Document:

Exhibit 10.1

                        SECURITIES SUBSCRIPTION AGREEMENT

         THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE
SECURITIES LAW. THEY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER REGULATION D ("REGULATION D") PROMULGATED UNDER THE ACT. THE
SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE
SECURITIES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR
SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AVAILABLE EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND THOSE LAWS.

         THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY BY OR TO
ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN
MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

         This Securities Subscription Agreement (the "AGREEMENT" or the
"SUBSCRIPTION AGREEMENT") is executed by [ ] (the "SUBSCRIBER") in connection
with the subscription by the Subscriber for 4% Convertible Debentures (the
"CONVERTIBLE DEBENTURES") and three (3) year Warrants exercisable at $1.00 per
share (the "WARRANTS") of Environmental Solutions Worldwide, Inc., a Florida
corporation (the "COMPANY"). The Company is offering an aggregate face amount of
up to $6.1 million (U.S.) of Convertible Debentures and 3.050 million Warrants
to purchase Common Stock, $0.001 par value per share, of the Company ("SHARES")
at $1.00 per Share. The terms of the Convertible Debentures, including the terms
on which the Convertible Debentures may be converted into Shares, are set forth
in the form of Convertible Debentures attached hereto as EXHIBIT A. The terms of
the Warrants are set forth in the form of the Warrant attached hereto as EXHIBIT
B. The solicitation of this Subscription and, if accepted by the Company, the
offer and sale of Convertible Debentures and Warrants, are being made in
reliance upon the provisions of the Securities Act of 1933, as amended (the
"ACT"). The Convertible Debentures, Warrants and the Shares issuable upon
conversion or exercise thereof are sometimes referred to herein as the
"SECURITIES". The Subscriber wishes to subscribe for the principal amount of the
Convertible Debentures and Warrants set forth in Section 20 in accordance with
the terms and conditions of this Agreement. It is agreed as follows:

1. OFFER TO SUBSCRIBE; PURCHASE PRICE

         The Subscriber hereby offers to purchase and subscribe for the
principal amount of Convertible Debentures and Warrants, and at the price, set
out in Section 20 of this Agreement. The Closing shall be deemed to occur when
this Agreement has been executed by both of the Subscriber and the Company (the
"CLOSING") and payment shall have been made by the Subscriber, by wire transfer,

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as directed in writing by the Company on the day so directed, to an escrow agent
in accord with the Escrow Agreement, against the Company's delivery of
Convertible Debentures and Warrants subscribed for. If the Closing does not
occur, the funds of the Subscriber shall be returned from escrow. The terms and
conditions of the escrow are set forth in an Escrow Agreement, the form of which
is attached hereto as EXHIBIT C hereto. The payment shall be made by delivering
same day funds in United States Dollars as designated above.

         2. SUBSCRIBER REPRESENTATIONS; ACCESS TO INFORMATION INDEPENDENT
            INVESTIGATION

         The Subscriber represents and warrants to, and covenants with, the
Company, on its own behalf and on behalf of each person or entity for which the
Subscriber is acting as a fiduciary, as follows:

         2.1 EXEMPT TRANSACTION. The Subscriber represents and warrants to the
Company that (i) the Subscriber is an accredited investor as the term is defined
in Rule 501(a) under the Act and (ii) the Subscriber is purchasing the
Securities for its own account and not with a view of reselling the Securities
in violation of the Securities Act.

         2.2 INDEPENDENT INVESTIGATION. The Subscriber, in offering to subscribe
for the Securities hereunder, has relied upon an independent investigation made
by it and has, prior to the date hereof, been given access to and the
opportunity to examine all books and records of the Company, and all material
contracts and documents of the Company; PROVIDED, that such investigation shall
not affect the Subscriber's ability to rely on the accuracy of the
representations and warranties of the Company set forth herein. The Subscriber
will keep confidential all non-public information regarding the Company that the
Subscriber receives from the Company unless disclosure of such information is
compelled by a court or other administrative body or, in the opinion of the
Subscriber's counsel, to comply with applicable law. In making the investment
decision to purchase the Convertible Debentures and Warrants, the Subscriber is
not relying on any oral or written representations or assurances from the
Company or any other person or any representation of the Company or any other
person other than as set forth in this Agreement, public filings of the Company
or in a document executed by a duly authorized representative of the Company
making reference to this Agreement. The Subscriber has such experience in
business and financial matters that it is capable of evaluating the risk of its
investment and determining the suitability of its investment. The Subscriber is
a sophisticated investor, and an accredited investor as defined in Rule 501 of
Regulation D. The Subscriber has obtained and reviewed the copies of the
Company's Form 10-KSB Annual Report for the most recent year ended December 31,
2003, and Form 10-QSB for the most recent fiscal quarter ended and copies of all
Form 8-K Reports from the beginning of the past fiscal year to the date hereof
and is aware that the Company has continued to sustain losses.

         2.3 ECONOMIC RISK. The Subscriber understands and acknowledges that an
investment in the Convertible Debentures and Warrants involves a high degree of
risk, including a possible total loss of investment. The Subscriber represents
that it is able to bear the economic risk of the investment. In making this
statement, the Subscriber hereby represents and warrants that the Subscriber has
adequate means of providing for the Subscriber's current needs and
contingencies; the Subscriber is able to afford to hold the Securities for an
indefinite period and the Subscriber further represents that the Subscriber has
such knowledge and experience in financial and business matters that the
Subscriber is capable of evaluating the merits and risks of the investment in
the Securities to be received by the Subscriber. Further, the Subscriber
represents that it has no present need for liquidity in such Convertible
Debentures.

         2.4 NO GOVERNMENT RECOMMENDATION OR APPROVAL. The Subscriber
understands that no United States federal or state agency or similar agency of
any other country has passed upon or made any recommendation or endorsement of
the Company, this transaction or the subscription of the Securities.

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         2.5 NO REGISTRATION. The Subscriber understands that the Securities and
the common stock issuable upon conversion of the Convertible Debentures and
exercise of the Warrants have not been registered under the Act and are being
offered and sold pursuant to an exemption from registration contained in the Act
based in part upon the representations of the Subscriber contained herein. The
Shares issuable upon exercise of the Warrants and the Shares issuable upon
conversion of the Convertible Debentures do, however, carry certain registration
rights as set forth in the Registration Rights Agreement executed by the parties
hereto in the form attached hereto as EXHIBIT D (the "REGISTRATION RIGHTS
AGREEMENT").

         2.6 NO PUBLIC SOLICITATION. Without conducting any independent
investigation, the Subscriber knows of no public solicitation or advertisement
of an offer in connection with the proposed issuance and sale of the Securities.

         2.7 INVESTMENT INTENT. The Subscriber is acquiring the Securities to be
issued and sold hereunder (and the Shares issuable upon conversion or exercise
as the case may be) for the Subscriber's own account (or for beneficiaries'
accounts over which the Subscriber has investment discretion). The Subscriber
has made no predetermined arrangements to sell the Convertible Debentures,
Warrants, or Shares other than as provided in the Registration Rights Agreement
and that the offering by the Company of the Securities to the Subscriber, as
contemplated in this Subscription Agreement (the "OFFERING"), together with any
subsequent resale by the Subscriber of the Convertible Debentures, Warrants or
the Shares, is not part of a plan or scheme to evade the registration provisions
of the Act by the Subscriber. The Subscriber currently has no short position in
the Shares.

         2.8 [INTENTIONALLY DELETED]
              ---------------------

         2.9 INCORPORATION AND AUTHORITY. The Subscriber has the full power and
authority to execute, deliver and perform this Agreement and to perform its
obligations hereunder. This Agreement has been duly approved by all necessary
action of the Subscriber, including any necessary shareholder approval (if
necessary), has been executed by persons duly authorized by the Subscriber, and
constitutes a valid and legally binding obligation of the Subscriber,
enforceable in accordance with its terms.

         2.10 NO RELIANCE ON TAX ADVICE. The Subscriber has reviewed with his,
her or its own tax advisors the foreign, federal, state and local tax
consequences of this investment, where applicable, and the transactions
contemplated by this Agreement. The Subscriber is relying solely on such
advisors and not on any statements or representations of the Company or any of
its agents and understands that the Subscriber (and not the Company) shall be
responsible for the Subscriber own income tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.

