Document:

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

      SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID
AFTER 5:00 P.M. EASTERN TIME ON [FIFTH ANNIVERSARY OF THE CLOSING DATE] (the
"EXPIRATION DATE").

No. Jan2004.02

                               IQ BIOMETRIX, INC.

                      WARRANT TO PURCHASE 18,750 SHARES OF
                     COMMON STOCK, PAR VALUE $0.01 PER SHARE

      For VALUE RECEIVED, Silverlake Holdings ("Warrantholder"), is entitled to
purchase, subject to the provisions of this Warrant, from IQ Biometrix, Inc., a
Delaware corporation ("Company"), at any time not later than 5:00 P.M., Eastern
time, on the Expiration Date (as defined above), at an exercise price per share
equal to $2.70 (the exercise price in effect being herein called the "Warrant
Price"), 18,750 shares ("Warrant Shares") of the Company's Common Stock, par
value $0.01 per share ("Common Stock"). The number of Warrant Shares purchasable
upon exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time as described herein.

      Section 1. Registration. The Company shall maintain books for the transfer
and registration of the Warrant. Upon the initial issuance of this Warrant, the
Company shall issue and register the Warrant in the name of the Warrantholder.

      Section 2. Transfers. As provided herein, this Warrant may be transferred
only pursuant to a registration statement filed under the Securities Act of
1933, as amended (the "Securities Act"), or an exemption from such registration.
Subject to such restrictions, the Company shall transfer this Warrant from time
to time upon the books to be maintained by the Company for that purpose, upon
surrender thereof for transfer properly endorsed or accompanied by appropriate
instructions for transfer and such other documents as may be reasonably required
by the Company, including, if required by the Company, an opinion of its counsel
to the effect that such transfer is exempt from the registration requirements of
the Securities Act, to establish that such transfer is being made in accordance
with the terms hereof, and a new Warrant shall be issued to the transferee and
the surrendered Warrant shall be canceled by the Company.

<PAGE>

      Section 3. Exercise of Warrant. Subject to the provisions hereof, the
Warrantholder may exercise this Warrant in whole or in part at any time prior to
its expiration upon surrender of the Warrant, together with delivery of the duly
executed Warrant exercise form attached hereto as Appendix A (the "Exercise
Agreement") and payment by cash, certified check or wire transfer of funds (or
by cash-less exercise as provided below) for the aggregate Warrant Price for
that number of Warrant Shares then being purchased, to the Company during normal
business hours on any business day at the Company's principal executive offices
(or such other office or agency of the Company as it may designate by notice to
the Warrantholder). The Warrant Shares so purchased shall be deemed to be issued
to the Warrantholder or the Warrantholder's designee, as the record owner of
such shares, as of the close of business on the date on which this Warrant shall
have been surrendered (or evidence of loss, theft or destruction thereof and
security or indemnity satisfactory to the Company), the Warrant Price shall have
been paid and the completed Exercise Agreement shall have been delivered.
Certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in the Exercise Agreement, shall be delivered to the
Warrantholder within a reasonable time, not exceeding three (3) business days,
after this Warrant shall have been so exercised. The certificates so delivered
shall be in such denominations as may be requested by the Warrantholder and
shall be registered in the name of the Warrantholder or such other name as shall
be designated by the Warrantholder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the
Warrantholder a new Warrant representing the number of shares with respect to
which this Warrant shall not then have been exercised. As used herein, "business
day" means a day, other than a Saturday or Sunday, on which banks in New York
City are open for the general transaction of business. Each exercise hereof
shall constitute the re-affirmation by the Warrantholder that the
representations and warranties contained in Section 5 of the Purchase Agreement
(as defined below) are true and correct in all material respects with respect to
the Warrantholder as of the time of such exercise.

      Section 4. Compliance with the Securities Act of 1933. Except as provided
in the Purchase Agreement (as defined below), the Company may cause the legend
set forth on the first page of this Warrant to be set forth on each Warrant or
similar legend on any security issued or issuable upon exercise of this Warrant,
unless counsel for the Company is of the opinion as to any such security that
such legend is unnecessary.

      Section 5. Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the Warrantholder in respect of which such shares are
issued, and in such case, the Company shall not be required to issue or deliver
any certificate for Warrant Shares or any Warrant until the person requesting
the same has paid to the Company the amount of such tax or has established to
the Company's reasonable satisfaction that such tax has been paid. The
Warrantholder shall be responsible for income taxes due under federal, state or
other law, if any such tax is due.

                                      -2-
<PAGE>

      Section 6. Mutilated or Missing Warrants. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if
requested by the Company.

      Section 7. Reservation of Common Stock. The Company hereby represents and
warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section
7, out of the authorized and unissued shares of Common Stock, sufficient shares
to provide for the exercise of the rights of purchase represented by this
Warrant. The Company agrees that all Warrant Shares issued upon due exercise of
the Warrant shall be, at the time of delivery of the certificates for such
Warrant Shares, duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock of the Company.

      Section 8. Adjustments. Subject and pursuant to the provisions of this
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.

            (a) If the Company shall, at any time or from time to time while
this Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares of
Common Stock into a smaller number of shares or issue by reclassification of its
outstanding shares of Common Stock any shares of its capital stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter exercising
the Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Warrantholder would have received if the Warrant
had been exercised immediately prior to such event upon payment of a Warrant
Price that has been adjusted to reflect a fair allocation of the economics of
such event to the Warrantholder. Such adjustments shall be made successively
whenever any event listed above shall occur.

            (b) If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation in which the Company is not the survivor, or sale, transfer or other
disposition of all or substantially all of the Company's assets to another
corporation shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each Warrantholder shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions herein specified and in lieu of the Warrant Shares
immediately theretofore issuable upon exercise of the Warrant, such shares of
stock, securities or assets as would have been issuable or payable with respect
to or in exchange for a number of Warrant Shares equal to the number of Warrant
Shares immediately theretofore issuable upon exercise of the Warrant, had such

                                      -3-
<PAGE>

reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of each Warrantholder to the end
that the provisions hereof (including, without limitation, provision for
adjustment of the Warrant Price) shall thereafter be applicable, as nearly
equivalent as may be practicable in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof. The Company shall not
effect any such consolidation, merger, sale, transfer or other disposition
unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger, or the corporation purchasing or otherwise acquiring such assets or
other appropriate corporation or entity shall assume the obligation to deliver
to the Warrantholder, at the last address of the Warrantholder appearing on the
books of the Company, such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Warrantholder may be entitled to
purchase, and the other obligations under this Warrant. The provisions of this
paragraph (b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.

            (c) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 8(a)), or
subscription rights or warrants, the Warrant Price to be in effect after such
payment date shall be determined by multiplying the Warrant Price in effect
immediately prior to such payment date by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price (as defined below) per share of Common Stock immediately prior
to such payment date, less the fair market value (as determined by the Company's
Board of Directors in good faith) of said assets or evidences of indebtedness so
distributed, or of such subscription rights or warrants, and the denominator of
which shall be the total number of shares of Common Stock outstanding multiplied
by such Market Price per share of Common Stock immediately prior to such payment
date. "Market Price" as of a particular date (the "Valuation Date") shall mean
the following: (a) if the Common Stock is then listed on a national stock
exchange, the closing sale price of one share of Common Stock on such exchange
on the last trading day prior to the Valuation Date; (b) if the Common Stock is
then quoted on The Nasdaq Stock Market, Inc. ("Nasdaq"), the National
Association of Securities Dealers, Inc. OTC Bulletin Board (the "Bulletin
Board") or such similar exchange or association, the closing sale price of one
share of Common Stock on Nasdaq, the Bulletin Board or such other exchange or
association on the last trading day prior to the Valuation Date or, if no such
closing sale price is available, the average of the high bid and the low asked
price quoted thereon on the last trading day prior to the Valuation Date; or (c)
if the Common Stock is not then listed on a national stock exchange or quoted on
Nasdaq, the Bulletin Board or such other exchange or association, the fair
market value of one share of Common Stock as of the Valuation Date, shall be
determined in good faith by the Board of Directors of the Company and the

                                      -4-
<PAGE>

Warrantholder. If the Common Stock is not then listed on a national securities
exchange, the Bulletin Board or such other exchange or association, the Board of
Directors of the Company shall respond promptly, in writing, to an inquiry by
the Warrantholder prior to the exercise hereunder as to the fair market value of
a share of Common Stock as determined by the Board of Directors of the Company.
In the event that the Board of Directors of the Company and the Warrantholder
are unable to agree upon the fair market value in respect of subpart (c) hereof,
the Company and the Warrantholder shall jointly select an appraiser, who is
experienced in such matters. The decision of such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne equally by the Company
and the Warrantholder. Such adjustment shall be made successively whenever such
a payment date is fixed.

