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                                                                     EXHIBIT 4.2

                                                                  EXECUTION COPY

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
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. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                                                 Date of Issuance: June 30, 2006

                                                                   $3,000,000.00

                     5.0% SUBORDINATED CONVERTIBLE DEBENTURE
                               DUE August 1, 2007

         THIS DEBENTURE is a duly authorized and issued 5.0% Subordinated
Convertible Debenture of Tutogen Medical, Inc., a Florida corporation, having a
principal place of business at 13709 Progress Blvd., Box 19, Alachua, FL 32615
(the "COMPANY"), designated as its 5.0% Subordinated Convertible Debenture, due
August 1, 2007 (the "DEBENTURE").

         FOR VALUE RECEIVED, the Company promises to pay to Azimuth Opportunity,
Ltd., an international business company incorporated under the laws of the
British Virgin Islands, or its registered assigns (the "HOLDER"), or shall have
paid pursuant to the terms hereunder, the principal sum of Three Million Dollars
and Zero Cents ($3,000,000) on or prior to the Maturity Date (as defined
herein), and to pay interest to the Holder on the aggregate then outstanding
principal amount of this Debenture at the rate of 5.0% per annum, payable
quarterly on March 31, June 30, September 30 and December 31, beginning on the
first such date after the Original Issue Date 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, so long as such payment shall not violate the terms of any provisions
of the debt instruments and agreements with the holders of the Company's Senior
Debt.

         Interest shall be calculated on the basis of a 365-day year and shall
accrue daily commencing on the Original Issue Date until payment in full has
been made of the principal amount of this Debenture, together with all accrued
and unpaid interest and other amounts which may become due hereunder. Interest
shall cease to accrue with respect to any principal amount

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that has been converted, provided that the Company in fact delivers the
Underlying Shares within the time period required by Section 4(c)(ii). Interest
hereunder shall be paid to the Person in whose name this Debenture is registered
on the records of the Company regarding registration and transfers of the
Debenture (the "DEBENTURE REGISTER").

         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:

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

                  "COMMISSION" means the Securities and Exchange Commission.

                  "COMMON STOCK" means the common stock, $0.0l par value per
share, of the Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.

                  "COMMON STOCK EQUIVALENTS" means any securities of the Company
or its subsidiaries which would entitle the holder thereof to acquire at any
time Common Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible
into or exerciseable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.

                  "CONVERSION DATE" shall have the meaning set forth in Section
4(a) hereof.

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

                  "EXCLUDED MATTER" means any one or more of the following: (i)
the effect of any change in the United States or foreign economies or securities
or financial markets in general, except to the extent the Company is affected
thereby to a disproportionately greater extent than other Persons in the
Company's industry; (ii) the effect of any change that generally affects any
industry in which the Company or any of its Subsidiaries operates, except to the
extent the Company is affected thereby to a disproportionately greater extent
than other Persons in such industry; (iii) the effect of any action taken by
Purchaser or its Affiliates (provided such action was without the participation
or consent of the Company) with respect to the transactions contemplated hereby
or with respect to the Company or its Subsidiaries; (iv) the effect of any
changes in applicable laws or accounting rules to the extent such changes affect
and are made applicable to and imposed upon all Persons operating in the
Company's industry; (v) any effect resulting from the public announcement of the
transactions contemplated by this Agreement, compliance with the terms of this
Agreement or the consummation of the transactions contemplated by this
Agreement; and (vi) the indirect or consequential effect of any generally
applicable change arising in connection with earthquakes or other natural
disasters, hostilities,

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acts of war, sabotage or terrorism or military actions or any escalation or
material worsening of any such earthquakes or other natural disasters,
hostilities, acts of war, sabotage or terrorism or military actions existing or
underway as of the date hereof, except to the extent the Company is affected
thereby to a disproportionately greater extent than other Persons in the
Company's industry.

                  "EXCEPTED ISSUANCE" shall have the meaning set forth in
Section 4(e)(iv)(C).

                  "JUNIOR DEBT" means any indebtedness incurred by the Company,
other than the Senior Debt and this Debenture, but including (i) any additional
indebtedness incurred by the Company as a result of any future increase in the
Company's Senior Debt, or (ii) any other future indebtedness or obligations of
the Company, except in the case of this clause (ii) for purchase liens for
equipment leases and purchases incurred in the ordinary course of the Company's
business consistent with past practice not exceeding $250,000 in the aggregate.

                  "MATERIAL ADVERSE EFFECT" means a state of fact, occurrence,
change or effect that has or is reasonably likely to have or result in a
material adverse effect on (i) the legality, validity or enforceability of any
Transaction Document, (ii) the results of operations, assets, business,
prospects or financial condition of the Company and the Subsidiaries, taken as a
whole, or (iii) the Company's ability to perform its obligations under any
Transaction Document; provided, however, that, in determining whether there has
been a Material Adverse Effect, any effect resulting from an Excluded Matter
shall be disregarded.

                  "MATURITY DATE" shall mean 366 days from the Original Issue
Date at which time the Holder shall elect to (i) provide the Company with a
Conversion Notice for the remaining outstanding principal amount of the
Debenture or (ii) demand that the Company promptly repay the remaining
outstanding principal amount of the Debenture in cash.

                  "OPTIONAL REDEMPTION AMOUNT" shall mean the sum of (i) 100% of
that portion of the principal amount of the Debenture being redeemed pursuant to
Section 4(h), (ii) accrued but unpaid interest on such portion 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 4(h).

                  "OPTIONAL REDEMPTION NOTICE" shall have the meaning set forth
in Section 4(h).

                  "OPTIONAL REDEMPTION NOTICE DATE" shall have the meaning set
forth in Section 4(h).

                  "ORIGINAL ISSUE DATE" shall mean the date of the first
issuance of the Debenture regardless of the number of transfers of the Debenture
and regardless of the number of instruments which may be issued to evidence the
Debenture.

                  "PERMITTED LIENS" means (i) statutory liens for taxes,
assessments and other governmental charges which are not yet due and payable or
are due but not delinquent or are being contested in good faith by appropriate
proceedings, (ii) statutory or common law liens to secure landlords,
sublandlords, licensors or sublicensors under leases or rental agreements, (iii)

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deposits or pledges made in connection with, or to secure payment of, workers'
compensation, unemployment insurance, old age pension or other social security
programs mandated under applicable laws, (iv) statutory or common law Liens in
favor of carriers, warehousemen, mechanics, workmen, repairmen and materialmen
to secure claims for labor, materials or supplies and other like liens, (v)
restrictions on transfer of securities imposed by applicable state and federal
securities laws, (vi) any other encumbrance affecting any asset which does not
materially impede or otherwise affect the ownership or operation of such asset,
(vii) liens resulting from a filing by a lessor as a precautionary filing for a
true lease, (viii) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds an
other obligations of a like nature incurred in the ordinary course of business,
(ix) vendor's Liens to secure payment, or (x) rights or claims of customers or
tenants under licenses or leases.

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

                  "PURCHASE AGREEMENT" means the Securities Purchase Agreement,
dated as of June 30, 2006, to which the Company and the original Holder are
parties, as amended, modified or supplemented from time to time in accordance
with its terms.

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

                  "SET PRICE" shall have the meaning set forth in Section 4(d).

                  "SENIOR DEBT" shall be all of the indebtedness identified in
Schedule 3.1(dd)(Seniority) to the Purchase Agreement.

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

                  "TRADING MARKET" means, as applicable, the following markets
or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market, the Nasdaq SmallCap Market or the OTC Bulletin Board.

