Document:

Exhibit 4.1

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: January 11, 2006
Original Conversion Price (subject to adjustment herein): $1.15

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

                      SENIOR SECURED CONVERTIBLE DEBENTURE
                              DUE JANUARY 11, 2009

     THIS SECURED  CONVERTIBLE  DEBENTURE is one of a series of duly  authorized
and issued Senior Secured Convertible Debentures of Electronic Control Security,
Inc.,  a New Jersey  corporation,  having a  principal  place of business at 790
Bloomfield Avenue, Clifton, New Jersey 07012 (the "Company"),  designated as its
Senior Secured Convertible Debenture,  due January 11, 2009 (this debenture, the
"Debenture"  and  collectively  with the other such  series of  debentures,  the
"Debentures").

     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 January 11, 2009 or
such  earlier  date as this  Debenture  is 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:

          "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).

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          "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)  (other  than the  Holder or its  Affiliates)  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 $0.001 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 of this Debenture.

          "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

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     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)(ii) 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.

          "Forced Conversion" shall have the meaning set forth in Section 6(c).

          "Forced Conversion Notice" shall have the meaning set forth in Section
     6(c).

          "Forced  Conversion  Notice  Date" shall have the meaning set forth in
     Section 6(c).

          "Fundamental  Transaction" shall have the meaning set forth in Section
     5(d).

          "Interest  Conversion  Rate"  means the  lesser of (a) the  Conversion
     Price  and  (b)  95% of the  lesser  of (i)  the  average  of the 10  VWAPs
     immediately  prior  to the  applicable  Interest  Payment  Date or (ii) the
     average  of the 10 VWAPs  immediately  prior  to the  date  the  applicable
     interest  payment  shares are issued and  delivered  if after the  Interest
     Payment Date.

          "Interest  Conversion  Shares"  shall  have the  meaning  set forth in
     Section 2(a).

          "Interest  Notice  Period" shall have the meaning set forth in Section
     2(a).

          "Interest  Period"  means,  initially,  the  period  beginning  on and
     including  the Original  Issue Date and ending on and  including  March 31,
     2006 and each  successive  period as follows:  the period  beginning on and
     including April 1 and ending on and including June 30; the period beginning
     on  July 1 and  ending  on and  including  September  30;  and  the  period
     beginning  on October 1 and ending on and  including  December  31; and the
     period beginning on January 1 and ending on and including March 31.

          "Interest  Payment  Date"  shall have the meaning set forth in Section
     2(a).

          "Interest  Share  Amount"  shall have the meaning set forth in Section
     2(a).

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          "Late Fees" shall have the meaning set forth in Section 2(d).

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

          "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).

          "Optional  Redemption"  shall  have the  meaning  set forth in Section
     6(a).

          "Optional  Redemption  Amount"  shall  mean the sum of (i) 120% of the
     principal amount of the Debenture then outstanding, (ii) accrued but unpaid
     interest and (iii) all liquidated  damages and other amounts due in respect
     of the Debenture.

          "Optional Redemption Date" shall have the meaning set forth in Section
     6(a).

          "Optional  Redemption  Notice"  shall  have the  meaning  set forth in
     Section 6(a).

          "Optional  Redemption Notice Date" shall have the meaning set forth in
     Section 6(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  existing on
     the Original Issue Date and set forth on Schedule  3.1(gg)  attached to the
     Purchase  Agreement,  (b) lease obligations and purchase money Indebtedness
     of up to  $_______,  in the  aggregate,  incurred  in  connection  with the
     acquisition of capital assets and lease  obligations  with respect to newly
     acquired or leased assets and (c)  Indebtedness of up to $500,000  incurred
     after the Original  Issue Date pursuant to which the holders  thereof shall
     have entered into a written  subordination  agreement  satisfactory  to the
     Holder,  which  Indebtedness  shall have a maturity date after the Maturity
     Date  hereof  and  shall  have  such  other  terms  and  conditions  as are
     reasonably satisfactory to the Holder.

          "Permitted Lien" shall mean the individual and collective reference to
     the  following:  (a) Liens for taxes,  assessments  and other  governmental
     charges  (including,   without  limitation,  in  connection  with  workers'
     compensation and unemployment insurance) 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 Borrowers)  have been
     established  in accordance  with GAAP,  (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

<PAGE>

     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   Borrowers   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  and (c)  Liens
     incurred  in  connection  with  Permitted  Indebtedness  under  clause  (b)
     thereunder  provided  that  such  Liens  are not  secured  by assets of the
     Borrowers or its Subsidiaries other than the assets so acquired or leased.

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

          "Prime Rate" means, for each Interest Period means, (i) the Prime Rate
     as shown on such  Trading Day  immediately  prior to the  beginning of such
     Interest  Period in The Wall Street  Journal  (Eastern  Edition)  under the
     caption "Money Rates - Prime Rate"; or (ii) if The Wall Street Journal does
     not publish such rate, the rate of interest publicly  announced by Citibank
     N.A.  as its  prime  rate,  on the  Trading  Day  immediately  prior to the
     beginning of such Interest Period.

          "Purchase Agreement" means the Securities Purchase Agreement, dated as
     of January  11,  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.

          "Threshold  Period"  shall  have the  meaning  given  to such  term in
     Section 6(c).

          "Trading  Day"  means a day on which the  Common  Stock is traded on a
     Trading Market.

          "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
     OTC Bulletin Board, the Nasdaq Capital Market, the American Stock Exchange,
     the New York Stock Exchange or the Nasdaq National Market.

          "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

<PAGE>

     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 Common Stock is not then listed
     or quoted on a Trading  Market and if prices for the Common  Stock are then
     quoted on the OTC Bulletin Board,  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  the  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 (c)
     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.

