Document:

Exhibit 4.1

                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------

         THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"),  dated as of May
17, 2006, by and among QUINTEK TECHNOLOGIES INC., a California  corporation (the
"Company"), and the Buyers listed on Schedule I attached hereto (individually, a
"Buyer" or collectively "Buyers").

                                   WITNESSETH
                                   ----------

         WHEREAS, the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation  D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act");

         WHEREAS,  the parties  desire  that,  upon the terms and subject to the
conditions  contained herein,  the Company shall issue and sell to the Buyer(s),
as provided  herein,  and the Buyer(s) shall purchase up to Two Million  Dollars
($2,000,000) of secured convertible  debentures (the "Convertible  Debentures"),
which shall be convertible  into shares of the Company's common stock, par value
$0.01 (the "Common  Stock") (as  converted,  the  "Conversion  Shares") of which
Seven Hundred Fifty  Thousand  Dollars  ($750,000)  shall be funded on the first
(1st)  business  day  following  the date hereof (the  "First  Closing"),  Seven
Hundred  Fifty  Thousand  Dollars  ($750,000)  shall be funded  upon the Company
increasing  its  authorized  shares of  Common  Stock to at least  five  hundred
million  (500,000,000) shares of Common Stock and two (2) business days prior to
the date the  registration  statement (the  "Registration  Statement") is filed,
pursuant to the Investor  Registration  Rights  Agreement dated the date hereof,
with the United  States  Securities  and  Exchange  Commission  (the "SEC") (the
"Second Closing"),  and Five Hundred Thousand Dollars ($500,000) shall be funded
on the date that the  Registration  Statement  is declared  effective by the SEC
(the "Third  Closing")  (individually  referred  to as a "Closing"  collectively
referred to as the "Closings"),  for a total purchase price of up to Two Million
Dollars ($2,000,000), (the "Purchase Price") in the respective amounts set forth
opposite each Buyer(s) name on Schedule I (the "Subscription Amount"); and

         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement (the "Investor  Registration Rights Agreement")  pursuant to which the
Company has agreed to provide certain  registration  rights under the Securities
Act and the rules and regulations  promulgated there under, and applicable state
securities laws; and

         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement,  the Company and the Buyers are executing  and  delivering a Security
Agreement;  QSI and Sapphire Consulting Services, both wholly owned subsidiaries
of the Company,  and the Buyers are executing and delivering Security Agreements
(all such security agreements shall be referred to as the "Security  Agreement")
pursuant  to which the  Company  and its  wholly  owned  subsidiaries  agreed to
provide the Buyers a security  interest in Pledged  Collateral  (as this term is

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defined in the each  Security  Agreement)  to secure the  Company's  obligations
under this Agreement, the Transaction Documents, or any other obligations of the
Company to the Buyer; and

         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement,  the parties hereto are executing and delivering Irrevocable Transfer
Agent Instructions (the "Irrevocable Transfer Agent Instructions")

         NOW,  THEREFORE,  in  consideration  of the mutual  covenants and other
agreements contained in this Agreement the Company and the Buyer(s) hereby agree
as follows:

1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.

(a) Purchase of Convertible Debentures.  Subject to the satisfaction (or waiver)
of the terms and conditions of this Agreement,  each Buyer agrees, severally and
not  jointly,  to  purchase at each  Closing and the Company  agrees to sell and
issue to each Buyer,  severally and not jointly,  at each  Closing,  Convertible
Debentures  in  amounts  corresponding  with the  Subscription  Amount set forth
opposite each Buyer's name on Schedule I hereto.

(b) Closing Date. The First Closing of the purchase and sale of the  Convertible
Debentures  shall take place at 10:00 a.m.  Eastern  Standard  Time on the first
(1st)  business  day  following  the date  hereof,  subject to  notification  of
satisfaction  of the  conditions  to the First  Closing set forth  herein and in
Sections  6 and 7 below  (or such  later  date as is  mutually  agreed to by the
Company and the Buyer(s)) (the "First Closing Date"),  the Second Closing of the
purchase and sale of the Convertible  Debentures  shall take place at 10:00 a.m.
Eastern  Standard Time two (2) business days prior to the date the  Registration
Statement is filed with the SEC,  subject to notification of satisfaction of the
conditions to the Second  Closing set forth herein and in Sections 6 and 7 below
(or such later date as is mutually  agreed to by the  Company and the  Buyer(s))
(the "Second Closing  Date"),  and the Third Closing of the purchase and sale of
the Convertible  Debentures shall take place at 10:00 a.m. Eastern Standard Time
on the date Registration  Statement is declared effective by the SEC, subject to
notification  of  satisfaction  of the conditions to the Third Closing set forth
herein and in Sections 6 and 7 below (or such later date as is  mutually  agreed
to by the Company and the Buyer(s))  (the "Third  Closing  Date")  (collectively
referred to a the "Closing  Dates").  The Closing shall occur on the  respective
Closing Dates at the offices of Yorkville  Advisors,  LLC,  3700 Hudson  Street,
Suite 3700,  Jersey  City,  New Jersey 07302 (or such other place as is mutually
agreed to by the Company and the Buyer(s)).

(c) Form of Payment.  Subject to the satisfaction of the terms and conditions of
this  Agreement,  on the  Closing  Dates,  (i) the Buyers  shall  deliver to the
Company such aggregate proceeds for the Convertible  Debentures to be issued and
sold to such Buyer(s),  minus the fees to be paid directly from the proceeds the
Closings as set forth herein,  and (ii) the Company shall deliver to each Buyer,
Convertible  Debentures  which such Buyer(s) is purchasing in amounts  indicated
opposite  such  Buyer's  name on  Schedule  I,  duly  executed  on behalf of the
Company.

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2. BUYER'S REPRESENTATIONS AND WARRANTIES.

         Each Buyer represents and warrants, severally and not jointly, that:

(a) Investment Purpose. Each Buyer is acquiring the Convertible  Debentures and,
upon conversion of Convertible Debentures, the Buyer will acquire the Conversion
Shares then  issuable,  for its own account for  investment  only and not with a
view towards,  or for resale in connection with, the public sale or distribution
thereof,  except  pursuant to sales  registered or exempted under the Securities
Act; provided,  however,  that by making the representations  herein, such Buyer
reserves the right to dispose of the Conversion Shares at any time in accordance
with or pursuant to an effective registration statement covering such Conversion
Shares or an available exemption under the Securities Act.

(b) Accredited Investor Status.  Each Buyer is an "Accredited  Investor" as that
term is defined in Rule 501(a)(3) of Regulation D.

(c)  Reliance  on  Exemptions.  Each  Buyer  understands  that  the  Convertible
Debentures  are being offered and sold to it in reliance on specific  exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Buyer's  compliance  with,  the  representations,  warranties,  agreements,
acknowledgments  and  understandings  of such Buyer set forth herein in order to
determine the  availability of such exemptions and the eligibility of such Buyer
to acquire such securities.

(d) Information.  Each Buyer and its advisors (and his or, its counsel), if any,
have been  furnished with all materials  relating to the business,  finances and
operations  of the  Company  and  information  he deemed  material  to making an
informed   investment   decision  regarding  his  purchase  of  the  Convertible
Debentures and the Conversion  Shares,  which have been requested by such Buyer.
Each Buyer and its advisors,  if any, have been afforded the  opportunity to ask
questions  of the Company and its  management.  Neither such  inquiries  nor any
other due diligence  investigations  conducted by such Buyer or its advisors, if
any, or its representatives  shall modify, amend or affect such Buyer's right to
rely on the  Company's  representations  and  warranties  contained in Section 3
below. Each Buyer understands that its investment in the Convertible  Debentures
and the  Conversion  Shares  involves a high degree of risk.  Each Buyer is in a
position   regarding  the  Company,   which,   based  upon  employment,   family
relationship  or economic  bargaining  power,  enabled and enables such Buyer to
obtain information from the Company in order to evaluate the merits and risks of
this investment. Each Buyer has sought such accounting, legal and tax advice, as
it has considered necessary to make an informed investment decision with respect
to its acquisition of the Convertible Debentures and the Conversion Shares.

(e) No Governmental Review. Each Buyer understands that no United States federal
or state agency or any other government or governmental  agency has passed on or
made any  recommendation  or  endorsement of the  Convertible  Debentures or the
Conversion  Shares,  or the fairness or  suitability  of the  investment  in the
Convertible  Debentures  or the  Conversion  Shares,  nor have such  authorities
passed upon or endorsed the merits of the offering of the Convertible Debentures
or the Conversion Shares.

