Document:

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                                                                     EXHIBIT 4.2

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND IS
BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THIS SECURITY MAY NOT BE SOLD
OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS.

                           8% CONVERTIBLE DEBENTURE
                              Due August 4, 2005

$1,000,000                                                       August 4, 2000

No. 1

          Inforetech Wireless Technology Inc., a Nevada corporation with
principal executive offices located at Suite 214, 5500 - 152/nd/ Street, Surrey,
British Columbia, Canada V3S 8E7 (the "Company"), for value received, hereby
promises to pay to the Holder (as such term is hereinafter defined), or such
other Person (as such term is hereinafter defined) upon order of the Holder, on
August 4, 2005 (the "Maturity Date"), the principal sum of One Million Dollars
($1,000,000), as such sum may be adjusted pursuant to Article 3, and to pay
interest thereon from September 12, 2000 (or the most recent interest payment
date to which interest has been paid), quarterly in arrears, on each March 31st,
June 30th, September 30th and December 31st of each year (each an "Interest
Payment Due Date" and collectively, the "Interest Payment Due Dates"),
commencing on September 30, 2000, at the rate of eight percent (8%) per annum
(the "Debenture Interest Rate"), until the Principal Amount (as such term is
hereinafter defined) of this Debenture has been paid in full or duly and
irrevocably provided for. The interest payable on any Interest Payment Due Date
shall be paid to the Person in whose name this Debenture is registered at the
close of business on the fifteenth (15/th/) day next preceding the applicable
Interest Payment Due Date and all interest payable on the Principal Amount of
this Debenture shall be calculated on the basis of a 360-day year for the actual
number of days elapsed. At the option of the Company, interest payable from time
to time on any Interest Payment Due Date may be paid through the delivery of
duly and validly authorized and issued, fully paid and non-assessable, freely
tradeable shares of Common Stock (as such term is hereinafter defined) valued at
the Market Price (as such term is hereinafter defined). The Common Stock to be
delivered in lieu of cash interest payments shall be registered for resale in
the Registration Statement (as such term is defined in the Registration Rights
Agreement (as such term is hereinafter defined)) to be filed by the Company to
register the Common Stock deliverable upon conversion of this Debenture and
issuable upon exercise of the Warrant (as such term is hereinafter defined) as
set forth in the Registration Rights Agreement. Notwithstanding the foregoing,
until such Registration Statement has been declared effective under the
Securities Act by the SEC (as such term is hereinafter defined), payment of
interest on this Debenture shall be in cash.

                                   ARTICLE 1
<PAGE>

                                  DEFINITIONS

SECTION 1.1    Definitions.  The terms defined in this Article whenever used in
               -----------
this Debenture have the following respective meanings:

          (1)  "Additional Capital Shares" has the meaning set forth in Section
3.1(g).

          (2)  "Affiliate" has the meaning ascribed to such term in Rule 12b-2
under the Securities Exchange Act of 1934, as amended.

          (3)  "Bankruptcy Code" means the United States Bankruptcy Code of
1986, as amended (11 U.S.C. '' 101 et. seq.).
                                   --  ---

          (4)  "Business Day" means a day other than Saturday, Sunday or any day
on which banks located in the State of New York are authorized or obligated to
close.

          (5)  "Capital Shares" means the Common Stock and any other shares of
any other class or series of capital stock, whether now or hereafter authorized
and however designated, which have the right to participate in the distribution
of earnings and assets (upon dissolution, liquidation or winding-up) of the
Company.

          (6)  "Closing Date" means September 12, 2000.

          (7)  "Common Shares" or "Common Stock" means shares of the Company's
Class A Common Equity Voting Stock, par value $0.001 per share.

          (8)  "Common Stock Issued at Conversion", when used with reference to
the securities deliverable upon conversion of this Debenture, means all Common
Shares now or hereafter Outstanding and securities of any other class or series
into which this Debenture hereafter shall have been changed or substituted,
whether now or hereafter created and however designated.

          (9)  "Company" means Inforetech Wireless Technology Inc., a Nevada
corporation, and any successor or resulting corporation by way of merger,
consolidation, sale or exchange of all or substantially all of the Company's
assets or otherwise.

          (10) "Conversion" or "conversion" means the repayment by the Company
of the Principal Amount of this Debenture (and, to the extent the Holder elects
as permitted by Section 3.1, accrued and unpaid interest thereon) by the
delivery of Common Stock on the terms provided in Section 3.2, and "convert,"
"converted," "convertible" and like words shall have a corresponding meaning.

          (11) "Conversion Date" means any day on which all or any portion of
the Principal Amount of this Debenture is converted in accordance with the
provisions hereof.
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          (12) "Conversion Notice" means a written notice of conversion
substantially in the form annexed hereto as Exhibit A.
                                            ---------
          (13) "Conversion Price" on any date of determination means the
applicable price for the conversion of this Debenture into Common Shares on such
day as set forth in Section 3.1(a).

          (14) "Current Market Price" on any date of determination means the
closing bid price of a Common Share on such day as reported on OTCBB; provided
                                                                      --------
that, if such security is not listed or admitted to trading on OTCBB, as
reported on the principal national security exchange or quotation system on
which such security is quoted or listed or admitted to trading, or, if not
quoted or listed or admitted to trading on any national securities exchange or
quotation system, the closing bid price of such security on the over-the-counter
market on the day in question as reported by Bloomberg LP or a similar generally
accepted reporting service, as the case may be.

          (15) "Debenture" or "Debentures" means this 8% Convertible Debenture
due August 4, 2005 of the Company or such other convertible debenture(s)
exchanged therefor as provided in Section 2.1.

          (16) "Default Interest Rate" shall be equal to the Debenture Interest
Rate plus an additional four percent (4%) per annum calculated on the basis of a
360-day year.

          (17) "Discount Multiplier" has the meaning set forth in Section
3.1(a).

          (18) "Event of Default" has the meaning set forth in Section 6.1.

          (19) "Holder" means The Shaar Fund Ltd., any successor thereto, or any
Person to whom this Debenture is subsequently transferred in accordance with the
provisions hereof.

          (20) "Interest Payment Due Date" has the meaning set forth in the
opening paragraph of this Debenture.

          (21) "Market Disruption Event" means any event that results in a
material suspension or limitation of trading of the Common Shares.

          (22) "Market Price" per Common Share means the average of the closing
bid prices of the Common Shares as reported on OTCBB for the three (3) Trading
Days on which the three (3) lowest closing bid prices are reported during the
applicable Valuation Period, it being understood that such three (3) Trading
Days need not be consecutive; provided that, if such security is not listed or
                              --------
admitted to trading on OTCBB, as reported on the principal national security
exchange or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the closing bid
prices of the Common Shares on the over-the-counter market as reported by
Bloomberg LP or a similar generally accepted reporting service, as the case may
be, for the three (3) Trading Days on which the three (3) lowest closing bid
prices are reported during the
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applicable Valuation Period, it being understood that such three (3) Trading
Days need not be consecutive.

          (23) "Maximum Rate" has the meaning set forth in Section 6.3.

          (24) "Optional Redemption Date" has the meaning set forth in Section
3.6.

          (25) "Optional Redemption Notice" has the meaning set forth in Section
3.6.

          (26) "Optional Redemption Termination Date" means the one hundred and
eightieth (180th) day following the Closing Date.

     (27) "OTCBB" means the OTC Bulletin Board service of the National
Association of Securities Dealers, Inc.

     (28) "Outstanding" when used with reference to Common Shares or Capital
Shares (collectively, "Shares") means, on any date of determination, all issued
and outstanding Shares, and includes all such Shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in such
Shares; provided, however, that any such Shares directly or indirectly owned or
        --------  -------
held by or for the account of the Company or any Subsidiary of the Company shall
not be deemed "Outstanding" for purposes hereof.

     (29) "Person" means an individual, a corporation, a partnership, an
association, a limited liability company, an unincorporated business
organization, a trust or other entity or organization, and any government or
political subdivision or any agency or instrumentality thereof.

     (30) "Principal Amount" means, for any date of calculation, the principal
sum set forth in the first paragraph of this Debenture (but only such principal
amount as to which the Holder has not theretofore furnished a Conversion Notice
in compliance with Section 3.2).

     (31) "Registration Rights Agreement" means that certain Registration Rights
Agreement dated as of August 4, 2000 by and between the Company and The Shaar
Fund Ltd., as the same may be amended from time to time.

     (32) "SEC" means the United States Securities and Exchange Commission.

     (33) "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as in effect at the time.

     (34) "Securities Purchase Agreement" means that certain Securities Purchase
Agreement dated as of August 4, 2000 by and between the Company and The Shaar
Fund Ltd., as the same may be amended from time to time.

                                      -4-
<PAGE>

          (35) "Subsidiary" means any entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are owned
directly or indirectly by the Company.

          (36) "Trading Day" means any day on which (i) purchases and sales of
securities on the principal national security exchange or quotation system on
which the Common Shares are traded are reported thereon, or, if not quoted or
listed or admitted to trading on any national securities exchange or quotation
system, as reported by Bloomberg LP or a similar generally accepted reporting
service, as the case may be, (ii) at least one bid for the trading of Common
Shares is reported and (iii) no Market Disruption Event occurs.

          (37) "Valuation Event" has the meaning set forth in Section 3.1(g).

          (38) "Valuation Period" means the ten (10) Trading Day period
immediately preceding the applicable Conversion Date or Interest Payment Due
Date.

          (39) "Warrant" means the warrant to purchase Common Stock issued by
the Company to the Holder pursuant to the Securities Purchase Agreement.

          All references to "cash" or "$" herein means currency of the United
States of America.

                                   ARTICLE 2
                            EXCHANGES AND TRANSFER

     SECTION 1.2    Exchange and Registration of Transfer of Debentures.  The
                    ---------------------------------------------------
Holder may, at its option, surrender this Debenture at the principal executive
offices of the Company and receive in exchange therefor a Debenture or
Debentures, each in the denomination of $10,000 or an integral multiple of
$1,000 in excess thereof, dated as of the date of this Debenture (which shall
accrue interest from the most recent Interest Payment Due Date on which an
interest payment was made in full), and payable to such Person or order as may
be designated by such Holder. The aggregate Principal Amount of the Debenture or
Debentures exchanged in accordance with this Section 2.1 shall equal the
aggregate unpaid Principal Amount of this Debenture as of the date of such
surrender; provided, however, that upon any exchange pursuant to this Section
           --------  -------
2.1 there shall be filed with the Company the name and address for all purposes
hereof of the Holder or Holders of the Debenture or Debentures delivered in such
exchange. This Debenture, when presented for registration of transfer or for
exchange or conversion, shall (if so required by the Company) be duly endorsed,
or be accompanied by a written instrument of transfer in form reasonably
satisfactory to the Company duly executed, by the Holder duly authorized in
writing.

