Document:

Exhibit
      4.8

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE"ACT") OR APPLICABLE STATE SECURITIES
      LAWS. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
      OF
      AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN
      OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
      COUNSEL TO THE BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
      UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

    

    CONVERTIBLE
      DEBENTURE

    

    FOR
      VALUE
      RECEIVED, OMNI U.S.A., INC., a Nevada corporation (hereinafter called the
      "BORROWER" or "COMPANY"), hereby promises to pay to the order of the Potawatomi
      Business Development Corp., or registered assigns (the "HOLDER") the sum of
      One
      Million Dollars ($1,000,000.00), on July 14, 2008 (the "MATURITY DATE"), and
      to
      pay interest quarterly on the unpaid principal balance hereof at the rate of
      eight percent (8%) per annum from July 14, 2006 (the "ISSUE DATE") until the
      same becomes due and payable, whether at maturity or upon acceleration or
      otherwise. Any amount of principal or interest on this Convertible Debenture
      ("the Debenture") which is not paid when due shall bear interest at the rate
      of
      fifteen percent (15%) per annum from the due date thereof until the same is
      paid
      ("DEFAULT INTEREST"). Interest shall commence accruing on the Issue Date, shall
      be computed on the basis of a 365-day year and the actual number of days elapsed
      and shall be payable quarterly, in cash or, to the extent not yet paid, at
      maturity or upon acceleration in accordance with the terms hereof in cash or,
      at
      the option of the Holder, in common stock. All payments due hereunder (to the
      extent not converted into Common Stock, par value $0.004995 per share, of the
      Borrower (the "COMMON STOCK") in accordance with the terms hereof) shall be
      made
      in lawful money of the United States of America provided that, to the extent
      that any accrued interest has not been paid when due, at the option of the
      Holder, in whole or in part, such accrued and unpaid interest may, upon written
      notice to the Borrower, be added to the principal amount of this Debenture,
      in
      which event interest shall accrue thereon in accordance with the terms of this
      Debenture and such additional principal amount shall be convertible into Common
      Stock in accordance with the terms of this Debenture. All payments shall be
      made
      at such address as the Holder shall hereafter give to the Borrower by written
      notice made in accordance with the provisions of this Debenture. Whenever any
      amount expressed to be due by the terms of this Debenture is due on any day
      which is not a business day, the same shall instead be due on the next
      succeeding day which is a business day. Except as otherwise expressly provided
      herein, this Debenture may not be prepaid by the Borrower. As used in this
      Debenture, the term "business day" shall mean any day other than a Saturday,
      Sunday or a day on which commercial banks in the City of San Diego, California
      are authorized or required by law or executive order to remain closed. Each
      capitalized term used herein, and not otherwise defined, shall have the meaning
      ascribed thereto in that certain Securities Purchase Agreement, dated July
      14,
      2006, pursuant to which this Debenture was originally issued (the "PURCHASE
      AGREEMENT"). For purposes hereof, the term "Debentures" shall be deemed to
      refer
      to this Debenture, all other convertible debentures issued pursuant to the
      Purchase Agreement and all convertible debentures issued in replacement hereof
      or thereof or otherwise with respect hereto or thereto.

    

    The
      following terms shall apply to this Debenture:

    

    
      
         

      

      
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    ARTICLE
      I.

    CONVERSION
      RIGHTS

    

    1.1
      CONVERSION RIGHT.

    

    (A)
      CONVERSION TIMING AND AMOUNT. Subject to the limitations on conversion contained
      herein, the Holder shall have the right from time to time, and at any time
      on or
      after the Conversion Beginning Date and on or prior to the earlier of (i) the
      Maturity Date and (ii) the date of payment of the Default Amount (as defined
      in
      Article III) pursuant to Article III or Section 1.6 hereof, to convert all
      or
      any part of the outstanding and unpaid principal amount of this Debenture into
      fully paid and non-assessable shares of Common Stock, as such Common Stock
      exists on the Issue Date, or any shares of capital stock or other securities
      of
      the Borrower into which such Common Stock shall hereafter be changed or
      reclassified, at the Conversion Price (as defined in Section 1.2 below)
      determined as provided herein (a "CONVERSION");

    

    (B)
      LIMITATION ON CONVERSION. Notwithstanding the above, in no event shall the
      Holder be entitled to convert any portion of this Debenture in excess of that
      portion of this Debenture upon conversion of which the sum of (1) the number
      of
      shares of Common Stock beneficially owned by the Holder and any applicable
      affiliates (other than shares of Common Stock which may be deemed beneficially
      owned through the ownership of the unconverted portion of the Debentures, the
      unexercised Warrants or the unexercised or unconverted portion of any other
      security of the Borrower subject to a limitation on conversion or exercise
      analogous to the limitations contained herein) and (2) the number of shares
      of
      Common Stock issuable upon the conversion of the portion of this Debenture
      with
      respect to which the determination of this proviso is being made, would result
      in beneficial ownership by the Holder and its affiliates of more than 4.99%
      of
      the outstanding shares of Common Stock (the "4.99% LIMITATION"). For purposes
      of
      the proviso to the immediately preceding sentence, (i) beneficial ownership
      shall be determined by the Holder in accordance with Section 13(d) of the
      Exchange Act and Regulations 13D-G thereunder, except as otherwise provided
      in
      clause (1) of such proviso to the immediately preceding sentence, and PROVIDED
      THAT the 4.99% Limitation shall be conclusively satisfied if the applicable
      Notice of Conversion includes a signed representation by the Holder that the
      issuance of the shares in such Notice of Conversion will not violate the 4.99%
      Limitation, and the Company shall not be entitled to require additional
      documentation of such satisfaction.

    

    The
      parties agree that, in the event that the Company receives any tender offer
      or
      any offer to enter into a merger with another entity whereby the Company shall
      not be the surviving entity (an "Offer"), then "4.99%" shall be automatically
      revised immediately after such offer to read "9.99%" each place it occurs in
      the
      first paragraph of this Section 1(b) above. Notwithstanding the above, Holder
      shall retain the option to either exercise or not exercise its option(s) to
      acquire Common Stock pursuant to the terms hereof after an Offer.

    

    
      
         

      

      
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    (C)
      CALCULATION OF CONVERSION AMOUNT. The number of shares of Common Stock to be
      issued upon each conversion of this Debenture shall be determined by dividing
      the Conversion Amount (as defined herein) by the applicable Conversion Price.
      The term "CONVERSION AMOUNT" means, with respect to any conversion of this
      Debenture, the sum of (1) the principal amount of this Debenture to be converted
      in such conversion, PLUS (2) all accrued and unpaid interest thereon for the
      period beginning on the Issue Date and ending on the Conversion Date (as defined
      in Section 1.4 hereof), PLUS (3) Default Interest, if any, on the amounts
      referred to in the immediately preceding clauses (1) and/or (2), PLUS (4) at
      the
      Holder's option, any amounts owed to the Holder pursuant to Sections 1.3 and
      1.4
      hereof or pursuant to Section 2 of that certain Registration Rights Agreement,
      dated as of July 14, 2006, executed in connection with the initial issuance
      of
      this Debenture and the other Debentures issued on the Issue Date (the
      "REGISTRATION RIGHTS AGREEMENT").

    

    1.2
      CONVERSION PRICE.

    

    (A)
      CONVERSION PRICE. Subject to the provisions of Section 1.5 below, the
      "CONVERSION PRICE" shall equal $0.50 (the "CONVERSION PRICE"), which represents
      a negotiated price, determined on the date of this Debenture (subject to
      equitable adjustments for stock splits, stock dividends or rights offerings
      by
      the Borrower relating to the Borrower's securities or the securities of any
      subsidiary of the Borrower, combinations, recapitalization, reclassifications,
      extraordinary distributions and similar events).

    

    (B)
      RESETS OF CONVERSION PRICE. In the event that the Borrower enters into a
      convertible debenture with another party within one year of the Closing Date,
      the Conversion Price shall be adjusted down to the conversion price of the
      subsequent convertible debentures if such price is less than the Conversion
      Price.

    

    (C)
      CERTAIN DEFINITIONS. For purposes hereof:

    

    1.3
      RESERVATION OF SHARES.

    

    (A)
      INCREASE AND MAINTENANCE OF AUTHORIZED AND RESERVED AMOUNT. The Borrower
      covenants that it will reserve (the "SHARE RESERVATION") from its authorized
      and
      unissued Common Stock a number of shares of Common Stock equal to the initial
      principal amount of this Debenture, divided by Conversion Price in effect on
      the
      date of the Initial Share Reservation, free from preemptive rights, to provide
      for the issuance of Common Stock upon the conversion of this Debenture. Borrower
      further covenants that, beginning on the date of the Initial Share Reservation
      (the "CONVERSION BEGINNING DATE"), and continuing throughout the period the
      conversion right exists, the Borrower will reserve from its authorized and
      unissued Common Stock a sufficient number of shares (the "RESERVED AMOUNT"),
      free from preemptive rights, to provide for the issuance of Common Stock upon
      the full conversion of this Debenture. The Reserved Amount shall be increased
      from time to time in accordance with the Borrower's obligations pursuant to
      Section 4(h) of the Purchase Agreement. The Borrower represents that upon
      issuance, such shares will be duly and validly issued, fully paid and
      non-assessable. In addition, if the Borrower shall issue any securities or
      make
      any change to its capital structure which would change the number of shares
      of
      Common Stock into which the Debentures shall be convertible at the then
      applicable Conversion Price, the Borrower shall at the same time make proper
      provision so that thereafter there shall be a sufficient number of shares of
      Common Stock authorized and reserved, free from preemptive rights, for
      conversion of the outstanding Debentures.

    

    (B)
      INSTRUCTIONS TO TRANSFER AGENT. The Borrower (i) acknowledges that it has
      irrevocably instructed its transfer agent to issue certificates for the Common
      Stock issuable upon conversion of this Debenture and (ii) agrees that its
      issuance of this Debenture shall constitute full authority to its officers
      and
      agents who are charged with the duty of executing stock certificates to execute
      and issue the necessary certificates for shares of Common Stock in accordance
      with the terms and conditions of this Debenture.

    

    
      
         

      

      
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    (C)
      CONVERSION FAILURE. If, at any time a Holder of this Debenture submits a Notice
      of Conversion, and the Borrower does not have sufficient authorized but unissued
      shares of Common Stock available to effect such conversion in accordance with
      the provisions of this Article I (a "CONVERSION FAILURE"), subject to Section
      5.8, the Borrower shall issue to the Holder all of the shares of Common Stock
      which are then available to effect such conversion. The portion of this
      Debenture which the Holder included in its Notice of Conversion and which
      exceeds the amount which is then convertible into available shares of Common
      Stock (the "EXCESS AMOUNT") shall, notwithstanding anything to the contrary
      contained herein, not be convertible into Common Stock in accordance with the
      terms hereof until (and at the Holder's option at any time after) the date
      additional shares of Common Stock are authorized and duly reserved for issuance
      by the Borrower to permit such conversion. The Borrower shall pay to the Holder
      payments ("CONVERSION FAILURE PAYMENTS") for a Conversion Failure in a dollar
      amount equal to:

    

    (A)
      a
      number of shares equal to the total outstanding principal amount plus
      accrued but unpaid interest of the Debenture at the time of the applicable
      Notice of Conversion, divided by the Conversion Price in effect
      during the period beginning on and including the date of the Conversion
      Failure and ending on the date (the "AUTHORIZATION DATE") that the Borrower
      authorizes a sufficient number of shares of Common Stock to effect
      conversion of the full outstanding principal balance of this Debenture (a
      "CONVERSION FAILURE PERIOD"),

    

    multiplied
      by

    

    (B)
      the
      difference of:

    

    (x)
      the
      highest Closing Price per share for the Company's Common Stock
      for
      any trading day during the applicable Conversion Failure Period,

    

    minus

    

    (y)
      the
      Conversion Price per share in effect at any time during
      the Conversion Failure Period.

    

    The
      Borrower shall use its best efforts to authorize a sufficient number of shares
      of Common Stock as soon as practicable following the earlier of (i) such time
      that the Holder notifies the Borrower or that the Borrower otherwise becomes
      aware that there are or likely will be insufficient authorized and unissued
      shares to allow full conversion of outstanding amount of this Debenture and
      (ii)
      a Conversion Failure. The Borrower shall send notice to the Holder of the
      authorization of additional shares of Common Stock, the Authorization Date
      and
      the amount of the Holder's accrued Conversion Failure Payments.