         2.11 INDEPENDENT LEGAL ADVICE. The Subscriber and the Company
acknowledge that each has had the opportunity to review this Agreement and the
transactions contemplated by this Agreement and has consulted with its own legal
counsel, and other advisors prior to execution of the within Agreement, and that
the Company will pay the fees and expenses with respect to the Offering,
including all filing fees.

         2.12 ACKNOWLEDGMENT. The Subscriber understands that the Securities are
being offered and sold to it in reliance of specific exemptions from the
registration requirements of Federal and State Securities laws and that the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Subscriber set
forth herein in order to determine the applicability of such exemptions and the
suitability of the Subscriber to acquire the Securities.

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         3. RESALES

         The Subscriber acknowledges and agrees that the Securities may and will
only be resold (a) pursuant to a Registration Statement under the Act; or (b)
pursuant to an exemption from registration under the Act.

         4. LEGENDS; SUBSEQUENT TRANSFER OF SECURITIES

         4.1 LEGENDS. The certificate(s) representing the Convertible Debentures
and Warrants shall bear a legend similar to the legend set forth below and any
other legend, if such legend or legends are reasonably required to comply with
state, federal or foreign law. Assuming that there are no changes in the
material facts set forth in Section 2 of this Agreement or applicable law from
the date hereof until the date of conversion, and subject to the Company's
transfer agent's receipt of a legal opinion from legal counsel, all certificates
representing the Shares into which the Convertible Debentures are converted or
Warrants are exercisable shall bear a legend.

                  "THE (CONVERTIBLE DEBENTURES OR WARRANTS) OF ENVIRONMENTAL
                  SOLUTIONS WORLDWIDE, INC. (THE "ISSUER") REPRESENTED BY THIS
                  CERTIFICATE HAVE BEEN ISSUED PURSUANT TO REGULATION D,
                  PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                  "ACT"), AND HAVE NOT BEEN REGISTERED UNDER THE ACT OR ANY
                  APPLICABLE STATE SECURITIES LAWS. THESE SHARES MAY NOT BE
                  OFFERED OR SOLD EXCEPT WITH AN EFFECTIVE REGISTRATION
                  STATEMENT FOR THE SHARES OR AN APPLICABLE EXEMPTION UNDER THE
                  SECURITIES ACT."

         5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF COMPANY

         The Company represents and warrants to, and covenants with, the
Subscriber as follows:

         5.1 ORGANIZATION, GOOD STANDING, AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to so qualify would not, individually or in
the aggregate, have a material adverse effect on the business, condition
(financial or otherwise), earnings, properties, prospects or results of
operations of the Company taken as a whole (a "MATERIAL ADVERSE EFFECT"). The
Company is not the subject of any pending or, to its knowledge, threatened
investigation or administrative or legal proceeding by the Internal Revenue
Service, the taxing authorities of any state or local jurisdiction, or the
Securities and Exchange Commission (the "COMMISSION") which have not been
disclosed in the reports referred to in Section 5.5 below.

         5.2 CORPORATE CONDITION. None of the Company's filings made with the
Commission (such filings, the "SEC REPORTS"), including, but not limited to,
those reports referenced in Section 5.5 below, contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading. There have been no material adverse changes in the Company's
business, properties, results of operations, condition (financial or otherwise)

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or prospects since the date of those reports which have not been disclosed to
the Subscriber in writing; PROVIDED, that the Subscriber is aware that the
Company has continued to sustain losses since the date of the most recent Report
on Form 10-QSB. Further, all material non-public information (other than the
specific information respecting the sale of the Securities themselves)
respecting the Company, its business and its financial condition, as the same
would be required to be disclosed in an SEC Report or registration statement (or
corresponding prospectus) if the Securities were otherwise being registered for
sale by the Company, has been so publicly reported or disclosed prior to the
sale of the Securities as contemplated herein.

         5.3 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution
and delivery of the Transaction Documents (as hereinafter defined), and the
performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance (or reservation for issuance) and delivery of the Shares
issuable upon conversion of the Convertible Debentures and the Shares issuable
upon exercise of Warrants have been taken, and the Transaction Documents
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms. "TRANSACTION DOCUMENTS" means,
collectively, this Agreement, the Registration Rights Agreement, the Escrow
Agreement, the Convertible Debentures, the Warrants and each of the other
documents entered into or delivered by the parties hereto in connection with the
transactions contemplated by this Agreement.

         5.4 VALID ISSUANCE OF CONVERTIBLE DEBENTURE, WARRANT AND COMMON STOCK.
When executed and delivered in accordance with the terms hereof for the
consideration expressed herein, the Convertible Debentures and Warrants will
have been issued in compliance with all applicable U.S. federal and state
securities laws. Upon issue, the Subscriber will acquire good and marketable
title to the Convertible Debentures, free and clear of all liens, claims,
encumbrances and pre-emptive rights. Upon issue, the Subscriber will acquire
good and marketable title to the Warrants, free and clear of all liens, claims,
encumbrances and pre-emptive rights. The Shares issuable upon conversion of the
Convertible Debentures and upon exercise of Warrants, as applicable, when issued
in accordance with the respective terms thereof, shall be duly and validly
issued and outstanding, fully paid and non-assessable, free and clear of any,
liens claims, encumberances and pre-emptive rights, and will have been issued in
compliance with all applicable U.S. federal and state securities laws. Subject
in part to the truth and accuracy of the Subscriber's representations set forth
in the Subscription Agreement, the offer, sale and issuance of the Securities
contemplated by this Agreement are exempt from the registration of any
applicable state and federal securities laws, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.

         5.5 CURRENT PUBLIC INFORMATION. The Company represents and warrants to
the Subscriber that the Company is a "reporting issuer" and it has a class of
securities registered under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and has filed all the materials required
to be filed as reports pursuant to the Exchange Act for a period of at least
twelve months preceding the date hereof (or for such shorter period as the
Company was required by law to file such material). All such reports (including,
without limitation, the SEC Reports) complied in all material respects with all
applicable requirements of Federal securities laws and the rules and regulations
promulgated thereunder. The Subscriber has obtained copies of the Company's Form
10-KSB Annual Report for the most recent year ended December 31, 2003 and Form
10-QSB for the most recent fiscal quarter ended, copies of all Form 8-K Reports
from the beginning of the Company's past fiscal year to the date of execution of
the within Agreement as well as all press releases.

         5.6 NO DIRECTED SELLING EFFORTS IN REGARD TO THIS TRANSACTION. The
Company has not, and, to the best of the Company's knowledge, neither the
Subscriber nor any distributor, if any, participating in the offering of the

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Securities nor any person acting for the Company or any such distributor has
conducted any "directed selling efforts" as that term is defined under the Act.
Such activity includes, without limitation, the making of printed material to
investors, the holding of promotional seminars, the placement of advertisements
with radio or television stations which discuss the offering of the Securities.
The Company represents and warrants that the Offering is not part of a plan or
scheme to evade the registration provisions of the Act.

         5.7 NO CONFLICTS. The execution and delivery of this Agreement and the
consummation of the issuance of the Securities and the transactions contemplated
by this Agreement do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under, the
Certificate of Incorporation or bylaws of the Company, or any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party or by which it or any of its properties or assets are bound, or any
existing applicable decree, judgment or order of any court, Federal or State
regulatory body, administrative agency or other governmental body having
jurisdiction over the Company or any of its properties or assets.

         5.8 ISSUANCE OF SECURITIES. The Company will issue one or more
certificates representing the Convertible Debentures and Warrants in the name of
the Subscriber in such denominations to be specified by the Subscriber prior to
closing. Upon conversion of the Convertible Debentures or exercise of Warrants
in accordance with their terms, the Company will issue one or more certificates
representing Shares in the name of the Subscriber and in such denominations to
be specified by the Subscriber prior to conversion. The Shares to be issued upon
conversion of the Convertible Debentures or exercise of the Warrants shall bear
restrictive legends unless subject to an effective registration or exemption
under the Act. Nothing in this section shall affect in any way the Subscriber's
obligations and agreement to comply with all applicable securities laws upon
resale of the Securities.

         5.9 NO ACTION. The Company has not taken and will not take any action
that will affect in any way the Subscriber's ability to resell the Securities in
accordance with applicable securities laws.

