Document:

Kinder Morgan, Inc. Exhibit 4.12 to S-8 Non-Qualified Dir Stock Agreement

Exhibit 4.12

KINDER MORGAN, INC.

NON-EMPLOYEE DIRECTOR

NONQUALIFIED STOCK OPTION AGREEMENT

     This Nonqualified Stock Option
Agreement ("Option Agreement") is between Kinder Morgan, Inc., a Kansas
corporation (the "Company"), and , BOD NAME ("Optionee"), who
agree as follows:

     Section 1.  Introduction.  The
Company has heretofore adopted the Kinder Morgan, Inc. Non-Employee Directors Stock Awards
Plan (the "Plan") for the purpose of promoting the interests of the Company and
its stockholders by aligning the compensation of the non-employee members of the Company's
Board of Directors (the "Board") with shareholder interests. The Company, acting
through the Committee (as defined in the Plan), has determined that its interests will be
advanced by the issuance to Optionee of a nonqualified stock option under the Plan.

     Section 2.  Option.  Subject
to the terms and conditions contained herein, the Company hereby grants to Optionee the
right and option ("Option") to purchase from the Company # OF SHARES
shares of the Company's common stock, $5.00 par value ("Common Stock"), at a
price of $________ per share. 

     Section 3.  Option
Period.  The Option herein granted may be exercised by Optionee in whole or in
part at any time during a ten year period (the "Option Period") beginning on _______________________________
(the "Date of Grant"). Notwithstanding the foregoing, this Option may not be
exercised until the first business day after the annual stockholders meeting held in
_______ ("Vesting Date"), and only if Optionee is a non-employee director of the
Company on the Vesting Date. If Optionee is not a non-employee director of the Company on
the Vesting Date, this Option shall immediately expire and shall not be exercisable.

     Section 4.  Procedure
for Exercise.  The Option herein granted may be exercised by the delivery by
Optionee of notice to the General Counsel or Vice President of Human Resources and
Administration of the Company setting forth the number of shares of Common Stock with
respect to which the Option is being exercised. Promptly upon notice, Optionee will remit
(i) cash, wire transfer of immediately available funds, cashier's check, bank draft, or
postal or express money order payable to the order of the Company, (ii) certificates
representing "mature shares" of Common Stock theretofore owned by Optionee duly
endorsed for transfer to the Company, or (iii) any combination of the preceding, equal in
value to the aggregate exercise price. For purposes of this Option Agreement, "mature
shares" means shares of Common Stock that Optionee has held free of any
transferability restrictions or risk of forfeiture for at least six (6) months. Unless the
Company consents to the contrary, the Notice shall be accompanied by a representation by
Optionee that all shares purchased are being acquired for investment and not with a view
to, or for resale in connection with, any distribution of said shares. This Option shall
be deemed to have been exercised immediately prior to the close of business on the date
(i) notice of such exercise and (ii) payment in full of the exercise price for the number
of share for which Options are being exercised, are both received by the Company and
Optionee shall be treated for all purposes as the record holder of such shares of Common
Stock as of such date.

     As promptly as practicable after
receipt of such notice and payment, the Company shall deliver to Optionee certificates for
the number of shares with respect to which such Option has been so exercised, issued in
Optionee's name or such other name as Optionee directs; provided, however, that such
delivery shall be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited such certificates in the United States mail, addressed to
Optionee at the address specified pursuant to this Section 4 or otherwise credits a
brokerage account designated by Optionee.

     Section 5.  Termination
of Board Membership.  If Optionee's membership on the Board is terminated
for any reason other than his or her death, this Option may be exercised by Optionee at
any time prior to the end of the calendar year containing the Date of Grant, or within
twelve (12) months after the termination of Board membership, whichever is longer (but in
no event after the expiration of ten (10) years from the Date of Grant) with respect to
all or any part of the number of shares remaining subject to the Option. At the end of
such period, this Option shall expire. If Optionee's membership on the Board is terminated
by reason of his or her death, this Option may be exercised by his or her estate or the
person or persons who acquire the right to exercise this Option by bequest or inheritance
at any time within one (1) year after the date of death to the extent Optionee was
entitled to exercise the Option at the time of his or her death (but in no event after the
expiration of a period of ten (10) years from the Date of Grant) with respect to all or
any part of the number of shares remaining subject to the Option. At the end of such
period, this Option shall expire.

     Section 6.  Transferability.  This
Option shall not be transferable otherwise than by will or the laws of descent and
distribution; provided, however, that if Optionee obtains the approval of the Committee
after making a request to the Committee in writing, Optionee may transfer or assign this
Option for estate planning purposes or to a charity. Any heir, legatee or transferee of
Optionee shall take rights herein granted subject to the terms and conditions hereof. No
transfer of this Option shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of such evidence as the
Committee may deem necessary to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions hereof. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of, or be subject to execution,
attachment or similar process, this Option, or of any right hereunder, in a manner not
permitted by the Plan or this Option Agreement, this Option and all rights hereunder shall
immediately become null and void.

     Section 7.  No Rights
as Stockholder.  Optionee shall have no rights as a stockholder with respect
to any shares of Common Stock covered by this Option Agreement until the Option is
exercised by written notice and accompanied by payment as provided in Section 4 of this
Option Agreement.

     Section 8.  Extraordinary
Corporate Transactions.  The existence of outstanding Options shall not
affect in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, exchanges or other
changes in the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issuance of Common Stock or other securities or subscription rights
thereto, or any issuance of bonds, debentures, preferred or prior preference stock ahead
of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or business, or
any other corporate act or 

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proceedings, whether of a similar character or otherwise. In the event
of any merger, consolidation or other reorganization of the Company with any other
corporation or corporations in which the Company is not the survivor, there shall be
substituted for each share of Common Stock then subject to this Option, the number and
kind of shares of stock, or other securities into which each outstanding share of Common
Stock shall be converted by such merger, consolidation or reorganization. In the event of
any such adjustment, the purchase price per share of this Option shall be proportionately
adjusted as necessary.

     Section 9.  Changes
in Capital Structure.  If the outstanding shares of Common Stock or other
securities of the Company, or both, for which the Option is then exercisable shall at any
time be changed or exchanged by declaration of a stock dividend, stock split or
combination of shares, the number and kind of shares of Common Stock or other securities
subject to the Option, and the purchase price, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares or other securities without
changing the aggregate exercise price.

     Section 10.  Compliance
With Securities Laws.  Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, Optionee (or any person acting under
Section 6) will enter into such written representations, warranties and agreements as
the Company may reasonably request in order to comply with applicable securities laws or
with this Option Agreement. If at any time the Board determines, in its discretion, that
the listing, registration or qualification of the shares subject to this Option upon any
securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the issue or purchase of shares thereunder, this Option may not be
exercised in whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained and the same shall have been free of any
conditions not acceptable to the Board.

     Section 11.  Compliance
With Laws.  Notwithstanding any of the other provisions hereof, Optionee
agrees that he or she will not exercise the Option granted hereby, and that the Company
will not be obligated to issue any shares pursuant to this Option Agreement, if the
exercise of the Option or the issuance of such shares of Common Stock would constitute a
violation by Optionee or by the Company of any provision of any law or regulation of any
governmental authority.