    

    (D)
      PAYMENT OF ACCRUED CONVERSION FAILURE PAYMENTS. The accrued Conversion Failure
      Payments for each Conversion Failure Period shall be paid in cash on or before
      the fifth (5th) day following the last business day of the applicable Conversion
      Failure Period in which they have accrued, PROVIDED that, at the option of
      the
      Holder (by written notice to the Borrower), such payments shall be added to
      the
      principal amount of this Debenture, in which event interest shall accrue thereon
      in accordance with the terms of this Debenture and such additional principal
      amount shall be convertible into Common Stock in accordance with the terms
      of
      this Debenture. Nothing herein shall limit the Holder's right to pursue actual
      damages (to the extent in excess of the Conversion Failure Payments) for the
      Borrower's failure to maintain a sufficient number of authorized shares of
      Common Stock, and the Holder shall have the right to pursue all remedies
      available at law or in equity (including a decree of specific performance and/or
      injunctive relief). Notwithstanding the above, if a particular Conversion
      Failure results in an Event of Default pursuant to Section 3.2, then the
      Conversion Failure Payment, for that Conversion Failure only, shall be
      considered to have been satisfied upon payment to the Holder of the Default
      Amount, in full, payable in accordance with Article III.

    

    
      
         

      

      
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    1.4
      METHOD OF CONVERSION.

    

    (A)
      MECHANICS OF CONVERSION. Subject to Section 1.1 and the other provisions of
      this
      Debenture, this Debenture may be converted by the Holder in whole or in part
      at
      any time and from time to time after the Issue Date, by (A) submitting to the
      Borrower a duly executed notice of conversion in the form attached hereto as
      Exhibit A ("NOTICE OF CONVERSION") by facsimile dispatched prior to Midnight,
      San Diego, CA time (the "CONVERSION NOTICE DEADLINE") on the date specified
      therein on the Conversion Date (as defined herein) (or by other means resulting
      in, or reasonably expected to result in, written notice to the Borrower on
      the
      date specified therein as the Conversion Date) to the office of the Borrower;
      which notice shall specify the principal amount of this Debenture to be
      converted, the applicable Conversion Price, and the number of shares of Common
      Stock issuable upon such conversion; and (B) subject to Section 1.4(b),
      surrendering this Debenture at the principal office of the
      Borrower.

    

    

    (B)
      SURRENDER OF DEBENTURE UPON CONVERSION. Notwithstanding anything to the contrary
      set forth herein, upon conversion of this Debenture in accordance with the
      terms
      hereof, the Holder shall not be required to physically surrender this Debenture
      to the Borrower unless the entire unpaid principal amount of this Debenture
      is
      so converted. The Holder and the Borrower shall maintain records showing the
      principal amount so converted and the dates of such conversions or shall use
      such other method, reasonably satisfactory to the Holder and the Borrower,
      so as
      not to require physical surrender of this Debenture upon each such conversion.
      In the event of any dispute or discrepancy, such records of the Borrower shall
      be controlling and determinative in the absence of manifest error.
      Notwithstanding the foregoing, if any portion of this Debenture is converted
      as
      aforesaid, the Holder may not transfer this Debenture unless the Holder first
      physically surrenders this Debenture to the Borrower, whereupon the Borrower
      will forthwith issue and deliver upon the order of the Holder a new Debenture
      of
      like tenor, registered as the Holder (upon payment by the Holder of any
      applicable transfer taxes) may request, representing in the aggregate the
      remaining unpaid principal amount of this Debenture. The Holder and any
      assignee, by acceptance of this Debenture, acknowledge and agree that, by reason
      of the provisions of this paragraph, following conversion of a portion of this
      Debenture, the unpaid and unconverted principal amount of this Debenture
      represented by this Debenture may be less than the amount stated on the face
      hereof.

    

    (C)
      PAYMENT OF TAXES. The Borrower shall not be required to pay any tax which may
      be
      payable in respect of any transfer involved in the issue and delivery of shares
      of Common Stock or other securities or property on conversion of this Debenture
      in a name other than that of the Holder (or in street name), and the Borrower
      shall not be required to issue or deliver any such shares or other securities or
      property unless and until the person or persons (other than the Holder or the
      custodian in whose street name such shares are to be held for the Holder's
      account) requesting the issuance thereof shall have paid to the Borrower the
      amount of any such tax or shall have established to the satisfaction of the
      Borrower that such tax has been paid.

    

    (D)
      LOST
      OR STOLEN DEBENTURES. Upon receipt by the Borrower of evidence of the loss,
      theft, destruction or mutilation of this Debenture, and (in the case of loss,
      theft or destruction) of indemnity reasonably satisfactory to the Borrower,
      and
      upon surrender and cancellation of this Debenture, if mutilated, the Borrower
      shall execute and deliver a new Debenture of like tenor and date.

    

    
      
         

      

      
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    (E)
      DELIVERY OF COMMON STOCK UPON CONVERSION. Upon submission of a Notice of
      Conversion, the Borrower shall, within three business days after the Conversion
      Date (the "DELIVERY PERIOD"), issue and deliver (or cause its Transfer Agent
      so
      to issue and deliver) in accordance with the terms hereof and the Purchase
      Agreement to or upon the order of the Holder that number of shares of Common
      Stock for the portion of this Debenture converted as shall be determined in
      accordance herewith.

    

    (F)
      DELIVERY FAILURE. In addition to any other remedies available to the Holder,
      including actual damages and/or equitable relief, in the event that the Borrower
      fails to deliver to the Holder Common Stock (a "DELIVERY FAILURE") issuable
      upon
      conversion of this Debenture pursuant to the Notice of Conversion by the date
      that is a two-day grace period following the Delivery Period, the Borrower
      shall
      pay to the Holder an amount ("DELIVERY FAILURE PAYMENTS") for a Delivery Failure
      in a dollar amount equal to:

    

    (A)
      a
      number of shares equal to the total outstanding principal amount and
any
      accrued but unpaid interest of the Debentures at the time of the applicable
      Notice of Conversion, divided by the lowest Conversion Price in effect
      during the period beginning on and including the date of the Delivery
      Failure and ending on the date (the "DELIVERY DATE") that the Borrower
      delivers to the Holder all of the Common Stock issuable upon conversion
      of this Debenture pursuant to the Notice of Conversion (a "DELVERY
      FAILURE PERIOD"),

    

    multiplied
      by

    

    (B)
      the
      difference of:

    

    (x)
      the
      highest Closing Price per share for the Company's Common Stock for any
      trading day during the applicable Delivery Failure Period,

    

    minus

    

    (y)
      the
      Conversion Price per share in effect at any time during
      the applicable Delivery Failure Period.

    

    (G)
      PAYMENT OF ACCRUED DELIVERY FAILURE PAYMENTS. The accrued Delivery Failure
      Payments for each Delivery Failure Period shall be paid in cash on or before
      the
      fifth (5th) day following the last business day of the Delivery Failure Period
      in which they have accrued, PROVIDED that, at the option of the Holder (by
      written notice to the Borrower), such payments shall be added to the principal
      amount of this Debenture, in which event interest shall accrue thereon in
      accordance with the terms of this Debenture and such additional principal amount
      shall be convertible into Common Stock in accordance with the terms of this
      Debenture; PROVIDED, HOWEVER, in the event of a failure by the Borrower to
      deliver shares upon conversion as a result of a Conversion Failure, the Holder
      shall not be entitled to receive Delivery Failure Payments but shall be entitled
      to receive Conversion Failure Payments in accordance with Section 1.3.
      Notwithstanding the above, if a particular Delivery Failure results in an Event
      of Default pursuant to Section 3.2, then the Delivery Failure Payment, for
      that
      Delivery Failure only, shall be considered to have been satisfied upon payment
      to the Holder of the Default Amount, in full, payable in accordance with Article
      III.

    

    (H)
      DELIVERY OF ELECTRONIC SHARES. In lieu of delivering physical certificates
      representing the Common Stock issuable upon conversion, provided the Borrower's
      Transfer Agent is participating in the Depository Trust Company ("DTC") Fast
      Automated Securities Transfer ("FAST") program, upon written request of the
      Holder and its compliance with the provisions contained in Section 1.1 and
      in
      this Section 1.4, the Borrower shall use its best efforts to cause its Transfer
      Agent to electronically transmit the Common Stock issuable upon conversion
      to
      the Holder by crediting the account of the Holder's Prime Broker with DTC
      through its Deposit Withdrawal Agent Commission ("DWAC") system. The time
      periods for delivery and penalties described in the immediately preceding
      paragraph shall apply to the electronic transmittals described
      herein.

    

    
      
         

      

      
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    (I)
      OBLIGATION OF BORROWER TO DELIVER COMMON STOCK. Upon receipt by the Borrower
      of
      a Notice of Conversion, the Holder shall be deemed to be the holder of record
      of
      the Common Stock issuable upon such conversion, the outstanding principal amount
      and the amount of accrued and unpaid interest on this Debenture shall be reduced
      to reflect such conversion, and, unless the Borrower defaults on its obligations
      hereunder, all rights with respect to the portion of this Debenture being so
      converted shall forthwith terminate except the right to receive the Common
      Stock
      or other securities, cash or other assets, as herein provided, on such
      conversion. If the Holder shall have given a Notice of Conversion as provided
      herein, the Borrower's obligation to issue and deliver the certificates for
      Common Stock shall be absolute and unconditional, irrespective of the absence
      of
      any action by the Holder to enforce the same, any waiver or consent with respect
      to any provision thereof, the recovery of any judgment against any person or
      any
      action to enforce the same, any failure or delay in the enforcement of any
      other
      obligation of the Borrower to the holder of record, or any setoff, counterclaim,
      recoupment, limitation or termination, or any breach or alleged breach by the
      Holder of any obligation to the Borrower, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Borrower to
      the
      Holder in connection with such conversion.

    

    (J)
      NO
      FRACTIONAL SHARES. If any conversion of this Debenture would result in a
      fractional share of Common Stock or the right to acquire a fractional share
      of
      Common Stock, such fractional share shall be disregarded and the number of
      shares of Common Stock issuable upon conversion of this Debenture shall be
      the
      next higher number of shares.

    

    (K)
      CONVERSION DATE. The "CONVERSION DATE" shall be the date specified in the Notice
      of Conversion, provided that the Notice of Conversion is submitted by facsimile
      (or by other means resulting in, or reasonably expected to result in, written
      notice) to the Borrower or its Transfer Agent before Midnight, San Diego, CA
      time, on the date so specified, otherwise the Conversion Date shall be the
      first
      business day after the date so specified (provided that the Notice of Conversion
      is actually received by the Borrower or its Transfer Agent on such business
      day). The person or persons entitled to receive the shares of Common Stock
      issuable upon conversion shall be treated for all purposes as the record holder
      or holders of such securities as of the Conversion Date and all rights with
      respect to this Debenture (or portion thereof) surrendered shall forthwith
      terminate except the rights set forth in Sections 1.4(f) and Section 1.7
      hereof.

    

    1.5
      EFFECT OF CERTAIN EVENTS.

    

    (A)
      EFFECT OF MERGER, CONSOLIDATION, ETC. At the option of the Holder, the sale,
      conveyance or disposition of all or substantially all of the assets of the
      Borrower, the effectuation by the Borrower of a transaction or series of related
      transactions in which more than 50% of the voting power of the Borrower is
      disposed of, or the consolidation, merger or other business combination of
      the
      Borrower with or into any other Person (as defined herein) or Persons when
      the
      Borrower is not the survivor shall, at the Holder's option, either: (i) be
      deemed to be an Event of Default (as defined in Article III) pursuant to which
      the Borrower shall be required to pay to the Holder upon the consummation of
      and
      as a condition to such transaction an amount equal to the Default Amount (as
      defined in Article III) or (ii) be treated pursuant to Section 1.5(b) hereof.
      "PERSON" shall mean any individual, corporation, limited liability company,
      partnership, association, trust or other entity or organization.

    

    
      
         

      

      
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    (B)
      ADJUSTMENT DUE TO MERGER, CONSOLIDATION, ETC. If, at any time when this
      Debenture is issued and outstanding and prior to conversion of all of the
      Debentures, there shall be any merger, consolidation, exchange of shares,
      recapitalization, reorganization, or other similar event, as a result of which
      shares of Common Stock of the Borrower shall be changed into the same or a
      different number of shares of another class or classes of stock or securities
      of
      the Borrower or another entity, or in case of any sale or conveyance of all
      or
      substantially all of the assets of the Borrower other than in connection with
      a
      plan of complete liquidation of the Borrower (each, a "CHANGE OF CONTROL
      TRANSACTION"), then the Holder of this Debenture shall thereafter have the
      right
      to receive upon conversion of this Debenture, upon the basis and upon the terms
      and conditions specified herein and in lieu of the shares of Common Stock
      immediately theretofore issuable upon conversion, such stock, securities or
      assets which the Holder would have been entitled to receive in such transaction
      had this Debenture been converted in full immediately prior to such transaction
      (without regard to any limitations on conversion set forth herein, including
      but
      not limited to without regard to the 4.99% Limitation), and in any such case
      appropriate provisions shall be made with respect to the rights and interests
      of
      the Holder of this Debenture to the end that the provisions hereof (including,
      without limitation, provisions for adjustment of the Conversion Price and of
      the
      number of shares issuable upon conversion of the Debenture) shall thereafter
      be
      applicable, as nearly as may be practicable in relation to any securities or
      assets thereafter deliverable upon the conversion hereof. The Borrower shall
      not
      effect any transaction described in this Section 1.5(b) unless (a) it first
      gives, to the extent practicable, thirty (30) days prior written notice (but
      in
      any event at least fifteen (15) business days prior written notice) of the
      record date of the special meeting of shareholders to approve, or if there
      is no
      such record date, the consummation of, such merger, consolidation, exchange
      of
      shares, recapitalization, reorganization or other similar event or sale of
      assets (during which time the Holder shall be entitled to convert this
      Debenture) and (b) the resulting successor or acquiring entity (if not the
      Borrower) and, if an entity different from the successor or acquiring entity,
      the entity whose capital stock or assets the holders of Common Stock are
      entitled to receive as a result of such Change of Control Transaction, assumes
      by written instrument the obligations of this Debenture, including this Section
      1.5(b). The above provisions shall similarly apply to successive consolidations,
      mergers, sales, transfers or share exchanges.

