Document:

EXHIBIT 10.3

                                                      Dated:  November ___, 2005

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

No.  CCP-4                                                              $500,000

                                 NS8 CORPORATION

                          Secured Convertible Debenture

                             Due November ___, 2008

This  Amended  and  Restated  Secured  Convertible  Debenture  (the "Debenture")
                                                                     ---------
is issued by NS8 CORPORATION, a Delaware corporation (the "Obligor"), to CORNELL
                                                           -------
CAPITAL  PARTNERS,  LP  (the  "Holder"),  pursuant  to  that  certain Securities
                               ------
Purchase  Agreement (the "Securities Purchase Agreement") of even date herewith.
                          -----------------------------

FOR  VALUE  RECEIVED,  the  Obligor  hereby promises to pay to the Holder or its
successors  and  assigns  the  principal  sum  of  Five Hundred Thousand Dollars
($500,000)  together with accrued but unpaid interest on or before November ___,
2008  (the  "Maturity  Date")  in  accordance  with  the  following  terms:
             --------------

Interest.  Interest  shall  accrue  on  the  outstanding  principal  balance
--------
hereof  at  an  annual  rate  equal  to  ten  percent  (10%).  Interest shall be
calculated on the basis of a 360-day year and the actual number of days elapsed,
to  the  extent permitted by applicable law.  Interest hereunder will be paid to
the  Holder  or  its  assignee  (as  defined  in  Section  4) in whose name this
Debenture is registered on the records of the Obligor regarding registration and
transfers  of  Debentures  (the  "Debenture  Register").
                                  -------------------

Right of Redemption.  The Obligor at its option shall have the right, with three
-------------------
(3)  business days advance written notice (the "Redemption Notice"), to redeem a
                                                -----------------
portion  or  all  amounts outstanding under this Debenture prior to the Maturity
Date  only  if  the  closing  bid price of the of the Obligor's Common Stock, as
reported  by  Bloomberg,  LP,  is  less  than the Fixed Price at the time of the
Redemption  Notice the Obligor shall pay an amount equal to the principal amount
outstanding  and  accrued  interest being redeemed, plus a redemption premium of
twenty percent (20%) ("Redemption Premium") of the amount redeemed (collectively
                       ------------------

                                      EX-19
<PAGE>

referred  to  as  the  "Redemption  Amount").  The  Obligor shall deliver to the
                        ------------------
Holder  the  Redemption  Amount  on  the  third  (3rd)  business  day  after the
Redemption  Notice.

Notwithstanding  the  foregoing  in  the  event  that the Obligor has elected to
redeem  a portion of the outstanding principal amount and accrued interest under
this  Debenture  the Holder shall still be entitled to effectuate Conversions as
contemplated  hereunder.

Security  Agreements.  This  Debenture  is  secured  by the Amended and Restated
-------------------
Security  Agreement (the "Security Agreement") of even date herewith between the
                          ------------------
Obligor  and  the  Holder,  the  Subsidiary  Security Agreement by and among the
Obligor,  the Holder and CanOnline Media Corporation and CanOnline Global Media,
Inc.,  each  a  direct or indirect wholly owned subsidiary of the Obligor, and a
Pledge and Escrow Agreement (the "Pledge Agreement") of even date herewith among
                                  ----------------
the  Obligor,  the  Holder,  and  the  Escrow  Agent.

Consent  of  Holder  to  Sell  Capital  Stock  or  Grant  Security Interests. So
----------------------------------------------------------------------
long as any of the principal amount or interest on this Debenture remains unpaid
and unconverted, the Obligor shall not, without the prior consent of the Holder,
(i)  issue  or  sell  any  common  stock  or  preferred  stock  with  or without
consideration,  (ii)  issue or sell any preferred stock, warrant, option, right,
contract,  call, or other security or instrument granting the holder thereof the
right  to  acquire  common stock with or without consideration, (iii) enter into
any  security  instrument  granting the holder a security interest in any of the
assets  of  the  Obligor,  or (iv) file any registration statements on Form S-8.
Notwithstanding  the  foregoing,  the  above restriction shall not apply to only
those  holders  of  the  Obligor's  stock  options contained in the Stock Option
Grants  (the  "Stock  Option  Grants")  attached  as Exhibit F of the Securities
               ---------------------
Purchase  Agreement  of  even  date  herewith  hereto.

Rights  of  First  Refusal.  So  long  as  any  portion  of  this  Debenture  is
--------------------------
outstanding (including principal or accrued interest), if the Obligor intends to
raise  additional  capital  by  the  issuance  or  sale  of capital stock of the
Obligor,  including  without limitation shares of any class of common stock, any
class  of preferred stock, options, warrants or any other securities convertible
or exercisable into shares of common stock (whether the offering is conducted by
the  Obligor, underwriter, placement agent or any third party) the Obligor shall
be  obligated  to offer to the Holder such issuance or sale of capital stock, by
providing  in  writing  the  principal amount of capital it intends to raise and
outline  of the material terms of such capital raise, prior to the offering such
issuance  or  sale  of  capital  stock  to  any third parties including, but not
limited  to,  current  or  former  officers  or  directors,  current  or  former
shareholders  and/or  investors of the obligor, underwriters, brokers, agents or
other  third parties.  The Holder shall have ten (10) business days from receipt
of  such notice of the sale or issuance of capital stock to accept or reject all
or  a  portion  of  such  capital  raising  offer.

This  Debenture  is  subject  to  the  following  additional  provisions:

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

Section  2.     Events  of  Default.
----------      -------------------

                                      EX-20
<PAGE>

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

     (i)  Any  default  in the payment of the principal of, interest on or other
charges in respect of this Debenture, free of any claim of subordination, as and
when  the same shall become due and payable (whether on a Conversion Date or the
Maturity  Date  or  by  acceleration  or  otherwise);

     (ii)  The  Obligor  shall  fail  to  observe or perform any other covenant,
agreement or warranty contained in, or otherwise commit any breach or default of
any  provision  of  this  Debenture (except as may be covered by Section 2(a)(i)
hereof) or any Transaction Document (as defined in Section 4) which is not cured
with  in  the  time  prescribed;

     (iii) The Obligor or any subsidiary of the Obligor shall commence, or there
shall  be  commenced  against the Obligor or any subsidiary of the Obligor under
any  applicable  bankruptcy  or insolvency laws as now or hereafter in effect or
any successor thereto, or the Obligor or any subsidiary of the Obligor commences
any  other proceeding under any reorganization, arrangement, adjustment of debt,
relief  of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction  whether  now or hereafter in effect relating to the Obligor or any
subsidiary  of  the  Obligor  or  there  is commenced against the Obligor or any
subsidiary  of  the  Obligor any such bankruptcy, insolvency or other proceeding
which  remains  undismissed  for  a  period  of  61  days; or the Obligor or any
subsidiary  of the Obligor is adjudicated insolvent or bankrupt; or any order of
relief  or  other order approving any such case or proceeding is entered; or the
Obligor  or  any  subsidiary  of  the  Obligor  suffers  any  appointment of any
custodian,  private  or  court  appointed  receiver  or  the  like for it or any
substantial  part of its property which continues undischarged or unstayed for a
period  of  sixty one (61) days; or the Obligor or any subsidiary of the Obligor
makes  a  general assignment for the benefit of creditors; or the Obligor or any
subsidiary of the Obligor shall fail to pay, or shall state that it is unable to
pay,  or  shall be unable to pay, its debts generally as they become due; or the
Obligor  or  any subsidiary of the Obligor shall call a meeting of its creditors
with  a  view  to  arranging  a  composition, adjustment or restructuring of its
debts;  or  the  Obligor  or  any  subsidiary of the Obligor shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any  of  the foregoing; or any corporate or other action is taken by the Obligor
or  any  subsidiary  of  the  Obligor  for  the  purpose of effecting any of the
foregoing;

     (iv)  The  Obligor or any subsidiary of the Obligor shall default in any of
its  obligations  under any other debenture or any mortgage, credit agreement or
other  facility,  indenture  agreement,  factoring agreement or other instrument
under  which  there may be issued, or by which there may be secured or evidenced
any  indebtedness for borrowed money or money due under any long term leasing or
factoring  arrangement  of  the  Obligor  or any subsidiary of the Obligor in an
amount  exceeding  $100,000,  whether  such  indebtedness  now  exists  or shall
hereafter be created and such default shall result in such indebtedness becoming
or  being declared due and payable prior to the date on which it would otherwise
become  due  and  payable;

                                      EX-21
<PAGE>

     (v)  The  Common  Stock  shall cease to be quoted for trading or listed for
trading on either the Nasdaq OTC Bulletin Board ("OTC"), Nasdaq SmallCap Market,
                                                  ---
New  York  Stock Exchange, American Stock Exchange or the Nasdaq National Market
(each,  a  "Subsequent  Market")  and  shall  not  again be quoted or listed for
            ------------------
trading  thereon  within  five  (5)  Trading  Days  of  such  delisting;

     (vi)  The  Obligor or any subsidiary of the Obligor shall be a party to any
Change  of  Control  Transaction  (as  defined  in  Section  4);

     (vii)  The  Obligor  shall  fail to file the Underlying Shares Registration
Statement  (as  defined in Section 4) with the Commission (as defined in Section
4), or the Underlying Shares Registration Statement shall not have been declared
effective  by  the Commission, in each case within the time periods set forth in
the  Registration Rights Agreement of even date herewith between the Obligor and
the  Holder;

     (viii) If the effectiveness of the Underlying Shares Registration Statement
lapses  for any reason or the Holder shall not be permitted to resell the shares
of  Common  Stock  underlying  this  Debenture  under  the  Underlying  Shares
Registration  Statement,  in  either  case,  for  more than five (5) consecutive
Trading  Days  or  an  aggregate  of  eight  Trading  Days  (which  need  not be
consecutive  Trading  Days);

     (ix)  The  Obligor  shall  fail  for  any  reason  to  deliver Common Stock
certificates to a Holder prior to the fifth (5th) Trading Day after a Conversion
Date  or  the  Obligor  shall  provide notice to the Holder, including by way of
public  announcement,  at any time, of its intention not to comply with requests
for  conversions  of  this  Debenture  in  accordance  with  the  terms  hereof;

