Document:

EXHIBIT 4.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: April 1, 2006
Original Conversion Price (subject to adjustment herein): $2.525

                                                                      $1,800,000

                    AMENDED 10% CONVERTIBLE SECURED DEBENTURE
                                DUE JUNE 27, 2007

         THIS 10% CONVERTIBLE SECURED DEBENTURE is one of a series of duly
authorized and issued 10% Convertible Secured Debentures of Velocity Asset
Management Inc., a Delaware corporation, having a principal place of business at
48 S. Franklin Turnpike, Ramsey, NJ 07446 (the "Company") and J. Holder Inc., a
New Jersey corporation, having a principal place of business at 3100 Route 138W,
Wall, New Jersey 07719 (the "JHolder", and the Company and the JHolder, each a
"Seller" and collectively the "Seller"), designated as, to each Seller, its 10%
Convertible Secured Debenture, due June 27, 2007 (this debenture, the
"Debenture" and collectively with the other such series of debentures, the
"Debentures").

         FOR VALUE RECEIVED, the Sellers, jointly and severally, promise to pay
to DKR Soundshore Oasis Holding Fund Ltd. or its registered assigns (the
"Holder"), or shall have paid pursuant to the terms hereunder, the principal sum
of $1,800,000 by June 27, 2007, or such earlier date as this Debenture is
required or permitted to be repaid as provided hereunder (the "Maturity Date"),
and to pay interest to the Holder on the aggregate unconverted and then
outstanding principal amount of this Debenture in accordance with the provisions
hereof. This Debenture is subject to the following additional provisions:

         Section 1.     Definitions. For the purposes hereof, in addition to the
terms defined elsewhere in this Debenture: (a) capitalized terms not otherwise
defined herein have the meanings given to such terms in the Purchase Agreement,
and (b) the following terms shall have the following meanings:

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                  "Alternate Consideration" shall have the meaning set forth in
         Section 5(d).

                  "Asset Sale" means a sale by the Sellers of any asset or
         Collateral (as defined in the Security Agreement), either real
         property, personal property or otherwise, including, but not limited
         to, the assets listed on Schedule 2 hereto, including receipt of
         payment on any obligations owed to the Sellers on such assets (by way
         of example, if a Seller receives payment on a third party obligation,
         whether debt or otherwise owed to such Seller, such payment for
         purposes of this Debenture shall constitute an Asset Sale).

                  "Base Conversion Price" shall have the meaning set forth in
         Section 5(b).

                  "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 in the State of New York are
         authorized or required by law or other government action to close.

                  "Buy-In" shall have the meaning set forth in Section 4(d)(v).

                  "Change of Control Transaction" means the occurrence after the
         date hereof of any of (i) an acquisition after the date hereof by an
         individual or legal entity or "group" (as described in Rule 13d-5(b)(1)
         promulgated under the Exchange Act) of effective control (whether
         through legal or beneficial ownership of capital stock of the Sellers,
         by contract or otherwise) of in excess of 33% of the voting securities
         of the Company, or (ii) the Sellers merge into or consolidate with any
         other Person, or any Person merges into or consolidates with a Seller
         and, after giving effect to such transaction, the stockholders of the
         applicable Seller immediately prior to such transaction own less than
         66% of the aggregate voting power of the applicable Seller or the
         successor entity of such transaction, or (iii) either Seller sells or
         transfers its assets, as an entirety or substantially as an entirety,
         to another Person and the stockholders of the Company immediately prior
         to such transaction own less than 66% of the aggregate voting power of
         the acquiring entity immediately after the transaction, (iv) a
         replacement at one time or within a three year period of more than
         one-half of the members of the Seller's board of directors 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),
         or (v) the execution by a Seller of an agreement to which the Company
         is a party or by which it is bound, providing for any of the events set
         forth above in (i) through (iv).

                  "Common Stock" means the common stock, par value $.001 per
         share, of the Company and stock of any other class of securities into
         which such securities may hereafter have been reclassified or changed
         into.

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                  "Conversion Date" shall have the meaning set forth in Section
         4(a).

                  "Conversion Price" shall have the meaning set forth in Section
         4(b).

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

                  "Debenture Register" shall have the meaning set forth in
         Section 2(c).

                  "Dilutive Issuance" shall have the meaning set forth in
         Section 5(b).

                  "Dilutive Issuance Notice" shall have the meaning set forth in
         Section 5(b).

                  "Effectiveness Period" shall have the meaning given to such
         term in the Registration Rights Agreement.

                  "Equity Conditions" unless waived by a Holder as to a
         particular event (which waiver shall apply only as to such event and
         only as to such Holder) as of the date of such event, shall mean,
         during the period in question, (i) the Company shall have duly honored
         all conversions and redemptions scheduled to occur or occurring by
         virtue of one or more Notice of Conversions of the Holder, if any, (ii)
         all liquidated damages and other amounts owing to the Holder in respect
         of this Debenture shall have been paid, (iii) there is an effective
         Registration Statement pursuant to which the Holder is permitted to
         utilize the prospectus thereunder to resell all of the shares issuable
         pursuant to the Transaction Documents (and the Company believes, in
         good faith, that such effectiveness will continue uninterrupted for the
         foreseeable future), (iv) the Common Stock is trading on the Trading
         Market and all of the shares issuable pursuant to the Transaction
         Documents are listed for trading on a Trading Market (and the Company
         believes, in good faith, that trading of the Common Stock on a Trading
         Market will continue uninterrupted for the foreseeable future), (v)
         there is a sufficient number of authorized but unissued and otherwise
         unreserved shares of Common Stock for the issuance of all of the shares
         issuable pursuant to the Transaction Documents, (vi) there is then
         existing no Event of Default or event which, with the passage of time
         or the giving of notice, would constitute an Event of Default, (vii)
         the issuance of the shares in question (or, in the case of a
         redemption, the shares issuable upon conversion in full of the
         redemption amount) to the Holder would not violate the limitations set
         forth in Section 4(c) and (viii) no public announcement of a pending or
         proposed Fundamental Transaction, Change of Control Transaction or
         acquisition transaction has occurred that has not been consummated.

                  "Event of Default" shall have the meaning set forth in Section
         8.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended, and the rules and regulations promulgated thereunder.

                  "Fundamental Transaction" shall have the meaning set forth in
         Section 5(d).

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                  "Interest Conversion Rate" means the lesser of 90% of (a) the
         average of the 10 Closing Prices immediately prior to the applicable
         Interest Payment Date and (b) the average of the 10 Closing Prices
         immediately prior to the date the applicable interest payment shares
         are issued and delivered if after the Interest Payment Date.

                  "Interest Conversion Shares" shall have the meaning set forth
         in Section 2(a).

                  "Interest Notice Period" shall have the meaning set forth in
         Section 2(a).

                  "Interest Payment Date" shall have the meaning set forth in
         Section 2(a).

                  "Interest Share Amount" shall have the meaning set forth in
         Section 2(a).

                  "Late Fees" shall have the meaning set forth in Section 2(d).

                  "Mandatory Default Amount" shall equal the sum of (i) the
         greater of: (A) 130% of the principal amount of this Debenture to be
         prepaid, plus all accrued and unpaid interest thereon, or (B) the
         principal amount of this Debenture to be prepaid, plus all other
         accrued and unpaid interest hereon, divided by the Conversion Price on
         (x) the date the Mandatory Default Amount is demanded or otherwise due
         or (y) the date the Mandatory Default Amount is paid in full, whichever
         is less, multiplied by the Closing Price on (x) the date the Mandatory
         Default Amount is demanded or otherwise due or (y) the date the
         Mandatory Default Amount is paid in full, whichever is greater, and
         (ii) all other amounts, costs, expenses and liquidated damages due in
         respect of this Debenture.

                  "Monthly Conversion Period" shall have the meaning set forth
         in Section 6(b) hereof.

                  "Monthly Conversion Price" shall have the meaning set forth in
         Section 6(b) hereof.

                  "Monthly Redemption" shall mean the redemption of this
         Debenture pursuant to Section 6(b) hereof.

                   "Monthly Redemption Amount" shall mean, as to a Monthly
         Redemption, $150,000.

                  "Monthly Redemption Date" means the 1st of each month,
         commencing on June 1, 2006 and ending upon the full redemption of this
         Debenture.

                  "Monthly Redemption Notice" shall have the meaning set forth
         in Section 6(b) hereof.

                  "Monthly Redemption Period" shall have the meaning set forth
         in Section 6(b) hereof.

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                  "Monthly Redemption Share Amount" shall have the meaning set
         forth in Section 6(b) hereof.

                  "New York Courts" shall have the meaning set forth in Section
         9(d).

                  "Notice of Conversion" shall have the meaning set forth in
         Section 4(a).

                  "Optional Redemption" shall have the meaning set forth in
         Section 6(a).

                  "Optional Redemption Amount" shall mean the sum of (i) 100% of
         the principal amount of the Debenture then outstanding, (ii) accrued
         but unpaid interest and (iii) all liquidated damages and other amounts
         due in respect of the Debenture.