    

    (C)
      ADJUSTMENT DUE TO DISTRIBUTION. If the Borrower shall declare or make any
      distribution of its assets (or rights to acquire its assets) to holders of
      Common Stock as a dividend, stock repurchase, by way of return of capital or
      otherwise (including any dividend or distribution to the Borrower's shareholders
      in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
      (i.e., a spin-off) (a "DISTRIBUTION"), then the Holder of this Debenture shall
      be entitled, upon any conversion of this Debenture after the date of record
      for
      determining shareholders entitled to such Distribution, to receive the amount
      of
      such assets which would have been payable to the Holder with respect to the
      shares of Common Stock issuable upon such conversion had such Holder been the
      holder of such shares of Common Stock on the record date for the determination
      of shareholders entitled to such Distribution.

    

    (D)
      PURCHASE RIGHTS. If, at any time when any Debentures are issued and outstanding,
      the Borrower issues any convertible securities or rights to purchase stock,
      warrants, securities or other property (the "PURCHASE RIGHTS") pro rata to
      the
      record holders of any class of Common Stock, then the Holder of this Debenture
      will be entitled to acquire, upon the terms applicable to such Purchase Rights,
      the aggregate Purchase Rights which such Holder could have acquired if such
      Holder had held the number of shares of Common Stock acquirable upon complete
      conversion of this Debenture (without regard to any limitations on conversion
      contained herein) immediately before the date on which a record is taken for
      the
      grant, issuance or sale of such Purchase Rights or, if no such record is taken,
      the date as of which the record holders of Common Stock are to be determined
      for
      the grant, issue or sale of such Purchase Rights.

    

    (E)
      ADDITIONAL ADJUSTMENTS TO CONVERSION PRICE. The Conversion Price shall be
      subject to adjustment from time to time as provided in this Section
      1.5(e).

    

    (i)
      ADJUSTMENT OF CONVERSION PRICE. If, and whenever on a date one year or less
      than
      the date of issuance of this Debenture, the Borrower issues or sells any shares
      of Common Stock for no consideration or for a consideration per share less
      than
      the Conversion Price then in effect, or issues any convertible securities,
      warrants (other than those
      issuable to the Holder), options (including but not limited to employee stock
      options), equity line type offerings or other underwritten offerings, or any
      other type of security that is convertible or exchangeable into common stock
      at
      a rate or price that is less than the Conversion Price then in effect, or
      carries with it the right to receive additional shares of Common Stock at a
      later date, such that the average price per share for such shares of Common
      Stock is less than the Conversion Price then in effect, then the Conversion
      Price shall immediately be reduced to equal the price per share of such other
      Common Stock, options, or other securities.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    (ii)
      SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Borrower at any time
      subdivides (by any stock split, stock dividend, recapitalization,
      reorganization, reclassification or otherwise) the shares
      of
      Common Stock acquirable hereunder into a greater number of shares,
      then, after the date of record for effecting such subdivision,
      the Conversion Price in effect immediately prior to such
      subdivision will be proportionately reduced. If the Borrower at any
      time
      combines (by reverse stock split, recapitalization, reorganization,
      reclassification or otherwise) the shares of Common Stock
      acquirable hereunder into a smaller number of shares, then, after
      the
      date of record for effecting such combination, the Conversion
      Price in effect immediately prior to such combination will
      be
      proportionately increased.

    

    

    (F)
      NOTICE OF ADJUSTMENTS. Upon the occurrence of each adjustment or readjustment
      of
      the Conversion Price as a result of the events described in this Section 1.5,
      the Borrower, at its expense, shall promptly compute such adjustment or
      readjustment and prepare and furnish to the Holder a certificate setting forth
      such adjustment or readjustment and showing in detail the facts upon which
      such
      adjustment or readjustment is based. The Borrower shall, upon the written
      request at any time of the Holder, furnish to such Holder a like certificate
      setting forth (i) such adjustment or readjustment, (ii) the Conversion Price
      at
      the time in effect and (iii) the number of shares of Common Stock and the
      amount, if any, of other securities or property which at the time would be
      received upon conversion of the Debenture.

    

    1.6
      [INTENTIONALLY LEFT BLANK].

    

    1.7
      STATUS AS SHAREHOLDER. Upon submission of a Notice of Conversion by a Holder,
      (i) the shares covered thereby (other than the shares, if any, which cannot
      be
      issued because their issuance would exceed such Holder's allocated portion
      of
      the Reserved Amount) shall be deemed converted into shares of Common Stock
      and
      (ii) the Holder's rights as a Holder of such converted portion of this Debenture
      shall cease and terminate, excepting only the right to receive certificates
      for
      such shares of Common Stock and to any remedies provided herein or otherwise
      available at law or in equity to such Holder because of a failure by the
      Borrower to comply with the terms of this Debenture. Notwithstanding the
      foregoing, if a Holder has not received certificates for all shares of Common
      Stock prior to the tenth (10th) business day after the expiration of the
      deadline with respect to a conversion of any portion of this Debenture for
      any
      reason, then (unless the Holder otherwise elects to retain its status as a
      holder of Common Stock by so notifying the Borrower) the Holder shall regain
      the
      rights of a Holder of this Debenture with respect to such unconverted portions
      of this Debenture and the Borrower shall, as soon as practicable, return such
      unconverted Debenture to the Holder or, if the Debenture has not been
      surrendered, adjust its records to reflect that such portion of this Debenture
      has not been converted. In all cases, the Holder shall retain all of its rights
      and remedies (including, without limitation, the right to receive Conversion
      Failure Payments pursuant to Section 1.3 to the extent required thereby for
      such
      Conversion Failure and any subsequent Conversion Failure) for the Borrower's
      failure to convert this Debenture.

    

    
      
         

      

      
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    ARTICLE
      II.

    CERTAIN
      COVENANTS

    

    2.1
      DISTRIBUTIONS ON CAPITAL STOCK. So long as the Borrower shall have any
      obligation under this Debenture, the Borrower shall not, without the Holder's
      written consent, (a) pay, declare or set apart for such payment, any dividend
      or
      other distribution (whether in cash, property or other securities) on shares
      of
      capital stock other than dividends on shares of Common Stock solely in the
      form
      of additional shares of Common Stock or (b) directly or indirectly or through
      any subsidiary make any other payment or distribution in respect of its capital
      stock.

    

    2.2
      RESTRICTION ON STOCK REPURCHASES. So long as the Borrower shall have any
      obligation under this Debenture, the Borrower shall not, without the Holder's
      written consent, redeem, repurchase or otherwise acquire (whether for cash
      or in
      exchange for property or other securities or otherwise) in any one transaction
      or series of related transactions any shares of capital stock of the Borrower
      or
      any warrants, rights or options to purchase or acquire any such shares, except
      for any such repurchases made by the Borrower in connection with the termination
      of employment of any of its employees, PROVIDED that such repurchases are (i)
      made at no greater than the Market Price of such shares of capital stock and
      (ii) approved by a majority of the Borrower's disinterested
      directors.

    

    2.3
      BORROWINGS. So long as the Borrower shall have any obligation under this
      Debenture, the Borrower shall not, without the Holder's written consent, create,
      incur, assume or suffer to exist any liability for borrowed money, except (a)
      borrowings in existence or committed on the date hereof and of which the
      Borrower has informed the Holder in writing prior to the date hereof, (b)
      indebtedness to trade creditors incurred in the ordinary course of business,
      (c)
      borrowings, the proceeds of which shall be used to repay this Debenture, or
      (d)
      asset-based borrowings involving accounts receivable or inventory financing
      or
      leaseholds.

    

    2.3
      ADVANCES AND LOANS. So long as the Borrower shall have any obligation under
      this
      Debenture, the Borrower shall not, without the Holder's written consent, lend
      money, give credit or make advances to any person, firm, joint venture or
      corporation, including, without limitation, officers, directors, employees,
      subsidiaries and affiliates of the Borrower, except loans, credits or advances
      (a) in existence or committed on the date hereof and which the Borrower has
      informed the Holder in writing prior to the date hereof, (b) made in the
      ordinary course of business, as determined by a majority of the Borrower's
      disinterested directors or (c) relating to (i) the recruitment or retention
      of
      employees or (ii) transactions with joint venture partners or subsidiaries,
      provided that such loans, credits or advances referred to in (i) and (ii) are
      approved by a majority of the Borrower's disinterested directors.

    

    2.4
      CONTINGENT LIABILITIES. So long as the Borrower shall have any obligation under
      this Debenture, the Company shall not without the Holder's written consent,
      assume, guarantee, endorse, contingently agree to purchase or otherwise become
      liable upon the obligation of any person, firm, partnership, joint venture
      or
      corporation, except by the endorsement of negotiable instruments for deposit
      or
      collection and except assumptions, guarantees, endorsements and contingencies
      (a) in existence or committed on the date hereof and which the Borrower has
      informed the Holder in writing prior to the date hereof, (b) made in the
      ordinary course of business, as determined by a majority of the Borrower's
      disinterested directors or (c) relating to (i) the recruitment or retention
      of
      employees or (ii) transactions with joint venture partners or subsidiaries,
      provided that such assumptions, guarantees, endorsements and contingencies
      referred to in (i) and (ii) are approved by a majority of the Borrower's
      disinterested directors.

    

    ARTICLE
      III.

    EVENTS
      OF
      DEFAULT

    

    Each
      of
      the following events shall be considered to be an "EVENT OF DEFAULT", unless
      waived by the Holder:

    

    
      
         

      

      
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    3.1
      FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails to pay the principal
      hereof or interest thereon when due on this Debenture, whether at maturity,
      upon
      mandatory prepayment, upon acceleration or otherwise;

    

    3.2
      CONVERSION AND THE SHARES. The Borrower (a) fails to issue shares of Common
      Stock to the Holder upon exercise by the Holder of the conversion rights of
      the
      Holder in accordance with the terms of this Debenture (for a period of at least
      sixty (60) days, if such failure is a Conversion Failure solely as a result
      of a
      shortage of authorized shares and the Borrower is using its best efforts to
      authorize a sufficient number of shares of Common Stock as soon as practicable
      or for a period of at least thirty (30) days if such failure is a Delivery
      Failure under Section 1.4(f) and is not as a result of a shortage of authorized
      shares), (b) at any time, the Company announces or states in writing that it
      will not honor its obligations to issue shares of Common Stock to the Holder
      upon exercise by the Holder of the conversion rights of the Holder in accordance
      with the terms of this Debenture, (c) fails to transfer or cause its transfer
      agent to transfer (electronically or in certificated form) any certificate
      for
      shares of Common Stock issued to the Holder upon conversion of this Debenture
      as
      and when required by this Debenture or the Registration Rights Agreement, or
      (d)
      fails to remove any restrictive legend (or to withdraw any stop transfer
      instructions in respect thereof) on any certificate for any shares of Common
      Stock issued to the Holder upon conversion of this Debenture as and when
      required by this Debenture, the Purchase Agreement or the Registration Rights
      Agreement (or makes any announcement or written statement that it does not
      intend to honor the obligations described in this paragraph) and any such
      failure shall continue uncured (or any announcement or written statement not
      to
      honor its obligations shall not be rescinded in writing) for ten (10) days
      after
      the Borrower shall have been notified thereof in writing by the
      Holder;

    

    3.3
      FAILURE TO EFFECT REGISTRATION. The Borrower fails to file with the Securities
      and Exchange Commission on or before January 1, 2007 the Registration
      Statement(s) (as defined in the Registration Rights Agreement) required to
      be
      filed pursuant to Section 2(a) of the Registration Rights Agreement, or fails
      to
      obtain effectiveness with the Securities and Exchange Commission prior to March
      1, 2007 of the Registration Statement(s) (as defined in the Registration Rights
      Agreement) required to be filed pursuant to Section 2(a) of the Registration
      Rights Agreement, or fails to obtain the effectiveness of any additional
      Registration Statement (required to be filed pursuant to Section 3(b) of the
      Registration Rights Agreement) within 60 days after the Registration Trigger
      Date (as defined in the Registration Rights Agreement), or as promptly as
      practicable in the event the Company is required to increase its authorized
      shares, or any such Registration Statement, after its initial effectiveness
      and
      during the Registration Period (as defined in the Registration Rights
      Agreement), lapses in effect or sales of all of the Registrable Securities
      (as
      defined in the Registration Rights Agreement) cannot otherwise be made
      thereunder (whether by reason of the Borrower's failure to amend or supplement
      the prospectus included therein in accordance with the Registration Rights
      Agreement, the Borrower's failure to file and obtain effectiveness with the
      SEC
      of an additional Registration Statement required pursuant to Section 3(b) of
      the
      Registration Rights Agreement or otherwise) for more than twenty (20)
      consecutive days or sixty (60) days in any twelve month period after such
      Registration Statement becomes effective;