     Section 12.  Withholding
of Tax.  To the extent that the exercise of this Option or the disposition
of shares of Common Stock acquired by exercise of this Option results in compensation
income to Optionee for federal or state income tax purposes, Optionee shall be solely
responsible to meet its obligation under applicable tax laws or regulations.

     Section 13.  No Right
to Board Membership.  Optionee shall be considered to be in service as a
director so long as he or she remains a member of the Board. Any questions as to whether
and when there has been a termination of Board membership and the cause of such
termination shall be determined by the Committee, and its determination shall be final.
Nothing contained herein shall be construed as conferring upon Optionee the right to
continue service as a director.

     Section 14.  Resolution
of Disputes.  As a condition of the granting of the Option hereby, Optionee
and Optionee's heirs, personal representatives, successors and transferees agree that 

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any dispute or disagreement which may arise hereunder shall be
determined by the Committee in its sole discretion and judgment, and that any such
determination and any interpretation by the Committee of the terms of this Option
Agreement shall be final and shall be binding and conclusive, for all purposes, upon the
Company, Optionee, and Optionee's heirs, personal representatives, successors and
transferees.

     Section 15.  Legends
on Certificate.  The certificates representing the shares of Common Stock
purchased by exercise of the Option will be stamped or otherwise imprinted with legends in
such form as the Company or its counsel may require with respect to any applicable
restrictions on sale or transfer and the stock transfer records of the Company will
reflect stop-transfer instructions with respect to such shares.

     Section 16.  Notices.  Every
notice hereunder shall be in writing and shall be given by registered or certified mail.
All notices of the exercise of any Option hereunder shall be directed to Kinder Morgan,
Inc., One Allen Center, 500 Dallas Street, Suite 1000, Houston, Texas 77002, Attention:
General Counsel or Vice President of Human Resources and Administration. Any notice given
by the Company to Optionee directed to Optionee at the address on file with the Company
shall be effective to bind Optionee and any other person who shall acquire rights
hereunder. The Company shall be under no obligation whatsoever to advise Optionee of the
existence, maturity or termination of any of Optionee's rights hereunder and Optionee
shall be deemed to have familiarized himself or herself with all matters contained herein
and in the Plan which may affect any of Optionee's rights or privileges hereunder.

     Section 17.  Construction
and Interpretation.  Whenever the term "Optionee" is used herein
under circumstances applicable to any other person or persons to whom this Option, in
accordance with the provisions of Section 6 hereof, may be transferred, the word
"Optionee" shall be deemed to include such person or persons.

     Section 18.  Agreement
Subject to Plan.  This Option Agreement is subject to the Plan. The terms
and provisions of the Plan (including any subsequent amendments thereto) are hereby
incorporated herein by reference thereto. In the event of a conflict between any term or
provision contained herein and a term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions of words and terms
contained in the Plan shall be applicable to this Option Agreement.

     Section 19.  Binding
Effect.  This Option Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under Optionee
as provided herein.

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     Section 20.  Entire
Agreement; Amendment.  This Option Agreement and any other agreements and
instruments contemplated by this Option Agreement contain the entire agreement of the
parties, and this Option Agreement may be amended only in writing signed by both parties.

     IN WITNESS WHEREOF, this
Nonqualified Stock Option Agreement has been executed as of the _____ day of ___________,
________.

		KINDER MORGAN, INC.

 

		/s/
    Joseph Listengart

		    Joseph Listengart

        VP,
    General Counsel

      

          
		  
		Print Name

		  

          
		  
		Signature

		  

        
		  
		Social Security Number

  

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Exhibit 10.62 Form of Secured Convertible Debenture due September 9, 2006

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").  THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT.

CALLABLE SECURED CONVERTIBLE DEBENTURE
Valencia, California September 9, 2004  $_________

FOR VALUE RECEIVED, CONECTISYS CORPORATION, a Colorado corporation (hereinafter
called the "Borrower"), hereby promises to pay to the order of
____________________________ or registered assigns (the "Holder") the sum of
$_________, on September 9, 2006 (the "Maturity Date"), and to pay interest on
the unpaid principal balance hereof at the rate of twelve percent (12%) per
annum from September 9, 2004 (the "Issue Date") until the same becomes due and
payable, whether at maturity or upon acceleration or by prepayment or
otherwise.  Any amount of principal or interest on this Debenture which is not
paid when due shall bear interest at the rate of fifteen percent (15%) per
annum from the due date thereof until the same is paid ("Default Interest").
Interest shall commence accruing on the issue date, shall be computed on the
basis of a 365-day year and the actual number of days elapsed and shall be
payable quarterly on March 31, June 30, September 30 and December 31 of each
year beginning on September 30, 2004 provided, however, that the interest
payments for the one year period following the Issue Date shall be payable on
the date hereof.  All payments due hereunder (to the extent not converted into
common stock, no par value per share, of the Borrower (the "Common Stock") in
accordance with the terms hereof) shall be made in lawful money of the United
States of America.  All payments shall be made at such address as the Holder
shall hereafter give to the Borrower by written notice made in accordance with
the provisions of this Debenture.  Whenever any amount expressed to be due by
the terms of this Debenture is due on any day which is not a business day, the
same shall instead be due on the next succeeding day which is a business day
and, in the case of any interest payment date which is not the date on which
this Debenture is paid in full, the extension of the due date thereof shall not
be taken into account for purposes of determining the amount of interest due on
such date.  As used in this Debenture, the term "business day" shall mean any
day other than a Saturday, Sunday or a day on which commercial banks in the
city of New York, New York are authorized or required by law or executive order
to remain closed.  Each capitalized term used herein, and not otherwise
defined, shall have the meaning ascribed thereto in that certain Securities
Purchase Agreement, dated April 19, 2004, pursuant to which this Debenture was
originally issued (the "Purchase Agreement").

This Debenture is free from all taxes, liens, claims and encumbrances with
respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of stockholders of the Borrower and will not impose
personal liability upon the holder thereof.  The obligations of the Borrower
under this Debenture shall be secured by that certain Security Agreement by and
between the Borrower and the Holder of even date herewith.