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 per  annum  equal to the
     greater  of (i) 8% per  annum or (ii)  the  Prime  Rate for the  applicable
     Interest Period plus 2.5%, or such lesser rate as shall be the highest rate
     permitted by applicable law, payable  quarterly on April 1, July 1, October
     1 and January 1, beginning on April 1, 2006, on each Conversion Date (as to
     that principal amount then being  converted),  on each Optional  Redemption
     Date (as to that principal  amount then being redeemed) 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,  fully paid and
     non-assessable shares of Common Stock at the Interest Conversion Rate, or a
     combination  thereof (the amount to be paid in shares,  the "Interest Share
     Amount"); provided, however, (i) payment in shares of Common Stock may only
     occur if during the 10 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, unless waived by the Holder in writing, have been
     met and the Company shall have given the Holder  notice in accordance  with
     the notice  requirements set forth below,  (ii) as to such Interest Payment
     Date, prior to the such Interest Notice Period (but not more 5 Trading Days
     prior to the commencement of the 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"),  (iii)  the  average  of the 10  VWAPs  immediately  prior to the
     applicable  Interest  Payment  Date equals or exceeds  the then  Conversion
     Price  and (iv)  the  average  daily  volume  during  the 20  Trading  Days
     immediately prior to the applicable Interest Payment Date equals or exceeds
     (a) 75,000  shares of Common Stock per Trading Day  (subject to  adjustment
     for forward and reverse stock splits,  recapitalizations,  stock  dividends
     and the like  after the  Original  Issue  Date) in the case of an  Interest
     Share  Amount  over 50% of the  interest  payment or (b)  50,000  shares of
     Common Stock per Trading Day (subject to adjustment for forward and reverse
     stock  splits,  recapitalizations,  stock  dividends and the like after the
     Original  Issue Date) in the case of an Interest  Share  Amount equal to or
     less than 50% of the interest payment.

          b)   Company's  Election to Pay Interest in Kind. Subject to the terms
     and conditions  herein,  the decision whether to pay interest  hereunder in
     shares of Common Stock or cash shall be at the  discretion  of the Company.
     Prior to the

<PAGE>

     commencement  of an Interest  Notice Period,  the Company shall provide the
     Holder with 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  (the  Company may indicate in such notice that the
     election  contained in such notice shall  continue for later  periods until
     revised)  and the  Interest  Share  Amount  as to the  applicable  Interest
     Payment Date.  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 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 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) and only 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 in fact 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
     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 the rate of 18% per  annum  (or such
     lower maximum amount of interest  permitted to be charged under  applicable
     law) ("Late Fees") which will accrue daily,  from the date such interest is
     due hereunder  through and  including the date of payment.  Notwithstanding
     anything to the contrary  contained herein, if on any Interest Payment Date
     the Company has elected to pay  interest in Common Stock and is not able to
     pay accrued  interest in the form of Common Stock  because it does not then
     satisfy the  conditions  for payment in the form of 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 cash interest payment, shall deliver, within
     three Trading Days of each applicable  Interest  Payment Date, an amount in
     cash equal to the product of 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  and  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.

<PAGE>

          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.

          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 2 Business  Days 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 $1.15 (subject to adjustment  herein)(the
     "Conversion Price").

<PAGE>

          c)   Conversion Limitations.

               i.   [RESERVED].

               ii.  Holder's  Restriction on  Conversion.  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
          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.  The  "Beneficial  Ownership
          Limitation" shall be 4.99% of the number of shares of the Common Stock

<PAGE>

          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.

          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.

               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 this Debenture
          (including,  if the Company has given  continuous  notice  pursuant to
          Section  2(b) for  payment of  interest  in shares of Common  Stock at
          least 20 Trading Days prior to the date on which the Conversion Notice
          is delivered to the Company,  shares of Common Stock  representing the
          payment of accrued interest otherwise  determined  pursuant to Section
          2(a) but assuming that the Interest  Payment  Period is the 20 Trading
          Days  period  immediately  prior to the date on which  the  Conversion
          Notice is delivered to the Company and excluding for such issuance the
          condition that the Company deliver  Interest  Conversion  Shares as to
          such  interest  payment) 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  commercially  reasonable
          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 third
          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.

<PAGE>

               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 fifth 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 $1000 of
          principal amount being  converted,  $10 per Trading Day (increasing to
          $20 per Trading Day after 5 Trading Days after such  damages  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 third Trading Day after the Conversion  Date,
          and if after such third  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

<PAGE>

          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
          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  (which  notice  shall
          include  evidence of the amounts  payable in respect of such  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 the  terms  and  conditions  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 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.

<PAGE>

               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 other than in connection  with the issuance of shares of Common Stock
     as regularly  scheduled  dividends  pursuant to the terms of the  Company's
     Series B Convertible  Preferred  Stock which  preferred  stock shall not be
     amended after the date hereof to increase the number of such  securities or
     to decrease the exercise,  exchange or conversion  price of such securities
     (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 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 two Business Days
     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

<PAGE>

     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)   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

<PAGE>

     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.

          e)   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.

          f)   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 (other than
          pursuant to the Purchase Agreement) 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

<PAGE>

          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,  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.      Optional Redemption and Forced Conversion.

