Document:

EXHIBIT 10.1

                             INTERCREDITOR AGREEMENT

     This  Intercreditor  Agreement  ("Agreement")  is  entered  into  effective
September  22,  2005,  between Nottingham Mayport, LLC ("NML"), Dutchess Private
Equities  Fund  LP  and  Dutchess  Private  Equities  Fund  II LP (collectively,
"Dutchess") and Bob (Robert) Unger ("Unger") (collectively, the "Creditors") and
Network  Installation  Corp.,  a  Nevada  corporation  ("NIC")  and  Kelley
Communication  Company,  Inc.,  a  Nevada  corporation  ("KCCI")  (collectively,
"Borrower").

                                    RECITALS:

     A.     Creditors  wish to advance credit (the "Loan") to the Borrower to be
evidenced  by  one  or  more promissory notes (the "Note").  Additionally, since
October  2003, NIC has secured financing ("Financing") with Dutchess through the
issuance of its convertible debentures ("Debentures") and may from time continue
to  issue  its  Debentures to Dutchess ("Future Financing"). Payment of the Note
and  Debentures  will be secured by a Security Agreement granting to Creditors a
security  interest  in  certain  assets of Borrower (the "Collateral") on a pari
passu  and  pro  rata  basis.  The  Note, Debentures and all other documents and
instruments  evidencing,  securing  or relating to the Loan, Financing or Future
Financing  are  hereinafter  sometimes  collectively  referred  to  as the "Loan
Documents."

     B.     The  Creditors  desire  to  set  forth  their  mutual understanding,
acknowledgment  and  agreement  with  respect  to  their  respective  rights and
priorities  under  the  Loan  Documents.

     NOW,  THEREFORE, in consideration of the recitals and agreements herein and
other  valuable  consideration,  the receipt and sufficiency of which are hereby
acknowledged,  the  parties  hereto  agree  as  follows:

                                   AGREEMENTS:

     1.     Priority  of  Lenders.  Neither of the Creditors shall have priority
            ---------------------
over  any  of  the  other  Creditors with respect to rights against the Borrower
under the Loan Documents, provided that the Creditors intend that their relative
burdens  and  benefits  from  enforcement  of  the  Loan  Documents  shall  be
proportionate  to the amounts owed to each Lender under the Loan Documents.  The
Creditors will share a security interest in the Collateral on a pari passu basis
in  proportion  to  the  amounts  owed  to each Lender under the Loan Documents.

     2.     Default  Under  the  Loan  Documents.
            ------------------------------------

          2.1     Notice  of  Default.  Upon  the  occurrence  of any default or
                  -------------------
event  of  default  ("Default")  under any of the Loan Documents, the party with
knowledge  of  such  Default shall provide written notice to any other party who
lacks  such  knowledge  within  five  (5) days of learning of such Default.  The
parties  agree that a Default under any of the Loan Documents shall be a Default
under  the  other  Loan  Documents,  and  vice  versa.

     2.2     Enforcement  Action and Sharing of Recoveries.  Prior to exercising
             ----------------------------------------------
any  rights  or  remedies  under  the Loan Documents, the parties shall reach an
agreement  on the enforcement action to be taken, if any, and the timing of such
action, taking into account any rights of senior lenders and senior lienholders.
Unless  agreed  to otherwise in writing, enforcement action taken under the Loan
Documents  shall  be  taken  in  such  a  way that the rights and remedies of he
Creditors  are  in  proportion  to  the amount owed to each Creditor by Borrower
under  the  Loan  Documents.  If  the Creditors are unable to reach an agreement
regarding  enforcement of the respective loan documents within ten business days
of  written  notice by either to the other, then, notwithstanding the procedures
for  settling  the  disagreement  under  Section  2.5,  the  Creditors  shall be
obligated  (and  shall be deemed to have agreed to and authorized) to pursue any
and  all  remedies  at  law  and  in  equity, as may be selected by Agent of the
Creditors  (as defined in Section 2.3), including without limitation suit on the
Notes,  Debentures  or  foreclosure  of  the  Collateral,  to the maximum extent
allowed  by  law, without any requirement to make an exclusive election but with
authority  vested  in  Agent  to  make  any such election or to elect to take no
action  in  light of rights of senior lenders or senior lienholders.  All monies
collected  in  connection with enforcement action (excluding payment voluntarily
made  in the absence of a default) from any source whatsoever, shall be first be
applied  to  the  costs  and  expenses,  including  attorneys' fees, incurred in
pursuing  the  enforcement  action  and  obtaining  the recovery.  The remaining
monies  shall  be distributed to the parties on a pari passu basis in proportion
to the amounts owed to each Lender under the Loan Documents (including principal
and  interest  under  the  Notes  and  Debentures).

          2.3     Control  of  Enforcement  Action;  No Liability or Warranties.
                  -------------------------------------------------------------
Dutchess  is  authorized to act as agent of the Creditors ("Agent") for purposes
of  enforcement  of  rights  of  the  Creditors  under the Loan Documents.  Once
agreement has been reached among Creditors under Section 2.2, the Agent shall be
authorized  to  take  all  actions  and  execute  all  documents  as he may deem
appropriate  to effectuate such agreement.  If the Creditors are unable to reach
agreement  and are therefore deemed to have reached agreement under Section 2.2,
the  Agent  may  determine  in  its sole discretion whether and when to commence
enforcement  action  and  shall  act as agent for the Creditors, exercising sole
control  over  all  matters  relating to the enforcement action on behalf of the
parties,  and  in  that  regard  the  Agent  shall  be  permitted  to  take into
consideration  any  required  consent of senior creditors or senior lienholders.
The  Agent  will  provide information regarding the status of enforcement action
taken  and  the  costs associated therewith on a regular basis, but no less than
monthly.