     (x)  The  Obligor  shall fail for any reason to deliver the payment in cash
pursuant  to  a Buy-In (as defined herein) within three (3) days after notice is
claimed  delivered  hereunder;

(b)  During  the  time  that  any  portion  of  this  Debenture  is outstanding,
if  any  Event  of  Default  has  occurred and has not been cured by the Obligor
within  ten (10) calendar days of , the full principal amount of this Debenture,
together  with  interest and other amounts owing in respect thereof, to the date
of  acceleration  shall  become  at  the  Holder's election, immediately due and
payable  in  cash,  provided  however, the Holder may request (but shall have no
obligation  to  request) payment of such amounts in Common Stock of the Obligor.
If an Event of Default occurs and remains uncured, the Conversion Price shall be
reduced to $0.015.  In addition to any other remedies, the Holder shall have the
right  (but  not the obligation) to convert this Debenture at any time after (x)
an  Event  of  Default  or  (y)  the  Maturity Date at the Conversion Price then
in-effect.  The  Holder  need  not  provide  and  the  Obligor hereby waives any
presentment,  demand,  protest  or  other notice of any kind, and the Holder may
immediately  and  without  expiration of any grace period enforce any and all of
its  rights  and remedies hereunder and all other remedies available to it under
applicable  law. Such declaration may be rescinded and annulled by Holder at any
time  prior  to  payment hereunder. No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.  Upon an
Event  of  Default, notwithstanding any other provision of this Debenture or any

                                      EX-22
<PAGE>

Transaction  Document,  the  Holder  shall  have no obligation to comply with or
adhere  to  any  limitations, if any, on the conversion of this Debenture or the
sale  of  the  Underlying  Shares.

Section  3.     Conversion.
----------      ----------

(a)  (i)  Conversion  at  Option  of  Holder.
          ----------------------------------

          (A) This Debenture shall be convertible into shares of Common Stock at
     the  option of the Holder, in whole or in part at any time and from time to
     time,  after  the Original Issue Date (as defined in Section 4) (subject to
     the  limitations  on  conversion set forth in Section 3(a)(ii) hereof). The
     number  of  shares  of  Common  Stock  issuable upon a conversion hereunder
     equals the quotient obtained by dividing (x) the outstanding amount of this
     Debenture  to  be  converted  by  (y)  the  Conversion Price (as defined in
     Section  3(c)(i)).  The  Obligor shall deliver Common Stock certificates to
     the  Holder  prior  to the Fifth (5th) Trading Day after a Conversion Date.

          (B)  Notwithstanding  anything to the contrary contained herein, if on
     any  Conversion  Date: (1) the number of shares of Common Stock at the time
     authorized,  unissued  and unreserved for all purposes, or held as treasury
     stock, is insufficient to pay principal and interest hereunder in shares of
     Common  Stock;  (2) the Common Stock is not listed or quoted for trading on
     the  OTC  or  on  a Subsequent Market; (3) the Obligor has failed to timely
     satisfy  its conversion; or (4) the issuance of such shares of Common Stock
     would result in a violation of Section 3(a)(ii), then, at the option of the
     Holder,  the Obligor, in lieu of delivering shares of Common Stock pursuant
     to Section 3(a)(i)(A), shall deliver, within three (3) Trading Days of each
     applicable  Conversion  Date, an amount in cash equal to the product of the
     outstanding  principal amount to be converted plus any interest due therein
     divided by the Conversion Price and multiplied by the highest closing price
     of  the  stock  from  date of the conversion notice till the date that such
     cash  payment  is  made.

     Further, if the Obligor shall not have delivered any cash due in respect of
conversion  of  this  Debenture  or  as payment of interest thereon by the fifth
(5th)  Trading  Day  after the Conversion Date, the Holder may, by notice to the
Obligor, require the Obligor to issue shares of Common Stock pursuant to Section
3(c), except that for such purpose the Conversion Price applicable thereto shall
be  the lesser of the Conversion Price on the Conversion Date and the Conversion
Price  on the date of such Holder demand. Any such shares will be subject to the
provisions  of  this  Section.

          (C) The Holder shall effect conversions by delivering to the Obligor a
     completed  notice  in  the form attached hereto as Exhibit A (a "Conversion
                                                                      ----------
     Notice").  The  date  on  which  a  Conversion  Notice  is delivered is the
     "Conversion  Date."  Unless  the  Holder is converting the entire principal
      ----------------
     amount  outstanding  under  this  Debenture,  the Holder is not required to
     physically  surrender  this  Debenture  to  the  Obligor in order to effect
     conversions.  Conversions  hereunder  shall have the effect of lowering the
     outstanding  principal amount of this Debenture plus all accrued and unpaid
     interest  thereon  in  an  amount  equal  to the applicable conversion. The
     Holder  and the Obligor shall maintain records showing the principal amount
     converted  and the date of such conversions. In the event of any dispute or
     discrepancy,  the  records  of  the  Holder  shall  be  controlling  and
     determinative  in  the  absence  of  manifest  error.

                                      EX-23
<PAGE>

     (ii)  Certain  Conversion  Restrictions.
           ---------------------------------

          (A)  A  Holder  may  not  convert  this Debenture or receive shares of
     Common Stock as payment of interest hereunder to the extent such conversion
     or  receipt  of  such interest payment would result in the Holder, together
     with  any  affiliate  thereof,  beneficially  owning  (as  determined  in
     accordance with Section 13(d) of the Exchange Act and the rules promulgated
     thereunder)  in excess of 4.9% of the then issued and outstanding shares of
     Common  Stock, including shares issuable upon conversion of, and payment of
     interest  on,  this Debenture held by such Holder after application of this
     Section.  Since  the  Holder will not be obligated to report to the Obligor
     the  number  of  shares  of  Common  Stock  it  may  hold  at the time of a
     conversion  hereunder,  unless  the conversion at issue would result in the
     issuance  of  shares  of  Common  Stock  in  excess  of  4.9%  of  the then
     outstanding shares of Common Stock without regard to any other shares which
     may be beneficially owned by the Holder or an affiliate thereof, the Holder
     shall  have  the  authority  and  obligation  to  determine  whether  the
     restriction  contained in this Section will limit any particular conversion
     hereunder  and to the extent that the Holder determines that the limitation
     contained  in  this  Section applies, the determination of which portion of
     the  principal  amount  of  this  Debenture  is  convertible  shall  be the
     responsibility  and obligation of the Holder. If the Holder has delivered a
     Conversion  Notice  for  a principal amount of this Debenture that, without
     regard  to  any  other  shares  that  the  Holder  or  its  affiliates  may
     beneficially  own,  would result in the issuance in excess of the permitted
     amount  hereunder,  the  Obligor  shall  notify the Holder of this fact and
     shall honor the conversion for the maximum principal amount permitted to be
     converted  on such Conversion Date in accordance with the periods described
     in  Section  3(a)(i)(A) and, at the option of the Holder, either retain any
     principal  amount tendered for conversion in excess of the permitted amount
     hereunder  for future conversions or return such excess principal amount to
     the  Holder.  The provisions of this Section may be waived by a Holder (but
     only  as  to itself and not to any other Holder) upon not less than 65 days
     prior  notice to the Obligor. Other Holders shall be unaffected by any such
     waiver.

(b)  (i) Nothing herein shall limit a Holder's right to pursue actual damages or
declare  an  Event  of  Default  pursuant to Section 2 herein for the Obligor 's
failure  to  deliver  certificates  representing  shares  of  Common  Stock upon
conversion  within  the  period  specified herein and such Holder shall have the
right  to  pursue  all  remedies  available to it at law or in equity including,
without  limitation,  a decree of specific performance and/or injunctive relief,
in  each  case  without  the  need to post a bond or provide other security. The
exercise  of  any  such  rights  shall  not  prohibit the Holder from seeking to
enforce  damages  pursuant  to any other Section hereof or under applicable law.

     (ii)     In  addition  to  any other rights available to the Holder, if the
Obligor fails to deliver to the Holder such certificate or certificates pursuant
to  Section 3(a)(i)(A) by the fifth (5th) Trading Day after the Conversion Date,
and  if  after  such  fifth  (5th)  Trading Day the Holder purchases (in an open
market  transaction  or  otherwise) Common Stock to deliver in satisfaction of a
sale  by  such  Holder  of  the  Underlying  Shares which the Holder anticipated
receiving  upon  such conversion (a "Buy-In"), then the Obligor shall (A) pay in
                                     ------
cash  to  the Holder (in addition to any remedies available to or elected by the
Holder)  the  amount  by  which (x) the Holder's total purchase price (including
brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the
product  of  (1) the aggregate number of shares of Common Stock that such Holder
anticipated  receiving from the conversion at issue multiplied by (2) the market

                                      EX-24
<PAGE>

price  of  the Common Stock at the time of the sale giving rise to such purchase
obligation  and  (B)  at the option of the Holder, either reissue a Debenture in
the  principal  amount equal to the principal amount of the attempted conversion
or  deliver  to  the Holder the number of shares of Common Stock that would have
been issued had the Obligor timely complied with its delivery requirements under
Section  3(a)(i)(A).  For example, if the Holder purchases Common Stock having a
total  purchase  price of $11,000 to cover a Buy-In with respect to an attempted
conversion  of  Debentures  with  respect  to  which  the  market  price  of the
Underlying  Shares on the date of conversion was a total of $10,000 under clause
(A)  of the immediately preceding sentence, the Obligor shall be required to pay
the  Holder  $1,000.  The  Holder  shall  provide  the  Obligor  written  notice
indicating  the  amounts  payable  to  the  Holder  in  respect  of  the Buy-In.

