued  Common Stock a sufficient  number of shares,  free from
preemptive  rights,  to provide for the  issuance of Common  Stock upon the full
conversion of this  Debenture and the other  Debentures  issued  pursuant to the
Purchase Agreement. The Borrower is required at all times to have authorized and
reserved  two times the number of shares  that is  actually  issuable  upon full
conversion of the Debentures (based on the Conversion Price of the Debentures or
the Exercise  Price of the Warrants in effect from time to time) (the  "Reserved
Amount"). The Reserved Amount shall be increased from time to time in accordance
with  the  Borrower's  obligations  pursuant  to  Section  4(h) of the  Purchase
Agreement.  The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable.  In addition, if the Borrower
shall issue any  securities  or make any change to its capital  structure  which
would  change  the number of shares of Common  Stock  into which the  Debentures
shall be convertible at the then current Conversion Price, the Borrower shall at
the  same  time  make  proper  provision  so that  thereafter  there  shall be a
sufficient  number of shares of Common Stock authorized and reserved,  free from
preemptive  rights, for conversion of the outstanding  Debentures.  The Borrower
(i) acknowledges that it has irrevocably  instructed its transfer agent to issue
certificates  for the Common Stock issuable upon  conversion of this  Debenture,
and (ii)  agrees that its  issuance  of this  Debenture  shall  constitute  full
authority  to its officers and agents who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of
Common Stock in accordance with the terms and conditions of this Debenture.

     If, at any time a Holder of this Debenture  submits a Notice of Conversion,
and the Borrower  does not have  sufficient  authorized  but unissued  shares of
Common  Stock  available  to  effect  such  conversion  in  accordance  with the
provisions of this Article I (a "Conversion  Default"),  subject to Section 4.8,
the  Borrower  shall issue to the Holder all of the shares of Common Stock which
are then  available  to effect such  conversion.  The portion of this  Debenture
which the Holder included in its Conversion  Notice and which exceeds the amount
which is then  convertible  into  available  shares of Common Stock (the "Excess
Amount") shall,  notwithstanding  anything to the contrary contained herein, not
be convertible  into Common


                                       4

<PAGE>


Stock in accordance  with the terms hereof until (and at the Holder's  option at
any time after) the date additional shares of Common Stock are authorized by the
Borrower  to permit  such  conversion,  at which  time the  Conversion  Price in
respect  thereof  shall  be  the  lesser  of (i)  the  Conversion  Price  on the
Conversion  Default Date (as defined below) and (ii) the Conversion Price on the
Conversion  Date  thereafter  elected  by the  Holder  in  respect  thereof.  In
addition,  the Borrower shall pay to the Holder  payments  ("Conversion  Default
Payments") for a Conversion Default in the amount of (x) the sum of (1) the then
outstanding  principal  amount of this  Debenture  plus (2)  accrued  and unpaid
interest  on  the  unpaid  principal  amount  of  this  Debenture   through  the
Authorization Date (as defined below) plus (3) Default Interest,  if any, on the
amounts referred to in clauses (1) and/or (2), multiplied by (y) .24, multiplied
by (z) (N/365),  where N = the number of days from the day the holder  submits a
Notice of  Conversion  giving  rise to a  Conversion  Default  (the  "Conversion
Default  Date")  to the  date  (the  "Authorization  Date")  that  the  Borrower
authorizes a sufficient number of shares of Common Stock to effect conversion of
the full outstanding principal balance of this Debenture. The Borrower shall use
its best efforts to  authorize a sufficient  number of shares of Common Stock as
soon as  practicable  following  the  earlier  of (i) such time that the  Holder
notifies the Borrower or that the Borrower  otherwise  becomes  aware that there
are or likely will be insufficient  authorized and unissued shares to allow full
conversion thereof and (ii) a Conversion Default. The Borrower shall send notice
to the Holder of the  authorization  of additional  shares of Common Stock,  the
Authorization  Date  and the  amount  of  Holder's  accrued  Conversion  Default
Payments.  The accrued Conversion Default Payments for each calendar month shall
be paid in cash or shall be convertible into Common Stock (at such time as there
are sufficient  authorized shares of Common Stock) at the applicable  Conversion
Price, at the Holder's option, as follows:

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

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

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

     1.4 Method of Conversion.

     (a) Mechanics of Conversion.  Subject to Section 1.1, this Debenture may be
converted  by the Holder in whole or in part at any time from time to time after
the Issue
                                       5

<PAGE>


Date, by (A)  submitting to the Borrower a Notice of Conversion (by facsimile or
other reasonable means of communication  dispatched on the Conversion Date prior
to 6:00  p.m.,  New York,  New York time) and (B)  subject  to  Section  1.4(b),
surrendering this Debenture at the principal office of the Borrower.