          a)   Optional  Redemption  at  Election  of  Company.  Subject  to the
     provisions of this Section 6, at any time after the 12-month anniversary of
     the  Effective  Date,  the  Company  may deliver a notice to the Holder (an
     "Optional  Redemption  Notice" and the date such notice is deemed delivered
     hereunder,  the  "Optional  Redemption  Notice  Date")  of its  irrevocable
     election to redeem some or all of the then outstanding  Debentures,  for an
     amount,  in  cash,  equal to the  Optional  Redemption  Amount  on the 20th
     Trading Day following the Optional  Redemption  Notice Date (such date, the
     "Optional Redemption Date" and such redemption, the "Optional Redemption").
     The Optional  Redemption  Amount is due in full on the Optional  Redemption
     Date.  The Company may only  effect an  Optional  Redemption  if during the
     period  commencing  on the Optional  Redemption  Notice Date through to the
     Optional  Redemption Date and through and including the date such shares of
     Common Stock are issued to the Holder,  each of the Equity Conditions shall
     have been met. If any of the Equity  Conditions shall cease to be satisfied
     at any time  during  the  required  period,  then the  Holder  may elect to
     nullify the Optional  Redemption  Notice by notice to the Company  within 3
     Trading Days after the first day on which any such Equity Condition has not
     been met (provided  that if, by a provision of the  Transaction  Documents,
     the Company is  obligated to notify the Holder of the  non-existence  of an
     Equity Condition, such notice period shall be extended to the third Trading
     Day after  proper  notice  from the  Company)  in which  case the  Optional
     Redemption Notice shall be null and void, ab initio.  The Company covenants
     and agrees that it will honor all Notices of  Conversion  tendered from the
     time of delivery of the  Optional  Redemption  Notice  through the date all
     amounts owing thereon are due and paid in full.

          b)   Redemption Procedure. The payment of cash pursuant to an Optional
     Redemption shall be made on the Optional Redemption Date. If any portion of
     the  cash  payment  for an  Optional  Redemption  shall  not be paid by the
     Company by the  respective  due date,  interest shall accrue thereon at the
     rate of 18% per annum (or the maximum  rate  permitted by  applicable  law,
     whichever  is less) until the payment of the  Optional  Redemption  Amount,
     plus all  amounts  owing  thereon  is paid in full.  Alternatively,  if any
     portion of the Optional  Redemption  Amount remains unpaid after such date,
     the Holders  subject to such redemption may elect, by written notice to the
     Company  given  at any  time  thereafter,  to  invalidate  ab  initio  such
     redemption, notwithstanding anything herein contained to the contrary, and,
     with respect the failure to honor the Optional  Redemption  as  applicable,
     the  Company  shall  have  no  further  right  to  exercise  such  Optional
     Redemption. Notwithstanding anything to the contrary in this Section 6, the
     Company's  determination  to redeem in cash or its elections  under Section
     6(b) shall be applied among the Holders of Debentures  ratably.  The Holder
     may elect to convert  the  outstanding  principal  amount of the  Debenture
     pursuant  to Section 4 prior to actual  payment in cash for any  redemption
     under  this  Section 6 by fax  delivery  of a Notice of  Conversion  to the
     Company.

<PAGE>

          c)   Forced  Conversion.   Notwithstanding   anything  herein  to  the
     contrary,  if after the  Effective  Date,  (i) each of the VWAPs for any 20
     consecutive  Trading Days (such period  commencing only after the Effective
     Date,  such  period the  "Threshold  Period"))  exceeds  $3.50  (subject to
     adjustment  for reverse and forward stock splits,  stock  dividends,  stock
     combinations and other similar  transactions of the Common Stock that occur
     after the  Original  Issue Date) and (ii) the daily  trading  volume on the
     Trading  Market for each Trading Day during such  Threshold  Period exceeds
     75,000  shares of Common  Stock  (subject  to  adjustment  for  forward and
     reverse stock splits, recapitalizations, stock dividends and the like after
     the Original Issue Date),  the Company may, within 1 Trading Day of the end
     of any such  period,  deliver a notice to the Holder (a "Forced  Conversion
     Notice" and the date such  notice is  received  by the Holder,  the "Forced
     Conversion Notice Date") to cause the Holder to immediately  convert all or
     part of the then  outstanding  principal  amount of Debentures  pursuant to
     Section 4. The Company may only effect a Forced Conversion Notice if all of
     the Equity Conditions are met through the applicable Threshold Period until
     the date of the applicable  Forced Conversion and through and including the
     date such  shares of Common  Stock are  issued to the  Holder.  Any  Forced
     Conversion  shall be applied  ratably to all Holders based on their initial
     purchases of Debentures pursuant to the Purchase Agreement. For purposes of
     clarification,  a  Forced  Conversion  shall  be  subject  to  all  of  the
     provisions  of Section 4,  including,  without  limitation,  the  provision
     requiring payment of liquidated damages and limitations on conversions.

     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  materially  and  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 (other than regularly scheduled dividends pursuant to the terms
     of the Company's Series B Convertible Preferred Stock which preferred stock
     shall not be amended after the date hereof to increase the dividend rate or
     number of shares of such securities).

<PAGE>

     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 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) 7 Trading Days
          after notice of such default sent by the Holder or by any other Holder
          and (B)15  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
          within the earlier to occur of (i) 5 Trading Days after notice of such
          default  sent by the Holder or by any other Holder and (ii) 10 Trading
          Days after the Company shall become or, should reasonably have become,
          aware of such failure,  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 or in any other
          Transaction  Documents  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 a
          case, as debtor, 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 a case
          against the Company or any  Subsidiary  thereof,  under any applicable
          bankruptcy  or  insolvency  laws, as now or hereafter in effect or any
          successor  thereto 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

<PAGE>

          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  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 ten 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 30  consecutive  Trading  Days  or 60  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 Company  shall be permitted an  additional  10  consecutive
          Trading Days during any 12 month period relating to such an event;

<PAGE>

               xi.  the   Company   shall   fail  for  any   reason  to  deliver
          certificates  to a  Holder  prior to the  fifth  Trading  Day  after a
          Conversion  Date or any  Forced  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. any monetary  judgment,  writ or similar final process shall
          be entered or filed  against the  Company,  any  Subsidiary  or any of
          their respective property or other assets for more than $100,000,  and
          shall  remain  unvacated,  unbonded  or  unstayed  for a period  of 45
          calendar days.

