Document:

Unassociated Document

    REGISTRATION
      RIGHTS AGREEMENT

    

    REGISTRATION
      RIGHTS AGREEMENT (this "Agreement"), dated as of December 28,
      2006,
      by and between BIOMETRX, INC., a Delaware corporation (the "Company"), and
      ___________________________________, and
      ______________ (“Buyer”).

    

    WHEREAS:

    

    A.
      In
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the "Securities Purchase Agreement"), the Company
      has agreed, upon the terms and subject to the conditions contained therein,
      to
      issue and sell to the Buyer the following:

    

    (i)
      Convertible debentures of the Company (the “Debentures”) issued pursuant to the
      Securities Purchase Agreement, and

    

    (ii)
      Warrants in the amount described in the Securities Purchase
      Agreement,

    

    where
      the
      Debenture is convertible into shares of the Company's common stock, par value
      $0.001
      per
      share (the "Common Stock"), upon the terms and subject to the limitations and
      conditions set forth in the Debenture and where each of the Warrants is
      exercisable into shares of Common Stock, each upon the terms and conditions
      and
      subject to the limitations and conditions set forth in the Warrants, all subject
      to the terms and conditions of the Securities Purchase Agreement;
      and

    

    B.
      To
      induce the Buyer to execute and deliver the Securities Purchase Agreement,
      the
      Company has agreed to provide certain registration rights under the Securities
      Act of 1933, as amended, and the rules and regulations thereunder, or any
      similar successor statute (collectively, the "1933 Act"), and applicable state
      securities laws;

    

    NOW,
      THEREFORE,
      In
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and the Buyer hereby agree as
      follows:

    

    1.
      DEFINITIONS.

    

    a.
      As
      used in this Agreement, the following terms shall have the following
      meanings:

    

    (i)
      "BUYER" means _______________ and any transferee or assignee who agrees to
      become bound by the provisions of this Agreement in accordance with Section
      9
      hereof.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (ii)
      “FILING DEADLINE,” for a given Registration statement, shall mean the date that
      is thirty (30) days after the date of Closing of the Debenture for which such
      registration is being effected.

    

    (iii)
      “REGISTRATION DEADLINE” shall mean the date that is one hundred ninety (90) days
      after the date of Closing of the Debenture for which such registration is being
      effected. 

    

    (iv)
      “WARRANTS” means the warrants issued by the Company in conjunction with the
      Debenture issued by the Company.

    

    (v)
      "REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration effected
      by
      preparing and filing a Registration Statement or Statements in compliance with
      the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule
      providing for offering securities on a continuous basis ("RULE 415"), and the
      declaration or ordering of effectiveness of such Registration Statement by
      the
      United States Securities and Exchange Commission (the "SEC").

    

    (vi)
      "REGISTRABLE SECURITIES," for a given Registration, means (a) the shares of
      Common Stock (the “Conversion Shares”) issued or issuable upon full conversion
      of the Debenture or otherwise pursuant to the Debenture for which such
      Registration is being effected (including, without limitation, any shares issued
      or issuable as “Payment Shares” or otherwise pursuant to the Securities Purchase
      Agreement), and (b) any shares of Common Stock (the “Warrant Shares”) issued or
      issuable upon exercise of or otherwise pursuant to the Warrant(s), and (c)
      any
      shares of capital stock issued or issuable as a dividend on or in exchange
      for
      or otherwise with respect to any of the foregoing, and (d) any other shares
      of
      common stock issued pursuant to the terms of the Securities Purchase Agreement,
      the Debenture, the Warrants, this Registration Rights Agreement or any other
      Transaction Document (as defined in the Securities Purchase Agreement) (in
      each
      case, without giving effect to any limitations on conversion set forth in the
      Debenture or limitations on exercise set forth in the Warrant), and (e) any
      securities issued or issuable upon any stock split, dividend or other
      distribution, recapitalization or similar event or in connection with any
      anti-dilution provisions with respect to the foregoing.

    

    (vii)
      "REGISTRATION STATEMENT(S)" means a registration statement(s) of the Company
      under the 1933 Act.

    

    b.
      Capitalized terms used herein and not otherwise defined herein shall have the
      respective meanings set forth in the Securities Purchase Agreement.

    

    2.
      REGISTRATION.

    

    a.
      MANDATORY REGISTRATION.
      Following the Closing of any Debenture pursuant to the Securities Purchase
      Agreement, the Company shall prepare, and, on or prior to the applicable Filing
      Deadline (as defined above) file with the SEC a Registration Statement on Form
      SB-2 (or, if Form SB-2 is not then available, on such form of Registration
      Statement as is then available to effect a registration of the Registrable
      Securities, subject to the consent of the Buyer, which consent will not be
      unreasonably withheld) covering the resale of the Registrable Securities which
      Registration Statement, to the extent allowable under the 1933 Act and the
      rules
      and regulations promulgated thereunder (including Rule 416), shall state that
      such Registration Statement also covers such indeterminate number of additional
      shares of Common Stock as may become issuable upon conversion of or otherwise
      pursuant to the Debenture and exercise of or otherwise pursuant to the Warrants
      to prevent dilution resulting from stock splits, stock dividends or similar
      transactions. The number of shares of Common Stock initially included in such
      Registration Statement shall be no less than one and one-half (1.5) times the
      aggregate number of Conversion Shares that are then issuable upon conversion
      of
      the Debenture or otherwise pursuant to the Debenture (based on the Conversion
      Price [as defined in the Debenture] then in effect) plus the aggregate number
      of
      Warrant Shares that are then issuable upon exercise of or otherwise pursuant
      to
      the Warrants, without regard to any limitation on the Buyer's ability to convert
      the Debenture or exercise the Warrants. The Company acknowledges that the number
      of shares initially included in each Registration Statement represents a good
      faith estimate of the maximum number of shares issuable upon conversion of
      the
      Debenture or otherwise pursuant to the Debenture and exercise of or otherwise
      pursuant to the Warrants and shall be amended if not sufficient. Each
      Registration Statement (and each amendment or supplement thereto, and each
      request for acceleration of effectiveness thereof) shall be provided to (and
      subject to the approval of) the Buyer and its counsel prior to its filing or
      other submission. 

     

    
      
        
        

      

      
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    b.
      PIGGY-BACK REGISTRATIONS.
      If at
      any time prior to the expiration of the Registration Period (as hereinafter
      defined) the Company shall determine to file with the SEC a Registration
      Statement relating to an offering for its own account or the account of others
      under the 1933 Act of any of its equity securities (other than on Form S-4
      or
      Form S-8 or their then equivalents relating to equity securities to be issued
      solely in connection with any acquisition of any entity or business or equity
      securities issuable in connection with stock option or other employee benefit
      plans), the Company shall send to Buyer written notice of such determination
      and, if within fifteen (15) days after the effective date of such notice, the
      Buyer shall so request in writing, the Company shall include in such
      Registration Statement all or any part of the Registrable Securities the Buyer
      requests to be registered, except that if, in connection with any underwritten
      public offering for the account of the Company, the managing underwriter(s)
      thereof shall impose a limitation on the number of shares of Common Stock which
      may be included in the Registration Statement because, in such underwriter(s)'
      judgment, marketing or other factors dictate such limitation is necessary to
      facilitate public distribution, then the Company shall be obligated to include
      in such Registration Statement only such limited portion of the Registrable
      Securities with respect to which the Buyer has requested inclusion hereunder
      as
      the underwriter shall permit;

    

    PROVIDED,
      HOWEVER,
      that
      the Company shall not exclude any Registrable Securities unless the Company
      has
      first excluded all outstanding securities, the holders of which are not entitled
      by contract to inclusion of such securities in such Registration Statement
      or
      are not entitled to pro rata inclusion with the Registrable Securities;
      and

    

    PROVIDED,
      FURTHER, HOWEVER,
      that,
      after giving effect to the immediately preceding proviso, any exclusion of
      Registrable Securities shall be made pro rata with holders of other securities
      having the contractual right to include such securities in the Registration
      Statement other than holders of securities entitled to inclusion of their
      securities in such Registration Statement by reason of demand registration
      rights. No right to registration of Registrable Securities under this Section
      2(b) shall be construed to limit any registration required under Section 2(a)
      hereof. If an offering in connection with which the Buyer is entitled to
      registration under this Section 2(d) is an underwritten offering, then the
      Buyer
      shall, unless otherwise agreed by the Company, offer and sell such Registrable
      Securities in an underwritten offering using the same underwriter or
      underwriters and, subject to the provisions of this Agreement, on the same
      terms
      and conditions as other shares of Common Stock included in such underwritten
      offering. Notwithstanding anything to the contrary set forth herein, the
      registration rights of the Buyer pursuant to this Section 2(b) shall only be
      available in the event the Company fails to timely file, obtain effectiveness
      or
      maintain effectiveness of any Registration Statement to be filed pursuant to
      Section 2(a) in accordance with the terms of this Agreement.

    

    
      
        
        

      

      
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    3.
      OBLIGATIONS OF THE COMPANY.
      In
      connection with the registration of the Registrable Securities, the Company
      shall have the following obligations:

    

    a.
      The
      Company shall prepare promptly, and file with the SEC as soon as practicable
      after the date of the Closing under the Securities Purchase Agreement (the
      "CLOSING DATE") (but no later than the Filing Deadline), Registration Statements
      with respect to the number of Registrable Securities provided in Section 2(a),
      and thereafter use its best efforts to cause each such Registration Statement
      relating to Registrable Securities to become effective as soon as possible
      after
      such filing, but in any event shall cause each such Registration Statement
      relating to Registrable Securities to become effective no later than the
      Registration Deadline, and shall keep the Registration Statement current and
      effective pursuant to Rule 415 at all times until such date as is the earlier
      of
      (i) the date on which all of the Registrable Securities for such Registration
      Statement have been sold and (ii) the date on which all of the Registrable
      Securities for such Registration Statement (in the opinion of counsel to the
      Buyer) may be immediately sold to the public without registration or restriction
      (including without limitation as to volume by each holder thereof) under the
      1933 Act (the "REGISTRATION PERIOD"), which Registration Statement (including
      any amendments or supplements thereto and prospectuses contained therein) shall
      not contain any untrue statement of a material fact or omit to state a material
      fact required to be stated therein, or necessary to make the statements therein
      not misleading.

    

    b.
      The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to each Registration Statements
      and
      the prospectus used in connection with the Registration Statements as may be
      necessary to keep the Registration Statements current and effective at all
      times
      during the Registration Period, and, during such period, comply with the
      provisions of the 1933 Act with respect to the disposition of all Registrable
      Securities of the Company covered by the Registration Statements until such
      time
      as all of such Registrable Securities have been disposed of in accordance with
      the intended methods of disposition by the seller or sellers thereof as set
      forth in the Registration Statements. In the event that on any Trading Day
      (as
      defined in the Debenture) (the "REGISTRATION TRIGGER DATE") the number of shares
      available under a Registration Statement filed pursuant to this Agreement is
      insufficient to cover all of the Registrable Securities issued or issuable
      upon
      conversion of the Debenture or otherwise pursuant to the Debenture (based on
      the
      Conversion Price [as defined in the Debenture] then in effect), exercise of
      or
      otherwise pursuant to the Warrants, and otherwise issuable pursuant to the
      Transaction Documents, in each case without giving effect to any limitations
      on
      the Buyer' ability to convert the Debenture, exercise the Warrants or otherwise
      receive shares of Common Stock pursuant to the Transaction Documents, the
      Company shall amend the Registration Statement, or file a new Registration
      Statement (on the short form available therefore, if applicable), or both,
      so as
      to cover one and one-half (1.5) times the total number of Registrable Securities
      so issued or issuable (without giving effect to any limitations on conversion
      contained in the Debenture, limitations on exercise contained in the Warrants
      or
      limitations on conversion or exercise or other payment of shares contained
      in
      the Securities Purchase Agreement) as of the Registration Trigger Date, in
      each
      case, as soon as practicable, but in any event within twenty (20) days after
      the
      Registration Trigger Date (based on the Conversion Prices of the Debenture,
      the
      Exercise Prices of the Warrants, and other relevant factors on which the Company
      reasonably elects to rely). The Company shall use its best efforts to cause
      such
      amendment and/or new Registration Statement to become effective as soon as
      practicable following the filing thereof, but in any event the Company shall
      cause such amendment and/or new Registration Statement to become effective
      within sixty (60) days of the Registration Trigger Date or as promptly as
      practicable in the event the Company is required to increase its authorized
      shares. 

    

    
      
        
        

      

      
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    c.
      The
      Company shall furnish to the Buyer and its legal counsel (i) promptly after
      the
      same is prepared and publicly distributed, filed with the SEC, or received
      by
      the Company, one copy of each Registration Statement and any amendment thereto,
      each preliminary prospectus and prospectus and each amendment or supplement
      thereto, and, in the case of the Registration Statement referred to in Section
      2(a), each letter written by or on behalf of the Company to the SEC or the
      staff
      of the SEC, and each item of correspondence from the SEC or the staff of the
      SEC, in each case relating to such Registration Statement (other than any
      portion of any thereof which contains information for which the Company has
      sought confidential treatment), and (ii) such number of copies of a prospectus,
      including a preliminary prospectus, and all amendments and supplements thereto
      and such other documents as the Buyer may reasonably request in order to
      facilitate the disposition of the Registrable Securities owned by the Buyer.
      The
      Company will immediately notify the Buyer by facsimile of the effectiveness
      of
      each Registration Statement or any post-effective amendment. The Company will
      promptly respond to any and all comments received from the SEC, with a view
      towards causing each Registration Statement or any amendment thereto to be
      declared effective by the SEC as soon as practicable and shall file an
      acceleration request as soon as practicable, but no later than three (3)
      business days (the "ACCELERATION REQUEST DEADLINE"), following the resolution
      or
      clearance of all SEC comments or, if applicable, following notification by
      the
      SEC that any such Registration Statement or any amendment thereto will not
      be
      subject to review.

    

    d.
      The
      Company shall use reasonable efforts to (i) register and qualify the Registrable
      Securities covered by the Registration Statements under such other securities
      or
      "blue sky" laws of such jurisdictions in the United States as the Buyer shall
      request, (ii) prepare and file in those jurisdictions such amendments (including
      post-effective amendments) and supplements to such registrations and
      qualifications as may be necessary to maintain the effectiveness thereof during
      the Registration Period, (iii) take such other actions as may be necessary
      to
      maintain such registrations and qualifications in effect at all times during
      the
      Registration Period, and (iv) take all other actions reasonably necessary or
      advisable to qualify the Registrable Securities for sale in such
      jurisdictions;

    

    
      
        
        

      

      
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    e.
      As
      promptly as practicable after becoming aware of such event, the Company shall
      notify the Buyer of the happening of any event, of which the Company has
      knowledge, as a result of which the prospectus included in any Registration
      Statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading, and use its best efforts promptly
      to
      prepare a supplement or amendment to any Registration Statement to correct
      such
      untrue statement or omission, and deliver such number of copies of such
      supplement or amendment to the Buyer as the Buyer may reasonably request;
      provided that, for not more than twenty (20) consecutive days (or a total of
      not
      more than sixty (60) days in any twelve (12) month period), the Company may
      delay the disclosure of material non-public information concerning the Company
      (as well as prospectus or Registration Statement updating) the disclosure of
      which at the time is not, in the good faith opinion of the Company, in the
      best
      interests of the Company (an "ALLOWED DELAY"); provided, further, that the
      Company shall promptly (i) notify the Buyer in writing of the existence of
      (but
      in no event, without the prior written consent of the Buyer, shall the Company
      disclose to the Buyer any of the facts or circumstances regarding) material
      non-public information giving rise to an Allowed Delay and (ii) advise the
      Buyer
      in writing to cease all sales under such Registration Statement until the end
      of
      the Allowed Delay, provided the above actions are consistent with the
      requirements of the 1933 Act and/or 1934 Act or other applicable law. Upon
      expiration of the Allowed Delay, the Company shall again be bound by the first
      sentence of this Section 3(e) with respect to the information giving rise
      thereto. Nothing herein relieves the obligations set forth in the Debenture
      or
      the Warrants relative to Failure Payments or payments of the Default Amount
      pursuant to Events of Default. 

    

    f.
      The
      Company shall use its best efforts to prevent the issuance of any stop order
      or
      other suspension of effectiveness of any Registration Statement, and, if such
      an
      order is issued, to obtain the withdrawal of such order at the earliest possible
      moment and to notify the Buyer who holds Registrable Securities being sold
      (or,
      in the event of an underwritten offering, the managing underwriters) of the
      issuance of such order and the resolution thereof.

    

    g.
      The
      Company shall permit a single firm of counsel designated by the Buyer to review
      such Registration Statement and all amendments and supplements thereto (as
      well
      as all requests for acceleration or effectiveness thereof), at Buyer’s own cost,
      a reasonable period of time prior to their filing with the SEC (not less than
      three (3) business days but not more then five (5) business days) and not file
      any document in a form to which such counsel reasonably objects and will not
      request acceleration of such Registration Statement without prior notice to
      such
      counsel. 