     (b) Surrender of Debenture Upon Conversion. Notwithstanding anything to the
contrary set forth herein,  upon conversion of this Debenture in accordance with
the terms hereof, the Holder shall not be required to physically  surrender this
Debenture  to the Borrower  unless the entire  unpaid  principal  amount of this
Debenture is so converted.  The Holder and the Borrower shall  maintain  records
showing the principal  amount so converted and the dates of such  conversions or
shall use such  other  method,  reasonably  satisfactory  to the  Holder and the
Borrower,  so as not to require  physical  surrender of this Debenture upon each
such conversion. In the event of any dispute or discrepancy, such records of the
Borrower  shall be  controlling  and  determinative  in the  absence of manifest
error.  Notwithstanding  the  foregoing,  if any  portion of this  Debenture  is
converted as aforesaid,  the Holder may not transfer this  Debenture  unless the
Holder first physically surrenders this Debenture to the Borrower, whereupon the
Borrower  will  forthwith  issue and deliver  upon the order of the Holder a new
Debenture of like tenor, registered as the Holder (upon payment by the Holder of
any applicable  transfer  taxes) may request,  representing in the aggregate the
remaining  unpaid  principal  amount  of  this  Debenture.  The  Holder  and any
assignee, by acceptance of this Debenture, acknowledge and agree that, by reason
of the provisions of this paragraph,  following  conversion of a portion of this
Debenture,  the  unpaid  and  unconverted  principal  amount  of this  Debenture
represented  by this  Debenture  may be less than the amount  stated on the face
hereof.

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

     (d) Delivery of Common Stock Upon Conversion.  Upon receipt by the Borrower
from the  Holder  of a  facsimile  transmission  (or other  reasonable  means of
communication) of a Notice of Conversion meeting the requirements for conversion
as provided in this Section  1.4, the Borrower  shall issue and deliver or cause
to be issued and delivered to or upon the order of the Holder  certificates  for
the Common Stock  issuable  upon such  conversion  within two (2) business  days
after such receipt  (and,  solely in the case of conversion of the entire unpaid
principal amount hereof,  surrender of this Debenture) (such second business day
being  hereinafter  referred to as the  "Deadline") in accordance with the terms
hereof and the Purchase Agreement (including,  without limitation, in accordance
with  the   requirements  of  Section  2(g)  of  the  Purchase   Agreement  that
certificates for shares of Common Stock issued on or after the effective date of
the Registration  Statement upon conversion of this Debenture shall not bear any
restrictive legend).


                                       6

<PAGE>


     (e)  Obligation of Borrower to Deliver  Common  Stock.  Upon receipt by the
Borrower of a Notice of Conversion,  the Holder shall be deemed to be the holder
of record of the Common Stock  issuable upon such  conversion,  the  outstanding
principal amount and the amount of accrued and unpaid interest on this Debenture
shall be reduced to reflect such conversion,  and, unless the Borrower  defaults
on its obligations  under this Article I, all rights with respect to the portion
of this Debenture being so converted shall forthwith  terminate except the right
to receive the Common Stock or other securities, cash or other assets, as herein
provided,  on such  conversion.  If the  Holder  shall  have  given a Notice  of
Conversion as provided  herein,  the Borrower's  obligation to issue and deliver
the  certificates  for  Common  Stock  shall  be  absolute  and   unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with  respect to any  provision  thereof,  the recovery of any
judgment  against any person or any action to enforce  the same,  any failure or
delay in the  enforcement of any other  obligation of the Borrower to the holder
of record, or any setoff, counterclaim,  recoupment,  limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower,
and  irrespective  of any other  circumstance  which might  otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion  Date  specified in the Notice of Conversion  shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00
p.m., New York, New York time, on such date.

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

     (g) Failure to Deliver  Common Stock Prior to Deadline.  Without in any way
limiting the Holder's right to pursue other remedies,  including  actual damages
and/or equitable relief,  the parties agree that if delivery of the Common Stock
issuable upon  conversion of this  Debenture is more than two (2) days after the
Deadline (other than a failure due to the circumstances described in Section 1.3
above,  which failure shall be governed by such Section) the Borrower  shall pay
to the Holder $2,000 per day in cash,  for each day beyond the Deadline that the
Borrower  fails to deliver such Common Stock.  Such cash amount shall be paid to
Holder by the fifth day of the month following the month in which it has accrued
or, at the option of the Holder (by written  notice to the Borrower by the first
day of the month following the month in which it has accrued), shall be added to
the principal  amount of this  Debenture,  in which event  interest shall accrue
thereon  in  accordance  with the terms of this  Debenture  and such  additional
principal  amount shall be convertible  into Common Stock in accordance with the
terms of this Debenture.