                                      -3-
<PAGE>

(f) Transfer or Resale.  Each Buyer  understands  that except as provided in the
Investor Registration Rights Agreement:  (i) the Convertible Debentures have not
been  and are  not  being  registered  under  the  Securities  Act or any  state
securities laws, and may not be offered for sale, sold,  assigned or transferred
unless (A)  subsequently  registered  thereunder,  or (B) such Buyer  shall have
delivered to the Company an opinion of counsel, in a generally  acceptable form,
to the effect that such  securities to be sold,  assigned or transferred  may be
sold,  assigned or transferred  pursuant to an exemption from such  registration
requirements;  (ii) any sale of such  securities  made in  reliance  on Rule 144
under the Securities Act (or a successor rule thereto)  ("Rule 144") may be made
only in  accordance  with the terms of Rule 144 and further,  if Rule 144 is not
applicable,  any  resale of such  securities  under  circumstances  in which the
seller  (or the  person  through  whom the sale is made)  may be deemed to be an
underwriter  (as  that  term is  defined  in the  Securities  Act)  may  require
compliance  with some other  exemption under the Securities Act or the rules and
regulations of the SEC  thereunder;  and (iii) neither the Company nor any other
person is under any obligation to register such securities  under the Securities
Act or any state  securities  laws or to comply with the terms and conditions of
any exemption thereunder.  The Company reserves the right to place stop transfer
instructions against the shares and certificates for the Conversion Shares.

(g) Legends.  Each Buyer  understands that the certificates or other instruments
representing the Convertible  Debentures and or the Conversion Shares shall bear
a restrictive  legend in  substantially  the following form (and a stop transfer
order may be placed against transfer of such stock certificates):

                  THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN
                  REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  OR
                  APPLICABLE  STATE  SECURITIES  LAWS. THE SECURITIES  HAVE BEEN
                  ACQUIRED  SOLELY FOR  INVESTMENT  PURPOSES AND NOT WITH A VIEW
                  TOWARD  RESALE  AND  MAY  NOT  BE  OFFERED  FOR  SALE,   SOLD,
                  TRANSFERRED  OR  ASSIGNED  IN  THE  ABSENCE  OF  AN  EFFECTIVE
                  REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES LAWS,
                  OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
                  REGISTRATION  IS NOT  REQUIRED  UNDER  SAID ACT OR  APPLICABLE
                  STATE SECURITIES LAWS.

The  legend set forth  above  shall be removed  and the  Company  within two (2)
business days shall issue a certificate without such legend to the holder of the
Conversion  Shares upon which it is stamped,  if, unless  otherwise  required by
state securities laws, (i) in connection with a sale  transaction,  provided the
Conversion  Shares are registered under the Securities Act or (ii) in connection
with a sale transaction,  after such holder provides the Company with an opinion
of counsel,  which opinion shall be in form,  substance and scope  customary for
opinions  of counsel in  comparable  transactions,  to the effect  that a public
sale,  assignment  or  transfer  of the  Conversion  Shares may be made  without
registration under the Securities Act.

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<PAGE>

(h)  Authorization,  Enforcement.  This  Agreement  has been  duly  and  validly
authorized,  executed  and  delivered on behalf of such Buyer and is a valid and
binding agreement of such Buyer enforceable in accordance with its terms, except
as such  enforceability  may be  limited  by  general  principles  of  equity or
applicable bankruptcy, insolvency,  reorganization,  moratorium, liquidation and
other  similar laws  relating to, or affecting  generally,  the  enforcement  of
applicable creditors' rights and remedies.

(i) Receipt of  Documents.  Each Buyer and his or its counsel has  received  and
read in their entirety: (i) this Agreement and each representation, warranty and
covenant set forth herein and the  Transaction  Documents  (as defined  herein);
(ii) all due  diligence and other  information  necessary to verify the accuracy
and completeness of such  representations,  warranties and covenants;  (iii) the
Company's  Form  10-KSB  for the  fiscal  year  ended  June 30,  2005;  (iv) the
Company's  Form  10-QSB for the fiscal  quarters  ended  September  20, 2005 and
December 31, 2005 and (v) answers to all questions  each Buyer  submitted to the
Company regarding an investment in the Company; and each Buyer has relied on the
information  contained  therein and has not been furnished any other  documents,
literature, memorandum or prospectus.

(j)  Due  Formation  of  Corporate  and  Other  Buyers.  If  the  Buyer(s)  is a
corporation,  trust,  partnership  or  other  entity  that is not an  individual
person, it has been formed and validly exists and has not been organized for the
specific purpose of purchasing the Convertible  Debentures and is not prohibited
from doing so.

(k) No Legal Advice From the Company.  Each Buyer acknowledges,  that it had the
opportunity to review this Agreement and the  transactions  contemplated by this
Agreement  with his or its own legal  counsel and  investment  and tax advisors.
Each  Buyer is  relying  solely  on such  counsel  and  advisors  and not on any
statements or  representations  of the Company or any of its  representatives or
agents for legal, tax or investment advice with respect to this investment,  the
transactions  contemplated  by  this  Agreement  or the  securities  laws of any
jurisdiction.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company  represents  and  warrants as of the date hereof to each of
the Buyers that, except as set forth in the SEC Documents (as defined herein) or
in the Disclosure Schedule attached hereto (the "Disclosure Schedule"):

(a)  Organization  and  Qualification.  The  Company  and its  subsidiaries  are
corporations duly organized and validly existing in good standing under the laws
of the  jurisdiction  in which  they are  incorporated,  and have the  requisite
corporate  power to own their  properties  and to carry on their business as now
being conducted. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the  business  conducted  by it makes such  qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in
good standing  would not have a material  adverse  effect on the Company and its
subsidiaries taken as a whole.

                                      -5-
<PAGE>

(b)  Authorization,  Enforcement,  Compliance  with Other  Instruments.  (i) The
Company  has the  requisite  corporate  power and  authority  to enter  into and
perform this Agreement, the Security Agreement, the Investor Registration Rights
Agreement, the Irrevocable Transfer Agent Agreement, the Convertible Debentures,
and any related  agreements  (collectively  the "Transaction  Documents") and to
issue the  Convertible  Debentures and the Conversion  Shares in accordance with
the terms hereof and thereof, (ii) the execution and delivery of the Transaction
Documents  by  the  Company  and  the  consummation  by it of  the  transactions
contemplated hereby and thereby, including,  without limitation, the issuance of
the  Convertible  Debentures  the  Conversion  Shares  and the  reservation  for
issuance and the issuance of the Conversion  Shares  issuable upon conversion or
exercise thereof,  have been duly authorized by the Company's Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its  stockholders,  (iii) the Transaction  Documents have been duly
executed and delivered by the Company, (iv) the Transaction Documents constitute
the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms,  except as such enforceability may be limited by
general   principles   of   equity   or   applicable   bankruptcy,   insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting  generally,  the  enforcement of creditors'  rights and remedies.  The
authorized  officer of the Company executing the Transaction  Documents knows of
no reason why the Company  cannot file the  registration  statement  as required
under the Investor Registration Rights Agreement or perform any of the Company's
other obligations under such documents.

(c)  Capitalization.  The  authorized  capital stock of the Company  consists of
200,000,000 shares of Common Stock and 50,000,000 shares of Preferred Stock, par
value $0.01 ("Preferred  Stock") of which 142,565,943 shares of Common Stock and
3,154,750  shares of  Preferred  Stock are issued and  outstanding.  All of such
outstanding   shares   have  been   validly   issued  and  are  fully  paid  and
nonassessable. No shares of Common Stock are subject to preemptive rights or any
other similar rights or any liens or  encumbrances  suffered or permitted by the
Company. As of the date of this Agreement, (i) there are no outstanding options,
warrants,  scrip,  rights to subscribe to, calls or commitments of any character
whatsoever  relating to, or securities or rights convertible into, any shares of
capital  stock  of  the  Company  or  any of  its  subsidiaries,  or  contracts,
commitments,  understandings  or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional  shares of capital stock
of the Company or any of its subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company  or  any  of its  subsidiaries,  (ii)  there  are  no  outstanding  debt
securities  and (iii) there are no  agreements or  arrangements  under which the
Company or any of its  subsidiaries  is obligated to register the sale of any of
their  securities  under the Securities Act (except pursuant to the Registration
Rights Agreement) and (iv) there are no outstanding  registration statements and
there are no outstanding  comment  letters from the SEC or any other  regulatory
agency.  There are no  securities or  instruments  containing  anti-dilution  or
similar  provisions  that will be triggered  by the issuance of the  Convertible
Debentures  as described  in this  Agreement.  The Company has  furnished to the
Buyer true and correct  copies of the Company's  Articles of  Incorporation,  as
amended and as in effect on the date hereof (the  "Articles of  Incorporation"),

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<PAGE>

and the Company's By-laws, as in effect on the date hereof (the "By-laws"),  and
the terms of all securities convertible into or exercisable for Common Stock and
the material  rights of the holders  thereof in respect thereto other than stock
options issued to employees and consultants.