     SECTION 1.3    Loss, Theft, Destruction of Debenture.  Upon receipt of
                    -------------------------------------
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Debenture and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Debenture, the Company shall make, issue and deliver, in
lieu of such lost, stolen, destroyed or mutilated Debenture, a new Debenture of
like tenor and unpaid Principal Amount dated as of the

                                      -5-
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date hereof (which shall accrue interest from the most recent Interest Payment
Due Date on which an interest payment was made in full). This Debenture shall be
held and owned upon the express condition that the provisions of this Section
2.2 are exclusive with respect to the replacement of a mutilated, destroyed,
lost or stolen Debenture and shall preclude any and all other rights and
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement of negotiable instruments or other
securities without the surrender thereof.

     SECTION 1.4    Who Deemed Absolute Owner.  The Company may deem the Person
                    -------------------------
in whose name this Debenture shall be registered upon the registry books of the
Company to be, and may treat it as, the absolute owner of this Debenture
(whether or not this Debenture shall be overdue) for the purpose of receiving
payment of or on account of the Principal Amount of this Debenture, for the
conversion of this Debenture and for all other purposes, and the Company shall
not be affected by any notice to the contrary. All such payments and such
conversions shall be valid and effectual to satisfy and discharge the liability
upon this Debenture to the extent of the sum or sums so paid or the conversion
or conversions so made.

     SECTION 1.5    Repayment at Maturity.  At the Maturity Date, the Company
                    ---------------------
shall repay the outstanding Principal Amount of this Debenture in whole in cash
at one hundred and twenty-five percent (125%) of the Principal Amount thereof,
together with all accrued and unpaid interest thereon, in cash, to the Maturity
Date.

                                   ARTICLE 3
                            CONVERSION OF DEBENTURE

     SECTION 1.6    Conversion; Conversion Price; Valuation Event.  (a)  At the
                    ---------------------------------------------
option of the Holder, this Debenture may be converted, either in whole or in
part, up to the full Principal Amount hereof (in increments of $10,000 in
Principal Amount or any integral multiple of $1,000 in excess thereof) into
Common Shares (calculated as to each such conversion to the nearest 1/100th of a
share), at any time and from time to time on any Business Day after the Optional
Redemption Termination Date, subject to compliance with Section 3.2. The number
of Common Shares into which this Debenture may be converted is equal to (i) the
Principal Amount of the Debenture being converted at the Conversion Date (plus,
at the option of the Holder, any accrued and unpaid interest on the Debenture
being converted through the Conversion Date) divided by (ii) the Conversion
Price. In addition, the Company shall pay to the Holder on the Conversion Date,
in cash, any accrued and unpaid interest on the Debenture being converted not
included at the option of the Holder in clause (i) of the immediately preceding
sentence. The "Conversion Price" shall be equal to the lesser of (y) seventy-
five percent (75%) (the "Discount Multiplier") of the Market Price and (z) Five
Dollars and Twenty-Five Cents ($5.25); provided, that in the event that the
                                       --------
Registration Statement has not been declared effective by the SEC within one
hundred and eighty (180) days after the Closing Date (the "Due Date"), then the
Discount Multiplier shall decrease by one percent (1%) effective as of the Due
Date to seventy-four percent (74%) and shall further decrease by one percent
(1%) for each week or partial week occurring after the Due Date that the
Registration Statement has not been declared effective by the SEC; provided,
                                                                   --------
however, that under no circumstances shall the Discount Multiplier be less than
-------
fifty percent (50%).

                                      -6-
<PAGE>

          (b)  Notwithstanding Section 3.1(a) but subject to Section 3.1(e), the
right of the Holder to convert this Debenture shall be temporarily suspended
("Conversion Right Blackout") on the first Trading Day, if any, occurring after
the Optional Redemption Termination Date on which the Current Market Price is
less than Five Dollars and Twenty-Five Cents ($5.25) but equal to or greater
than Three Dollars and Fifty Cents ($3.50). The Conversion Right Blackout shall
continue in effect until the earliest to occur of (i) the sixtieth (60/th/)
calendar day immediately following the date of the Conversion Right Blackout,
provided, that the Current Market Price on any Trading Day included within such
--------
sixty-calendar-day-period is not less than Three Dollars and Fifty Cents
($3.50); (ii) the first Trading Day (the "Threshold Date") on which the Current
Market Price is equal to or greater than Five Dollars and Twenty-Five Cents
($5.25), provided, that the Current Market Price on any Trading Day occurring on
         --------
or after the date of the Conversion Right Blackout and prior to the Threshold
Date is not less than Three Dollars and Fifty Cents ($3.50); (iii) the sixtieth
(60/th/) calendar day immediately following the first Trading Day on which the
Current Market Price is less than Three Dollars and Fifty Cents ($3.50) during
the sixty-calendar-day-period immediately following the date of the Conversion
Right Blackout or (iv) in the event that the Current Market Price is less than
Three Dollars and Fifty Cents ($3.50) during the sixty-calendar-day-period
immediately following the date of the Conversion Right Blackout, the first
Trading Day on which the Current Market Price is equal to or greater than Three
Dollars and Fifty Cents ($3.50) (such earliest date being hereinafter referred
to as the "Conversion Right Reinstatement Date").

          (c)  Notwithstanding Section 3.1(a) but subject to Section 3.1(e), if
the Conversion Right Reinstatement Date shall occur by reason of either clause
(i) or (ii) of Section 3.1(b), then the right of the Holder to convert this
Debenture shall be temporarily suspended ("Contingent Conversion Right
Blackout") on the first Trading Day, if any, occurring after such Conversion
Right Reinstatement Date on which the Current Market Price is less than Three
Dollars and Fifty Cents ($3.50). The Contingent Conversion Right Blackout shall
continue in effect until the earlier to occur of the (i) sixtieth (60/th/)
calendar day immediately following the date of the Contingent Conversion Right
Blackout or (ii) first Trading Day on which the Current Market Price is equal to
or greater than Three Dollars and Fifty Cents ($3.50).

          (d) Notwithstanding Section 3.1(a) but subject to Section 3.1(e), the
right of the Holder to convert this Debenture shall be temporarily suspended
("Alternate Conversion Right Blackout") on the first Trading Day (the "Subject
Trading Day"), if any, occurring after the Optional Redemption Termination Date
on which the Current Market Price is less than Three Dollars and Fifty Cents
($3.50) and the Current Market Price on the Trading Day immediately preceding
the Subject Trading Day was no less than Five Dollars and Twenty-Five Cents
($5.25). The Alternate Conversion Right Blackout shall continue in effect until
the earlier to occur of (i) the sixtieth (60/th/) calendar day immediately
following the date of the Alternate Conversion Right Blackout or the first
Trading Day on which the Current Market Price is equal to or greater than Three
Dollars and Fifty Cents ($3.50).

          (e)  Under no circumstances shall the (i) Conversion Right Blackout
occur if the Alternate Conversion Right Blackout shall have occurred and (ii)
Alternate Conversion Right Blackout occur if the Conversion Right Blackout shall
have occurred.  Subject to the additional limitations set forth in the
immediately preceding sentence, there shall be no more than (i) one (1)
Conversion Right Blackout, (ii) subject to the satisfaction of the conditions
precedent set forth in

                                      -7-
<PAGE>

Section 3.1(c), one (1) Contingent Conversion Right Blackout and (iii) one (1)
Alternate Conversion Right Blackout while any portion of this Debenture remains
outstanding. The occurrence of the Conversion Right Blackout, Contingent
Conversion Right Blackout or the Alternate Conversion Right Blackout shall have
no effect upon (i) Conversion Notice(s) delivered by the Holder in accordance
with Section 3.2 (and, if applicable Section 3.6) prior to the date of the
Conversion Right Blackout or Contingent Conversion Right Blackout or the
Alternate Conversion Right Blackout, as applicable, or (ii) the downward
adjustment of the Discount Multiplier in the manner provided for in Section
3.1(a).

          (f)   The Holder shall also have the right to convert this Debenture
prior to the Optional Redemption Termination Date to the extent provided for in
Section 3.6.

          (g)   Within two (2) Business Days of the occurrence of a Valuation
Event, the Company shall send notice of such occurrence to the Holder.
Notwithstanding anything to the contrary contained herein, if a Valuation Event
occurs during any Valuation Period, the Holder may convert some or all of this
Debenture, at its sole option, at a Conversion Price equal to the Current Market
Price on any Trading Day during the Valuation Period. For purposes of this
Section 3.1(g), a "Valuation Event" shall mean an event in which the Company at
any time takes any of the following actions:

          (i)   subdivides or combines its Capital Shares;

          (ii)  makes any distribution on its Capital Shares;

          (iii) issues any additional Capital Shares (the "Additional Capital
Shares"), otherwise than as provided in clauses (i) and (ii) above, at a price
per share less, or for other consideration lower, than the Current Market Price
in effect immediately prior to such issuances, or without consideration, except
for issuances under (A) employee benefit plans consistent with those presently
in effect and (B) presently outstanding warrants, options or convertible
securities;

          (iv)  issues any warrants, options or other rights to subscribe for or
purchase any Additional Capital Shares if the price per share for which
Additional Capital Shares may at any time thereafter be issuable pursuant to
such warrants, options or other rights shall be less than the Current Market
Price in effect immediately prior to such issuance;

          (v)   issues any securities convertible into or exchangeable or
exercisable for Additional Capital Shares if the consideration per share for
which Additional Capital Shares may at any time thereafter be issuable pursuant
to the terms of such convertible, exchangeable or exercisable securities shall
be less than the Current Market Price in effect immediately prior to such
issuance;

          (vi)  announces or effects a Fundamental Corporate Change (as such
term is hereinafter defined);

          (vii) makes a distribution of its assets or evidences of
indebtedness to the holders of its Capital Shares as a dividend in liquidation
or by way of return of capital or other than as a dividend payable out of
earnings or surplus legally available for the payment of dividends under

                                      -8-
<PAGE>

applicable law or any distribution to such holders made in respect of the sale
of all or substantially all of the Company's assets (other than under the
circumstances provided for in clauses (i) through (v) above) or

          (vii)   takes any action affecting the number of Outstanding Capital
Shares, other than an action described in any of the above clauses (i) through
(vii), inclusive, which in the opinion of the Company's Board of Directors,
determined in good faith, would have a material adverse effect upon the rights
of the Holder at the time of a conversion of this Debenture or is reasonably
likely to result in a decrease in the Market Price.