         5.10 COMPLIANCE WITH LAWS. As of the date hereof, the conduct of the
business of the Company complies in all material respects with all material
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable thereto. The Company has not received notice of any alleged violation
of any statute, law, regulations, ordinance, rule, judgment, order or decree
from any governmental authority. The Company shall comply with all applicable
securities laws with respect to the sale of the Securities, including, but not
limited to, the filing of all reports required to be filed in connection
therewith with the Commission or any other regulatory authority. Further,
assuming the accuracy of the representations of the Subscriber, the offer and
sale by the Company of the Securities (including, without limitation, the Shares
issuable upon conversion of the Convertible Debentures and the Shares issuable
upon exercise of the Warrants) is exempt from registration under the Securities
Act.

         5.11 LITIGATION. Except as disclosed in the Company's Annual Report on
Form 10-KSB, its Form 8-K Reports, or any Quarterly Reports on Form 10-QSB filed
since the date of such Form 10-KSB, there is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or foreign, now
pending or, to the knowledge of the Company, threatened, against or affecting
the Company, or any of its properties, which could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

         5.12 DISCLOSURES. There is no fact known to the Company (other than
general economic conditions known to the public generally) that has not been
disclosed in writing to the Subscriber that (a) could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect or (b) could
reasonably be expected, individually or in the aggregate, to materially and
adversely affect the ability of the Company to perform its obligations pursuant
the Transaction Documents and the issuance of the Convertible Debentures and
Warrants hereunder.

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         5.13 CAPITALIZATION. The Company, as of the date of the Closing, will
have outstanding the number of shares of Common Stock, Convertible Debentures
and Warrants as set forth on EXHIBIT E. All of the issued and outstanding shares
of capital stock of the Company and each of its subsidiaries have been duly
authorized and are validly issued, fully paid and non-assessable. No personal
liability attaches to the registered holders of the Common Stock by reason of
their being registered holders thereof.

         5.14. MATERIAL CHANGES. Except as disclosed in the SEC Reports, since
December 31, 2003: (i) the Company and its subsidiaries have not incurred any
material liabilities or obligations, indirect, or contingent, or entered into
any material oral or written agreement or other transaction which is not in the
ordinary course of business or which could reasonably be expected to result in a
material reduction in the future earnings or prospects of the Company and its
subsidiaries; (ii) each of the Company and its subsidiaries have not sustained
any material loss or interference with its businesses or properties from fire,
flood, windstorm, accident or other calamity not covered by insurance; (iii)
except as described in the SEC Reports, the Company and its subsidiaries have
not paid or declared any dividends or other distributions with respect to its
capital stock and neither the Company nor any of its subsidiaries is in default
in the payment of principal or interest on any outstanding debt obligations;
(iv) there has not been any change in the capital stock of the Company or any of
its subsidiaries other than the sale of the Securities hereunder, shares or
options issued pursuant to stock option plans or purchase plans approved by the
Company's Board of Directors and repurchases of shares or options pursuant to
repurchase plans already approved by the Company's Board of Directors, or
indebtedness material to the Company or any of its subsidiaries (other than in
the ordinary course of business); and (v) there has not been any other event or
change that would have, individually or in the aggregate, a Material Adverse
Effect.

         5.15 FINANCIAL STATEMENTS. The consolidated financial statements of the
Company and the related notes contained in the SEC Reports present fairly, in
accordance with generally accepted accounting principles, the consolidated
financial position of the Company and its subsidiaries as of the dates
indicated, and the results of their operations, cash flows and the changes in
shareholders' equity for the periods therein specified, subject, in the case of
unaudited financial statements for interim periods, to normal year-end audit
adjustments. Such consolidated financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods therein
specified, except that unaudited financial statements may not contain all
footnotes required by generally accepted accounting principles. The Company has
fully complied with the Sarbanes-Oxley Act of 2002.

         5.16 STABILIZATION. Neither the Company nor any of its subsidiaries has
taken, directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities, the Convertible Debentures, the
Warrants, the Shares issuable upon exercise of the Warrants and the Shares
issuable upon exercise of the Convertible Debentures.

         5.17 BROKERS. The Company has taken no action which would give rise to
any claim by any person for brokerage commissions, finders' fees or similar
payments by the Subscriber relating to this Subscription Agreement or the
transactions contemplated hereby.

         5.18 CONSENTS. Except as to filings which may be required under
applicable state securities regulations, no consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or of any court

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or other tribunal is required by the Company in connection with the transactions
contemplated hereby. No consent of any party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which the Company
is a party, or by which any of its properties or assets is bound, is required
for the execution, delivery, or performance by the Company of the transactions
contemplated by the Transaction Documents.

         5.19 INTELLECTUAL PROPERTY. To the Company's knowledge, the Company
owns, or has the right to use, all patents, trademarks, service marks, trade
names, copyrights, licenses, trade secrets or other proprietary rights necessary
to its business as now conducted without conflicting with or infringing upon the
right or claimed right of any person under or with respect to any of the
foregoing. Except for hardware and software licenses entered into in the
ordinary course of business, the Company is not bound by or a party to any
options, licenses or agreements of any kind with respect to patents, trademarks,
service marks, trade names, copyrights, licenses, trade secrets or other
proprietary rights of any other person or entity. The Company has not received
any communications alleging that the Company has violated the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity. The Company is not aware of
any violation by a third party of any of the Company's patents, trade marks,
service marks, trade names, copyrights, trade secrets or other proprietary
rights.

         5.20 FOREIGN CORRUPT PRACTICES ACT. Neither the Company nor any
director, officer, agent, or other person acting on behalf of the Company has,
in the course of his or its actions for or on behalf of the Company violated any
provision of the United States Foreign Corrupt Practices Act of 1977, as
amended, or the regulations there under.

         5.21 OTHER SUBSCRIPTION AGREEMENTS. The Company is simultaneously, with
the execution of this Subscription Agreement, entering into one or more
subscription agreements with other purchasers of Securities (the "OTHER
PURCHASERS") with substantially the same terms and conditions as this
Subscription Agreement; and no Other Purchaser is subscribing for any securities
of the Company on the Closing with terms and conditions different from the terms
and conditions of this Subscription Agreement.

         5.22 DILUTIVE EFFECT. The Company understands and acknowledges that the
number of Shares issuable upon conversion of the Convertible Debentures will
increase in certain circumstances. Except as provided in the Convertible
Debentures, the Company further acknowledges that its obligation to issue Shares
upon conversion of the Convertible Debentures in accordance with this Agreement
and the Convertible Debentures is not conditioned on the dilutive effect that
such issuance may have on the ownership interests of other shareholders of the
Company.

         6. ADDITIONAL COVENANTS OF COMPANY

         6.1 CORPORATE EXISTENCE AND TAXES. For as long as any Convertible
Debentures and Warrants remain outstanding, the Company shall, maintain its
corporate existence in good standing, and shall pay all its taxes when due
except for taxes which the Company disputes in good faith and for which adequate
reserves are established on the Company's books and records.

         6.2 RESERVED SHARES AND LISTINGS; EXCHANGE ACT.  For so long as any
Convertible Debentures and Warrants remain outstanding:

                  (a) the Company will reserve from its authorized but unissued
shares of Common Stock, par value $0.001 per share ("COMMON STOCK"), a
sufficient number of Shares to permit the conversion in full of the outstanding
principal and interest amount of Convertible Debentures and the full exercise of
Warrants; and

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                  (b) the Company will maintain the listing of its Shares on the
Over the Counter Bulletin Board or other exchange; and

                  (c) the Company shall timely file all reports required to be
filed with the Commission pursuant to the Exchange Act and the Company shall not
terminate its status as an issuer required to file reports under the Exchange
Act even if the Exchange Act or the rules and regulations thereunder would
permit such termination.

         6.3 USE OF PROCEEDS.  The Company shall use all of the net
proceeds from the sale of all Securities for general corporate purposes.

         6.4 ESCROW ACCOUNT. The Company shall not take any action to cause the
release of any monies from the escrow account until the Company has received net
proceeds into the escrow account established with Baratta & Goldstein (the
"ESCROW AGENT") pursuant to the terms of the Escrow Agreement (the "ESCROW
AGREEMENT"), among the Company, the Subscriber and Baratta & Goldstein of a
minimum of an aggregate of $3,000,000.

