Document:

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                                                                   Exhibit 10.12

                           Rogue Wave Software, Inc.

                          1997 EQUITY INCENTIVE PLAN

                            Adopted October 9, 1997
                           Amended October 13, 1998
                            Amended January 21,1999
                           Amended October 21, 1999
                         Amended as of October 1, 2000
                            Amended April 20, 2000
                       Stockholder Approval Not Required

1.   Purposes.

     (a)  The purpose of the Plan is to provide a means by which selected
Employees (including Officers) of and Consultants to the Company and its
Affiliates may be given an opportunity to benefit from increases in value of the
common stock of the Company ("Common Stock") through the granting of (i)
Nonstatutory Stock Options, (ii) stock bonuses, (iii) rights to purchase
restricted stock, and (iv) stock appreciation rights, all as defined below.

     (b)  The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Consultants, to secure and retain the services
of new Employees and Consultants, and to provide incentives for such persons to
exert maximum efforts for the success of the Company and its Affiliates.

     (c)  The Company intends that the Stock Awards issued under the Plan shall,
in the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to subsection 3(c), be
either (i) Options granted pursuant to Section 6, (ii) stock bonuses or rights
to purchase restricted stock granted pursuant to Section 8 hereof, or (iii)
stock appreciation rights granted pursuant to Section 9 hereof.

2.   Definitions.

     (a)  "Affiliate" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.

     (b)  "Board" means the Board of Directors of the Company.

     (c)  "Code" means the Internal Revenue Code of 1986, as amended.

     (d)  "Committee" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.

     (e)  "Company" means Rogue Wave Software, Inc.

     (f)  "Concurrent Stock Appreciation Right" or "Concurrent Right" means a
right granted pursuant to subsection 9(b)(2) of the Plan.
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     (g)  "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.

     (h)  "Continuous Service" means the employment or relationship with the
Company or an Affiliate is not interrupted or terminated. The Board, in its sole
discretion, may determine whether Continuous Service shall be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; or (ii)
transfers between locations of the Company or between the Company, Affiliates or
their successors.

     (i)  "Director" means a member of the Board.

     (j)  "Employee" means any person, employed by the Company or any Affiliate
of the Company. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.

     (k)  "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     (l)  "Fair Market Value" means, as of any date, the value of the Common
Stock of the Company determined as follows:

          (1)  If the Common Stock is listed on any established stock exchange,
or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in Common Stock) on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Board deems reliable;

          (2)  In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.

     (m)  "Independent Stock Appreciation Right" means a right granted pursuant
to subsection 9(b)(3) of the Plan.

     (n)  "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

     (o)  "Nonstatutory Stock Option" means an Option not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (p)  "Option" means a Nonstatutory Stock Option granted pursuant to the
Plan.

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     (q)  "Option Agreement" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.

     (r)  "Optionee" means a person to whom an Option is granted pursuant to the
Plan.

     (s) "Plan" means this Rogue Wave Software, Inc. 1997 Equity Incentive Plan.

     (t)  "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.

     (u)  "Stock Appreciation Right" means any of the various types of rights
which may be granted under Section 9 of the Plan.

     (v)  "Stock Award" means any right granted under the Plan, including any
Option, any stock bonus, and any right to purchase restricted stock.

     (w)  "Stock Award Agreement" means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

     (x)  "Tandem Stock Appreciation Right" or "Tandem Right" means a right
granted pursuant to subsection 9(b)(1) of the Plan.

3.   Administration.

     (a)  The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).

     (b)  The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

          (1)  To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Option, a stock bonus, a
right to purchase restricted stock, a Stock Appreciation Right, or a combination
of the foregoing; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive stock pursuant to a Stock Award; whether a person shall be permitted to
receive stock upon exercise of an Independent Stock Appreciation Right; and the
number of shares with respect to which a Stock Award shall be granted to each
such person.

          (2)  To construe and interpret the Plan and Stock Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

          (3)  To amend the Plan or a Stock Award as provided in Section 15.

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          (4)  Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.

     (c)  The Board may delegate administration of the Plan to a committee or
committees ("Committee") of one or more members of the Board. If administration
is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board (and
references in this Plan to the Board shall thereafter be to the Committee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan.

4.   Shares Subject To The Plan.

     (a)  Subject to the provisions of Section 14 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate four million eight hundred fifty thousand
(4,850,000) shares of Common Stock. If any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without having been
exercised in full (or vested in the case of Restricted Stock), the stock not
acquired under such Stock Award shall revert to and again become available for
issuance under the Plan. Shares subject to Stock Appreciation Rights exercised
in accordance with Section 9 of the Plan shall not be available for subsequent
issuance under the Plan.

