Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Columbus Ventures Inc. - Exhibit 10.1

SHARE CANCELLATION AGREEMENT

This Agreement dated effective the 20th day of March, 2008.

BETWEEN:

LUBOW KLAUSER
Uhlandstrasse
7 
71549 Auenwald, Germany

(the “Shareholder”)

OF THE FIRST PART 

AND:

COLUMBUS VENTURES INC.
810
Peace Portal Drive, Suite 210 
Blaine, WA 98230

(the “Company”)

OF THE SECOND PART

WHEREAS the Shareholder has agreed to surrender for
cancellation 15,000,000 shares of the Company’s common stock held by the
Shareholder.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in
consideration of the sum of $1.00 paid by the Company to the Shareholder (the
receipt of which is hereby acknowledged) the parties hereto mutually agree as
follows:

1. The Shareholder shall surrender for cancellation 15,000,000
shares of the Company’s common stock (the “Shares”).

2. The parties acknowledge that the closing of this Agreement
shall occur on or before March 31, 2008.

3. This Agreement may be executed in one or more counter-parts,
each of which so executed shall constitute an original and all of which together
shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this
Agreement effective as of the date of this Agreement.

	 	/s/ Lubow Klauser 	 
	 	LUBOW KLAUSER 	 
	 	  	 
	COLUMBUS VENTURES INC. 	 
	 	  	 
	By:	/s/ Alvaro Vollmers	 
	 	Alvaro Vollmers, Chief
      Executive OfficerFiled by Automated Filing Services Inc. (604) 609-0244 - Global Energy Inc. - Exhibit 10.9

NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS
DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN
SOLD 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. 

GLOBAL ENERGY, INC. 

SECURED CONVERTIBLE
DEBENTURE 

	Issuance Date: March 20, 2008 	Original Principal Amount: $500,000 
	No. GEYI-1-4 	 

     FOR VALUE RECEIVED, GLOBAL
ENERGY, INC., a Nevada corporation (the "Company"), hereby promises to
pay to the order of YA GLOBAL INVESTMENTS, L.P. (FORMERLY, CORNELL CAPITAL
PARTNERS, L.P.) or registered assigns (the "Holder") the amount set out
above as the Original Principal Amount (as reduced pursuant to the terms hereof
pursuant to redemption, conversion or otherwise, the "Principal") when
due, whether upon the Maturity Date (as defined below), on any Installment Date
with respect to the Installment Amount due on such Installment Date (each, as
defined herein), acceleration, redemption or otherwise (in each case in
accordance with the terms hereof) and to pay interest ("Interest") on any
outstanding Principal at the applicable Interest Rate from the date set out
above as the Issuance Date (the "Issuance Date") until the same becomes
due and payable, whether upon an Interest Date (as defined below), any
Installment Date or the Maturity Date or acceleration, conversion, redemption or
otherwise (in each case in accordance with the terms hereof). This Secured
Convertible Debenture (including all Secured Convertible Debentures issued in
exchange, transfer or replacement hereof, this "Debenture") is one of an
issue of Secured Convertible Debentures issued pursuant to the Securities
Purchase Agreement (collectively, the "Debentures" and such other Senior
Convertible Debentures, the "Other Debentures"). Certain capitalized
terms used herein are defined in Section 17. 

(1) GENERAL TERMS 

     (a) Payment of Principal.
On each Installment Date, the Company shall pay to the Holder an amount equal to
the Installment Amount due on such Installment Date in accordance with Section
3. On the Maturity Date, the Company shall pay to the Holder an amount in cash
representing all outstanding Principal, accrued and unpaid Interest. The
"Maturity Date" shall be October 31, 2010, as may be extended at the
option of the Holder (i) in 

the event that, and for so long as, an Event of Default (as
defined below) shall have occurred and be continuing on the Maturity Date (as
may be extended pursuant to this Section 1) or any event shall have occurred and
be continuing on the Maturity Date (as may be extended pursuant to this Section
1) that with the passage of time and the failure to cure would result in an
Event of Default. Other than as specifically permitted by this Debenture, the
Company may not prepay or redeem any portion of the outstanding Principal
without the prior written consent of the Holder. 

     (b) Interest. Interest
shall accrue on the outstanding principal balance hereof at an annual rate equal
to ten percent (10%) (“Interest Rate”). Interest shall be calculated on
the basis of a 365-day year and the actual number of days elapsed, to the extent
permitted by applicable law. Interest hereunder shall be paid on each Interest
Payment Date and on the Maturity Date (or sooner as provided herein) to the
Holder or its assignee in whose name this Debenture is registered on the records
of the Company regarding registration and transfers of Debentures at the option
of the Company in cash, or, provided that the Equity Conditions are then
satisfied converted into Common Stock at the Company Conversion Price as of the
date paid. 

     (c) Security. The
Debenture is secured by a security interest in all of the assets of the Company
as evidenced by the security agreement dated July 6, 2007 (the “Security
Agreement”). 

(2) EVENTS OF DEFAULT.

     (a) An “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) the Company's failure to pay
to the Holder any amount of Principal, Interest, or other amounts when and as
due under this Debenture (including, without limitation, the Company's failure
to pay any redemption payments or amounts hereunder) or any other Transaction
Document; 

     (ii) The Company or any
subsidiary of the Company shall commence, or there shall be commenced against
the Company or any subsidiary of the Company under any applicable bankruptcy or
insolvency laws as now or hereafter in effect or any successor thereto, or the
Company or any subsidiary of the Company 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 of
the Company or there is commenced against the Company or any subsidiary of the
Company any such bankruptcy, insolvency or other proceeding which remains
undismissed for a period of 61 days; or the Company or any subsidiary of the
Company is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Company or any
subsidiary of the Company suffers any appointment of any custodian, private or
court appointed receiver or the like for it or any substantial part of its
property which continues undischarged or unstayed for a period of sixty one (61)
days; or the Company or any subsidiary of the Company makes a 

2 

general assignment for the benefit of creditors; or the Company
or any subsidiary of the Company shall fail to pay, or shall state that it is
unable to pay, or shall be unable to pay, its debts generally as they become
due; or the Company or any subsidiary of the Company shall call a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of
its debts; or the Company or any subsidiary of the Company shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Company
or any subsidiary of the Company for the purpose of effecting any of the
foregoing; 

     (iii) The Company or any
subsidiary of the Company shall default in any of its obligations under any
other debenture or 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 or any subsidiary of the Company in an amount exceeding $100,000,
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;