(c)  (i)  The  Holder  is  entitled,  at  its  option,  to  convert,  and  sell
on  the  same  day, at any time, until payment in full of this Debenture, all or
any  part  of the principal amount of the Debenture, plus accrued interest, into
shares  of  the Company's common stock, par value $0.001 per share, at the price
per share equal to the lesser of (a) $0.075 (the "Fixed Price") or (b) an amount
                                                  -----------
equal  to  ninety  percent  (90%)  of the average of the three (3) lowest volume
weighted average prices of the Common Stock, as quoted by Bloomberg, LP, for the
thirty  (30) trading days immediately preceding the Conversion Date which may be
adjusted  pursuant  to the other terms of this Debenture.  Subparagraphs (a) and
(b)  above  are  individually  referred  to  as  a  "Conversion  Price."
                                                     ------------------

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

(iii)     If the Obligor, at any time while this Debenture is outstanding, shall
issue rights, options or warrants to all holders of Common Stock (and not to the
Holder)  entitling them to subscribe for or purchase shares of Common Stock at a
price  per  share  less  than  the  Fixed  Price,  then the Fixed Price shall be
multiplied by a fraction, of which the denominator shall be the number of shares
of  the Common Stock (excluding treasury shares, if any) outstanding on the date
of  issuance of such rights or warrants (plus the number of additional shares of
Common  Stock  offered for subscription or purchase), and of which the numerator
shall be the number of shares of the Common Stock (excluding treasury shares, if
any)  outstanding  on  the date of issuance of such rights or warrants, plus the
number  of  shares  which  the  aggregate  offering price of the total number of
shares  so  offered  would purchase at the Fixed Price. Such adjustment shall be
made  whenever  such  rights  or warrants are issued, and shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such rights, options or warrants. However, upon the expiration of any

                                      EX-25
<PAGE>

such  right,  option  or  warrant  to  purchase  shares  of the Common Stock the
issuance  of which resulted in an adjustment in the Fixed Price pursuant to this
Section,  if  any  such right, option or warrant shall expire and shall not have
been  exercised,  the  Fixed  Price  shall  immediately  upon such expiration be
recomputed  and  effective  immediately upon such expiration be increased to the
price  which  it  would  have  been (but reflecting any other adjustments in the
Fixed  Price  made pursuant to the provisions of this Section after the issuance
of  such rights or warrants) had the adjustment of the Fixed Price made upon the
issuance  of such rights, options or warrants been made on the basis of offering
for  subscription  or  purchase  only  that number of shares of the Common Stock
actually  purchased  upon  the  exercise  of  such  rights,  options or warrants
actually  exercised.

(iv)     If  the  Obligor  or any subsidiary thereof, as applicable, at any time
while  this  Debenture  is  outstanding,  shall  issue shares of Common Stock or
rights,  warrants, options or other securities or debt that are convertible into
or  exchangeable  for  shares  of  Common  Stock  ("Common  Stock  Equivalents")
                                                    --------------------------
entitling  any  Person  to  acquire shares of Common Stock, at a price per share
less  than  the  Fixed  Price (if the holder of the Common Stock or Common Stock
Equivalent  so  issued shall at any time, whether by operation of purchase price
adjustments,  reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which is issued in
connection  with such issuance, be entitled to receive shares of Common Stock at
a  price  per  share  which is less than the Fixed Price, such issuance shall be
deemed to have occurred for less than the Fixed Price), then, at the sole option
of  the  Holder,  the  Fixed  Price  shall be adjusted to mirror the conversion,
exchange  or  purchase  price  for such Common Stock or Common Stock Equivalents
(including any reset provisions thereof) at issue. Such adjustment shall be made
whenever  such  Common Stock or Common Stock Equivalents are issued. The Obligor
shall  notify  the  Holder  in  writing,  no  later  than  one (1)  business day
following the issuance of any Common Stock or Common Stock Equivalent subject to
this Section, indicating therein the applicable issuance price, or of applicable
reset  price,  exchange  price,  conversion  price  and  other pricing terms. No
adjustment  under  this  Section  shall  be  made  as  a result of issuances and
exercises  of options to purchase shares of Common Stock issued for compensatory
purposes  pursuant to any of the Obligor's stock option or stock purchase plans.

(v)     If  the  Obligor, at any time while this Debenture is outstanding, shall
distribute  to  all holders of Common Stock (and not to the Holder) evidences of
its  indebtedness  or  assets or rights or warrants to subscribe for or purchase
any  security,  then  in  each such case the Fixed Price at which this Debenture
shall  thereafter  be  convertible  shall be determined by multiplying the Fixed
Price  in effect immediately prior to the record date fixed for determination of
stockholders  entitled  to  receive such distribution by a fraction of which the
denominator  shall  be  the  Closing  Bid Price determined as of the record date
mentioned  above,  and of which the numerator shall be such Closing Bid Price on
such  record  date  less  the  then fair market value at such record date of the
portion  of such assets or evidence of indebtedness so distributed applicable to
one  outstanding  share  of  the  Common  Stock  as  determined  by the Board of
Directors  in good faith. In either case the adjustments shall be described in a
statement  provided  to  the  Holder  of  the  portion of assets or evidences of
indebtedness  so distributed or such subscription rights applicable to one share
of Common Stock. Such adjustment shall be made whenever any such distribution is
made  and  shall  become  effective  immediately after the record date mentioned
above.

                                      EX-26
<PAGE>

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

(vii)     The  Obligor  shall  maintain  a  share  reserve  of not less than one
percent  (100%)  of  the shares of Common Stock issuable upon conversion of this
Debenture;  and  within  three  (3)  Business  Days following the receipt by the
Obligor  of  a  Holder's notice that such minimum number of Underlying Shares is
not  so  reserved,  the  Obligor  shall  promptly reserve a sufficient number of
shares  of  Common  Stock  to  comply  with  such  requirement.

(viii)     All  calculations  under  this  Section  3 shall be rounded up to the
nearest  $0.001  of  a  share.

(ix)     Whenever  the Fixed Price is adjusted pursuant to Section 3 hereof, the
Obligor shall promptly mail to the Holder a notice setting forth the Fixed Price
after such adjustment and setting forth a brief statement of the facts requiring
such  adjustment.

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

                                      EX-27
<PAGE>

expected  that  holders  of  the  Common  Stock  of  record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share  exchange,  provided,  that  the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action  required  to  be  specified  in  such notice.  The Holder is entitled to
convert  this Debenture during the 20-day calendar period commencing the date of
such  notice  to  the  effective  date  of  the  event  triggering  such notice.

(xi)     In  case  of  any  (1)  merger  or  consolidation of the Obligor or any
subsidiary  of  the  Obligor  with  or  into  another Person, or (2) sale by the
Obligor  or any subsidiary of the Obligor of more than one-half of the assets of
the  Obligor in one or a series of related transactions, a Holder shall have the
right  to  (A) exercise any rights under Section 2(b), (B) convert the aggregate
amount  of  this  Debenture  then outstanding into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be  entitled  upon such event or series of related events to receive such amount
of  securities,  cash and property as the shares of Common Stock into which such
aggregate  principal  amount  of  this  Debenture  could  have  been  converted
immediately  prior  to  such  merger,  consolidation  or  sales  would have been
entitled, or (C) in the case of a merger or consolidation, require the surviving
entity  to  issue  to the Holder a convertible Debenture with a principal amount
equal  to  the  aggregate  principal  amount of this Debenture then held by such
Holder,  plus  all  accrued and unpaid interest and other amounts owing thereon,
which  such  newly  issued  convertible  Debenture  shall  have  terms identical
(including with respect to conversion) to the terms of this Debenture, and shall
be  entitled to all of the rights and privileges of the Holder of this Debenture
set  forth  herein  and  the  agreements  pursuant to which this Debentures were
issued. In the case of clause (C), the conversion price applicable for the newly
issued  shares of convertible preferred stock or convertible Debentures shall be
based upon the amount of securities, cash and property that each share of Common
Stock  would  receive  in  such  transaction  and the Conversion Price in effect
immediately prior to the effectiveness or closing date for such transaction. The
terms  of  any such merger, sale or consolidation shall include such terms so as
to  continue  to  give  the Holder the right to receive the securities, cash and
property  set  forth in this Section upon any conversion or redemption following
such  event.  This  provision  shall  similarly apply to successive such events.

(d)  The  Obligor  covenants  that  it  will  at  all  times  reserve  and  keep
available  out  of its authorized and unissued shares of Common Stock solely for
the  purpose  of  issuance  upon  conversion  of  this  Debenture and payment of
interest on this Debenture, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of persons other than the Holder,
not less than such number of shares of the Common Stock as shall (subject to any
additional  requirements  of  the  Obligor  as to reservation of such shares set
forth  in  this  Debenture) be issuable (taking into account the adjustments and
restrictions  of  Sections 2(b) and 3(c)) upon the conversion of the outstanding
principal  amount  of  this  Debenture  and  payment  of interest hereunder. The
Obligor  covenants  that  all  shares  of Common Stock that shall be so issuable
shall,  upon  issue,  be  duly  and  validly  authorized, issued and fully paid,
nonassessable  and,  if  the  Underlying  Shares Registration Statement has been
declared  effective  under  the  Securities  Act,  registered for public sale in
accordance  with  such  Underlying  Shares  Registration  Statement.

                                      EX-28
<PAGE>

(e)     Upon  a  conversion hereunder the Obligor shall not be required to issue
stock certificates representing fractions of shares of the Common Stock, but may
if  otherwise permitted, make a cash payment in respect of any final fraction of
a  share based on the Closing Bid Price at such time. If the Obligor elects not,
or  is  unable,  to  make  such  a cash payment, the Holder shall be entitled to
receive,  in  lieu  of  the final fraction of a share, one whole share of Common
Stock.

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

     (g)     Any  notices, consents, waivers or other communications required or
permitted  to  be  given  under  the terms hereof must be in writing and will be
deemed  to  have  been  delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is  mechanically  or  electronically  generated  and kept on file by the sending
party);  or (iii) one (1) trading day after deposit with a nationally recognized
overnight  delivery  service,  in  each  case properly addressed to the party to
receive  the  same.  The addresses and facsimile numbers for such communications
shall  be:

If  to  the  Company,  to:     NS8  Corporation
                               600  University  Street  -  Suite  1525
                               Seattle,  WA  98101
                               Attention:  Anthony  Alda
                               Telephone:  (604)  677-6994
                               Facsimile:  (604)  677-7011

With  a  copy  to:             McGuireWoods,  LLP
                               1345  Avenue  of  the  Americas
                               New  York,  NY  10105
                               Attention:  Louis  W.  Zehil,  Esq.
                               Telephone:  (212)  548-2138
                               Facsimile:  (212)  680-2175

If  to  the  Holder:           Cornell  Capital  Partners,  LP
                               101  Hudson  Street,  Suite  3700
                               Jersey  City,  NJ  07302
                               Attention:  Mark  Angelo
                               Telephone:  (201)  985-8300

                                      EX-29
<PAGE>

With  a  copy  to:             David  Gonzalez  Rillo,  Esq.
                               101  Hudson  Street  -  Suite  3700
                               Jersey  City,  NJ  07302
                               Telephone:  (201)  985-8300
                               Facsimile:  (201)  985-8266

or at such other address and/or facsimile number and/or to the attention of such
other  person  as  the  recipient party has specified by written notice given to
each  other  party  three  (3)  business days prior to the effectiveness of such
change.  Written  confirmation  of  receipt  (i)  given by the recipient of such
notice,  consent,  waiver  or  other  communication,  (ii)  mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and  an  image  of  the  first page of such
transmission  or  (iii)  provided  by a nationally recognized overnight delivery
service,  shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with  clause  (i),  (ii)  or  (iii)  above,  respectively.