    

    h.
      The
      Company shall hold in confidence and not make any disclosure of information
      concerning the Buyer provided to the Company unless (i) disclosure of such
      information is necessary to comply with federal or state securities laws, (ii)
      the disclosure of such information is necessary to avoid or correct a
      misstatement or omission in any Registration Statement, (iii) the release of
      such information is ordered pursuant to a subpoena or other order from a court
      or governmental body of competent jurisdiction, or (iv) such information has
      been made generally available to the public other than by disclosure in
      violation of this or any other agreement. The Company agrees that it shall,
      upon
      learning that disclosure of such information concerning the Buyer is sought
      in
      or by a court or governmental body of competent jurisdiction or through other
      means, give prompt notice to the Buyer prior to making such disclosure, and
      allow the Buyer, at its expense, to undertake appropriate action to prevent
      disclosure of, or to obtain a protective order for, such
      information.

    

    
      
        
        

      

      
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    i.
      The
      Company shall use its best efforts to (i) cause all the Registrable Securities
      covered by the Registration Statement to be listed on each national securities
      exchange on which securities of the same class or series issued by the Company
      are then listed, if any, if the listing of such Registrable Securities is then
      permitted under the rules of such exchange, or (ii) to the extent the securities
      of the same class or series are not then listed on a national securities
      exchange, secure the designation and quotation, of all the Registrable
      Securities covered by the Registration Statement on the NNM or, if not eligible
      for the NNM on the Nasdaq Small Cap or, if not eligible for the Nasdaq Small
      Cap, on the Over the Counter electronic bulletin board and, without limiting
      the
      generality of the foregoing, to arrange for at least two market makers to
      register with the National Association of Securities Dealers, Inc. ("NASD")
      as
      such with respect to such Registrable Securities.

    

    j.
      The
      Company shall provide a transfer agent and registrar, which may be a single
      entity, for the Registrable Securities not later than the effective date of
      the
      Registration Statement.

    

    k.
      The
      Company shall cooperate with the Buyer who holds Registrable Securities being
      offered and the managing underwriter or underwriters, if any, to facilitate
      the
      timely preparation and delivery of certificates (not bearing any restrictive
      legends) representing Registrable Securities to be offered pursuant to such
      Registration Statement and enable such certificates to be in such denominations
      or amounts, as the case may be, as the managing underwriter or underwriters,
      if
      any, or the Buyer may reasonably request and registered in such names as the
      managing underwriter or underwriters, if any, or the Buyer may request, and,
      within three (3) business days after a Registration Statement which includes
      Registrable Securities is ordered effective by the SEC, the Company shall
      deliver, and shall cause legal counsel selected by the Company to deliver,
      to
      the transfer agent for the Registrable Securities (with copies to the Buyer)
      an
      appropriate instruction and an opinion of such counsel in the form required
      by
      the transfer agent in order to issue the Registrable Securities free of
      restrictive legends.

    

    l.
      At the
      request of the holders of a majority-in-interest of the Registrable Securities,
      the Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      any
      prospectus used in connection with the Registration Statement as may be
      necessary in order to change the plan of distribution set forth in such
      Registration Statement.

    

    
      
        
        

      

      
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    m.
      The
      Company shall not, and shall not agree to, allow the holders of any securities
      of the Company to include any of their securities in any Registration Statement
      under Section 2(a) hereof or any amendment or supplement thereto under Section
      3(b) hereof without the consent of the holders of a majority-in-interest of
      the
      Registrable Securities, except for securities which have contractual piggyback
      registration rights in effect at the time of the Initial Closing (as defined
      in
      the Securities Purchase Agreement). In addition, the Company shall not offer
      any
      securities for its own account or the account of others in any Registration
      Statement under Section 2(a) hereof or any amendment or supplement thereto
      under
      Section 3(b) hereof without the consent of the holders of a majority-in-interest
      of the Registrable Securities.

    

    n.
      The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Buyer of Registrable Securities pursuant to a
      Registration Statement.

     

    o.
      The
      Company shall comply with all applicable laws related to a Registration
      Statement and offering and sale of securities and all applicable rules and
      regulations of governmental authorities in connection therewith (including
      without limitation the 1933 Act and the 1934 Act and the rules and regulations
      promulgated by the SEC).

    

    p.  Further
      Registration Statements. Except for a registration statement filed on behalf
      of
      the Buyer pursuant to Section 2 of this Agreement, an underwritten public
      offering, and except as set forth on Schedule 3(P) hereto, the Company will
      not
      file any registration statements or amend any already filed registration
      statement, including but not limited to Forms S-8, with the Commission or with
      state regulatory authorities without the consent of the Subscriber until the
      expiration of the "Exclusion Period", which shall be defined as the sooner
      of
      (i) the date that the Registration Statement shall have been current and
      available for use in connection with the resale of the Registrable Securities
      for a period of 180 days, or (ii) until all the Shares and Warrant Shares have
      been resold or transferred by the Subscribers pursuant to the Registration
      Statement or are eligible for immediate unrestricted resale pursuant to Rule
      144(k), without volume limitations. The Exclusion Period will be tolled during
      the pendency of an Event of Default as defined in the Debenture or an Event
      of
      Default as defined in the Warrants. 

    

    q.
      If
      requested in writing by a Holder and if required of the Holder’s selling
      registered broker-dealer by NASD (as defined below) in order to effect the
      resale of the Registrable Securities by the Holder, the Company shall use
      commercially reasonable efforts to effect a filing with respect to the public
      offering contemplated by the Registration Statement (an “Issuer
      Filing”)
      with
      the National Association of Securities Dealers, Inc. (“NASD”)
      Corporate Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) within
      five Trading Days of such request and pay the filing fee required by such Issuer
      Filing. The Company shall use commercially reasonable efforts to pursue the
      Issuer Filing until the NASD issues a letter confirming that it does not object
      to the terms of the offering contemplated by the Registration
      Statement.

    

    4.
      OBLIGATIONS OF THE BUYER.
      In
      connection with the registration of the Registrable Securities, the Buyer shall
      have the following obligations:

    

    
      
        
        

      

      
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    a.
      It
      shall be a condition precedent to the obligations of the Company to complete
      the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of the Buyer that the Buyer shall furnish to the Company such
      information regarding itself, the Registrable Securities held by it and the
      intended method of disposition of the Registrable Securities held by it as
      shall
      be reasonably required to effect the registration of such Registrable Securities
      and shall execute such documents in connection with such registration as the
      Company may reasonably request. At least three (3) business days prior to the
      first anticipated filing date of the Registration Statement, the Company shall
      notify the Buyer of the information the Company requires from each the
      Buyer.

    

    b.
      The
      Buyer, by the Buyer's acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of the Registration Statements hereunder, unless
      the Buyer has notified the Company in writing of the Buyer's election to exclude
      all of the Buyer's Registrable Securities from the Registration
      Statements.

    

    c.
      In the
      event of an underwritten offering pursuant to Section 2(b) in which any
      Registrable Securities are to be included, the Buyer agrees to enter into and
      perform the Buyer's obligations under an underwriting agreement, in usual and
      customary form, including, without limitation, customary indemnification and
      contribution obligations, with the managing underwriter of such offering and
      take such other actions as are reasonably required in order to expedite or
      facilitate the disposition of the Registrable Securities, unless the Buyer
      has
      notified the Company in writing of the Buyer's election to exclude all of the
      Buyer's Registrable Securities from such Registration Statement.

    

    d.
      The
      Buyer agrees that, upon receipt of any notice from the Company of the happening
      of any event of the kind described in Section 3(f) or 3(g), the Buyer will
      immediately discontinue disposition of Registrable Securities pursuant to the
      Registration Statement covering such Registrable Securities until the Buyer's
      receipt of the copies of the supplemented or amended prospectus contemplated
      by
      Section 3(f) or 3(g) and, if so directed by the Company, the Buyer shall deliver
      to the Company (at the expense of the Company) or destroy (and deliver to the
      Company a certificate of destruction) all copies in the Buyer's possession,
      of
      the prospectus covering such Registrable Securities current at the time of
      receipt of such notice.

    

    e.
      No
      Buyer may participate in any underwritten registration hereunder unless the
      Buyer (i) agrees to sell the Buyer's Registrable Securities on the basis
      provided in any underwriting arrangements in usual and customary form entered
      into by the Company, (ii) completes and executes all questionnaires, powers
      of
      attorney, indemnities, underwriting agreements and other documents reasonably
      required under the terms of such underwriting arrangements, and (iii) agrees
      to
      pay its pro rata share of all underwriting discounts and commissions and any
      expenses in excess of those payable by the Company pursuant to Section 5
      below.

    

    5.
      EXPENSES OF REGISTRATION.
      All
      reasonable expenses, other than underwriting discounts and commissions, incurred
      in connection with registrations, filings or qualifications pursuant to Sections
      2 and 3, including, without limitation, all registration, listing and
      qualification fees, printers and accounting fees, the fees and disbursements
      of
      counsel for the Company shall be borne by the Company.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    6.
      INDEMNIFICATION.
      In the
      event any Registrable Securities are included in a Registration Statement under
      this Agreement:

    

    a.
      To the
      extent permitted by law, the Company will indemnify, hold harmless and defend
      (i) the Buyer, (ii) the directors, officers, partners, managers, members,
      employees, agents and each person who controls any Buyer within the meaning
      of
      the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
      ACT"), if any, (iii) any underwriter (as defined in the 1933 Act) for the Buyer
      in connection with an underwritten offering pursuant to Section 2(b) hereof,
      and
      (iv) the directors, officers, partners, employees and each person who controls
      any such underwriter within the meaning of the 1933 Act or the 1934 Act, if
      any
      (each, an "INDEMNIFIED PERSON"), against any joint or several losses, claims,
      damages, liabilities or expenses (collectively, together with actions,
      proceedings or inquiries by any regulatory or self-regulatory organization,
      whether commenced or threatened, in respect thereof, "CLAIMS") to which any
      of
      them may become subject insofar as such Claims arise out of or are based upon:
      (i) any untrue statement or alleged untrue statement of a material fact in
      a
      Registration Statement or the omission or alleged omission to state therein
      a
      material fact required to be stated or necessary to make the statements therein
      not misleading; (ii) any untrue statement or alleged untrue statement of a
      material fact contained in any preliminary prospectus if used prior to the
      effective date of such Registration Statement, or contained in the final
      prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading; or (iii) any violation or alleged violation by the Company
      of the 1933 Act, the 1934 Act, any other law, including, without limitation,
      any
      state securities law, or any rule or regulation thereunder relating to the
      offer
      or sale of the Registrable Securities (the matters in the foregoing clauses
      (i)
      through (iii) being, collectively, "VIOLATIONS"). Subject to the restrictions
      set forth in Section 6(c) with respect to the number of legal counsel, the
      Company shall reimburse the Indemnified Person, promptly as such expenses are
      incurred and are due and payable, for any reasonable legal fees or other
      reasonable expenses incurred by them in connection with investigating or
      defending any such Claim. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(a): (i) shall
      not apply to a Claim arising out of or based upon a Violation which occurs
      in
      reliance upon and in conformity with information furnished in writing to the
      Company by any Indemnified Person or underwriter for such Indemnified Person
      expressly for use in connection with the preparation of such Registration
      Statement or any such amendment thereof or supplement thereto; (ii) shall not
      apply to amounts paid in settlement of any Claim if such settlement is effected
      without the prior written consent of the Company, which consent shall not be
      unreasonably withheld; and (iii) with respect to any preliminary prospectus,
      shall not inure to the benefit of any Indemnified Person if the untrue statement
      or omission of material fact contained in the preliminary prospectus was
      corrected on a timely basis in the prospectus, as then amended or supplemented,
      such corrected prospectus was timely made available by the Company pursuant
      to
      Section 3(c) hereof, and the Indemnified Person was promptly advised in writing
      not to use the incorrect prospectus prior to the use giving rise to a Violation
      and such Indemnified Person, notwithstanding such advice, used it. Such
      indemnity shall remain in full force and effect regardless of any investigation
      made by or on behalf of the Indemnified Person and shall survive the transfer
      of
      the Registrable Securities by the Buyer pursuant to Section 9. 

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    b.
      [Intentionally Omitted].

    

    c.
      Promptly after receipt by an Indemnified Person under this Section 6 of notice
      of the commencement of any action (including any governmental action), such
      Indemnified Person shall, if Claim in respect thereof is to be made against
      any
      the Company under this Section 6, deliver to the Company a written notice of
      the
      commencement thereof, and the Company shall have the right to participate in,
      and, to the extent the Company so desires, to assume control of the defense
      thereof with counsel mutually satisfactory to the Company and the Indemnified
      Person, as the case may be. 

    

    PROVIDED,
      HOWEVER,
      that an
      Indemnified Person shall have the right to retain its own counsel with the
      fees
      and expenses to be paid by the Company, if, in the reasonable opinion of counsel
      retained by the Company, the representation by such counsel of the Indemnified
      Person and the Company would be inappropriate due to actual or potential
      differing interests between such Indemnified Person and any other party
      represented by such counsel in such proceeding. The Company shall pay for only
      one separate legal counsel for the Indemnified Persons, and such legal counsel
      shall be selected by Buyer, if the Buyer is entitled to indemnification
      hereunder. The failure to deliver written notice to the Company within a
      reasonable time of the commencement of any such action shall not relieve the
      Company of any liability to the Indemnified Person under this Section 6, except
      to the extent that the Company is actually prejudiced in its ability to defend
      such action. The indemnification required by this Section 6 shall be made by
      periodic payments of the amount thereof during the course of the investigation
      or defense, as such expense, loss, damage or liability is incurred and is due
      and payable.

    

    d.
      To the
      extent permitted by law, the Buyer will indemnify, hold harmless and defend
      (i)
      the Company, and (ii) the directors, officers, partners, managers, members,
      employees, or agents of the Company, if any (each, a "COMPANY INDEMNIFIED
      PERSON"), against any joint or several losses, claims, damages, liabilities
      or
      expenses (collectively, together with actions, proceedings or inquiries by
      any
      regulatory or self-regulatory organization, whether commenced or threatened,
      in
      respect thereof, "CLAIMS") to which any of them may become subject insofar
      as
      such Claims arise out of or are based upon a Claim arising out of or based
      upon
      any violation or alleged violation by the Company of the 1933 Act, the 1934
      Act,
      any other law, including, without limitation, any state securities law, or
      any
      rule or regulation thereunder relating to the offer or sale of the Registrable
      Securities, which occurs due to the inclusion by the Company in a Registration
      Statement of false or misleading information about the Buyer, where such
      information was furnished in writing to the Company by the Buyer for the purpose
      of inclusion in such Registration Statement.

    

    7.
      CONTRIBUTION.
      To the
      extent any indemnification by the Company is prohibited or limited by law,
      the
      Company agrees to make the maximum contribution with respect to any amounts
      for
      which it would otherwise be liable under Section 6 to the fullest extent
      permitted by law. 

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    8.
      REPORTS UNDER THE 1934 ACT.
      With a
      view to making available to the Buyer the benefits of Rule 144 promulgated
      under
      the 1933 Act or any other similar rule or regulation of the SEC that may at
      any
      time permit the Buyer to sell securities of the Company to the public without
      registration ("RULE 144"), the Company agrees to:

    

    a.
      make
      and keep public information available, as those terms are understood and defined
      in Rule 144;

    

    b.
      file
      with the SEC in a timely manner all reports and other documents required of
      the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements (it being understood that nothing herein shall
      limit the Company's obligations under Section 4(c) of the Securities Purchase
      Agreement) and the filing of such reports and other documents is required for
      the applicable provisions of Rule 144; and

    

    c.
      furnish to the Buyer so long as the Buyer owns Registrable Securities, promptly
      upon request, (i) a written statement by the Company that it has complied with
      the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
      a
      copy of the most recent annual or quarterly report of the Company and such
      other
      reports and documents so filed by the Company, and (iii) such other information
      as may be reasonably requested to permit the Buyers to sell such securities
      pursuant to Rule 144 without registration.

    

    9.
      ASSIGNMENT OF REGISTRATION RIGHTS.
      The
      rights under this Agreement shall be automatically assignable by the Buyers
      to
      any transferee of all or any portion of Registrable Securities if: (i) the
      Buyer
      agrees in writing with the transferee or assignee to assign such rights, and
      a
      copy of such agreement is furnished to the Company within a reasonable time
      after such assignment, (ii) the Company is, within a reasonable time after
      such
      transfer or assignment, furnished with written notice of (a) the name and
      address of such transferee or assignee, and (b) the securities with respect
      to
      which such registration rights are being transferred or assigned, (iii)
      following such transfer or assignment, the further disposition of such
      securities by the transferee or assignee is restricted under the 1933 Act and
      applicable state securities laws, (iv) at or before the time the Company
      receives the written notice contemplated by clause (ii) of this sentence, the
      transferee or assignee agrees in writing with the Company to be bound by all
      of
      the provisions contained herein, and (v) such transfer shall have been made
      in
      accordance with the applicable requirements of the Securities Purchase
      Agreement. In the event that the Buyer transfers all or any portion of its
      Registrable Securities pursuant to this Section, the Company shall have at
      least
      ten (10) days to file any amendments or supplements necessary to keep the
      Registration Statement current and effective pursuant to Rule 415, and the
      commencement date of any Event of Failure or Event of Default under the
      Debenture or the Warrants caused thereby will be extended by ten (10)
      days.

    

    10.
      AMENDMENT OF REGISTRATION RIGHTS.
      Provisions of this Agreement may be amended and the observance thereof may
      be
      waived (either generally or in a particular instance and either retroactively
      or
      prospectively), only with written consent of the Company, the Buyer (to the
      extent such Buyer still owns Registrable Securities) and Buyers who hold a
      majority interest of the Registrable Securities. Any amendment or waiver
      effected in accordance with this Section 10 shall be binding upon the Buyer
      and
      the Company.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    11.
      MISCELLANEOUS. 

