Document:

EXHIBIT 4.2

                            SPECTRE INDUSTRIES, INC.

                 10% CONVERTIBLE DEBENTURES DUE JANUARY 29, 2001

      THE SECURITY OR SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT (A) OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (B) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR ANOTHER THEN-AVAILABLE EXEMPTION UNDER THE SECURITIES ACT AND
STATE SECURITIES LAWS, (C) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS, OR (D) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER).

Certificate No.                                               U.S.  $___________

FOR VALUE RECEIVED, SPECTRE INDUSTRIES, INC., a corporation organized under the
laws of the State of Nevada (the "Company"), hereby promises to pay to _________
__________, or registered assigns, the principal sum of _____________________
($____________) on January 29, 2001, and to pay interest thereon in the manner
set forth herein from October 15, 2001 at the rate of 10% per annum, payable
semi-annually on July 29 and January 29, commencing on July 29, 1999 (each such
date, an "Interest Payment Date"), until the principal hereof is paid or made
available for payment in the manner set forth herein.

      1. ISSUANCE. This Debenture is one of a duly authorized issue of
Debentures of the Company designated as its 10% Convertible Debentures, dated
January 29, 1999 in an aggregate principal amount of up to $ .

      2. INTEREST.

      (a) Interest Rate; Payment. The Company promises to pay interest on the
principal amount of this Debenture at the rate of 10% per annum. Interest on
this Debenture will accrue from the date the funds shall have been received by
the Company, as confirmed by written notice to the Holder (as defined) until
payment in full of the principal amount hereof has been made or duly provided
for and will be based on the actual number of days and months elapsed and
computed on a 360-day year consisting of twelve 30-day months. Interest shall be
payable in arrears on the earlier to occur of (i) the date of conversion to
Common Stock (as defined in Section 4 below) as provided herein of all or a
portion of this Debenture (if this Debenture shall be converted in part, then
interest only with respect to the portion of this Debenture so converted shall
be payable at such time) and (ii), with respect to any unconverted portion of
this Debenture, each Interest Payment Date on or prior to January 29, 2001 (the
"Maturity Date"). Interest on this Debenture is payable to

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the holder of this Debenture registered on the books of the Company (the
"Holder") at the option of the Company in the form of either such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

      (b) Interest Reserve. The Company shall pay 10% of the principal amount of
this Debenture into a separate interest reserve account established in the name
of the Company with a reputable banking institution in New York City. The
Company shall keep in such account funds in an amount equal to 10% of the
unconverted principal amount of this Debenture at all times on or prior to July
29, 1999, and funds in an amount equal to 5% of the unconverted principal amount
of this Debenture at all times on or prior to January 29, 2000. Thereafter, the
Company shall no longer be required to keep any funds in such account. The funds
in such account may be invested in interest bearing securities issued by the
United States of America or any political subdivision thereof, a money market or
similar account or in comparable securities or mutual funds.

      3. PRINCIPAL. On the Maturity Date, upon surrender of this Debenture by
the Holder to the Company, the Company shall pay to the Holder the outstanding
principal amount hereof (1) in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts or (2) in shares of common stock, par value $.0001 per share, of
the Company (the "Common Stock"), valued at the lower of (x) $.80 per share or
(y) the average closing price per share of Common Stock on the stock exchange or
automated quotation system on which the Common Stock is then listed or quoted,
as the case may be, and, if the Common Stock is listed or quoted on more than
one such exchange or automated quotation system, on such exchange or automated
quotation system as may be selected by the Board of Directors of the Company for
the purpose of establishing such average price, on the twenty (20) trading days
immediately preceding the payment date, in each case together with accrued
interest on such outstanding principal amount as set forth in Section 2.

      4. CONVERSION.

      (a) Conversion Right; Price. Subject to this Section 4,

                  (i) the Holder of this Debenture has the right to convert this
      Debenture, in whole or in part in increments of $1,000 (inclusive of
      accrued interest with respect thereto), into shares of Common Stock at any
      time prior to the Maturity Date

            (ii) the Company has the right to force the conversion of this
      Debenture, in whole or in part in increments of $1,000 (inclusive of
      accrued interest with respect thereto), into Common Stock at any time on
      or after July 29, 2000 upon giving the Holder thirty (30) days prior
      notice in writing if the closing price of the Common Stock has been at
      least $1.25 for twenty (20) consecutive trading days during the three
      month period immediately preceding such notice.

      The price at which this Debenture (or any portion thereof) may be so
      converted into shares of Common Stock (the "Conversion Price") shall be
      $.80. In lieu of any fractional share of Common Stock to which the Holder
      would otherwise be entitled upon conversion of this Debenture (or portion
      thereof), the number of shares of Common Stock issuable upon

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      conversion of this Debenture shall be rounded up to the nearest whole
      number. In the case of a dispute as to the calculation of the Conversion
      Price, the Holder's calculation shall be deemed conclusive absent manifest
      error.

      (b) Mechanics of Conversion. (i) To convert this Debenture (or a portion
thereof) the Holder must (i) complete and sign the Notice of Conversion set
forth as Exhibit A to this Debenture (the "Notice of Conversion") and deliver
the Notice of Conversion to the Company as herein provided and (ii) on or prior
to the date on which delivery of Common Stock is required to be made hereunder,
(x) deliver this Debenture, duly endorsed, to the Company and (y) pay any
transfer or similar tax if required. The Holder shall surrender this Debenture
and the Notice of Conversion to the Company (with an advance copy by facsimile
of the Notice of Conversion). The date on which Notice of Conversion is given
(the "Date of Conversion") shall be deemed to be the date of receipt by the
Company of the facsimile of the Notice of Conversion, provided that this
Debenture is received by the Company within five (5) business days thereafter.
The Company shall not be obligated to cause the transfer agent for the Common
Stock (the "Transfer Agent") to issue certificates evidencing the shares of
Common Stock issuable upon such conversion unless either this Debenture has been
received by the Company or, if this Debenture has been lost, stolen or
destroyed, the Holder executes an agreement satisfactory to the Company to
indemnify the Company from any loss incurred by it in connection with this
Debenture.

      (ii) The Company shall cause the Transfer Agent to issue and deliver
within ten (10) business days after the actual delivery to the Company of this
Debenture to the Holder of this Debenture at the address of the Holder on the
books of the Company or as otherwise directed pursuant to the Notice of
Conversion, a certificate or certificates for the number of shares of Common
Stock to which such Holder shall be entitled as aforesaid. The person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date. Notwithstanding that the Holder is required to
deliver this Debenture, duly endorsed, within five (5) business days after the
Date of Conversion, if this Debenture is not received by the Company within ten
(10) business days after the Date of Conversion, the Notice of Conversion shall
become null and void.

      (iii) Following conversion of this Debenture, or a portion thereof, the
principal amount so converted, will be deemed paid in full and satisfied, and
such principal amount will no longer be outstanding. In the event this Debenture
is converted in part, the Company will issue to the Holder a new Debenture in a
principal amount equal to the portion of this Debenture not converted.

      (c) Reservation of Stock Issuable Upon Conversion. The Company shall at
all times reserve and keep available out of its authorized but unissued shares
of Common Stock or shares of Common Stock held in treasury, or both, solely for
the purpose of effecting the conversion of this Debenture, such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of this Debenture and all other securities of the Company convertible
or exchangeable into Common Stock.

