Document:

Exhibit 4.1
NLMIN #____

NEITHER THIS NOTE, THE SHARES OF COMMON STOCK NOR ANY OTHER SECURITIES ISSUABLE
UPON CONVERSION OF THIS NOTE (COLLECTIVELY THE "SECURITIES") HAVE BEEN ACQUIRED
FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") SHALL HAVE
BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS
LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE AND ANY
SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE.

                      NEWTOWN LANE MARKETING, INCORPORATED
                         10% Convertible Promissory Note

$____________                                                 ________ ___, 2005

      FOR VALUE RECEIVED, Newtown Lane Marketing, Incorporated, a Delaware
corporation (the "Company") with its principal executive office at 33 Newtown
Lane, East Hampton, NY 11937, promises to pay to the order of _________________
(the "Payee" or the "Holder of this Note") or registered assigns on December 31
2007 (the "Maturity Date"), the principal amount of _____________ Dollars
($________) (the "Principal Amount") in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts. Interest on this Note shall accrue on the
Principal Amount outstanding from time to time at a rate of ten percent (10%)
per annum, compounded annually, and shall be payable on the Maturity Date, or
earlier upon conversion of this Note in accordance with the provisions of
Section 6 hereof (or as may otherwise be provided in this Note). Nothing in item
(ii) of this paragraph shall be construed as the consent by the holder of this
Note to any action otherwise prohibited by the terms of this Note or as a waiver
of any such prohibition.

      This Note and other identical Notes in the aggregate principal amount of
up to $500,000 (collectively, the "Notes") are issued to the Payee and other
purchasers of Notes in connection with a private placement of Units by the
Company (the "Financing"), pursuant to the Company's Confidential Offering
Memorandum (the "Memorandum"), and a Subscription Agreement between the Company
and the Payee (the "Subscription Agreement"), a copy of which documents are
available for inspection at the Company's principal office.

      Notwithstanding any provision to the contrary contained herein, this Note
is subject and entitled to certain terms, conditions, covenants and agreements
contained in the Subscription Agreement. Any transferee of this Note, by its
acceptance hereof, assumes the obligations of the Payee in the Subscription
Agreement with respect to the conditions and procedures for transfer of this
Note. Reference to the Subscription Agreement shall in no way impair the
absolute and unconditional obligation of the Company to pay both principal
hereof and interest hereon as provided herein.

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      Each payment by the Company pursuant to this Note shall be made without
set-off or counterclaim and in immediately available funds.

      The Company (i) waives presentment, demand, protest or notice of any kind
in connection with this Note and (ii) agrees, in the event of an Event of
Default, to pay to the holder of this Note, on demand, all costs and expenses
(including reasonable legal fees and expenses) incurred in connection with the
enforcement and collection of this Note.

      1. Prepayment. This Note and all other Notes may be prepaid in whole but
not in part prior to the Maturity Date if the Company sends written notice of
such prepayment to each Holder at least twenty-five (25) days prior to the
prepayment date and each Noteholder during such 25-day period shall have the
right to convert the Note into Conversion Shares as provided herein.

      2. Shares. In consideration for the loan evidenced by this Note, the
Company issued to the Holders of this Note, shares of common stock of the
Company (the "Common Stock") to the product of (i) (1) the aggregate principal
amount of each Note, multiplied by (2) twenty (20%) percent, and (ii) divided by
thirty-five cents ($0.35).

      3. Covenants of Company.

            A. Affirmative Covenants. The Company covenants and agrees that, so
long as this Note shall be outstanding, it will perform the obligations set
forth in this Section 4A:

                  (i) Taxes and Levies. The Company will promptly pay and
      discharge all taxes, assessments, and governmental charges or levies
      imposed upon the Company and each of its subsidiaries or upon either of
      their income and profits, or upon any of its property, before the same
      shall become delinquent, as well as all claims for labor, materials and
      supplies which, if unpaid, might become a lien or charge upon such
      properties or any part thereof; provided, however, that the Company and
      each of its subsidiaries shall not be required to pay and discharge any
      such tax, assessment, charge, levy or claim so long as the validity
      thereof shall be contested in good faith by appropriate proceedings and
      the Company and each of its subsidiaries shall set aside on its books
      adequate reserves in accordance with generally accepted accounting
      principles ("GAAP") with respect to any such tax, assessment, charge, levy
      or claim so contested;

                  (ii) Maintenance of Existence. The Company will do or cause to
      be done all things reasonably necessary to preserve and keep in full force
      and effect its corporate existence, rights and franchises and comply with
      all laws applicable to the Company, except where the failure to comply
      could not reasonably be expected to have a material adverse effect on the
      Company;

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                  (iii) Maintenance of Property. The Company will at all times
      maintain, preserve, protect and keep such property material to the conduct
      of its business in good repair, working order and condition, and from time
      to time make all needful and proper repairs, renewals, replacements and
      improvements thereto as shall be reasonably required in the conduct of its
      business;

                  (iv) Insurance. The Company will, to the extent necessary for
      the operation of its business, keep adequately insured by financially
      sound reputable insurers, all property of a character usually insured by
      similar corporations and carry such other insurance as is usually carried
      by similar corporations;

                  (v) Books and Records. The Company and each of its
      subsidiaries will at all times keep true and correct books, records and
      accounts reflecting all of their respective business affairs and
      transactions in accordance with GAAP. Such books and records shall be open
      at reasonable times and upon reasonable notice to the inspection of the
      Payee or its agents, subject to the execution by such persons of a
      reasonable non-disclosure agreement;

                  (vi) Underlying Securities. The Company shall keep reserved
      such number of shares of Common Stock as will permit full conversion of
      the Notes;

                  (vii) Notice of Certain Events. The Company will give prompt
      written notice (with a description in reasonable detail) to the Payee of:

                        (a) the occurrence of any Event of Default (as defined
            in Section 5 hereof), or any event which, with the giving of notice
            or the lapse of time, would constitute an Event of Default, or an
            event of default under any document or instrument evidencing or
            governing any indebtedness of the Company and the delivery of any
            notice effecting the acceleration of any such indebtedness; and

                        (b) the occurrence of any litigation, arbitration or
            governmental investigation or proceeding not previously disclosed by
            the Company to the Payee in writing which has been instituted or, to
            the knowledge of the Company, is threatened, against the Company or
            to which any of its properties, assets or revenues is subject which,
            if adversely determined, would reasonably be expected to have a
            material adverse effect on the Company; and

                        (c) any material adverse development which shall occur
            in any litigation, arbitration or governmental investigation or
            proceeding previously disclosed by the Company to the Payee.

            B. Negative Covenants. The Company covenants and agrees that, other
than as may be expressed provided herein, so long as this Note shall be
outstanding, it will perform the obligations set forth in this Section 4B:

                  (i) Liquidation, Dissolution, Etc.. Unless the Company prepays
      the Note upon 25 days written notice during which the Holder may convert
      into Conversion Shares as provided herein, the Company will not liquidate
      or dissolve, consolidate with, or merge into or with, any other
      corporation or other entity, except that any wholly-owned subsidiary may

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      merge with another wholly-owned subsidiary or with the Company (so long as
      the Company is the surviving entity and no Event of Default shall occur as
      a result thereof).

                  (ii) Sales of Assets. Unless the Company prepays the Note upon
      25 days written notice during which the Holder may convert into Conversion
      Shares as provided herein, the Company will not sell, transfer, lease or
      otherwise dispose of, or grant options, warrants or other rights with
      respect to, all or a substantial part of its properties or assets (an
      "Asset Transaction") to any person or entity, provided that this clause
      (ii) shall not restrict (1) any disposition made in the ordinary course of
      business and consisting of (a) capital goods that are obsolete or have no
      remaining useful life or (b) finished goods inventories or (2) any other
      Asset Transaction.

                  (iii) Redemptions. The Company will not redeem or repurchase
      any outstanding securities of the Company or any of its subsidiaries;

                  (iv) Investments. Except for standard and normal industry
      related investments, the Company will not purchase, own, invest in or
      otherwise acquire, directly or indirectly, any stock or other securities
      or make or permit to exist any investment or capital contribution or
      acquire any interest whatsoever in any other person or entity or permit to
      exist any loans or advances for such purposes except for investments in
      direct obligations of the United States of America or any agency thereof,
      obligations guaranteed by the United States of America and certificates of
      deposit or other obligations of any bank or trust company organized under
      the laws of the United States or any state thereof and having capital and
      surplus of at least $500,000,000.

