Document:

<PAGE>
                                                                     EXHIBIT 4.1

                                FORM OF DEBENTURE

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
         SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
         STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
         ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

No. 05-01-(1)                                                 US $_____________

                             NEW VISUAL CORPORATION

                     7% SENIOR SECURED CONVERTIBLE DEBENTURE
                      SERIES 05-01 DUE __________, 200_(2)

         THIS DEBENTURE is one of a duly authorized issue of up to
$__________(3) in Debentures of NEW VISUAL CORPORATION, a corporation organized
and existing under the laws of the State of Utah (the "Company") designated as
its 7% Senior Secured Convertible Debentures Series 05-01.

         FOR VALUE RECEIVED, the Company promises to pay to ___________________,
the registered holder hereof (the "Holder"), the principal sum of
___________________ and 00/100 Dollars (US $ ___________________) on
______________, 200_(4) (the "Maturity Date") and to pay interest, on a compound
basis, on the principal sum outstanding from time to time in arrears at the rate
of 7% per annum, accruing from ______________, 200_(5), the date of initial
issuance of this Debenture (the "Issue Date"), on the date (each, an "Interest
Payment Date") which is the earlier of (i) the last calendar day of June and
December of each calendar year (each, a "Scheduled Interest Payment Date"),
except that the first Scheduled Interest Payment Date shall be December 31,
2005, (ii) a Conversion Date (as defined below) or (iii) the Maturity Date, as
the case may be. Interest shall accrue semi-annually (pro-rated on a daily basis
for any period longer or shorter than a half year) from the later of the Issue
Date or the previous Interest Payment Date) and shall be payable in cash or, at
the Company's option but subject to the other provisions of this Debenture, in
Common Stock. If not paid in full on an Interest Payment Date, interest shall be
fully cumulative and shall accrue on a daily basis, based on a 365-day year
semi-annually or until paid, whichever is earlier. Additional provisions
regarding the payment of interest are provided in Section 4(D) below (the terms
of which shall govern as if this sentence were not included in this Debenture).

         This Debenture is being issued pursuant to the terms of the Securities
Purchase Agreement, dated May ___, 2005 (the "Securities Purchase Agreement"),
to which the Company and the Holder (or the Holder's predecessor in interest)
are parties. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Securities Purchase Agreement.

___________

(1)Insert unique Debenture number for each issuance.
(2) Insert date which is third anniversary of the relevant Closing Date
(3) Insert Aggregate Purchase Price.
(4) See footnote 2
(5) Insert the Closing Date.

                                       1
<PAGE>

         This Debenture is subject to the following additional provisions:

         1. The Debentures will initially be issued in denominations determined
by the Company, but are exchangeable for an equal aggregate principal amount of
Debentures of different denominations, as requested by the Holder surrendering
the same. No service charge will be made for such registration or transfer or
exchange.

         2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.

         3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended (the "Act"), and other
applicable state and foreign securities laws and the terms of the Securities
Purchase Agreement. In the event of any proposed transfer of this Debenture, the
Company may require, prior to issuance of a new Debenture in the name of such
other person, that it receive reasonable transfer documentation that is
sufficient to evidence that such proposed transfer complies with the Act and
other applicable state and foreign securities laws and the terms of the
Securities Purchase Agreement. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's 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 be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.

         4. A. (i) At any time on or after the Commencement Date (as defined
below) and prior to the time this Debenture is paid in full in accordance with
its terms (including, without limitation, after the Prepayment Date and after
the occurrence of an Event of Default, as those terms are defined below, or, if
the Debenture is not fully paid or converted after the Maturity Date), the
Holder of this Debenture is entitled, at its option, subject to the following
provisions of this Section 4, to convert this Debenture at any time into shares
of Common Stock, $0.001 par value ("Common Stock"), of the Company of the
Company at the Conversion Price (as defined below). The minimum principal amount
of each conversion shall be $10,000 or, if the outstanding principal amount of
this Debenture is less than $10,000, the outstanding principal balance of this
Debenture.

                           (ii) On the Maturity Date the Company shall pay the
principal and accrued interest (through the actual date of payment) of any
portion of this Debenture which is then outstanding.

                           (iii) For purposes of this Debenture, the following
terms shall have the meanings indicated below:

         "Commencement Date" means the earlier of (x) the date which is
         sixty-five (65) days after the Issue Date, or (y) the Effective Date.

         "Conversion Price" means the lower of (x) the Variable Conversion Price
         or (y) the Lowest Fixed Conversion Price (each of which amount is
         subject to adjustment as provided herein).

         "Variable Conversion Price" means the amount equal to (x) the VWAP for
         the five (5) Trading Days ending on the Trading Day immediately
         preceding the relevant Conversion Date, multiplied by (y) (1) one
         hundred percent (100%), less (2) the Effective Percentage.

         "VWAP" means the volume weighted average price of the Common Stock on
         the Principal Trading Market for the relevant Trading Day(s), as
         reported by the Reporting Service.

         "Reporting Service" means Bloomberg LP or if that service is not then
         reporting the relevant information regarding the Common Stock, a
         comparable reporting service of national reputation selected by a
         Majority in Interest of the Holders and reasonably acceptable to the
         Company.

         "Effective Percentage" means thirty percent (30%), which percentage is
         subject to increase under certain conditions as contemplated in the
         Securities Purchase Agreement.

                                       2
<PAGE>

         "Lowest Fixed Conversion Price" means the lowest New Transaction Price
         from any New Transaction (as those terms are defined in the Securities
         Purchase Agreement) (which amount, if any, is subject to subsequent
         adjustment as provided herein).

                  B. Conversion shall be effectuated by faxing a Notice of
Conversion (as defined below) to the Company as provided in this paragraph. The
Notice of Conversion shall be executed by the Holder of this Debenture and shall
evidence such Holder's intention to convert this Debenture or a specified
portion hereof in the form annexed hereto as Exhibit A. If paid in Common Stock
as contemplated hereby, interest accrued or accruing from the Issue Date to the
relevant Interest Payment Date and not previously paid shall be paid in Common
Stock at the Conversion Price applicable as of such Interest Payment Date. No
fractional shares of Common Stock or scrip representing fractions of shares will
be issued on conversion, but the number of shares issuable shall be rounded to
the nearest whole share. The date on which notice of conversion is given (the
"Conversion Date") shall be deemed to be the date on which the Holder faxes or
otherwise delivers the conversion notice ("Notice of Conversion") to the Company
so that it is received by the Company on or before such specified date, provided
that, if such conversion would convert the entire remaining principal of this
Debenture, the Holder shall deliver to the Company the original Debentures being
converted no later than five (5) Trading Days thereafter. Delivery of the Notice
of Conversion shall be accepted by the Company by hand, mail or courier delivery
at the address specified in said Exhibit A or at the facsimile number specified
in said Exhibit A (each of such address or facsimile number may be changed by
notice given to the Holder in the manner provided in the Securities Purchase
Agreement). Certificates representing Common Stock upon conversion ("Conversion
Certificates") will be delivered to the Holder at the address specified in the
Notice of Conversion (which may be the Holder's address for notices as
contemplated by the Securities Purchase Agreement or a different address), via
express courier, by electronic transfer or otherwise, within three (3) Trading
Days (such third Trading Day, the "Delivery Date") after the relevant Conversion
Date and, if interest is paid by Common Stock with respect to any other Interest
Payment Date, the Interest Payment Date. The Holder shall be deemed to be the
holder of the shares issuable to it in accordance with the provisions of this
Section 4(B) on the Conversion Date.