      (d) Adjustment to Conversion Price. (i) If, prior to the conversion of the
entire principal amount of this Debenture, the number of outstanding shares of
Common Stock is increased by a

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stock split, stock dividend of shares of Common Stock or other shares of capital
stock, reclassification or other similar event, the Conversion Price shall be
proportionately reduced, or if the number of outstanding shares of Common Stock
is decreased by a combination or reclassification of shares or other similar
event, the Conversion Price shall be proportionately increased, in each case,
such that the Holder of this Debenture will have the right to receive upon
conversion of this Debenture the number of shares of Common Stock (or other
shares of Capital Stock) of the Company (notwithstanding the limitation set
forth in the third paragraph of Section 4(a)) which such Holder would have been
entitled to receive had the Holder converted this Debenture immediately prior to
such action.

      (ii) If, prior to the conversion of the entire principal amount of this
Debenture, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event (a "Conversion
Reclassification Event"), as a result of which shares of Common Stock of the
Company shall be changed into the same or a different number of shares of the
Company or the same or another class or classes of stock or securities of the
Company or another entity, then the Holder of this Debenture shall thereafter
have the right to receive upon conversion of this Debenture, upon the basis and
the terms and conditions specified herein, such shares of stock and/or
securities as may be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore receivable upon the
conversion of this Debenture (irrespective of the limitations set forth in
Section 4(a)) had such Conversion Reclassification Event not taken place, and in
any such case appropriate provisions shall be made with respect to the rights
and interests of the Holder of this Debenture such that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of this Debenture)
shall thereafter be applicable, as nearly as may be practicable in relation to
any shares of stock or securities thereafter deliverable upon the conversion of
this Debenture. The Company shall not effect any Conversion Reclassification
Event unless the resulting successor or acquiring entity (if not the Company)
assumes the obligation to deliver to the Holder of this Debenture such shares of
stock and/or securities as the Holder of this Debenture is entitled to receive
upon conversion in accordance with the foregoing.

      (iv) In the event that the Company shall at any time after the date of
this Agreement (i) issue shares of Common Stock without consideration (other
than in the form of a dividend) or at a price per share less than the Conversion
Price, or (ii) issue options, rights or warrants to subscribe for or purchase
Common Stock (or securities convertible into Common Stock) without consideration
or at a price per share (or having a conversion price per share, if a security
convertible into Common Stock) less than the Conversion Price, the Conversion
Price to be in effect after the date of such issuance shall be adjusted by
multiplying the Conversion Price in effect immediately prior to the date of such
issuance by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of such issuance plus the number of shares
of Common Stock which the aggregate offering price of the total number of shares
of Common Stock so to be issued or the aggregate initial conversion price of the
convertible securities so to be issued would purchase at the Conversion Price
immediately prior to such issuance and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of such issuance plus
the number of additional shares of Common Stock to be issued (or into which the
convertible securities so to be issued are initially convertible). In case the
subscription price for such securities may be paid in a consideration, part or
all of which shall be in a form other than cash, the value of such

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consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive. Such adjustment shall be
made successively whenever the date of such issuance is fixed and, in the event
that such shares or options, rights or warrants (or portions thereof) expire
without being issued, the Conversion Price shall again be adjusted to reflect
such occurrence.

      (v) If any adjustment under this Section 4(d) would create a fractional
share of Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share shall be disregarded and the number of shares of Common
Stock issuable upon conversion shall be the next higher number of shares.

      5. REDEMPTION. The Debenture may be redeemed in whole or in part by the
Company at 100% of the principal plus accrued interest through and including the
date of redemption at any time by giving the Holder at least thirty (30) days
prior notice in writing. It being understood that the Holder's conversion right
pursuant to Section 4 hereof shall remain in full force and effect until the
fifth business day immediately preceding the effective date of such redemption.

      6. SUBORDINATION.

      (a) The Company, for itself, its successors and assigns, covenants and
agrees, and the Holder of this Debenture, by acceptance hereof, covenants and
agrees, that payment of the principal of and interest on this Debenture is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full of all Senior
Indebtedness. "Senior Indebtedness" means the principal of, premium, if any, and
unpaid interest on (a) indebtedness of the Company (including indebtedness of
others guaranteed by the Company), other than this Debenture, whether
outstanding on the date of original issuance of this Debenture or hereafter
created, incurred, assumed, or guaranteed, (i) for money owing to banks, (ii)
for money borrowed from other than banks or (iii) arising under a lease of
property, equipment or other assets, which indebtedness, pursuant to generally
accepted accounting principles then in effect, is classified upon the balance
sheet of the Company as a liability of the Company, unless in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is provided that such indebtedness is not superior in right of payment to this
Debenture, and (b) renewals, extensions, modifications and refundings of any
such indebtedness.

      (b) Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of the assets and liabilities
of the Company or otherwise, the holders of all Senior Indebtedness shall be
entitled to receive payment in full of the principal thereof, premium, if any,
and the interest due thereon before the Holder of this Debenture is entitled to
receive any payment of principal or interest on this Debenture; and in the event
that, notwithstanding the foregoing, any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
shall be received by the Holder of this Debenture before all Senior Indebtedness
is paid in full, such payment or distribution shall be paid over to the holders
of such Senior Indebtedness or their representative or to the trustee under any
indenture or agreement under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably

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as aforesaid, for application to the payment of all Senior Indebtedness
remaining unpaid until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness.

      (c) Subject to the payment in full of all Senior Indebtedness, the Holder
of this Debenture shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of the Company applicable to
Senior Indebtedness until the principal of and interest on this Debenture shall
be paid in full and no such payments or distributions to the Holder of this
Debenture of cash, property or securities otherwise distributable to the Senior
Indebtedness shall, as between the Company, its creditors other than the holders
of Senior Indebtedness, and the Holder of this Debenture, be deemed to be a
payment by the Company to or on account of this Debenture. It is understood that
the provisions of this Section 5 are and are intended solely for the purpose of
defining the relative rights of the Holder of this Debenture and the holders of
Senior Indebtedness. Nothing contained in this Debenture is intended to, or
shall, impair, as between the Company, its creditors other than the holders of
Senior Indebtedness, and the Holder of this Debenture, the obligation of the
Company, which is unconditional and absolute, to pay to the Holder of this
Debenture principal of and interest on this Debenture as and when the same shall
become due and payable in accordance with its terms, or to affect the relative
rights of the Holder of this Debenture and creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything in this Debenture prevent
the Holder of this Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Debenture, subject to the rights, if any,
under this Section 5 of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.

      (d) If the Holder of this Debenture does not file a proper claim or proof
of debt in the form required in any proceeding referred to above prior to 30
days before the expiration of the time to file such claim in such proceeding,
then the holder of any Senior Indebtedness is hereby authorized, and has the
right, to file an appropriate claim or claims for or on behalf of the Holder.

      (e) The Holder of this Debenture by its acceptance hereof agrees to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Section 5.

      7. REGISTERED HOLDER. The Company may for all purposes treat the
registered holders on its books and records of this Debenture as the Holder.

      8. DENOMINATIONS. Debentures (and any Debenture issued in exchange, upon
transfer or upon conversion) may be issued in a minimum principal amount of
$10,000 (or such lesser amount upon a conversion in part of a Debenture provided
such lesser amount represents such Holder's entire holding of Debentures).