    

    a.
      A
      person or entity is deemed to be a holder of Registrable Securities whenever
      such person or entity owns of record such Registrable Securities. If the Company
      receives conflicting instructions, notices or elections from two or more persons
      or entities with respect to the same Registrable Securities, the Company shall
      act upon the basis of instructions, notice or election received from the
      registered owner of such Registrable Securities.

    

    b.
      Any
      notices required or permitted to be given under the terms hereof shall be sent
      by certified or registered mail (return receipt requested) or delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile and shall be effective five days after being placed in the mail,
      if
      mailed by regular United States mail, or upon receipt, if delivered personally
      or by courier (including a recognized overnight delivery service) or by
      facsimile, in each case addressed to a party. The addresses for such
      communications shall be:

    

    If
      to the
      Company: To the address set forth immediately below such

    Company’s
      name on the signature pages hereto.

    

    With
      copy
      to:

    

    Joel
      C.
      Schneider, Esq.

    Sommer
      & Schneider LLP

    595
      Stewart Avenue, Suite 710

    Garden
      City, NY 11530

    Telephone:
      (516) 228-8181

    Facsimile:
      (516) 228-8211

    

    If
      to a
      Buyer: To the address set forth immediately below such Buyer's name on the
      signature pages hereto.

    

    Each
      party shall provide notice to the other party of any change in
      address.

    

    c.
      Failure of any party to exercise any right or remedy under this Agreement or
      otherwise, or delay by a party in exercising such right or remedy, shall not
      operate as a waiver thereof.

    

    d.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York. Any controversy or claim arising out of or
      related to this Agreement or the breach thereof, shall be settled by binding
      arbitration in New York, NY in accordance with the Expedited Procedures (Rules
      53-57) of the Commercial Arbitration Rules of the American Arbitration
      Association (“AAA”). A proceeding shall be commenced upon written demand by
      Company or the Buyer to the other. The arbitrator(s) shall enter a judgment
      by
      default against any party, which fails or refuses to appear in any properly
      noticed arbitration proceeding. The proceeding shall be conducted by one (1)
      arbitrator, unless the amount alleged to be in dispute exceeds two hundred
      fifty
      thousand dollars ($250,000), in which case three (3) arbitrators shall preside.
      The arbitrator(s) will be chosen by the parties from a list provided by the
      AAA,
      and if they are unable to agree within ten (10) days, the AAA shall select
      the
      arbitrator(s). The arbitrators must be experts in securities law and financial
      transactions. The arbitrators shall assess costs and expenses of the
      arbitration, including all attorneys’ and experts’ fees, as the arbitrators
      believe is appropriate in light of the merits of the parties’ respective
      positions in the issues in dispute. Each party submits irrevocably to the
      jurisdiction of any state court sitting in New York, NY or to the United States
      District Court sitting in New York for purposes of enforcement of any discovery
      order, judgment or award in connection with such arbitration. The award of
      the
      arbitrator(s) shall be final and binding upon the parties and may be enforced
      in
      any court having jurisdiction. The arbitration shall be held in such place
      as
      set by the arbitrator(s) in accordance with Rule 55. With respect to any
      arbitration proceeding in accordance with this section, the prevailing party’s
      reasonable attorney’s fees and expenses shall be borne by the non-prevailing
      party.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    Although
      the parties, as expressed above, agree that all claims, including claims that
      are equitable in nature, for example specific performance, shall initially
      be
      prosecuted in the binding arbitration procedure outlined above, if the
      arbitration panel dismisses or otherwise fails to entertain any or all of the
      equitable claims asserted by reason of the fact that it lacks jurisdiction,
      power and/or authority to consider such claims and/or direct the remedy
      requested, then, in only that event, will the parties have the right to initiate
      litigation respecting such equitable claims or remedies. The forum for such
      equitable relief shall be in either a state or federal court sitting in New
      York, NY. Each party waives any right to a trial by jury, assuming such right
      exists in an equitable proceeding, and irrevocably submits to the jurisdiction
      of said New York court. New York law shall govern both the proceeding as well
      as
      the interpretation and construction of this Agreement and the transaction as
      a
      whole.

    

    e.
      This
      Agreement and the Securities Purchase Agreement (including all schedules and
      exhibits thereto) constitute the entire agreement among the parties hereto
      with
      respect to the subject matter hereof and thereof. There are no restrictions,
      promises, warranties or undertakings, other than those set forth or referred
      to
      herein and therein. This Agreement and the Securities Purchase Agreement
      supersede all prior agreements and understandings among the parties hereto
      with
      respect to the subject matter hereof and thereof.

    

    f.
      Subject to the requirements of Section 9 hereof, this Agreement shall inure
      to
      the benefit of and be binding upon the successors and assigns of each of the
      parties hereto.

    

    g.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    

    h.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement.
      This Agreement, once executed by a party, may be delivered to the other party
      hereto by facsimile transmission of a copy of this Agreement bearing the
      signature of the party so delivering this Agreement.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    i.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    

    j.
      Except
      as otherwise provided herein, all consents and other determinations to be made
      by the Buyer pursuant to this Agreement shall be made by Buyers holding a
      majority of the Registrable Securities, determined as if the all of the
      Debenture and Warrants then outstanding have been converted or exercised into
      for Registrable Securities.

    

    k.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Buyer by vitiating the intent and purpose of the
      transactions contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for breach of its obligations hereunder will be inadequate and
      agrees, in the event of a breach or threatened breach by the Company of any
      of
      the provisions hereunder, that the Buyer shall be entitled, in addition to
      all
      other available remedies in law or in equity, to an injunction or injunctions
      to
      prevent or cure breaches of the provisions of this Agreement and to enforce
      specifically the terms and provisions hereof, without the necessity of showing
      economic loss and without any bond or other security being
      required.

    

    l.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

    

    m.
      In the
      event that any provision of this Agreement is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any provision hereof
      which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision hereof.

    

    n.
      The
      initial number of Registrable Securities included in any Registration Statement
      and each increase to the number of Registrable Securities included therein
      shall
      be allocated pro rata among the Buyers based on the number of Registrable
      Securities held by the Buyer at the time of such establishment or increase,
      as
      the case may be. In the event an Buyer shall sell or otherwise transfer any
      of
      such holder's Registrable Securities, each transferee shall be allocated a
      pro
      rata portion of the number of Registrable Securities included in a Registration
      Statement for such transferor. Any shares of Common Stock included on a
      Registration Statement and which remain allocated to any person or entity which
      does not hold any Registrable Securities shall be allocated to the remaining
      Buyers, pro rata based on the number of shares of Registrable Securities then
      held by the Buyers. For the avoidance of doubt, the number of Registrable
      Securities held by a Buyer shall be determined as if all the Debenture and
      Warrants then outstanding and held by a Buyer were converted into or exercised
      for Registrable Securities, without regard to any limitation on the Buyer's
      ability to convert the Debenture or exercise the Warrants.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    o.
      There
      shall be no oral modifications or amendments to this Agreement. This Agreement
      may be modified or amended only in writing.

    

     

    IN
      WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
      Agreement to be duly executed as of the 28th
      day of
      December, 2006.

    

    

    
      	
              COMPANY:

              BIOMETRX,
                INC.

               

               

              By:
                ________________________

              Mark
                Basile, CEO

               

              ADDRESS:

               

              500
                North Broadway, Suite 204

              Jericho,
                NY 11753

              Phone:
                516-937-2828

              Fax:
                516-937-2880Medcom

            	
              BUYER:

               

               

               

              By:
                ______________________

              _________,
                ____________

               

              ADDRESS:

               

              __________________________

              __________________________

              Telephone:
                ___________

              Fax:
                ________________

            

    

    

    
      
        
        

      

      16Unassociated Document

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE"ACT") OR APPLICABLE STATE SECURITIES
      LAWS. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
      OF
      AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN
      OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
      COUNSEL TO THE BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
      UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

     

    CONVERTIBLE
      DEBENTURE

    

    FOR
      VALUE
      RECEIVED, bioMETRX,
      Inc.,
      a
Delaware
      corporation (hereinafter called the "BORROWER" or “COMPANY”), hereby promises to
      pay to the order of ___________________________,___________or
      its registered assigns (the "HOLDER") the sum of ________________ U.S. Dollars
      (U.S. $________), on June 29, 2008 (the "MATURITY DATE"), and to pay interest
      (“Interest”) on the unpaid principal balance hereof at the rate of eight percent
      (8%) per annum (the “Interest Rate”) from December 29, 2006 (the "ISSUE DATE")
      until the same becomes due and payable, whether on a Principal Payment Due
      Date,
      at maturity or upon acceleration or otherwise. Interest shall commence accruing
      on the Issue Date, shall be computed on the basis of a 365-day year and the
      actual number of days elapsed and shall be payable quarterly (as further
      described below), in cash or, to the extent not yet paid, at maturity or upon
      acceleration in accordance with the terms hereof. Payments of Interest shall
      be
      due and payable (i) quarterly, on each January 1, April 1, July 1 and October
      1
      after the Issue Date, (ii) on each Conversion Date (as to that principal amount
      then being converted) and (iii) on the Maturity Dated (each such date, an
“Interest Payment Date”) Provided that the Equity Payment Conditions (as defined
      below) have been met on each of the five Trading Days immediately preceding
      the
      date of payment of Interest Payment Shares (as defined below) and provided
      that
      interest is paid timely, the Borrower may pay the interest payable on this
      Debenture with registered, free-trading shares of Common Stock (“Interest
      Payment Shares”) with an attributed value per share equal to 80% of the Market
      Price (as defined in Section 1 hereof) as calculated on the date that such
      interest is due to be paid hereunder, or as calculated on the date that such
      Interest Payment Shares are delivered to the Holder, whichever is less.
This
      Convertible Debenture (including all Convertible Debentures issued in exchange,
      transfer or replacement hereof, this "Debenture") is
      one of
      an issue of Convertible Debentures
      issued
      pursuant to the Securities Purchase Agreement on
      the
      Closing Date (collectively, the "Debentures" and such other Convertible
      Debentures, the "Other Debentures"). 

    

    Except
      as
      otherwise expressly provided herein, this Debenture may not be prepaid by the
      Borrower. All payments due hereunder (to the extent not converted into Common
      Stock, par value $0.001 per share, of the Borrower (the "COMMON STOCK") in
      accordance with the terms hereof) shall be made in lawful money of the United
      States of America provided that, to the extent that any accrued interest has
      not
      been paid when due, at the option of the Holder, in whole or in part, such
      accrued and unpaid interest may, upon written notice to the Borrower, be added
      to the principal amount of this Debenture, in which event interest shall accrue
      thereon in accordance with the terms of this Debenture and such additional
      principal amount shall be convertible into Common Stock in accordance with
      the
      terms of this Debenture. All payments shall be made at such address as the
      Holder shall hereafter give to the Borrower by written notice made in accordance
      with the provisions of this Debenture. Whenever any amount expressed to be
      due
      by the terms of this Debenture is due on any day which is not a business day,
      the same shall instead be due on the next succeeding day which is a business
      day. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      following terms shall apply to this Debenture:

    

    Section
      1. Certain
      Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      that
      certain Securities Purchase Agreement, of date even herewith, pursuant to which
      the Debenture was originally issued (the "SECURITIES PURCHASE AGREEMENT" or
      the
“PURCHASE AGREEMENT”), shall have the meanings given such terms in the
      Securities Purchase Agreement. For the purposes hereof, the following terms
      shall have the following meanings:

     

    "BUSINESS
      DAY" shall mean any day other than a Saturday, Sunday or a day on which
      commercial banks in the City of New York, New York are authorized or required
      by
      law or executive order to remain closed. 

     

    “CLOSING
      DATE” means the Trading Day when all of the Transaction Documents have been
      executed and delivered by the applicable parties thereto, and all conditions
      precedent to (i) each Holder’s obligations to pay the Subscription Amount and
      (ii) the Corporation’s obligations to deliver the Securities have been satisfied
      or waived.

    

    "CLOSING
      PRICE," as of any date, means the last sale price of the Common Stock on the
      PRINCIPAL MARKET as reported by Bloomberg or, if the PRINCIPAL MARKET is not
      the
      principal trading market for such security, the last sale price of such security
      on the principal securities exchange or trading market where such security
      is
      listed or traded as reported by Bloomberg, Inc., or if no last sale price of
      such security is available on the PRINCIPAL MARKET for such security or in
      any
      of the foregoing manners, the average of the bid prices of any market makers
      for
      such security that are listed in the "pink sheets" by the National Quotation
      Bureau, Inc. If the Closing Price cannot be calculated for such security on
      such
      date in the manner provided above, the Closing Price shall be the fair market
      value as mutually determined by the Company and the Holder.

    

    "CONVERTIBLE
      SECURITIES" means any stock or securities (other than Options) directly or
      indirectly convertible into or exercisable or exchangeable for Common
      Stock.

    

    "DEBENTURES"
      shall be deemed to refer to this Debenture, all other convertible debentures
      issued pursuant to the Purchase Agreement and all convertible debentures issued
      in replacement hereof or thereof or otherwise with respect hereto or
      thereto.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “EFFECTIVE
      DATE” shall have the meaning ascribed to it in the Registration Rights
      Agreement.

    

    “EQUITY
      PAYMENT CONDITIONS” shall mean, during the each Trading Day of the period in
      question, (i)
      the
      Corporation shall have duly honored all conversions scheduled to occur or
      occurring by virtue of one or more Notices of Conversion, if any, (ii) all
      Required Cash Payments shall have been paid; (iii) no Events of Default have
      occurred that have not been cured, (iv)
      there is an effective Registration Statement pursuant to which the Holder is
      permitted to utilize the prospectus thereunder to resell all of the Conversion
      Shares, Warrant Shares and other shares issued or issuable pursuant to the
      Transaction Documents (and the Corporation believes, in good faith, that such
      effectiveness will continue uninterrupted for the foreseeable future)(or such
      shares may be resold, without restriction, pursuant to Rule 144(k)), (v) the
      Common Stock is trading on the Principal Market and all of the shares issuable
      pursuant to the Transaction Documents are listed for trading on a Principal
      Market (and the Corporation believes, in good faith, that trading of the Common
      Stock on a Principal Market will continue uninterrupted for the foreseeable
      future), (vi) 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, (vii) the Company has
      not
      been a party to a Major Transaction, (viii) all of the shares issued or issuable
      pursuant to the transaction proposed would not violate the 4.99% Beneficial
      Ownership Limitation (or the 9.99% Beneficial Ownership Limitation, as
      applicable) and would not cause the number of shares issued to the Holder to
      exceed the Pro Rata Exchange Cap Amount (as defined in the Securities Purchase
      Agreement) or the Conversion Cap, (ix) the daily trading volume of the Company’s
      common stock for each such Trading Day exceeds $50,000, and (x)
      no
      public announcement of a pending or proposed Major Transaction or acquisition
      transaction has occurred that has not been consummated.

    

    "INDEBTEDNESS"
      of any Person means, without duplication (i) all indebtedness for borrowed
      money, (ii) all obligations issued, undertaken or assumed as the deferred
      purchase price of property or services, including (without limitation) "capital
      leases" in accordance with generally accepted accounting principles (other
      than
      trade payables entered into in the ordinary course of business), (iii) all
      reimbursement or payment obligations with respect to letters of credit, surety
      bonds and other similar instruments, (iv) all obligations evidenced by notes,
      bonds, debentures or similar instruments, including obligations so evidenced
      incurred in connection with the acquisition of property, assets or businesses,
      (v) all indebtedness created or arising under any conditional sale or other
      title retention agreement, or incurred as financing, in either case with respect
      to any property or assets acquired with the proceeds of such indebtedness (even
      though the rights and remedies of the seller or bank under such agreement in
      the
      event of default are limited to repossession or sale of such property), (vi)
      all
      monetary obligations under any leasing or similar arrangement which, in
      connection with generally accepted accounting principles, consistently applied
      for the periods covered thereby, is classified as a capital lease, (vii) all
      indebtedness referred to in clauses (i) through (vi) above secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, (viii) all obligations issued, undertaken or assumed as
      part
      of any financing facility with respect to accounts receivables of the Company
      and its Subsidiaries, including, without limitation, any factoring arrangement
      of such accounts receivables and (ix) all Contingent Obligations in respect
      of
      indebtedness or obligations of others of the kinds referred to in clauses (i)
      through (viii) above.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “ISSUE
      DATE” shall mean the date of the first issuance of any Debenture regardless of
      the number of transfers of any particular Debenture.

    

    "MARKET
      PRICE," as of any date, means the Volume Weighted Average Price (as defined
      herein) of the Company’s Common Stock during the five (5) consecutive trading
      day period immediately preceding the date in question.

    

    "OPTIONS"
      means any rights, warrants or options to subscribe for or purchase Common Stock
      or Convertible Securities.

    

    "PERSON"
      means an individual, a limited liability company, a partnership, a joint
      venture, a corporation, a trust, an unincorporated organization, any other
      entity and a government or any department or agency thereof.

    

    “PRINCIPAL
      MARKET” shall have the meaning ascribed to it in the Securities Purchase
      Agreement by and between the Company and the Holder.

    

    “REGISTRATION
      RIGHTS AGREEMENT” shall have the meaning ascribed to it in the Securities
      Purchase Agreement.