(d) Issuance of Securities.  The Convertible Debentures are duly authorized and,
upon issuance in accordance with the terms hereof,  shall be duly issued,  fully
paid and nonassessable,  are free from all taxes, liens and charges with respect
to the issue thereof.  The  Conversion  Shares  issuable upon  conversion of the
Convertible Debentures have been duly authorized and reserved for issuance. Upon
conversion  or  exercise  in  accordance  with the  Convertible  Debentures  the
Conversion Shares will be duly issued, fully paid and nonassessable.

(e) No Conflicts.  The execution,  delivery and  performance of the  Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated  hereby  will not (i)  result in a  violation  of the  Articles  of
Incorporation,  any certificate of  designations  of any  outstanding  series of
preferred  stock  of the  Company  or the  By-laws  or  (ii)  conflict  with  or
constitute  a default  (or an event  which with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,   acceleration  or  cancellation  of,  any  agreement,  indenture  or
instrument to which the Company or any of its subsidiaries is a party, or result
in a  violation  of  any  law,  rule,  regulation,  order,  judgment  or  decree
(including  federal and state  securities laws and regulations and the rules and
regulations  of The  National  Association  of  Securities  Dealers  Inc.'s  OTC
Bulletin Board on which the Common Stock is quoted) applicable to the Company or
any of its  subsidiaries or by which any property or asset of the Company or any
of  its  subsidiaries  is  bound  or  affected.  Neither  the  Company  nor  its
subsidiaries  is in violation of any term of or in default under its Articles of
Incorporation   or  By-laws  or  their   organizational   charter  or   by-laws,
respectively,  or any  material  contract,  agreement,  mortgage,  indebtedness,
indenture,  instrument,  judgment,  decree  or  order  or any  statute,  rule or
regulation  applicable to the Company or its  subsidiaries.  The business of the
Company and its subsidiaries is not being conducted,  and shall not be conducted
in violation of any material law,  ordinance,  or regulation of any governmental
entity.  Except as  specifically  contemplated by this Agreement and as required
under the Securities Act and any applicable  state  securities laws, the Company
is not  required to obtain any consent,  authorization  or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under or contemplated by this
Agreement or the  Registration  Rights  Agreement in  accordance  with the terms
hereof  or  thereof.   All  consents,   authorizations,   orders,   filings  and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have been  obtained or effected  on or prior to the date  hereof.  The
Company and its  subsidiaries  are unaware of any facts or  circumstance,  which
might give rise to any of the foregoing.

(f) SEC Documents:  Financial  Statements.  Since December 31, 2003, the Company
has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC under the  Securities  Exchange  Act of 1934,  as
amended  (the  "Exchange  Act") (all of the  foregoing  filed  prior to the date
hereof or amended  after the date hereof and all exhibits  included  therein and
financial  statements  and  schedules  thereto  and  documents  incorporated  by
reference therein,  being hereinafter  referred to as the "SEC Documents").  The
Company has delivered to the Buyers or their representatives,  or made available
through the SEC's website at  http://www.sec.gov.,  true and complete  copies of

                                      -7-
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the SEC Documents. As of their respective dates, the financial statements of the
Company disclosed in the SEC Documents (the "Financial  Statements") complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally  accepted  accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise  indicated in such Financial  Statements or the notes  thereto,  or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary  statements) and, fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  No other  information  provided by or on behalf of the Company to
the  Buyer  which  is not  included  in the SEC  Documents,  including,  without
limitation,  information  referred  to in this  Agreement,  contains  any untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make the statements  therein,  in the light of the circumstances  under
which they were made, not misleading.

(g) 10(b)-5.  The SEC Documents do not include any untrue statements of material
fact,  nor do they omit to state any material fact required to be stated therein
necessary to make the statements made, in light of the circumstances under which
they were made, not misleading.

(h) Absence of  Litigation.  There is no action,  suit,  proceeding,  inquiry or
investigation  before  or  by  any  court,  public  board,   government  agency,
self-regulatory  organization  or body pending against or affecting the Company,
the Common Stock or any of the Company's  subsidiaries,  wherein an  unfavorable
decision,  ruling or  finding  would (i) have a material  adverse  effect on the
transactions   contemplated   hereby  (ii)  adversely  affect  the  validity  or
enforceability  of, or the  authority  or ability of the  Company to perform its
obligations under, this Agreement or any of the documents  contemplated  herein,
or (iii) have a material adverse effect on the business, operations, properties,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole.

(i) Acknowledgment Regarding Buyer's Purchase of the Convertible Debentures. The
Company  acknowledges  and  agrees  that the  Buyer(s)  is acting  solely in the
capacity of an arm's length  purchaser  with respect to this  Agreement  and the
transactions  contemplated  hereby.  The Company further  acknowledges  that the
Buyer(s) is not acting as a financial advisor or fiduciary of the Company (or in
any  similar  capacity)  with  respect to this  Agreement  and the  transactions
contemplated  hereby  and any  advice  given  by the  Buyer(s)  or any of  their
respective  representatives  or agents in connection with this Agreement and the
transactions  contemplated  hereby is merely incidental to such Buyer's purchase
of the  Convertible  Debentures or the Conversion  Shares.  The Company  further
represents to the Buyer that the Company's decision to enter into this Agreement
has been based  solely on the  independent  evaluation  by the  Company  and its
representatives.

(j) No General Solicitation. Neither the Company, nor any of its affiliates, nor
any person  acting on its or their  behalf,  has  engaged in any form of general
solicitation  or general  advertising  (within the meaning of Regulation D under
the  Securities  Act) in  connection  with the offer or sale of the  Convertible
Debentures or the Conversion Shares.

                                      -8-
<PAGE>

(k) No Integrated Offering.  Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf has,  directly or indirectly,  made any
offers or sales of any  security or  solicited  any offers to buy any  security,
under   circumstances  that  would  require   registration  of  the  Convertible
Debentures  or the  Conversion  Shares  under the  Securities  Act or cause this
offering of the Convertible Debentures or the Conversion Shares to be integrated
with prior offerings by the Company for purposes of the Securities Act.

(l)  Employee  Relations.  Neither the Company  nor any of its  subsidiaries  is
involved in any labor dispute nor, to the knowledge of the Company or any of its
subsidiaries,  is any such  dispute  threatened.  None of the  Company's  or its
subsidiaries'  employees  is a  member  of a  union  and  the  Company  and  its
subsidiaries believe that their relations with their employees are good.

(m)  Intellectual  Property  Rights.  The  Company and its  subsidiaries  own or
possess adequate rights or licenses to use all trademarks,  trade names, service
marks,  service mark  registrations,  service  names,  patents,  patent  rights,
copyrights, inventions, licenses, approvals, governmental authorizations,  trade
secrets and rights  necessary  to conduct  their  respective  businesses  as now
conducted.  The Company and its  subsidiaries  do not have any  knowledge of any
infringement by the Company or its subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks,  service  mark  registrations,  trade secret or other  similar  rights of
others,  and,  to the  knowledge  of the  Company  there is no claim,  action or
proceeding being made or brought against, or to the Company's  knowledge,  being
threatened against, the Company or its subsidiaries  regarding trademark,  trade
name, patents,  patent rights,  invention,  copyright,  license,  service names,
service marks,  service mark registrations,  trade secret or other infringement;
and the Company and its  subsidiaries  are unaware of any facts or circumstances
which might give rise to any of the foregoing.

(n)  Environmental  Laws. The Company and its subsidiaries are (i) in compliance
with  any  and all  applicable  foreign,  federal,  state  and  local  laws  and
regulations  relating  to  the  protection  of  human  health  and  safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval.

(o) Title.  Any real property and facilities held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable leases
with such  exceptions as are not material and do not interfere with the use made
and proposed to be made of such  property  and  buildings by the Company and its
subsidiaries.

(p) Insurance.  The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its  subsidiaries  are engaged.  Neither the
Company nor any such  subsidiary has been refused any insurance  coverage sought
or applied for and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and

                                      -9-
<PAGE>

when such coverage  expires or to obtain similar  coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially
and adversely  affect the  condition,  financial or otherwise,  or the earnings,
business or operations of the Company and its subsidiaries, taken as a whole.

(q) Regulatory  Permits.  The Company and its subsidiaries  possess all material
certificates,  authorizations  and permits  issued by the  appropriate  federal,
state or foreign  regulatory  authorities  necessary to conduct their respective
businesses,  and neither the Company nor any such  subsidiary  has  received any
notice of  proceedings  relating to the revocation or  modification  of any such
certificate, authorization or permit.