          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  Default  Amount.  Commencing 10 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
     15% per annum,  or such lower  maximum  amount of interest  permitted to be
     charged  under  applicable  law.  Upon the payment in full of the Mandatory
     Default Amount on this entire Debenture the Holder shall promptly surrender
     this  Debenture  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 (973) 574-8562, Attn: Arthur Barchenko,  President or such
     other  address or  facsimile  number as the  Company  may  specify for such
     purposes by notice to the Holder 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  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.

<PAGE>

          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.  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.

<PAGE>

          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.

          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.

<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.

                                        ELECTRONIC CONTROL SECURITY, INC.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:Exhibit 4.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
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  EXERCISE  OF THIS
SECURITY  MAY BE PLEDGED IN  CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT WITH A
REGISTERED  BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL  INSTITUTION THAT IS AN
"ACCREDITED  INVESTOR"  AS DEFINED IN RULE 501(a)  UNDER THE  SECURITIES  ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                        ELECTRONIC CONTROL SECURITY, INC.

     THIS COMMON STOCK  PURCHASE  WARRANT (the  "Warrant")  certifies  that, for
value received,  _____________ (the "Holder"),  is entitled,  upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the date hereof (the "Initial  Exercise Date") and on or
prior to the close of  business  on the third year  anniversary  of the  Initial
Exercise Date (the "Termination Date") but not thereafter,  to subscribe for and
purchase from Electronic  Control Security,  Inc., a New Jersey corporation (the
"Company"),  up to ______  shares (the "Warrant  Shares") of Common  Stock,  par
value $0.001 per share, of the Company (the "Common Stock").  The purchase price
of one share of Common Stock under this  Warrant  shall be equal to the Exercise
Price, as defined in Section 2(b).

     Section 1.  Definitions.  Capitalized  terms used and not otherwise defined
herein shall have the meanings  set forth in that  certain  Securities  Purchase
Agreement (the "Purchase Agreement"),  dated January 11, 2006, among the Company
and the purchasers signatory thereto.

     Section 2.         Exercise.

          a)   Exercise of Warrant.  Exercise of the purchase rights represented
     by this Warrant may be made,  in whole or in part,  at any time or times on
     or after the Initial Exercise Date and on or before the Termination Date by
     delivery to the Company of a duly executed  facsimile copy of the Notice of
     Exercise Form annexed hereto (or such other office or agency of the Company
     as it may  designate by notice in writing to the  registered  Holder at the
     address of such Holder  appearing on the books of the  Company);  provided,

<PAGE>

     however,  within 5 Trading  Days of the date said  Notice  of  Exercise  is
     delivered to the Company,  if this Warrant is exercised in full, the Holder
     shall have  surrendered  this Warrant to the Company and the Company  shall
     have received payment of the aggregate Exercise Price of the shares thereby
     purchased  by wire  transfer or  cashier's  check drawn on a United  States
     bank. Notwithstanding anything herein to the contrary, the Holder shall not
     be required to physically  surrender  this Warrant to the Company until the
     Holder has purchased all of the Warrant Shares available  hereunder and the
     Warrant has been  exercised  in full.  Partial  exercises  of this  Warrant
     resulting in  purchases of a portion of the total number of Warrant  Shares
     available  hereunder  shall have the  effect of  lowering  the  outstanding
     number of Warrant  Shares  purchasable  hereunder in an amount equal to the
     applicable number of Warrant Shares  purchased.  The Holder and the Company
     shall maintain  records showing the number of Warrant Shares  purchased and
     the date of such purchases.  The Company shall deliver any objection to any
     Notice of Exercise Form 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  Warrant,  acknowledge  and agree
     that, by reason of the provisions of this paragraph, following the purchase
     of a portion of the Warrant Shares hereunder,  the number of Warrant Shares
     available  for  purchase  hereunder  at any given time may be less than the
     amount stated on the face hereof.

          b)   Exercise Price. The exercise price of the Common Stock under this
     Warrant shall be $2.00,  subject to  adjustment  hereunder  (the  "Exercise
     Price").

          c)   Cashless Exercise. If at any time after one year from the date of
     issuance  of this  Warrant  there is no  effective  Registration  Statement
     registering,  or no current  prospectus  available  for,  the resale of the
     Warrant  Shares by the Holder,  then this  Warrant may also be exercised at
     such time by means of a "cashless  exercise"  in which the Holder  shall be
     entitled to receive a certificate for the number of Warrant Shares equal to
     the quotient obtained by dividing [(A-B) (X)] by (A), where:

          (A) = the VWAP on the Trading Day  immediately  preceding  the date of
                such election;

          (B) = the Exercise Price of this Warrant, as adjusted; and

          (X) = the number of Warrant  Shares  issuable  upon  exercise  of this
                Warrant  in  accordance  with the terms of this  Warrant by
                means of a cash exercise rather than a cashless exercise.

     Notwithstanding  anything herein to the contrary,  on the Termination Date,
this Warrant shall be automatically  exercised via cashless exercise pursuant to
this Section 2(c).

          d)   Holder's Restrictions.  The Company shall not effect any exercise
     of this  Warrant,  and a Holder  shall not have the right to  exercise  any
     portion of this  Warrant,  pursuant to Section  2(c) or  otherwise,  to the
     extent that after  giving  effect to such  issuance  after  exercise,  such
     Holder  (together  with 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  Exercise,  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 exercise
     of this Warrant 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) exercise of the remaining,  nonexercised portion
     of this Warrant  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 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 2(d), beneficial ownership shall be
     calculated  in  accordance  with Section  13(d) of the Exchange Act and the
     rules and regulations  promulgated  thereunder,  it being acknowledged by a
     Holder  that the  Company  is not  representing  to such  Holder  that such
     calculation  is in  compliance  with Section  13(d) of the Exchange Act and
     such Holder is solely responsible for any schedules required to be filed in
     accordance  therewith.  To the extent that the limitation contained in this
     Section  2(d)  applies,  the  determination  of  whether  this  Warrant  is
     exercisable (in relation to other  securities  owned by such Holder) and of
     which a  portion  of this  Warrant  is  exercisable  shall  be in the  sole
     discretion of a Holder, and the submission of a Notice of Exercise shall be
     deemed  to be each  Holder's  determination  of  whether  this  Warrant  is
     exercisable (in relation to other  securities  owned by such Holder) and of
     which portion of this Warrant is exercisable,  in each case subject to such
     aggregate percentage  limitation,  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
     2(d), 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 (x) the Company's  most recent Form 10-QSB or Form 10-KSB,  as
     the case may be, (y) a more recent  public  announcement  by the Company or
     (z) 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