            (d) An adjustment to the Warrant Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an
adjustment.

            (e) In the event that, as a result of an adjustment made pursuant to
this Section 8, the Warrantholder shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the number of
such other shares so receivable upon exercise of this Warrant shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant Shares
contained in this Warrant.

            (f) Except as provided in subsection (g) hereof, if and whenever the
Company shall issue or sell, or is, in accordance with any of subsections (f)(l)
through (f)(7) hereof, deemed to have issued or sold, any shares of Common Stock
for no consideration or for a consideration per share less than the Warrant
Price in effect immediately prior to the time of such issue or sale, then and in
each such case (a "Trigger Issuance") the then-existing Warrant Price, shall be
reduced, as of the close of business on the effective date of the Trigger
Issuance, to a price determined as follows:

                  Adjusted Warrant Price = (A x B) + D
                                           -----------
                                            A+C

                  where

                  "A" equals the number of shares of Common Stock outstanding,
including Additional Shares of Common Stock (as defined below) deemed to be
issued hereunder, immediately preceding such Trigger Issuance;

                  "B" equals the Warrant Price in effect immediately preceding
such Trigger Issuance;

                  "C" equals the number of Additional Shares of Common Stock
issued or deemed issued hereunder as a result of the Trigger Issuance; and

                  "D" equals the aggregate consideration, if any, received or
deemed to be received by the Company upon such Trigger Issuance;

                                      -5-
<PAGE>

provided, however, that in no event shall the Warrant Price after giving effect
to such Trigger Issuance be greater than the Warrant Price in effect prior to
such Trigger Issuance.

            For purposes of this subsection (f), "Additional Shares of Common
Stock" shall mean all shares of Common Stock issued by the Company or deemed to
be issued pursuant to this subsection (f), other than Excluded Issuances (as
defined in subsection (g) hereof).

            For purposes of this subsection (f), the following subsections
(f)(l) to (f)(7) shall also be applicable:

                  (f)(1) Issuance of Rights or Options. In case at any time the
            Company shall in any manner grant (directly and not by assumption in
            a merger or otherwise) any warrants or other rights to subscribe for
            or to purchase, or any options for the purchase of, Common Stock or
            any stock or security convertible into or exchangeable for Common
            Stock (such warrants, rights or options being called "Options" and
            such convertible or exchangeable stock or securities being called
            "Convertible Securities") whether or not such Options or the right
            to convert or exchange any such Convertible Securities are
            immediately exercisable, and the price per share for which Common
            Stock is issuable upon the exercise of such Options or upon the
            conversion or exchange of such Convertible Securities (determined by
            dividing (i) the sum (which sum shall constitute the applicable
            consideration) of (x) the total amount, if any, received or
            receivable by the Company as consideration for the granting of such
            Options, plus (y) the aggregate amount of additional consideration
            payable to the Company upon the exercise of all such Options, plus
            (z), in the case of such Options which relate to Convertible
            Securities, the aggregate amount of additional consideration, if
            any, payable upon the issue or sale of such Convertible Securities
            and upon the conversion or exchange thereof, by (ii) the total
            maximum number of shares of Common Stock issuable upon the exercise
            of such Options or upon the conversion or exchange of all such
            Convertible Securities issuable upon the exercise of such Options)
            shall be less than the Warrant Price in effect immediately prior to
            the time of the granting of such Options, then the total number of
            shares of Common Stock issuable upon the exercise of such Options or
            upon conversion or exchange of the total amount of such Convertible
            Securities issuable upon the exercise of such Options shall be
            deemed to have been issued for such price per share as of the date
            of granting of such Options or the issuance of such Convertible
            Securities and thereafter shall be deemed to be outstanding for
            purposes of adjusting the Warrant Price. Except as otherwise
            provided in subsection 8(f)(3), no adjustment of the Warrant Price
            shall be made upon the actual issue of such Common Stock or of such
            Convertible Securities upon exercise of such Options or upon the
            actual issue of such Common Stock upon conversion or exchange of
            such Convertible Securities.

                  (f)(2) Issuance of Convertible Securities. In case the Company
            shall in any manner issue (directly and not by assumption in a
            merger or otherwise) or sell any Convertible Securities, whether or
            not the rights to exchange or convert any such Convertible

                                      -6-
<PAGE>

            Securities are immediately exercisable, and the price per share for
            which Common Stock is issuable upon such conversion or exchange
            (determined by dividing (i) the sum (which sum shall constitute the
            applicable consideration) of (x) the total amount received or
            receivable by the Company as consideration for the issue or sale of
            such Convertible Securities, plus (y) the aggregate amount of
            additional consideration, if any, payable to the Company upon the
            conversion or exchange thereof, by (ii) the total number of shares
            of Common Stock issuable upon the conversion or exchange of all such
            Convertible Securities) shall be less than the Warrant Price in
            effect immediately prior to the time of such issue or sale, then the
            total maximum number of shares of Common Stock issuable upon
            conversion or exchange of all such Convertible Securities shall be
            deemed to have been issued for such price per share as of the date
            of the issue or sale of such Convertible Securities and thereafter
            shall be deemed to be outstanding for purposes of adjusting the
            Warrant Price, provided that (a) except as otherwise provided in
            subsection 8(f)(3), no adjustment of the Warrant Price shall be made
            upon the actual issuance of such Common Stock upon conversion or
            exchange of such Convertible Securities and (b) no further
            adjustment of the Warrant Price shall be made by reason of the issue
            or sale of Convertible Securities upon exercise of any Options to
            purchase any such Convertible Securities for which adjustments of
            the Warrant Price have been made pursuant to the other provisions of
            subsection 8(f).

                  (f)(3) Change in Option Price or Conversion Rate. Upon the
            happening of any of the following events, namely, if the purchase
            price provided for in any Option referred to in subsection 8(f)(l)
            hereof, the additional consideration, if any, payable upon the
            conversion or exchange of any Convertible Securities referred to in
            subsections 8(f)(l) or 8(f)(2), or the rate at which Convertible
            Securities referred to in subsections 8(f)(l) or 8(f)(2) are
            convertible into or exchangeable for Common Stock shall change at
            any time (including, but not limited to, changes under or by reason
            of provisions designed to protect against dilution), the Warrant
            Price in effect at the time of such event shall forthwith be
            readjusted to the Warrant Price which would have been in effect at
            such time had such Options or Convertible Securities still
            outstanding provided for such changed purchase price, additional
            consideration or conversion rate, as the case may be, at the time
            initially granted, issued or sold. On the termination of any Option
            for which any adjustment was made pursuant to this subsection 8(f)
            or any right to convert or exchange Convertible Securities for which
            any adjustment was made pursuant to this subsection 8(f) (including
            without limitation upon the redemption or purchase for consideration
            of such Convertible Securities by the Company), the Warrant Price
            then in effect hereunder shall forthwith be changed to the Warrant
            Price which would have been in effect at the time of such
            termination had such Option or Convertible Securities, to the extent
            outstanding immediately prior to such termination, never been
            issued.

                  (f)(4) Stock Dividends. Subject to the provisions of this
            Section 8(f), in case the Company shall declare a dividend or make
            any other distribution upon any stock of the Company (other than the
            Common Stock) payable in Common Stock, Options or Convertible

                                      -7-
<PAGE>

            Securities, then any Common Stock, Options or Convertible
            Securities, as the case may be, issuable in payment of such dividend
            or distribution shall be deemed to have been issued or sold without
            consideration.