      9. EVENTS OF DEFAULT.

      (a) An "Event of Default" under this Debenture occurs if:

            (i) the Company defaults in effecting a conversion of this Debenture
      in accordance with the provisions hereof and such default continues for a
      period of 10 business days;

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            (ii) the Company defaults in the payment of the principal of or
      interest on this Debenture when the same becomes due and payable and, in
      the case of a default in any interest payment, the same continues for a
      period of 30 days;

            (iii) the Company or any subsidiary pursuant to or within the
      meaning of any federal or state bankruptcy, insolvency or other law for
      the relief of debtors ("Bankruptcy Law"):

            (A) commences a voluntary case or proceeding;

            (B) consents to the entry of an order for relief against it in an
            involuntary case or proceeding;

            (C) consents to the appointment of any receiver, trustee, assignee,
            liquidator, custodian or similar official under any Bankruptcy Law
            (a "Custodian") of it or for any substantial part of its property;
            or

            (D) makes a general assignment for the benefit of its creditors; or
            takes any comparable action under any foreign laws relating to
            insolvency; a court of competent jurisdiction enters an order or
            decree under any Bankruptcy Law that: (I) is for relief against the
            Company or any subsidiary in an involuntary case or proceeding; (II)
            appoints a Custodian of the Company or any subsidiary or for any
            substantial part of its property; or (III) orders the winding up or
            liquidation of the Company or any subsidiary; or similar relief is
            granted under any foreign laws and the order or decree remains
            unstayed and in effect for 60 days; or

            (iv) any final judgment or decree for the payment of money in excess
      of $1,000,000 (to the extent not covered by insurance) is rendered against
      the Company or any subsidiary and is not discharged and either (A) an
      enforcement proceeding has been commenced by any creditor upon such
      judgment or decree or (B) there is a period of 60 days following such
      judgment during which such judgment or decree is not discharged, waived or
      the execution thereof stayed and, in the case of (B), such default
      continues for 10 days after the notice specified below.

 The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is 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. A
default under clauses (iii) or (iv) above is not an Event of Default until the
Holder of this Debenture notifies the Company of such default and the Company
does not cure such default within the time specified after receipt of such
notice. Such notice must specify the default, demand that it be remedied and
state that such notice is a "Notice of Default". Upon receipt of a Notice of
Default, the Company shall deliver to the Holder of this Debenture, within 30
days, written notice of the status of such Event of Default and what action the
Company is taking or proposes to take with respect thereto.

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      (b) If an Event of Default (other than an Event of Default specified in
clause (iii) above) occurs and is continuing, the Holder of this Debenture may
declare the principal of and accrued interest on this Debenture to be
immediately due and payable and upon such declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in clause (iii) above occurs, the principal of and interest on this Debenture
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Holder of this Debenture.

      10. NO AMENDMENT. No provision of this Debenture may be amended, altered
or modified without the written agreement of the Holder and the Company.

      11. NO VOTING RIGHTS. This Debenture shall not entitle the Holder hereof
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 attend any meetings of stockholders or any other proceedings of the Company.

      12. LOST OR DESTROYED 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 thereof, and indemnity, if requested,
all reasonably satisfactory to the Company.

      13. SALES IN COMPLIANCE WITH APPLICABLE LAW. The Holder of this Debenture,
by acceptance hereof, agrees that it will not offer, sell or otherwise dispose
of this Debenture or the shares of Common Stock issuable upon conversion hereof
except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Securities Act"), including Regulation
S promulgated under the Securities Act, or any applicable state blue sky laws
relating to the sale of securities and the Holder agrees to provide the Company
with such documentation as the Company shall deem necessary in accordance with
this Debenture to demonstrate that such offer, sale or disposition complies with
applicable securities laws.

      14. ASSIGNMENT AND TRANSFER. Prior to effecting any assignment or transfer
of this Debenture, the Holder shall have delivered to the Company a completed
Certificate of Transfer, substantially in the form of Exhibit B hereto, and, if
required, a Seller Representation Letter, substantially in the form of Exhibit C
hereto. The Company shall not be required to register the transfer of any
Debenture unless and until it is in possession of such completed Certificate of
Transfer and, if required, Seller Representation Letter, and any assignment or
transfer of this Debenture not made in accordance with the terms hereof shall be
null and void and of no force or effect.

      15. GOVERNING LAW. This Debenture shall be governed by, enforced under and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of laws thereof.

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      16. BUSINESS DAY DEFINITION. For purposes hereof, the term "business day"
shall mean any day on which banks are generally open for business in the City of
New York.

      17. NOTICE. Any notice or other communication required or permitted to be
given hereunder shall be given as provided herein or delivered against receipt
if to (i) the Company, having an address c/o Wuersch & Gering LLP, 11 Hanover
Square, 21st Floor, New York, NY 10005; facsimile no.: 212-509-9559, Attention:
Chief Executive Officer and (ii) the Holder of this Debenture, to such Holder at
its last address as shown on the Debenture register (or to such other address as
any such party shall have furnished to the other in writing from time to time).
Except as otherwise set forth herein, any notice or other communication mailed
or otherwise delivered shall be deemed given at the time of receipt thereof.

      18. WAIVER.

      (a) The Company hereby waives presentment for payment, notice of dishonor,
protest and notice of protest and, in the event of default hereunder, the
Company agrees to pay all costs of collection, including reasonable attorneys'
fees.

      (b) Any waiver by the Company or the Holder hereof 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 hereof 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.

      19. UNENFORCEABLE PROVISIONS. If any provision of this Debenture is
invalid, illegal or unenforceable, the remaining provisions 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.

                           [signature page to follow]

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

Dated:  January 29, 1999

SPECTRE INDUSTRIES, INC.

By:________________________________
Name:
Title:

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ASSIGNMENT:

I or we assign and transfer this Debenture to

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)

--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number, if any)

and irrevocably appoint _________________________________ as agent to transfer
this Debenture on the books of the Company. The agent may substitute another to
act for him.

Date:______________________________

___________________________________
(Sign exactly as your name appears on the face of this Debenture)

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                                                                       EXHIBIT A

                            SPECTRE INDUSTRIES, INC.

                 10% CONVERTIBLE DEBENTURES DUE January 29, 2001

                              Notice of Conversion

(To be executed by the Holder in order to convert the Debenture or portion
thereof)

The undersigned hereby irrevocably elects to convert (the entire principal
amount) ($____________ principal amount) of Debenture No.____ into shares of
Common Stock, $.0001 par value (the "Common Stock"), of Spectre Industries, Inc.
(the "Company") as of the Date of Conversion (which shall be the date of receipt
by facsimile by the Company of this Notice of Conversion). 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 as reasonably requested by the Company or its Transfer Agent.
No fee will be charged to the Holder for any conversion, except for transfer
taxes, if any.

The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Debenture shall be made in compliance with, pursuant to an
exemption from registration under the Securities Act. The undersigned represents
and warrants that it has made and will make any filings with the Securities and
Exchange Commission as may be required to be made by it from time to time.

If the stock certificate is to be made out in another person's name, fill in the
form below:

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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type other person's name, address and zip code)

--------------------------------------------------------------------------------
(Insert assignee's U.S. social security or tax identification number, if any)

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Conversion calculation:

Date of Conversion:           _____________________________

Applicable Conversion Price:  _____________________________

Total number of shares:       _____________________________

Accrued Interest:             _____________________________

Name of Holder:               _____________________________

By:________________________________
Name:
Title:

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                                                                       EXHIBIT B

                            SPECTRE INDUSTRIES, INC.