Section  4.    Definitions.  For  the  purposes  hereof,  the  following  terms
----------     -----------
shall  have  the  following  meanings:

"Business  Day" means any day except Saturday, Sunday and any day which shall be
 -------------
a  federal  legal  holiday  in  the  United  States  or  a  day on which banking
institutions  are  authorized  or  required by law or other government action to
close.

"Change of Control Transaction" means the occurrence of (a) an acquisition after
 -----------------------------
the  date  hereof  by  an individual or legal entity or "group" (as described in
Rule  13d-5(b)(1)  promulgated  under  the  Exchange  Act)  of effective control
(whether  through legal or beneficial ownership of capital stock of the Obligor,
by  contract  or  otherwise)  of  in excess of fifty percent (50%) of the voting
securities  of  the Obligor (except that the acquisition of voting securities by
the  Holder  shall  not  constitute a Change of Control Transaction for purposes
hereof), (b) a replacement at one time or over time of more than one-half of the
members  of  the  board  of  directors of the Obligor which is not approved by a
majority  of  those individuals who are members of the board of directors on the
date  hereof (or by those individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors was approved by
a  majority of the members of the board of directors who are members on the date
hereof), (c) the merger, consolidation or sale of fifty percent (50%) or more of
the assets of the Obligor or any subsidiary of the Obligor in one or a series of
related  transactions  with  or into another entity, or (d) the execution by the
Obligor of an agreement to which the Obligor is a party or by which it is bound,
providing  for  any  of  the  events  set  forth  above  in  (a),  (b)  or  (c).

"Commission"  means  the  Securities  and  Exchange  Commission.
 ----------

"Common  Stock"  means  the  common stock, par value $0.0001, of the Obligor and
 -------------
stock  of  any  other  class  into which such shares may hereafter be changed or
reclassified.

                                      EX-30
<PAGE>

"Conversion  Date"  shall  mean the date upon which the Holder gives the Obligor
 ----------------
notice  of  their  intention  to  effectuate a conversion of this Debenture into
shares  of  the  Company's  Common  Stock  as  outlined  herein.

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

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

"Closing  Bid Price" means the price per share in the last reported trade of the
 ------------------
Common  Stock  on  the  OTC  or  on the exchange  which the Common Stock is then
listed  as  quoted  by  Bloomberg,  LP.

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

 "Securities  Act"  means  the Securities Act of 1933, as amended, and the rules
  ---------------
and  regulations  promulgated  thereunder.

"Trading  Day" means a day on which the shares of Common Stock are quoted on the
 ------------
OTC  or quoted or traded on such Subsequent Market on which the shares of Common
Stock  are then quoted or listed; provided, that in the event that the shares of
Common  Stock  are  not listed or quoted, then Trading Day shall mean a Business
Day.

"Transaction  Documents"  means  the  Securities Purchase Agreement or any other
 ----------------------
agreement  delivered  in  connection  with  the  Securities  Purchase Agreement,
including,  without limitation, the Amended and Restated Security Agreement, the
Subsidiary  Agreement,  the  Pledge  Agreement,  the  Irrevocable Transfer Agent
Instructions,  the  Investor  Registration  Rights Agreement and the Warrants of
even  date  herewith.

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

"Underlying  Shares  Registration  Statement"  means  a  registration  statement
 -------------------------------------------
meeting  the  requirements  set  forth  in  the  Registration  Rights Agreement,
covering  among  other things the resale of the Underlying Shares and naming the
Holder  as  a  "selling  stockholder"  thereunder.

Section  5.     Except  as  expressly  provided  herein,  no  provision  of this
----------
Debenture  shall  alter  or  impair  the  obligations  of the Obligor, which are
absolute  and unconditional, to pay the principal of, interest and other charges
(if  any)  on,  this  Debenture at the time, place, and rate, and in the coin or
currency,  herein  prescribed.  This  Debenture  is  a  direct obligation of the
Obligor.  This  Debenture  ranks  pari  passu  with  all other Debentures now or
hereafter  issued under the terms set forth herein. As long as this Debenture is
outstanding,  the  Obligor  shall not and shall cause their subsidiaries not to,
without  the  consent of the Holder, (i) amend its certificate of incorporation,
bylaws  or  other  charter documents so as to adversely affect any rights of the
Holder;  (ii)  repay,  repurchase  or  offer  to  repay, repurchase or otherwise
acquire  shares  of its Common Stock or other equity securities other than as to

                                      EX-31
<PAGE>

the  Underlying Shares to the extent permitted or required under the Transaction
Documents;  or  (iii)  enter  into  any  agreement  with  respect  to any of the
foregoing.

Section  6.     This Debenture shall not entitle the Holder to any of the rights
----------
of  a  stockholder  of  the  Obligor, including without limitation, the right to
vote, to receive dividends and other distributions, or to receive any notice of,
or  to attend, meetings of stockholders or any other proceedings of the Obligor,
unless  and  to  the  extent converted into shares of Common Stock in accordance
with  the  terms  hereof.

Section  7.     If  this  Debenture is mutilated, lost, stolen or destroyed, the
----------
Obligor  shall  execute  and  deliver, in exchange and substitution for and upon
cancellation  of the mutilated Debenture, or in lieu of or in substitution for a
lost, stolen or destroyed Debenture, a new Debenture for the principal amount of
this  Debenture so mutilated, lost, stolen or destroyed but only upon receipt of
evidence  of  such  loss,  theft  or  destruction  of such Debenture, and of the
ownership  hereof,  and  indemnity, if requested, all reasonably satisfactory to
the  Obligor.

Section  8.     No  indebtedness  of  the Obligor is senior to this Debenture in
----------
right  of payment, whether with respect to interest, damages or upon liquidation
or dissolution or otherwise.  Without the Holder's consent, the Obligor will not
and  will not permit any of their subsidiaries to, directly or indirectly, enter
into,  create, incur, assume or suffer to exist any indebtedness of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired
or  any  interest  therein or any income or profits there from that is senior in
any  respect  to  the  obligations  of  the  Obligor  under  this  Debenture.

Section  9.     This  Debenture shall be governed by and construed in accordance
----------
with  the laws of the State of New Jersey, without giving effect to conflicts of
laws  thereof.  Each of the parties consents to the jurisdiction of the Superior
Courts  of  the State of New Jersey sitting in Hudson County, New Jersey and the
U.S.  District  Court  for  the  District  of New Jersey  sitting in Newark, New
Jersey  in  connection  with any dispute arising under this Debenture and hereby
waives,  to  the  maximum  extent permitted by law, any objection, including any
objection  based  on forum non conveniens to the bringing of any such proceeding
                     ----- --- ----------
in  such  jurisdictions.

Section  10.     If  the Obligor fails to strictly comply with the terms of this
-----------
Debenture,  then  the  Obligor shall reimburse the Holder promptly for all fees,
costs  and expenses, including, without limitation, attorneys' fees and expenses
incurred  by  the  Holder  in  any  action  in  connection  with this Debenture,
including, without limitation, those incurred: (i) during any workout, attempted
workout,  and/or  in  connection  with  the  rendering of legal advice as to the
Holder's rights, remedies and obligations, (ii) collecting any sums which become
due  to  the  Holder,  (iii)  defending  or  prosecuting  any  proceeding or any
counterclaim  to  any proceeding or appeal; or (iv) the protection, preservation
or  enforcement  of  any  rights  or  remedies  of  the  Holder.

Section  11.     Any  waiver  by the Holder of a breach of any provision of this
-----------
Debenture  shall  not  operate  as  or  be construed to be a waiver of any other
breach  of  such  provision  or  of  any  breach  of any other provision of this
Debenture. The failure of the Holder to insist upon strict adherence to any term
of  this  Debenture on one or more occasions shall not be considered a waiver or

                                      EX-32
<PAGE>

deprive  that  party  of the right thereafter to insist upon strict adherence to
that  term  or  any other term of this Debenture. Any waiver must be in writing.

Section  12.     If  any  provision  of  this  Debenture  is invalid, illegal or
-----------
unenforceable,  the balance of this Debenture shall remain in effect, and if any
provision  is  inapplicable to any person or circumstance, it shall nevertheless
remain  applicable  to all other persons and circumstances. If it shall be found
that  any  interest  or other amount deemed interest due hereunder shall violate
applicable  laws  governing usury, the applicable rate of interest due hereunder
shall  automatically be lowered to equal the maximum permitted rate of interest.
The  Obligor  covenants (to the extent that it may lawfully do so) that it shall
not  at  any  time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would  prohibit  or  forgive  the  Obligor from paying all or any portion of the
principal  of  or  interest  on  this Debenture as contemplated herein, wherever
enacted,  now  or  at  any  time  hereafter  in  force,  or which may affect the
covenants  or  the performance of this indenture, and the Obligor (to the extent
it  may lawfully do so) hereby expressly waives all benefits or advantage of any
such  law,  and  covenants  that it will not, by resort to any such law, hinder,
delay  or  impeded  the execution of any power herein granted to the Holder, but
will  suffer  and  permit  the execution of every such as though no such law has
been  enacted.

Section  13.     Whenever any payment or other obligation hereunder shall be due
-----------
on  a  day  other  than  a  Business Day, such payment shall be made on the next
succeeding  Business  Day.

Section  14.     THE  PARTIES  HEREBY  KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY
-----------
WAIVE  THE  RIGHT  ANY  OF  THEM  MAY  HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION  BASED  HEREON  OR  ARISING  OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT  OR  ANY  TRANSACTION  DOCUMENT  OR  ANY  COURSE OF CONDUCT, COURSE OF
DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS
PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS
AGREEMENT.