                  (v) Transactions with Affiliates. The Company will not repay
      any indebtedness or enter into any transaction, including, without
      limitation, the purchase, sale, lease or exchange of property, real or
      personal, the purchase or sale of any security, the borrowing or lending
      of any money, or the rendering of any service, with any person or entity
      affiliated with the Company (including any officers, directors and
      shareholders of the Company's and/or any of its subsidiaries' outstanding
      capital stock); and

                  (vi) Dividends. The Company will not accrue, declare or pay
      any cash dividends or distributions, whether accrued or otherwise, on its
      outstanding capital stock, provided, however, that nothing herein
      contained shall prevent the Company (a) from effecting a stock split or
      declaring or paying any dividend consisting solely of shares of any class
      of Common Stock to the holders of shares of such class of Common Stock,
      provided that (i) such stock split or stock dividend is effected equally
      across all classes of Common Stock and (ii) the Holder of the Note
      participates in such events as if the holder had converted the Note
      immediately prior to such event into the number of shares of Common Stock
      he would be entitled to receive if he had so converted (or the number of
      shares of Common Stock (as defined below) is convertible into), as more
      fully described in the anti-dilution provisions below; and (b) so long as
      the Company is taxed under Subchapter S of the Internal Revenue Code, from
      declaring and paying such cash dividends as are necessary to enable each
      of the Company's shareholders to pay their income taxes on the portion of
      the Company's income allocable to him.

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      5. Events of Default.

            A. The term "Event of Default" shall mean any of the events set
forth in this Section 5A:

                  (i) Non-Payment of Obligations. The Company shall default in
      the payment of the principal or accrued interest on this Note when and as
      the same shall become due and payable, whether by acceleration or
      otherwise.

                  (ii) Non-Performance of Affirmative Covenants. The Company
      shall default in the due observance or performance of any covenant set
      forth in Section 4A, which default shall continue uncured for five (5)
      business days.

                  (iii) Non-Performance of Negative Covenants. The Company or
      any of its subsidiaries shall default in the due observance or performance
      of any covenant set forth in Section 4B.

                  (iv) Bankruptcy, Insolvency, etc. The Company shall: (a)
      generally fail or be unable to pay, or admit in writing its inability to
      pay, its debts as they become due; (b) apply for, consent to, or acquiesce
      in, the appointment of a trustee, receiver, sequestrator or other
      custodian for the Company or any of its property, or make a general
      assignment for the benefit of creditors; (c) in the absence of such
      application, consent or acquiesce in, permit or suffer to exist the
      appointment of a trustee, receiver, sequestrator or other custodian for
      the Company or for any part of its property, and such trustee, receiver,
      sequestrator or other custodian shall not be discharged within thirty (30)
      days; (d) permit or suffer to exist the commencement of any bankruptcy,
      reorganization, debt arrangement or other case or proceeding under any
      bankruptcy or insolvency law, or any dissolution, winding up or
      liquidation proceeding, in respect of the Company, and, if such case or
      proceeding is not commenced by the Company or converted to a voluntary
      case, such case or proceeding shall be consented to or acquiesced in by
      the Company or shall result in the entry of an order for relief or shall
      remain for sixty (60) days undismissed; or (e) take any corporate action
      authorizing, or in furtherance of, any of the foregoing; and

                  (viii) Subscription Agreement; Etc. The Company shall violate
      any material representation, warranty, covenant, agreement or obligation
      set forth in the Subscription Agreement, and such default is continuing
      for ten (10) days.

            B. Action if Event of Default. If any Event of Default shall occur
for any reason, whether voluntary or involuntary, and be continuing, the Payee
may, upon notice to the Company, (i) allow the Note to remain outstanding and
continue to accrue interest at the rate provided for above or (ii) declare all
or any portion of the outstanding Principal Amount of the Note together with
interest accrued thereon to be due and payable and any or all other obligations
hereunder to be due and payable, whereupon the full unpaid Principal Amount (or
any portion thereof so demanded), such accrued interest and any and all other
such obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand, or presentment.

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            D. Remedies. In case any Event of Default shall occur and be
continuing, the Payee may proceed to protect and enforce its rights by a
proceeding seeking the specific performance of any covenant or agreement
contained in this Note or in aid of the exercise of any power granted in this
Note or may proceed to enforce the payment of this Note or to enforce any other
legal or equitable rights as such holder shall determine.

      6. Conversion.

            A. Holder's Conversion Right. At any time and from time to time, the
Holder of this Note shall be entitled to convert any portion of the Principal
Amount and/or accrued but unpaid interest into fully paid and non-assessable
shares of Common Stock, in accordance with this Section 6(a) and Sections 6(b)
and Section 6(c). The Company shall not issue any fraction of a share of Common
Stock upon any conversion. All shares of Common Stock (including fractions
thereof) issuable upon conversion of the Notes by a holder thereof shall be
aggregated for purposes of determining whether the conversion would result in
the issuance of a fraction of a share of Common Stock. If, after the
aforementioned aggregation, the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall, in lieu of issuing such
fractional share, pay to the holder the fair value thereof in cash.

            B. Conversion Price. Subject to anti-dilution adjustment as provided
in Section 6D, the "Conversion Price" of the outstanding Principal Amount of the
Notes shall be equal to thirty-five cents ($0.35). The Principal Amount and
interest thereon so elected by the Holder to be converted (the "Converted
Amount"), will convert into that number of shares of Common Stock determined by
dividing the Converted Amount by the Conversion Price, as adjusted at the time
of conversion.

            C. Mechanics of Conversion. To convert the Note into shares of
Common Stock on any date (a "Conversion Date"), the holder thereof shall (i)
transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59
p.m., New York time on such date, a copy of an executed notice of conversion in
the form attached hereto as Exhibit I (the "Conversion Notice") to the Company,
and (ii) surrender to a common carrier for delivery to the Company within three
(3) business days of such date the original Note being converted (or an
indemnification undertaking with respect to such Note in the case of their loss,
theft or destruction); provided, however, notwithstanding anything to the
contrary provided herein or elsewhere, the Holder in its sole option and in its
sole discretion shall have the absolute right to instead of submitting the
original Note to the Company as provided above upon a conversion of the Note,
not submit the Note to the Company upon a conversion and have the Company reduce
the Principal Amount being converted on the Company's books and records in the
amount as expressly provided in the Conversion Notice, which shall have the same

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effect as if the Holder submitted the original Note. On or before the third
(3rd) business day following the date of receipt of a Conversion Notice and the
original Note, or an affidavit that the Holder lost its original Note (the
"Share Delivery Date"), the Company shall issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
holder or its designee, for the number of shares of Common Stock to which the
holder shall be entitled. If the Principal Amount represented by the Note(s)
submitted for conversion pursuant to this Section 6C(ii) is greater than the
Converted Amount, and the Holder has elected to submit the original Note to the
Company then the Company shall, as soon as practicable and in no event later
than three (3) business days after receipt of the Notes (the "Note Delivery
Date") and at its own expense, issue and deliver to the holder a new Note
representing the Principal Amount not converted. The person or persons entitled
to receive the shares of Common Stock issuable upon a conversion of Note shall
be treated for all purposes as the record holder or holders of such shares of
Common Stock on the Conversion Date.

            D. Anti-Dilution Provisions. The Conversion Price in effect at any
time and the number and kind of securities issuable upon conversion of the Notes
shall be subject to adjustment from time to time upon the happening of certain
events as follows:

                  (i) Adjustment for Stock Splits and Combinations. If the
      Company at any time or from time to time on or after the date of any
      issuance of any Notes (the "Original Issuance Date"), effects a
      subdivision of the outstanding Common Stock, the Conversion Price then in
      effect immediately before that subdivision shall be proportionately
      decreased, and conversely, if the Company at any time or from time to time
      on or after the Original Issuance Date combines the outstanding shares of
      Common Stock into a smaller number of shares, the Conversion Price then in
      effect immediately before the combination shall be proportionately
      increased. Any adjustment under this subsection (i) shall become effective
      at the close of business on the date the subdivision or combination
      becomes effective.

                  (ii) Adjustment for Certain Dividends and Distributions. If
      the Company at any time or from time to time on or after the Original
      Issuance Date makes, or fixes a record date for the determination of
      holders of Common Stock entitled to receive, a dividend or other
      distribution payable in additional shares of Common Stock, then and in
      each such event the Conversion Price then in effect shall be decreased as
      of the time of such issuance or, in the event such record date is fixed,
      as of the close of business on such record date, by multiplying the
      Conversion Price then in effect by a fraction (1) the numerator of which
      is the total number of shares of Common Stock issued and outstanding
      immediately prior to the time of such issuance or the close of business on
      such record date and (2) the denominator of which shall be the total
      number of shares of Common Stock issued and outstanding immediately prior
      to the time of such issuance or the close of business on such record date
      plus the number of shares of Common Stock issuable in payment of such
      dividend or distribution; provided, however, that if such record date is
      fixed and such dividend is not fully paid or if such distribution is not
      fully made on the date fixed therefor, the Conversion Price shall be
      recomputed accordingly as of the close of business on such record date and
      thereafter the Conversion Price shall be adjusted pursuant to this
      subsection (ii) as of the time of actual payment of such dividends or
      distributions.