                 10% CONVERTIBLE DEBENTURES DUE JANUARY 29, 2001

                             Certificate of Transfer

To:      Spectre Industries, Inc.
         Attn. Chief Executive Officer

Ladies and Gentlemen:

The undersigned is delivering this Certificate of Transfer in connection with
the proposed transfer of Certificates No._______________________________________
_____________________________ of the 10% Convertible Debentures due January 29,
2001 (the "Debentures") of Spectre Industries, Inc. (the "Company") or, prior to
the registration thereof under the United States Securities Act of 1933 pursuant
to that certain Registration Rights Agreement between the Company and the
initial holder of the Debenture, the shares of Common Stock, par value $.0001
per share (the "Shares"), of the Company into which such Debentures are
convertible. For purposes of this letter, the term "Securities" shall mean the
Debentures or the Shares, as the case may be, that are the subject of such
proposed transfer.

The undersigned hereby confirms that:

(i)   The undersigned is

      CHECK ONE BOX BELOW

      |_| (a) not a U.S. person within the meaning of Regulation S under the
      Securities Act of 1933, as amended ("Regulation S") and the transfer of
      the Securities has occurred outside of the United States in accordance
      with the requirements of Regulation S; or

      |_| (b) the undersigned is an "accredited investor" (as defined in Rule
      501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
      (the "Securities Act"), an "Accredited Investor");

(ii) (A) the Securities have been acquired by the undersigned for the
undersigned's own account or for the account of one or more other Accredited
Investors for each of which the undersigned exercises sole investment discretion
or (B) the undersigned is a "bank", within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring the
Securities as fiduciary for the account of one or more institutions for which
the undersigned exercises sole investment discretion;

                                       1
<PAGE>

(iii) the undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of purchasing the Securities;

(iv) the undersigned is not acquiring the Securities with a view to the
distribution thereof or with any present intention of offering or reselling the
Securities, except as permitted below; provided that the disposition of the
undersigned's property and property of any accounts for which the undersigned is
acting as fiduciary shall remain at all times within its control; and

(v) all of the representations and warranties contained in that certain
Subscription Agreement between the Company and the original holder of the
Debentures, a copy of which has heretofore been delivered or made available to
the undersigned (the "Subscription Agreement") are true and correct with respect
to the undersigned as of the date hereof and the date of transfer of the
Securities.

The undersigned agrees to be bound by all of the terms and conditions of the
Subscription Agreement.

The undersigned understands that the proposed transfer of the Securities does
not involve any public offering within the United States within the meaning of
the Securities Act and that such proposed transfer of the Securities has not
been registered under the Securities Act or any applicable state securities
laws, and the undersigned agrees, on its own behalf and on behalf of each
account for which the undersigned acquires any Securities, that such Securities
may be resold or otherwise transferred only (a) to the Company or any subsidiary
thereof, (b) inside the United States to an Institutional Accredited Investor
that, prior to such transfer furnishes to the Company a signed letter containing
the same representations and agreements relating to the restrictions on transfer
of such Securities set forth herein, (c) outside the United States in a
transaction meeting the requirements of Rule 904 under the Securities Act, (d)
pursuant to an exemption from registration provided by Rule 144 under the
Securities Act (if applicable) or (e) pursuant to a registration statement which
has been declared effective under the Securities Act. The undersigned agrees
that any such transfer of Securities referred to in this paragraph shall be in
accordance with applicable securities laws of any State of the United States or
any other applicable jurisdiction and in accordance with the legends set forth
on the Securities. The undersigned further agrees to provide any person
purchasing any of the Securities from the undersigned a notice advising such
purchaser that resales of such Securities are restricted as stated herein. The
undersigned understands that the registrar and transfer agent for the Securities
(which in the case of the Debentures shall be the Company) will not be required
to accept for registration or transfer any Securities, except upon presentation
of evidence satisfactory to the Company that the foregoing restrictions on
transfer have been complied with. The undersigned further understands that any
Securities will be in the form of definitive physical certificates and that such
certificates will bear a legend or legends (unless the sale of the Securities
has been registered under the Securities Act) reflecting the substance of this
paragraph.

The undersigned acknowledges that the Company, others and you will rely upon the
undersigned's confirmations, acknowledgments and agreements set forth herein,
and the undersigned agrees to notify you promptly in writing if any of its
representations or warranties herein ceases to be accurate and complete.

                                       2
<PAGE>

      IN WITNESS WHEREOF, the undersigned has duly executed, or caused its duly
appointed representative to execute this Certificate of Transfer on the date
specified below.

___________________________________
(NAME OF TRANSFEREE)

By:________________________________
Name:______________________________
Title:_____________________________

Address:___________________________
___________________________________
___________________________________

                                       3
<PAGE>

                                                                       Exhibit C

                            SPECTRE INDUSTRIES, INC.

                 10% CONVERTIBLE DEBENTURES DUE JANUARY 29, 2001

                          Seller Representation Letter
               (required only for resales into the United States)

To:      Spectre Industries, Inc.
         Attn. Chief Executive Officer

Ladies and Gentlemen:

The undersigned is delivering this Seller Representation Letter in connection
with the proposed transfer of Certificates No._________________________________
__________________________________________________________ of the 10%
Convertible Debentures due January 29, 2001 (the "Debentures") of Spectre
Industries, Inc. (the "Company") or, prior to the registration thereof under the
United States Securities Act of 1933 pursuant to that certain Registration
Rights Agreement between the Company and the initial holder of the Debenture,
the shares of Common Stock, par value $.0001 per share (the "Shares"), of the
Company into which such Debentures are convertible. For purposes of this letter,
the term "Securities" shall mean the Debentures or the Shares, as the case may
be, that are the subject of such proposed transfer.

In order to effect the transfer of the Securities by the undersigned (the
"Transferor") without registration under the U.S. Securities Act of 1933, as
amended (the "Securities Act") and to have the legend removed from the
Securities, the Transferor represents, warrants and acknowledges to the Company
that:

1. the Transferor has not been engaged as a distributor or dealer by the Company
or anyone else, and is not receiving a selling commission fee or other
remuneration, with respect to the Securities Purchase Agreement pursuant to
which the Debentures were originally issued and sold (the "Securities Purchase
Agreement") or otherwise in connection with any purchase and/or sale of the
Securities;

2. neither the Transferor nor any person acting for the Transferor has conducted
any general solicitation relating to the offer and sale of the Securities in the
United States

3. the Transferor understands that the transfer of the Securities to the
Purchaser on the books of the Company is to be made in reliance on the specific
exemptions from the registration requirements of the United States federal
securities laws and any applicable state securities laws ("State Acts")
specified in the attachment hereto and that the Company is relying upon the
truth and accuracy of, and the Transferor's compliance with, the
representations, warranties, agreements, acknowledgments and understandings set
forth herein in order to determine the availability of such

                                       1
<PAGE>

exemptions and the eligibility of the Transferor to sell, transfer or otherwise
dispose of the Securities;

4. the Transferor is not transferring the Securities to settle any put option,
short position or other similar instrument or position with respect to the
Shares or securities of the same class as the Shares;

5. assuming that the Debentures were originally issued in compliance with
Regulation S under the Securities Act, upon consultation with counsel, the
Transferor believes that the sale, transfer or other disposition of the
Securities in respect of which this letter is being provided is not in violation
of the Securities Act, the U.S. Securities Exchange Act of 1934, as amended, any
applicable State Acts or the rules and regulations of the U.S. Securities
Exchange Commission and any state securities commissions promulgated under any
of the foregoing; and

6. the representations and warranties made by the Transferor to the Company at
the time that the Transferor acquired the Securities are true and correct as of
the date hereof and as of the effective date of the transfer.