                  C. Notwithstanding any other provision hereof or of any of the
other Transaction Agreements, in no event (except (i) as specifically provided
herein as an exception to this provision, or (ii) while there is outstanding a
tender offer for any or all of the shares of the Company's Common Stock) shall
the Holder be entitled to convert any portion of this Debenture, or shall the
Company have the obligation to convert such Debenture (and the Company shall not
have the right to pay interest hereon in shares of Common Stock) to the extent
that, after such conversion or issuance of stock in payment of interest, the sum
of (1) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Debentures or other convertible securities or of the unexercised portion of
warrants or other rights to purchase Common Stock), and (2) the number of shares
of Common Stock issuable upon the conversion of the Debentures with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock (after taking into account the shares to be
issued to the Holder upon such conversion). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, except as otherwise provided in clause (1) of such sentence. The
Holder, by its acceptance of this Debenture, further agrees that if the Holder
transfers or assigns any of the Debentures to a party who or which would not be
considered such an affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 4(C) as if such transferee or assignee were the original Holder
hereof. Nothing herein shall preclude the Holder from disposing of a sufficient
number of other shares of Common Stock beneficially owned by the Holder so as to
thereafter permit the continued conversion of this Debenture.

                  D. (i) Subject to the terms of Section 4(C) and to the other
terms of this Section 4(D), interest on the principal amount of this Debenture
converted pursuant to a Notice of Conversion shall be due and payable, at the
option of the Company, in cash or Common Stock on the Interest Payment Date.

                           (ii) If the interest is to be paid in cash, the
Company shall make such payment within three (3) Trading Days of the Interest
Payment Date. If the interest is not paid by such third Trading Day, the
interest must be paid in Common Stock in accordance with the provisions of this
Section 4(D), unless the Holder consents otherwise in each specific instance.

                                       3
<PAGE>

                           (iii) If interest is to be paid in Common Stock
(whether at the election of the Company or as required hereunder), the number of
shares of Common Stock to be received shall be determined by dividing the dollar
amount of the interest by the Conversion Price in effect on the relevant
Interest Payment Date. In such event, the Common Stock shall be delivered to the
Holder, or per Holder's instructions, (i) if being issued in connection with a
conversion of this Debenture, on the Delivery Date for the related Conversion
Certificates pursuant to the preceding provisions of this Section 4 (such date,
a "Delivery Date"), and (ii) with respect to all other instances, within five
(5) Trading Days after the Interest Payment Date (such fifth Trading Day, a
"Delivery Date"), with the shares issuable then based on the cumulative accrued
interest through such effective date.

                           (iv) If not paid in full on an Interest Payment Date,
interest shall be fully cumulative and shall accrue on a daily basis, based on a
365-day year, semi-annually or until paid, whichever is earlier.

                  E. Reference is made to the provisions of Section 4(g) of the
Securities Purchase Agreement, the terms of which are incorporated herein by
reference. The Conversion Price and other provisions of this Debenture shall be
adjusted as provided in the applicable provisions of said Section 4(g) of the
Securities Purchase Agreement.

                  F. (i) Anything in the other provisions of this Debenture or
any of the other Transaction Agreements to the contrary notwithstanding, the
Company shall have the right to prepay the outstanding principal of this
Debenture, together with all accrued interest thereon, in whole or in part, on
the terms and conditions provided in this Section 4(F). If the Company elects to
make such a prepayment, the Company shall give the Holder a written notice (the
"Prepayment Notice") of its election to prepay all or a portion of then
outstanding Debenture. The prepayment amount shall be equal to one hundred
twenty percent (120%) of the sum of (x) the principal of this Debenture being
prepaid, plus (y) accrued interest thereon through the Prepayment Date.
Additional terms regarding this prepayment right are provided below.

                           (ii) The Prepayment Notice shall specify (x) the
principal amount of the Debenture being prepaid by the Company (the "Prepayment
Principal Amount"), (y) the date (the "Prepayment Date"), which shall be not
less than ten (10) Trading Days after the Prepayment Notice is received by the
Holder, on which such prepayment will be made, and (z) identify the bank (the
"Prepayment Bank") where the Prepayment Funds (as defined below) have been
deposited. The Prepayment Notice shall be accompanied by the Prepayment Bank's
confirmation to the Holder that funds (the "Prepayment Funds") equal to the
Prepayment Principal Amount plus all accrued but unpaid interest thereon through
the Prepayment Date have been deposited with the Prepayment Bank and
instructions for the method by which the Holder can provide instructions to the
Prepayment Bank to make payment of the Prepayment Funds to the Holder (such
payment to made by check or wire, as specified by the Holder) on the Prepayment
Date.

                           (iii) Even after the issuance of a Prepayment Notice,
the Holder may continue to convert this Debenture as provided in the other
provisions of this Debenture until this Debenture is paid in full. If the Holder
converts any portion of this Debenture after the date of the Prepayment Notice
and prior to the payment of the Prepayment Funds to the Holder (the "Prepayment
Conversion Period"), so that the then outstanding principal of this Debenture is
less than the Prepayment Principal Amount, the Holder shall notify the
Prepayment Bank of the then outstanding principal of this Debenture; provided,
however, if the Prepayment Principal Amount is less than the principal of the
then Unconverted Debenture, any such conversions made during the Prepayment
Conversion Period shall be deemed made in the following order of priority: (x)
first, out of principal of the Unconverted Debenture in excess of the Prepayment
Principal Amount, and (y) then, out of the Prepayment Principal Amount. To the
extent that any conversions made during the Prepayment Conversion Period are
deemed made out of the Prepayment Principal Amount, the Prepayment Funds will
then be adjusted to and be deemed to be equal such outstanding principal plus
all accrued but unpaid interest thereon through the Prepayment Date.

                           (iv) If the Prepayment Funds are not timely paid or
made available to the Holder, the Holder will have the option, exercisable at
any time prior to the actual payment of the Prepayment Funds (together with any
additional interest accruing on the Prepayment Principal Amount after the
Prepayment Date) to effect either or both of the following actions: (x)
cancellation, ab initio, of the prepayment contemplated by the Prepayment Notice
and (y) cancellation of the Company's prepayment right under this Section 4(F).