The following terms shall apply to this Debenture:

ARTICLE I.  CONVERSION RIGHTS

1.1 Conversion Right.  The Holder shall have the right from time to time, and
at any time on or prior to the earlier of (i) the Maturity Date and (ii) the
date of payment of the Default Amount (as defined in Article III) pursuant to
Section 1.6(a) or Article III, the Optional Prepayment Amount (as defined in
Section 5.1 or any payments pursuant to Section 1.7, each in respect of the
remaining outstanding principal amount of this Debenture to convert all or any
part of the outstanding and unpaid principal amount of this Debenture into
fully paid and non assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of
the Borrower into which such Common Stock shall hereafter be changed or
reclassified at the conversion price  (the "Conversion Price") determined as
provided herein (a "Conversion"); provided, however, that in no event shall the
Holder be entitled to convert any portion of this Debenture in excess of that
portion of this Debenture 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 or the
unexercised or unconverted portion of any other security of the Borrower
(including, without limitation, the warrants issued by the Borrower pursuant to
the Purchase Agreement) subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this 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.  For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulations 13D G thereunder, except as otherwise provided in
clause (1) of such proviso.  The number of shares of Common Stock to be issued
upon each conversion of this Debenture shall be determined by dividing the
Conversion Amount (as defined below) by the applicable Conversion Price then in
effect on the date specified in the notice of conversion, in the form attached
hereto as Exhibit A (the "Notice of Conversion"), delivered to the Borrower by
the Holder in accordance with Section 1.4 below; provided that the Notice of
Conversion is submitted by facsimile (or by other means resulting in, or
reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New
York, New York time on such conversion date (the "Conversion Date").  The term
"Conversion Amount" means, with respect to any conversion of this Debenture,
the sum of (1) the principal amount of this Debenture to be converted in such
conversion plus (2) accrued and unpaid interest, if any, on such principal
amount at the interest rates provided in this Debenture to the Conversion Date
plus (3) Default Interest, if any, on the amounts referred to in the
immediately preceding clauses (1) and/or (2) plus (4) at the Holder's option,
any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or
pursuant to Section 2(c) of that certain Registration Rights Agreement, dated
as of April 19, 2004, executed in connection with the initial issuance of this
Debenture and the other Debentures issued on the Issue Date (the "Registration
Rights Agreement").

1.2 Conversion Price.

(a) Calculation of Conversion Price.  The Conversion Price shall be the lesser
of (i) the Variable Conversion Price (as defined herein) and (ii) the Fixed
Conversion Price (as defined herein) (subject, in each case, to equitable
adjustments for stock splits, stock dividends or rights offerings by the
Borrower relating to the Borrower's securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events).  The "Variable Conversion
Price" shall mean the Applicable Percentage (as defined herein) multiplied by
the Market Price (as defined herein).  "Market Price" means the average of the
lowest three (3) Trading Prices (as defined below) for the Common Stock during
the twenty (20) Trading Day period ending one Trading Day prior to the date the
Conversion Notice is sent by the Holder to the Borrower via facsimile (the
"Conversion Date").  "Trading Price" means, for any security as of any date,
the intraday trading price on the Over-the-Counter Bulletin Board (the "OTCBB")
as reported by a reliable reporting service mutually acceptable to and
hereafter designated by Holders of a majority in interest of the Debentures and
the Borrower or, if the OTCBB is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded
or, if no intraday trading price of such security is available in any of the
foregoing manners, the average of the intraday trading prices of any market
makers for such security that are listed in the "pink sheets" by the National
Quotation Bureau, Inc.  If the Trading Price cannot be calculated for such
security on such date in the manner provided above, the Trading Price shall be
the fair market value as mutually determined by the Borrower and the holders of
a majority in interest of the Debentures being converted for which the
calculation of the Trading Price is required in order to determine the
Conversion Price of such Debentures.  "Trading Day" shall mean any day on which
the Common Stock is traded for any period on the OTCBB, or on the principal
securities exchange or other securities market on which the Common Stock is
then being traded.  "Applicable Percentage" shall mean 40.0%.  The "Fixed
Conversion Price" shall mean $0.005.

(b) Conversion Price During Major Announcements.  Notwithstanding anything
contained in Section 1.2(a) to the contrary, in the event the Borrower (i)
makes a public announcement that it intends to consolidate or merge with any
other corporation (other than a merger in which the Borrower is the surviving
or continuing corporation and its capital stock is unchanged) or sell or
transfer all or substantially all of the assets of the Borrower or (ii) any
person, group or entity (including the Borrower) publicly announces a tender
offer to purchase 50% or more of the Borrower's Common Stock (or any other
takeover scheme) (the date of the announcement referred to in clause (i) or
(ii) is hereinafter referred to as the  "Announcement Date"), then the
Conversion Price shall, effective upon the Announcement Date and continuing
through the Adjusted Conversion Price Termination Date (as defined below), be
equal to the lower of (x) the Conversion Price which would have been applicable
for a Conversion occurring on the Announcement Date and (y) the Conversion
Price that would otherwise be in effect. From and after the Adjusted Conversion
Price Termination Date, the Conversion Price shall be determined as set forth
in this Section 1.2(a).  For purposes hereof,  "Adjusted Conversion Price
Termination Date" shall mean, with respect to any proposed transaction or
tender offer (or takeover scheme) for which a public announcement as
contemplated by this Section 1.2(b) has been made, the date upon which the
Borrower (in the case of clause (i) above) or the person, group or entity (in
the case of clause (ii) above) consummates or publicly announces the
termination or abandonment of the proposed transaction or tender offer (or
takeover scheme) which caused this Section 1.2(b) to become operative.

1.3 Authorized Shares.  Subject to the Stockholder Approval (as defined in
Section 4(l) of the Purchase Agreement), the Borrower covenants that during the
period the conversion right exists, the Borrower will reserve from its
authorized and unissued Common Stock a sufficient number of shares, free from
preemptive rights, to provide for the issuance of Common Stock upon the full
conversion of this Debenture and the other Debentures issued pursuant to the
Purchase Agreement.  The Borrower is required at all times to have authorized
and reserved two times the number of shares that is actually issuable upon full
conversion of the Debentures (based on the Conversion Price of the Debentures
or the Exercise Price of the Warrants in effect from time to time) (the
"Reserved Amount").  The Reserved Amount shall be increased from time to time
in accordance with the Borrower's obligations pursuant to Section 4(h) of the
Purchase Agreement.  The Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non assessable.  In addition,
if the Borrower shall issue any securities or make any change to its capital
structure which would change the number of shares of Common Stock into which
the Debentures shall be convertible at the then current Conversion Price, the
Borrower shall at the same time make proper provision so that thereafter there
shall be a sufficient number of shares of Common Stock authorized and reserved,
free from preemptive rights, for conversion of the outstanding Debentures.  The
Borrower (i) acknowledges that it has irrevocably instructed its transfer agent
to issue certificates for the Common Stock issuable upon conversion of this
Debenture, and (ii) agrees that its issuance of this Debenture shall constitute
full authority to its officers and agents who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates
for shares of Common Stock in accordance with the terms and conditions of this
Debenture.