                  "Optional Redemption Date" shall have the meaning set forth in
         Section 6(a).

                  "Optional Redemption Notice" shall have the meaning set forth
         in Section 6(a).

                  "Optional Redemption Notice Date" shall have the meaning set
         forth in Section 6(a).

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

                  "Permitted Indebtedness" shall mean (a) the Indebtedness
         existing on the Original Issue Date and set forth on Schedule 3.1(gg)
         attached to the Purchase Agreement, (b) lease obligations and purchase
         money Indebtedness of up to $2,000,000, in the aggregate, incurred in
         connection with the acquisition of capital assets and lease obligations
         with respect to newly acquired or leased assets and (c) Indebtedness
         incurred after the Original Issue Date pursuant to which the holders
         thereof shall have entered into a written subordination agreement
         satisfactory to the Holder, which Indebtedness shall have a maturity
         date after the Maturity Date hereof and shall have such other terms and
         conditions as are reasonably satisfactory to the Holder.

                  "Permitted Lien" shall mean the individual and collective
         reference to the following: (a) Liens for taxes, assessments and other
         governmental charges (including, without limitation, in connection with
         workers' compensation and unemployment insurance) or levies not yet due
         or Liens for taxes, assessments and other governmental charges or
         levies being contested in good faith and by appropriate proceedings for
         which adequate reserves (in the good faith judgment of the management
         of the Sellers) have been established in accordance with GAAP, (b)
         Liens imposed by law which were incurred in the ordinary course of
         business, such as carriers', warehousemen's and mechanics' Liens,
         statutory landlords' Liens, and other similar Liens arising in the
         ordinary course of business, and (x) which do not individually or in
         the aggregate materially detract from the value of such property or
         assets or materially impair the use thereof in the operation of the
         business of the Sellers and its consolidated Subsidiaries or (y) which

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         are being contested in good faith by appropriate proceedings, which
         proceedings have the effect of preventing the forfeiture or sale of the
         property or asset subject to such Lien, (c) Liens incurred in
         connection with Permitted Indebtedness under clause (b) thereunder
         provided that such Liens are not secured by assets of the Sellers or
         its Subsidiaries other than the assets so acquired or leased and (d)
         Liens incurred in connection with Permitted Indebtedness under clause
         (a) thereunder.

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

                  "Pre-Redemption Conversion Shares" shall have the meaning set
         forth in Section 6(a) hereof.

                  "Purchase Agreement" means the Securities Purchase Agreement,
         dated as of October 27, 2005, to which the Sellers and the original
         Holder are parties, as amended, modified or supplemented from time to
         time in accordance with its terms.

                  "Registration Rights Agreement" means the Registration Rights
         Agreement, dated as of the date of the Purchase Agreement, to which the
         Company and the original Holder are parties, as amended, modified or
         supplemented from time to time in accordance with its terms.

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

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

                  "Subsidiary" shall have the meaning given to such term in the
         Purchase Agreement.

                  "Trading Day" means a day on which the Common Stock is traded
         on a Trading Market.

                  "Trading Market" means any of the following markets or
         exchanges on which the Common Stock is listed or quoted for trading on
         the date in question: the Nasdaq Capital Market, the American Stock
         Exchange, the New York Stock Exchange, the Nasdaq National Market or
         the OTC Bulletin Board.

                   "Transaction Documents" shall have the meaning set forth in
         the Purchase Agreement.

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         Section 2.        Interest.
         ---------         --------

                  a)       Payment of Interest in Cash or Kind. The Sellers
         shall pay interest to the Holder on the aggregate unconverted and then
         outstanding principal amount of this Debenture at the rate of 10% per
         annum, payable monthly on first day of each calendar month, beginning
         on the first such date after the Original Issue Date, on each Monthly
         Redemption Date (as to that principal amount then being redeemed), on
         each Conversion Date (as to that principal amount then being
         converted), on each Optional Redemption Date (as to the principal
         amount in full being redeemed) and on the Maturity Date (except that,
         if any such date is not a Business Day, then such payment shall be due
         on the next succeeding Business Day) (each such date, an "Interest
         Payment Date"), in cash or shares of Common Stock at the Interest
         Conversion Rate, or a combination thereof (the amount to be paid in
         shares, the "Interest Share Amount"); provided, however, payment in
         shares of Common Stock may only occur if (i) during the 10 Trading Days
         immediately prior to the applicable Interest Payment Date (the
         "Interest Notice Period") and through and including the date such
         shares of Common Stock are issued to the Holder all of the Equity
         Conditions, unless waived by the Holder in writing, have been met and
         the Company shall have given the Holder notice in accordance with the
         notice requirements set forth below and (ii) as to such Interest
         Payment Date, prior to the such Interest Notice Period (but not more 5
         Trading Days prior to the commencement of the Interest Notice Period),
         the Company shall have delivered to the Holder's account with The
         Depository Trust Company a number of shares of Common Stock to be
         applied against such Interest Share Amount equal to the quotient of (x)
         the applicable Interest Share Amount divided by (y) the then Conversion
         Price (the "Interest Conversion Shares").

                  b)       Company's Election to Pay Interest in Kind. Subject
         to the terms and conditions herein, the decision whether to pay
         interest hereunder in shares of Common Stock or cash shall be at the
         discretion of the Company. Prior to the commencement of an Interest
         Notice Period, the Company shall provide the Holder with written notice
         of its election to pay interest hereunder on the applicable Interest
         Payment Date either in cash, shares of Common Stock or a combination
         thereof (the Company may indicate in such notice that the election
         contained in such notice shall continue for later periods until
         revised) and the Interest Share Amount as to the applicable Interest
         Payment Date. During any Interest Notice Period, the Company's election
         (whether specific to an Interest Payment Date or continuous) shall be
         irrevocable as to such Interest Payment Date. Subject to the
         aforementioned conditions, failure to timely provide such written
         notice shall be deemed an election by the Company to pay the interest
         on such Interest Payment Date in cash. At any time the Company delivers
         a notice to the Holder of its election to pay the interest in shares of
         Common Stock, the Company shall file a prospectus supplement pursuant
         to Rule 424 or shall file a Current Report on Form 8-K disclosing such
         election. The aggregate number of shares of Common Stock otherwise
         issuable to the Holder on an Interest Payment Date shall be reduced by
         the number of Interest Conversion Shares previously issued to the
         Holder in connection with such Interest Payment Date.

                  c)       Interest Calculations. Interest shall be calculated
         on the basis of a 360-day year and shall accrue daily commencing on the
         Original Issue Date until payment in full of the principal sum,
         together with all accrued and unpaid interest and other amounts which

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         may become due hereunder, has been made. Payment of interest in shares
         of Common Stock (other than the Interest Conversion Shares issued prior
         to an Interest Notice Period) shall otherwise occur pursuant to Section
         4(d)(ii) and only for purposes of the payment of interest in shares,
         the Interest Payment Date shall be deemed the Conversion Date. Interest
         shall cease to accrue with respect to any principal amount converted,
         provided that the Company in fact delivers the Conversion Shares within
         the time period required by Section 4(d)(ii). Interest hereunder will
         be paid to the Person in whose name this Debenture is registered on the
         records of the Company regarding registration and transfers of this
         Debenture (the "Debenture Register"). Except as otherwise provided
         herein, if at any time the Company pays interest partially in cash and
         partially in shares of Common Stock to the holders of the Debentures,
         then such payment shall be distributed ratably among the holders of the
         Debentures based on their (or their predecessor's) then principal
         amount of Debentures pursuant to the Purchase Agreement.

                  d)       Late Fee. All overdue accrued and unpaid interest to
         be paid hereunder shall entail a late fee at the rate of 18% per annum
         (or such lower maximum amount of interest permitted to be charged under
         applicable law) ("Late Fees") which will accrue daily, from the date
         such interest is due hereunder through and including the date of
         payment. Notwithstanding anything to the contrary contained herein, if
         on any Interest Payment Date the Company has elected to pay interest in
         Common Stock and is not able to pay accrued interest in the form of
         Common Stock because it does not then satisfy the conditions for
         payment in the form of Common Stock set forth above, then the Sellers,
         in lieu of delivering either shares of Common Stock pursuant to this
         Section 2 or paying the regularly scheduled cash interest payment,
         shall deliver, within three Trading Days of each applicable Interest
         Payment Date, an amount in cash equal to the product of the number of
         shares of Common Stock otherwise deliverable to the Holder in
         connection with the payment of interest due on such Interest Payment
         Date and the highest VWAP during the period commencing on the Interest
         Payment Date and ending on the Trading Day prior to the date such
         payment is made. If any Interest Conversion Shares are issued to the
         Holder in connection with an Interest Payment Date and are not applied
         against an Interest Share Amount, then the Holder shall promptly return
         such excess shares to the Company.

                  e)       Prepayment. Except as otherwise set forth in this
         Debenture including, but not limited to, Section 6(a), the Sellers may
         not prepay any portion of the principal amount of this Debenture
         without the prior written consent of the Holder.

