Document:

Exhibit 4.10

      NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

No. 10                                                              $25,000.00

                                -------------
                      12% SECURED CONVERTIBLE DEBENTURE
                             DUE DECEMBER 1, 2000

      THIS DEBENTURE is issued by IVOICE.COM, INC., a Delaware corporation
having a principal place of business at 1230 Highway 34, Aberdeen, New Jersey
07747 (the "Company"), and is designated as the Company's 12% Secured
Convertible Debentures, due December 1, 2000 (the "Debentures").

      FOR VALUE RECEIVED, the Company promises to pay to AJW PARTNERS, LLC, or
its registered assigns (the "Holder"), the principal sum of Twenty-five and
no/100 ($25,000.00) Dollars, on December 1, 2000 or such earlier date as the
Debentures are required or permitted to be repaid as provided hereunder (the
"Maturity Date") and to pay interest to the Holder on such principal sum at the
rate of 12% per annum, payable on a quarterly basis on March 31, June 30,
September 30 and December 31 of each year while such Debentures are outstanding
(each an "Interest Payment Date") and on each Conversion Date (as defined
herein) for such principal amount, commencing on the earlier to occur of a
Conversion Date for such principal amount and January 1, 2000, in cash or shares
of Common Stock (as defined in Section 7). Subject to the terms and conditions
herein, the decision whether to pay interest hereunder in Common Stock or cash
shall be at the discretion of the Company. Interest shall accrue daily
commencing on the Original Issue Date (as defined in Section 7) until payment in
full of the principal sum, together with all accrued and unpaid interest and
other amounts which may become due hereunder, has been made. Any interest not
paid on any Interest Payment Date shall continue to accrue and shall be due and
payable upon conversion of the Debentures. Interest hereunder will be paid to
the Person (as defined in Section 7) in whose name this Debenture is registered
on the records of the Company regarding registration and transfers of Debentures
(the "Debenture Register"). All overdue accrued and unpaid interest shall entail
a late fee at the rate of 15% per annum (to accrue daily, from the date such
interest is due hereunder through and including the date of payment), payable in
cash. Not less than ten (10) Trading Days (as defined in Section 7) prior to
Interest Payment Date, the Company shall provide the Holder notice of its
intention to pay interest in cash or shares of Common Stock (the Company may
indicate in such notice that the election contained in such notice shall
continue for later periods until revised). If interest is paid in shares of
Common Stock, the number of shares of Common Stock issuable on account of such
interest shall equal the cash amount of such interest on such Interest Payment
Date divided by the Conversion Price (as defined below) on such date.
Notwithstanding anything to contrary set forth herein, for purposes of
determining the number of shares of Common Stock that are issuable as payment of
interest hereunder, the Conversion Price shall not be subject to any Floor to
which the Conversion Price would otherwise be subject.

      Notwithstanding anything to the contrary contained herein, the Company may
not issue shares of Common Stock in payment of interest on the principal amount
if:

            (i) the number of shares of Common Stock at the time authorized,
unissued and unreserved for all purposes, or held as treasury stock, is
insufficient to pay interest hereunder in shares of Common Stock;

<PAGE>

            (ii) after the Interest Effectiveness Date (as defined in Section 7)
such shares (x) are not registered for resale pursuant to an effective
Underlying Shares Regulation A Filing (as defined in Section 7) and (y) may not
be sold without volume restrictions pursuant to Rule 144(k) promulgated under
the Securities Act (as defined in Section 7), as determined by counsel to the
Company pursuant to a written opinion letter, addressed to the Company's
transfer agent in the form and substance acceptable to the applicable Holder and
such transfer agent (if the Company is permitted and elects to pay interest in
shares of Common Stock under this clause (ii) prior to the Interest
Effectiveness Date and thereafter an Underlying Shares Regulation A Filing shall
be declared effective by the Commission (as defined in Section 7), the Company
shall, within three (3) Trading Days after the date of such declaration of
effectiveness, exchange such shares for shares of Common Stock that are free of
restrictive legends of any kind)

            (iii) such shares are not listed or quoted on either the Nasdaq
National Market ("NASDAQ") or on the New York Stock Exchange, American Stock
Exchange or the Nasdaq SmallCap Market or OTC Bulletin Board (each, a
"Subsequent Market");

            (iv) the  Company  has  failed to timely  satisfy  its  conversion
obligations hereunder; or

            (v) the  issuance of such shares  would  result in a violation  of
Section 4(a)(ii)(A).

      This Debenture is subject to the following additional provisions:

            Section 1. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same. No service charge will be made
for such registration of transfer or exchange.

            Section 2 Prior to due presentment to the Company for transfer of
this Debenture, the Company and any agent of the Company may treat the Person
(as defined in Section 7) in whose name this Debenture is duly registered on the
Debenture Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Debenture is
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.

            Section 3   Events of Default.

            (a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

            (i) any default in the payment of the principal of, interest on or
      liquidated damages in respect of, this Debenture, free of any claim of
      subordination except in accordance with a subordination agreement executed
      by the Holder, as and when the same shall become due and payable (whether
      on the applicable Interest Payment Date, a Conversion Date or the Maturity
      Date or by acceleration or otherwise);

            (ii) the Company shall fail to observe or perform any other
      covenant, agreement or warranty contained in, or otherwise commit any
      breach of any of, this Debenture, the Purchase Agreement, the Registration
      Rights Agreement (as defined in Section 7) or the Security Agreements (as
      defined in Section 7), and such failure or breach shall not have been
      remedied within 30 days after the date on which notice of such failure or
      breach shall have been given;

            (iii) the Company or any of its subsidiaries shall commence, or
      there shall be commenced against the Company or any such subsidiary a case
      under any applicable bankruptcy or insolvency laws as now or hereafter in
      effect or any successor thereto, or the Company commences any other
      proceeding under any reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law
      of any jurisdiction whether now or hereafter in effect relating to the
      Company or any subsidiary thereof or there is commenced against the
      Company or any subsidiary thereof any such bankruptcy, insolvency

<PAGE>

      or other proceeding which remains undismissed for a period of 60 days; or
      the Company or any subsidiary thereof is adjudicated insolvent or
      bankrupt; or any order of relief or other order approving any such case or
      proceeding is entered; or the Company or any subsidiary thereof suffers
      any appointment of any custodian or the like for it or any substantial
      part of its property which continues undischarged or unstayed for a period
      of 60 days; or the Company or any subsidiary thereof makes a general
      assignment for the benefit of creditors; or the Company shall fail to pay,
      or shall state that it is unable to pay, or shall be unable to pay, its
      debts generally as they become due; or the Company or any subsidiary
      thereof shall call a meeting of its creditors with a view to arranging a
      composition, adjustment or restructuring of its debts; or the Company or
      any subsidiary thereof shall by any act or failure to act indicate its
      consent to, approval of or acquiescence in any of the foregoing; or any
      corporate or other action is taken by the Company or any subsidiary
      thereof for the purpose of effecting any of the foregoing;

            (iv) the Company shall default in any of its obligations under any
      mortgage, credit agreement or other facility, indenture agreement or other
      instrument under which there may be issued, or by which there may be
      secured or evidenced any indebtedness of the Company in an amount
      exceeding ten thousand dollars ($10,000), whether such indebtedness now
      exists or shall hereafter be created and such default shall result in such
      indebtedness becoming or being declared due and payable prior to the date
      on which it would otherwise become due and payable;

            (v) the Common Stock shall be delisted from either the NASDAQ or a
      Subsequent Market or shall be suspended from trading on the NASDAQ without
      resuming trading and/or being relisted thereon or on a Subsequent Market
      or having such suspension lifted, as the case may be, within two (2) days;

            (vi) the Company shall be a party to any Change of Control
      Transaction (as defined in Section 7), shall agree to sell or dispose all
      or in excess of 50% of its assets in one or more transactions (whether or
      not such sale would constitute a Change of Control Transaction), or shall
      redeem or repurchase more than a de minimis number of shares of Common
      Stock or other equity securities of the Company (other than redemptions of
      Underlying Shares (as defined in Section 7));

            (xxv) an Underlying Shares Regulation A Filing shall not have been
      declared effective by the Commission on or prior to the 150th day after
      the date hereof (the "Effectiveness Date").

            (xxvi) if, during the Effectiveness Period, the effectiveness of the
      Underlying Shares Regulation A Filing lapses for any reason for more than
      an aggregate of five (5) Trading Days (which need not be consecutive
      days), or the Holder shall not be permitted to resell Registrable
      Securities under the Underlying Shares Regulation A Filing for more than
      an aggregate of five (5) Trading Days (which need not be consecutive
      days);

            (ix) an Event (as hereinafter defined) shall not have been cured to
      the satisfaction of the Holder prior to the expiration of thirty (30) days
      from the Event Date (as defined below) relating thereto (other than an
      Event resulting from a failure of an Underlying Shares Regulation A Filing
      to be declared effective by the Commission on or prior to the
      Effectiveness Date, which shall be covered by Section 3(a)(vii));

            (xi) the Company shall fail for any reason to deliver certificates
      to a Holder prior to the tenth (10th) day after a Conversion Date pursuant
      to Section 4(b) or the Company shall provide notice to the Holder,
      including by way of public announcement, at any time, of its intention not
      to comply with requests for conversions of any Debentures in accordance
      with the terms hereof;

            (xii) the Company shall fail for any reason to deliver the payment
      in cash pursuant to a Buy-In within seven (7) days after notice is deemed
      delivered hereunder;

<PAGE>

            (xiii) the Company shall issue any shares of Common Stock or Common
      Stock Equivalents (as defined herein) in connection with or to any present
      or future lender or creditor of the Company or any subsidiary thereof;

            (xiv) the Company shall agree to pay or settle any litigation or
      claim for an amount in stock or cash that exceeds by more than $25,000 the
      insurance coverage for such litigation or claim; or

            (xv) the Company shall restructure any material portion of its
      present or future debt obligations or payables.