                                       4
<PAGE>

         5. A. Subject to the terms of the Securities Purchase Agreement, no
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the coin or currency or
where contemplated herein in shares of its Common Stock, as applicable, as
herein prescribed. This Debenture and all other Debentures now or hereafter
issued of similar terms are direct obligations of the Company.

                  B. Payment of this Debenture is secured pursuant to the terms
of the Security Interest Agreement of even date herewith executed by the
Company, as debtor, in favor of the Buyer and the Other Buyers, as secured
parties. The terms of the Security Interest Agreement are incorporated herein by
reference.

         6. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.

         7. All payments contemplated hereby to be made "in cash" shall be made
in immediately available good funds of United States of America currency by wire
transfer to an account designated in writing by the Holder to the Company (which
account may be changed by notice similarly given). All payments of cash and each
delivery of shares of Common Stock issuable to the Holder as contemplated hereby
shall be made to the Holder at the address last appearing on the Debenture
Register of the Company as designated in writing by the Holder from time to
time; except that the Holder can designate, by notice to the Company, a
different delivery address for any one or more specific payments or deliveries.

         8. If, for as long as this Debenture remains outstanding, the Company
enters into a merger (other than where the Company is the surviving entity) or
consolidation with another corporation or other entity or a sale or transfer of
all or substantially all of the assets of the Company to another person
(collectively, a "Sale"), the Company will require, in the agreements reflecting
such transaction, that the surviving entity expressly assume the obligations of
the Company hereunder. Notwithstanding the foregoing, if the Company enters into
a Sale and the holders of the Common Stock are entitled to receive stock,
securities or property in respect of or in exchange for Common Stock, then as a
condition of such Sale, the Company and any such successor, purchaser or
transferee will agree that the Debenture may thereafter be converted on the
terms and subject to the conditions set forth above into the kind and amount of
stock, securities or property receivable upon such merger, consolidation, sale
or transfer by a holder of the number of shares of Common Stock into which this
Debenture might have been converted immediately before such merger,
consolidation, sale or transfer, subject to adjustments which shall be as nearly
equivalent as may be practicable. In the event of any such proposed Sale, (i)
the Holder hereof shall have the right to convert by delivering a Notice of
Conversion to the Company within fifteen (15) days of receipt of notice of such
Sale from the Company, except that Section 4(C) shall not apply to such
conversion.

         9. If, at any time while any portion of this Debenture remains
outstanding, the Company spins off or otherwise divests itself of a part of its
business or operations or disposes of all or of a part of its assets in a
transaction (the "Spin Off") in which the Company, in addition to or in lieu of
any other compensation received and retained by the Company for such business,
operations or assets, causes securities of another entity (the "Spin Off
Securities") to be issued to security holders of the Company, the Company shall
cause (i) to be reserved Spin Off Securities equal to the number thereof which
would have been issued to the Holder had all of the Holder's Debentures
outstanding on the record date (the "Record Date") for determining the amount
and number of Spin Off Securities to be issued to security holders of the
Company (the "Outstanding Debentures") been converted as of the close of
business on the Trading Day immediately before the Record Date (the "Reserved
Spin Off Shares"), and (ii) to be issued to the Holder on the conversion of all
or any of the Outstanding Debentures, such amount of the Reserved Spin Off
Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction,
of which (I) the numerator is the principal amount of the Outstanding Debentures
then being converted, and (II) the denominator is the principal amount of the
Outstanding Debentures.

                                       5
<PAGE>

         10. If, at any time while any portion of this Debenture remains
outstanding, the Company effectuates a stock split or reverse stock split of its
Common Stock or issues a dividend on its Common Stock consisting of shares of
Common Stock, the Conversion Price or the Lowest Fixed Conversion Price, if any,
and any other fixed amounts calculated as contemplated hereby or by any of the
other Transaction Agreements shall be equitably adjusted to reflect such action.
By way of illustration, and not in limitation, of the foregoing, (i) if the
Company effectuates a 2:1 split of its Common Stock, thereafter, with respect to
any conversion for which the Company issues shares after the record date of such
split, the Lowest Fixed Conversion Price, if any, shall be deemed to be one-half
of what it had been immediately prior to such split; (ii) if the Company
effectuates a 1:10 reverse split of its Common Stock, thereafter, with respect
to any conversion for which the Company issues shares after the record date of
such reverse split, the Lowest Fixed Conversion Price shall be deemed to be ten
times what it had been calculated to be immediately prior to such split; and
(iii) if the Company declares a stock dividend of one share of Common Stock for
every 10 shares outstanding, thereafter, with respect to any conversion for
which the Company issues shares after the record date of such dividend, the
Conversion Price (whether or not based on a Lowest Fixed Conversion Price) shall
be deemed to be such amount multiplied by a fraction, of which the numerator is
the number of shares (10 in the example) for which a dividend share will be
issued and the denominator is such number of shares plus the dividend share(s)
issuable or issued thereon (11 in the example).

         11. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the shares of Common Stock
issuable upon conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky or foreign
laws or similar laws relating to the sale of securities.

         12. This Debenture shall be governed by and construed in accordance
with the laws of the State of New York for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the exclusive jurisdiction of
the federal courts whose districts encompass any part of the County of New York
or the state courts of the State of New York sitting in the County of New York
in connection with any dispute arising under this Debenture and hereby waives,
to the maximum extent permitted by law, any objection, including any objection
based on FORUM NON COVENIENS, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, the Company shall
reimburse the Holder for any reasonable legal fees and disbursements incurred by
the Holder in enforcement of or protection of any of its rights under any of
this Debenture.

         13. JURY TRIAL WAIVER. The Company and the Holder hereby waive a trial
by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out of or in
connection with this Debenture.

         14. (i) Prior to the Maturity Date, the following shall constitute an
"Event of Default":

                  a.       The Company shall default in the payment of principal
                           or interest on this Debenture or any other amount due
                           hereunder, and, (i) with respect to a payment of
                           interest on a Scheduled Interest Payment Date, such
                           default shall continue for a period of five (5)
                           Trading Days after the Holder gives the Company's
                           written notice thereof, and (ii) in all other
                           instances, such default shall continue for a period
                           of five (5) Trading Days; or

                  b.       Any of the representations or warranties made by the
                           Company herein, in the Securities Purchase Agreement
                           or any of the other Transaction Agreements or in any
                           certificate or financial or other written statements
                           heretofore or hereafter furnished by the Company in
                           connection with the execution and delivery of this
                           Debenture or the Securities Purchase Agreement shall
                           be false or misleading in any material respect at the
                           time made; or