    

    “SHARES”
      shall mean the shares of Common Stock issuable upon conversion of the
      Debentures. 

    

    “SUBSCRIPTION
      AMOUNT” shall mean, as to each Buyer, the amount to be paid for the Debenture
      purchased pursuant to the Purchase Agreement as specified in Section 10 of
      the
      Purchase Agreement, in United States Dollars and in immediately available
      funds.

    

    “SUBSIDIARIES”
      shall have the meaning ascribed to it in the Securities Purchase
      Agreement.

    

    "TRADING
      DAY" shall mean any day on which the Common Sock is traded for any period on
      the
      PRINCIPAL MARKET, or on the principal securities exchange or other securities
      market on which the Common Stock is then being traded. 

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “TRANSACTION
      DOCUMENTS” shall have the meaning ascribed to it in the Securities Purchase
      Agreement.

    

    The
      "VOLUME WEIGHTED AVERAGE PRICE" or “VWAP” for any security as of any date means
      the volume weighted average sale price on the Principal Market, as reported
      by,
      or as calculated based upon data reported by, Bloomberg Financial Markets or
      an
      equivalent, reliable reporting service mutually acceptable to and hereafter
      designated by holders of a majority in interest of the Debentures and the
      Company ("BLOOMBERG") or, if no volume weighted average sale price is reported
      for such security, then the last closing trade price of such security as
      reported by Bloomberg, or, if no last closing trade price is reported for such
      security by Bloomberg, the average of the bid prices of any market makers for
      such security that are listed in the "pink sheets" by the National Quotation
      Bureau, Inc. If the Volume Weighted Average Price is to be determined over
      a
      period of more than one trading day, then “Volume Weighted Average Price” for
      the period shall mean the volume weighted average of the daily Volume Weighted
      Average Prices, determined as set forth above, for each business day during
      the
      period. If the volume weighted average price cannot be calculated for such
      security on such date in the manner provided above, the volume weighted average
      price shall be the fair market value as mutually determined by the Company
      and
      the holders of a majority in interest of the Debentures being converted for
      which the calculation of the volume weighted average price is required in order
      to determine the Conversion Price of such Debentures. 

     

    Section
      2. Conversion.
      

    

    (a)
      Conversion
      Right.

     

    (i)  Conversion
      Timing and Amount. Subject
      to the limitations on conversion contained herein, the record Holder of this
      Debenture shall have the right from time to time, and at any time on or after
      the Issue Date hereof to convert any of all of the Debentures (plus any accrued
      and unpaid interest, Failure Payments and other Required Cash Payments) into
      fully paid and non-assessable shares of Common Stock, or any shares of capital
      stock or other securities of the Company into which such Common Stock shall
      hereafter be changed or reclassified, at the Conversion Price (as defined in
      Section 2(b) below, subject to adjustment as provided herein) determined as
      provided herein (a "CONVERSION"). The Conversion Rights set forth in this
      Section 2 shall remain in full force and effect immediately from the Issue
      Date
      until the Debenture is paid in full regardless of the occurrence of an Event
      of
      Default.

     

    (ii) 
      Limitation On Conversion. Notwithstanding
      the above, in no event shall the Holder be entitled to convert any portion
      of
      this Debenture in excess of that portion of this Debenture upon conversion
      of
      which the sum of (1) the number of shares of Common Stock beneficially owned
      by
      the Holder and any applicable affiliates (other than shares of Common Stock
      which may be deemed beneficially owned through the ownership of the unconverted
      portion of the Debenture, the unexercised Warrants or the unexercised or
      unconverted portion of any other security of the Company subject to a limitation
      on conversion or exercise analogous to the limitations contained herein)(the
      “Beneficially Owned Shares”) and (2) the number of shares of Common Stock
      issuable upon the conversion of the portion of the Debenture with respect to
      which the determination of this proviso is being made, would result in
      beneficial ownership by the Holder and its affiliates of more than 4.99% of
      the
      outstanding shares of Common Stock (the “4.99% BENEFICIAL OWNERSHIP
      LIMITATION”). For purposes of the proviso to the immediately preceding sentence,
      (i) beneficial ownership shall be determined by the Holder in accordance with
      Section 13(d) of the Exchange Act and Regulations 13D-G thereunder, except
      as
      otherwise provided in clause (1) of such proviso to the immediately preceding
      sentence, and PROVIDED THAT the 4.99% Beneficial Ownership Limitation shall
      be
      conclusively satisfied if the applicable Notice of Conversion includes a signed
      representation by the Holder, if requested by the Company, that the issuance
      of
      the shares in such Notice of Conversion will not violate the 4.99% Beneficial
      Ownership Limitation, and the Company shall not be entitled to require
      additional documentation of such satisfaction. 

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    The
      parties agree that, in the event that the Company receives any tender offer
      or
      any offer to enter into a merger with another entity whereby the Company shall
      not be the surviving entity (an “Offer”), in the event of a Forced Conversion by
      the Company in accordance with Section 2(g) hereof, or in the event that Default
      Shares are being issued to the Holder pursuant to Section 13 hereof, then
“4.99%” shall be automatically revised immediately after such offer to read
“9.99%” each place it occurs in the first paragraph of this Section 2(a)(ii)
      above. Notwithstanding the above, Holder shall retain the option to either
      exercise or not exercise its option(s) to acquire Common Stock pursuant to
      the
      terms hereof after an Offer. In addition, the 4.99% Beneficial Ownership
      Limitation provisions of this Section 2(a)(ii) 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 4.99% 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 2(a)(ii) shall continue to
      apply. The limitations on conversion set forth in this subsection are referred
      to as the “Beneficial Ownership Limitations.” 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 further waived by
      such Holder. The provisions of this paragraph shall be construed and implemented
      in a manner otherwise than in strict conformity with the terms of this Section
      2(ii) 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. 

     

    (iii)          Maximum
      Exercise of Rights.
      In the
      event the Holder notifies the Company that the exercise of the rights described
      in this Section 2 or the issuance of Payment Shares (as defined in the
      Securities Purchase Agreement) or other shares of Common Stock issuable to
      the
      Holder under the terms of the Transaction Documents (collectively, “Issuable
      Shares”) would result in the issuance of an amount of common stock of the
      Company that would exceed the maximum amount that may be issued to a Holder
      calculated in the manner described in Section 2(a)(ii) of this Agreement, then
      the issuance of such additional shares of common stock of the Company to such
      Holder will be deferred in whole or in part until such time as such Holder
      is
      able to beneficially own such common stock without exceeding the maximum amount
      set forth calculated in the manner described in Section 2(a)(ii) of this
      Agreement. The determination of when such common stock may be issued shall
      be
      made by each Holder as to only such Holder.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (iv)  Calculation
      of Conversion Amount.
      The
      number of shares of Common Stock to be issued upon each conversion of this
      Debenture shall be determined by dividing the Conversion Amount (as defined
      herein) by the applicable Conversion Price. The term "CONVERSION AMOUNT" means,
      with respect to any conversion of the Debenture, the sum of (1) the principal
      amount of the Debenture to be converted in such conversion, PLUS (2) all accrued
      and unpaid Interest thereon for the period beginning on the Issue Date and
      ending on the Conversion Date (as defined in Section 2(d) hereof), PLUS (3)
      at
      the Holder's option, any Failure Payments or other Required Cash Payment owed
      to
      the Holder. 

    

    (b) Conversion
      Price.

    

    (i) Initial
      Conversion Price.
      The
      "CONVERSION PRICE" shall initially equal $1.00
      (the
      "INITIAL CONVERSION PRICE") (subject to resets and adjustments pursuant to
      the
      terms of this Debenture and subject to equitable adjustments for stock splits,
      stock dividends or rights offerings by the Company relating to the Company's
      securities or the securities of any subsidiary of the Company, combinations,
      recapitalization, reclassifications, extraordinary distributions and similar
      events).

    

    (ii)
      Dispute
      Resolution.
      In the
      case of a dispute as to the determination of the Closing Bid Price, the Closing
      Sale Price or the Volume Weighted Average Price or the arithmetic calculation
      of
      the Conversion Price, Failure Payment Amount, Required Cash Payment amount,
      or
      Dividend calculation, or any redemption price, redemption amount, Default Amount
      or similar calculation, the Company shall submit the disputed determinations
      or
      arithmetic calculations via facsimile within two (2) Business Days of receipt,
      or deemed receipt, of the Conversion Notice, any redemption notice, Default
      Notice or other event giving rise to such dispute, as the case may be, to the
      Holder. If the Holder and the Company are unable to agree upon such
      determination or calculation within two (2) Business Days of such disputed
      determination or arithmetic calculation being submitted to the Holder, then
      the
      Company shall, within two (2) Business Days submit via facsimile (a) the
      disputed determination of the Closing Bid Price, the Closing Sale Price or
      the
      Volume Weighted Average Price to an independent, reputable investment bank
      selected by the Company and approved by the Holder or (b) the disputed
      arithmetic calculation of the Conversion Price or any redemption price,
      redemption amount or Default Amount to the Company’s independent, outside
      accountant. The Company, at the Company’s expense, shall cause the investment
      bank or the accountant, as the case may be, to perform the determinations or
      calculations and notify the Company and the Holder of the results no later
      than
      five (5) Business Days from the time it receives the disputed determinations
      or
      calculations. Such investment bank’s or accountant’s determination or
      calculation, as the case may be, shall be binding upon all parties absent
      demonstrable error.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (c)
      Reservation
      of Shares.
      

    

    (i)
      Increase
      and Maintenance of Authorized and Reserved Amount. The
      Company represents that the aggregate number of its authorized shares is at
      least 25,000,000
      shares
      and covenants that is will initially reserve (the “INITIAL SHARE RESERVATION”)
      from its authorized and unissued Common Stock a number of shares of Common
      Stock
      equal to at least 150% of the initial principal amount of this Debenture,
      divided by Conversion Price in effect on the Issue Date of this Debenture,
      free
      from preemptive rights, to provide for the issuance of Common Stock upon the
      conversion of this Debenture. Company further covenants that, beginning on
      the
      Issue Date hereof, and continuing throughout the period that any portion of
      this
      Debenture is outstanding, the Company will reserve from its authorized and
      unissued Common Stock a sufficient number of shares (the “RESERVED AMOUNT”),
      free from preemptive rights, to provide for the issuance of Common Stock upon
      the full conversion of this Debenture. The Reserved Amount shall be increased
      from time to time in accordance with the Company's obligations pursuant to
      Section 4(h) of the Purchase Agreement. The Company represents that upon
      issuance, such shares will be duly and validly issued, fully paid and
      non-assessable. In addition, if the Company shall issue any securities or make
      any change to its capital structure which would change the number of shares
      of
      Common Stock into which the Debenture shall be convertible at the then
      applicable Conversion Price, the Company shall at the same time make proper
      provision so that thereafter there shall be a sufficient number of shares of
      Common Stock authorized and reserved, free from preemptive rights, for
      conversion of the outstanding portion of this Debenture.

    

    (ii)
      Conversion
      Failure. If,
      at
      any time a Holder of this Debenture submits a Notice of Conversion, and the
      Company does not have sufficient authorized but unissued shares of Common Stock
      available to effect such conversion in accordance with the provisions of this
      Section 2 (a "CONVERSION FAILURE"), the Company shall issue to the Holder all
      of
      the shares of Common Stock which are then available to effect such conversion.
      The portion of the Debenture which the Holder included in its Notice of
      Conversion and which exceeds the amount which is then convertible into available
      shares of Common Stock (the "EXCESS AMOUNT") shall, notwithstanding anything
      to
      the contrary contained herein, not be convertible into Common Stock in
      accordance with the terms hereof until (and at the Holder's option at any time
      after) the date additional shares of Common Stock are authorized and duly
      reserved for issuance by the Company to permit such conversion. 

    

    The
      Company shall use its best efforts to authorize and reserve a sufficient number
      of shares of Common Stock as soon as practicable following the earlier of (i)
      such time that the Holder notifies the Company or that the Company otherwise
      becomes aware that there are or likely will be insufficient authorized, reserved
      and unissued shares to allow full conversion of outstanding amount of the
      Debenture and (ii) a Conversion Failure. The Company shall send notice to the
      Holder of the authorization of additional shares of Common Stock, the
      Authorization Date and the amount of the Holder's accrued Conversion Failure
      Payments. 

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    The
      Reserved Amount shall be allocated pro rata among the Holders of Debentures
      based on the original Principal Amount of the Debenture initially issued to
      each
      Holder divided by the aggregate principal amount of all Debentures issued to
      all
      buyers in the Offering (where the “Offering” shall mean the offering of
      debentures pursuant to the Securities Purchase Agreement). In the event a holder
      shall sell or otherwise transfer such Holder’s Debenture, each transferee shall
      immediately be allocated a pro rata portion of such transferor’s Reserved
      Amount. Any portion of the Reserved Amount which remains allocated to any person
      or entity which does not hold any Debenture shall be allocated to the remaining
      holders of Debentures, pro rata based on the Holder’s Fully Diluted Holdings at
      the time of such allocation. 

    

    (d)
      Method
      of Conversion.

    

    (i)
      Mechanics
      of Conversion.
      Subject
      to Section 2(a) and the other provisions of this Debenture, this Debenture
      may
      be converted into Common Stock by the Holder in whole or in part at any time
      and
      from time to time after the Issue Date, by (A) submitting to the Company a
      duly
      executed notice of conversion in the form attached hereto as Exhibit
      A
      ("NOTICE
      OF CONVERSION") by facsimile dispatched prior to Midnight, New York City time
      (the "CONVERSION NOTICE DEADLINE") on the date specified therein as the
      Conversion Date (as defined herein) (or by other means resulting in written
      notice to the Company on the date specified therein as the Conversion Date)
      to
      the office of the Company; which notice shall specify the principal amount
      of
      this Debenture to be converted (plus the dollar amount of any accrued but unpaid
      Interest Failure Payments, or other Required Cash Payments that the Holder
      elects to convert into Common Stock), the applicable Conversion Price, and
      the
      number of shares of Common Stock issuable upon such conversion; and (B) subject
      to Section 2(d)(vi), surrendering the certificate (“Debenture Certificate”)
      representing a share Debenture at the principal office of the
      Company.

    

    (ii)
      Conversion Date.
      The
      "CONVERSION DATE" shall be the date specified in the Notice of Conversion,
      provided that the Notice of Conversion is submitted by facsimile (or by other
      means resulting in, or reasonably expected to result in, written notice) to
      the
      Company or its Transfer Agent before Midnight, New York City time, on the date
      so specified, otherwise the Conversion Date shall be the date that the Notice
      of
      Conversion (or a facsimile thereof) is first received by the Company or its
      Transfer Agent. The person or persons entitled to receive the shares of Common
      Stock issuable upon conversion shall be treated for all purposes as the record
      holder or holders of such securities as of the Conversion Date.

    

    (iii)
      Delivery
      of Common Stock Upon Conversion. Upon
      submission of a Notice of Conversion, the Company shall, within three (3)
      business days after the Conversion Date (the "DELIVERY PERIOD"), issue and
      deliver (or cause its Transfer Agent so to issue and deliver) in accordance
      with
      the terms hereof and the Purchase Agreement to or upon the order of the Holder
      that number of shares of Common Stock (“Conversion Shares”) for the principal
      amount of this Debenture (plus the dollar amount of any accrued but unpaid
      Interest, Failure Payments, or other Required Cash Payments that the Holder
      elects to convert into Common Stock) converted as shall be determined in
      accordance herewith. Upon the conversion of this Debenture, the Company shall,
      at its own cost and expense, take all necessary action, including obtaining
      and
      delivering an opinion of counsel to assure that the Company's transfer agent
      shall issue stock certificates in the name of Holder (or its nominee) or such
      other persons as designated by Holder and in such denominations to be specified
      at conversion representing the number of shares of common stock issuable upon
      such conversion. The Company warrants that no instructions other than these
      instructions have been or will be given to the transfer agent of the Company's
      Common Stock and that, unless waived by the Holder, the Shares will be
      free-trading, and freely transferable, and will not contain a legend restricting
      the resale or transferability of the Shares provided the Shares are being sold
      pursuant to an effective registration statement covering the Shares or are
      otherwise exempt from registration.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (iv)
      Delivery
      Failure. In
      addition to any other remedies which may be available to the Holder, in the
      event that the Company fails for any reason to effect delivery of the Conversion
      Shares by the end of the Delivery Period, or fails to effect delivery of Default
      Shares by the Default Share Delivery Deadline (as defined in Section 7 hereof)
      (each, a “Delivery Failure”), the Holder, at its option, will be entitled to
      revoke all or part of the relevant Notice of Conversion (a “Conversion
      Revocation”) or rescind all or part of the notice of Mandatory Redemption (a
“Redemption Revocation”), as applicable, by delivery of a notice to such effect
      to the Company whereupon the Holder shall regain the rights of a Holder of
      this
      Debenture with respect to such unconverted portions of this Debenture and the
      Company and the Holder shall each be restored to their respective positions
      immediately prior to the delivery of such notice, except that the liquidated
      damages described herein shall be payable through the date notice of revocation
      or rescission is given to the Company. 