            (b) If any Event of Default occurs and is continuing, the full
principal amount of this Debenture (and, at the Holder's option, all other
Debentures then held by such Holder), together with interest and other amounts
owing in respect thereof, to the date of acceleration shall become, immediately
due and payable in cash. The aggregate amount payable upon an Event of Default
shall be equal to the sum of (i) the Optional Prepayment Price (as defined in
Section 7) plus (ii) the product of (A) the number of Underlying Shares issued
in respect of conversions hereunder or as payment of interest hereunder, in
either case, within thirty (30) days of the date of a declaration of an Event of
Default and then held by the Holder and (B) the Per Share Market Value (as
defined in Section 7) on the date prepayment is due or the date the full
prepayment price is paid, whichever is greater. Interest shall accrue on the
prepayment amount hereunder from the seventh day after such amount is due (being
the date of an Event of Default) through the date of prepayment in full thereof
at the rate of 15% per annum. All Debentures and Underlying Shares for which the
full repayment price hereunder shall have been paid in accordance herewith shall
be promptly surrendered to or as directed by the Company. The Holder need not
provide and the Company hereby waives any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and without expiration of any
grace period enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such declaration may be
rescinded and annulled by Holder at any time prior to payment hereunder. No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.

        Section 4.  Conversion.

        (a) (i) Conversion at Option of Holder. This Debenture shall be
convertible into shares of Common Stock at the option of the Holder, in whole or
in part at any time and from time to time, after the Original Issue Date
(subject to the limitations on conversion set forth in Section 4(a)(ii) hereof).
The number of shares of Common Stock issuable upon a conversion hereunder shall
be determined by dividing the outstanding principal amount of this Debenture to
be converted, plus all accrued but unpaid interest thereon, by the Conversion
Price. The Holder shall effect conversions by surrendering the Debentures (or
such portions thereof) to be converted, together with the form of conversion
notice attached hereto as Exhibit A (a "Conversion Notice") to the Company. Each
Conversion Notice shall specify the principal amount of Debentures to be
converted and the date on which such conversion is to be effected, which date
may not be prior to the date such Conversion Notice is deemed to have been
delivered hereunder (a "Conversion Date"). If no Conversion Date is specified in
a Conversion Notice, the Conversion Date shall be the date that such Conversion
Notice is deemed delivered hereunder. Subject to Section 4(b), each Conversion
Notice, once given, shall be irrevocable. If the Holder is converting less than
all of the principal amount represented by the Debenture(s) tendered by the
Holder with the Conversion Notice, or if a conversion hereunder cannot be
effected in full for any reason, the Company shall honor such conversion to the
extent permissible hereunder and shall promptly deliver to such Holder (in the
manner and within the time set forth in Section 4(b)) a new Debenture for such
principal amount as has not been converted.

                  (ii)  Certain Conversion Restrictions

                  (A)(1) A Holder may not convert Debentures or receive shares
of Common Stock as payment of interest hereunder to the extent such conversion
or receipt of such interest payment would result in the Holder, together with
any affiliate thereof, beneficially owning (as determined in accordance with
Section 13(d) of the Exchange Act (as defined in Section 7) and the rules
promulgated thereunder) in excess of 4.999% of the then issued

<PAGE>

and outstanding shares of Common Stock, including shares issuable upon
conversion of, and payment of interest on, the Debentures held by such Holder
after application of this Section. The Holder shall have the sole authority and
obligation to determine whether the restriction contained in this Section
applies and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the
principal amount of Debentures are convertible shall be in the sole discretion
of the Holder. The provisions of this Section may be waived by a Holder (but
only as to itself and not to any other Holder) upon not less than 5 days prior
notice to the Company. Other Holders shall be unaffected by any such waiver.

                        (2) A Holder  may not  convert  Debentures  or receive
shares of Common Stock as payment of interest hereunder to the extent such
conversion or receipt of such interest payment would result in the Holder,
together with any affiliate thereof, beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules promulgated
thereunder) in excess of 9.999% of the then issued and outstanding shares of
Common Stock, including shares issuable upon conversion of, and payment of
interest on, the Debentures held by such Holder after application of this
Section. The Holder shall have the sole authority and obligation to determine
whether the restriction contained in this Section applies and to the extent that
the Holder determines that the limitation contained in this Section applies, the
determination of which portion of the principal amount of Debentures are
convertible shall be in the sole discretion of the Holder. The provisions of
this Section may be waived by a Holder (but only as to itself and not to any
other Holder) upon not less than 15 days prior notice to the Company. Other
Holders shall be unaffected by any such waiver.

                  (B) If the Common Stock is then listed for trading on the
NASDAQ or the Nasdaq SmallCap Market and the Company has not obtained the
Shareholder Approval (as defined below), then the Company may not issue in
excess of [ ] shares of Common Stock upon conversions of Debentures or as
payment of interest thereon in shares of Common Stock, which number shall be
subject to adjustment pursuant to Sections 4(c)(ii), (iii), (v), (vi) and (x)
(such number of shares, the "Issuable Maximum"). The Issuable Maximum equals
19.999% of the number of shares of Common Stock outstanding immediately prior to
the closing of transactions set forth in the Purchase Agreement. If on any
Conversion Date (A) the Common Stock is listed for trading on the NASDAQ or the
Nasdaq SmallCap Market, (B) the Conversion Price then in effect is such that the
aggregate number of shares of Common Stock that would then be issuable upon
conversion in full of all then outstanding Debentures and as payment of interest
thereon in shares of Common Stock, together with any shares of Common Stock
previously issued upon conversion of Debentures and as payment of interest
thereon, would exceed Issuable Maximum, and (C) the Company shall not have
previously obtained the vote of shareholders (the "Shareholder Approval"), if
any, as may be required by the applicable rules and regulations of the Nasdaq
Stock Market (or any successor entity) applicable to approve the issuance of
shares of Common Stock in excess of the Issuable Maximum pursuant to the terms
hereof, then the Company shall issue to the Holder so requesting a conversion a
number of shares of Common Stock equal to the Issuable Maximum and, with respect
to the remainder of the principal amount of Debentures then held by such Holder
for which a conversion in accordance with the Conversion Price would result in
an issuance of shares of Common Stock in excess of the Issuable Maximum (the
"Excess Principal"), the converting Holder shall have the option to require the
Company to either (1) use its best efforts to obtain the Shareholder Approval
applicable to such issuance as soon as is possible, but in any event not later
than the 75th day after such request, or (2) pay cash to the converting Holder
in an amount equal to the Optional Prepayment Amount for the Excess Principal.
If the Company fails to pay the Optional Prepayment Amount in full pursuant to
this Section, the Company will pay interest thereon at a rate of 15% per annum
to the converting Holder, accruing daily from the Conversion Date until such
amount, plus all such interest thereon, is paid in full.

            (b) (i) Not later than five (5) Trading Days after any Conversion
Date, the Company will deliver to the Holder (i) a certificate or certificates
which shall be free of restrictive legends and trading restrictions representing
the number of shares of Common Stock being acquired upon the conversion of
Debentures (subject to the limitations set forth in Section 4(a)(ii) hereof),
(ii) Debentures in a principal amount equal to the principal amount of
Debentures not converted, (iii) a bank check in the amount of accrued and unpaid
interest (if the Company has elected or is required to pay accrued interest in
cash), and (iv) if the Company has elected and is permitted hereunder to pay
accrued interest in shares of Common Stock, certificates, which shall be free of
restrictive legends and trading restrictions (other than those required by
Section 3.1 (b) of the Purchase Agreement), representing such shares of Common
Stock; provided,

<PAGE>

that the Company shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon conversion of the principal amount of
Debentures until Debentures are delivered for conversion to the Company, or the
Holder notifies the Company that such Debentures have been lost, stolen or
destroyed and provides a bond (or other adequate security) reasonably
satisfactory to the Company to indemnify the Company from any loss incurred by
it in connection therewith. The Company shall, upon request of the Holder, if
available, use its best efforts to deliver any certificate or certificates
required to be delivered by the Company under this Section electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions. If in the case of any Conversion
Notice such certificate or certificates, including for purposes hereof, any
shares of Common Stock to be issued on the Conversion Date on account of accrued
but unpaid interest hereunder, are not delivered to or as directed by the
applicable Holder by the third (3rd) Trading Day after the Conversion Date, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such certificate or certificates thereafter, to rescind
such conversion, in which event the Company shall immediately return the
certificates representing the principal amount of Debentures tendered for
conversion.