2.4     Arbitration.  If  there  is any dispute among the parties regarding this
        -----------
Agreement, the parties may seek resolution of such dispute by arbitration, which
     shall be the exclusive means of resolving such dispute.  If the parties are
unable  to  reach agreement on the enforcement action to be taken and the timing
thereof,  the  Agent  shall be authorized to act as provided in Section 2.2, but
the  parties  may  simultaneously  seek  resolution  of  any  such  dispute  by
arbitration,  which  shall  be  the  exclusive  means of resolving such dispute.
Arbitration  may  be  initiated  by  either party by making a written demand for
arbitration  on  the  other party.  The demand shall contain a statement setting
forth  the  nature  of  the  dispute,  the  resolution  sought.  Within five (5)
business  days  of that demand, the parties shall select one arbitrator.  If for
any reason, the parties are unable to agree upon the selection of the arbitrator
within  seven (7) calendar days after a notice of arbitration is given, then the
arbitrator  shall  be selected in the manner provided for by the Arizona Uniform
Arbitration Act, A.R.S.   12-1501, et seq.  The arbitrator and the parties shall
schedule  a hearing promptly and the arbitrators shall render a decision no more
than  21 days after such arbitrator's selection.  Any decision of the arbitrator
shall  be  final,  binding  and  conclusive  upon  the  parties.  Costs  of  the
arbitration  shall  be shared by the parties.  All other aspects of this binding
arbitration shall be governed by the Arizona Uniform Arbitration Act and, to the
extent  consistent  with  such  Act,  the  rules  of  the  American  Arbitration
Association  unless  the parties agree otherwise at the time.  These arbitration
procedures  require  that  unless the Creditors agree otherwise, the parties use
them  exclusively  rather than litigation as a means of resolving their disputes
hereunder  or  to determine the consequences of a default and the implementation
of  the remedies therefore.  Notwithstanding any other provision of this section
to  the  contrary, if a party wishes to seek interim relief, whether affirmative
or  prohibitive,  in  the  form  of a temporary restraining order or preliminary
injunction  or  other  interim  equitable  relief concerning a dispute including
without  limitation  declaratory  relief,  provisional  remedies, special action
relief,  stay  proceedings  in  connection  with  special  action relief and any
similar  relief of an interim nature, either before beginning or at any point in
the  arbitration  procedures, such party may initiate the appropriate litigation
to  obtain  such  relief  ("Equitable  Litigation").  Nothing  herein  shall  be
construed to suspend or terminate the obligation of the Creditors to promptly to
proceed  with  the  arbitration  procedures  concerning  the dispute that is the
subject  of  such  Equitable  litigation while such Equitable Litigation and any
appeal  therefrom  is  pending.  Notwithstanding  any contrary provisions of the
Arizona  Rules  of  Civil Procedure or the Federal Rules of Civil Procedure, the
parties  agree  there  shall  be no consolidation of any hearing for preliminary
injunction  in  the Equitable Litigation with a trial of an action for permanent
injunction  on  the  same  matter.  Regardless of whether such interim relief is
granted or denied or such Equitable Litigation is pending or any appeal is taken
from  the  grant  or  denial  of  such  relief,  at  all times the parties shall
diligently  proceed  to  complete  the  arbitration  procedures.  Any interim or
appellate  relief  granted  in  such Equitable Litigation shall remain in effect
until, and only until, the arbitration procedures concerning the dispute that is
the subject of such Equitable Litigation result in a settlement agreement or the
issuance  of  an arbitration decision which shall be binding and final and shall
supercede  and  nullify  any  decision  in  the  Equitable  Litigation.

     3.     Borrower's Other Obligations.  This Agreement shall not be deemed or
            ----------------------------
construed to determine any rights or priorities of the Creditors with respect to
any  obligations of Borrower to either of them except obligations under the Loan
Documents.

     4.     Review  of  Loan Documents.  The Creditors acknowledge that each has
            --------------------------
received  and  reviewed  (and  had an opportunity to have its counsel to review)
copies  of  the  Loan  Documents.

     5.     Notice  of Assignment.  In the event any party assigns any or all of
            ---------------------
his  rights  under  the  Loan  Documents  to  any  other  person or entity, such
assignment  shall  be  conditioned  upon  such  entity  or  person  assuming the
obligations  of  the  assigning  party hereunder.  Within ten (10) business days
immediately  following any such assignment, the assigning party shall deliver to
the  other  party(s)  copies  of  the  documents  evidencing such assignment and
assumption.

     6.     Benefit  of  This  Agreement.  The  terms,  covenants and agreements
            ----------------------------
contained  herein  are  solely  for  the  benefit  of  the  Creditors  and their
respective  successors  and  assigns, and are not for the benefit of, and do not
confer  any  rights or remedies on, Borrower or any other third party, and shall
not,  as  against Borrower, in any way affect or limit the rights or remedies of
any  of  the Creditors under the Loan Documents with respect to Borrower, or any
collateral  for  any  Loan.

     7.     Notices.  All  notices, demands, requests or other communications to
            -------
be  sent  by  one  party  to  the other hereunder or required by law shall be in
writing and shall be deemed to have been validly given or served by (a) personal
delivery  (including  by  any  messenger  or  courier service) (b) by electronic
facsimile  transmission  or  (c)  by  certified or registered U.S. mail, postage
prepaid,  with  return  receipt  requested,  as  follows:
Nottingham  Mayport,  LLC:Attn:  James  H.  Click,  Jr.,  Manager
                              6725  East  Camino  Principal
                              Tucson,  Arizona  85715
                              Phone:  (520)  570-7343
                              Fax:  (520)  747-9965

With  a  copy  to:            Scott  DeWald,  Esq.
                              Lewis  and  Roca  LLP
                              40  North  Central  Avenue
                              Phoenix,  Arizona  85004
                              Phone:  (602)  262-5333
                              Fax:     (602)  262-5747

     Unger:                   Robert  Unger
                              1899  Hillsboro  Drive
                              Henderson,  NV  89014
                              Phone:  (702)  454-9331
                              Fax:  (702)  454-9332

          Dutchess:           Attn:  Douglas  Leighton
                              Dutchess  Capital  Management  LLC
                              50  Commonwealth  Ave.,  Suite  2
                              Boston,  MA  02116
                              Phone:  (617)  301-4701
                              Fax:  (617)  249-0947

Borrower:              Attn:  Michael  Kelley
                              Kelley  Communication  Company,  Inc.
                              5625  South  Arville  St.,  Suite  E
                              Las  Vegas.  NV  89118
                              Phone:  (702)  889-8777
                              Fax:  (702)  899-8237

                       Attn:  Jeffrey  Hultman
                              Network  Installation  Corp.
                              15235  Alton  Parkway,  Suite  200
                              Irvine,  CA  92618
                              Phone:  (949)  753-7551
                              Fax:  (949)  753-7499

Notice  given  by  personal  delivery  shall  be  deemed given and received upon
delivery  to  the  appropriate  address,  if  the delivery is made during normal
business  hours  on  a Business Day (and on the first Business Day following the
day  of delivery if the delivery is made other than during normal business hours
on  a  Business Day).  Notices shall be deemed given and received (i) if sent by
electronic facsimile transfer, upon confirmed transmission, (ii) if sent by U.S.
mail, upon two (2) business days after deposit in the U.S. mail, and (iii) if by
personal delivery, upon receipt.  Each party may from time to time designate, by
a notice given as provided herein, a different notice address.  The inability to
deliver  because of a changed address of which no notice was given, or rejection
or  other  refusal to accept any notice shall be deemed to be the receipt of the
notice  as  of  the date of such inability to deliver or rejection or refusal to
accept.  Any notice to be given by any party hereto may be given by the attorney
for  such  party.

     8.     Reliance.  The  Creditors each hereby acknowledge that it is relying
            --------
on  the  agreements made herein in connection with its determination to make the
Loan  to  Borrower.

     9.     Binding  Agreement.  This  Agreement shall be binding upon and inure
            ------------------
to  the  benefit  of  the  parties  hereto  and  their respective successors and
assigns.

     10.     Counterparts.  This  Agreement  may be executed concurrently in one
             ------------
or  more  counterparts by the parties, which counterparts together when executed
by  all  of the parties shall for all purposes be deemed an original, but all of
which  together  shall  constitute  one  and  the  same  instrument.  Signatures
produced  by  electronic  facsimile transmission shall be accepted as originals.

     11.     Entire  Agreement.  This Agreement constitutes and incorporates the
             -----------------
entire  agreement  between  the  Creditors concerning the subject matter of this
Agreement,  and  supersedes  and cancels any prior understandings and agreements
between  the  Creditors  concerning  the  subject  matter  hereof.

12.     Use  of  Terms.  As  used herein, words in any gender shall be deemed to
        --------------
include  the  other  genders,  and  the  singular shall be deemed to include the
plural,  and  vice  versa.