                                       6
<PAGE>

                  c.       Subject to the terms of the Securities Purchase
                           Agreement, the Company fails to authorize or to cause
                           its Transfer Agent to issue shares of Common Stock
                           upon exercise by the Holder of the conversion rights
                           of the Holder in accordance with the terms of this
                           Debenture (provided, however, that for purposes of
                           this provision, such failure to cause the Transfer
                           Agent to issue such shares shall not be deemed to
                           occur until two (2) Trading Days after the Delivery
                           Date), fails to transfer or to cause its Transfer
                           Agent to transfer any certificate for shares of
                           Common Stock issued to the Holder upon conversion of
                           this Debenture and when required by this Debenture or
                           any other Transaction Agreement, and such transfer is
                           otherwise lawful, or fails to remove any restrictive
                           legend on any certificate or fails to cause its
                           Transfer Agent to remove such restricted legend, in
                           each case where such removal is lawful, as and when
                           required by this Debenture, or any other Transaction
                           Agreement, and any such failure shall continue
                           uncured for ten (10) Trading Days; or

                  d.       The Company shall fail to perform or observe, in any
                           material respect, any other covenant, term,
                           provision, condition, agreement or obligation of any
                           Debenture in this series and such failure shall
                           continue uncured for a period of thirty (30) days
                           after the Company's receipt written notice from the
                           Holder of such failure; or

                  e.       The Company shall fail to perform or observe, in any
                           material respect, any covenant, term, provision,
                           condition, agreement or obligation of the Company
                           under any of the Transaction Agreements and such
                           failure, if capable of being cured, shall continue
                           uncured for a period of thirty (30) days after the
                           Holder gives the Company written notice thereof (but
                           if not capable of being cured, such thirty day period
                           shall be deemed expired immediately upon the giving
                           of such notice); or

                  f.       The Company shall (1) admit in writing its inability
                           to pay its debts generally as they mature; (2) make
                           an assignment for the benefit of creditors or
                           commence proceedings for its dissolution; or (3)
                           apply for or consent to the appointment of a trustee,
                           liquidator or receiver for its or for a substantial
                           part of its property or business; or

                  g.       A trustee, liquidator or receiver shall be appointed
                           for the Company or for a substantial part of its
                           property or business without its consent and shall
                           not be discharged within sixty (60) days after such
                           appointment; or

                  h.       Any governmental agency or any court of competent
                           jurisdiction at the instance of any governmental
                           agency shall assume custody or control of the whole
                           or any substantial portion of the properties or
                           assets of the Company and shall not be dismissed
                           within sixty (60) days thereafter; or

                  i.       Any money judgment, writ or warrant of attachment, or
                           similar process in excess of Five Hundred Thousand
                           ($500,000) Dollars in the aggregate shall be entered
                           or filed against the Company or any of its properties
                           or other assets and shall remain unpaid, unvacated,
                           unbonded or unstayed for a period of sixty (60) days
                           or in any event later than five (5) days prior to the
                           date of any proposed sale thereunder; or

                                       7
<PAGE>

                  j.       Bankruptcy, reorganization, insolvency or liquidation
                           proceedings or other proceedings for relief under any
                           bankruptcy law or any law for the relief of debtors
                           shall be instituted by or against the Company and, if
                           instituted against the Company, shall not be
                           dismissed within sixty (60) days after such
                           institution or the Company shall by any action or
                           answer approve of, consent to, or acquiesce in any
                           such proceedings or admit the material allegations
                           of, or default in answering a petition filed in any
                           such proceeding; or

                  k.       The Company shall have its Common Stock suspended
                           from trading on, or delisted from, the Principal
                           Trading Market for in excess of fifteen (15) Trading
                           Days.

         (ii)     After the Maturity Date, the term "Event of Default" shall
                  mean:

                  a.       The Company shall default in the payment of principal
                           or interest on this Debenture or any other amount due
                           hereunder, and, in any such instance, the same shall
                           continue for a period of five (5) Trading Days; or

                  b.       Subject to the terms of the Securities Purchase
                           Agreement, the Company fails to authorize or to cause
                           its Transfer Agent to issue shares of Common Stock
                           upon exercise by the Holder of the conversion rights
                           of the Holder in accordance with the terms of this
                           Debenture (provided, however, that for purposes of
                           this provision, such failure to cause the Transfer
                           Agent to issue such shares shall not be deemed to
                           occur until two (2) Trading Days after the Delivery
                           Date), fails to transfer or to cause its Transfer
                           Agent to transfer any certificate for shares of
                           Common Stock issued to the Holder upon conversion of
                           this Debenture and when required by this Debenture or
                           any other Transaction Agreement, and such transfer is
                           otherwise lawful, or fails to remove any restrictive
                           legend on any certificate or fails to cause its
                           Transfer Agent to remove such restricted legend, in
                           each case where such removal is lawful, as and when
                           required by this Debenture, or any other Transaction
                           Agreement, and any such failure shall continue
                           uncured for ten (10) Trading Days.

         (iii)    If an Event of Default shall have occurred and is continuing,
                  then, or at any time thereafter, and in each and every such
                  case, unless such Event of Default shall have been cured or
                  waived in writing by the Holder (which waiver shall not be
                  deemed to be a waiver of any subsequent default), at the
                  option of the Holder and in the Holder's sole discretion, the
                  Holder may elect to redeem all or part of the Unconverted
                  Debenture (as defined below) on the terms provided in Section
                  15 hereof.

         15. A. The Company acknowledges that if there is an Event of Default,
the Holder may require the Company to immediately redeem all or any part of the
outstanding portion of this Debenture for an amount equal to the Redemption
Amount (as defined below).

                  B. For purposes of this Debenture, the following terms shall
have the meanings indicated below:

         "Unconverted Debenture" means the principal amount of this Debenture
         which has not been converted as of the relevant date.

         "Redemption Payment Date" means the date on which the Company actually
         pays the Redemption Amount.

                                       8
<PAGE>

         "Redemption Amount" means the amount equal to:

                           V                x  M
                    -----------------
                          CP

                  where:

                  "V" means the principal of an Unconverted Debenture plus any
         accrued but unpaid interest thereon;

                  "CP" means the Conversion Price in effect on the date (the
         "Redemption Notice Date") of the Redemption Notice (as defined below);
         and

                  "M" means the highest closing price per share of the Common
         Stock during the period beginning on the Redemption Notice Date and
         ending on the Redemption Payment Date.

                  C. The Holder of an Unconverted Debenture may elect to redeem
a portion of such Unconverted Debenture without electing to redeem the balance
of the Unconverted Debenture. The Holder's option to redeem all or part of the
Unconverted Debenture shall be exercised by the Holder giving written notice of
the exercise of this provision by the Holder (a "Redemption Notice") at any time
after a relevant Event of Default has occurred. The Redemption Notice shall
specify (a) the date (the "Redemption Due Date") on which the Redemption Amount
shall be paid, which date shall be at least five (5) Trading Days after the date
(a "Redemption Notice Date") on which the Holder Redemption Notice is given, and
(b) the wire instructions for the account to which the Redemption Amount is to
be paid; provided, however, that the Company shall have the right to accelerate
the date of such payment.