         6.5 FURTHER FINANCINGS. If within six months from the date of Closing,
the Company enters into or closes another financing or other transaction (which
for securities law purposes would be integrable with the offer and sale of the
Securities) on terms and conditions more favorable to another purchaser than
this Subscription Agreement, the Convertible Debentures, the Warrants and the
Registration Rights Agreement (in each case, such determination to be made by
the Subscriber), then the terms and conditions of this Offering shall be
adjusted to reflect the more favorable terms to such purchaser (including, at
the Subscriber's option, the issuance of additional Securities or other
securities of the Company). The foregoing shall apply to successive financings
or successive other transactions within six months of the date of the Closing.

         6.6 PUBLICITY. Except as may be required by applicable law or
regulation, the Company shall not use, directly or indirectly, the Subscriber's
name or the name of any of its affiliates in any advertisement, announcement,
press release or other similar communication unless it has received the prior
written consent of the Subscriber for the specific use contemplated or as
otherwise required by applicable law or regulation.

         7. CONDITIONS TO CLOSING; DELIVERIES AT CLOSING

         7.1 CONDITIONS TO SUBSCRIBER'S OBLIGATIONS TO CLOSE.  The obligations
of the Subscriber to purchase the Convertible Debentures and the Warrants
offered hereunder are conditioned on the fulfillment or waiver of the following:

                  (a) the execution and delivery of the Transaction Documents
and such other documents, opinions, certificates and instruments that the
Subscriber may reasonably request;

                  (b) all the representations and warranties of the Company in
this Agreement as of the date hereof shall be true and correct at the Closing as
if made on such date, and the Company shall have performed all actions required
hereunder;

                                       9
<PAGE>

                  (c) the Company shall have performed in all material respects
all agreements which the Transaction Documents provide shall be performed on or
before the date of the Closing;

                  (d) no event shall have occurred and be continuing or would
result from the consummation of the transactions contemplated by the Transaction
Documents which would, individually or in the aggregate, constitute a Material
Adverse Effect;

                  (e) no order, judgment or decree of any court, arbitrator or
governmental authority shall enjoin or restrain the Subscriber from purchasing
the Securities or consummating the transactions contemplated by the Transaction
Documents and there shall not be existing, or, to the knowledge of the Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Company or any of its subsidiaries which
would reasonably be expected to result in such an order, judgment or decree; and

                  (f) the Company shall not have defaulted on any long-term debt
(including, but not limited to, any other series of convertible debentures or
the Convertible Debentures).

         7.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS TO CLOSE. The obligations
of the Company to issue the Convertible Debentures and the Warrants offered
hereunder are conditioned on the fulfillment or waiver of the following:

                  (a) the execution and delivery of this Agreement, the
Registration Rights Agreement and the Escrow Agreement by the Subscriber;

                  (b) all representations and warranties of the Subscriber made
in this Agreement as of the date hereof shall be true and correct at the Closing
as if made on such date, and the Subscriber shall have performed all actions
required hereunder; and

                  (c) the execution of all Officer Certificates and special
representations required by the Subscriber.

         8. GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, applicable to agreements made in and wholly
to be performed in that jurisdiction with regards to the choice of law rules of
such state, except for matters arising under the Act or the Exchange Act which
matters shall be construed and interpreted in accordance with such laws. Any
action brought to enforce, or otherwise arising out of, this Agreement shall be
heard and determined in either a Federal or state court sitting in the County of
New York, State of New York, and the parties consent to jurisdiction in the
State of New York.

         9. ENTIRE AGREEMENT; AMENDMENT

         This Agreement, the Transaction Documents and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and no party shall be able or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.

                                       10
<PAGE>

         10. NOTICES, ETC.

         Any notice, demand or request required or permitted to be given by
 either the Company or the Subscriber pursuant to the terms of this Agreement
 shall be in writing and shall be deemed given when delivered personally or by
 facsimile, with a hard copy to follow by two day courier addressed to the
 parties at the addresses of the parties set forth at the end of this Agreement
 or such other address as a party may request by notifying the other in writing.

         11. INDEMNIFICATION

         11. 1 COMPANY INDEMNIFICATION. In consideration of the Subscriber's
execution and delivery of the Transaction Documents to which it is a party and
acquiring the Securities hereunder and thereunder and in addition to all of the
Company's other obligations under the Transaction Documents to which it is a
party, the Company shall defend, protect, indemnify and hold harmless the
Subscriber and each other holder of the Securities and all of their
shareholders, trustees, partners, members, officers, directors, employees and
direct or indirect investors and any of the foregoing persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"SUBSCRIBER INDEMNITEES") from and against any and all actions, causes of
action, suits, claims, losses, costs, penalties, fees, liabilities and damages
(other than consequential damages), and expenses in connection therewith
(irrespective of whether any such Subscriber Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "SUBSCRIBER INDEMNIFIED LIABILITIES"),
incurred by any Subscriber Indemnitee as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in the Transaction Documents, (b) any breach of any
covenant, agreement or obligation of the Company contained in the Transaction
Documents, or (c) any cause of action, suit or claim brought or made against
such Subscriber Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) other than those arising from or resulting from a
misrepresentation or breach of any representation or warranty made by such
Subscriber Indemnitee contained in the Transaction Documents to which it is a
party, the execution, delivery, performance or enforcement of the Transaction
Documents, (ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities, or
(iii) the status of the Subscriber or holder of the Securities as an investor in
the Company.

         11.2 SUBSCRIBER INDEMNIFICATION. In consideration of the Company's
execution and delivery of the Transaction Documents and issuance of the
Securities hereunder and thereunder and in addition to all of each Subscriber's
other obligations under the Transaction Documents, the Subscriber shall,
severally and not jointly, defend, protect, indemnify and hold harmless the
Company and all of the Company's officers, directors, agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"COMPANY INDEMNITEES") from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages (other
than consequential damages), and expenses in connection therewith (irrespective
of whether any such Company Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "COMPANY INDEMNIFIED LIABILITIES"), incurred by any
Company Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Subscriber in the Transaction Documents to which it is a party, (b) any breach
of any covenant, agreement or obligation of the Subscriber contained in the
Transaction Documents to which it is a party or (c) any cause of action, suit or

                                       11
<PAGE>

claim brought or made against such Company Indemnitee by a third party and
arising out of or resulting from, other than those arising from or resulting
from a misrepresentation or breach of any representation or warranty made by
such Company Indemnitee contained in the Transaction Documents or a breach of
any covenant, agreement or obligation by such Company Indemnitee contained in
the Transaction Documents or from the gross negligence, willful misconduct or
bad faith of such Company Indemnitee, the execution, delivery, performance or
enforcement of the Transaction Documents.

         11.3 CONTRIBUTION; MECHANICS AND PROCEDURES. To the extent that the
foregoing undertaking by the Company and the Subscriber may be unenforceable for
any reason, the Company or the Subscriber, as the case may be, shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 11 shall be the same as those set forth in
Section 4(c) of the Registration Rights Agreement.

         12. NO STRICT CONSTRUCTION

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

         13. NO THIRD PARTY BENEFICIARIES

         This Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other person or entity.

         14. SURVIVAL

         All covenants, agreements, representations and warranties made by the
Company and the Subscriber herein the Transaction Documents shall survive the
execution of this Subscription Agreement, the delivery to the Subscriber of the
Convertible Debentures and the Warrants being purchased and the payment
therefor.

         15. SUCCESSORS AND ASSIGNS

         This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns, including any purchasers of
the Convertible Debentures or the Warrants. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Subscriber, including by merger or consolidation, except in
accordance with the applicable provisions of the Convertible Notes and the
Warrants with respect to which the Company is in compliance with such respective
provisions of the Convertible Debentures and the Warrants. The Subscriber may
assign, without the consent of the Company, some or all of its rights hereunder
to any person to whom the Subscriber assigns or transfers Securities, or the
right to acquire Securities, in accordance herewith; PROVIDED, that such
transferee agrees in writing to be bound with respect to the transferred
Securities to the provisions hereof that apply to the transferring Subscriber,
in which event such assignee shall be deemed to be a Subscriber hereunder with
respect to such assigned rights.