     (b)  The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

5.   Eligibility.

     Stock Awards may be granted to Employees (including Officers) and
Consultants. Notwithstanding the foregoing, the aggregate number of shares of
Common Stock issued pursuant to Stock Awards granted to Officers cannot exceed
forty percent (40%) of the number of shares of Common Stock reserved for
issuance under the Plan as determined at the time of each issuance to an
Officer, except that there shall be excluded from this calculation shares of
Common Stock issued to Officers not previously employed by the Company pursuant
to Stock Awards granted as an inducement essential to such individuals entering
into employment contracts with the Company.

6.   Option Provisions.

     Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

     (a)  Term. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.

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     (b)  Price. The exercise price of each Option shall be not less than eighty
-five percent (85%) of the Fair Market Value of the stock subject to the Option
on the date the Option is granted. Notwithstanding the foregoing, an Option may
be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

     (c)  Consideration. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other Common Stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other Common Stock of the
Company) with the person to whom the Option is granted or to whom the Option is
transferred pursuant to subsection 6(d), or (C) in any other form of legal
consideration that may be acceptable to the Board.

     In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

     (d)  Transferability. An Option may be transferred to the extent provided
in the Option Agreement; provided that if the Option Agreement does not
expressly permit the transfer of the Option, the Option shall not be
transferable except by will, by the laws of descent and distribution or pursuant
to a domestic relations order satisfying the requirements of Rule 16b-3, and
shall be exercisable during the lifetime of the person to whom the Option is
granted only by such person or any transferee pursuant to a domestic relations
order. Notwithstanding the foregoing, the person to whom the Option is granted
may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionee,
shall thereafter be entitled to exercise the Option.

     (e)  Vesting. The total number of shares of stock subject to an Option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that from time to time during each of
such installment periods, the Option may become exercisable ("vest") with
respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The provisions of this
subsection 6(e) are subject to any Option provisions governing the minimum
number of shares as to which an Option may be exercised.

     (f)  Termination of Continuous Service. In the event an Optionee's
Continuous Service terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination) but only within
such period of time ending on the earlier of (i) the date three (3)

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months after the termination of the Optionee's Continuous Service (or such
longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
after termination, the Optionee does not exercise his or her Option within the
time specified in the Option Agreement, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

     (g)  Disability of Optionee. In the event an Optionee's Continuous Service
terminates as a result of the Optionee's disability, the Optionee may exercise
his or her Option (to the extent that the Optionee was entitled to exercise it
at the date of termination), but only within such period of time ending on the
earlier of (i) the date twelve (12) months following such termination (or such
longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
at the date of termination, the Optionee is not entitled to exercise his or her
entire Option, the shares covered by the unexercisable portion of the Option
shall revert to and again become available for issuance under the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the shares covered by
such Option shall revert to and again become available for issuance under the
Plan.

     (h)  Death of Optionee. In the event of the death of an Optionee during, or
within a three-month period (or 12 month period in the case of totally disabled
Optionees) after the termination of, the Optionee's Continuous Service, the
Option shall be fully vested and may be exercised by the Optionee's estate, by a
person who acquired the right to exercise the Option by bequest or inheritance
or by a person designated to exercise the option upon the Optionee's death
pursuant to subsection 6(d), but only within the period ending on the earlier of
(i) the date twelve (12) months following the date of death (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the
term of such Option as set forth in the Option Agreement. If, at the time of
death, the Optionee was not entitled to exercise his or her entire Option, the
shares covered by the unexercisable portion of the Option shall revert to and
again become available for issuance under the Plan. If, after death, the Option
is not exercised within the time specified herein, the Option shall terminate,
and the shares covered by such Option shall revert to and again become available
for issuance under the Plan.

     (i)  Early Exercise. The Option may, but need not, include a provision
whereby the Optionee may elect at any time before the termination of the
Optionee's Continuous Service to exercise the Option as to any part or all of
the shares subject to the Option prior to the full vesting of the Option. Any
unvested shares so purchased may be subject to a repurchase right in favor of
the Company or to any other restriction the Board determines to be appropriate.

     (j)  Re-Load Options. Without in any way limiting the authority of the
Board or Committee to make or not to make grants of Options hereunder, the Board
or Committee shall have the authority (but not an obligation) to include as part
of any Option Agreement a provision entitling the Optionee to a further Option
(a "Re-Load Option") in the event the Optionee exercises the Option evidenced by
the Option agreement, in whole or in part, by surrendering other shares of
Common Stock in accordance with this Plan and the terms and conditions of the
Option Agreement. Any such Re-Load Option (i) shall be for a number of shares
equal to the number of shares surrendered as part or all of the exercise price
of such Option; (ii) shall have an

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expiration date which is the same as the expiration date of the Option the
exercise of which gave rise to such Re-Load Option; and (iii) shall have an
exercise price which is equal to one hundred percent (100%) of the Fair Market
Value of the Common Stock subject to the Re-Load Option on the date of exercise
of the original Option.