If, at any time a Holder of this Debenture submits a Notice of Conversion, and
the Borrower does not have sufficient authorized but unissued shares of Common
Stock available to effect such conversion in accordance with the provisions of
this Article I (a "Conversion Default"), subject to Section 4.8, the Borrower
shall issue to the Holder all of the shares of Common Stock which are then
available to effect such conversion.  The portion of this Debenture which the
Holder included in its Conversion Notice and which exceeds the amount which is
then convertible into available shares of Common Stock (the "Excess Amount")
shall, notwithstanding anything to the contrary contained herein, not be
convertible into Common Stock in accordance with the terms hereof until (and at
the Holder's option at any time after) the date additional shares of Common
Stock are authorized by the Borrower to permit such conversion, at which time
the Conversion Price in respect thereof shall be the lesser of (i) the
Conversion Price on the Conversion Default Date (as defined below) and (ii) the
Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof.  In addition, the Borrower shall pay to the Holder payments
("Conversion Default Payments") for a Conversion Default in the amount of (x)
the sum of (1) the then outstanding principal amount of this Debenture plus (2)
accrued and unpaid interest on the unpaid principal amount of this Debenture
through the Authorization Date (as defined below) plus (3) Default Interest, if
any, on the amounts referred to in clauses (1) and/or (2), multiplied by (y)
..24, multiplied by (z) (N/365), where N = the number of days from the day the
holder submits a Notice of Conversion giving rise to a Conversion Default (the
"Conversion Default Date") to the date (the "Authorization Date") that the
Borrower authorizes a sufficient number of shares of Common Stock to effect
conversion of the full outstanding principal balance of this Debenture.  The
Borrower shall use its best efforts to authorize a sufficient number of shares
of Common Stock as soon as practicable following the earlier of (i) such time
that the Holder notifies the Borrower or that the Borrower otherwise becomes
aware that there are or likely will be insufficient authorized and unissued
shares to allow full conversion thereof and (ii) a Conversion Default.  The
Borrower shall send notice to the Holder of the authorization of additional
shares of Common Stock, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments.  The accrued Conversion Default Payments
for each calendar month shall be paid in cash or shall be convertible into
Common Stock (at such time as there are sufficient authorized shares of Common
Stock) at the applicable Conversion Price, at the Borrower's option, as
follows:

(a) In the event of a payment in cash, cash payment shall be made to Holder by
the fifth (5th) day of the month following the month in which it has accrued;
and

(b) In the event of a payment in Common Stock, the Holder may convert such
payment amount into Common Stock at the Conversion Price (as in effect at the
time of conversion) at any time after the fifth day of the month following the
month in which it has accrued in accordance with the terms of this Article I
(so long as there is then a sufficient number of authorized shares of Common
Stock).

The Borrower's election shall be made in writing to the Holder at any time
prior to 6:00 p.m., New York, New York time, on the third day of the month
following the month in which Conversion Default payments have accrued.  If no
election is made, the Holder receives cash.  Nothing herein shall limit the
Holder's right to pursue actual damages (to the extent in excess of the
Conversion Default Payments) for the Borrower's failure to maintain a
sufficient number of authorized shares of Common Stock, and each holder shall
have the right to pursue all remedies available at law or in equity (including
degree of specific performance and/or injunctive relief).

1.4 Method of Conversion.

(a) Mechanics of Conversion.  Subject to Section 1.1, this Debenture may be
converted by the Holder in whole or in part at any time from time to time after
the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by
facsimile or other reasonable means of communication dispatched on the
Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to
Section 1.4(b), surrendering this Debenture at the principal office of the
Borrower.

(b) Surrender of Debenture Upon Conversion.  Notwithstanding anything to the
contrary set forth herein, upon conversion of this Debenture in accordance with
the terms hereof, the Holder shall not be required to physically surrender this
Debenture to the Borrower unless the entire unpaid principal amount of this
Debenture is so converted.  The Holder and the Borrower shall maintain records
showing the principal amount so converted and the dates of such conversions or
shall use such other method, reasonably satisfactory to the Holder and the
Borrower, so as not to require physical surrender of this Debenture upon each
such conversion.  In the event of any dispute or discrepancy, such records of
the Borrower shall be controlling and determinative in the absence of manifest
error.  Notwithstanding the foregoing, if any portion of this Debenture is
converted as aforesaid, the Holder may not transfer this Debenture unless the
Holder first physically surrenders this Debenture to the Borrower, whereupon
the Borrower will forthwith issue and deliver upon the order of the Holder a
new Debenture of like tenor, registered as the Holder (upon payment by the
Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Debenture.  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 represented by this Debenture may be less than the amount stated on
the face hereof.

(c) Payment of Taxes.  The Borrower shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock or other securities or property on conversion of this
Debenture in a name other than that of the Holder (or in street name), and the
Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the
Holder or the custodian in whose street name such shares are to be held for the
Holder's account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion.  Upon receipt by the Borrower
from the Holder of a facsimile transmission (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and
deliver or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Debenture) (such
second business day being hereinafter referred to as the "Deadline") in
accordance with the terms hereof and the Purchase Agreement (including, without
limitation, in accordance with the requirements of Section 2(g) of the Purchase
Agreement that certificates for shares of Common Stock issued on or after the
effective date of the Registration Statement upon conversion of this Debenture
shall not bear any restrictive legend).

(e) Obligation of Borrower to Deliver Common Stock.  Upon receipt by the
Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder
of record of the Common Stock issuable upon such conversion, the outstanding
principal amount and the amount of accrued and unpaid interest on this
Debenture shall be reduced to reflect such conversion, and, unless the Borrower
defaults on its obligations under this Article I, all rights with respect to
the portion of this Debenture being so converted shall forthwith terminate
except the right to receive the Common Stock or other securities, cash or other
assets, as herein provided, on such conversion.  If the Holder shall have given
a Notice of Conversion as provided herein, the Borrower's obligation to issue
and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in
connection with such conversion.  The Conversion Date specified in the Notice
of Conversion shall be the Conversion Date so long as the Notice of Conversion
is received by the Borrower before 6:00 p.m., New York, New York time, on such
date.

(f) Delivery of Common Stock by Electronic Transfer.  In lieu of delivering
physical certificates representing the Common Stock issuable upon conversion,
provided the Borrower's transfer agent is participating in the Depository Trust
Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon
request of the Holder and its compliance with the provisions contained in
Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to
cause its transfer agent to electronically transmit the Common Stock issuable
upon conversion to the Holder by crediting the account of Holder's Prime Broker
with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

(g) Failure to Deliver Common Stock Prior to Deadline.  Without in any way
limiting the Holder's right to pursue other remedies, including actual damages
and/or equitable relief, the parties agree that if delivery of the Common Stock
issuable upon conversion of this Debenture is more than three (3) days after
the Deadline (other than a failure due to the circumstances described in
Section 1.3 above, which failure shall be governed by such Section) the
Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond
the Deadline that the Borrower fails to deliver such Common Stock.  Such cash
amount shall be paid to Holder by the fifth day of the month following the
month in which it has accrued or, at the option of the Holder (by written
notice to the Borrower by the first day of the month following the month in
which it has accrued), shall be added to the principal amount of this
Debenture, in which event interest shall accrue thereon in accordance with the
terms of this Debenture and such additional principal amount shall be
convertible into Common Stock in accordance with the terms of this Debenture.