     13.     Severability.  If  any  provision  in  this Agreement shall be held
             ------------
invalid,  illegal  or  unenforceable in any jurisdiction, the validity, legality
and  enforceability  of  the remaining provisions of this Agreement shall not be
impaired thereby, nor shall the validity, legality or enforceability of any such
defective  provision  be  in  any  way  affected  or  impaired  in  any  other
jurisdiction.

     14.     Modification,  Waiver,  Consent.  Any modification or waiver of any
             -------------------------------
provision of this Agreement shall not be effective unless the same is in writing
and  signed  by  the  party  against  whom  enforcement is sought, and then such
modification, waiver or consent shall be effective only in the specific instance
and  for  the  specific  purpose  given.

     15.     Time  of  the  Essence.  Time  is of the essence in this Agreement.
             ----------------------

     16.     Governing  Law.  The provisions of this Agreement shall be governed
             --------------
by and construed in accordance with the law of the State of Nevada applicable to
contracts  made  in  such State. Any action or proceeding seeking to enforce any
provision  of, or based on any right or obligation arising out of, or to resolve
any  legal  or  factual  disputes  concerning,  or  other  wise relating to this
Agreement will be exclusively resolved by arbitration between the parties before
a  single  arbitrator  in  Phoenix,  Arizona  under  the  American  Arbitration
Association  rules.  If  the  parties  are unable to agree on an arbitrator, one
will  be  appointed by the AAA.  Any decision or award of the arbitrator will be
final  and  binding  on  the  parties,  and judgment may be entered in any court
having  jurisdiction  over  the  party against which the decision and award run.

     17.     Counsel.  This  Agreement has been drafted by Lewis and Roca LLP on
             -------
behalf  of  NML.  The  Creditors  have been advised to seek their own counsel in
connection  with  this  Agreement.

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

NOTTINGHAM  MAYPORT,  LLC  ("NML"),  an  Arizona  Limited  Liability  Company

/s/  James  H.  Click,  Jr.
---------------------------
By:  James  H.  Click,  Jr.,  Its  Manager

ROBERT  UNGER

/s/  Robert  Unger
------------------

DUTCHESS  CAPITAL  MANAGEMENT LLC, GENERAL PARTNER TO; DUTCHESS PRIVATE EQUITIES
FUND  LP  AND  DUTCHESS  PRIVATE  EQUITIES  FUND  II  LP  ("Dutchess")

/s/  Michael  A.  Novielli
--------------------------
By:  Michael  A.  Novielli,  Managing  Member

BORROWER

KELLEY  COMMUNICATION  COMPANY,  INC.

/s/  James Michael  Kelley
---------------------------
By  James Michael  Kelley,  President
   ----------------------------------

NETWORK  INSTALLATION  CORP.

     /s/  Jeffrey  R.  Hultman
     -------------------------
By  Jeffrey  R.  Hultman,  President
    --------------------Exhibit 10.1

                               DEBENTURE AGREEMENT

THE  SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN  RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE
SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT
BE  TRANSFERRED  OR  RESOLD  EXCEPT  AS  PERMITTED  UNDER  SUCH LAWS PURSUANT TO
REGISTRATION  OR  AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS  OF  THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.
ANY  REPRESENTATION  TO  THE  CONTRARY  IS  UNLAWFUL.

FACE  AMOUNT                                     $500,000
PRICE                                            $500,000
DEBENTURE  NUMBER                    September - 2005-101
ISSUANCE  DATE                       September  30,  2005
MATURITY  DATE                       September  30,  2010

     FOR  VALUE  RECEIVED,  Securac  Corp. a Nevada corporation (the "Company"),
hereby  promises  to  pay  DUTCHESS  PRIVATE EQUITIES FUND, II, LP ("Holder") by
September  30,  2010 (the "Maturity Date"), the principal amount of Five Hundred
Thousand  Dollars  ($500,000)  U.S.,  and  to pay interest and redemption on the
principal  amount hereof, and any accrued penalties accrued, in such amounts, at
such  times  and  on  such  terms  and  conditions  as  are  specified  herein.

     The  Debenture  is  subject  to automatic conversion at the end of five (5)
years  from the date of issuance at which time the Debenture outstanding will be
automatically  converted  based  upon  the formula set forth in Section 3.2 (c).

Article  1          Interest

     The  Company  shall  pay ten percent (10%) annual coupon on the unpaid Face
Amount  of this Debenture (the "Debenture") at such times and in such amounts as
outlined  in this section.  The Company will make mandatory prepaid payments, in
advance,  on  the  interest  ("Interest  Payment"),  with  the  minimum Interest
Payments  outlined  in  Exhibit  B  for  the  first  one  (1)  month, and herein
incorporate  by  reference  in  the  amount  of  four  thousand  one hundred and
twenty-five dollars and ninety-six cents ($4,125.96) per month for the first one
(1)  month  following  Issuance  Date.  The first Interest Payment is due within
three  days  of  funds  being  disbursed  to  the  Company  (a  "Closing:").

     Any monies paid to the Holder in excess of the interest due when paid shall
be  credited  toward  the  Face  Amount  of  the  Debenture.

Article  2          Method  of  Payment

     Section  2.1     Prior  to  the  U.S.  Securities  and  Exchange Commission
("SEC")  declaring  the  registration  statement  for  the shares underlying the
Debenture  ("Registration  Statement")  effective  ("Effective  Date").

     Amortizing  payments  will  be  made by the Company in satisfaction of this
Debenture  (each  a  "Payment,"  and collectively, the "Payments") shall be made
monthly  on  the  first day of each business day of each month while there is an
outstanding  balance  on  the Debenture, to the Holder, in the amounts ("Payment
Amount" and collectively, the "Payment Amounts") outlined below on the following
schedule:

Payment for Month 1 (due within three (3) days of the Issuance Date)   $4,125.96

Payment  for  Month  2  and  each  month  thereafter                  $54,345.18

Notwithstanding any provision to the contrary in this Debenture, the Company may
pay  in full to the Holder the Face Amount, or any balance remaining thereof, in
readily  available  funds  at  any  time  and from time to time without penalty.

The  minimum Payments are outlined on Exhibit B, attached hereto and incorporate
by  reference.

     Section  2.2     Subsequent  to  the  Effective  Date.

     The  Holder,  at  its sole option, shall be entitled to either a) request a
Payment  from  the  Company in the amounts set forth in the table in Section 2.1
above;  or,  b)  the  Holder  may  elect  to  convert a portion of the Debenture
pursuant  to  Article 3 below in an amount equal to the Payment Amount.   In the
event the Holder is unable to convert that portion of the debenture equal to the
Payment  Amount  during a calendar month, the Company shall make a payment in an
amount  equal  to  the difference between the amount converted by the Holder and
the  Payment  Amount  due  for  that  month.

     Nothing  contained  in this Article 2 shall limit the amount the Holder can
elect  to  convert  during a calendar month except as defined in Section 3.2 (i)

     All Payments made in this Article 2, shall be applied toward the Redemption
Amount  as  outlined  in  Article  14,  herein.

     Section  2.3  Prepayment

The  Company  may make additional payments ("Prepayment") without any penalties.
After  Closing,  the  Company  must  make  a  Prepayment  to the Holder when the
aggregate  amount  of financing received by the Company is in excess of $500,000
("Threshold  Amount").  The  Company agrees to pay one hundred percent (100%) of
any  proceeds  raised  by  the  Company  over  the  Threshold  Amount toward the
Prepayment of the Debenture with Interest until the Amount is paid in full.  The
Prepayments  shall  be  made  to  the  Holder  upon the Company's receipt of the
financing.  Failure  to  do  so  will  result  in  an  event  of  default.