<PAGE>

     of securities of the Company, including this Warrant, by such Holder or its
     Affiliates since the date as of which such number of outstanding  shares of
     Common Stock was reported.  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
     exercise of this Warrant. The Beneficial Ownership Limitation provisions of
     this  Section  2(d) 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 exercise of this Warrant, and the provisions of
     this Section 2(d) 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
     2(d) 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 Warrant. =

          e)   Mechanics of Exercise.

               i.   Authorization of Warrant Shares.  The Company covenants that
          all  Warrant  Shares  which may be  issued  upon the  exercise  of the
          purchase rights represented by this Warrant will, upon exercise of the
          purchase  rights  represented  by this  Warrant,  be duly  authorized,
          validly issued,  fully paid and nonassessable and free from all taxes,
          liens and charges in respect of the issue thereof (other than taxes in
          respect of any transfer occurring contemporaneously with such issue).

<PAGE>

               ii.  Delivery of  Certificates  Upon Exercise.  Certificates  for
          shares purchased  hereunder shall be transmitted by the transfer agent
          of the Company to the Holder by crediting  the account of the Holder's
          prime broker with the  Depository  Trust  Company  through its Deposit
          Withdrawal  Agent  Commission  ("DWAC")  system  if the  Company  is a
          participant in such system,  and otherwise by physical delivery to the
          address  specified  by the Holder in the Notice of  Exercise  within 3
          Trading  Days  from the  delivery  to the  Company  of the  Notice  of
          Exercise Form,  surrender of this Warrant (if required) and payment of
          the  aggregate  Exercise  Price as set  forth  above  ("Warrant  Share
          Delivery  Date").  This Warrant shall be deemed to have been exercised
          on the date the Exercise Price is received by the Company. The Warrant
          Shares  shall be deemed to have been  issued,  and Holder or any other
          person  so  designated  to be named  therein  shall be  deemed to have
          become a holder of record of such shares for all  purposes,  as of the
          date the Warrant has been  exercised  by payment to the Company of the
          Exercise  Price and all taxes  required to be paid by the  Holder,  if
          any,  pursuant  to Section  2(e)(vii)  prior to the  issuance  of such
          shares, have been paid.

               iii. Delivery of New  Warrants  Upon  Exercise.  If this  Warrant
          shall have been exercised in part,  the Company shall,  at the request
          of a Holder and upon  surrender  of this Warrant  certificate,  at the
          time of  delivery  of the  certificate  or  certificates  representing
          Warrant Shares,  deliver to Holder a new Warrant evidencing the rights
          of Holder to purchase the  unpurchased  Warrant  Shares  called for by
          this  Warrant,  which  new  Warrant  shall in all  other  respects  be
          identical with this Warrant.

               iv.  Rescission  Rights.  If  the  Company  fails  to  cause  its
          transfer agent to transmit to the Holder a certificate or certificates
          representing  the Warrant Shares pursuant to this Section  2(e)(iv) by
          the Warrant Share Delivery  Date,  then the Holder will have the right
          to rescind such exercise.

               v.   Compensation   for  Buy-In  on  Failure  to  Timely  Deliver
          Certificates Upon Exercise.  In addition to any other rights available
          to the Holder,  if the Company  fails to cause its  transfer  agent to
          transmit to the Holder a certificate or certificates  representing the
          Warrant Shares  pursuant to an exercise on or before the Warrant Share
          Delivery  Date,  and if after such date the Holder is  required by its
          broker to purchase (in an open market transaction or otherwise) shares
          of Common Stock to deliver in  satisfaction of a sale by the Holder of
          the Warrant  Shares which the Holder  anticipated  receiving upon such
          exercise (a  "Buy-In"),  then the Company shall (1) pay in cash to the
          Holder  the  amount by which (x) the  Holder's  total  purchase  price
          (including  brokerage  commissions,  if any) for the  shares of Common
          Stock so purchased  exceeds (y) the amount obtained by multiplying (A)
          the number of Warrant  Shares that the Company was required to deliver
          to the Holder in  connection  with the exercise at issue times (B) the
          price at which the sell order giving rise to such purchase  obligation
          was executed,  and (2) at the option of the Holder,  either  reinstate
          the portion of the Warrant and equivalent number of Warrant Shares for
          which  such  exercise  was not  honored  or  deliver to the Holder the
          number of shares of Common  Stock that would have been  issued had the
          Company  timely  complied  with its exercise and delivery  obligations
          hereunder.  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

<PAGE>

          attempted  exercise of shares of Common Stock with an  aggregate  sale
          price giving rise to such purchase obligation of $10,000, under clause
          (1) 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,  together  with  applicable  confirmations  and
          other  evidence  reasonably  requested by the Company.  Nothing herein
          shall limit a Holder's right to pursue any other remedies available to
          it hereunder,  at law or in equity including,  without  limitation,  a
          decree of specific  performance  and/or injunctive relief with respect
          to the Company's failure to timely deliver  certificates  representing
          shares of Common  Stock  upon  exercise  of the  Warrant  as  required
          pursuant to the terms hereof.

