Document:

Exhibit 4.1

                                                                       EXHIBIT A

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THIS  SECURITY AND THE  SECURITIES  ISSUABLE  UPON  CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: February __, 2006
Original Conversion Price (subject to adjustment herein): $0.17

                                                                $---------------

                        7% SECURED CONVERTIBLE DEBENTURE
                              DUE FEBRUARY __, 2009

            THIS 7%  SECURED  CONVERTIBLE  DEBENTURE  is one of a series of duly
authorized and issued 7%  Convertible  Debentures of Secured  Services,  Inc., a
Delaware  corporation,  having a principal  place of business at 11490  Commerce
Park Drive, Suite 240, Reston, Virginia 20191 (the "COMPANY"), designated as its
7% Secured Convertible Debenture, due February___, 2009 (the "DEBENTURE(S)").

            FOR   VALUE   RECEIVED,    the   Company    promises   to   pay   to
________________________ or its registered assigns (the "HOLDER"), or shall have
paid pursuant to the terms hereunder,  the principal sum of  $_______________ by
February  ___,  2009,  or such  earlier date as the  Debentures  are required or
permitted to be repaid as provided  hereunder (the "MATURITY DATE"),  and to pay
interest  to the  Holder  on the  aggregate  unconverted  and  then  outstanding
principal  amount of this Debenture in accordance  with the  provisions  hereof.
This Debenture is subject to the following additional provisions:

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

                                       1
<PAGE>

                        "ALTERNATE  CONSIDERATION"  shall have the  meaning  set
            forth in Section 5(d).

                        "BASE CONVERSION PRICE" shall have the meaning set forth
            in Section 5(b).

                        "BUSINESS DAY" means any day except Saturday, Sunday and
            any day which shall be a federal  legal holiday in the United States
            or a day on which banking  institutions in the State of New York are
            authorized or required by law or other government action to close.

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

                        "CHANGE OF  CONTROL  TRANSACTION"  means the  occurrence
            after the date  hereof of any of (i) an  acquisition  after the date
            hereof by an  individual or legal entity or "group" (as described in
            Rule  13d-5(b)(1)  promulgated  under the Exchange Act) of effective
            control  (whether  through legal or beneficial  ownership of capital
            stock of the Company,  by contract or otherwise) of in excess of 40%
            of the voting securities of the Company,  or (ii) the Company merges
            into or  consolidates  with any other  Person,  or any Person merges
            into or  consolidates  with the Company and,  after giving effect to
            such transaction,  the stockholders of the Company immediately prior
            to such  transaction own less than 60% of the aggregate voting power
            of the Company or the successor entity of such transaction, or (iii)
            the  Company  sells or  transfers  its  assets,  as an  entirety  or
            substantially as an entirety, to another Person and the stockholders
            of the Company  immediately  prior to such transaction own less than
            60%  of  the  aggregate   voting  power  of  the  acquiring   entity
            immediately after the transaction, (iv) a replacement at one time or
            within a three year  period of more than  one-half of the members of
            the Company's board of directors which is not approved by a majority
            of those  individuals  who are members of the board of  directors on
            the date hereof (or by those  individuals who are serving as members
            of the board of directors on any date whose  nomination to the board
            of directors  was approved by a majority of the members of the board
            of  directors  who  are  members  on the  date  hereof),  or (v) the
            execution  by the Company of an  agreement to which the Company is a
            party or by which it is bound,  providing  for any of the events set
            forth above in (i) through (iv).

                        "COMMON STOCK" means the common stock,  par value $.0001
            per share, of the Company and stock of any other class of securities
            into which such  securities may hereafter have been  reclassified or
            changed into.

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

                        "CONVERSION  PRICE"  shall have the meaning set forth in
            Section 4(b).

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

                                       2
<PAGE>

                        "DEBENTURE REGISTER" shall have the meaning set forth in
            Section 2(c).

                        "DILUTIVE  ISSUANCE" shall have the meaning set forth in
            Section 5(b).

                        "DILUTIVE  ISSUANCE  NOTICE"  shall have the meaning set
            forth in Section 5(b).

                        "EFFECTIVENESS  PERIOD"  shall have the meaning given to
            such term in the Registration Rights Agreement.

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

                        "EVENT OF  DEFAULT"  shall have the meaning set forth in
            Section 8.

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

                        "FUNDAMENTAL  TRANSACTION"  shall have the  meaning  set
            forth in Section 5(e).

                        "INTEREST  CONVERSION  RATE"  means 90% of the lesser of
            (a) the average of the 20 VWAPs  immediately prior to the applicable
            Interest Payment Date or (b) the average of the 20 VWAPs immediately
            prior to the date the applicable  interest payment shares are issued
            and delivered if after the Interest Payment Date.

                        "INTEREST PAYMENT DATE" shall have the meaning set forth
            in Section 2(a).

                        "LATE  FEES" shall have the meaning set forth in Section
            2(d).

                                       3
<PAGE>

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

                        "NEW YORK  COURTS"  shall have the  meaning set forth in
            Section 9(d).

                        "NOTICE OF CONVERSION"  shall have the meaning set forth
            in Section 4(a).

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

                        "PERMITTED INDEBTEDNESS" shall mean (a) the Indebtedness
            (as  such  term  is  defined  in  Section  3.1(aa)  of the  Purchase
            Agreement)  existing  on the  Original  Issue  Date and set forth on
            SCHEDULE  3.1(aa)  attached  to  the  Purchase   Agreement  and  (b)
            Indebtedness incurred by the Company that does not mature or require
            payments  of  principal  prior to the four year  anniversary  of the
            Original  Issue Date and is made  expressly  subordinate in right of
            payment  to  the  Indebtedness  evidenced  by  this  Debenture,   as
            reflected  in a  written  agreement  acceptable  to the  Holder  and
            approved by the Holder in writing.

                        "PERMITTED   LIEN"   shall  mean  the   individual   and
            collective  reference  to  the  following:   (a)  Liens  for  taxes,
            assessments and other governmental  charges or levies not yet due or
            Liens for  taxes,  assessments  and other  governmental  charges  or
            levies being contested in good faith and by appropriate  proceedings
            for which  adequate  reserves  (in the good  faith  judgment  of the
            management of the Company) have been  established in accordance with
            GAAP  and (b)  Liens  imposed  by law  which  were  incurred  in the
            ordinary course of business,  such as carriers',  warehousemen's and
            mechanics'  Liens,  statutory  landlords'  Liens,  and other similar
            Liens arising in the ordinary  course of business,  and (x) which do
            not  individually  or in the aggregate  materially  detract from the
            value of such  property  or  assets  or  materially  impair  the use
            thereof in the  operation  of the  business  of the  Company and its
            consolidated  Subsidiaries  or (y) which are being contested in good
            faith by appropriate proceedings,  which proceedings have the effect
            of  preventing  the  forfeiture  or sale of the  property  or  asset
            subject to such Lien.

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

                                       4
<PAGE>

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

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

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

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

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

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

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

                        "VWAP" means,  for any date, the price determined by the
            first of the following clauses that applies: (a) if the Common Stock
            is then  listed  or quoted on a  Trading  Market,  the daily  volume
            weighted  average  price of the  Common  Stock for such date (or the
            nearest  preceding  date) on the Trading  Market on which the Common
            Stock is then listed or quoted as reported  by  Bloomberg  Financial
            L.P.  (based on a Trading  Day from 9:30 a.m.  Eastern  Time to 4:02
            p.m.  Eastern Time);  (b) if the OTC Bulletin Board is not a Trading
            Market,  the volume  weighted  average price of the Common Stock for
            such date (or the nearest preceding date) on the OTC Bulletin Board;
            (c) if the  Common  Stock is not then  listed  or  quoted on the OTC
            Bulletin  Board and if prices for the Common Stock are then reported
            in the "Pink  Sheets"  published by Pink  Sheets,  LLC (or a similar
            organization  or agency  succeeding  to its  functions  of reporting
            prices),  the most recent bid price per share of the Common Stock so
            reported;  or (d) in all other  cases,  the fair  market  value of a
            share of Common  Stock as  determined  by an  independent  appraiser
            selected in good faith by the Holder and  reasonably  acceptable  to
            the Company.

                                       5
<PAGE>

            SECTION 2.   INTEREST.

                        a)          PAYMENT  OF  INTEREST  IN CASH OR KIND.  The
            Company   shall  pay  interest  to  the  Holder  on  the   aggregate
            unconverted and then outstanding  principal amount of this Debenture
            at the rate of 7% per annum, payable quarterly on March 31, June 30,
            September 30 and December 31, beginning on the first such date after
            the  Original  Issue  Date,  on  each  Conversion  Date  (as to that
            principal  amount then being  converted),  and on the Maturity  Date
            (except  that,  if any such date is not a  Business  Day,  then such
            payment shall be due on the next succeeding Business Day) (each such
            date,  an  "INTEREST  PAYMENT  DATE"),  in cash or duly  authorized,
            validly issued, fully paid and non-assessable shares of Common Stock
            at the  Interest  Conversion  Rate (the amount to be paid in shares,
            the "INTEREST SHARE AMOUNT"),  or a combination  thereof;  PROVIDED,
            HOWEVER,  that (i) payment in shares of Common  Stock may only occur
            if during the 20 Trading Days  immediately  prior to the  applicable
            Interest Payment Date (the "INTEREST NOTICE PERIOD") and through and
            including  the date such  shares of Common  Stock are  issued to the
            Holder all of the Equity  Conditions have been met (unless waived by
            the Holder in writing), (ii) the Company shall have given the Holder
            notice in accordance  with the notice  requirements  set forth below
            and (iii) as to such Interest  Payment Date,  prior to such Interest
            Notice  Period  (but  not  more  than 5  Trading  Days  prior to the
            commencement of such Interest Notice Period), the Company shall have
            delivered to the Holder's  account with The Depository Trust Company
            a number  of  shares  of Common  Stock to be  applied  against  such
            Interest  Share Amount  equal to the quotient of (x) the  applicable
            Interest Share Amount divided by (y) the then Conversion  Price (the
            "INTEREST CONVERSION SHARES").

                        b)          COMPANY'S  ELECTION TO PAY INTEREST IN KIND.
            Subject to the terms and conditions  herein, the decision whether to
            pay interest hereunder in cash or shares of Common Stock shall be at
            the  discretion  of the Company.  Prior to the  commencement  of any
            Interest  Notice  Period,  the Company shall deliver to the Holder a
            written  notice of its  election to pay  interest  hereunder  on the
            applicable  Interest  Payment Date either in cash,  shares of Common
            Stock or a combination  thereof and the Interest  Share Amount as to
            the applicable  Interest Payment Date, provided that the Company may
            indicate in such notice that the  election  contained in such notice
            shall apply to future  Interest  Payment  Dates  until  revised by a
            subsequent notice.  During any Interest Notice Period, the Company's
            election   (whether   specific  to  an  Interest   Payment  Date  or
            continuous)  shall be irrevocable as to such Interest  Payment Date.
            Subject to the aforementioned conditions,  failure to timely provide
            such  written  notice  shall be deemed an election by the Company to
            pay the interest on such Interest  Payment Date in cash. At any time
            the Company  delivers a notice to the Holder of its  election to pay
            the  interest in shares of Common  Stock,  the Company  shall timely
            file a prospectus  supplement  pursuant to Rule 424 disclosing  such
            election.  The aggregate  number of shares of Common Stock otherwise
            issuable to the Holder on an Interest  Payment Date shall be reduced
            by the number of Interest Conversion Shares previously issued to the
            Holder in connection with such Interest Payment Date.