     1.5  Concerning  the  Shares.  The  shares of Common  Stock  issuable  upon
conversion  of this  Debenture  may not be sold or  transferred  unless (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the  Borrower  or its  transfer  agent  shall have been  furnished  with an
opinion  of  counsel  (which  opinion  shall be in  form,

                                       7

<PAGE>


substance   and  scope   customary   for  opinions  of  counsel  in   comparable
transactions)  to the effect  that the shares to be sold or  transferred  may be
sold or  transferred  pursuant to an exemption from such  registration  or (iii)
such  shares are sold or  transferred  pursuant  to Rule 144 under the Act (or a
successor  rule)  ("Rule  144")  or  (iv)  such  shares  are  transferred  to an
"affiliate"  (as  defined  in Rule 144) of the  Borrower  who  agrees to sell or
otherwise  transfer the shares only in accordance  with this Section 1.5 and who
is an  Accredited  Investor  (as defined in the Purchase  Agreement).  Except as
otherwise  provided  in the  Purchase  Agreement  (and  subject  to the  removal
provisions  set forth  below),  until  such time as the  shares of Common  Stock
issuable upon conversion of this Debenture have been registered under the Act as
contemplated  by the  Registration  Rights  Agreement or  otherwise  may be sold
pursuant to Rule 144 without any  restriction  as to the number of securities as
of a particular  date that can then be immediately  sold,  each  certificate for
shares of Common Stock  issuable upon  conversion of this Debenture that has not
been so included in an  effective  registration  statement  or that has not been
sold  pursuant to an  effective  registration  statement  or an  exemption  that
permits  removal  of the  legend,  shall  bear  a  legend  substantially  in the
following form, as appropriate:

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

                  The legend set forth above  shall be removed and the  Borrower
shall issue to the Holder a new certificate therefor free of any transfer legend
if (i) the  Borrower or its  transfer  agent  shall have  received an opinion of
counsel,  in form,  substance  and scope  customary  for  opinions of counsel in
comparable  transactions,  to the effect  that a public sale or transfer of such
Common Stock may be made without  registration  under the Act and the shares are
so sold or  transferred,  (ii) such Holder provides the Borrower or its transfer
agent with reasonable  assurances that the Common Stock issuable upon conversion
of this  Debenture  (to the  extent  such  securities  are  deemed  to have been
acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case
of the Common Stock issuable upon conversion of this Debenture, such security is
registered  for sale by the Holder  under an  effective  registration  statement
filed under the Act or  otherwise  may be sold  pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be immediately  sold.  Nothing in this Debenture  shall (i) limit the Borrower's
obligation under the Registration Rights Agreement or (ii) affect in any way the
Holder's obligations to comply with applicable  prospectus delivery requirements
upon the resale of the securities referred to herein.

1.6 Effect of Certain Events.

     (a) Effect of Merger, Consolidation,  Etc. At the option of the Holder, the
sale, conveyance or disposition of all or substantially all of the assets of the
Borrower, the effectuation by the Borrower of a transaction or series of related
transactions  in

                                       8

<PAGE>


which more than 50% of the voting  power of the  Borrower is disposed of, or the
consolidation, merger or other business combination of the Borrower with or into
any other  Person (as  defined  below) or Persons  when the  Borrower is not the
survivor  shall  either:  (i) be deemed to be an Event of Default (as defined in
Article  III)  pursuant  to which the  Borrower  shall be required to pay to the
Holder upon the consummation of and as a condition to such transaction an amount
equal to the  Default  Amount (as  defined  in  Article  III) or (ii) be treated
pursuant  to  Section  1.6(b)  hereof.   "Person"  shall  mean  any  individual,
corporation, limited liability company, partnership, association, trust or other
entity or organization.

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

     (c) Adjustment Due to  Distribution.  If the Borrower shall declare or make
any  distribution  of its assets (or rights to acquire its assets) to holders of
Common  Stock as a dividend,  stock  repurchase,  by way of return of capital or
otherwise (including any dividend or distribution to the Borrower's stockholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a "Distribution"),  then the Holder of this Debenture shall
be entitled,  upon any conversion of this Debenture after the date of record for
determining stockholders entitled to such Distribution, to receive the amount of
such  assets  which would have been  payable to the Holder  with  respect to the
shares of Common Stock  issuable upon such  conversion  had such Holder been the
holder of such shares of Common  Stock on the record date for the  determination
of stockholders entitled to such Distribution.

                                       9

<PAGE>


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

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

     Additionally, the Borrower shall be deemed to have issued or sold shares of
Common  Stock if the  Borrower  in any  manner  issues or sells any  Convertible
Securities,  whether or not immediately  convertible  (other than where the same
are issuable  upon the  exercise of Options),  and the price per share for which
Common Stock is issuable upon such conversion or exchange is less than the Fixed
Conversion Price then in effect,  then the Fixed Conversion Price shall be equal
to such price per share. For the purposes of the preceding sentence,  the "price
per share for which Common Stock is issuable  upon such  conversion or exchange"
is determined by dividing (i) the total amount,  if any,  received or receivable
by the  Borrower  as  consideration  for  the  issuance  or  sale  of  all  such
Convertible  Securities,   plus  the  minimum  aggregate  amount  of  additional
consideration,  if any,  payable to the Borrower upon the conversion or exchange
thereof at the time such  Convertible  Securities  first become  convertible  or
exchangeable,  by (ii) the  maximum  total  number of  shares  of  Common  Stock
issuable upon the conversion or exchange of all such Convertible Securities.  No
further  adjustment to the Fixed  Conversion  Price will be made upon the actual
issuance of such Common Stock upon  conversion  or exchange of such  Convertible
Securities.