    

    (v)
      Obligation
      of Company to Deliver Common Stock. Upon
      receipt by the Company of a Notice of Conversion, the Holder shall be deemed
      to
      be the holder of record of the Common Stock issuable upon such conversion,
      and,
      except as otherwise provided in this Debenture, unless the Company defaults
      on
      its obligations hereunder, all rights with respect to the portion of this
      Debenture being so converted shall forthwith terminate except the right to
      receive the Common Stock or other securities, cash or other assets, as herein
      provided, on such conversion. If the Holder shall have given a Notice of
      Conversion as provided herein, the Company's obligation to issue and deliver
      the
      certificates for Common Stock shall be absolute and unconditional, irrespective
      of the absence of any action by the Holder to enforce the same, any waiver
      or
      consent with respect to any provision thereof, the recovery of any judgment
      against any person or any action to enforce the same, any failure or delay
      in
      the enforcement of any other obligation of the Company to the holder of record,
      or any setoff, counterclaim, recoupment, limitation or termination, or any
      breach or alleged breach by the Holder of any obligation to the Company, and
      irrespective of any other circumstance which might otherwise limit such
      obligation of the Company to the Holder in connection with such conversion.
      The
      provisions of this subsection are subject to the provisions of Section 2(d)(iv)
      hereof.

    

    (vi) Surrender
      of Debenture Certificates Upon Conversion; Book-Entry.
      Notwithstanding anything to the contrary set forth herein, upon conversion
      of
      this Debenture in accordance with the terms hereof, the Holder shall not be
      required to physically surrender the Debenture Certificate to the Company unless
      all of this Debenture is converted, in which case such Holder shall deliver
      the
      Debenture Certificate being converted to the Company promptly following the
      Conversion Date at issue. The Holder and the Company shall maintain records
      showing the amount of this Debenture that is so converted and the dates of
      such
      conversions or shall use such other method, reasonably satisfactory to the
      Holder and the Company, so as not to require physical surrender of this
      Debenture Certificate upon each such conversion. In the event of any dispute
      or
      discrepancy, such records of the Company shall be controlling and determinative
      in the absence of manifest error. 

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (vii)
      No
      Fractional Shares.
      If any
      conversion of this Debenture would result in a fractional share of Common Stock
      or the right to acquire a fractional share of Common Stock, such fractional
      share shall be disregarded and the number of shares of Common Stock issuable
      upon conversion of this Debenture shall be the next higher number of
      shares.

    

    (viii)
      Lost
      or Stolen Debenture Certificates. Upon
      receipt by the Company of evidence of the loss, theft, destruction or mutilation
      of a Debenture Certificate, and (in the case of loss, theft or destruction)
      of
      indemnity reasonably satisfactory to the Company, and upon surrender and
      cancellation of the Debenture Certificate, if mutilated, the Company shall
      execute and deliver a new Debenture Certificate of like tenor and
      date.

    

    (e)
       Legends.
      The
      Holder understands that the Debenture Certificates and, until such time as
      Conversion Shares and any other Issued Common Shares (as defined in the Purchase
      Agreement) have been registered under the 1933 Act as contemplated by the
      Registration Rights Agreement or otherwise may be sold pursuant to Rule 144
      without any restriction as to the number of securities as of a particular date
      that can then be immediately sold, the Conversion Shares and any other Issued
      Common Shares may bear a restrictive legend in substantially the following
      form
      (and a stop-transfer order may be placed against transfer of the certificates
      for such Securities):

    

    "The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933, as amended, or applicable state securities laws. The
      securities may not be sold, transferred or assigned in the absence of an
      effective registration statement for the securities under said Act, or an
      opinion of counsel, in form, substance and scope reasonably satisfactory to
      counsel to the Company, that registration is not required under said Act or
      unless sold pursuant to Rule 144 under said Act."

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (i)
      Removal
      of Legends. The
      Company will issue and deliver the Conversion Shares without restrictive legends
      (including the legend set forth above in this Section 2(e)), and will remove
      any
      restrictive legends on any Conversion Shares that contain restrictive legends
      (including the legend set forth above in this Section 2(e)), in each case when
      and as required under Section 6(a) of the Securities Purchase Agreement. The
      Holder agrees to sell all Securities, including those represented by a
      certificate(s) from which the legend has been removed, in compliance with
      applicable prospectus delivery requirements, if any. 

    

    (ii)
       DTC
      Delivery. In
      lieu
      of delivering physical certificates representing the unlegended shares of common
      stock (the “Unlegended Shares”), provided the Holder’s Transfer Agent is
      participating in the Depository Trust Company ("DTC") Fast Automated Securities
      Transfer ("FAST") program, upon request of the Holder, so long as the
      certificates therefor do not bear a legend and the Holder is not obligated
      to
      return such certificate for the placement of a legend thereon, the Company
      shall
      cause its Transfer Agent to electronically transmit the Unlegended Shares to
      the
      Holder by crediting the account of the Holder's Prime Broker with DTC through
      its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for
      delivery and penalties described herein shall likewise apply to the electronic
      transmittals described herein. 

    

    (f)
      Status
      as Shareholder.
      Upon
      submission of a Notice of Conversion by a Holder, (i) the shares covered thereby
      (other than the shares, if any, which cannot be issued because their issuance
      would exceed such Holder's allocated portion of the Reserved Amount) shall
      be
      deemed converted into shares of Common Stock and (ii) the Holder's rights as
      a
      Holder of such converted portion of this Debenture shall cease and terminate,
      excepting only the right to receive certificates for such shares of Common
      Stock
      and to any remedies provided herein or in the Transaction Documents or otherwise
      available at law or in equity to such Holder because of a failure by the Company
      to comply with the terms of this Debenture, including but not limited to the
      remedies provided in Section 2(d)(iv), Section 6 and Section 8 hereof.
      Notwithstanding the foregoing, if a Holder initiates a Conversion Revocation
      or
      a Redemption Revocation pursuant to Section 2(d)(iv) hereof, the Holder shall
      regain the rights of a Holder of this Debenture with respect to such unconverted
      portion of this Debenture as specified in Section 2(d)(iv) and the Company
      shall, as soon as practicable, return such unconverted portion of this Debenture
      to the Holder or, if the Debenture Certificate has not been surrendered, adjust
      its records to reflect that such portion of the Debenture has not been
      converted. In all cases, the Holder shall retain all of its rights and remedies
      (including, without limitation, the right to receive Failure Payments pursuant
      to Section 6 to the extent required thereby for such Event of Failure and any
      subsequent Event of Failure and the right to receive the Default Amount pursuant
      to Section 8 to the extent required thereby) for the Company's failure to
      convert this Debenture.

    

    
      
        
        

      

      
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    (g)
       Forced
      Conversion. 

     

    Anytime
      after the Effective Date, if for each of any ten (10) consecutive Trading Days
      (i) the Equity Payment Conditions have all been met, and (ii) the closing bid
      price for the Common Stock exceeds $2.50, then the Company may provide to the
      Holders a twenty (20) Trading Day advance notice (an “Advance Forced Conversion
      Notice”) to all Holders notifying the Holders that the Company has elected to
      force each Holder to convert all or a specified portion of the Debenture held
      by
      such Holders on the date that is Twenty (20) Trading Days after the date of
      such
      advance notice (the “Target Forced Conversion Date”). If the closing bid price
      for the Common Stock for each Trading Day during the ten (10) consecutive
      Trading Day period immediately preceding the Target Forced Conversion Date
      (the
“Forced Conversion Threshold
      Period”)
      exceeds $2.50,
      and if
      the Equity Payment Conditions are met during each Trading Day of the Forced
      Conversion Threshold
      Period,
      then
      the Debenture shall be deemed automatically converted as of the Target Forced
      Conversion Date to the extent set forth in the Advance Forced Conversion Notice
      (a “Forced Conversion”). The Company shall, within three (3) business days after
      the Target Forced Conversion Date (the "DELIVERY PERIOD"), issue and deliver
      (or
      cause its Transfer Agent so to issue and deliver) in accordance with the terms
      hereof and the Purchase Agreement to or upon the order of the Holder that number
      of shares of Common Stock (“Conversion Shares”) for the principal amount of this
      Debenture for which conversion was forced (plus the dollar amount of any accrued
      but unpaid Interest) as shall be determined in accordance herewith. In the
      event
      of a Forced Conversion, the Holder shall promptly deliver the Debenture for
      which conversion was forced to the Company, if and to the extent required under
      Section 2(d)(vi) hereof. 

     

    Notwithstanding
      the above, if any one or more of the Equity Payment Conditions are not met
      on
      any Trading Day during the Forced Conversion Threshold Period, then the Company
      shall not be entitled to force conversion of the portion of the Debenture
      described in the Advance Company Redemption Notice. Any Forced Conversion
      Notices shall be applied ratably to all of the Holders in proportion to each
      Holder’s initial purchases of Debentures pursuant to the Securities Purchase
      Agreement, provided that any voluntary conversions by a Holder during the Forced
      Conversion Threshold Period shall be applied against such Holder’s pro-rata
      allocation thereby decreasing the aggregate amount forcibly converted hereunder.
      

     

    Notwithstanding
      anything herein to the contrary, a Forced Conversion Notice shall be void and
      of
      no effect to the extent that, in the sole determination of the Holder, the
      forced Conversion would cause the 9.99% Beneficial Ownership Limitation of
      Section 2(a)(ii) to be exceeded. In the event the Company issues a Forced
      Conversion Notice and because of the 9.99% Beneficial Ownership Limitation
      it is
      unable to force the Holders to convert all of the Debenture, as to any portion
      of the Debenture outstanding, the Company shall not have the right to issue
      another Forced Conversion Notice for at least 30 days and at such time all
      conditions hereunder must again be met, including the pricing condition and
      the
      Equity Payment Conditions.

     

    
      
        
        

      

      
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    Section
      3. Effect
      of Certain Events.

    

    (a)
      Effect
      of Merger, Consolidation, Etc. At
      the
      option of the Holder, the sale, conveyance or disposition of all or
      substantially all of the assets of the Company, the effectuation by the Company
      of a transaction or series of related transactions in which more than 50% of
      the
      voting power of the Company is disposed of, or the consolidation, merger or
      other business combination of the Company with or into any other Person (as
      defined herein) or Persons when the Company is not the survivor shall, at the
      Holder’s option, either: (i) be deemed to be an Event of Default (as defined in
      Section 7) pursuant to which the Company shall be required to pay to the Holder
      upon the consummation of and as a condition to such transaction an amount equal
      to the Default Amount (as defined in Section 8) or (ii) be treated pursuant
      to
      Section 3(b) hereof. "PERSON" shall mean any individual, corporation, limited
      liability company, partnership, association, trust or other entity or
      organization. 

    

    (b)
      Adjustment
      Due to Merger, Consolidation, Etc. If,
      at
      any time when this Debenture or any portion thereof is issued and outstanding
      and prior to conversion of all of this Debenture, there shall be any merger,
      consolidation, exchange of shares, recapitalization, reorganization, or other
      similar event, as a result of which shares of Common Stock of the Company shall
      be changed into the same or a different number of shares of another class or
      classes of stock or securities of the Company or another entity, or in case
      of
      any sale or conveyance of all or substantially all of the assets of the Company
      other than in connection with a plan of complete liquidation of the Company
      (each, a "CHANGE OF CONTROL TRANSACTION"), then the Holder of this Debenture,
      at
      the Holder’s option, shall thereafter have the right to receive upon conversion
      of this Debenture, upon the basis and upon the terms and conditions specified
      herein and in lieu of the shares of Common Stock immediately theretofore
      issuable upon conversion, such stock, securities or assets which the Holder
      would have been entitled to receive in such transaction had the Debenture (plus
      any accrued and unpaid Interest, Failure Payments and other Required Cash
      Payments) been converted in full immediately prior to such transaction (without
      regard to any contractual, legal, or regulatory restrictions on such exercise
      and issuance, if any, including but not limited to the Beneficial Ownership
      Limitation, and without regard to whether or not a sufficient number of shares
      are authorized and reserved to effect any such exercise and issuance), and
      in
      any such case appropriate provisions shall be made with respect to the rights
      and interests of the Holder of this Debenture to the end that the provisions
      hereof (including, without limitation, provisions for adjustment of the
      Conversion Price and of the number of shares issuable upon conversion of this
      Debenture) shall thereafter be applicable, as nearly as may be practicable
      in
      relation to any securities or assets thereafter deliverable upon the conversion
      hereof. The Company shall not effect any transaction described in this Section
      3(b) unless (a) it first gives, thirty (30) days prior written notice of the
      record date of the special meeting of shareholders to approve, or if there
      is no
      such record date, the consummation of, such merger, consolidation, exchange
      of
      shares, recapitalization, reorganization or other similar event or sale of
      assets (during which time the Holder shall be entitled to convert this
      Debenture) and (b) the resulting successor or acquiring entity (if not the
      Company) and, if an entity different from the successor or acquiring entity,
      the
      entity whose capital stock or assets the holders of Common Stock are entitled
      to
      receive as a result of such Change of Control Transaction, assumes by written
      instrument the obligations of this Debenture, including this Section 3(b).
      The
      above provisions shall similarly apply to successive consolidations, mergers,
      sales, transfers or share exchanges. 

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (c)
      Participation.
      The
      Holder, as the holder of the Debenture, shall be entitled to receive such
      dividends paid and distributions made to the holders of Common Stock of the
      Company to the same extent as if the Holder had completely converted the
      Debenture into Common Stock (without regard to any limitations on conversion
      herein or elsewhere and without regard to whether or not a sufficient number
      of
      shares are authorized and reserved to effect any such exercise and issuance)
      and
      had held such shares of Common Stock on the record date for such dividends
      and
      distributions. Payments under the preceding sentence shall be made concurrently
      with the dividend or distribution to the holders of Common Stock. 

    

    (d)
      Rights
      Upon Issuance of Purchase Rights. If
      at any
      time the Company grants, issues or sells any Options, Convertible Securities
      or
      rights to purchase shares, warrants, securities or other property pro rata
      to
      the record holders of any class of Common Shares (the “Purchase Rights”),
      then the Holders will be entitled to acquire, upon the terms applicable to
      such
      Purchase Rights, the aggregate Purchase Rights which such Holder could have
      acquired if such Holder had held the number of Common Shares acquirable upon
      complete conversion of the Debenture (without taking into account any
      limitations or restrictions on the convertibility of the Debenture) immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Shares are to be determined for the grant, issue or
      sale of such Purchase Rights.

    

    (e)
      Additional
      Adjustments to Conversion Price.
      The
      Conversion Price shall be subject to adjustment from time to time as provided
      in
      this Section 3(e). 

    

    (i)
      Adjustment of Conversion Price Due to Share Issuances (MFN).
      So long
      any portion of this Debenture is outstanding, if the Company shall issue, sell,
      or grant or agree to issue, sell or grant (A) any shares of Common Stock ,
      except for shares issued upon the exercise or conversion of currently
      outstanding derivative securities, (B) any option (except for options granted
      pursuant to the Company’s Equity Incentive Plan), warrant, debt or security that
      is convertible or exchangeable into Common Stock, at an effective price per
      share that is less than the Conversion Price in effect at the time of such
      issue
      (each, a “Dilutive Issuance”), then, and thereafter successively upon each such
      issue, the Conversion Price shall be reduced (an “MFN Adjustment”) to such other
      lower issue price (the “MFN Adjustment Price”). For purposes of this adjustment,
      the issuance of any security carrying the right to convert such security into
      shares of Common Stock or of any warrant, right or option to purchase Common
      Stock shall result in an adjustment to the Conversion Price upon the issuance
      of
      the above-described security and again upon any adjustment to the conversion
      price of such securities (which shall result in an adjustment of the Conversion
      Price to an effective price per share equal to the lesser of the existing
      Conversion Price and the then current conversion price of such securities)
      and
      upon the issuance of shares of Common Stock upon exercise of such conversion
      or
      purchase rights if such issuance is at a price lower than the then applicable
      Conversion Price (which shall result in an adjustment of the Conversion Price
      to
      a price equal to the lesser of the existing Conversion Price and the issuance
      price of such shares of Common Stock). The reduction of the Conversion Price
      described in this paragraph is in addition to other rights of the Holder
      described in this Debenture and the Securities Purchase Agreement. 

    

    
      
        
        

      

      
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    (ii)
      Subdivision or Combination of Common Stock.
      If the
      Company at any time subdivides (by any stock split, stock dividend,
      recapitalization, reorganization, reclassification or otherwise) the shares
      of
      Common Stock acquirable hereunder into a greater number of shares, then, after
      the date of record for effecting such subdivision, the Conversion Price in
      effect immediately prior to such subdivision will be proportionately reduced.
      If
      the Company at any time combines (by reverse stock split, recapitalization,
      reorganization, reclassification or otherwise) the shares of Common Stock
      acquirable hereunder into a smaller number of shares, then, after the date
      of
      record for effecting such combination, the Conversion Price in effect
      immediately prior to such combination will be proportionately
      increased.

    

    (iii)
      Notice
      of Adjustments. Whenever
      the Conversion Price is adjusted pursuant to this Section 3 or otherwise, the
      Company shall promptly mail to the Holder a notice (a “Conversion Price
      Adjustment Notice”) setting forth the Conversion Price after such adjustment and
      setting forth a statement of the facts requiring such adjustment. For purposes
      of clarification, whether or not the Corporation provides a Conversion Price
      Adjustment Notice pursuant to this Section 3(g), upon the occurrence of any
      event that leads to an adjustment of the Conversion Price, the Holders are
      entitled to receive a number of Conversion Shares based upon the new Conversion
      Price, as adjusted, for conversions occurring on or after the date of such
      adjustment, regardless of whether a Holder accurately refers to the adjusted
      Conversion Price in the Notice of Conversion.