Transferor:

___________________________________

Dated:_____________________________

By:________________________________
Name:
Title:

                                       2EXHIBIT 4.3

                            SPECTRE INDUSTRIES, INC.

                10% CONVERTIBLE DEBENTURES DUE February 25, 2001

      THE SECURITY OR SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD TO ANY PERSON EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT: (1) IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT
(A) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (B) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR ANOTHER THEN AVAILABLE EXEMPTION UNDER THE
SECURITIES ACT AND STATE SECURITIES LAWS, (C) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS, OR
(D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (2) PRIOR TO ANY SUCH TRANSFER, IT WILL FURNISH TO THE COMPANY OR THE
TRANSFER AGENT FOR THE COMMON STOCK SUCH CERTIFICATIONS, LEGAL OPINIONS, OR
OTHER INFORMATION AS THE COMPANY OR SUCH TRANSFER AGENT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR STATE SECURITIES LAWS; AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE
COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.

Certificate No.                                                 U.S.  $________

FOR VALUE RECEIVED, SPECTRE INDUSTRIES, INC., a corporation organized under the
laws of the State of Nevada (the "Company"), hereby promises to pay to _________
___________ or registered assigns, the principal sum of ___________ $________ on
February 25, 2001, and to pay interest thereon in the manner set forth herein
from February at the rate of 10% per annum, payable semi-annually on August 25,
and February 25, commencing on August 25, 1999 (each such date, an "Interest
Payment Date"), until the principal hereof is paid or made available for payment
in the manner set forth herein.

      1. ISSUANCE. This Debenture is one of a duly authorized issue of
Debentures of the Company designated as its 10% Convertible Debentures, dated
February 25, 1999 in an aggregate principal amount of up to $50,000.

      2. INTEREST.

                                       1
<PAGE>

      (a) The Company promises to pay interest on the principal amount of this
Debenture at the rate of 10% per annum. Interest on this Debenture will accrue
from the date the funds shall have been received by the Company, as confirmed by
written notice to the Holder (as defined) until payment in full of the principal
amount hereof has been made or duly provided for and will be based on the actual
number of days and months elapsed and computed on a 360-day year consisting of
twelve 30-day months. Interest shall be payable in arrears on the earlier to
occur of (i) the date of conversion to Common Stock (as defined in Section 4
below) as provided herein of all or a portion of this Debenture (if this
Debenture shall be converted in part, then interest only with respect to the
portion of this Debenture so converted shall be payable at such time) and (ii),
with respect to any unconverted portion of this Debenture, each Interest Payment
Date on or prior to February 25, 2001 (the "Maturity Date"). Interest on this
Debenture is payable to the holder of this Debenture registered on the books of
the Company (the "Holder") at the option of the Company in the form of either
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.

      3. PRINCIPAL. On the Maturity Date, upon surrender of this Debenture by
the Holder to the Company, the Company shall pay to the Holder the outstanding
principal amount hereof in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, together with accrued interest on such outstanding principal amount as
set forth in Section 2 above.

      4. CONVERSION.

      (a) Conversion Right; Price. Subject to this Section 4,

            (i) the Holder of this Debenture has the right to convert this
      Debenture, in whole or in part in increments of $1,000 (inclusive of
      accrued interest with respect thereto), into shares of common stock, par
      value .0001 per share, of the Company (the "Common Stock") at any time
      prior to the Maturity Date.

            (ii) the Company has the right to force the conversion of this
      Debenture, in whole or in part in increments of $1,000 (inclusive of
      accrued interest with respect thereto), into Common Stock at any time
      after August 25, 2000 upon giving the Holder thirty (30) days prior notice
      in writing if the closing price of the Common Stock has been at least
      $1.25 for twenty (20) consecutive trading days during the three month
      period immediately preceding such notice.

      The price at which this Debenture (or any portion thereof) may be so
      converted into shares of Common Stock (the "Conversion Price") shall be
      $.80. In lieu of any fractional share of Common Stock to which the Holder
      would otherwise be entitled upon conversion of this Debenture (or portion
      thereof), the number of shares of Common Stock issuable upon conversion of
      this Debenture shall be rounded up to the nearest whole number. In the
      case of a dispute as to the calculation of the Conversion Price, the
      Holder's calculation shall be deemed conclusive absent manifest error.

                                       2
<PAGE>

      (b) Mechanics of Conversion. (i) To convert this Debenture (or a portion
thereof) the Holder must (i) complete and sign the Notice of Conversion set
forth as Exhibit A to this Debenture (the "Notice of Conversion") and deliver
the Notice of Conversion to the Company as herein provided and (ii) on or prior
to the date on which delivery of Common Stock is required to be made hereunder,
(x) deliver this Debenture, duly endorsed, to the Company and (y) pay any
transfer or similar tax if required. The Holder shall surrender this Debenture
and the Notice of Conversion to the Company (with an advance copy by facsimile
of the Notice of Conversion). The date on which Notice of Conversion is given
(the "Date of Conversion") shall be deemed to be the date of receipt by the
Company of the facsimile of the Notice of Conversion, provided that this
Debenture is received by the Company within five (5) business days thereafter.
The Company shall not be obligated to cause the transfer agent for the Common
Stock (the "Transfer Agent") to issue certificates evidencing the shares of
Common Stock issuable upon such conversion unless either this Debenture has been
received by the Company or, if this Debenture has been lost, stolen or
destroyed, the Holder executes an agreement satisfactory to the Company to
indemnify the Company from any loss incurred by it in connection with this
Debenture.

      (ii) The Company shall cause the Transfer Agent to issue and deliver
within ten (10) business days after the actual delivery to the Company of this
Debenture to the Holder of this Debenture at the address of the Holder on the
books of the Company or as otherwise directed pursuant to the Notice of
Conversion, a certificate or certificates for the number of shares of Common
Stock to which such Holder shall be entitled as aforesaid. The person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date. Notwithstanding that the Holder is required to
deliver this Debenture, duly endorsed, within five (5) business days after the
Date of Conversion, if this Debenture is not received by the Company within ten
(10) business days after the Date of Conversion, the Notice of Conversion shall
become null and void.

      (iii) Following conversion of this Debenture, or a portion thereof, the
principal amount so converted, will be deemed paid in full and satisfied, and
such principal amount will no longer be outstanding. In the event this Debenture
is converted in part, the Company will issue to the Holder a new Debenture in a
principal amount equal to the portion of this Debenture not converted.

      (c) Reservation of Stock Issuable Upon Conversion. The Company shall at
all times reserve and keep available out of its authorized but unissued shares
of Common Stock or shares of Common Stock held in treasury, or both, solely for
the purpose of effecting the conversion of this Debenture, such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of this Debenture and all other securities of the Company convertible
or exchangeable into Common Stock.

      (d) Adjustment to Conversion Price. (i) If, prior to the conversion of the
entire principal amount of this Debenture, the number of outstanding shares of
Common Stock is increased by a stock split, stock dividend of shares of Common
Stock or other shares of capital stock, reclassification or other similar event,
the Conversion Price shall be proportionately reduced, or if the number of
outstanding shares of Common Stock is decreased by a combination or
reclassification of shares or other similar event, the Conversion Price shall be
proportionately

                                       3
<PAGE>

increased, in each case, such that the Holder of this Debenture will have the
right to receive upon conversion of this Debenture the number of shares of
Common Stock (or other shares of Capital Stock) of the Company (notwithstanding
the limitation set forth in the third paragraph of Section 4(a)) which such
Holder would have been entitled to receive had the Holder converted this
Debenture immediately prior to such action.