                                       10
<PAGE>



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

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

     1.7 Trading Market  Limitations.  Unless  permitted by the applicable rules
and regulations of the principal  securities market on which the Common Stock is
then listed or traded,  in no event shall the Borrower issue upon  conversion of
or otherwise pursuant to this Debenture and the other Debentures issued pursuant
to the Purchase Agreement more than the maximum number of shares of Common Stock
that the Borrower can issue pursuant to any rule of the principal  United States
securities  market on which the Common Stock is then traded (the "Maximum  Share
Amount"),  which, as of the Issue Date shall be 5,940,949  shares (19.99% of the
total shares  outstanding  on the Issue Date),  subject to equitable  adjustment
from time to time for  stock  splits,  stock  dividends,  combinations,  capital
reorganizations  and similar events relating to the Common Stock occurring after
the date  hereof.  Once the  Maximum  Share  Amount has been issued (the date of
which is  hereinafter  referred to as the  "Maximum  Conversion  Date"),  if the
Borrower fails to eliminate any  prohibitions  under applicable law or the rules
or  regulations of any stock  exchange,  interdealer  quotation  system or other
self-regulatory  organization  with jurisdiction over the Borrower or any of its
securities on the  Borrower's  ability to issue shares of Common Stock in excess
of the Maximum Share Amount (a "Trading Market  Prepayment  Event"),  in lieu of
any further right to convert this  Debenture,  and in full  satisfaction  of the
Borrower's  obligations  under this  Debenture,  the  Borrower  shall pay to the
Holder,  within fifteen (15) business days of the Maximum  Conversion  Date (the
"Trading Market Prepayment  Date"), an amount equal to 130% times the sum of (a)
the then outstanding  principal amount of this Debenture  immediately  following
the

                                       11

<PAGE>


Maximum  Conversion  Date,  plus (b) accrued  and unpaid  interest on the unpaid
principal  amount of this Debenture to the Trading Market  Prepayment Date, plus
(c) Default  Interest,  if any, on the amounts  referred to in clause (a) and/or
(b)  above,  plus (d) any  optional  amounts  that may be added  thereto  at the
Maximum  Conversion  Date by the Holder in accordance with the terms hereof (the
then outstanding  principal amount of this Debenture  immediately  following the
Maximum  Conversion  Date, plus the amounts  referred to in clauses (b), (c) and
(d) above  shall  collectively  be  referred  to as the  "Remaining  Convertible
Amount").  With respect to each Holder of  Debentures,  the Maximum Share Amount
shall refer to such  Holder's pro rata share  thereof  determined  in accordance
with Section 4.8 below. In the event that the sum of (x) the aggregate number of
shares of Common Stock issued upon  conversion  of this  Debenture and the other
Debentures  issued  pursuant to the Purchase  Agreement  plus (y) the  aggregate
number of shares of Common Stock that remain  issuable  upon  conversion of this
Debenture and the other  Debentures  issued pursuant to the Purchase  Agreement,
represents at least one hundred  percent (100%) of the Maximum Share Amount (the
"Triggering  Event"),  the Borrower will use its best efforts to seek and obtain
Stockholder  Approval  (or obtain  such other  relief as will allow  conversions
hereunder  in  excess  of the  Maximum  Share  Amount)  as soon  as  practicable
following the Triggering  Event and before the Maximum  Conversion Date. As used
herein,  "Stockholder  Approval"  means  approval  by  the  stockholders  of the
Borrower to authorize  the issuance of the full number of shares of Common Stock
which would be issuable upon full conversion of the then outstanding  Debentures
but for the Maximum Share Amount.

     1.8 Status as  Stockholder.  Upon submission of a Notice of Conversion by a
Holder,  (i) the shares covered  thereby  (other than the shares,  if any, which
cannot be issued  because their  issuance  would exceed such Holder's  allocated
portion  of the  Reserved  Amount  or  Maximum  Share  Amount)  shall be  deemed
converted  into shares of Common Stock and (ii) the Holder's  rights as a Holder
of such converted portion of this Debenture shall cease and terminate, excepting
only the right to receive  certificates  for such shares of Common  Stock and to
any remedies provided herein or otherwise  available at law or in equity to such
Holder  because of a failure by the  Borrower  to comply  with the terms of this
Debenture.   Notwithstanding  the  foregoing,  if  a  Holder  has  not  received
certificates  for all shares of Common Stock prior to the tenth (10th)  business
day after the  expiration  of the Deadline  with respect to a conversion  of any
portion of this  Debenture  for any reason,  then  (unless the Holder  otherwise
elects to retain  its  status as a holder of Common  Stock by so  notifying  the
Borrower) the Holder shall regain the rights of a Holder of this  Debenture with
respect to such  unconverted  portions of this Debenture and the Borrower shall,
as soon as practicable,  return such unconverted  Debenture to the Holder or, if
the Debenture has not been surrendered,  adjust its records to reflect that such
portion of this Debenture has not been converted. In all cases, the Holder shall
retain all of its rights and remedies  (including,  without limitation,  (i) the
right to receive  Conversion  Default  Payments  pursuant  to Section 1.3 to the
extent  required  thereby  for  such  Conversion   Default  and  any  subsequent
Conversion  Default and (ii) the right to have the Conversion Price with respect
to subsequent  conversions  determined  in accordance  with Section 1.3) for the
Borrower's failure to convert this Debenture.