         16. COUNTERPARTS

         This Agreement may be executed in two or more identical counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party; PROVIDED, that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile signature.

                                       12
<PAGE>

         17. HEADINGS

         The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.

         18. SEVERABILITY

         If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

         19. AMOUNT

         The undersigned Subscriber hereby subscribes for a Convertible
Debenture in the principal amount of $[ ] and [ ] warrants*.

The undersigned Subscriber acknowledges that this subscription shall not be
effective unless accepted by the Company as indicated below.

This Subscription Is Accepted by the Company on the day of September, 2004.

                                  Environmental Solutions Worldwide, Inc.

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

                                  Subscriber:

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

-----------
*   Warrants represent 25% coverage of the conversion of principal of the
    Debentures prior to accrual of interest if any (I.E., in accordance with the
    Transaction Documents, a $100 Debenture is convertible into 200 shares of
    Common Stock and will receive 50 Warrants (100/.50= 200 shares; 200 x .25=
    50 Warrants).

                                       13
<PAGE>Exhibit 10.2

                                    DEBENTURE

         THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY
STATE SECURITIES LAW. THEY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER REGULATION D ("REGULATION D") PROMULGATED UNDER THE
SECURITIES ACT. THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO
AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND THOSE LAWS.

         THESE  SECURITIES HAVE NOT BEEN  RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES  COMMISSION OR REGULATORY AUTHORITY, ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

No. [ ] U.S.$[ ]

Issuance Date:  September 13, 2004

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

                          4% CONVERTIBLE DEBENTURE DUE

THIS 4% CONVERTIBLE DEBENTURE, issued this [ ] day of September 2004, is one of
duly authorized issue of 4% Convertible Debentures (including all 4% Convertible
Debentures issued in exchange, transfer or replacement hereof, this "DEBENTURE")
of Environmental Solutions Worldwide, Inc., a corporation duly organized and
existing under the law of the State of Florida (the "COMPANY"), designated as
its 4% Convertible Debentures Due September 13, 2007, in an aggregate principal
amount of U.S.$[ ] (collectively, the "DEBENTURES" and such other Debentures,
the "OTHER DEBENTURES").

FOR VALUE RECEIVED, the Company promises to pay to [ ], the registered holder
hereof (the "HOLDER"), the principal sum of $[ ], on or prior to September 13,
2007 (the "MATURITY DATE"), and to pay interest on the principal sum outstanding
time to time on the yearly anniversary of the issuance date set forth above (the
"ISSUANCE DATE") of this Debenture (each an "INTEREST PAYMENT DATE"), commencing
September 13, 2005, up to and including the Maturity Date, at the rate of 4% per
annum, and shall be computed on the basis of a 365-day year and actual days
elapsed. Accrual of interest on this Debenture shall commence on the Issuance
Date and shall continue to accrue until the next Interest Payment Date. The
interest so payable will be paid on each Interest Payment Date to the person in
whose name this Debenture (or one or more predecessor Debentures) is registered

                                       1
<PAGE>

on the records of the Company regarding registration and transfers of the
Debentures (the "DEBENTURE REGISTER") on the first business day prior to such
Interest Payment Date. Notwithstanding the foregoing, the Company may elect to
forego paying interest until such time as this Debenture matures, is converted
or redeemed, as the case may be. All accrued and unpaid interest shall bear
interest at the same rate of 4% per annum from the date hereof until the date of
payment. The principal of this Debenture is payable in coin or currency of the
United States of America as at the time of payment is legal tender for public
and private debts or, at the option of the Company, in shares of Common Stock,
par value $0.001 per share (the "COMMON STOCK"), under the same conversion
formula as stated herein at the address of the Holder last appearing on the
Debenture Register of the Company as designated in writing by the Holder from
time to time. The Debenture Register shall represent the record of ownership and
right to receive principal and interest payments on this Debenture. Interest and
principal shall be payable only to the registered Holder as reflected in the
Debenture Register. At the Company's option, interest on the within Debenture
will be payable in cash or shares of Common Stock under the conversion formulas
as stated herein. The right to receive principal and interest payments under
this Debenture shall be transferable only through an appropriate entry in the
Debenture Register as provided herein.

This Debenture is subject to the following additional provisions:

1. DEBENTURES. The Debentures are exchangeable for an equal aggregate principal
amount of Debentures of different authorized denominations, as requested by the
Holders surrendering the same, but shall not be issuable in denominations less
than integral multiples of ten thousand dollars ($10,000). No service charge
will be made for such registration of transfer or exchange.

2. WITHHOLDING. The Company shall be entitled to withhold, if applicable, from
all payments of interest on this Debenture, any amounts required to be withheld
under the applicable provisions of the United States income tax laws or other
applicable laws at the time of such payments. The Holder shall pay all taxes,
charges, or levies in connection with the issuance or transfer thereof other
than amounts so withheld.

3. TRANSFER. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred,
assigned or exchanged only in compliance with the Securities Act of 1933, as
amended (the "SECURITIES ACT"), including Regulation D promulgated under the
Securities Act. Any Holder of this Debenture, by acceptance hereof, agrees to
the representations, warranties and covenants herein. Prior to due presentment
to the Company for transfer of this Debenture, the Company and any agent of the
Company may treat the person in whose name this Debenture is duly registered on
the Company's 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 be overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.

                                       2
<PAGE>

4. CONVERSION; OTHER AGREEMENTS. The record Holders of this Debenture shall have
conversion rights as follows (the "CONVERSION RIGHTS"):

(a) RIGHT TO CONVERT. The record Holder of this Debenture shall be entitled, at
the option of the Holder, to convert any or all of the aggregate principal and
accrued and unpaid interest of Debentures held by such Holder, at any time after
the date of issuance of this Debenture, at the office of the Company or any
transfer agent for the Debentures, into that number of fully-paid and
non-assessable shares of Common Stock of the Company calculated in accordance
with the following formulas (collectively, the "CONVERSION RATES"):

               (i) In the case of principal: The number of shares of Common
          Stock to be issuable upon conversion of any principal amount shall be
          determined by dividing (x) the principal amount of this Debenture to
          be converted by (y) the Fixed Conversion Price (as defined herein).
          The term "FIXED CONVERSION PRICE" means $.50, subject to adjustment as
          provided herein.

               (ii) In the case of interest: The number of shares of Common
          Stock to be issuable upon conversion of any interest amount shall be
          determined by dividing (x) the interest amount of this Debenture to be
          converted by (y) the Fair Market Value of a share of Common Stock (as
          defined herein). The term "FAIR MARKET VALUE" means (i) the average of
          the closing sales prices of the Common Stock on all domestic national
          securities exchanges on which the Common Stock is listed, or (ii) if
          there have been no sales on any such exchange on any day, the average
          of the highest bid and lowest asked prices on all such exchanges at
          the end of such a day, or (iii) if on any day the Common Stock is not
          so listed, the sales price of the Common Stock as of 4:00 P.M., New
          York time, as reported on the NASDAQ National Market, or (iv) if the
          Common Stock is not reported on the NASDAQ National Market, the
          average of the representative bid and asked quotations for the Common
          Stock as 4:00 P.M., New York time, as reported on the NASDAQ
          interdealer quotation system, or any similar successor organization,
          or (v) if the foregoing do not apply, the last closing bid price or
          last trade price, respectively, of the Common Stock in the
          over-the-counter market on the electronic bulletin board for the
          Common Stock as reported by Bloomberg Financial Markets ("BLOOMBERG"),
          or (vi) if no closing bid price or last trade price, respectively, is
          reported for the Common Stock by Bloomberg, the average of the bid
          prices, or the ask prices, respectively, of any market makers for the
          Common Stock as reported in the "pink sheets" by Pink Sheets LLC
          (formerly the National Quotation Bureau, Inc.) in each such case
          averaged over a period of 21 trading days consisting of the day as of
          which "Fair Market Value" is being determined and the 20 consecutive
          trading days prior to such day. Notwithstanding the foregoing, if at
          any time of determination either (x) the Common Stock is not
          registered pursuant to Section 12 of the Securities Exchange Act of
          1934, as amended, and is not (A) listed on a national securities
          exchange, (B) authorized for quotation in the NASDAQ system (inclusive
          of the Over the Counter Bulletin Board) or (C) reported in the Pink
          Sheets, or (y) less than 25% of the outstanding Common Stock is held
          by the public free of transfer restrictions under the Securities Act,

                                       3
<PAGE>

          then Fair Market Value shall mean the price that would be paid per
          share for the entire common equity interest in the Company in an
          orderly sale transaction between a willing buyer and a willing seller,
          taking into account the appropriate lack of liquidity of the Company's
          securities and any appropriate discount of the minority position
          represented by shares of Common Stock issuable upon conversion of this
          Debenture, using valuation techniques then prevailing in the
          securities industry and assuming full disclosure of all relevant
          information and a reasonable period of time for effectuating such
          sale. Fair Market Value shall be determined by the Company's Board of
          Directors in its good faith judgment. Notwithstanding anything to the
          contrary herein, a Holder shall have the right to require that an
          independent investment banking firm mutually acceptable to the Company
          and the Holder determine Fair Market Value, which firm shall submit to
          the Company and the Holder a written report setting forth such
          determination. The expenses of such firm will be borne equally by the
          Company and requesting Holder, and the determination of such firm will
          be final and binding upon all parties.