                  "TRANSACTION DOCUMENTS" shall have the meaning set forth in
the Purchase Agreement.

                  "UNDERLYING SHARES" means the shares of Common Stock issuable
upon conversion of the Debenture or as payment of interest in accordance with
the terms hereof.

                  "UNDERLYING SHARES REGISTRATION STATEMENT" means a
registration statement meeting the requirements set forth in the Purchase
Agreement, covering among other things the resale of the Underlying Shares and
naming the Holder as a "selling stockholder" thereunder.

                  "VWAP" means, for any date, the price determined by the first
of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the

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daily volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the Trading Market on which the Common Stock is then
listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day
from 9:30 a.m. Eastern Time to 4:00 p.m. Eastern Time); (b) if the Common Stock
is not then listed or quoted on a Trading Market and if prices for the Common
Stock are then quoted on the OTC Bulletin Board, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on the
OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
"Pink Sheets" published by the National Quotation Bureau Incorporated (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Purchaser and
reasonably acceptable to the Company.

         SECTION 2. 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 exchanged only in compliance with the Purchase Agreement
and applicable federal and state securities laws and regulations. Prior to due
presentment to the Company 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 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 Company nor any such agent shall be
affected by notice to the contrary.

         SECTION 3. 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 the principal of,
                  interest on, or liquidated damages in respect of, the
                  Debenture, as and when the same shall become due and payable
                  (whether on an Interest Payment Date or the Maturity Date or
                  by acceleration or otherwise) which default is not cured, if
                  possible to cure, within 3 Business Days of written notice of
                  such default sent by the Holder; provided, that no notice need
                  be given, nor any period allowed for cure, in the case of the
                  failure to pay principal plus accrued interest on the Maturity
                  Date;

                           (ii) any representation, warranty or statement made
                  by the Company or any of its subsidiaries in the Transaction
                  Documents shall be untrue or incorrect in any material respect
                  as of the date when made or deemed made;

                           (iii) the Company or any of its subsidiaries shall
                  commence, or there shall be commenced against the Company or
                  any such subsidiary, a case under any applicable bankruptcy or
                  insolvency laws as now or hereafter in effect or any successor
                  thereto, or the Company commences any other proceeding under

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                  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 Company or any subsidiary thereof or there is
                  commenced against the Company or any subsidiary thereof any
                  such bankruptcy, insolvency or other proceeding which remains
                  undismissed for a period of 30 days; or the Company or any
                  subsidiary thereof is adjudicated insolvent or bankrupt; or
                  any order of relief or other order approving any such case or
                  proceeding is entered; or the Company 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 30 days; or the
                  Company or any subsidiary thereof makes a general assignment
                  for the benefit of creditors; or the Company shall fail to
                  pay, or shall state that it is unable to pay, or shall be
                  unable to pay, its debts generally as they become due; or the
                  Company or any subsidiary thereof shall call a meeting of its
                  creditors with a view to arranging a composition, adjustment
                  or restructuring of its debts; or the Company 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 any corporate or other action is
                  taken by the Company or any subsidiary thereof for the purpose
                  of effecting any of the foregoing;

                           (iv) the holder of a charge takes possession of all
                  or any part of the Company or any Subsidiary's property having
                  a value in excess of $250,000;

                           (v) the Company receives an order ceasi ng,
                  suspending or prohibiting trading in any securities of the
                  Company from any stock exchange or securities regulatory
                  authority having jurisdiction that is not remedied prior to
                  two weeks following the receipt of such order;

                           (vi) the Company shall fail to observe or perform any
                  financial covenant contained in any of the Transaction
                  Documents;

                           (vii) any event occurs which would have a Material
                  Adverse Effect on the Company and its subsidiaries taken as a
                  whole or termination of the Company's principal executive
                  officer occurs; or

                           (viii) the Company incurs any additional debt,
                  whether constituting an increase in Senior Debt or otherwise,
                  that would (i) rank PARI PASSU or senior to this Debenture or
                  (ii) that is secured by any of the Company's assets, cash flow
                  or intangibles (other than Permitted Liens).

                  b) If any Event of Default occurs and is continuing, the
         Holder may notify the Company at any time on or after the Event of
         Default that an Event of Default has occurred and (i) demand that the
         Company remedy the Event of Default within 30 days or (ii) demand that
         all amounts due under this Debenture, together with interest and other
         amounts owing in respect thereof to the date of acceleration, shall
         become immediately due and payable in cash. Interest shall accrue on
         the amounts due from the day of the Event of Default through the date
         of prepayment in full thereof in an amount equal to

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         1.5% per month, to accrue daily from the date of the Event of Default
         through and including the date of payment. This Debenture, if the full
         prepayment price hereunder shall have been paid in accordance herewith,
         shall promptly be surrendered to or as directed by the Company. The
         Holder need not provide and the Company hereby waives any presentment,
         demand, protest or other notice of any kind, and, except as otherwise
         provided in Section 3(a) or in the Purchase Agreement, 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. The Company shall
         pay on demand all reasonable costs and expenses incurred, including,
         but not limited to, legal fees, and fees charged to and by the Holder
         in connection with obtaining or discharging this Debenture and in
         exercising any remedy under this Debenture.

         SECTION 4. CONVERSION.

                  a) VOLUNTARY CONVERSION. At any time after the Original Issue
         Date, 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(b) 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 the 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 by the Company.
         To effect conversions hereunder, the Holder shall not be required to
         physically surrender the 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 within three Business Days of
         receipt of such notice. 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.

                  b) CONVERSION LIMITATION. 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
         9.9% of the number of shares of the Common Stock outstanding
         immediately after giving effect to such conversion. For purposes of the
         foregoing sentence, the number of shares of

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         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, the Debenture or the Warrant)
         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(b), beneficial ownership shall be calculated
         in accordance with Section 13(d) of the Exchange Act. 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 the 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. For
         purposes of this Section 4(b), 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-Q or Form 10-K, 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(b) may be waived by the Holder upon, at the election of the
         Holder, not less than 61 days' prior written notice to the Company, and
         the provisions of this Section 4(b) 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).

                  In addition, 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 of this
         Debenture, and the exercise of the Warrant issued under the Purchase
         Agreement, the Company will have issued in the aggregate a number of
         shares of its Common Stock that is 19.9% or more of the number of
         outstanding shares of the Common Stock.

         c)       MECHANICS OF CONVERSION.

                  (i) UNDERLYING SHARES ISSUABLE UPON CONVERSION OF PRINCIPAL
         AMOUNT. The number of shares of Common Stock issuable upon a conversion

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         shall be determined by the quotient obtained by dividing (x) the
         outstanding principal amount of this Debenture to be converted by (y)
         the Set Price.

                  (ii) DELIVERY OF CERTIFICATE UPON CONVERSION. Not later than
         five Trading Days after any Conversion Date, the Company will deliver
         to the Holder a certificate or certificates representing the Underlying
         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 the Debenture (including, if so timely elected by the
         Company, shares of Common Stock representing the payment of accrued
         interest) 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. 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 the Debenture
         tendered for conversion.

                  (iii) 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(c)(ii) by the fifth Trading Day
         after the Conversion Date, the Company shall pay to the Holder, in
         cash, as liquidated damages and not as a penalty, for each $2,000 of
         principal amount being converted, $10 per Trading Day (increasing to
         $20 per Trading Day after five Trading Days after such damages begin to
         accrue) for each Trading Day after such fifth Trading Day until such
         certificates are delivered. The Company's obligations to issue and
         deliver the Underlying 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
         Underlying 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.