                  D. If all of the Unconverted Debentures are being redeemed
pursuant to this Section 5, then, upon payment in full of the Redemption Amount
for all of the Unconverted Debentures in accordance with the provisions of this
Section 5, the Holder shall deliver the Debenture to the Company marked "paid in
full".

                  E. If the Redemption Amount is not timely paid by the Company,
the Holder may declare the Redemption Amount due under this Debenture
immediately due and payable, without presentment, demand, protest or notice of
any kinds, all of which are hereby expressly waived, anything herein or in any
note or other instruments contained to the contrary notwithstanding, and the
Holder may immediately enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law, including, but
not necessarily limited to, the equitable remedy of specific performance and
injunctive relief. If such outstanding amount is not timely paid in full by the
Company, the unpaid amount computed as of such date will bear interest at the
rate of eighteen percent (18%) or the highest rate allowed by law, whichever is
lower, from the date of the Event of Default until and including the date
actually paid. Any partial payments shall be applied first to all accrued
interest and then to principal.

         16. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a shareholder in respect of any meeting of
shareholders or any rights whatsoever as a shareholder of the Company, unless
and to the extent converted in accordance with the terms hereof.

                      [Balance of page intentionally blank]

                                       9
<PAGE>

         17. In the event for any reason, any payment by or act of the Company
or the Holder shall result in payment of interest which would exceed the limit
authorized by or be in violation of the law of the jurisdiction applicable to
this Debenture, then IPSO FACTO the obligation of the Company to pay interest or
perform such act or requirement shall be reduced to the limit authorized under
such law, so that in no event shall the Company be obligated to pay any such
interest, perform any such act or be bound by any requirement which would result
in the payment of interest in excess of the limit so authorized. In the event
any payment by or act of the Company shall result in the extraction of a rate of
interest in excess of a sum which is lawfully collectible as interest, then such
amount (to the extent of such excess not returned to the Company) shall, without
further agreement or notice between or by the Company or the Holder, be deemed
applied to the payment of principal, if any, hereunder immediately upon receipt
of such excess funds by the Holder, with the same force and effect as though the
Company had specifically designated such sums to be so applied to principal and
the Holder had agreed to accept such sums as an interest-free prepayment of this
Debenture. If any part of such excess remains after the principal has been paid
in full, whether by the provisions of the preceding sentences of this Section or
otherwise, such excess shall be deemed to be an interest-free loan from the
Company to the Holder, which loan shall be payable immediately upon demand by
the Company. The provisions of this Section shall control every other provision
of this Debenture.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.

Dated: ______________, 200__

                                           NEW VISUAL CORPORATION

                                           By:
                                               ---------------------------------

                                               ---------------------------------
                                               (Print Name)

                                               ---------------------------------
                                               (Title)

                                       10
<PAGE>

                                    EXHIBIT A

                             NEW VISUAL CORPORATION

                              NOTICE OF CONVERSION
                                       OF
    7% SENIOR SECURED CONVERTIBLE DEBENTURE SERIES 05-01 DUE ________, 200_
  (To be Executed by the Registered Holder in Order to Convert the Debenture)

TO:      New Visual Corporation                      VIA FAX: (503) 257-6622
         305 NE 102nd Ave., Suite 105
         Portland, OR 97220
         Attn: President

FROM: _________________________________________________________ ("Holder")

DATE: _______________________________________________ (the "Conversion Date")

RE:      Conversion of $_________________ principal amount (the "Converted
         Debenture") of the 7% Convertible Debenture Series 05-01-___ Due
         _________, 200_ (the "Debenture") of NEW VISUAL CORPORATION (the
         "Company") into ________________________ shares (the "Conversion
         Shares") of Common Stock (defined below)

         The captioned Holder hereby gives notice to the Company, pursuant to
the Debenture of NEW VISUAL CORPORATION that the Holder elects to convert the
Converted Debenture into fully paid and non-assessable shares of Common Stock,
$0.001 par value (the "Common Stock"), of the Company as of the Conversion Date
specified above. Said conversion shall be based on the following Conversion
Price

         [ ]      $________________, representing the Variable Conversion Price
                  (as defined in the Debenture)

         [ ]      $________________, representing the Lowest Fixed Conversion
                  Price (as defined in the Debenture)

         [ ]      $________________, representing the Lowest Fixed Conversion
                  Price, adjusted in accordance with the provisions of the
                  Debenture

                                       11
<PAGE>

Based on this Conversion Price, the number of Conversion Shares indicated above
should be issued in the following name(s):

          Name and Record Address                  Conversion Shares

          ------------------------------           --------------------------
          ------------------------------           --------------------------
          ------------------------------           --------------------------

         It is the intention of the Holder to comply with the provisions of
Section 4(C) of the Debenture regarding certain limits on the Holder's right to
convert thereunder. Based on the analysis on the attached Worksheet Schedule,
the Holder believe this conversion complies with the provisions of said Section
4(C). Nonetheless, to the extent that, pursuant to the conversion effected
hereby, the Holder would have more shares than permitted under said Section,
this notice should be amended and revised, ab initio, to refer to the conversion
which would result in the issuance of shares consistent with such provision. Any
conversion above such amount is hereby deemed void and revoked.

         As contemplated by the Debenture, this Notice of Conversion is being
sent by facsimile to the telecopier number and officer indicated above.

         If this Notice of Conversion represents the full conversion of the
outstanding balance of the Converted Debenture, the Holder either (1) has
previously surrendered the Converted Debenture to the Company or (2) will
surrender (or cause to be surrendered) the Converted Debenture to the Company at
the address indicated above by express courier within five (5) Trading Days
after delivery or facsimile transmission of this Notice of Conversion.

         The certificates representing the Conversion Shares should be
transmitted by the Company to the Holder via express courier or by electronic
transfer within the time contemplated by the Debenture after receipt of this
Notice of Conversion (by facsimile transmission or otherwise) to:

                      -------------------------------------
                      -------------------------------------
                      -------------------------------------

                                       12
<PAGE>

         As contemplated by the Debenture, the Company should also pay all
accrued but unpaid interest on the Converted Debenture to the Holder.

                           --If the Company elects to pay such interest in
                  Common Stock, as contemplated by and subject to the provisions
                  of the Debenture, such shares should be issued in the name of
                  the Holder and delivered in the same manner as, and together
                  with, the Conversion Shares.