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

                                       6
<PAGE>

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

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

                        e)          PREPAYMENT. Except as otherwise set forth in
            this  Debenture,  the  Company  may not  prepay  any  portion of the
            principal amount of this Debenture without the prior written consent
            of the Holder.

            SECTION 3.  REGISTRATION OF TRANSFERS AND EXCHANGES.

                        a)          DIFFERENT  DENOMINATIONS.  This Debenture is
            exchangeable  for an equal aggregate  principal amount of Debentures
            of different  authorized  denominations,  as requested by the Holder
            surrendering  the  same.  No  service  charge  will be made for such
            registration of transfer or exchange.

                                       7
<PAGE>

                        b)          INVESTMENT  REPRESENTATIONS.  This Debenture
            has been issued subject to certain investment representations of the
            original  Holder  set  forth in the  Purchase  Agreement  and may be
            transferred  or  exchanged  only in  compliance  with  the  Purchase
            Agreement  and  applicable  federal  and state  securities  laws and
            regulations.

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

            SECTION 4. CONVERSION.

                        a)          VOLUNTARY CONVERSION.  At any time after the
            Original Issue Date until this  Debenture is no longer  outstanding,
            this Debenture  shall be convertible  into shares of Common Stock at
            the option of the  Holder,  in whole or in part at any time and from
            time to time (subject to the  limitations on conversion set forth in
            Section  4(c)  hereof).  The  Holder  shall  effect  conversions  by
            delivering to the Company the form of Notice of Conversion  attached
            hereto as ANNEX A (a "NOTICE OF CONVERSION"), specifying therein the
            principal  amount of this  Debenture to be converted and the date on
            which such conversion is to be effected (a "CONVERSION DATE"). If no
            Conversion  Date  is  specified  in  a  Notice  of  Conversion,  the
            Conversion  Date shall be the date that such Notice of Conversion is
            provided  hereunder.  To effect  conversions  hereunder,  the Holder
            shall not be required to physically  surrender this Debenture to the
            Company  unless the entire  principal  amount of this Debenture plus
            all  accrued  and unpaid  interest  thereon  has been so  converted.
            Conversions   hereunder  shall  have  the  effect  of  lowering  the
            outstanding principal amount of this Debenture in an amount equal to
            the applicable conversion. The Holder and the Company shall maintain
            records showing the principal  amount converted and the date of such
            conversions.  The Company  shall deliver any objection to any Notice
            of  Conversion  within 1 Business Day of receipt of such notice.  In
            the event of any dispute or  discrepancy,  the records of the Holder
            shall be controlling  and  determinative  in the absence of manifest
            error. The Holder and any assignee, by acceptance of this Debenture,
            acknowledge  and agree  that,  by reason of the  provisions  of this
            paragraph,  following conversion of a portion of this Debenture, the
            unpaid and  unconverted  principal  amount of this  Debenture may be
            less than the amount stated on the face hereof.

                        b)          CONVERSION  PRICE.  The conversion  price in
            effect on any  Conversion  Date shall be equal to $0.17  (subject to
            adjustment herein)(the "CONVERSION PRICE").

                        c)          CONVERSION LIMITATIONS.

                                    i.          The Company shall not effect any
                        conversion  of this  Debenture,  and a Holder  shall not
                        have the right to convert any portion of this  Debenture
                        to  the  extent  that  after   giving   effect  to  such
                        conversion, such Holder (together with

                                       8
<PAGE>

                        such Holder's affiliates, and any other person or entity
                        acting as a group  together  with such  Holder or any of
                        such   Holder's   affiliates),   as  set  forth  on  the
                        applicable Notice of Conversion,  would beneficially own
                        in excess of the  Beneficial  Ownership  Limitation  (as
                        defined below). For purposes of the foregoing  sentence,
                        the number of shares of Common Stock  beneficially owned
                        by such  Holder and its  affiliates  shall  include  the
                        number  of  shares  of  Common   Stock   issuable   upon
                        conversion of this  Debenture  with respect to which the
                        determination  of such sentence is being made, but shall
                        exclude the number of shares of Common Stock which would
                        be  issuable  upon  (A)  conversion  of  the  remaining,
                        nonconverted   principal   amount   of  this   Debenture
                        beneficially   owned  by  such  Holder  or  any  of  its
                        affiliates   and  (B)  exercise  or  conversion  of  the
                        unexercised  or   nonconverted   portion  of  any  other
                        securities   of   the   Company   (including,    without
                        limitation,   any  other  Debentures  or  the  Warrants)
                        subject  to  a  limitation  on  conversion  or  exercise
                        analogous   to   the   limitation    contained    herein
                        beneficially   owned  by  such  Holder  or  any  of  its
                        affiliates.   Except  as  set  forth  in  the  preceding
                        sentence,  for purposes of this Section 4(c), beneficial
                        ownership shall be calculated in accordance with Section
                        13(d) of the Exchange Act and the rules and  regulations
                        promulgated   thereunder.   To  the   extent   that  the
                        limitation  contained in this Section 4(c) applies,  the
                        determination  of whether this  Debenture is convertible
                        (in  relation to other  securities  owned by such Holder
                        together  with any  affiliates)  and of which amounts of
                        this  Debenture  are  convertible  shall  be in the sole
                        discretion  of  such  Holder,  and the  submission  of a
                        Notice of Conversion shall be deemed to be such Holder's
                        determination of whether this Debenture may be converted
                        (in relation to other  securities  owned by such Holder)
                        and which amounts of this Debenture are convertible,  in
                        each  case   subject   to  such   aggregate   percentage
                        limitations. To ensure compliance with this restriction,
                        each Holder will be deemed to  represent  to the Company
                        each time it delivers a Notice of  Conversion  that such
                        Notice of Conversion  has not violated the  restrictions
                        set forth in this  paragraph  and the Company shall have
                        no  obligation to verify or confirm the accuracy of such
                        determination.  In addition,  a determination  as to any
                        group status as  contemplated  above shall be determined
                        in accordance with Section 13(d) of the Exchange Act and
                        the rules and regulations  promulgated  thereunder.  For
                        purposes of this Section 4(c), in determining the number
                        of outstanding shares of Common Stock, a Holder may rely
                        on the number of  outstanding  shares of Common Stock as
                        reflected in the most recent of the  following:  (A) the
                        Company's most recent Form 10-QSB or Form 10-KSB, as the
                        case may be, (B) a more recent  public  announcement  by
                        the  Company or (C) any other  notice by the  Company or
                        the Company's transfer agent setting forth the number of
                        shares of Common Stock outstanding.  Upon the written or
                        oral request of a Holder,  the Company  shall within two
                        Trading  Days  confirm  orally  and in  writing  to such
                        Holder  the  number  of  shares  of  Common  Stock  then
                        outstanding.  In any case,  the  number  of  outstanding
                        shares of Common Stock shall be determined  after giving
                        effect to the  conversion  or exercise of  securities of
                        the Company, including this Debenture, by such Holder or
                        its affiliates since the date as of which such number of
                        outstanding shares of Common Stock was reported.

                                       9
<PAGE>

                        The "Beneficial  Ownership Limitation" shall be 4.99% of
                        the  number of shares of the  Common  Stock  outstanding
                        immediately  after  giving  effect  to the  issuance  of
                        shares of Common Stock issuable upon  conversion of this
                        Debenture held by the Holder.  The Beneficial  Ownership
                        Limitation provisions of this Section 4(c) may be waived
                        by such Holder, at the election of such Holder, upon not
                        less than 61 days' prior notice to the Company to change
                        the  Beneficial  Ownership  Limitation  to  9.99% of the
                        number  of  shares  of  the  Common  Stock   outstanding
                        immediately  after  giving  effect  to the  issuance  of
                        shares of Common Stock upon conversion of this Debenture
                        held by the Holder,  and the  provisions of this Section
                        4(c) shall  continue  to apply.  Upon such a change by a
                        Holder of the Beneficial  Ownership Limitation from such
                        4.99%   limitation   to  such  9.99%   limitation,   the
                        Beneficial  Ownership  Limitation  may not be  waived by
                        such Holder.  The provisions of this paragraph  shall be
                        implemented  in  a  manner   otherwise  than  in  strict
                        conformity  with  the  terms  of  this  Section  4(c) to
                        correct this paragraph (or any portion hereof) which may
                        be   defective   or   inconsistent   with  the  intended
                        Beneficial  Ownership  Limitation herein contained or to
                        make  changes or  supplements  necessary or desirable to
                        properly give effect to such limitation. The limitations
                        contained in this  paragraph  shall apply to a successor
                        holder of this Debenture.

                                    ii.         Until the Company  has  obtained
                        Authorized  Share  Approval,  the  Company may not issue
                        upon  conversion of this Debenture a number of shares of
                        Common Stock which,  when  aggregated with any shares of
                        Common Stock issued  prior to such  Conversion  Date (A)
                        pursuant  to  any  Debentures  issued  pursuant  to  the
                        Purchase  Agreement  and (B)  pursuant  to any  Warrants
                        issued pursuant to the Purchase Agreement,  would exceed
                        1,000,000 shares of Common Stock  ("ISSUABLE  MAXIMUM").
                        Each  Holder  shall  be  entitled  to a  portion  of the
                        Issuable  Maximum  equal  to the  quotient  obtained  by
                        dividing  (x)  the  aggregate  principal  amount  of the
                        Debenture(s)  issued  and  sold  to such  Holder  on the
                        Original  Issue  Date  by (y)  the  aggregate  principal
                        amount of all Debentures  issued and sold by the Company
                        on the  Original  Issue  Date.  If any  Holder  shall no
                        longer  hold  the   Debenture(s),   then  such  Holder's
                        remaining  portion  of the  Issuable  Maximum  shall  be
                        allocated  pro-rata among the remaining  Holders.  If on
                        any Conversion Date: (1) the applicable Conversion Price
                        then in  effect is such that the  shares  issuable  upon
                        conversion  in full of all then  outstanding  Debentures
                        would exceed the Issuable  Maximum,  and (2) the Company
                        has not previously  obtained  Authorized Share Approval,
                        then the Company shall issue to the Holder  requesting a
                        conversion  a number of shares of Common  Stock equal to
                        such   Holder's   pro-rata   portion   (which  shall  be
                        calculated pursuant to the terms hereof) of the Issuable
                        Maximum  and,  with  respect  to  the  remainder  of the
                        aggregate principal amount of the Debentures  (including
                        any  interest)  then  held by such  Holder  for  which a
                        conversion in accordance with the applicable  Conversion
                        Price  would  result in an  issuance of shares of Common
                        Stock in excess of such Holder's pro-rata portion (which
                        shall be calculated pursuant to the terms hereof) of the
                        Issuable Maximum (the "EXCESS  PRINCIPAL"),  the Company
                        shall  be  prohibited   from   converting   such  Excess
                        Principal, and shall notify the Holder of

                                       10
<PAGE>

                        the reason therefore. This Debenture shall thereafter be
                        unconvertible to such extent until and unless Authorized
                        Share  Approval  is  subsequently   obtained,  but  this
                        Debenture  shall  otherwise  remain  in full  force  and
                        effect.

                        d)          MECHANICS OF CONVERSION

                                    i.          CONVERSION  SHARES ISSUABLE UPON
                        CONVERSION OF PRINCIPAL AMOUNT.  The number of shares of
                        Common Stock issuable upon a conversion  hereunder shall
                        be determined  by the quotient  obtained by dividing (x)
                        the outstanding principal amount of this Debenture to be
                        converted by (y) the Conversion Price. i.