                  (f)(5) Consideration for Stock. In case any shares of Common
            Stock, Options or Convertible Securities shall be issued or sold for
            cash, the consideration received therefor shall be deemed to be the
            net amount received by the Company therefor, after deduction
            therefrom of any expenses incurred or any underwriting commissions
            or concessions paid or allowed by the Company in connection
            therewith. In case any shares of Common Stock, Options or
            Convertible Securities shall be issued or sold for a consideration
            other than cash, the amount of the consideration other than cash
            received by the Company shall be deemed to be the fair value of such
            consideration as determined in good faith by the Board of Directors
            of the Company, after deduction of any expenses incurred or any
            underwriting commissions or concessions paid or allowed by the
            Company in connection therewith. In case any Options shall be issued
            in connection with the issue and sale of other securities of the
            Company, together comprising one integral transaction in which no
            specific consideration is allocated to such Options by the parties
            thereto, such Options shall be deemed to have been issued for such
            consideration as determined in good faith by the Board of Directors
            of the Company. If Common Stock, Options or Convertible Securities
            shall be issued or sold by the Company and, in connection therewith,
            other Options or Convertible Securities (the "Additional Rights")
            are issued, then the consideration received or deemed to be received
            by the Company shall be reduced by the fair market value of the
            Additional Rights (as determined using the Black-Scholes option
            pricing model or another method mutually agreed to by the Company
            and the Warrantholder). The Board of Directors of the Company shall
            respond promptly, in writing, to an inquiry by the Warrantholder as
            to the fair market value of the Additional Rights. In the event that
            the Board of Directors of the Company and the Warrantholder are
            unable to agree upon the fair market value of the Additional Rights,
            the Company and the Warrantholder shall jointly select an appraiser,
            who is experienced in such matters. The decision of such appraiser
            shall be final and conclusive, and the cost of such appraiser shall
            be borne evenly by the Company and the Warrantholder.

                  (f)(6) Record Date. In case the Company shall take a record of
            the holders of its Common Stock for the purpose of entitling them
            (i) to receive a dividend or other distribution payable in Common
            Stock, Options or Convertible Securities or (ii) to subscribe for or
            purchase Common Stock, Options or Convertible Securities, then such
            record date shall be deemed to be the date of the issue or sale of
            the shares of Common Stock deemed to have been issued or sold upon
            the declaration of such dividend or the making of such other
            distribution or the date of the granting of such right of
            subscription or purchase, as the case may be.

                  (f)(7) Treasury Shares. The number of shares of Common Stock
            outstanding at any given time shall not include shares owned or held

                                      -8-
<PAGE>

            by or for the account of the Company or any of its wholly-owned
            subsidiaries, and the disposition of any such shares (other than the
            cancellation or retirement thereof) shall be considered an issue or
            sale of Common Stock for the purpose of this subsection (f).

            (g) Anything herein to the contrary notwithstanding, the Company
shall not be required to make any adjustment of the Warrant Price in the case of
the issuance of (A) capital stock, Options or Convertible Securities issued to
directors, officers, employees or consultants of the Company in connection with
their service as directors of the Company, their employment by the Company or
their retention as consultants by the Company pursuant to an equity compensation
program approved by the Board of Directors of the Company or the compensation
committee of the Board of Directors of the Company, (B) shares of Common Stock
issued upon the conversion or exercise of Options or Convertible Securities
issued prior to the date hereof, provided such securities are not amended after
the date hereof to increase the number of shares of Common Stock issuable
thereunder, (C) securities issued pursuant to that certain Purchase Agreement
dated December 30, 2004, among the Company and the Investors named therein (the
"Purchase Agreement") and securities issued upon the exercise or conversion of
those securities, and (D) shares of Common Stock issued or issuable by reason of
a dividend, stock split or other distribution on shares of Common Stock (but
only to the extent that such a dividend, split or distribution results in an
adjustment in the Warrant Price pursuant to the other provisions of this
Warrant) (collectively, "Excluded Issuances").

            (h) Upon any adjustment to the Warrant Price pursuant to Section
8(f) above, the number of Warrant Shares purchasable hereunder shall be adjusted
by multiplying such number by a fraction, the numerator of which shall be the
Warrant Price in effect immediately prior to such adjustment and the denominator
of which shall be the Warrant Price in effect immediately thereafter.

      Section 9. Fractional Interest. The Company shall not be required to issue
fractions of Warrant Shares upon the exercise of this Warrant. If any fractional
share of Common Stock would, except for the provisions of the first sentence of
this Section 9, be deliverable upon such exercise, the Company, in lieu of
delivering such fractional share, shall pay to the exercising Warrantholder an
amount in cash equal to the Market Price of such fractional share of Common
Stock on the date of exercise.

      Section 10. Extension of Expiration Date. If the Company fails to cause
any Registration Statement covering Registrable Securities (unless otherwise
defined herein, capitalized terms are as defined in the Registration Rights
Agreement relating to the Warrant Shares (the "Registration Rights Agreement"))
to be declared effective prior to the applicable dates set forth therein, or if
any of the events specified in Section 2(c)(ii) of the Registration Rights
Agreement occurs, and the Blackout Period (whether alone, or in combination with
any other Blackout Period) continues for more than 60 days in any 12 month
period, or for more than a total of 90 days, then the Expiration Date of this
Warrant shall be extended one day for each day beyond the 60-day or 90-day
limits, as the case may be, that the Blackout Period continues.

                                      -9-
<PAGE>

      Section 11. Benefits. Nothing in this Warrant shall be construed to give
any person, firm or corporation (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.

      Section 12. Notices to Warrantholder. Upon the happening of any event
requiring an adjustment of the Warrant Price, the Company shall promptly give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Failure to give such notice to the Warrantholder or any
defect therein shall not affect the legality or validity of the subject
adjustment.

      Section 13. Identity of Transfer Agent. The Transfer Agent for the Common
Stock is American Stock Transfer & Trust Co.. Upon the appointment of any
subsequent transfer agent for the Common Stock or other shares of the Company's
capital stock issuable upon the exercise of the rights of purchase represented
by the Warrant, the Company will mail to the Warrantholder a statement setting
forth the name and address of such transfer agent.

      Section 14. Notices. Unless otherwise provided, any notice required or
permitted under this Warrant shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or facsimile, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one business day after
delivery to such carrier. All notices shall be addressed as follows: if to the
Warrantholder, at its address as set forth in the Company's books and records
and, if to the Company, at the address as follows, or at such other address as
the Warrantholder or the Company may designate by ten days' advance written
notice to the other:

                           If to the Company:

                                    IQ Biometrix, Inc.
                                    39111 Paseo Padre Parkway, Suite 304
                                    Fremont, California 94538
                                    Attention: Michael Walsh
                                    Fax: (510) 713-0206

                           With a copy to:

                                    The Crone Law Group
                                    201 Mission Street, Suite 1930
                                    San Francisco, California 94105
                                    Attention:  Mark E. Crone, Esq.
                                    Fax:  (415) 495-8901

                                      -10-
<PAGE>

      Section 15. Registration Rights. The initial Warrantholder is entitled to
the benefit of certain registration rights with respect to the shares of Common
Stock issuable upon the exercise of this Warrant as provided in the Registration
Rights Agreement, and any subsequent Warrantholder may be entitled to such
rights.

      Section 16. Successors. All the covenants and provisions hereof by or for
the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.

      Section 17. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law
provisions thereof. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant
and the transactions contemplated hereby. Service of process in connection with
any such suit, action or proceeding may be served on each party hereto anywhere
in the world by the same methods as are specified for the giving of notices
under this Warrant. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of venue in such court.
The Company and, by accepting this Warrant, the Warrantholder, each irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE
WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

      Section 18. Call Provision. Notwithstanding any other provision contained
herein to the contrary, in the event that the closing bid price of a share of
Common Stock as traded on the Bulletin Board (or such other exchange or stock
market on which the Common Stock may then be listed or quoted) equals or exceeds
200% of the Warrant Price then in effect for twenty (20) consecutive trading
days commencing after the Registration Statement (as defined in the Registration
Rights Agreement) has been declared effective, the Company, upon thirty (30)
days prior written notice (the "Notice Period") given to the Warrantholder
within one business day immediately following the end of such twenty (20)
trading day period, may call this Warrant, in whole but not in part, at a
redemption price equal to $0.01 per share of Common Stock then purchasable
pursuant to this Warrant; provided that (i) the Company simultaneously calls all
Company Warrants (as defined below) on the same terms and (ii) all of the shares
of Common Stock issuable hereunder either (A) are registered pursuant to an

                                      -11-
<PAGE>

effective Registration Statement (as defined in the Registration Rights
Agreement) which has not been suspended and for which no stop order is in
effect, and pursuant to which the Warrantholder is able to sell such shares of
Common Stock at all times during the Notice Period or (B) no longer constitute
Registrable Securities (as defined in the Registration Rights Agreement).
Notwithstanding any such notice by the Company, the Warrantholder shall have the
right to exercise this Warrant prior to the end of the Notice Period.