                  (ii) If the Company fails to deliver to the Holder such
certificate or certificates pursuant to Section 4(b)(i), including for purposes
hereof, any shares of Common Stock to be issued on the Conversion Date on
account of accrued but unpaid interest hereunder, by the fifth (5th) Trading Day
after the Conversion Date, the Company shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, $250.00 for each Trading Day after such
fifth (5th) Trading Day until such certificates are delivered. Nothing herein
shall limit a Holder's right to pursue actual damages for the Company's failure
to deliver certificates representing shares of Common Stock upon conversion
within the period specified herein and such Holder shall have the right to
pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief. The
exercise of any such rights shall not prohibit the Holders from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.
Further, if the Company shall not have delivered any cash due in respect of
conversions of Debentures or as payment of interest thereon by the fifth (5th)
Trading Day after the Conversion Date, the Holder may, by notice to the Company,
require the Company to issue shares of Common Stock pursuant to Section 4(c),
except that for such purpose the Conversion Price applicable thereto shall be
the lesser of the Conversion Price on the Conversion Date and the Conversion
Price on the date of such Holder demand. Any such shares will be subject to the
provision of this Section.

                  (iii) In addition to any other rights available to the Holder,
if the Company fails to deliver to the Holder such certificate or certificates
pursuant to Section 4(b)(i), including for purposes hereof, any shares of Common
Stock to be issued on the Conversion Date on account of accrued but unpaid
interest hereunder, by the fifth (5th) Trading Day after the Conversion Date,
and if after such fifth (5th) Trading Day the Holder purchases (in an open
market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by such Holder of the Underlying Shares which the Holder anticipated
receiving upon such conversion (a "Buy-In"), then the Company shall (A) pay in
cash to the Holder (in addition to any remedies available to or elected by the
Holder) the amount by which (x) the Holder's total purchase price (including
brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the
product of (1) the aggregate number of shares of Common Stock that such Holder
anticipated receiving from the conversion at issue multiplied by (2) the market
price of the Common Stock at the time of the sale giving rise to such purchase
obligation and (B) at the option of the Holder, either reissue Debentures in
principal amount equal the principal amount of the attempted conversion or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its delivery requirements under
Section 4(b)(i). For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of Debentures with respect to which the market price of the
Underlying Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence, the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In.
Notwithstanding anything contained herein to the contrary, if a Holder requires
the Company to make payment in respect of a Buy-In for the failure to timely
deliver certificates hereunder and the Company timely pays in full such payment,
the Company shall not be required to pay such Holder liquidated damages under
Section 4(b)(ii) in respect of the certificates resulting in such Buy-In.

<PAGE>

            (c) (i) The conversion price (the "Conversion Price") in effect on
any Conversion Date shall be 50% of the average of the bid price during the
twenty (20) Trading Days immediately preceding the applicable Conversion Date,
provided, that such twenty (20) Trading Day period shall be extended for the
number of Trading Days during such period in which (A) trading in the Common
Stock is suspended by the NASDAQ or a Subsequent Market on which the Common
Stock is then listed, or (B) after the date declared effective by the
Commission, the Underlying Shares Regulation A Filing is not effective, or (C)
after the date declared effective by the Commission, the Prospectus included in
the Underlying Shares Regulation A Filing may not be used by the Holder for the
resale of Underlying Shares. If (a) an Underlying Shares Regulation A Filing is
not filed on or prior to the Filing Date (as defined under the Registration
Rights Agreement) (if the Company files such Underlying Shares Regulation A
Filing without affording the Holder the opportunity to review and comment on the
same as required by Section 3(a) of the Registration Rights Agreement, the
Company shall not be deemed to have satisfied this clause (a)), or (b) the
Company fails to file with the Commission a request for acceleration in
accordance with Rule 12d1-2 promulgated under the Exchange Act, within five (5)
days of the date that the Company is notified (orally or in writing, whichever
is earlier) by the Commission that an Underlying Shares Regulation A Filing will
not be "reviewed," or not subject to further review, or (c) the Underlying
Shares Regulation A Filing is not declared effective by the Commission on or
prior to the Effectiveness Date, or (d) such Underlying Shares Regulation A
Filing is filed with and declared effective by the Commission but thereafter
ceases to be effective as to all Registrable Securities at any time prior to the
expiration of the Effectiveness Period (as defined in the Registration Rights
Agreement), without being succeeded within ten (10) days by an amendment to such
Underlying Shares Regulation A Filing or by a subsequent Underlying Shares
Regulation A Filing filed with and declared effective by the Commission, or (e)
the Common Stock shall be delisted or suspended from trading on the NASDAQ or on
any Subsequent Market for more than three (3) Business Days (which need not be
consecutive days), (f) the conversion rights of the Holders are suspended for
any reason or (g) an amendment to the Underlying Shares Regulation A Filing is
not filed by the Company with the Commission within ten (10) days of the
Commission's notifying the Company that such amendment is required in order for
the Underlying Shares Regulation A Filing to be declared effective (any such
failure or breach being referred to as an "Event," and for purposes of clauses
(a), (c), (f) the date on which such Event occurs, or for purposes of clause (b)
the date on which such five (5) day period is exceeded, or for purposes of
clauses (d) and (g) the date which such 10 day-period is exceeded, or for
purposes of clause (e) the date on which such three (3) Business Day-period is
exceeded, being referred to as "Event Date"), then, on the Event Date and on
each monthly anniversary thereof until such time as the applicable Event is
cured, the Company shall pay to the Holder 2.5% of the aggregate principal
amount of the Debentures then outstanding in cash, as liquidated damages and not
as penalty. The provisions of this Section are not exclusive and shall in no way
limit the Company's obligations under the Registration Rights Agreement.

                  (ii) If the Company, at any time while any Debentures are
outstanding, (a) shall pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock, (b) subdivide
outstanding shares of Common Stock into a larger number of shares, (c) combine
outstanding shares of Common Stock into a smaller number of shares, or (d) issue
by reclassification of shares of the Common Stock any shares of capital stock of
the Company, then the Conversion Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such
event. Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.

                  (iii) INTENTIONALLY OMITTED

                  (iv) If the Company or any subsidiary thereof, as applicable
with respect to Common Stock Equivalents (as defined below), at any time while
Debentures are outstanding, shall issue shares of Common Stock or rights,
warrants, options or other securities or debt that is convertible into or
exchangeable for shares of Common Stock ("Common Stock Equivalents") entitling
any Person to acquire shares of Common Stock at a price per share less than the
Conversion Price, then the Conversion Price shall be multiplied by a fraction,
the numerator of which shall be

<PAGE>

the number of shares of Common Stock outstanding immediately prior to the
issuance of such shares of Common Stock or such Common Stock Equivalents plus
the number of shares of Common Stock which the offering price for such shares of
Common Stock or Common Stock Equivalents would purchase at the Conversion Price,
and the denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to such issuance plus the number of shares
of Common Stock so issued or issuable, provided, that for purposes hereof, all
shares of Common Stock that are issuable upon conversion, exercise or exchange
of Common Stock Equivalents shall be deemed outstanding immediately after the
issuance of such Common Stock Equivalents. Such adjustment shall be made
whenever such shares of Common Stock or Common Stock Equivalents are issued.

                  (v)  INTENTIONALLY OMITTED

                  (vi) In case of any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is converted
into other securities, cash or property, the Holders shall have the right
thereafter to, at their option, (A) convert the then outstanding principal
amount, together with all accrued but unpaid interest and any other amounts then
owing hereunder in respect of this Debenture only into the shares of stock and
other securities, cash and property receivable upon or deemed to be held by
holders of the Common Stock following such reclassification or share exchange,
and the Holders of the Debentures shall be entitled upon such event to receive
such amount of securities, cash or property as the shares of the Common Stock of
the Company into which the then outstanding principal amount, together with all
accrued but unpaid interest and any other amounts then owing hereunder in
respect of this Debenture could have been converted immediately prior to such
reclassification or share exchange would have been entitled or (B) require the
Company to prepay the aggregate of its outstanding principal amount of
Debentures, plus all interest and other amounts due and payable thereon, at a
price determined in accordance with Section 3(b). The entire prepayment price
shall be paid in cash. This provision shall similarly apply to successive
reclassifications or share exchanges.

                  (vii) All calculations under this Section 4 shall be made to
the nearest 1/100th of a cent or share, as the case may be.

                  (viii) Whenever the Conversion Price is adjusted pursuant to
any of Section 4(c)(ii) - (v), the Company shall promptly mail to each Holder a
notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

                  (ix) If (A) the Company shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share of exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of the Debentures, and shall
cause to be mailed to the Holders at their last addresses as they shall appear
upon the stock books of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, however, that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such

<PAGE>

notice. Holders are entitled to convert Debentures during the 20-day
period commencing the date of such notice to the effective date of the event
triggering such notice.