               vi.  No Fractional Shares or Scrip. No fractional shares or scrip
          representing  fractional  shares  shall be issued upon the exercise of
          this  Warrant.  As to any  fraction  of a  share  which  Holder  would
          otherwise  be  entitled to purchase  upon such  exercise,  the Company
          shall pay a cash  adjustment  in respect of such final  fraction in an
          amount equal to such fraction multiplied by the Exercise Price.

               vii. Charges,  Taxes and Expenses.  Issuance of certificates  for
          Warrant  Shares  shall be made  without  charge to the  Holder for any
          issue or transfer  tax or other  incidental  expense in respect of the
          issuance of such certificate, all of which taxes and expenses shall be
          paid by the Company, and such certificates shall be issued in the name
          of the  Holder  or in such  name or  names as may be  directed  by the
          Holder; provided,  however, that in the event certificates for Warrant
          Shares are to be issued in a name  other than the name of the  Holder,
          this Warrant when surrendered for exercise shall be accompanied by the
          Assignment Form attached  hereto duly executed by the Holder;  and the
          Company  may  require,  as a condition  thereto,  the payment of a sum
          sufficient to reimburse it for any transfer tax incidental thereto.

               viii. Closing  of  Books.   The   Company   will  not  close  its
          stockholder  books or records in any manner which  prevents the timely
          exercise of this Warrant, pursuant to the terms hereof.

     Section 3.         Certain Adjustments.

          a)   Stock  Dividends  and Splits.  If the Company,  at any time while
     this Warrant 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
     other than in  connection  with the  issuance of shares of Common  Stock as
     regularly scheduled dividends pursuant to the terms of the Company's Series
     B Convertible  Preferred  Stock which  preferred stock shall not be amended
     after the date  hereof to  increase  the  number of such  securities  or to
     decrease the  exercise,  exchange or  conversion  price of such  securities
     (which,  for  avoidance  of doubt,  shall not  include any shares of Common
     Stock issued by the Company  pursuant to this Warrant or upon conversion of
     the Debentures),  (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 in each case the Exercise Price shall
     be multiplied  by a fraction of which the numerator  shall be the number of

<PAGE>

     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
     and the number of shares  issuable  upon  exercise of this Warrant shall be
     proportionately adjusted. Any adjustment made pursuant to this Section 3(a)
     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  Warrant 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 Exercise Price (such lower price, the "Base Share Price"
     and such  issuances  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
     Exercise  Price,  such  issuance  shall be deemed to have occurred for less
     than the Exercise Price on such date of the Dilutive  Issuance),  then, the
     Exercise  Price shall be reduced  and only  reduced to equal the Base Share
     Price  and the  number  of  Warrant  Shares  issuable  hereunder  shall  be
     increased such that the aggregate Exercise Price payable  hereunder,  after
     taking into account the decrease in the Exercise  Price,  shall be equal to
     the aggregate  Exercise  Price prior to such  adjustment.  Such  adjustment
     shall be made  whenever such Common Stock or Common Stock  Equivalents  are
     issued.  Notwithstanding the foregoing,  no adjustments shall be made, paid
     or issued  under this Section  3(b) in respect of an Exempt  Issuance.  The
     Company  shall notify the Holder in writing,  no later than the Trading 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 3(b),  upon the occurrence of any Dilutive
     Issuance,  after the date of such Dilutive  Issuance the Holder is entitled
     to receive a number of  Warrant  Shares  based  upon the Base  Share  Price
     regardless of whether the Holder  accurately refers to the Base Share Price
     in the Notice of Exercise.

          c)   Pro Rata Distributions.  If the Company, at any time prior to the
     Termination  Date, shall distribute to all holders of Common Stock (and not
     to  Holders  of the  Warrants)  evidences  of its  indebtedness  or  assets
     (including  cash and cash dividends) or rights or warrants to subscribe for
     or  purchase  any  security  other than the Common  Stock  (which  shall be
     subject to Section  3(b)),  then in each such case the Exercise Price shall
     be adjusted by multiplying the Exercise 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 per share
     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.

<PAGE>

          d)   Fundamental  Transaction.  If, at any time while this  Warrant 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  exercise of this
     Warrant, the Holder shall have the right to receive, for each Warrant Share
     that would have been issuable upon such exercise  immediately  prior to the
     occurrence of such  Fundamental  Transaction,  at the option of the Holder,
     (a) upon exercise of this Warrant,  the number of shares of Common Stock of
     the  successor or  acquiring  corporation  or of the Company,  if it is the
     surviving  corporation,  and any additional  consideration  (the "Alternate
     Consideration")  receivable  upon or as a  result  of such  reorganization,
     reclassification,  merger,  consolidation  or  disposition  of  assets by a
     Holder of the number of shares of Common  Stock for which  this  Warrant is
     exercisable  immediately  prior  to such  event  or (b) if the  Company  is
     acquired  in an all  cash  transaction,  cash  equal  to the  value of this
     Warrant as determined in accordance with the  Black-Scholes  option pricing
     formula.  For  purposes  of any such  exercise,  the  determination  of the
     Exercise 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  Exercise  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 exercise
     of this  Warrant  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  warrant  consistent  with the  foregoing  provisions  and
     evidencing  the Holder's  right to exercise  such  warrant  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  Section 3(d) and
     insuring  that this  Warrant  (or any such  replacement  security)  will be
     similarly  adjusted  upon  any  subsequent   transaction   analogous  to  a
     Fundamental Transaction.

          e)   Calculations. All calculations under this Section 3 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 3, 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.

          f)   Voluntary  Adjustment  By  Company.  The  Company may at any time
     during the term of this Warrant  reduce the then current  Exercise Price to
     any amount and for any period of time  deemed  appropriate  by the Board of
     Directors of the Company.

<PAGE>

          g)   Notice to Holders.

               i.   Adjustment to Exercise Price. Whenever the Exercise Price is
          adjusted  pursuant to this Section 3, the Company shall  promptly mail
          to each Holder a notice  setting  forth the Exercise  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 Exercise 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 mailed to the Holder at its last
          address as it shall  appear upon the Warrant  Register 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, 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  exercise  this  Warrant  during  the  20-day  period
          commencing  on the date of such  notice to the  effective  date of the
          event triggering such notice.