    

    Section
      4. Company’s
      Right to Redeem.
      Anytime
      after the Effective Date, if (i) the Equity Payment Conditions have all been
      met
      for the prior Trading Day, and (ii) the daily VWAP of the Company’s common stock
      for the prior Trading Day exceeds 150%
      of the
      Initial Conversion Price for this Debenture, then the Company may provide to
      the
      Holders a twenty (20) Trading Day advance notice (an “Advance Company Redemption
      Notice”) stating that the Company has elected to Redeem all or any portion of
      the outstanding Debenture on the date that is twenty (20) Trading Days after
      the
      date of such notice (the “Target Redemption Date”), and certifying that the
      Company has set aside available cash in the amount of the aggregate projected
      Company Redemption Amount (as defined below) for use in effecting the
      redemption. If the daily VWAP for the Common Stock for each Trading Day during
      the twenty (20) consecutive Trading Day period immediately preceding the Target
      Redemption Date (the “Threshold
      Period”),
      which
      twenty (20) consecutive Trading Day period shall have commenced only after
      the
      Effective Date, exceeds 150%
      of the
      Initial Conversion Price for this Debenture, and if the Equity Payment
      Conditions are met during each Trading Day of the Threshold
      Period,
      then
      the Company shall, within five (5) Trading Days after any such Threshold Period,
      deliver the Company Redemption Amount (as defined below) to each Holder (a
      “Company Redemption”). If any one or more of the Equity Payment Conditions are
      not met on any Trading Day during the Threshold Period, then the Company shall
      not be entitled to redeem the portion of the Debenture described in the Advance
      Company Redemption Notice. Any Company Redemption shall be applied ratably
      to
      all of the Holders in proportion to each Holder’s initial purchase of its
      Debenture under the Purchase Agreement, provided that any voluntary conversions
      by a Holder during the Threshold Period shall be applied against such Holder’s
      pro-rata allocation thereby decreasing the aggregate amount forcibly converted
      hereunder. The Holder, at its option, may continue to convert its Debenture
      in
      accordance with the terms hereof after the receipt of an Advance Company
      Redemption Notice until the Holder receives payment of the Company Redemption
      Amount, and the amount of this Debenture to be redeemed shall not exceed the
      amount which remains outstanding as of the date of Payment of the Company
      Redemption Amount. Once the Company delivers an Advance Company Redemption
      Notice, the Company may not deliver another such notice for at least thirty
      (30)
      Trading Days. The “Company Redemption Amount” shall equal one hundred and twenty
      five percent (125%)
      of the
      outstanding principal amount of the Debenture being redeemed, plus all accrued
      and unpaid Interest, Failure Payments or other Required Cash Payments.

    

    
      
        
        

      

      
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    Neither
      a
      Forced Conversion nor a Company Redemption of the Debenture shall have any
      effect on the Holder’s Warrants. Notwithstanding any Forced Conversion or
      Company Redemption of the Debenture, the Holder shall retain all of the Warrants
      to which it would otherwise be entitled.

    

    Section
      5. Certain
      Covenants.

    

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

    

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

    

    (c)
      Incurrence
      of Indebtedness.  So
      long as this Debenture is outstanding, the Company shall not, without the
      Holder’s written consent, and the Company shall not permit any of its
      Subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer
      to
      exist any Indebtedness, other than the Indebtedness evidenced by this Debenture
      unless such Indebtedness is (i) subordinated in right of payment to the
      Debentures; or (ii) trade payables in the ordinary course of business; (iii)
      letters of credit for the purchase, manufacture or shipment of inventory, and
      (iv) capital leases for equipment reasonably necessary for the Company’s
      business. 

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (d)
      Senior
      Securities.
      The
      Debentures shall constitute senior debt of the Company. There is no debt
      currently outstanding that is senior to the Debentures except as set forth
      on
      SCHEDULE 5(D). All future debt issued by the Company shall be subordinated
      and
      junior to the Debentures. The Company shall not, without the written permission
      of the Holder, issue any other debt that is senior to, or pari passu with,
      the
      Debentures. 

    

    (e)
      Negative
      Covenants.
      As long
      as any portion of this Debenture remains outstanding, without the prior written
      consent of Holders holding at least 75% of the then outstanding principal amount
      of Debentures, the Company shall not, and shall not permit any of its
      Subsidiaries to, directly or indirectly:

     

    (i)
      other
      than as contemplated by the Transaction Documents, 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;

    

    (ii)
      enter into, create, incur, assume or suffer to exist any
      mortgage, lien, pledge, charge, security interest or other encumbrance upon
      or
      in any property or assets (including accounts and contract rights) owned by
      the
      Company or any of its Subsidiaries (collectively, "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;

    

    (iii)
      amend its charter documents, including, without limitation, the certificate
      of
      incorporation and bylaws, in any manner that materially and adversely affects
      any rights of the Holder;

    

    (iv)
      repay, repurchase or offer to repay, repurchase or otherwise acquire more than
      a
      de minimis number of shares of Common Stock or Common Stock Equivalents other
      than as to (a) the Conversion Shares or Warrant Shares as permitted or required
      under the Transaction Documents and (b) repurchases of Common Stock or Common
      Stock Equivalents of departing officers and directors of the Company, provided
      that all repurchases from such departing officers and directors shall not exceed
      an aggregate of $150,000 in any 12 month period; 

    

    (v)
      other
      than those required under the terms of this Debenture, pay cash dividends or
      distributions on any equity securities of the Company;

    

    
      
        
        

      

      
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    (vi)
      enter into any transaction with any Affiliate of the Company which would be
      required to be disclosed in any public filing with the Commission, unless such
      transaction is made on an arm’s-length basis and expressly approved by a
      majority of the disinterested directors of the Company (even if less than a
      quorum otherwise required for board approval); or

    

    (vii)
      enter into any agreement with respect to any of the foregoing.

    

    (f) Rights
      Upon Issuance of Purchase Rights. 

    

    If
      at any
      time the Company grants, issues or sells any Options, Convertible Securities
      or
      rights to purchase shares, warrants, securities or other property pro rata
      to
      the record holders of any class of Common Shares (the “Purchase Rights”),
      then the Holders will be entitled to acquire, upon the terms applicable to
      such
      Purchase Rights, the aggregate Purchase Rights which such Holder could have
      acquired if such Holder had held the number of Common Shares acquirable upon
      complete conversion of the Debenture (without taking into account any
      limitations or restrictions on the convertibility of the Debenture) immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Shares are to be determined for the grant, issue or
      sale of such Purchase Rights.

    

     (g) Limitations
      on Senior Management Securities.
      The
      Company shall not permit any of its senior management to sell or transfer,
      directly or indirectly, any Common Stock, Option, Convertible Security or any
      other instrument convertible into or exercisable or exchangeable for Common
      Stock, or to convert or exercise any such convertible or exercisable instrument
      (except as may be issued pursuant to the terms of an Approved Share Plan)
      beneficially owned by such Person, unless (i) holders
      of Debentures representing at least 75%
      of the
      aggregate principal amount of the Debentures then outstanding shall
      have executed a written consent to such sale, transfer or exercise or (ii)
      for
      each of the sixty (60) consecutive Trading Days (the “Limitation Measuring
      Period”) prior to the date of such sale, transfer or exercise, the Registration
      Statement covering the resale of the Conversion Shares shall have been effective
      and the VWAP of the Common Stock shall have equaled or exceeded 175% of the
      initial Conversion Price (subject to appropriate adjustments for stock splits,
      stock dividends, stock combinations and other similar transactions after the
      Issue Date) for each Trading Day during the Limitation Measuring Period (the
      “Senior Management Limitation”). 

    

    (h)
      Major
      Transaction.
      The
      Company shall not effect a Major Transaction, as defined below, unless it shall
      first place into an escrow account with an independent escrow agent, at least
      five (5) Business Days prior to the closing date of the Major Transaction (the
      “Major Transaction Escrow Deadline”), an amount equal to the Mandatory
      Redemption Amount (as defined below) for the Holder’s outstanding Debenture (the
“Major Transaction Escrow Amount”). Concurrently upon closing of any Major
      Transaction, the Company shall pay or shall instruct the escrow agent to pay
      the
      Mandatory Redemption Amount to the Holder,
      which
      payment shall constitute a redemption of the Debenture (“Redemption Upon Major
      Transaction”).  

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    For
      purposes hereof, a "Major Transaction" shall be deemed to have occurred at
      such
      time as any of the following events have occurred:

    

    (A) a
      consolidation, merger, exchange of shares, recapitalization, reorganization,
      business combination or other similar event, (A) following which the holders
      of
      Common Stock of the Company immediately preceding such consolidation, merger,
      combination or event either (i) no longer hold a majority of the shares of
      Common Stock of the Company or (ii) no longer have the ability to elect the
      board of directors of the Company or (B) as a result of which shares of Common
      Stock of the Company shall be changed into (or the shares of Common Stock become
      entitled to receive) the same or a different number of shares of the same or
      another class or classes of stock or securities of the Company or another entity
      (collectively, a “Change of Control”); 

    

    (B) the
      sale
      or transfer of all or substantially all of the Company's assets (an “Asset
      Sale”);  

    

    (C) a
      purchase, tender or exchange offer made to the holders of outstanding shares
      of
      Common Stock, such that following such purchase, tender or exchange offer a
      Change of Control shall have occurred; or

    

    (D) an
      issuance or series of issuances by the Company after the date of this Debenture,
      without the Holder’s approval, of an aggregate number of shares of Common Stock
      in excess of 25% of the Company’s outstanding common stock as of the date
      hereof.

    

    

    Section
      6. Events
      of Failure.
      

    

    (a)
      Definitions.

    

    Each
      of
      the following shall be considered to be an “EVENT OF FAILURE”:

    

    (i)
      A
      Conversion Failure as defined in Section 2(c)(iii)
      hereof; 

    

    (ii)
      A
      Registration Failure as defined in Section 7(c)
      hereof;

    

    (iii)
      A
      Delisting Event as defined in Section 7(i) hereof;

    

    (iv)
      A
      Share Authorization Failure as defined in Section 7(k) hereof;

    

    (v)
      A
      Stop Trade Failure as defined in Section 7(m) hereof;

    

    (vi)
      A
      Delivery Failure pursuant to Section 2(d)(iv) hereof or a failure by the Company
      to timely deliver Common Stock to the Holder pursuant to and in the form
      required by this Debenture, the Securities Purchase Agreement or the Warrant,
      or, if requested by Holder, a replacement Debenture Certificate; 

    

    
      
        
        

      

      
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    (vii)
      A
      Cross Default as defined in Section 7(n) hereof; 

    

    (viii)
      A
      Legend Removal Failure as defined in Section 7(p); or

    

    (ix)
      Breach of any provision of Section 4(e) of the Securities Purchase
      Agreement.

    

    (x)
      A
      Payment Failure as defined in Section 7(a) hereof.

    

    (b)
      Failure
      Payments. The
      Company understands that any Event of Failure (as defined above) could result
      in
      economic loss to the Holder. In the event that any Event of Failure occurs,
      as
      compensation to the Holder for such loss, the Company agrees to pay (as
      liquidated damages and not as a penalty) to the Holder the amount equal to
      eighteen percent (18%) per annum (“Failure Payments”) of the aggregate
      outstanding principal amount of the Holder’s Debenture on such day (or the
      maximum rate allowed under applicable law, whichever is less) after the date
      of
      the Event of Failure until the Event of Failure is cured, compounded monthly.
      The Company shall pay any payments incurred under this Section in immediately
      available funds upon demand. Failure Payments are in addition to any Shares
      that
      the Holder is entitled to upon conversion of this Debenture. Notwithstanding
      anything to the contrary herein, the amount of Failure Payments payable by
      the
      Company to the Holder due to a Registration Failure shall not exceed an
      aggregate total of nine percent (9%) (the “Registration Failure Payment Cap”) of
      the aggregate outstanding principal amount of the Holder’s
      Debenture.

     

    (c)
      Payment
      of Accrued Failure Payments. The
      accrued Failure Payments for each Event of Failure shall be paid in cash on
      or
      before the fifth (5th) day of each month following a month in which Failure
      Payments accrued, PROVIDED that, at the option of the Holder (by written notice
      to the Company), if such payments are not paid within the time period specified,
      such payments shall be added to the outstanding principal amount of this
      Debenture, in which event interest shall accrue thereon in accordance with
      the
      terms of this Debenture and such additional principal amount shall be
      convertible into Common Stock at the applicable Conversion Price in accordance
      with the terms of this Debenture. Nothing herein shall limit the Holder's right
      to pursue actual damages (to the extent in excess of the Failure Payments)
      for
      the Company's Event of Failure, and the Holder shall have the right to pursue
      all remedies available at law or in equity (including a decree of specific
      performance and/or injunctive relief). Any shares of Common Stock issued upon
      conversion of such amounts shall be Registrable Securities (as defined in the
      Registration Rights Agreement). 

     

    
      
        
        

      

      
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    (d)
      Maximum
      Rate of Interest.
      Nothing
      contained herein or in any document referred to herein or delivered in
      connection herewith shall be deemed to establish or require the payment of
      a
      rate of interest or other charges in excess of the maximum permitted by
      applicable law. In the event that the rate of interest or dividends required
      to
      be paid or other charges hereunder exceed the maximum permitted by such law,
      any
      payments in excess of such maximum shall be credited against amounts owed by
      the
      Company to the Holder and thus refunded to the Company.

    

    (e)
      Liquidated
      Damages.
      The
      parties hereto acknowledge and agree that the sums payable as Failure Payments
      or pursuant to a Mandatory Redemption shall give rise to liquidated damages
      and
      not penalties. The parties further acknowledge that (i) the amount of loss
      or
      damages likely to be incurred by the Holder is incapable or is difficult to
      precisely estimate, (ii) the amounts specified bear a reasonable proportion
      and
      are not plainly or grossly disproportionate to the probable loss likely to
      be
      incurred by the Investor, and (iii) the parties are sophisticated business
      parties and have been represented by sophisticated and able legal and financial
      counsel and negotiated this Agreement at arm’s length.

    

    Section
      7. Events
      of Default.

    

    Each
      of
      the following events shall be considered to be an "EVENT OF DEFAULT," unless
      waived by the Holder: 

    

    (a)
      Failure
      to Make Cash Payments. The
      Company fails to pay (each, a “Payment Failure”) any cash payments due to the
      Holder under the terms of this Debenture when due under this Debenture, whether
      on a dividend payment due date, at maturity, upon mandatory prepayment, upon
      acceleration, upon an Event of Failure, or upon an Automatic Redemption or
      otherwise or fails to pay any liquidated damages or due and owing under this
      Debenture, the Securities Purchase Agreement, a Warrant or any other Transaction
      Document when due, including but not limited to all accrued and unpaid Interest,
      Failure Payments and accrued and unpaid interest thereon (each cash payment
      referred to above is referred to as a “Required Cash Payment”), and such failure
      continues for a period of five (5) days after the applicable due date with
      respect to Required Cash Payments in excess of $50,000 or continues for a period
      of twenty (20) days after the applicable due date with respect to Required
      Cash
      Payments that are $50,000 or less.

    

    (b)
      Conversion
      and Delivery of the Shares.
      The
      Company (a) fails to issue and deliver shares of Common Stock to the Holder
      upon
      exercise by the Holder of the conversion rights of the Holder in accordance
      with
      the terms of this Debenture (for a period of at least sixty (60) days, if such
      failure is a Conversion Failure solely as a result of a shortage of authorized
      shares and the Company is using its best efforts to authorize a sufficient
      number of shares of Common Stock as soon as practicable or for a period of
      at
      least twenty (20) days if such failure is a Delivery Failure under Section
      2(d)(iv) and is not as a result of a shortage of authorized shares), (b) at
      any
      time, the Company announces or states in writing that it will not honor its
      obligations to issue shares of Common Stock to the Holder upon exercise by
      the
      Holder of the conversion rights of the Holder in accordance with the terms
      of
      this Debenture, (c) fails for a period of twenty (20) days to transfer or cause
      its transfer agent to transfer (electronically or in certificated form) any
      certificate for shares of Common Stock issued or issuable to the Holder upon
      conversion of the Debenture as and when required by the terms of this Debenture
      or the Registration Rights Agreement, or (d) fails for a period of twenty (20)
      days to remove any restrictive legend (or to withdraw any stop transfer
      instructions in respect thereof) on any certificate for any shares of Common
      Stock issued to the Holder upon conversion of this Debenture as and when
      required by the Debenture, the Purchase Agreement or the Registration Rights
      Agreement (or makes any announcement or written statement that it does not
      intend to honor the obligations described in this paragraph).