                  (iii) Adjustments for Other Dividends and Distributions. In
      the event the Company at any time or from time to time on or after the
      Original Issuance Date makes, or fixes a record date for the determination

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      of holders of Common Stock entitled to receive, a dividend or other
      distribution payable in securities of the Company other than shares of
      Common Stock, then and in each such event provision shall be made so that
      the holders of the Notes shall receive upon conversion thereof, in
      addition to the number of shares of Common Stock receivable thereupon, the
      amount of securities of the Company which they would have received had
      their Notes been converted into Common Stock on the date of such event and
      had they thereafter, during the period from the date of such event to and
      including the conversion date, retained such securities receivable by them
      as aforesaid during such period, subject to all other adjustments called
      for during such period under this subsection (e) with respect to the
      rights of the holders of the Notes

                  (iv) Adjustment for Reclassification, Exchange and
      Substitution. In the event that at any time or from time to time on or
      after the Original Issuance Date, the Common Stock issuable upon the
      conversion of the Notes is changed into the same or a different number of
      shares of any class or classes of stock, whether by recapitalization,
      reclassification or otherwise (other than a subdivision or combination of
      shares or stock dividend or a reorganization, merger, consolidation or
      sale of assets, provided for elsewhere in this subsection (e)), then and
      in any such event each holder of the Notes shall have the right thereafter
      to convert such stock into the kind and amount of stock and other
      securities and property receivable upon such recapitalization,
      reclassification or other change, by holders of the maximum number of
      shares of Common Stock into which Notes could have been converted
      immediately prior to such recapitalization, reclassification or change,
      all subject to further adjustment as provided herein.

                  (v) Reorganizations, Mergers, Consolidations or Sales of
      Assets. If at any time or from time to time on or after the Original
      Issuance Date there is a capital reorganization of the Common Stock (other
      than a recapitalization, subdivision, combination, reclassification or
      exchange of shares provided for elsewhere in this subsection (e)) or a
      merger or consolidation of the Company with or into another corporation,
      or the sale of all or substantially all of the Company's properties and
      assets to any other person, then, as a part of such reorganization,
      merger, consolidation or sale, provision shall be made so that the holders
      of the Notes shall thereafter be entitled to receive upon conversion of
      the Notes the number of shares of stock or other securities or property to
      which a holder of the number of shares of Common Stock deliverable upon
      conversion would have been entitled on such capital reorganization,
      merger, consolidation, or sale. In any such case, appropriate adjustment
      shall be made in the application of the provisions of this subsection (e)
      with respect to the rights of the holders of the Notes after the
      reorganization, merger, consolidation or sale to the end that the
      provisions of this subsection (e) (including adjustment of the Conversion
      Price then in effect and the number of shares issuable upon conversion of
      the Notes) shall be applicable after that event and be as nearly
      equivalent as may be practicable.

                  (vi) No Adjustments in Certain Circumstances. No adjustment in
            the Conversion Price shall be required unless such adjustment would
            require an increase or decrease of at least one ($0.01) cent in such
            price; provided, however, that any adjustments which by reason of
            this subsection (vii) are not required to be made shall be carried

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            forward and taken into account in any subsequent adjustment required
            to be made hereunder. All calculations under this Section 6(d)(vii)
            shall be made to the nearest cent or to the nearest one-hundredth of
            a share, as the case may be.

            E. No Impairment. The Company will not directly and/or indirectly
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company but will at all times in good faith assist
in the carrying out of all the provisions of this Section 6 and in the taking of
all such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Notes against impairment.

            F. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 6,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the holder of
this Note(s) a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Company shall, upon the written request at any time of the holder of this
Note(s), furnish or cause to be furnished to such holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) Conversion Price at
the time in effect, and (iii) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon the
conversion of the this Note(s).

            G. Stock Purchase Rights. If at any time or from time to time, the
Company grants or issues to the record holders of the Common Stock any options,
warrants or rights (collectively, "Stock Purchase Rights") entitling any holder
of Common Stock to purchase Common Stock or any security convertible into or
exchangeable for Common Stock or to purchase any other stock or securities of
the Company, the holder of this Note(s) shall be entitled to acquire, upon the
terms applicable to such Stock Purchase Rights, the aggregate Stock Purchase
Rights which the holder of this Note(s) could have acquired if it had been the
record holder of the maximum number of shares of Common Stock issuable upon
conversion of this Note(s) on both (x) the record date for such grant or
issuance of such Stock Purchase Rights, and (y) the date of the grant or
issuance of such Stock Purchase Rights.

            H. Limitation on Conversion. Except to allow the conversion and sale
of the Conversion Shares in a merger, combination or similar transaction, or
upon a liquidation or distribution of assets of the Company or similar
transaction, in no event shall the Payee be entitled to convert, any Principal
Amount in excess of that amount upon conversion of which the sum of (1) the
number of shares of Common Stock beneficially owned by the Payee or the holder
of Conversion Shares and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the unconverted
portion of this Note, and (2) the number of shares of Common stock issuable upon
the conversion of this Note with respect to which the determination of this
provision is being made, would result in beneficial ownership by the Holder and
its affiliates of more than 9.99% of the outstanding shares of Common Stock of
the Company (after taking into account the shares to be issued to the Payee or

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the holder of Conversion Shares upon such conversion). For purposes of this
provision to the immediately preceding sentence, beneficial ownership shall be
determined by the Holder based upon and in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13 D-G thereunder,
except as otherwise provided in clause (1) of such provision.

            I. Stamp Taxes, etc. The Company shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of shares of
Common Stock, upon conversion of this Note; provided, however, that the Company
shall not be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for such shares
in a name other than that of the holder of this Note, and the Company shall not
be required to issue or deliver any such certificate unless and until the person
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the Company's satisfaction that such tax
has been paid.

            J. Validity of Stock. All shares of Common Stock which may be issued
upon conversion of this Note will, upon issuance by the Company in accordance
with the terms of this Note, be validly issued, free from all taxes and liens
with respect to the issuance thereof (other than those created by the holders),
free from all pre-emptive or similar rights and fully paid and non-assessable.

            K. Reservation of Shares. The Company covenants and agrees that it
will at all times have authorized and reserved, solely for the purpose of such
possible conversion, out of its authorized but unissued shares, a sufficient
number of shares of its Common Stock to provide for the exercise in full of the
conversion rights contained in this Note.

            L. Notice of Certain Transactions. In case at any time:

                  (i) The Company shall declare any dividend upon, or other
      distribution in respect of, its Common Stock; or

                  (ii) The Company shall offer for subscription to the holders
      of its Common Stock any additional shares of stock of any class or any
      other securities convertible into shares of stock or any rights to
      subscribe thereto; or

                  (iii) There shall be any capital reorganization or
      reclassification of the capital stock of the Company, or a sale of all or
      substantially all of the assets of the Company, or a consolidation or
      merger of the Company with another corporation (other than a merger with a
      subsidiary in which merger the Company is the continuing corporation and
      which does not result in any reclassification); or

                  (iv) There shall be a voluntary or involuntary dissolution;
      liquidation or winding-up of the Company; then, in any one or more of said
      cases, the Company shall cause to be mailed to the Payee at the earliest
      practicable time (and, in any event not less than twenty (20) days before
      any record date or other date set for definitive action), 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
      such reorganization, reclassification, sale, consolidation, merger or
      dissolution, liquidation or winding-up shall take place, as the case may

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<PAGE>

      be. Such notice shall also set forth such facts as shall indicate the
      effect of such action (to the extent such effect may be known at the date
      of such notice) on the Conversion Price and the kind and amount of the
      shares of stock and other securities and property deliverable upon the
      conversion of this Note. Such notice shall also specify the date as of
      which the holders of the Common Stock of record shall participate in said
      dividend, distribution or subscription rights or shall be entitled to
      exchange their Common Stock for securities or other property deliverable
      upon such reorganization, reclassification, sale, consolidation, merger or
      dissolution, liquidation or winding-up, as the case may be.

      Nothing herein shall be construed as the consent of the Holder of this
Note to any action otherwise prohibited by the terms of this Note or as a waiver
of any such prohibition.