      (ii) If, prior to the conversion of the entire principal amount of this
Debenture, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event (a "Conversion
Reclassification Event"), as a result of which shares of Common Stock of the
Company shall be changed into the same or a different number of shares of the
Company or the same or another class or classes of stock or securities of the
Company or another entity, then the Holder of this Debenture shall thereafter
have the right to receive upon conversion of this Debenture, upon the basis and
the terms and conditions specified herein, such shares of stock and/or
securities as may be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore receivable upon the
conversion of this Debenture (irrespective of the limitations set forth in
Section 4(a)) had such Conversion Reclassification Event not taken place, and in
any such case appropriate provisions shall be made with respect to the rights
and interests of the Holder of this Debenture such that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of this Debenture)
shall thereafter be applicable, as nearly as may be practicable in relation to
any shares of stock or securities thereafter deliverable upon the conversion of
this Debenture. The Company shall not effect any Conversion Reclassification
Event unless the resulting successor or acquiring entity (if not the Company)
assumes the obligation to deliver to the Holder of this Debenture such shares of
stock and/or securities as the Holder of this Debenture is entitled to receive
upon conversion in accordance with the foregoing.

      (iv) In the event that the Company shall at any time after the date of
this Agreement (i) issue shares of Common Stock without consideration (other
than in the form of a dividend) or at a price per share less than the Conversion
Price, or (ii) issue options, rights or warrants to subscribe for or purchase
Common Stock (or securities convertible into Common Stock) without consideration
or at a price per share (or having a conversion price per share, if a security
convertible into Common Stock) less than the Conversion Price, the Conversion
Price to be in effect after the date of such issuance shall be adjusted by
multiplying the Conversion Price in effect immediately prior to the date of such
issuance by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of such issuance plus the number of shares
of Common Stock which the aggregate offering price of the total number of shares
of Common Stock so to be issued or the aggregate initial conversion price of the
convertible securities so to be issued would purchase at the Conversion Price
immediately prior to such issuance and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of such issuance plus
the number of additional shares of Common Stock to be issued (or into which the
convertible securities so to be issued are initially convertible). In case the
subscription price for such securities may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive. Such adjustment shall be made
successively whenever the date of such issuance is fixed and, in the event that
such shares or option, rights or warrants (or

                                       4
<PAGE>

portions thereof) expire without being issued, the Conversion Price shall again
be adjusted to reflect such occurrence.

      (v) If any adjustment under this Section 4(d) would create a fractional
share of Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share shall be disregarded and the number of shares of Common
Stock issuable upon conversion shall be the next higher number of shares.

      5. REDEMPTION. The Debenture may be redeemed in whole or in part by the
Company 100% of the principal plus accrued interest through and including the
date of redemption at any time by giving the Holder at least thirty (30) days
prior notice in writing. It being understood that the Holder's conversion right
pursuant to Section 4 hereof shall remain in full force and effect until the
fifth business day immediately preceding the effective date of such redemption.

      6. SUBORDINATION.

      (a) The Company, for itself, its successors and assigns, covenants and
agrees, and the Holder of this Debenture, by acceptance hereof, covenants and
agrees, that payment of the principal of and interest on this Debenture is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full of all Senior
Indebtedness. "Senior Indebtedness" means the principal of, premium, if any, and
unpaid interest on (a) indebtedness of the Company (including indebtedness of
others guaranteed by the Company), other than this Debenture, whether
outstanding on the date of original issuance of this Debenture or hereafter
created, incurred, assumed, or guaranteed, (i) for money owing to banks, (ii)
for money borrowed from other than banks or (iii) arising under a lease of
property, equipment or other assets, which indebtedness, pursuant to generally
accepted accounting principles then in effect, is classified upon the balance
sheet of the Company as a liability of the Company, unless in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is provided that such indebtedness is not superior in right of payment to this
Debenture, and (b) renewals, extensions, modifications and refundings of any
such indebtedness.

      (b) Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of the assets and liabilities
of the Company or otherwise the holders of all Senior Indebtedness shall be
entitled to receive payment in full of the principal thereof, premium, if any,
and the interest due thereon before the Holder of this Debenture is entitled to
receive any payment of principal or interest on this Debenture; and in the event
that, notwithstanding the foregoing, any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
shall be received by the Holder of this Debenture before all Senior Indebtedness
is paid in full, such payment or distribution shall be paid over to the holders
of such Senior Indebtedness or their representative or to the trustee under any
indenture or agreement under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably as aforesaid, for application to the
payment of all Senior Indebtedness remaining unpaid until all such Senior
Indebtedness shall have been paid in full, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness.

                                       5
<PAGE>

      (c) Subject to the payment in full of all Senior Indebtedness, the Holder
of this Debenture shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of the Company applicable to
Senior Indebtedness until the principal of and interest on this Debenture shall
be paid in full and no such payments or distributions to the Holder of this
Debenture of cash, property or securities otherwise distributable to the Senior
Indebtedness shall, as between the Company, its creditors other than the holders
of Senior Indebtedness, and the Holder of this Debenture, be deemed to be a
payment by the Company to or on account of this Debenture. It is understood that
the provisions of this Section 5 are and are intended solely for the purpose of
defining the relative rights of the Holder of this Debenture and the holders of
Senior Indebtedness, on the other hand. Nothing contained in this Debenture is
intended to, or shall, impair, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the Holder of this Debenture, the
obligation of the Company, which is unconditional and absolute, to pay to the
Holder of this Debenture principal of and interest on this Debenture as and when
the same shall become due and payable in accordance with its terms, or to affect
the relative rights of the Holder of this Debenture and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything in this
Debenture prevent the Holder of this Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Debenture, subject
to the rights, if any, under this Section 5 of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.

      (d) If the Holder of this Debenture does not file a proper claim or proof
of debt in the form required in any proceeding referred to above prior to 30
days before the expiration of the time to file such claim in such proceeding,
then the holder of any Senior Indebtedness is hereby authorized, and has the
right, to file an appropriate claim or claims for or on behalf of the Holder.

      (e) The Holder of this Debenture by its acceptance hereof agrees to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Section 5.

      7. REGISTERED HOLDER. The Company may for all purposes treat the
registered holders on its books and records of this Debenture as the Holder.

      8. DENOMINATIONS. Debentures (and any Debenture issued in exchange, upon
transfer or upon conversion) may be issued in a minimum principal amount of
$10,000 (or such lesser amount upon a conversion in part of a Debenture provided
such lesser amount represents such Holder's entire holding of Debentures).