         Section 3.        Registration of Transfers and Exchanges.
         ----------        ----------------------------------------

                  a)       Different Denominations. 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.

                  b)       Investment Representations. This Debenture has been
         issued subject to certain investment representations of the original
         Holder set forth in the Purchase Agreement and may be transferred or

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         exchanged only in compliance with the Purchase Agreement and applicable
         federal and state securities laws and regulations.

                  c)       Reliance on Debenture Register. Prior to due
         presentment to the Sellers for transfer of this Debenture, the Sellers
         and any agent of the Sellers may treat the Person in whose name this
         Debenture is duly registered on the Debenture Register as the owner
         hereof for the purpose of receiving payment as herein provided and for
         all other purposes, whether or not this Debenture is overdue, and
         neither the Sellers nor any such agent shall be affected by notice to
         the contrary.

         Section 4.        Conversion.
         ----------        ----------

                  a)       Voluntary Conversion. At any time after the Original
         Issue Date until this Debenture is no longer outstanding, 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 (subject to the limitations on conversion set forth in Section
         4(d) hereof). The Holder shall effect conversions by delivering to the
         Company the form of Notice of Conversion attached hereto as Annex A (a
         "Notice of Conversion"), specifying therein the principal amount of
         this Debenture to be converted and the date on which such conversion is
         to be effected (a "Conversion Date"). If no Conversion Date is
         specified in a Notice of Conversion, the Conversion Date shall be the
         date that such Notice of Conversion is received hereunder. To effect
         conversions hereunder, the Holder shall not be required to physically
         surrender this Debenture to the Company unless the entire principal
         amount of this Debenture plus all accrued and unpaid interest thereon
         has been so converted. Conversions hereunder shall have the effect of
         lowering the outstanding principal amount of this Debenture in an
         amount equal to the applicable conversion. The Holder and the Company
         shall maintain records showing the principal amount converted and the
         date of such conversions. The Company shall deliver any objection to
         any Notice of Conversion promptly, but in no event later than 2
         Business Days after receipt of such notice. In the event of any dispute
         or discrepancy, the records of the Holder shall be controlling and
         determinative in the absence of manifest error. The Holder and any
         assignee, by acceptance of this Debenture, acknowledge and agree that,
         by reason of the provisions of this paragraph, following conversion of
         a portion of this Debenture, the unpaid and unconverted principal
         amount of this Debenture may be less than the amount stated on the face
         hereof. Subject to the Holder's right to rescind pursuant to Section
         4(d)(iii), Notices of Conversion shall be irrevocable.

                  b)       Conversion Price. The conversion price in effect on
         any Conversion Date shall be equal to $2.525 (subject to adjustment
         herein)(the "Conversion Price").

                  c)       Holder's Restriction on Conversion. The Company shall
         not effect any conversion of this Debenture, and the Holder shall not
         have the right to convert any portion of this Debenture, pursuant to
         Section 4(a) or otherwise, to the extent that after giving effect to
         such conversion, the Holder (together with the Holder's Affiliates), as
         set forth on the applicable Notice of Conversion, would beneficially
         own in excess of 4.99% of the number of shares of the Common Stock
         outstanding immediately after giving effect to such conversion. For

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         purposes of the foregoing sentence, the number of shares of Common
         Stock beneficially owned by the Holder and its Affiliates shall include
         the number of shares of Common Stock issuable upon conversion of this
         Debenture with respect to which the determination of such sentence is
         being made, but shall exclude the number of shares of Common Stock
         which would be issuable upon (A) conversion of the remaining,
         nonconverted portion of this Debenture beneficially owned by the Holder
         or any of its Affiliates and (B) exercise or conversion of the
         unexercised or nonconverted portion of any other securities of the
         Company (including, without limitation, any other Debentures or the
         Warrants) subject to a limitation on conversion or exercise analogous
         to the limitation contained herein beneficially owned by the Holder or
         any of its Affiliates. Except as set forth in the preceding sentence,
         for purposes of this Section 4(c)(ii), beneficial ownership shall be
         calculated in accordance with Section 13(d) of the Exchange Act and the
         rules and regulations promulgated thereunder. To the extent that the
         limitation contained in this section applies, the determination of
         whether this Debenture is convertible (in relation to other securities
         owned by the Holder) and of which a portion of this Debenture is
         convertible shall be in the sole discretion of such Holder. To ensure
         compliance with this restriction, the Holder will be deemed to
         represent to the Company each time it delivers a Notice of Conversion
         that such Notice of Conversion has not violated the restrictions set
         forth in this paragraph and the Company shall have no obligation to
         verify or confirm the accuracy of such determination. In addition, a
         determination as to any group status as contemplated above shall be
         determined in accordance with Section 13(d) of the Exchange Act and the
         rules and regulations promulgated thereunder. For purposes of this
         Section 4(c)(ii), in determining the number of outstanding shares of
         Common Stock, the Holder may rely on the number of outstanding shares
         of Common Stock as reflected in (x) the Company's most recent Form
         10-QSB or Form 10-KSB, as the case may be, (y) a more recent public
         announcement by the Company or (z) any other notice by the Company or
         the Company's Transfer Agent setting forth the number of shares of
         Common Stock outstanding. Upon the written or oral request of the
         Holder, the Company shall within two Trading Days confirm orally and in
         writing to the Holder the number of shares of Common Stock then
         outstanding. In any case, the number of outstanding shares of Common
         Stock shall be determined after giving effect to the conversion or
         exercise of securities of the Company, including this Debenture, by the
         Holder or its Affiliates since the date as of which such number of
         outstanding shares of Common Stock was reported. The provisions of this
         Section 4(c) may be waived by the Holder, at the election of the
         Holder, upon not less than 61 days' prior notice to the Company, and
         the provisions of this Section 4(c) shall continue to apply until such
         61st day (or such later date, as determined by the Holder, as may be
         specified in such notice of waiver). The provisions of this paragraph
         shall be implemented in a manner otherwise than in strict conformity
         with the terms of this Section 4(c) to correct this paragraph (or any
         portion hereof) which may be defective or inconsistent with the
         intended 4.99% beneficial ownership limitation herein contained or to
         make changes or supplements necessary or desirable to properly give
         effect to such 4.99% limitation. The limitations contained in this
         paragraph shall apply to a successor holder of this Debenture. The
         holders of Common Stock of the Company shall be third party
         beneficiaries of this Section 4(c) and the Company may not waive this
         Section 4(c) without the consent of holders of a majority of its Common
         Stock.

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                  d)       Mechanics of Conversion

                           i.       Conversion Shares Issuable Upon Conversion
                  of Principal Amount. The number of shares of Common Stock
                  issuable upon a conversion hereunder shall be determined by
                  the quotient obtained by dividing (x) the outstanding
                  principal amount of this Debenture to be converted by (y) the
                  Conversion Price. i.

                           ii.      Delivery of Certificate Upon Conversion. Not
                  later than five Trading Days after any Conversion Date, the
                  Company will deliver or cause to be delivered to the Holder
                  (A) a certificate or certificates representing the Conversion
                  Shares which shall be free of restrictive legends and trading
                  restrictions (other than those required by the Purchase
                  Agreement) representing the number of shares of Common Stock
                  being acquired upon the conversion of this Debenture
                  (including, if the Company has given continuous notice
                  pursuant to Section 2(b) for payment of interest in shares of
                  Common Stock at least 20 Trading Days prior to the date on
                  which the Conversion Notice is delivered to the Company,
                  shares of Common Stock representing the payment of accrued
                  interest otherwise determined pursuant to Section 2(a) but
                  assuming that the Interest Payment Period is the 10 Trading
                  Days period immediately prior to the date on which the
                  Conversion Notice is delivered to the Company and excluding
                  for such issuance the condition that the Company deliver
                  Interest Conversion Shares as to such interest payment) and
                  (B) a bank check in the amount of accrued and unpaid interest
                  (if the Company is required to pay accrued interest in cash).
                  The Company shall, if available and if allowed under
                  applicable securities laws, use its best efforts to deliver
                  any certificate or certificates required to be delivered by
                  the Company under this Section electronically through the
                  Depository Trust Corporation or another established clearing
                  corporation performing similar functions.

                           iii.     Failure to Deliver Certificates. If in the
                  case of any Notice of Conversion such certificate or
                  certificates are not delivered to or as directed by the
                  applicable Holder by the fifth Trading Day after a Conversion
                  Date, the Holder shall be entitled by written notice to the
                  Company at any time on or before its receipt of such
                  certificate or certificates thereafter, to rescind such
                  conversion, in which event the Company shall immediately
                  return the certificates representing the principal amount of
                  this Debenture tendered for conversion.