     (iv) If the Common Stock is
quoted or listed for trading on any of the following and it ceases to be so
quoted or listed for trading and shall not again be quoted or listed for trading
on any Primary Market within five (5) Trading Days of such delisting: (a) the
American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq Global
Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board
(“OTCBB”) (each, a “Primary Market”); 

     (v) The Company or any subsidiary
of the Company shall be a party to any Change of Control Transaction (as defined
in Section 6) unless in connection with such Change of Control Transaction this
Debenture is retired;

     (vi) The Company shall fail to
file the Underlying Shares Registration Statement with the Commission, or the
Underlying Shares Registration Statement shall not have been declared effective
by the Commission, in each case within thirty (30) days of the periods set forth
in the Registration Rights Agreement (“Registration Rights Agreement”)
dated July 6, 2007 among the Company and each Buyer listed on Schedule I
attached thereto, or, while the Underlying Shares Registration Statement is
required to be maintained effective pursuant to the terms of the Investor
Registration Rights Agreement, the effectiveness of the Underlying Shares
Registration Statement lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to the Holder for sale of all of the
Holder’s Registrable Securities (as defined in the Investor Registration Rights
Agreement) in accordance with the terms of the Investor Registration Rights
Agreement, and such lapse or unavailability continues for a period of more than
ten (10) consecutive Trading Days or for more than an aggregate of twenty (20)
days in any 365-day period (which need not be consecutive); 

     (vii) the Company's (A) failure
to cure a Conversion Failure by delivery of the required number of shares of
Common Stock within five (5) Business Days after the applicable Conversion
Failure or (B) notice, written or oral, to any holder of the Debentures, 

3 

including by way of public announcement, at any time, of its
intention not to comply with a request for conversion of any Debentures into
shares of Common Stock that is tendered in accordance with the provisions of the
Debentures, other than pursuant to Section 4(c); 

     (viii) The Company shall fail for
any reason to deliver the payment in cash pursuant to a Buy-In (as defined
herein) within three (3) Business Days after such payment is due;

     (ix) The Company shall fail to
observe or perform any other covenant, agreement or warranty contained in, or
otherwise commit any breach or default of any provision of this Debenture
(except as may be covered by Section 2(a)(i) through 2(a)(vii) hereof) or any
Transaction Document (as defined in Section 16) which is not cured within the
time prescribed. 

     (x) any Event of Default (as
defined in the Other Debentures) occurs with respect to any Other Debentures.

     (b) During the time that any
portion of this Debenture is outstanding, if any Event of Default has occurred,
the full unpaid 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; provided however,
the Holder may request (but shall have no obligation to request) payment of such
amounts in Common Stock of the Company. Furthermore, in addition to any other
remedies, the Holder shall have the right (but not the obligation) to convert
this Debenture at any time after (x) an Event of Default or (y) the Maturity
Date at the Company Conversion Price. The Holder need not provide and the
Company hereby waives any presentment, demand, protest or other notice of any
kind, (other than required notice of conversion) 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. No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon.

(3) COMPANY INSTALLMENT CONVERSION OR REDEMPTION.

     (a) General. On each
applicable Installment Date, the Company shall pay to the Holder of this
Debenture the Installment Amount due on such date by converting such Installment
Amount into shares of Common Stock of the Company, provided that there is not
then an Equity Conditions Failure, in accordance with this Section 3 (a "Company
Conversion"); provided, however, that the Company may, at its option following
notice to the Holder, redeem such Installment Amount (a "Company
Redemption") or by any combination of a Company Conversion and a Company
Redemption so long as all of the outstanding applicable Installment Amount shall
be converted and/or redeemed by the Company on the applicable Installment Date,
subject to the provisions of this Section 3. On or prior to the date which is
the fifth (5th) Trading Day prior to each Installment Date (each, an
"Installment Notice Due Date"), the Company shall deliver written notice
(each, a "Company Installment Notice"), to the Holder which Company
Installment Notice shall (i) either (A) confirm that the applicable Installment
Amount of the Holder’s Debenture shall be converted in whole pursuant to a
Company Conversion or (B) (1) 

4 

state that the Company elects to redeem, or is required to
redeem in accordance with the provisions of the Debenture, in whole or in part,
the applicable Installment Amount pursuant to a Company Redemption and (2)
specify the portion (including Interest) which the Company elects or is required
to redeem pursuant to a Company Redemption (such amount to be redeemed, the
"Company Redemption Amount") and the portion (including Interest), if
any, that the Company elects to convert pursuant to a Company Conversion (such
amount a "Company Conversion Amount") which amounts when added
together, must equal the applicable Installment Amount and (ii) if the
Installment Amount is to be paid, in whole or in part, pursuant to a Company
Conversion, certify that there is not then an Equity Conditions Failure as of
the date of the Company Installment Notice. Each Company Installment Notice
shall be irrevocable. If the Company does not timely deliver a Company
Installment Notice in accordance with this Section 3, then the Company shall be
deemed to have delivered an irrevocable Company Installment Notice confirming a
Company Conversion and shall be deemed to have certified that there is not then
an Equity Conditions Failure in connection with any such conversion. The Company
Conversion Amount (whether set forth in the Company Installment Notice or by
operation of this Section 3) shall be converted in accordance with Section 3(b)
and the Company Redemption Amount shall be paid in accordance with Section 3(c).

     (b) Mechanics of Company
Conversion. Subject to Section 3(d), if the Company delivers a Company
Installment Notice and elects, or is deemed to have elected, in whole or in
part, a Company Conversion in accordance with Section 3(a), then the applicable
Company Conversion Amount, if any, which remains outstanding as of the
applicable Installment Date shall be converted as of the applicable Installment
Date by converting on such Installment Date such Company Conversion Amount at
the Company Conversion Price; provided that the Equity Conditions are then
satisfied (or waived in writing by the Holder) on such Installment Date and that
the Holder Pro Rata Amount of the Installment Volume Limitation is not exceeded.
If the Equity Conditions are not satisfied (or waived in writing by the Holder)
on such Installment Date or the Holder Pro Rata Amount of the Installment Volume
Limitation is exceeded (unless waived in writing by the Holder), then at the
option of the Holder designated in writing to the Company, the Holder may
require the Company to do any one or more of the following: (i) the Company
shall redeem all or any part of the unconverted Company Conversion Amount
designated by the Holder (such designated amount is referred to as the
"Unconverted Redemption Amount") and the Company shall pay to the Holder
within three (3) days of such Installment Date, by wire transfer of immediately
available funds, an amount in cash equal to such Unconverted Redemption Amount,
and/or (ii) the Company Conversion shall be null and void with respect to all or
any part of the unconverted Company Conversion Amount designated by the Holder
and the Holder shall be entitled to all the rights of a holder of this Debenture
with respect to such designated amount of the Company Conversion Amount;
provided, however, that the Conversion Price for such unconverted Company
Conversion Amount shall thereafter be adjusted to equal the lesser of (A) the
Company Conversion Price as in effect on the date on which the Holder voided the
Company Conversion and (B) the Company Conversion Price as in effect on the date
on which the Holder delivers a Conversion Notice relating thereto. If the
Company fails to redeem any Unconverted Redemption Amount by the third
(3rd) day following the applicable Installment Date, then the Holder
shall have all rights under this Debenture (including, without limitation, such
failure constituting an Event of Default). Notwithstanding anything to the
contrary in this Section 3(b), but subject to Section 4(c)(i), until the Company
delivers Common Stock representing the Company Conversion 