                                    ii.         DELIVERY  OF  CERTIFICATE   UPON
                        CONVERSION.  Not later than three Trading Days after any
                        Conversion Date, the Company will deliver or cause to be
                        delivered   to  the   Holder   (A)  a   certificate   or
                        certificates  representing  the Conversion  Shares which
                        shall  be  free  of  restrictive   legends  and  trading
                        restrictions  (other than those required by the Purchase
                        Agreement)  representing  the number of shares of Common
                        Stock being  acquired upon the  conversion of Debentures
                        (including,  if so timely elected by the Company, shares
                        of Common  Stock  representing  the  payment  of accrued
                        interest)  and (B) a bank check in the amount of accrued
                        and unpaid  interest  (if the Company is required to pay
                        accrued   interest  in  cash).  The  Company  shall,  if
                        available  and if allowed  under  applicable  securities
                        laws, use its best efforts to deliver any certificate or
                        certificates  required  to be  delivered  by the Company
                        under this Section electronically through the Depository
                        Trust  Corporation  or  another   established   clearing
                        corporation performing similar functions.

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

                                    iv.         OBLIGATION   ABSOLUTE;   PARTIAL
                        LIQUIDATED  DAMAGES. If the Company fails for any reason
                        to   deliver   to  the  Holder   such   certificate   or
                        certificates  pursuant to Section  4(d)(ii) by the third
                        Trading Day after the Conversion Date, the Company shall
                        pay to such Holder,  in cash, as liquidated  damages and
                        not as a penalty,  for each $2,000 of  principal  amount
                        being converted,  $10 per Trading Day (increasing to $20
                        per Trading Day after 5 Trading Days after such damages

                                       11
<PAGE>

                        begin to accrue)  for each  Trading Day after such fifth
                        Trading Day until such  certificates are delivered.  The
                        Company's   obligations   to  issue  and   deliver   the
                        Conversion  Shares upon  conversion of this Debenture in
                        accordance  with  the  terms  hereof  are  absolute  and
                        unconditional, irrespective of any action or inaction by
                        the  Holder to enforce  the same,  any waiver or consent
                        with respect to any  provision  hereof,  the recovery of
                        any judgment against any Person or any action to enforce
                        the  same,  or  any  setoff,  counterclaim,  recoupment,
                        limitation  or  termination,  or any  breach or  alleged
                        breach  by  the  Holder  or  any  other  Person  of  any
                        obligation  to the Company or any  violation  or alleged
                        violation of law by the Holder or any other person,  and
                        irrespective  of  any  other  circumstance  which  might
                        otherwise  limit such  obligation  of the Company to the
                        Holder  in   connection   with  the   issuance  of  such
                        Conversion  Shares;  PROVIDED,  HOWEVER,  such  delivery
                        shall not operate as a waiver by the Company of any such
                        action the Company may have  against the Holder.  In the
                        event  the  Holder  of this  Debenture  shall  elect  to
                        convert any or all of the outstanding  principal  amount
                        hereof,  the Company may not refuse  conversion based on
                        any  claim  that the  Holder  or any one  associated  or
                        affiliated  with  the  Holder  has been  engaged  in any
                        violation  of law,  agreement  or for any other  reason,
                        unless,   an  injunction   from  a  court,   on  notice,
                        restraining  and or enjoining  conversion of all or part
                        of this  Debenture  shall have been sought and  obtained
                        and the  Company  posts a surety bond for the benefit of
                        the Holder in the amount of 150% of the principal amount
                        of this Debenture  outstanding,  which is subject to the
                        injunction,  which bond shall remain in effect until the
                        completion of  arbitration/litigation of the dispute and
                        the proceeds of which shall be payable to such Holder to
                        the extent it  obtains  judgment.  In the  absence of an
                        injunction  precluding the same, the Company shall issue
                        Conversion  Shares  or,  if  applicable,  cash,  upon  a
                        properly noticed conversion.  Nothing herein shall limit
                        a Holder's  right to pursue actual damages or declare an
                        Event of  Default  pursuant  to Section 8 herein for the
                        Company's  failure to deliver  Conversion  Shares within
                        the period  specified  herein and such Holder shall have
                        the right to pursue all remedies  available to it at law
                        or in equity including,  without limitation, a decree of
                        specific   performance  and/or  injunctive  relief.  The
                        exercise  of any such  rights  shall  not  prohibit  the
                        Holder from seeking to enforce  damages  pursuant to any
                        other Section hereof or under applicable law.

                                    v.          COMPENSATION   FOR   BUY-IN   ON
                        FAILURE TO TIMELY DELIVER  CERTIFICATES UPON CONVERSION.
                        In addition to any other rights available to the Holder,
                        if the  Company  fails for any  reason to deliver to the
                        Holder  such  certificate  or  certificates  pursuant to
                        Section  4(d)(ii)  by the  fifth  Trading  Day after the
                        Conversion Date, and if after such fifth Trading Day the
                        Holder is required by its brokerage firm to purchase (in
                        an open market transaction or otherwise) Common Stock to
                        deliver in  satisfaction of a sale by such Holder of the
                        Conversion Shares which the Holder anticipated receiving
                        upon such  conversion  (a  "BUY-IN"),  then the  Company
                        shall (A) pay in cash to the Holder (in  addition to any
                        remedies  available  to or  elected by the  Holder)  the
                        amount by which (x) the Holder's total

                                       12
<PAGE>

                        purchase price (including brokerage commissions, if any)
                        for  the  Common  Stock  so  purchased  exceeds  (y) the
                        product of (1) the aggregate  number of shares of Common
                        Stock that such Holder  anticipated  receiving  from the
                        conversion  at issue  multiplied  by (2) the actual sale
                        price  of the  Common  Stock  at the  time  of the  sale
                        (including brokerage commissions, if any) giving rise to
                        such  purchase  obligation  and (B) at the option of the
                        Holder,  either reissue (if surrendered)  this Debenture
                        in a principal  amount equal to the principal  amount of
                        the  attempted  conversion  or deliver to the Holder the
                        number of shares of Common  Stock  that  would have been
                        issued had the Company timely complied with its delivery
                        requirements under Section 4(d)(ii). For example, if the
                        Holder  purchases  Common Stock having a total  purchase
                        price of  $11,000 to cover a Buy-In  with  respect to an
                        attempted  conversion of this  Debenture with respect to
                        which the actual sale price of the Conversion  Shares at
                        the time of the sale (including  brokerage  commissions,
                        if any) giving rise to such  purchase  obligation  was a
                        total of $10,000  under  clause  (A) of the  immediately
                        preceding sentence, the Company shall be required to pay
                        the Holder $1,000.  The Holder shall provide the Company
                        written  notice  indicating  the amounts  payable to the
                        Holder  in  respect  of  the   Buy-In.   Notwithstanding
                        anything  contained herein to the contrary,  if a Holder
                        requires  the  Company  to make  payment in respect of a
                        Buy-In for the  failure to timely  deliver  certificates
                        hereunder  and the  Company  timely  pays  in full  such
                        payment,  the Company  shall not be required to pay such
                        Holder  liquidated  damages  under  Section  4(d)(iv) in
                        respect of the certificates resulting in such Buy-In.

                                    vi.         RESERVATION  OF SHARES  ISSUABLE
                        UPON CONVERSION.  The Company  covenants that it will at
                        all  times  reserve  and  keep   available  out  of  its
                        authorized  and  unissued  shares of Common Stock solely
                        for the  purpose of  issuance  upon  conversion  of this
                        Debenture  and payment of  interest  on this  Debenture,
                        each as herein provided,  free from preemptive rights or
                        any other actual  contingent  purchase rights of persons
                        other  than the  Holder  (and the other  holders  of the
                        Debentures),  not less than such number of shares of the
                        Common  Stock  as  shall   (subject  to  any  additional
                        requirements  of the Company as to  reservation  of such
                        shares set forth in the Purchase  Agreement) be issuable
                        (taking into account the adjustments and restrictions of
                        Section  5)  upon  the  conversion  of  the  outstanding
                        principal  amount  of  this  Debenture  and  payment  of
                        interest  hereunder.  The  Company  covenants  that  all
                        shares of Common Stock that shall be so issuable  shall,
                        upon issue, be duly and validly  authorized,  issued and
                        fully  paid,  nonassessable  and,  if  the  Registration
                        Statement is then effective  under the  Securities  Act,
                        registered  for  public  sale in  accordance  with  such
                        Registration Statement.

                                    vii.        FRACTIONAL   SHARES.    Upon   a
                        conversion  hereunder  the Company shall not be required
                        to issue stock  certificates  representing  fractions of
                        shares  of  the  Common  Stock,  but  may  if  otherwise
                        permitted, make a cash payment in

                                       13
<PAGE>

                        respect of any final  fraction  of a share  based on the
                        VWAP at such time.  If the  Company  elects  not,  or is
                        unable, to make such a cash payment, the Holder shall be
                        entitled to receive,  in lieu of the final fraction of a
                        share, one whole share of Common Stock.

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

            SECTION 5. CERTAIN ADJUSTMENTS.

                        a)          STOCK  DIVIDENDS  AND STOCK  SPLITS.  If the
            Company, at any time while this Debenture is outstanding: (A) pays a
            stock dividend or otherwise makes a distribution or distributions on
            shares of its Common Stock or any other equity or equity  equivalent
            securities  payable in shares of Common Stock (which,  for avoidance
            of doubt, shall not include any shares of Common Stock issued by the
            Company pursuant to this Debenture,  including as interest thereon),
            (B)  subdivides  outstanding  shares of Common  Stock  into a larger
            number of shares,  (C) combines  (including  by way of reverse stock
            split)  outstanding  shares of Common Stock into a smaller number of
            shares,  or (D) issues by  reclassification  of shares of the Common
            Stock  any  shares  of  capital  stock  of  the  Company,  then  the
            Conversion  Price  shall be  multiplied  by a fraction  of which the
            numerator  shall be the number of shares of Common Stock  (excluding
            treasury shares, if any) outstanding  immediately  before such event
            and of which the denominator shall be the number of shares of Common
            Stock outstanding  immediately after such event. Any adjustment made
            pursuant to this Section shall become  effective  immediately  after
            the record date for the  determination  of stockholders  entitled to
            receive such  dividend or  distribution  and shall become  effective
            immediately  after the effective  date in the case of a subdivision,
            combination or re-classification.

                        b)          SUBSEQUENT  EQUITY SALES.  If the Company or
            any  Subsidiary  thereof,  as  applicable,  at any time  while  this
            Debenture is  outstanding,  shall offer,  sell,  grant any option to
            purchase  or  offer,   sell  or  grant  any  right  to  reprice  its
            securities, or otherwise dispose of or issue (or announce any offer,
            sale,  grant or any option to  purchase  or other  disposition)  any
            Common Stock or Common  Stock  Equivalents  entitling  any Person to
            acquire shares of Common Stock, at an effective price per share less
            than  the  then  Conversion  Price  (such  lower  price,  the  "BASE
            CONVERSION PRICE" and such issuances

                                       14
<PAGE>

            collectively,  a "DILUTIVE ISSUANCE"), as adjusted hereunder (if the
            holder of the Common  Stock or Common  Stock  Equivalents  so issued
            shall  at  any  time,   whether  by  operation  of  purchase   price
            adjustments,  reset  provisions,  floating  conversion,  exercise or
            exchange prices or otherwise, or due to warrants,  options or rights
            per share  which is  issued in  connection  with such  issuance,  be
            entitled to receive shares of Common Stock at an effective price per
            share which is less than the Conversion  Price,  such issuance shall
            be deemed to have  occurred  for less than the  Conversion  Price on
            such date of the Dilutive Issuance), then the Conversion Price shall
            be reduced to equal the Base Conversion Price. Such adjustment shall
            be made whenever such Common Stock or Common Stock  Equivalents  are
            issued.  Notwithstanding  the foregoing,  no adjustment will be made
            under  this  Section  5(b) in  respect  of an Exempt  Issuance.  The
            Company  shall  notify  the  Holder in  writing,  no later  than the
            Business  Day  following  the issuance of any Common Stock or Common
            Stock Equivalents  subject to this section,  indicating  therein the
            applicable  issuance price, or of applicable  reset price,  exchange
            price,  conversion  price and other  pricing  terms (such notice the
            "DILUTIVE ISSUANCE NOTICE"). For purposes of clarification,  whether
            or not the Company  provides a Dilutive  Issuance Notice pursuant to
            this Section 5(b),  upon the  occurrence  of any Dilutive  Issuance,
            after the date of such  Dilutive  Issuance the Holder is entitled to
            receive a number of Conversion Shares based upon the Base Conversion
            Price regardless of whether the Holder accurately refers to the Base
            Conversion Price in the Notice of Conversion.