     There shall be no Re-Load Options on a Re-Load Option. Any such Re-Load
Option shall be subject to the availability of sufficient shares under
subsection 4(a) and shall be subject to such other terms and conditions as the
Board or Committee may determine which are not inconsistent with the express
provisions of the Plan regarding the terms of Options.

7.   Option Grants For Officers and Directors. Officers shall be eligible for
any Stock Awards under the Plan. Directors shall not be eligible for any Stock
Awards under the Plan

8.   Terms Of Stock Bonuses And Purchases Of Restricted Stock.

     Each stock bonus or restricted stock purchase agreement shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. The terms and conditions of stock bonus or restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate agreements need not be identical, but each stock bonus or
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions as appropriate:

     (a)  Purchase Price. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such agreement but in no event shall the purchase
price be less than eighty-five percent (85%) of the stock's Fair Market Value on
the date such award is made. Notwithstanding the foregoing, the Board or the
Committee may determine that eligible participants in the Plan may be awarded
stock pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company for its benefit.

     (b)  Transferability. No rights under a stock bonus or restricted stock
purchase agreement shall be transferable except by will or the laws of descent
and distribution or, if the agreement so provides, pursuant to a domestic
relations order satisfying the requirements of Rule 16b-3, so long as stock
awarded under such agreement remains subject to the terms of the agreement.

     (c)  Consideration. The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to a
deferred payment or other arrangement with the person to whom the stock is sold;
or (iii) in any other form of legal consideration that may be acceptable to the
Board or the Committee in its discretion. Notwithstanding the foregoing, the
Board or the Committee to which administration of the Plan has been delegated
may award stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.

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     (d)  Vesting. Shares of stock sold or awarded under the Plan may, but need
not, be subject to a repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board or the Committee.

     (e)  Termination of Continuous Service. In the event a Participant's
Continuous Service terminates, the Company may repurchase or otherwise reacquire
any or all of the shares of stock held by that person which have not vested as
of the date of termination under the terms of the stock bonus or restricted
stock purchase agreement between the Company and such person.

9.   Stock Appreciation Rights.

     (a)  The Board or Committee shall have full power and authority,
exercisable in its sole discretion, to grant Stock Appreciation Rights under the
Plan to Employees and Consultants. To exercise any outstanding Stock
Appreciation Right, the holder must provide written notice of exercise to the
Company in compliance with the provisions of the Stock Award Agreement
evidencing such right. No limitation shall exist on the aggregate amount of cash
payments the Company may make under the Plan in connection with the exercise of
a Stock Appreciation Right.

     (b)  Three types of Stock Appreciation Rights shall be authorized for
issuance under the Plan:

          (1)  Tandem Stock Appreciation Rights. Tandem Stock Appreciation
Rights will be granted appurtenant to an Option, and shall, except as
specifically set forth in this Section 9, be subject to the same terms and
conditions applicable to the particular Option grant to which it pertains.
Tandem Stock Appreciation Rights will require the holder to elect between the
exercise of the underlying Option for shares of stock and the surrender, in
whole or in part, of such Option for an appreciation distribution. The
appreciation distribution payable on the exercised Tandem Right shall be in cash
(or, if so provided, in an equivalent number of shares of stock based on Fair
Market Value on the date of the Option surrender) in an amount up to the excess
of (A) the Fair Market Value (on the date of the Option surrender) of the number
of shares of stock covered by that portion of the surrendered Option in which
the Optionee is vested over (B) the aggregate exercise price payable for such
vested shares.

          (2)  Concurrent Stock Appreciation Rights. Concurrent Rights will be
granted appurtenant to an Option and may apply to all or any portion of the
shares of stock subject to the underlying Option and shall, except as
specifically set forth in this Section 9, be subject to the same terms and
conditions applicable to the particular Option grant to which it pertains. A
Concurrent Right shall be exercised automatically at the same time the
underlying Option is exercised with respect to the particular shares of stock to
which the Concurrent Right pertains. The appreciation distribution payable on an
exercised Concurrent Right shall be in cash (or, if so provided, in an
equivalent number of shares of stock based on Fair Market Value on the date of
the exercise of the Concurrent Right) in an amount equal to such portion as
shall be determined by the Board or the Committee at the time of the grant of
the excess of (A) the aggregate Fair Market Value (on the date of the exercise
of the Concurrent Right) of the vested

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shares of stock purchased under the underlying Option which have Concurrent
Rights appurtenant to them over (B) the aggregate exercise price paid for such
shares.

     (3)  Independent Stock Appreciation Rights. Independent Rights will be
granted independently of any Option and shall, except as specifically set forth
in this Section 9, be subject to the same terms and conditions applicable to
Options as set forth in Section 6. They shall be denominated in share
equivalents. The appreciation distribution payable on the exercised Independent
Right shall be not greater than an amount equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the Independent
Right) of a number of shares of Company stock equal to the number of share
equivalents in which the holder is vested under such Independent Right, and with
respect to which the holder is exercising the Independent Right on such date,
over (B) the aggregate Fair Market Value (on the date of the grant of the
Independent Right) of such number of shares of Company stock. The appreciation
distribution payable on the exercised Independent Right shall be in cash or, if
so provided, in an equivalent number of shares of stock based on Fair Market
Value on the date of the exercise of the Independent Right.