     SECTION 1.7    Exercise of Conversion Privilege.  (a) Subject to Sections
                    --------------------------------
3.1(b), 3.1(c) and 3.1(d), conversion of this Debenture may be exercised, in
whole or in part, on any Business Day after the Optional Redemption Termination
Date by the Holder by telecopying an executed and completed Conversion Notice to
the Company. Each date on which a Conversion Notice is telecopied to the Company
in accordance with the provisions of this Section 3.2 shall constitute a
Conversion Date. The Company shall convert this Debenture and issue the Common
Stock Issued at Conversion in the manner provided below in this Section 3.2, and
all voting and other rights associated with the beneficial ownership of the
Common Stock Issued at Conversion shall vest with the Holder, effective as of
the Conversion Date at the time specified in the Conversion Notice. The
Conversion Notice also shall state the name or names (with addresses) of the
persons who are to become the holders of the Common Stock Issued at Conversion
in connection with such conversion. The Holder shall deliver this Debenture by
express courier within thirty (30) days following the date on which the
telecopied Conversion Notice has been transmitted to the Company. Upon surrender
for conversion, this Debenture shall be accompanied by a proper assignment
hereof to the Company or be endorsed in blank. As promptly as practicable after
the receipt of the Conversion Notice as aforesaid, but in any event not more
than three (3) Business Days after the Company's receipt of such Conversion
Notice, the Company shall (i) issue the Common Stock Issued at Conversion in
accordance with the provisions of this Article 3 and (ii) cause to be mailed for
delivery by overnight courier to the Holder (x) a certificate or certificate(s)
representing the number of Common Shares to which the Holder is entitled by
virtue of such conversion, (y) cash, as provided in Section 3.3, in respect of
any fraction of a Common Share deliverable upon such conversion and (z) cash or
shares of Common Stock, as applicable, representing the amount of accrued and
unpaid interest on this Debenture as of the Conversion Date. Such conversion
shall be deemed to have been effected at the time at which the Conversion Notice
indicates, and at such time the rights of the Holder of this Debenture, as such
(except if and to the extent that any Principal Amount thereof remains
unconverted), shall cease and the Person and Persons in whose name or names the
Common Stock Issued at Conversion shall be issuable shall be deemed to have
become the holder or holders of record of the Common Shares represented thereby,
and all voting and other rights associated with the beneficial ownership of such
Common Shares shall at such time vest with such Person or Persons. The
Conversion Notice shall constitute a contract between the Holder and the
Company, whereby the Holder shall be deemed to subscribe for the number of
Common Shares which it will be entitled to receive upon such conversion and, in
payment and satisfaction of such subscription (and for any cash adjustment to
which it is entitled pursuant to Section 3.4), to surrender this Debenture and
to release the Company from all liability thereon (except if and to the extent
that any Principal Amount thereof remains unconverted). No cash payment
aggregating less than $1.00 shall be required to be given unless specifically
requested by the Holder.

                                      -9-
<PAGE>

          (b)  If, at any time after the date of this Debenture, (i) the Company
challenges, disputes or denies the right of the Holder hereof to effect the
conversion of this Debenture into Common Shares or otherwise dishonors or
rejects any Conversion Notice delivered in accordance with this Section 3.2 or
(ii) any third party who is not and has never been an Affiliate of the Holder
commences any lawsuit or legal proceeding or otherwise asserts any claim before
any court or public or governmental authority which seeks to challenge, deny,
enjoin, limit, modify, delay or dispute the right of the Holder hereof to effect
the conversion of this Debenture into Common Shares, then the Holder shall have
the right, by written notice to the Company, to require the Company to promptly
redeem this Debenture for cash at one hundred and thirty-five percent (135%) of
the Principal Amount thereof, together with all accrued and unpaid interest
thereon to the date of redemption. Under any of the circumstances set forth
above, the Company shall be responsible for the payment of all costs and
expenses of the Holder, including reasonable legal fees and expenses, as and
when incurred in defending itself in any such action or pursuing its rights
hereunder (in addition to any other rights of the Holder).

          (c)  The Holder shall be entitled to exercise its conversion privilege
notwithstanding the commencement of any case under the Bankruptcy Code. In the
event the Company is a debtor under the Bankruptcy Code, the Company hereby
waives to the fullest extent permitted any rights to relief it may have under 11
U.S.C. ' 362 in respect of the Holder's conversion privilege. The Company hereby
waives to the fullest extent permitted any rights to relief it may have under 11
U.S.C. ' 362 in respect of the conversion of this Debenture. The Company agrees,
without cost or expense to the Holder, to take or consent to any and all action
necessary to effectuate relief under 11 U.S.C. ' 362.

     SECTION 1.8    Fractional Shares.  No fractional Common Shares or scrip
                    -----------------
representing fractional Common Shares shall be delivered upon conversion of this
Debenture. Instead of any fractional Common Shares which otherwise would be
delivered upon conversion of this Debenture, the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
multiplied by the Current Market Price on the Conversion Date. No cash payment
of less than $1.00 shall be required to be given unless specifically requested
by the Holder.

     SECTION 1.9    Adjustments.  The Conversion Price and the number of shares
                    -----------
deliverable upon conversion of this Debenture are subject to adjustment from
time to time as follows:

               (1)  Issuance of Securities. If at any time while this Debenture,
                    ----------------------
or any portion thereof, is outstanding the Company issues and sells pursuant to
an exemption from registration under the Securities Act (A) Common Shares at a
purchase price that is lower than the Conversion Price on the date of issuance
of such Common Shares, (B) warrants or options with an exercise price on the
date of issuance thereof that is lower than the Conversion Price for the Holder
on such date, except for warrants or options issued pursuant to employee stock
option agreements or stock incentive agreements of the Company or (C)
convertible, exchangeable or exercisable securities with a right to exchange at
lower than the Current Market Price on the date of issuance or conversion, as
applicable, of such convertible, exchangeable or exercisable securities, except
for stock option agreements or stock incentive agreements, then the Conversion
Price shall be reduced

                                     -10-
<PAGE>

to equal the lowest of any such purchase price, exercise price or exchange
price, and the number of shares of Common Stock into which this Debenture is
convertible pursuant to Section 3.1(a) shall be correspondingly adjusted. After
such reduction, the Conversion Price shall never exceed the Conversion Price as
so reduced, in spite of any subsequent increase in the Market Price.

          (2)  Reclassification, Etc. In case the Company shall reorganize its
               ---------------------
capital, reclassify its capital stock, consolidate or merge with or into another
Person (where the Company is not the survivor or where there is a change in or
distribution with respect to the Common Stock of the Company), sell, convey,
transfer or otherwise dispose of all or substantially all its property, assets
or business to another Person, or effectuate a transaction or series of related
transactions in which more than fifty percent (50%) of the voting power of the
Company is disposed of (each, a "Fundamental Corporate Change") and, pursuant to
the terms of such Fundamental Corporate Change, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation ("Other Property") are to be received by
or distributed to the holders of Common Stock of the Company, then the Holder of
this Debenture shall have the right thereafter, at its sole option, to (x)
require the Company to prepay this Debenture for cash at one hundred and twenty-
five percent (125%) of the Principal Amount thereof, together with all accrued
and unpaid interest thereon to the date of prepayment, (y) receive the number of
shares of common stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property as is receivable
upon or as a result of such Fundamental Corporate Change by a holder of the
number of shares of Common Stock into which such the outstanding portion of this
Debenture may be converted at the Conversion Price applicable immediately prior
to such Fundamental Corporate Change or (z) require the Company, or such
successor, resulting or purchasing corporation, as the case may be, to, without
benefit of any additional consideration therefor, execute and deliver to the
Holder a debenture with substantial identical rights, privileges, powers,
restrictions and other terms as this Debenture in an amount equal to the amount
outstanding under this Debenture immediately prior to such Fundamental Corporate
Change. For purposes hereof, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to prepayment and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions shall similarly apply to successive Fundamental Corporate
Changes.

          (3)  Spin-offs. Notwithstanding anything to the contrary herein, if at
               ---------
any time the Company shall "spin-off" certain of its assets or businesses by
transferring, directly or indirectly, such assets or businesses to a Subsidiary
("Spinco") and making a dividend ("Spin-off Dividend") to the Company's
stockholders of the shares of capital stock of Spinco, then prior to making such
Spin-off Dividend, the Company shall cause Spinco to issue to each Holder a
debenture, with substantially identical terms as this Debenture, in an amount
equal to the amount outstanding under this Debenture immediately prior to such
Spin-off Dividend.

     SECTION 1.10   Certain Conversion Limits.
                    -------------------------

                                     -11-
<PAGE>

               (1)  Notwithstanding anything herein to the contrary, the Holder
shall not have the right, and the Company shall not have the obligation, to
convert all or any portion of this Debenture (and the Company shall not have the
right to pay interest on this Debenture in shares of Common Stock) if and to the
extent that the issuance to the Holder of shares of Common Stock upon such
conversion (or payment of interest) would result in the Holder being deemed the
"beneficial owner" of more than five percent (5%) of the then Outstanding shares
of Common Stock within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules promulgated thereunder. If any court of
competent jurisdiction shall determine that the foregoing limitation is
ineffective to prevent a Holder from being deemed the beneficial owner of more
than five percent (5%) of the then Outstanding shares of Common Stock, then the
Company shall prepay this Debenture in part, in such Principal Amount as is
necessary to cause such Holder to be deemed the beneficial owner of not more
than five percent (5%) of the then Outstanding shares of Common Stock. Such
prepayment shall be for cash at a prepayment price of one hundred and twenty-
five percent (125%) of the Principal Amount thereof, together with all accrued
and unpaid interest thereon to the date of prepayment.

               (2)  Notwithstanding anything herein to the contrary, if and to
the extent that, on any date (the "Section 16 Determination Date"), the holding
by the Holder of this Debenture would result in the Holder's becoming subject to
the provisions of Section 16(b) of the Securities Exchange Act of 1934, as
amended, by virtue of being deemed the "beneficial owner" of more than ten
percent (10%) of the then Outstanding shares of Common Stock, then the Holder
shall not have the right, and the Company shall not have the obligation, to
convert any portion of this Debenture (the "Section 16 Prepayment Portion") as
shall cause such Holder to be deemed the beneficial owner of more than ten
percent (10%) of the then Outstanding shares of Common Stock during the period
ending sixty (60) days after the Section 16 Determination Date. If any court of
competent jurisdiction shall determine that the foregoing limitation is
ineffective to prevent a Holder from being deemed the beneficial owner of more
than ten percent (10%) of the then Outstanding shares of Common Stock for the
purposes of such Section 16(b), then the Company shall prepay the Section 16
Prepayment Portion. Upon such determination by a court of competent
jurisdiction, the Holder shall have no interest in or rights under such Section
16 Prepayment Portion. Any and all interest paid on or prior to the date of such
determination shall be deemed interest paid on the remaining portion of this
Debenture held by the Holder. Such prepayment shall be for cash at a prepayment
price of one hundred and twenty-five percent (125%) of the Principal Amount
thereof, together with all accrued and unpaid interest thereon to the date of
prepayment.