      9. EVENTS OF DEFAULT. -

      (a) An "Event of Default" under this Debenture occurs if:

            (i) the Company defaults in effecting a conversion of this Debenture
      in accordance with the provisions hereof and such default continues for a
      period of 10 business days;

                                       6
<PAGE>

            (ii) the Company defaults in the payment of the principal of or
      interest on this Debenture when the same becomes due and payable and, in
      the case of a default in any interest payment, the same continues for a
      period of 30 days;

            (iii) the Company or any subsidiary pursuant to or within the
      meaning of any federal or state bankruptcy, insolvency or other law for
      the relief of debtors ("Bankruptcy Law"):

            (A) commences a voluntary case or proceeding;

            (B) consents to the entry of an order for relief against it in an
            involuntary case or proceeding;

            (C) consents to the appointment of any receiver, trustee, assignee,
            liquidator, custodian or similar official under any Bankruptcy Law
            (a "Custodian") of it or for any substantial part of its property;
            or

            (D) makes a general assignment for the benefit of its creditors; or
            takes any comparable action under any foreign laws relating to
            insolvency; a court of competent jurisdiction enters an order or
            decree under any Bankruptcy Law that: (I) is for relief against the
            Company or any subsidiary in an involuntary case or proceeding; (II)
            appoints a Custodian of the Company or any subsidiary or for any
            substantial part of its property; or (III) orders the winding up or
            liquidation of the Company or any subsidiary; or similar relief is
            granted under any foreign laws and the order or decree remains
            unstayed and in effect for 60 days; or

            (iv) any final judgment or decree for the payment of money in excess
      of $1,000,000 (to the extent not covered by insurance) is rendered against
      the Company or any subsidiary and is not discharged and either (A) an
      enforcement proceeding has been commenced by any creditor upon such
      judgment or decree or (B) there is a period of 60 days following such
      judgment during which such judgment or decree is not discharged, waived or
      the execution thereof stayed and, in the case of (B), such default
      continues for 10 days after the notice specified below.

The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is 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. A
default under clause (iii) or (iv) above is not an Event of Default until the
Holder of this Debenture notifies the Company of such default and the Company
does not cure such default within the time specified after receipt of such
notice. Such notice must specify the default, demand that it be remedied and
state that such notice is a "Notice of Default". Upon receipt of a Notice of
Default, the Company shall deliver to the Holder of this Debenture, within 30
days, written notice of the status of such Event of Default and what action the
Company is taking or proposes to take with respect thereto.

      (b) If an Event of Default (other than an Event of Default specified in
clauses (iii) above) occurs and is continuing, the Holder of this Debenture may
declare the principal of and accrued

                                       7
<PAGE>

interest on this Debenture to be immediately due and payable and upon such
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in clause (iii) above occurs, the principal of
and interest on this Debenture shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Holder of
this Debenture.

      10. NO AMENDMENT. No provision of this Debenture may be amended, altered
or modified without the written agreement of the Holder and the Company.

      11. NO VOTING RIGHTS. This Debenture shall not entitle the Holder hereof
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 attend any meetings of stockholders or any other proceedings of the Company.

      12. LOST OR DESTROYED 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 thereof, and indemnity, if requested,
all reasonably satisfactory to the Company.

      13. SALES IN COMPLIANCE WITH APPLICABLE LAW. The Holder of this Debenture,
by acceptance hereof, agrees that it will not offer, sell or otherwise dispose
of this Debenture or the shares of Common Stock issuable upon conversion hereof
except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Securities Act"), including Regulation
S promulgated under the Securities Act, or any applicable state blue sky laws
relating to the sale of securities and the Holder agrees to provide the Company
with such documentation as the Company shall deem necessary in accordance with
this Debenture and the Securities Purchase Agreement to demonstrate that such
offer, sale or disposition complies with applicable securities laws.

      14. ASSIGNMENT AND TRANSFER. Prior to effecting any assignment or transfer
of this Debenture, the Holder shall have delivered to the Company a completed
Certificate of Transfer, substantially in the form of Exhibit B hereto, and, if
required, a Seller Representation Letter, substantially in the form of Exhibit C
hereto. The Company shall not be required to register the transfer of any
Debenture unless and until it is in possession of such completed Certificate of
Transfer and, if required, Seller Representation Letter, and any assignment or
transfer of this Debenture not made in accordance with the terms hereof shall be
null and void and of no force or effect.

      15. GOVERNING LAW. This Debenture shall be governed by, enforced under and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of laws thereof.

                                       8
<PAGE>

      16. BUSINESS DAY DEFINITION. For purposes hereof, the term "business day"
shall mean any day on which banks are generally open for business in the City of
New York.

      17. NOTICE. Any notice or other communication required or permitted to be
given hereunder shall be given as provided herein or delivered against receipt
if to (i) the Company, having an address c/o Wuersch & Gering LLP, 11 Hanover
Square, 21st Floor, New York, NY 10005; facsimile no.: 212-509-9559, Attention:
Chief Executive Officer and (ii) the Holder of this Debenture, to such Holder at
its last address as shown on the Debenture register (or to such other address as
any such party shall have furnished to the other in writing from time to time).
Except as otherwise set forth herein, any notice or other communication mailed
or otherwise delivered shall be deemed given at the time of receipt thereof.

      18. WAIVER.

      (a) The Company hereby waives presentment for payment, notice of dishonor,
protest and notice of protest and, in the event of default hereunder, the
Company agrees to pay all costs of collection, including reasonable attorneys'
fees.

      (b) Any waiver by the Company or the Holder hereof 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 hereof 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.

      19. UNENFORCEABLE PROVISIONS. If any provision of this Debenture is
invalid, illegal or unenforceable, the remaining provisions 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.

                           [signature page to follow]

                                       9
<PAGE>

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

Dated:  February 25, 1999

SPECTRE INDUSTRIES, INC.

By:________________________________
Name:
Title:

                                       10
<PAGE>

ASSIGNMENT:

I or we assign and transfer this Debenture to

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)

--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number, if any)

and irrevocably appoint _________________________________ as agent to transfer
this Debenture on the books of the Company. The agent may substitute another to
act for him.

Date:______________________________

___________________________________
(Sign exactly as your name appears on the face of this Debenture)

                                       11
<PAGE>

                                                                       EXHIBIT A

                            SPECTRE INDUSTRIES, INC.

                10% CONVERTIBLE DEBENTURES DUE FEBRUARY 25, 2001

                              Notice of Conversion

(To be executed by the Holder in order to convert the Debenture or portion
thereof)

The undersigned hereby irrevocably elects to convert (the entire principal
amount) ($____________ principal amount) of Debenture No.____ into shares of
Common Stock, $.0001 par value (the "Common Stock"), of Spectre Industries, Inc.
(the "Company") as of the Date of Conversion (which shall be the date of receipt
by facsimile by the Company of this Notice of Conversion). 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 as reasonably requested by the Company or its Transfer Agent.
No fee will be charged to the Holder for any conversion, except for transfer
taxes, if any.

The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Debenture shall be made in compliance with, pursuant to an
exemption from registration under the Securities Act. The undersigned represents
and warrants that it has made and will make any filings with the Securities and
Exchange Commission as may be required to be made by it from time to time.

If the stock certificate is to be made out in another person's name, fill in the
form below:

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type other person's name, address and zip code)

--------------------------------------------------------------------------------
(Insert assignee's U.S. social security or tax identification number, if any)

                                       1
<PAGE>

Conversion calculation:

Date of Conversion:           ___________________________

Applicable Conversion Price:  ___________________________

Total number of shares:       ___________________________

Accrued Interest:             ___________________________

Name of Holder:               ___________________________

By:________________________________
Name:
Title:

                                       2
<PAGE>

                                                                       EXHIBIT B

                            SPECTRE INDUSTRIES, INC.