                        c)          PRO RATA  DISTRIBUTIONS.  If the Company, at
            any time while this Debenture is  outstanding,  shall  distribute to
            all  holders  of  Common  Stock  (and  not  to  the  holders  of the
            Debenture)  evidences of its indebtedness or assets  (including cash
            and cash  dividends)  or  rights or  warrants  to  subscribe  for or
            purchase any security,  then in each such case the Conversion  Price
            shall be adjusted by  multiplying  such  Conversion  Price in effect
            immediately  prior to the  record  date fixed for  determination  of
            stockholders  entitled to receive such distribution by a fraction of
            which the denominator  shall be the VWAP determined as of the record
            date mentioned  above, and of which the numerator shall be such VWAP
            on such record  date less the then fair market  value at such record
            date of the portion of such assets or  evidence of  indebtedness  so
            distributed  applicable to one outstanding share of the Common Stock
            as  determined  by the Board of Directors  in good faith.  In either
            case the adjustments  shall be described in a statement  provided to
            the Holder of the portion of assets or evidences of  indebtedness so
            distributed or such  subscription  rights applicable to one share of
            Common  Stock.  Such  adjustment  shall  be made  whenever  any such
            distribution is made and shall become  effective  immediately  after
            the record date mentioned above.

                        d)          SUBSEQUENT RIGHTS OFFERINGS. If the Company,
            at any time while the Debenture is outstanding,  shall issue rights,
            options  or  warrants  to all  holders  of Common  Stock (and not to
            Holders)  entitling  them to  subscribe  for or  purchase  shares of
            Common Stock at a price per share that is lower than the VWAP on the
            record date  referenced  below,  then the Conversion  Price shall be
            multiplied  by a  fraction  of which  the  denominator  shall be the
            number of shares of the Common Stock outstanding on the date

                                       15
<PAGE>

            of issuance of such rights or warrants plus the number of additional
            shares of Common Stock offered for subscription or purchase,  and of
            which the  numerator  shall be the  number  of shares of the  Common
            Stock outstanding on the date of issuance of such rights or warrants
            plus the number of shares which the aggregate  offering price of the
            total number of shares so offered (assuming  delivery to the Company
            in full of all  consideration  payable upon exercise of such rights,
            options or warrants)  would purchase at such VWAP.  Such  adjustment
            shall be made whenever such rights or warrants are issued, and shall
            become  effective   immediately   after  the  record  date  for  the
            determination  of  stockholders  entitled  to receive  such  rights,
            options or warrants.

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

                                       16
<PAGE>

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

                        g)          NOTICE TO THE HOLDER.

                                    i.          ADJUSTMENT TO CONVERSION  PRICE.
                        Whenever the  Conversion  Price is adjusted  pursuant to
                        any of this Section 5, the Company  shall  promptly mail
                        to each  Holder a notice  setting  forth the  Conversion
                        Price after such  adjustment  and setting  forth a brief
                        statement of the facts requiring such adjustment. If the
                        Company  issues a variable  rate  security,  despite the
                        prohibition  thereon  in  the  Purchase  Agreement,  the
                        Company  shall be deemed to have issued  Common Stock or
                        Common  Stock   Equivalents   at  the  lowest   possible
                        conversion  or exercise  price at which such  securities
                        may be  converted or exercised in the case of a Variable
                        Rate Transaction (as defined in the Purchase Agreement).

                                    ii.         NOTICE  TO ALLOW  CONVERSION  BY
                        HOLDER.  If (A) the Company shall declare a dividend (or
                        any other  distribution)  on the Common  Stock;  (B) the
                        Company  shall  declare  a  special   nonrecurring  cash
                        dividend on or a redemption of the Common Stock; (C) the
                        Company  shall  authorize the granting to all holders of
                        the Common Stock rights or warrants to subscribe  for or
                        purchase any shares of capital  stock of any class or of
                        any rights;  (D) the approval of any stockholders of the
                        Company  shall  be  required  in  connection   with  any
                        reclassification  of the Common Stock, any consolidation
                        or merger to which the  Company is a party,  any sale or
                        transfer  of all or  substantially  all of the assets of
                        the Company,  of any compulsory  share exchange  whereby
                        the Common  Stock is  converted  into other  securities,
                        cash or property;  (E) the Company  shall  authorize the
                        voluntary or  involuntary  dissolution,  liquidation  or
                        winding up of the affairs of the Company;  then, in each
                        case, the Company shall cause to be filed at each office
                        or agency  maintained  for the purpose of  conversion of
                        this  Debenture,  and  shall  cause to be  mailed to the
                        Holder at its last addresses as it shall appear upon the
                        stock books of the  Company,  at least 20 calendar  days
                        prior  to  the  applicable   record  or  effective  date
                        hereinafter  specified, a notice stating (x) the date on
                        which a record  is to be taken for the  purpose  of such
                        dividend, distribution,  redemption, rights or warrants,
                        or if a record is not to be taken,  the date as of which
                        the holders of the Common Stock of record to be entitled
                        to such dividend,  distributions,  redemption, rights or
                        warrants are to be  determined  or (y) the date on which
                        such  reclassification,   consolidation,  merger,  sale,
                        transfer  or  share   exchange  is  expected  to  become
                        effective  or  close,  and the  date as of  which  it is
                        expected  that  holders  of the  Common  Stock of record
                        shall be entitled to exchange their shares of the Common
                        Stock for securities, cash or other property deliverable
                        upon such reclassification, consolidation, merger, sale,
                        transfer or share exchange; PROVIDED,

                                       17
<PAGE>

                        that the  failure  to mail  such  notice  or any  defect
                        therein or in the mailing  thereof  shall not affect the
                        validity  of  the  corporate   action   required  to  be
                        specified  in such  notice.  The Holder is  entitled  to
                        convert  this   Debenture   during  the  20-day   period
                        commencing the date of such notice to the effective date
                        of the event triggering such notice.

            SECTION 6.  [RESERVED].

            SECTION 7.  NEGATIVE  COVENANTS.  So  long  as any  portion  of this
Debenture  is  outstanding,  the Company will not and will not permit any of its
Subsidiaries to directly or indirectly:

                        a)          other  than  Permitted  Indebtedness,  enter
            into,  create,  incur,  assume,  guarantee  or  suffer  to exist any
            indebtedness  for  borrowed  money of any  kind,  including  but not
            limited to, a  guarantee,  on or with respect to any of its property
            or assets now owned or hereafter acquired or any interest therein or
            any income or profits therefrom;

                        b)          other  than  Permitted  Liens,  enter  into,
            create,  incur,  assume or suffer to exist any liens of any kind, on
            or with  respect  to any of its  property  or  assets  now  owned or
            hereafter  acquired or any interest therein or any income or profits
            therefrom;

                        c)          amend  its  certificate  of   incorporation,
            bylaws or other  charter  documents  so as to  adversely  affect any
            rights of the Holder;

                        d)          repay,   repurchase   or  offer  to   repay,
            repurchase  or otherwise  acquire  more than a DE MINIMIS  number of
            shares of its Common Stock or Common Stock Equivalents other than as
            to the Conversion  Shares to the extent  permitted or required under
            the  Transaction   Documents  or  as  otherwise   permitted  by  the
            Transaction Documents;

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

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

            SECTION 8.  EVENTS OF DEFAULT.

                        a)          "EVENT OF  DEFAULT",  wherever  used herein,
            means any one of the  following  events  (whatever  the  reason  and
            whether  it  shall  be  voluntary  or  involuntary  or  effected  by
            operation of law or pursuant to any judgment, decree or order of any
            court,  or any order,  rule or regulation of any  administrative  or
            governmental body):

                                    i.          any  default  in the  payment of
                        (A)  the  principal  amount  of  any  Debenture,  or (B)
                        interest (including Late Fees) on, or liquidated damages
                        in respect of, any Debenture, as and when the same shall
                        become due and payable  (whether on a Conversion Date or
                        the Maturity Date or by acceleration or

                                       18
<PAGE>
                        otherwise)  which  default,  solely  in the  case  of an
                        interest  payment  or other  default  under  clause  (B)
                        above, is not cured, within 3 Trading Days;

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

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

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

                                    v.          (i)  the  Company  or any of its
                        Subsidiaries shall commence, or there shall be commenced
                        against the Company or any such Subsidiary, a case under
                        any applicable  bankruptcy or insolvency  laws as now or
                        hereafter  in effect or any  successor  thereto,  or the
                        Company or any Subsidiary commences any other proceeding
                        under any  reorganization,  arrangement,  adjustment  of
                        debt,  relief of  debtors,  dissolution,  insolvency  or
                        liquidation or similar law of any  jurisdiction  whether
                        now or  hereafter  in effect  relating to the Company or
                        any  Subsidiary  thereof  or  (ii)  there  is  commenced
                        against the Company or any  Subsidiary  thereof any such
                        bankruptcy, insolvency or other proceeding which remains
                        undismissed  for a  period  of 60  days;  or  (iii)  the
                        Company or any  Subsidiary  thereof is  adjudicated by a
                        court of competent  jurisdiction  insolvent or bankrupt;
                        or any order of relief or other order approving any such
                        case or  proceeding  is entered;  or (iv) the Company or
                        any Subsidiary  thereof  suffers any  appointment of any
                        custodian or the like for it or any substantial  part of
                        its property which  continues  undischarged  or unstayed
                        for a  period  of 60  days;  or (v) the  Company  or any
                        Subsidiary  thereof makes a general  assignment  for the
                        benefit of creditors;  or (vi) the Company shall fail to
                        pay,  or shall  state that it is unable to pay, or shall
                        be unable to pay,  its debts  generally  as they  become
                        due;  or (vii) the  Company  or any  Subsidiary  thereof
                        shall  call a meeting  of its  creditors  with a view to
                        arranging a composition,  adjustment or restructuring of
                        its debts; or (viii) the Company or any

                                       19
<PAGE>

                        Subsidiary  thereof  shall by any act or  failure to act
                        expressly  indicate  its  consent  to,  approval  of  or
                        acquiescence  in any  of  the  foregoing;  or  (ix)  any
                        corporate or other action is taken by the Company or any
                        Subsidiary  thereof for the purpose of effecting  any of
                        the foregoing;

                                    vi.         the  Company  or any  Subsidiary
                        shall  default  in  any  of its  obligations  under  any
                        mortgage, credit agreement or other facility,  indenture
                        agreement, factoring agreement or other instrument under
                        which  there  may be  issued,  or by which  there may be
                        secured or evidenced any indebtedness for borrowed money
                        or money due under any long term  leasing  or  factoring
                        arrangement  of  the  Company  in  an  amount  exceeding
                        $150,000,  whether such indebtedness now exists or shall
                        hereafter  be created and such  default  shall result in
                        such  indebtedness  becoming or being  declared  due and
                        payable  prior to the  date on which it would  otherwise
                        become due and payable;