(b) MECHANICS OF CONVERSION. In order to convert Debentures into shares of
Common Stock, the Holder shall surrender the certificate or certificates
therefor, duly endorsed, by either overnight courier or 2-day courier, to the
office of the Company or of any transfer agent for the Debentures, and shall
give written notice to the Company at such office with a copy to Chief Executive
Officer, tel. 215-721-2188, facsimile 215-721-2192, that such Holder elects to
convert the same, the amount of principal and/or interest of the Debentures to
be so converted and a calculation of the number of shares of Common Stock to be
issued upon conversion; PROVIDED, HOWEVER, that the Company shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable
upon such conversion unless either the certificates evidencing such Debentures
are delivered to the Company or its transfer agent as provided above, or the
Holder notifies the Company or its transfer agent that such certificates have
been lost, stolen or destroyed and executes an agreement satisfactory to the
Company to indemnify the Company from any loss incurred by it in connection with
such certificates.

The Company shall issue and deliver to the Holder within five (5) business days
after delivery to the Company of such Debenture certificates, or after such
agreement and indemnification, to such Holder of Debentures at the address of
the Holder on the books of the Company, a certificate or certificates for the
number of shares of Common Stock to which the Holder shall be entitled as
aforesaid. The date on which notice of conversion is given (the "DATE OF

                                       4
<PAGE>

CONVERSION") shall be deemed to be the date in such notice of conversion is
received by the Company; PROVIDED, that the original Debentures to be converted
are received by the transfer agent or the Company within five (5) business days
thereafter, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date. If the
original Debentures to be converted are not received by the transfer agent or
the Company within five (5) business days after the Date of Conversion, the
notice of conversion shall become null and void.

Following conversion of a Debenture, or a portion thereof, the principal and,
upon payment thereof of the interest owed on that Debenture or portion of the
Debenture so converted will be deemed paid in full and satisfied, and such
Debenture or portion thereof will no longer be outstanding. If this Debenture
should be converted in part only, the Company shall promptly, upon surrender of
this Debenture, execute and deliver a new Debenture. Whenever the Company is
required to issue a new Debenture pursuant to the terms of this Debenture, such
new Debenture (i) shall be of like tenor with this Debenture, (ii) shall
represent, as indicated on the face of such new Debenture, the principal amount
remaining outstanding, (iii) shall have an issuance date, as indicated on the
face of such new Debenture, which is the same as the Issuance Date of this
Debenture, (iv) shall have the same rights and conditions as this Debenture, and
(v) shall represent the proportionate amount of accrued interest on the
principal amount and interest of this Debenture that correspond to the principal
of the new Debenture, from the Issuance Date.

(c) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the
Debentures, such number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all then outstanding Debentures. The
Company covenants that all shares of Common Stock to be issued upon conversion
of this Debenture are validly authorized and reserved for issuance and, if and
when this Debenture is converted in whole or in part the shares of Common Stock
issued will be duly and validly issued, fully paid, nonassessable, without any
personal liability attaching to the ownership thereof, and will not be issued in
violation of any preemptive or other rights of shareholders.

(d) MANDATORY PAYMENT OR CONVERSION ON MATURITY DATE. Each Holder of a Debenture
outstanding on the Maturity Date, shall have the right to payment of all
principal (and any accrued and unpaid interest thereon) on this Debenture paid
to such Holder in cash or in immediately available funds or, at the option of
the Company, in shares of Common Stock computed in accordance with Section 4
above. On the Maturity Date, the Company shall pay to the Holder an amount in
cash, in immediately available funds or, at the option of the Company, in shares
of Common Stock computed in accordance with Section 4 above an amount equal to
the then outstanding principal amount (and any accrued and unpaid interest
thereon) on this Debenture.

                                       5
<PAGE>

(e) ADJUSTMENT TO CONVERSION PRICE.

(i) If, prior to the conversion of all of the Debentures, the number of
outstanding shares of Common Stock is increased by a stock split, stock dividend
or other similar event, then the Fixed Conversion Price shall be proportionately
reduced. If prior to conversion of all the Debentures, the number of outstanding
shares of Common Stock is decreased by a reverse stock split, combination or
reclassification of shares, or other similar event, the Fixed Conversion Price
shall be proportionately increased.

(ii) In case the Company shall at any time after the date this Debenture is
first issued, sell additional shares of Common Stock or equivalents thereto,
including by way of example, pursuant to options, warrants, rights or other
securities convertible into shares of Common Stock (for purposes hereof
respecting such equivalent securities, such determination to be made at the time
of sale, grant or award of the equivalent security irrespective of the ultimate
conversion or exercise thereof) (other than pursuant to qualified or
non-qualified employee stock option plans approved by the Board of Directors or
option grants to consultants for bona fide services provided to the Company) in
a private transaction (as contrasted with a public sale registered with the
Securities and Exchange Commission) at prices (including with respect to
equivalent securities, exercise, grant or conversion prices) less than the then
current Fixed Conversion Price, then the then current Fixed Conversion Price
shall be reduced to equal the sale, issuance, exercise or conversion price, as
applicable, of the Common Stock or equivalent thereto. Such adjustment shall be
made successively whenever any event listed above shall occur.

(iii) No adjustment need be made if it would result in a change of less than 1%
of the Conversion Price. Any adjustments required to be made by this subsection
shall be rounded up to the right to acquire the nearest whole number of shares
of Common Stock.

(f) NO CHARGES OR TAXES. The issuance of certificates for shares of Common Stock
upon conversion of this Debenture shall be made without charge to Holder or the
purchaser of any issuance tax in respect thereof or other cost incurred by the
Company in connection with such conversion and the related issuance of shares of
Common Stock issuable upon conversion.

(g) NO INTERFERENCE. The Company shall not close its books against the transfer
of this Debenture or of any shares of Common Stock issued or issuable upon the
conversion of this Debenture in any manner which interferes with the timely
conversion of this Debenture.

(h) ASSISTANCE. The Company shall assist and cooperate with any reasonable
request by the Holder or any purchaser which is required to make any
governmental filings or obtain any governmental approvals prior to or in
connection with any conversion of this Debenture.

(i) CONTINGENT CONVERSION. Notwithstanding any other provision hereof, if a
conversion of any portion of this Debenture is to be made in connection with a
public offering or sale of the Company (pursuant to a merger, sale of stock or
otherwise), such exercise may at the election of the Holder be conditioned upon
the consummation of such transaction, in which case such exercise shall not be
deemed to be effective until immediately prior to consummation of such
transaction.

                                       6
<PAGE>

(j) CERTAIN ACTIONS. The Company shall take all such actions as may be necessary
to ensure that all shares of Common Stock that may be issued without violation
by the Company of any applicable law or governmental regulation or any
requirements of any domestic securities exchange or quotation system upon which
shares of Common Stock or other securities constituting securities that may be
issuable upon conversion of this Debenture may be listed or quoted (except for
official notice of issuance which shall be immediately delivered by the Company
upon each such issuance). The Company will use its best efforts to cause the
shares of Common Stock issued upon conversion of this Debenture, immediately
upon such conversion, to be listed on any domestic national securities exchange
or quotation system upon which shares of Common Stock or other securities
issuable upon conversion of this Debenture are listed or quoted at the time of
such exercise.