Article  3          Conversion

Section  3.1     Conversion  Privilege

(a)     The Holder of this Debenture shall have the right to convert any and all
     amounts  owing under this Debenture into shares of Common Stock at any time
following  the  Closing  Date  and  which is before the close of business on the
Maturity  Date,  except  as  set  forth  in Section 3.1(c) below.  The number of
shares  of  Common  Stock  issuable  upon  the  conversion  of this Debenture is
determined  pursuant to Section 3.2 and rounding the result to the nearest whole
share.

(b)     This Debenture may not be converted, whether in whole or in part, except
     in  accordance  with  this  Article  3.

(c)     In the event all or any portion of this Debenture remains outstanding on
     the  Maturity  Date,  the  unconverted  portion  of  such  Debenture  will
automatically  be  converted  into  shares  of  Common Stock on such date in the
manner  set  forth  in  Section  3.2.

Section  3.2     Conversion  Procedure.

(a)     Conversion Procedures. The unpaid Face Amount of and accrued interest on
     this  Debenture  may  be converted, in whole or in part, any time following
the  Closing  Date.  Such  conversion  shall  be  effectuated  by sending to the
Company a facsimile or via electronic mail the signed Notice of Conversion which
evidences  Holder's  intention  to convert the Debenture indicated.  The date on
which  the Notice of Conversion is delivered ("Conversion Date") shall be deemed
to  be  the date on which the Holder has delivered to the Company a facsimile of
the  signed  Notice  of  Conversion.  Notwithstanding  the  above, any Notice of
Conversion  received by 5:00 P.M. EST, shall be deemed to have been received the
previous  business  day,  with  receipt  being  via  a  confirmation  of time of
facsimile  of  the  Holder.

(b)  Common  Stock  to  be Issued. Upon the conversion of any Debenture and upon
receipt  by  the  Company of a facsimile of Holder's signed Notice of Conversion
the  Company  shall  instruct  its  transfer  agent  to issue stock certificates
without  restrictive  legend  (other than a legend referring to the registration
statement  and  prospectus delivery requirements) or stop transfer instructions,
if  at that time the Registration Statement has been declared effective (or with
proper  restrictive  legend  if  the  Registration Statement has not as yet been
declared  effective),  in  such  denominations  to  be  specified  at conversion
representing the number of shares of Common Stock issuable upon such conversion,
as  applicable.  The  Company  shall  act  as  Registrar  and  shall maintain an
appropriate  ledger  containing  the  necessary information with respect to each
Debenture.  The  Company  warrants  that  no  instructions,  other  than  these
instructions,  have  been  given or will be given to the transfer agent and that
the  Common  Stock  shall otherwise be freely resold, except as may be set forth
herein.

(c)  Conversion  Rate.  Holder  is entitled to convert the unpaid Face Amount of
this  Debenture,  plus accrued interest, any time following the Closing Date, at
the  lesser  of (i) the lowest closing bid price of the Common Stock between the
Issuance  Date and the date of filing the registration statement covering resale
of  the  shares  underlying  this  Debenture;  or  (ii) fifty-five cents ($.55).
("Fixed Conversion Price"), each being referred to as the "Conversion Price". No
fractional  shares  or  scrip representing fractions of shares will be issued on
conversion,  but  the number of shares issuable shall be rounded up, as the case
may  be,  to  the  nearest  whole  share.  The Holder shall retain all rights of
conversions  during  any  partial  trading  days.

(d)  Nothing contained in this Debenture shall be deemed to establish or require
the  payment  of  interest to the Holder at a rate in excess of the maximum rate
permitted  by  governing law. In the event that the rate of interest required to
be  paid  exceeds  the  maximum  rate  permitted  by  governing law, the rate of
interest  required  to  be paid thereunder shall be automatically reduced to the
maximum rate permitted under the governing law and such excess shall be returned
with  reasonable  promptness  by  the  Holder  to  the  Company.

(e)     It  shall  be the Company's responsibility to take all necessary actions
and  to  bear  all  such  costs  to  issue  the Common Stock as provided herein,
including  the  responsibility and cost for delivery of an opinion letter to the
transfer  agent,  if  so  required.  The person in whose name the certificate of
Common  Stock is to be registered shall be treated as a shareholder of record on
and  after  the conversion date. Upon surrender of any Debentures that are to be
converted  in  part, the Company shall issue to the Holder a new Debenture equal
to  the  unconverted  amount,  if  so  requested  in  writing  by  Holder.

(f)  Within  three (3) business days after receipt of the documentation referred
to  above  in  Section  3.2(a),  the  Company  shall  deliver  a certificate, in
accordance with Section 3.2(c) for the number of shares of Common Stock issuable
upon  the  conversion.  In  the  event the Company does not make delivery of the
Common  Stock, as instructed by Holder, within three (3) business days after the
Conversion  Date,  then  in  such  event  the  Company shall pay to Holder three
percent  (3%)  per  day  in  cash,  of  the dollar value of the Debentures being
converted,  compounded  daily,  per  each day after the third (3rd) business day
following  the  Conversion  Date  that  the Common Stock is not delivered to the
Purchaser,  as  liquidated  damages.

                The  Company acknowledges that its failure to deliver the Common
Stock  within  three  (3) business days after the Conversion Date will cause the
Holder  to  suffer  damages  in  an  amount that will be difficult to ascertain.
Accordingly,  the  parties  agree  that  it  is  appropriate  to include in this
Debenture a provision for liquidated damages.  The parties acknowledge and agree
that  the  liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form  and  amount  of  such  liquidated  damages  are  reasonable  and  will not
constitute  a  penalty.  The payment of liquidated damages shall not relieve the
Company  from  its obligations to deliver the Common Stock pursuant to the terms
of  this  Debenture.

              To  the extent that the failure of the Company to issue the Common
Stock pursuant to this Section 3.2(f) is due to the unavailability of authorized
but unissued shares of Common Stock, the provisions of this Section 3.2(f) shall
not  apply  but  instead  the  provisions  of  Section  3.2(m)  shall  apply.

              The  Company  shall  make any payments incurred under this Section
3.2(f)  in  immediately  available funds within three (3) business days from the
date the Common Stock is fully delivered.  Nothing herein shall limit a Holder's
right  to  pursue  actual  damages  or  cancel  the conversion for the Company's
failure  to  issue  and  deliver  Common  Stock  to  the Holder within three (3)
business  days  after  the  Conversion  Date.

     The  Company  shall  at  all  times  reserve  (or  make alternative written
arrangements  for  reservation or contribution of shares) and have available all
Common  Stock  necessary  to meet conversion of the Debentures by all Holders of
the entire amount of Debentures then outstanding. If, at any time Holder submits
a  Notice  of Conversion and the Company does not have sufficient authorized but
unissued shares of Common Stock (or alternative shares of Common Stock as may be
contributed  by  Stockholders) available to effect, in full, a conversion of the
Debentures  (a  "Conversion Default", the date of such default being referred to
herein  as the "Conversion Default Date"), the Company shall issue to the Holder
all  of  the  shares  of  Common  Stock  which  are available, and the Notice of
Conversion as to any Debentures requested to be converted but not converted (the
"Unconverted  Debentures"), may be deemed null and void upon written notice sent
by  the  Holder  to  the  Company.  The  Company  shall  provide  notice of such
Conversion  Default  ("Notice of Conversion Default") to all existing Holders of
outstanding  Debentures,  by  facsimile,  within three (3) business days of such
default  (with  the original delivered by overnight or two day courier), and the
Holder  shall  give notice to the Company by facsimile within five business days
of  receipt  of the Notice of Conversion Default (with the original delivered by
overnight  or  two day courier) of its election to either nullify or confirm the
Notice  of  Conversion.