                  (iv) COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY DELIVER
         CERTIFICATES UPON CONVERSION. In addition to any other rights available
         to the Holder, if the

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         Company fails for any reason to deliver to the Holder such certificate
         or certificates pursuant to Section 4(c)(ii) by the fifth Trading Day
         after the Conversion Date, and if after such fifth 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 the Holder of the Underlying Shares which the Holder
         anticipated receiving upon such conversion (a "BUY-IN"), then the
         Company 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 the 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 purchase
         obligation and (B) at the option of the Holder, either reissue the
         Debenture in 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(c)(i). For
         example, if the Holder purchases Common Stock having a total purchase
         price of $11,000 to cover a Buy-In with respect to an attempted
         conversion of the Debenture with respect to which the actual sale price
         of the Underlying 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 Company shall be required to pay the Holder $1,000. The
         Holder shall provide the Company 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 payment in respect of a Buy-In for the failure to
         timely deliver certificates hereunder and the Company timely pays in
         full such payment, the Company shall not be required to pay the Holder
         liquidated damages under Section 4(c)(iii) in respect of the
         certificates resulting in such Buy-In.

                  (v) RESERVATION OF SHARES ISSUABLE. 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 the Debenture and payment of interest on the
         Debenture, each as herein provided, free from preemptive rights or any
         other actual contingent purchase rights of persons other than the
         Holder, not less than such number of shares of the Common Stock as
         shall (subject to any additional requirements of the Company as to
         reservation of such shares set forth in the Purchase Agreement) be
         issuable (taking into account the adjustments and restrictions of
         Section 4(b)) upon the conversion of the outstanding principal amount
         of the 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 Underlying Shares Registration
         Statement is then effective under the Securities Act, registered for
         public sale in accordance with such Underlying Shares Registration
         Statement.

                                       10
<PAGE>

                  (vi) 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 cash payment, the Holder shall be entitled to
         receive, in lieu of the final fraction of a share, one whole share of
         Common Stock.

                  (vii) 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.

                  d) CONVERSION PRICE. The conversion price in effect on any
         Conversion Date shall be equal $5.15 (subject to adjustment herein)
         (the "SET PRICE").

                  e) CERTAIN ADJUSTMENTS.

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

                           (ii) 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

                                       11
<PAGE>

                  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 Set Price (such
                  lower price, the "BASE SHARE 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 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 Set
                  Price, such issuance shall be deemed to have occurred for less
                  than the Set Price on such date of the Dilutive Issuance),
                  then, the Set Price shall be reduced and only reduced to equal
                  the Base Share Price and the number of Underlying Shares
                  issuable hereunder shall be increased such that the aggregate
                  Set Price payable hereunder, after taking into account the
                  decrease in the Set Price, shall be equal to the aggregate Set
                  Price prior to such adjustment. Such adjustment shall be made
                  whenever such Common Stock or Common Stock Equivalents are
                  issued. Notwithstanding the foregoing, no adjustments shall be
                  made, paid or issued under this Section 4(e)(ii) in respect of
                  an Excepted Issuance. 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 4(e)(ii), upon the occurrence of any
                  Dilutive Issuance, after the date of such Dilutive Issuance
                  the Holder is entitled to receive a number of Underlying
                  Shares based upon the Base Share Price regardless of whether
                  the Holder accurately refers to the Base Share Price in the
                  Notice of Conversion.

                           (iii) SUBSEQUENT RIGHTS OFFERINGS. If the Company, at
                  any time while the Debenture is outstanding, after failing to
                  deliver notice to Holder in accordance with Section 4(g)(ii)
                  hereof (Notice to Allow Conversion by Holder), shall issue
                  rights, options or warrants to all holders of Common Stock
                  (and not to Holder) entitling them to subscribe for or
                  purchase shares of Common Stock at a price per share less than
                  the VWAP at the record date mentioned below, then the Set
                  Price shall be multiplied by a fraction, of which the
                  denominator shall be the number of shares of the Common Stock
                  outstanding on the date of issuance of such rights or
                  warrants, plus the number of additional shares of Common Stock
                  offered for subscription or purchase, and of which the
                  numerator shall be the number of shares of the Common Stock
                  outstanding on the date of issuance of such rights or warrants
                  plus the number of shares which the aggregate offering price
                  of the total number of shares so offered (assuming receipt by
                  the Company in full of all consideration payable upon exercise
                  of such rights, options or warrants) would purchase at such
                  VWAP. Such adjustment shall be made whenever such rights or
                  warrants are issued, and shall become effective

                                       12
<PAGE>

                  immediately after the record date for the determination of
                  stockholders entitled to receive such rights, options or
                  warrants.

                           (iv) PRO RATA DISTRIBUTIONS. If the Company, at any
                  time while this Debenture is outstanding, after failing to
                  deliver notice to Holder in accordance with Section 4(g)(ii)
                  hereof (Notice to Allow Conversion by Holder), shall
                  distribute to all holders of Common Stock (and not to Holder)
                  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 Set Price
                  shall be adjusted by multiplying the Set 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 (if the VWAP shall then
                  be determinable and otherwise the fair market value per share
                  as determined by the Board of Directors in good faith), and of
                  which the numerator shall be such VWAP on such record date
                  less the then per share 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.

                           (v) 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 (other than a merger the sole purpose of which is to
                  change the state of incorporation of the Company), (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 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 immediately prior to the closing of such
                  Fundamental Transaction this Debenture shall be canceled and
                  the Holder shall have the right to receive, for each
                  Underlying 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 Set 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
                  Set

                                       13
<PAGE>

                  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 in connection
                  with such Fundamental Transaction.

                           (vi) For purposes of determining the adjusted Set
                  Price under Section 4(e)(ii) hereof, the following will be
                  applicable:

                                    (A) CHANGE IN OPTION PRICE OR CONVERSION
                           RATE. If there is a change at any time in (i) the
                           amount of additional consideration payable to the
                           Company upon the exercise of any Options; (ii) the
                           amount of additional consideration, if any, payable
                           to the Company upon the exercise, conversion or
                           exchange of any Common Stock Equivalent; or (iii) the
                           rate at which any Common Stock Equivalents are
                           convertible into or exchangeable for Common Stock (in
                           each such case, other than under or by reason of
                           provisions designed to protect against dilution), the
                           Set Price in effect at the time of such change will
                           be readjusted to the Set Price which would have been
                           in effect at such time had such Options or Common
                           Stock Equivalents still outstanding provided for such
                           changed additional consideration or changed
                           conversion rate, as the case may be, at the time
                           initially granted, issued or sold.

                                    (B) CALCULATION OF CONSIDERATION RECEIVED.
                           If any Common Stock, Options or Common Stock
                           Equivalents are issued, granted or sold for cash, the
                           consideration received therefor for purposes of this
                           Debenture will be the amount received by the Company
                           therefor, before deduction of reasonable commissions,
                           underwriting discounts or allowances or other
                           reasonable expenses paid or incurred by the Company
                           in connection with such issuance, grant or sale. In
                           case any Common Stock, Options or Common Stock
                           Equivalents are issued or sold for a consideration
                           part or all of which shall be other than cash, the
                           amount of the consideration other than cash received
                           by the Company will be the fair market value of such
                           consideration, except where such consideration
                           consists of securities, in which case the amount of
                           consideration received by the Company will be the
                           fair market value (closing bid price, if traded on
                           any market) thereof as of the date of receipt. In
                           case any Common Stock, Options or Common Stock
                           Equivalents are issued in connection with any merger
                           or consolidation in which the Company is the
                           surviving corporation, the amount of consideration
                           therefor will be deemed to be the fair market value
                           of such portion of the net assets and business of the
                           non-surviving corporation as is attributable to such
                           Common Stock, Options or Common Stock Equivalent, as
                           the case may be. The fair market value of any
                           consideration other than cash or securities will be
                           determined in good faith by an investment banker or
                           other appropriate expert of national reputation
                           selected by the Company and reasonably acceptable to
                           the

                                       14
<PAGE>

                           holder hereof, with the costs of such appraisal to be
                           borne by the Company.