10.  Cancellation And Re-Grant Of Options.

     (a)  The Board or the Committee shall have the authority to effect, at any
time and from time to time, (i) the repricing of any outstanding Options and/or
any Stock Appreciation Rights under the Plan and/or (ii) with the consent of any
adversely affected holders of Options and/or Stock Appreciation Rights, the
cancellation of any outstanding Options and/or any Stock Appreciation Rights
under the Plan and the grant in substitution therefor of new Options and/or
Stock Appreciation Rights under the Plan covering the same or different numbers
of shares of stock, but having an exercise price per share not less than: eighty
five percent (85%) of the Fair Market Value for an Option. Notwithstanding the
foregoing, the Board or the Committee may grant an Option and/or Stock
Appreciation Right with an exercise price lower than that set forth above if
such Option and/or Stock Appreciation Right is granted as part of a transaction
to which Section 424(a) of the Code applies.

     (b)  Shares subject to an Option or Stock Appreciation Right canceled under
this Section 10 shall continue to be counted against the maximum award of
Options and Stock Appreciation Rights permitted to be granted pursuant to the
Plan. The repricing of an Option and/or Stock Appreciation Right hereunder
resulting in a reduction of the exercise price, shall be deemed to be a
cancellation of the original Option and/or Stock Appreciation Right and the
grant of a substitute Option and/or Stock Appreciation Right.

11.  Covenants Of The Company.

     (a)  During the terms of the Stock Awards, the Company shall keep available
at all times the number of shares of stock required to satisfy such Stock
Awards.

     (b)  The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares under Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
of 1933, as amended (the "Securities Act") either the Plan, any

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Stock Award or any stock issued or issuable pursuant to any such Stock Award.
If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such Stock Awards unless and until such authority is obtained.

12.  Use Of Proceeds From Stock.

     Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.

13.  Miscellaneous.

     (a)  The Board shall have the power to accelerate the time at which a Stock
Award may first be exercised or the time during which a Stock Award or any part
thereof will vest, notwithstanding the provisions in the Stock Award stating the
time at which it may first be exercised or the time during which it will vest.

     (b)  Neither an Employee nor a Consultant nor any person to whom a Stock
Award is transferred in accordance with the Plan shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
subject to such Stock Award unless and until such person has satisfied all
requirements for exercise of the Stock Award pursuant to its terms.

     (c)  Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Employee, Consultant or other holder of
Stock Awards any right to continue in the employ of the Company or any
Affiliate, or to continue serving as a Consultant, or shall affect the right of
the Company or any Affiliate to terminate the employment of any Employee with or
without notice and with or without cause, or the right to terminate the
relationship of any Consultant pursuant to the terms of such Consultant's
agreement with the Company or Affiliate.

     (d)  The Company may require any person to whom a Stock Award is granted,
or any person to whom a Stock Award is transferred in accordance with the Plan,
as a condition of exercising or acquiring stock under any Stock Award, (1) to
give written assurances satisfactory to the Company as to such person's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (2) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Stock Award for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered under
a then currently effective registration statement under the Securities Act, or
(ii) as to any particular requirement, a determination is made by counsel for
the Company that

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such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.

     (e)  To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of stock
under a Stock Award by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the Common Stock otherwise issuable to the participant
as a result of the exercise or acquisition of stock under the Stock Award; or
(3) delivering to the Company owned and unencumbered shares of the Common Stock
of the Company.

14.  Adjustments Upon Changes In Stock.

     (a)  If any change is made in the stock subject to the Plan, or subject to
any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan and the maximum number of shares subject to
award to any person during any calendar year, and the outstanding Stock Awards
will be appropriately adjusted in the class(es) and number of shares and price
per share of stock subject to such outstanding Stock Awards. Such adjustments
shall be made by the Board or the Committee, the determination of which shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company".)

     (b)  In the event of: (1) a dissolution, liquidation or sale of
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; or (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Common
Stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise, then to the extent permitted by applicable law: (i) any surviving
corporation or an Affiliate of such surviving corporation shall assume any Stock
Awards outstanding under the Plan or shall substitute similar Stock Awards for
those outstanding under the Plan, or (ii) such Stock Awards shall continue in
full force and effect. In the event any surviving corporation and its Affiliates
refuse to assume or continue such Stock Awards, or to substitute similar options
for those outstanding under the Plan, then, with respect to Stock Awards held by
persons whose Continuous Service has not terminated, the time during which such
Stock Awards may be exercised shall be accelerated and the Stock Awards
terminated if not exercised prior to such event.