                           iv.      Obligation Absolute; Partial Liquidated
                  Damages. If the Company fails for any reason to deliver to the
                  Holder such certificate or certificates pursuant to Section
                  4(d)(ii) by the fifth Trading Day after the Conversion Date,
                  the Sellers, jointly and severally, shall pay to such Holder,
                  in cash, as liquidated damages and not as a penalty, for each
                  $1000 of principal amount being converted, $10 per Trading Day
                  (increasing to $20 per Trading Day after 5 Trading Days after
                  such damages begin to accrue) for each Trading Day after such

                                       11
<PAGE>

                  fifth Trading Day until such certificates are delivered. The
                  Company's obligations to issue and deliver the Conversion
                  Shares upon conversion of this Debenture in accordance with
                  the terms hereof are absolute and unconditional, irrespective
                  of any action or inaction by the Holder to enforce the same,
                  any waiver or consent with respect to any provision hereof,
                  the recovery of any judgment against any Person or any action
                  to enforce the same, or any setoff, counterclaim, recoupment,
                  limitation or termination, or any breach or alleged breach by
                  the Holder or any other Person of any obligation to the
                  Company or any violation or alleged violation of law by the
                  Holder or any other person, and irrespective of any other
                  circumstance which might otherwise limit such obligation of
                  the Company to the Holder in connection with the issuance of
                  such Conversion Shares; provided, however, such delivery shall
                  not operate as a waiver by the Company of any such action the
                  Company may have against the Holder. In the event the Holder
                  of this Debenture shall elect to convert any or all of the
                  outstanding principal amount hereof, the Company may not
                  refuse conversion based on any claim that the Holder or any
                  one associated or affiliated with the Holder has been engaged
                  in any violation of law, agreement or for any other reason,
                  unless, an injunction from a court, on notice, restraining and
                  or enjoining conversion of all or part of this Debenture shall
                  have been sought and obtained and the Company posts a surety
                  bond for the benefit of the Holder in the amount of 150% of
                  the principal amount of this Debenture outstanding, which is
                  subject to the injunction, which bond shall remain in effect
                  until the completion of arbitration/litigation of the dispute
                  and the proceeds of which shall be payable to such Holder to
                  the extent it obtains judgment. In the absence of an
                  injunction precluding the same, the Company shall issue
                  Conversion Shares or, if applicable, cash, upon a properly
                  noticed conversion. Nothing herein shall limit a Holder's
                  right to pursue actual damages or declare an Event of Default
                  pursuant to Section 8 herein for the Company's failure to
                  deliver Conversion Shares 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. 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.       Compensation for Buy-In on Failure to Timely
                  Deliver Certificates Upon Conversion. In addition to any other
                  rights available to the Holder, if the Company fails for any
                  reason to deliver to the Holder such certificate or
                  certificates pursuant to Section 4(d)(ii) by the fifth Trading
                  Day after the Conversion Date, and if after such third Trading
                  Day the Holder is required by its brokerage firm to purchase
                  (in an open market transaction or otherwise) Common Stock to
                  deliver in satisfaction of a sale by such Holder of the
                  Conversion Shares which the Holder anticipated receiving upon
                  such conversion (a "Buy-In"), then the Sellers, jointly and
                  severally, 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
                  actual sale price of the Common Stock at the time of the sale
                  (including brokerage commissions, if any) giving rise to such

                                       12
<PAGE>

                  purchase obligation and (B) at the option of the Holder,
                  either reissue (if surrendered) this Debenture in a 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 Company
                  timely complied with its delivery requirements under Section
                  4(d)(ii). 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 this Debenture with
                  respect to which the actual sale price of the Conversion
                  Shares at the time of the sale (including brokerage
                  commissions, if any) giving rise to such purchase obligation
                  was a total of $10,000 under clause (A) of the immediately
                  preceding sentence, the Sellers shall be required to pay the
                  Holder $1,000. The Holder shall provide the Sellers written
                  notice indicating the amounts payable to the Holder in respect
                  of the Buy-In. Notwithstanding anything contained herein to
                  the contrary, if a Holder requires the Company to make a
                  payment in respect of a Buy-In for the failure to timely
                  deliver certificates hereunder and the Company timely pays in
                  full such amount, the Company shall not be required to pay
                  such Holder partial liquidated damages under Section 4(d)(iv)
                  in respect of the certificates resulting in such Buy-In.

                           vi.      Reservation of Shares Issuable Upon
                  Conversion. The Company 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 (and the other holders of the
                  Debentures), not less than such number of shares of the Common
                  Stock as shall (subject to any additional requirements of the
                  Company as to the reservation of such shares and the terms and
                  conditions set forth in the Purchase Agreement) be issuable
                  (taking into account the adjustments and restrictions of
                  Section 5) upon the conversion of the outstanding principal
                  amount of this Debenture and payment of interest hereunder.
                  The Company 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
                  Registration Statement is then effective under the Securities
                  Act, registered for public sale in accordance with such
                  Registration Statement.

                           vii.     Fractional Shares. Upon a conversion
                  hereunder the Company 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 VWAP at
                  such time. If the Company elects not, or is unable, to make
                  such a cash payment, the Holder shall be entitled to receive,

                                       13
<PAGE>

                  in lieu of the final fraction of a share, one whole share of
                  Common Stock.

                           viii.    Transfer Taxes. The issuance of certificates
                  for shares of the Common Stock on conversion of this Debenture
                  shall be made without charge to the Holder hereof for any
                  documentary stamp or similar taxes that may be payable in
                  respect of the issue or delivery of such certificate, provided
                  that the Company 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 this Debenture so converted
                  and the Company shall not be required to issue or deliver such
                  certificates unless or until the person or persons requesting
                  the issuance thereof shall have paid to the Company the amount
                  of such tax or shall have established to the satisfaction of
                  the Company that such tax has been paid.

         Section 5.        Certain Adjustments.
         ----------        --------------------

                  a)       Stock Dividends and Stock Splits. If the Company, at
         any time while this Debenture is outstanding: (A) pays a stock dividend
         or otherwise makes a distribution or distributions on shares of its
         Common Stock or any other equity or equity equivalent securities
         payable in shares of Common Stock (which, for avoidance of doubt, shall
         not include any shares of Common Stock issued by the Company pursuant
         to this Debenture, including as interest thereon), (B) subdivides
         outstanding shares of Common Stock into a larger number of shares, (C)
         combines (including by way of reverse stock split) outstanding shares
         of Common Stock into a smaller number of shares, or (D) issues by
         reclassification of shares of the Common Stock any shares of capital
         stock of the Company, then the 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
         immediately before such event and of which the denominator shall be the
         number of shares of Common Stock outstanding immediately 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.

                  b)       Subsequent Equity Sales. If the Company or any
         Subsidiary thereof, as applicable, at any time while this Debenture is
         outstanding, shall offer, sell, grant any option to purchase or offer,
         sell or grant any right to reprice its securities, or otherwise dispose
         of or issue (or announce any offer, sale, grant or any option to
         purchase or other disposition) any Common Stock or Common Stock
         Equivalents entitling any Person to acquire shares of Common Stock, at
         an effective price per share less than the then Conversion Price (such
         lower price, the "Base Conversion Price" and such issuances
         collectively, a "Dilutive Issuance"), as adjusted hereunder (if the
         holder of the Common Stock or Common Stock Equivalents so issued shall
         at any time, whether by operation of purchase price adjustments, reset
         provisions, floating conversion, exercise or exchange prices or

                                       14
<PAGE>

         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 an effective price per share which is less than the
         Conversion Price, such issuance shall be deemed to have occurred for
         less than the Conversion Price on such date of the Dilutive Issuance),
         then the Conversion Price shall be reduced to equal the Base Conversion
         Price. Such adjustment shall be made whenever such Common Stock or
         Common Stock Equivalents are issued. Notwithstanding the foregoing, no
         adjustment will be made under this Section 5(b) in respect of (i) an
         Exempt Issuance or (ii) the Secondary Offering if this Debenture is
         subject to an Optional Redemption Notice delivered to the Holder within
         5 Trading Days of the Closing of the Secondary Offering; provided,
         however, if this Debenture is not redeemed in full on the Optional
         Redemption Date, an adjustment shall be made under this Section 5(b) in
         respect of the Secondary Offering. The Company shall notify the Holder
         in writing, no later than the Business Day following the issuance of
         any Common Stock or Common Stock Equivalents subject to this section,
         indicating therein the applicable issuance price, or of applicable
         reset price, exchange price, conversion price and other pricing terms
         (such notice the "Dilutive Issuance Notice"). For purposes of
         clarification, whether or not the Company provides a Dilutive Issuance
         Notice pursuant to this Section 5(b), upon the occurrence of any
         Dilutive Issuance, after the date of such Dilutive Issuance the Holder
         is entitled to receive a number of Conversion Shares based upon the
         Base Conversion Price regardless of whether the Holder accurately
         refers to the Base Conversion Price in the Notice of Conversion.