     The Company agrees to pay to Holder of outstanding Debenture payments for a
Conversion  Default  ("Conversion  Default Payments") in the amount of (N/365) x
(.24)  x  the  initial issuance price of the outstanding and/or tendered but not
converted  Debentures  held by each Holder where N = the number of days from the
Conversion  Default Date to the date (the "Authorization Date") that the Company
authorizes a sufficient number of shares of Common Stock to effect conversion of
all  remaining  Debentures.  The  Company  shall  send  notice  ("Authorization
Notice")  to  Holder  of  outstanding Debenture that additional shares of Common
Stock  have  been  authorized;  stating the Authorization Date and the amount of
Holder's  accrued  Conversion  Default Payments.  The accrued Conversion Default
shall  be  paid  in  cash  or  shall  be  convertible  into  Common Stock at the
Conversion  Rate,  upon  written notice sent by the Holder to the Company, which
Conversion  Default shall be payable as follows:  (i) in the event Holder elects
to  take  such  payment  in  cash, cash payments shall be made to such Holder of
outstanding  Debentures  by the fifth (5th) day of the following calendar month,
or (ii) in the event Holder elects to take such payment in stock, the Holder may
convert such payment amount into Common Stock  at  the conversion rate set forth
in  Section  3.2(c)  at any time after the fifth (5th) day of the calendar month
following  the  month  in which the Authorization Notice was received, until the
expiration  of  the  mandatory  three  (3)  year  conversion  period.

     The  Company  acknowledges that its failure to maintain a sufficient number
of authorized but unissued shares of Common Stock to effect in full a conversion
of  the Debenture will cause the Holder to suffer damages in an amount that will
be  difficult  to  ascertain.  Accordingly,  the  parties  agree  that  it  is
appropriate  to  include  in  this Agreement a provision for liquidated damages.
The  parties  acknowledge  and  agree  that the liquidated damages provision set
forth in this section represents the parties' good faith effort to quantify such
damages  and, as such, agree that the form and amount of such liquidated damages
are  reasonable  and  will  not constitute a penalty.  The payment of liquidated
damages shall not relieve the Company from its obligations to deliver the Common
Stock  pursuant  to the terms of this Debenture.  Nothing herein shall limit the
Holder's  right to pursue actual damages for the Company's failure to maintain a
sufficient  number  of  authorized  shares  of  Common  Stock.

     If,  by  the  third  (3rd)  business  day  after the Conversion Date of any
portion  of  the  Debenture  to be converted (the "Delivery Date"), the transfer
agent  fails  for  any reason to deliver the Common Stock upon conversion by the
Holder  and  after  such  Delivery  Date the Holder purchases, in an open market
transaction  or otherwise, shares of Common Stock (the "Covering Shares") solely
in  order  to  make  delivery  in  satisfaction of a sale of Common Stock by the
Holder (the "Sold Shares"), which delivery such Holder anticipated to make using
the Common Stock issuable upon conversion (a "Buy-In"), the Company shall pay to
the  Holder,  in  addition  to  any other amounts due to Holder pursuant to this
Debenture,  and  not  in  lieu thereof, the Buy-In Adjustment Amount (as defined
below).  The  "Buy  In  Adjustment Amount" is the amount equal to the excess, if
any,  of (x) the Holder's total purchase price (including brokerage commissions,
if  any)  for  the  Covering  Shares  over (y) the net proceeds (after brokerage
commissions,  if  any)  received by the Holder from the sale of the Sold Shares.
The  Company shall pay the Buy-In Adjustment Amount to the Holder in immediately
available  funds within three (3) business days of written demand by the Holder.
By  way  of  illustration  and not in limitation of the foregoing, if the Holder
purchases  shares  of  Common  Stock  having  a  total purchase price (including
brokerage  commissions)  of  $11,000 to cover a Buy-In with respect to shares of
Common  Stock  it sold for net proceeds of $10,000, the Buy-In Adjustment Amount
which  the  Company  will  be  required  to  pay  to  the Holder will be $1,000.
Notwithstanding  the  foregoing,  Holder  agrees  not  to  engage,  directly  or
indirectly  in  any  short  sales  in  the  Common  Stock

(g)  Prospectus  and  Other  Documents. The Company shall furnish to Holder such
number of prospectuses and other documents incidental to the registration of the
shares  of Common Stock underlying the Debentures, including any amendment of or
supplements  thereto.  Any  filings  submitted  via  EDGAR  will  constitute
fulfillment.

(h)  Limitation  on  Issuance  of  Shares. If the Company's Common Stock becomes
listed  on  the  Nasdaq SmallCap Market after the issuance of the Debenture, the
Company  may  be limited in the number of shares of Common Stock it may issue by
virtue  of  (X)  the number of authorized shares or (Y) the applicable rules and
regulations  of  the  principal  securities  market on which the Common Stock is
listed  or  traded,  including,  but  not  necessarily  limited  to, NASDAQ Rule
4310(c)(25)(H)(i)  or  Rule  4460(i)(1), as may be applicable (collectively, the
"Cap  Regulations").  Without  limiting  the  other  provisions thereof, (i) the
Company  will  take  all steps reasonably necessary to be in a position to issue
shares of Common Stock on conversion of the Debentures without violating the Cap
Regulations  and  (ii)  if,  despite taking such steps, the Company still cannot
issue  such  shares  of  Common Stock without violating the Cap Regulations, the
holder of a Debenture which cannot be converted as result of the Cap Regulations
(each  such Debenture, an "Unconverted Debenture") shall have the right to elect
either  of  the  following  remedies:

     (x)  if  permitted  by  the  Cap  Regulations, require the Company to issue
shares  of Common Stock in accordance with such holder's Notice of Conversion at
a  conversion  purchase  price equal to the average of the closing bid price per
share  of  Common  Stock  for  any five (5) consecutive Trading Days (subject to
certain  equitable  adjustments for certain events occurring during such period)
during the sixty (60) Trading Days immediately preceding the Conversion Date; or

     (y)  require the Company to redeem each Unconverted Debenture for an amount
(the  "Redemption Amount"), payable in cash, equal to the sum of (i) one hundred
thirty-three  percent  (133%) of the principal of an Unconverted Debenture, plus
(ii) any accrued but unpaid interest thereon through and including the date (the
"Redemption  Date")  on  which  the  Redemption  Amount  is  paid to the holder.

     A  holder  of  an Unconverted Debenture may elect one of the above remedies
with  respect  to  a  portion of such Unconverted Debenture and the other remedy
with  respect  to  other  portions  of the Unconverted Debenture.  The Debenture
shall  contain  provisions  substantially  consistent with the above terms, with
such additional provisions as may be consented to by the Holder.  The provisions
of  this section are not intended to limit the scope of the provisions otherwise
included  in  the  Debenture.