                         ARTICLE II. CERTAIN COVENANTS

     2.1  Distributions on Capital Stock. So long as the Borrower shall have any
obligation  under this  Debenture,  the Borrower  shall not without the Holder's
written consent (a) pay, declare or set apart for such payment,  any dividend or
other distribution  (whether in cash, property or other securities) on shares of
capital stock other than  dividends on shares of Common Stock solely in the form
of  additional  shares of Common Stock or (b) directly or  indirectly or through
any subsidiary  make any other payment or distribution in respect of its capital
stock


                                       12
<PAGE>


except for  distributions  pursuant  to any  shareholders'  rights plan which is
approved by a majority of the Borrower's disinterested directors.

     2.2  Restriction on Stock  Repurchases.  So long as the Borrower shall have
any obligation under this Debenture, the Borrower shall not without the Holder's
written consent redeem,  repurchase or otherwise acquire (whether for cash or in
exchange for property or other  securities or otherwise) in any one  transaction
or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such shares.

     2.3  Borrowings.  So long as the Borrower shall have any  obligation  under
this Debenture,  the Borrower shall not,  without the Holder's  written consent,
create,  incur,  assume or suffer to exist any  liability  for  borrowed  money,
except (a)  borrowings in existence or committed on the date hereof and of which
the  Borrower  has  informed  Holder in writing  prior to the date  hereof,  (b)
indebtedness  to trade  creditors  or  financial  institutions  incurred  in the
ordinary  course of business or (c)  borrowings,  the proceeds of which shall be
used to repay this Debenture.

     2.4 Sale of Assets. So long as the Borrower shall have any obligation under
this Debenture,  the Borrower shall not,  without the Holder's  written consent,
sell,  lease or  otherwise  dispose  of any  significant  portion  of its assets
outside the ordinary  course of business.  Any consent to the disposition of any
assets may be conditioned on a specified use of the proceeds of disposition.

     2.5 Advances and Loans.  So long as the Borrower  shall have any obligation
under this  Debenture,  the Borrower  shall not,  without the  Holder's  written
consent,  lend money,  give credit or make advances to any person,  firm,  joint
venture or corporation,  including,  without  limitation,  officers,  directors,
employees, subsidiaries and affiliates of the Borrower, except loans, credits or
advances (a) in existence or committed on the date hereof and which the Borrower
has  informed  Holder  in  writing  prior  to the date  hereof,  (b) made in the
ordinary course of business or (c) not in excess of $50,000.

     2.6  Contingent  Liabilities.  So  long  as the  Borrower  shall  have  any
obligation  under this Debenture,  the Borrower shall not,  without the Holder's
written consent, assume, guarantee,  endorse,  contingently agree to purchase or
otherwise  become liable upon the obligation of any person,  firm,  partnership,
joint  venture  or   corporation,   except  by  the  endorsement  of  negotiable
instruments  for  deposit  or  collection  and except  assumptions,  guarantees,
endorsements and  contingencies (a) in existence or committed on the date hereof
and which the Borrower has informed  Holder in writing prior to the date hereof,
and (b) similar transactions in the ordinary course of business.

                         ARTICLE III. EVENTS OF DEFAULT

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


                                       13

<PAGE>



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

     3.2 Conversion and the Shares. The Borrower fails to issue shares of Common
Stock to the  Holder  (or  announces  or  threatens  that it will not  honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance  with the terms of this Debenture (for a period of at least
sixty (60)  days,  if such  failure  is solely as a result of the  circumstances
governed by Section 1.3 and the  Borrower is using its best efforts to authorize
a sufficient number of shares of Common Stock as soon as practicable),  fails to
transfer  or  cause  its  transfer  agent  to  transfer  (electronically  or  in
certificated  form) any  certificate  for shares of Common  Stock  issued to the
Holder upon  conversion of or otherwise  pursuant to this  Debenture as and when
required by this Debenture or the  Registration  Rights  Agreement,  or fails to
remove any restrictive legend (or to withdraw any stop transfer  instructions in
respect thereof) on any certificate for any shares of Common Stock issued to the
Holder upon  conversion of or otherwise  pursuant to this  Debenture as and when
required by this Debenture or the  Registration  Rights  Agreement (or makes any
announcement,  statement  or  threat  that it  does  not  intend  to  honor  the
obligations  described in this  paragraph)  and any such failure shall  continue
uncured (or any  announcement,  statement or threat not to honor its obligations
shall not be rescinded  in writing)  for ten (10) days after the Borrower  shall
have been notified thereof in writing by the Holder.