15.  Amendment Of The Plan and Stock Awards.

                                       11
<PAGE>

     (a)  The Board at any time, and from time to time, may amend the Plan.

     (b)  The Board may in its sole discretion submit any amendment to the Plan
for stockholder approval.

     (c)  Rights and obligations under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

     (d)  The Board at any time, and from time to time, may amend the terms of
any one or more Stock Award; provided, however, that the rights and obligations
under any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

16.  Termination Or Suspension Of The Plan.

     (a)  The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate ten (10) years from the date the Plan is
adopted by the Board. No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated.

     (b)  Rights and obligations under any Stock Award granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the Stock Award was granted.

17.  Effective Date Of Plan.

     The Plan shall become effective on the date adopted by the Board.

                                       12<PAGE>

                                                                   Exhibit 4.2.1
                                   DEBENTURE

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

No.    CD-1                                                        US  $ 200,000
    ---------                                                          ---------

                               RICH COAST, INC.

                  8% CONVERTIBLE DEBENTURE DUE JUNE 11, 2003

          THIS DEBENTURE is one of a duly authorized issue of $1,500,000 in
Debentures of RICH COAST, INC., a corporation duly organized and existing under
the laws of the State of Delaware (the "Company") designated as its 8%
Convertible Debentures Due June 11, 2003.

          FOR VALUE RECEIVED, the Company promises to pay to Canadian Advantage
Limited Partnership, the registered holder hereof (the "Holder"), the principal
sum of $500,000 (US $) Dollars on June 11, 2003 (the "Maturity Date") and to pay
interest on the principal sum outstanding from time to time in arrears upon the
earlier of the Conversion Date, as defined below or June 11, 2003 at the rate of
8% per annum accruing from the date of initial issuance. Accrual of interest
shall commence on the first such business day to occur after the date hereof
until payment in full of the principal sum has been made or duly provided for.
Subject to the provisions of  paragraph 4 and paragraph 5 below, the principal
of, and interest on, this Debenture are payable at the option of the Holder, in
shares of Common Stock of the Company, $.001 par value ("Common Stock"), or in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, at the address last
appearing on the Debenture Register of the Company as designated in writing by
the Holder from time to time. The Company will pay the principal of and interest
upon this Debenture on the Maturity Date, less any amounts required by law to be
deducted, to the registered holder of this Debenture as of the tenth day prior
to the Maturity Date and addressed to such Holder at the last address appearing
on the Debenture Register. The forwarding of such check shall constitute a
payment of principal and interest hereunder and shall satisfy and discharge the
liability for principal and interest on this Debenture to the extent of the sum
represented by such check plus any amounts so deducted.

                                      -1-
<PAGE>

          This Debenture is subject to the following additional provisions:

          1.  The Debentures are issuable in denominations of Ten Thousand
Dollars (US$10,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders surrendering the same. No
service charge will be made for such registration or transfer or exchange.

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

          3.  This Debenture has been issued subject to investment
representations of the original holder  hereof and may be transferred or
exchanged only in compliance with the Securities Act of 1933, as amended (the
"Act"), and other applicable state and foreign securities laws. In the event of
any proposed transfer of this Debenture, the Company may require, prior to
issuance of a new Debenture in the name of such other person, that it receive
reasonable transfer documentation including opinions that the issuance of the
Debenture in such other name does not and will not cause a violation of the Act
or any applicable state or foreign securities laws. Prior to due presentment for
transfer of this Debenture, the Company and any agent of the Company may treat
the person in whose name this Debenture is duly registered on the Company's
Debenture Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Debenture be
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.

          4.  The Holder of this Debenture is entitled, at its option, to
convert at any time, the principal amount of this Debenture together with the
accrued interest thereon (and any other amounts due to the Holder hereunder),
into shares of Common Stock of the Company at a conversion price for each share
of Common Stock equal to the lesser of (i) the closing bid price of the shares
of Common Stock as reported by Bloomberg, LP on the date of issuance of the
Debentures (the "Fixed Conversion Price"), or (ii) seventy five (75%) of the
five day average closing bid price of the Common Stock, as reported by
Bloomberg, LP for the five trading days immediately preceding the applicable
Conversion Date (the "Conversion Price"). Conversion shall be effectuated by
surrendering the Debentures to be converted to the Company with the form of
conversion notice attached hereto as Exhibit A, executed by the Holder of the
Debenture evidencing such Holder's intention to convert this Debenture or a
specified portion (as above provided) hereof, and accompanied, if required by
the Company, by proper assignment hereof in blank. Interest accrued or accruing
from the date of issuance to the date of conversion shall, at the option of the
Holder, be paid in cash or Common Stock upon conversion at the Conversion Price.
No fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest
whole share. The date on which notice of conversion is given (the "Conversion
Date") shall be deemed to be the date on which the Holder has delivered this
Debenture, with the conversion notice duly executed, to the Company.  Facsimile
delivery of the conversion notice shall be accepted

                                      -2-
<PAGE>

          by the Company at telephone number (_____________; ATT: ___________).
Certificates representing Common Stock upon conversion will be delivered within
ten (10) days from the Conversion Date.