                                    (C) EXCEPTED ISSUANCES. Notwithstanding the
                           foregoing, no adjustment will be made under Section
                           4(e)(ii) in respect of (1) the granting or exercise
                           of options to employees, officers, consultants and
                           directors of the Company pursuant to any stock option
                           plan duly adopted by a majority of the non-employee
                           members of the Board of Directors of the Company or a
                           majority of the members of a committee of
                           non-employee directors established for such purpose,
                           (2) the conversion of the Debenture or the conversion
                           or exercise of any other security issued by the
                           Company in connection with the offer and sale of the
                           Company's securities pursuant to the Purchase
                           Agreement, (3) the amendment, exercise, conversion or
                           redemption of any Common Stock Equivalent or Options
                           issued and outstanding on the Original Issue Date,
                           (4) the payment of interest on any Senior Debt in
                           shares of the Company's Common Stock, (5) the
                           issuance of any shares or Common Stock Equivalent
                           pursuant to the terms of any convertible securities
                           issued and outstanding on the Original Issue Date,
                           (6) the issuance of securities in connection with
                           acquisitions, leasing arrangements, collaborations,
                           licensing arrangements or strategic investments, the
                           primary purpose of which is not to raise capital, or
                           (7) securities issued in connection with any stock
                           split or stock dividend or pursuant to the Company's
                           shareholder rights plan (each, an "EXCEPTED
                           ISSUANCE").

                  f) CALCULATIONS. All calculations under this Section 4 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 4, the number of shares of
         Common Stock outstanding as of a given date shall be the sum of the
         number of shares of Common Stock (excluding treasury shares, if any)
         outstanding.

                  g) NOTICE TO THE HOLDER.

                           (i) ADJUSTMENT TO SET PRICE. Whenever the Set Price
                  is adjusted pursuant to Section 4(e), the Company shall
                  promptly mail to the Holder a notice setting forth the Set
                  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 exercise
                  price at which such securities may be converted or exercised
                  in the case of a Variable Rate Transaction.

                           (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

                                       15
<PAGE>

                  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 the Debenture, and shall cause to be
                  mailed to the Holder at its last address 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 the
                  Debenture during the 20-day period commencing the date of such
                  notice to the effective date of the event triggering such
                  notice.

                  h) OPTIONAL REDEMPTION AT ELECTION OF COMPANY. Subject to the
         provisions of this Section 4(h), at any time after the later of (i) the
         Original Issue Date and (ii) the Effective Date, 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 Debenture, in whole or in part, for an amount, in cash,
         equal to the Optional Redemption Amount on the fifth Trading Day
         following the Optional Redemption Notice Date (such date, the "OPTIONAL
         REDEMPTION DATE" and such redemption, the "OPTIONAL REDEMPTION"). The
         Optional Redemption Amount is due in full on the Optional Redemption
         Date. 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 the Optional Redemption Amount is
         paid in full.

                  i) 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 shall not be
         paid by the Company by the respective due date, interest shall accrue
         thereon at the rate of 1.5% per month (or the maximum rate permitted by
         applicable law, whichever is less) until the payment of the Optional
         Redemption Amount is paid in full. The Holder may elect to convert the
         outstanding principal amount of the Debenture pursuant to Section 4
         prior to actual payment in cash

                                       16
<PAGE>

         for any redemption under this Section 4 by fax delivery of a Notice of
         Conversion to the Company.

         SECTION 5. 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 Company, at the address set forth above, facsimile
number (386) 462-1421, ATTN: Chief Financial Officer or such other address or
facsimile number as the Company 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 Company hereunder shall be in
writing and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service addressed to the Holder at the facsimile telephone
number or address of the Holder appearing on the books of the Company, 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.

         SECTION 6. ABSOLUTE OBLIGATION. This Debenture is an unsecured direct
debt obligation of the Company. The Debenture shall rank junior to all of the
Company's Senior Debt. This Debenture shall rank senior to all of the Company's
Junior Debt. For the avoidance of doubt, this Debenture must be repaid in full
prior to the incurrence by the Company of any additional indebtedness or
obligations that would by its terms rank PARI PASSU or senior to this Debenture
and/or be secured by any of the Company's assets, cash flow or intangibles
(other than Permitted Liens), whether as the result of an increase in the Senior
Debt or otherwise.

         SECTION 7. LOST OR MUTILATED DEBENTURE. If this Debenture shall be
mutilated, lost, stolen or destroyed, the Company 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 Company.

         SECTION 8. 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 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

                                       17
<PAGE>

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.

         SECTION 9. WAIVER. Any waiver by the Company 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 Company 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.

         SECTION 10. 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 any applicable laws governing usury, the applicable rate of
interest due hereunder shall automatically be lowered to equal the maximum
permitted rate of interest. The Company covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law or other law which would prohibit or forgive the Company from
paying all or any portion of the principal of or interest on the 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
Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impeded the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every such as
though no such law has been enacted.

         SECTION 11. 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.

         SECTION 12. FORCE MAJEURE. In no event shall a Holder have any claim or
right against the Company for any failure of performance in accordance with this
Debenture due to causes beyond its reasonable control, including, but not
limited to: such delays arising directly out of an act of God, fire, flood or
other natural catastrophe; laws, orders, rules, regulations, directions or
action of governmental authorities having jurisdiction or any civil military
authority; or national emergency, riot, act of terrorism or war or labor
dispute.

                                       18
<PAGE>

         SECTION 13. HEADINGS. The headings used in this Debenture are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Debenture.

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

<PAGE>

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

                                        TUTOGEN MEDICAL, INC.

                                        By:      /S/ GUY L. MAYER
                                             -----------------------------------
                                             Name:  Guy L. Mayer
                                             Title: Chief Executive Officer

<PAGE>

                                     ANNEX A

                              NOTICE OF CONVERSION

         The undersigned hereby elects to convert principal under the 5.0%
Subordinated Convertible Debenture of Tutogen Medical, Inc. (the "COMPANY"), due
on August 1, 2007, into shares of common stock, $0.0l par value per share (the
"COMMON STOCK"), of the Company according to the conditions hereof, as of the
date written below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be
charged to the holder for any conversion, except for such transfer taxes, if
any.

         By the delivery of this Notice of Conversion the undersigned represents
and warrants to the Company that its ownership of the Company's Common Stock
does not exceed the amounts determined in accordance with Section 13(d) of the
Exchange Act, specified under Section 4 of this Debenture.

         The undersigned agrees to comply with the prospectus delivery
requirements under the applicable securities laws in connection with any
transfer of the aforesaid shares of Common Stock.