(r)  Internal  Accounting  Controls.  The Company  and each of its  subsidiaries
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurance  that (i)  transactions  are executed in  accordance  with
management's general or specific authorizations,  (ii) transactions are recorded
as necessary to permit  preparation of financial  statements in conformity  with
generally accepted accounting  principles and to maintain asset  accountability,
and (iii) the recorded  amounts for assets is compared with the existing  assets
at  reasonable  intervals  and  appropriate  action is taken with respect to any
differences.

(s) No  Material  Adverse  Breaches,  etc.  Neither  the  Company nor any of its
subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment,  decree,  order,  rule or regulation  which in the judgment of the
Company's  officers has or is expected in the future to have a material  adverse
effect on the business, properties,  operations, financial condition, results of
operations or prospects of the Company or its subsidiaries.  Neither the Company
nor any of its  subsidiaries  is in breach of any  contract or  agreement  which
breach, in the judgment of the Company's officers,  has or is expected to have a
material  adverse  effect on the  business,  properties,  operations,  financial
condition,   results  of   operations   or  prospects  of  the  Company  or  its
subsidiaries.

(t) Tax Status.  The Company and each of its subsidiaries has made and filed all
federal and state  income and all other tax  returns,  reports and  declarations
required by any  jurisdiction to which it is subject and (unless and only to the
extent that the Company and each of its  subsidiaries has set aside on its books
provisions  reasonably  adequate  for the  payment of all unpaid and  unreported
taxes) has paid all taxes and other  governmental  assessments  and charges that
are material in amount,  shown or determined to be due on such returns,  reports
and  declarations,  except those being contested in good faith and has set aside
on its books  provision  reasonably  adequate  for the  payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim.

(u) Certain Transactions. Except for arm's length transactions pursuant to which
the Company makes payments in the ordinary course of business upon terms no less
favorable  than the Company  could obtain from third  parties and other than the
grant of stock  options  disclosed in the SEC  Documents,  none of the officers,
directors,  or employees of the Company is presently a party to any  transaction
with the Company (other than for services as employees, officers and directors),
including  any  contract,  agreement  or  other  arrangement  providing  for the

                                      -10-
<PAGE>

furnishing  of  services  to or by,  providing  for  rental of real or  personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such employee or, to the knowledge of the Company,  any corporation,
partnership,  trust or other entity in which any officer,  director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

(v) Fees and Rights of First Refusal.  The Company is not obligated to offer the
securities  offered  hereunder on a right of first refusal basis or otherwise to
any third parties including,  but not limited to, current or former shareholders
of the Company, underwriters, brokers, agents or other third parties.

(w)  Creation and Issuance of Super  Voting  Preferred  Shares.  Within five (5)
calendar  days of the First  Closing the Company will file with the Secretary of
State of  California,  a certificate of  designations  for a series of preferred
stock carrying super voting rights (the  "Certificate  of  Designations").  Such
Certificate of  Designations  shall provide that upon the occurrence of an Event
of Default, as defined in the Convertible Debentures,  which remains uncured for
thirty  (30)  calendar  days the Buyer's  shall be  entitled to vote,  unless as
otherwise permitted by statute, the Super Voting Preferred Shares as outlined in
Section 4 (o) herein.  The Company,  within two (2)  business  days of obtaining
confirmation  of the filing of the  Certificate  of  Designations,  shall  issue
shares of such class of  preferred  stock to Andrew Haag and Robert  Steele such
that  preferred  shares  have  the  right  to cast  one  hundred  fifty  million
(150,000,000) votes (the "Super Voting Preferred Shares").

4. COVENANTS.

(a) Best Efforts.  Each party shall use its best efforts to timely  satisfy each
of the  conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.

(b) Form D. The Company  agrees to file a Form D with respect to the  Conversion
Shares as  required  under  Regulation  D and to provide a copy  thereof to each
Buyer  promptly after such filing.  The Company shall,  on or before the Closing
Date, take such action as the Company shall reasonably determine is necessary to
qualify the Conversion  Shares, or obtain an exemption for the Conversion Shares
for  sale  to the  Buyers  at the  Closing  pursuant  to  this  Agreement  under
applicable securities or "Blue Sky" laws of the states of the United States, and
shall provide  evidence of any such action so taken to the Buyers on or prior to
the Closing Date.

(c) Reporting Status. Until the earlier of (i) the date as of which the Buyer(s)
may sell all of the  Conversion  Shares  without  restriction  pursuant  to Rule
144(k) promulgated under the Securities Act (or successor thereto),  or (ii) the
date on which (A) the Buyer(s) shall have sold all the Conversion Shares and (B)
none of the Convertible Debentures are outstanding (the "Registration  Period"),
the Company shall file in a timely manner all reports  required to be filed with
the SEC pursuant to the Exchange Act and the  regulations of the SEC thereunder,
and the Company  shall not  terminate  its status as an issuer  required to file
reports  under  the  Exchange  Act even if the  Exchange  Act or the  rules  and
regulations thereunder would otherwise permit such termination.

                                      -11-
<PAGE>

(d) Use of  Proceeds.  The Company  will use the  proceeds  from the sale of the
Convertible Debentures for general corporate and working capital purposes.

(e)  Reservation  of  Shares.  The  Company  shall  take all  action  reasonably
necessary  to at all times have  authorized,  and  reserved  for the  purpose of
issuance,  such number of shares of Common Stock as shall be necessary to effect
the issuance of the Conversion  Shares. If at any time the Company does not have
available  such shares of Common Stock as shall from time to time be  sufficient
to effect the conversion of all of the Conversion Shares, the Company shall call
and hold a special meeting of the  shareholders  within thirty (30) days of such
occurrence,  for the sole purpose of increasing the number of shares authorized.
The Company's management shall recommend to the shareholders to vote in favor of
increasing  the number of shares of Common Stock  authorized.  Management  shall
also vote all of its  shares in favor of  increasing  the  number of  authorized
shares of Common Stock.

(f) Listings or  Quotation.  The Company  shall  promptly  secure the listing or
quotation  of the  Conversion  Shares upon each  national  securities  exchange,
automated  quotation  system or The National  Association of Securities  Dealers
Inc.'s  Over-The-Counter  Bulletin Board ("OTCBB") or other market, if any, upon
which  shares of Common  Stock are then  listed or quoted  (subject  to official
notice of issuance)  and shall use its best efforts to maintain,  so long as any
other shares of Common Stock shall be so listed,  such listing of all Conversion
Shares from time to time issuable under the terms of this Agreement. The Company
shall maintain the Common Stock's authorization for quotation on the OTCBB.

(g) Fees and Expenses.

(i) Each of the  Company  and the  Buyer(s)  shall pay all  costs  and  expenses
incurred  by such  party  in  connection  with the  negotiation,  investigation,
preparation,  execution and delivery of the Transaction  Documents.  The Company
shall  pay  Yorkville  Advisors  LLC a fee  equal  to ten  percent  (10%) of the
Purchase Price.

(ii) The Company shall pay a structuring fee to Yorkville Advisors LLC of Twenty
Thousand  Dollars  ($20,000) in connection with this  transaction,  of which Ten
Thousand  Dollars  ($10,000)  has  already  been paid and Ten  Thousand  Dollars
($10,000) shall be paid directly from the proceeds of the First Closing.

(iii) The  Company  shall  pay  Yorkville  Advisors,  LLC a  non-refundable  due
diligence  fee of Five  Thousand  Dollars  ($5,000) of which Two  Thousand  Five
Hundred  Dollars  ($2,500) has been paid and Two Thousand  Five Hundred  Dollars
($2,500) shall be paid directly from the proceeds of the First Closing.

(iv) The Company shall issue to the Buyer a warrants to purchase an aggregate of
Fifty Six Million Three Hundred Ninety Seven Thousand (56,397,000) shares of the
Company's  Common Stock for a period of five (5) years as follows:  1) a warrant
to purchase  17,857,000 shares of the Company's Common Stock which shall have an
exercise price of $0.07 per share, 2) a warrant to purchase 15,625,000 shares of
the Company's Common Stock shall have an exercise price of $0.08 per share, 3) a

                                      -12-
<PAGE>

warrant to purchase  12,500,000 shares of the Company's Common Stock which shall
have an  exercise  price  of $0.10  per  share,  and 4) a  warrant  to  purchase
10,415,000  shares of the  Company's  Common  Stock which shall have an exercise
price of $0.12 per  share  (collectively  referred  to as the  "Warrants").  The
shares  of Common  Stock  issuable  under the  Warrants  shall  collectively  be
referred to as the "Warrant Shares".