(i)  Limitation  on Amount of Conversion and Ownership. Notwithstanding anything
to  the  contrary in this Debenture, in no event shall the Holder be entitled to
convert  that amount of Debenture, and in no event shall the Company permit that
amount of conversion, into that number of shares, which when added to the sum of
the  number  of  shares  of  Common  Stock  beneficially owned, (as such term is
defined  under  Section  13(d)  and Rule 13d-3 of the Securities Exchange Act of
1934, as may be amended, (the "1934 Act")), by the Holder, would exceed 4.99% of
the  number  of  shares  of  Common Stock outstanding on the Conversion Date, as
determined  in  accordance with Rule 13d-1(j) of the 1934 Act. In the event that
the  number  of  shares  of Common Stock outstanding as determined in accordance
with  Section  13(d) of the 1934 Act is different on any Conversion Date than it
was  on  the Closing Date, then the number of shares of Common Stock outstanding
on  such  Conversion  Date  shall govern for purposes of determining whether the
Holder  would be acquiring beneficial ownership of more than 4.99% of the number
of  shares  of  Common  Stock  outstanding  on  such  Conversion  Date.

(j)     Legend.  The  Holder acknowledges that each certificate representing the
Debentures,  and the Common Stock unless registered pursuant to the Registration
Rights  Agreement,  shall  be  stamped  or  otherwise  imprinted  with  a legend
substantially  in  the  following  form:

THE  SECURITIES  EVIDENCED  BY  THIS  CERTIFICATE  MAY  NOT  BE OFFERED OR SOLD,
TRANSFERRED,  PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT
TO  AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,  (ii)  TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR
RULE  UNDER  SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) IF AN
EXEMPTION  FROM  REGISTRATION  UNDER  SUCH  ACT  IS  AVAILABLE.

     (m)  Prior to conversion of the Debenture, if at any time the conversion of
all  the Debentures and exercise of all the Warrants outstanding would result in
an  insufficient  number of authorized shares of Common Stock being available to
cover all the conversions, then in such event, the Company will move to call and
hold  a shareholder's meeting or have shareholder action with written consent of
the proper number of shareholders within thirty (30) days of such event, or such
greater  period  of  time  if  statutorily  required  or reasonably necessary as
regards  standard brokerage house and/or SEC requirements and/or procedures, for
the  purpose  of authorizing additional shares of Common Stock to facilitate the
conversions.   In such an event management of the Company shall recommend to all
shareholders  to  vote their shares in favor of increasing the authorized number
of  shares  of  Common  Stock.  Management  of the Company shall vote all of its
shares of Common Stock in favor of increasing the number of shares of authorized
Common  Stock.  The  Company represents and warrants that under no circumstances
will  it  deny  or prevent Holder's right to convert the Debentures as permitted
under  the  terms  of  this  Subscription  Agreement  or the Registration Rights
Agreement.  Nothing in this Section shall limit the obligation of the Company to
make the payments set forth in Section 3.2(g).  The investor, at his option, may
request  the  company  to  authorize and issue additional shares if the investor
feels  it is necessary for conversions in the future. In the event the Company's
shareholder's  meeting  does  not  result  in  the  necessary authorization, the
Company  shall  redeem the outstanding Debentures for an amount equal to (x) the
sum of the principal of the outstanding Debentures plus accrued interest thereon
multiplied  by  (y)  133%.

Section  3.3 Fractional Shares. The Company shall not issue fractional shares of
Common  Stock,  or  scrip  representing  fractions  of  such  shares,  upon  the
conversion  of  this  Debenture. Instead, the Company shall round up or down, as
the  case  may  be,  to  the  nearest  whole  share.

Section  3.4     Taxes  on  Conversion.  The  Company shall pay any documentary,
stamp  or  similar  issue  or  transfer tax due on the issue of shares of Common
Stock  upon the conversion of this Debenture.  However, the Holder shall pay any
such  tax  which  is  due because the shares are issued in a name other than its
name.

Section  3.5  Company  to Reserve Stock. The Company shall reserve the number of
shares  of Common Stock required pursuant to and upon the terms set forth in the
Subscription Agreement to permit the conversion of this Debenture. All shares of
Common  Stock which may be issued upon the conversion hereof shall upon issuance
be  validly  issued, fully paid and nonassessable and free from all taxes, liens
and  charges  with  respect  to  the  issuance  thereof.

Section  3.6  Restrictions on Sale. This Debenture has not been registered under
the  Securities  Act  of 1933, as amended, (the "Act") and is being issued under
Section  4(2) of the Act and Rule 506 of Regulation D promulgated under the Act.
This  Debenture  and  the  Common Stock issuable upon the conversion thereof may
only  be  sold  pursuant  to  registration  under  or an exemption from the Act.

Article  4          Mergers

     The  Company  shall  not  consolidate  or  merge  into,  or transfer all or
substantially  all  of  its assets to, any person, unless such person assumes in
writing  the  obligations  of  the  Company under this Debenture and immediately
after  such transaction no Event of Default exists.  Any reference herein to the
Company  shall  refer  to  such  surviving  or  transferee  corporation  and the
obligations  of  the  Company  shall  terminate  upon  such  written assumption.

Article  5       Security

     This  Debenture  is  secured  by  a  Security  Agreement  (the  "Security
Agreement")  of  even  date  herewith  between  the  Company  and  the  Holder.

Article  6          Defaults  and  Remedies

Section  6.1  Events of Default. An "Event of Default" occurs if (a) the Company
does  not make the Payment of the principal of this Debenture by conversion into
Common Stock within five (5) business days of the Maturity Date, upon redemption
or  otherwise,  (b) the Company does not make a payment, other than a payment of
principal,  for  a  period of three (3) business days thereafter, (c) any of the
Company's  representations or warranties contained in the Subscription Agreement
or  this  Debenture were false when made or the Company fails to comply with any
of  its  other agreements in the Transaction Documents (as defined in Article 16
below)  and  such  failure continues for a period of five (5) business days, (d)
the  Company  pursuant  to  or  within  the  meaning  of  any Bankruptcy Law (as
hereinafter defined): (i) commences a voluntary case; (ii) consents to the entry
of  an order for relief against it in an involuntary case; (iii) consents to the
appointment  of  a  Custodian  (as  hereinafter  defined)  of  it  or for all or
substantially  all  of  its  property or (iv) makes a general assignment for the
benefit  of  its  creditors  or  (v) a court of competent jurisdiction enters an
order  or  decree  under  any Bankruptcy Law that: (A) is for relief against the
Company  in  an involuntary case; (B) appoints a Custodian of the Company or for
all  or  substantially  all of its property or (C) orders the liquidation of the
Company,  and  the order or decree remains unstayed and in effect for sixty (60)
calendar  days,  (e) the Company's Common Stock is suspended or no longer listed
on  any recognized exchange including electronic over-the-counter bulletin board
for  in excess of five (5) consecutive Trading Days (e) the Company violates any
terms  and  conditions of the Registration Rights Agreement (f) the Registration
Statement  underlying  the Debenture is not declared effective by the SEC within
twelve  (12)  months  of  the  Issuance  Date.