     3.3  Failure  to  Timely  File  Registration  or Effect  Registration.  The
Borrower fails to file the Registration  Statement  within  forty-five (45) days
following the Filing Date (as defined in the Registration  Rights  Agreement) or
obtain  effectiveness  with  the  Securities  and  Exchange  Commission  of  the
Registration  Statement  within one hundred five (105) days following the Filing
Date or such Registration  Statement lapses in effect (or sales cannot otherwise
be made  thereunder  effective,  whether by reason of the Borrower's  failure to
amend or supplement  the  prospectus  included  therein in  accordance  with the
Registration   Rights   Agreement  or  otherwise)  for  more  than  twenty  (20)
consecutive  days or forty  (40)  days in any  twelve  month  period  after  the
Registration Statement becomes effective;

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

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


                                       14

<PAGE>


     3.6  Receiver or Trustee.  The Borrower or any  subsidiary  of the Borrower
shall make an assignment  for the benefit of creditors,  or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial  part of
its  property or  business,  or such a receiver or trustee  shall  otherwise  be
appointed;

     3.7 Judgments. Any money judgment, writ or similar process shall be entered
or filed  against the Borrower or any  subsidiary  of the Borrower or any of its
property or other  assets for more than  $50,000,  and shall  remain  unvacated,
unbonded or unstayed for a period of twenty (20) days unless otherwise consented
to by the Holder, which consent will not be unreasonably withheld;

     3.8  Bankruptcy.  Bankruptcy,  insolvency,  reorganization  or  liquidation
proceedings or other  proceedings for relief under any bankruptcy law or any law
for the relief of debtors  shall be instituted by or against the Borrower or any
subsidiary of the Borrower;

     3.9  Delisting of Common  Stock.  The  Borrower  shall fail to maintain the
listing of the Common  Stock on at least one of the OTCBB,  the Nasdaq  National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American
Stock Exchange; or

     3.10 Default Under Other  Debentures.  An Event of Default has occurred and
is continuing under any of the other Debentures  issued pursuant to the Purchase
Agreement,

then,  upon the occurrence and during the  continuation  of any Event of Default
specified in Section 3.1,  3.2,  3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of  the  Holders  of a  majority  of  the  aggregate  principal  amount  of  the
outstanding  Debentures  issued pursuant to the Purchase  Agreement  exercisable
through the  delivery of written  notice to the  Borrower by such  Holders  (the
"Default  Notice"),  and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become  immediately due and payable and
the Borrower shall pay to the Holder,  in full  satisfaction  of its obligations
hereunder,  an amount  equal to the greater of (i) 130% times the sum of (w) the
then outstanding  principal amount of this Debenture plus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of payment
(the  "Mandatory  Prepayment  Date") plus (y) Default  Interest,  if any, on the
amounts  referred to in clauses (w) and/or (x) plus (z) any amounts  owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement (the then outstanding principal amount of this
Debenture  to the date of payment  plus the amounts  referred to in clauses (x),
(y) and (z)  shall  collectively  be  known  as the  "Default  Sum") or (ii) the
"parity  value" of the Default Sum to be prepaid,  where  parity value means (a)
the highest  number of shares of Common Stock  issuable  upon  conversion  of or
otherwise  pursuant to such Default Sum in  accordance  with Article I, treating
the Trading Day  immediately  preceding  the  Mandatory  Prepayment  Date as the
"Conversion Date" for purposes of determining the lowest  applicable  Conversion
Price,  unless the Default  Event arises as a result of a breach in respect of a
specific  Conversion  Date in  which  case  such  Conversion  Date  shall be the
Conversion  Date),  multiplied  by (b) the highest  Closing Price for the Common
Stock during the period  beginning on the date of first  occurrence of the Event
of  Default  and  ending  one day prior to the  Mandatory  Prepayment  Date (the
"Default  Amount") and all other amounts  payable  hereunder  shall  immediately
become due and payable, all without demand,  presentment or notice, all of which
hereby  are  expressly  waived,  together  with all  costs,  including,  without
limitation,  legal fees and

                                       15

<PAGE>



expenses, of collection,  and the Holder shall be entitled to exercise all other
rights and remedies  available at law or in equity. If the Borrower fails to pay
the Default  Amount  within five (5) business  days of written  notice that such
amount is due and payable,  then the Holder shall have the right at any time, so
long as the  Borrower  remains  in default  (and so long and to the extent  that
there are sufficient  authorized shares), to require the Borrower,  upon written
notice,  to  immediately  issue,  in lieu of the Default  Amount,  the number of
shares of Common Stock of the Borrower  equal to the Default  Amount  divided by
the Conversion Price then in effect.