                   [REMAINDER OF PAGE INTENTIONLLY LEFT BLANK]

                                      EX-33
<PAGE>

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

                                                            NS8 CORPORATION

                                                            By: /s/ Anthony Alda
                                                                ----------------
                                                            Name: Anthony Alda
                                                            Title: CEO

                                      EX-34
<PAGE>

                                   EXHIBIT "A"
                                   -----------
                              NOTICE OF CONVERSION
                              --------------------
        (To be executed by the Holder in order to convert the Debenture)

TO:

     The  undersigned  hereby  irrevocably  elects  to  convert  $
                                                                  -------------
of  the  principal amount of the above Debenture into Shares of Common Stock of
NS8  Corporation,  according  to  the  conditions  stated  therein,  as  of  the
Conversion  Date  written  below.

<TABLE>
<CAPTION>
<S>                             <C>
Conversion Date:
                                --------------------------------------
Applicable Conversion Price:
                                --------------------------------------
Signature:
                                --------------------------------------
Name:
                                --------------------------------------
Address:
                                --------------------------------------
Amount to be converted:         $
                                --------------------------------------
Amount of Debenture
 unconverted:                   $
                                --------------------------------------
Conversion Price per share:     $
                                --------------------------------------
Number of shares of Common
Stock to be issued:
                                --------------------------------------
Please issue the shares of
 Common Stock in the following
 name and to the following
 address:
                                --------------------------------------
Issue to:
                                --------------------------------------
Authorized Signature:
                                --------------------------------------
Name:
                                --------------------------------------
Title:
                                --------------------------------------
Phone Number:
                                --------------------------------------
Broker DTC Participant Code:
                                --------------------------------------
Account Number:
                                --------------------------------------
</TABLE>

                                      EX-35
<PAGE>EXHIBIT 10.4

                     AMENDED AND RESTATED SECURITY AGREEMENT
                     ---------------------------------------

     THIS  AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement"), is entered
                                                         ---------
into  and  made  effective  as  of  November  ___,  2005,  by  and  between  NS8
CORPORATION, a Delaware corporation with its principal place of business located
at 600 University Street, Suite 1525, Seattle, WA 98101 (the "Company"), and the
                                                              -------
BUYER(S)  listed  on  Schedule  I  attached to the Securities Purchase Agreement
dated  the  date  hereof  (the  "Secured  Party").
                                 --------------

WHEREAS,  the  Company  issued to the Secured Party convertible debentures under
the Securities Purchase Agreement dated May 19, 2004 between the Company and the
Secured  Party.  This  Agreement  shall amend and restate the Security Agreement
between  the  Company  and  the  Secured  Party  dated  May  19,  2004;

WHEREAS,  the  Company  has  requested  the  Secured  Party  to  make additional
financing  available  to  the  Company;

WHEREAS,  the  Secured  Party is willing to provide such additional financing on
the  condition that such additional financing is secured hereunder and under the
UCC-1  Financing  Statement  filed  in  Delaware  on  June 14, 2004, file number
2004-167-7198-7,  in connection with the Securities Purchase Agreement dated May
19,  2004  and  the  convertible  debentures  issued  thereto;

WHEREAS,  all  of  the Company's obligations to the Secured Party are secured by
this  Agreement,  which  was  perfected pursuant to that certain UCC-1 Financing
Statement  filed  in  Delaware  on  June  14, 2004, file number 2004-167-7198-7;

WHEREAS,  the  Company shall issue and sell to the Secured Party, as provided in
the  Securities Purchase Agreement of even date herewith between the Company and
the  Secured  Party (the "Securities Purchase Agreement"), and the Secured Party
                          -----------------------------
shall purchase up to Three Million One Hundred Sixty Three Thousand Four Hundred
Thirty  Dollars ($3,163,430) of secured convertible debentures (the "Convertible
                                                                     -----------
Debentures"),  which  shall  be  convertible into shares of the Company's common
----------
stock,  par  value  $0.0001  (the "Common Stock") (as converted, the "Conversion
                                   ------------                       ----------
Shares")  in  the  respective  amounts  set forth opposite each Buyer(s) name on
------
Schedule  I  attached  to  the  Securities  Purchase  Agreement;

WHEREAS,  to induce the Secured Party to enter into the transaction contemplated
by  the  Securities Purchase Agreement, the Convertible Debentures, the Investor
Registration  Rights Agreement of even date herewith between the Company and the
Secured  Party  (the  "Investor  Registration Rights Agreement"), the Pledge and
                       ---------------------------------------
Escrow  Agreement of even date herewith among the Company, the Secured Party and
David Gonzalez, Esq. (the "Pledge Agreement"), the Escrow Agreement of even date
                           ----------------
herewith  among  the  Company,  the Secured Party, and David Gonzalez, Esq. (the
"Escrow  Agreement"),  and the Irrevocable Transfer Agent Instructions among the
 -----------------
Company,  the  Secured  Party,  Transfer  Agent,  and  David Gonzalez, Esq. (the
"Transfer  Agent  Instructions")  (collectively  referred to as the "Transaction
 -----------------------------                                       -----------
Documents"),  the Company hereby grants to the Secured Party a security interest
---------
in  and  to  the  pledged  property identified on Exhibit A hereto (collectively
                                                  ---------
referred  to  as  the  "Pledged  Property")  until  the  satisfaction  of  the
                        -----------------
Obligations,  as  defined  herein  below.

                                      EX-36
<PAGE>

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein
contained,  and  for  other  good  and  valuable consideration, the adequacy and
receipt  of  which  are  hereby acknowledged, the parties hereto hereby agree as
follows:

                                   ARTICLE 1.

                         DEFINITIONS AND INTERPRETATIONS
                         -------------------------------

Section  1.1.     Recitals.
                  --------

     The  above  recitals  are  true and correct and are incorporated herein, in
their  entirety,  by  this  reference.

Section  1.2.     Interpretations.
                  ---------------

     Nothing  herein  expressed  or implied is intended or shall be construed to
confer  upon  any person other than the Secured Party any right, remedy or claim
under  or  by  reason  hereof.

Section  1.3.     Obligations  Secured.
                  --------------------

     The  obligations  secured hereby are any and all obligations of the Company
now  existing  or  hereinafter  incurred  to  the Secured Party, whether oral or
written  and  whether  arising  before,  on  or after the date hereof including,
without  limitation, those obligations of the Company to the Secured Party under
this  Agreement,  the  Transaction  Documents,  and  any  other  amounts  now or
hereafter  owed  to  the  Secured  Party  by the Company thereunder or hereunder
(collectively,  the  "Obligations").
                      -----------

                                   ARTICLE 2.

                 PLEDGED PROPERTY, ADMINISTRATION OF COLLATERAL
                 ----------------------------------------------
                      AND TERMINATION OF SECURITY INTEREST
                      ------------------------------------

Section  2.1.     Pledged  Property.
                  -----------------

     (a)     Company  hereby  pledges  to  the Secured Party, and creates in the
Secured  Party  for  its  benefit,  a  security interest for such time until the
Obligations  are  paid  in full, in and to all of the property of the Company as
set  forth  in  Exhibit  "A"  attached  hereto  and the products thereof and the
                ------------
proceeds  of  all  such  items  (collectively,  the  "Pledged  Property"):
                                                      -----------------

     (b)  Simultaneously  with the execution and delivery of this Agreement, the
Company  shall  make,  execute,  acknowledge,  file,  record  and deliver to the
Secured Party any documents reasonably requested by the Secured Party to perfect
its security interest in the Pledged Property. Simultaneously with the execution
and delivery of this Agreement, the Company shall make, execute, acknowledge and
deliver  to the Secured Party such documents and instruments, including, without
limitation,  financing statements, certificates, affidavits and forms as may, in
the Secured Party's reasonable judgment, be necessary to effectuate, complete or
perfect, or to continue and preserve, the security interest of the Secured Party

                                      EX-37
<PAGE>

in  the  Pledged  Property,  and  the  Secured  Party
shall hold such documents and instruments as secured party, subject to the terms
and  conditions  contained  herein.

Section  2.2.     Rights;  Interests;  Etc.
                  -------------------------

     (a)     So  long as no Event of Default (as hereinafter defined) shall have
occurred  and  be  continuing:

     (i) the Company shall be entitled to exercise any and all rights pertaining
to  the  Pledged  Property  or any part thereof for any purpose not inconsistent
with  the  terms  hereof;  and

     (ii)  the  Company  shall  be  entitled  to  receive and retain any and all
payments  paid  or  made  in  respect  of  the  Pledged  Property.

     (b)     Upon  the  occurrence  and  during  the  continuance of an Event of
Default:

     (i)  All  rights  of  the  Company  to  exercise  the rights which it would
otherwise  be  entitled  to exercise pursuant to Section 2.2(a)(i) hereof and to
receive  payments  which  it would otherwise be authorized to receive and retain
pursuant  to  Section  2.2(a)(ii) hereof shall be suspended, and all such rights
shall  thereupon become vested in the Secured Party who shall thereupon have the
sole  right  to exercise such rights and to receive and hold as Pledged Property
such  payments;  provided,  however,  that  if  the  Secured  Party shall become
entitled  and  shall  elect  to  exercise  its  right  to realize on the Pledged
Property  pursuant  to  Article  5  hereof,  then  all cash sums received by the
Secured  Party, or held by Company for the benefit of the Secured Party and paid
over  pursuant  to  Section  2.2(b)(ii)  hereof,  shall  be  applied against any
outstanding  Obligations;  and

     (ii)  All  interest, dividends, income and other payments and distributions
which  are  received  by  the  Company  contrary  to  the  provisions of Section
2.2(b)(i)  hereof  shall  be  received  in  trust for the benefit of the Secured
Party,  shall  be  segregated  from  other  property of the Company and shall be
forthwith  paid  over  to  the  Secured  Party;  or

     (iii)  The Secured Party in its sole discretion shall be authorized to sell
any  or all of the Pledged Property at public or private sale in order to recoup
all  of  the  outstanding  principal  plus accrued interest owed pursuant to the
Convertible  Debenture  as  described  herein.

     (c)     An  "Event  of Default" shall be deemed to have occurred under this
                  -----------------
Agreement  upon  an  Event  of  Default  under  the  Convertible  Debentures.