      7. Waivers.

            A. No failure or delay on the part of the Payee in exercising any
power or right under this Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on the Company in any case shall entitle it to any notice or demand
in similar or other circumstances. No waiver or approval by the Payee shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.

            B. To the extent that the Company makes a payment or payments to the
Payee, and such payment or payments or any part thereof are subsequently for any
reason invalidated, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.

      8. Miscellaneous.

            A. Parties in Interest. All covenants, agreements and undertakings
in this Note binding upon the Company or the Payee shall bind and inure to the
benefit of the successors and permitted assigns of the Company and the Payee,
respectively, whether so expressed or not.

            B. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York without regard to
the conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Agreement, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction

                                       11
<PAGE>

of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto expressly and
irrevocably waive any claim that any such jurisdiction is not a convenient forum
for any such suit or proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and disbursements.

            C. Notices. All notices required or permitted under this Note shall
be given in accordance with the Subscription Agreement.

            D. Waiver of Jury Trial. THE PAYEE AND THE COMPANY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND
DELIVERED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE PAYEE OR THE COMPANY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S PURCHASING THIS NOTE.

      IN WITNESS WHEREOF, this Note has been executed and delivered on the date
specified above by the duly authorized representative of the Company.

                                           NEWTOWN LANE MARKETING, INCORPORATED

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

                                       12
<PAGE>

                                    EXHIBIT I

                      NEWTOWN LANE MARKETING, INCORPORATED
                                CONVERSION NOTICE

      Reference is made to the 10% Senior Convertible Promissory Note (the
"Note") of Newtown Lane Marketing, Incorporated. (the "Company"). In accordance
with and pursuant to the Note, the undersigned hereby elects to convert such
Principal Amount (as defined in the Note) all accrued but unpaid interest
indicated below into shares of common stock (the "Common Stock"), of the
Company, as of the date specified below.

      Date of Conversion: ______________________________________________________

      Principal Amount to be converted: ________________________________________

      Accrued but unpaid interest to be converted: _____________________________

      Note to be Converted: NLMIN Note No.: ____________________________________

      Number of Shares of Common Stock to be issued on conversion of Principal
      Amount and/or all accrued but unpaid interest: ___________________________

      Conversion Price Used: ___________________________________________________

      Please deliver the Common Stock into which the Principal Amount is being
converted to the following address:

                        ________________________________

                        ________________________________

                        ________________________________

                        ________________________________

                                       13Exhibit 4.2

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED FOR RESALE UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY
STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF ANY EFFECTIVE REGISTRATION STATEMENT AS TO SUCH
SECURITIES FILED UNDER THE ACT, OR AN EXEMPTION FROM REGISTRATION, AND
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS. THE ISSUER MAY REQUIRE AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER HEREOF THAT SUCH REGISTRATION IS
NOT REQUIRED AND THAT SUCH LAWS ARE COMPLIED WITH. THIS WARRANT MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED PRIOR TO __________________________, 2006 AND THE
REGISTERED HOLDER OF THIS WARRANT, BY ITS/HIS/HER ACCEPTANCE HEREOF, AGREES THAT
IT WILL NOT SELL, TRANSFER OR ASSIGN THIS WARRANT PRIOR TO THAT DATE.

VOID AFTER 5:00 P.M., SPOKANE, WASHINGTON TIME, ON _______________ , 2009

Warrant to subscribe for and purchase ________________ shares of Common Stock,
$.001par value, of

                      NEWTOWN LANE MARKETING, INCORPORATED

This is to Certify That,

FOR ONE HUNDRED DOLLARS ($100) AND OTHER VALUE RECEIVED, PUBLIC SECURITIES,
INC., a Washington Corporation, (the "Holder") is entitled to purchase, subject
to the provisions of this Warrant, from NEWTOWN LANE MARKETING, INCORPORATED, a
Delaware Corporation ("Company"), at any time on or after , 2006, and not later
than 5:00 p.m., Spokane, Washington Time, on _____________________, 2009, a
total of XXXXX shares of Common Stock of the Company ("Securities") exercisable
at a purchase price of $0.56 for the Securities . The number of Securities to be
received upon the exercise of this Warrant and the price to be paid for the
Securities may be adjusted from time to time as hereinafter set forth. The
purchase price of a Security in effect at any time and as adjusted from time to
time is hereinafter sometimes referred to as the "Exercise Price." This Warrant
is or may be one of a series of Warrants identical in form issued by the Company
to purchase an aggregate of ________ Shares of Common Stock. The Securities, as
adjusted from time to time, underlying the Warrants are hereinafter sometimes
referred to as "Warrant Securities".

(1.)  Exercise of Warrant. Subject to the provisions of Section (7) hereof, this
      Warrant may be exercised in whole or in part at anytime or from time to
      time on or after , 2006, but not later than 5:00 p.m., Spokane, Washington
      Time on ___________________________, 2009, or if _______________________,
      2009 is a day on which banking institutions are authorized by law to
      close, then on the next succeeding day which shall not be such a day, by
      presentation and surrender hereof to the Company or at the office of its

<PAGE>

      stock transfer agent, if any, with the Purchase Form annexed hereto duly
      executed and accompanied by payment of the Exercise Price for the number
      of shares of Securities as specified in such Form, together with all
      federal and state taxes applicable upon such exercise. During the term of
      this Warrant, the Company agrees that the Holder shall be entitled to
      participate in any tender offer being made for the Securities and to so
      notify the Holder within a reasonable time of such tender offer no later
      than the third business day after the day the Company becomes aware that
      any tender offer is being made for the Securities. If this Warrant should
      be exercised in part only, the Company shall, upon surrender of this
      Warrant for cancellation, execute and deliver a new Warrant evidencing the
      right of the Holder to purchase the balance of the Securities purchasable
      hereunder not purchased. Upon receipt by the Company of this Warrant at
      the office of the Company or at the office of the Company's stock transfer
      agent, in proper form for exercise and accompanied by the total Exercise
      Price, the Holder shall be deemed to be the holder of record of the
      Securities issuable upon such exercise, notwithstanding that the stock
      transfer books of the Company shall then be closed or that certificates
      representing such Securities shall not then be actually delivered to the
      Holder.

(2.)  Reservation of Securities. The Company hereby agrees that at all times
      there shall be reserved for issuance and/or delivery upon exercise of this
      Warrant such number of shares of Securities as shall be required for
      issuance or delivery upon exercise of this Warrant. The Company covenants
      and agrees that, upon exercise of this Warrant and payment of the Exercise
      Price therefor, all Securities issuable upon such exercise shall be duly
      and validly issued, fully paid, non-assessable and not subject to the
      preemptive rights of any stockholder.

(3.)  Fractional Shares. No fractional shares or scrip representing fractional
      shares shall be issued upon the exercise of this Warrant. With respect to
      any fraction of a share called for upon any exercise hereof, the Company
      shall pay to the Holder an amount in cash equal to such fraction
      multiplied by the current market value of such fractional share,
      determined as follows:

      (a)   If the Securities are listed on a national securities exchange or
            admitted to unlisted trading privileges on such exchange, the
            current value shall be the last reported sale price of the Common
            Stock on such exchange on the last business day prior to the date of
            exercise of this Warrant or if no such sale is made on such day, the
            average of the closing bid and asked prices for such day on such
            exchange; or,

      (b)   If the Securities are not so listed or admitted to unlisted trading
            privileges, the current value shall be the mean of the last reported

                                       2
<PAGE>

            bid and asked prices reported by the National Association of
            Securities Dealers Automated Quotation System (or, if not so quoted
            on NASDAQ or quoted by the National Quotation Bureau, Inc.) on the
            last business day prior to the date of the exercise of this Warrant;
            or (c) If the Securities are not so listed or admitted to unlisted
            trading privileges and bid and asked prices are not so reported, the
            current value shall be an amount, not less than book value,
            determined in such reasonable manner as may be prescribed by the
            Board of Directors of the Company, such determination to be final
            and binding on the Holder.