                  (x) In case of any (1) merger or consolidation of the Company
with or into another Person that would constitute a Change of Control
Transaction, or (2) sale by the Company of more than one-half of the assets of
the Company (on an as valued basis) in one or a series of related transactions,
or (3) tender or other offer or exchange (whether by the Company or another
Person) pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, stock, cash or property of the
Company or another Person; then a Holder shall have the right to (A) if
permitted under Section 3(b) hereof, exercise its rights of prepayment under
Section 3(b) with respect to such event, (B) convert its aggregate principal
amount of Debentures then outstanding into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be entitled upon such event or series of related events to receive such amount
of securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of Debentures could have been converted immediately
prior to such merger, consolidation or sales would have been entitled, (C) in
the case of a merger or consolidation, (x) require the surviving entity to issue
shares of convertible preferred stock or convertible debentures with such
aggregate stated value or in such face amount, as the case may be, equal to the
aggregate principal amount of Debentures then held by such Holder, plus all
accrued and unpaid interest and other amounts owing thereon, which newly issued
shares of preferred stock or debentures shall have terms identical (including
with respect to conversion) to the terms of this Debenture (except, in the case
of preferred stock, as may be required to reflect the differences between equity
and debt) and shall be entitled to all of the rights and privileges of a Holder
of Debentures set forth herein and the agreements pursuant to which the
Debentures were issued (including, without limitation, as such rights relate to
the acquisition, transferability, registration and listing of such shares of
stock other securities issuable upon conversion thereof), and (y) simultaneously
with the issuance of such convertible preferred stock or convertible debentures,
shall have the right to convert such instrument only into shares of stock and
other securities, cash and property receivable upon or deemed to be held by
holders of Common Stock following such merger or consolidation, or (D) in the
event of an exchange or tender offer or other transaction contemplated by clause
(3) of this Section, tender or exchange its aggregate principal amount of
Debentures for such securities, stock, cash and other property receivable upon
or deemed to be held by holders of Common Stock that have tendered or exchanged
their shares of Common Stock following such tender or exchange, and such Holder
shall be entitled upon such exchange or tender to receive such amount of
securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of Debentures could have been converted (taking into
account all then accrued and unpaid dividends) immediately prior to such tender
or exchange would have been entitled as would have been issued. In the case of
clause (C), the conversion price applicable for the newly issued shares of
convertible preferred stock or convertible debentures shall be based upon the
amount of securities, cash and property that each share of Common Stock would
receive in such transaction and the Conversion Price in effect immediately prior
to the effectiveness or closing date for such transaction. The terms of any such
merger, sale, consolidation, tender or exchange shall include such terms so as
continue to give the Holders of Debentures the right to receive the securities,
cash and property set forth in this Section upon any conversion or redemption
following such event. This provision shall similarly apply to successive such
events.

            (d) The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of Common Stock solely for
the purpose of issuance upon conversion of the Debentures and payment of
interest on the Debentures, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of persons other than the
Holders, not less than such number of shares of the Common Stock as shall
(subject to any additional requirements of the Company as to reservation of such
shares set forth in the Purchase Agreement) be issuable (taking into account the
adjustments and restrictions of Section 4(b)) upon the conversion of the
outstanding principal amount of the Debentures and payment of interest
hereunder. The Company covenants that all shares of Common Stock that shall be
so issuable shall, upon issue, be duly and validly authorized, issued and fully
paid, nonassessable and, if the Underlying Shares Regulation A Filing has been
declared effective under the Securities Act, registered for public sale in
accordance with such Underlying Shares Regulation A Filing.

            (e) Upon a conversion hereunder the Company shall not be required to
issue stock certificates representing fractions of shares of the Common Stock,
but may if otherwise permitted, make a cash payment in respect

<PAGE>

of any final fraction of a share based on the Per Share Market Value at such
time. If the Company elects not, or is unable, to make such a cash payment, the
Holder shall be entitled to receive, in lieu of the final fraction of a share,
one whole share of Common Stock.

            (f) The issuance of certificates for shares of the Common Stock on
conversion of the Debentures shall be made without charge to the Holders thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such certificate, provided that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon conversion in a name
other than that of the Holder of such Debentures so converted and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

            (g) Any and all notices or other communications or deliveries to be
provided by the Holders of the Debentures hereunder, including, without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
by certified or registered mail, postage prepaid, addressed to the Company, at
1230 Highway 34, Aberdeen, New Jersey 07747 facsimile number (732) 441-7700),
attention Chief Executive Officer, or such other address or facsimile number as
the Company may specify for such purposes by notice to the Holders delivered in
accordance with this Section, with a copy to The N.I.R. Group, LLC, 155 First
Street, Suite B, Mineola, New York 11501 (facsimile number (516) 739-7115),
attention CSR. Any and all notices or other communications or deliveries to be
provided by the Company hereunder shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
by certified or registered mail, postage prepaid, addressed to each Holder of
the Debentures at the facsimile telephone number or address of such Holder
appearing on the books of the Company, or if no such facsimile telephone number
or address appears, at the principal place of business of the holder. Any notice
or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 8:00 p.m. (New York City time), (ii) the date
after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section later than
8:00 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) four days after deposit in the United States
mail, (iv) the Business Day following the date of mailing, if send by nationally
recognized overnight courier service, or (v) upon actual receipt by the party to
whom such notice is required to be given.

            Section 5.   Optional Prepayment.

            (a) The Company shall have the right, exercisable at any time upon
twenty (20) Trading Days prior written notice to the Holders of the Debentures
to be prepaid and accompanied by any waiver required by holders of senior
indebtedness of the Company for such prepayment (the "Optional Prepayment
Notice"), to prepay, all or any portion of the outstanding principal amount of
the Debentures which have not previously been repaid or for which Conversion
Notices have not previously been delivered. The prepayment price applicable to
such prepayments shall equal the Optional Prepayment Price (as defined in
Section 7) and shall be paid in cash. Any such prepayment shall be free of any
claim of subordination. The Holders shall have the right to tender, and the
Company shall honor, Conversion Notices delivered prior to the expiration of the
twentieth (20th) Trading Day after receipt by the Holders of an Optional
Prepayment Notice for such Debentures (the 20th Trading Day after receipt by the
Holders of an Optional Prepayment Notice is referred to herein as the "Optional
Prepayment Date").

            (b) If any portion of the Optional Prepayment Price shall not be
paid by the Company by the second (2nd) Business Day following the Optional
Prepayment Date, the Optional Prepayment Price shall be increased by 15% per
annum (to accrue daily) until paid (which amount shall be paid as liquidated
damages and not as a penalty). In addition, if any portion of the optional
Prepayment Price remains unpaid through the expiration of the Optional
Prepayment Date, the Holder subject to such prepayment may elect by written
notice to the Company to either (x) demand conversion in accordance with the
formula and the time period therefor set forth in Section 4 of any portion of
the principal amount of Debentures for which the Optional Prepayment Price, plus
accrued liquidated damages thereof,

<PAGE>

has not been paid in full (the "Unpaid Prepayment Principal Amount"), in which
event the applicable Per Share Market Value shall be the lower of the Per Share
Market Value calculated on the Optional Prepayment Date and the Per Share Market
Value as of the Holder's written demand for conversion, or (y) invalidate ab
initio such optional redemption, notwithstanding anything herein contained to
the contrary. If the Holder elects option (x) above, the Company shall within
three (3) Trading Days such election is deemed delivered hereunder to the Holder
the shares of Common Stock issuable upon conversion of the Unpaid Prepayment
Principal Amount subject to such conversion demand and otherwise perform its
obligations hereunder with respect thereto; or, if the Holder elects option (y)
above, the Company shall promptly, and in any event not later than three (3)
Trading Days from receipt of notice of such election, return to the Holder new
Debentures for the full Unpaid Prepayment Principal Amount. If, upon an election
under option (x) above, the Company fails to deliver the shares of Common Stock
issuable upon conversion of the Unpaid Prepayment Principal Amount within the
time period set forth in this Section, the Company shall pay to the Holder in
cash, as liquidated damages and not as a penalty, $2,500 per day until the
Company delivers such Common Stock to the Holder.

            Section 6.   INTENTIONALLY OMITTED

            Section 7.  Definitions.  For the purposes  hereof,  the following
terms shall have the following meanings:

            "Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York or the State of California are authorized or required by law
or other government action to close.

            "Change of Control Transaction" means the occurrence of any of (i)
an acquisition after the date hereof by an individual or legal entity or "group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of in
excess of 33% of the voting securities of the Company, (ii) a replacement of
more than one-half of the members of the Company's board of directors which is
not approved by those individuals who are members of the board of directors on
the date hereof in one or a series of related transactions, (iii) the merger of
the Company with or into another entity, consolidation or sale of all or
substantially all of the assets of the Company in one or a series of related
transactions, unless following such transaction, the holders of the Company's
securities continue to hold at least 33% of such securities following such
transaction or (iv) the execution by the Company of an agreement to which the
Company is a party or by which it is bound, providing for any of the events set
forth above in (i), (ii) or (iii).

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means the Class A Common Stock, $.01 par value per
share, of the Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Interest Effectiveness Date" means the earlier to occur of (x) the
Effectiveness Date and (y) the date that an Underlying Shares Regulation A
Filing is declared effective by the Commission.

            "Optional Prepayment Price" for any Debentures shall equal 120% of
principal amount of Debentures to be prepaid, plus all accrued and unpaid
interest thereon.

            "Original Issue Date" shall mean the date of the first issuance of
the Debentures regardless of the number of transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such
Debenture.