    

    3.4
      BREACH OF COVENANTS. The Borrower breaches any material covenant or other
      material term or condition contained in Article II hereof or in Sections 1.3,
      1.4 or 1.5 of this Debenture, or Sections 4(b), 4(c), 4(d), 4(e), 4(h), 4(i),
      4(j), 4(k), 4(l), 4(m) or 5 of the Purchase Agreement and such breach continues
      for a period of ten (10) business days after written notice thereof to the
      Borrower from the Holder;

    

    3.5
      BREACH OF REPRESENTATIONS AND WARRANTIES. Any representation or warranty of
      the
      Borrower made herein or in any agreement, statement or certificate given in
      writing pursuant hereto (including, without limitation, pursuant to the Purchase
      Agreement and the Registration Rights Agreement), shall be false or misleading
      in any material respect when made and the breach of which has a material adverse
      effect on the rights of the Holder with respect to this Debenture, the Purchase
      Agreement or the Registration Rights Agreement;

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    3.6
      RECEIVER OR TRUSTEE. The Borrower or any subsidiary of the Borrower shall make
      an assignment for the benefit of creditors, or apply for or consent to the
      appointment of a receiver or trustee for it or for a substantial part of its
      property or business, or such a receiver or trustee shall otherwise be
      appointed;

    

    3.7
      JUDGMENTS. Any money judgment, writ or similar process shall be entered or
      filed
      by a court against the Borrower or any subsidiary of the Borrower or any of
      its
      property or other assets for more than $1,000,000, and shall remain unvacated,
      unbonded or unstayed for a period of twenty (20) days unless otherwise consented
      to by the Holder, which consent will not be unreasonably withheld;

    

    3.8
      BANKRUPTCY. Bankruptcy, insolvency, reorganization 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 Borrower or any "significant
      subsidiary" (as defined in Rule 1-02(w) of Regulation S-X promulgated under
      the
      1933 Act) of the Borrower;

    

    3.9
      DELISTING OF COMMON STOCK. The Borrower shall fail to maintain the listing
      of
      the Common Stock on at least one of the NNM, the Nasdaq Small Cap, the NYSE,
      OTC-BB or the AMEX (as those terms are defined in the Registration Rights
      Agreement);

    

    3.10
      DEFAULT UNDER OTHER DEBENTURES. An Event of Default has occurred and is
      continuing under any of the other Debentures issued pursuant to the Purchase
      Agreement or under any of the warrants ("WARRANTS") issued pursuant to the
      Purchase Agreement;

    

    3.11
      FAILURE TO AUTHORIZE AND RESERVE COMMON STOCK. The Borrower shall fail to
      authorize and reserve, and maintain authorized and reserved, shares of Common
      Stock as required under Section 1.3 hereof; or

    

    3.12
      ACCEPTANCE OF A TENDER OFFER BY THE BORROWER. The Borrower shall accept a tender
      offer ("TENDER OFFER") from any person or entity to acquire fifty percent (50%)
      or more of the Borrower's shares of Common Stock.

    

    If
      any
      Events of Default shall occur then, unless waived by the Holder, upon the
      occurrence and during the continuation of any Event of Default specified in
      Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, 3.10, 3.11 or 3.12, at the option
      of
      the Holder, such option exercisable through the delivery of written notice
      to
      the Borrower by such Holders (the "DEFAULT NOTICE"), or upon the occurrence
      of
      an Event of Default specified in Section 3.6 or 3.8, the Debentures shall become
      immediately due and payable and the Borrower shall pay to the Holder, in full
      satisfaction of its obligations hereunder, an amount equal to the greater
      of:

    

    (i)
      115%
      TIMES the SUM of

    

    (w)
      the
      then outstanding principal amount of this Debenture, PLUS

    

    (x)
      all
      accrued and unpaid interest thereon for the period beginning on
      the
      Issue Date and ending on the date of payment of the Default Amount
      (the "DEFAULT PAYMENT DATE"), PLUS

    

    (y)
      Default Interest, if any, on the amounts referred to in clauses (w)
      and/or (x), PLUS

    

    (z)
      any
      amounts owed to the Holder pursuant to Section 2(c) of the Registration
      Rights Agreement

    

    (the
      then
      outstanding principal amount of this Debenture to the date of
      payment PLUS the amounts referred to in clauses (x), (y) and (z)
      shall
      collectively be known as the "DEFAULT SUM"),

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    or

    

    (ii)
      the
      Parity Value of the Default Sum to be prepaid, where "PARITY VALUE"
      means

    

    (a)
      the
      highest number of shares of Common Stock issuable upon conversion
      of such Default Sum in accordance with Article I (without giving
      any effect to any limitation on conversion of the Debenture contained
      herein, including but not limited to the 4.99% Limitation)
      calculated as follows: the Default Sum divided by the Conversion Price
in
      effect
      at any time after the Holder delivers a Default Notice to the  Borrower,
      through the date that the Borrower pays the Default Amount,

    

    MULTIPLIED
      BY

    

    (b)
      the
      highest Closing Price (as defined herein) for the Common Stock
      during the period beginning on the date of first occurrence of the
      Event
      of Default (provided that, with respect to a Conversion Failure
      or Delivery Failure that has resulted in an Event of Default under
      this Article III, such period shall begin on the date of the applicable
      Notice of Conversion) and ending one day prior to the Default
      Payment Date.

    

    The
      greater of (i) and (ii) immediately above is referred to herein as the "DEFAULT
      AMOUNT". The Conversion Price shall continue to be reset and adjusted in
      accordance with the terms of this Debenture notwithstanding a Default, up until
      the Default Amount is paid to the Holder in full. The Default Amount, together
      with all other amounts payable hereunder, shall immediately become due and
      payable, all without demand, presentment or notice, all of which hereby are
      expressly waived, together with all costs, including, without limitation, legal
      fees and expenses, of collection, and the Holder shall be entitled to exercise
      all other rights and remedies available at law or in equity.

    

    If
      the
      Borrower fails to pay the Default Amount within five (5) business days of
      written notice that such amount is due and payable (the "Default Amount Due
      Date"), then the Holder shall have the right at any time, so long as the
      Borrower remains in default (and so long and to the extent that there are
      sufficient authorized shares), to require the Borrower, upon written notice
      (which may be given one or more times, from time to time anytime after the
      Default Amount Due Date), to immediately issue, in lieu of all or any specified
      portion (the "Specified Portion") of the unpaid portion (the "Unpaid Portion")
      of the Default Amount, a number of shares (the "Default Shares") of Common
      Stock
      of the Borrower, subject to the 9.99% Limitation, equal to the Specified Portion
      of the Default Amount divided by the Conversion Price in effect on the date
      such
      shares are issued to the Holder, PROVIDED THAT, the Holder may require that
      such
      payment of shares be made in one or more installments at such time and in such
      amounts as Holder chooses.

    

    The
      Holder shall not be entitled to receive Default Shares on a given date if and
      to
      the extent that such issuance would cause the 9.99% Amount, as defined below,
      to
      be exceeded (the "9.99% LIMITATION"). If and to the extent that the issuance
      of
      Default Shares with respect to a given Specified Portion would result in the
      a
      violation of the 9.99% Limitation, then that particular Specified Portion shall
      be automatically reduced to a value that would cause the number of Default
      Shares to be issued to equal the 9.99% Amount, and the amount of such reduction
      shall be added back to the Unpaid Portion of the Default Amount.

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    For
      purposes hereof, "9.99% Amount" shall mean a number of Default Shares to be
      issued with respect to a particular Specified Portion of the Default Amount
      which would, when aggregated with all other shares of Common Stock held by
      the
      Holder and its affiliates at the time of such issuance, result in beneficial
      ownership by the Holder and its affiliates of exactly 9.99% of the outstanding
      shares of Common Stock of the Borrower, with beneficial ownership being
      determined in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934, as amended (the "EXCHANGE ACT"), and Regulations 13D-G thereunder,
      PROVIDED THAT the 9.99% Limitation shall be conclusively satisfied if the Holder
      provides a signed representation that the issuance of the applicable shares
      will
      not violate the 9.99% Limitation, and the Company shall not be entitled to
      require additional documentation of such satisfaction.

    

    ARTICLE
      IV.

    MISCELLANEOUS

    

    4.1
      FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder
      in the exercise of any power, right or privilege hereunder shall operate as
      a
      waiver thereof, nor shall any single or partial exercise of any such power,
      right or privilege preclude other or further exercise thereof or of any other
      right, power or privileges. All rights and remedies existing hereunder are
      cumulative to, and not exclusive of, any rights or remedies otherwise
      available.

    

    4.2
      NOTICES. Any notice herein required or permitted to be given shall be in writing
      and may be personally served or delivered by courier or sent by United States
      mail and shall be deemed to have been given upon receipt if personally served
      (which shall include telephone line facsimile transmission) or sent by courier
      or five (5) days after being deposited in the United States mail, certified,
      with postage pre-paid and properly addressed, if sent by mail. For the purposes
      hereof, the address of the Holder shall be as shown on the records of the
      Borrower; and the address of the Borrower shall be OMNI U.S.A., INC., 2236
      Rutherford Rd., Suite 107, Carlsbad, CA 92008, Telephone: (760) 929-7500,
      Facsimile: (760) 929-7504. Both the Holder and the Borrower may change the
      address for service by service of written notice to the other as herein
      provided.

    

    4.3
      AMENDMENTS. Except as otherwise expressly provided herein, this Debenture and
      any provision hereof may only be amended by an instrument in writing signed
      by
      the Borrower and the Holder. The term "Debenture" and all reference thereto,
      as
      used throughout this instrument, shall mean this instrument as originally
      executed, or if later amended or supplemented, then as so amended or
      supplemented.

    

    4.4
      ASSIGNABILITY. This Debenture shall be binding upon the Borrower and its
      successors and assigns, and shall inure to be the benefit of the Holder and
      its
      successors and assigns.

    

    4.5
      COST
      OF COLLECTION. If default is made in the payment of this Debenture, the Borrower
      shall pay the Holder hereof costs of collection, including reasonable attorneys'
      fees.

    

    4.6
      GOVERNING LAW; ARBITRATION. This Debenture shall be governed by and construed
      in
      accordance with the internal laws of the State of California. Any controversy
      or
      claim arising out of or related to this Debenture or the breach thereof, shall
      be settled by binding arbitration in San Diego, CA in accordance with the
      Expedited Procedures (Rules 53-57) of the Commercial Arbitration Rules of the
      American Arbitration Association ("AAA"). A proceeding shall be commenced upon
      written demand by Company or the Holder to the other. The arbitrator(s) shall
      enter a judgment by default against any party, which fails or refuses to appear
      in any properly noticed arbitration proceeding. The proceeding shall be
      conducted by one (1) arbitrator, unless the amount alleged to be in dispute
      exceeds two hundred fifty thousand dollars ($250,000), in which case three
      (3)
      arbitrators shall preside. The arbitrator(s) will be chosen by the parties
      from
      a list provided by the AAA, and if they are unable to agree within ten (10)
      days, the AAA shall select the arbitrator(s). The arbitrators must be experts
      in
      securities law and financial transactions. The arbitrators shall assess costs
      and expenses of the arbitration, including all attorneys' and experts' fees,
      as
      the arbitrators believe is appropriate in light of the merits of the parties'
      respective positions in the issues in dispute. Each party submits irrevocably
      to
      the jurisdiction of any state court sitting in San Diego, CA or to the United
      States District Court sitting in San Diego, CA for purposes of enforcement
      of
      any discovery order, judgment or award in connection with such arbitration.
      The
      award of the arbitrator(s) shall be final and binding upon the parties and
      may
      be enforced in any court having jurisdiction. The arbitration shall be held
      in
      such place as set by the arbitrator(s) in accordance with Rule 55. With respect
      to any arbitration proceeding in accordance with this section, the prevailing
      party's reasonable attorney's fees and expenses shall be borne by the
      non-prevailing party.

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    Although
      the parties, as expressed above, agree that all claims, including claims that
      are equitable in nature, for example specific performance, shall initially
      be
      prosecuted in the binding arbitration procedure outlined above, if the
      arbitration panel dismisses or otherwise fails to entertain any or all of the
      equitable claims asserted by reason of the fact that it lacks jurisdiction,
      power and/or authority to consider such claims and/or direct the remedy
      requested, then, in only that event, will the parties have the right to initiate
      litigation respecting such equitable claims or remedies. The forum for such
      equitable relief shall be in either a state or federal court sitting in San
      Diego, CA. Each party waives any right to a trial by jury, assuming such right
      exists in an equitable proceeding, and irrevocably submits to the jurisdiction
      of said California court. California law shall govern both the proceeding as
      well as the interpretation and construction of the Debenture and the transaction
      as a whole.