      Section 19. Cashless Exercise. The Warrantholder may elect to receive,
without the payment by the Warrantholder of the aggregate Warrant Price in
respect of the shares of Common Stock to be acquired, shares of Common Stock
equal to the value of this Warrant or any portion hereof by the surrender of
this Warrant (or such portion of this Warrant being so exercised) together with
the Net Issue Election Notice annexed hereto as Appendix B duly executed, at the
office of the Company. Thereupon, the Company shall issue to the Warrantholder
such number of fully paid, validly issued and nonassessable shares of Common
Stock as is computed using the following formula:

                                  X = Y (A - B)
                                          A

where

                  X = the number of shares of Common Stock which the
Warrantholder has then requested be issued to the Warrantholder;

                  Y = the total number of shares of Common Stock covered by this
Warrant which the Warrantholder has surrendered at such time for cash-less
exercise (including both shares to be issued to the Warrantholder and shares to
be canceled as payment therefor);

                  A = the "Market Price" of one share of Common Stock as at the
time the net issue election is made; and

                  B = the Warrant Price in effect under this Warrant at the time
the net issue election is made.

      Section 20. No Rights as Stockholder. Prior to the exercise of this
Warrant, the Warrantholder shall not have or exercise any rights as a
stockholder of the Company by virtue of its ownership of this Warrant.

      Section 21. Amendment; Waiver. This Warrant is one of a series of Warrants
of like tenor issued by the Company pursuant to the Purchase Agreement and
initially covering an aggregate of 825,000 shares of Common Stock (collectively,
the "Company Warrants"). Any term of this Warrant may be amended or waived
(including the adjustment provisions included in Section 8 of this Warrant) upon
the written consent of the Company and the holders of Company Warrants
representing at least 50% of the number of shares of Common Stock then subject
to all outstanding Company Warrants (the "Majority Holders"); provided, that (x)

                                      -12-
<PAGE>

any such amendment or waiver must apply to all Company Warrants; and (y) the
number of Warrant Shares subject to this Warrant, the Warrant Price and the
Expiration Date may not be amended, and the right to exercise this Warrant may
not be altered or waived, without the written consent of the Warrantholder.

      Section 22. Section Headings. The section headings in this Warrant are for
the convenience of the Company and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.

                                      -13-
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, as of the 11th day of January, 2005.

                                IQ BIOMETRIX, INC.

                                By: /s/ William B.G. Scigliano
                                    ------------------------------
                                Name: William B.G. Scigliano
                                Title:  Chief Executive Officer and President

                                      -14-
<PAGE>

                                   APPENDIX A
                               IQ BIOMETRIX, INC.
                              WARRANT EXERCISE FORM

To IQ Biometrix, Inc.:

      The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant,
_______________ shares of Common Stock ("Warrant Shares") provided for therein,
and requests that certificates for the Warrant Shares be issued as follows:

                           -------------------------------
                           Name
                           --------------------------------
                           Address
                           --------------------------------
                           --------------------------------
                           Federal Tax ID or Social Security No.

      and delivered by (certified mail to the above address, or (electronically
(provide DWAC Instructions:___________________), or (other (specify):
__________________________________________).

and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of this Warrant be registered in
the name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.

Dated: ___________________, ____

Note:  The signature must correspond with
the name of the Warrantholder as written
on the first page of the Warrant in every
particular, without alteration or enlargement
or any change whatever, unless the Warrant
has been assigned.

 Signature:______________________________

 ______________________________
          Name (please print)

          ______________________________
          ______________________________
          Address
          ______________________________
          Federal Identification or
          Social Security No.

          Assignee:
          ______________________________
          ______________________________

                                      -15-
<PAGE>

                                   APPENDIX B
                               IQ BIOMETRIX, INC.
                            NET ISSUE ELECTION NOTICE

To: IQ Biometrix, Inc.

Date:[_________________________]

      The undersigned hereby elects under Section 19 of this Warrant to
surrender the right to purchase [____________] shares of Common Stock pursuant
to this Warrant and hereby requests the issuance of [_____________] shares of
Common Stock. The certificate(s) for the shares issuable upon such net issue
election shall be issued in the name of the undersigned or as otherwise
indicated below.

-----------------------------------------
Signature

-----------------------------------------
Name for Registration

-----------------------------------------
Mailing Address

                                      -16-EXHIBIT A

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

                            5% CONVERTIBLE DEBENTURE

US $500,000.00                                                        1/11/2005

            FOR VALUE RECEIVED, IQ Biometrix, Inc., a Delaware corporation (the
"Company"), hereby unconditionally promises to pay to the order of Enable Growth
Partners (the "Holder"), having an address at ______________________, at such
address or at such other place as may be designated in writing by the Holder, or
its assigns, the aggregate principal sum of Five Hundred Thousand United States
Dollars ($500,000.00), together with interest from the date set forth above on
the unpaid principal balance of this Debenture outstanding at a rate equal to
five percent (5.0%) (computed on the basis of the actual number of days elapsed
in a 360-day year) per annum and continuing on the outstanding principal until
this 5% Convertible Debenture (the "Debenture") is converted into Common Stock
as provided herein or indefeasibly and irrevocably paid in full by the Company.
Interest on this Debenture shall be payable quarterly on the last day of March,
June, September and December of each year (each, an "Interest Payment Date"),
commencing on March 31, 2005, to the Holder of record on the immediately
preceding March 15, June 15, September 15 or December 15, as applicable (each,
an "Interest Record Date"). Subject to the other provisions of this Debenture,
the principal of this Debenture and all accrued and unpaid interest hereon shall
mature and become due and payable on June 30, 2005 (the "Stated Maturity Date").
Except as provided herein, all payments of principal and interest by the Company
under this Debenture shall be made in United States dollars in immediately
available funds to an account specified by the Holder. At the option of the
Company, interest due hereunder may be paid by the issuance to the Holder within
two (2) business days of an Interest Payment Date of a number (rounded downward
to the nearest whole share) of newly issued, fully paid and non-assessable
shares (the "Interest Shares") of the Company's common stock, par value $0.01
per share ("Common Stock"), equal to the interest amount owed divided by the
Share Price (as defined below). As defined herein, "Share Price" means the
effective purchase price per share at which the Company has agreed to issue
shares of Common Stock pursuant to the terms of the Purchase Agreement (as
defined below) (appropriately adjusted for any stock split, reverse stock split,
stock dividend or other reclassification or combination of the Common Stock
occurring after the date hereof).The Company shall reserve a sufficient number
of duly authorized but unissued shares of Common Stock to meet its obligations
hereunder.

<PAGE>

            In the event that any amount due hereunder is not paid when due,
such overdue amount shall bear interest at an annual rate of twelve percent
(12%) until paid. Any such overdue interest shall be payable upon demand in
cash. In no event shall any interest charged, collected or reserved under this
Debenture exceed the maximum rate then permitted by applicable law and if any
such payment is paid by the Company, then such excess sum shall be credited by
the Holder as a payment of principal.

            This Debenture is one of a series of Debentures (the "Company
Debentures") of like tenor in an aggregate principal amount of [Three Million
Three Hundred Thousand United States Dollars ($3,300,000)] issued by the Company
pursuant to the terms of the Purchase Agreement.

      1. Definitions. Capitalized terms used herein shall have the respective
meanings ascribed thereto in the Purchase Agreement unless otherwise defined
herein. Unless the context otherwise requires, when used herein the following
terms shall have the meaning indicated:

            "Additional Rights" has the meaning set forth in Section 4 hereof.

            "Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly through one or more intermediaries Controls, is
controlled by, or is under common control with, such Person.

            "Board" shall mean the Board of Directors of Company.