5 

Amount to the Holder, the Company Conversion Amount may be
converted by the Holder into Common Stock pursuant to Section 4. In the event
that the Holder elects to convert the Company Conversion Amount prior to the
applicable Installment Date as set forth in the immediately preceding sentence,
the Company Conversion Amount so converted shall be deducted from the
Installment Amounts relating to the applicable Installment Dates as set forth in
the applicable Conversion Notice. 

     (c) Mechanics of Company
Redemption. If the Company elects a Company Redemption in accordance with
Section 3(a), then the Company Redemption Amount, if any, which is to be paid to
the Holder on the applicable Installment Date shall be redeemed by the Company
on such Installment Date, and the Company shall pay to the Holder on such
Installment Date, by wire transfer of immediately available funds, in an amount
in cash (the "Company Installment Redemption Price") equal to the
Principal portion of the Company Redemption Amount plus accrued and unpaid
Interest. If the Company fails to redeem the Company Redemption Amount on the
applicable Installment Date by payment of the Company Installment Redemption
Price on such date, then at the option of the Holder designated in writing to
the Company (any such designation, "Conversion Notice" for purposes of
this Debenture), the Holder may require the Company to convert all or any part
of the Company Redemption Amount into shares of Common Stock of the Company at
the Company Conversion Price. Conversions required by this Section 3(c) shall be
made in accordance with the provisions of Section 4(b). Notwithstanding anything
to the contrary in this Section 3(c), but subject to Section 4(c)(i), until the
Company Installment Redemption Price (together with any interest thereon) is
paid in full, the Company Redemption Amount (together with any interest thereon)
may be converted, in whole or in part, by the Holder into Common Stock pursuant
to Section 4. In the event the Holder elects to convert all or any portion of
the Company Redemption Amount prior to the applicable Installment Date as set
forth in the immediately preceding sentence, the Company Redemption Amount so
converted shall be deducted from the Installment Amounts relating to the
applicable Installment Dates as set forth in the applicable Conversion Notice.

     (d) Deferred Installment
Amount. Notwithstanding any provision of this Section 3 to the contrary, the
Holder may, at its option and in its sole discretion, deliver a written notice
to the Company at least two (2) days prior to any Installment Notice Due Date
electing to have the payment of all or any portion of an Installment Amount
payable on the next Installment Date deferred to the Maturity Date. Any amount
deferred to the Maturity Date pursuant to this Section 3(d) shall continue to
accrue Interest through the Maturity Date. 

     (e) Cancellation of
Installment Amount. Notwithstanding any provision of this Section 3 to the
contrary, in the event that the Volume Weighted Average Price of the Common
Stock equals or exceeds the applicable Conversion Price for each of the five (5)
consecutive Trading Days immediately preceding the Installment Notice Due Date
and no Event of Default has occurred then the Installment Amount payable on such
Installment Date shall be deferred to the Maturity Date. Any amount
deferred to the Maturity Date pursuant to this Section 3(e) shall continue to
accrue Interest through the Maturity Date.

     (f) Company’s Additional Cash
Redemption. The Company at its option shall have the right to redeem
(“Optional Redemption”) a portion or all amounts outstanding under this
Debenture in addition to any Installment Amount prior to the Maturity 

6 

Date provided that as of the date of the Holder’s receipt of a
Redemption Notice (as defined herein) (i) the Closing Bid Price is less than the
Conversion Price, (ii) the Underlying Shares Registration Statement is
effective, and (iii) no Event of Default has occurred. The Company shall pay an
amount equal to the principal amount being redeemed plus a redemption premium
(“Redemption Premium”) equal to twenty percent (20%) of the Principal
amount being redeemed, and accrued Interest, (collectively referred to as the
“Company Additional Redemption Amount”). In order to make a
redemption pursuant to this Section, the Company shall first provide written
notice to the Holder of its intention to make a redemption (the “Redemption
Notice”) setting forth the amount of Principal it desires to redeem. After
receipt of the Redemption Notice the Holder shall have three (3) Business Days
to elect to convert all or any portion of this Debenture, subject to the
limitations set forth in Section 4(b). On the fourth (4th) Business Day after
the Redemption Notice, the Company shall deliver to the Holder the Company
Additional Redemption Amount with respect to the Principal amount redeemed after
giving effect to conversions effected during the three (3) Business Day period.

     (4) CONVERSION OF
DEBENTURE. This Debenture shall be convertible into shares of the Company's
Common Stock, on the terms and conditions set forth in this Section 4. 

     (a) Conversion Right.
Subject to the provisions of Section 4(c), at any time or times on or after the
Issuance Date, the Holder shall be entitled to convert any portion of the
outstanding and unpaid Conversion Amount (as defined below) into fully paid and
nonassessable shares of Common Stock in accordance with Section 4(b), at the
Conversion Rate (as defined below). The number of shares of Common Stock
issuable upon conversion of any Conversion Amount pursuant to this Section 4(a)
shall be determined by dividing (x) such Conversion Amount by (y) the Conversion
Price (the "Conversion Rate"). The Company shall not issue any fraction
of a share of Common Stock upon any conversion. If the issuance would result in
the issuance of a fraction of a share of Common Stock, the Company shall round
such fraction of a share of Common Stock up to the nearest whole share. The
Company shall pay any and all transfer, stamp and similar taxes that may be
payable with respect to the issuance and delivery of Common Stock upon
conversion of any Conversion Amount.

     (i) "Conversion Amount"
means the portion of the Principal and accrued Interest to be converted,
redeemed or otherwise with respect to which this determination is being made.

     (ii) "Conversion Price"
means, as of any Conversion Date (as defined below) or other date of
determination, $1.25, subject to adjustment as provided herein.