                                      EX-38
<PAGE>

                                   ARTICLE 3.

                          ATTORNEY-IN-FACT; PERFORMANCE
                          -----------------------------

Section  3.1.     Secured  Party  Appointed  Attorney-In-Fact.
                  -------------------------------------------

     Upon the occurrence of an Event of Default, the Company hereby appoints the
Secured  Party  as  its  attorney-in-fact,  with full authority in the place and
stead  of  the Company and in the name of the Company or otherwise, from time to
time  in  the  Secured  Party's discretion to take any action and to execute any
instrument  which  the Secured Party may reasonably deem necessary to accomplish
the  purposes  of  this Agreement, including, without limitation, to receive and
collect all instruments made payable to the Company representing any payments in
respect  of  the Pledged Property or any part thereof and to give full discharge
for  the  same.  The  Secured  Party  may  demand, collect, receipt for, settle,
compromise,  adjust,  sue  for, foreclose, or realize on the Pledged Property as
and  when  the  Secured  Party may determine.  To facilitate collection from and
after an occurrence of an Event of Default, the Secured Party may notify account
debtors  and  obligors  on any Pledged Property to make payments directly to the
Secured  Party.

Section  3.2.     Secured  Party  May  Perform.
                  ----------------------------

     If the Company fails to perform any agreement contained herein, the Secured
Party,  at  its  option,  may  itself  perform,  or  cause  performance of, such
agreement,  and  the  expenses  of  the  Secured  Party  incurred  in connection
therewith shall be included in the Obligations secured hereby and payable by the
Company  under  Section  8.3.

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

Section  4.1.     Authorization;  Enforceability.
                  ------------------------------

     Each  of  the  parties hereto represents and warrants that it has taken all
action  necessary  to  authorize the execution, delivery and performance of this
Agreement  and  the  transactions  contemplated  hereby;  and upon execution and
delivery,  this Agreement shall constitute a valid and binding obligation of the
respective  party, subject to applicable bankruptcy, insolvency, reorganization,
moratorium  and  similar  laws  affecting creditors' rights or by the principles
governing  the  availability  of  equitable  remedies.

Section  4.2.     Ownership  of  Pledged  Property.
                  --------------------------------

     The  Company  warrants  and  represents that it is the legal and beneficial
owner  of  the  Pledged  Property free and clear of any lien, security interest,
option  or  other charge or encumbrance except for the security interest created
by  this  Agreement.

                                      EX-39
<PAGE>

                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
                    ----------------------------------------

Section  5.1.     Default  and  Remedies.
                  ----------------------

     (a) If an Event of Default occurs, then in each such case the Secured Party
may  declare  the  Obligations to be due and payable immediately, by a notice in
writing  to  the  Company,  and upon any such declaration, the Obligations shall
become  immediately  due  and  payable.

     (b)  Upon  the  occurrence of an Event of Default, the Secured Party shall:
(i)  be  entitled  to  receive  all  distributions  with  respect to the Pledged
Property,  (ii) to cause the Pledged Property to be transferred into the name of
the  Secured Party or its nominee, (iii) to dispose of the Pledged Property, and
(iv) to realize upon any and all rights in the Pledged Property then held by the
Secured  Party.

Section  5.2.     Method of Realizing Upon the Pledged Property: Other Remedies.
                  -------------------------------------------------------------

     Upon  the  occurrence of an Event of Default, in addition to any rights and
remedies  available  at  law or in equity, the following provisions shall govern
the  Secured  Party's  right  to  realize  upon  the  Pledged  Property:

     (a) Any item of the Pledged Property may be sold for cash or other value in
any  number  of lots at brokers board, public auction or private sale and may be
sold  without  demand,  advertisement  or  notice (except that the Secured Party
shall give the Company ten (10) days' prior written notice of the time and place
or  of  the  time  after  which  a  private  sale  may  be  made  (the  "Sale
                                                                         ----
Notice")),  which  notice period is hereby agreed to be commercially reasonable.
At  any  sale  or  sales  of  the  Pledged Property, the Company may bid for and
purchase the whole or any part of the Pledged Property and, upon compliance with
the  terms  of  such  sale,  may  hold,  exploit and dispose of the same without
further  accountability  to  the  Secured  Party.  The  Company will execute and
deliver,  or  cause  to  be executed and delivered, such instruments, documents,
assignments,  waivers,  certificates,  and  affidavits and supply or cause to be
supplied  such  further  information and take such further action as the Secured
Party  reasonably  shall  require  in  connection  with  any  such  sale.

     (b)  Any  cash  being held by the Secured Party as Pledged Property and all
cash  proceeds  received by the Secured Party in respect of, sale of, collection
from, or other realization upon all or any part of the Pledged Property shall be
applied  as  follows:

     (i)     to  the  payment  of  all  amounts  due  the  Secured Party for the
expenses  reimbursable  to  it  hereunder  or owed to it pursuant to Section 8.3
hereof;

     (ii)  to  the  payment  of  the  Obligations  then  due  and  unpaid.

     (iii)  the  balance,  if  any,  to  the person or persons entitled thereto,
including,  without  limitation,  the  Company.

                                      EX-40
<PAGE>

     (c)     In  addition  to  all  of the rights and remedies which the Secured
Party  may  have pursuant to this Agreement, the Secured Party shall have all of
the  rights  and  remedies provided by law, including, without limitation, those
under  the  Uniform  Commercial  Code.

     (i)     If the Company fails to pay such amounts due upon the occurrence of
an  Event of Default which is continuing, then the Secured Party may institute a
judicial  proceeding  for  the  collection  of  the  sums so due and unpaid, may
prosecute  such  proceeding to judgment or final decree and may enforce the same
against  the Company and collect the monies adjudged or decreed to be payable in
the  manner  provided  by law out of the property of Company, wherever situated.

     (ii)  The  Company  agrees that it shall be liable for any reasonable fees,
expenses and costs incurred by the Secured Party in connection with enforcement,
collection  and  preservation  of  the Transaction Documents, including, without
limitation, reasonable legal fees and expenses, and such amounts shall be deemed
included  as  Obligations secured hereby and payable as set forth in Section 8.3
hereof.

Section  5.3.     Proofs  of  Claim.
                  -----------------

     In  case  of  the  pendency  of  any receivership, insolvency, liquidation,
bankruptcy,  reorganization,  arrangement,  adjustment,  composition  or  other
judicial proceeding relating to the Company or the property of the Company or of
such  other obligor or its creditors, the Secured Party (irrespective of whether
the  Obligations  shall  then  be  due  and  payable  as therein expressed or by
declaration  or  otherwise  and  irrespective of whether the Secured Party shall
have made any demand on the Company for the payment of the Obligations), subject
to  the rights of Previous Security Holders, shall be entitled and empowered, by
intervention  in  such  proceeding  or  otherwise:

     (i)  to  file  and  prove  a  claim for the whole amount of the Obligations
and  to  file such other papers or documents as may be necessary or advisable in
order  to  have  the  claims  of  the Secured Party (including any claim for the
reasonable  legal  fees  and expenses and other expenses paid or incurred by the
Secured  Party  permitted  hereunder  and  of  the Secured Party allowed in such
judicial  proceeding),  and

     (ii)  to  collect  and  receive  any  monies  or  other property payable or
deliverable  on  any  such claims and to distribute the same; and any custodian,
receiver,  assignee, trustee, liquidator, sequestrator or other similar official
in  any  such  judicial  proceeding is hereby authorized by the Secured Party to
make such payments to the Secured Party and, in the event that the Secured Party
shall  consent  to the making of such payments directed to the Secured Party, to
pay  to  the  Secured  Party  any  amounts  for  expenses  due  it  hereunder.

Section  5.4.     Duties  Regarding  Pledged  Property.
                  ------------------------------------

     The  Secured Party shall have no duty as to the collection or protection of
the  Pledged  Property  or  any  income thereon or as to the preservation of any
rights pertaining thereto, beyond the safe custody and reasonable care of any of
the  Pledged  Property  actually  in  the  Secured  Party's  possession.

                                      EX-41
<PAGE>

                                   ARTICLE 6.

                              AFFIRMATIVE COVENANTS
                              ---------------------

     The  Company  covenants and agrees that, from the date hereof and until the
Obligations  have  been fully paid and satisfied, unless the Secured Party shall
consent  otherwise  in  writing  (as  provided  in  Section  8.4  hereof):

Section  6.1.     Existence,  Properties,  Etc.
                  -----------------------------

     (a)     The  Company  shall do, or cause to be done, all things, or proceed
with due diligence with any actions or courses of action, that may be reasonably
necessary  (i)  to  maintain the Company's due organization, valid existence and
good standing under the laws of its state of incorporation, and (ii) to preserve
and keep in full force and effect all qualifications, licenses and registrations
in  those  jurisdictions  in  which  the  failure to do so could have a Material
Adverse Effect (as defined below); and (b) the Company shall not do, or cause to
be  done,  any  act  impairing the Company's corporate power or authority (i) to
carry on the Company's business as now conducted, and (ii) to execute or deliver
this  Agreement  or  any  other  document  delivered  in  connection  herewith,
including,  without  limitation,  any UCC-1 Financing Statements required by the
Secured  Party  to  which  it  is  or  will  be  a  party, or perform any of its
obligations  hereunder  or  thereunder.  For purpose of this Agreement, the term
"Material  Adverse  Effect"  shall  mean  any  material  and  adverse  affect as
 -------------------------
determined  by  Secured Party in its reasonable discretion, whether individually
or  in  the  aggregate,  upon  (a)  the  Company's assets, business, operations,
properties  or  condition,  financial  or  otherwise;  (b) the Company's to make
payment  as  and  when  due  of  all  or any part of the Obligations; or (c) the
Pledged  Property.

Section  6.2.     Financial  Statements  and  Reports.
                  -----------------------------------

     The  Company  shall  furnish  to the Secured Party within a reasonable time
such  financial  data  as  the  Secured Party may reasonably request, including,
without  limitation,  the  following:

     (a)     Copies  of  all  accountants'  reports  and  accompanying financial
reports  submitted  to the Company by independent accountants in connection with
each  annual  examination  of  the  Company.