            "Business Day" other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

            "Change of Control" means, at any time (i) any Person or any Persons
acting together that would constitute a "group" for purposes of Section 13(d)
under the 1934 Act, or any successor provision thereto, shall acquire beneficial
ownership (within the meaning of Rule 13d-3 under the 1934 Act, or any successor
provision thereto) in a single transaction or a series of related transactions,
of more than 50% of the aggregate voting power of the Company; or (ii) the
Company merges into or consolidates with any other Person, or any Person merges
into or consolidates with the Company and, after giving effect to such
transaction, the stockholders of the Company immediately prior to such
transaction own less than 50% of the aggregate voting power of the Company or
the successor entity of such transaction; or (iii) the Company sells or
transfers its assets, as an entirety or substantially as an entirety, to another
Person and the stockholders of the Company immediately prior to such transaction
own less than 50% of the aggregate voting power of the acquiring entity
immediately after the transaction; or (iv) any "change of control" or similar
event under any loan agreement, mortgage, indenture or other agreement relating
to any indebtedness for borrowed money of the Company shall occur; or (v) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board (together with any new directors whose election by
the stockholders of the Company was proposed by a vote of the majority of
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office. Notwithstanding the foregoing, the Wherify Merger shall
not constitute a Change of Control provided that the Wherify Merger is
consummated on substantially the terms existing on the date hereof.

                                      -2-
<PAGE>

            "Common Stock" has the meaning set forth in the first paragraph
hereof.

            "Company" has the meaning set forth in the first paragraph hereof.

            "Company Debentures" has the meaning set forth in the third
paragraph hereof.

            "Control" (including the terms "controlling", "controlled by" or
"under common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise

            "Conversion Price" shall mean initially $2.00 per share, subject to
adjustment as provided in Section 6.

            "Convertible Securities" has the meaning set forth in Section 4
hereof.

            "Debenture" has the meaning set forth in the first paragraph hereof.

            "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.

            "Event of Default" has the meaning set forth in Section 6 hereof.

            "Excluded Issuances" has the meaning set forth in Section 4 hereof.

            "Holder" has the meaning set forth in the first paragraph hereof.

            "Indebtedness" has the meaning set forth in Section 7 hereof.

            "Interest Payment Date" has the meaning set forth in the first
paragraph hereof.

            "Interest Record Date" has the meaning set forth in the first
paragraph hereof.

            "Interest Shares" has the meaning set forth in the first paragraph
hereof.

            "Investors" has the meaning set forth in the Purchase Agreement.

            "Mandatory Conversion Date" has the meaning set forth in Section 6
hereof.

            "Market Price", as of a particular date (the "Valuation Date"),
shall mean the following with respect to any class of securities: (A) if such
security is then listed on a national stock exchange, the Market Price shall be
the closing bid price of one share of such security on such exchange on the last
Trading Day prior to the Valuation Date, provided that if such security has not
traded in the prior ten (10) trading sessions, the Market Price shall be the
average closing bid price of such security in the most recent ten (10) trading
sessions during which such security has traded; (B) if such security is then
included in The Nasdaq Stock Market, Inc. ("Nasdaq"), the Market Price shall be
the closing bid price of one share of such security on Nasdaq on the last
Trading Day prior to the Valuation Date or, if no such closing sale price is
available, the average of the high bid and the low ask price quoted on Nasdaq as
of the end of the last Trading Day prior to the Valuation Date, provided that if
such security has not traded in the prior ten (10) trading sessions, the Market
Price shall be the average closing price of one share of such security in the
most recent ten (10) trading sessions during which such security has traded; (C)
if such security is then included in the Over-the-Counter Bulletin Board, the
Market Price shall be the closing sale price of one share of such security on
the Over-the-Counter Bulletin Board on the last Trading Day prior to the
Valuation Date or, if no such closing sale price is available, the average of
the high bid and the low ask price quoted on the Over-the-Counter Bulletin Board

                                      -3-
<PAGE>

as of the end of the last Trading Day prior to the Valuation Date, provided that
if such stock has not traded in the prior ten (10) trading sessions, the Market
Price shall be the average closing price of one share of such security in the
most recent ten (10) trading sessions during which such security has traded; or
(D) if such security is then included in the "pink sheets," the Market Price
shall be the closing sale price of one share of such security on the "pink
sheets" on the last Trading Day prior to the Valuation Date or, if no such
closing sale price is available, the average of the high bid and the low ask
price quoted on the "pink sheets" as of the end of the last Trading Day prior to
the Valuation Date, provided that if such stock has not traded in the prior ten
(10) trading sessions, the Market Price shall be the average closing price of
one share of such security in the most recent ten (10) trading sessions during
which such security has traded.

            "Options" has the meaning set forth in Section 4 hereof.

            "Permitted Indebtedness" means:

            (a) Indebtedness existing on the Closing Date and refinancings,
renewals and extensions of any such Indebtedness if the average life to maturity
thereof is greater than or equal to that of the Indebtedness being refinanced or
extended and if the principal amount thereof is not increased;

            (b) Deferred taxes;

            (c) Guaranties by any Subsidiary of any "Permitted Indebtedness" of
the Company or another Subsidiary; and

            (d) Indebtedness of the Company to any Subsidiary and Indebtedness
of any Subsidiary to another Subsidiary which constitutes "Permitted
Indebtedness".

            "Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.

            "Purchase Agreement" shall mean the Purchase Agreement, dated as of
December 30, 2005, and as that agreement may be amended from time to time, by
and among the Company and the Investors.

            "Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of [date], and as that agreement may be amended from time to
time, by and among the Company and the Investors.

            "Repurchase Date" has the meaning set forth in Section 4 hereof.

            "Repurchase Notice" has the meaning set forth in Section 4 hereof.

            "Repurchase Price" has the meaning set forth in Section 4 hereof.

            "Required Holders" means collectively, (i) any holder of Company
Debentures who, together with its Affiliates, holds 20% or more of the
outstanding principal amount of the Company Debentures, and (ii) the holders of
at least a majority of the outstanding Company Debentures.

            "Stated Maturity Date" has the meaning set forth in the first
paragraph hereof.

                                      -4-
<PAGE>

            "Subsidiary" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board or other governing
body (or, if there are no such voting interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such first Person.

            "Trading Day" means (i) if the relevant stock or security is listed
or admitted for trading on The New York Stock Exchange, Inc. or any other
national securities exchange, a day on which such exchange is open for business;
(ii) if the relevant stock or security is quoted on the Nasdaq Stock Market or
any other system of automated dissemination of quotations of securities prices,
a day on which trades may be effected through such system; or (iii) if the
relevant stock or security is not listed or admitted for trading on any national
securities exchange or quoted on the Nasdaq Stock Market or any other system of
automated dissemination of quotation of securities prices, a day on which the
relevant stock or security is traded in a regular way in the over-the-counter
market and for which a closing bid and a closing asked price for such stock or
security are available, shall mean a day, other than a Saturday or Sunday, on
which The New York Stock Exchange, Inc. is open for trading.

            "Trigger Issuance" has the meaning set forth in Section 4 hereof.

            "Wherify Merger" means the merger of Wherify Acquisition, Inc. with
and into Wherify Wireless, Inc. pursuant to the Agreement and Plan of Merger,
dated as of April 14, 2004, among the Company, Wherify Acquisition, Inc. and
Wherify Wireless, Inc., as amended prior to the date hereof.

            Purchase Agreement. This Debenture is one of the several 5%
Convertible Debentures of the Company issued pursuant to the Purchase Agreement.
This Debenture is subject to the terms and conditions of, and entitled to the
benefit of, the provisions of the Purchase Agreement. This Debenture is
transferable and assignable to any Person to whom such transfer is permissible
under the Purchase Agreement and applicable law. The Company agrees to issue
from time to time a replacement Debenture in the form hereof to facilitate such
transfers and assignments. In addition, after delivery of an indemnity in form
and substance reasonably satisfactory to the Company, the Company also agrees to
promptly issue a replacement Debenture if this Debenture is lost, stolen,
mutilated or destroyed.

      2. No Right of Prepayment or Redemption. Except as provided in Section 6
hereof, this Debenture shall not be prepayable or redeemable by the Company
prior to the Stated Maturity Date.

      3. Repurchase of the Debenture at the Option of the Holder Upon Change of
Control.

            (a) If a Change of Control occurs, this Debenture shall be purchased
by the Company, at the option of the Holder thereof, at a cash purchase price
equal to 130% of the principal amount of this Debenture plus accrued and unpaid
interest (the "Repurchase Price") to, but not including, the date that is 30
days following the date of the notice of a Change of Control delivered by the
Company pursuant to clause (b) below (the "Repurchase Date"), subject to
satisfaction by or on behalf of the Holder of the requirements set forth in
clause (c) below. If the Repurchase Date is on a date that is after an Interest

                                      -5-
<PAGE>

Record Date and on or prior to the corresponding Interest Payment Date, the
Company shall pay such interest to the holder of record on the corresponding
Interest Record Date and the Repurchase Price shall not include accrued
interest.

