Document:

AMENDMENT NO. 1 TO CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

      This Amendment No. 1 to the Convertible  Debenture Purchase Agreement (the
"Amendment")  is made and entered  into on this ___ day of April,  2004,  by and
between Orange Soda, Inc., a Delaware corporation (the "Company") and HEM Mutual
Assurance LLC., a limited liability  corporation organized under the laws of the
State of Colorado (the "Purchaser").

RECITALS.

A.    The parties  described above entered into Convertible  Debenture  Purchase
      Agreement  on the 27th day of October,  2003,  a copy of which is attached
      hereto  and  made a  part  hereof  as  Exhibit  A  hereto  (the  "Purchase
      Agreement").

B.    The parties  have  elected to amend the terms of Exhibits  A-3 and K-2 and
      have elected to reduce the amendment to writing as provided for herein.

      Now,  therefore in consideration of the mutual covenants  contained herein
and other good and viable  consideration the receipt and sufficiency of which is
hereby acknowledged, each of the parties agrees as follows:

      1.  Amendement of Purchase  Agreement.  (a) All references in the Purchase
Agreement  to "Exhibit  A-3" shall be read as "Exhibit  A-3a,  Exhibit  A-3b and
Exhibit A-3c".

      (b)   All  references in the Purchase  Agreement to "Exhibit K-2" shall be
            read as "Exhibit K-2a, Exhibit K-2b and Exhibit K-2c".

      (c)   All  references in the Purchase  Agreement to "Note C" shall be read
            as "Note C1, Note C2 and Note C3".

      (d)   All  references  in the Purchase  Agreement  to "First  Debenture C"
            shall be read as references to "First  Debenture C1, First Debenture
            C2 and First Debenture C3".

      (e)   Exhibit  A-3 of the  Purchase  Agreement  is  hereby  replaced  with
            Exhibit B hereto.

      (f)   Exhibit  K-2 of the  Purchase  Agreement  is  hereby  replaced  with
            Exhibit C hereto.

      2. Entire Agreement. This Amendment constitutes the entire agreement among
the parties.  No provision  hereof may be amended,  modified or waived except in
writing,  executed by all parties  hereto.  This Amendment  supercedes all prior
negotiations,  representations and agreements made by and among the parties with
respect to the subject matter referred to above. The illegality of any provision

                                                                          Page 1
<PAGE>

of this  Amendment  shall not  render  any other  provision  hereof  illegal  or
otherwise affect the enforceability of this Amendment.

      3. Binding Effect;  Benefits. This Amendment shall inure to the benefit of
and  shall be  binding  upon the  parties  hereto  and their  respective  heirs,
administrators,  executors,  successors and permitted  assigns.  Nothing in this
Amendment,  express or implied,  is intended to confer on any person  other than
the  parties  hereto  or  their  respective  heirs,  administrators,  executors,
successors  and  permitted  assigns,  any  rights,   remedies,   obligations  or
liabilities.

      4. Governing Law and Jurisdiction.  This Amendment shall be deemed to be a
contract  made  under the laws of the State of New  York,  and for all  purposes
shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York applicable to contracts to be made and performed  entirely
within the state and no defense  given or allowed by the laws of any other state
or country shall be interposed in any action or proceeding  herein,  unless such
defense  is also  given or  allowed by the laws of the State of New York and not
waived  hereby.  The  courts  of the  State of New  York  shall  have  exclusive
jurisdiction  over all  controversies or disputes  relating to or arising out of
this   Amendment,   including   without   limitation,   with   respect   to  the
interpretation,  performance or breach of this Amendment. The parties consent to
personal  jurisdiction in the courts of such State and agree that process may be
served upon them in any such action by prepaid  air  courier  with  simultaneous
notice to such parties' counsel herein named, at the address set forth herein or
on the signature page hereto, or in any other manner permitted by New York law.

      5. Headings.  Headings in this  Amendment are for reference  purposes only
and shall not be deemed to have any substantive effect.

      6.  Counterparts.  This  Amendment  may  be  executed  in  any  number  of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall be deemed to be one and the same instrument.

      7.  Facsimile  Signatures.  This Amendment may be signed by facsimile copy
and shall be valid and binding upon delivery by facsimile of a signed copy.

                     [SIGNATURE PAGE TO IMMEDIATELY FOLLOW]

                                                                          Page 2
<PAGE>

IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
date first above written.

                                    Orange Soda, Inc.

                                    By:
                                       ---------------------------
                                    Name:  Steve Careaga
                                    Title: President
                                           -----------------------

                                    HEM MUTUAL ASSURANCE LLC

                                    By:
                                       ---------------------------
                                    Name:  Pierce Loughran
                                    Title: Manager

                                                                          Page 3

<PAGE>

                                   EXHIBIT A

                                                                          Page 4

<PAGE>

                                   EXHIBIT B

                                                                          Page 5

<PAGE>

                                   EXHIBIT C

                                                                          Page 6EXHIBIT A-3a

                               FIRST DEBENTURE C1

NEITHER THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE  SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER  RULE  504  OF  REGULATION  D  PROMULGATED  UNDER  THE  U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS.