Section  6.3.     Accounts  and  Reports.
                  ----------------------

     The  Company  shall  maintain a standard system of accounting in accordance
with  generally accepted accounting principles consistently applied and provide,
at  its  sole  expense,  to  the  Secured  Party  the  following:

     (a)  as  soon  as  available,  a  copy of any notice or other communication
alleging  any nonpayment or other material breach or default, or any foreclosure
or  other  action  respecting any material portion of its assets and properties,
received respecting any of the indebtedness of the Company in excess of $100,000
(other  than  the Obligations), or any demand or other request for payment under
any guaranty, assumption, purchase agreement or similar agreement or arrangement
respecting  the  indebtedness  or  obligations  of others in excess of $100,000,
including  any received from any person acting on behalf of the Secured Party or
beneficiary  thereof;  and

                                      EX-42
<PAGE>

     (b) within fifteen (15) days after the making of each submission or filing,
a  copy  of  any  report, financial statement, notice or other document, whether
periodic  or  otherwise,  submitted  to  the  shareholders  of  the  Company, or
submitted  to  or filed by the Company with any governmental authority involving
or affecting (i) the Company that could have a Material Adverse Effect; (ii) the
Obligations;  (iii)  any  part  of  the  Pledged  Property;  or  (iv) any of the
transactions  contemplated  in  this  Agreement  or  the  Loan  Instruments.

Section  6.4.     Maintenance  of  Books  and  Records;  Inspection.
                  -------------------------------------------------

     The  Company  shall  maintain its books, accounts and records in accordance
with  generally  accepted accounting principles consistently applied, and permit
the  Secured  Party, its officers and employees and any professionals designated
by  the Secured Party in writing, at any time to visit and inspect during normal
business hours with reasonable prior notice to the Company any of its properties
(including  but  not  limited  to  the  collateral  security  described  in  the
Transaction  Documents  and/or  the  Loan  Instruments),  corporate  books  and
financial  records,  and  to discuss its accounts, affairs and finances with any
employee,  officer  or  director  thereof.

Section  6.5.     Maintenance  and  Insurance.
                  ---------------------------

     (a)  The  Company  shall  maintain  or  cause  to be maintained, at its own
expense,  all  of its assets and properties in good working order and condition,
making  all  necessary  repairs  thereto  and renewals and replacements thereof.

     (b)  The  Company  shall  maintain  or  cause  to be maintained, at its own
expense, insurance in form, substance and amounts (including deductibles), which
the  Company  deems reasonably necessary to the Company's business, (i) adequate
to  insure all assets and properties of the Company, which assets and properties
are  of  a  character  usually insured by persons engaged in the same or similar
business  against  loss or damage resulting from fire or other risks included in
an extended coverage policy; (ii) against public liability and other tort claims
that may be incurred by the Company; (iii) as may be required by the Transaction
Documents  and/or  applicable  law  and  (iv)  as may be reasonably requested by
Secured  Party,  all  with  adequate,  financially sound and reputable insurers.

Section  6.6.     Contracts  and  Other  Collateral.
                  ---------------------------------

     The  Company  shall perform all of its obligations under or with respect to
each  instrument,  receivable,  contract  and  other  intangible included in the
Pledged  Property  to  which  the Company is now or hereafter will be party on a
timely  basis and in the manner therein required, including, without limitation,
this  Agreement.

Section  6.7.     Defense  of  Collateral,  Etc.
                  ------------------------------

     The  Company  shall defend and enforce its right, title and interest in and
to  any  part  of:  (a) the Pledged Property; and (b) if not included within the
Pledged  Property,  those assets and properties whose loss could have a Material
Adverse  Effect,  the  Company shall defend the Secured Party's right, title and

                                      EX-43
<PAGE>

interest in and to each and every part of the Pledged Property, each against all
manner  of  claims and demands on a timely basis to the full extent permitted by
applicable  law.

Section  6.8.     Payment  of  Debts,  Taxes,  Etc.
                  ---------------------------------

     The  Company  shall  pay,  or cause to be paid, all of its indebtedness and
other  liabilities and perform, or cause to be performed, all of its obligations
in accordance with the respective terms thereof, and pay and discharge, or cause
to  be paid or discharged, all taxes, assessments and other governmental charges
and  levies  imposed upon it, upon any of its assets and properties on or before
the  last  day on which the same may be paid without penalty, as well as pay all
other  lawful  claims  (whether  for  services,  labor,  materials,  supplies or
otherwise)  as  and  when  due

Section  6.9.     Taxes  and  Assessments;  Tax  Indemnity.
                  ----------------------------------------

     The  Company  shall  (a)  file  all  tax  returns and appropriate schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency,  (b)  pay  and  discharge  all  taxes, assessments and governmental
charges  or levies imposed upon the Company, upon its income and profits or upon
any  properties  belonging  to  it,  prior to the date on which penalties attach
thereto,  and  (c) pay all taxes, assessments and governmental charges or levies
that,  if  unpaid,  might  become  a  lien or charge upon any of its properties;
provided,  however,  that  the  Company  in good faith may contest any such tax,
assessment,  governmental  charge or levy described in the foregoing clauses (b)
and  (c)  so  long  as appropriate reserves are maintained with respect thereto.

Section  6.10.     Compliance  with  Law  and  Other  Agreements.
                   ---------------------------------------------

     The  Company  shall  maintain its business operations and property owned or
used  in  connection  therewith  in  compliance with (a) all applicable federal,
state  and  local  laws,  regulations  and  ordinances  governing  such business
operations  and  the use and ownership of such property, and (b) all agreements,
licenses,  franchises,  indentures and mortgages to which the Company is a party
or by which the Company or any of its properties is bound.  Without limiting the
foregoing,  the Company shall pay all of its indebtedness promptly in accordance
with  the  terms  thereof.

Section  6.11.     Notice  of  Default.
                   -------------------

     The  Company  shall  give  written  notice  to  the  Secured  Party  of the
occurrence  of  any  default  or  Event  of  Default  under  this Agreement, the
Transaction  Documents  or  any  other Loan Instrument or any other agreement of
Company  for  the  payment  of  money,  promptly  upon  the  occurrence thereof.

Section  6.12.     Notice  of  Litigation.
                   ----------------------

     The  Company shall give notice, in writing, to the Secured Party of (a) any
actions,  suits  or  proceedings  wherein  the  amount  at issue is in excess of
$50,000,  instituted by any persons against the Company, or affecting any of the
assets  of  the  Company,  and (b) any dispute, not resolved within fifteen (15)
days  of  the  commencement thereof, between the Company on the one hand and any

                                      EX-44
<PAGE>

governmental  or  regulatory  body  on the other hand, which might reasonably be
expected  to  have  a  Material  Adverse  Effect  on  the business operations or
financial  condition  of  the  Company.

                                   ARTICLE 7.

                               NEGATIVE COVENANTS
                               ------------------

     The  Company  covenants  and  agrees  that,  from the date hereof until the
Obligations  have  been  fully paid and satisfied, the Company shall not, unless
the Secured Party shall consent otherwise in writing, which consent shall not be
unreasonably  withheld  or  unreasonably  delayed:

Section  7.1.     Indebtedness.
                  ------------

     The Company shall not directly or indirectly permit, create, incur, assume,
permit  to  exist,  increase,  renew  or  extend on or after the date hereof any
indebtedness  on  its  part,  including  commitments,  contingencies  and credit
availabilities,  or  apply  for  or  offer  or  agree to do any of the foregoing
(excluding  any indebtedness of the Company to the Secured Party, trade accounts
payable and accrued expenses incurred in the ordinary course of business and the
endorsement  of  negotiable instruments payable to the Company, respectively for
deposit  or  collection  in  the  ordinary  course  of  business).

Section  7.2.     Liens  and  Encumbrances.
                  ------------------------

     The Company shall not directly or indirectly make, create, incur, assume or
permit to exist any assignment, transfer, pledge, mortgage, security interest or
other  lien  or  encumbrance  of  any  nature  in, to or against any part of the
Pledged  Property or of the Company's capital stock, or offer or agree to do so,
or  own  or  acquire  or agree to acquire any asset or property of any character
subject  to  any  of  the foregoing encumbrances (including any conditional sale
contract  or  other  title retention agreement), or assign, pledge or in any way
transfer  or  encumber  its right to receive any income or other distribution or
proceeds  from  any part of the Pledged Property or the Company's capital stock;
or  enter  into  any sale-leaseback financing respecting any part of the Pledged
Property  as  lessee, or cause or assist the inception or continuation of any of
the  foregoing.

Section 7.3.     Certificate of Incorporation, By-Laws, Mergers, Consolidations,
                 ---------------------------------------------------------------
Acquisitions  and  Sales.
------------------------

     Without the prior express written consent of the Secured Party, the Company
shall  not:  (a) Amend its Certificate of Incorporation or By-Laws; (b) issue or
sell  its  stock,  stock  options, bonds, notes or other corporate securities or
obligations (except as otherwise permitted in the Transaction Documents); (c) be
a  party  to any merger, consolidation or corporate reorganization, (d) purchase
or  otherwise acquire all or substantially all of the assets or stock of, or any
partnership  or joint venture interest in, any other person, firm or entity, (e)
sell,  transfer,  convey,  grant  a  security  interest  in  or lease all or any
substantial  part  of its assets, nor (f) create any subsidiaries nor convey any
of  its  assets  to  any  newly  formed  subsidiary.

                                      EX-45
<PAGE>

Section  7.4.     Management,  Ownership.
                  ----------------------

     The  Company  shall not materially change its ownership, executive staff or
management  without  the  prior  written  consent  of  the  Secured  Party.  The
ownership, executive staff and management of the Company are material factors in
the Secured Party's willingness to institute and maintain a lending relationship
with  the  Company.

Section  7.5.     Dividends,  Etc.
                  ---------------

     The  Company  shall not declare or pay any dividend of any kind, in cash or
in  property, on any class of its capital stock, nor purchase, redeem, retire or
otherwise  acquire for value any shares of such stock, nor make any distribution
of  any kind in respect thereof, nor make any return of capital to shareholders,
nor  make  any  payments  in respect of any pension, profit sharing, retirement,
stock  option,  stock  bonus,  incentive compensation or similar plan (except as
required  or  permitted  hereunder),  without  the  prior written consent of the
Secured  Party,  which  consent  shall  not  be  unreasonably  withheld.