            (b) No later than 30 days after the occurrence of a Change of
Control, the Company shall give written notice thereof to the Holder, which
notice shall include a form of repurchase notice to be completed by the Holder
and shall (i) state briefly, the events causing a Change of Control and the date
of such Change of Control, (ii) specify the Repurchase Price and (iii) the
Repurchase Date.

            (c) The Holder may exercise its rights specified in this Section 4
upon delivery to the Company of (i) a written notice of purchase (a "Repurchase
Notice") to the Company at any time on or prior to 5:00 p.m., New York time, on
the Repurchase Date stating the portion of the Debenture which the Holder will
deliver to be purchased, which portion must be in principal amounts of $1,000 or
an integral multiple of $1,000, and irrevocably agreeing that such principal
amount of the Debenture shall be purchased by the Company as of the Repurchase
Date and (ii) this Debenture.

            (d) In the event that this Debenture is repurchased in part, upon
surrender of this Debenture, the Company shall execute and deliver to the Holder
a new Debenture equal in principal amount to the unpurchased portion of the
Debenture surrendered.

      4. Conversion Rights.

            (a) Subject to and upon compliance with the provisions of this
Debenture, prior to the Stated Maturity Date, the Holder shall have the right,
at its option at any time, to convert some or all of the Debenture into such
number of fully paid and nonassessable shares of Common Stock as is obtained by:
(i) adding (A) the principal amount of this Debenture to be converted and (B)
the amount of any accrued but unpaid interest with respect to such portion of
this Debenture to be converted; and (ii) dividing the result obtained pursuant
to clause (i) above by the Conversion Price then in effect The rights of
conversion set forth in this Section 4 shall be exercised by the Holder by
giving written notice to the Company that the Holder elects to convert a stated
amount of this Debenture into Common Stock and by surrender of this Debenture
(or, in lieu thereof, by delivery of an appropriate lost security affidavit in
the event this Debenture shall have been lost or destroyed) to the Company at
its principal office (or such other office or agency of the Company as the
Company may designate by notice in writing to the Holder) at any time on the
date set forth in such notice (which date shall not be earlier than the
Company's receipt of such notice), together with a statement of the name or
names (with address) in which the certificate or certificates for shares of
Common Stock shall be issued.

            (b) Promptly after receipt of the written notice referred to in
Section 4(a) above and surrender of this Debenture (or, in lieu thereof, by
delivery of an appropriate lost security affidavit in the event this Debenture
shall have been lost or destroyed), but in no event more than five (5) Business
Days thereafter, the Company shall issue and deliver, or cause to be issued and
delivered, to the Holder, registered in such name or names as the Holder may
direct in writing, a certificate or certificates for the number of whole shares
of Common Stock issuable upon the conversion of such portion of this Debenture.
To the extent permitted by law, such conversion shall be deemed to have been
effected, and the Conversion Price shall be determined, as of the close of

                                      -6-
<PAGE>

business on the date on which such written notice shall have been received by
the Company and this Debenture shall have been surrendered as aforesaid (or, in
lieu thereof, an appropriate lost security affidavit has been delivered to the
Company), and at such time, the rights of the Holder shall cease with respect to
the principal amount and accrued interest of the Debentures being converted, and
the Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby.

            (c) No fractional shares shall be issued upon any conversion of this
Debenture into Common Stock. If any fractional share of Common Stock would,
except for the provisions of the first sentence of this Section 4(c), be
delivered upon such conversion, the Company, in lieu of delivering such
fractional share, shall pay to the Holder an amount in cash equal to the Market
Price of such fractional share of Common Stock. In case the principal amount of
this Debenture exceeds the principal amount being converted, the Company shall,
upon such conversion, execute and deliver to the Holder, at the expense of the
Company, a new Debenture for the principal amount of this Debenture surrendered
which is not to be converted.

            (d) If the Company shall, at any time or from time to time while
this Debenture is outstanding, pay a dividend or make a distribution on its
Common Stock in shares of Common Stock, subdivide its outstanding shares of
Common Stock into a greater number of shares or combine its outstanding shares
of Common Stock into a smaller number of shares or issue by reclassification of
its outstanding shares of Common Stock any shares of its capital stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then the Conversion
Price in effect immediately prior to the date upon which such change shall
become effective, shall be adjusted by the Company so that the Holder thereafter
converting this Debenture shall be entitled to receive the number of shares of
Common Stock or other capital stock which the Holder would have received if the
Debenture had been converted immediately prior to such event upon payment of a
Conversion Price that has been adjusted to reflect a fair allocation of the
economics of such event to the Holder, without regard to any conversion
limitation specified in this Section 4. Such adjustments shall be made
successively whenever any event listed above shall occur.

            (e) If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation in which the Company is not the survivor, or sale, transfer or other
disposition of all or substantially all of the Company's assets to another
corporation shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby the Holder shall thereafter
have the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion of this Debenture such shares
of stock, securities or assets as would have been issuable or payable with
respect to or in exchange for a number of shares of Common Stock equal to the
number of shares of Common Stock immediately theretofore issuable upon
conversion of this Debenture, had such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition not taken place, and
in any such case appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the provisions hereof (including,
without limitation, provision for adjustment of the Conversion Price) shall
thereafter be applicable, as nearly equivalent as may be practicable in relation

                                      -7-
<PAGE>

to any shares of stock, securities or assets thereafter deliverable upon the
conversion hereof. The Company shall not effect any such consolidation, merger,
sale, transfer or other disposition unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing or
otherwise acquiring such assets or other appropriate corporation or entity shall
assume the obligation to deliver to the Holder, at the last address of the
Holder appearing on the books of the Company, such shares of stock, securities
or assets as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase, without regard to any conversion limitation specified in
Section 4, and the other obligations under this Debenture. The provisions of
this paragraph (e) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.

            (f) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 4(d)), or
subscription rights or Debentures, the Conversion Price to be in effect after
such payment date shall be determined by multiplying the Conversion Price in
effect immediately prior to such payment date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding multiplied
by the Market Price of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Board in good faith) of said assets
or evidences of indebtedness so distributed, or of such subscription rights or
Debentures, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such Market Price immediately prior to
such payment date. Such adjustment shall be made successively whenever such a
payment date is fixed.

            (g) An adjustment to the Conversion Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an
adjustment.

            (h) In the event that, as a result of an adjustment made pursuant to
this Section 4, the Holder shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the number of
such other shares so receivable upon conversion of this Debenture shall be
subject thereafter to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions contained in this Debenture.

            (i) Except as provided in Section 4(j) hereof, if and whenever the
Company shall issue or sell, or is, in accordance with any of Sections 5(i)(i)
through 5(i)(viii) hereof, deemed to have issued or sold, any shares of Common
Stock for no consideration or for a consideration per share less than the
Conversion Price in effect immediately prior to the time of such issue or sale,
then and in each such case (a "Trigger Issuance") the then-existing Conversion
Price, shall be reduced, as of the close of business on the effective date of
the Trigger Issuance, to a price determined as follows:

                                      -8-
<PAGE>

                  Adjusted Conversion Price = (A x B) + D
                                               A+C

                  where

                  "A" equals the number of shares of Common Stock outstanding,
including Additional Shares of Common Stock (as defined below) deemed to be
issued hereunder, immediately preceding such Trigger Issuance;

                  "B" equals the Conversion Price in effect immediately
preceding such Trigger Issuance;

                  "C" equals the number of Additional Shares of Common Stock
issued or deemed issued hereunder as a result of the Trigger Issuance; and

                  "D" equals the aggregate consideration, if any, received or
deemed to be received by the Company upon such Trigger Issuance;

provided, however, that in no event shall the Conversion Price after giving
effect to such Trigger Issuance be greater than the Conversion Price in effect
prior to such Trigger Issuance.

            For purposes of this subsection (i), "Additional Shares of Common
Stock" shall mean all shares of Common Stock issued by the Company or deemed to
be issued pursuant to this subsection (i), other than Excluded Issuances (as
defined in subsection (j) hereof).