                  c)       Pro Rata Distributions. If the Company, at any time
         while this Debenture is outstanding, shall distribute to all holders of
         Common Stock (and not to the holders of the Debenture) evidences of its
         indebtedness or assets (including cash and cash dividends) or rights or
         warrants to subscribe for or purchase any security, then in each such
         case the Conversion Price shall be adjusted by multiplying such
         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 VWAP determined as
         of the record date mentioned above, and of which the numerator shall be
         such VWAP 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.

                  d)       Fundamental Transaction. If, at any time while this
         Debenture is outstanding, (A) the Company effects any merger or
         consolidation of the Company with or into another Person, (B) the
         Company effects any sale of all or substantially all of its assets in
         one or a series of related transactions, (C) any tender offer or
         exchange offer (whether by the Company or another Person) is completed
         pursuant to which holders of Common Stock are permitted to tender or

                                       15
<PAGE>

         exchange their shares for other securities, cash or property, or (D)
         the Company effects any reclassification of the Common Stock or any
         compulsory share exchange pursuant to which the Common Stock is
         effectively converted into or exchanged for other securities, cash or
         property (in any such case, a "Fundamental Transaction"), then upon any
         subsequent conversion of this Debenture, the Holder shall have the
         right to receive, for each Conversion Share that would have been
         issuable upon such conversion immediately prior to the occurrence of
         such Fundamental Transaction, the same kind and amount of securities,
         cash or property as it would have been entitled to receive upon the
         occurrence of such Fundamental Transaction if it had been, immediately
         prior to such Fundamental Transaction, the holder of one share of
         Common Stock (the "Alternate Consideration"). For purposes of any such
         conversion, the determination of the Conversion Price shall be
         appropriately adjusted to apply to such Alternate Consideration based
         on the amount of Alternate Consideration issuable in respect of one
         share of Common Stock in such Fundamental Transaction, and the Company
         shall apportion the Conversion Price among the Alternate Consideration
         in a reasonable manner reflecting the relative value of any different
         components of the Alternate Consideration. If holders of Common Stock
         are given any choice as to the securities, cash or property to be
         received in a Fundamental Transaction, then the Holder shall be given
         the same choice as to the Alternate Consideration it receives upon any
         conversion of this Debenture following such Fundamental Transaction. To
         the extent necessary to effectuate the foregoing provisions, any
         successor to a Seller or surviving entity in such Fundamental
         Transaction shall issue to the Holder a new debenture consistent with
         the foregoing provisions and evidencing the Holder's right to convert
         such debenture into Alternate Consideration. The terms of any agreement
         pursuant to which a Fundamental Transaction is effected shall include
         terms requiring any such successor or surviving entity to comply with
         the provisions of this paragraph (d) and insuring that this Debenture
         (or any such replacement security) will be similarly adjusted upon any
         subsequent transaction analogous to a Fundamental Transaction.

                  e)       Calculations. All calculations under this Section 5
         shall be made to the nearest cent or the nearest 1/100th of a share, as
         the case may be. For purposes of this Section 5, the number of shares
         of Common Stock deemed to be issued and outstanding as of a given date
         shall be the sum of the number of shares of Common Stock (excluding
         treasury shares, if any) issued and outstanding.

                  f)       Notice to the Holder.

                           i.       Adjustment to Conversion Price. Whenever the
                  Conversion Price is adjusted pursuant to any of this Section
                  5, the Company shall promptly mail to each Holder a notice
                  setting forth the Conversion Price after such adjustment and
                  setting forth a brief statement of the facts requiring such
                  adjustment. If the Company issues a variable rate security,
                  despite the prohibition thereon in the Purchase Agreement, the
                  Company shall be deemed to have issued Common Stock or Common
                  Stock Equivalents at the lowest possible conversion or

                                       16
<PAGE>

                  exercise price at which such securities may be converted or
                  exercised in the case of a Variable Rate Transaction (as
                  defined in the Purchase Agreement).

                           ii.      Notice to Allow Conversion by Holder. If (A)
                  the Company shall declare a dividend (or any other
                  distribution) on the Common Stock; (B) the Company shall
                  declare a special nonrecurring cash dividend on or a
                  redemption of the Common Stock; (C) the Company 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 Company shall be required in
                  connection with any reclassification of the Common Stock, any
                  consolidation or merger to which the Company is a party, any
                  sale or transfer of all or substantially all of the assets of
                  the Company, of any compulsory share exchange whereby the
                  Common Stock is converted into other securities, cash or
                  property; (E) the Company shall authorize the voluntary or
                  involuntary dissolution, liquidation or winding up of the
                  affairs of the Company; then, in each case, the Company 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 addresses as it shall appear
                  upon the stock books of the Company, at least 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 period commencing the date of such notice to
                  the effective date of the event triggering such notice.

         Section 6.        Optional Redemption.
         ----------        --------------------

                  a)       Optional Redemption at Election of Company. Subject
         to the provisions of this Section 6, at any time after the Effective
         Date and prior to March 31, 2006, directly and solely out of the
         proceeds raised in the Secondary Offering, the Company may deliver a
         notice to the Holder (an "Optional Redemption Notice" and the date such
         notice is deemed delivered hereunder, the "Optional Redemption Notice
         Date") of its irrevocable election to redeem the then outstanding
         Debentures in full for an amount, equal to the Optional Redemption
         Amount on the 20th Trading Day following the Optional Redemption Notice
         Date (such date, the "Optional Redemption Date" and such redemption,

                                       17
<PAGE>

         the "Optional Redemption"). The Optional Redemption Amount is due in
         full on the Optional Redemption Date. The Company may only effect an
         Optional Redemption if during the period commencing on the Optional
         Redemption Notice Date through to the Optional Redemption Date and
         through and including the date such shares of Common Stock are issued
         to the Holder, each of the Equity Conditions shall have been met. If
         any of the Equity Conditions shall cease to be satisfied at any time
         during the required period, then the Holder may elect to nullify the
         Optional Redemption Notice by notice to the Company within 3 Trading
         Days after the first day on which any such Equity Condition has not
         been met (provided that if, by a provision of the Transaction
         Documents, the Company is obligated to notify the Holder of the
         non-existence of an Equity Condition, such notice period shall be
         extended to the third Trading Day after proper notice from the Company)
         in which case the Optional Redemption Notice shall be null and void, ab
         initio. The Company covenants and agrees that it will honor all Notices
         of Conversion tendered from the time of delivery of the Optional
         Redemption Notice through the date all amounts owing thereon are due
         and paid in full.

                  b)       Monthly Redemption. On each Monthly Redemption Date,
         the Sellers, jointly and severally, shall redeem the Monthly Redemption
         Amount plus accrued but unpaid interest, the sum of all liquidated
         damages and any other amounts then owing to such Holder in respect of
         this Debenture (the "Monthly Redemption"). The Monthly Redemption
         Amount due on each Monthly Redemption Date shall be paid in cash;
         provided, however, as to any Monthly Redemption and upon 30 Trading
         Days' prior written irrevocable notice (the "Monthly Redemption Notice"
         and the 30 Trading Day period immediately following the Monthly
         Redemption Notice, the "Monthly Redemption Period"), in lieu of a cash
         redemption payment the Company may elect to pay all or part of a
         Monthly Redemption Amount in Conversion Shares (such dollar amount to
         be paid on a Monthly Redemption Date in Conversion Shares, the "Monthly
         Redemption Share Amount") based on a conversion price equal to 85% of
         the average of the three lowest Closing Prices during the ten Trading
         Days immediately prior to the Monthly Redemption Date, the "Monthly
         Conversion Price" and such period, the "Monthly Conversion Period");
         provided, further, that the Company may not pay the Monthly Redemption
         Amount in Conversion Shares unless, (y) from the date the Holder
         receives the duly delivered Monthly Redemption Notice through and until
         the date such Monthly Redemption is paid in full, the Equity
         Conditions, unless waived in writing by the Holder, have been satisfied
         and (z) as to such Monthly Redemption, prior to such Monthly Redemption
         Period (but not more than 5 Trading Days prior to the commencement of
         the Monthly Redemption Period), the Company shall have delivered to the
         Holder's account with The Depository Trust Company a number of shares
         of Common Stock to be applied against such Monthly Redemption Share
         Amount equal to the quotient of (x) the applicable Monthly Redemption
         Share Amount divided by (y) the then Conversion Price (the
         "Pre-Redemption Conversion Shares"). The Holder may convert, pursuant
         to Section 4(a), any principal amount of this Debenture subject to a
         Monthly Redemption at any time prior to the date that the Monthly
         Redemption Amount and all amounts owing thereon are due and paid in
         full. Unless otherwise indicated by the Holder in the applicable Notice
         of Conversion, any principal amount of this Debenture converted during