(4.)  Exchange, Assignment or Loss of Warrant. This Warrant is exchangeable,
      without expense, at the option of the Holder, upon presentation and
      surrender hereof to the Company or at the office of its stock transfer
      agent, if any, for other Warrants of different denominations entitling the
      Holder thereof to purchase (under the same terms and conditions as
      provided by this Warrant) in the aggregate the same number of Securities
      purchasable hereunder. This Warrant may not be sold, transferred,
      assigned, or hypothecated until after one year from the effective date of
      the Registration Statementhereof except that it may be (i) assigned in
      whole or in part to the officers of the "Underwriter(s)", and (ii)
      transferred to any successor to the business of the "Underwriter(s)." Any
      such assignment shall be made by surrender of this Warrant to the Company,
      or at the office of its stock transfer agent, if any, with the Assignment
      Form annexed hereto duly executed and with funds sufficient to pay any
      transfer tax; whereupon the Company shall, without charge, execute and
      deliver a new Warrant in the name of the assignee named insuch instrument
      of assignment, and this Warrant shall promptly be canceled. This Warrant
      may be divided or combined with other Warrants which carry the same rights
      upon presentation hereof at the office of the Company or at the office of
      its stock transfer agent, if any, together with a written notice
      specifying the names and denominations in which new Warrants are to be
      issued and signed by the Holder hereof. The term "Warrant" as used herein
      includes any Warrants issued in substitution for or replacement of this
      Warrant, or into which this Warrant may be divided or exchanged. Until
      this Warrant is duly transferred on the books of the Company, the Company
      may treat the registered holder of this Warrant as absolute owner hereof
      for all purposes without being affected by any notice to the contrary.
      Each successive holder of this Warrant, or any portion of the rights
      represented thereby, shall be bound by the terms and conditions set forth
      herein. Upon receipt by the Company of evidence satisfactory to it of the
      loss, theft, destruction or mutilation of this Warrant, and (in the case
      of loss, theft or destruction) of reasonably satisfactory indemnification,
      and upon surrender and cancellation of this Warrant, if mutilated, the
      Company will execute and deliver a new Warrant of like tenor and date. Any
      such new Warrant executed and delivered shall constitute an additional
      contractual obligation on the part of the Company, whether or not the
      Warrant so lost, stolen, destroyed, or mutilated shall be at any time
      enforceable by anyone.

                                       3
<PAGE>

(5.)  Rights of the Holder. The Holder shall not, by virtue hereof, be entitled
      to any rights of a stockholder in the Company, either at law or equity,
      and the rights of the Holder are limited to those expressed in the Warrant
      and are not enforceable against the Company except to the extent set forth
      herein.

(6.)  Notices to Warrant Holders. So long as this Warrant shall be outstanding
      and unexercised (i) if the Company shall pay any dividend or make any
      distribution upon the Common Stock, or (ii) if the Company shall offer to
      the holders of Common Stock for subscription or purchase by them any
      shares of stock of any class or any other rights, or (iii) if any capital
      reorganization of the Company, reclassification of the capital stock of
      the Company, consolidation or merger of the Company with or into another
      corporation, sale, lease or transfer of all or substantially all of the
      property and assets of the Company to another corporation which is
      effected in such a manner that the holders of Common Stock shall be
      entitled to receive stock, securities or assets with respect to or in
      exchange for Common Stock, or voluntary or involuntary dissolution,
      liquidation or winding up of the Company shall be effected, then, in any
      such case, the Company shall cause to be delivered to the Holder, at least
      ten (10) days prior to the date specified in (x) or (y) below, as the case
      may be, a notice containing a brief description of the proposed action and
      stating the date on which (x) a record is to be taken for the purpose of
      such dividend, distribution or rights, or (y) such reclassification,
      reorganization, consolidation, merger, conveyance, lease, dissolution,
      liquidation or winding up is to take place and the date, if any, is to be
      fixed, as of which the holders of Common Stock of record shall be entitled
      to exchange their shares of Common Stock for equivalent securities or
      other property deliverable upon such reclassification, reorganization,
      consolidation, merger, conveyance, dissolution, liquidation or winding up.

(7.)  Adjustment of Exercise Price and Number of Shares of Common Stock
      Deliverable.

      (A)

            (i)   Except as hereinafter provided, in the event the Company
                  shall, at any time or from time to time after the date hereof,
                  issue any shares of Common Stock as a stock dividend to the
                  holders of Common Stock, or subdivide or combine the
                  outstanding shares of Common Stock into a greater or lesser
                  number of shares (any such issuance, subdivision or
                  combination being herein call a "Change of Shares"), then, and
                  thereafter upon each further Change of Shares, the Exercise
                  Price of the Common Stock issuable upon the exercise of the
                  Warrant in effect immediately prior to such Change of Shares
                  shall be changed to a price (including any applicable fraction
                  of a cent to the nearest cent) determined by dividing (i) the
                  sum of (a) the total number of shares of Common Stock

                                       4
<PAGE>

                  outstanding immediately prior to such Change of Shares,
                  multiplied by the Exercise Price in effect immediately prior
                  to such Change of Shares, and (b) the consideration, if any,
                  received by the Company upon such issuance, subdivision or
                  combination by (ii) the total number of shares of Common Stock
                  outstanding immediately after such Change of Shares; provided,
                  however, that in no event shall the Exercise Price be adjusted
                  pursuant to this computation to an amount in excess of the
                  Exercise Price in effect immediately prior to such
                  computation, except in the case of a combination of
                  outstanding shares of Common Stock.

            For the purposes of any adjustment to be made in accordance with
            this Section (7) the following provisions shall be applicable:

                  (I)   Shares of Common Stock issuable by way of dividend or
                        other distribution on any capital stock of the Company
                        shall be deemed to have been issued immediately after
                        the opening of business on the day following the record
                        date for the determination of shareholders entitled to
                        receive such dividend or other distribution and shall be
                        deemed to have been issued without consideration.

                  (II)  The number of shares of Common Stock at any one time
                        outstanding shall not be deemed to include the number of
                        shares issuable (subject to readjustment upon the actual
                        issuance thereof) upon the exercise of options, rights
                        or warrants and upon the conversion or exchange of
                        convertible or exchangeable securities.

            (ii)  Upon each adjustment of the Exercise Price pursuant to this
                  Section (7), the number of shares of Securities purchasable
                  upon the exercise of each Warrant shall be the number derived
                  by multiplying the number of shares of Securities purchasable
                  immediately prior to such adjustment by the Exercise Price in
                  effect prior to such adjustment and dividing the product so
                  obtained by the applicable adjusted Exercise Price.

      (B)   In case of any reclassification or change of outstanding Securities
            issuable upon exercise of the Warrants (other than a change in par
            value, or from par value to no par value, or from no par value to
            par value or as a result of a subdivision or combination), or in
            case of any consolidation or merger of the Company with or into
            another corporation other than a merger with a "Subsidiary" (which
            shall mean any corporation or corporations, as the case may be, of
            which capital stock having ordinary power to elect a majority of the
            Board of Directors of such corporation (regardless of whether or not
            at the time capital stock of any other class or classes of such
            corporation shall have or may have voting power by reason of the
            happening of any contingency) is at the time directly or indirectly

                                       5
<PAGE>

            owned by the Company or by one or more Subsidiaries) or by the
            Company and one or more Subsidiaries in which merger the Company is
            the continuing corporation and which does not result in any
            reclassification or change of the then outstanding shares of Common
            Stock or other capital stock issuable upon exercise of the Warrants
            (other than a change in par value, or from par value to no par
            value, or from no par value to par value or as a result of
            subdivision or combination) or in case of any sale or conveyance to
            another corporation of the property of the Company as an entirety or
            substantially as an entirety, then, as a condition of such
            reclassification, change, consolidation, merger, sale or conveyance,
            the Company, or such successor or purchasing corporation, as the
            case may be, shall make lawful and adequate provision whereby the
            Holder of each Warrant then outstanding shall have the right
            thereafter to receive on exercise of such Warrant the kind and
            amount of securities and property receivable upon such
            reclassification, change, consolidation, merger, sale or conveyance
            by a holder of the number of securities issuable upon exercise of
            such Warrant immediately prior to such reclassification, change,
            consolidation, merger, sale or conveyance and shall forthwith file
            at the principal office of the Company a statement signed on its
            behalf by its President or a Vice President and by its Treasurer or
            an Assistant Treasurer or its Secretary or an Assistant Secretary
            evidencing such provision. Such provisions shall include provision
            for adjustments which shall be as nearly equivalent as may be
            practicable to the adjustments provided for in Section (7)(A). The
            above provisions of this Section (7)(B) shall similarly apply to
            successive reclassifications and changes of shares of Common Stock
            and to successive consolidations, mergers, sales or conveyances.

      (C)   Irrespective of any adjustments or changes in the Exercise Price or
            the number of Securities purchasable upon exercise of the Warrants,
            the Warrant Certificates theretofore and thereafter issued shall
            (unless the Company shall exercise its option to issue new Warrant
            Certificates pursuant hereto) continue to express the Exercise Price
            per share and the number of shares purchasable thereunder as the
            Exercise Price per share and the number of shares purchasable
            thereunder as expressed in the Warrant Certificates when the same
            were originally issued.