    

    4.7
      CERTAIN AMOUNTS. Whenever pursuant to this Debenture the Borrower is required
      to
      pay an amount in excess of the outstanding principal amount (or the portion
      thereof required to be paid at that time) plus accrued and unpaid interest
      plus
      Default Interest on such interest, the Borrower and the Holder agree that the
      actual damages to the Holder from the receipt of cash payment on this Debenture
      may be difficult to determine and the amount to be so paid by the Borrower
      represents stipulated damages and not a penalty and is intended to compensate
      the Holder in part for loss of the opportunity to convert this Debenture and
      to
      earn a return from the sale of shares of Common Stock acquired upon conversion
      of this Debenture at a price in excess of the price paid for such shares
      pursuant to this Debenture. The Borrower and the Holder hereby agree that such
      amount of stipulated damages is not plainly disproportionate to the possible
      loss to the Holder from the receipt of a cash payment without the opportunity
      to
      convert this Debenture into shares of Common Stock.

    

    4.8
      ALLOCATIONS OF AND RESERVED AMOUNT. The Reserved Amount shall be allocated
      pro
      rata among the holders of Debentures based on the principal amount of such
      Debentures issued to the Holder. Each increase to the Reserved Amount shall
      be
      allocated pro rata among the holders of Debentures based on the principal amount
      of such Debentures held by the Holder at the time of the increase in the
      Reserved Amount. In the event a Holder shall sell or otherwise transfer any
      of
      such Holder's Debentures, each transferee shall be allocated a pro rata portion
      of such transferor's Reserved Amount. Any portion of the Reserved Amount which
      remains allocated to any person or entity which does not hold any Debentures
      shall be allocated to the remaining Holders of Debentures, pro rata based on
      the
      principal amount of such Debentures then held by such Holders.

    

    4.9
      DAMAGES SHARES. The shares of Common Stock that may be issuable to the Holder
      pursuant to Sections 1.3 and 1.4 hereof and pursuant to Section 2 of the
      Registration Rights Agreement ("DAMAGES SHARES") shall be treated as Common
      Stock issuable upon conversion of this Debenture for all purposes hereof and
      shall be subject to all of the limitations and afforded all of the rights of
      the
      other shares of Common Stock issuable hereunder, including without limitation,
      the right to be included in the Registration Statement filed pursuant to the
      Registration Rights Agreement. For purposes of calculating interest payable
      on
      the outstanding principal amount hereof, except as otherwise provided herein,
      amounts convertible into Damages Shares ("DAMAGES AMOUNTS") shall not bear
      interest but must be converted prior to the conversion of any outstanding
      principal amount hereof, until the outstanding Damages Amounts is
      zero.

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    4.10
      DENOMINATIONS. At the request of the Holder, upon surrender of this Debenture,
      the Borrower shall promptly issue new Debentures in the aggregate outstanding
      principal amount hereof, in the form hereof, in such denominations as the Holder
      shall request.

    

    4.11
      PURCHASE AGREEMENT. By its acceptance of this Debenture, the Holder agrees
      to be
      bound by the applicable terms of the Purchase Agreement.

    

    4.12
      NOTICE OF CORPORATE EVENTS. Except as otherwise provided in this Debenture,
      the
      Holder of this Debenture shall have no rights as a Holder of Common Stock unless
      and only to the extent that it converts this Debenture into Common Stock. The
      Borrower shall provide the Holder with prior notification of any meeting of
      the
      Borrower's shareholders (and copies of proxy materials and other information
      sent to shareholders). In the event of any taking by the Borrower of a record
      of
      its shareholders for the purpose of determining shareholders who are entitled
      to
      receive payment of any dividend or other distribution, any right to subscribe
      for, purchase or otherwise acquire (including by way of merger, consolidation,
      reclassification or recapitalization) any share of any class or any other
      securities or property, or to receive any other right, or for the purpose of
      determining shareholders who are entitled to vote in connection with any
      proposed sale, lease or conveyance of all or substantially all of the assets
      of
      the Borrower or any proposed liquidation, dissolution or winding up of the
      Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
      days prior to the record date specified therein (or thirty (30) days prior
      to
      the consummation of the transaction or event, whichever is earlier), of the
      date
      on which any such record is to be taken for the purpose of such dividend,
      distribution, right or other event, and a brief statement regarding the amount
      and character of such dividend, distribution, right or other event to the extent
      known at such time. The Borrower shall make a public announcement of any event
      requiring notification to the Holder hereunder substantially simultaneously
      with
      the notification to the Holder in accordance with the terms of this Section
      5.12.

    

    4.13
      REMEDIES. The Borrower acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder, by vitiating the intent
      and
      purpose of the transaction contemplated hereby. Accordingly, the Borrower
      acknowledges that the remedy at law for a breach of its obligations under this
      Debenture will be inadequate and agrees, in the event of a breach or threatened
      breach by the Borrower of the provisions of this Debenture, that the Holder
      shall be entitled, in addition to all other available remedies at law or in
      equity, to an injunction or injunctions restraining, preventing or curing any
      breach of this Debenture and to enforce specifically the terms and provisions
      thereof, without the necessity of showing economic loss and without any bond
      or
      other security being required.

    

    IN
      WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its name
      by
      its duly authorized officer this 14th day of July 2006.

     

     

    
      	 	
              BORROWER:

              OMNI
                U.S.A., INC.

              

              By:
                /S/
                LOWELL W.
                GIFFHORN             
                

              Lowell
                W. Giffhorn, CFO

            

    

    
       

      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    

    NOTICE
      OF
      CONVERSION

    

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

    

    The
      undersigned hereby irrevocably elects to convert $__________ principal amount
      of
      the Debenture (defined herein) into shares of common stock, $.004995 par value
      per share ("Common Stock"), of OMNI U.S.A., INC., a Nevada corporation (the
      "BORROWER") according to the conditions of the convertible debentures of the
      Borrower dated as of July 14, 2006 (the "DEBENTURES"), as of the date written
      below. If securities 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. No fee will be charged
      to
      the Holder for any conversion, except for transfer taxes, if any.

    

    The
      Borrower shall electronically transmit the Common Stock issuable pursuant to
      this Notice of Conversion to the account of the undersig undersigned or its
      nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC
      TRANSFER").

    

    Name
      of
      DTC Prime Broker:______________________________

    Account
      Number:________________________________________

    

    In
      lieu
      of receiving shares of Common Stock issuable pursuant to this Notice
      of
      Conversion by way of a DWAC Transfer, the undersigned hereby requests
      that the Borrower issue a certificate or certificates for the number
      of
      shares of Common Stock set forth above (which numbers are based
      on
      the Holder's calculation attached hereto) in the name(s) specified
      immediately below or, if additional space is necessary, on an attachment
      hereto:

    

    Name:
      _________________________________________________

    

    Address:
      _______________________________________________

    

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable to the undersigned upon conversion of the Debentures
      shall be made pursuant to registration of the securities under the Securities
      Act of 1933, as amended (the "ACT"), or pursuant to an exemption from
      registration under the Act.

    

    Date
      of
      Conversion:_______________________________

    Applicable
      Conversion Price:________________________

    Number
      of
      Shares of Common ______________________

    Stock
      to
      be Issued Pursuant to (i): ____________________

    Conversion
      of the Debentures:_______________________

    

    

    (ii)
      Conversion of Conversion Failure Payments, Delivery

    Failure
      Payments and/or payments pursuant to Section 2(c) of

    the
      Registration Rights Agreement: __________________________

    Signature:
      __________________________________________________

    Name:
      _______________________________________________________

    Address:
      ____________________________________________________

     

    
      
         

      

      
        17Exhibit
      4.9

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    REGISTRATION
      RIGHTS AGREEMENT (this "Agreement"), dated as of July 14, 2006, by and between
      OMNI U.S.A., INC., a Nevada corporation (the "Company"), and the Potawatomi
      Business Development Corp., (the “Buyer”). 

    

    WHEREAS:

    

    A.
      In
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the "Securities Purchase Agreement"), the Company
      has agreed, upon the terms and subject to the conditions contained therein,
      to
      issue and sell to the Buyer (i) convertible debentures (the "Debentures") that
      are convertible into shares of the Company's common stock, par value $0.004995
      per share (the "Common Stock"), upon the terms and subject to the limitations
      and conditions set forth in such Debentures and (ii) warrants (the "Warrants")
      to purchase 2,000,000 shares of Common Stock, upon the terms and conditions
      and
      subject to the limitations and conditions set forth in the Warrants dated July
      14, 2006; and

    

    B.
      To
      induce the Buyer to execute and deliver the Securities Purchase Agreement,
      the
      Company has agreed to provide certain registration rights under the Securities
      Act of 1933, as amended, and the rules and regulations thereunder, or any
      similar successor statute (collectively, the "1933 Act"), and applicable state
      securities laws;

    

    NOW,
      THEREFORE, In consideration of the premises and the mutual covenants contained
      herein and other good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Company and the Buyer hereby agree as
      follows:

    

    1.
      DEFINITIONS.

    

    a.
      As
      used in this Agreement, the following terms shall have the following
      meanings:

    

    (i)
      "BUYER" means Carol Leese, Chief Executive Officer Potawatomi Business
      Development Corp., and any transferee or assignee who agrees to become bound
      by
      the provisions of this Agreement in accordance with Section 9
      hereof.

    

    (ii)
      "REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration effected
      by
      preparing and filing a Registration Statement or Statements in compliance with
      the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule
      providing for offering securities on a continuous basis ("RULE 415"), and the
      declaration or ordering of effectiveness of such Registration Statement by
      the
      United States Securities and Exchange Commission (the "SEC").

    

     

    (iii)
      "REGISTRABLE SECURITIES" means (a) the shares of Common Stock (the "Conversion
      Shares") issued or issuable upon conversion of or otherwise pursuant to the
      Debentures (including, without limitation, any shares issued or issuable
      pursuant to Sections 1.3 and 1.4 of the Debentures and Section 2 herein) (b)
      any
      shares of Common Stock (the "Warrant Shares") issued or issuable upon exercise
      of or otherwise pursuant to the Warrants and (c) any shares of capital stock
      issued or issuable as a dividend on or in exchange for or otherwise with respect
      to any of the foregoing.

    

    (iv)
      "REGISTRATION STATEMENT(S)" means a registration statement(s) of the Company
      under the 1933 Act.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    b.
      Capitalized terms used herein and not otherwise defined herein shall have the
      respective meanings set forth in the Securities Purchase Agreement.

    

    2.
      REGISTRATION.

    

    A.
      MANDATORY REGISTRATION. The Company shall prepare, and, on or prior to January
      1, 2007 (the "FILING DATE") file with the SEC a Registration Statement on Form
      SB-2 (or, if Form SB-2 is not then available, on such form of Registration
      Statement as is then available to effect a registration of the Registrable
      Securities, subject to the consent of the Buyer, which consent will not be
      unreasonably withheld) covering the resale of the Registrable Securities, which
      Registration Statement, to the extent allowable under the 1933 Act and the
      rules
      and regulations promulgated thereunder (including Rule 416), shall state that
      such Registration Statement also covers such indeterminate number of additional
      shares of Common Stock as may become issuable upon conversion of or otherwise
      pursuant to the Debentures and exercise of or otherwise pursuant to the Warrants
      to prevent dilution resulting from stock splits, stock dividends or similar
      transactions. The number of shares of Common Stock initially included in such
      Registration Statement shall be no less than the aggregate number of Conversion
      Shares that are then issuable upon conversion of or otherwise pursuant to the
      Debentures (based on the Conversion Price (as defined in the Debentures) then
      in
      effect) and the aggregate number of Warrant Shares that are then issuable upon
      exercise of or otherwise pursuant to the Warrants, without regard to any
      limitation on the Buyer's ability to convert the Debentures or exercise the
      Warrants. The Company acknowledges that the number of shares initially included
      in the Registration Statement represents a good faith estimate of the maximum
      number of shares issuable upon conversion of or otherwise pursuant to the
      Debentures and exercise of or otherwise pursuant to the Warrants. The
      Registration Statement (and each amendment or supplement thereto, and each
      request for acceleration of effectiveness thereof) shall be provided to (and
      subject to the approval of) the Buyer and its counsel prior to its filing or
      other submission.