(k) NON-CIRCUMVENTION. The Company shall not, and shall not permit its
subsidiaries to, directly or indirectly, by any action avoid or seek to avoid
the observance or performance of any terms of this Debenture or impair or
diminish its value, but shall at all times in good faith assist in carrying out
of all such terms of this Debenture.

(l) AUTHORITY. The Company has all requisite corporate power and authority to
enter into and perform its obligations under this Debenture and to issue and
deliver the Debenture to the Holder. The execution, delivery, and performance by
the Company of its obligations under this Debenture, including the issuance and
delivery of the Debenture to the Holder, have been duly authorized by all
necessary corporate action on the part of the Company. This Debenture has been
duly executed and delivered by the Company and is a legal, valid and binding
obligation of the Company and is enforceable against the Company in accordance
with its terms.

(m) GOVERNMENTAL ACTIONS. Without limiting the generality of the foregoing, the
Company shall obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Debenture.

(n) REGISTRATION RIGHTS. The Holder shall have the registration rights and be
subject to the same obligations and undertakings with respect to the shares
issuable upon exercise of this Debenture as are granted pursuant to the
Registration Rights Agreement, dated as of September 13, 2004 (the "REGISTRATION
RIGHTS Agreement"), as amended or supplemented from time to time, providing
registration rights to the Holder.

5. REDEMPTION.

(a) RIGHT TO REDEEM. Except as provided in Sections 5(b) and (d) herein, the
Company may at its sole option elect to redeem this Debenture in accordance with
Section 5(c).

(b) RIGHT TO REDEEM ON CONVERSION. The Company shall not have the right, after
receipt of a notice of conversion pursuant to Section 4, to redeem in whole or
in part any Debentures submitted for conversion. If the Company wishes to redeem
some, but not all, of the Debentures previously submitted for conversion, the
Company shall notify the Holder on five (5) days written notice, and it will be
the option of the Holder to elect to have the Debenture redeemed.

                                       7
<PAGE>

(c) MECHANICS OF REDEMPTION ON CONVERSION. The Company shall effect each such
redemption by giving notice of its election to redeem, by facsimile to Holder.
Such redemption notice shall indicate whether the Company will redeem all or
part of the Debentures. The Company shall not be entitled to send any notice of
redemption and begin the redemption procedure unless it has the full amount of
the redemption price, in cash, available in a demand or other immediately
available account in a bank or similar financial institution on the date the
redemption notice is sent to Holder.

(d) MECHANICS OF CONVERSION ON REDEMPTION. The Holder may within three (3)
business days of receipt of the Notice of Redemption elect to send Notice of
Conversion to the Company should Holder wish for the Debenture to be converted
rather than redeemed by the Company.

(e) REDEMPTION PRICE. The redemption price per Debenture shall equal one hundred
and ten percent (110%) multiplied by the then outstanding principal amount plus
unpaid interest to the date of redemption.

The redemption price shall be paid in cash to the Holder of Debentures redeemed
within ten (10) business days of the delivery of the notice of such redemption
to such Holder; PROVIDED, HOWEVER, that the Company shall not be obligated to
deliver any portion of such redemption price unless either the certificates
evidencing the Debentures redeemed are delivered to the Company or its transfer
agent as provided in Section 4(b), or the Holder notifies the Company or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the Company to indemnify the Company from
any loss incurred by it in connection with such certificates.

6. NO IMPAIRMENT. 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, and interest on, this Debenture at
the time, place, and rate, and in the coin or currency, or Common Stock herein
prescribed. This Debenture and all other Debentures now and hereafter issued of
similar terms are direct obligations of the Company.

7. TERMINATION. After this Debenture shall have been surrendered for conversion
as herein provided or notice of redemption shall have been given by the Company
pursuant to Section 4(d) herein, this Debenture shall no longer be deemed to be
outstanding and all rights with respect to this Debenture, including, without
limitation, the right to receive interest hereon and the principal hereof, shall
forthwith terminate as of the Date of Conversion, except only the right of the
Holder hereof to receive shares of Common Stock in exchange therefore.
Notwithstanding anything to the contrary herein, if the Holder or the Company,
as applicable, is converting less than the outstanding principal amount and/or
less than the amount of unpaid interest accrued thereon, then the rights and
obligations under this Debenture shall terminate only with respect to the
principal and/or interest being so converted.

8. [INTENTIONALLY DELETED]

                                       8
<PAGE>

9. COSTS AND EXPENSES. The Company agrees to pay all costs and expenses,
including reasonable attorney's fees, which may be incurred by the Holder in
collecting any amount due under this Debenture.

10. EVENTS OF DEFAULT; REMEDIES. If one or more of the following described
"EVENTS OF DEFAULT" shall occur:

(a) The Company shall default in the payment of principal or interest on these
Debentures; or

(b) Any of the representations or warranties made by the Company herein, in the
Securities Subscription Agreement, dated as of the date hereof, relating to
these Debentures (the "SUBSCRIPTION AGREEMENt") or in any certificate or
financial or other written statements heretofore or hereafter furnished by or on
behalf of the Company in connection with the execution and delivery of this
Debenture or the Subscription Agreement shall be false or misleading in a any
material respect at the time made; or

(c) The Company shall fail to perform or observe, in any material respect, any
other covenant, term, provision, condition, agreement or obligation of the
Company under this Debenture and such failure shall continue uncured for a
period of fifteen (15) business days after notice from Holder of such failure;
or

(d) The Company or any of its subsidiaries shall (1) admit in writing its
inability to pay its debts generally as they mature; (2) make an assignment for
the benefit of creditors or commence proceedings for its dissolution; or (3)
apply for or consent to the appointment of a trustee, liquidator or receiver for
its or for a substantial part of its property or business; or

(e) A trustee, liquidator or receiver shall be appointed for the Company, any of
its subsidiaries or for a substantial part of their respective property or
business without their consent and shall not be discharged within forty five
(45) business days after such appointment; or

(f) Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial portion of the properties or assets of the Company or any of
its subsidiaries and shall not be dismissed within forty five (45) business days
thereafter; or

(g) Bankruptcy, reorganization, insolvency or liquidation proceedings or other
proceedings for relief under any bankruptcy law or any law for the relief of
debtors shall be instituted by or against the Company or any of its subsidiaries
and, if instituted against the Company or any of its subsidiaries shall not be
dismissed within forty five (45) business days after such instruction or if the
Company or any of its subsidiaries shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any proceeding; or

(h) The Common Stock shall not be traded on an exchange or over the counter
market.

                                       9
<PAGE>

Then, or at any time thereafter, and in each and every such case, unless such
Event or Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the principal (and any accrued
interest) amount of this Debenture shall become immediately due and payable,
without presentment, demand protest or notice of any kind, all of which are
hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately, and
with expiration of any period of grace, enforce any and all of the Holder's
rights and remedies provided herein or any other rights or remedies afforded by
law.

11. MERGERS, CONSOLIDATIONS, CHANGE OF CONTROL, ETC.

(a) CHANGE OF CONTROL. Each of the following events shall constitute a "CHANGE
OF CONTROL":

(i) the consolidation, merger or other business combination (including, without
limitation, a reorganization or recapitalization) of the Company with or into
another person or entity (other than (A) a consolidation, merger or other
business combination (including, without limitation, reorganization or
recapitalization) in which holders of the Company's voting power immediately
prior to the transaction continue after the transaction to hold, directly or
indirectly, the voting power of the surviving entity or entities necessary to
elect a majority of the members of the board of directors (or their equivalent
if other than a corporation) of such entity or entities, or (B) pursuant to a
migratory merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company);

(ii) the sale or transfer of all or substantially all of the Company's assets;
or

(iii) a purchase, tender or exchange offer made to and accepted by the holders
of more than the 50% of the outstanding shares of Common Stock.