1.5 Concerning the Shares.  The shares of Common Stock issuable upon conversion
of this Debenture may not be sold or transferred unless (i) such shares are
sold pursuant to an effective registration statement under the Act or (ii) the
Borrower or its transfer agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares
to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration or (iii) such shares are sold or transferred pursuant to
Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares
are transferred to an "affiliate" (as defined in Rule 144) of the Borrower who
agrees to sell or otherwise transfer the shares only in accordance with this
Section 1.5 and who is an Accredited Investor (as defined in the Purchase
Agreement).  Except as otherwise provided in the Purchase Agreement (and
subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Debenture have been
registered under the Act as contemplated by the Registration Rights Agreement
or otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
each certificate for shares of Common Stock issuable upon conversion of this
Debenture that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.  THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT  UNLESS SOLD PURSUANT TO RULE 144
OR REGULATION S UNDER SAID ACT."

The legend set forth above shall be removed and the Borrower shall issue to the
Holder a new certificate therefor free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Common Stock
may be made without registration under the Act and the shares are so sold or
transferred, (ii) such Holder provides the Borrower or its transfer agent with
reasonable assurances that the Common Stock issuable upon conversion of this
Debenture (to the extent such securities are deemed to have been acquired on
the same date) can be sold pursuant to Rule 144 or (iii) in the case of the
Common Stock issuable upon conversion of this Debenture, such security is
registered for sale by the Holder under an effective registration statement
filed under the Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can
then be immediately sold.  Nothing in this Debenture shall (i) limit the
Borrower's obligation under the Registration Rights Agreement or (ii) affect in
any way the Holder's obligations to comply with applicable prospectus delivery
requirements upon the resale of the securities referred to herein.

1.6 Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc.  At the option of the Holder, the
sale, conveyance or disposition of all or substantially all of the assets of
the Borrower, the effectuation by the Borrower of a transaction or series of
related transactions in which more than 50% of the voting power of the Borrower
is disposed of, or the consolidation, merger or other business combination of
the Borrower with or into any other Person (as defined below) or Persons when
the Borrower is not the survivor shall either:  (i) be deemed to be an Event of
Default (as defined in Article III) pursuant to which the Borrower shall be
required to pay to the Holder upon the consummation of and as a condition to
such transaction an amount equal to the Default Amount (as defined in Article
III) or (ii) be treated pursuant to Section 1.6(b) hereof.  "Person" shall mean
any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

(b) Adjustment Due to Merger, Consolidation, Etc.  If, at any time when this
Debenture is issued and outstanding and prior to conversion of all of the
Debentures, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities
of the Borrower or another entity, or in case of any sale or conveyance of all
or substantially all of the assets of the Borrower other than in connection
with a plan of complete liquidation of the Borrower, then the Holder of this
Debenture shall thereafter have the right to receive upon conversion of this
Debenture, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock immediately theretofore issuable upon
conversion, such stock, securities or assets which the Holder would have been
entitled to receive in such transaction had this Debenture been converted in
full immediately prior to such transaction (without regard to any limitations
on conversion set forth herein), and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder of this
Debenture to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Debenture) shall thereafter be applicable, as
nearly as may be practicable in relation to any securities or assets thereafter
deliverable upon the conversion hereof.  The Borrower shall not effect any
transaction described in this Section 1.6(b) unless (a) it first gives, to the
extent practicable, thirty (30) days prior written notice (but in any event at
least fifteen (15) days prior written notice) of the record date of the special
meeting of stockholders to approve, or if there is no such record date, the
consummation of, such merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event or sale of assets
(during which time the Holder shall be entitled to convert this Debenture) and
(b) the resulting successor or acquiring entity (if not the Borrower) assumes
by written instrument the obligations of this Section 1.6(b).  The above
provisions shall similarly apply to successive consolidations, mergers, sales,
transfers or share exchanges.

(c) Adjustment Due to Distribution.  If the Borrower shall declare or make any
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the Borrower's
shareholders in cash or shares (or rights to acquire shares) of capital stock
of a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this
Debenture shall be entitled, upon any conversion of this Debenture after the
date of record for determining shareholders entitled to such Distribution, to
receive the amount of such assets which would have been payable to the Holder
with respect to the shares of Common Stock issuable upon such conversion had
such Holder been the holder of such shares of Common Stock on the record date
for the determination of shareholders entitled to such Distribution.

(d) Adjustment Due to Dilutive Issuance.  If, at any time when any Debentures
are issued and outstanding, the Borrower issues or sells, or in accordance with
this Section 1.6(d) hereof is deemed to have issued or sold, any shares of
Common Stock for no consideration or for a consideration per share (before
deduction of reasonable expenses or commissions or underwriting discounts or
allowances in connection therewith) less than the Fixed Conversion Price in
effect on the date of such issuance (or deemed issuance) of such shares of
Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Fixed Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance.

The Borrower shall be deemed to have issued or sold shares of Common Stock if
the Borrower in any manner issues or grants any warrants, rights or options,
whether or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities convertible into or exchangeable for Common Stock
("Convertible Securities") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as
"Options") and the price per share for which Common Stock is issuable upon the
exercise of such Options is less than the Fixed Conversion Price then in
effect, then the Fixed Conversion Price shall be equal to such price per share.
For purposes of the preceding sentence, the "price per share for which Common
Stock is issuable upon the exercise of such Options" is determined by dividing
(i) the total amount, if any, received or receivable by the Borrower as
consideration for the issuance or granting of all such Options, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Borrower upon the exercise of all such Options, plus, in the case of
Convertible Securities issuable upon the exercise of such Options, the minimum
aggregate amount of additional consideration payable upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable).  No further adjustment to
the Conversion Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares of
Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same
are issuable upon the exercise of Options), and the price per share for which
Common Stock is issuable upon such conversion or exchange is less than the
Fixed Conversion Price then in effect, then the Fixed Conversion Price shall be
equal to such price per share.  For the purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any, received or
receivable by the Borrower as consideration for the issuance or sale of all
such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities.
No further adjustment to the Fixed Conversion Price will be made upon the
actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities.

(e) Purchase Rights.  If, at any time when any Debentures are issued and
outstanding, the Borrower issues any convertible securities or rights to
purchase stock, warrants, securities or other property (the "Purchase Rights")
pro rata to the record holders of any class of Common Stock, then the Holder of
this Debenture will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Debenture (without regard to any
limitations on conversion contained herein) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights
or, if no such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

(f) Notice of Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Conversion Price as a result of the events described in
this Section 1.6, the Borrower, at its expense, shall promptly compute such
adjustment or readjustment and prepare and furnish to the Holder of a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based.  The Borrower
shall, upon the written request at any time of the Holder, furnish to such
Holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other securities or property which
at the time would be received upon conversion of the Debenture.