     (b) Mechanics of Conversion.

     (i) Optional Conversion.
To convert any Conversion Amount into shares of Common Stock on any date (a
"Conversion Date"), the Holder shall (A) transmit by facsimile (or
otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on
such date, a copy of an executed notice of conversion in the form attached
hereto as Exhibit I (the "Conversion Notice") to the Company and
(B) if required by Section 4(b)(iv), surrender this Debenture to a nationally
recognized overnight delivery service for delivery to the Company (or 

7 

an indemnification undertaking reasonably satisfactory to the
Company with respect to this Debenture in the case of its loss, theft or
destruction). On or before the third Business Day following the date of receipt
of a Conversion Notice (the "Share Delivery Date"), the Company shall (X)
if legends are not required to be placed on certificates of Common Stock
pursuant to the Securities Purchase Agreement and provided that the Transfer
Agent is participating in the Depository Trust Company's ("DTC") Fast
Automated Securities Transfer Program, credit such aggregate number of shares of
Common Stock to which the Holder shall be entitled to the Holder's or its
designee's balance account with DTC through its Deposit Withdrawal Agent
Commission system or (Y) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of shares of Common Stock to which the
Holder shall be entitled which certificates shall not bear any restrictive
legends unless required pursuant to Section 2(g) of the Securities Purchase
Agreement. If this Debenture is physically surrendered for conversion and the
outstanding Principal of this Debenture is greater than the Principal portion of
the Conversion Amount being converted, then the Company shall as soon as
practicable and in no event later than three (3) Business Days after receipt of
this Debenture and at its own expense, issue and deliver to the holder a new
Debenture representing the outstanding Principal not converted. The Person or
Persons entitled to receive the shares of Common Stock issuable upon a
conversion of this Debenture shall be treated for all purposes as the record
holder or holders of such shares of Common Stock upon the transmission of a
Conversion Notice.

     (ii) Company's Failure to
Timely Convert. If within three (3) Trading Days after the Company's receipt
of the facsimile copy of a Conversion Notice the Company shall fail to issue and
deliver a certificate to the Holder or credit the Holder's balance account with
DTC for the number of shares of Common Stock to which the Holder is entitled
upon such holder's conversion of any Conversion Amount (a "Conversion
Failure"), and if on or after such Trading Day the Holder purchases (in an
open market transaction or otherwise) Common Stock to deliver in satisfaction of
a sale by the Holder of Common Stock issuable upon such conversion that the
Holder anticipated receiving from the Company (a "Buy-In"), then the
Company shall, within three (3) Business Days after the Holder's request and in
the Holder's discretion, either (i) pay cash to the Holder in an amount equal to
the Holder's total purchase price (including brokerage commissions and other out
of pocket expenses, if any) for the shares of Common Stock so purchased (the
"Buy-In Price"), at which point the Company's obligation to
deliver such certificate (and to issue such Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to the Holder a certificate or
certificates representing such Common Stock and pay cash to the Holder in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of shares of Common Stock, times (B) the Closing Bid Price on the
Conversion Date. 

     (iii) Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of
any portion of this Debenture in accordance with the terms hereof, the Holder
shall not be required to physically surrender this Debenture to the Company
unless (A) the full Conversion Amount represented by this Debenture is being
converted or (B) the Holder has provided the Company with prior written notice
(which notice may be included in a Conversion Notice) requesting reissuance of
this Debenture upon physical surrender of this Debenture. The Holder and the
Company shall maintain records showing the Principal and 

8 

Interest converted and the dates of such conversions or shall
use such other method, reasonably satisfactory to the Holder and the Company, so
as not to require physical surrender of this Debenture upon conversion. 

     (c) Limitations on Conversions.

     (i) Beneficial Ownership.
The Company shall not effect any conversions of this Debenture and the Holder
shall not have the right to convert any portion of this Debenture or receive
shares of Common Stock as payment of interest hereunder to the extent that after
giving effect to such conversion or receipt of such interest payment, the
Holder, together with any affiliate thereof, would beneficially own (as
determined in accordance with Section 13(d) of the Exchange Act and the rules
promulgated thereunder) in excess of 4.99% of the number of shares of Common
Stock outstanding immediately after giving effect to such conversion or receipt
of shares as payment of interest. Since the Holder will not be obligated to
report to the Company the number of shares of Common Stock it may hold at the
time of a conversion hereunder, unless the conversion at issue would result in
the issuance of shares of Common Stock in excess of 4.99% of the then
outstanding shares of Common Stock without regard to any other shares which may
be beneficially owned by the Holder or an affiliate thereof, the Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent
that the Holder determines that the limitation contained in this Section
applies, the determination of which portion of the principal amount of this
Debenture is convertible shall be the responsibility and obligation of the
Holder. If the Holder has delivered a Conversion Notice for a principal amount
of this Debenture that, without regard to any other shares that the Holder or
its affiliates may beneficially own, would result in the issuance in excess of
the permitted amount hereunder, the Company shall notify the Holder of this fact
and shall honor the conversion for the maximum principal amount permitted to be
converted on such Conversion Date in accordance with Section 4(a) and, any
principal amount tendered for conversion in excess of the permitted amount
hereunder shall remain outstanding under this Debenture. The provisions of this
Section may be waived by a Holder (but only as to itself and not to any other
Holder) upon not less than 65 days prior notice to the Company. Other Holders
shall be unaffected by any such waiver. 

     (d) Other Provisions. 

     (i) The Company shall at all
times reserve and keep available out of its authorized Common Stock the full
number of shares of Common Stock issuable upon conversion of all outstanding
amounts under this Debenture; and within three (3) Business Days following the
receipt by the Company of a Holder's notice that such minimum number of
Underlying Shares is not so reserved, the Company shall promptly reserve a
sufficient number of shares of Common Stock to comply with such requirement.

     (ii) All calculations under this
Section 4 shall be rounded to the nearest $0.0001 or whole share. 

     (iii) 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

9 

herein provided, free from preemptive rights or any other
actual contingent purchase rights of persons other than the Holder, not less
than such number of shares of the Common Stock as shall (subject to any
additional requirements of the Company as to reservation of such shares set
forth in this Debenture or in the Transaction Documents) be issuable (taking
into account the adjustments and restrictions set forth herein) 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 Underlying Shares Registration
Statement has been declared effective under the Securities Act, registered for
public sale in accordance with such Underlying Shares Registration Statement.