                           ARTICLE IV. MISCELLANEOUS

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

     4.2 Notices.  Any notice herein  required or permitted to be given shall be
in  writing  and may be  personally  served or  delivered  by courier or sent by
United  States  mail and  shall be deemed to have been  given  upon  receipt  if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after  being  deposited  in the United  States
mail, certified,  with postage pre-paid and properly addressed, if sent by mail.
For the  purposes  hereof,  the  address of the Holder  shall be as shown on the
records of the  Borrower;  and the  address of the  Borrower  shall be 4 Mulford
Place, Suite 2G, Hempstead, New York 11550, facsimile number: 509-472-4654. Both
the Holder and the  Borrower  may change the  address  for service by service of
written notice to the other as herein provided.

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

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

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

     4.6  Governing  Law.  THIS  DEBENTURE  SHALL BE  ENFORCED,  GOVERNED BY AND
CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE


                                       16

<PAGE>



STATE OF NEW YORK  APPLICABLE  TO AGREEMENTS  MADE AND TO BE PERFORMED  ENTIRELY
WITHIN SUCH STATE,  WITHOUT  REGARD TO THE  PRINCIPLES OF CONFLICT OF LAWS.  THE
BORROWER  HEREBY  SUBMITS TO THE  EXCLUSIVE  JURISDICTION  OF THE UNITED  STATES
FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING
UNDER THIS DEBENTURE,  THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
TRANSACTIONS  CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE
DEFENSE OF AN INCONVENIENT  FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.
BOTH PARTIES  FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST
CLASS MAIL SHALL BE DEEMED IN EVERY  RESPECT  EFFECTIVE  SERVICE OF PROCESS UPON
THE PARTY IN ANY SUCH SUIT OR  PROCEEDING.  NOTHING  HEREIN SHALL AFFECT  EITHER
PARTY'S  RIGHT TO SERVE  PROCESS  IN ANY OTHER  MANNER  PERMITTED  BY LAW.  BOTH
PARTIES  AGREE  THAT A  FINAL  NON-APPEALABLE  JUDGMENT  IN  ANY  SUCH  SUIT  OR
PROCEEDING  SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY
SUIT ON SUCH  JUDGMENT OR IN ANY OTHER LAWFUL  MANNER.  THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL
FEES AND EXPENSES,  INCLUDING  ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY
IN CONNECTION WITH SUCH DISPUTE.

     4.7 Certain  Amounts.  Whenever  pursuant to this Debenture the Borrower is
required to pay an amount in excess of the outstanding  principal amount (or the
portion  thereof  required  to be paid at that  time)  plus  accrued  and unpaid
interest  plus Default  Interest on such  interest,  the Borrower and the Holder
agree that the actual  damages to the Holder from the receipt of cash payment on
this Debenture may be difficult to determine and the amount to be so paid by the
Borrower  represents  stipulated  damages  and not a penalty  and is intended to
compensate  the  Holder  in part for loss of the  opportunity  to  convert  this
Debenture and to earn a return from the sale of shares of Common Stock  acquired
upon  conversion  of this  Debenture  at a price in excess of the price paid for
such shares pursuant to this Debenture. The Borrower and the Holder hereby agree
that such amount of stipulated  damages is not plainly  disproportionate  to the
possible  loss to the Holder  from the  receipt of a cash  payment  without  the
opportunity to convert this Debenture into shares of Common Stock.

     4.8  Allocations of Maximum Share Amount and Reserved  Amount.  The Maximum
Share Amount and Reserved  Amount shall be allocated  pro rata among the Holders
of Debentures  based on the principal  amount of such Debentures  issued to each
Holder.  Each increase to the Maximum Share Amount and Reserved  Amount shall be
allocated pro rata among the Holders of Debentures based on the principal amount
of such  Debentures  held by each  Holder  at the  time of the  increase  in the
Maximum  Share  Amount or Reserved  Amount.  In the event a Holder shall sell or
otherwise  transfer any of such Holder's  Debentures,  each transferee  shall be
allocated  a pro rata  portion of such  transferor's  Maximum  Share  Amount and
Reserved  Amount.  Any portion of the Maximum  Share  Amount or Reserved  Amount
which  remains  allocated  to any  person  or  entity  which  does  not hold any
Debentures shall be allocated to the remaining  Holders of Debentures,  pro rata
based on the principal amount of such Debentures then held by such Holders.

                                       17

<PAGE>


     4.9 Damages Shares.  The shares of Common Stock that may be issuable to the
Holder  pursuant to Sections 1.3 and 1.4(g)  hereof and pursuant to Section 2(c)
of the  Registration  Rights  Agreement  ("Damages  Shares") shall be treated as
Common Stock issuable upon  conversion of this Debenture for all purposes hereof
and shall be subject to all of the limitations and afforded all of the rights of
the  other  shares  of  Common  Stock  issuable  hereunder,   including  without
limitation,  the  right  to be  included  in the  Registration  Statement  filed
pursuant to the  Registration  Rights  Agreement.  For  purposes of  calculating
interest payable on the outstanding principal amount hereof, except as otherwise
provided herein,  amounts  convertible  into Damages Shares ("Damages  Amounts")
shall not bear  interest but must be converted  prior to the  conversion  of any
outstanding  principal amount hereof,  until the outstanding  Damages Amounts is
zero.