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

                                    viii.       the Company  shall be a party to
                        any  Change  of  Control   Transaction   or  Fundamental
                        Transaction, shall agree to sell or dispose of all or in
                        excess of 40% of its assets in one or more  transactions
                        (whether or not such sale would  constitute  a Change of
                        Control  Transaction) or shall redeem or repurchase more
                        than a de minimis  number of its  outstanding  shares of
                        Common Stock or other equity  securities  of the Company
                        (other  than   redemptions  of  Conversion   Shares  and
                        repurchases  of shares of Common  Stock or other  equity
                        securities  of departing  officers and  directors of the
                        Company;  provided  such  repurchases  shall not  exceed
                        $100,000,  in  the  aggregate,   for  all  officers  and
                        directors during the term of this Debenture);

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

                                    x.          if,  during  the   Effectiveness
                        Period   (as   defined   in  the   Registration   Rights
                        Agreement),   the   effectiveness  of  the  Registration
                        Statement  lapses for any reason or the Holder shall not
                        be  permitted  to  resell  Registrable   Securities  (as
                        defined in the Registration  Rights Agreement) under the
                        Registration Statement, in either case, for more than 10
                        consecutive  Trading Days or 15 non-consecutive  Trading
                        Days during any 12 month period; PROVIDED, HOWEVER, that
                        in the event that the Company is  negotiating  a merger,
                        consolidation,   acquisition   or   sale   of   all   or
                        substantially all of its assets or a similar transaction
                        and in the  written  opinion of counsel to the  Company,
                        the  Registration  Statement,  would be  required  to be
                        amended   to   include   information   concerning   such
                        transactions   or  the  parties   thereto  that  is  not
                        available or may not be publicly  disclosed at the time,
                        the

                                       20
<PAGE>

                        Company shall be permitted an additional 10  consecutive
                        Trading Days during any 12 month period relating to such
                        an event;

                                    xi.         the  Company  shall fail for any
                        reason to deliver  certificates to a Holder prior to the
                        tenth  Trading Day after a Conversion  Date  pursuant to
                        and in accordance with Section 4(d) or the Company shall
                        provide notice to the Holder, including by way of public
                        announcement,  at  any  time,  of its  intention  not to
                        comply with requests for  conversions  of any Debentures
                        in accordance with the terms hereof; or

                                    xii.        The Company shall fail to obtain
                        Authorized  Share  Approval  within 150 calendar days of
                        the Closing Date.

                        b)          REMEDIES UPON EVENT OF DEFAULT. If any Event
            of Default  occurs,  the full  principal  amount of this  Debenture,
            together with  interest and other amounts owing in respect  thereof,
            to the date of acceleration  shall become, at the Holder's election,
            immediately  due and payable in cash.  The aggregate  amount payable
            upon an Event of Default shall be equal to the Mandatory  Prepayment
            Amount.  Commencing  5 days  after  the  occurrence  of any Event of
            Default that results in the eventual acceleration of this Debenture,
            the interest rate on this Debenture  shall accrue at the rate of 18%
            per annum, or such lower maximum amount of interest  permitted to be
            charged  under  applicable  law. All  Debentures  for which the full
            Mandatory  Prepayment  Amount  hereunder  shall  have  been  paid in
            accordance  herewith shall promptly be surrendered to or as directed
            by the Company.  The Holder need not provide and the Company  hereby
            waives any presentment, demand, protest or other notice of any kind,
            and the Holder may immediately  and without  expiration of any grace
            period enforce any and all of its rights and remedies  hereunder and
            all  other  remedies  available  to it under  applicable  law.  Such
            declaration  may be  rescinded  and  annulled  by Holder at any time
            prior to payment hereunder and the Holder shall have all rights as a
            Debenture  holder until such time, if any, as the full payment under
            this Section shall have been  received by it. No such  rescission or
            annulment shall affect any subsequent Event of Default or impair any
            right consequent thereon.

            SECTION 9.  MISCELLANEOUS.

                        a)          NOTICES.   Any  and  all  notices  or  other
            communications or deliveries to be provided by the Holder hereunder,
            including, without limitation, any Notice of Conversion, shall be in
            writing and delivered personally, by facsimile, sent by a nationally
            recognized  overnight courier service,  addressed to the Company, at
            the address set forth above, facsimile number (888) 445-4467,  ATTN:
            DALE  QUICK,  PRESIDENT  AND CHIEF  EXECUTIVE  OFFICER or such other
            address or  facsimile  number as the  Company  may  specify for such
            purposes by notice to the Holders  delivered in accordance with this
            Section.  Any and all notices or other  communications or deliveries
            to be  provided  by the  Company  hereunder  shall be in writing and
            delivered personally, by facsimile, sent by a

                                       21
<PAGE>

            nationally  recognized  overnight  courier service addressed to each
            Holder at the facsimile  telephone  number or address of such Holder
            appearing  on the  books  of the  Company,  or if no such  facsimile
            telephone  number or  address  appears,  at the  principal  place of
            business  of the  Holder.  Any  notice  or  other  communication  or
            deliveries  hereunder  shall be deemed  given and  effective  on the
            earliest  of (i)  the  date  of  transmission,  if  such  notice  or
            communication is delivered via facsimile at the facsimile  telephone
            number  specified in this Section  prior to 5:30 p.m. (New York City
            time), (ii) the date after the date of transmission,  if such notice
            or  communication  is  delivered  via  facsimile  at  the  facsimile
            telephone number specified in this Section later than 5:30 p.m. (New
            York City time) on any date and  earlier  than 11:59 p.m.  (New York
            City time) on such date, (iii) the second Business Day following the
            date of mailing, if sent by nationally  recognized overnight courier
            service,  or (iv)  upon  actual  receipt  by the  party to whom such
            notice is required to be given.

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

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

                        d)          GOVERNING LAW. All questions  concerning the
            construction,  validity,  enforcement  and  interpretation  of  this
            Debenture  shall  be  governed  by and  construed  and  enforced  in
            accordance with the internal laws of the State of New York,  without
            regard to the  principles  of conflicts  of law thereof.  Each party
            agrees that all legal  proceedings  concerning the  interpretations,
            enforcement and defense of the  transactions  contemplated by any of
            the Transaction Documents (whether brought against a party hereto or
            its  respective  affiliates,   directors,  officers,   shareholders,
            employees  or agents)  shall be  commenced  in the state and federal
            courts  sitting in the City of New York,  Borough of Manhattan  (the
            "NEW YORK COURTS").  Each party hereto hereby irrevocably submits to
            the  exclusive   jurisdiction   of  the  New  York  Courts  for  the
            adjudication of any dispute  hereunder or in connection  herewith or
            with  any  transaction   contemplated  hereby  or  discussed  herein
            (including with respect to the enforcement of any of the Transaction
            Documents),  and hereby irrevocably waives, and agrees not to assert
            in  any  suit,  action  or  proceeding,  any  claim  that  it is not
            personally  subject to the  jurisdiction  of any such court, or such
            New  York  Courts  are  improper  or  inconvenient  venue  for  such
            proceeding.

                                       22
<PAGE>

            Each party hereby irrevocably waives personal service of process and
            consents  to  process  being  served  in any such  suit,  action  or
            proceeding  by mailing a copy  thereof via  registered  or certified
            mail or overnight delivery (with evidence of delivery) to such party
            at the address in effect for notices to it under this  Debenture and
            agrees  that  such  service  shall  constitute  good and  sufficient
            service of process  and notice  thereof.  Nothing  contained  herein
            shall be deemed to limit in any way any  right to serve  process  in
            any manner  permitted by law. Each party hereto  hereby  irrevocably
            waives,  to the fullest extent  permitted by applicable law, any and
            all right to trial by jury in any legal proceeding arising out of or
            relating to this Debenture or the transactions  contemplated hereby.
            If either party shall  commence an action or  proceeding  to enforce
            any provisions of this Debenture,  then the prevailing party in such
            action or proceeding  shall be reimbursed by the other party for its
            attorneys  fees and  other  costs  and  expenses  incurred  with the
            investigation,   preparation  and  prosecution  of  such  action  or
            proceeding.

                        e)          WAIVER.  Any  waiver by the  Company  or the
            Holder  of a breach of any  provision  of this  Debenture  shall not
            operate  as or be  construed  to be a waiver of any other  breach of
            such  provision  or of any  breach  of any other  provision  of this
            Debenture.  The  failure of the Company or the Holder to insist upon
            strict  adherence  to any  term  of  this  Debenture  on one or more
            occasions  shall not be considered a waiver or deprive that party of
            the right thereafter to insist upon strict adherence to that term or
            any other term of this Debenture. Any waiver must be in writing.

                        f)          SEVERABILITY.   If  any  provision  of  this
            Debenture is invalid, illegal or unenforceable,  the balance of this
            Debenture   shall  remain  in  effect,   and  if  any  provision  is
            inapplicable to any person or  circumstance,  it shall  nevertheless
            remain  applicable  to all other  persons and  circumstances.  If it
            shall be found that any interest or other amount deemed interest due
            hereunder  violates  applicable laws governing usury, the applicable
            rate of interest due  hereunder  shall  automatically  be lowered to
            equal the maximum permitted rate of interest.  The Company covenants
            (to the extent that it may  lawfully do so) that it shall not at any
            time insist upon,  plead, or in any manner  whatsoever claim or take
            the benefit or  advantage  of, any stay,  extension  or usury law or
            other law which would  prohibit  or forgive the Company  from paying
            all or any portion of the principal of or interest on this Debenture
            as  contemplated  herein,  wherever  enacted,  now  or at  any  time
            hereafter  in  force,  or which  may  affect  the  covenants  or the
            performance of this indenture, and the Company (to the extent it may
            lawfully do so) hereby expressly waives all benefits or advantage of
            any such law, and covenants  that it will not, by resort to any such
            law,  hinder,  delay or impeded the  execution  of any power  herein
            granted to the Holder,  but will suffer and permit the  execution of
            every such as though no such law has been enacted.

                        g)          NEXT BUSINESS  DAY.  Whenever any payment or
            other  obligation  hereunder  shall  be  due on a day  other  than a
            Business  Day,  such  payment  shall be made on the next  succeeding
            Business Day.

                                       23
<PAGE>

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

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

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

                                       24
<PAGE>

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

                                          SECURED SERVICES, INC.

                                          By:___________________________________
                                             Name:
                                             Title:

                                       25
<PAGE>

                                     ANNEX A

                              NOTICE OF CONVERSION

         The  undersigned  hereby  elects  to  convert  principal  under  the 7%
Convertible  Debenture of Secured  Services,  Inc., a Delaware  corporation (the
"COMPANY"),  due on February __, 2009,  into shares of common  stock,  par value
$0.0001  per  share  (the  "COMMON  STOCK"),  of the  Company  according  to the
conditions  hereof,  as of the date written below. If shares are to be issued in
the name of a person other than the  undersigned,  the undersigned  will pay all
transfer  taxes  payable with respect  thereto and is  delivering  herewith such
certificates  and opinions as reasonably  requested by the Company in accordance
therewith.  No fee will be charged to the holder for any conversion,  except for
such transfer taxes, if any.

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

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

Conversion calculations:

                     Date to Effect Conversion:

                     Principal Amount of Debenture to be Converted:

                     Payment of Interest in Common Stock __ yes  __ no
                              If yes,  $_____ of Interest Accrued on Account of
                              Conversion at Issue.