     (iv) Nothing herein shall limit a
Holder's right to pursue actual damages or declare an Event of Default pursuant
to Section 2 herein for the Company 's failure to deliver certificates
representing shares of Common Stock upon conversion 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, in each case without the need to post a
bond or provide other security. 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.

(5) Adjustments to Conversion Price 

     (a) Adjustment of Conversion
Price upon Issuance of Common Stock. If the Company, at any time while this
Debenture is outstanding, issues or sells, or in accordance with this Section
5(a) is deemed to have issued or sold, any shares of Common Stock, excluding
shares of Common Stock deemed to have been issued or sold by the Company in
connection with any Excluded Securities, for a consideration per share (the “New
Issuance Price”) less than a price equal to the Conversion Price in effect
immediately prior to such issue or sale (such price the "Applicable
Price") (the foregoing a "Dilutive Issuance"), then immediately after
such Dilutive Issuance the Conversion Price then in effect shall be reduced to
an amount equal to the New Issuance Price. For purposes of determining the
adjusted Conversion Price under this Section 5(a), the following shall be
applicable: 

     (i) Issuance of Options.
If the Company in any manner grants or sells any Options and the lowest price
per share for which one share of Common Stock is issuable upon the exercise of
any such Option or upon conversion or exchange or exercise of any Convertible
Securities issuable upon exercise of such Option is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the granting or sale of
such Option for such price per share. For purposes of this Section, the "lowest
price per share for which one share of Common Stock is issuable upon the
exercise of any such Option or upon conversion or exchange or exercise of any
Convertible Securities issuable upon exercise of such Option" shall be equal to
the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to any one share of Common Stock upon granting or
sale of the Option, upon exercise of the Option and upon conversion or exchange
or exercise of any Convertible Security issuable upon exercise of such Option.
No further adjustment of the Conversion Price shall be made upon the actual
issuance of such share of Common Stock or of such Convertible Securities 

10 

upon the exercise of such Options or upon the actual issuance
of such Common Stock upon conversion or exchange or exercise of such Convertible
Securities. 

     (ii) Issuance of Convertible
Securities. If the Company in any manner issues or sells any Convertible
Securities and the lowest price per share for which one share of Common Stock is
issuable upon such conversion or exchange or exercise thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such Convertible Securities for such price per share. For
the purposes of this Section, the "lowest price per share for which one share of
Common Stock is issuable upon such conversion or exchange or exercise" shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock upon the
issuance or sale of the Convertible Security and upon the conversion or exchange
or exercise of such Convertible Security. No further adjustment of the
Conversion Price shall be made upon the actual issuance of such share of Common
Stock upon conversion or exchange or exercise of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of the Conversion Price had been or
are to be made pursuant to other provisions of this Section, no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale. 

     (iii) Change in Option Price
or Rate of Conversion. If the purchase price provided for in any Options,
the additional consideration, if any, payable upon the issue, conversion,
exchange or exercise of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exchangeable or exercisable for
Common Stock changes at any time, the Conversion Price in effect at the time of
such change shall be adjusted to the Conversion Price which would have been in
effect at such time had such Options or Convertible Securities provided for such
changed purchase price, additional consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold. For purposes of
this Section, if the terms of any Option or Convertible Security that was
outstanding as of the Issuance Date are changed in the manner described in the
immediately preceding sentence, then such Option or Convertible Security and the
Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such change. No adjustment shall
be made if such adjustment would result in an increase of the Conversion Price
then in effect. 

     (iv) Calculation of
Consideration Received. In case any Option is issued in connection with the
issue or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to such
Options by the parties thereto, the Options will be deemed to have been issued
for the difference of (x) the aggregate fair market value of such Options and
other securities issued or sold in such integrated transaction, less (y) the
fair market value of the securities other than such Option, issued or sold in
such transaction and the other securities issued or sold in such integrated
transaction will be deemed to have been issued or sold for the balance of the
consideration received by the Company. If any Common Stock, Options or
Convertible Securities are issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor will be deemed to be the gross
amount raised by the Company; provided, however, that such gross amount is not
greater than 110% of the net amount received by the Company therefor. If any

11 

Common Stock, Options or Convertible Securities are issued or
sold for a consideration other than cash, the amount of the consideration other
than cash received by the Company will be the fair value of such consideration,
except where such consideration consists of securities, in which case the amount
of consideration received by the Company will be the Closing Bid Price of such
securities on the date of receipt. If any Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring
valuation (the "Valuation Event"), the fair value of such consideration will be
determined within five (5) Business Days after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser
shall be deemed binding upon all parties absent manifest error and the fees and
expenses of such appraiser shall be borne by the Company. 

     (v) Record Date. If the
Company takes a record of the holders of Common Stock for the purpose of
entitling them (A) to receive a dividend or other distribution payable in Common
Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date will be
deemed to be the date of the issue or sale of the Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be. 

     (b) Adjustment of Conversion
Price upon Subdivision or Combination of Common Stock. If the
Company, at any time while this Debenture is outstanding, shall (a) pay a stock
dividend or otherwise make a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock, (b) subdivide outstanding shares of Common Stock into a
larger number of shares, (c) combine (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (d) issue
by reclassification of shares of the Common Stock any shares of capital stock of
the Company, then the 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 before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such
event. Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification. 

     (c) Purchase Rights. If at
any time the Company grants, issues or sells any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of Common Stock (the "Purchase Rights"),
then the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Debenture 

12 

(without taking into account any limitations or restrictions on
the convertibility of this Debenture) immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights. 

     (d) Other Events. If any
event occurs of the type contemplated by the provisions of this Section 4 but
not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an
appropriate adjustment in the Conversion Price so as to protect the rights of
the Holder under this Debenture; provided that no such adjustment will increase
the Conversion Price as otherwise determined pursuant to this Section 5. 

     (e) Other Corporate
Events. In addition to and not in substitution for any other rights
hereunder, prior to the consummation of any Fundamental Transaction pursuant to
which holders of shares of Common Stock are entitled to receive securities or
other assets with respect to or in exchange for shares of Common Stock (a
"Corporate Event"), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon a
conversion of this Debenture, at the Holder's option, (i) in addition to the
shares of Common Stock receivable upon such conversion, such securities or other
assets to which the Holder would have been entitled with respect to such shares
of Common Stock had such shares of Common Stock been held by the Holder upon the
consummation of such Corporate Event (without taking into account any
limitations or restrictions on the convertibility of this Debenture) or (ii) in
lieu of the shares of Common Stock otherwise receivable upon such conversion,
such securities or other assets received by the holders of shares of Common
Stock in connection with the consummation of such Corporate Event in such
amounts as the Holder would have been entitled to receive had this Debenture
initially been issued with conversion rights for the form of such consideration
(as opposed to shares of Common Stock) at a conversion rate for such
consideration commensurate with the Conversion Rate. Provision made pursuant to
the preceding sentence shall be in a form and substance satisfactory to the
Required Holders. The provisions of this Section shall apply similarly and
equally to successive Corporate Events and shall be applied without regard to
any limitations on the conversion or redemption of this Debenture. 