Section  7.6.     Guaranties;  Loans.
                  ------------------

     The  Company  shall  not  guarantee  nor  be  liable in any manner, whether
directly  or  indirectly,  or  become contingently liable after the date of this
Agreement  in  connection  with the obligations or indebtedness of any person or
persons,  except  for  (i)  the  indebtedness  currently  secured  by  the liens
identified  on  the Pledged Property identified on Exhibit A hereto and (ii) the
endorsement  of  negotiable  instruments  payable  to the Company for deposit or
collection  in  the ordinary course of business.  The Company shall not make any
loan,  advance  or  extension  of  credit to any person other than in the normal
course  of  its  business.

Section  7.7.     Conduct  of  Business.
                  ---------------------

     The Company will continue to engage, in an efficient and economical manner,
in  a  business  of the same general type as conducted by it on the date of this
Agreement.

Section  7.8.     Places  of  Business.
                  --------------------

     The  location  of  the  Company's chief place of business is 600 University
Street,  Suite  1525,  Seattle,  WA  98101.  The  Company  shall  not change the
location  of its chief place of business, chief executive office or any place of
business disclosed to the Secured Party or move any of the Pledged Property from
its  current  location  without  thirty  (30)  days' prior written notice to the
Secured  Party  in  each  instance.

                                   ARTICLE 8.

                                  MISCELLANEOUS
                                  -------------

Section  8.1.     Notices.
                  -------

     All  notices  or  other  communications  required  or permitted to be given
pursuant  to  this Agreement shall be in writing and shall be considered as duly
given  on:  (a)  the  date  of  delivery,  if delivered in person, by nationally

                                      EX-46
<PAGE>

recognized  overnight  delivery  service  or  (b) five (5) days after mailing if
mailed  from  within  the  continental  United  States by certified mail, return
receipt  requested  to  the  party  entitled  to  receive  the  same:

If  to  the  Secured  Party:     Cornell  Capital  Partners,  LP
                                 101  Hudson  Street-Suite  3700
                                 Jersey  City,  New  Jersey  07302
                                 Attention:  Mark  Angelo
                                   Portfolio  Manager
                                 Telephone:  (201)  986-8300
                                 Facsimile:  (201)  985-8266

With  a  copy  to:               David  Gonzalez,  Esq.
                                 101  Hudson  Street,  Suite  3700
                                 Jersey  City,  NJ  07302
                                 Telephone:  (201)  985-8300
                                 Facsimile:  (201)  985-8266

And  if  to  the  Company:       NS8  Corporation
                                 600  University  Street  -  Suite  1525
                                 Seattle,  WA  98101
                                 Attention:  Anthony  Alda
                                 Telephone:  (604)  677-6994
                                 Facsimile:  (604)  677-7011

With  a  copy  to:               McGuireWoods,  LLP
                                 1345  Avenue  of  the  Americas
                                 New  York,  NY  10105
                                 Attention:  Louis  W.  Zehil,  Esq.
                                 Telephone:  (212)  548-2138
                                 Facsimile:  (212)  680-2175

     Any  party  may  change  its  address  by  giving notice to the other party
stating its new address.  Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant  to  this  Agreement.

Section  8.2.     Severability.
                  ------------

     If  any provision of this Agreement shall be held invalid or unenforceable,
such  invalidity  or  unenforceability  shall  attach only to such provision and
shall  not  in  any  manner  affect or render invalid or unenforceable any other
severable  provision  of this Agreement, and this Agreement shall be carried out
as  if  any  such  invalid or unenforceable provision were not contained herein.

                                      EX-47
<PAGE>

Section  8.3.     Expenses.
                  --------

     In  the  event  of an Event of Default, the Company will pay to the Secured
Party  the  amount  of any and all reasonable expenses, including the reasonable
fees  and  expenses  of  its  counsel,  which  the  Secured  Party  may incur in
connection  with:  (i)  the  custody or preservation of, or the sale, collection
from,  or other realization upon, any of the Pledged Property; (ii) the exercise
or  enforcement of any of the rights of the Secured Party hereunder or (iii) the
failure  by  the  Company  to  perform or observe any of the material provisions
hereof.

Section  8.4.     Waivers,  Amendments,  Etc.
                  ---------------------------

     The  Secured  Party's  delay  or  failure at any time or times hereafter to
require  strict  performance  by  Company  of  any  undertakings,  agreements or
covenants  shall  not  waive, affect, or diminish any right of the Secured Party
under  this Agreement to demand strict compliance and performance herewith.  Any
waiver  by  the  Secured Party of any Event of Default shall not waive or affect
any other Event of Default, whether such Event of Default is prior or subsequent
thereto  and whether of the same or a different type.  None of the undertakings,
agreements  and  covenants  of  the  Company contained in this Agreement, and no
Event  of Default, shall be deemed to have been waived by the Secured Party, nor
may  this  Agreement  be  amended,  changed  or  modified,  unless  such waiver,
amendment,  change  or  modification  is  evidenced  by an instrument in writing
specifying  such  waiver,  amendment,  change  or modification and signed by the
Secured  Party.

Section 8.5.     Continuing  Security  Interest.
                 ------------------------------

     This  Agreement  shall create a continuing security interest in the Pledged
Property and shall: (i) remain in full force and effect until payment in full of
the  Obligations;  and  (ii)  be binding upon the Company and its successors and
heirs and (iii) inure to the benefit of the Secured Party and its successors and
assigns.  Upon  the  payment  or  satisfaction  in  full of the Obligations, the
Company  shall be entitled to the return, at its expense, of such of the Pledged
Property  as  shall  not have been sold in accordance with Section 5.2 hereof or
otherwise  applied  pursuant  to  the  terms  hereof.

Section  8.6.     Independent  Representation.
                  ---------------------------

     Each  party  hereto acknowledges and agrees that it has received or has had
the  opportunity to receive independent legal counsel of its own choice and that
it has been sufficiently apprised of its rights and responsibilities with regard
to  the  substance  of  this  Agreement.

Section  8.7.     Applicable  Law:  Jurisdiction.
                  ------------------------------

     This  Agreement shall be governed by and interpreted in accordance with the
laws  of the State of New Jersey without regard to the principles of conflict of
laws.  The  parties further agree that any action between them shall be heard in
Hudson  County,  New Jersey, and expressly consent to the jurisdiction and venue
of  the  Superior  Court  of New Jersey, sitting in Hudson County and the United
States  District  Court  for  the  District of New Jersey sitting in Newark, New
Jersey  for  the  adjudication  of  any  civil  action asserted pursuant to this
Paragraph.

                                      EX-48
<PAGE>

Section  8.8.     Waiver  of  Jury  Trial.
                  -----------------------

     AS  A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND  TO  MAKE  THE  FINANCIAL  ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY
WAIVES  ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO
THIS  AGREEMENT  AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

Section  8.9.     Entire  Agreement.
                  -----------------

     This  Agreement  constitutes  the  entire  agreement  among the parties and
supersedes  any  prior agreement or understanding among them with respect to the
subject  matter  hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      EX-49
<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  this  Security
Agreement  as  of  the  date  first  above  written.

                                                    COMPANY:
                                                    NS8 CORPORATION

                                                    By: /s/ Anthony Alda
                                                        ------------------------
                                                    Name: Anthony Alda
                                                    Title: CEO

                                                    SECURED PARTY:
                                                    CORNELL CAPITAL PARTNERS, LP

                                                    By: Yorkville Advisors, LLC
                                                    Its: General Partner

                                                    By: /s/ Mark Angelo
                                                        ------------------------
                                                    Name: Mark Angelo
                                                    Title: Portfolio Manager

                                      EX-50
<PAGE>

                                    EXHIBIT A
                         DEFINITION OF PLEDGED PROPERTY

     For  the purpose of securing prompt and complete payment and performance by
the  Company  of  all  of  the  Obligations,  the  Company  unconditionally  and
irrevocably hereby grants to the Secured Party a continuing security interest in
and  to,  and  lien  upon,  the  following  Pledged  Property  of  the  Company:

     (a)  all  goods  of  the Company, including, without limitation, machinery,
equipment,  furniture,  furnishings,  fixtures,  signs,  lights,  tools,  parts,
supplies  and  motor  vehicles  of  every kind and description, now or hereafter
owned  by  the Company or in which the Company may have or may hereafter acquire
any  interest,  and  all  replacements, additions, accessions, substitutions and
proceeds  thereof,  arising  from  the  sale  or  disposition thereof, and where
applicable,  the  proceeds  of insurance and of any tort claims involving any of
the  foregoing;

     (b) all inventory of the Company, including, but not limited to, all goods,
wares,  merchandise, parts, supplies, finished products, other tangible personal
property, including such inventory as is temporarily out of Company's custody or
possession  and  including  any  returns  upon  any  accounts or other proceeds,
including  insurance  proceeds, resulting from the sale or disposition of any of
the  foregoing;

     (c)  all contract rights and general intangibles of the Company, including,
without  limitation,  goodwill, trademarks, trade styles, trade names, leasehold
interests,  partnership  or  joint  venture  interests,  patents  and  patent
applications,  copyrights,  deposit  accounts  whether  now  owned  or hereafter
created;

     (d) all documents, warehouse receipts, instruments and chattel paper of the
Company  whether  now  owned  or  hereafter  created;

     (e)  all  accounts  and  other  receivables,  instruments or other forms of
obligations  and  rights to payment of the Company (herein collectively referred
to  as "Accounts"), together with the proceeds thereof, all goods represented by
        --------
such  Accounts  and  all  such  goods  that  may  be  returned  by the Company's
customers,  and  all  proceeds  of  any  insurance  thereon, and all guarantees,
securities  and  liens  which  the  Company may hold for the payment of any such
Accounts  including,  without  limitation,  all  rights  of stoppage in transit,
replevin and reclamation and as an unpaid vendor and/or lienor, all of which the
Company  represents  and  warrants will be bona fide and existing obligations of
its respective customers, arising out of the sale of goods by the Company in the
ordinary  course  of  business;

     (f) to the extent assignable, all of the Company's rights under all present
and future authorizations, permits, licenses and franchises issued or granted in
connection  with  the  operations  of  any  of  its  facilities;

     (g)  all  products  and  proceeds (including, without limitation, insurance
proceeds)  from  the  above-described  Pledged  Property.

                                      EX-51
<PAGE>

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