                10% CONVERTIBLE DEBENTURES DUE FEBRUARY 25, 2001

                             Certificate of Transfer

To:      Spectre Industries, Inc.
         Attn. Chief Executive Officer

Ladies and Gentlemen:

The undersigned is delivering this Certificate of Transfer in connection with
the proposed transfer of Certificates No. ______________________________________
________________________________________________________________ of the 10%
Convertible Debentures due February 25, 2001 (the "Debentures") of Spectre
Industries, Inc. (the "Company") or, prior to the registration thereof under the
United States Securities Act of 1933 pursuant to that certain Registration
Rights Agreement between the Company and the initial holder of the Debenture,
the shares of Common Stock, par value $.0001 per share (the "Shares"), of the
Company into which such Debentures are convertible. For purposes of this letter,
the term "Securities" shall mean the Debentures or the Shares, as the case may
be, that are the subject of such proposed transfer.

The undersigned hereby confirms that:

(i) The undersigned is

      CHECK ONE BOX BELOW

      |_| (a) not a U.S. person within the meaning of Regulation S under the
      Securities Act of 1933, as amended ("Regulation S") and the transfer of
      the Securities has occurred outside of the United States in accordance
      with the requirements of Regulation S; or

      |_| (b) the undersigned is an "accredited investor" (as defined in Rule
      501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
      (the "Securities Act"), an "Accredited Investor");

(ii) (A) the Securities have been acquired by the undersigned for the
undersigned's own account or for the account of one or more other Accredited
Investors for each of which the undersigned exercises sole investment discretion
or (B) the undersigned is a "bank", within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring the
Securities as fiduciary for the account of one or more institutions for which
the undersigned exercises sole investment discretion;

                                       1
<PAGE>

(iii) the undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of purchasing the Securities;

(iv) the undersigned is not acquiring the Securities with a view to the
distribution thereof or with any present intention of offering or reselling the
Securities, except as permitted below; provided that the disposition of the
undersigned's property and property of any accounts for which the undersigned is
acting as fiduciary shall remain at all times within its control; and

(v) all of the representations and warranties contained in that certain
Subscription Agreement between the Company and the original holder of the
Debentures, a copy of which has heretofore been delivered or made available to
the undersigned (the "Subscription Agreement") are true and correct with respect
to the undersigned as of the date hereof and the date of transfer of the
Securities.

The undersigned agrees to be bound by all of the terms and conditions of the
Subscription Agreement.

The undersigned understands that the proposed transfer of the Securities does
not involve any public offering within the United States within the meaning of
the Securities Act and that such proposed transfer of the Securities has not
been registered under the Securities Act or any applicable state securities
laws, and the undersigned agrees, on its own behalf and on behalf of each
account for which the undersigned acquires any Securities, that such Securities
may be resold or otherwise transferred only (a) to the Company or any subsidiary
thereof, (b) inside the United States to an Institutional Accredited Investor
that, prior to such transfer furnishes to the Company a signed letter containing
the same representations and agreements relating to the restrictions on transfer
of such Securities set forth herein, (c) outside the United States in a
transaction meeting the requirements of Rule 904 under the Securities Act, (d)
pursuant to an exemption from registration provided by Rule 144 under the
Securities Act (if applicable) or (e) pursuant to a registration statement which
has been declared effective under the Securities Act. The undersigned agrees
that any such transfer of Securities referred to in this paragraph shall be in
accordance with applicable securities laws of any State of the United States or
any other applicable jurisdiction and in accordance with the legends set forth
on the Securities. The undersigned further agrees to provide any person
purchasing any of the Securities from the undersigned a notice advising such
purchaser that resales of such Securities are restricted as stated herein. The
undersigned understands that the registrar and transfer agent for the Securities
(which in the case of the Debentures shall be the Company) will not be required
to accept for registration or transfer any Securities, except upon presentation
of evidence satisfactory to the Company that the foregoing restrictions on
transfer have been complied with. The undersigned further understands that any
Securities will be in the form of definitive physical certificates and that such
certificates will bear a legend or legends (unless the sale of the Securities
has been registered under the Securities Act) reflecting the substance of this
paragraph.

The undersigned acknowledges that the Company, others and you will rely upon the
undersigned's confirmations, acknowledgments and agreements set forth herein,
and the undersigned agrees to notify you promptly in writing if any of its
representations or warranties herein ceases to be accurate and complete.

                                       2
<PAGE>

            IN WITNESS WHEREOF, the undersigned has duly executed, or caused its
duly appointed representative to execute this Certificate of Transfer on the
date specified below.

___________________________________
(NAME OF TRANSFEREE)

By:________________________________
Name:______________________________
Title:_____________________________

Address:___________________________
___________________________________
___________________________________

                                       3
<PAGE>

                                                                       Exhibit C

                            SPECTRE INDUSTRIES, INC.

                10% CONVERTIBLE DEBENTURES DUE FEBRUARY 25, 2001

                          Seller Representation Letter
               (required only for resales into the United States)

To:      Spectre Industries, Inc.
         Attn. Chief Executive Officer

Ladies and Gentlemen:

The undersigned is delivering this Seller Representation Letter in connection
with the proposed transfer of Certificates No. _________________________________
__________________________________________________________ of the 10%
Convertible Debentures due February 25, 2001 (the "Debentures") of Spectre
Industries, Inc. (the "Company") or, prior to the registration thereof under the
United States Securities Act of 1933 pursuant to that certain Registration
Rights Agreement between the Company and the initial holder of the Debenture,
the shares of Common Stock, par value $.0001 per share (the "Shares"), of the
Company into which such Debentures are convertible. For purposes of this letter,
the term "Securities" shall mean the Debentures or the Shares, as the case may
be, that are the subject of such proposed transfer.

In order to effect the transfer of the Securities by the undersigned (the
"Transferor") without registration under the U.S. Securities Act of 1933, as
amended (the "Securities Act") and to have the legend removed from the
Securities, the Transferor represents, warrants and acknowledges to the Company
that:

1. the Transferor has not been engaged as a distributor or dealer by the Company
or anyone else, and is not receiving a selling commission fee or other
remuneration, with respect to the Securities Purchase Agreement pursuant to
which the Debentures were originally issued and sold (the "Securities Purchase
Agreement") or otherwise in connection with any purchase and/or sale of the
Securities;

2. neither the Transferor nor any person acting for the Transferor has conducted
any general solicitation relating to the offer and sale of the Securities in the
United States

3. the Transferor understands that the transfer of the Securities to the
Purchaser on the books of the Company is to be made in reliance on the specific
exemptions from the registration requirements of the United States federal
securities laws and any applicable state securities laws ("State Acts")
specified in the attachment hereto and that the Company is relying upon the
truth and accuracy of, and the Transferor's compliance with, the
representations, warranties, agreements, acknowledgments and understandings set
forth herein in order to determine the availability of such

                                       1
<PAGE>

exemptions and the eligibility of the Transferor to sell, transfer or otherwise
dispose of the Securities;

4. the Transferor is not transferring the Securities to settle any put option,
short position or other similar instrument or position with respect to the
Shares or securities of the same class as the Shares;

5. assuming that the Debentures were originally issued in compliance with
Regulation S under the Securities Act, upon consultation with counsel, the
Transferor believes that the sale, transfer or other disposition of the
Securities in respect of which this letter is being provided is not in violation
of the Securities Act, the U.S. Securities Exchange Act of 1934, as amended, any
applicable State Acts or the rules and regulations of the U.S. Securities
Exchange Commission and any state securities commissions promulgated under any
of the foregoing; and

6. the representations and warranties made by the Transferor to the Company at
the time that the Transferor acquired the Securities are true and correct as of
the date hereof and as of the effective date of the transfer.

Transferor:

___________________________________

Dated:_____________________________

By:________________________________
Name:
Title:

                                       2

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