     (f) Whenever the Conversion Price
is adjusted pursuant to Section 5 hereof, the Company shall promptly mail to the
Holder a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. 

     (g) In case of any (1) merger or
consolidation of the Company or any subsidiary of the Company with or into
another Person, or (2) sale by the Company or any subsidiary of the Company of
more than one-half of the assets of the Company in one or a series of related
transactions, a Holder shall have the right to (A) exercise any rights under
Section 2(b), (B) convert the aggregate amount of this Debenture then
outstanding into the shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of Common Stock following such
merger, consolidation or sale, and such Holder shall be entitled upon such event
or series of related events to receive such amount of securities, cash and 

13 

property as the shares of Common Stock into which such
aggregate principal amount of this Debenture could have been converted
immediately prior to such merger, consolidation or sales would have been
entitled, or (C) in the case of a merger or consolidation, require the surviving
entity to issue to the Holder a convertible Debenture with a principal amount
equal to the aggregate principal amount of this Debenture then held by such
Holder, plus all accrued and unpaid interest and other amounts owing thereon,
which such newly issued convertible Debenture shall have terms identical
(including with respect to conversion) to the terms of this Debenture, and shall
be entitled to all of the rights and privileges of the Holder of this Debenture
set forth herein and the agreements pursuant to which this Debentures were
issued. In the case of clause (C), the conversion price applicable for the newly
issued shares of convertible preferred stock or convertible Debentures shall be
based upon the amount of securities, cash and property that each share of Common
Stock would receive in such transaction and the Conversion Price in effect
immediately prior to the effectiveness or closing date for such transaction. The
terms of any such merger, sale or consolidation shall include such terms so as
to continue to give the Holder the right to receive the securities, cash and
property set forth in this Section upon any conversion or redemption following
such event. This provision shall similarly apply to successive such events. 

(6) REISSUANCE OF THIS DEBENTURE. 

     (a) Transfer. If this
Debenture is to be transferred, the Holder shall surrender this Debenture to the
Company, whereupon the Company will, subject to the satisfaction of the transfer
provisions of the Securities Purchase Agreement, forthwith issue and deliver
upon the order of the Holder a new Debenture (in accordance with Section 6(d)),
registered in the name of the registered transferee or assignee, representing
the outstanding Principal being transferred by the Holder and, if less then the
entire outstanding Principal is being transferred, a new Debenture (in
accordance with Section 6(d)) to the Holder representing the outstanding
Principal not being transferred. The Holder and any assignee, by acceptance of
this Debenture, acknowledge and agree that, by reason of the provisions of
Section 4(b)(iii) following conversion or redemption of any portion of this
Debenture, the outstanding Principal represented by this Debenture may be less
than the Principal stated on the face of this Debenture. 

     (b) Lost, Stolen or Mutilated
Debenture. Upon receipt by the Company of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Debenture,
and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form and, in the case of
mutilation, upon surrender and cancellation of this Debenture, the Company shall
execute and deliver to the Holder a new Debenture (in accordance with Section
6(d)) representing the outstanding Principal. 

     (c) Debenture Exchangeable for
Different Denominations. This Debenture is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Debenture
or Debentures (in accordance with Section 6(d)) representing in the aggregate
the outstanding Principal of this Debenture, and each such new Debenture will
represent such portion of such outstanding Principal as is designated by the
Holder at the time of such surrender. 

14 

     (d) Issuance of New
Debentures. Whenever the Company is required to issue a new Debenture
pursuant to the terms of this Debenture, such new Debenture (i) shall be of like
tenor with this Debenture, (ii) shall represent, as indicated on the face of
such new Debenture, the Principal remaining outstanding (or in the case of a new
Debenture being issued pursuant to Section 6(a) or Section 6(c), the Principal
designated by the Holder which, when added to the principal represented by the
other new Debentures issued in connection with such issuance, does not exceed
the Principal remaining outstanding under this Debenture immediately prior to
such issuance of new Debentures), (iii) shall have an issuance date, as
indicated on the face of such new Debenture, which is the same as the Issuance
Date of this Debenture, (iv) shall have the same rights and conditions as this
Debenture, and (v) shall represent accrued and unpaid Interest from the Issuance
Date. 

     (7) NOTICES. Any notices,
consents, waivers or other communications required or permitted to be given
under the terms hereof must be in writing and will be deemed to have been
delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
(1) Trading Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be: 

	If to the Company, to: 	Migdal Aviv 
	  	7 Abba Hilel Street 
	  	Ramat Gan, 52520 
	  	Israel 
	  	Telephone: 011 972 3 5913952 
	  	Facsimile: 011 +972 9 955 0454 
	  	  
	With a copy to: 	Clark Wilson LLP 
	  	800 – 885 West Georgia Street 
	  	Vancouver, BC Canada 
	  	V6M 3R9 
	  	Attention: Bernard Pinsky 
	  	Telephone: 604.687.5700 
	  	Facsimile: 604.687.6314 
	  	  
	  	  
	If to the Holder: 	YA Global Investments, L.P. 
	  	101 Hudson Street, Suite 3700 
	  	Jersey City, NJ 07303 
	  	Attention: Mark Angelo 
	  	Telephone: (201) 985-8300 

15 

	With a copy to: 	David Gonzalez, Esq. 
	  	101 Hudson Street – Suite 3700 
	  	Jersey City, NJ 07302 
	  	Telephone: (201) 985-8300 
	  	Facsimile: (201) 985-8266 

     or at such other address and/or
facsimile number and/or to the attention of such other person as the recipient
party has specified by written notice given to each other party three (3)
Business Days prior to the effectiveness of such change. Written confirmation of
receipt (i) given by the recipient of such notice, consent, waiver or other
communication, (ii) mechanically or electronically generated by the sender's
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (iii) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively. 