               (3)  Unless the Company shall have obtained the approval of its
voting stockholders to such issuance in accordance with the rules of any stock
market with which the Company shall be required to comply, but only to the
extent required thereby, the Company shall not issue shares of Common Stock (i)
upon conversion of this Debenture or (ii) as a payment of interest on this
Debenture, if such issuance of Common Stock, when added to the number of shares
of Common Stock previously issued by the Company (x) upon conversion of a
portion of this Debenture, (y) upon exercise of the Warrants issued pursuant to
the terms of the Securities Purchase Agreement and (z) in payment of interest on
this Debenture would equal or exceed twenty percent (20%) of the number of
Common Shares which were issued and outstanding on the Closing Date (the
"Maximum Issuance Amount"). In the event that a properly executed Conversion
Notice is

                                      -12-
<PAGE>

received by the Company which would require the Company to issue shares of
Common Stock equal to or in excess of the Maximum Issuance Amount, the Company
shall honor such conversion request by (a) converting the portion of the
Debenture stated in the Conversion Notice which is not in excess of the Maximum
Issuance Amount and (b) prepaying the remaining portion of the Debenture stated
in the Conversion Notice in cash at a prepayment price of one hundred and
twenty-five percent (125%) of the Principal Amount of the remaining portion of
this Debenture, together with all accrued and unpaid dividends on the total
portion of this Debenture stated in the Conversion Notice to the date of
prepayment. In the event the Company shall elect to pay interest in shares of
Common Stock which would require the Company to issue shares of Common Stock
equal to or in excess of the Maximum Issuance Amount, the Company shall pay such
interest by (y) issuing a number of shares of Common Stock equal to one share
less than the Maximum Issuance Amount and (z) paying the balance due on such
interest payment in cash.

     SECTION 1.11   Optional Redemption.  Subject to Section 3.7, the Company on
                    -------------------
or prior to the Optional Redemption Termination Date, may redeem this Debenture
in whole but not in part at one hundred and twenty-five percent (125%) of the
Principal Amount thereof, together with all accrued and unpaid interest thereon
to the date of redemption (the "Optional Redemption Date"); provided that the
                                                            --------
Current Market Price on the Trading Day the notice (the "Optional Redemption
Notice") provided for in Section 3.7 is given does not exceed Eight Dollars and
Seven Cents ($8.07).  Under no circumstances may the Company give an Optional
Redemption Notice on a Trading Day on which the Current Market Price exceeds
Eight Dollars and Seven Cents ($8.07).  Notwithstanding its receipt of the
Optional Redemption Notice, the Holder upon receipt of such notice shall have
the right to convert this Debenture at the Conversion Price in whole or in part
by delivery of a Conversion Notice to the Company in accordance with Section 3.2
at any time prior to the Optional Redemption Date.

     SECTION 1.12   Notice of Redemption.  The Optional Redemption Notice shall
                    --------------------
be provided by the Company to the Holder in writing at the Holder's last address
appearing in the Company's security registry, not less than thirty (30) Business
Days prior to the Optional Redemption Date and not more than forty-five (45)
Business Days prior to the Optional Redemption Date, which notice shall be in
substantially the form of Exhibit B hereto, specify the Optional Redemption Date
                          ---------
and refer to Section 3.6 (including a statement of the redemption price) and
this Section 3.7.

     SECTION 1.13   Surrender of Debentures.  Upon any redemption of this
                    -----------------------
Debenture pursuant to Sections 3.2, 3.5, 3.6 or 6.2, or upon maturity pursuant
to Section 2.4, the Holder shall either deliver this Debenture by hand to the
Company at its principal executive offices or surrender the same to the Company
at such address by nationally recognized overnight courier. Payment of the
redemption price or the amount due on maturity specified in Section 2.4, shall
be made by the Company to the Holder against receipt of this Debenture (as
provided in this Section 3.8) by wire transfer of immediately available funds to
such account(s) as the Holder shall specify by written notice to the Company. If
payment of such redemption price is not made in full by the redemption date, or
the amount due on maturity is not paid in full by the Maturity Date, the Holder
shall again have the right to convert this Debenture as provided in Article 3
hereof or to declare an Event of Default.

                                      -13-
<PAGE>

                                   ARTICLE 4
                       STATUS; RESTRICTIONS ON TRANSFER

     SECTION 1.14   Status of Debenture.  This Debenture is an unsecured
                    -------------------
obligation of the Company, and constitutes a legal, valid and binding obligation
of the Company, enforceable in accordance with its terms subject, as to
enforceability, to general principles of equity and to principles of bankruptcy,
insolvency, reorganization and other similar laws of general applicability
relating to or affecting creditors' rights and remedies generally.

     SECTION 1.15   Restrictions on Transfer.  This Debenture, and any Common
                    ------------------------
Shares deliverable upon the conversion hereof, have not been registered under
the Securities Act. The Holder by accepting this Debenture agrees that this
Debenture and the shares of Common Stock to be acquired as interest on and upon
conversion of this Debenture may not be assigned or otherwise transferred unless
and until (i) the Company has received the opinion of counsel for the Holder
that this Debenture or such shares may be sold pursuant to an exemption from
registration under the Securities Act or (ii) a registration statement relating
to this Debenture or such shares has been filed by the Company and declared
effective by the SEC.

     Each certificate for shares of Common Stock deliverable hereunder shall
bear a legend as follows unless and until such securities have been sold
pursuant to an effective registration statement under the Securities Act:

          "The securities represented by this certificate have
          not been registered under the Securities Act of 1933,
          as amended (the "Securities Act"). The securities may
          not be offered for sale, sold or otherwise transferred
          except (i) pursuant to an effective registration
          statement under the Securities Act or (ii) pursuant to
          an exemption from registration under the Securities Act
          in respect of which the issuer of this certificate has
          received an opinion of counsel satisfactory to the
          issuer of this certificate to such effect. Copies of
          the agreement covering both the purchase of the
          securities and restrictions on their transfer may be
          obtained at no cost by written request made by the
          holder of record of this certificate to the Secretary
          of the issuer of this certificate at the principal
          executive offices of the issuer of this certificate."

                                   ARTICLE 5
                                   COVENANTS

     SECTION 1.16   Conversion.  The Company shall, not later than three (3)
                    ----------
Business Days after the Company's receipt of a Conversion Notice, issue and
deliver to the Holder the requisite shares of Common Stock Issued at Conversion.

     SECTION 1.17   Notice of Default.  If any one or more events occur which
                    -----------------
constitute or which, with notice, lapse of time, or both, would constitute an
Event of Default, the Company

                                      -14-
<PAGE>

shall forthwith give notice to the Holder, specifying the nature and status of
the Event of Default or such other event(s), as the case may be.

     SECTION 1.18   Payment of Obligations.  So long as this Debenture shall be
                    ----------------------
outstanding, the Company shall pay, extend, or discharge at or before maturity,
all its respective material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings.

     SECTION 1.19   Compliance with Laws.  So long as this Debenture shall be
                    --------------------
outstanding, the Company shall comply with all applicable laws, ordinances,
rules, regulations and requirements of governmental authorities, except for such
noncompliance which would not have a material adverse effect on the business,
properties, prospects, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries.

     SECTION 1.20   Inspection of Property, Books and Records.  So long as this
                    -----------------------------------------
Debenture shall be outstanding, the Company shall keep proper books of record
and account in which full, true and correct entries shall be made of all
material dealings and transactions in relation to its business and activities
and shall permit representatives of the Holder at the Holder's expense to visit
and inspect any of its respective properties, to examine and make abstracts from
any of its respective books and records, not reasonably deemed confidential by
the Company, and to discuss its respective affairs, finances and accounts with
its respective officers and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.

                                   ARTICLE 6
                                   REMEDIES

     SECTION 1.21   Events of Default.  "Event of Default" wherever used herein
                    -----------------
means any one of the following events:

          (1)  the Company shall default in the payment of principal of or
interest on this Debenture as and when the same shall be due and payable and, in
the case of an interest payment default, such default shall continue for three
(3) Business Days after the date such interest payment was due, or the Company
shall fail to perform or observe in any other covenant, agreement, term,
provision, undertaking or commitment under this Debenture, the Warrant, the
Securities Purchase Agreement or the Registration Rights Agreement and such
default shall continue for a period of ten (10) Business Days after the delivery
to the Company of written notice that the Company is in default hereunder or
thereunder;

          (2)  any of the representations or warranties made by the Company
herein, in the Securities Purchase Agreement, the Warrant, the Registration
Rights Agreement or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection
with the execution and delivery of this Debenture, the Warrant, the Securities
Purchase Agreement or the Registration Rights Agreement shall be false or
misleading on the Closing Date;

                                      -15-
<PAGE>

          (3)  under the laws of any jurisdiction not otherwise covered by
clauses (iv) and (v) below, the Company or any Subsidiary (A) becomes insolvent
or generally not able to pay its debts as they become due, (B) admits in writing
its inability to pay its debts generally or makes a general assignment for the
benefit of creditors, (C) institutes or has instituted against it any proceeding
seeking (x) to adjudicate it a bankrupt or insolvent, (y) liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors including any plan of compromise or
arrangement or other corporate proceeding involving or affecting its creditors
or (z) the entry of an order for relief or the appointment of a receiver,
trustee or other similar or it or for any substantial part of its properties and
assets, and in the case of any such official proceeding instituted against it
(but not instituted by it), either the proceeding remains undismissed or
unstayed for a period of sixty (60) calendar days, or any of the actions sought
in such proceeding (including the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its properties and assets) occurs or (D) takes
any corporate action to authorize any of the above actions;

          (4)  the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Subsidiary a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under the Bankruptcy
Code or any other applicable Federal or state law, or appointing a receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the winding-up
or liquidation of its affairs, and any such decree or order continues and is
unstayed and in effect for a period of sixty (60) calendar days;

          (5)  the institution by the Company or any Subsidiary of proceedings
to be adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the filing by
it of a petition or answer or consent seeking reorganization or relief under the
Bankruptcy Code or any other applicable federal or state law, or the consent by
it to the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of the
Company or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as and when they become due, or the
taking of corporate action by the Company in furtherance of any such action;

          (6)  a final judgment or final judgments for the payment of money
shall have been entered by any court or courts of competent jurisdiction against
the Company and remains undischarged for a period (during which execution shall
be effectively stayed) of thirty (30) days, provided that the aggregate amount
                                            --------
of all such judgments at any time outstanding (to the extent not paid or to be
paid, as evidenced by a written communication to that effect from the applicable
insurer, by insurance) exceeds One Hundred Thousand Dollars ($100,000);

          (7)  it becomes unlawful for the Company to perform or comply with its
obligations under this Debenture, the Warrant, the Securities Purchase Agreement
or the Registration Rights Agreement in any respect;

                                      -16-
<PAGE>

          (8)  the Common Shares shall be delisted from the OTCBB (the "Trading
Market" or, to the extent the Company becomes eligible to list its Common Stock
on any national security exchange or other quotation system, upon official
notice of listing on any such exchange or system, as the case may be, it shall
be the "Trading Market") or suspended from trading on the Trading Market, and
shall not be reinstated, relisted or such suspension lifted, as the case may be,
within five (5) days or

          (9)  the Company shall default (giving effect to any applicable grace
period) in the payment of principal or interest as and when the same shall
become due and payable, under any indebtedness, individually or in the
aggregate, of more than One Hundred Thousand Dollars ($100,000).