(v) The Warrant Shares shall have "piggy-back" and demand registration rights.

(h) Corporate  Existence.  So long as any of the Convertible  Debentures  remain
outstanding, the Company shall not directly or indirectly consummate any merger,
reorganization, restructuring, reverse stock split consolidation, sale of all or
substantially all of the Company's assets or any similar  transaction or related
transactions (each such transaction,  an "Organizational  Change") unless, prior
to the consummation an  Organizational  Change,  the Company obtains the written
consent of each  Buyer.  In any such case,  the  Company  will make  appropriate
provision with respect to such holders'  rights and interests to insure that the
provisions of this Section 4(h) will thereafter be applicable to the Convertible
Debentures.

(i)  Transactions  With  Affiliates.  So long as any Convertible  Debentures are
outstanding, the Company shall not, and shall cause each of its subsidiaries not
to, enter into, amend,  modify or supplement,  or permit any subsidiary to enter
into, amend,  modify or supplement any agreement,  transaction,  commitment,  or
arrangement with any of its or any subsidiary's officers,  directors, person who
were  officers  or  directors  at any time  during the  previous  two (2) years,
stockholders who beneficially own five percent (5%) or more of the Common Stock,
or  Affiliates  (as  defined  below) or with any  individual  related  by blood,
marriage,  or  adoption to any such  individual  or with any entity in which any
such entity or individual owns a five percent (5%) or more  beneficial  interest
(each a "Related Party"),  except for (a) customary employment  arrangements and
benefit programs on reasonable  terms, (b) any investment in an Affiliate of the
Company,  (c) any  agreement,  transaction,  commitment,  or  arrangement  on an
arms-length  basis on terms no less  favorable  than terms which would have been
obtainable  from a person  other than such  Related  Party,  (d) any  agreement,
transaction,  commitment,  or arrangement which is approved by a majority of the
disinterested directors of the Company; for purposes hereof, any director who is
also an officer of the Company or any  subsidiary  of the Company shall not be a
disinterested  director  with  respect  to  any  such  agreement,   transaction,
commitment, or arrangement.  "Affiliate" for purposes hereof means, with respect
to any person or entity,  another person or entity that, directly or indirectly,
(i) has a ten percent  (10%) or more  equity  interest in that person or entity,
(ii) has ten percent (10%) or more common  ownership with that person or entity,
(iii)  controls that person or entity,  or (iv) shares common  control with that
person or entity.  "Control"  or  "controls"  for  purposes  hereof means that a
person or entity has the  power,  direct or  indirect,  to conduct or govern the
policies of another person or entity.

(j) Transfer Agent. The Company covenants and agrees that, in the event that the
Company's agency  relationship  with the transfer agent should be terminated for
any reason  prior to a date which is two (2) years after the Closing  Date,  the
Company shall  immediately  appoint a new transfer  agent and shall require that
the new  transfer  agent  execute  and  agree to be  bound  by the  terms of the
Irrevocable Transfer Agent Instructions (as defined herein).

                                      -13-
<PAGE>

(k)  Restriction  on Issuance of the Capital Stock.  So long as any  Convertible
Debentures  are  outstanding,  the Company shall not,  without the prior written
consent of the  Buyer(s),  (i) issue or sell shares of Common Stock or Preferred
Stock without  consideration or for a consideration  per share less than the bid
price of the Common Stock  determined  immediately  prior to its issuance,  (ii)
issue any preferred stock,  warrant,  option,  right,  contract,  call, or other
security or instrument  granting the holder  thereof the right to acquire Common
Stock without consideration or for a consideration less than such Common Stock's
Bid Price determined  immediately  prior to it's issuance,  (iii) enter into any
security  instrument  granting  the  holder a security  interest  in any and all
assets of the  Company,  or (iv) file any  registration  statement  on Form S-8.
Notwithstanding   the  foregoing  the  Company  shall  be  entitled  to  file  a
registration   statement  on  Form  S-8   registering  up  to  fifteen   million
(15,000,000) issuable under the Company's bonafide employee stock option plan.

(l) Neither the Buyer(s) nor any of its  affiliates  have an open short position
in the Common Stock of the Company,  and the Buyer(s)  agrees that it shall not,
and that it will cause its  affiliates  not to,  engage in any short sales of or
hedging transactions with respect to the Common Stock as long as any Convertible
Debentures shall remain outstanding.

(m) Rights of First  Refusal.  For a period of  eighteen  (18)  months  from the
Closing Dates, so long as any portion of Convertible Debentures are outstanding,
if the Company  intends to raise  additional  capital by the issuance or sale of
capital stock of the Company,  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 Company, underwriter,  placement agent or any third
party) the Company  shall be obligated  to offer to the Buyers 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 Buyers shall have three (3) 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.

(n) Increase of Authorized  shares of Common Stock.  The Company shall  increase
its  authorized  shares of Common  Stock to five hundred  million  (500,000,000)
shares of Common Stock on or before August 9, 2006.

(o) Super Voting  Preferred.  In the event that there exists an Event of Default
as  defined  in the  Transaction  Documents  and  specifically  the  Convertible
Debentures, which remains uncured for a period of thirty (30) calendar days, the
Buyer's shall be entitled to vote, via proxy,  the Super Voting Preferred Shares
issued to Andrew Haag and Robert Steele.

                                      -14-
<PAGE>

5. TRANSFER AGENT INSTRUCTIONS.

(a) The Company shall issue the Irrevocable  Transfer Agent  Instructions to its
transfer agent  irrevocably  appointing  David  Gonzalez,  Esq. as the Company's
agent for purpose of having certificates  issued,  registered in the name of the
Buyer(s) or its respective  nominee(s),  for the Conversion Shares  representing
such amounts of  Convertible  Debentures  as specified  from time to time by the
Buyer(s) to the Company  upon  conversion  of the  Convertible  Debentures,  for
interest  owed  pursuant  to the  Convertible  Debenture,  and  for  any and all
Liquidated Damages (as this term is defined in the Investor  Registration Rights
Agreement). David Gonzalez, Esq. shall be paid a cash fee of Fifty Dollars ($50)
for  every  occasion  they  act  pursuant  to  the  Irrevocable  Transfer  Agent
Instructions.  The  Company  shall not change its  transfer  agent  without  the
express written  consent of the Buyer(s),  which may be withheld by the Buyer(s)
in its sole discretion. Prior to registration of the Conversion Shares under the
Securities  Act,  all  such  certificates  shall  bear  the  restrictive  legend
specified  in Section  2(g) of this  Agreement.  The  Company  warrants  that no
instruction other than the Irrevocable  Transfer Agent Instructions  referred to
in this Section 5, and stop transfer instructions to give effect to Section 2(g)
hereof  (in the case of the  Conversion  Shares  prior to  registration  of such
shares  under the  Securities  Act) will be given by the Company to its transfer
agent and that the Conversion  Shares shall otherwise be freely  transferable on
the books and  records  of the  Company as and to the  extent  provided  in this
Agreement  and the  Investor  Registration  Rights  Agreement.  Nothing  in this
Section 5 shall  affect in any way the  Buyer's  obligations  and  agreement  to
comply with all applicable  securities laws upon resale of Conversion Shares. If
the Buyer(s) provides the Company with an opinion of counsel, in form, scope and
substance  customary for opinions of counsel in comparable  transactions  to the
effect that  registration  of a resale by the Buyer(s) of any of the  Conversion
Shares is not required  under the  Securities  Act, the Company shall within two
(2) business days instruct its transfer agent to issue one or more  certificates
in such name and in such  denominations  as specified by the Buyer.  The Company
acknowledges  that  a  breach  by it of its  obligations  hereunder  will  cause
irreparable  harm to the  Buyer by  vitiating  the  intent  and  purpose  of the
transaction contemplated hereby. Accordingly,  the Company acknowledges that the
remedy  at law for a breach  of its  obligations  under  this  Section 5 will be
inadequate  and  agrees,  in the event of a breach or  threatened  breach by the
Company  of the  provisions  of this  Section  5,  that  the  Buyer(s)  shall be
entitled,  in  addition  to  all  other  available  remedies,  to an  injunction
restraining any breach and requiring  immediate  issuance and transfer,  without
the necessity of showing  economic  loss and without any bond or other  security
being required.

6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

         The  obligation  of  the  Company  hereunder  to  issue  and  sell  the
Convertible  Debentures  to the  Buyer(s)  at the  Closings  is  subject  to the
satisfaction,  at or  before  the  Closing  Dates,  of  each  of  the  following
conditions,  provided that these  conditions  are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:

(a) Each Buyer shall have executed the Transaction  Documents and delivered them
to the Company.