     (8) Except as expressly provided
herein, no provision of this Debenture shall alter or impair the obligations of
the Company, which are absolute and unconditional, to pay the principal of,
interest and other charges (if any) on, this Debenture at the time, place, and
rate, and in the coin or currency, herein prescribed. This Debenture is a direct
obligation of the Company. As long as this Debenture is outstanding, the Company
shall not and shall cause their subsidiaries not to, without the consent of the
Holder, (i) amend its certificate of incorporation, bylaws or other charter
documents so as to adversely affect any rights of the Holder; (ii) repay,
repurchase or offer to repay, repurchase or otherwise acquire shares of its
Common Stock or other equity securities other than as to the Underlying Shares
to the extent permitted or required under the Transaction Documents; or (iii)
enter into any agreement with respect to any of the foregoing.

     (9) This Debenture shall not
entitle the Holder to any of the rights of a stockholder of the Company,
including without limitation, the right to vote, to receive dividends and other
distributions, or to receive any notice of, or to attend, meetings of
stockholders or any other proceedings of the Company, unless and to the extent
converted into shares of Common Stock in accordance with the terms hereof. 

     (10) No indebtedness of the
Company is senior to this Debenture in right of payment, whether with respect to
interest, damages or upon liquidation or dissolution or otherwise. Without the
Holder’s consent, the Company will not and will not permit any of their
subsidiaries to, directly or indirectly, enter into, create, incur, assume or
suffer to exist any indebtedness 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 there from that is senior in any respect to the
obligations of the Company under this Debenture. 

     (11) This Debenture shall be
governed by and construed in accordance with the laws of the State of New
Jersey, without giving effect to conflicts of laws thereof. Each of the parties
consents to the jurisdiction of the Superior Courts of the State of New Jersey
sitting in 

16 

Hudson County, New Jersey and the U.S. District Court for the
District of New Jersey sitting in Newark, New Jersey in connection with any
dispute arising under this Debenture and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
conveniens to the bringing of any such proceeding in such jurisdictions.

     (12) If the Company fails to
strictly comply with the terms of this Debenture, then the Company shall
reimburse the Holder promptly for all fees, costs and expenses, including,
without limitation, attorneys’ fees and expenses incurred by the Holder in any
action in connection with this Debenture, including, without limitation, those
incurred: (i) during any workout, attempted workout, and/or in connection with
the rendering of legal advice as to the Holder’s rights, remedies and
obligations, (ii) collecting any sums which become due to the Holder, (iii)
defending or prosecuting any proceeding or any counterclaim to any proceeding or
appeal; or (iv) the protection, preservation or enforcement of any rights or
remedies of the Holder. 

     (13) Any waiver by 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 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. 

     (14) 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 shall violate 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. 

     (15) 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. 

     (16) THE PARTIES HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION 

17 

DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT. 

     (17) CERTAIN DEFINITIONS
For purposes of this Debenture, the following terms shall have the following
meanings: 

     (a) “Approved Stock Plan”
means a stock option plan that has been approved by the Board of Directors of
the Company, pursuant to which the Company’s securities may be issued only to
any employee, officer, or director for services provided to the Company. 

     (b) "Bloomberg" means Bloomberg
  Financial Markets. 

     (c) “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 are
authorized or required by law or other government action to close. 

     (d) “Change of Control
Transaction” means the occurrence of (a) 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 fifty percent (50%) of the voting
securities of the Company (except that the acquisition of voting securities by
the Holder or any other current holder of convertible securities of the Company
shall not constitute a Change of Control Transaction for purposes hereof), (b) a
replacement at one time or over time of more than one-half of the members of the
board of directors of the Company which is not approved by a majority of those
individuals who are members of the board of directors on the date of such change
(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 of such
change), (c) the merger, consolidation or sale of fifty percent (50%) or more of
the assets of the Company or any subsidiary of the Company in one or a series of
related transactions with or into another entity that is not a related entity to
the Company, provided however in the event the Company seeks to consummate a
merger, consolidation or sale of fifty percent (50%) or more of the assets of
the Company or any subsidiary of the Company in one or a series of related
transactions with or into another entity that is a related entity to the Company
the Company shall obtain the prior written consent of the Holder, or (d) 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 (a), (b)
or (c). 

     (e) “Closing Bid Price”
means the price per share in the last reported trade of the Common Stock on a
Primary Market or on the exchange which the Common Stock is then listed as
quoted by Bloomberg. 

     (f) “Convertible
Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for Common Stock.

18 

     (g) “Commission”
  means the Securities and Exchange Commission. 

     (h) “Common Stock” means
the common stock, par value $.001, of the Company and stock of any other class
into which such shares may hereafter be changed or reclassified. 

     (i) "Company Conversion
Price" means, the lower of (i) the applicable Conversion Price and (ii) that
price which shall be computed as ninety five percent (95%) of the lowest Volume
Weighted Average Price of the Common Stock during the fifteen (15) consecutive
Trading Days immediately preceding the applicable Installment Date. All such
determinations to be appropriately adjusted for any stock split, stock dividend,
stock combination or other similar transaction. 

     (j) "Equity Conditions"
means that each of the following conditions is satisfied: (i) on each day during
the period beginning two (2) weeks prior to the applicable date of determination
and ending on and including the applicable date of determination (the "Equity
Conditions Measuring Period"), either (x) the Underlying Shares Registration
Statement filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all applicable shares of Common Stock to be
issued in connection with the event requiring determination or (y) all
applicable shares of Common Stock to be issued in connection with the event
requiring determination shall be eligible for sale without restriction and
without the need for registration under any applicable federal or state
securities laws; (ii) on each day during the Equity Conditions Measuring Period,
the Common Stock is designated for quotation on the Principal Market and shall
not have been suspended from trading on such exchange or market nor shall
delisting or suspension by such exchange or market been threatened or pending
either (A) in writing by such exchange or market or (B) by falling below the
then effective minimum listing maintenance requirements of such exchange or
market; (iii) during the Equity Conditions Measuring Period, the Company shall
have delivered Conversion Shares upon conversion of the Debentures to the Holder
on a timely basis as set forth in Section 4(b)(ii) hereof; (iv) any applicable
shares of Common Stock to be issued in connection with the event requiring
determination may be issued in full without violating Section 4(c) hereof and
the rules or regulations of the Primary Market; (v) during the Equity Conditions
Measuring Period, there shall not have occurred either (A) an Event of Default
or (B) an event that with the passage of time or giving of notice would
constitute an Event of Default; and (vii) the Company shall have no knowledge of
any fact that would cause (x) the Registration Statements required pursuant to
the Registration Rights Agreement not to be effective and available for the
resale of all applicable shares of Common Stock to be issued in connection with
the event requiring determination or (y) any applicable shares of Common Stock
to be issued in connection with the event requiring determination not to be
eligible for sale without restriction and without the need for registration
under any applicable federal or state securities laws. 