As  used  in  this  Section 6.1, the term "Bankruptcy Law" means Title 11 of the
United  States  Code  or  any  similar  federal  or  state law for the relief of
debtors.  The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.  A default under clause (c) or (e)
above  is  not  an  Event  of  Default until the holders of at least one hundred
percent  (100%)  of the aggregate principal amount of the Debentures outstanding
notify  the Company of such default and the Company does not cure it within five
(5) business days after the receipt of such notice, unless the Company commences
to  cure such default within such period, which must specify the default, demand
that  it  be  remedied  and state that it is a "Notice of Default". Prior to the
expiration  of  the  time  for  curing  a  default as set forth in the preceding
sentence,  the  holders  of  a  majority  in  aggregate  principal amount of the
Debentures  at  the  time outstanding (exclusive of Debentures then owned by the
Company  or any subsidiary or affiliate) may, on behalf of the holders of all of
the  Debentures,  waive  any  past Event of Default hereunder (or any past event
which,  with  the  lapse  of  time  or  notice  and  lapse of time designated in
subsection  (a),  would  constitute  an  Event  of  Default  hereunder)  and its
consequences, except a default in the payment of the principal of or interest on
any  of the Debentures. In the case of any such waiver, such default or Event of
Default  shall  be deemed to have been cured for every purpose of this Debenture
and  the  Company  and  the holders of the Debentures shall be restored to their
former  positions  and  rights hereunder, respectively; but no such waiver shall
extend  to  any  subsequent  or  other  default  or  impair any right consequent
thereon.

          In the Event of Default and provided the Debentures have not been paid
in full, the Holder may elect to secure a portion of the Company's assets not to
exceed  200%  of the Face Amount of the Note,  in Pledged Collateral (as defined
in  the  Irrevocable  Transfer  Agent  Agreement).  The Holder may also elect to
garnishee  Revenue  from  the Company in an amount that will repay the Holder on
the  schedules  outlined  in  this  Agreement.

     In  the  Event  of  Default,  as outlined in this Agreement, the Holder can
exercise  its  right to increase the Face Amount of the Debenture by ten percent
(10%)  as an initial penalty and for each Event of Default under this Agreement.
In  addition,  the  Holder  may  elect  to  increase  the Face Amount by two and
one-half  percent  (2.5%)  per  month  (pro-rata  for partial periods) paid as a
penalty  for liquated damages ("Liquidated Damages").  The Liquated Damages will
be  compounded  daily.  It  is the intention and acknowledgement of both parties
that the Liquidated Damages not be deemed as interest.  In order to exercise its
right  to  trigger  either the 10% penalty or the Liquidated Damages, the Holder
shall give the Company three (3) business days' prior written notice, specifying
in  reasonable  detail  the  basis  therefor.  If during such period the Company
redeems the Debenture as outlined in Article 14, neither the 10% penalty nor the
Liquidated  Damages  shall  become  effective.

     In  the  event  of Default, specifically to Section 6.1 (f), the Holder may
elect to switch the Conversion Price of the Debenture as outlined in Section 3.2
(c)  above  ("Default Conversion Price").  The Default Conversion Price shall be
equal to the lesser of a) the Fixed Conversion Price or b) seventy percent (70%)
of  the  lowest  closing  bid  price of the Common Stock during the fifteen (15)
trading days prior to conversion.  Upon written notice being sent to the Company
by  the  Holder  of  Default under Section 6.1 (f), and the Holder's election to
exercise  the  remedy  to  switch the conversion price to the Default Conversion
Price,  the  Company  shall  immediately  withdraw  the  Registration Statement.
Further,  the  Company  agrees  that the date of consideration for the Debenture
shall  remain  the  Issuance  Date  stated herein.  The Company shall provide an
opinion  letter  from counsel within two (2) business days of written request by
the  Holder  stating  that  the  date  of consideration for the Debenture is the
Issuance Date and submission of proper Rule 144 support documentation consisting
of  Form  144,  a  broker's  representation letter and a seller's representation
letter.  In the event the Company does not deliver the opinion letter within two
business  days,  the  Default Conversion Price shall immediately decrease by two
percent  (2%) for each business day an opinion letter fails to be delivered.  In
the  event  that counsel to the Company fails or refuses to render an opinion as
required  to  issue the Shares in accordance with this paragraph (either with or
without  restrictive  legends,  as applicable), then the Company irrevocably and
expressly  authorizes  counsel  to the Investor to render such opinion and shall
authorize  the  Transfer  Agent  shall  accept  and  be entitled to rely on such
opinion  for  the  purposes of issuing the Shares.  Any costs incurred by Holder
for  such  opinion  letter  shall  be added to the Face Amount of the Debenture.

Section  6.2     Acceleration.  If an Event of Default occurs and is continuing,
the  Holder  hereof by notice to the Company may declare the remaining principal
amount  of this Debenture, together with all accrued interest and any liquidated
damages,  to be due and payable.  Upon such declaration, the remaining principal
amount  shall  be  due  and  payable  immediately.

Section  6.3     Seniority.  No  indebtedness  of  the Company is senior to this
Debenture in right of payment, whether with respect to interest, damages or upon
     liquidation  or  dissolution  or  otherwise.

Article  7          Registered  Debentures

Section  7.1     Record Ownership.  The Company, or its attorney, shall maintain
a register of the holders of the Debentures (the "Register") showing their names
     and  addresses  and  the serial numbers and principal amounts of Debentures
issued to them.  The Register may be maintained in electronic, magnetic or other
computerized form.  The Company may treat the person named as the Holder of this
Debenture  in  the Register as the sole owner of this Debenture.   The Holder of
this  Debenture  is  the  person  exclusively  entitled  to  receive payments of
interest  on  this  Debenture,  receive  notifications  with  respect  to  this
Debenture, convert it into Common Stock and otherwise exercise all of the rights
and  powers  as  the  absolute  owner  hereof.

Worn  or  Lost Debentures.  If this Debenture becomes worn, defaced or mutilated
but is still substantially intact and recognizable, the Company or its agent may
issue  a  new Debenture in lieu hereof upon its surrender.   Where the Holder of
this  Debenture claims that the Debenture has been lost, destroyed or wrongfully
taken,  the Company shall issue a new Debenture in place of the Debenture if the
Holder  so  requests  by  written notice to the Company actually received by the
Company  before  it  is  notified that the Debenture has been acquired by a bona
fide  purchaser and the Holder has delivered to the Company an indemnity bond in
such amount and issued by such surety as the Company deems satisfactory together
with  an  affidavit  of the Holder setting forth the facts concerning such loss,
destruction or wrongful taking and such other information in such form with such
proof  or  verification  as  the  Company  may  request.

Article  8          Notice.

     Any  notices,  consents,  waivers  or  other  communications  required  or
permitted  to  be given under the terms of this Debenture 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 a confirmation
of  transmission is mechanically or electronically generated and kept on file by
the  sending  party);  or  (iii)  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:

If  to  the  Company:

Terry  Allen
Securac  Corp
2500,  520  5th  Ave  SW
Calgary,  Alberta,  CA  T2P  3R7
Telephone:  403-225-0403
Facsimile:  403-234-0301

If  to  the  Investor:

     At  the  address  listed  in  the  Questionnaire.

     Each  party  shall provide five (5) business days prior notice to the other
party  of  any  change  in  address,  phone  number  or  facsimile  number.

Article  9          Time
     Where  this  Debenture  authorizes  or requires the payment of money or the
performance  of  a  condition  or obligation on a Saturday or Sunday or a public
holiday,  or authorizes or requires the payment of money or the performance of a
condition or obligation within, before or after a period of time computed from a
certain date, and such period of time ends on a Saturday or a Sunday or a public
holiday,  such  payment  may be made or condition or obligation performed on the
next  succeeding  business day, and if the period ends at a specified hour, such
payment  may  be made or condition performed, at or before the same hour of such
next  succeeding  business  day,  with  the  same force and effect as if made or
performed  in  accordance  with  the  terms of this Debenture.  A "business day"
shall  mean  a day on which the banks in Calgary, Alberta are generally open for
business.