    

    B.
      [INTENTIONALLY OMITTED].

    

    C.
      PAYMENTS BY THE COMPANY. The Company shall use its best efforts to obtain
      effectiveness of the Registration Statement as soon as practicable, but in
      any
      event not later than March 1, 2007 (the "REGISTRATION DEADLINE"). If (i) the
      Registration Statement covering the Registrable Securities required to be filed
      by the Company pursuant to Section 2(a) hereof is not declared effective by
      the
      SEC by the Registration Deadline, or (ii) after the Registration Statement
      has
      been declared effective by the SEC, sales of all of the Registrable Securities
      cannot be made pursuant to the Registration Statement, or (iii) the Common
      Stock
      is not listed or included for quotation on the Over the Counter Electronic
      Bulletin Board (the "OTC-BB"), the Nasdaq National Market ("NNM"), the Nasdaq
      Small Cap Market ("NASDAQ SMALL CAP"), the New York Stock Exchange (the "NYSE")
      or the American Stock Exchange (the "AMEX"), then the Company will make payments
      to the Buyer in such amounts and at such times as shall be determined pursuant
      to this Section 2(c) as partial relief for the damages to the Buyer by reason
      of
      any such delay in or reduction of its ability to sell the Registrable Securities
      (which remedy shall not be exclusive of any other remedies available at law
      or
      in equity). The Company shall pay to each holder of the Debentures or
      Registrable Securities an amount equal to the then outstanding principal amount
      of the Debentures (and, in the case of holders of Registrable Securities, the
      principal amount of Debentures from which such Registrable Securities were
      converted or the aggregate exercise price paid for such Registrable Securities
      upon exercise of the Warrants) ("OUTSTANDING PRINCIPAL AMOUNT") multiplied
      by
      the Applicable Percentage (as defined below) times the number of months
      (prorated for partial months) after the Registration Deadline and prior to
      the
      date the Registration Statement is declared effective by the SEC;

    

    The
      term
      "APPLICABLE PERCENTAGE" means 2.0 hundredths (.02). (For example, if the
      Registration Statement becomes effective one (1) month after the Registration
      Deadline, the Company would pay $20,000 for each $1,000,000 of Outstanding
      Principal Amount. If thereafter, sales of all of the Registrable Securities
      could not be made pursuant to the Registration Statement for an additional
      period of one (1) month, the Company would pay an additional $20,000 for each
      $1,000,000 Outstanding Principal Amount. Such amounts shall be paid in cash
      within five (5) days after the end of each period that gives rise to such
      obligation, PROVIDED that, if any such period extends for more than thirty
      (30)
      days, interim payments shall be made for each such thirty (30) day
      period,

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    PROVIDED,
      FURTHER, that, if such amounts are not paid within the period specified, at
      the
      Buyer's option, such amounts may be added to the Conversion Amount (as defined
      in the Debentures) of the Debentures and thereafter be convertible into Common
      Stock at the "CONVERSION PRICE" (as defined in the Debentures) in accordance
      with the terms of the Debentures. Any shares of Common Stock issued upon
      conversion of such amounts shall be Registrable Securities. Nothing herein
      shall
      limit the Buyer's right to pursue damages for the failure to timely obtain
      effectiveness of the Registration Statement by the Registration Deadline or
      to
      thereafter maintain the effectiveness of the Registration Statement as required
      pursuant to this Agreement or to maintain the listing of the Common
      Stock;

    

    D.
      PIGGY-BACK REGISTRATIONS. If at any time prior to the expiration of the
      Registration Period (as hereinafter defined) the Company shall determine to
      file
      with the SEC a Registration Statement relating to an offering for its own
      account or the account of others under the 1933 Act of any of its equity
      securities (other than on Form S-4 or Form S-8 or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with stock option or other employee benefit plans), the Company
      shall
      send to Buyer written notice of such determination and, if within fifteen (15)
      days after the effective date of such notice, the Buyer shall so request in
      writing, the Company shall include in such Registration Statement all or any
      part of the Registrable Securities the Buyer requests to be registered, except
      that if, in connection with any underwritten public offering for the account
      of
      the Company, the managing underwriter(s) thereof shall impose a limitation
      on
      the number of shares of Common Stock which may be included in the Registration
      Statement because, in such underwriter(s)' judgment, marketing or other factors
      dictate such limitation is necessary to facilitate public distribution, then
      the
      Company shall be obligated to include in such Registration Statement only such
      limited portion of the Registrable Securities with respect to which the Buyer
      has requested inclusion hereunder as the underwriter shall permit;

    

    PROVIDED,
      HOWEVER, that the Company shall not exclude any Registrable Securities unless
      the Company has first excluded all outstanding securities, the holders of which
      are not entitled by contract to inclusion of such securities in such
      Registration Statement or are not entitled to pro rata inclusion with the
      Registrable Securities; and

    

    PROVIDED,
      FURTHER, HOWEVER, that, after giving effect to the immediately preceding
      proviso, any exclusion of Registrable Securities shall be made pro rata with
      holders of other securities having the contractual right to include such
      securities in the Registration Statement other than holders of securities
      entitled to inclusion of their securities in such Registration Statement by
      reason of demand registration rights. No right to registration of Registrable
      Securities under this Section 2(d) shall be construed to limit any registration
      required under Section 2(a) hereof. If an offering in connection with which
      the
      Buyer is entitled to registration under this Section 2(d) is an underwritten
      offering, then the Buyer shall, unless otherwise agreed by the Company, offer
      and sell such Registrable Securities in an underwritten offering using the
      same
      underwriter or underwriters and, subject to the provisions of this Agreement,
      on
      the same terms and conditions as other shares of Common Stock included in such
      underwritten offering. Notwithstanding anything to the contrary set forth
      herein, the registration rights of the Buyer pursuant to this Section 2(d)
      shall
      only be available in the event the Company fails to timely file, obtain
      effectiveness or maintain effectiveness of any Registration Statement to be
      filed pursuant to Section 2(a) in accordance with the terms of this
      Agreement.

    

    E.
      ELIGIBILITY FOR FORM SB-2. The Company represents and warrants that it meets
      the
      registrant eligibility and transaction requirements for the use of Form SB-2
      for
      registration of the sale by the Buyer of the Registrable Securities and the
      Company shall file all reports required to be filed by the Company with the
      SEC
      in a timely manner so as to maintain such eligibility for the use of Form
      SB-2.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.
      OBLIGATIONS OF THE COMPANY. In connection with the registration of the
      Registrable Securities, the Company shall have the following
      obligations:

    

    a.
      The
      Company shall prepare promptly, and file with the SEC as soon as practicable
      after the date of the Closing under the Securities Purchase Agreement (the
      "CLOSING DATE") (but no later than the Filing Date), a Registration Statement
      with respect to the number of Registrable Securities provided in Section 2(a),
      and thereafter use its best efforts to cause such Registration Statement
      relating to Registrable Securities to become effective as soon as possible
      after
      such filing (but in no event later than the Registration Deadline), and keep
      the
      Registration Statement effective pursuant to Rule 415 at all times until such
      date as is the earlier of (i) the date on which all of the Registrable
      Securities have been sold and (ii) the date on which the Registrable Securities
      (in the opinion of counsel to the Buyer) may be immediately sold to the public
      without registration or restriction (including without limitation as to volume
      by each holder thereof) under the 1933 Act (the "REGISTRATION PERIOD"), which
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein,
      or
      necessary to make the statements therein not misleading.

    

    b.
      The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to the Registration Statements and
      the prospectus used in connection with the Registration Statements as may be
      necessary to keep the Registration Statements effective at all times during
      the
      Registration Period, and, during such period, comply with the provisions of
      the
      1933 Act with respect to the disposition of all Registrable Securities of the
      Company covered by the Registration Statements until such time as all of such
      Registrable Securities have been disposed of in accordance with the intended
      methods of disposition by the seller or sellers thereof as set forth in the
      Registration Statements. In the event that on any Trading Day (as defined in
      the
      Debentures) (the "REGISTRATION TRIGGER DATE") the number of shares available
      under a Registration Statement filed pursuant to this Agreement is insufficient
      to cover all of the Registrable Securities issued or issuable upon conversion
      of
      or otherwise pursuant to the Debentures (based on the Conversion Price (as
      defined in the Debentures) then in effect) and exercise of or otherwise pursuant
      to the Warrants, in each case without giving effect to any limitations on the
      Buyer's ability to convert the Debentures or exercise the Warrants, the Company
      shall amend the Registration Statement, or file a new Registration Statement
      (on
      the short form available therefore, if applicable), or both, so as to cover
      one
      hundred percent (100%) of all of the Registrable Securities so issued or
      issuable (without giving effect to any limitations on conversion contained
      in
      the Debentures or exercise contained in the Warrants) as of the Registration
      Trigger Date, in each case, as soon as practicable, but in any event within
      twenty (20) business days after the necessity therefore arises (based on the
      market price of the Common Stock and other relevant factors on which the Company
      reasonably elects to rely), provided, however that the Company shall have a
      sufficient number of authorized and unissued shares. In the event the Company
      does not have a sufficient number of authorized and unissued shares, the Company
      shall use its best efforts to obtain all necessary shareholder approvals and
      to
      make all necessary filings to increase its authorized shares as promptly as
      practicable and, within twenty (20) business days after the necessary increase
      in its authorized shares shall become effective, amend the Registration
      Statement or file a new Registration Statement as set forth above. The Company
      shall use its best efforts to cause such amendment and/or new Registration
      Statement to become effective as soon as practicable following the filing
      thereof, but in any event within sixty (60) days of the Registration Trigger
      Date or as promptly as practicable in the event the Company is required to
      increase its authorized shares. The provisions of Section 2(c) above shall
      be
      applicable with respect to the Company's obligations under this Section
      3(b).

    

    c.
      The
      Company shall furnish to the Buyer and its legal counsel (i) promptly after
      the
      same is prepared and publicly distributed, filed with the SEC, or received
      by
      the Company, one copy of each Registration Statement and any amendment thereto,
      each preliminary prospectus and prospectus and each amendment or supplement
      thereto, and, in the case of the Registration Statement referred to in Section
      2(a), each letter written by or on behalf of the Company to the SEC or the
      staff
      of the SEC, and each item of correspondence from the SEC or the staff of the
      SEC, in each case relating to such Registration Statement (other than any
      portion of any thereof which contains information for which the Company has
      sought confidential treatment), and (ii) such number of copies of a prospectus,
      including a preliminary prospectus, and all amendments and supplements thereto
      and such other documents as the Buyer may reasonably request in order to
      facilitate the disposition of the Registrable Securities owned by the Buyer.
      The
      Company will immediately notify the Buyer by facsimile of the effectiveness
      of
      each Registration Statement or any post-effective amendment. The Company will
      promptly respond to any and all comments received from the SEC, with a view
      towards causing each Registration Statement or any amendment thereto to be
      declared effective by the SEC as soon as practicable and shall file an
      acceleration request as soon as practicable, but no later than three (3)
      business days (the "ACCELERATION REQUEST DEADLINE"), following the resolution
      or
      clearance of all SEC comments or, if applicable, following notification by
      the
      SEC that any such Registration Statement or any amendment thereto will not
      be
      subject to review.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    d.
      The
      Company shall use reasonable efforts to (i) register and qualify the Registrable
      Securities covered by the Registration Statements under such other securities
      or
      "blue sky" laws of such jurisdictions in the United States as the Buyer, (ii)
      prepare and file in those jurisdictions such amendments (including
      post-effective amendments) and supplements to such registrations and
      qualifications as may be necessary to maintain the effectiveness thereof during
      the Registration Period, (iii) take such other actions as may be necessary
      to
      maintain such registrations and qualifications in effect at all times during
      the
      Registration Period, and (iv) take all other actions reasonably necessary or
      advisable to qualify the Registrable Securities for sale in such
      jurisdictions;

    

    e.
      [INTENTIONALLY OMITTED]

    

    f.
      As
      promptly as practicable after becoming aware of such event, the Company shall
      notify the Buyer of the happening of any event, of which the Company has
      knowledge, as a result of which the prospectus included in any Registration
      Statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading, and use its best efforts promptly
      to
      prepare a supplement or amendment to any Registration Statement to correct
      such
      untrue statement or omission, and deliver such number of copies of such
      supplement or amendment to the Buyer as the Buyer may reasonably request;
      provided that, for not more than twenty (20) consecutive days (or a total of
      not
      more than sixty (60) days in any twelve (12) month period), the Company may
      delay the disclosure of material non-public information concerning the Company
      (as well as prospectus or Registration Statement updating) the disclosure of
      which at the time is not, in the good faith opinion of the Company, in the
      best
      interests of the Company (an "ALLOWED DELAY"); provided, further, that the
      Company shall promptly (i) notify the Buyer in writing of the existence of
      (but
      in no event, without the prior written consent of the Buyer, shall the Company
      disclose to the Buyer any of the facts or circumstances regarding) material
      non-public information giving rise to an Allowed Delay and (ii) advise the
      Buyer
      in writing to cease all sales under such Registration Statement until the end
      of
      the Allowed Delay, provided the above actions are consistent with the
      requirements of the 1933 Act and/or 1934 Act or other applicable law. Upon
      expiration of the Allowed Delay, the Company shall again be bound by the first
      sentence of this Section 3(f) with respect to the information giving rise
      thereto.