            For purposes of this Section 4(i), the following subsections (i)(i)
to (i)(vii) shall also be applicable (subject, in each such case, to the
provisions of Section 4(j) hereof):

            (i) In case at any time the Company shall in any manner grant
(directly and not by assumption in a merger or otherwise) any Debentures or
other rights to subscribe for or to purchase, or any options for the purchase
of, Common Stock or any stock or security convertible into or exchangeable for
Common Stock (such Debentures, rights or options being called "Options" and such
convertible or exchangeable stock or securities being called "Convertible
Securities") whether or not such Options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of (x) the
total amount, if any, received or receivable by the Company as consideration for
the granting of such Options, plus (y) the aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options, plus
(z), in the case of such Options which relate to Convertible Securities, the

                                      -9-
<PAGE>

aggregate amount of additional consideration, if any, payable upon the issue or
sale of such Convertible Securities and upon the conversion or exchange thereof,
by (ii) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less
than the Market Price of the Common Stock immediately prior to the time of the
granting of such Options, then the total number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange of the
total amount of such Convertible Securities issuable upon the exercise of such
Options shall be deemed to have been issued for such price per share as of the
date of granting of such Options or the issuance of such Convertible Securities
and thereafter shall be deemed to be outstanding for purposes of adjusting the
Conversion Price. Except as otherwise provided in subsection 4(i)(iii), no
adjustment of the Conversion Price shall be made upon the actual issue of such
Common Stock or of such Convertible Securities upon exercise of such Options or
upon the actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.

            (ii) In case the Company shall in any manner issue (directly and not
by assumption in a merger or otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert any such Convertible Securities
are immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (i) the sum
(which sum shall constitute the applicable consideration) of (x) the total
amount received or receivable by the Company as consideration for the issue or
sale of such Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall be less than
the Market Price of the Common Stock immediately prior to the time of such issue
or sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issue or sale of
such Convertible Securities and thereafter shall be deemed to be outstanding for
purposes of adjusting the Conversion Price, provided that (a) except as
otherwise provided in subsection 4(i)(iii), no adjustment of the Conversion
Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) no further
adjustment of the Conversion Price shall be made by reason of the issue or sale
of Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Conversion Price have been
made pursuant to the other provisions of subsection 6(i).

            (iii) Upon the happening of any of the following events, namely, if
the purchase price provided for in any Option referred to in subsection 4(i)(i)
hereof, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subsections 5(i)(i) or
5(i)(ii), or the rate at which Convertible Securities referred to in subsections
5(i)(i) or 5(i)(ii) are convertible into or exchangeable for Common Stock shall
change at any time (including, but not limited to, changes under or by reason of
provisions designed to protect against dilution), the Conversion Price in effect
at the time of such event shall forthwith be readjusted to the Conversion Price
which would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold. On the termination of any Option for which
any adjustment was made pursuant to this subsection 4(i) or any right to convert
or exchange Convertible Securities for which any adjustment was made pursuant to
this subsection 4(i) (including without limitation upon the redemption or
purchase for consideration of such Convertible Securities by the Company), the

                                      -10-
<PAGE>

Conversion Price then in effect hereunder shall forthwith be changed to the
Conversion Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding immediately
prior to such termination, never been issued.

            (iv) Subject to the provisions of this Section 4(i), in case the
Company shall declare a dividend or make any other distribution upon any stock
of the Company (other than the Common Stock) payable in Common Stock, Options or
Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.

            (v) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for cash, the consideration received therefor
shall be deemed to be the net amount received by the Company therefor, after
deduction therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection therewith. In case any
shares of Common Stock, Options or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board, after deduction of any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any Options shall be issued in
connection with the issue and sale of other securities of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be deemed
to have been issued for such consideration as determined in good faith by the
Board of the Company. If Common Stock, Options or Convertible Securities shall
be issued or sold by the Company and, in connection therewith, other Options or
Convertible Securities (the "Additional Rights") are issued, then the
consideration received or deemed to be received by the Company shall be reduced
by the fair market value of the Additional Rights (as determined using the
Black-Scholes option pricing model or another method mutually agreed to by the
Company and the Holder). The Board shall respond promptly, in writing, to an
inquiry by the Holder as to the fair market value of the Additional Rights. In
the event that the Board and the Holder are unable to agree upon the fair market
value of the Additional Rights, the Company and the Holder shall jointly select
an appraiser, who is experienced in such matters. The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Holder.

            (vi) In case the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in Common Stock, Options or Convertible Securities or
(ii) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.

            (vii) The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the Company
or any of its wholly-owned subsidiaries, and the disposition of any such shares
(other than the cancellation or retirement thereof) shall be considered an issue
or sale of Common Stock for the purpose of this subsection (i).

                                      -11-
<PAGE>

            (j) Anything herein to the contrary notwithstanding, the Company
shall not be required to make any adjustment of the Conversion Price in the case
of the issuance of (A) capital stock, Options or Convertible Securities issued
to directors, officers, employees or consultants of the Company in connection
with their service as directors of the Company, their employment by the Company
or their retention as consultants by the Company pursuant to an equity
compensation program approved by the Board or the compensation committee of the
Board, (B) shares of Common Stock issued upon the conversion or exercise of
Options or Convertible Securities issued prior to the date hereof, provided such
securities are not amended after the date hereof to increase the number of
shares of Common Stock issuable thereunder, (C) securities issued pursuant to
the Purchase Agreement and securities issued upon the exercise or conversion of
those securities, (D) shares of Common Stock issued or issuable by reason of a
dividend, stock split or other distribution on shares of Common Stock (but only
to the extent that such a dividend, split or distribution results in an
adjustment in the Conversion Price pursuant to the other provisions of this
Debenture), and (E) shares of Common Stock issued pursuant to the Wherify
Merger, provided that the Wherify Merger occurs on substantially the terms
existing on the date hereof (collectively, "Excluded Issuances").

            (k) In case at any time:

            (i) the Company shall declare any dividend upon its Common Stock or
any other class or series of capital stock of the Company payable in cash or
stock or make any other distribution to the holders of its Common Stock or any
such other class or series of capital stock;

            (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock or any other class or series of capital stock of the
Company any additional shares of stock of any class or other rights; or

            (iii) there shall be any capital reorganization or reclassification
of the capital stock of the Company, any acquisition or a liquidation,
dissolution or winding up of the Company;

then, in any one or more of said cases, the Company shall give, by delivery in
person or by certified or registered mail, return receipt requested, addressed
to the Holder at the address of such Holder as shown on the books of the
Company, (a) at least 20 Business Days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any event set forth in clause (iii) of this Section 4(k) and (b)
in the case of any event set forth in clause (iii) of this Section 4(k), at
least 20 Business Days' prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (a) shall also
specify, in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock or such other class or series of
capital stock shall be entitled thereto and such notice in accordance with the
foregoing clause (b) shall also specify the date on which the holders of Common
Stock and such other series or class of capital stock shall be entitled to
exchange their Common Stock and other stock for securities or other property
deliverable upon consummation of the applicable event set forth in clause (iii)
of this Section 4(k).

                                      -12-
<PAGE>

            (l) Upon any adjustment of the Conversion Price, then and in each
such case the Company shall give prompt written notice thereof, by delivery in
person or by certified or registered mail, return receipt requested, addressed
to the Holder at the address of such Holder as shown on the books of the
Company, which notice shall state the Conversion Price resulting from such
adjustment and setting forth in reasonable detail the method upon which such
calculation is based.

            (m) The Company shall at all times to reserve and keep available out
of its authorized Common Stock, solely for the purpose of issuance upon
conversion of this Debenture as herein provided, such number of shares of Common
Stock as shall then be issuable upon the conversion of this Debenture. The
Company covenants that all shares of Common Stock which shall be so issued shall
be duly and validly issued and fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, and that the Company will from time to
time take all such action as may be requisite to assure that the par value per
share of the Common Stock is at all times equal to or less than the Conversion
Price in effect at the time. The Company shall take all such action as may be
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirement of
any national securities exchange upon which the Common Stock may be listed. The
Company shall not take any action which results in any adjustment of the
Conversion Price if the total number of shares of Common Stock issued and
issuable after such action upon conversion of this Debenture would exceed the
total number of shares of Common Stock then authorized by the Company's
Certificate of Incorporation.

            (n) The issuance of certificates for shares of Common Stock upon
conversion of this Debenture shall be made without charge to the holders thereof
for any issuance tax in respect thereof, provided that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
Holder.