          (a)  In the event that the Company shall at any time after the date
          hereof (i) declare a dividend on the outstanding Common Stock payable
          in shares of its capital stock; (ii) subdivide the outstanding Common
          Stock; (iii) combine the outstanding Common Stock into a smaller
          number of shares; or (iv) issue any shares of its capital stock by
          reclassification of the Common Stock (including any such
          reclassification in connection with a consolidation or merger in which
          the Corporation is the continuing corporation), then, in each case,
          the Fixed Conversion Price in effect at the time of the record date
          for the determination of stockholders entitled to receive such
          dividend or distribution or of the effective date of such subdivision,
          combination, or reclassification shall be adjusted so that it shall
          equal the price determined by multiplying such Fixed Conversion Price
          by a fraction, the numerator of which shall be the number of shares of
          Common Stock outstanding immediately prior to such action, and the
          denominator of which shall be the number of shares of Common Stock
          outstanding after giving effect to such action.  Such adjustment shall
          be made successively whenever any event listed above shall occur and
          shall become effective at the close of business on such record date or
          at the close of business on the date immediately preceding such
          effective date, as applicable.

          5.   Except as otherwise provided in paragraph 9, in the event all or
any portion of this Debenture remains outstanding on the Maturity Date, the
unconverted portion of the Debenture will automatically be converted into shares
of Common Stock on such date in the manner set forth in paragraph  4 as if the
Maturity Date were the Conversion Date ("Mandatory Conversion").

          6.   Except in the case of Mandatory Conversion, in no event shall the
Holder be entitled to convert that amount of the Debenture in excess of that
amount upon conversion of which the sum of (1) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Debentures), and (2) the number of shares of Common
Stock issuable upon the conversion of the Debenture with respect to which the
determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.9% of the outstanding
shares of Common Stock of the Company. For purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section 13
(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13 D-G
thereunder, except as otherwise provided in clause (1) of the immediately
preceding sentence.

          7.   In the event that the Common Stock is not delivered per the
written instructions of the Holder within five business days after the
Conversion Date in accordance with the terms hereof , then in such event the
Company shall pay to Holder one percent (1%) of the amount

                                      -3-
<PAGE>

          of the Debentures being converted per each day after the tenth (10th)
business day following the Conversion Date that the certificates for the shares
of Common Stock are not delivered in cash or shares of Common Stock, based upon
the Conversion Price at the option of the Holder.

          (a) The Company acknowledges that its failure to deliver the
          certificates for the shares of Common Stock within ten (10) days after
          the Conversion Date will cause the Holder to suffer damages in an
          amount that will be difficult to ascertain. Accordingly, the parties
          agree that it is appropriate to include in this Debenture a provision
          for liquidated damages. The parties acknowledge and agree that the
          liquidated damages provision set forth in this paragraph represents
          the parties' good faith effort to quantify such damages and, as such,
          agree that the form and amount of such liquidated damages are
          reasonable and do not constitute a penalty. The payment of liquidated
          damages shall not relieve the Company from its obligations to deliver
          the shares of Common Stock pursuant to the terms of this Debenture.

          (b) To the extent that the failure of the Company to issue the Common
          Stock pursuant to this paragraph 7 is due to the unavailability of
          authorized but unissued shares of Common Stock, the provisions of this
          paragraph 7 shall not apply but instead the provisions of paragraph 8
          shall apply.

          (c) The Company shall make the cash payment in immediately available
          funds or issue such shares of Common Stock incurred under this
          paragraph 7 within three (3) business days from the date of issuance
          of the applicable shares of Common Stock. Nothing herein shall limit a
          Holder's right to pursue actual damages or cancel the conversion for
          the Company's failure to issue and deliver the shares of Common Stock
          to the Holder within ten (10) business days after the Conversion Date.

          8.  The Company shall at all times reserve and have available the
number of shares of Common Stock issuable upon conversion of the Debentures then
outstanding. If, at any time Holder submits a Notice of Conversion and the
Company does not have a sufficient number of  authorized but unissued shares of
Common Stock available to effect, in full, a conversion of the Debentures (a
"Conversion Default," the date of such default being referred to herein as the
"Conversion Default Date"), the Company shall issue to the Holder all of the
shares of Common Stock which are available for issuance, and the Notice of
Conversion as to any Debentures requested to be converted but not converted (the
"Unconverted Debentures"), upon Holder's sole option, may be deemed null and
void. The Company shall provide notice of such Conversion Default ("Notice of
Conversion Default") to all existing Holders of outstanding Debentures, by
facsimile, within one (1) business day of such default (with the original
delivered by overnight or two day courier), and the Holder shall give notice to
the Company by facsimile within five business days of receipt of the original
Notice of Conversion Default (with the original delivered by overnight or two
day courier) of its election to either nullify or confirm the Notice of
Conversion.