                                      -15-
<PAGE>

(b) The Buyer(s)  shall have  delivered  to the Company the  Purchase  Price for
Convertible  Debentures in respective amounts as set forth next to each Buyer as
outlined on Schedule I attached hereto,  minus any fees to be paid directly from
the proceeds the Closings as set forth herein,  by wire transfer of  immediately
available U.S. funds pursuant to the wire instructions provided by the Company.

(c) The representations and warranties of the Buyer(s) shall be true and correct
in all material respects as of the date when made and as of the Closing Dates as
though made at that time (except for  representations  and warranties that speak
as of a specific  date),  and the Buyer(s) shall have  performed,  satisfied and
complied in all material respects with the covenants,  agreements and conditions
required by this  Agreement to be  performed,  satisfied or complied with by the
Buyer(s) at or prior to the Closing Dates.

7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

(a) The  obligation  of the  Buyer(s)  hereunder  to  purchase  the  Convertible
Debentures at the First Closing is subject to the satisfaction, at or before the
First Closing Date, of each of the following conditions:

(i) The Company shall have executed the Transaction  Documents and delivered the
same to the Buyer(s).

(ii) The Common Stock shall be authorized for quotation on the OTCBB, trading in
the Common  Stock  shall not have been  suspended  for any  reason,  and all the
Conversion  Shares  issuable upon the conversion of the  Convertible  Debentures
shall be approved by the OTCBB.

(iii)  The  representations  and  warranties  of the  Company  shall be true and
correct  in all  material  respects  (except  to the  extent  that  any of  such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such  representations  and warranties  shall be true and
correct  without further  qualification)  as of the date when made and as of the
First Closing Date as though made at that time (except for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or  complied  with by the  Company  at or prior to the First  Closing  Date.  If
requested by the Buyer, the Buyer shall have received a certificate, executed by
the  President  of the  Company,  dated as of the  First  Closing  Date,  to the
foregoing effect and as to such other matters as may be reasonably  requested by
the Buyer including,  without  limitation an update as of the First Closing Date
regarding the representation contained in Section 3(c) above.

(iv)  The  Company  shall  have  executed  and  delivered  to the  Buyer(s)  the
Convertible  Debentures  in the  respective  amounts  set  forth  opposite  each
Buyer(s) name on Schedule I attached hereto.

(v) The Buyer(s)  shall have  received an opinion of counsel from counsel to the
Company in a form satisfactory to the Buyer(s).

                                      -16-
<PAGE>

(vi) The Company  shall have  provided  to the  Buyer(s) a  certificate  of good
standing  from the  secretary  of state  from the state in which the  company is
incorporated.

(vii) The  Company  shall have filed a form UCC-1 or such other  forms as may be
required to perfect the Buyer's  interest in the Pledged Property as detailed in
the Security  Agreement  dated the date hereof and provided proof of such filing
to the Buyer(s).

(viii) The Company shall have provided to the Buyer an  acknowledgement,  to the
satisfaction  of the Buyer,  from the  Company's  independent  certified  public
accountants as to its ability to provide all consents  required in order to file
a registration statement in connection with this transaction.

(ix) The Company shall have reserved out of its authorized  and unissued  Common
Stock,  solely for the purpose of effecting the  conversion  of the  Convertible
Debentures,  shares  of  Common  Stock to effect  the  conversion  of all of the
Conversion Shares then outstanding.

(x)  The  Irrevocable  Transfer  Agent  Instructions,   in  form  and  substance
satisfactory  to the Buyer,  shall have been  delivered to and  acknowledged  in
writing by the  Company's  transfer  agent.  (b) The  obligation of the Buyer(s)
hereunder to accept the Convertible  Debentures at the Second Closing is subject
to the  satisfaction,  at or before  the  Second  Closing  Date,  of each of the
following conditions:

(i) The Common Stock shall be authorized for quotation on the OTCBB,  trading in
the Common  Stock  shall not have been  suspended  for any  reason,  and all the
Conversion  Shares  issuable upon the conversion of the  Convertible  Debentures
shall be approved by the OTCBB.

(ii) The representations and warranties of the Company shall be true and correct
in all material respects (except to the extent that any of such  representations
and warranties is already  qualified as to  materiality  in Section 3 above,  in
which  case,  such  representations  and  warranties  shall be true and  correct
without  further  qualification)  as of the date when made and as of the  Second
Closing  Date as  though  made at that  time  (except  for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or  complied  with by the  Company at or prior to the Second  Closing  Date.  If
requested by the Buyer, the Buyer shall have received a certificate, executed by
two  officers  of the  Company,  dated as of the  Second  Closing  Date,  to the
foregoing effect and as to such other matters as may be reasonably  requested by
the Buyer including,  without limitation an update as of the Second Closing Date
regarding the representation contained in Section 3(c) above.

(iii) The  Company  shall  have  executed  and  delivered  to the  Buyer(s)  the
Convertible  Debentures  in the  respective  amounts  set  forth  opposite  each
Buyer(s) name on Schedule I attached hereto.

                                      -17-
<PAGE>

(iv) The Company shall have  provided the Buyer a filed copy of the  Certificate
of  Designations  indicating  that in the event  that  there  exists an Event of
Default as defined in the Transaction Documents and specifically the Convertible
Debentures, which remains uncured for a period of thirty (30) calendar days, the
Buyer's shall be entitled to vote, via proxy,  the Super Voting Preferred Shares
issued to Andrew Haag and Robert Steele.

(v) The Company shall have  certified  that all conditions to the Second Closing
have been  satisfied  that the Company has  increased its  authorized  shares of
Common Stock to at least five  hundred  million  (500,000,000)  shares of Common
Stock and that the Company will file the Registration  Statement with the SEC in
compliance  with the rules and  regulations  promulgated  by the SEC for  filing
thereof two (2)  business  days after the Second  Closing.  If  requested by the
Buyer, the Buyer shall have received a certificate, executed by the two officers
of the Company, dated as of the Second Closing Date, to the foregoing effect. .

(c)  The  obligation  of  the  Buyer(s)  hereunder  to  accept  the  Convertible
Debentures at the Third Closing is subject to the satisfaction, at or before the
Third Closing Date, of each of the following conditions:

(i) The Common Stock shall be authorized for quotation on the OTCBB,  trading in
the Common  Stock  shall not have been  suspended  for any  reason,  and all the
Conversion  Shares  issuable upon the conversion of the  Convertible  Debentures
shall be approved by the OTCBB.

(ii) The representations and warranties of the Company shall be true and correct
in all material respects (except to the extent that any of such  representations
and warranties is already  qualified as to  materiality  in Section 3 above,  in
which  case,  such  representations  and  warranties  shall be true and  correct
without  further  qualification)  as of the date  when  made and as of the Third
Closing  Date as  though  made at that  time  (except  for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or  complied  with by the  Company  at or prior to the Third  Closing  Date.  If
requested by the Buyer, the Buyer shall have received a certificate, executed by
two  officers  of the  Company,  dated as of the  Fourth  Closing  Date,  to the
foregoing effect and as to such other matters as may be reasonably  requested by
the Buyer including,  without  limitation an update as of the Third Closing Date
regarding the representation contained in Section 3(c) above.

(iii) The  Company  shall  have  executed  and  delivered  to the  Buyer(s)  the
Convertible  Debentures  in the  respective  amounts  set  forth  opposite  each
Buyer(s) name on Schedule I attached hereto.

(iv) The Company shall have  certified  that all conditions to the Third Closing
have been  satisfied  and that the  Company's  Registration  Statement  has been
declared  effective by the SEC. If requested by the Buyer,  the Buyer shall have
received a certificate, executed by the two officers of the Company, dated as of
the Third Closing Date, to the foregoing effect.