     (k) "Equity Conditions
Failure" means that on any applicable date the Equity Conditions have not
been satisfied (or waived in writing by the Holder). 

     (l) “Exchange Act” means
the Securities Exchange Act of 1934, as amended. 

19 

     (m) “Excluded Securities”
means, (a) shares issued or deemed to have been issued by the Company pursuant
to an Approved Stock Plan (b) shares of Common Stock issued or deemed to be
issued by the Company upon the conversion, exchange or exercise of any right,
option, obligation or security outstanding on the date prior to date of the
Securities Purchase Agreement, provided that the terms of such right, option,
obligation or security are not amended or otherwise modified on or after the
date of the Securities Purchase Agreement, and provided that the conversion
price, exchange price, exercise price or other purchase price is not reduced,
adjusted or otherwise modified and the number of shares of Common Stock issued
or issuable is not increased (whether by operation of, or in accordance with,
the relevant governing documents or otherwise) on or after the date of the
Securities Purchase Agreement, (c) shares issued in connection with any
acquisition by the Company, whether through an acquisition of stock or a merger
of any business, assets or technologies, leasing arrangement or any other
transaction the primary purpose of which is not to raise equity capital, and (d)
the shares of Common Stock issued or deemed to be issued by the Company upon
conversion of this Debenture. 

     (n) "Holder Pro Rata
Amount" means a fraction (i) the numerator of which is the Original
Principal Amount of this Debenture on the Issuance Date and (ii) the denominator
of which is the aggregate Purchase Price (as defined in the Securities Purchase
Agreement). 

     (o) "Installment Amount"
means with respect to any Installment Date, the lesser of (A) the product of (i)
$300,000, multiplied by (ii) Holder Pro Rata Amount and (B) the Principal amount
under this Debenture as of such Installment Date, as any such Installment Amount
may be reduced pursuant to the terms of this Debenture, whether upon conversion,
redemption or otherwise, together with, in each case the sum of any accrued and
unpaid Interest with respect to such Principal amount. In the event the Holder
shall sell or otherwise transfer any portion of this Debenture, the transferee
shall be allocated a pro rata portion of the each unpaid Installment Amount
hereunder. In the event that the Holder is the holder of more than one Debenture
of this series of Secured Convertible Debentures issued pursuant to the
Securities Purchase Agreement, then the Holder shall have the right to allocate
the any Installment Amount due to it among the Debentures as it sees fit and
shall notify the Company of such allocation.

     (p) "Installment Date"
means the first Business Day on or after July 31, 2008, and continuing on the
first Business Day of each successive calendar month thereafter.

     (q) "Installment Volume
Limitation" means 15% of the aggregate dollar trading volume (as reported on
Bloomberg) of the Common Stock on the Principal Market over the forty (40)
consecutive Trading Day period ending on the Trading Day immediately preceding
the applicable Installment Notice Date. 

     (r) “Interest Payment
Date” shall mean the first Business Day on or after each of: January 31,
2008, April 30, 2008, July 31, 2008, October 31, 2008, January 31, 2009, April
30, 2009, July 31, 2009, October 31, 2009, January 31, 2010, and April 30,
2010.

     (s) “Options” means any
rights, warrants or options to subscribe for or purchase shares of Common Stock
or Convertible Securities. 

20 

     (t) “Original Issue Date”
means the date of the first issuance of this Debenture regardless of the number
of transfers and regardless of the number of instruments, which may be issued to
evidence such Debenture. 

     (u) “Person” means a
corporation, an association, a partnership, organization, a business, an
individual, a government or political subdivision thereof or a governmental
agency. 

     (v) “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder. 

     (w) “Securities Purchase
Agreement” means the Securities Purchase Agreement dated July 6, 2007 by and
among the Company and the Buyers listed on Schedule I attached thereto.

     (x) “Trading Day” means a
day on which the shares of Common Stock are quoted on the OTCBB or quoted or
traded on such Primary Market on which the shares of Common Stock are then
quoted or listed; provided, that in the event that the shares of Common Stock
are not listed or quoted, then Trading Day shall mean a Business Day. 

     (y) “Transaction
Documents” means the Securities Purchase Agreement or any other agreement
delivered in connection with the Securities Purchase Agreement, including,
without limitation, the Security Agreement, the Irrevocable Transfer Agent
Instructions, and the Registration Rights Agreement. 

     (z) “Underlying Shares”
means the shares of Common Stock issuable upon conversion of this Debenture or
as payment of interest in accordance with the terms hereof. 

     (aa) “Underlying Shares
Registration Statement” means a registration statement meeting the
requirements set forth in the Registration Rights Agreement, covering among
other things the resale of the Underlying Shares and naming the Holder as a
“selling stockholder” thereunder. 

     (bb) "Volume Weighted Average
Price" means, for any security as of any date, the daily dollar
volume-weighted average price for such security on the Primary Market as
reported by Bloomberg through its “Historical Prices – Px Table with Average
Daily Volume” functions, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC.

     (cc) "Warrants" has the
meaning ascribed to such term in the Securities Purchase Agreement, and shall
include all warrants issued in exchange therefor or replacement thereof. 

[Signature Page Follows] 

21 

     IN WITNESS WHEREOF, the
Company has caused this Secured Convertible Debenture to be duly executed by a
duly authorized officer as of the date set forth above. 

	 	COMPANY: 
	 	GLOBAL ENERGY, INC. 
	 	  	  
	 	By: 	/s/ Asi Shalgi 
	 	Name: 	Asi Shalgi 
	 	Title: 	Chief Executive Officer

 EXHIBIT I

  CONVERSION NOTICE 

 (To be executed by the Holder in order to Convert the Debenture)
  

TO:  

     The undersigned hereby irrevocably elects to convert $      of the principal amount of Debenture No.GEYI-1-4 into Shares of Common Stock of GLOBAL ENERGY, INC., according to the conditions stated therein, as
of the Conversion Date written below. 

	
Conversion Date:
		 

	
	
Conversion Amount to be
		 

	
	
converted:
		
$
	
	
Conversion Price:
		
$
	
	
Number of shares of Common
		 

	
	
Stock to be issued:
		 

	
	
Amount of Debenture
		 

	
	
Unconverted:
		
$
	

Please issue the shares of Common Stock in the following name and to the following address: Issue to:   

	
Authorized Signature:
	
	
Name:
	
	
Title:
	
	
Broker DTC Participant Code:
	
	
Account Number:

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