    

    g.
      The
      Company shall use its best efforts to prevent the issuance of any stop order
      or
      other suspension of effectiveness of any Registration Statement, and, if such
      an
      order is issued, to obtain the withdrawal of such order at the earliest possible
      moment and to notify the Buyer who holds Registrable Securities being sold
      (or,
      in the event of an underwritten offering, the managing underwriters) of the
      issuance of such order and the resolution thereof.

    

    h.
      The
      Company shall permit a single firm of counsel designated by the Buyer to review
      such Registration Statement and all amendments and supplements thereto (as
      well
      as all requests for acceleration or effectiveness thereof) a reasonable period
      of time prior to their filing with the SEC (not less than three (3) business
      days but not more then five (5) business days) and not file any document in
      a
      form to which such counsel reasonably objects and will not request acceleration
      of such Registration Statement without prior notice to such
      counsel.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    i.
      The
      Company shall make generally available to its security holders as soon as
      practicable, but not later than ninety (90) days after the close of the period
      covered thereby, an earnings statement (in form complying with the provisions
      of
      Rule 158 under the 1933 Act) covering a twelve-month period beginning not later
      than the first day of the Company's fiscal quarter next following the effective
      date of the Registration Statement.

    

    j.
      At the
      request of the Buyer participating in an underwritten offering pursuant to
      Section 2(d), the Company shall furnish, on the date that Registrable Securities
      are delivered to an underwriter for sale in connection with any Registration
      Statement pursuant to Section 2(d), (i) an opinion, dated as of such date,
      from
      counsel representing the Company for purposes of such Registration Statement,
      in
      form, scope and substance as is customarily given in an underwritten public
      offering, addressed to the underwriters, if any, and the Buyer and (ii) a
      letter, dated such date, from the Company's independent certified public
      accountants in form and substance as is customarily given by independent
      certified public accountants to underwriters in an underwritten public offering,
      addressed to the underwriters, if any, and the Buyer.

    

    k.
      The
      Company shall make available for inspection by (i) the Buyer, and (ii) one
      firm
      of attorneys and one firm of accountants or other agents retained by the Buyer
      (collectively, the "INSPECTORS") all pertinent financial and other records,
      and
      pertinent corporate documents and properties of the Company (collectively,
      the
      "RECORDS"), as shall be reasonably deemed necessary by each Inspector to enable
      each Inspector to exercise its due diligence responsibility, and cause the
      Company's officers, directors and employees to supply all information which
      any
      Inspector may reasonably request for purposes of such due
      diligence;

    

    PROVIDED,
      HOWEVER, that each Inspector shall hold in confidence and shall not make any
      disclosure (except to the Buyer) of any Record or other information which the
      Company determines in good faith to be confidential, and of which determination
      the Inspectors are so notified, unless (a) the disclosure of such Records is
      necessary to avoid or correct a misstatement or omission in any Registration
      Statement, (b) the release of such Records is ordered pursuant to a subpoena
      or
      other order from a court or government body of competent jurisdiction, or (c)
      the information in such Records has been made generally available to the public
      other than by disclosure in violation of this or any other agreement. The
      Company shall not be required to disclose any confidential information in such
      Records to any Inspector until and unless such Inspector shall have entered
      into
      confidentiality agreements (in form and substance satisfactory to the Company)
      with the Company with respect thereto, substantially in the form of this Section
      3(k). The Buyer agrees that it shall, upon learning that disclosure of such
      Records is sought in or by a court or governmental body of competent
      jurisdiction or through other means, give prompt notice to the Company and
      allow
      the Company, at its expense, to undertake appropriate action to prevent
      disclosure of, or to obtain a protective order for, the Records deemed
      confidential. Nothing herein (or in any other confidentiality agreement between
      the Company and the Buyer) shall be deemed to limit the Buyer's ability to
      sell
      Registrable Securities in a manner which is otherwise consistent with applicable
      laws and regulations.

    

    l.
      The
      Company shall hold in confidence and not make any disclosure of information
      concerning the Buyer provided to the Company unless (i) disclosure of such
      information is necessary to comply with federal or state securities laws, (ii)
      the disclosure of such information is necessary to avoid or correct a
      misstatement or omission in any Registration Statement, (iii) the release of
      such information is ordered pursuant to a subpoena or other order from a court
      or governmental body of competent jurisdiction, or (iv) such information has
      been made generally available to the public other than by disclosure in
      violation of this or any other agreement. The Company agrees that it shall,
      upon
      learning that disclosure of such information concerning the Buyer is sought
      in
      or by a court or governmental body of competent jurisdiction or through other
      means, give prompt notice to the Buyer prior to making such disclosure, and
      allow the Buyer, at its expense, to undertake appropriate action to prevent
      disclosure of, or to obtain a protective order for, such
      information.

    

    m.
      The
      Company shall use its best efforts to (i) cause all the Registrable Securities
      covered by the Registration Statement to be listed on each national securities
      exchange on which securities of the same class or series issued by the Company
      are then listed, if any, if the listing of such Registrable Securities is then
      permitted under the rules of such exchange, or (ii) to the extent the securities
      of the same class or series are not then listed on a national securities
      exchange, secure the designation and quotation, of all the Registrable
      Securities covered by the Registration Statement on the NNM or, if not eligible
      for the NNM on the Nasdaq Small Cap or, if not eligible for the Nasdaq Small
      Cap, on the Over the Counter electronic bulletin board and, without limiting
      the
      generality of the foregoing, to arrange for at least two market makers to
      register with the National Association of Securities Dealers, Inc. ("NASD")
      as
      such with respect to such Registrable Securities.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    n.
      The
      Company shall provide a transfer agent and registrar, which may be a single
      entity, for the Registrable Securities not later than the effective date of
      the
      Registration Statement.

    

    o.
      The
      Company shall cooperate with the Buyer who holds Registrable Securities being
      offered and the managing underwriter or underwriters, if any, to facilitate
      the
      timely preparation and delivery of certificates (not bearing any restrictive
      legends) representing Registrable Securities to be offered pursuant to such
      Registration Statement and enable such certificates to be in such denominations
      or amounts, as the case may be, as the managing underwriter or underwriters,
      if
      any, or the Buyer may reasonably request and registered in such names as the
      managing underwriter or underwriters, if any, or the Buyer may request, and,
      within three (3) business days after a Registration Statement which includes
      Registrable Securities is ordered effective by the SEC, the Company shall
      deliver, and shall cause legal counsel selected by the Company to deliver,
      to
      the transfer agent for the Registrable Securities (with copies to the Buyer)
      an
      appropriate instruction and an opinion of such counsel in the form required
      by
      the transfer agent in order to issue the Registrable Securities free of
      restrictive legends.

    

    p.
      At the
      request of the holders of a majority-in-interest of the Registrable Securities,
      the Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      any
      prospectus used in connection with the Registration Statement as may be
      necessary in order to change the plan of distribution set forth in such
      Registration Statement.

    

    q.
      The
      Company shall not, and shall not agree to, allow the holders of any securities
      of the Company to include any of their securities in any Registration Statement
      under Section 2(a) hereof or any amendment or supplement thereto under Section
      3(b) hereof without the consent of the holders of a majority-in-interest of
      the
      Registrable Securities. In addition, the Company shall not offer any securities
      for its own account or the account of others in any Registration Statement
      under
      Section 2(a) hereof or any amendment or supplement thereto under Section 3(b)
      hereof without the consent of the holders of a majority-in-interest of the
      Registrable Securities.

    

    r.
      The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Buyer of Registrable Securities pursuant to a
      Registration Statement.

    

    s.
      The
      Company shall comply with all applicable laws related to a Registration
      Statement and offering and sale of securities and all applicable rules and
      regulations of governmental authorities in connection therewith (including
      without limitation the 1933 Act and the 1934 Act and the rules and regulations
      promulgated by the SEC).

    

    4.
      OBLIGATIONS OF THE BUYER. In connection with the registration of the Registrable
      Securities, the Buyer shall have the following obligations:

    

    a.
      It
      shall be a condition precedent to the obligations of the Company to complete
      the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of the Buyer that the Buyer shall furnish to the Company such
      information regarding itself, the Registrable Securities held by it and the
      intended method of disposition of the Registrable Securities held by it as
      shall
      be reasonably required to effect the registration of such Registrable Securities
      and shall execute such documents in connection with such registration as the
      Company may reasonably request. At least three (3) business days prior to the
      first anticipated filing date of the Registration Statement, the Company shall
      notify the Buyer of the information the Company requires from each the
      Buyer.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    b.
      The
      Buyer, by the Buyer's acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of the Registration Statements hereunder, unless
      the Buyer has notified the Company in writing of the Buyer's election to exclude
      all of the Buyer's Registrable Securities from the Registration
      Statements.

    

    c.
      In the
      event of an underwritten offering pursuant to Section 2(d) in which any
      Registrable Securities are to be included, the Buyer agrees to enter into and
      perform the Buyer's obligations under an underwriting agreement, in usual and
      customary form, including, without limitation, customary indemnification and
      contribution obligations, with the managing underwriter of such offering and
      take such other actions as are reasonably required in order to expedite or
      facilitate the disposition of the Registrable Securities, unless the Buyer
      has
      notified the Company in writing of the Buyer's election to exclude all of the
      Buyer's Registrable Securities from such Registration Statement.

    

    d.
      The
      Buyer agrees that, upon receipt of any notice from the Company of the happening
      of any event of the kind described in Section 3(f) or 3(g), the Buyer will
      immediately discontinue disposition of Registrable Securities pursuant to the
      Registration Statement covering such Registrable Securities until the Buyer's
      receipt of the copies of the supplemented or amended prospectus contemplated
      by
      Section 3(f) or 3(g) and, if so directed by the Company, the Buyer shall deliver
      to the Company (at the expense of the Company) or destroy (and deliver to the
      Company a certificate of destruction) all copies in the Buyer's possession,
      of
      the prospectus covering such Registrable Securities current at the time of
      receipt of such notice.

    

    e.
      No
      Buyer may participate in any underwritten registration hereunder unless the
      Buyer (i) agrees to sell the Buyer's Registrable Securities on the basis
      provided in any underwriting arrangements in usual and customary form entered
      into by the Company, (ii) completes and executes all questionnaires, powers
      of
      attorney, indemnities, underwriting agreements and other documents reasonably
      required under the terms of such underwriting arrangements, and (iii) agrees
      to
      pay its pro rata share of all underwriting discounts and commissions and any
      expenses in excess of those payable by the Company pursuant to Section 5
      below.

    

    5.
      EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting
      discounts and commissions, incurred in connection with registrations, filings
      or
      qualifications pursuant to Sections 2 and 3, including, without limitation,
      all
      registration, listing and qualification fees, printers and accounting fees,
      the
      fees and disbursements of counsel for the Company, and the reasonable fees
      and
      disbursements of one counsel selected by the Buyer pursuant to Sections 2(b)
      and
      3(h) hereof shall be borne by the Company.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    6.
      INDEMNIFICATION. In the event any Registrable Securities are included in a
      Registration Statement under this Agreement:

    

    a.
      To the
      extent permitted by law, the Company will indemnify, hold harmless and defend
      (i) the Buyer, (ii) the directors, officers, partners, managers, members,
      employees, agents and each person who controls any Buyer within the meaning
      of
      the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
      ACT"), if any, (iii) any underwriter (as defined in the 1933 Act) for the Buyer
      in connection with an underwritten offering pursuant to Section 2(d) hereof,
      and
      (iv) the directors, officers, partners, employees and each person who controls
      any such underwriter within the meaning of the 1933 Act or the 1934 Act, if
      any
      (each, an "INDEMNIFIED PERSON"), against any joint or several losses, claims,
      damages, liabilities or expenses (collectively, together with actions,
      proceedings or inquiries by any regulatory or self-regulatory organization,
      whether commenced or threatened, in respect thereof, "CLAIMS") to which any
      of
      the may become subject insofar as such Claims arise out of or are based upon:
      (i) any untrue statement or alleged untrue statement of a material fact in
      a
      Registration Statement or the omission or alleged omission to state therein
      a
      material fact required to be stated or necessary to make the statements therein
      not misleading; (ii) any untrue statement or alleged untrue statement of a
      material fact contained in any preliminary prospectus if used prior to the
      effective date of such Registration Statement, or contained in the final
      prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading; or (iii) any violation or alleged violation by the Company
      of the 1933 Act, the 1934 Act, any other law, including, without limitation,
      any
      state securities law, or any rule or regulation thereunder relating to the
      offer
      or sale of the Registrable Securities (the matters in the foregoing clauses
      (i)
      through (iii) being, collectively, "VIOLATIONS"). Subject to the restrictions
      set forth in Section 6(c) with respect to the number of legal counsel, the
      Company shall reimburse the Indemnified Person, promptly as such expenses are
      incurred and are due and payable, for any reasonable legal fees or other
      reasonable expenses incurred by them in connection with investigating or
      defending any such Claim. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(a): (i) shall
      not apply to a Claim arising out of or based upon a Violation which occurs
      in
      reliance upon and in conformity with information furnished in writing to the
      Company by any Indemnified Person or underwriter for such Indemnified Person
      expressly for use in connection with the preparation of such Registration
      Statement or any such amendment thereof or supplement thereto; (ii) shall not
      apply to amounts paid in settlement of any Claim if such settlement is effected
      without the prior written consent of the Company, which consent shall not be
      unreasonably withheld; and (iii) with respect to any preliminary prospectus,
      shall not inure to the benefit of any Indemnified Person if the untrue statement
      or omission of material fact contained in the preliminary prospectus was
      corrected on a timely basis in the prospectus, as then amended or supplemented,
      such corrected prospectus was timely made available by the Company pursuant
      to
      Section 3(c) hereof, and the Indemnified Person was promptly advised in writing
      not to use the incorrect prospectus prior to the use giving rise to a Violation
      and such Indemnified Person, notwithstanding such advice, used it. Such
      indemnity shall remain in full force and effect regardless of any investigation
      made by or on behalf of the Indemnified Person and shall survive the transfer
      of
      the Registrable Securities by the Buyer pursuant to Section 9.