                                       18
<PAGE>

         the applicable Monthly Redemption Period until the date the Monthly
         Redemption Amount is paid in full shall be first applied to the
         principal amount subject to the Monthly Redemption Amount payable in
         cash and then to the Monthly Redemption Share Amount. Any principal
         amount of this Debenture converted during the applicable Monthly
         Redemption Period in excess of the Monthly Redemption Amount shall be
         applied against the last principal amount of this Debenture scheduled
         to be redeemed hereunder, in reverse time order from the Maturity Date;
         provided, however, if any such conversion is applied to such Monthly
         Redemption Amount, the Pre-Redemption Conversion Shares, if any were
         issued in connection with such Monthly Redemption or were not already
         applied to such conversions, shall be first applied against such
         conversion. The Company covenants and agrees that it will honor all
         Notice of Conversions tendered up until such amounts are paid in full.
         The Company's determination to pay a Monthly Redemption in cash, shares
         of Common Stock or a combination thereof shall be applied ratably to
         all of the holders of the Debentures based on their (or their
         predecessor's) initial purchases of Debentures pursuant to the Purchase
         Agreement. At any time the Company delivers a notice to the Holder of
         its election to pay the Monthly Redemption Amount in shares of Common
         Stock, the Company shall file a prospectus supplement pursuant to Rule
         424 disclosing such election.

                  c)       Holder Redemption Right. Upon written notice from the
         Sellers to the Holder of an Asset Sale (a "Sale of Asset Notice" and
         the date such notice is deemed delivered hereunder, the "Sale of Asset
         Notice Date"), the Holder shall have the right to deliver a written
         notice to the Company (a "Holder Redemption Notice" and the date such
         notice is deemed delivered hereunder, the "Holder Redemption Notice
         Date") of its irrevocable election to cause the Sellers use 100% of the
         proceeds of such sale to redeem all or part of the then outstanding
         principal amount of this Debenture for an amount, in cash, equal to (i)
         the principal amount of this Debenture then outstanding, (ii) accrued
         but unpaid interest and (iii) all liquidated damages and other amounts
         due in respect of this Debenture (the "Holder Redemption" and such
         amount the "Holder Redemption Amount"). The Sellers must give a Sale of
         Asset Notice within 5 Trading Days of each Asset Sale. The Holder
         Redemption Notice must be delivered within 10 Trading Days after the
         Sale of Asset Notice Date. The Holder Redemption Amount is due and
         payable on, and contingent upon, the closing or occurrence of the sale.
         Notwithstanding anything herein to the contrary, the Sellers may elect
         to exclude up to, in the aggregate, $15,000 of Asset Sales in any
         calendar quarter from the provisions of this Section 6(c).

                  d)       Redemption Procedure. The payment of cash pursuant to
         an Optional Redemption shall be made on the Optional Redemption Date.
         If any portion of the cash payment for an Optional Redemption or Holder
         Redemption shall not be paid by the Sellers by the respective due date,
         interest shall accrue thereon at the rate of 18% per annum (or the
         maximum rate permitted by applicable law, whichever is less) until the
         payment of the Optional Redemption Amount or Holder Redemption Amount,
         as applicable, plus all amounts owing thereon is paid in full.
         Alternatively, if any portion of the Optional Redemption Amount or
         Holder Redemption Amount, as applicable, remains unpaid after such
         date, the Holders subject to such redemption may elect, by written

                                       19
<PAGE>

         notice to the Company given at any time thereafter, to invalidate ab
         initio such redemption, notwithstanding anything herein contained to
         the contrary, and, with respect the failure to honor the Optional
         Redemption as applicable, the Company shall have no further right to
         exercise such Optional Redemption. Notwithstanding anything to the
         contrary in this Section 6, the Company's determination to redeem in
         cash or its elections under Section 6(b) shall be applied among the
         Holders of Debentures ratably. The Holder may elect to convert the
         outstanding principal amount of the Debenture pursuant to Section 4
         prior to actual payment in cash for any redemption under this Section 6
         by fax delivery of a Notice of Conversion to the Company.

         Section 7.        Negative Covenants. So long as any portion of this
Debenture is outstanding, the Sellers will not and will not permit any of its
Subsidiaries to directly or indirectly:

                  a)       other than Permitted Indebtedness, except with the
         prior written consent of the Agent (as defined in the Security
         Agreement), enter into, create, incur, assume, guarantee or suffer to
         exist any indebtedness for borrowed money of any kind, including but
         not limited to, a guarantee, 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 therefrom;

                  b)       other than Permitted Liens, enter into, create,
         incur, assume or suffer to exist any liens 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 therefrom;

                  c)       amend its certificate of incorporation, bylaws or
         other charter documents so as to materially and adversely affect any
         rights of the Holder other than amendments that effect all stakeholders
         equally and proportionally;

                  d)       repay, repurchase or offer to repay, repurchase or
         otherwise acquire more than a de minimis number of its securities other
         than as to the Conversion Shares to the extent permitted or required
         under the Transaction Documents or as otherwise permitted by the
         Transaction Documents;

                  e)       enter into any agreement with respect to any of the
         foregoing; or

                  f)       pay cash dividends or distributions on any equity
         securities of the Sellers.

         Section 8.        Events of Default.
         ---------         -----------------

                  a)       "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 (A) the
                  principal amount of any Debenture, or (B) interest (including
                  Late Fees) on, or liquidated damages in respect of, any

                                       20
<PAGE>

                  Debenture, in each case 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) which default, solely in the case of an interest
                  payment or other default under clause (B) above, is not cured,
                  within 3 Trading Days;

                           ii.      the Sellers shall fail to observe or perform
                  any other covenant or agreement contained in this Debenture or
                  any other Debenture (other than a breach by the Company of its
                  obligations to deliver shares of Common Stock to the Holder
                  upon conversion which breach is addressed in clause (xi)
                  below) which failure is not cured, if possible to cure, within
                  the earlier to occur of (A) 5 Trading Days after notice of
                  such default sent by the Holder or by any other Holder and
                  (B)10 Trading Days after the Sellers shall become or should
                  have become aware of such failure;

                           iii.     a default or event of default (subject to
                  any grace or cure period provided for in the applicable
                  agreement, document or instrument) shall occur under (A) any
                  of the Transaction Documents, or (B) any other material
                  agreement, lease, document or instrument to which the Sellers
                  or any Subsidiary is bound;

                           iv.      any representation or warranty made herein,
                  in any other Transaction Documents, in any written statement
                  pursuant hereto or thereto, or in any other report, financial
                  statement or certificate made or delivered to the Holder or
                  any other holder of Debentures shall be untrue or incorrect in
                  any material respect as of the date when made or deemed made;

                           v.       (i) the Sellers or any of its Subsidiaries
                  shall commence a case, as debtor, a case under any applicable
                  bankruptcy or insolvency laws as now or hereafter in effect or
                  any successor thereto, or the Sellers or any Subsidiary
                  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 Sellers or any Subsidiary thereof or (ii) there is
                  commenced a case against the Sellers or any Subsidiary
                  thereof, under any applicable bankruptcy or insolvency laws,
                  as now or hereafter in effect or any successor thereto which
                  remains undismissed for a period of 60 days; or (iii) the
                  Sellers or any Subsidiary thereof is adjudicated by a court of
                  competent jurisdiction insolvent or bankrupt; or any order of
                  relief or other order approving any such case or proceeding is
                  entered; or (iv) the Sellers or any Subsidiary thereof suffers
                  any appointment of any custodian or the like for it or any
                  substantial part of its property which continues undischarged
                  or unstayed for a period of 60 days; or (v) the Sellers or any
                  Subsidiary thereof makes a general assignment for the benefit
                  of creditors; or (vi) the Sellers 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 (vii) the Sellers or

                                       21
<PAGE>

                  any Subsidiary thereof shall call a meeting of its creditors
                  with a view to arranging a composition, adjustment or
                  restructuring of its debts; or (viii) the Sellers or any
                  Subsidiary thereof shall by any act or failure to act
                  expressly indicate its consent to, approval of or acquiescence
                  in any of the foregoing; or (ix) any corporate or other action
                  is taken by the Sellers or any Subsidiary thereof for the
                  purpose of effecting any of the foregoing;

                           vi.      the Sellers or any Subsidiary shall default
                  in any of its obligations under 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 Sellers in an amount exceeding
                  $150,000, 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;

                           vii.     the Common Stock shall not be eligible for
                  quotation on or quoted for trading on a Trading Market and
                  shall not again be eligible for and quoted or listed for
                  trading thereon within five Trading Days;

                           viii.    the Company shall be a party to any Change
                  of Control Transaction or Fundamental Transaction, shall agree
                  to sell or dispose of all or in excess of 33% of its assets in
                  one or more transactions (whether or not such sale would
                  constitute a Change of Control Transaction) or shall redeem or
                  repurchase more than a de minimis number of its outstanding
                  shares of Common Stock or other equity securities of the
                  Sellers (other than redemptions of Conversion Shares and
                  repurchases of shares of Common Stock or other equity
                  securities of departing officers and directors of the Sellers;
                  provided such repurchases shall not exceed $100,000, in the
                  aggregate, for all officers and directors during the term of
                  this Debenture);

                           ix.      a Registration Statement shall not have been
                  declared effective by the Commission on or prior to the 180
                  calendar day after the Closing Date;

                           x.       if, during the Effectiveness Period (as
                  defined in the Registration Rights Agreement), the
                  effectiveness of the Registration Statement lapses for any
                  reason or the Holder shall not be permitted to resell
                  Registrable Securities (as defined in the Registration Rights
                  Agreement) under the Registration Statement, in either case,
                  for more than 60 consecutive Trading Days or 90
                  non-consecutive Trading Days during any 12 month period;
                  provided, however, that in the event that the Company is
                  negotiating a merger, consolidation, acquisition or sale of
                  all or substantially all of its assets or a similar
                  transaction and in the written opinion of counsel to the
                  Company, the Registration Statement, would be required to be
                  amended to include information concerning such transactions or

                                       22
<PAGE>

                  the parties thereto that is not available or may not be
                  publicly disclosed at the time, the Company shall be permitted
                  an additional 10 consecutive Trading Days during any 12 month
                  period relating to such an event; or

                           xi.      a Seller shall fail for any reason to
                  deliver certificates to a Holder prior to the fifth Trading
                  Day after a Conversion Date pursuant to and in accordance with
                  Section 4(d) or the Company 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 any Debentures in accordance with the terms hereof.