1.7 Trading Market Limitations.  Unless permitted or not prohibited by the
applicable rules and regulations of the principal securities market on which
the Common Stock is then listed or traded, in no event shall the Borrower issue
upon conversion of or otherwise pursuant to this Debenture and the other
Debentures issued pursuant to the Purchase Agreement more than the maximum
number of shares of Common Stock that the Borrower can issue pursuant to any
rule of the principal United States securities market on which the Common Stock
is then traded (the "Maximum Share Amount"), which, as of the Issue Date shall
be 19.99% of the total shares outstanding on the Closing Date (as defined in
the Purchase Agreement), subject to equitable adjustment from time to time for
stock splits, stock dividends, combinations, capital reorganizations and
similar events relating to the Common Stock occurring after the date hereof.
Once the Maximum Share Amount has been issued (the date of which is hereinafter
referred to as the "Maximum Conversion Date"), if the Borrower fails to
eliminate any prohibitions under applicable law or the rules or regulations of
any stock exchange, interdealer quotation system or other self-regulatory
organization with jurisdiction over the Borrower or any of its securities on
the Borrower's ability to issue shares of Common Stock in excess of the Maximum
Share Amount (a "Trading Market Prepayment Event"), in lieu of any further
right to convert this Debenture, and in full satisfaction of the Borrower's
obligations under this Debenture, the Borrower shall pay to the Holder, within
fifteen (15) business days of the Maximum Conversion Date (the "Trading Market
Prepayment Date"), an amount equal to 130% times the sum of (a) the then
outstanding principal amount of this Debenture immediately following the
Maximum Conversion Date, plus (b) accrued and unpaid interest on the unpaid
principal amount of this Debenture to the Trading Market Prepayment Date, plus
(c) Default Interest, if any, on the amounts referred to in clause (a) and/or
(b) above, plus (d) any optional amounts that may be added thereto at the
Maximum Conversion Date by the Holder in accordance with the terms hereof (the
then outstanding principal amount of this Debenture immediately following the
Maximum Conversion Date, plus the amounts referred to in clauses (b), (c) and
(d) above shall collectively be referred to as the "Remaining Convertible
Amount").  With respect to each Holder of Debentures, the Maximum Share Amount
shall refer to such Holder's pro rata share thereof determined in accordance
with Section 4.8 below.  In the event that the sum of (x) the aggregate number
of shares of Common Stock issued upon conversion of this Debenture and the
other Debentures issued pursuant to the Purchase Agreement plus (y) the
aggregate number of shares of Common Stock that remain issuable upon conversion
of this Debenture and the other Debentures issued pursuant to the Purchase
Agreement, represents at least one hundred percent (100%) of the Maximum Share
Amount (the "Triggering Event"), the Borrower will use its best efforts to seek
and obtain Stockholder Approval (or obtain such other relief as will allow
conversions hereunder in excess of the Maximum Share Amount) as soon as
practicable following the Triggering Event and before the Maximum Conversion
Date.  As used herein, "Stockholder Approval" means approval by the
stockholders of the Borrower to authorize the issuance of the full number of
shares of Common Stock which would be issuable upon full conversion of the then
outstanding Debentures but for the Maximum Share Amount.

1.8 Status as Stockholder.  Upon submission of a Notice of Conversion by a
Holder, (i) the shares covered thereby (other than the shares, if any, which
cannot be issued because their issuance would exceed such Holder's allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder's rights as a Holder
of such converted portion of this Debenture shall cease and terminate,
excepting only the right to receive certificates for such shares of Common
Stock and to any remedies provided herein or otherwise available at law or in
equity to such Holder because of a failure by the Borrower to comply with the
terms  of this Debenture.  Notwithstanding the foregoing, if a Holder has not
received certificates for all shares of Common Stock prior to the tenth (10th)
business day after the expiration of the Deadline with respect to a conversion
of any portion of this Debenture for any reason, then (unless the Holder
otherwise elects to retain its status as a holder of Common Stock by so
notifying the Borrower) the Holder shall regain the rights of a Holder of this
Debenture with respect to such unconverted portions of this Debenture and the
Borrower shall, as soon as practicable, return such unconverted Debenture to
the Holder or, if the Debenture has not been surrendered, adjust its records to
reflect that such portion of this Debenture has not been converted.  In all
cases, the Holder shall retain all of its rights and remedies (including,
without limitation, (i) the right to receive Conversion Default Payments
pursuant to Section 1.3 to the extent required thereby for such Conversion
Default and any subsequent Conversion Default and (ii) the right to have the
Conversion Price with respect to subsequent conversions determined in
accordance with Section 1.3) for the Borrower's failure to convert this
Debenture.

ARTICLE II.  CERTAIN COVENANTS

2.1 Distributions on Capital Stock.  So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not without the Holder's
written consent (a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

2.2 Restriction on Stock Repurchases.  So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not without the Holder's
written consent redeem, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any one transaction
or series of related transactions any shares of capital stock of the Borrower
or any warrants, rights or options to purchase or acquire any such shares.

2.3 Borrowings.  So long as the Borrower shall have any obligation under this
Debenture, the Borrower shall not, without the Holder's written consent,
create, incur, assume or suffer to exist any liability for borrowed money,
except (a) borrowings in existence or committed on the date hereof and of which
the Borrower has informed Holder in writing prior to the date hereof, (b)
indebtedness to trade creditors or lenders incurred in the ordinary course of
business or (c) borrowings, the proceeds of which shall be used to repay this
Debenture.

2.4 Sale of Assets.  So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the Holder's written consent,
sell, lease or otherwise dispose of any significant portion of its assets
outside the ordinary course of business.  Any consent to the disposition of any
assets may be conditioned on a specified use of the proceeds of disposition.

2.5 Advances and Loans.  So long as the Borrower shall have any obligation
under this Debenture, the Borrower shall not, without the Holder's written
consent, lend money, give credit or make advances to any person, firm, joint
venture or corporation, including, without limitation, officers, directors,
employees, subsidiaries and affiliates of the Borrower, except loans, credits
or advances (a) in existence or committed on the date hereof and which the
Borrower has informed Holder in writing prior to the date hereof, (b) made in
the ordinary course of business or (c) not in excess of $50,000.

2.6 Contingent Liabilities.  So long as the Borrower shall have any obligation
under this Debenture, the Borrower shall not, without the Holder's written
consent, assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable upon the obligation of any person, firm, partnership,
joint venture or corporation, except by the endorsement of negotiable
instruments for deposit or collection and except assumptions, guarantees,
endorsements and contingencies (a) in existence or committed on the date hereof
and which the Borrower has informed Holder in writing prior to the date hereof,
and (b) similar transactions in the ordinary course of business.

ARTICLE III.  EVENTS OF DEFAULT

If any of the following events of default (each, an "Event of Default") shall
occur:

3.1 Failure to Pay Principal or Interest.  The Borrower fails to pay the
principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon a Trading Market Prepayment Event pursuant to Section 1.7, upon
acceleration or otherwise.

3.2 Conversion and the Shares.  The Borrower fails to issue shares of Common
Stock to the Holder (or announces or threatens that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of
the Holder in accordance with the terms of this Debenture (for a period of at
least sixty (60) days, if such failure is solely as a result of the
circumstances governed by Section 1.3 and the Borrower is using its best
efforts to authorize a sufficient number of shares of Common Stock as soon as
practicable), fails to transfer or cause its transfer agent to transfer
(electronically or in certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this
Debenture as and when required by this Debenture or the Registration Rights
Agreement, or fails to remove any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Debenture as and when required by this Debenture or the Registration
Rights Agreement (or makes any announcement, statement or threat that it does
not intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any announcement, statement or threat not to
honor its obligations shall not be rescinded in writing) for ten (10) days
after the Borrower shall have been notified thereof in writing by the Holder.