     SECTION 1.22   Acceleration of Maturity; Rescission and Annulment.  If an
                    --------------------------------------------------
Event of Default occurs and is continuing, then and in every such case the
Holder may, by a notice in writing to the Company, rescind any outstanding
Conversion Notice and declare that all amounts owing or otherwise outstanding
under this Debenture are immediately due and payable and upon any such
declaration this Debenture shall become immediately due and payable in cash at a
price of one hundred and twenty-five percent (125%) of the Principal Amount
thereof, together with all accrued and unpaid interest thereon to the date of
payment; provided, however, in the case of any Event of Default described in
         --------  -------
clauses (iii), (iv), (v) or (vii) of Section 6.1, such amount automatically
shall become immediately due and payable without the necessity of any notice or
declaration as aforesaid.

     SECTION 1.23   Default Interest Rate.  (a)  If any portion of the
                    ---------------------
principal of or interest on this Debenture shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise) such principal of and
interest on the Debenture which is due and owing but not paid shall, without
limiting the Holder's rights under this Debenture, bear interest at the Default
Interest Rate until paid in full.

          (b)  Notwithstanding anything herein to the contrary, if at any time
the applicable interest rate as provided for herein shall exceed the maximum
lawful rate which may be contracted for, charged, taken or received by the
Holder in accordance with applicable laws of the State of New York (the "Maximum
Rate"), the rate of interest applicable to this Debenture shall be limited to
the Maximum Rate.

     SECTION 1.24   Remedies Not Waived.  No course of dealing between the
                    -------------------
Company and the Holder or any delay in exercising any rights hereunder shall
operate as a waiver by the Holder.

                                   ARTICLE 7
                                 MISCELLANEOUS

     SECTION 1.25   Notice of Certain Events.  In the case of the occurrence of
                    ------------------------
any event described in Section 3.1(b) or 3.4 of this Debenture, the Company
shall cause to be mailed to the Holder of this Debenture at its last address as
it appears in the Company's security registry, at least twenty (20) days prior
to the applicable record, effective or expiration date hereinafter specified
(or,

                                      -17-
<PAGE>

if such twenty (20) days' notice is not possible, at the earliest possible date
prior to any such record, effective or expiration date), a notice thereof,
including, if applicable, a statement of (y) the date on which a record is to be
taken for the purpose of such dividend, distribution, issuance or granting of
rights, options or warrants, or if a record is not to be taken, the date as of
which the holders of record of Common Stock to be entitled to such dividend,
distribution, issuance or granting of rights, options or warrants are to be
determined or (z) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of record
of Common Stock will be entitled to exchange their shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale transfer, dissolution, liquidation or winding-up.

     SECTION 1.26   Register.  The Company shall keep at its principal office a
                    --------
register in which the Company shall provide for the registration of this
Debenture.  Upon any transfer of this Debenture in accordance with Articles 2
and 4 hereof, the Company shall register such transfer on the Debenture
register.

     SECTION 1.27   Withholding.  To the extent required by applicable law, the
                    -----------
Company may withhold amounts for or on account of any taxes imposed or levied by
or on behalf of any taxing authority in the United States having jurisdiction
over the Company from any payments made pursuant to this Debenture.

     SECTION 1.28   Transmittal of Notices.  Except as may be otherwise provided
                    ----------------------
herein, any notice or other communication or delivery required or permitted
hereunder shall be in writing and shall be delivered personally, or sent by
telecopier machine or by a nationally recognized overnight courier service, and
shall be deemed given when so delivered personally, or by telecopier machine or
overnight courier service as follows:

          (1)  if to the Company, to:

               Inforetech Wireless Technology Inc.
               Suite 214
               5500 - 152/nd/ Street
               Surrey, British Columbia
               Canada V3S 8E7
               Attention:  Robert C. Silzer
               Telecopier: 604.576.7401
               Telephone:  604.576.7442

               with a copy to:

               Holmes Greenslade
               1880 - 1066 West Hastings Street
               Vancouver, British Columbia
               Canada V6E 3X1
               Attention:  John W. Greenslade
               Telecopier: 604.688.0426

                                      -18-
<PAGE>

               Telephone:  604.688.7861

          (2)  if to the Holder, to the address of such Holder as shown on the
books of the Company.

Each of the Holder or the Company may change the foregoing address by notice
given pursuant to this Section 7.4.

     SECTION 1.29   Governing Law.  THIS DEBENTURE SHALL BE GOVERNED BY, AND
                    -------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS PRINCIPLES).  WITH RESPECT TO ANY SUIT, ACTION OR
PROCEEDINGS RELATING TO THIS DEBENTURE, THE COMPANY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK AND HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  SUBJECT TO APPLICABLE LAW, THE COMPANY AGREES THAT FINAL
JUDGMENT AGAINST IT IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS DEBENTURE SHALL BE CONCLUSIVE "ND MAY BE ENFORCED IN ANY OTHER
JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT, A
CERTIFIED COPY OF WHICH JUDGMENT SHALL BE CONCLUSIVE EVIDENCE THEREOF AND THE
AMOUNT OF ITS INDEBTEDNESS, OR BY SUCH OTHER MEANS PROVIDED BY LAW.

     SECTION 1.30   Headings.  The headings of the Articles and Sections of this
                    --------
Debenture are inserted for convenience only and do not constitute a part of this
Debenture.

     SECTION 1.31   Payment Dates.  Whenever any payment hereunder shall be due
                    -------------
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

     SECTION 1.32   Binding Effect.  Each Holder by accepting this Debenture
                    --------------
agrees to be bound by and comply with the terms and provisions of this
Debenture.

     SECTION 1.33   No Stockholder Rights.  Except as otherwise provided herein,
                    ---------------------
this Debenture shall not entitle the Holder to any of the rights of a
stockholder of the Company, including, without limitation, the right to vote, to
receive dividends and other distributions, or to receive any notice of, or to
attend, meetings of stockholders or any other proceedings of the Company, unless
and to the extent converted into shares of Common Stock in accordance with the
terms hereof.

                    [REMAINDER OF PAGE INTENTIONALLY BLANK.
                         NEXT PAGE IS SIGNATURE PAGE.]

                                      -19-
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Debenture to be signed by
its duly authorized officer on the date of this Debenture.

                              Inforetech Wireless technology Inc.

                              By: ________________________________
                                  Name:
                                  Title:

                                      -20-
<PAGE>

                                                                       EXHIBIT A

                          [FORM OF CONVERSION NOTICE]

TO:  Inforetech Wireless Technology Inc.
     Suite 214
     5500 - 152/nd/ Street
     Surrey, British Columbia
     Canada V3S 8E7
     Attn:  Corporate Secretary

          The undersigned owner of this 8% Convertible Debenture due August 4,
2005 (the "Debenture") issued by Inforetech Wireless Technology Inc. (the
"Company") hereby irrevocably exercises its option to convert $__________
Principal Amount of the Debenture [and accrued and unpaid interest thereon to
the date of this Notice] into shares of Common Stock in accordance with the
terms of the Debenture.  The undersigned hereby instructs the Company to convert
the portion of the Debenture specified above into shares of Common Stock Issued
at Conversion in accordance with the provisions of Article 3 of the Debenture.
The undersigned directs that the Common Stock and certificates therefor
deliverable upon conversion, the Debenture reissued in the Principal Amount not
being surrendered for conversion hereby, [the check or shares of Common Stock in
payment of the accrued and unpaid interest thereon to the date of this Notice,]
together with any check in payment for fractional Common Stock, be registered in
the name of and/or delivered to the undersigned unless a different name has been
indicated below.  All capitalized terms used and not defined herein have the
respective meanings assigned to them in the Debenture.  The conversion pursuant
hereto shall be deemed to have been effected at the date and time specified
below, and at such time the rights of the undersigned as a Holder of the
Principal Amount of the Debenture set forth above shall cease and the Person or
Persons in whose name or names the Common Stock Issued at Conversion shall be
registered shall be deemed to have become the holder or holders of record of the
Common Shares represented thereby and all voting and other rights associated
with the beneficial ownership of such Common Shares shall at such time vest with
such Person or Persons.

Date and time:

                                             _________________________________
                                             Signature

     Fill in for registration of Debenture:

Please print name and address
(including ZIP code number):

________________________
________________________
________________________

                                      A-1
<PAGE>

                                                                       EXHIBIT B

                      [FORM OF COMPANY REDEMPTION NOTICE]

Dated:

TO:  [Holder]
     [Address]

          Inforetech Wireless Technology Inc. (the "Company") hereby irrevocably
exercises its option to redeem $__________ Principal Amount of the 8%
Convertible Debenture due August 4, 2005  issued by the Company (the
"Debenture"), at a redemption price of $__________ and of accrued and unpaid
interest thereon, in accordance with the terms of the Debenture.  The
undersigned hereby instructs the Holder to surrender the portion of the
Debenture specified above in accordance with the provisions of Section 3.8 of
the Debenture.  Upon receipt of such surrendered Debenture, the Company shall
deliver the check in payment of the redemption price and for fractional Common
Stock.  All capitalized terms used and not defined herein have the respective
meanings assigned to them in the Debenture.