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

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

     4.12 Notice of Corporate  Events.  Except as otherwise  provided below, the
Holder of this Debenture shall have no rights as a Holder of Common Stock unless
and only to the extent that it converts this  Debenture  into Common Stock.  The
Borrower shall provide the Holder with prior  notification of any meeting of the
Borrower's  stockholders  (and copies of proxy  materials and other  information
sent to stockholders). In the event of any taking by the Borrower of a record of
its stockholders for the purpose of determining stockholders who are entitled to
receive  payment of any dividend or other  distribution,  any right to subscribe
for, purchase or otherwise acquire  (including by way of merger,  consolidation,
reclassification  or  recapitalization)  any  share of any  class  or any  other
securities  or property,  or to receive any other  right,  or for the purpose of
determining  stockholders  who  are  entitled  to vote in  connection  with  any
proposed sale, lease or conveyance of all or substantially  all of the assets of
the  Borrower  or any  proposed  liquidation,  dissolution  or winding up of the
Borrower,  the Borrower shall mail a notice to the Holder,  at least twenty (20)
days prior to the record  date  specified  therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which  any such  record  is to be taken  for the  purpose  of such  dividend,
distribution,  right or other event, and a brief statement  regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public  announcement  of any event
requiring notification to the Holder hereunder substantially simultaneously with
the  notification  to the Holder in  accordance  with the terms of this  Section
4.12.

4.13 Remedies.  The Borrower acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder, by vitiating the intent and
purpose  of the  transaction  contemplated  hereby.  Accordingly,  the  Borrower
acknowledges  that the remedy at law for a breach of its obligations  under this
Debenture will be inadequate and agrees,  in the event of a breach or threatened
breach by the  Borrower of the  provisions  of this  Debenture,  that the Holder
shall be  entitled,  in  addition to all other  available  remedies at law or


                                       18
<PAGE>



in equity, and in addition to the penalties  assessable herein, to an injunction
or  injunctions  restraining,  preventing or curing any breach of this Debenture
and to  enforce  specifically  the terms and  provisions  thereof,  without  the
necessity of showing  economic loss and without any bond or other security being
required.

                         ARTICLE V. OPTIONAL PREPAYMENT

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



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                                       19

<PAGE>


                  IN WITNESS  WHEREOF,  Borrower has caused this Debenture to be
signed in its name by its duly authorized officer this 16th day of April, 2003.


                             TORBAY HOLDINGS, INC.


                             By:    ______________________________
                                    William Thomas Large
                                    President and Chief Executive Officer



                                       20
<PAGE>

                                                                       EXHIBIT A

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

                  The   undersigned   hereby   irrevocably   elects  to  convert
$________principal amount of the Debenture (defined below) into shares of common
stock, par value $.0001 per share ("Common Stock"), of Torbay Holdings,  Inc., a
Delaware  corporation  (the  "Borrower")  according  to  the  conditions  of the
convertible  debentures  of  the  Borrower  dated  as of  April  16,  2003  (the
"Debentures"),  as of the date written below.  If securities are to be issued in
the name of a person other than the  undersigned,  the undersigned  will pay all
transfer  taxes  payable with respect  thereto and is  delivering  herewith such
certificates.  No fee will be charged to the Holder for any  conversion,  except
for transfer  taxes,  if any. A copy of each  Debenture  is attached  hereto (or
evidence of loss, theft or destruction thereof).

                  The Borrower  shall  electronically  transmit the Common Stock
issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system (
"DWAC Transfer").

              Name of DTC Prime Broker:_________________________________________

              Account Number:___________________________________________________

                  In lieu of receiving shares of Common Stock issuable  pursuant
to this Notice of Conversion by way of a DWAC Transfer,  the undersigned  hereby
requests that the Borrower issue a certificate or certificates for the number of
shares of Common Stock set forth below (which  numbers are based on the Holder's
calculation  attached hereto) in the name(s) specified  immediately below or, if
additional space is necessary, on an attachment hereto:

              Name:_____________________________________________________________

              Address:__________________________________________________________

                  The  undersigned  represents  and warrants that all offers and
sales by the  undersigned of the  securities  issuable to the  undersigned  upon
conversion  of the  Debentures  shall be made  pursuant to  registration  of the
securities under the Securities Act of 1933, as amended (the "Act"), or pursuant
to an exemption from registration under the Act.

                  Date of Conversion:_______________________________
                  Applicable Conversion Price:______________________
                  Number of Shares of Common Stock to be Issued Pursuant to
                  Conversion of the Debentures:_____________________
                  Signature:________________________________________
                  Name:_____________________________________________
                  Address:__________________________________________

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



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