                     Number of shares of Common Stock to be issued:

                     Signature:

                     Name:

                     Address:

                                       26
<PAGE>

                                   SCHEDULE 1

                               CONVERSION SCHEDULE

The 7%  Convertible  Debentures  due on  February  __,  2009,  in the  aggregate
principal amount of $____________  issued by Secured Services,  Inc., a Delaware
corporation.  This Conversion Schedule reflects conversions made under Section 4
of the above referenced Debenture.

                                     Dated:

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

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

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

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

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

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

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

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

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

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

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

                                       27Exhibit 4.2

                                                                       EXHIBIT C

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THIS  SECURITY  AND THE  SECURITIES  ISSUABLE  UPON  EXERCISE  OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                             SECURED SERVICES, INC.

                  THIS COMMON STOCK PURCHASE  WARRANT (the "WARRANT")  certifies
that, for value received,  _____________ (the "HOLDER"),  is entitled,  upon the
terms and subject to the limitations on exercise and the conditions  hereinafter
set forth, at any time on or after the date hereof (the "INITIAL EXERCISE DATE")
and on or prior to the close of  business  on the four year  anniversary  of the
Initial Exercise Date (the "TERMINATION DATE") but not thereafter,  to subscribe
for and  purchase  from Secured  Services,  Inc.,  a Delaware  corporation  (the
"COMPANY"),  up to ______  shares (the "WARRANT  SHARES") of Common  Stock,  par
value $.0001 per share, of the Company (the "COMMON STOCK").  The purchase price
of one share of Common Stock under this  Warrant  shall be equal to the Exercise
Price, as defined in Section 2(b).

            SECTION 1.  DEFINITIONS.  Capitalized  terms used and not  otherwise
defined  herein shall have the  meanings  set forth in that  certain  Securities
Purchase Agreement (the "PURCHASE  AGREEMENT"),  dated February ___, 2006, among
the Company and the purchasers signatory thereto.

            SECTION 2.  EXERCISE.

                        a)          EXERCISE   OF   WARRANT.   Exercise  of  the
            purchase rights represented by this Warrant may be made, in whole or
            in part, at any time or times on or after the Initial  Exercise Date
            and on or before the Termination  Date by delivery to the Company of
            a duly  executed  facsimile  copy of the  Notice  of  Exercise  Form
            annexed  hereto (or such other office or agency of the Company as it
            may designate by notice in writing to the

                                       1
<PAGE>

            registered  Holder at the  address of such Holder  appearing  on the
            books of the Company);  and,  within 3 Trading Days of the date said
            Notice of Exercise is delivered to the  Company,  the Company  shall
            have received payment of the aggregate  Exercise Price of the shares
            thereby  purchased by wire  transfer or  cashier's  check drawn on a
            United States bank. Notwithstanding anything herein to the contrary,
            the  Holder  shall not be  required  to  physically  surrender  this
            Warrant to the  Company  until the Holder has  purchased  all of the
            Warrant  Shares  available   hereunder  and  the  Warrant  has  been
            exercised in full, in which case,  the Holder shall  surrender  this
            Warrant to the Company for cancellation within 3 Trading Days of the
            date the final  Notice of  Exercise  is  delivered  to the  Company.
            Partial  exercises  of this  Warrant  resulting  in  purchases  of a
            portion of the total number of Warrant  Shares  available  hereunder
            shall have the effect of lowering the outstanding  number of Warrant
            Shares  purchasable  hereunder in an amount equal to the  applicable
            number of Warrant Shares purchased. The Holder and the Company shall
            maintain  records showing the number of Warrant Shares purchased and
            the date of such purchases.  The Company shall deliver any objection
            to any Notice of Exercise  Form within 1 Business  Day of receipt of
            such notice. In the event of any dispute or discrepancy, the records
            of the Holder shall be controlling and  determinative in the absence
            of manifest  error.  The Holder and any  assignee,  by acceptance of
            this  Warrant,   acknowledge  and  agree  that,  by  reason  of  the
            provisions of this paragraph, following the purchase of a portion of
            the Warrant Shares hereunder, the number of Warrant Shares available
            for purchase hereunder at any given time may be less than the amount
            stated on the face hereof.

                        b)          EXERCISE PRICE. The exercise price per share
            of the Common  Stock under this Warrant  shall be $0.17,  subject to
            adjustment hereunder (the "EXERCISE PRICE").

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

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

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

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

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

                                       2
<PAGE>

                        d)          EXERCISE LIMITATIONS.

                                                i.          The  Company   shall
                                    not effect any exercise of this Warrant, and
                                    a  Holder   shall  not  have  the  right  to
                                    exercise   any  portion  of  this   Warrant,
                                    pursuant to Section  2(c) or  otherwise,  to
                                    the extent that after giving  effect to such
                                    issuance  after exercise as set forth on the
                                    applicable  Notice of Exercise,  such Holder
                                    (together with such Holder's Affiliates, and
                                    any other person or entity acting as a group
                                    together  with  such  Holder  or any of such
                                    Holder's  Affiliates),  as set  forth on the
                                    applicable   Notice   of   Exercise,   would
                                    beneficially own in excess of the Beneficial
                                    Ownership Limitation (as defined below). For
                                    purposes  of  the  foregoing  sentence,  the
                                    number   of    shares   of   Common    Stock
                                    beneficially  owned by such  Holder  and its
                                    Affiliates   shall  include  the  number  of
                                    shares  of  Common   Stock   issuable   upon
                                    exercise  of this  Warrant  with  respect to
                                    which such  determination is being made, but
                                    shall exclude the number of shares of Common
                                    Stock  which  would  be  issuable  upon  (A)
                                    exercise  of  the  remaining,   nonexercised
                                    portion of this Warrant  beneficially  owned
                                    by such Holder or any of its  Affiliates and
                                    (B)   exercise   or    conversion   of   the
                                    unexercised or  nonconverted  portion of any
                                    other securities of the Company  (including,
                                    without limitation,  any other Debentures or
                                    Warrants)   subject  to  a   limitation   on
                                    conversion  or  exercise  analogous  to  the
                                    limitation   contained  herein  beneficially
                                    owned   by  such   Holder   or  any  of  its
                                    affiliates.  Except  as  set  forth  in  the
                                    preceding  sentence,  for  purposes  of this
                                    Section 2(d)(i),  beneficial ownership shall
                                    be  calculated  in  accordance  with Section
                                    13(d) of the  Exchange Act and the rules and
                                    regulations promulgated thereunder, it being
                                    acknowledged by a Holder that the Company is
                                    not  representing  to such  Holder that such
                                    calculation  is in  compliance  with Section
                                    13(d) of the Exchange Act and such Holder is
                                    solely   responsible   for   any   schedules
                                    required   to   be   filed   in   accordance
                                    therewith. To the extent that the limitation
                                    contained in this Section 2(d) applies,  the
                                    determination  of  whether  this  Warrant is
                                    exercisable (in relation to other securities
                                    owned  by  such  Holder  together  with  any
                                    Affiliates)  and of which a portion  of this
                                    Warrant is exercisable  shall be in the sole
                                    discretion of a Holder,  and the  submission
                                    of a Notice of  Exercise  shall be deemed to
                                    be each  Holder's  determination  of whether
                                    this Warrant is exercisable  (in relation to
                                    other   securities   owned  by  such  Holder
                                    together with any  Affiliates)  and of which
                                    portion of this Warrant is  exercisable,  in
                                    each   case   subject   to  such   aggregate
                                    percentage limitation, and the Company shall
                                    have no  obligation to verify or confirm the
                                    accuracy of such determination. In addition,
                                    a  determination  as to any group  status as
                                    contemplated  above shall be  determined  in
                                    accordance   with   Section   13(d)  of  the
                                    Exchange  Act and the rules and  regulations
                                    promulgated thereunder. For purposes of this
                                    Section 2(d), in  determining  the number of
                                    outstanding shares of Common Stock, a Holder
                                    may rely on the number of outstanding shares
                                    of  Common  Stock  as  reflected  in (x) the
                                    Company's  most  recent  Form 10-QSB or Form
                                    10-KSB,  as  the  case  may  be,  (y) a more
                                    recent public announcement by the Company or
                                    (z) any other  notice by the  Company or the
                                    Company's Transfer Agent setting

                                       3
<PAGE>

                                    forth the  number of shares of Common  Stock
                                    outstanding.   Upon  the   written  or  oral
                                    request  of  a  Holder,  the  Company  shall
                                    within two Trading Days  confirm  orally and
                                    in  writing  to such  Holder  the  number of
                                    shares of Common Stock then outstanding.  In
                                    any case, the number of  outstanding  shares
                                    of Common  Stock shall be  determined  after
                                    giving effect to the  conversion or exercise
                                    of securities of the Company, including this
                                    Warrant,  by such  Holder or its  Affiliates
                                    since  the date as of which  such  number of
                                    outstanding   shares  of  Common  Stock  was
                                    reported.    The    "Beneficial    Ownership
                                    Limitation"  shall be 4.99% of the number of
                                    shares  of  the  Common  Stock   outstanding
                                    immediately   after  giving  effect  to  the
                                    issuance of shares of Common Stock  issuable
                                    upon   exercise   of   this   Warrant.   The
                                    Beneficial Ownership  Limitation  provisions
                                    of this  Section  2(d)(i)  may be  waived by
                                    such Holder, at the election of such Holder,
                                    upon not less than 61 days' prior  notice to
                                    the   Company  to  change   the   Beneficial
                                    Ownership  Limitation to 9.99% of the number
                                    of shares of the  Common  Stock  outstanding
                                    immediately   after  giving  effect  to  the
                                    issuance  of  shares of  Common  Stock  upon
                                    exercise of this Warrant, and the provisions
                                    of  this  Section  2(d)  shall  continue  to
                                    apply. Upon such a change by a Holder of the
                                    Beneficial  Ownership  Limitation  from such
                                    4.99%  limitation to such 9.99%  limitation,
                                    the Beneficial  Ownership Limitation may not
                                    be  further  waived  by  such  Holder.   The
                                    provisions  of  this   paragraph   shall  be
                                    construed  and   implemented   in  a  manner
                                    otherwise than in strict conformity with the
                                    terms of this  Section  2(d)(i)  to  correct
                                    this paragraph (or any portion hereof) which
                                    may be  defective or  inconsistent  with the
                                    intended  Beneficial   Ownership  Limitation
                                    herein  contained  or  to  make  changes  or
                                    supplements   necessary   or   desirable  to
                                    properly give effect to such limitation. The
                                    limitations   contained  in  this  paragraph
                                    shall  apply to a  successor  holder of this
                                    Warrant.

                                                ii.         Unless  the  Company
                                    has obtained Authorized Share Approval,  the
                                    Company may not issue upon  exercise of this
                                    Warrant a number  of shares of Common  Stock
                                    which,  when  aggregated  with any shares of
                                    Common   Stock   issued   (A)   upon   prior
                                    conversion of any Debentures issued pursuant
                                    to the Purchase Agreement and (B) upon prior
                                    exercise of any Warrants  issued pursuant to
                                    the   Purchase    Agreement   would   exceed
                                    1,000,000  shares of Common Stock ("ISSUABLE
                                    MAXIMUM").  If on any attempted  exercise of
                                    this Warrant, the issuance of Warrant Shares
                                    would  exceed the  Issuable  Maximum and the
                                    Company's  shareholders  have not previously
                                    voted in favor of Authorized Share Approval,
                                    then the  Company  shall issue to the Holder
                                    request a Warrant  exercise  such  number of
                                    Warrant  Shares as may be  issued  below the
                                    Issuable  Maximum  and,  with respect to the
                                    remainder of the aggregate number of Warrant
                                    Shares,    this   Warrant   shall   not   be
                                    exercisable   until  and  unless  Authorized
                                    Share Approval has been obtained.