      (D)   After each adjustment of the Exercise Price pursuant to this Section
            (7), the Company will promptly prepare a certificate signed on its
            behalf by the President or Vice President, and by the Treasurer or
            an Assistant Treasurer or the Secretary or an Assistant Secretary,
            of the Company setting forth: (i) the Exercise Price as so adjusted,
            (ii) the number of Securities purchasable upon exercise of each
            Warrant, after such adjustment, and (iii) a brief statement of the
            facts accounting for such adjustment. The Company will promptly file
            such certificate in the Company's minute books and cause a brief
            summary thereof to be sent by ordinary first class mail to each
            Holder at his last address as it shall appear on the registry books
            of the Company. No failure to mail such notice nor any defect

                                       6
<PAGE>

            therein or in the mailing thereof shall affect the validity thereof
            except as to the holder to whom the Company failed to mail such
            notice, or except as to the holder whose notice was defective. The
            affidavit of an officer or the Secretary or an Assistant Secretary
            of the Company that such notice has been mailed shall, in the
            absence of fraud, be prima facie evidence of the facts stated
            therein.

      (i)   Intent of Provisions. Notwithstanding any provision to the contrary,
            if any event occurs as to which, in the opinion of the Board of
            Directors of the Company, the other provisions of this Section 7 are
            not strictly applicable or if strictly applicable, would not fairly
            protect the rights of the Holders' Warrant in accordance with the
            essential intent and principles of such provisions, then such Board
            of Directors shall appoint a firm of independent certified public
            accountants (which may be the regular auditors of the Company) which
            shall give its opinion upon the adjustment, if any, on a basis
            consistent with such essential intent and principles, necessary to
            preserve, without dilution, the rights of the Holders. Upon receipt
            of such opinion by the Board of Directors of the Company, the
            Company shall forthwith make the adjustments described therein

      (E)   No adjustment of the Exercise Price shall be made as a result of or
            in connection with the issuance or sale of Securities if the amount
            of said adjustment shall be less than $0.001, provided, however,
            that in such case, any adjustment that would otherwise be required
            then to be made shall be carried forward and shall be made at the
            time of and together with the next subsequent adjustment that shall
            amount, together with any adjustment so carried forward, to at least
            $.001. In addition, Holders shall not be entitled to cash dividends
            paid by the Company prior to the exercise of any Warrant or Warrants
            held by them.

      (F)   In the event that the Company shall at any time prior to the
            exercise of all Warrants declare a dividend consisting solely of
            shares of Common Stock or otherwise distribute to its stockholders
            any assets, property, rights, or evidences of indebtedness, the
            Holders of the unexercised Warrants shall thereafter be entitled, in
            addition to the Securities or other securities and property
            receivable upon the exercise thereof, to receive, upon the exercise
            of such Warrants, the same property, assets, rights, or evidences of
            indebtedness, that they would have been entitled to receive at the
            time of such dividend or distribution as if the Warrants had been
            exercised immediately prior to such dividend or distribution. At the
            time of any such dividend or distribution, the Company shall make
            appropriate reserves to ensure the timely performance of the
            provisions of this Section (7).

                                       7
<PAGE>

      (G)

            (G.1) Right to Exercise on a Net Issuance Basis. In lieu of
                  exercising this Warrant for cash, the Holder shall have the
                  right to exercise this Warrant or any portion thereof (the
                  "Net Issuance Right") into Common Stock as provided in this
                  Section G.1 at any time or from time to time during the period
                  specified on page one of this Warrant Agreement, hereof by the
                  surrender of this Warrant to the Company with a duly executed
                  and completed Exercise Form marked to reflect net issuance
                  exercise. Upon exercise of the Net Issuance Right with respect
                  to a particular number of shares of the Securities subject to
                  this Warrant and noted on the Exercise Form (the "Net Issuance
                  Warrant Shares"), the Company shall deliver to the Holder
                  (without payment by the Holder of any Exercise Price or any
                  cash or other consideration) (X) that number of shares of
                  fully paid and nonassessable shares of Common Stock equal to
                  the quotient obtained by dividing the value of this Warrant
                  (or the specified portion hereof) on the Net Issuance Exercise
                  Date, which value shall be determined by subtracting (A) the
                  aggregate Exercise Price of the Net Issuance Warrant Shares
                  immediately prior to the exercise of the Net Issuance Right
                  from (B) the aggregate fair market value of the Net Issuance
                  Warrant Shares issuable upon exercise of this Warrant (or the
                  specified portion hereof) on the Net Issuance Exercise Date
                  (as herein defined) by (Y) the fair market value one share of
                  Common Stock on the Net Issuance Exercise Date (as herein
                  defined). Expressed as a formula as shown below, such net
                  issuance exercise shall be computed as follows: X = B-A / Y
                  Where: X = the number of shares of Common Stock that may be
                  issued to the Holder, Y = the fair market value ("FMV") of one
                  share of Common Stock as of the Net Issuance Exercise Date, A
                  = the aggregate Exercise Price (i.e. the product determined by
                  multiplying the Net Issuance Warrant Shares by the Exercise
                  Price) and B = the aggregate FMV (i.e. the product determined
                  by multiplying the FMV by the Net Issuance Warrant Shares).

            (G.1.2) Determination of Fair Market Value. For purposes of this
                  Section G.1.2, "fair market value" of a share of Common Stock
                  as of the Net Issuance Exercise Date shall mean:

                              (i)   if the Net Issuance Right is exercised in
                                    connection with and contingent upon a Public
                                    Offering, and if the Company's registration
                                    Statement relating to such Public Offering
                                    has been declared effective by the SEC, then
                                    the initial "Price to Public" specified in
                                    the final Prospectus with respect to such
                                    offering.

                              (ii)  if the Net Issuance Right is not exercised
                                    in connection with and contingent upon a
                                    Public Offering, then as follows:

                                       8
<PAGE>

                                        (a)   If traded on a securities
                                              exchange, the fair market value of
                                              the Common Stock shall be deemed
                                              to be the last reported sale price
                                              or if no reported sale takes
                                              place, the average of the last
                                              reported sale prices for the last
                                              three (3) trading days prior to
                                              the Net Issuance Date;

                                        (b)   If traded on the Nasdaq National
                                              Market or the Nasdaq Small Cap
                                              Market, the fair market value of
                                              the Common Stock shall be deemed
                                              to be the average of the last
                                              reported sale price of the common
                                              Stock on such Market over the last
                                              three (3) trading days prior to
                                              the Net Issuance Exercise Date;

                                        (c)   If traded over-the-counter other
                                              than on the Nasdaq National market
                                              or the Nasdaq SmallCap Market, the
                                              fair market value of the Common
                                              Stock shall be deemed to be the
                                              average of the midpoint between
                                              the closing bid and ask prices of
                                              the Common Stock over the 3-day
                                              trading period prior to the Net
                                              Issuance Exercise Date; and,

                                        (d)   If there is no public market for
                                              the Common Stock, then the fair
                                              market value shall be determined
                                              by mutual agreement of the
                                              Warrantholder and the Company, and
                                              if the Warrantholder and the
                                              Company are unable to so agree, at
                                              the Company's sole expense, by an
                                              investment banker of national
                                              reputation selected by the Company
                                              and reasonably acceptable to the
                                              Warrantholder.

(8.)  Piggyback Registration. If, at any time commencing one year from the
      effective date of the registration statement and expiring four (4) years
      thereafter, the Company proposes to register any of its securities under
      the Securities Act of 1933, as amended (the "Act") (other than in
      connection with a merger or pursuant to Form S-8, S-4 or other comparable

                                       9
<PAGE>

      registration statement) it will give written notice by registered mail, at
      least thirty (30) days prior to the filing of each such registration
      statement, to the Holders and to all other Holders of the Warrants and/or
      the Warrant Securities of its intention to do so. If the Holder or other
      Holders of the Warrants and/or Warrant Securities notify the Company
      within twenty (20) days after receipt of any such notice of its or their
      desire to include the resale of any such securities in such proposed
      registration statement, the Company shall afford each of the Underwriter
      and such Holders of the Warrants and/or Warrant Securities the opportunity
      to have the resale of any such Warrant Securities registered under such
      registration statement. In the event any underwriter underwriting the sale
      of securities registered by such registration statement shall limit the
      number of securities includable in such registration by shareholders of
      the Company, the number of such securities shall be allocated pro rata
      among the holders of Warrants and the holders of other securities entitled
      to piggyback registration rights. Notwithstanding the provisions of this
      Section, the Company shall have the right at any time after it shall have
      given written notice pursuant to this Section (irrespective of whether a
      written request for inclusion of any such securities shall have been made)
      to elect not to file any such proposed registration statement, or to
      withdraw the same after the filing but prior to the effective date
      thereof.