                           xii.     the Sellers shall fail to notify the Holder
                  within 5 Trading Days of any Asset Sale; or

                           xiii.    Within 5 Trading Days of the Original Issue
                  Date, the Sellers shall fail to deliver the documentation
                  necessary to perfect the Holder's security interest in the
                  Collateral set forth on Schedule 2 attached hereto, including
                  but not limited to, assignments of such Collateral.

                  b)       Remedies Upon Event of Default. If any Event of
         Default occurs, the full principal amount of this Debenture, together
         with interest and other amounts owing in respect thereof, to the date
         of acceleration shall become, at the Holder's election, immediately due
         and payable in cash. The aggregate amount payable upon an Event of
         Default shall be equal to the Mandatory Default Amount. Commencing 5
         days after the occurrence of any Event of Default that results in the
         eventual acceleration of this Debenture, the interest rate on this
         Debenture shall accrue at the rate of 18% per annum, or such lower
         maximum amount of interest permitted to be charged under applicable
         law. Upon the payment in full of the Mandatory Default Amount on this
         entire Debenture the Holder shall promptly surrender this Debenture to
         or as directed by the Company. The Holder need not provide and the
         Sellers 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 and the Holder shall have all rights as a
         Debenture holder until such time, if any, as the full payment under
         this Section shall have been received by it. No such rescission or
         annulment shall affect any subsequent Event of Default or impair any
         right consequent thereon.

         Section 9.        Miscellaneous.
         ----------        --------------

                  a)       Notices. Any and all notices or other communications
         or deliveries to be provided by the Holder hereunder, including,
         without limitation, any Notice of Conversion, shall be in writing and
         delivered personally, by facsimile, sent by a nationally recognized
         overnight courier service, addressed to the Sellers, at the address set

                                       23
<PAGE>

         forth above, facsimile number facsimile number (732) 556-0365, Attn:
         James J. Mastriani, CFO and Chief Legal Officer or such other address
         or facsimile number as the Sellers may specify for such purposes by
         notice to the Holder delivered in accordance with this Section. Any and
         all notices or other communications or deliveries to be provided by the
         Sellers hereunder shall be in writing and delivered personally, by
         facsimile, sent by a nationally recognized overnight courier service
         addressed to each Holder at the facsimile telephone number or address
         of such Holder appearing on the books of the Sellers, or if no such
         facsimile telephone number or address appears, at the principal place
         of business of the Holder. Any notice or other communication or
         deliveries hereunder shall be deemed given and effective on the
         earliest of (i) the date of transmission, if such notice or
         communication is delivered via facsimile at the facsimile telephone
         number specified in this Section prior to 5:30 p.m. (New York City
         time), (ii) the date after the date of transmission, if such notice or
         communication is delivered via facsimile at the facsimile telephone
         number specified in this Section later than 5:30 p.m. (New York City
         time) on any date and earlier than 11:59 p.m. (New York City time) on
         such date, (iii) the second Business Day following the date of mailing,
         if sent by nationally recognized overnight courier service, or (iv)
         upon actual receipt by the party to whom such notice is required to be
         given.

                  b)       Absolute Obligation. Except as expressly provided
         herein, no provision of this Debenture shall alter or impair the
         obligation of the Sellers, which is absolute and unconditional, to pay
         the principal of, interest and liquidated damages (if any) on, this
         Debenture at the time, place, and rate, and in the coin or currency,
         herein prescribed. This Debenture is a direct debt obligation of the
         Sellers. This Debenture ranks pari passu with all other Debentures now
         or hereafter issued under the terms set forth herein.

                  c)       Security Interest. This Debenture is a direct debt
         obligation of the Sellers and, pursuant to the Security Agreement, is
         secured by all of the assets of the Sellers; provided, however, that
         such security shall be subject to the terms and conditions of the
         Subordination Agreement with Wells Fargo Foothill, Inc.

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

                  e)       Governing Law. All questions concerning the
         construction, validity, enforcement and interpretation of this
         Debenture shall be governed by and construed and enforced in accordance
         with the internal laws of the State of New York, without regard to the
         principles of conflicts of law thereof. Each party agrees that all
         legal proceedings concerning the interpretations, enforcement and
         defense of the transactions contemplated by any of the Transaction
         Documents (whether brought against a party hereto or its respective

                                       24
<PAGE>

         affiliates, directors, officers, shareholders, employees or agents)
         shall be commenced in the state and federal courts sitting in the City
         of New York, Borough of Manhattan (the "New York Courts"). Each party
         hereto hereby irrevocably submits to the exclusive jurisdiction of the
         New York Courts for the adjudication of any dispute hereunder or in
         connection herewith or with any transaction contemplated hereby or
         discussed herein (including with respect to the enforcement of any of
         the Transaction Documents), and hereby irrevocably waives, and agrees
         not to assert in any suit, action or proceeding, any claim that it is
         not personally subject to the jurisdiction of any such court, or such
         New York Courts are improper or inconvenient venue for such proceeding.
         Each party hereby irrevocably waives personal service of process and
         consents to process being served in any such suit, action or proceeding
         by mailing a copy thereof via registered or certified mail or overnight
         delivery (with evidence of delivery) to such party at the address in
         effect for notices to it under this Debenture and agrees that such
         service shall constitute good and sufficient service of process and
         notice thereof. Nothing contained herein shall be deemed to limit in
         any way any right to serve process in any manner permitted by law. Each
         party hereto hereby irrevocably waives, to the fullest extent permitted
         by applicable law, any and all right to trial by jury in any legal
         proceeding arising out of or relating to this Debenture or the
         transactions contemplated hereby. If either party shall commence an
         action or proceeding to enforce any provisions of this Debenture, then
         the prevailing party in such action or proceeding shall be reimbursed
         by the other party for its attorneys' fees and other costs and expenses
         incurred with the investigation, preparation and prosecution of such
         action or proceeding.

                  f)       Waiver. Any waiver by the Sellers or 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
         Sellers or 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.

                  g)       Severability. 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 violates applicable laws
         governing usury, the applicable rate of interest due hereunder shall
         automatically be lowered to equal the maximum permitted rate of
         interest. The Sellers covenant (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
         Sellers 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 Sellers (to the extent it may
         lawfully do so) hereby expressly waive all benefits or advantage of any
         such law, and covenants that it will not, by resort to any such law,

                                       25
<PAGE>

         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.

                  h)       Next Business Day. 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.

                  i)       Headings. The headings contained herein are for
         convenience only, do not constitute a part of this Debenture and shall
         not be deemed to limit or affect any of the provisions hereof.

                  j)       Assumption. Any successor to the Sellers or surviving
         entity in a Fundamental Transaction shall (i) assume in writing all of
         the obligations of the Sellers under this Debenture and the other
         Transaction Documents pursuant to written agreements in form and
         substance satisfactory to the Holder (such approval not to be
         unreasonably withheld or delayed) prior to such Fundamental Transaction
         and (ii) to issue to the Holder a new debenture of such successor
         entity evidenced by a written instrument substantially similar in form
         and substance to this Debenture, including, without limitation, having
         a principal amount and interest rate equal to the principal amounts and
         the interest rates of the Debentures held by the Holder and having
         similar ranking to this Debenture, and satisfactory to the Holder (any
         such approval not to be unreasonably withheld or delayed). The
         provisions of this Section 9(i) shall apply similarly and equally to
         successive Fundamental Transactions and shall be applied without regard
         to any limitations of this Debenture.

                              *********************

                                       26
<PAGE>

         IN WITNESS WHEREOF, the Sellers have caused this Debenture to be duly
executed by a duly authorized officer as of the date first above indicated.

                                    VELOCITY ASSET MANAGEMENT INC.