          (a) The Company agrees to pay to all Holders of outstanding Debentures

                                      -4-
<PAGE>

          payments for a Conversion Default ("Conversion Default Payments") in
          the amount of (N/365) x (.24) x the original principal amount plus the
          accrued interest thereon of the outstanding and tendered but not
          converted Debentures held by each Holder where N = the number of days
          from the Conversion Default Date to the date (the "Authorization
          Date") that the Company authorizes a sufficient number of shares of
          Common Stock to effect conversion of all remaining Debentures. The
          Company shall send a notice ("Authorization Notice") to each Holder of
          outstanding Debentures that additional shares of Common Stock have
          been authorized, the Authorization Date and the amount of Holder's
          accrued Conversion Default Payments. The accrued Conversion Default
          Payments shall be paid in cash or shall be convertible into shares of
          Common Stock at the Conversion Price, at the Holder's option, payable
          as follows: (i) in the event Holder elects to take such payment in
          cash, cash payments shall be made to such Holder of outstanding
          Debentures by the fifth day of the calendar month following the
          Conversion Default Date and each month thereafter, or (ii) in the
          event Holder elects to take such payment in shares of Common Stock,
          the Holder may convert such payment amount into shares of Common Stock
          at the Conversion Price at anytime after the fifth day of the calendar
          month following the month in which the Authorization Notice was
          received, until the Mandatory Conversion Date.

          (b) The Company acknowledges that its failure to maintain a sufficient
          number of authorized but unissued shares of Common Stock to effect in
          full a conversion of the Debentures will cause the Holder to suffer
          damages in an amount that will be difficult to ascertain. Accordingly,
          the parties agree that it is appropriate to include in this Agreement
          a provision for liquidated damages. The parties acknowledge and agree
          that the liquidated damages provision set forth in this section
          represents the parties' good faith effort to quantify such damages
          and, as such, agree that the form and amount of such liquidated
          damages are reasonable and do not constitute a penalty.  The payment
          of liquidated damages shall not relieve the Company from its
          obligations to deliver the Common Stock pursuant to the terms of this
          Agreement.

          (c) Nothing herein shall limit the Holder's right to pursue actual
          damages or cancel the Notice of Conversion for the Company's failure
          to maintain a sufficient number of authorized shares of Common Stock.

          9.   In no event shall the Company be required to issue more than 20%
of the number of shares of Common Stock outstanding on the date hereof (the
"Maximum Number") upon the conversion of the Debentures unless the stockholders
of the Company approve the issuance of additional shares of Common Stock upon
the conversion of the Debentures or NASDAQ waives the requirements of Market
Place Rule 4460(i)(1)(D).  In the event that the Maximum Number of shares of
Common Stock have been issued upon the conversion of the Debentures, and (i)
NASDAQ has not waived the requirements of Market Place Rule 4460(i)(1)(D) or
(ii) the stockholders have not approved the issuance of additional shares of
Common Stock, then any Debentures that remain unconverted shall, at the election
of the Holder, be immediately due and payable at an amount equal

                                      -5-
<PAGE>

          to 133% percent of the sum of  (i) the principal amount of the
Debentures and (ii) an amount equal to any accrued and unpaid interest thereon,
within five (5) business days of the Holder's election.  The Company agrees to
take such corporate action as may be necessary to obtain the approval of the
stockholders, including the filing of a proxy statement with the Securities and
Exchange Commission within thirty (30) days of the date hereof, to issue
additional shares of Common Stock upon the conversion of the Debentures.  In the
event that the Company does not file the proxy statement within thirty (30) days
of the date hereof, the interest rate hereunder shall be increased by two (2%)
percent per month from the date hereof until the preliminary proxy statement is
filed.

          10.  No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Debenture at the time, place, and rate, and
in the coin or currency, herein proscribed provided, however, the Company may
prepay this Debenture in whole or in part without penalty as provided in
paragraph 11. This Debenture and all other Debentures now or hereafter issued of
similar terms are direct obligations of the Company.

          11.  The Company may redeem, in cash, the Debentures at any time, upon
giving a redemption notice, to the Holder at a redemption price equal to 133% of
the principal amount of, plus accrued interest on, the Debentures. Except as
provided in this Section 11 the Debentures are not redeemable or prepayable.