                                  Very truly yours,

                                  Inforetech Wireless technology Inc.

                                  By:___________________________________
                                     Name:
                                     Title:

                                      B-1<PAGE>

                                                                     EXHIBIT 4.3

                         REGISTRATION RIGHTS AGREEMENT

          Registration Rights Agreement dated as of August 4, 2000 (this
"Agreement") by and between Inforetech Wireless Technology Inc., a Nevada
corporation, with principal executive offices located at Suite 214, 5500 -
152/nd/ Street, Surrey, British Columbia, Canada V3S-8E7 (the "Company"), and
The Shaar Fund Ltd. (the "Initial Investor").

          WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement dated as of August 4, 2000, by and between the
Initial Investor and the Company (the "Securities Purchase Agreement"), the
Company has agreed to issue and sell to the Initial Investor (i) an 8%
Convertible Debenture (the "Debenture") of the Company in the aggregate
principal amount of $1,000,000 (U.S.) which, upon the terms of and subject to
the conditions contained therein, is convertible into shares of the Company's
Class A Common Equity Voting Stock, par value $0.001 per share (the "Common
Stock") and (ii) a Common Stock Purchase Warrant (the "Warrant") to purchase
shares of Common Stock; and

          WHEREAS, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide with respect to
the Common Stock issued or issuable in lieu of cash dividend payments on the
Debenture, upon conversion of the Debenture and exercise of the Warrant certain
registration rights under the Securities Act;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:

          1.   Definitions

          (1)  As used in this Agreement, the following terms shall have the
meanings:

               (1) "Affiliate" of any specified Person means any other Person
     who directly, or indirectly through one or more intermediaries, is in
     control of, is controlled by, or is under common control with, such
     specified Person. For purposes of this definition, control of a Person
     means the power, directly or indirectly, to direct or cause the direction
     of the management and policies of such Person whether by contract,
     securities, ownership or otherwise; and the terms "controlling" and
     "controlled" have the respective meanings correlative to the foregoing.

               (2)  "Closing Date" means September 12, 2000.

               (3)  "Commission" means the Securities and Exchange Commission.

               (4) "Current Market Price" on any date of determination means the
     closing bid price of a share of the Common Stock on such day as reported on
     the OTC Bulletin Board service of the National Association of Securities
     Dealers, Inc. ("OTCBB"); provided, if such security is not listed or
                              --------
     admitted to trading on OTCBB, as reported on the
<PAGE>

     principal national security exchange or quotation system on which such
     security is quoted or listed or admitted to trading, or, if not quoted or
     listed or admitted to trading on any national securities exchange or
     quotation system, the closing bid price of such security on the over-the-
     counter market on the day in question as reported by Bloomberg LP, or a
     similar generally accepted reporting service, as the case may be.

          (5)  "Exchange Act" means the Securities Exchange Act of 1934, as
     amended, and the rules and regulations of the Commission thereunder, or any
     similar successor statute.

          (6)  "Investor" means each of the Initial Investor and any transferee
     or assignee of Registrable Securities which agrees to become bound by all
     of the terms and provisions of this Agreement in accordance with Section 8
     hereof.

          (7)  "Person" means any individual, partnership, corporation, limited
     liability company, joint stock company, association, trust, unincorporated
     organization, or a government or agency or political subdivision thereof.

          (8)  "Prospectus" means the prospectus (including, without limitation,
     any preliminary prospectus and any final prospectus filed pursuant to Rule
     424(b) under the Securities Act, including any prospectus that discloses
     information previously omitted from a prospectus filed as part of an
     effective registration statement in reliance on Rule 430A under the
     Securities Act) included in the Registration Statement, as amended or
     supplemented by any prospectus supplement with respect to the terms of the
     offering of any portion of the Registrable Securities covered by the
     Registration Statement and by all other amendments and supplements to such
     prospectus, including all material incorporated by reference in such
     prospectus and all documents filed after the date of such prospectus by the
     Company under the Exchange Act and incorporated by reference therein.

          (9)  "Public Offering" means an offer registered with the Commission
     and the appropriate state securities commissions by the Company of its
     Common Stock and made pursuant to the Securities Act.

          (10) "Registrable Securities" means the Common Stock issued or
     issuable (i) in lieu of cash dividend payments on the Debenture, (ii) upon
     conversion or redemption of the Debenture or (iii) upon exercise of the
     Warrant; provided, however, a share of Common Stock shall cease to be a
     --------  -------
     Registrable Security for purposes of this Agreement when it no longer is a
     Restricted Security.

          (11) "Registration Statement" means a registration statement of the
     Company filed on an appropriate form under the Securities Act providing for
     the registration of, and the sale on a continuous or delayed basis by the
     holders of, all of the Registrable Securities pursuant to Rule 415 under
     the Securities Act, including the Prospectus contained therein and forming
     a part thereof, any amendments to such registration statement and

                                      -2-
<PAGE>

     supplements to such Prospectus, and all exhibits to and other material
     incorporated by reference in such registration statement and Prospectus.

          (12) "Restricted Security" means any share of Common Stock issued or
     issuable in lieu of cash dividend payments on the Debenture, upon
     conversion or redemption of the Debenture or exercise of the Warrant except
     any such share that (i) has been registered pursuant to an effective
     registration statement under the Securities Act and sold in a manner
     contemplated by the prospectus included in such registration statement,
     (ii) has been transferred in compliance with the resale provisions of Rule
     144 under the Securities Act (or any successor provision thereto) or is
     transferable pursuant to paragraph (k) of Rule 144 under the Securities Act
     (or any successor provision thereto) or (iii) otherwise has been
     transferred and a new share of Common Stock not subject to transfer
     restrictions under the Securities Act has been delivered by or on behalf of
     the Company.

          (13) "Securities Act" means the Securities Act of 1933, as amended,
     and the rules and regulations of the Commission thereunder, or any similar
     successor statute.

        (2)  All capitalized terms used and not defined herein have the
     respective meaning assigned to them in the Securities Purchase Agreement.

        2.  Registration

        (1)  Filing and Effectiveness of Registration Statement. The Company
     shall prepare and file with the Commission not later than sixty (60) days
     after the Closing Date, a Registration Statement relating to the offer and
     sale of the Registrable Securities and shall use its best efforts to cause
     the Commission to declare such Registration Statement effective under the
     Securities Act as promptly as practicable but in no event later than one
     hundred and eighty (180) days after the Closing Date, assuming for purposes
     hereof a Conversion Price under the Debenture of Four Dollars ($4 (U.S.))
     per share. The Company shall promptly (and, in any event, no more than 24
     hours after it receives comments from the Commission), notify the Buyer
     when and if it receives any comments from the Commission on the
     Registration Statement and promptly forward a copy of such comments, if
     they are in writing, to the Buyer. At such time after the filing of the
     Registration Statement pursuant to this Section 2(a) as the Commission
     indicates, either orally or in writing, that it has no further comments
     with respect to such Registration Statement or that it is willing to
     entertain appropriate requests for acceleration of effectiveness of such
     Registration Statement, the Company shall promptly, and in no event later
     than two (2) business days after receipt of such indication from the
     Commission, request that the effectiveness of such Registration Statement
     be accelerated within forty-eight (48) hours of the Commission's receipt of
     such request. The Company shall not include any other securities in excess
     of ten million (10,000,000) shares of Common Stock in the Registration
     Statement relating to the offer and sale of the Registrable Securities. The
     Company shall notify the Initial Investor by written notice that such
     Registration Statement has been declared effective by the Commission within
     24 hours of such declaration by the Commission.

       (2)  Eligibility for Use of Form S-3. The Company agrees that at such
     time as it meets all the requirements for the use of Securities Act
     Registration Statement on Form S-3 it shall

                                      -3-
<PAGE>

     file all reports and information required to be filed by it with the
     Commission in a timely manner and take all such other action so as to
     maintain such eligibility for the use of such form.

       (3)  Additional Registration Statement. In the event the Current Market
     Price declines to Five Dollars ($5 (U.S.)) per share or less and each time
     thereafter that the Current Market Price declines by ten percent (10%)
     (each such date, a "Decline Date"), the Company shall, to the extent
     required by the Securities Act (because the additional shares were not
     covered by the Registration Statement filed pursuant to Section 2(a)), as
     reasonably determined by the Initial Investor, file an additional
     Registration Statement with the Commission for such additional number of
     Registrable Securities as would be issuable upon conversion of the
     Debenture and exercise of the Warrant (the "Additional Registrable
     Securities") in addition to those previously registered, assuming (x) with
     respect to the first Additional Registration Statement, a Conversion Price
     of Three Dollars ($3 U.S.)) per share and (y) with respect to each
     succeeding Additional Registration Statement, a Conversion Price of ten
     percent (10%) less than the Conversion Price assumed with respect to the
     immediately preceding Additional Registration Statement. The Company shall,
     to the extent required by the Securities Act, as reasonably determined by
     the Initial Investor, prepare and file with the Commission not later than
     the 30th day thereafter, a Registration Statement relating to the offer and
     sale of such Additional Registrable Securities and shall use its best
     efforts to cause the Commission to declare such Registration Statement
     effective under the Securities Act as promptly as practicable but not later
     than 60 days thereafter. The Company shall not include any other securities
     in the Registration Statement relating to the offer and sale of such
     Additional Registrable Securities.

          If the Additional Registration Statement is not (i) filed with the
Commission within 30 days after the Decline Date or (ii) declared effective by
the Commission within 90 days after the Decline Date (either of which, without
duplication, an "Additional Registration Date"), then the Company shall make the
payments to the Initial Investor equal to 2% (the "Liquidated Damage Rate") of
the Purchase Price (as defined in the Securities Purchase Agreement) from the
Additional Registration Date to the first Additional Computation Date and for
each Additional Computation Date thereafter, calculated on a pro rata basis to
the date on which the Additional Registration Statement is filed with (in the
event of an Additional Registration Date pursuant to clause (i) above) or
declared effective by (in the event of an Additional Registration Date pursuant
to clause (ii) above) the Commission (the "Additional Periodic Amount")
provided, however, that in no event shall the liquidated damages be less than
--------  -------
$25,000; provided, further, however, that if the Additional Registration
         --------  -------  -------
Statement is not declared effective by the Commission within 120 days after the
Additional Registration Date set forth in clause (ii) above, then the Liquidated
Damage Rate shall increase to 4%; provided, further, however, that the
                                  --------  -------  -------
Liquidated Damage Rate shall increase by 1% for each 30 day period after the
120/th/ day after the Additional Registration Date set forth in clause (ii)
above that the Additional Registration Statement is not declared effective by
the Commission. The full Additional Periodic Amount shall be paid by the Company
to the Initial Investor by wire transfer of immediately available funds within
three (3) days after each Additional Computation Date.