                                    By: /s/ JAMES J. MASTRIANI
                                        ----------------------------------------
                                        Name:  James J. Mastriani
                                        Title: Chief Financial Officer and
                                                 Chief Legal Officer

                                    J. HOLDER INC.

                                    By: /s/ W. PETER RAGAN, SR.
                                        ----------------------------------------
                                        Name:  W. Peter Ragan, Sr.
                                        Title: President

                                       27EXHIBIT 10.1

                               AMENDMENT AGREEMENT

         This Amendment Agreement (the "Agreement"), dated as of May 19, 2006,
is by and Among Velocity Asset Management Inc., a Delaware corporation (the
"Company"), J. Holder Inc., a New Jersey corporation (together with the Company,
the "Sellers") and DKR Soundshore Oasis Holding Fund Ltd. (the "Holder").

         WHEREAS, the Holder holds $1,800,000 principal amount of the Sellers'
10% Convertible Secured Debentures due April 27, 2007 (the "Debentures") and a
Common Stock Purchase Warrant (the "Warrant") to purchase up to 200,000 shares
of common stock of the Company (the "Common Stock"), which Debentures and
Warrants were issued pursuant to that certain Securities Purchase Agreement,
dated October 27, 2005 (the "Purchase Agreement") and the other documents
entered into in connection therewith (the "Transaction Documents"); and

         WHEREAS, the parties wish to amend certain terms of the Debenture,
Warrant and Transaction Documents.

         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the Sellers and the Holder agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

         Section 1.     Definitions. Capitalized terms not defined in this
Agreement shall have the meanings ascribed to such terms in the Purchase
Agreement.

                                   ARTICLE II
                             AMENDMENT OF SECURITIES

         Section 2.1.   Amendment to Maturity Date. The second paragraph of the
first page of the Debenture is hereby amended and restated as follows: "FOR
VALUE RECEIVED, the Sellers, jointly and severally, promise to pay to DKR
Soundshore Oasis Holding Fund Ltd. or its registered assigns (the "Holder"), or
shall have paid pursuant to the terms hereunder, the principal sum of $1,800,000
by June 27, 2007, or such earlier date as this Debenture is required or
permitted to be repaid as provided hereunder (the "Maturity Date"), and to pay
interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Debenture in accordance with the provisions hereof."
All references in the Debenture or Transaction Documents that the Debenture is
due on April 27, 2007 are hereby replaced with June 27, 2007.

         Section 2.2.   Amendment to Monthly Redemption Date. The definition of
"Monthly Redemption Date" under Section 1 of the Debenture is hereby amended and
restated as follows: "Monthly Redemption Date" means the 1st of each month,
commencing on June 1, 2006 and ending upon the full redemption of this
Debenture."

                                       1
<PAGE>

         Section 2.3.   Amendment to the Number of Warrant Shares. The first
paragraph of the Warrant is hereby amended and restated as follows: "THIS COMMON
STOCK PURCHASE WARRANT (the "Warrant") certifies that, for value received, DKR
Soundshore Oasis Holding Fund Ltd. (the "Holder"), is entitled, upon the terms
and subject to the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the earlier of the 6 month anniversary of the
completion of the Secondary Offering and the 9 month anniversary of the date of
the Purchase Agreement (the "Initial Exercise Date") and on or prior to the
close of business on the 5 year anniversary of the Initial Exercise Date (the
"Termination Date") but not thereafter, to subscribe for and purchase from
Velocity Asset Management Inc., a Delaware corporation (the "Company"), up to
250,000 shares (the "Warrant Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"). The purchase price of one share of
Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b)." All references in the Warrant or Transaction Documents that
the number of Warrant Shares issuable pursuant to the Warrant is "200,000" are
hereby replaced with "250,000"

         Section 2.4.   Registration of Warrant Shares. The Company shall use
best efforts to include the additional 50,000 Warrant Shares issuable as a
result of the amendment set forth in Section 2.3 on the Registration Statement.
In the event that the Company is unable to include such shares on the
Registration Statement, if at any time during the period that the Warrant is
outstanding there is not an effective registration statement covering all of
such Warrant Shares and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-8 (as promulgated under the Securities Act) or
its then equivalent relating to equity securities issuable in connection with
the stock option or other employee benefit plans, then the Company shall send to
the Holder a written notice of such determination and, if within fifteen days
after the date of such notice, if the Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Warrant Shares such Holder requests to be registered. Except as specifically set
forth herein, all rights and privileges of the holder of Warrant Shares under
the Purchase Agreement, Warrant and other Transaction Documents shall equally
apply to the holder of such Warrant Shares.

         Section 2.5.   Effect on Purchase Agreement. Except as expressly set
forth above, all of the terms and conditions of the Transaction Documents shall
continue in full force and effect after the execution of this Agreement, and
shall not be in any way changed, modified or superseded by the terms set forth
herein.

         Section 2.6.   Filing of Press Release. Within 1 Trading Day of the
date hereof, the Company shall issue a Current Report on Form 8-K, reasonably
acceptable to each Purchaser disclosing the material terms of the transactions
contemplated hereby, which shall include this Agreement as an attachment
thereto.

                                       2
<PAGE>

         Section 2.7.   Replacement Securities. Upon the request of the Holder
and surrender of the applicable instrument to the Company, the Sellers shall,
within 5 Trading Days of the date of such request, issue or cause to be issued
in exchange and substitution for and upon cancellation thereof, or in lieu of
and substitution therefor, a new instrument representing the Debenture and
Warrant which instruments shall incorporate the terms provided for hereunder and
which shall evidence the then Conversion Price (as of the date hereof, $2.525)
and then Exercise Price (as of the date hereof, $3.10). The Holder shall not be
required to pay any costs associated with the issuance of such replacement
Securities.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         Section 3.1.   Representations and Warranties of the Sellers. The
Sellers, jointly and severally, hereby make the representations and warranties
set forth below to the Holder that as of the date of its execution of this
Agreement:

                (a)     Authorization, etc. The execution, delivery and
         performance of this Agreement, the consummation of the transactions
         contemplated hereby and thereby have been duly authorized by all
         necessary corporate action on the part of the Sellers, and this
         Agreement constitutes the legal, valid and binding obligation of the
         Sellers enforceable against the Sellers in accordance with its terms.

                (b)     Compliance with Laws, Other Instruments of the Sellers,
         etc. The execution and delivery of this Agreement will not conflict
         with or result in a breach of, or require any consent under, the
         articles/certificate of incorporation or any applicable law or
         regulation, or any order, writ, injunction or decree of any court or
         governmental authority or agency (other than filings which will be made
         by the Sellers as may be required by applicable state securities laws),
         or any agreement or instrument to which the Sellers is a party or by
         which it is bound or to which it is subject, or constitute a default
         under any such agreement or instrument, or result in the creation or
         imposition of any lien upon any of the revenues or assets of the
         Sellers pursuant to the terms of any such agreement or instrument.

         Section 3.2.   Representations and Warranties of the Holder. The Holder
hereby makes the representations and warranties set forth below to the Sellers
that as of the date of its execution of this Agreement:

                (a)     Due Authorization. Such Holder represents and warrants
         that (i) the execution and delivery of this Agreement by it and the
         consummation by it of the transactions contemplated hereby have been
         duly authorized by all necessary action on its behalf and (ii) this
         Agreement has been duly executed and delivered by such Holder and
         constitutes the valid and binding obligation of such Holder,
         enforceable against it in accordance with its terms.

                                       3
<PAGE>

                                   ARTICLE IV
                                  MISCELLANEOUS

         Section 4.1.   Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be made in
accordance with the provisions of the Purchase Agreement.

         Section 4.2.   Survival. All warranties and representations (as of the
date such warranties and representations were made) made herein or in any
certificate or other instrument delivered by it or on its behalf under this
Agreement shall be considered to have been relied upon by the parties hereto and
shall survive the issuance of the Amendment Common Stock. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns
of each of the parties; provided however that no party may assign this Agreement
or the obligations and rights of such party hereunder without the prior written
consent of the other parties hereto.

         Section 4.3.   Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together 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, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

         Section 4.4.   Severability. If any provision of this Agreement is held
to be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         Section 4.5.   Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be determined pursuant to the Governing Law provision of the Purchase Agreement.

         Section 4.6.   Entire Agreement. The Agreement, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

         Section 4.7.   Construction. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof. 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.

                             ***********************

                                       4
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.

                                        VELOCITY ASSET MANAGEMENT INC.

                                        By: /s/ JAMES J. MASTRIANI
                                            ------------------------------------
                                            Name:  James J. Mastriani
                                            Title: Chief Financial Officer and
                                                     Chief Legal Officer

                                        J. HOLDER INC.

                                        By: /s/ W. PETER RAGAN, SR.
                                            ------------------------------------
                                            Name:  W. Peter Ragan, Sr.
                                            Title: President

Name of Holder: DKR Soundshore Oasis Holding Fund Ltd.
Signature of Authorized Signatory of Holder: /s/ BRAD CASWELL
                                             -----------------------------------
Name of Authorized Signatory:                    Brad Caswell
                             ---------------------------------------------------
Title of Authorized Signatory:                   Director
                               -------------------------------------------------

                                       5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]