            (o) The Company will not at any time close its transfer books
against the transfer, as applicable, of this Debenture or of any shares of
Common Stock issued or issuable upon the conversion of this Debenture in any
manner which interferes with the timely conversion of this Debenture, except as
may otherwise be required to comply with applicable securities laws.

            (p) To the extent permitted by applicable law and the listing
requirements of the Nasdaq Stock Market and any exchange on which the Common
Stock is then listed, the Company from time to time may decrease the Conversion
Price by any amount for any period of time if the period is at least twenty (20)
days, the decrease is irrevocable during the period and the Board shall have
made a determination that such decrease would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion Price
is decreased pursuant to the preceding sentence, the Company shall provide
written notice thereof to the Holder at least fifteen (15) days prior to the
date the decreased Conversion Price takes effect, and such notice shall state
the decreased Conversion Price and the period during which it will be in effect.

                                      -13-
<PAGE>

      5. Mandatory Conversion. Notwithstanding any other provision contained
herein to the contrary, this Debenture and all accrued and unpaid interest due
hereon shall automatically, and without any action on the part of the Holder,
convert into shares of Common Stock at the Conversion Price then in effect
immediately upon the consummation of the Wherify Merger; provided, that the
Wherify Merger occurs on substantially the terms in effect on the date hereof.
The date of such conversion is hereinafter referred to as the "Mandatory
Conversion Date". The Company shall give the Holder prompt written notice of any
mandatory conversion of the Debenture pursuant to this Section 6. From and after
such Mandatory Conversion Date this Debenture shall cease to accrue interest,
shall cease to be outstanding and shall represent only the right to receive
shares of Common Stock upon compliance with the provisions of Sections 5(a) and
(b) hereof.

      6. Indebtedness Covenant. The Company agrees that, so long as any amount
payable under this Debenture remains unpaid, it will not, and will cause its
Subsidiaries not to, without the prior written consent of the Required Holders:
create, incur, guarantee, issue, assume or in any manner become liable in
respect of, any obligation (i) for borrowed money, other than trade payables
incurred in the ordinary course of business, (ii) evidenced by bonds,
debentures, notes, or other similar instruments, (iii) in respect of letters of
credit or other similar instruments (or reimbursement obligations with respect
thereto), except letters of credit or other similar instruments issued to secure
payment of trade payables arising in the ordinary course of business consistent
with past practices, (iv) to pay the deferred purchase price of property or
services, except trade payables arising in the ordinary course of business
consistent with past practices, (v) as lessee under capitalized leases, (vi)
secured by a lien, pledge, security interest, claim or other encumbrance on any
asset of the Company or a Subsidiary, whether or not such obligation is assumed
by the Company or such Subsidiary and (vii) of any other Person (collectively,
"Indebtedness"), other than Permitted Indebtedness.

      7. Event of Default. The occurrence of any of following events shall
constitute an "Event of Default" hereunder:

            (a) the failure of the Company to make any payment of principal on
this Debenture when due, whether at maturity, upon acceleration or otherwise;

            (b) the failure of the Company to make any payment of interest on
this Debenture, or any other amounts due under the Purchase Agreement, the
Registration Rights Agreement, this Debenture or the Warrants when due, whether
at maturity, upon acceleration or otherwise, and such failure continues for more
than five (5) days;

            (c) the Company and/or its Subsidiaries fail to make a required
payment or payments on Indebtedness of Two Hundred Fifty Thousand United States
Dollars ($250,000) or more in aggregate principal amount and such failure
continues for more than ten (10) days;

            (d) there shall have occurred an acceleration of the stated maturity
of any Indebtedness of the Company or its Subsidiaries of Two Hundred Fifty
Thousand United States Dollars ($250,000) or more in aggregate principal amount
(which acceleration is not rescinded, annulled or otherwise cured within ten
(10) days of receipt by the Company or a Subsidiary of notice of such
acceleration);

                                      -14-
<PAGE>

            (e) the Company makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts generally as they become due;
or an order, judgment or decree is entered adjudicating the Company as bankrupt
or insolvent; or any order for relief with respect to the Company is entered
under the Federal Bankruptcy Code or any other bankruptcy or insolvency law; or
the Company petitions or applies to any tribunal for the appointment of a
custodian, trustee, receiver or liquidator of the Company or of any substantial
part of the assets of the Company, or commences any proceeding relating to it
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction; or any such petition
or application is filed, or any such proceeding is commenced, against the
Company and either (i) the Company by any act indicates its approval thereof,
consents thereto or acquiescence therein or (ii) such petition application or
proceeding is not dismissed within sixty (60) days;

            (f) a final, non-appealable judgment which, in the aggregate with
other outstanding final judgments against the Company and its Subsidiaries,
exceeds One Hundred Thousand United States Dollars ($100,000) shall be rendered
against the Company or a Subsidiary and within sixty (60) days after entry
thereof, such judgment is not discharged or execution thereof stayed pending
appeal, or within sixty (60) days after the expiration of such stay, such
judgment is not discharged;

            (g) the Company is in breach of the requirements of Section 6
hereof;

            (h) if any representation or statement of fact made in the Purchase
Agreement or furnished to the Holder at any time by or on behalf of the Company
proves to have been false in any material respect when made or furnished; or

            (i) if the Company fails to observe or perform in any material
respect any of its covenants contained in the Purchase Agreement, the
Registration Rights Agreement, the Warrants or this Debenture (other than any
failure which is covered by Section 7(a), (b) or (g)), and such failure
continues for thirty (30) days after receipt by the Company of notice thereof.

            Upon the occurrence of any such Event of Default all unpaid
principal and accrued interest under this Debenture shall become immediately due
and payable (A) upon election of the Holder, with respect to (a) through (d) and
(f) through (i), and (B) automatically, with respect to (e). Upon the occurrence
of an Event of Default, the Holder shall have the right to exercise any other
right, power or remedy as may be provided herein or as may be provided at law or
in equity.

      8. No Waiver. No delay or omission on the part of the Holder in exercising
any right under this Debenture shall operate as a waiver of such right or of any
other right of the Holder, nor shall any delay, omission or waiver on any one
occasion be deemed a bar to or waiver of the same or any other right on any
future occasion.

      9. Amendments in Writing. Any term of this Debenture may be amended or
waived upon the written consent of the Company and the Required Holders;
provided, that (x) any such amendment or waiver must apply to all outstanding
Company Debentures; and (y) without the consent of the Holder hereof, no
amendment or waiver shall (i) change the Stated Maturity Date of this Debenture,
(ii) reduce the principal amount of this Debenture or the interest rate due

                                      -15-
<PAGE>

hereon, (iii) change the Conversion Price or (iv) change the place of payment of
this Debenture. No such waiver or consent on any one instance shall be construed
to be a continuing waiver or a waiver in any other instance unless it expressly
so provides.

      10. Waivers. The Company hereby forever waives presentment, demand,
presentment for payment, protest, notice of protest, notice of dishonor of this
Debenture and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Debenture.

      11. Waiver of Jury Trial. EACH OF THE COMPANY AND, BY ACCEPTING THIS
DEBENTURE, THE HOLDER, HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS NOTE OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. EACH
OF THE COMPANY AND THE HOLDER HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

      12. Governing Law; Consent to Jurisdiction. This Debenture shall be
governed by and construed under the law of the State of New York, without giving
effect to the conflicts of law principles thereof. The Company and, by accepting
this Debenture, the Holder, each irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Debenture and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Debenture. The Company and, by accepting this
Debenture, the Holder, each irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. The Company and, by accepting this Debenture, the Holder, each
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

      13. Costs. If an action is instituted to collect on this Debenture, the
Company promises to pay all costs and expenses, including reasonable attorney's
fees, incurred in connection with such action.

      14. Notices. All notices hereunder shall be given in writing and shall be
deemed delivered when received by the other party hereto at the address set
forth in the Purchase Agreement or at such other address as may be specified by
such party from time to time in accordance with the Purchase Agreement.

      15. Successors and Assigns. This Debenture shall be binding upon the
successors or assigns of the Company and shall inure to the benefit of the
successors and assigns of the Holder.

                  [Remainder of Page Intentionally Left Blank]

                                      -16-
<PAGE>

                             IQ BIOMETRIX, INC.

                             By: /s/ William B.G. Scigliano
                                 ------------------------------
                                 Name:  William B.G. Scigliano
                                 Title: Chief Executive Officer and President

                                      -17-

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