Article  10          No  Assignment

     This  Debenture  shall  not  be  assignable.

Article  11          Rules  of  Construction.

     In  this  Debenture,  unless  the  context otherwise requires, words in the
singular  number include the plural, and in the plural include the singular, and
words  of the masculine gender include the feminine and the neuter, and when the
sense  so  indicates,  words  of the neuter gender may refer to any gender.  The
numbers  and  titles  of  sections  contained  in the Debenture are inserted for
convenience  of  reference  only, and they neither form a part of this Debenture
nor are they to be used in the construction or interpretation hereof.  Wherever,
in  this  Debenture, a determination of the Company is required or allowed, such
determination  shall  be  made  by  a  majority of the Board of Directors of the
Company and if it is made in good faith, it shall be conclusive and binding upon
the  Company  and  the  Holder  of  this  Debenture.

Article  12          Governing  Law
     The validity, terms, performance and enforcement of this Debenture shall be
governed  and construed by the provisions hereof and in accordance with the laws
of  the  Commonwealth  of  Massachusetts  applicable  to  agreements  that  are
negotiated,  executed,  delivered  and  performed  solely in the Commonwealth of
Massachusetts.

Article  13          Litigation

DISPUTES  SUBJECT  TO  ARBITRATION  GOVERNED  BY  MASSACHUSETTS  LAW
--------------------------------------------------------------------

     All  disputes  arising  under  this  agreement  shall  be  governed  by and
interpreted  in  accordance  with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws.  The parties to this agreement
will  submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA").  The  arbitrator  shall  be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an  attorney  admitted to practice law in the Commonwealth of Massachusetts.  No
party  to  this agreement will challenge the jurisdiction or venue provisions as
provided  in  this  section.

Article  14  Redemption

     The  Holder  shall  have  the  right  to be redeemed from the Debenture, in
whole or in part, at a price equal to one hundred and twenty-five percent (125%)
of the outstanding principal amount of the Debenture, including accrued interest
(and  penalties  if  applicable).  Any  Payments, as defined in Article 2 above,
shall  apply  to  the Redemption Amount.  The Holder also holds the right to use
the  existing  equity  line  to  redeem  the  Debenture.

Article  15     Investor  Warrants

     As an additional inducement to Holder, the Company shall issue a warrant to
purchase  one  hundred  and  eighty-one  thousand,  eight  hundred  and nineteen
(181,819)  shares  of its common stock exercisable at the strike prices outlined
in  the  Warrant  Agreement,  attached  hereto and incorporated by reference, to
Holder.

Article  16     Transaction  Documents

The  Company  agrees  that  contemporaneously with the execution and delivery of
this  Debenture,  the parties hereto are executing and delivering a Registration
Rights  Agreement, Subscription Agreement, Warrant Agreement, Security Agreement
and  the  Irrevocable  Transfer  Agent Agreement (collectively, the "Transaction
Documents")  pursuant  to which the Company has agreed to provide certain rights
and  obligations  as  defined  in  the  documents.

Article  17     Waiver

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

Article  18     Waiver  of  Jury  Trial.

AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS AGREEMENT, THE
PARTIES  HERETO  HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED  IN  ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED  WITH  THIS  TRANSACTION.

                                      *.*.*

     IN  WITNESS WHEREOF, the Company has duly executed this Debenture as of the
date  first  written  above  and  duly  authorized  to  sign  on  behalf  of:
                         SECURAC  CORP.
                         --------------

                         By:    /s/Terry  W.  Allen
                                -------------------
                         Name:     Terry  W.  Allen
                         Title:     Chief  Executive  Officer

                         By: /s/Paul  James  Hookham
                             -----------------------
                         Name:  Paul  James  Hookham
                         Title:     Chief  Financial  Officer

                              DUTCHESS  PRIVATE  EQUITIES  FUND,  II,  L.P.
                              BY  ITS  GENERAL  PARTNER  DUTCHESS
                              CAPITAL  MANAGEMENT,  LLC

                         By: /s/Douglas  H.  Leighton
                             ------------------------
                         Name:  Douglas  H.  Leighton
                         Title:  A  Managing  Member

                                    Exhibit A

                              NOTICE OF CONVERSION
                              --------------------

     (To be Executed by the Registered Owner in order to Convert Debenture)
TO  SECURAC  CORP.

     The  undersigned  hereby  irrevocably  elects,  as  of ________________, to
convert  $________________  of  its convertible debenture (the "Debenture") into
Common  Stock  of  Securac  Corp.(the "Company") according to the conditions set
                   --------------
forth  in  the  Debenture  issued  by  the  Company.

Date  of  Conversion________________________________________________

Applicable  Conversion  Price________________________________________

Number  of  Debentures  Issuable  upon  this  Conversion_______________________

Name(Print)___________Dutchess  Private  Equities Fund, II, LP _________________
                      ----------------------------------------

Address______________50  Commonwealth  Ave,  Boston,  MA  02116_____________
                     ------------------------------------------

Phone_____617-301-4700_____________  Fax________617-249-0947___________
          -------------------------             ------------

                    By:_______________________________________
                                  Douglas  Leighton

<TABLE>
<CAPTION>

EXHIBIT B PAYMENT SCHEDULE
<S>          <C>          <C>           <C>         <C>         <C>        <C>
Convertible Amount     Interest Rate  Redemption                               PMT
   $500,000.00              10%       125%                                 $54,345.18

                         Amount with
                        Accrued Interest            Applied to   Applied to  Applied to
  DATE      Amount Due   for Period      Payment    Principal    Interest   Redemptions
10/1/2005  $500,000.00   $504,125.96   $ 4,125.96  $     0.00   $4,125.96  $     0.00
11/1/2005  $500,000.00   $504,125.95   $54,345.18  $40,175.38   $4,125.96  $50,219.22
12/1/2005  $459,824.62   $463,619.05   $54,345.18  $40,440.60   $3,794.43  $50,550.75
 1/1/2006  $419,384.02   $422,844.74   $54,345.18  $40,707.57   $3,460.72  $50,884.46
 2/1/2006  $378,676.45   $381,801.26   $54,345.18  $40,976.30   $3,124.81  $51,220.37
 3/1/2006  $337,700.15   $340,486.83   $54,345.18  $41,246.81   $2,786.67  $51,558.51
 4/1/2006  $296,453.35   $298,899.65   $54,345.18  $41,519.10   $2,446.31  $51,898.87
 5/1/2006  $254,934.25   $257,037.94   $54,345.18  $41,793.19   $2,103.70  $52,241.48
 6/1/2006  $213,141.06   $214,899.88   $54,345.18  $42,069.09   $1,758.82  $52,586.36
 7/1/2006  $171,071.97   $172,483.65   $54,345.18  $42,346.81   $1,411.67  $52,933.51
 8/1/2006  $128,725.17   $129,787.40   $54,345.18  $42,626.36   $1,062.23  $53,282.95
 9/1/2006  $ 86,098.81   $ 86,809.29   $54,345.18  $42,907.76   $  710.48  $53,634.70
10/1/2006  $ 43,191.05   $ 43,547.46   $54,345.18  $43,191.02   $  356.41  $53,988.77
11/1/2006  $      0.00   $      0.00   $        -      ($0.00)  $    0.00      ($0.00)
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]