            "Per Share Market Value" means on any particular date (a) the
closing bid price per share of the Common Stock on such date on the NASDAQ or on
such Subsequent Market on which the Common Stock is then listed or quoted, or if
there is no such price on such date, then the closing bid price on the NASDAQ or
on such Subsequent

<PAGE>

Market on the date nearest preceding such date, or (b) if the Common Stock is
not then listed or quoted on the NASDAQ or a Subsequent Market, the closing bid
price for a share of Common Stock in the over-the-counter market, as reported by
the National Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or (c) if the Common Stock is not then reported by the National
Quotation Bureau Incorporated (or similar organization or agency succeeding to
its functions of reporting prices), then the average of the "Pink Sheet" quotes
for the relevant conversion period, as determined in good faith by the Holder,
or (d) if the Common Stock is not then publicly traded the fair market value of
a share of Common Stock as determined by an Appraiser selected in good faith by
the Holders of a majority in interest of the principal amount of Debentures then
outstanding.

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

            "Purchase Agreement" means the Secured Convertible Debenture
Purchase Agreement, dated as of the Original Issue Date, between the Company and
the original Holder of Debentures, as amended, modified or supplemented from
time to time in accordance with its terms.

            "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Original Issue Date, between the Company and the
original Holder of Debentures, as amended, modified or supplemented from time to
time in accordance with its terms.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Security Agreements" means the Security Agreement, of even date
herewith between the Company and the original Holder of Debentures, as amended
modified or supplemented from time to time in accordance with its terms.

            "Trading Day" means (a) a day on which the Common Stock is traded on
the NASDAQ or on such Subsequent Market on which the Common Stock is then listed
or quoted, or (b) if the Common Stock is not listed on the NASDAQ or a
Subsequent Market, a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a), (b) and (c)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

            "Underlying Shares" means the shares of Common Stock issuable upon
conversion of Debentures or as payment of interest in accordance with the terms
hereof.

            "Underlying Shares Regulation A Filing" means a filing pursuant to
Regulation a meeting the requirements set forth in the Registration Rights
Agreement, covering among other things the resale of the Underlying Shares and
naming the Holder as a "selling stockholder" thereunder.

            Section 8. Except as expressly provided herein, no provision of this
Debenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, interest and liquidated damages (if
any) on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture is a direct obligation of the
Company. This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein. The Company may only
voluntarily prepay the outstanding principal amount on the Debentures in
accordance with Section 5 hereof.

<PAGE>

            Section 9. This Debenture shall not entitle the Holder to any of the
rights of a stockholder of the Company, including without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of stockholders or any other proceedings of the
Company, unless and to the extent converted into shares of Common Stock in
accordance with the terms hereof.

            Section 10. If this Debenture shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed debenture, a new Debenture for the
principal amount of this Debenture so mutilated, lost, stolen or destroyed but
only upon receipt of evidence of such loss, theft or destruction of such
Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Company.

            Section 11. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of laws thereof. The Company and the Holders hereby irrevocably submit
to the exclusive jurisdiction of the state and federal courts sitting in the
County of Nassau, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, or that such suit, action or proceeding is improper. Each of the
Company and the Holder hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
receiving a copy thereof sent to the Company at the address in effect for
notices to it under this instrument and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.

            Section 12. Any waiver by the Company or the Holder of a breach of
any provision of this Debenture shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Debenture. The failure of the Company or the Holder to insist
upon strict adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Debenture. Any waiver must be in writing.

            Section 13. If any provision of this Debenture is invalid, illegal
or unenforceable, the balance of this Debenture shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

            Section 14. Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

            Section 15. The payment obligations under this Debenture and the
obligations of the Company to the Holder arising upon the conversion of all or
any of the Debentures in accordance with the provisions hereof are secured
pursuant to the Security Agreements.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGE FOLLOWS]

<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Secured Convertible
Debenture to be duly executed by a duly authorized officer as of the date first
above indicated.

                              IVOICE.COM, INC.

                              By:________________________________
                                 Name:
                                 Title:

Attest:

By:___________________________
   Name:
   Title:

<PAGE>

                                   EXHIBIT A

                             NOTICE OF CONVERSION

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

The undersigned hereby elects to convert the attached Debenture into shares of
Class A Common Stock, no par value per share (the "Common Stock"), of
____________________(the "Company") according to the conditions hereof, as of
the date written below. If shares are to be issued in the name of a person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be
charged to the holder for any conversion, except for such transfer taxes, if
any.

Conversion calculations:
                           ____
                              Date to Effect Conversion

                              ________________________________________________
                              Principal Amount of Debentures to be Converted

                                          _________________________________
                              Number of shares of Common Stock to be Issued

                              ________________________________________________
                              Applicable Conversion Price

                              ________________________________________________
                              Signature

                              ________________________________________________
                              Name

                              ________________________________________________
                              AddressExhibit 10.1

                               Ivoice.com, Inc.

                            1999 STOCK OPTION PLAN

                                  SECTION 1

                                 DEFINITIONS

      As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:

      (a) "Act" means the Securities Act of 1933, as amended.

      (b) "Administrator" means the Board or the Committee, whichever shall be
administering the Plan from time to time in the discretion of the Board, as
described in Section 3 of the Plan.

      (c) "Board" means the Board of Directors of the Company.

      (d) "Code" means the Internal Revenue Code of 1986, as amended.

      (e) "Committee" means the committee appointed by the Board in accordance
with Section 3 of the Plan.

      (f) "Company" means Ivoice.com, Inc., a Delaware corporation.

      (g) "Director" means a member of the Board of Directors of the Company.

      (h) "Employee" means an individual who is employed (within the meaning of
Section 3401 of the Code and the regulations thereunder) by the Company or any
future Parent Corporation or Subsidiary Corporation of the Company.

      (i) "Employer Company" means the company, whether the Company or a Parent
Corporation or Subsidiary Corporation of the Company, which employs the
Employee.

      (j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

      (k) "Fair Market Value of Shares" shall mean (i) if the Shares are not
publicly traded on the day in question, the fair market value of the Shares on
the day in question as determined and set forth in writing by the Administrator
(which, in making such determination, shall make a good faith effort to
establish the true fair market value of the Shares as of such date using such
methods as it deems appropriate, including independent appraisals, and taking
into consideration any requirements set forth in the Code or the regulations
thereunder), (ii) if the Shares are publicly traded on the day in question, the
closing price of the Shares on the day in question. The closing price shall be
the average of the highest and lowest quoted selling prices on the New York
Stock Exchange or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which the Shares are
listed or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, as reported by the Nasdaq Stock Market's National
Market on the day in question, or by the Nasdaq SmallCap Market, or by the
Nasdaq Over the Counter Bulletin Board, or (iii) if the Shares are not listed or
admitted to trading on any national securities exchange or reported by the
Nasdaq Stock Market's National Market, the closing price of the Shares shall be
the average of the highest and lowest quoted selling prices as reported by The
Wall Street Journal for the over-the-counter market on the day in question.

      (l) "Incentive Stock Option" means an Option for Shares which is intended
to be, designated in writing as, and qualifies as an Incentive Stock Option
within the meaning of Section 422 of the Code.

      (m) "Inside Director" means a Director who is an Employee.

      (n) "Key Employee" means any Employee so designated pursuant to Section
3.2 by the Administrator to receive Options.

<PAGE>

      (o) "Nonstatutory Stock Option" means an Option which is not an Incentive
Stock Option and which is designated as a Nonstatutory Stock Option by the
Board.

       (p) "Option" means an option to purchase a Share pursuant to the
provisions of this Plan.

      (q) "Optionee" means an Employee or Outside Director to whom an Option has
been granted hereunder.

      (r) "Option Price" means the price per share of the Shares subject to each
Option as provided in Section 6.4.

      (s) "Option Term" means the maximum period of time during which an Option
may be exercised as set forth in Section 6.5 below.

      (t) "Outside Director" means a Director who is not an Employee.

      (u) "Parent Corporation" shall have the meaning assigned to that term
under Section 424 of the Code.

      (v) "Plan" means the Ivoice.com, Inc. 1999 Stock Option Plan, the terms
of which are set forth herein.

      (w) "Share" or "Shares" means Class A Common Stock, $.01 par value, or, in
the event that the outstanding Shares are hereafter changed into or exchanged
for different shares or securities of the Company or some other corporation or
other entity, such other shares or securities.

      (x) "Stock Option Agreement" means the agreement described in Section 6.1
between the Company and the Optionee under which the Optionee may purchase
Shares hereunder.

      (y) "Subsidiary Corporation" shall have the meaning assigned to that term
under Section 424 of the Code.

      (z) "Total and Permanent Disability", unless otherwise specified in the
applicable Stock Option Agreement, means the inability of an Employee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
twelve months.

                                    SECTION 2

                                    THE PLAN

      2.1. Name. This Plan shall be known as "Ivoice.com, Inc. 1999 Stock
Option Plan."

      2.2. Purpose. The purpose of this Plan is to advance the interests of the
Company and its stockholders by affording Employees of the Employer Company and
Outside Directors an opportunity to acquire or increase their proprietary
interest in the Company by the grant to such individuals of Options under the
terms set forth herein. By thus encouraging such individuals to acquire or
increase their proprietary interest in the Company, the Company seeks to
attract, motivate and retain those highly competent individuals upon whose
judgment, initiative, leadership, and continued efforts the success of the
Company in large measure depends.

      2.3. Intention. It is intended that Options (if any) issued to Employees
as Incentive Stock Options under this Plan will qualify as Incentive Stock
Options under Section 422 of the Code and the terms of this Plan shall be
interpreted in accordance with such intention. Options issued to Outside
Directors shall be Non-Statutory Stock Options.