3.3 Failure to Maintain Registration.  The Registration Statement lapses in
effect (or sales cannot otherwise be made thereunder effective, whether by
reason of the Borrower's failure to amend or supplement the prospectus included
therein in accordance with the Registration Rights Agreement or otherwise) for
more than twenty (20) consecutive days or forty (40) days in any twelve month
period after the Registration Statement becomes effective;

3.4 Breach of Covenants.  The Borrower breaches any material covenant or other
material term or condition contained in Sections 1.3, 1.6 or 1.7 of this
Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase
Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

3.5 Breach of Representations and Warranties.  Any representation or warranty
of the Borrower made herein or in any agreement, statement or certificate given
in writing pursuant hereto or in connection herewith (including, without
limitation, the Purchase Agreement and the Registration Rights Agreement),
shall be false or misleading in any material respect when made and the breach
of which has (or with the passage of time will have) a material adverse effect
on the rights of the Holder with respect to this Debenture, the Purchase
Agreement or the Registration Rights Agreement;

3.6 Receiver or Trustee.  The Borrower or any subsidiary of the Borrower shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed;

3.7 Judgments.  Any money judgment, writ or similar process shall be entered or
filed against the Borrower or any subsidiary of the Borrower or any of its
property or other assets for more than $50,000, and shall remain unvacated,
unbonded or unstayed for a period of twenty (20) days unless otherwise
consented to by the Holder, which consent will not be unreasonably withheld;

3.8 Bankruptcy.  Bankruptcy, insolvency, reorganization 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 Borrower or any
subsidiary of the Borrower;

3.9 Delisting of Common Stock.  The Borrower shall fail to maintain the listing
of the Common Stock on at least one of the OTCBB, the Nasdaq National Market,
the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock
Exchange; or

3.10  Default Under Other Debentures.  An Event of Default has occurred and is
continuing under any of the other Debentures issued pursuant to the Purchase
Agreement,

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Debentures issued pursuant to the Purchase Agreement exercisable
through the delivery of written notice to the Borrower by such Holders (the
"Default Notice"), and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 130% times the sum of (w) the
then outstanding principal amount of this Debenture plus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of
payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on
the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to
the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section
2(c) of the Registration Rights Agreement (the then outstanding principal
amount of this Debenture to the date of payment plus the amounts referred to in
clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or
(ii) the "parity value" of the Default Sum to be prepaid, where parity value
means (a) the highest number of shares of Common Stock issuable upon conversion
of or otherwise pursuant to such Default Sum in accordance with Article I,
treating the Trading Day immediately preceding the Mandatory Prepayment Date as
the "Conversion Date" for purposes of determining the lowest applicable
Conversion Price, unless the Default Event arises as a result of a breach in
respect of a specific Conversion Date in which case such Conversion Date shall
be the Conversion Date), multiplied by (b) the highest Closing Price for the
Common Stock during the period beginning on the date of first occurrence of the
Event of Default and ending one day prior to the Mandatory Prepayment Date (the
"Default Amount") and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in
equity.  If the Borrower fails to pay the Default Amount within five (5)
business days of written notice that such amount is due and payable, then the
Holder shall have the right at any time, so long as the Borrower remains in
default (and so long and to the extent that there are sufficient authorized
shares), to require the Borrower, upon written notice, to immediately issue, in
lieu of the Default Amount, the number of shares of Common Stock of the
Borrower equal to the Default Amount divided by the Conversion Price then in
effect.

ARTICLE IV.  MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver.  No failure or delay on the part of the
Holder in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privileges.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

4.2 Notices.  Any notice herein required or permitted to be given shall be in
writing and may be personally served or delivered by courier or sent by United
States mail and shall be deemed to have been given upon receipt if personally
served (which shall include telephone line facsimile transmission) or sent by
courier or three (3) days after being deposited in the United States mail,
certified, with postage pre paid and properly addressed, if sent by mail.  For
the purposes hereof, the address of the Holder shall be as shown on the records
of the Borrower; and the address of the Borrower shall be 24370 Avenue
Tibbitts, Suite 130, Valencia, California  91355, facsimile number:  661-295-
5981).  Both the Holder and the Borrower may change the address for service by
service of written notice to the other as herein provided.

4.3 Amendments.  This Debenture and any provision hereof may only be amended by
an instrument in writing signed by the Borrower and the Holder.  The term
"Debenture" and all reference thereto, as used throughout this instrument,
shall mean this instrument (and the other Debentures issued pursuant to the
Purchase Agreement) as originally executed, or if later amended or
supplemented, then as so amended or supplemented.

4.4 Assignability.  This Debenture shall be binding upon the Borrower and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns.  Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Debenture to the contrary, this Debenture may
be pledged as collateral in connection with a bona fide margin account or other
lending arrangement.

4.5 Cost of Collection.  If default is made in the payment of this Debenture,
the Borrower shall pay the Holder hereof costs of collection, including
reasonable attorneys' fees.

4.6 Governing Law.  THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS.  THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT A FINAL NON-
APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

4.7 Certain Amounts.  Whenever pursuant to this Debenture the Borrower is
required to pay an amount in excess of the outstanding principal amount (or the
portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on
this Debenture may be difficult to determine and the amount to be so paid by
the Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this
Debenture and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Debenture at a price in excess of the price paid for
such shares pursuant to this Debenture.  The Borrower and the Holder hereby
agree that such amount of stipulated damages is not plainly disproportionate to
the possible loss to the Holder from the receipt of a cash payment without the
opportunity to convert this Debenture into shares of Common Stock.

4.8 Allocations of Maximum Share Amount and Reserved Amount.  The Maximum Share
Amount and Reserved Amount shall be allocated pro rata among the Holders of
Debentures based on the principal amount of such Debentures issued to each
Holder.  Each increase to the Maximum Share Amount and Reserved Amount shall be
allocated pro rata among the Holders of Debentures based on the principal
amount of such Debentures held by each Holder at the time of the increase in
the Maximum Share Amount or Reserved Amount.  In the event a Holder shall sell
or otherwise transfer any of such Holder's Debentures, each transferee shall be
allocated a pro rata portion of such transferor's Maximum Share Amount and
Reserved Amount.  Any portion of the Maximum Share Amount or Reserved Amount
which remains allocated to any person or entity which does not hold any
Debentures shall be allocated to the remaining Holders of Debentures, pro rata
based on the principal amount of such Debentures then held by such Holders.

4.9 Damages Shares.  The shares of Common Stock that may be issuable to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section 2(c)
of the Registration Rights Agreement ("Damages Shares") shall be treated as
Common Stock issuable upon conversion of this Debenture for all purposes hereof
and shall be subject to all of the limitations and afforded all of the rights
of the other shares of Common Stock issuable hereunder, including without
limitation, the right to be included in the Registration Statement filed
pursuant to the Registration Rights Agreement.  For purposes of calculating
interest payable on the outstanding principal amount hereof, except as
otherwise provided herein, amounts convertible into Damages Shares ("Damages
Amounts") shall not bear interest but must be converted prior to the conversion
of any outstanding principal amount hereof, until the outstanding Damages
Amounts is zero.