                           --If the Company elects or is required to pay the
                  dividends in cash, such payment should be made by wire
                  transfer as follows:(6)

                           -----------------------------------

                           -----------------------------------

                           -----------------------------------

-------------------------------------
(Print name of Holder)

By:
    ---------------------------------
    (Signature of Authorized Person)

-------------------------------------
(Printed Name and Title)

____________

(6) Information should include the following:

All Wires:

     (1) Bank Name
     (2) Bank Address (including street, city, state)
     (3) ABA or Wire Routing No.
     (4) Account Name
     (5) Account Number

If Wire is going to International (Non-US) Bank, all of the above PLUS:
     (6) SWIFT Number

                                       13
<PAGE>

                              NOTICE OF CONVERSION
                               WORKSHEET SCHEDULE

1. Current Common Stock holdings of Holder and Affiliates _____________

2. Shares to be issued on current conversion(7) _____________

3. Other shares to be issued on other current conversion(s) and other current
exercise(s) _____________

4. Other shares eligible to be acquired within next 60 days without restriction
_____________

5. Total [sum of Lines 1 through 4] _____________

6. Outstanding shares of Common Stock(8) _____________

7. Adjustments to Outstanding
         a.       Shares known to Holder as previously issued to Holder or
                  others but not included in Line 6 ____________
         b.       Shares to be issued per Line(s) 2 and 3 ____________
         c.       Total Adjustments [Lines 7a and 7b] _____________

8. Total Adjusted Outstanding [Lines 6 plus 7c] _____________

9. Holder's Percentage [Line 5 divided by Line 8] _____________% [Note: Line 9
not to be above 4.99%]

______________

(7) Includes conversion of principal and assumes interest will be paid in Common
Stock at the Conversion Price.
(8) Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent.

                                       14<PAGE>
                                                                     EXHIBIT 4.2

                                 FORM OF WARRANT

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
         SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
         STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
         ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                             NEW VISUAL CORPORATION

                          COMMON STOCK PURCHASE WARRANT
                               CLASS 2005-___(1)

         1. ISSUANCE. In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by NEW VISUAL
CORPORATION, a Utah corporation (the "Company"), _____________________________
or registered assigns (the "Holder") is hereby granted the right to purchase at
any time, on or after the Commencement Date (as defined below) until 5:00 P.M.,
New York City time, on the Expiration Date (as defined below), _________________
Thousand __________ (____________)(2) fully paid and nonassessable shares of the
Company's Common Stock, $0.001 par value per share (the "Common Stock"), at an
initial exercise price per share (the "Exercise Price") of $_____(3) per share,
subject to further adjustment as set forth herein. This Warrant is being issued
pursuant to the terms of that certain Securities Purchase Agreement, dated as of
May ___, 2005 (the "Agreement"), to which the Company and Holder (or Holder's
predecessor in interest) are parties. Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Agreement. This Warrant
was originally issued to the Holder of the Holder's predecessor in interest on
_____________, 2005(4) (the "Issue Date").

_____________

(1) Insert "A" or "B"
(2) Insert: (i) for Class A: number equal to one hundred percent (100%) of the
Issue Date Conversion and (ii) for Class B: number equal to fifty percent (50%)
of the Issue Date Conversion Shares
(3) Insert: (i) for Class A: amount equal to two hundred percent (200%) of the
VWAP for the three (3) Trading Days ending on the Trading Day immediately
preceding the Closing Date; and (ii) for Class B: amount equal to one hundred
percent (100%) of the VWAP for the three (3) Trading Days ending on the Trading
Day immediately preceding the Closing Date
(4) Insert the Closing Date.

<PAGE>

         2. EXERCISE OF WARRANTS.

                  2.1 GENERAL.

                  (a) This Warrant is exercisable in whole or in part at any
time and from time to time commencing on the Commencement Date (as defined
below). Such exercise shall be effectuated by submitting to the Company (either
by delivery to the Company or by facsimile transmission as provided in Section 8
hereof) a completed and duly executed Notice of Exercise (substantially in the
form attached to this Warrant Certificate) as provided in the Notice of Exercise
(or revised by notice given by the Company as contemplated by the Section headed
"NOTICES" in the Agreement). The date such Notice of Exercise is faxed to the
Company shall be the "Exercise Date," provided that, if such exercise represents
the full exercise of the outstanding balance of the Warrant, the Holder of this
Warrant tenders this Warrant Certificate to the Company within five (5) Trading
Days thereafter. The Notice of Exercise shall be executed by the Holder of this
Warrant and shall indicate (i) the number of shares then being purchased
pursuant to such exercise and (ii) if applicable (as provided below), whether
the exercise is a cashless exercise.

                  (b) The provisions of this Section 2.1(b) shall only be
applicable (i) on or after the first anniversary of the Issue Date, and (ii) if,
and only if, on the Exercise Date there is no effective Registration Statement
covering the Warrant Shares (other than during a Permitted Suspension Period, as
defined in the Registration Rights Agreement). If the Notice of Exercise form
elects a "cashless" exercise, the Holder shall thereby be entitled to receive a
number of shares of Common Stock equal to (w) the excess of the Current Market
Value (as defined below) over the total cash exercise price of the portion of
the Warrant then being exercised, divided by (x) the Market Price of the Common
Stock. For the purposes of this Warrant, the terms (y) "Current Market Value"
shall mean an amount equal to the Market Price of the Common Stock, multiplied
by the number of shares of Common Stock specified in such Notice of Exercise
Form, and (z) "Market Price of the Common Stock" shall mean the average Closing
Price (as defined below) of the Common Stock for the three (3) Trading Days
ending on the Trading Day immediately prior to the Exercise Date.

                  (c) If the Notice of Exercise form elects a "cash" exercise
(or if the cashless exercise referred to in the immediately preceding paragraph
(b) is not available in accordance with its terms), the Exercise Price per share
of Common Stock for the shares then being exercised shall be payable, at the
election of the Holder, in cash or by certified or official bank check or by
wire transfer in accordance with instructions provided by the Company at the
request of the Holder.

<PAGE>

                  (d) Upon the appropriate payment, if any, of the Exercise
Price for the shares of Common Stock purchased, together with the surrender of
this Warrant Certificate (if required), the Holder shall be entitled to receive
a certificate or certificates for the shares of Common Stock so purchased. The
Company shall deliver such certificates representing the Warrant Shares in
accordance with the instructions of the Holder as provided in the Notice of
Exercise (the certificates delivered in such manner, the "Warrant Share
Certificates") within three (3) Trading Days (such third Trading Day, a "Warrant
Share Delivery Date") of (i) with respect to a "cashless exercise," the Exercise
Date or, (ii) with respect to a "cash" exercise, the later of the Exercise Date
or the date the payment of the Exercise Price for the relevant Warrant Shares is
received by the Company.

                  (e) The Holder shall be deemed to be the holder of the shares
issuable to it in accordance with the provisions of this Section 2.1 on the
Exercise Date.

                  2.2 LIMITATION ON EXERCISE. Notwithstanding the provisions of
this Warrant, the Agreement or of the other Transaction Agreements, in no event
(except (i) as specifically provided in this Warrant as an exception to this
provision, (ii) during the forty-five (45) day period prior to the Expiration
Date, or (iii) while there is outstanding a tender offer for any or all of the
shares of the Company's Common Stock) shall the Holder be entitled to exercise
this Warrant, or shall the Company have the obligation to issue shares upon such
exercise of all or any portion of this Warrant to the extent that, after such
exercise the sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of
the Warrants or other rights to purchase Common Stock or through the ownership
of the unconverted portion of convertible securities), and (2) the number of
shares of Common Stock issuable upon the exercise of the Warrants with respect
to which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock (after taking into account the shares to be
issued to the Holder upon such exercise). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such sentence.
The Holder, by its acceptance of this Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which would not be
considered such an affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 2.2 as if such transferee or assignee were the original Holder
hereof.