No sooner than 21 days nor later than 15 days prior to the consummation of a
Change of Control the Company shall deliver written notice thereof via facsimile
and overnight courier to the Holder (a "CHANGE OF CONTROL NOTICE").
Notwithstanding anything herein to the contrary, (x) no Change of Control Notice
shall be made prior to the public announcement of a Change of Control and (y) no
Change of Control Notice shall be made prior to the consummation of the Change
of Control described in (a)(iii) above. Notwithstanding anything herein to the
contrary, the Change of Control Notice shall be delivered no later than one
Business Day following the events described in (x) and (y) of the preceding
sentence.

(b) ASSUMPTION. Prior to the consummation of any Change of Control, the Company
will secure from any person or entity purchasing the Company's assets or Common
Stock or any successor resulting from such Change of Control (in each case, an
"ACQUIRING ENTITY") a written agreement (in form and substance satisfactory to
the holders of Debentures representing at least a majority of the aggregate
principal amount of the Debentures then outstanding) to deliver to each holder
of Debentures in exchange for such Debentures, a security of the Acquiring
Entity evidenced by a written instrument substantially similar in form and
substance to the Debentures, including, without limitation, having a principal

                                       10
<PAGE>

amount and interest rate equal to the principal amounts and the interest rates
of the Debentures held by such holder, and satisfactory to the holders of
Debentures representing at least a majority of the aggregate principal amount of
the Debentures then outstanding. In the event that an Acquiring Entity is
directly or indirectly controlled by a company or entity whose common stock or
similar equity interest is listed, designated or quoted on a securities exchange
or trading market, the holders of Debentures representing at least a majority of
the aggregate principal amount of the Debentures then outstanding may elect to
treat such person or entity as the Acquiring Entity for purposes of this Section
11(b).

(c) OTHER CORPORATE EVENTS. Prior to the consummation of any recapitalization,
reorganization, consolidation, merger, spin-off or other business combination
(other than a Change of Control) pursuant to which holders of Common Stock are
entitled to receive securities or other assets with respect to or in exchange
for Common Stock (a "CORPORATE EVENT"), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive
upon a conversion of this Debenture, (i) in addition to the shares of Common
Stock receivable upon such conversion, such securities or other assets to which
the Holder would have been entitled with respect to such shares of Common Stock
had such shares of Common Stock been held by the Holder upon the consummation of
such Corporate Event or (ii) in lieu of the shares of Common Stock otherwise
receivable upon such conversion, such securities or other assets received by the
holders of Common Stock in connection with the consummation of such Corporate
Event in such amounts as the Holder would have been entitled to receive had this
Debenture initially been issued with conversion rights for the form of such
consideration (as opposed to shares of Common Stock) at a conversion rate for
such consideration commensurate with the Conversion Rates. Provision made
pursuant to the preceding sentence shall be in a form and substance satisfactory
to the holders of Debentures representing at least a majority of the aggregate
principal amount of the Debentures then outstanding.

12. LOST OR DESTROYED DEBENTURE. 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 thereof, and indemnity and bond, if
requested, all reasonably satisfactory to the Company.

13. [INTENTIONALLY DELETED]

14. GOVERNING LAW. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of laws.

15. BUSINESS DAY DEFINITION. For purposes hereof, the term "business day" shall
mean any day on which banks are generally open for business in the State of New
York, USA and excluding any Saturday and Sunday.

                                       11
<PAGE>

16. NOTICES. Any notice, demand or request required or permitted to be given by
either the Company or the Holder pursuant to the terms of this Debenture shall
be in writing and shall be deemed given when delivered personally, or by
facsimile (with a hard copy to follow by two day courier), addressed to the
Company attention Chief Executive Officer at 132 Penn Avenue, Telford, PA 18969,
tel. 215-721-2188, facsimile 215-721-2192 with a copy to Baratta & Goldstein,
attn: Joseph Baratta, Esq., tel. 212-750-9700, facsimile 212-750-8297, or the
Holder at [ ] , or such other addresses as a party may request by notifying the
other in writing.

17. WAIVER. Any waiver by the Company or the Holder hereof of a breach of any
provision of this Debenture shall not operate as or be construed to be a waiver
of any breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Company or the Holder hereof 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.

18. NOTICES OF CERTAIN ACTIONS. In case at any time the Company shall propose
to:

(a) pay any dividend or make any distribution on shares of Common Stock in
shares of Common Stock or equivalents thereto or make any other distribution; or

(b) issue any rights, warrants or other Common Stock to all holders of Common
Stock entitling them to purchase any additional shares of Common Stock or any
other rights, debentures, warrants or other Common Stock; or

(c) effect any reclassification or change of outstanding shares of Common Stock,
or any consolidation, merger, sale, lease or conveyance of property, described
in Sections 4 or 11 hereof; or

(d) effect any liquidation, dissolution or winding-up of the Company; or

(e) take any other action which would cause an adjustment to the Fixed
Conversion Price; or

(f) provide to its shareholders any information which is regularly provided to
shareholders,

then, and in any one or more of such cases (a) through (f), the Company shall,
subject to any other Sections of this Debenture, give written notice thereof, by
certified mail, postage prepaid, to the Holder at the Holder's address as it
shall appear in the Debenture Register, mailed at least fifteen (15) days prior
to (i) the date as of which the holders of record of shares of securities to be
entitled to receive any such dividend, distribution, rights, debentures,
warrants or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution or winding-up, or (iii) the date of such other action which would
require an adjustment to the Fixed Conversion Price. In the case of subsection
(f) above, written notice to the Holder may be given by regular mail.

                                       12
<PAGE>

19. UNENFORCEABLE PROVISIONS. 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.

20. RESTRICTION ON REDEMPTION AND DIVIDENDS. Until all of the Debentures have
been converted, redeemed or otherwise satisfied in accordance with their terms,
the Company shall not, directly or indirectly, (A) repurchase, redeem, or
declare or pay any cash dividend or distribution on, the Common Stock or (B)
distribute any material property or assets of any kind to holders of the Common
Stock in respect of the Common Stock.

21. RANK. Obligations under this Debenture, including payments of principal and
interest and other payments due under this Debenture, shall rank pari passu with
all Other Debentures.

22. VOTE TO ISSUE, OR CHANGE THE TERMS OF, DEBENTURES. The affirmative vote at a
meeting duly called for such purpose or the written consent without a meeting of
the holders of Debentures representing not less than a majority of the aggregate
principal amount of the then outstanding Debentures shall be required for any
change or amendment to this Debenture or the Other Debentures; PROVIDED, that
the Holder of this Debenture may waive any term or provision of this Debenture
without such vote or written consent.

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

24. CONSTRUCTION; HEADINGS. This Debenture shall be deemed to be jointly drafted
by the Company and the Holder and shall not be construed against any person as
the drafter hereof. The headings of this Debenture are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Debenture.

25. REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Debenture shall be cumulative and in
addition to all other remedies available under this Debenture and any of the
other Transaction Documents (as defined in the Subscription Agreement), at law
or in equity (including a decree of specific performance and/or other injunctive
relief), and nothing herein shall limit the Holder's right to pursue actual

                                       13
<PAGE>

damages for any failure by the Company to comply with the terms of this
Debenture. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof). The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

26. WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Debenture and
the Subscription Agreement.

27. FURTHER ACKNOWLEDGEMENT. The Company will, at the time of each conversion of
this Debenture, upon the request of the Holder hereof, acknowledge in writing
its continuing obligation to afford to such Holder all rights (including,
without limitation, any rights to registration, pursuant to the Registration
Rights Agreement, of the shares of Common Stock issued upon such conversion) to
which such Holder shall continue to be entitled after such conversion in
accordance with its terms of this Debenture; PROVIDED, that if the Holder of
this Debenture shall fail to make any such requests, such failure shall not
affect the continuing obligation of the Company to afford such rights to such
Holder.

IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by
an officer thereof duly authorized.

                                   Environmental Solutions Worldwide, Inc.

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

                                       14
<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
common stock, $0.001 par value per share (the "COMMON STOCK"), of Environmental
Solutions Worldwide, Inc. (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 the 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

                            Payment of Interest in Kind    [ ] Yes
                                                           [ ] No

                            --------------------------------------------------
                            Interest Accrued on Account of Conversion at Issue

                            --------------------------------------------------
                            Number of shares of Common Stock to be Issued

                            --------------------------------------------------
                            Applicable Conversion Price

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

                            --------------------------------------------------
                            Name

                            --------------------------------------------------
                            Address

                                       15
<PAGE>

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