                                    SECTION 3

                                 ADMINISTRATION

      3.1. Administration. The Plan shall be administered, in the discretion of
the Board from time to time, by the Board or by the Committee acting as the
Administrator. The Committee shall be appointed by the Board, in a manner
consistent with the Company's Bylaws, and shall consist of not less than three
(3) members of the Board; provided, however, that, after the Company effects an
initial public offering, the Committee will be comprised of solely two (2) or
more members, each of who is an outside director (within the meaning of Code
Section 162(m) and the Treasury Regulations thereunder) as well as a
non-employee director (within the meaning of Rule 16(b)-3 of the Securities and
Exchange Commission adopted under the Securities Exchange Act of 1934, as
amended). The Board may from time to time remove members from, or add members
to, the Committee. Vacancies on the Committee, however caused,

<PAGE>

shall be filled by the Board. The Board may appoint one (1) of the members of
the Committee as Chairman. The Administrator shall hold meetings at such times
and places as it may determine. Acts of a majority of the Administrator at which
a quorum is present, or acts reduced to or approved in writing by the unanimous
consent of the members of the Administrator, shall be the valid acts of the
Administrator.

      3.2. Duties. The Administrator shall from time to time at its discretion
select the Employees who are to be granted Options, determine the number of
Shares to be subject to Options to be granted to each Optionee and designate any
such Options granted to Employees as Incentive Stock Options or Non-Statutory
Stock Options. The interpretation and construction by the Administrator of any
provisions of the Plan or of any Option granted thereunder shall be final. No
member of the Administrator shall be liable for any action or determination made
in good faith with respect to the Plan or any Option granted hereunder.

                                    SECTION 4

                                  PARTICIPATION

      4.1. Eligibility. The Optionees shall be:

      (a) such persons (collectively, "Participants"; individually a
"Participant") as the Administrator may select from among the following classes
of persons, subject to the terms and conditions of Section 4.2 below:

      (1) Key Employees of the Company;

      (2) Key Employees of the Company's Parent Corporations or Subsidiary
Corporations; and

      (b) Outside Directors, who shall automatically be eligible to participate
in the Plan in accordance with Section 6.12 below.

      4.2. Ten-Percent Stockholders. An Employee who beneficially owns more than
ten percent (10%) of the total combined voting power of all classes of
outstanding stock of the Company, as determined under Sections 422 and 424 of
the Code, shall not be eligible to receive an Incentive Stock Option unless (i)
the Option Price of the Shares subject to such Option is at least one hundred
ten percent (110%) of the Fair Market Value of such Shares on the date of grant
and (ii) such Option by its terms is not exercisable after the expiration of
five (5) years from the date of grant.

      (a) Stock Ownership. For purposes of Section 4.2 above, in determining
stock ownership, an Employee's beneficial ownership of any class of outstanding
stock of the Employer Company or a Parent Corporation or a Subsidiary
Corporation shall be determined as provided in Rule 16a-1(a) of the Securities
and Exchange Commission adopted under the Exchange Act, and in any event (i)
such Participant shall be considered as owning the stock owned, directly or
indirectly, by or for his or her brothers and sisters, spouse, ancestors and
lineal descendants; (ii) stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its stockholders, partners or beneficiaries; and (iii)
stock with respect to which such Participant holds an Option shall not be
counted.

      (b) Outstanding Stock. For purposes of Section 4.2 above, "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant of the Option to the Optionee. "Outstanding stock" shall not include
shares authorized for issue under outstanding Options held by the Optionee or by
any other person.

                                    SECTION 5

                             SHARES SUBJECT TO PLAN

      5.1. Shares Available for Options. Subject to adjustment pursuant to the
provisions of Section 5.2 hereof, the total number of Shares which may be issued
upon the exercise of all Options shall not exceed 7,500,000 Shares. Such Shares
may be either authorized and unissued Shares or issued Shares which have been
reacquired by the Company (pursuant to Section 6.7(d) or otherwise). If any
Option shall expire or terminate for any reason without having been exercised in
full, new Options may be granted covering Shares originally set aside for the
unexercised portion of such expired or terminated Option.

<PAGE>

      5.2. Adjustments.

      (a) Stock Splits and Dividends. Subject to any required action by the
Board, the number of Shares covered by the Plan as provided in Section 5.1
hereof, the number of Shares covered by each outstanding Option and the Option
Price thereof shall be proportionately adjusted for any increase or decrease in
the number of issued Shares resulting from a recapitalization, reclassification,
subdivision or consolidation of Shares or the payment of a stock dividend (but
only if paid in Shares), a stock split or any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the
Company.

      (b) Mergers. Subject to any required action by the Board and/or
stockholders, if the Company shall merge with another corporation and the
Company is the surviving corporation in such merger and under the terms of such
merger the Shares outstanding immediately prior to the merger remain outstanding
and unchanged, each outstanding Option shall continue to apply to the Shares
subject thereto and shall also pertain and apply to any additional securities
and other property, if any, to which a holder of the number of Shares subject to
the Option would have been entitled as a result of the merger.

      (c) Adjustment Determination. To the extent that the foregoing adjustments
relate to securities of the Company, such adjustments shall be made by the
Administrator, whose determination shall be conclusive and binding on all
persons. In computing any adjustment under this Section 5.2, any fractional
Share which might otherwise become subject to an Option shall be eliminated.

      (d) Special Dividends. Subject to any required action by the Board, the
Administrator shall be entitled to determine whether any adjustment shall be
made with respect to the number of Shares covered by the Plan as provided in
Section 5.1 hereof, the number of Shares covered by each outstanding Option and
the Option Price thereof if the Company pays a special or extraordinary
dividend.

                                    SECTION 6

                                     OPTIONS

      6.1. Option Grant and Agreement.

      (a) The Administrator may from time to time, subject to the terms of this
Plan, grant to any Participant (other than a person who is an Outside Director)
one or more Options but in no event may any such Participant receive Options
under this Plan on more than 500,000 Shares during any one calendar year. Each
Option grant shall be evidenced by a written Stock Option Agreement, dated as of
the date of grant and executed by the Company and the Optionee, which Stock
Option Agreement shall set forth the number of Options granted, whether the
Options are Incentive Stock Options or Nonstatutory Stock Options, the Option
Price, the Option Term and such other terms and conditions as may be determined
appropriate by the Administrator, provided that such terms and conditions are
not inconsistent with the Plan. The Stock Option Agreement shall incorporate
this Plan by reference and provide that any inconsistencies or disputes shall be
resolved in favor of the Plan language.

      (b) Except as provided in Section 6.12 below, grants under the Plan shall
be made by the Administrator selectively among the Participants and the terms
and provisions of such grants and the agreements evidencing the same (including,
without limitation, the form, the amount, the timing, the exercisability and the
vesting schedule of such grants) need not be uniform, whether or not the
Optionees are similarly situated.

      6.2. Conditions with Respect to Non-Statutory Stock Options. Certain
Non-Statutory Stock Options ("Performance Grants") shall be subject to the
following conditions, which conditions shall be stated within the applicable
Stock Option Agreement.

      (a) At the time of grant, the Administrator may, in its discretion, place
additional restrictions on Performance Grants requiring that, for example, the
Option will vest only if and when, or on an accelerated basis if and when, the
Common Stock price exceeds a specific amount. Generally, Performance Grants will
be subject to the same requirements described herein, unless the Administrator
decides otherwise.

<PAGE>

      (b) At the time of grant, the Administrator may, in its discretion, place
additional restrictions on the Performance Grants requiring that on the exercise
of such a grant an Employee will purchase Shares that will be forfeited if the
Optionee terminates employment within a certain number of years. Additional
transferability restrictions may be imposed in connection with Performance
Grants.

      6.3. Conditions with Respect to Incentive Stock Options. Each Incentive
Stock Option shall be subject to the following conditions, which conditions
shall be stated within the applicable Stock Option Agreement. Any Incentive
Stock Option which does not comply with these provisions shall not be considered
an Incentive Stock Option and instead shall be considered a Nonstatutory Option
issued under the Plan:

      (a) To the extent that the aggregate Fair Market Value of Shares
(determined as of the time an Option is granted) exercisable for the first time
by an Optionee during any calendar year under such Incentive Stock Option and
any other Incentive Stock Option issued by the Company or any Subsidiary
Corporation or Parent Corporation exceeds $100,000, such excess Incentive Stock
Options shall be deemed Nonstatutory Stock Options.

      (b) No Incentive Stock Option may be assigned or transferred by an
Optionee other than by will or by the laws of descent and distribution. During
the lifetime of an Incentive Stock Optionee, the Option may be exercisable only
by the Optionee. Transfer of an Incentive Stock Option by will or by the laws of
descent and distribution shall not be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an
authenticated copy of the will or such other evidence as the Administrator may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee of the terms and conditions of such Incentive Stock Option.

      6.4. Option Price. The Option Price shall be determined by the
Administrator, subject to any limitations imposed by this Plan and, in any
event, shall not be less than eighty-five (85) percent of the Fair Market Value
on the date of grant. The Option Price for Incentive Stock Options shall not be
less than the Fair Market Value of Shares on the date such Incentive Stock
Options are granted and, in the case of Incentive Stock Options granted to an
Optionee described in Section 4.2 hereof, the Option Price shall not be less
than one hundred ten percent (110%) of the Fair Market Value of Shares on the
date of grant.