                  2.3 CERTAIN DEFINITIONS. As used herein, each of the following
terms has the meaning set forth below, unless the context otherwise requires:

                  (a) "Commencement Date" means the date which is the earlier of
(i) sixty-five (65) days after the Closing Date, or (ii) the Effective Date.

<PAGE>

                  (b) "Closing Price" means the 4:00 P.M. closing bid price of
the Common Stock on the Principal Trading Market on the relevant Trading Day(s),
as reported by the Reporting Service for the relevant date.

                  (c) "Expiration Date" means the date which the last calendar
of the month in which the ________(5) anniversary of the Effective Date occurs

                  (d) "Reporting Service" means Bloomberg LP or if that service
is not then reporting the relevant information regarding the Common Stock, a
comparable reporting service of national reputation selected by a Majority in
Interest of the Holders and reasonably acceptable to the Company.

         3. RESERVATION OF SHARES. The Company hereby agrees that at all times
during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant, one hundred twenty-five percent (125%) of the number
of shares of its Common Stock as shall be required for issuance of the Warrant
Shares for the then unexercised portion of this Warrant. For the purposes of
such calculations, the Company should assume that the outstanding portion of
this Warrants were exercisable in full at any time, without regard to any
restrictions which might limit the Holder's right to exercise any portion of
this Warrant held by the Holder.

         4. MUTILATION OR LOSS OF WARRANT. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.

         5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.

         6. PROTECTION AGAINST DILUTION AND OTHER ADJUSTMENTS.

______________

(5) Insert: (i) for Class A: third; and (ii) for Class B: first

                                       1
<PAGE>

                  6.1 ADJUSTMENT MECHANISM. If an adjustment of the Exercise
Price is required pursuant to this Section 6 (other than pursuant to Section
6.4), the Holder shall be entitled to purchase such number of shares of Common
Stock as will cause (i) (x) the total number of shares of Common Stock Holder is
entitled to purchase pursuant to this Warrant following such adjustment,
multiplied by (y) the adjusted Exercise Price per share, to equal the result of
(ii) (x) the dollar amount of the total number of shares of Common Stock Holder
is entitled to purchase before adjustment, multiplied by (y) the total Exercise
Price before adjustment.(6)

                  6.2 CAPITAL ADJUSTMENTS. In case of any stock split or reverse
stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation (where the Company is not the
surviving entity), the provisions of this Section 6 shall be applied as if such
capital adjustment event had occurred immediately prior to the date of this
Warrant and the original Exercise Price had been fairly allocated to the stock
resulting from such capital adjustment; and in other respects the provisions of
this Section shall be applied in a fair, equitable and reasonable manner so as
to give effect, as nearly as may be, to the purposes hereof. A rights offering
to stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights. The Company will not effect any consolidation or
merger, unless prior to the consummation thereof, the successor or acquiring
entity (if other than the Company) and, if an entity different from the
successor or acquiring entity, the entity whose capital stock or assets the
holders of the Common Stock of the Company are entitled to receive as a result
of such consolidation or merger assumes by written instrument the obligations
under this Warrant (including under this Section 6) and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

                  6.3 ADJUSTMENT FOR SPIN OFF. If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or of a part of
its assets in a transaction (the "Spin Off") in which the Company does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then the Company shall cause (i) to be reserved
Spin Off Securities equal to the number thereof which would have been issued to
the Holder had all of the Holder's unexercised Warrants outstanding on the
record date (the "Record Date") for determining the amount and number of Spin
Off Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the Trading Day
immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to
be issued to the Holder on the exercise of all or any of the Outstanding
Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved
Spin Off Shares, multiplied by (y) a fraction, of which (I) the numerator is the
amount of the Outstanding Warrants then being exercised, and (II) the
denominator is the amount of the Outstanding Warrants.

_____________

(6) [NOTE: ACTUAL AMOUNTS TO BE INSERTED IN FOOTNOTE TO EXECUTED WARRANT BASED
ON EXERCISE PRICE DETERMINED ON CLOSING DATE.] Example: Assume 10,000 shares
remain under Warrant at original stated Exercise Price of US$[1.00]. Total
exercise price (clause (y) in text) is (i) 10,000 x (ii) US$[1.00], or
US$[10,000]. Company effects 2:1 stock split. Exercise Price is adjusted to
US$[0.50]. Number of shares covered by Warrant is adjusted to 20,000, because
(applying clause (x) in text) (i) 20,000 x (ii) US$[0.50] = US$[10,000].

<PAGE>

                  6.4 ADJUSTMENT FOR CERTAIN TRANSACTIONS. Reference is made to
the provisions of Section 4(g) of the Agreement, the terms of which are
incorporated herein by reference. The number of shares covered by this Warrant
and the Exercise Price shall be adjusted as provided in the applicable
provisions of said Section 4(g) of the Agreement.

         7. TRANSFER TO COMPLY WITH THE SECURITIES ACT; REGISTRATION RIGHTS.

                  7.1 TRANSFER. This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act relating to such security or an opinion of
counsel satisfactory to the Company that registration is not required under the
Act. Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.

                  7.2 REGISTRATION RIGHTS. (a) Reference is made to the
Registration Rights Agreement. The Company's obligations under the Registration
Rights Agreement and the other terms and conditions thereof with respect to the
Warrant Shares, including, but not necessarily limited to, the Company's
commitment to file a registration statement including the Warrant Shares, to
have the registration of the Warrant Shares completed and effective, and to
maintain such registration, are incorporated herein by reference.

                  (b) In addition to the registration rights referred to in the
preceding provisions of Section 7.2(a), effective after the expiration of the
effectiveness of the Registration Statement as contemplated by the Registration
Rights Agreement, the Holder shall have piggy-back registration rights with
respect to the Warrant Shares then held by the Holder or then subject to
issuance upon exercise of this Warrant (collectively, the "Remaining Warrant
Shares"), subject to the conditions set forth below. If, at any time after the
Registration Statement has ceased to be effective, the Company participates
(whether voluntarily or by reason of an obligation to a third party) in the
registration of any shares of the Company's stock (other than a registration on
Form S-8 or on Form S-4), the Company shall give written notice thereof to the
Holder and the Holder shall have the right, exercisable within ten (10) Trading
Days after receipt of such notice, to demand inclusion of all or a portion of
the Holder's Remaining Warrant Shares in such registration statement. If the
Holder exercises such election, the Remaining Warrant Shares so designated shall
be included in the registration statement at no cost or expense to the Holder
(other than any costs or commissions which would be borne by the Holder under
the terms of the Registration Rights Agreement). The Holder's rights under this
Section 7 shall expire at such time as the Holder can sell all of the Remaining
Warrant Shares under Rule 144 without volume or other restrictions or limit.