                                      -18-
<PAGE>

8. INDEMNIFICATION.

(a) In consideration of the Buyer's execution and delivery of this Agreement and
acquiring the Convertible Debentures and the Conversion Shares hereunder, and in
addition to all of the Company's other  obligations  under this  Agreement,  the
Company shall defend, protect, indemnify and hold harmless the Buyer(s) and each
other holder of the Convertible Debentures and the Conversion Shares, and all of
their officers, directors,  employees and agents (including, without limitation,
those  retained  in  connection  with  the  transactions  contemplated  by  this
Agreement) (collectively,  the "Buyer Indemnitees") from and against any and all
actions,  causes of action,  suits,  claims,  losses,  costs,  penalties,  fees,
liabilities and damages, and expenses in connection  therewith  (irrespective of
whether  any  such  Buyer  Indemnitee  is  a  party  to  the  action  for  which
indemnification  hereunder is sought), and including reasonable  attorneys' fees
and  disbursements  (the  "Indemnified  Liabilities"),  incurred  by  the  Buyer
Indemnitees or any of them as a result of, or arising out of, or relating to (a)
any  misrepresentation  or breach of any  representation or warranty made by the
Company  in  this  Agreement,   the  Convertible   Debentures  or  the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby or thereby,  (b) any breach of any  covenant,  agreement or
obligation  of  the  Company  contained  in  this  Agreement,  or  the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby  or  thereby,  or (c) any  cause of  action,  suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution,  delivery,  performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the parties
hereto, any transaction financed or to be financed in whole or in part, directly
or indirectly,  with the proceeds of the issuance of the Convertible  Debentures
or  the  status  of the  Buyer  or  holder  of the  Convertible  Debentures  the
Conversion Shares, as a Buyer of Convertible  Debentures in the Company.  To the
extent that the foregoing  undertaking by the Company may be  unenforceable  for
any reason,  the Company shall make the maximum  contribution to the payment and
satisfaction of each of the Indemnified Liabilities,  which is permissible under
applicable law.

(b) In consideration of the Company's  execution and delivery of this Agreement,
and in addition to all of the Buyer's other  obligations  under this  Agreement,
the Buyer shall defend, protect, indemnify and hold harmless the Company and all
of its officers, directors, employees and agents (including, without limitation,
those  retained  in  connection  with  the  transactions  contemplated  by  this
Agreement)  (collectively,  the "Company  Indemnitees") from and against any and
all  Indemnified  Liabilities  incurred by the  Indemnitees  or any of them as a
result of, or arising out of, or relating to (a) any misrepresentation or breach
of any  representation  or  warranty  made by the  Buyer(s)  in this  Agreement,
instrument or document contemplated hereby or thereby executed by the Buyer, (b)
any breach of any covenant, agreement or obligation of the Buyer(s) contained in
this  Agreement,  the  Investor  Registration  Rights  Agreement  or  any  other
certificate,  instrument or document  contemplated hereby or thereby executed by
the Buyer,  or (c) any cause of action,  suit or claim  brought or made  against
such  Company  Indemnitee  based  on  material  misrepresentations  or  due to a
material  breach and arising out of or resulting from the  execution,  delivery,
performance or enforcement of this Agreement,  the Investor  Registration Rights
Agreement  or any other  instrument,  document or  agreement  executed  pursuant

                                      -19-
<PAGE>

hereto  by  any  of  the  parties  hereto.  To the  extent  that  the  foregoing
undertaking by each Buyer may be unenforceable for any reason,  each Buyer shall
make the maximum  contribution  to the payment and  satisfaction  of each of the
Indemnified Liabilities, which is permissible under applicable law.

9. GOVERNING LAW: MISCELLANEOUS.

(a)  Governing  Law.  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.

(b)  Counterparts.  This  Agreement  may be  executed  in two or more  identical
counterparts,  all of which shall be considered  one and the same  agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered to the other party.  In the event any  signature  page is delivered by
facsimile transmission,  the party using such means of delivery shall cause four
(4) additional  original executed signature pages to be physically  delivered to
the other party within five (5) days of the execution and delivery hereof.

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

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

(e) Entire Agreement, Amendments. This Agreement supersedes all other prior oral
or written  agreements between the Buyer(s),  the Company,  their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this  Agreement  and  the  instruments  referenced  herein  contain  the  entire
understanding  of the parties  with  respect to the matters  covered  herein and
therein and,  except as  specifically  set forth herein or therein,  neither the
Company  nor  any  Buyer  makes  any  representation,   warranty,   covenant  or
undertaking with respect to such matters.  No provision of this Agreement may be
waived or amended other than by an instrument in writing  signed by the party to
be charged with enforcement.

(f) Notices. Any notices, consents, waivers, or other communications required or
permitted to be given under the terms of this  Agreement  must be in writing and
will be  deemed  to  have  been  delivered  (i)  upon  receipt,  when  delivered
personally;  (ii) upon  confirmation of receipt,  when sent by facsimile;  (iii)
three  (3)  days  after  being  sent  by U.S.  certified  mail,  return  receipt
requested,  or (iv)  one (1) 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:

                                      -20-
<PAGE>

If to the Company, to:                     Quintek Technologies Inc.
                                           17951 Lyon Circle
                                           Huntington Beach, CA 92647
                                           Attention:    Robert A. Steele
                                           Telephone:   (714) 848-7741
                                           Facsimile:   (714) 848-7701

With a copy to:                            Sichenzia Ross Friedman Ference LLP
                                           1065 Avenue of the Americas
                                           New York, NY 10018
                                           Attention:   Greg Sichenzia, Esq.
                                           Telephone:   (212) 93-9700
                                           Facsimile:   (212) 930-9725

         If to the Buyer(s),  to its address and facsimile number on Schedule I,
with copies to the Buyer's  counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written  notice to the other party of any change in
address or facsimile number.

(g)  Successors and Assigns.  This Agreement  shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.  Neither
the  Company  nor any  Buyer  shall  assign  this  Agreement  or any  rights  or
obligations  hereunder  without  the prior  written  consent of the other  party
hereto.

(h) No Third Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any  provision  hereof be enforced by, any other
person.

(i)  Survival.  Unless this  Agreement is terminated  under  Section  9(l),  the
representations  and  warranties  of the Company and the  Buyer(s)  contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9,
and the  indemnification  provisions  set forth in Section 8, shall  survive the
Closing  for a  period  of two  (2)  years  following  the  date  on  which  the
Convertible  Debentures are converted in full. The Buyer(s) shall be responsible
only  for  its  own  representations,   warranties,   agreements  and  covenants
hereunder.

(j)  Publicity.  The Company and the  Buyer(s)  shall have the right to approve,
before issuance any press release or any other public  statement with respect to
the transactions contemplated hereby made by any party; provided,  however, that
the Company shall be entitled,  without the prior  approval of the Buyer(s),  to
issue  any  press  release  or other  public  disclosure  with  respect  to such
transactions  required under applicable  securities or other laws or regulations
(the Company  shall use its best  efforts to consult the Buyer(s) in  connection
with any such press release or other public  disclosure prior to its release and
Buyer(s) shall be provided with a copy thereof upon release thereof).

(k) Further Assurances. Each party shall do and perform, or cause to be done and
performed,  all such further acts and things,  and shall execute and deliver all

                                      -21-
<PAGE>

such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(l)  Termination.  In the event that the First  Closing  shall not have occurred
with  respect to the Buyers on or before  five (5)  business  days from the date
hereof due to the Company's or the Buyer's failure to satisfy the conditions set
forth in Sections 6 and 7 above (and the non-breaching  party's failure to waive
such unsatisfied condition(s)), the non-breaching party shall have the option to
terminate this  Agreement  with respect to such breaching  party at the close of
business  on such  date  without  liability  of any  party to any  other  party;
provided,  however, that if this Agreement is terminated by the Company pursuant
to this  Section  9(l),  the Company  shall remain  obligated  to reimburse  the
Buyer(s)  for the fees and  expenses of  Yorkville  Advisors  LLC  described  in
Section 4(g) above.

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

                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]

                                      -22-
<PAGE>

         IN WITNESS  WHEREOF,  the  Buyers  and the  Company  have  caused  this
Securities  Purchase  Agreement to be duly executed as of the date first written
above.

                                    COMPANY:

                                    QUINTEK TECHNOLOGIES INC.

                                     By: /s/ ROBERT A. STEELE
                                         --------------------
                                     Name:   Robert A. Steele
                                     Title:  Chief Executive Officer

                                      -23-

                                   SCHEDULE I

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>

                                                                                 Address/Facsimile             Amount of
                Name                              Signature                       Number of Buyer             Subscription
-----------------------------          --------------------------------  --------------------------------     ---------------

<S>                                    <C>                                  <C>                       <C>           <C>
Cornell Capital Partners, LP           By:      Yorkville Advisors, LLC  101 Hudson Street - Suite 3700          $2,000,000
                                       Its:     General Partner          Jersey City, NJ  07303
                                                                         Facsimile:        (201) 985-8266

                                       By: /s/ MARK ANGELO
                                       Name:    Mark Angelo
                                       Its:     Portfolio Manager

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

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>Exhibit 4.2

                                                            Dated:  May 17, 2006

         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-1 $750,000

                            QUINTEK TECHNOLOGIES INC.