(9.)  Demand Registration.

      (a)   At any time commencing one year from the effective date of the
            registration statement and expiring four (4) years thereafter, the
            Holders of the Warrants and/or Warrant Securities representing a
            "Majority" (as hereinafter defined) of such securities (assuming the
            exercise of all of the Warrants) shall have the right (which right
            is in addition to the registration rights under Section (i) hereof),
            exercisable by written notice to the Company, to have the Company
            prepare and file with the Securities and Exchange Commission (the
            "Commission"), on one occasion, a registration statement and such
            other documents, including a prospectus, as may be necessary in the
            opinion of both counsel for the Company and counsel for the
            Underwriter and Holders, in order to comply with the provisions of
            the Act, so as to permit a public offering and sale of their
            respective Warrant Securities for twelve (12) consecutive months by
            such Holders and any other holders of the Warrants and/or Warrant
            Securities who notify the Company within ten (10) days after
            receiving notice from the Company of such request.

      (b)   The Company covenants and agrees to give written notice of any
            registration request under this Section (i) by any Holder or Holders
            to all other registered Holders of the Warrants and the Warrant
            Securities within ten (10) days from the date of the receipt of any
            such registration request.

                                       10
<PAGE>

      (c)   In addition to the registration rights under this Section (9) at any
            time commencing one year after the effective date of the
            registration statement and expiring four (4) years thereafter, the
            Holders of Representative's Warrants and/or Warrant Securities shall
            have the right, exercisable by written request to the Company, to
            have the Company prepare and file, on one occasion, with the
            Commission a registration statement so as to permit a public
            offering and sale for twelve (12) consecutive months by such Holders
            of its Warrant Securities; provided, however, that the provisions of
            Section (9)(b) hereof shall not apply to any such registration
            request and registration and all costs incident thereto shall be at
            the expense of the Holder or Holders making such request.

(10.) Covenants of the Company With Respect to Registration. In connection with
      any registration under Section (8) or (9) hereof, the Company covenants
      and agrees as follows:

      (a)   The Company shall use its best efforts to file a registration
            statement within thirty (30) days of receipt of any demand therefor,
            shall use its best efforts to have any registration statement
            declared effective at the earliest possible time, and shall furnish
            each Holder desiring to sell Warrant Securities such number of
            prospectuses as shall reasonably be requested.

      (b)   The Company shall pay all costs (excluding fees and expenses of
            Holder(s)' counsel and any underwriting or selling commissions),
            fees and expenses in connection with all registration statements
            filed pursuant to Sections (h), (i) and (j) hereof including,
            without limitation, the Company's legal and accounting fees,
            printing expenses, blue sky fees and expenses. If the Company shall
            fail to comply with the provisions of Section (10)(a), the Company
            shall, in addition to any other equitable or other relief available
            to the Holder(s), extend the Exercise Period by such number of days
            as shall equal the delay caused by the Company's failure.

      (c)   The Company will take all necessary action which may be required in
            qualifying or registering the Warrant Securities included in a
            registration statement for resale under the securities or blue sky
            laws of such states as are reasonably requested by the Holder(s),
            provided that the Company shall not be obligated to execute or file
            any general consent to service of process or to qualify as a foreign
            corporation to do business under the laws of any such jurisdiction.

      (d)   The Company shall indemnify the Holder(s) of the Warrant Securities
            to be resold pursuant to any registration statement and each person,
            if any, who controls such Holders within the meaning of Section 15
            of the Act or Section 20(a) of the Securities Exchange Act of 1934,
            as amended ("Exchange Act"), from and against all loss, claim,
            damage, expense or liability (including all expenses reasonably
            incurred in investigating, preparing or defending against any claim

                                       11
<PAGE>

            whatsoever) to which any of them may become subject under the Act,
            the Exchange Act or otherwise, arising from such registration
            statement but only to the same extent and with the same effect as
            the provisions pursuant to which the Company has agreed to indemnify
            the Underwriter contained in Section 7 of the Underwriting Agreement
            relating to the offering.

      (e)   The Holder(s) of the Warrant Securities to be resold pursuant to a
            registration statement, and their successors and assigns, shall
            severally, and not jointly, indemnify the Company, its officers and
            directors and each person, if any, who controls the Company within
            the meaning of Section 15 of the Act or Section 20(a) of the
            Exchange Act, against all loss, claim, damage or expense or
            liability (including all expenses reasonably incurred in
            investigating, preparing or defending against any claim whatsoever)
            to which they may become subject under the Act, the Exchange Act or
            otherwise, arising from information furnished by or on behalf of
            such Holders, or their successors or assigns, for specific inclusion
            in such registration statement to the same extent with the same
            effect as the provisions contained in Section 7 of the Underwriting
            Agreement pursuant to which the Underwriter has agreed to indemnify
            the Company.

      (f)   The Holder(s) may exercise their Warrants prior to the initial
            filing of any registration statement or the effectiveness thereof.

      (g)   The Company shall not permit the inclusion of any securities other
            than the Warrant Securities to be included in any registration
            statement filed pursuant to Section (9) hereof, or permit any other
            registration statement to be or remain effective during the
            effectiveness of a registration statement filed pursuant to Section
            (9) hereof, other than a secondary offering of equity securities of
            the Company, without the prior written consent of the Holders of the
            Warrants and Warrant Securities representing a Majority of such
            securities.

      (h)   The Company shall furnish to each Holder participating in the
            offering and to each underwriter, if any, a signed counterpart,
            addressed to such Holder or underwriter, of (x) an opinion of
            counsel to the Company, dated the effective date of such
            registration statement (and, if such registration includes an
            underwritten public offering, an opinion dated the date of the
            closing under the underwriting agreement), and (y) a "cold comfort"
            letter dated the effective date of such registration statement (and,
            if such registration includes an underwritten public offering, a
            letter dated the date of the closing under the underwriting
            agreement) signed by the independent public accountants who have
            issued a report on the Company's financial statements included in

                                       12
<PAGE>

            such registration statement, in each case covering substantially the
            same matters with respect to such registration statement (and the
            prospectus included therein) and, in the case of such accountants'
            letter, with respect to events subsequent to the date of such
            financial statements, as are customarily covered in opinions of
            issuer's counsel and in accountants' letters delivered to
            underwriters in underwritten public offerings of securities.

      (i)   The Company shall as soon as practicable after the effective date of
            the registration statement, and in any event within 15 months
            thereafter, make "generally available to its security holders"
            (within the meaning of Rule 158 under the Act) an earnings statement
            (which need not be audited) complying with Section 11(a) of the Act
            and covering a period of at least 12 consecutive months beginning
            after the effective date of the registration statement.

      (j)   The Company shall deliver promptly to each Holder participating in
            the offering requesting the correspondence and memoranda described
            below and to the managing underwriters, copies of all correspondence
            between the Commission and the Company, its counsel or auditors and
            all memoranda relating to discussions with the Commission or its
            staff with respect to the registration statement and permit each
            Holder and underwriter to do such investigation, upon reasonable
            advance notice, with respect to information contained in or omitted
            from the registration statement as it deems reasonably necessary to
            comply with applicable securities laws or rules of the National
            Association of Securities Dealers, Inc. ("NASD") or an Exchange.
            Such investigation shall include access to books, records and
            properties and opportunities to discuss the business of the Company
            with its officers and independent auditors, all to such reasonable
            extent and at such reasonable times and as often as any such Holder
            or underwriter shall reasonably request.

      (k)   The Holders shall be parties to any underwriting agreement relating
            to an underwritten sale of their Warrant Securities and may, at
            their option, require that any or all the representations,
            warranties and covenants of the Company to or for the benefit of
            such underwriters shall also be made to and for the benefit of such
            Holders. Such Holders shall not be required to make any
            representations or warranties to or agreements with the Company or
            the underwriters except as they may relate to such Holders and their
            intended methods of distribution.

      (l)   For purposes of this Agreement, the term "Majority" in reference to
            the Holders of Warrants or Warrant Securities, shall mean in excess
            of fifty (50%) of the then outstanding Warrants and Warrant
            Securities that (i) are not held by the Company, an affiliate,
            officer, creditor, employee or agent thereof or any of their
            respective affiliates, members of their family, persons acting as
            nominees or in conjunction therewith or (ii) have not been resold to
            the public pursuant to a registration statement filed with the
            Commission under the Act.