          As used in this Section 2(c), "Additional Computation Date" means the
date which is 30 days after the Additional Registration Date and, if the
Additional Registration Statement

                                      -4-
<PAGE>

required to be filed by the Company pursuant to this Section 2(c) has not
theretofore been declared effective by the Commission, each date which is 30
days after the previous Additional Computation Date until such Additional
Registration Statement is so declared effective.

       (4)  (i)  If the Company proposes to register any of its warrants, Common
Stock or any other shares of common stock of the Company under the Securities
Act (other than a registration (A) on Form S-8 or S-4 or any successor or
similar forms, (B) relating to Common Stock or any other shares of common stock
of the Company issuable upon exercise of employee share options or in connection
with any employee benefit or similar plan of the Company or (C) in connection
with a direct or indirect acquisition by the Company of another Person or any
transaction with respect to which Rule 145 (or any successor provision) under
the Securities Act applies), whether or not for sale for its own account, it
will each such time, give prompt written notice at least 20 days prior to the
anticipated filing date of the registration statement relating to such
registration to each Investor, which notice shall set forth such Investor's
rights under this Section 2(d) and shall offer such Investor the opportunity to
include in such registration statement such number of Registrable Securities as
such Investor may request. Upon the written request of any Investor made within
10 days after the receipt of notice from the Company (which request shall
specify the number of Registrable Securities intended to be disposed of by such
Investor), the Company will use its best efforts to effect the registration
under the Securities Act of all Registrable Securities that the Company has been
so requested to register by each Investor, to the extent requisite to permit the
disposition of the Registrable Securities so to be registered; provided,
                                                               --------
however, that (A) if such registration involves a Public Offering, each Investor
-------
must sell its Registrable Securities to any underwriters selected by the Company
with the consent of such Investor on the same terms and conditions as apply to
the Company and (B) if, at any time after giving written notice of its intention
to register any Registrable Securities pursuant to this Section 2 and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
Registrable Securities, the Company shall give written notice to each Investor
and, thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration.  The Company's obligations
under this Section 2(d) shall terminate on the date that the registration
statement to be filed in accordance with Section 2(a) is declared effective by
the Commission.

       (1)  If a registration pursuant to this Section 2(d) involves a Public
     Offering and the managing underwriter thereof advises the Company that, in
     its view, the number of shares of Common Stock that the Company and the
     Investors intend to include in such registration exceeds the largest number
     of shares of Common Stock that can be sold without having an adverse effect
     on such Public Offering (the "Maximum Offering Size"), the Company will
     include in such registration only such number of shares of Common Stock as
     does not exceed the Maximum Offering Size, and the number of shares in the
     Maximum Offering Size shall be allocated among the Company, the Investors
     and any other sellers of Common Stock in such Public Offering ("Third-Party
     Sellers"), first, pro rata among the Investors until all the shares of
     Common Stock originally proposed to be offered for sale by the Investors
     have been allocated, and second, pro rata among the Company and any Third-
     Party Sellers, in each case on the basis of the relative number of shares
     of Common Stock originally proposed to be offered for sale under such
     registration by each of the Investors, the

                                      -5-
<PAGE>

     Company and the Third-Party Sellers, as the case may be. If as a result of
     the proration provisions of this Section 2(d)(ii), any Investor is not
     entitled to include all such Registrable Securities in such registration,
     such Investor may elect to withdraw its request to include any Registrable
     Securities in such registration. With respect to registrations pursuant to
     this Section 2(d), the number of securities required to satisfy any
     underwriters' over-allotment option shall be allocated among the Company,
     the Investors and any Third Party Seller pro rata on the basis of the
     relative number of securities offered for sale under such registration by
     each of the Investors, the Company and any such Third Party Sellers before
     the exercise of such over-allotment option.

          3.  Obligations of the Company

          In connection with the registration of the Registrable Securities, the
Company shall:

          (1) Promptly (i) prepare and file with the Commission such amendments
(including post-effective amendments) to the Registration Statement and
supplements to the Prospectus as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the Prospectus forming part
thereof to be current and useable by Investors for resales of the Registrable
Securities for a period of five (5) years from the date on which the
Registration Statement is first declared effective by the Commission (the
"Effective Time") or such shorter period that will terminate when all the
Registrable Securities covered by the Registration Statement have been sold
pursuant thereto in accordance with the plan of distribution provided in the
Prospectus, transferred pursuant to Rule 144 under the Securities Act or
otherwise transferred in a manner that results in the delivery of new securities
not subject to transfer restrictions under the Securities Act (the "Registration
Period") and (ii) take all lawful action such that each of (A) the Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an 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
and (B) the Prospectus forming part of the Registration Statement, and any
amendment or supplement thereto, does not at any time during the Registration
Period include an 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, in light of the circumstances under which they were made, not
misleading;

          (2) During the Registration Period, comply with the provisions of the
Securities Act with respect to the Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the Investors as set forth in the Prospectus forming part of the
Registration Statement;

          (3) (i)Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus (including any supplements thereto), provide (A) draft copies
thereof to the Investors and reflect in such documents all such comments as the
Investors (and their counsel) reasonably may propose and (B) to the Investors a
copy of the accountant's consent letter to be included in the filing and (ii)
furnish to each
                                      -6-
<PAGE>

Investor whose Registrable Securities are included in the Registration Statement
and its legal counsel identified to the Company, (A) promptly after the same is
prepared and publicly distributed, filed with the Commission, or received by the
Company, one copy of the Registration Statement, each Prospectus, and each
amendment or supplement thereto and (B) such number of copies of the Prospectus
and all amendments and supplements thereto and such other documents, as such
Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;

          (4) (i)Register or qualify the Registrable Securities covered by the
Registration Statement under such securities or "blue sky" laws of such
jurisdictions as the Investors who hold a majority-in-interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in such jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period and (iv) take all such other lawful actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
--------  -------
therewith or as a condition thereto to (A) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (B) subject itself to general taxation in any such jurisdiction or
(C) file a general consent to service of process in any such jurisdiction;

          (5) As promptly as practicable after becoming aware of such event,
notify each Investor of the occurrence of any event, as a result of which the
Prospectus included in the 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, in
light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver a
number of copies of such supplement and amendment to each Investor as such
Investor may reasonably request;

          (6) As promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time and take all lawful action
to effect the withdrawal, recession or removal of such stop order or other
suspension;

          (7) Cause all the Registrable Securities covered by the Registration
Statement to be listed on the principal national securities exchange, and
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

          (8)  Maintain 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;

                                      -7-
<PAGE>

          (9) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the registration statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts, as the case may be, as the Investors reasonably may
request and registered in such names as the Investor may request; and, within
three (3) business days after a registration statement which includes
Registrable Securities is declared effective by the Commission, deliver and
cause legal counsel selected by the Company to deliver to the transfer agent for
the Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such registration statement) an appropriate
instruction and, to the extent necessary, an opinion of such counsel;

          (10) Take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Investors of their Registrable
Securities in accordance with the intended methods therefor provided in the
Prospectus which are customary under the circumstances;

          (11) Make generally available to its security holders as soon as
practicable, but in any event not later than three (3) months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Registration Statement and (ii) the effective date of each post-effective
amendment to the Registration Statement, as the case may be, an earnings
statement of the Company and its subsidiaries complying with Section 11 (a) of
the Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);

          (12) In the event of an underwritten offering, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;

          (13) (i)Make reasonably available for inspection by Investors, any
underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by such
Investors or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by such Investors or any such
underwriter, attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
--------  -------
designated in writing by the Company, in good faith, as confidential,
proprietary or containing any material nonpublic information shall be kept
confidential by such Investors and any such underwriter, attorney, accountant or
agent (pursuant to an appropriate confidentiality agreement in the case of any
such holder or agent), unless such disclosure is made pursuant to judicial
process in a court proceeding (after first giving the Company an opportunity
promptly to seek a protective order or otherwise limit the scope of the
information sought to be disclosed) or is required by law, or such records,
information or documents become available to the public generally or through a
third party not in violation of an accompanying obligation of confidentiality;
and provided, further, that, if the
    --------  -------

                                      -8-

<PAGE>

foregoing inspection and information gathering would otherwise disrupt the
Company's conduct of its business, such inspection and information gathering
shall, to the maximum extent possible, be coordinated on behalf of the Investors
and the other parties entitled thereto by one firm of counsel designed by and on
behalf of the majority in interest of Investors and other parties;

          (14) In connection with any underwritten offering, make such
representations and warranties to the Investors participating in such
underwritten offering and to the managers, in form, substance and scope as are
customarily made by the Company to underwriters in secondary underwritten
offerings;

          (15) In connection with any underwritten offering, obtain opinions of
counsel to the Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managers) addressed to the
underwriters, covering such matters as are customarily covered in opinions
requested in secondary underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of the opinion and as of the Effective Time of the Registration Statement or
most recent post-effective amendment thereto, as the case may be, the absence
from the Registration Statement and the Prospectus, including any documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, subject to customary
limitations);

          (16) In connection with any underwritten offering, obtain "cold
comfort" letters and updates thereof from the independent public accountants of
the Company (and, if necessary, from the independent public accountants of any
subsidiary of the Company or of any business acquired by the Company, in each
case for which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each underwriter
participating in such underwritten offering (if such underwriter has provided
such letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed), in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
secondary underwritten offerings;

          (17) In connection with any underwritten offering, deliver such
documents and certificates as may be reasonably required by the managers, if
any, and

          (18) In the event that any broker-dealer registered under the Exchange
Act shall be an "Affiliate" (as defined in Rule 2729(b)(1) of the rules and
regulations of the National Association of Securities Dealers, Inc. (the "NASD
Rules") (or any successor provision thereto)) of the Company or has a "conflict
of interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor
provision thereto)) and such broker-dealer shall underwrite, participate as a
member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Registration
Statement, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including, without limitation, by (A)
engaging a "qualified independent underwriter" (as defined

                                      -9-
<PAGE>

in Rule 2720(b)(15) of the NASD Rules (or any successor provision thereto)) to
participate in the preparation of the Registration Statement relating to such
Registrable Securities, to exercise usual standards of due diligence in respect
thereof and to recommend the public offering price of such Registrable
Securities, (B) indemnifying such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 6 hereof and
(C) providing such information to such broker-dealer as may be required in order
for such broker-dealer to comply with the requirements of the NASD Rules.