<PAGE>

         8. BUY-IN AMOUNT.

                  (a) If, by the relevant Warrant Share Delivery Date, the
Company fails for any reason to deliver the relevant Warrant Share Certificates,
and after such Warrant Share Delivery Date, the Holder who has exercised this
Warrant (an "Exercising Holder") purchases, in an arm's-length open market
transaction or otherwise, shares of Common Stock (the "Covering Shares") in
order to make delivery in satisfaction of a sale of Common Stock by the
Exercising Holder (the "Sold Shares"), which delivery such Exercising Holder
anticipated to make using the shares to be issued upon such exercise (a
"Buy-In"), the Exercising Holder shall have the right to require the Company to
pay to the Exercising Holder, in addition to and not in lieu of all other
amounts contemplated in other provisions of the Transaction Agreements, the
Warrant Share Buy-In Adjustment Amount (as defined below). The Company shall pay
the Warrant Share Buy-In Adjustment Amount to the Exercising Holder in
immediately available funds immediately upon demand by the Exercising Holder.

                  (b) The term "Warrant Share Buy-In Adjustment Amount" means
the amount equal to the excess, if any, of (i) the Exercising Holder's total
purchase price (including brokerage commissions, if any) for the Covering Shares
over (ii) the net proceeds (after brokerage commissions, if any) received by the
Exercising Holder from the sale of the Sold Shares. By way of illustration and
not in limitation of the foregoing, if the Exercising Holder purchases shares of
Common Stock having a total purchase price (including brokerage commissions) of
$11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net
proceeds of $10,000, the Warrant Share Buy-In Adjustment Amount which the
Company will be required to pay to the Exercising Holder will be $1,000.

         9. NOTICES. Any notice required or permitted hereunder shall be given
in manner provided in the Section headed "NOTICES" in the Agreement, the terms
of which are incorporated herein by reference.

         10. SUPPLEMENTS AND AMENDMENTS; WHOLE AGREEMENT. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant contains the full understanding of the parties hereto with
respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.

<PAGE>

         11. GOVERNING LAW. This Warrant shall be deemed to be a contract made
under the laws of the State of New York for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the County of New York or
the state courts of the State of New York sitting in the County of New York in
connection with any dispute arising under this Warrant and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
FORUM NON CONVENIENS, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, the Company shall
reimburse the Holder for any reasonable legal fees and disbursements incurred by
the Buyer in enforcement of or protection of any of its rights under any of the
Transaction Agreements.

         12. JURY TRIAL WAIVER. The Company and the Holder hereby waive a trial
by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out or in
connection with this Warrant.

         13. REMEDIES. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.

         14. COUNTERPARTS. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

                   [Balance of page intentionally left blank]

<PAGE>

         15. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
of this Warrant are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.

         IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the th day of _____________________________, 200__.

                                            NEW VISUAL CORPORATION

                                            By:
                                                --------------------------------

                                                --------------------------------
                                                (Print Name)

                                                --------------------------------
                                                (Title)

<PAGE>

                          NOTICE OF EXERCISE OF WARRANT

TO:      New Visual Corporation                      VIA FAX: (503) 257-6622
         305 NE 102nd Ave., Suite 105
         Portland, OR 97220
         Attn: President

         The undersigned hereby irrevocably elects to exercise the right,
represented by the Common Stock Purchase Warrant Class ___, dated as of
_____________________, 20___ , to purchase ___________ shares of the Common
Stock, $0.001 par value ("Common Stock"), of NEW VISUAL CORPORATION and tenders
herewith payment in accordance with Section 2 of said Common Stock Purchase
Warrant, as follows:

[ ]      CASH: $________________________ = (Exercise Price x Exercise Shares)

            Payment is being made by:
                 [ ]    enclosed check
                 [ ]    wire transfer
                 [ ]    other

[ ]      CASHLESS EXERCISE [if available pursuant to Section 2.1(b)]:

          Net number of Warrant Shares to be issued to Holder :       _________*

          * based on:  Current Market Value - (Exercise Price X Exercise Shares)
                       ---------------------------------------------------------
                                  Market Price of Common Stock

          where:
          Market Price of Common Stock ["MP"]         =        $_______________
          Current Market Value [MP x Exercise Shares] =        $_______________

         It is the intention of the Holder to comply with the provisions of
Section 2.2 of the Warrant regarding certain limits on the Holder's right to
exercise thereunder. Based on the analysis on the attached Worksheet Schedule,
the Holder believes this exercise complies with the provisions of said Section
2.2. Nonetheless, to the extent that, pursuant to the exercise effected hereby,
the Holder would have more shares than permitted under said Section, this notice
should be amended and revised, ab initio, to refer to the exercise which would
result in the issuance of shares consistent with such provision. Any exercise
above such amount is hereby deemed void and revoked.

<PAGE>

         As contemplated by the Warrant, this Notice of Conversion is being sent
by facsimile to the telecopier number and officer indicated above.

         If this Notice of Exercise represents the full exercise of the
outstanding balance of the Warrant, the Holder either (1) has previously
surrendered the Warrant to the Company or (2) will surrender (or cause to be
surrendered) the Warrant to the Company at the address indicated above by
express courier within five (5) Trading Days after delivery or facsimile
transmission of this Notice of Exercise.

         The certificates representing the Warrant Shares should be transmitted
by the Company to the Holder

         [ ]   via express courier, or

         [ ]   by electronic transfer

after receipt of this Notice of Exercise (by facsimile transmission or
otherwise) to:

                  -------------------------------------
                  -------------------------------------
                  -------------------------------------

Dated: ______________________

_____________________________
[Name of Holder]

By: _________________________

<PAGE>

                          NOTICE OF EXERCISE OF WARRANT
                               WORKSHEET SCHEDULE

1. Current Common Stock holdings of Holder and Affiliates             __________

2. Shares to be issued on current exercise                            __________

3. Other shares to be issued on other current exercise(s) and
         other current conversion(s)(7)                               __________

4. Other shares eligible to be acquired within next 60 days
         without restriction                                          __________

5. Total [sum of Lines 1 through 4]                                   __________

6. Outstanding shares of Common Stock(8)                              __________

7. Adjustments to Outstanding
         a. Shares known to Holder as previously issued
             to Holder or others but not included in Line 6           __________
         b. Shares to be issued per Line(s) 2 and 3                   __________
         c. Total Adjustments [Lines 7a and 7b]                       __________

8. Total Adjusted Outstanding [Lines 6 plus 7c]                       __________

9. Holder's Percentage [Line 5 divided by Line 8]                     _________%
   [Note: Line 9 not to be above 4.99%]

___________

(7) Includes shares issuable on conversion of convertible securities (including
assumed payment of interest or dividends) or exercise of other rights, including
other warrants or options
(8)Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]