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (c)
      Failure
      to Effect Registration. 
      A
      Registration Default occurs, where “Registration Default” shall mean a
      Registration Failure (as defined below) that occurs and remains uncured for
      a
      period of more than ninety (90) days, where as “Registration Failure” means that
      (i) the Company fails to file with the Securities and Exchange Commission on
      or
      before the Filing Deadline (as defined in the Registration Rights Agreement,
      the
“FILING DEADLINE) the Registration Statement(s) (as defined in the Registration
      Rights Agreement, the “REGISTRATION STATEMENT(S)”) required to be filed pursuant
      to Section 2(a) of the Registration Rights Agreement, or (ii) the Company fails
      to obtain effectiveness with the Securities and Exchange Commission prior to
      the
      Registration Deadline of the Registration Statement(s) (as defined in the
      Registration Rights Agreement) required to be filed pursuant to Section 2(a)
      of
      the Registration Rights Agreement, or fails to keep such Registration Statements
      current and effective as required in Section 3 of the Registration Rights
      Agreement, or (iii) the Company fails to file any amendment to the Registration
      Statement, or any additional Registration Statement required to be filed
      pursuant to Section 3(b) of the Registration Rights Agreement within twenty
      (20)
      days of the applicable Registration Trigger Date (as defined in the Registration
      Rights Agreement), or fails to cause such amendment and/or new Registration
      Statement to become effective within sixty (60) days of the applicable
      Registration Trigger Date (as defined in the Registration Rights Agreement),
      or
      (iv) any Registration Statement required to be filed under the Registration
      Rights Agreement, after its initial effectiveness and during the Registration
      Period (as defined in the Registration Rights Agreement), lapses in effect
      or
      sales of all of the Registrable Securities (as defined in the Registration
      Rights Agreement) cannot otherwise be made thereunder (whether by reason of
      the
      Company's failure to amend or supplement the prospectus included therein in
      accordance with the Registration Rights Agreement, the Company's failure to
      file
      and obtain effectiveness with the SEC of an additional Registration Statement
      or
      amended Registration Statement required pursuant to Section 12 of the
      Registration Rights Agreement or otherwise). A Registration Default shall also
      be deemed to have occurred if, at any time, the Company fails to provide a
      commercially reasonable written response to any comments (“SEC Comments”) to a
      Registration Statement submitted by the SEC within twenty (20) business days
      of
      the date that such SEC comments are received by the Company (a “Company SEC
      Comment Response Failure”).

    

    (d) Breach
      of Covenants.
      The
      Company breaches any covenant or other term or condition of this Debenture,
      or
      any of the other Transaction Documents in any respect, for which a default
      period is not already specified, and such breach, if subject to cure, continues
      for a period of twenty (20) days after written notice to the Company from the
      Holder.

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (e)
      Breach
      of Representations and Warranties. 
      Any
      representation or warranty of the Company made herein, in any of the Transaction
      Documents or in any agreement, statement or certificate given in writing
      pursuant hereto (including, without limitation, pursuant to the Purchase
      Agreement, the Registration Rights Agreement and the Warrants), shall be false
      or misleading in any material respect when made and the breach of which has
      a
      material adverse effect on the rights of the Holder with respect to this
      Debenture, the Purchase Agreement, the Registration Rights Agreement or the
      Warrants.

    

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

    

    (g)
      Judgments. 
      Any
      money judgment, writ or similar process shall be entered or filed by a court
      against the Company or any subsidiary of the Company or any of its property
      or
      other assets for more than $1,000,000, and shall remain unvacated, unbonded
      or
      unstayed for a period of twenty (20) days unless otherwise consented to by
      the
      Holder, which consent will not be unreasonably withheld.

    

    (h)
      Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings for relief under any bankruptcy law or any law for the relief of
      debtors shall be instituted by or against the Company or any "significant
      subsidiary" (as defined in Rule 1-02(w) of Regulation S-X promulgated under
      the
      1933 Act) of the Company.

    

    (i) Delisting
      of Common Stock.
      A
      Delisting Event (as defined below) occurs and remains uncured for a period
      of
      thirty (30) days, where a “Delisting Event” means Delisting of the Common Stock
      from the Principal Market; failure to comply with the requirements for continued
      listing on the Principal Market for a period of seven consecutive trading days;
      or notification from the Principal Market that the Company is not in compliance
      with the conditions for such continued listing on the Principal
      Market.

    

    (j)
      Default
      Under Other Debentures or Warrants.  An
      Event
      of Default has occurred and is continuing with respect to any Debenture issued
      pursuant to the Purchase Agreement and held by other holders or under any of
      the
      warrants issued to other holders pursuant to the other purchase agreements
      relating to the Debenture.

    

    (k)
      Failure to Authorize and Reserve Common Stock. A
      Share
      Authorization Failure (as defined below) occurs and remains uncured for a period
      of sixty (60) days, where a “Share Authorization Failure” means that the Company
      shall fail to authorize and reserve, and maintain authorized and reserved,
      shares of Common Stock as required under Section 2(c) hereof. 

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (l)
       Stop
      Trade.
      A Stop
      Trade Default occurs, where a “Stop Trade Default” means a Stop Trade Failure
      (as defined below) that occurs and remains uncured for a period of thirty (30)
      days, where a “Stop Trade Failure” means that an SEC or judicial stop trade
      order or Principal Market trading suspension with respect to Company's Common
      Stock. A “Stop Trade Default” shall immediately occur in the event of a Stop
      Trade Failure, where a contributing cause to such trade stoppage is a failure
      by
      the Company to make any required filings within the time required by the
      applicable laws or regulations (a “Company Filing Failure”).

    

    (m)
      Reverse
      Splits.
      The
      Company effectuates a reverse split of its

    Common
      Stock without the prior written consent of the Holder.

    

    (n)
      Cross
      Default.
      An Event
      of Default (as defined herein and in each of the Holder’s Warrants,
      respectively) in any other Debenture or Warrant issued by the Company to the
      Holder pursuant to the Securities Purchase Agreement or any other agreement
      between the parties currently existing or in the future shall constitute an
      Event of Default hereunder. In addition, a Cross Default (as defined below)
      that
      occurs and remains uncured for a period of twenty (20) days shall constitute
      an
      Event of Default, where a “Cross Default” means a default by the Company of a
      material term, covenant, warranty or undertaking of any of the Transaction
      Documents (as that term is defined in the Purchase Agreement) or other agreement
      to which the Company and Holder are parties, including but not limited to the
      Debentures, the Warrants issued pursuant to the Securities Purchase Agreement
      and the Warrants issued pursuant to other securities purchase agreements related
      to the sale of Debentures, or the occurrence of a material event of default
      under any such other agreement which is not cured after any required notice
      and/or cure period

    

    (o)
      Failure
      to Make Timely 1934 Act Filings.  An
      SEC
      Filing Failure (as defined below) occurs and remains uncured for a period of
      thirty (30) days, where an “SEC Filing Failure” means that the Company shall
      fail to make timely filings of all reports required to be filed with the SEC
      pursuant to the Securities Act of 1934 (the “1934 Act”) or the Company shall
      cease to be a “Reporting Issuer” under the 1934 Act.

    

    (p)
      Legend
      Removal Failure. A
      Legend
      Removal Failure (as defined below) occurs and remains uncured for a period
      of
      twenty (20) days, where “Legend Removal Failure” means a failure by the Company
      to issue Conversion Shares or Payment Shares without restrictive legends or
      to
      remove restrictive legends from Conversion Shares or Payment Shares when so
      required, in each case pursuant to Section 2(e) hereof or otherwise pursuant
      to
      the Transaction Documents.

     

    (q)
      Corporate
      Existence; Major
      Transaction.
      The
      Company has failed to place the Major Transaction Escrow Amount into escrow
      by
      the Major Transaction Escrow Deadline, or has effected a Major Transaction
      without paying the Major Transaction Escrow Amount to the Holder.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (r)
       Breach
      of Capital Raising Limitations, Limited Issuances or Rights of
      Participation.
      A breach
      of any of Section 4(e)(i - v) of the Securities Purchase Agreement
      occurs.

    

    (s)
      (A)
      the indictment or conviction of any of the named executive officers (as defined
      in Item 402(a)(3) of Regulation S-K) or any of the directors of the Company
      of a
      violation of federal or state securities laws or (B) the settlement in an amount
      over $100,000 by any such officer or director of an action relating to such
      officer's violation of federal or state securities laws, breach of fiduciary
      duties or self-dealing.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    Section
      8. Mandatory
      Redemption; Posting of Bond.

    

    (a) [Intentionally
      Left Blank].

    

    (b)
      Mandatory
      Redemption. If
      any
      Events of Default shall occur then, unless waived by the Holder, upon the
      occurrence and during the continuation of any Event of Default, at the option
      of
      the Holder, such option exercisable through the delivery of written notice
      to
      the Company by such Holders (the "DEFAULT NOTICE"), the Debenture shall become
      immediately due and payable and the Company shall pay to the Holder (a
“MANDATORY REDEMPTION”), in full satisfaction of its obligations hereunder, an
      amount equal to the greater of (i) and (ii) immediately below, referred to
      herein as the "DEFAULT AMOUNT" or the “MANDATORY REDEMPTION
      AMOUNT”):

    

    (i)
      115%
      TIMES the SUM of 

    

    (x)
      the
      aggregate outstanding principal amount of this Debenture, PLUS 

    

    (y)
      all
      accrued and unpaid Interest thereon for the period beginning on the Issue Date
      and ending on the date of payment of the Default Amount (the "DEFAULT PAYMENT
      DATE"), PLUS 

    

    (z)
      accrued and unpaid Failure Payments and other Required Cash Payments, if
      any.

     

    (the
      then
      outstanding principal amount of this Debenture to the date of payment PLUS
      the
      amounts referred to in clauses (y) and (z) shall collectively be known as the
      "DEFAULT SUM"), 

    

    or
      

    

    (ii)
      the
      Conversion Value of the Default Sum to be prepaid, where ”CONVERSION VALUE”
means 

    

    (a)
      the
      number of shares of Common Stock that would be issuable upon conversion of
      such
      Default Sum in accordance with Section
      2
      (without
      giving any effect to any limitation on conversion of this Debenture contained
      herein, including but not limited to the 4.99% Beneficial
      Ownership Limitation
      and the 9.9% Beneficial Ownership Limitation) on the date that the Holder
      delivers a Default Notice to the Company or the date that the Company pays
      the
      Default Amount, whichever yields the greatest number of shares (the “Default
      Notice Date”) calculated as follows: the Default Sum divided by the lesser of
      (1) the Default Reset Price (as defined below) in effect on the Default Notice
      Date or (2) the Default Reset Price in effect on the date that the Company
      pays
      the Default Amount. 

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    MULTIPLIED
      BY 

    

    (b)
      the
      greater of (i) the Closing Price (as defined herein) for the Common Stock on
      the
      Default Notice Date or (ii) the Closing Price on the date that the Company
      pays
      the Default Amount. 

    

    After
      an
      Event of Default occurs, the Conversion Price shall be permanently decreased
      (but not increased) on the first Trading Day of each calendar month thereafter
      (each a “Default Adjustment Date”) until the Default Amount is paid in full, to
      a price (the “Default Reset Price”) equal to the lesser of (i) the Conversion
      Price then in effect, or (ii) the lowest Market Price that has occurred on
      any
      Default Adjustment Date since the date that the Event of Default began.
      Notwithstanding the occurrence of an Event of Default, Failure Payments and
      any
      other Required Cash Payments shall continue to accrue. The Default Amount,
      together with all other amounts payable hereunder, shall immediately become
      due
      and payable, all without demand, presentment or notice, all of which hereby
      are
      expressly waived, together with all costs, including, without limitation, legal
      fees and expenses, of collection, and the Holder shall be entitled to exercise
      all other rights and remedies available at law or in equity. 

    

    If
      the
      Company fails to pay the Default Amount within five (5) business days of written
      notice that such amount is due and payable (the “Default Amount Due Date”), then
      interest shall accrue thereon at a rate of eighteen percent (18%) per annum,
      compounded monthly (or the maximum amount allowed by applicable law, whichever
      is less), and the Holder shall have the right at any time, so long as the
      Company remains in default (and so long and to the extent that there are
      sufficient authorized shares), to require the Company, upon written notice
      (“Default Conversion Notice”) (which may be given one or more times, from time
      to time anytime after the Default Amount Due Date), to immediately issue, in
      lieu of all or any specified portion (the “Specified Portion”) of the unpaid
      portion (the “Unpaid Portion”) of the Default Amount, a number of shares (the
“Default Shares”) of Common Stock of the Company, subject to the Default 9.99%
      Limitation (as defined below), equal to the Specified Portion of the Default
      Amount divided by the Default Adjustment Price in effect on the date such shares
      are issued to the Holder, PROVIDED THAT, the Holder may require that such
      payment of shares be made in one or more installments at such time and in such
      amounts as Holder chooses. The Default shares are due within five (5) Business
      Days of the date that the Holder delivers a Default Conversion Notice to the
      Company (the “Default Share Delivery Deadline”).

    

    To
      the
      extent redemptions required by this Section 8 are deemed or determined by a
      court of competent jurisdiction to be prepayments of the Debenture by the
      Company, such redemptions shall be deemed to be voluntary prepayments. If the
      Company is unable to redeem all of the Debenture submitted for redemption,
      the
      Company shall redeem a pro rata amount from each Holder based on the
      principal amount of the Debenture submitted for redemption by such Holder
      relative to the total principal amount of Debentures submitted for redemption
      by
      all Holders. 

    

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    The
      Holder shall not be entitled to receive Default Shares on a given date if and
      to
      the extent that such issuance would cause the 9.99% Amount, as defined below,
      to
      be exceeded (the ”Default 9.99% LIMITATION”). If and to the extent that the
      issuance of Default Shares with respect to a given Specified Portion would
      result in the a violation of the Default 9.99% Limitation, then that particular
      Specified Portion shall be automatically reduced to a value that would cause
      the
      number of Default Shares to be issued to equal the 9.99% Amount, and the amount
      of such reduction shall be added back to the Unpaid Portion of the Default
      Amount.

    

    For
      purposes hereof, “9.99% Amount” shall mean a number of Default Shares to be
      issued with respect to a particular Specified Portion of the Default Amount
      which would, when aggregated with all other shares of Common Stock held by
      the
      Holder and its affiliates at the time of such issuance, result in beneficial
      ownership by the Holder and its affiliates of exactly 9.99% of the outstanding
      shares of Common Stock of the Company, with beneficial ownership being
      determined in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934, as amended (the "EXCHANGE ACT"), and Regulations 13D-G thereunder,
      PROVIDED THAT the 9.99% Limitation shall be conclusively satisfied if the Holder
      provides a signed representation that the issuance of the applicable shares
      will
      not violate the 9.99% Limitation, and the Company shall not be entitled to
      require additional documentation of such satisfaction. 

    

    (c)
      Posting
      of Bond. In
      the
      event that any Event of Default occurs hereunder or any Event of Default occurs
      under any of the Transaction Documents (as defined in the Securities Purchase
      Agreement), the Company may not raise as a legal defense (in any Lawsuit, as
      defined below, or otherwise) or justification to such Event of Default any
      claim
      that such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, unless the Company has posted a surety bond
      (a
“Surety Bond”) for the benefit of such Holder in an amount equal to the
      aggregate Surety Bond Value (as defined below) of all of the Holder’s Debenture
      and Warrants (the “Bond Amount”), 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 Holder obtains judgment.

    

    For
      purposes hereof, a “Lawsuit” shall mean any lawsuit, arbitration or other
      dispute resolution filed by either party herein pertaining to any of the
      Transaction Documents (as defined in the Securities Purchase
      Agreement).
      

    

    “Debenture
      Market Value” shall mean the outstanding principal amount of this Debenture,
      plus any accrued and unpaid Interest, Failure Payments and other Required Cash
      Payments, divided by the lowest Conversion Price in effect at any time during
      period between the applicable Event of Default and the filing of the bond
      required by this subsection (the “Surety Bond Pricing Period”), all multiplied
      by the highest Closing Price during the Surety Bond Pricing Period.

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    “Surety
      Bond Value,” for each Debenture, shall mean 130% of the highest Debenture Market
      Value (as defined above) of each of the Holder’s Debenture and for each Warrant,
      shall mean 130% of the highest Warrant Market Value (as defined in Section
      9 of
      the Warrants) of each of the Holder’s Warrants (where, in each case, such
      highest market value represents the highest value determined during the period
      from the date of the subject Event of Default through the trading day preceding
      the date that such bond goes into effect).

    

    (d)
      Injunction
      and Posting of Bond.
      In the
      event that the Event of Default referred to in subsection 8(c) above pertains
      to
      the Company’s failure to deliver unlegended shares of common stock to the Holder
      pursuant to a Debenture Conversion, Warrant Exercise, legend removal request,
      or
      otherwise, the Company may not refuse such unlegended share delivery based
      on
      any claim that such Holder or any one associated or affiliated with such Holder
      has been engaged in any violation of law, unless an injunction from a court,
      on
      prior notice to Holder, restraining and or enjoining conversion of all or part
      of said Debenture shall have been sought and obtained by the Company and the
      Company has posted a Surety Bond for the benefit of such Holder in the amount
      of
      the Bond Amount (as described above), 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 Holder obtains judgment.
      

    

    (e) Redemption
      by Other Holders.
      Upon the
      Company's receipt of notice from any of the holders of the Other Debentures
      for
      redemption or repayment as a result of an event or occurrence substantially
      similar to an Event of Default (each, an "Other Redemption Notice"), the Company
      shall immediately, but no later than one (1) Business Day of its receipt
      thereof, forward to the Holder by facsimile a copy of such notice. If the
      Company receives a Redemption Notice and one or more Other Redemption Notices,
      during the seven (7) Business Day period beginning on and including the date
      which is three (3) Business Days prior to the Company's receipt of the Holder's
      Redemption Notice and ending on and including the date which is three (3)
      Business Days after the Company's receipt of the Holder's Redemption Notice
      and
      the Company is unable to redeem all principal, interest and other amounts
      designated in such Redemption Notice and such Other Redemption Notices received
      during such seven (7) Business Day period, then the Company shall redeem a
      pro
      rata amount from each holder of the Debentures (including the Holder) based
      on
      the principal amount of the Debentures submitted for redemption pursuant to
      such
      Redemption Notice and such Other Redemption Notices received by the Company
      during such seven (7) Business Day period.