Conversion calculations:

                                    Date to Effect Conversion:

                                    Principal Amount of Debenture to be
                                    Converted:

                                    Number of shares of Common Stock to be
                                    issued:

                                    Signature:

                                    Name:

                                    Delivery address for physical delivery:

                                    DTC DWAC Account for electronic delivery:

Contact information in case of questions:

<PAGE>

                                   SCHEDULE 1

                               CONVERSION SCHEDULE

         5.0% Subordinated Convertible Debenture due on August 1, 2007, in the
aggregate principal amount of Three Million Dollars ($3,000,000.00) issued by
Tutogen Medical, Inc. This Conversion Schedule reflects conversions made under
Section 4 of the above referenced Debenture.

<TABLE>
<CAPTION>
                                                           Dated:

=============================== ============================ ============================ ============================
  Date of Conversion (or for                                 Aggregate Principal Amount
 first entry, Original Issue       Amount of Conversion        Remaining Subsequent to
             Date                    Principal Amount         Conversion (or original)          Company Attest
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                              <C>                          <C>                          <C>
------------------------------- ---------------------------- ---------------------------- ----------------------------

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

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

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

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

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

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

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

=============================== ============================ ============================ ============================

</TABLE><PAGE>

                                                                     EXHIBIT 4.3

                                                                  EXECUTION COPY

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
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 EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 175,000 Shares of Common Stock of

                              TUTOGEN MEDICAL, INC.

                  THIS COMMON STOCK PURCHASE WARRANT (the "WARRANT") certifies
that, for value received, Azimuth Opportunity Ltd., an international business
company incorporated under the laws of the British Virgin Islands (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
date hereof (the "INITIAL EXERCISE DATE") and on or prior to the Termination
Date (as hereinafter defined) but not thereafter, to subscribe for and purchase
from Tutogen Medical, Inc., a Florida corporation (the "COMPANY"), up to 175,000
shares (the "WARRANT SHARES") of Common Stock, par value $0.01 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).

                  Subject to the last sentence of Section 2(c) hereof, this
Warrant shall terminate (the "TERMINATION DATE") at 5:00 p.m. Eastern Time on
the earlier of (i) the three year anniversary of the Initial Exercise Date; and
(ii) the day prior to the effective date of a transaction in which (A) the
Company effects any merger or consolidation of the Company with or into another
Person (other than a merger or reorganization involving only a change in the
state of incorporation of the Company or the acquisition by the Company of other
businesses where the Company survives as a going concern), (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 exchange their shares for other securities,
cash or

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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.

         Section 1. DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement, dated June 30, 2006 ( the "PURCHASE AGREEMENT"), between the
Company and the purchaser signatory thereto.

         Section 2. EXERCISE.

                  a) EXERCISE OF WARRANT. Exercise of the purchase rights
         represented by this Warrant may be made, in whole or in part, at any
         time or times on or after the Initial Exercise Date and on or before
         the Termination Date by delivery to the Company of (i) a duly executed
         facsimile copy of the Notice of Exercise Form annexed hereto (or such
         other office or agency of the Company as it may designate by notice in
         writing to the registered Holder at the address of the Holder appearing
         on the books of the Company); specifying therein the amount of Warrant
         Shares to be exercised, (ii) payment of the aggregate Exercise Price of
         the shares thereby purchased by wire transfer or cashier's check drawn
         on a United States bank, and (iii) if this Warrant is exercised in
         full, surrender of this Warrant to the Company. Notwithstanding
         anything herein to the contrary, the Holder shall not be required to
         physically surrender this Warrant to the Company until the Holder has
         purchased all of the Warrant Shares available hereunder and the Warrant
         has been exercised in full. Partial exercises of this Warrant resulting
         in purchases of a portion of the total number of Warrant Shares
         available hereunder shall have the effect of lowering the outstanding
         number of Warrant Shares purchasable hereunder in an amount equal to
         the applicable number of Warrant Shares purchased. The Holder and the
         Company shall maintain records showing the number of Warrant Shares
         purchased and the date of such purchases. The Company shall deliver any
         objection to any Notice of Exercise Form within three Trading Days of
         receipt of such notice. The Holder and any assignee, by acceptance of
         this Warrant, acknowledge and agree that, by reason of the provisions
         of this paragraph, following the purchase of a portion of the Warrant
         Shares hereunder, the number of Warrant Shares available for purchase
         hereunder at any given time may be less than the amount stated on the
         face hereof.

                  b) EXERCISE PRICE. The exercise price of the Common Stock
         under this Warrant shall be $5.15, subject to adjustment hereunder (the
         "EXERCISE PRICE").

                  c) CASHLESS EXERCISE. If at any time after one year from the
         date of issuance of this Warrant there is no effective Registration
         Statement registering, or no current prospectus available for, the
         resale of the Warrant Shares by the Holder, then this Warrant may also
         be exercised at such time by means of a "cashless exercise" in which
         the Holder shall be entitled to receive a certificate for the number of
         Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)]
         by (A), where:

                  (A)      = the VWAP on the Trading Day immediately preceding
                           the date of such election;

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                  (B)      = the Exercise Price of this Warrant, as adjusted;
                           and

                  (X)      = the number of Warrant Shares issuable upon exercise
                           of this Warrant in accordance with the terms of this
                           Warrant by means of a cash exercise rather than a
                           cashless exercise.

                  Notwithstanding anything herein to the contrary, on the
         Termination Date, this Warrant shall be automatically exercised via
         cashless exercise pursuant to this Section 2(c).

                  d) EXERCISE LIMITATIONS; HOLDER'S RESTRICTIONS. At any time
         after the Common Stock is registered under Section 12 of the Exchange
         Act, the Holder shall not have the right to exercise any portion of
         this Warrant, pursuant to Section 2(c) or otherwise, to the extent that
         after giving effect to such issuance after exercise, the Holder
         (together with the Holder's affiliates), as set forth on the applicable
         Notice of Exercise, would beneficially own in excess of 9.9% of the
         number of shares of the Common Stock outstanding immediately after
         giving effect to such issuance. For 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 exercise of this Warrant 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)
         exercise of the remaining, nonexercised portion of this Warrant
         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 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 2(d), beneficial
         ownership shall be calculated in accordance with Section 13(d) of the
         Exchange Act, it being acknowledged by the Holder that the Company is
         not representing to the Holder that such calculation is in compliance
         with Section 13(d) of the Exchange Act and the Holder is solely
         responsible for any schedules required to be filed in accordance
         therewith. To the extent that the limitation contained in this Section
         2(d) applies, the determination of whether this Warrant is exercisable
         (in relation to other securities owned by the Holder) and of which a
         portion of this Warrant is exercisable shall be in the sole discretion
         of the Holder, and the submission of a Notice of Exercise shall be
         deemed to be the Holder's determination of whether this Warrant is
         exercisable (in relation to other securities owned by the Holder) and
         of which portion of this Warrant is exercisable, in each case subject
         to such aggregate percentage limitation, and the Company shall have no
         obligation to verify or confirm the accuracy of such determination. For
         purposes of this Section 2(d), 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-Q or 10-K, 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

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         outstanding shares of Common Stock shall be determined after giving
         effect to the conversion or exercise of securities of the Company,
         including this Warrant, 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 2(d) 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 2(d)
         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).

                  In addition, the Company shall not effect any conversion of
         this Warrant, and the Holder shall not have the right to exercise any
         portion of this Warrant, pursuant to Section 2(a) or otherwise, to the
         extent that after giving effect to such exercise of this Warrant, and
         the exercise of the Debenture issued under the Purchase Agreement, the
         Company will have issued in the aggregate a number of shares of its
         Common Stock that is 19.9% or more of the number of outstanding shares
         of the Common Stock.

                  e) MECHANICS OF EXERCISE.