          12.  Nothing contained in this Debenture shall be deemed to establish
or require the payment of interest to the Holder at a rate in excess of the
maximum rate permitted by governing law. In the event that the rate of interest
required to be paid under the Debenture exceeds the maximum rate permitted by
governing law, the rate of interest required to be paid thereunder shall be
automatically reduced to the maximum rate permitted under the governing and any
amounts collected in excess of the permissible amount shall be deemed a payment
of principal. To the extent that such excess amount exceeds the aggregate
principal amount of this Debenture, such excess shall be returned with
reasonable promptness by the holder to the Company.

          13.  If the Company merges or consolidates with another corporation or
sells or transfers all or substantially all of its assets to another person and
the holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common Stock, then as a condition of
such merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee agree that the Debenture may thereafter be
converted on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of shares of Common
Stock into which this Debenture might have been converted immediately before
such merger, consolidation, sale or transfer, subject to adjustments which shall
be as nearly equivalent as may be practicable. In the event of any proposed
merger, consolidation or sale or transfer of all or substantially all of the
assets of the Company (a "Sale"), the Holder hereof shall have the right to
convert by delivering a Notice of Conversion to the Company within fifteen (15)
days of receipt of notice of such Sale from the Company. In the event the Holder
hereof shall elect not to convert, the

                                      -6-
<PAGE>

          Company may prepay all outstanding principal and accrued interest on
this Debenture, less all amounts required by law to be deducted, upon which
tender of payment following such notice, the right of conversion shall
terminate.

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

          15.  This Debenture shall be governed by and construed in accordance
with the laws of the State of New York.

          16.  The following shall constitute an "Event of Default":

               a.   The Company shall default in the payment of principal or
                    interest on this Debenture; or

               b.   The Company shall default in the performance of its
                    obligations under the Subscription Agreement or the Security
                    Agreement; or

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

               d.  The Company fails to issue shares of Common Stock to the
                    Holder or to cause its Transfer Agent to issue shares of
                    Common Stock upon exercise by the Holder of the conversion
                    rights of the Holder in accordance with the terms of this
                    Debenture or the Subscription Agreement, fails to transfer
                    or to cause its Transfer Agent to transfer any certificate
                    for shares of Common Stock issued to the Holder upon
                    conversion of this Debenture and when required by this
                    Debenture, the Subscription Agreement or the Registration
                    Rights Agreement, or fails to remove any restrictive legend
                    or to cause its Transfer Agent to transfer on any
                    certificate or any shares of Common Stock issued to the
                    Holder upon conversion of this Debenture as and when
                    required by this Debenture, the Subscription Agreement or
                    the    Registration Rights Agreement and any such failure
                    shall continue uncured for five (5) business days.

                                      -7-
<PAGE>

               e.   The Company shall fail to perform or observe, in any
                    material respect, any other covenant, term, provision,
                    condition, agreement or obligation of the Company under this
                    Debenture, the Subscription Agreement, the Registration
                    Rights Agreement or the Security Agreement and such failure
                    shall continue uncured for a period of ten (10) days after
                    written notice from the Holder of such failure; or

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

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

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

               i.   Any money judgment, writ or warrant of attachment, or
                    similar process in excess of Two Hundred Thousand ($200,000)
                    Dollars in the aggregate shall be entered or filed against
                    the Company or any of its properties or other assets and
                    shall remain unpaid, unvacated, unbonded or unstayed for a
                    period of sixty (60) days or in any event later than five
                    (5) days prior to the date of any proposed sale thereunder;
                    or

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

               k.   The Company shall have its Common Stock suspended or
                    delisted from an exchange or over-the-counter market from
                    trading for in

                                      -8-
<PAGE>

               excess of five (5) business days.

Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
notice of any kinds, all of which are hereby expressly waived, anything herein
or in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately enforce any and all of the Holder's rights and
remedies provided herein or any other rights or remedies afforded by law.

          17.  Upon an Event of Default, the interest rate hereunder shall
increase from 8% to 20% per annum.

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

                                      -9-
<PAGE>

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

Dated:  June 11, 1998

                                    RICH COAST, INC.

                              By:   /s/ James P. Fagan
                                    ----------------------------
                                    Name:
                                    Title:

                                      -10-
<PAGE>

                                   EXHIBIT A

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

          (To be Executed by the Registered Holder in order to Convert the
           Debentures)

     The Holder hereby irrevocably elects, as of ______________, 1998 to convert
$________ of Debentures of Rich Coast, Inc. (the "Company") into shares of
Common Stock of  the Company according to the conditions set forth in the
Subscription Agreement dated ______________, 1998.

Date of Conversion:                          ________________________

Applicable Conversion Price:                 ________________________

Number of shares of Common Stock:            ________________________

                                             ___________________________________
                                                          Signature

                                             ___________________________________
                                                          Print Name

Address for delivery of the Common Stock     ___________________________________

                                             ___________________________________

                                             ___________________________________

Phone                                        ___________________________________

Fax                                          ___________________________________

Please call me if you need to confirm this facsimile Notice.

Tax I.D. No.:
                                             ___________________________________

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