      6.5. Option Term. The Option Term shall be determined by the Administrator
at the time of grant, subject to any limitations imposed by this Plan, but in
any event shall not be more than ten years from the date such Option is granted,
and, in the case of an Incentive Stock Option granted to an Optionee described
in Section 4.2 hereof, shall not be more than five years from the date such
Option is granted. Options may be subject to earlier termination as provided in
this Plan.

      6.6. Limitations on Exercise of Options. Notwithstanding anything
contained in this Plan to the contrary:

      (a) Options may not be exercised until the Plan has been ratified by the a
majority of the stockholders as provided in Section 9.8.

      (b) Options shall be exercisable in full or in such equal or unequal
installments as the Administrator shall determine; provided that if an Optionee
does not purchase all of the Shares which the Optionee is entitled to purchase
on a certain date or within an established installment period, the Optionee's
right to purchase any unpurchased Shares shall continue during the Option Term
(taking into account any early termination of such Option Term which may be
provided for under the Plan); provided, further that an Optionee who is not an
officer, director or consultant shall have the right to exercise at least 20% of
the options granted per year over five (5) years from the grant date.

      6.7. Method of Exercising Options; Withholding Tax.

      (a) Options shall be exercised by a written notice, delivered to the
Company at its principal office located at 1230 Route 34, Aberdeen, NJ 07747,
Attention: Stock Option Committee, or such other address that may be designated
by the Company, specifying the number of Shares to be purchased and tendering
payment in full for such Shares. Payment may be tendered in cash or by
certified, bank cashier's or teller's check or by Shares (valued at Fair Market
Value as of the date of tender), or some combination of the foregoing or such
other form of consideration which has been approved by the Board or the
Committee, including any approved cashless exercise mechanism or a promissory
note given by the Optionee. The right to deliver in full or partial payment of
such Option Price any

<PAGE>

consideration other than cash shall be limited to such frequency as the Board or
the Committee shall determine in its absolute discretion from time to time. In
the event all or part of the Option Price is paid in Shares, any excess of the
value of such Shares over the Option Price will be returned to the Optionee as
follows: (i) any whole Share remaining in excess of the Option Price will be
returned in kind, and may be represented by one or more share certificates; and
(ii) any partial Shares remaining in excess of the Option Price will be returned
in cash.

      (b) In the event an Optionee pays all or part of the Option Price in
Shares, the Administrator shall be entitled as it deems appropriate to award to
the Optionee additional Options equal to the number of Shares tendered to
exercise, provided such Option has an Option Price equal to Fair Market Value.

      (c) In the event the Company determines that it is required to withhold
state or Federal income tax as a result of the exercise of an Option, as a
condition to the exercise thereof, the Optionee may be required to make
arrangements satisfactory to the Company to enable it to satisfy such
withholding requirements. Payment of such withholding requirements may be made,
in the discretion of the Administrator, (i) in cash, (ii) by delivery of Shares
registered in the name of the Optionee having a Fair Market Value at the time of
exercise equal to the amount to be withheld, (iii) by the Company retaining or
not issuing such number of Shares subject to the Option as have a Fair Market
Value at the time of exercising equal to the amount to be withheld or (iv) any
combination of (i), (ii) and (iii) above.

      (d) The Administrator shall be entitled as it deems appropriate to make
available for issuance under the Plan Shares tendered by an Optionee as payment
of the Option Price or Shares used to satisfy the Company's withholding
requirements.

      6.8. Rights in the Event of Sale, Merger or Other Reorganization. Except
as expressly provided in Section 5.2 and this Section 6.8, the Optionee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or Option Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets. In any
such event (other than a merger in which the Company is the surviving
corporation as described in Section 5.2(b) and under the terms of which the
shares of Common Stock outstanding immediately prior to the merger remain
outstanding and unchanged):

      (a) Unless otherwise provided in the Stock Option Agreement for any given
Option, upon any such merger, consolidation, or sale or transfer of assets, all
rights of the Optionee with respect to the unexercised portion of any Option
shall become immediately vested and may be exercised immediately, except to the
extent that any agreement or undertaking of any party to any such merger,
consolidation, or sale or transfer of assets, shall make specific provision for
the assumption of the obligations of the Company with respect to the Plan and
the rights of Optionees with respect to Options granted thereunder.

      (b) Unless otherwise provided in the Stock Option Agreement for any given
Option, upon any such liquidation or dissolution, all rights of the Optionee
with respect to the unexercised portion of any Option shall wholly and
completely terminate and all Options shall be canceled at the time of any such
liquidation or dissolution, except to the extent that any plan pursuant to which
such liquidation or dissolution is effected, shall make specific provision with
respect to the Plan and the rights of Optionees with respect to Options granted
thereunder.

      Notwithstanding the foregoing, the holder of any such Option or right
theretofore granted and still outstanding shall have the right immediately prior
to the effective date of such merger, consolidation, sale or transfer of assets,
liquidation or dissolution to exercise such Option in whole or in part without
regard to any installment provision that may have been made part of the terms
and conditions of such Option or right; provided, that any conditions precedent
to such exercise set forth in the Stock Option Agreement other than the passage
of time, have occurred or been waived. In no event, however, may any Incentive
Stock Option which becomes exercisable pursuant to this Section 6.8 be
exercised, in whole or in part, later than the date preceding the tenth
anniversary date of the grant thereof.

<PAGE>

      6.9. Rights in the Event of Death. Unless otherwise provided in the Stock
Option Agreement for any given Option, if an Optionee's employment with the
Employer Company or service as a member of the Board is terminated on account of
death, the person or persons who shall have acquired the right, by will or the
laws of descent and distribution, to exercise the Optionee's Options shall
continue to have (subject to Sections 6.3 and 6.6 above) the right, for a period
of at least six (6) months from the date of termination by death or such longer
period (if any) as may be specified in the applicable Stock Option Agreement, to
exercise any Options which such Optionee would have been entitled to exercise on
the Optionee's death or during the first year thereafter. At the expiration of
such period any such Options which remain unexercised shall expire. Unless the
Administrator provides otherwise in the Stock Option Agreement, any Options that
could not have been exercised by an Optionee as of the Optionee's death or
during the first year thereafter may not be exercised.

      6.10. Rights in the Event of Total and Permanent Disability. Unless
otherwise provided in the Stock Option Agreement for any given Option, if an
Optionee's employment with the Employer Company or service as a member of the
Board is terminated on account of Total and Permanent Disability, the Optionee
shall have (subject to Sections 6.3 and 6.6 above) the right, for a period of at
least six (6) months from the date of termination by disability or such longer
period (if any) as may be specified in the applicable Stock Option Agreement, to
exercise any Options which such Optionee would have been entitled to exercise on
the date of such Optionee's Total and Permanent Disability. At the expiration of
such period any such Options which remain unexercised shall expire. Unless the
Administrator provides otherwise in the Stock Option Agreement, any Options that
could not have been exercised by an Optionee on the date of such Optionee's
Total and Permanent Disability may not be exercised.

      6.11. Rights in the Event of Termination of Employment or Service. Unless
otherwise provided in the Stock Option Agreement for any given Option, in the
event that an Optionee's employment with the Employer Company or service as a
member of the Board terminates, other than by reason of death or Total and
Permanent Disability and other than due to termination for "Cause," the Optionee
shall have (subject to Sections 6.3 and 6.6 above) the right, for a period of at
least ninety (90) days from the date of such termination or such longer period
(if any) as may be specified in the applicable Stock Option Agreement, to
exercise any Options which such Optionee would have been entitled to exercise on
the date of such Optionee's termination. At the expiration of such period any
such Options which remain unexercised shall expire. Unless the Administrator
provides otherwise in the Stock Option Agreement, any Options that could not
have been exercised by an Optionee on the date of such Optionee's termination of
employment or service as a member of the Board may not be exercised.
Notwithstanding the foregoing, if an Optionee's employment or service is
terminated for "Cause," the Company may notify the Optionee that any Options not
exercised prior to the termination are canceled, provided, however, that such
Optionee shall have fifteen (15) days to cure such termination for "Cause." For
purposes hereof and unless the Administrator provides otherwise in the Stock
Option Agreement, a termination of employment or service for "Cause" shall
include dismissal as a result of (1) Optionee's conviction of any crime or
offense involving money or other property of the Company or its subsidiaries or
which constitutes a felony in the jurisdiction involved; (2) Optionee's gross
negligence, gross incompetence or willful gross misconduct in the performance of
his or her duties; or (3) Optionee's willful failure or refusal to perform his
or her duties.

      6.12. Automatic Option Grants to Outside Directors.

      (a) First Option. Each person who becomes an Outside Director after August
2, 1999 shall be automatically granted an Option to purchase twenty thousand
(20,000) Shares (the "First Option") on the date on which such person first
becomes an Outside Director, whether through election by the stockholders of the
Company or appointment by the Board to fill a vacancy; provided, however, that
an Inside Director who ceases to be an Inside Director but who remains a member
of the Board shall not receive the grant of a First Option; provided further,
that if any person serving as an Outside Director on August 2, 1999 received
less that 20,000 shares (as adjusted for any stock splits or combinations
subsequent to the date of such grant) on the date such person became a member of
the Board, such person shall be granted an Option to purchase a number of Shares
equal to the difference between twenty thousand (20,000) Shares and the Shares
actually granted (as adjusted).