                           i. AUTHORIZATION OF WARRANT SHARES. The Company
                  covenants that all Warrant Shares which may be issued upon the
                  exercise of the purchase rights represented by this Warrant
                  will, upon exercise of the purchase rights represented by this
                  Warrant, be duly authorized, validly issued, fully paid and
                  nonassessable and free from all taxes, liens and charges in
                  respect of the issue thereof (other than taxes in respect of
                  any transfer occurring contemporaneously with such issue).

                           ii. DELIVERY OF CERTIFICATES UPON EXERCISE.
                  Certificates for shares purchased hereunder shall be
                  transmitted by the transfer agent of the Company to the Holder
                  by crediting the account of the Holder's prime broker with the
                  Depository Trust Company through its Deposit Withdrawal Agent
                  Commission ("DWAC") system if the Company is a participant in
                  such system, and otherwise by physical delivery to the address
                  specified by the Holder in the Notice of Exercise within five
                  Trading Days following the last to be received by the Company
                  of (x) the Notice of Exercise Form, (y) surrender of this
                  Warrant (if required) and (z) payment of the aggregate
                  Exercise Price as set forth above ("WARRANT SHARE DELIVERY
                  DATE"). This Warrant shall be deemed to have been exercised on
                  the date the Exercise Price is received by the Company. The
                  Warrant Shares shall be deemed to have been issued, and Holder
                  or any other person so designated to be named therein shall be
                  deemed to have become a holder of record of such shares for
                  all purposes, as of the date the Warrant has been exercised by
                  payment to the Company of the Exercise Price and all taxes
                  required to be paid by the Holder, if any, pursuant to Section
                  2(e)(vii) prior to the issuance of such shares, have been
                  paid.

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                           iii. DELIVERY OF NEW WARRANTS UPON EXERCISE. If this
                  Warrant shall have been exercised in part, the Company shall,
                  at the time of delivery of the certificate or certificates
                  representing Warrant Shares, deliver to Holder a new Warrant
                  evidencing the rights of Holder to purchase the unpurchased
                  Warrant Shares called for by this Warrant, which new Warrant
                  shall in all other respects be identical with this Warrant.

                           iv. RESCISSION RIGHTS. If the Company fails to cause
                  its transfer agent to transmit to the Holder a certificate or
                  certificates representing the Warrant Shares pursuant to this
                  Section 2(e) by the Warrant Share Delivery Date, then the
                  Holder will have the right to rescind such exercise.

                           v. COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY
                  DELIVER CERTIFICATES UPON EXERCISE. In addition to any other
                  rights available to the Holder, if the Company fails to cause
                  its transfer agent to transmit to the Holder a certificate or
                  certificates representing the Warrant Shares pursuant to an
                  exercise on or before the Warrant Share Delivery Date, and if
                  after such date the Holder is required by its broker to
                  purchase (in an open market transaction or otherwise) shares
                  of Common Stock to deliver in satisfaction of a sale by the
                  Holder of the Warrant Shares which the Holder anticipated
                  receiving upon such exercise (a "BUY-IN"), then the Company
                  shall (1) pay in cash to the Holder the amount by which (x)
                  the Holder's total purchase price (including brokerage
                  commissions, if any) for the shares of Common Stock so
                  purchased exceeds (y) the amount obtained by multiplying (A)
                  the number of Warrant Shares that the Company was required to
                  deliver to the Holder in connection with the exercise at issue
                  times (B) the price at which the sell order giving rise to
                  such purchase obligation was executed, and (2) at the option
                  of the Holder, either reinstate the portion of the Warrant and
                  equivalent number of Warrant Shares for which such exercise
                  was not honored or deliver to the Holder the number of shares
                  of Common Stock that would have been issued had the Company
                  timely complied with its exercise and delivery obligations
                  hereunder. 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 exercise of shares of Common
                  Stock with an aggregate sale price giving rise to such
                  purchase obligation of $10,000, under clause (1) of the
                  immediately preceding sentence the Company shall be required
                  to pay the Holder $1,000. The Holder shall provide the Company
                  written notice indicating the amounts payable to the Holder in
                  respect of the Buy-In, together with applicable confirmations
                  and other evidence reasonably requested by the Company.
                  Nothing herein shall limit the Holder's right to pursue any
                  other remedies available to it hereunder, at law or in equity
                  including, without limitation, a decree of specific
                  performance and/or injunctive relief with respect to the
                  Company's failure to timely deliver certificates representing
                  shares of

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                  Common Stock upon exercise of the Warrant as required pursuant
                  to the terms hereof.

                           vi. NO FRACTIONAL SHARES OR SCRIP. No fractional
                  shares or scrip representing fractional shares shall be issued
                  upon the exercise of this Warrant. As to any fraction of a
                  share which Holder would otherwise be entitled to purchase
                  upon such exercise, the Company shall pay a cash adjustment in
                  respect of such final fraction in an amount equal to such
                  fraction multiplied by the Exercise Price.

                           vii. CHARGES, TAXES AND EXPENSES. Issuance of
                  certificates for Warrant Shares shall be made without charge
                  to the Holder for any issue or transfer tax or other
                  incidental expense in respect of the issuance of such
                  certificate, all of which taxes and expenses shall be paid by
                  the Company, and such certificates shall be issued in the name
                  of the Holder or in such name or names as may be directed by
                  the Holder; PROVIDED, HOWEVER, that in the event --------
                  ------- certificates for Warrant Shares are to be issued in a
                  name other than the name of the Holder, this Warrant when
                  surrendered for exercise shall be accompanied by the
                  Assignment Form attached hereto duly executed by the Holder;
                  and the Company may require, as a condition thereto, the
                  payment of a sum sufficient to reimburse it for any transfer
                  tax incidental thereto.

                           viii. CLOSING OF BOOKS. The Company will not close
                  its stockholder books or records in any manner which prevents
                  the timely exercise of this Warrant, pursuant to the terms
                  hereof.

         Section 3. CERTAIN ADJUSTMENTS.

                  a) STOCK DIVIDENDS AND SPLITS. If the Company, at any time
         while this Warrant is outstanding: (A) pays a stock dividend or
         otherwise make a distribution or distributions on shares of its Common
         Stock or any other equity or equity equivalent securities payable in
         shares of Common Stock (which, for avoidance of doubt, shall not
         include any shares of Common Stock issued by the Company pursuant to
         this Warrant), (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 in each case the
         Exercise 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 and the number of shares
         issuable upon exercise of this Warrant shall be proportionately
         adjusted. Any adjustment made pursuant to this Section 3(a) 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.