          4.   Obligations of the Investors

          In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:

          (1)  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 a particular Investor that such Investor 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. As least seven (7)
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if such Investor elects to
have any of its Registrable Securities included in the Registration Statement.
If at least two (2) business days prior to the anticipated filing date the
Company has not received the Requested Information from an Investor (a "Non-
Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor and
have no further obligations to the Non-Responsive Investor;

          (2)  Each Investor by its acceptance of the Registrable Securities
agrees to cooperate with the Company in connection with the preparation and
filing of the Registration Statement hereunder, unless such Investor has
notified the Company in writing of its election to exclude all of its
Registrable Securities from the Registration Statement and

          (3)  Each Investor agrees that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in Section 3(e) or
3(f), it shall immediately discontinue its disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(e) and, if so directed by the Company, such
Investor 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 such
Investor's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.

          5.   Expenses of Registration

                                      -10-
<PAGE>

          All expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Section 3, but including, without limitation, all registration, listing, and
qualifications fees, printing and engraving fees, accounting fees, and the fees
and disbursements of counsel for the Company, and the reasonable fees of one
firm of counsel to the holders of a majority in interest of the Registrable
Securities shall be borne by the Company.

          6.   Indemnification and Contribution

          (1)  The Company shall indemnify and hold harmless each Investor and
each underwriter, if any, which facilitates the disposition of Registrable
Securities, and each of their respective officers and directors and each person
who controls such Investor or underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes hereinafter referred to as an "Indemnified Person") from and against
any losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, not misleading, or
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Indemnified Person for all reasonable legal and other expenses
incurred by them in connection with investigating or defending any such action
or claim as and when such expenses are incurred; provided, however, that the
                                                 --------  -------
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the occurrence of an event of the type specified in Section 3(e), the use by
the Indemnified Person of an outdated or defective Prospectus after the Company
has provided to such Indemnified Person an updated Prospectus correcting the
untrue statement or alleged untrue statement or omission or alleged omission
giving rise to such loss, claim, damage or liability.

          (2)  Indemnification by the Investors and Underwriters. Each Investor
agrees, as a consequence of the inclusion of any of its Registrable Securities
in a Registration Statement, and each underwriter, if any, which facilitates the
disposition of Registrable Securities shall agree, as a consequence of
facilitating such disposition of Registrable Securities, severally and not
jointly, to (i) indemnify and hold harmless the Company, its directors
(including any person who, with his or her consent, is named in the Registration
Statement as a director nominee of the Company), its officers who sign any
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to which the
Company or such other persons may

                                      -11-
<PAGE>

become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement or Prospectus or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
light of the circumstances under which they were made, in the case of the
Prospectus), not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such holder or underwriter expressly for use
therein; provided, however, that no Investor or underwriter shall be liable
         --------  -------
under this Section 6(b) for any amount in excess of the net proceeds paid to
such Investor or underwriter in respect of shares sold by it and (ii) reimburse
the Company for any legal or other expenses incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.

          (3)  Notice of Claims, etc. Promptly after receipt by a party seeking
indemnification pursuant to this Section 6 (an "Indemnified Party") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 6 is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (x) the Indemnifying Party shall have agreed to pay such fees, costs
and expenses, (y) the Indemnified Party and the Indemnifying Party shall
reasonably have concluded that representation of the Indemnified Party by the
Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party or (z) the Indemnifying Party shall have failed to employ
legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be borne exclusively by the Indemnified Party. Except as
provided above, the Indemnifying Party shall not, in connection with any Claim
in the same jurisdiction, be liable for the fees and expenses of more than one
firm of counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnified Party shall not, without the prior written consent of
the Indemnifying Party (which consent shall not unreasonably be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not include an unconditional release of the Indemnifying Party from all
liabilities with respect to such Claim or judgment.

                                      -12-
<PAGE>

          (4)  Contribution. If the indemnification provided for in this Section
6 is unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnifying Party or by such Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Investors or any underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 6(d).
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Investors and any underwriters in this
Section 6(d) to contribute shall be several in proportion to the percentage of
Registrable Securities registered or underwritten, as the case may be, by them
and not joint.

          (5)  Notwithstanding any other provision of this Section 6, in no
event shall any (i) Investor be required to undertake liability to any person
under this Section 6 for any amounts in excess of the dollar amount of the
proceeds to be received by such Investor from the sale of such Investor's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Registration Statement under which such
Registrable Securities are to be registered under the Securities Act and (ii)
underwriter be required to undertake liability to any Person hereunder for any
amounts in excess of the aggregate discount, commission or other compensation
payable to such underwriter with respect to the Registrable Securities
underwritten by it and distributed pursuant to the Registration Statement.

          (6)  The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 6 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

          7.   Rule 144

                                      -13-
<PAGE>

          With a view to making available to the Investors the benefits of Rule
144 under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to
use its best efforts to:

          (1)  comply with the provisions of paragraph (c) (1) of Rule 144 and

          (2)  file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of any Investor, make available other information as required
by, and so long as necessary to permit sales of, its Registrable Securities
pursuant to Rule 144.

          8.   Assignment

          The rights to have the Company register Registrable Securities
pursuant to this Agreement shall be automatically assigned by the Investors to
any permitted transferee of all or any portion of such Registrable Securities
(or all or any portion of the Debenture or Warrant of the Company which is
convertible into such securities) only if (a) the Investor 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, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment, the securities so transferred or assigned to the
transferee or assignee constitute Restricted Securities and (d) at or before the
time the Company received the written notice contemplated by clause (b) of this
sentence the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein.

          9.   Amendment and Waiver

          Any provision 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 the written consent of the Company
and Investors who hold a majority-in-interest of the Registrable Securities.
Any amendment or waiver effected in accordance with this Section 9 shall be
binding upon each Investor and the Company.

          10.  Changes in Common Stock

          If, and as often as, there are any changes in the Common Stock by way
of stock split, stock dividend, reverse split, combination or reclassification,
or through merger, consolidation, reorganization or recapitalization, or by any
other means, appropriate adjustment shall be made in the provisions hereof, as
may be required, so that the rights and privileges granted hereby shall continue
with respect to the Common Stock as so changed.

                                      -14-
<PAGE>

          11.  Miscellaneous

          (1)  A person or entity shall be 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.

          (2)  If, after the date hereof and prior to the Commission declaring
the Registration Statement to be filed pursuant to Section 2(a) effective under
the Securities Act, the Company grants to any Person any registration rights
with respect to any Company securities which are more favorable to such other
Person than those provided in this Agreement, then the Company forthwith shall
grant (by means of an amendment to this Agreement or otherwise) identical
registration rights to all Investors hereunder.

          (3)  Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally, or sent by telecopier machine or by a
nationally recognized overnight courier service, and shall be deemed given when
so delivered personally, or by telecopier machine or overnight courier service
as follows:

               (1)  if to the Company, to:

                    Inforetech Wireless Technology Inc.
                    Suite 214
                    5500 - 152/nd/ Street
                    Surrey, British Columbia
                    Canada V3S-8E7
                    Attention:  Robert C. Silzer
                    Telecopier: 604.576.7401
                    Telephone:  604.576.7442

                    with a copy to:

                    Holmes Greenslade
                    1880-1066 West Hastings Street
                    Vancouver, British Columbia
                    Canada V6E 3X1
                    Attention:  John W. Greenslade
                    Telecopier: 604.688.0426
                    Telephone:  604.688.7861

               (2)  if to the Buyer, to:

                    The Shaar Fund Ltd.

                                      -15-
<PAGE>

                    c/o Levinson Capital Management, LLC
                    Suite 1820
                    2 World Trade Center
                    New York, New York 10048
                    Attention:  Sam Levinson
                    Telecopier: 212.432.7771
                    Telephone:  212.432.7711

                    with a copy to:

                    Herrick, Feinstein LLP
                    2 Park Avenue
                    New York, New York 10016
                    Attention:  Irwin A. Kishner
                    Telecopier: 212.592.1500
                    Telephone:  212.592.1435

               (3)  if to any other Investor, at such address as such Investor
     shall have provided in writing to the Company.

The Company, the Initial Investor or any Investor may change the foregoing
address by notice given pursuant to this Section 11(c).

               (4)  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.

               (5)  This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.

               (6)  The remedies provided in this Agreement are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

                                      -16-
<PAGE>

          (7)  The Company shall not enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Company is not currently a party to any agreement
granting any registration rights with respect to any of its securities to any
person which conflicts with the Company's obligations hereunder or gives any
other party the right to include any securities in any Registration Statement
filed pursuant hereto, except for such rights and conflicts as have been
irrevocably waived. Without limiting the generality of the foregoing, without
the written consent of the holders of a majority in interest of the Registrable
Securities, the Company shall not grant to any person the right to request it to
register any of its securities under the Securities Act unless the rights so
granted are subject in all respect to the prior rights of the holders of
Registrable Securities set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement. The restrictions on the
Company's rights to grant registration rights under this paragraph shall
terminate on the date the Registration Statement to be filed pursuant to Section
2(a) is declared effective by the Commission.

          (8)  This Agreement, the Securities Purchase Agreement, the Escrow
Instructions of even date herewith (the "Escrow Instructions") among the
Company, the Initial Investor and Herrick, Feinstein LLP, the Debenture and the
Warrant constitute the entire agreement among the parties hereto with respect to
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement,
the Securities Purchase Agreement, the Escrow Instructions, the Debenture and
the Warrant supersede all prior agreements and undertakings among the parties
hereto with respect to the subject matter hereof.

          (9)  Subject to the requirements of Section 8 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.

          (10) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

          (11) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.

          (12) The Company acknowledges that any failure by the Company to
perform its obligations under Section 3, or any delay in such performance, could
result in direct damages to the Investors and the Company agrees that, in
addition to any other liability the Company may have by reason of any such
failure or delay, the Company shall be liable for all direct damages caused by
such failure or delay.

          (13) This Agreement may be executed in two (2) counterparts, each of
which shall be deemed an original but both of which shall constitute one and the
same agreement. A facsimile transmission of this signed Agreement shall be legal
and binding on the parties hereto.

                    [REMAINDER OF PAGE INTENTIONALLY BLANK.
                         NEXT PAGE IS SIGNATURE PAGE.]

                                      -17-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be executed and delivered on the date first above written.

                              Inforetech Wireless Technology Inc.

                              By: /s/ Robert C. Silzer
                                  ----------------------------
                                  Name:  Robert C. Silzer
                                  Title: President

                              The Shaar Fund Ltd.
                              By: Shaar Advisory Services N.V.

                              By: /s/ Wim Langeveld
                                  ----------------------------
                                  Name:  Wim Langeveld
                                  Title: Managing Director

                                      -18-

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