      (b) Subsequent Option. Each Outside Director shall be automatically
granted an Option to purchase ten thousand (10,000) Shares (a "Subsequent
Option") on their annual anniversary date as a member of the Board of Directors.

<PAGE>

      (c) Terms of Options. The terms of First Options and Subsequent Options
granted hereunder shall be as follows:

            (i) Term. The term of the Option shall be ten (10) years.

            (ii) Exercise Price. The exercise price per Share shall be one
hundred percent (100%) of the Fair Market Value on the date of grant. In the
event that the date of grant is not a trading day, the exercise price per Share
shall be the Fair Market Value on the next trading day immediately following the
date of grant.

            (iii) Vesting Schedule. Each grant of Shares subject to the Option
shall vest in its entirety and become exercisable on the first anniversary of
the grant date, subject to the Optionee remaining an Outside Director as of the
applicable vesting date.

      (c) Stock Option Agreement. Each Option granted to Outside Directors shall
be evidenced by a Stock Option Agreement, which shall contain such other
provisions as may be applicable to such Options under this Plan.

      6.13 Changes in Control of Company. In the event there occurs a Change in
Control of the Company (as hereafter defined) all of the Shares subject to the
Option shall vest and become exercisable upon the effective date of any such
Change in Control.

      (a) Definition of "Change in Control." For purposes of the Plan,
"Change in Control" shall be defined as:

            (i) When any "person" as defined in Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d) and 14(d) thereof (including a "group" as
defined in Section 13(d) of the Exchange Act, but excluding the Company, any
Subsidiary or any employee benefit plan sponsored or maintained by the Company
or any Subsidiary (including any trustee of such plan acting as trustee),
directly or indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act, as amended from time to time), of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities.

            (ii) The individuals, who were members of the Board as of the first
date the Board was constituted of at least (5) five members (the "Incumbent
Board"), cease for any reason to constitute at least a majority of the Board;
provided however, that any individual becoming a director subsequent to the
Effective Date, whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall not, for purposes of this section, be
counted in determining whether the Incumbent Board constitutes a majority of the
Board.

            (iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business Combination:

                  A. all or substantially all of the individuals and entities
who were the beneficial owners of the then outstanding shares of common stock of
the Company and the beneficial owners of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than seventy percent (70%) of the
then outstanding shares of common stock and the combined voting power of the
then outstanding securities entitled to vote generally in the election of
directors, respectively, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or indirectly or through one or more
subsidiaries); and

                  B. no person (excluding any employee benefit plan or related
trust) of the Company or such corporation resulting from such Business
Combination beneficially owns, directly or indirectly, fifty percent (50%) or
more of the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the corporation
except to the extent that such ownership existed prior to the Business
Combination; or

                                  SECTION 7

                     SHARES ISSUED PURSUANT TO AN OPTION

      7.1. Issuance of Certificates. The Company shall not be required to
issue or deliver any certificate for

<PAGE>

Shares purchased upon the exercise of any Option, or any portion thereof, prior
to fulfillment of all of the following applicable conditions:

      (a) The admission of such Shares to listing on all stock exchanges or
markets on which the Shares are then listed to the extent such admission is
necessary;

      (b) The completion of any registration or other qualification of such
Shares under any federal or state securities laws or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, which the Board shall in its sole discretion deem necessary or
advisable, or the determination by the Board in its sole discretion that no such
registration or qualification is required;

      (c) The obtaining of any approval or other clearance from any federal or
state governmental agency which the Board shall, in its sole discretion,
determine to be necessary or advisable; and

      (d) The lapse of such reasonable period of time following the exercise of
the Option as the Board from time to time may establish for reasons of
administrative convenience.

      7.2. Compliance with Securities and Other Laws. In no event shall the
Company be required to sell, issue or deliver Shares pursuant to Options if in
the opinion of the Company the issuance thereof would constitute a violation by
either the Optionee or the Company of any provision of any law or regulation of
any governmental authority or any securities exchange. As a condition of any
sale or issuance of Shares pursuant to Options, the Company may place legends on
the Shares, issue stop-transfer orders and require such agreements or
undertakings from the Optionee as the Company may deem necessary or advisable to
assure compliance with any such law or regulation, including if the Company or
its counsel deems it appropriate, representations from the Optionee that the
Optionee is acquiring the Shares solely for investment and not with a view to
distribution and that no distribution of the Shares acquired by the Optionee
will be made unless registered pursuant to applicable federal and state
securities laws or unless, in the opinion of counsel to the Company, such
registration is unnecessary.

      7.3. Requirements in the Event of a Disposition of Shares. Any Optionee,
or person representing such Optionee, who sells, exchanges, transfers or
otherwise disposes of any Shares acquired pursuant to the exercise of an
Incentive Stock Option within two (2) years following the grant of such
Incentive Stock Option or within one (1) year following the actual transfer of
such Shares to the Optionee, shall be obligated to notify the Company in writing
of the date of disposition, the number of Shares so disposed and the amount of
consideration received as a result of such disposition. The Company shall have
the right to take whatever reasonable action it deems appropriate against an
Optionee, including early termination of any Options which remain outstanding,
in order to recover any additional taxes the Company incurs as a result of such
Optionee's failure to so notify the Company.

      7.4. Legend. All certificates for Shares purchased upon the exercise of
an Incentive Stock Option shall bear a legend indicating that such Shares
were issued pursuant to an Incentive Stock Option grant.

                                  SECTION 8

               TERMINATION, AMENDMENT AND MODIFICATION OF PLAN

      8.1. Board Termination, Amendment and Modification of Plan. The Board may
at any time amend or modify the Plan; provided, however, that no such action of
the Board, without approval of the stockholders of the Company (in the same
manner as provided in Section 9.8), may:

      (a) Increase the number of Shares which may be issued under the Plan;

      (b) Modify the requirements as to eligibility for participation in the
Plan;

      (c) Change the Option Price provisions in Sections 1.(p) or 6.4 other than
to change the manner of determining the Fair Market Value of the Shares to
conform with any then applicable provisions of the Code or regulations or
rulings thereunder, unless such change does not have a materially adverse effect
on the Company; or

      (d) Amend this Section 8.1 to defeat its purpose.

<PAGE>

Notwithstanding anything above to contrary, the Board shall be entitled adjust
the Option Price with respect to any outstanding Option at any time provided
that the Optionee shall so consent.

      8.2. Plan Termination. Subject to Section 9.8 below, unless terminated
earlier as provided in Section 8.1, the Plan shall terminate ten (10) years from
the date it is adopted by the Board and no Option shall be granted under this
Plan after such expiration date. Termination of the Plan shall not alter or
impair any of the rights or obligations under any Option theretofore granted
under the Plan unless the Optionee shall so consent.

      8.3. Effect of Termination, Amendment or Modification of Plan.
Notwithstanding Sections 8.1 and 8.2, no termination, amendment or modification
of the Plan shall in any manner affect any Option theretofore granted under the
Plan without the written consent of the Optionee or a person who shall have
acquired the right to exercise the Option by will or the laws of descent and
distribution.

                                  SECTION 9

                                MISCELLANEOUS

      9.1. Non-assignability of Options. No Option shall be assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution. During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee.

      9.2. Leaves of Absence. Unless the Administrator determines otherwise,
the vesting of an Option granted under the Plan shall not be tolled during
any unpaid leave of absence taken by an Optionee.

      9.3. No Employment Rights. Nothing in the Plan or in any Option granted
hereunder or in any Stock Option Agreement relating thereto shall confer upon
any individual the right to continue in the employ or service of the Employer
Company.

      9.4. Purchase Offer. The Administrator may offer to purchase, for cash or
Shares, any Option granted hereunder and such offer to purchase any Option shall
be on such terms and conditions as the Administrator establishes and
communicates to the Optionee at the time the offer is extended to the Optionee.

      9.5. Binding Effect. The Plan shall be binding upon the successors and
assigns of the Company.

      9.6. Singular, Plural, Gender. Whenever used herein, except where the
context clearly indicates to the contrary, nouns in the singular shall
include the plural, and the masculine pronoun shall include the feminine
gender.

      9.7. Headings. Headings of the Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.

      9.8. Effective Date; Ratification by Stockholders. This Plan shall become
effective upon its adoption by the Board but is subject to the ratification and
approval by the affirmative vote of the holders of a majority of the Company's
outstanding shares of capital stock within 12 months following such adoption. If
this Plan is not so approved by the stockholders this Plan shall become null and
void and of no force or effect. Any Options granted pursuant to the Plan may not
be exercised until the Plan shall have been ratified and approved by the
stockholders pursuant to this Section.

      9.9. Rights as Stockholder. An Optionee or transferee of an Option shall
have no rights as a stockholder with respect to any Shares subject to such
Option prior to the purchase of such Shares by exercise of such Option as
provided herein.

      9.10. Applicable Law. This Plan and the Options granted hereunder shall
be interpreted, administered and otherwise subject to the laws of the State
of New Jersey, without giving effect to the principles of conflict of laws
thereof.

      9.11. Reports. The Company will comply with all applicable reporting
requirements applicable to Incentive Stock Options under the Code.

      9.12. Information to Employees. All Optionees shall be provided with
financial statements of the Company

<PAGE>

annually unless the Optionee is a key employee whose duties in connection with
the Company assure him or her access to equivalent information.

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