                                       13
<PAGE>

(11.) Buy-Out of Registration Demand. In lieu of carrying out its obligations to
      effect a Piggyback Registration or Demand Registration of any registrable
      securities pursuant to the Section, the Company may carry out such
      obligation by offering to purchase and purchasing such Registrable
      Securities requested to be registered in an amount in cash equal to the
      difference between (a) 95% of the last sale price of the Common Stock on
      the day the request for registration is made and (b) the Exercise Price in
      effect on such day; the purchase transaction closing within three (3)
      business days; provided however, that the Holder or Holders may decline
      such request rather than accept such offer by the Company.

(12.) Conditions of Company's Obligations. The Company's obligation under
      Section 10 hereof shall be conditioned as to each such public offering,
      upon a timely receipt by the Company in writing of: (a) Information as to
      the terms of such public offering furnished by or on behalf of the Holders
      making a public distribution of their Warrant Securities.

(13.) Continuing Effect of Agreement. The Company's agreements with respect to
      the Warrant Securities in this Warrant will continue in effect regardless
      of the exercise or surrender of this Warrant.

(14)  Notices. Any notices or certificates by the Company to the Holder and by
      the Holder to the Company shall be deemed delivered if in writing and
      delivered personally or sent by certified mail, to the Holder, addressed
      to him or sent to 300 North Argonne Road, Suite 202, Spokane, Washington
      99212, or, if the Holder has designated, by notice in writing to the
      Company, any other address, to such other address, and, if to the Company,
      addressed to Richard M. Cohen, Chief Executive Officer, 33 Newtown Lane,
      East Hampton, New York 11937. The Company may change its address by
      written notice to the Holder.

(15)  Limited Transferability. The Warrant may be divided or combined, upon
      request to the Company by the Warrant holder, into a certificate or
      certificates evidencing the same aggregate number of Warrants. The Warrant
      may not be offered, sold, transferred, pledged or hypothecated in the
      absence of any effective registration statement as to such Warrant filed
      under the Act, or an exemption from the requirement of such registration,
      and compliance with the applicable federal and state securities laws. The
      Company shall permit the Holder or his duly authorized attorney, upon
      written request during ordinary business hours, to inspect and copy or
      make extracts from its books showing the registered holders of Warrants.

(16)  Transfer to Comply With the Securities Act of 1933. The Company may cause
      the following legend, or one similar thereto, to be set forth on the
      Warrants and on each certificate representing Warrant Securities, or any
      other security issued or issuable upon exercise of this Warrant not
      theretofore distributed to the public or sold to underwriters for

                                       14
<PAGE>

      distribution to the public pursuant to Sections (8) or (9) hereof; unless
      counsel satisfactory to the Company is of the opinion as to any such
      certificate that such legend, or one similar thereto, is unnecessary: "The
      warrants represented by this certificate are restricted securities and may
      not be offered for sale, sold or otherwise transferred unless an opinion
      of counsel satisfactory to the Company is obtained stating that such
      offer, sale or transfer is in compliance wrath state and federal
      securities law. With respect to Warrant Securities that have not
      theretofore been subject to a registration statement pursuant to Sections
      8 or 9 hereof, upon request, the Company will arrange at its expense to
      have an opinion of counsel satisfactory to the Company issued, which will
      provide that to the extent Warrant Securities were acquired through the
      Net Issuance Exercise of this Warrant as provided in Section 7(G.1)
      without the payment of any cash, the Holder's date of acquisition of such
      Warrant Securities will be the date of acquisition of the Warrant. The
      issuance of any opinion relating to the transferability of any Warrant or
      Warrant Securities will be conditioned upon the Holder providing evidence
      satisfactory to such counsel of the proper acquisition and exercise of
      this Warrant, the completion and filing of all forms or other documents
      required to comply with federal and state securities laws and the
      continued applicability of the current interpretation of Rule
      144(d)(3)(ii) as expressed in items 4, 61 and 64 of the Division of
      Corporation Finance Manual of Publicly Available Telephone
      Interpretations. The Company will provide upon request to any Holder a
      list of the registered holders of Warrants. Such costs and expenses of
      Counsel shall be at its sole cost and expense. The Company represents and
      warrants, it will not hinder, delay or impede in any fashion, the
      assignment and/or exercise of the this Warrant, the issuance of any
      underlying securities, and/or the resale of such underlying securities. To
      effect such transaction, the Company shall cause such legal opinions to
      issue in a timely and professional manner upon demand by the Underwriter.

(17)  Applicable Law. This Warrant shall be governed by, and construed in
      accordance with, the laws of the State of Delaware, without giving effect
      to conflict of law principles.

(18.) Amendment. This Warrant may not be amended except in a writing signed by
      each Holder and the Company.

(19.) Severability. If any provisions of this Warrant shall be held to be
      invalid or unenforceable, such invalidity or enforceability shall not
      affect any other provision of this Warrant.

(20.) Survival of Indemnification Provisions. The indemnification provisions of
      this Warrant shall survive until , 2016.

(21)  Company to Provide Reports. Etc. While this Warrant Certificate remains
      outstanding, the Company shall mail to the persons in whose name this
      Warrant Certificate is registered copies of all reports and correspondence
      which the Company mails to its stockholders.

                                       15
<PAGE>

(22)  Representations and Warranties of Holder. The Holder hereby represents and
      warrants to the Company:

      (a)   The Holder understands that this Warrant Certificate and the Common
            Shares to be issued herein, HAS NOT BEEN APPROVED OR DlSAPPROVED BY
            TME UNITED STATES SECURITIES AND EXCHANGE COMMISSION, THE STATE OF
            DELAWARE, OR ANY OTHER STATE SECURITIES AGENCIES.

      (b)   This Warrant Certificate and the Common Stock to be issued herein
            may not be transferred, encumbered, sold, hypothecated, or otherwise
            disposed of to any person, without the express prior written consent
            of the Company and the prior opinion of counsel for the Company,
            that such disposition will not violate Federal and/or State
            Securities Acts. Disposition shall include, but is not limited to
            acts of selling, assigning, transferring, pledging, encumbering,
            hypothecating, giving, and any form of conveying, whether voluntary
            or not.

      (c)   To the extent that any Federal and/or State Securities laws shall
            require, the Holder hereby agrees that any shares acquired pursuant
            to this Warrant Certificate shall be without preference as to
            dividends, assets, or voting rights and shall have no greater or
            lesser rights per share than the securities issued for cash or its
            equivalent.

      (d)   This Warrant is subject in all respects to the terms and provisions
            of an Underwriting Agreement between the Company and Public
            Securities, Inc., (the Underwriter therein and the initial Holder
            hereof), relating to a public offering of the Common Stock and
            Warrants of the Company dated , 2006.

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officers and to be sealed with the seal of the Company this day of
June, 2006.

CAPSOURCE FINANCIAL, INC, INC.

By
   ---------------------------------
          Richard M. Cohen
Title: Chief Executive Officer
Date:
      ------------------------------
Attest:

------------------------------------
Secretary

                                       16
<PAGE>

                                  PURCHASE FORM

The Undersigned hereby exercises the Warrant Certificate to subscribe for and
purchase shares of Common Stock, $.001 par value ("Common Shares"), of NEWTOWN
LANE MARKETING, INCORPORATED, a Delaware Corporation, evidenced by the within
the Warrant Certificate and herewith makes payment of the Exercise Price. Kindly
issue certificates for the Common Shares in accordance with the instructions
given below. The certificate for the unexercised balance, if any, of the within
Warrant Certificate will be registered in the name of the undersigned.

Dated:
_______________________________________
(Signature)

Instructions for registration of Common Shares

_______________________________________
Name (Please print)

_______________________________________
Social Security or Other Identifying Number:

_______________________________________
Address:

_______________________________________
Street

_______________________________________
City, State and Zip Code

HOLDER:

PUBLIC SECURITIES, INC.

By: ___________________________________
Title: President

Instructions for registration of certificate representing the unexercised
balance of Warrant (if any)

_______________________________________
Name (Please print)

_______________________________________
Social Security or Other Identifying Number:

_______________________________________
Address:

_______________________________________
Street

_______________________________________
City, State and Zip Code

                                       17
<PAGE>

                               FORM OF ASSIGNMENT
                (to be executed by the registered holder hereof)

FOR VALUE RECEIVED, ____________________________ does hereby sell, assign and
transfer unto ___________________________________________ the right to purchase
shares of the Common Stock of the Company, $.001 par value ("Common Shares"), of
NEWTOWN LANE MARKETING, INCORPORATED, a Delaware Corporation, evidenced by the
within Warrant, and does hereby irrevocably constitute and appoint
____________________________ attomey, to transfer such right on the books of the
Company with full power of substitution in the premises.

DATED: ________________, 200___

_______________________________
(Signature)

_______________________________
(Signature guaranteed)

                                       18

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