     Section 4.         Transfer of Warrant.

          a)   Transferability.   Subject  to  compliance  with  any  applicable
     securities  laws and the  conditions  set forth in  Sections  5(a) and 4(d)
     hereof and to the provisions of Section 4.1 of the Purchase Agreement, this
     Warrant and all rights  hereunder  are  transferable,  in whole or in part,
     upon  surrender  of this  Warrant at the  principal  office of the Company,
     together  with a written  assignment of this Warrant  substantially  in the
     form  attached  hereto duly executed by the Holder or its agent or attorney

<PAGE>

     and funds  sufficient to pay any transfer  taxes payable upon the making of
     such  transfer.  Upon such surrender  and, if required,  such payment,  the
     Company  shall execute and deliver a new Warrant or Warrants in the name of
     the  assignee  or  assignees  and  in  the  denomination  or  denominations
     specified in such instrument of assignment, and shall issue to the assignor
     a new Warrant  evidencing the portion of this Warrant not so assigned,  and
     this Warrant shall promptly be cancelled.  A Warrant, if properly assigned,
     may be exercised by a new holder for the purchase of Warrant Shares without
     having a new Warrant issued.

          b)   New Warrants.  This Warrant may be divided or combined with other
     Warrants upon  presentation  hereof at the aforesaid office of the Company,
     together with a written notice  specifying the names and  denominations  in
     which new Warrants  are to be issued,  signed by the Holder or its agent or
     attorney. Subject to compliance with Section 4(a), as to any transfer which
     may be involved in such division or combination,  the Company shall execute
     and  deliver a new  Warrant or  Warrants  in  exchange  for the  Warrant or
     Warrants to be divided or combined in accordance with such notice.

          c)   Warrant Register.  The Company shall register this Warrant,  upon
     records to be  maintained  by the Company for that  purpose  (the  "Warrant
     Register"),  in the name of the record Holder hereof from time to time. The
     Company  may deem and treat the  registered  Holder of this  Warrant as the
     absolute  owner  hereof  for the  purpose  of any  exercise  hereof  or any
     distribution  to the  Holder,  and for all other  purposes,  absent  actual
     notice to the contrary.

          d)   Transfer  Restrictions.  If, at the time of the surrender of this
     Warrant in connection  with any transfer of this  Warrant,  the transfer of
     this Warrant shall not be registered pursuant to an effective  registration
     statement under the Securities Act and under applicable state securities or
     blue sky laws,  the Company may require,  as a condition  of allowing  such
     transfer (i) that the Holder or transferee of this Warrant, as the case may
     be,  furnish to the  Company a written  opinion of counsel  (which  opinion
     shall be in form,  substance and scope customary for opinions of counsel in
     comparable  transactions)  to the  effect  that such  transfer  may be made
     without  registration  under the Securities Act and under  applicable state
     securities or blue sky laws, (ii) that the holder or transferee execute and
     deliver  to  the  Company  an  investment  letter  in  form  and  substance
     acceptable to the Company and (iii) that the  transferee be an  "accredited
     investor" as defined in Rule 501(a)(1),  (a)(2),  (a)(3), (a)(7), or (a)(8)
     promulgated under the Securities Act or a qualified  institutional buyer as
     defined in Rule 144A(a) under the Securities Act.

     Section 5.         Miscellaneous.

          a)   Title to Warrant.  Prior to the  Termination  Date and subject to
     compliance with applicable laws and Section 4 of this Warrant, this Warrant
     and all rights  hereunder  are  transferable,  in whole or in part,  at the
     office  or  agency  of the  Company  by the  Holder  in  person  or by duly
     authorized  attorney,  upon  surrender  of this Warrant  together  with the
     Assignment Form annexed hereto properly endorsed. The transferee shall sign
     an investment letter in form and substance  reasonably  satisfactory to the
     Company.

          b)   No Rights as Shareholder  Until  Exercise.  This Warrant does not
     entitle the Holder to any voting rights or other rights as a shareholder of
     the  Company  prior to the  exercise  hereof.  Upon the  surrender  of this
     Warrant and the payment of the aggregate  Exercise  Price (or by means of a
     cashless exercise),  the Warrant Shares so purchased shall be and be deemed
     to be issued to such  Holder as the record  owner of such  shares as of the
     close of business on the later of the date of such surrender or payment.

<PAGE>

          c)   Loss,  Theft,  Destruction or Mutilation of Warrant.  The Company
     covenants  that  upon  receipt  by  the  Company  of  evidence   reasonably
     satisfactory  to it of the loss,  theft,  destruction or mutilation of this
     Warrant or any stock  certificate  relating to the Warrant  Shares,  and in
     case of loss,  theft or  destruction,  of indemnity or security  reasonably
     satisfactory  to it (which,  in the case of the Warrant,  shall not include
     the  posting of any bond),  and upon  surrender  and  cancellation  of such
     Warrant or stock  certificate,  if  mutilated,  the  Company  will make and
     deliver a new  Warrant or stock  certificate  of like tenor and dated as of
     such cancellation, in lieu of such Warrant or stock certificate.

          d)   Saturdays,  Sundays,  Holidays, etc. If the last or appointed day
     for the taking of any action or the  expiration  of any right  required  or
     granted herein shall be a Saturday,  Sunday or a legal  holiday,  then such
     action may be taken or such right may be exercised  on the next  succeeding
     day not a Saturday, Sunday or legal holiday.

          e)   Authorized Shares.