    

    b.
      [Intentionally Omitted].

    

    c.
      Promptly after receipt by an Indemnified Person under this Section 6 of notice
      of the commencement of any action (including any governmental action), such
      Indemnified Person shall, if Claim in respect thereof is to be made against
      any
      Indemnified Person or the Company under this Section 6, deliver to the Company
      a
      written notice of the commencement thereof, and the Company shall have the
      right
      to participate in, and, to the extent the Company so desires, to assume control
      of the defense thereof with counsel mutually satisfactory to the Company and
      the
      Indemnified Person, as the case may be.

    

    PROVIDED,
      HOWEVER, that an Indemnified Person shall have the right to retain its own
      counsel with the fees and expenses to be paid by the Company, if, in the
      reasonable opinion of counsel retained by the Company, the representation by
      such counsel of the Indemnified Person and the Company would be inappropriate
      due to actual or potential differing interests between such Indemnified Person
      and any other party represented by such counsel in such proceeding. The Company
      shall pay for only one separate legal counsel for the Indemnified Persons,
      and
      such legal counsel shall be selected by Buyer, if the Buyer is entitled to
      indemnification hereunder. The failure to deliver written notice to the Company
      within a reasonable time of the commencement of any such action shall not
      relieve the Company of any liability to the Indemnified Person under this
      Section 6, except to the extent that the Company is actually prejudiced in
      its
      ability to defend such action. The indemnification required by this Section
      6
      shall be made by periodic payments of the amount thereof during the course
      of
      the investigation or defense, as such expense, loss, damage or liability is
      incurred and is due and payable.

    

    7.
      CONTRIBUTION. To the extent any indemnification by the Company is prohibited
      or
      limited by law, the Company agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    8.
      REPORTS UNDER THE 1934 ACT. With a view to making available to the Buyer the
      benefits of Rule144 promulgated under the 1933 Act or any other similar rule
      or
      regulation of the SEC that may at any time permit the Buyer to sell securities
      of the Company to the public without registration ("RULE 144"), the Company
      agrees to:

    

    a.
      make
      and keep public information available, as those terms are understood and defined
      in Rule 144;

    

    b.
      file
      with the SEC in a timely manner all reports and other documents required of
      the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements (it being understood that nothing herein shall
      limit the Company's obligations under Section 4(c) of the Securities Purchase
      Agreement) and the filing of such reports and other documents is required for
      the applicable provisions of Rule 144; and

    

    c.
      furnish to the Buyer so long as the Buyer owns Registrable Securities, promptly
      upon request, (i) a written statement by the Company that it has complied with
      the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
      a
      copy of the most recent annual or quarterly report of the Company and such
      other
      reports and documents so filed by the Company, and (iii) such other information
      as may be reasonably requested to permit the Buyers to sell such securities
      pursuant to Rule 144 without registration.

    

    9.
      ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this Agreement shall be
      automatically assignable by the Buyers to any transferee of all or any portion
      of Registrable Securities if: (i) the Buyer agrees in writing with the
      transferee or assignee to assign such rights, and a copy of such agreement
      is
      furnished to the Company within a reasonable time after such assignment, (ii)
      the Company is, within a reasonable time after such transfer or assignment,
      furnished with written notice of (a) the name and address of such transferee
      or
      assignee, and (b) the securities with respect to which such registration rights
      are being transferred or assigned, (iii) following such transfer or assignment,
      the further disposition of such securities by the transferee or assignee is
      restricted under the 1933 Act and applicable state securities laws, (iv) at
      or
      before the time the Company receives the written notice contemplated by clause
      (ii) of this sentence, the transferee or assignee agrees in writing with the
      Company to be bound by all of the provisions contained herein, and (v) such
      transfer shall have been made in accordance with the applicable requirements
      of
      the Securities Purchase Agreement.

    

    10.
      AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be amended
      and the observance thereof may be waived (either generally or in a particular
      instance and either retroactively or prospectively), only with written consent
      of the Company, the Buyer (to the extent such Buyer still owns Registrable
      Securities) and Buyers who hold a majority interest of the Registrable
      Securities. Any amendment or waiver effected in accordance with this Section
      10
      shall be binding upon the Buyer and the Company.

    

    11.
      MISCELLANEOUS.

    

    a.
      A
      person or entity is deemed to be a holder of Registrable Securities whenever
      such person or entity owns of record such Registrable Securities. If the Company
      receives conflicting instructions, notices or elections from two or more persons
      or entities with respect to the same Registrable Securities, the Company shall
      act upon the basis of instructions, notice or election received from the
      registered owner of such Registrable Securities.

    

    b.
      Any
      notices required or permitted to be given under the terms hereof shall be sent
      by certified or registered mail (return receipt requested) or delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile and shall be effective five days after being placed in the mail,
      if
      mailed by regular United States mail, or upon receipt, if delivered personally
      or by courier (including a recognized overnight delivery service) or by
      facsimile, in each case addressed to a party. The addresses for such
      communications shall be:

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    If
      to the
      Company: To the address set forth immediately below such Company's
      name on the signature pages hereto.

    

    With
      copy
      to:

    

    David
      Ficksman, Esq.

    TROY
      & GOULD PC

    1801
      Century Park East, Suite 1600 

    Los
      Angeles, CA 90067-2367

    Tel
      (310)
      553-4441

    Fax
      (310)
      201-4746

    

    If
      to a
      Buyer: To the address set forth immediately below such Buyer's name on the
      signature pages hereto.

    

    Each
      party shall provide notice to the other party of any change in
      address.

    

    c.
      Failure of any party to exercise any right or remedy under this Agreement or
      otherwise, or delay by a party in exercising such right or remedy, shall not
      operate as a waiver thereof.

    

    d.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of California. Any controversy or claim arising out of or
      related to this Debenture or the breach thereof, shall be settled by binding
      arbitration in San Diego, CA in accordance with the Expedited Procedures (Rules
      53-57) of the Commercial Arbitration Rules of the American Arbitration
      Association ("AAA"). A proceeding shall be commenced upon written demand by
      Company or the Buyer to the other. The arbitrator(s) shall enter a judgment
      by
      default against any party, which fails or refuses to appear in any properly
      noticed arbitration proceeding. The proceeding shall be conducted by one (1)
      arbitrator, unless the amount alleged to be in dispute exceeds two hundred
      fifty
      thousand dollars ($250,000), in which case three (3) arbitrators shall preside.
      The arbitrator(s) will be chosen by the parties from a list provided by the
      AAA,
      and if they are unable to agree within ten (10) days, the AAA shall select
      the
      arbitrator(s). The arbitrators must be experts in securities law and financial
      transactions. The arbitrators shall assess costs and expenses of the
      arbitration, including all attorneys' and experts' fees, as the arbitrators
      believe is appropriate in light of the merits of the parties' respective
      positions in the issues in dispute. Each party submits irrevocably to the
      jurisdiction of any state court sitting in San Diego, CA or to the United States
      District Court sitting in California for purposes of enforcement of any
      discovery order, judgment or award in connection with such arbitration. The
      award of the arbitrator(s) shall be final and binding upon the parties and
      may
      be enforced in any court having jurisdiction. The arbitration shall be held
      in
      such place as set by the arbitrator(s) in accordance with Rule 55. With respect
      to any arbitration proceeding in accordance with this section, the prevailing
      party's reasonable attorney's fees and expenses shall be borne by the
      non-prevailing party.

    

    Although
      the parties, as expressed above, agree that all claims, including claims that
      are equitable in nature, for example specific performance, shall initially
      be
      prosecuted in the binding arbitration procedure outlined above, if the
      arbitration panel dismisses or otherwise fails to entertain any or all of the
      equitable claims asserted by reason of the fact that it lacks jurisdiction,
      power and/or authority to consider such claims and/or direct the remedy
      requested, then, in only that event, will the parties have the right to initiate
      litigation respecting such equitable claims or remedies. The forum for such
      equitable relief shall be in either a state or federal court sitting in San
      Diego, CA. Each party waives any right to a trial by jury, assuming such right
      exists in an equitable proceeding, and irrevocably submits to the jurisdiction
      of said California court. California law shall govern both the proceeding as
      well as the interpretation and construction of this Agreement and the
      transaction as a whole.

    

    e.
      This
      Agreement and the Securities Purchase Agreement (including all schedules and
      exhibits thereto) constitute the entire agreement among the parties hereto
      with
      respect to the subject matter hereof and thereof. There are no restrictions,
      promises, warranties or undertakings, other than those set forth or referred
      to
      herein and therein. This Agreement and the Securities Purchase Agreement
      supersede all prior agreements and understandings among the parties hereto
      with
      respect to the subject matter hereof and thereof.

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

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

    

    g.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    

    h.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement.
      This Agreement, once executed by a party, may be delivered to the other party
      hereto by facsimile transmission of a copy of this Agreement bearing the
      signature of the party so delivering this Agreement.

    

    i.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    

    j.
      Except
      as otherwise provided herein, all consents and other determinations to be made
      by the Buyer pursuant to this Agreement shall be made by Buyers holding a
      majority of the Registrable Securities, determined as if the all of the
      Debentures then outstanding have been converted into Registrable
      Securities.

    

    k.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Buyer by vitiating the intent and purpose of the
      transactions contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for breach of its obligations hereunder will be inadequate and
      agrees, in the event of a breach or threatened breach by the Company of any
      of
      the provisions hereunder, that the Buyer shall be entitled, in addition to
      all
      other available remedies in law or in equity, to an injunction or injunctions
      to
      prevent or cure breaches of the provisions of this Agreement and to enforce
      specifically the terms and provisions hereof, without the necessity of showing
      economic loss and without any bond or other security being
      required.

    

    l.
      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.

    

    m.
      In the
      event that any provision of this Agreement is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any provision hereof
      which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision hereof.

    

    n.
      The
      initial number of Registrable Securities included in any Registration Statement
      and each increase to the number of Registrable Securities included therein
      shall
      be allocated pro rata among the Buyers based on the number of Registrable
      Securities held by the Buyer at the time of such establishment or increase,
      as
      the case may be. In the event an Buyer shall sell or otherwise transfer any
      of
      such holder's Registrable Securities, each transferee shall be allocated a
      pro
      rata portion of the number of Registrable Securities included in a Registration
      Statement for such transferor. Any shares of Common Stock included on a
      Registration Statement and which remain allocated to any person or entity which
      does not hold any Registrable Securities shall be allocated to the remaining
      Buyers, pro rata based on the number of shares of Registrable Securities then
      held by the Buyers. For the avoidance of doubt, the number of Registrable
      Securities held by a Buyer shall be determined as if all the Debentures and
      Warrants then outstanding and held by the Buyer were converted into or exercised
      for Registrable Securities.

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    o.
      There
      shall be no oral modifications or amendments to this Agreement. This Agreement
      may be modified or amended only in writing.

    

    IN
      WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
      Agreement to be duly executed as of the 14th day of July 2006. 

    
 

    
      	
              OMNI
                U.S.A., INC., the Company

            	
              Potawatomi
                Business Development Corp., the Buyer

            
	 	 
	 	 
	
              By:
                /S/ LOWELL W.
                GIFFHORN                   
                

            	
              By:
                /S/ CAROL
                LEESE                    
                

            
	
              Lowell
                W. Giffhorn, CFO

            	
              Carol
                Leese, CEO

            
	 	 
	
              ADDRESS:

            	
              ADDRESS:

            
	
              2236
                Rutherford Rd., Suite 107

            	
              320
                E. Buffalo St., Suite 607

            
	
              Carlsbad,
                CA 92008

            	
              Milwaukee,
                WI 53202

            
	
              Telephone:
                (760) 929-7500 Ext 210

            	
              Telephone:
                262-785-8140

            
	
              Facsimile:
                (760) 929-7504

            	
              Facsimile:
                262-785-8141

            

    

     

     

    
      
         

      

      
        13

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