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                  b) SUBSEQUENT EQUITY SALES. If the Company or any Subsidiary
         thereof, as applicable, prior to the later of (A) one year from the
         date of this Warrant and (B) the date on which the Debenture is repaid
         or converted in full, 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 Exercise
         Price (such lower price, the "BASE SHARE 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
         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
         Exercise Price, such issuance shall be deemed to have occurred for less
         than the Exercise Price on such date of the Dilutive Issuance), then,
         the Exercise Price shall be reduced and only reduced to equal the Base
         Share Price and the number of Warrant Shares issuable hereunder shall
         be increased such that the aggregate Exercise Price payable hereunder,
         after taking into account the decrease in the Exercise Price, shall be
         equal to the aggregate Exercise Price prior to such adjustment. Such
         adjustment shall be made whenever such Common Stock or Common Stock
         Equivalents are issued. Notwithstanding the foregoing, no adjustments
         shall be made, paid or issued under this Section 3(b) in respect of an
         Exempt Issuance. 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 3(b), upon the occurrence of any Dilutive Issuance, after the
         date of such Dilutive Issuance the Holder is entitled to receive a
         number of Warrant Shares based upon the Base Share Price regardless of
         whether the Holder accurately refers to the Base Share Price in the
         Notice of Exercise.

                  c) SUBSEQUENT RIGHTS OFFERINGS. If the Company, at any time
         prior to the later of (A) one year from the date of this Warrant and
         (B) the date on which the Debenture is repaid or converted in full,
         after failing to deliver notice to Holder in accordance with Section
         3(g)(ii) hereof (Notice to Allow Exercise by Holder), shall issue
         rights, options or warrants to all holders of Common Stock (and not to
         Holder) entitling them to subscribe for or purchase shares of Common
         Stock at a price per share less than the VWAP at the record date
         mentioned below, then the Exercise Price shall be multiplied by a
         fraction, of which the denominator shall be the number of shares of the
         Common Stock outstanding on the date of issuance of such rights or
         warrants, plus the number of additional shares of Common Stock offered
         for subscription or purchase, and of which the numerator shall be the
         number of shares of the Common Stock outstanding on the date of
         issuance of such rights or warrants plus the number of shares which the
         aggregate offering price of the total number of shares so offered
         (assuming receipt by the Company in full of all consideration payable
         upon exercise of such rights, options or warrants) would purchase at
         such VWAP. Such adjustment shall be made whenever such

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         rights or warrants are issued, and shall become effective immediately
         after the record date for the determination of stockholders entitled to
         receive such rights, options or warrants.

                  d) PRO RATA DISTRIBUTIONS. If the Company, at any time prior
         to the later of (A) one year from the date of this Warrant and (B) the
         date on which the Debenture is repaid or converted in full, after
         failing to deliver notice to Holder in accordance with Section 3(g)(ii)
         hereof (Notice to Allow Exercise by Holder), shall distribute to all
         holders of Common Stock (and not to Holder) evidences of its
         indebtedness or assets (including cash and cash dividends) or rights or
         warrants to subscribe for or purchase any security other than the
         Common Stock (which shall be subject to Section 3(b)), then in each
         such case the Exercise Price shall be adjusted by multiplying the
         Exercise 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 (if the VWAP shall then be determinable
         and otherwise the fair market value per share as determined by the
         Board of Directors in good faith), and of which the numerator shall be
         such VWAP on such record date less the then per share 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.

                  e) CALCULATIONS. All calculations under this Section 3 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 3, 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) VOLUNTARY ADJUSTMENT BY COMPANY. The Company may at any
         time during the term of this Warrant reduce the then current Exercise
         Price to any amount and for any period of time deemed appropriate by
         the Board of Directors of the Company.

                  g) NOTICE TO HOLDERS.

                           i. ADJUSTMENT TO EXERCISE PRICE. Whenever the
                  Exercise Price is adjusted pursuant to this Section 3, the
                  Company shall promptly mail to the Holder a notice setting
                  forth the Exercise 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
                  exercise price at which such securities may be converted or
                  exercised in the case of a Variable Rate Transaction.

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                           ii. NOTICE TO ALLOW EXERCISE 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
                  mailed to the Holder at its last address as it shall appear
                  upon the Warrant Register 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 exercise this Warrant during the 20-day period
                  commencing on the date of such notice to the effective date or
                  the termination date of the event triggering such notice.

         Section 4. TRANSFER OF WARRANT.

         a) TRANSFERABILITY. Subject to compliance with any applicable
securities laws and the conditions set forth in Sections 5(a) and 4(d) hereof
and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant

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shall promptly be cancelled. A Warrant, if properly assigned, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant
issued.

                  b) NEW WARRANTS. This Warrant may be divided or combined with
         other Warrants upon presentation hereof at the aforesaid office of the
         Company, together with a written notice specifying the names and
         denominations in which new Warrants are to be issued, signed by the
         Holder or its agent or attorney. Subject to compliance with Section
         4(a), as to any transfer which may be involved in such division or
         combination, the Company shall execute and deliver a new Warrant or
         Warrants in exchange for the Warrant or Warrants to be divided or
         combined in accordance with such notice.

                  c) WARRANT REGISTER. The Company shall register this Warrant,
         upon records to be maintained by the Company for that purpose (the
         "WARRANT REGISTER"), in the name of the record Holder hereof from time
         to time. The Company may deem and treat the registered Holder of this
         Warrant as the absolute owner hereof for the purpose of any exercise
         hereof or any distribution to the Holder, and for all other purposes,
         absent actual notice to the contrary.

                  d) TRANSFER RESTRICTIONS. If, at the time of the surrender of
         this Warrant in connection with any transfer of this Warrant, the
         transfer of this Warrant shall not be registered pursuant to an
         effective registration statement under the Securities Act and under
         applicable state securities or blue sky laws, the Company may require,
         as a condition of allowing such transfer (i) that the Holder or
         transferee of this Warrant, as the case may be, furnish to the Company
         a written opinion of counsel (which opinion shall be in form, substance
         and scope customary for opinions of counsel in comparable transactions)
         to the effect that such transfer may be made without registration under
         the Securities Act and under applicable state securities or blue sky
         laws, (ii) that the holder or transferee execute and deliver to the
         Company an investment letter in form and substance acceptable to the
         Company and (iii) that the transferee be an "accredited investor" as
         defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
         promulgated under the Securities Act or a qualified institutional buyer
         as defined in Rule 144A(a) under the Securities Act.

         Section 5. MISCELLANEOUS.

                  a) TITLE TO WARRANT. Prior to the Termination Date and subject
         to compliance with applicable laws and Section 4 of this Warrant, this
         Warrant and all rights hereunder are transferable, in whole or in part,
         at the office or agency of the Company by the Holder in person or by
         duly authorized attorney, upon surrender of this Warrant together with
         the Assignment Form annexed hereto properly endorsed. The transferee
         shall sign an investment letter in form and substance reasonably
         satisfactory to the Company.

                  b) NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does
         not entitle the Holder to any voting rights or other rights as a
         shareholder of the Company prior to the exercise hereof. Upon the
         surrender of this Warrant and the payment of the aggregate Exercise
         Price (or by means of a cashless exercise), the Warrant Shares so
         purchased shall be and be deemed to be issued to the Holder as the
         record owner of such shares as of the close of business on the later of
         the date of such surrender or payment.

                                       10
<PAGE>

                  c) LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The
         Company covenants that upon receipt by the Company of evidence
         reasonably satisfactory to it of the loss, theft, destruction or
         mutilation of this Warrant or any stock certificate relating to the
         Warrant Shares, and in case of loss, theft or destruction, of indemnity
         or security reasonably satisfactory to it (which, in the case of the
         Warrant, shall not include the posting of any bond), and upon surrender
         and cancellation of such Warrant or stock certificate, if mutilated,
         the Company will make and deliver a new Warrant or stock certificate of
         like tenor and dated as of such cancellation, in lieu of such Warrant
         or stock certificate.

                  d) SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed
         day for the taking of any action or the expiration of any right
         required or granted herein shall be a Saturday, Sunday or a legal
         holiday, then such action may be taken or such right may be exercised
         on the next succeeding day not a Saturday, Sunday or legal holiday.

                  e) AUTHORIZED SHARES.