                                       4
<PAGE>

                        e)          MECHANICS OF EXERCISE.

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

                                                ii.         DELIVERY          OF
                                    CERTIFICATES UPON EXERCISE. Certificates for
                                    shares   purchased    hereunder   shall   be
                                    transmitted  by the  transfer  agent  of the
                                    Company  to  the  Holder  by  crediting  the
                                    account of the  Holder's  prime  broker with
                                    the  Depository  Trust  Company  through its
                                    Deposit Withdrawal Agent Commission ("DWAC")
                                    system if the  Company is a  participant  in
                                    such  system,   and  otherwise  by  physical
                                    delivery  to the  address  specified  by the
                                    Holder in the  Notice of  Exercise  within 3
                                    Trading   Days  from  the  delivery  to  the
                                    Company  of the  Notice  of  Exercise  Form,
                                    surrender of this Warrant (if  required) and
                                    payment of the aggregate  Exercise  Price as
                                    set forth  above  ("WARRANT  SHARE  DELIVERY
                                    DATE"). This Warrant shall be deemed to have
                                    been  exercised  on the  date  the  Exercise
                                    Price  is  received  by  the  Company.   The
                                    Warrant  Shares shall be deemed to have been
                                    issued,  and  Holder or any other  person so
                                    designated  to be  named  therein  shall  be
                                    deemed to have  become a holder of record of
                                    such shares for all purposes, as of the date
                                    the Warrant has been exercised by payment to
                                    the  Company  of the  Exercise  Price (or by
                                    cashless  exercise,  if  permitted)  and all
                                    taxes required to be paid by the Holder,  if
                                    any,  pursuant to Section 2(e)(vii) prior to
                                    the issuance of such shares, have been paid.

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

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

                                                v.          COMPENSATION     FOR
                                    BUY-IN  ON   FAILURE   TO   TIMELY   DELIVER
                                    CERTIFICATES  UPON EXERCISE.  In addition to
                                    any other rights available to the Holder, if
                                    the  Company  fails  to cause  its  transfer
                                    agent   to   transmit   to  the   Holder   a
                                    certificate or certificates representing the
                                    Warrant Shares pursuant to an exercise on or
                                    before the Warrant Share Delivery Date, and

                                       5
<PAGE>

                                    if after such date the Holder is required by
                                    its broker to  purchase  (in an open  market
                                    transaction  or otherwise)  shares of Common
                                    Stock to deliver in  satisfaction  of a sale
                                    by the Holder of the  Warrant  Shares  which
                                    the Holder  anticipated  receiving upon such
                                    exercise  (a  "BUY-IN"),  then  the  Company
                                    shall  (1)  pay in cash  to the  Holder  the
                                    amount  by  which  (x)  the  Holder's  total
                                    purchase    price    (including    brokerage
                                    commissions,  if  any)  for  the  shares  of
                                    Common  Stock so  purchased  exceeds (y) the
                                    amount   obtained  by  multiplying  (A)  the
                                    number of Warrant  Shares  that the  Company
                                    was  required  to  deliver  to the Holder in
                                    connection  with the exercise at issue times
                                    (B) the price at which the sell order giving
                                    rise  to  such   purchase   obligation   was
                                    executed,  and  (2)  at  the  option  of the
                                    Holder,  either reinstate the portion of the
                                    Warrant  and  equivalent  number of  Warrant
                                    Shares  for  which  such  exercise  was  not
                                    honored  or deliver to the Holder the number
                                    of shares of Common  Stock  that  would have
                                    been issued had the Company timely  complied
                                    with its exercise  and delivery  obligations
                                    hereunder.   For  example,   if  the  Holder
                                    purchases   Common   Stock  having  a  total
                                    purchase  price of $11,000 to cover a Buy-In
                                    with  respect to an  attempted  exercise  of
                                    shares of  Common  Stock  with an  aggregate
                                    sale  price  giving  rise to  such  purchase
                                    obligation  of $10,000,  under clause (1) of
                                    the  immediately   preceding   sentence  the
                                    Company  shall be required to pay the Holder
                                    $1,000. The Holder shall provide the Company
                                    written   notice   indicating   the  amounts
                                    payable  to the  Holder  in  respect  of the
                                    Buy-In  and,  upon  request of the  Company,
                                    evidence of the amount of such loss. Nothing
                                    herein  shall  limit  a  Holder's  right  to
                                    pursue any other  remedies  available  to it
                                    hereunder,  at law or in  equity  including,
                                    without  limitation,  a decree  of  specific
                                    performance  and/or  injunctive  relief with
                                    respect to the  Company's  failure to timely
                                    deliver certificates  representing shares of
                                    Common Stock upon exercise of the Warrant as
                                    required pursuant to the terms hereof.

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

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

                                       6
<PAGE>

                                    attached hereto duly executed by the Holder;
                                    and the Company may require,  as a condition
                                    thereto,  the payment of a sum sufficient to
                                    reimburse it for any transfer tax incidental
                                    thereto.

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

            SECTION 3.  CERTAIN ADJUSTMENTS.

                        a)          STOCK DIVIDENDS AND SPLITS.  If the Company,
            at any time while  this  Warrant  is  outstanding:  (A) pays a stock
            dividend or otherwise make a distribution or distributions on shares
            of its  Common  Stock  or any  other  equity  or  equity  equivalent
            securities  payable in shares of Common Stock (which,  for avoidance
            of doubt, shall not include any shares of Common Stock issued by the
            Company upon exercise of this Warrant),  (B) subdivides  outstanding
            shares of Common Stock into a larger number of shares,  (C) combines
            (including  by way of reverse  stock  split)  outstanding  shares of
            Common  Stock  into a smaller  number of  shares,  or (D)  issues by
            reclassification of shares of the Common Stock any shares of capital
            stock of the Company,  then in each case the Exercise Price shall be
            multiplied by a fraction of which the numerator  shall be the number
            of  shares of  Common  Stock  (excluding  treasury  shares,  if any)
            outstanding   immediately   before  such  event  and  of  which  the
            denominator   shall  be  the  number  of  shares  of  Common   Stock
            outstanding  immediately  after  such event and the number of shares
            issuable  upon  exercise of this  Warrant  shall be  proportionately
            adjusted.  Any  adjustment  made pursuant to this Section 3(a) shall
            become  effective   immediately   after  the  record  date  for  the
            determination  of stockholders  entitled to receive such dividend or
            distribution  and  shall  become  effective  immediately  after  the
            effective  date  in  the  case  of  a  subdivision,  combination  or
            re-classification.

                        b)          SUBSEQUENT  EQUITY SALES.  If the Company or
            any  Subsidiary  thereof,  as  applicable,  at any time  while  this
            Warrant is  outstanding,  shall sell or grant any option to purchase
            or sell or grant any right to reprice its  securities,  or otherwise
            dispose  of or issue (or  announce  any  offer,  sale,  grant or any
            option to purchase or other  disposition) any Common Stock or Common
            Stock  Equivalents  entitling any Person to acquire shares of Common
            Stock,  at an effective  price per share less than the then Exercise
            Price (such lower price,  the "BASE SHARE PRICE" and such  issuances
            collectively,  a "DILUTIVE  ISSUANCE")  (if the holder of the Common
            Stock or  Common  Stock  Equivalents  so  issued  shall at any time,
            whether  by  operation   of  purchase   price   adjustments,   reset
            provisions,  floating  conversion,  exercise or  exchange  prices or
            otherwise, or due to warrants, options or rights per share which are
            issued in  connection  with such  issuance,  be  entitled to receive
            shares of Common Stock at an effective price per share which is less
            than the  Exercise  Price,  such  issuance  shall be  deemed to have
            occurred  for less  than  the  Exercise  Price  on such  date of the
            Dilutive  Issuance),  then the  Exercise  Price shall be reduced and
            only reduced to equal the Base Share Price and the number of Warrant
            Shares issuable hereunder shall be increased such that the aggregate
            Exercise  Price  payable  hereunder,  after  taking into account the
            decrease  in the  Exercise  Price,  shall be equal to the  aggregate
            Exercise Price prior to such  adjustment.  Such adjustment  shall be
            made

                                       7
<PAGE>

            whenever such Common Stock or Common Stock  Equivalents  are issued.
            Notwithstanding the foregoing, no adjustments shall be made, paid or
            issued under this Section 3(b) in respect of an Exempt Issuance. The
            Company  shall  notify  the  Holder in  writing,  no later  than the
            Trading Day  following  the  issuance of any Common  Stock or Common
            Stock Equivalents  subject to this section,  indicating  therein the
            applicable  issuance  price,  or  applicable  reset price,  exchange
            price,  conversion  price and other  pricing  terms (such notice the
            "DILUTIVE ISSUANCE NOTICE"). For purposes of clarification,  whether
            or not the Company  provides a Dilutive  Issuance Notice pursuant to
            this Section 3(b),  upon the  occurrence  of any Dilutive  Issuance,
            after the date of such  Dilutive  Issuance the Holder is entitled to
            receive a number of Warrant  Shares  based upon the Base Share Price
            regardless of whether the Holder accurately refers to the Base Share
            Price in the Notice of Exercise.

                        c)          SUBSEQUENT RIGHTS OFFERINGS. If the Company,
            at any time while the Warrant is  outstanding,  shall issue  rights,
            options  or  warrants  to all  holders  of Common  Stock (and not to
            Holders)  entitling  them to  subscribe  for or  purchase  shares of
            Common  Stock at a price per share  less than the VWAP at the record
            date mentioned below, then the Exercise Price shall be multiplied by
            a fraction,  of which the denominator  shall be the number of shares
            of the Common  Stock  outstanding  on the date of  issuance  of such
            rights or warrants  plus the number of  additional  shares of Common
            Stock  offered  for  subscription  or  purchase,  and of  which  the
            numerator  shall  be  the  number  of  shares  of the  Common  Stock
            outstanding  on the date of issuance of such rights or warrants plus
            the number of shares which the aggregate offering price of the total
            number of shares so offered (assuming receipt by the Company in full
            of all consideration  payable upon exercise of such rights,  options
            or warrants) would purchase at such VWAP.  Such adjustment  shall be
            made whenever  such rights or warrants are issued,  and shall become
            effective immediately after the record date for the determination of
            stockholders entitled to receive such rights, options or warrants.

                        d)          PRO RATA  DISTRIBUTIONS.  If the Company, at
            any time prior to the  Termination  Date,  shall  distribute  to all
            holders  of  Common  Stock  (and  not to  Holders  of the  Warrants)
            evidences of its  indebtedness  or assets  (including  cash and cash
            dividends)  or rights or warrants to  subscribe  for or purchase any
            security  other than the  Common  Stock  (which  shall be subject to
            Section  3(b)),  then in each such case the Exercise  Price shall be
            adjusted by  multiplying  the Exercise  Price in effect  immediately
            prior to the record  date fixed for  determination  of  stockholders
            entitled  to receive  such  distribution  by a fraction of which the
            denominator  shall  be the VWAP  determined  as of the  record  date
            mentioned  above,  and of which the numerator  shall be such VWAP on
            such record  date less the then per share fair market  value at such
            record   date  of  the   portion  of  such  assets  or  evidence  of
            indebtedness so distributed  applicable to one outstanding  share of
            the Common  Stock as  determined  by the Board of  Directors in good
            faith.  In  either  case the  adjustments  shall be  described  in a
            statement  provided  to the  Holder  of the  portion  of  assets  or
            evidences of indebtedness so distributed or such subscription rights
            applicable to one share of Common Stock.  Such  adjustment  shall be
            made  whenever  any  such  distribution  is made  and  shall  become
            effective immediately after the record date mentioned above.