                          Secured Convertible Debenture

                                Due May 17, 2009

         This  Secured  Convertible  Debenture  (the  "Debenture")  is issued by
QUINTEK TECHNOLOGIES INC., a California 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 Seven Hundred Fifty  Thousand
Dollars  ($750,000)  together with accrued but unpaid  interest on or before May
17, 2009 (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 365-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  5) 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 provided that the Closing Bid Price of the of the Obligor's Common
Stock, as reported by Bloomberg,  LP, is less than the Fixed Conversion Price at
the time of the Redemption  Notice. The Obligor shall pay an amount equal to the
principal amount being redeemed plus a redemption premium ("Redemption Premium")

                                      -1-
<PAGE>

equal to twenty  percent  (20%) of the  principal  amount  being  redeemed,  and
accrued interest,  (collectively  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.

                  In the event the Obligor  exercises a redemption of either all
or a portion of the outstanding  principal amounts plus accrued interest due and
outstanding under this debenture as outlined herein,  the Holder shall receive a
warrant to purchase two hundred fifty thousand (250,000) shares of the Company's
Common Stock for every One Hundred Thousand  Dollars  ($100,000)  redeemed,  pro
rata.  (the  "Warrant") The Warrant shall be exercisable at an exercise price of
$0.0662. The Warrant shall survive for five (5) years from the issuance date and
the shares of the Company's  Common Stock  issuable upon exercise of the Warrant
shall have "piggy-back" and demand registration rights.

         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 be permitted to convert all or any portion
of this Debenture during such three business day period.

         Security Agreements.  This Debenture is secured by a Security Agreement
of even  date  herewith  between  the  Obligor  and  the  Holder,  and  Security
Agreements of even date herewith between QSI and Sapphire  Consulting  Services,
both wholly owned subsidiaries of the Company, and the Holder (all such security
agreements shall be referred to as the "Security Agreement").

         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  shares  of  Common  Stock or  preferred  stock  without
consideration or for  consideration per share less than the Closing Bid Price of
the Common Stock  determined  immediately  prior to its issuance,  (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 without consideration or for consideration per share less than the Closing
Bid Price of the Common  Stock  determined  immediately  prior to its  issuance,
(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 Company shall be entitled to file a
registration   statement  on  Form  S-8   registering  up  to  fifteen   million
(15,000,000) issuable under the Company's bonafide employee stock option plan.

         Rights of First Refusal.  For a period of eighteen (18) months from the
date hereof, 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

                                      -2-
<PAGE>

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 three (3) 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.

         (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 5) 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

                                      -3-
<PAGE>

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;

                  (v) The Common  Stock  shall cease to be quoted for trading or
listing for trading on either the Nasdaq OTC Bulletin Board ("OTC"),  or if then
listed on  Nasdaq  Capital  Market,  New York  Stock  Exchange,  American  Stock
Exchange or the Nasdaq National Market (each, a "Subsequent Market") shall cease
to be quoted for  trading or  listing  on such  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 5);

                  (vii) The  Obligor  shall fail to file the  Underlying  Shares
Registration Statement (as defined in Section 5) with the Commission (as defined
in Section 5), 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 Investor  Registration Rights Agreement  ("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,  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

                                      -4-
<PAGE>

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.
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 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) Conversion at Option of Holder.

                  (i) 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 5) (subject to the
limitations  on  conversion  set forth in Section  3(b)  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.

                  (ii)  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(b),  then,  at the option of the Holder,  the
Obligor,  in lieu of  delivering  shares of Common  Stock  pursuant  to  Section
3(a)(i),  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,  chosen by the Holder,  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.

                                      -5-
<PAGE>

                  (iii) 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.

         (b) Certain Conversion Restrictions.

                  (i) 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 4.99% 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 4.99% 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) 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.

         (c) Conversion Price and Adjustments to Conversion Price.

         (i) The conversion  price in effect on any Conversion Date shall be, at
the sole  option  of the  Holder,  equal  to  either  (a)  $0.0662  (the  "Fixed
Conversion  Price")  or (b)  ninety  five  percent  (95%) of the  lowest  Volume
Weighted  Average  Price of the Common Stock during the thirty (30) trading days
immediately  preceding  the  Conversion  Date as  quoted by  Bloomberg,  LP (the
"Market Conversion Price"). The Fixed Conversion Price and the Market Conversion
Price are  collectively  referred to as the  "Conversion  Price." The Conversion

                                      -6-
<PAGE>

Price  may  be  adjusted   pursuant  to  the  other  terms  of  this  Debenture.
Notwithstanding the restriction set for the in Section 2(b)(ii) the Holder shall
have the  absolute  right to convert any or all of this  Debenture  at the Fixed
Conversion Price free of such restriction.

                   (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
Conversion  Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common  Stock  (excluding  treasury  shares,  if any)
outstanding  before such event and of which the denominator  shall be the number
of shares of Common Stock  outstanding  after such event.  Any  adjustment  made
pursuant to this Section  shall become  effective  immediately  after the record
date for the determination of stockholders  entitled to receive such dividend or
distribution and shall become effective  immediately after the effective date in
the case of a subdivision, combination or re-classification.

                  (iii) 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 Conversion  Price, then
the Fixed  Conversion  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 Conversion  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 such right,
option or warrant to purchase  shares of the Common  Stock the issuance of which
resulted  in an  adjustment  in the  Fixed  Conversion  Price  pursuant  to this
Section,  if any such right,  option or warrant  shall expire and shall not have
been  exercised,   the  Fixed  Conversion  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  Conversion  Price made pursuant to the  provisions of
this Section after the issuance of such rights or warrants)  had the  adjustment
of the Fixed Conversion 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  Conversion  Price (if the  holder of the  Common
Stock or Common  Stock  Equivalent  so  issued  shall at any  time,  whether  by

                                      -7-
<PAGE>

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
Conversion  Price,  such issuance shall be deemed to have occurred for less than
the Fixed Conversion  Price),  then, at the sole option of the Holder, the Fixed
Conversion  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
Conversion Price at which this Debenture shall  thereafter be convertible  shall
be determined by multiplying the Fixed  Conversion  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.

                  (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.

                                      -8-
<PAGE>

                  (vii)  The  Obligor  shall  at  all  times  reserve  and  keep
available out of its authorized Common Stock the full number of shares of Common
Stock issuable upon conversion of all outstanding  amounts under 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 $0.01 or whole share.

                  (ix)  Whenever the  Conversion  Price is adjusted  pursuant to
Section 3 hereof, the Obligor shall promptly mail to the Holder a notice setting
forth the  Conversion  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 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

                                      -9-
<PAGE>

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)      Other Provisions.

                  (i) 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.

                  (ii) 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.

                  (iii) 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

                                      -10-
<PAGE>

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.

                  (iv)  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.

                  (v) 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) 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
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).  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.

         Section  4.   Notices.   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:

                                      -11-
<PAGE>

If to the Company, to:                 Quintek Technologies Inc.
                                       17951 Lyon Circle
                                       Huntington Beach, CA 92647
                                       Attention:    Robert A. Steele
                                       Telephone:    (714) 848-7741
                                       Facsimile:    (714) 848-7701

With a copy to:                        Sichenzia Ross Friedman Ference, LLP
                                       1065 Avenue of the Americas
                                       New York, NY 10018
                                       Attention:    Greg Sichenzia, Esq.
                                       Telephone:    (212) 93-9700
                                       Facsimile:    (212) 930-9725

If to the Holder:                      Cornell Capital Partners, LP
                                       101 Hudson Street, Suite 3700
                                       Jersey City, NJ 07303
                                       Attention:     Mark Angelo
                                       Telephone:     (201) 985-8300

With a copy to:                        David Gonzalez, 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 5.      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

                                      -12-
<PAGE>

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).

         "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.

         "Commission" means the Securities and Exchange Commission.

         "Common Stock" means the common stock,  par value $0.01, of the Obligor
and stock of any other class into which such shares may  hereafter be changed or
reclassified.

         "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.

         "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 Security Agreement, the Irrevocable Transfer
Agent Instructions, and the Registration Rights Agreement.

                                      -13-
<PAGE>

         "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 6. 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
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 7. 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 8. 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 9. 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  10. 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

                                      -14-
<PAGE>

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 11. 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  12. 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
deprive that party of the right  thereafter  to insist upon strict  adherence to
that term or any other term of this Debenture. Any waiver must be in writing.

         Section 13. If any provision of this  Debenture is invalid,  illegal or
unenforceable,  the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance,  it shall  nevertheless
remain applicable to all other persons and  circumstances.  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 14. Whenever any payment or other obligation hereunder shall be
due on a day other than a Business  Day,  such payment shall be made on the next
succeeding Business Day.

         Section 15. THE 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]

                                      -15-
<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.

                         QUINTEK TECHNOLOGIES INC.

                         By: /s/ ROBERT A. STEELE
                             --------------------
                             Name: Robert A. Steele
                         Title: Chief Executive Officer

                                      -16-

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