                           The Company covenants that during the period the
                  Warrant is outstanding, it will reserve from its authorized
                  and unissued Common Stock a sufficient number of shares to
                  provide for the issuance of the Warrant Shares upon the
                  exercise of any purchase rights under this Warrant. The
                  Company further covenants that its issuance of this Warrant
                  shall constitute full authority to its officers who are
                  charged with the duty of executing stock certificates to
                  execute and issue the necessary certificates for the Warrant
                  Shares upon the exercise of the purchase rights under this
                  Warrant. The Company will take all such reasonable action as
                  may be necessary to assure that such Warrant Shares may be
                  issued as provided herein without violation of any applicable
                  law or regulation, or of any requirements of the Trading
                  Market upon which the Common Stock may be listed.

                           Except and to the extent as waived or consented to by
                  the Holder, the Company shall not by any action, including,
                  without limitation, amending its certificate of incorporation
                  or through any reorganization, transfer of assets,
                  consolidation, merger, dissolution, issue or sale of
                  securities or any other voluntary action, avoid or seek to
                  avoid the observance or performance of any of the terms of
                  this Warrant, but will at all times in good faith assist in
                  the carrying out of all such terms and in the taking of all
                  such actions as may be necessary or appropriate to protect the
                  rights of Holder as set forth in this Warrant against
                  impairment. Without limiting the generality of the foregoing,
                  the Company will (a) not increase the par value of any Warrant
                  Shares above the amount payable therefor upon such exercise
                  immediately prior to such increase in par value, (b) take all
                  such action as may be necessary or appropriate in order that
                  the Company may validly and legally issue fully paid and
                  nonassessable Warrant Shares upon the exercise of this
                  Warrant, and (c) use commercially reasonable efforts to obtain
                  all such authorizations, exemptions or consents from any
                  public regulatory body having jurisdiction thereof as may be
                  necessary to enable the Company to perform its obligations
                  under this Warrant.

                                       11
<PAGE>

                           Before taking any action which would result in an
                  adjustment in the number of Warrant Shares for which this
                  Warrant is exercisable or in the Exercise Price, the Company
                  shall obtain all such authorizations or exemptions thereof, or
                  consents thereto, as may be necessary from any public
                  regulatory body or bodies having jurisdiction thereof.

                  f) JURISDICTION. All questions concerning the construction,
         validity, enforcement and interpretation of this Warrant shall be
         determined in accordance with the provisions of the Purchase Agreement.

                  g) RESTRICTIONS. The Holder acknowledges that the Warrant
         Shares acquired upon the exercise of this Warrant, if not registered,
         will have restrictions upon resale imposed by state and federal
         securities laws.

                  h) NONWAIVER AND EXPENSES. No course of dealing or any delay
         or failure to exercise any right hereunder on the part of Holder shall
         operate as a waiver of such right or otherwise prejudice Holder's
         rights, powers or remedies, notwithstanding the fact that all rights
         hereunder terminate on the Termination Date. If the Company willfully
         and knowingly fails to comply with any provision of this Warrant, which
         results in any material damages to the Holder, the Company shall pay to
         Holder such amounts as shall be sufficient to cover any costs and
         expenses including, but not limited to, reasonable attorneys' fees,
         including those of appellate proceedings, incurred by Holder in
         collecting any amounts due pursuant hereto or in otherwise enforcing
         any of its rights, powers or remedies hereunder.

                  i) NOTICES. Any notice, request or other document required or
         permitted to be given or delivered to the Holder by the Company shall
         be delivered in accordance with the notice provisions of the Purchase
         Agreement.

                  j) LIMITATION OF LIABILITY. No provision hereof, in the
         absence of any affirmative action by Holder to exercise this Warrant or
         purchase Warrant Shares, and no enumeration herein of the rights or
         privileges of Holder, shall give rise to any liability of Holder for
         the purchase price of any Common Stock or as a stockholder of the
         Company, whether such liability is asserted by the Company or by
         creditors of the Company.

                  k) REMEDIES. Holder, in addition to being entitled to exercise
         all rights granted by law, including recovery of damages, will be
         entitled to specific performance of its rights under this Warrant. The
         Company agrees that monetary damages would not be adequate compensation
         for any loss incurred by reason of a breach by it of the provisions of
         this Warrant and hereby agrees to waive the defense in any action for
         specific performance that a remedy at law would be adequate.

                  l) SUCCESSORS AND ASSIGNS. Subject to applicable securities
         laws, this Warrant and the rights and obligations evidenced hereby
         shall inure to the benefit of and be binding upon the successors of the
         Company and the successors and permitted assigns of Holder. The
         provisions of this Warrant are intended to be for the benefit of all
         Holders from time to time of this Warrant and shall be enforceable by
         the Holder or holder of Warrant Shares.

                                       12
<PAGE>

                  m) AMENDMENT. This Warrant may be modified or amended or the
         provisions hereof waived with the written consent of the Company and
         the Holder.

                  n) SEVERABILITY. Wherever possible, each provision of this
         Warrant shall be interpreted in such manner as to be effective and
         valid under applicable law, but if any provision of this Warrant shall
         be prohibited by or invalid under applicable law, such provision shall
         be ineffective to the extent of such prohibition or invalidity, without
         invalidating the remainder of such provisions or the remaining
         provisions of this Warrant.

                  o) HEADINGS. The headings used in this Warrant are for the
         convenience of reference only and shall not, for any purpose, be deemed
         a part of this Warrant.

                  p) FORCE MAJEURE. In no event shall a Holder have any claim or
         right against the Company for any failure of performance in accordance
         with this Warrant due to causes beyond its reasonable control,
         including, but not limited to: such delays arising directly out of an
         act of God, fire, flood or other natural catastrophe; laws, orders,
         rules, regulations, directions or action of governmental authorities
         having jurisdiction or any civil military authority; or national
         emergency, riot, act of terrorism or war or labor dispute.

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

                                       13
<PAGE>

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

Dated:  June 30, 2006

                                           TUTOGEN MEDICAL, INC.

                                           By:      /S/ GUY L. MAYER
                                              -----------------------------
                                           Name:  Guy L. Mayer
                                           Title: Chief Executive Officer

<PAGE>

                               NOTICE OF EXERCISE

To:      TUTOGEN MEDICAL, INC.

                  (1) The undersigned hereby elects to purchase ________ Warrant
Shares of the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

                  (2) Payment shall take the form of (check applicable box):

                      [  ] in lawful money of the United States; or

                      [ ] the cancellation of such number of Warrant Shares
                      as is necessary, in accordance with the formula set
                      forth in subsection 2(c), to exercise this Warrant
                      with respect to the maximum number of Warrant Shares
                      purchasable pursuant to the cashless exercise
                      procedure set forth in subsection 2(c).

                  (3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is
specified below:

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

The Warrant Shares shall be delivered to the following:

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

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

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

                  (4) ACCREDITED INVESTOR. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:
                          --------------------------------------------------
SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY:
                                                        --------------------
Name of Authorized Signatory:
                              ----------------------------------------------
Title of Authorized Signatory:
                               ---------------------------------------------
Date:
      ----------------------------------------------------------------------

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                      Do not use this form to exercise the
warrant.)

                  FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

_______________________________________________ whose address is

________________________________________________________________.

_______________________________________________________________

                                                Dated:  ______________, _______

                   Holder's Signature:       _____________________________

                   Holder's Address:         _____________________________

                                             _____________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

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