    

    Section
      9. Conversion
      Cap Redemption; Automatic
      Redemption. 

    

    (a)
      Conversion Cap Redemption. 

    

    For
      purposes hereof, the following terms shall have the following
      meanings:

    

    “Conversion
      Cap” shall mean a number of shares equal to thirty percent (30%) of the number
      of shares of the Company’s common stock that are outstanding on the Business Day
      immediately preceding the date of the Closing of the purchase of Holder’s
      Debenture.

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    “Fully
      Diluted Conversion Amount,” at any given time, shall mean (i) the aggregate
      number of shares of Common Stock that have been issued to the Holder upon the
      conversion of Holder’s Debenture, plus (ii) the aggregate number of shares of
      Common Stock that would be issuable to the Holder upon the full Conversion
      of
      all of Holder’s outstanding Debenture, together with any accrued and unpaid
      interest, Failure Payments or other Required Cash Payments (without regard
      to
      any limitations on conversion herein or elsewhere, including but not limited
      to
      the Beneficial Ownership Limitation, and without regard to whether or not a
      sufficient number of shares are authorized and reserved to effect any such
      exercise and issuance).

    

    “Holder’s
      Pro-Rata Portion” shall mean the purchase price of the Debenture purchased by
      the Holder in this offering, divided by the aggregate purchase price of all
      Debentures sold by the Company in this offering. 

    

    In
      the
      event that at any time the Fully Diluted Conversion Amount would exceed the
      Holder’s Pro-Rata Portion of the Conversion Cap (a “Conversion Cap Violation”),
      then the Company shall be required to redeem (a “Conversion Cap Redemption”) a
      sufficient amount (the “Conversion Cap Redemption Amount”) of the Debenture such
      that the Fully Diluted Conversion Amount after giving effect to such redemption
      equals the Conversion Cap (a “Conversion Cap Redemption”). Each Conversion Cap
      Redemption shall be at a redemption price, in cash, equal to the outstanding
      principal amount of this Debenture, plus all accrued and unpaid Interest,
      Failure Payments and other Required Cash Payments (the “Conversion Cap
      Redemption Price”). The Conversion Cap Redemption Price shall be applied first
      to accrued and unpaid Interest, Failure Payments and other Required Cash
      Payments, and then to the principal amount of the Debenture.

    

    The
      Conversion Cap Redemption Amount shall be due and payable in four (4) equal
      payments, the first of which will be due on the first Business Day of the next
      calendar month (the “First Cap Payment Date”) following the first Conversion Cap
      Violation, the fourth of which shall be due on the Maturity Date, and the second
      and third of which shall be due on the first Business Day of the calendar months
      that are closest to being one-third (1/3) and two-thirds (2/3), respectively,
      of
      the time period between the First Cap Payment Date and the Maturity Date, as
      determined in good faith by the Company (each, a “Conversion Cap Redemption
      Payment Date”). 

    

    In
      the
      event one or more additional Conversion Cap Violations occur subsequent to
      the
      first such violation, the aggregate amount of accrued and unpaid Conversion
      Cap
      Redemption Amounts from all such violations shall be paid in equal payments
      on
      the remaining Conversion Cap Redemption Payment Dates as such dates were
      determined pursuant to the first such violation.

    

    (b)
      Automatic Redemption at End of Term. 

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    Any
      Debenture that has not been submitted for conversion into Common Stock and
      has
      not been subjected to a Default Notice by midnight, New York City time, on
      the
      date that is two
      (2) years
      after
      the date hereof (the “Automatic Redemption Date”), shall be automatically
      redeemed for
      a
      redemption price, in cash, equal to the outstanding principal amount of this
      Debenture, plus all accrued and unpaid Interest, Failure Payments and other
      Required Cash Payments (the “Automatic Redemption Amount”). The Automatic
      Redemption Amount shall be due and payable within 5 Trading Days of the
      Automatic Redemption Date. 

     

    Section
      10.  Miscellaneous.

    

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

    

    (b)
      Notices. 
      Any
      notice herein required or permitted to be given shall be in writing and may
      be
      personally served or delivered by courier or sent by United States mail and
      shall be deemed to have been given upon receipt if personally served (which
      shall include telephone line facsimile transmission) or sent by courier or
      five
      (5) days after being deposited in the United States mail, certified, with
      postage pre-paid and properly addressed, if sent by mail. For the purposes
      hereof, the address of the Holder shall be as shown on the records of the
      Company; and the address of the Company shall be bioMETRX,
      Inc.; 500
      North
      Broadway, Suite 204; Jericho, NY 11753; Phone: 516-937-2828; Fax:
      516-937-2880. Both the Holder and the Company may change the address for service
      by service of written notice to the other as herein provided. The
      Company shall provide the Holder with prompt written notice of all actions
      taken
      pursuant to this Debenture, including in reasonable detail a description of
      such
      action and the reason therefore.  Without limiting the generality of the
      foregoing, the Company will give written notice to the Holder (i) immediately
      upon any adjustment of the Conversion Price, setting forth in reasonable detail,
      and certifying, the calculation of such adjustment and (ii) at least twenty
       days prior to the date on which the Company closes its books or takes a
      record (A) with respect to any dividend or distribution upon the Common Stock,
      (B) with respect to any pro rata subscription offer to holders of Common Stock
      or (C) for determining rights to vote with respect to any Major Transaction,
      dissolution or liquidation, provided in each case that such information shall
      be
      made known to the public prior to or in conjunction with such notice being
      provided to the Holder.

    

    (c) Payments.
       Whenever any payment of cash is to be made by the Company to any Person
      pursuant to this Debenture, such payment shall be made in lawful money of the
      United States of America by a check drawn on the account of the Company and
      sent
      via overnight courier service to such Person at such address as previously
      provided to the Company in writing (which address, in the case of each of the
      Purchasers, shall initially be as set forth on the Schedule of Buyers attached
      to the Securities Purchase Agreement); provided that the Holder may elect to
      receive a payment of cash via wire transfer of immediately available funds
      by
      providing the Company with prior written notice setting out such request and
      the
      Holder's wire transfer instructions.  Whenever any amount expressed to be
      due by the terms of this Debenture is due on any day which is not a Business
      Day, the same shall instead be due on the next succeeding day which is a
      Business Day and, in the case of any Interest Date which is not the date on
      which
      this
      Debenture is paid in full, the extension of the due date thereof shall not
      be
      taken into account for purposes of determining the amount of Interest due on
      such date.  

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    (d)
      Amendments.
      Except
      as otherwise expressly provided herein, the Debentures and any provision hereof
      may only be amended by an instrument in writing signed by the Company and the
      Holder. The term "Debenture" and all reference thereto, as used throughout
      this
      instrument, shall mean this instrument as originally executed, or if later
      amended or supplemented, then as so amended or supplemented.

    

    (e)
      Assignability.
      This
      Debenture shall be binding upon the Company and its successors and assigns,
      and
      shall inure to be the benefit of the Holder and its successors and
      assigns.

    

    (f)
      Payment
      of Collection, Enforcement and Other Costs. If
      (a) this Debenture is placed in the hands of an attorney for collection or
      enforcement or is collected or enforced through any legal proceeding or the
      Holder otherwise takes action to collect amounts due under this Debenture or
      to
      enforce the provisions of this Debenture or (b) there occurs any bankruptcy,
      reorganization, receivership of the Company or other proceedings affecting
      Company creditors' rights and involving a claim under this Debenture, then
      the
      Company shall pay the costs incurred by the Holder for such collection,
      enforcement or action or in connection with such bankruptcy, reorganization,
      receivership or other proceeding, including, but not limited to, attorneys'
      fees
      and disbursements.

    

    (g)
      Governing
      Law; Arbitration; Equitable Relief.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Debenture or the Transaction Documents 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. Any
      controversy or claim arising out of or related to this Debenture or the breach
      hereof or thereof, shall be settled by binding arbitration in New York, NY
      in
      accordance with the Expedited Procedures (Rules 53-57) of the Commercial
      Arbitration Rules of the American Arbitration Association (“AAA”). A proceeding
      shall be commenced upon written demand by Company or the Holder to the other.
      The arbitrator(s) shall enter a judgment by default against any party, which
      fails or refuses to appear in any properly noticed arbitration proceeding.
      The
      proceeding shall be conducted by one (1) arbitrator, unless the amount alleged
      to be in dispute exceeds two hundred fifty thousand dollars ($250,000), in
      which
      case three (3) arbitrators shall preside. The arbitrator(s) will be chosen
      by
      the parties from a list provided by the AAA, and if they are unable to agree
      within ten (10) days, the AAA shall select the arbitrator(s). The arbitrators
      must be experts in securities law and financial transactions. The arbitrators
      shall assess costs and expenses of the arbitration, including all attorneys’ and
      experts’ fees, as the arbitrators believe is appropriate in light of the merits
      of the parties’ respective positions in the issues in dispute. Each party
      submits irrevocably to the jurisdiction of any state court sitting in New York,
      NY or to the United States District Court sitting in New York for purposes
      of
      enforcement of any discovery order, judgment or award in connection with such
      arbitration. The award of the arbitrator(s) shall be final and binding upon
      the
      parties and may be enforced in any court having jurisdiction. The arbitration
      shall be held in such place as set by the arbitrator(s) in accordance with
      Rule
      55. With respect to any arbitration proceeding in accordance with this section,
      the prevailing party’s reasonable attorney’s fees and expenses shall be borne by
      the non-prevailing party.

    

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    Although
      the parties, as expressed above, agree that all claims, including claims that
      are equitable in nature, for example specific performance, shall initially
      be
      prosecuted in the binding arbitration procedure outlined above, if the
      arbitration panel dismisses or otherwise fails to entertain any or all of the
      equitable claims asserted by reason of the fact that it lacks jurisdiction,
      power and/or authority to consider such claims and/or direct the remedy
      requested, then, in only that event, will the parties have the right to initiate
      litigation respecting such equitable claims or remedies. The forum for such
      equitable relief shall be in either a state or federal court sitting in New
      York, NY. Each party waives any right to a trial by jury, assuming such right
      exists in an equitable proceeding, and irrevocably submits to the jurisdiction
      of said New York court. New York law shall govern both the proceeding as well
      as
      the interpretation and construction of the Debenture and the transaction as
      a
      whole.

    

    Notwithstanding
      the above, the Holder shall be entitled to seek injunctive relief in a state
      or
      federal court sitting in New York, NY to prevent a breach of Section 5(h)
      hereof, pertaining to Major Transactions or Section 4(m) of the Securities
      Purchase Agreement, pertaining to disposition of Intellectual
      Property.

    

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

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    (i)
      Allocations
      of Reserved Amount.
      The
      Reserved Amount shall be allocated pro rata among the holders of Debentures
      based on the original principal amount of Debentures issued to the Holder.
      Each
      increase to the Reserved Amount shall be allocated pro rata among the holders
      of
      Debentures based on the aggregate number of shares into which all of the
      Holder’s outstanding Debenture would be convertible and into which all of
      Holder’s outstanding Warrants would be exercisable at the time of the increase
      (collectively, the “Fully Diluted Holdings”). In the event a Holder shall sell
      or otherwise transfer any of such Holder's Debenture, each transferee shall
      be
      allocated a pro rata portion of such transferor's Reserved Amount. Any portion
      of the Reserved Amount which remains allocated to any person or entity which
      does not hold any Debentures shall be allocated to the remaining Holders of
      Debentures, pro rata based on the Holder’s Fully Diluted Holdings at the time of
      such allocation.

     

    (j)
      Rule
      144 Hold Period. For
      purposes of Rule 144, it is intended, understood and acknowledged that the
      Common Stock issuable upon conversion of this Debenture shall be deemed to
      have
      been acquired at the time the Debenture was issued. Moreover, it is intended,
      understood and acknowledged that the holding period for the Common Stock
      issuable upon conversion of this Debenture shall be deemed to have commenced
      on
      the date this Debenture was issued. 

    

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

    

    (l)
      Notice
      of Corporate Events. 
      Except
      as otherwise provided in this Debenture, the Holder of this Debenture shall
      have
      no rights as a Holder of Common Stock unless and only to the extent that it
      converts this Debenture into Common Stock. The Company shall provide the Holder
      with prior notification of any meeting of the Company's shareholders (and copies
      of proxy materials and other information sent to shareholders). In the event
      of
      any taking by the Company of a record of its shareholders for the purpose of
      determining shareholders who are entitled to receive payment of any dividend
      or
      other distribution, any right to subscribe for, purchase or otherwise acquire
      (including by way of merger, consolidation, reclassification or
      recapitalization) any share of any class or any other securities or property,
      or
      to receive any other right, or for the purpose of determining shareholders
      who
      are entitled to vote in connection with any proposed sale, lease or conveyance
      of all or substantially all of the assets of the Company or any proposed
      liquidation, dissolution or winding up of the Company, the Company shall mail
      a
      notice to the Holder, at least twenty (20) days prior to the record date
      specified therein (or thirty (30) days prior to the consummation of the
      transaction or event, whichever is earlier), of the date on which any such
      record is to be taken for the purpose of such dividend, distribution, right
      or
      other event, and a brief statement regarding the amount and character of such
      dividend, distribution, right or other event to the extent known at such time.
      The Company shall make a public announcement of any event requiring notification
      to the Holder hereunder substantially simultaneously with the notification
      to
      the Holder in accordance with the terms of this Section 10(k).

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    (m)
      Remedies. The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Holder, by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Debenture will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Debenture or the Transaction Documents, that
      the Holder shall be entitled, in addition to all other available remedies at
      law
      or in equity, to an injunction or injunctions restraining, preventing or curing
      any breach of the Debenture and the Transaction Documents and to enforce
      specifically the terms and provisions thereof, without the necessity of showing
      economic loss and without any bond or other security being
      required.

    

    
      	1.  	
              IN
                WITNESS WHEREOF, Company has caused the Debenture to be signed in
                its name
                by its duly authorized officer this 28th
                day of December, 2006.

            

    

    

    COMPANY:
      

    bioMETRX,
      Inc.

    

    By:__________________________________

    Print
      Name: Mark Basile

    Title:
      Chief Executive Officer 

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    NOTICE
      OF CONVERSION

    

    (To
      be
      Executed by the Registered Holder in order to Convert the
      Debenture)

    

    The
      undersigned hereby irrevocably elects to convert $__________ in principal amount
      of the Debenture (defined herein) into shares of common stock, par value $0.001
      per share ("Common Stock"), of bioMETRX,
      Inc. (the
      "COMPANY"), plus:

    -
      $_________ in accrued and unpaid Interest Payments, 

    -
      $_________ in accrued and unpaid Failure Payments, plus

    -
      $_________ in accrued and unpaid interest on late payments,

    -$_________
      in other Required Cash Payments (specify): _____________

    ______________________________________________________.

    

    all
      according to the conditions of the convertible Debenture of the Company dated
      as
      of December 28, 2006 (the "DEBENTURE"), as of the date written below. If
      securities are to be issued in the name of a person other than the undersigned,
      the undersigned will pay all transfer taxes payable with respect thereto and
      is
      delivering herewith such certificates. No fee will be charged to the Holder
      for
      any conversion, except for transfer taxes, if any. By submitting this Notice
      of
      Conversion, the Holder certifies that the issuance of the number of shares
      of
      Common Stock requested hereby will not result in a violation of the 4.99%
      Beneficial Ownership Limitation (or, if applicable, the 9.99% Beneficial
      Ownership Limitation).

    

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

    

    Name
      of
      DTC Prime Broker:______________________________

    Account
      Number:________________________________________

    

    In
      lieu
      of receiving shares of Common Stock issuable pursuant to this

    Notice
      of
      Conversion by way of a DWAC Transfer, the undersigned hereby

    requests
      that the Company issue a certificate or certificates for the

    number
      of
      shares of Common Stock set forth above (which numbers are

    based
      on
      the Holder's calculation attached hereto) in the name(s)

    specified
      immediately below or, if additional space is necessary, on an

    attachment
      hereto:

    

    Name:
      _________________________________________________

    

    Address:
      _______________________________________________

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    registration
      under the Act.

    

    Date
      of
      Conversion:_______________________________

    Applicable
      Conversion Price:________________________

    Number
      of
      Shares of Common ______________________

    Stock
      to
      be Issued Pursuant to (i): ____________________

    Conversion
      of the Debenture:_______________________

    (ii)
      Conversion of Conversion Failure Payments, Delivery Failure

    Payments
      and/or payments pursuant to Section 2(c) of the

    Registration
      Rights Agreement: _________________________________

    Signature:
      ______________________________________________________

    Name:
      _________________________________________________________

    Address:
      _______________________________________________________

    

    The
      Company is not required to issue shares of Common Stock until the original
      Debenture(s) (or evidence of loss, theft or destruction thereof) to be converted
      are received by the Company or its Transfer Agent, if such delivery is required
      under the terms of the Debenture. The Company shall issue and deliver shares
      of
      Common Stock to an overnight courier not later than two business days following
      receipt of the original Debenture(s) to be converted, and shall make payments
      pursuant to the Debenture for the number of business days such issuance and
      delivery is late.

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