4.10  Denominations.  At the request of the Holder, upon surrender of this
Debenture, the Borrower shall promptly issue new Debentures in the aggregate
outstanding principal amount hereof, in the form hereof, in such denominations
of at least $50,000 as the Holder shall request.

4.11  Purchase Agreement.  By its acceptance of this Debenture, each Holder
agrees to be bound by the applicable terms of the Purchase Agreement.

4.12  Notice of Corporate Events.  Except as otherwise provided below, the
Holder of this Debenture shall have no rights as a Holder of Common Stock
unless and only to the extent that it converts this Debenture into Common
Stock.  The Borrower shall provide the Holder with prior notification of any
meeting of the Borrower's shareholders (and copies of proxy materials and other
information sent to shareholders).  In the event of any taking by the Borrower
of a record of its shareholders for the purpose of determining shareholders who
are entitled to receive payment of any dividend or other distribution, any
right to subscribe for, purchase or otherwise acquire (including by way of
merger, consolidation, reclassification or recapitalization) any share of any
class or any other securities or property, or to receive any other right, or
for the purpose of determining shareholders who are entitled to vote in
connection with any proposed sale, lease or conveyance of all or substantially
all of the assets of the Borrower or any proposed liquidation, dissolution or
winding up of the Borrower, the Borrower shall mail a notice to the Holder, at
least twenty (20) days prior to the record date specified therein (or thirty
(30) days prior to the consummation of the transaction or event, whichever is
earlier), of the date on which any such record is to be taken for the purpose
of such dividend, distribution, right or other event, and a brief statement
regarding the amount and character of such dividend, distribution, right or
other event to the extent known at such time.  The Borrower shall make a public
announcement of any event requiring notification to the Holder hereunder
substantially simultaneously with the notification to the Holder in accordance
with the terms of this Section 4.12.

4.13  Remedies.  The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby.  Accordingly,
the Borrower acknowledges that the remedy at law for a breach of its
obligations under this Debenture will be inadequate and agrees, in the event of
a breach or threatened breach by the Borrower of the provisions of this
Debenture, that the Holder shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining, preventing or
curing any breach of this Debenture and to enforce specifically the terms and
provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required.

ARTICLE V.  CALL OPTION

5.1 Call Option.  Notwithstanding anything to the contrary contained in this
Article V, for not more than thirty (30) days from the date hereof, so long as
(i) no Event of Default or Trading Market Prepayment Event shall have occurred
and be continuing, (ii) the Borrower has a sufficient number of authorized
shares of Common Stock reserved for issuance upon full conversion of the
Debentures, and (iii) the Common Stock is trading at or below $.01 per share,
then at any time after the Issue Date, the Borrower shall have the right,
exercisable on not less than ten (10) Trading Days prior written notice to the
Holders of the Debentures (which notice may not be sent to the Holders of the
Debentures until the Borrower is permitted to prepay the Debentures pursuant to
this Section 5.1), to prepay all of the outstanding Debentures in accordance
with this Section 5.1.  Any notice of prepayment hereunder (an "Optional
Prepayment") shall be delivered to the Holders of the Debentures at their
registered addresses appearing on the books and records of the Borrower and
shall state (1) that the Borrower is exercising its right to prepay all of the
Debentures issued on the Issue Date and (2) the date of prepayment (the
"Optional Prepayment Notice").  On the date fixed for prepayment (the "Optional
Prepayment Date"), the Borrower shall make payment of the Optional Prepayment
Amount (as defined below) to or upon the order of the Holders as specified by
the Holders in writing to the Borrower at least one (1) business day prior to
the Optional Prepayment Date.  If the Borrower exercises its right to prepay
the Debentures, the Borrower shall make payment to the holders of an amount in
cash (the "Optional Prepayment Amount") equal to either (i) 130% (for payments
occurring within thirty (30) days of the Issue Date), (ii) 140% (for
prepayments occurring between thirty-one (31) and ninety (90) days of the Issue
Date), or (iii) 150% (for prepayments occurring after the ninetieth (90th) day
following the Issue Date), multiplied by the sum of (w) the then outstanding
principal amount of this Debenture plus (x) accrued and unpaid interest on the
unpaid principal amount of this Debenture to the Optional Prepayment Date plus
(y) Default Interest, if any, on the amounts referred to in clauses (w) and (x)
plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof or pursuant to Section 2(c) of the Registration Rights Agreement (the
then outstanding principal amount of this Debenture to the date of payment plus
the amounts referred to in clauses (x), (y) and (z) shall collectively be known
as the "Optional Prepayment Sum"). Notwithstanding notice of an Optional
Prepayment, the Holders shall at all times prior to the Optional Prepayment
Date maintain the right to convert all or any portion of the Debentures in
accordance with Article I and any portion of Debentures so converted after
receipt of an Optional Prepayment Notice and prior to the Optional Prepayment
Date set forth in such notice and payment of the aggregate Optional Prepayment
Amount shall be deducted from the principal amount of Debentures which are
otherwise subject to prepayment pursuant to such notice.  If the Borrower
delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment
Amount due to the Holders of the Debentures within two (2) business days
following the Optional Prepayment Date, the Borrower shall forever forfeit its
right to redeem the Debentures pursuant to this Section 5.1.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its name
by its duly authorized officer this 9th day of September, 2004.

CONECTISYS CORPORATION

By:______________________________
Robert A. Spigno
Chief Executive Officer

EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Debentures)

The undersigned hereby irrevocably elects to convert $________principal amount
of the Debenture (defined below) into shares of common stock, no par value per
share ("Common Stock"), of Conectisys Corporation, a Colorado corporation (the
"Borrower") according to the conditions of the convertible debentures of the
Borrower dated as of September 9, 2004 (the "Debentures"), as of the date
written below.  If securities 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.  No fee will be
charged to the Holder for any conversion, except for transfer taxes, if any.  A
copy of each Debenture is attached hereto (or evidence of loss, theft or
destruction thereof).

The Borrower shall electronically transmit the Common Stock issuable pursuant
to this Notice of Conversion to the account of the undersigned or its nominee
with DTC through its Deposit Withdrawal Agent Commission system ( "DWAC
Transfer").

Name of DTC Prime Broker:
Account Number:

In lieu of receiving shares of Common Stock issuable pursuant to this Notice of
Conversion by way of a DWAC Transfer, the undersigned hereby requests that the
Borrower issue a certificate or certificates for the number of shares of Common
Stock set forth below (which numbers are based on the Holder's calculation
attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:

Name:
Address:

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon conversion of
the Debentures shall be made pursuant to registration of the securities under
the Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption
from registration under the Act.

Date of Conversion:___________________________
Applicable Conversion Price:____________________
Number of Shares of Common Stock to be Issued Pursuant to
Conversion of the Debentures:______________
Signature:___________________________________
Name:______________________________________
Address:____________________________________

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the
Debentures for the number of business days such issuance and delivery is late.

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