               The  Company  covenants  that  during the  period the  Warrant is
          outstanding,  it will reserve from its authorized and unissued  Common
          Stock a sufficient number of shares to provide for the issuance of the
          Warrant  Shares upon the  exercise of any  purchase  rights under this
          Warrant.  The  Company  further  covenants  that its  issuance of this
          Warrant  shall  constitute  full  authority  to its  officers  who are
          charged with the duty of executing  stock  certificates to execute and
          issue the  necessary  certificates  for the  Warrant  Shares  upon the
          exercise of the purchase  rights under this Warrant.  The Company will
          take all such  reasonable  action as may be  necessary  to assure that
          such Warrant Shares may be issued as provided herein without violation
          of any  applicable law or regulation,  or of any  requirements  of the
          Trading Market upon which the Common Stock may be listed.

               Except and to the extent as waived or consented to by the Holder,
          the Company shall not by any action,  including,  without  limitation,
          amending   its   certificate   of   incorporation   or   through   any
          reorganization,    transfer   of   assets,   consolidation,    merger,
          dissolution,  issue  or  sale of  securities  or any  other  voluntary
          action, avoid or seek to avoid the observance or performance of any of
          the terms of this Warrant,  but will at all times in good faith assist
          in the  carrying  out of all such  terms and in the taking of all such
          actions as may be  necessary or  appropriate  to protect the rights of
          Holder  as set  forth  in this  Warrant  against  impairment.  Without
          limiting the  generality  of the  foregoing,  the Company will (a) not
          increase the par value of any Warrant  Shares above the amount payable
          therefor upon such exercise  immediately prior to such increase in par
          value,  (b) take all such action as may be necessary or appropriate in
          order that the Company  may  validly and legally  issue fully paid and
          nonassessable  Warrant  Shares upon the exercise of this Warrant,  and
          (c)  use   commercially   reasonable   efforts   to  obtain  all  such
          authorizations, exemptions or consents from any public regulatory body
          having jurisdiction  thereof as may be necessary to enable the Company
          to perform its obligations under this Warrant.

               Before  taking any action which would result in an  adjustment in
          the number of Warrant  Shares for which this Warrant is exercisable or
          in  the   Exercise   Price,   the  Company   shall   obtain  all  such
          authorizations or exemptions  thereof,  or consents thereto, as may be
          necessary   from  any  public   regulatory   body  or  bodies   having
          jurisdiction thereof.

<PAGE>

          f)   Jurisdiction.   All  questions   concerning   the   construction,
     validity,   enforcement  and   interpretation  of  this  Warrant  shall  be
     determined in accordance with the provisions of the Purchase Agreement.

          g)   Restrictions.  The Holder  acknowledges  that the Warrant  Shares
     acquired upon the exercise of this Warrant,  if not  registered,  will have
     restrictions upon resale imposed by state and federal securities laws.

          h)   Nonwaiver  and  Expenses.  No course of  dealing  or any delay or
     failure to exercise any right hereunder on the part of Holder shall operate
     as a waiver of such right or otherwise prejudice Holder's rights, powers or
     remedies,  notwithstanding  the fact that all rights hereunder terminate on
     the  Termination  Date. If the Company  willfully  and  knowingly  fails to
     comply with any  provision of this  Warrant,  which results in any material
     damages to the  Holder,  the Company  shall pay to Holder  such  amounts as
     shall be  sufficient  to cover any costs and  expenses  including,  but not
     limited  to,  reasonable  attorneys'  fees,  including  those of  appellate
     proceedings,  incurred by Holder in  collecting  any  amounts due  pursuant
     hereto or in  otherwise  enforcing  any of its  rights,  powers or remedies
     hereunder.

          i)   Notices.  Any  notice,  request  or other  document  required  or
     permitted to be given or  delivered  to the Holder by the Company  shall be
     delivered  in  accordance  with  the  notice  provisions  of  the  Purchase
     Agreement.

          j)   Limitation of Liability.  No provision  hereof, in the absence of
     any  affirmative  action by Holder to  exercise  this  Warrant or  purchase
     Warrant  Shares,  and no enumeration  herein of the rights or privileges of
     Holder,  shall give rise to any liability of Holder for the purchase  price
     of any  Common  Stock or as a  stockholder  of the  Company,  whether  such
     liability is asserted by the Company or by creditors of the Company.

          k)   Remedies.  Holder,  in addition to being entitled to exercise all
     rights granted by law, including  recovery of damages,  will be entitled to
     specific  performance of its rights under this Warrant.  The Company agrees
     that  monetary  damages  would not be  adequate  compensation  for any loss
     incurred by reason of a breach by it of the  provisions of this Warrant and
     hereby  agrees to waive the defense in any action for specific  performance
     that a remedy at law would be adequate.

          l)   Successors and Assigns.  Subject to applicable  securities  laws,
     this Warrant and the rights and obligations evidenced hereby shall inure to
     the benefit of and be binding  upon the  successors  of the Company and the
     successors and permitted assigns of Holder.  The provisions of this Warrant
     are intended to be for the benefit of all Holders from time to time of this
     Warrant  and shall be  enforceable  by any such Holder or holder of Warrant
     Shares.

          m)   Amendment.  This  Warrant  may  be  modified  or  amended  or the
     provisions  hereof  waived with the written  consent of the Company and the
     Holder.

          n)   Severability.  Wherever possible,  each provision of this Warrant
     shall be  interpreted  in such  manner as to be  effective  and valid under
     applicable law, but if any provision of this Warrant shall be prohibited by
     or invalid under applicable law, such provision shall be ineffective to the
     extent  of  such  prohibition  or  invalidity,   without  invalidating  the
     remainder of such provisions or the remaining provisions of this Warrant.

<PAGE>

          o)   Headings.   The  headings  used  in  this  Warrant  are  for  the
     convenience of reference  only and shall not, for any purpose,  be deemed a
     part of this Warrant.

     IN WITNESS  WHEREOF,  the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.

Dated: January 11, 2006

                                             ELECTRONIC CONTROL SECURITY, INC.

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

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