                                       8
<PAGE>

                        e)          FUNDAMENTAL  TRANSACTION.  If,  at any  time
            while this  Warrant is  outstanding,  (A) the  Company  effects  any
            merger or  consolidation of the Company with or into another Person,
            (B) the Company effects any sale of all or substantially  all of its
            assets in one or a series of  related  transactions,  (C) any tender
            offer or exchange offer  (whether by the Company or another  Person)
            is completed pursuant to which holders of Common Stock are permitted
            to tender or exchange  their  shares for other  securities,  cash or
            property,  or (D) the Company  effects any  reclassification  of the
            Common Stock or any compulsory share exchange  pursuant to which the
            Common Stock is  effectively  converted  into or exchanged for other
            securities,  cash or  property  (in any such  case,  a  "FUNDAMENTAL
            TRANSACTION"),  then, upon any subsequent  exercise of this Warrant,
            the Holder shall have the right to receive,  for each Warrant  Share
            that would have been issuable upon such exercise  immediately  prior
            to the occurrence of such Fundamental Transaction,  at the option of
            the Holder, (a) upon exercise of this Warrant,  the number of shares
            of Common Stock of the successor or acquiring  corporation or of the
            Company,  if it is the  surviving  corporation,  and any  additional
            consideration (the "ALTERNATE  CONSIDERATION") receivable upon or as
            a  result   of  such   reorganization,   reclassification,   merger,
            consolidation  or disposition of assets by a Holder of the number of
            shares  of  Common  Stock  for which  this  Warrant  is  exercisable
            immediately prior to such event or (b) if the Company is acquired in
            an all cash transaction,  cash equal to the value of this Warrant as
            determined  in  accordance  with the  Black-Scholes  option  pricing
            formula. For purposes of any such exercise, the determination of the
            Exercise  Price  shall be  appropriately  adjusted  to apply to such
            Alternate   Consideration   based  on  the   amount   of   Alternate
            Consideration  issuable  in respect of one share of Common  Stock in
            such  Fundamental  Transaction,  and the Company shall apportion the
            Exercise  Price among the  Alternate  Consideration  in a reasonable
            manner reflecting the relative value of any different  components of
            the  Alternate  Consideration.  If holders of Common Stock are given
            any choice as to the securities,  cash or property to be received in
            a Fundamental  Transaction,  then the Holder shall be given the same
            choice  as to the  Alternate  Consideration  it  receives  upon  any
            exercise of this Warrant following such Fundamental Transaction.  To
            the extent  necessary to effectuate  the foregoing  provisions,  any
            successor  to the Company or  surviving  entity in such  Fundamental
            Transaction shall issue to the Holder a new warrant  consistent with
            the  foregoing  provisions  and  evidencing  the  Holder's  right to
            exercise such warrant into Alternate Consideration. The terms of any
            agreement  pursuant to which a Fundamental  Transaction  is effected
            shall include terms requiring any such successor or surviving entity
            to comply with the provisions of this Section 3(d) and insuring that
            this Warrant (or any such  replacement  security)  will be similarly
            adjusted upon any subsequent  transaction analogous to a Fundamental
            Transaction.

                        f)          CALCULATIONS.  All  calculations  under this
            Section 3 shall be made to the nearest  cent or the nearest  1/100th
            of a share,  as the case may be. For purposes of this Section 3, the
            number of shares of Common Stock deemed to be issued and outstanding
            as of a given  date  shall be the sum of the  number  of  shares  of
            Common  Stock  (excluding   treasury  shares,  if  any)  issued  and
            outstanding.

                                       9
<PAGE>

                        g)          VOLUNTARY ADJUSTMENT BY COMPANY. The Company
            may at any time  during  the term of this  Warrant  reduce  the then
            current  Exercise  Price to any  amount  and for any  period of time
            deemed appropriate by the Board of Directors of the Company.

                        h)          NOTICE TO HOLDERS.

                                                i.          ADJUSTMENT        TO
                                    EXERCISE PRICE.  Whenever the Exercise Price
                                    is  adjusted  pursuant to any  provision  of
                                    this Section 3, the Company  shall  promptly
                                    mail to each Holder a notice  setting  forth
                                    the Exercise Price after such adjustment and
                                    setting forth a brief statement of the facts
                                    requiring  such  adjustment.  If the Company
                                    issues a variable rate security, despite the
                                    prohibition    thereon   in   the   Purchase
                                    Agreement,  the  Company  shall be deemed to
                                    have  issued  Common  Stock or Common  Stock
                                    Equivalents    at   the   lowest    possible
                                    conversion  or exercise  price at which such
                                    securities  may be converted or exercised in
                                    the case of a Variable Rate  Transaction (as
                                    defined in the Purchase Agreement).

                                                ii.         NOTICE    TO   ALLOW
                                    EXERCISE BY HOLDER. If (A) the Company shall
                                    declare   a    dividend    (or   any   other
                                    distribution in whatever form) on the Common
                                    Stock;  (B)  the  Company  shall  declare  a
                                    special  nonrecurring  cash dividend on or a
                                    redemption  of the  Common  Stock;  (C)  the
                                    Company shall  authorize the granting to all
                                    holders  of  the  Common   Stock  rights  or
                                    warrants to  subscribe  for or purchase  any
                                    shares of  capital  stock of any class or of
                                    any   rights;   (D)  the   approval  of  any
                                    stockholders   of  the   Company   shall  be
                                    required    in    connection     with    any
                                    reclassification  of the Common  Stock,  any
                                    consolidation or merger to which the Company
                                    is a party,  any sale or  transfer of all or
                                    substantially  all  of  the  assets  of  the
                                    Company,  of any  compulsory  share exchange
                                    whereby the Common Stock is  converted  into
                                    other securities,  cash or property; (E) the
                                    Company  shall  authorize  the  voluntary or
                                    involuntary   dissolution,   liquidation  or
                                    winding up of the  affairs  of the  Company;
                                    then, in each case,  the Company shall cause
                                    to be  mailed  to the  Holder  at  its  last
                                    address as it shall  appear upon the Warrant
                                    Register  of  the   Company,   at  least  20
                                    calendar days prior to the applicable record
                                    or effective date hereinafter  specified,  a
                                    notice  stating  (x)  the  date  on  which a
                                    record  is to be taken  for the  purpose  of
                                    such  dividend,  distribution,   redemption,
                                    rights or warrants, or if a record is not to
                                    be taken,  the date as of which the  holders
                                    of the Common Stock of record to be entitled
                                    to such dividend, distributions, redemption,
                                    rights or warrants are to be  determined  or
                                    (y) the date on which such reclassification,
                                    consolidation,  merger,  sale,  transfer  or
                                    share   exchange   is   expected  to  become
                                    effective or close, and the date as of which
                                    it is  expected  that  holders of the Common
                                    Stock  of  record   shall  be   entitled  to
                                    exchange  their  shares of the Common  Stock
                                    for  securities,   cash  or  other  property
                                    deliverable   upon  such   reclassification,
                                    consolidation,  merger,  sale,  transfer  or
                                    share exchange; provided that the failure to
                                    mail such notice or any defect therein or in
                                    the  mailing  thereof  shall not  affect the
                                    validity of the corporate action required to
                                    be specified  in such notice.

                                       10
<PAGE>

                                    The  Holder is  entitled  to  exercise  this
                                    Warrant during the 20-day period  commencing
                                    on the date of such notice to the  effective
                                    date of the event triggering such notice.

            SECTION 4.  TRANSFER OF WARRANT.

                        a)          TRANSFERABILITY.  Subject to compliance with
            any  applicable  securities  laws and the  conditions  set  forth in
            Section  4(d)  hereof and to the  provisions  of Section  4.1 of the
            Purchase   Agreement,   this   Warrant  and  all  rights   hereunder
            (including,   without  limitation,   any  registration  rights)  are
            transferable, in whole or in part, upon surrender of this Warrant at
            the  principal  office  of  the  Company  or its  designated  agent,
            together with a written assignment of this Warrant  substantially in
            the form attached hereto duly executed by the Holder or its agent or
            attorney and funds sufficient to pay any transfer taxes payable upon
            the making of such  transfer.  Upon such surrender and, if required,
            such payment, the Company shall execute and deliver a new Warrant or
            Warrants  in  the  name  of the  assignee  or  assignees  and in the
            denomination  or  denominations  specified  in  such  instrument  of
            assignment, and shall issue to the assignor a new Warrant evidencing
            the portion of this Warrant not so assigned,  and this Warrant shall
            promptly  be  cancelled.  A Warrant,  if properly  assigned,  may be
            exercised by a new holder for the purchase of Warrant Shares without
            having a new Warrant issued.

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

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

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

                                       11
<PAGE>

            defined  in  Rule  501(a)(1),  (a)(2),  (a)(3),  (a)(7),  or  (a)(8)
            promulgated  under the Securities Act or a "qualified  institutional
            buyer" as defined in Rule 144A(a) under the Securities Act.

            SECTION 5.  MISCELLANEOUS.

                        a)          NO RIGHTS  AS  SHAREHOLDER  UNTIL  EXERCISE.
            This  Warrant  does not entitle  the Holder to any voting  rights or
            other rights as a  shareholder  of the Company prior to the exercise
            hereof as set forth in Section 2(e)(ii).

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

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

                        d)          AUTHORIZED SHARES.

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

                                    Except  and  to  the  extent  as  waived  or
                        consented to by the Holder, the Company shall not by any
                        action,  including,  without  limitation,  amending  its
                        certificate    of    incorporation    or   through   any
                        reorganization,   transfer  of  assets,   consolidation,
                        merger, dissolution,  issue or sale of securities or any
                        other  voluntary  action,  avoid  or seek to  avoid  the
                        observance  or  performance  of any of the terms of this
                        Warrant,  but will at all times in good faith  assist in
                        the  carrying out of all such terms and in the taking of
                        all such actions as may be necessary or

                                       12
<PAGE>

                        appropriate to protect the rights of Holder as set forth
                        in this Warrant against impairment. Without limiting the
                        generality  of the  foregoing,  the Company will (a) not
                        increase  the par value of any Warrant  Shares above the
                        amount payable  therefor upon such exercise  immediately
                        prior to such  increase in par value,  (b) take all such
                        action as may be necessary or  appropriate in order that
                        the Company may validly and legally issue fully paid and
                        nonassessable  Warrant  Shares upon the exercise of this
                        Warrant, and (c) use commercially  reasonable efforts to
                        obtain all such  authorizations,  exemptions or consents
                        from any  public  regulatory  body  having  jurisdiction
                        thereof as may be  necessary  to enable  the  Company to
                        perform its obligations under this Warrant.

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

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

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

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

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

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

                                       13
<PAGE>

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

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

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

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

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

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

                                       14
<PAGE>

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

Dated:   February __, 2006

                                        SECURED SERVICES, INC.

                                        By:_____________________________________
                                           Name:
                                           Title:

                                       15
<PAGE>

                               NOTICE OF EXERCISE

TO:      SECURED SERVICES, INC.

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

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

                           [ ] in lawful money of the United States; or

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

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

                  _________________________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

                  _________________________________________

                  _________________________________________

                  _________________________________________

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

[SIGNATURE OF HOLDER]
---------
Name of Investing Entity: ______________________________________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: _________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Date: __________________________________________________________________________

<PAGE>

                                 ASSIGNMENT FORM

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

            FOR  VALUE  RECEIVED,  [____]  all  of or  [_______]  shares  of the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

___________________________________________________________________.

___________________________________________________________________

                                                 Dated:  ______________, _______

                  Holder's Signature:        _____________________________

                  Holder's Address:          _____________________________

                                             _____________________________

Signature Guaranteed:  ___________________________________________

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

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