US $140,000                                                     October 27, 2003

                  1% CONVERTIBLE DEBENTURE DUE OCTOBER 26, 2008

      THIS DEBENTURE of Reality Wireless  Networks.,  a Nevada  corporation (the
"Company")  in the  aggregate  principal  amount of One Hundred  Forty  Thousand
Dollars (US $140,000),  is designated as its $140,000,  1% Convertible Debenture
due October 26, 2008 (the "Debentures").

      FOR VALUE  RECEIVED,  except as  otherwise  provided  herein,  the Company
promises  to pay to HEM Mutual  Assurance  LLC or its  registered  assigns  (the
"Holder"),  the  principal  sum  of  One  Hundred  Forty  Thousand  Dollars  (US
$140,000),  on or prior to October  26,  2008 (the  "Maturity  Date") and to pay
interest to the Holder on the  principal sum at the rate of one percent (1%) per
annum.  Except  as  otherwise  provided  herein,  interest  shall  accrue  daily
commencing on the Original  Issuance Date (as defined in Section 1 below) in the
form of cash or common  stock of the Company  selected by the Holder  subject to
the  provisions  of Section 2(b) hereof,  until payment in full of the principal
sum,  together  with all  accrued  and  unpaid  interest,  has been made or duly
provided  for.  If at any time  after  the  Original  Issuance  Date an Event of
Default has occurred  and is  continuing,  interest  shall accrue at the rate of
fifteen  percent  (15%) per annum from the date of the Event of Default  and the
applicable  cure period through and including the date of payment.  Interest due
and payable  hereunder  shall be paid to the person in whose name this Debenture
(or one or more  successor  Debentures)  is  registered  on the  records  of the
Company  regarding  registration and transfers of the Debentures (the "Debenture
Register");  provided, however, that the Company's obligation to a transferee of
this Debenture shall arise only if such transfer,  sale or other  disposition is
made in accordance  with the terms and conditions  hereof and of the Convertible
Debenture  Purchase  Agreement  (the  "Purchase  Agreement")  by and between the
Company and the Purchaser  (as such term is defined in the Purchase  Agreement),
dated as of October 27, 2003, as may be amended from time to time. A transfer of
the right to  receive  principal  and  interest  under this  Debenture  shall be
transferable  only through an  appropriate  entry in the  Debenture  Register as
provided herein.

      Notwithstanding  anything contained herein, in the Purchase Agreement,  or
in the  Note C1 to the  contrary,  this  First  Debenture  C1 shall  not  accrue
interest, shall not be convertible, and

                                    A 3a - 1
<PAGE>

shall not be subject to repayment by the Company at its  maturity,  and the Note
C1 shall not be due and payable  and shall not be deemed  part of the  "Purchase
Price" for purposes of Section 4.25 of the Purchase Agreement, unless and until:

      (i)   the Holder elects that Note C1 shall become due and payable; and

      (ii)  the number of Escrow  Shares for the aggregate  principal  amount of
            the Debentures  then  outstanding  and this First Debenture C1 is at
            least  200% of the number of shares of common  stock of the  Company
            that  would  be  needed  to  satisfy  full  conversion  of all  such
            unconverted Debentures,

provided,  however,  that if subparagraph (i) is satisfied and subparagraph (ii)
is not,  the  Company  shall  increase  in  accordance  with and  subject to the
provisions  of  Section  4.14 of the  Purchase  Agreement,  the number of Escrow
Shares to cover 200% of the number of shares of common stock of the Company that
would be needed to satisfy full conversion of all of such Debenture  pursuant to
the  procedures set forth in Section 4.14 of the Purchase  Agreement;  provided,
further, that,  notwithstanding the foregoing, this First Debenture C1 shall not
accrue interest,  shall not be convertible and shall not be subject to repayment
by the Company at its maturity,  and the Note C1 shall not be deemed part of the
"Purchase Price" for purposes of Section 4.25 of the Purchase Agreement,  unless
and  until  the  Note C1 is paid in full by the  Holder  or its  successors  and
assigns.

      If the  Note C1 has not been  paid in full by the  Holder  to the  Company
(whether  or not it is  otherwise  then due or  payable by its  terms),  (i) any
payments  from the Company to the Holder  pursuant to Sections  4.19 and 4.33 of
the Purchase Agreement will be offset by the principal amount of the Note C1 and
(ii) "Debentures" shall specifically refer to First Debenture A, First Debenture
B, First Debenture C1, First Debenture C2, First Debenture C3, First Debenture D
and the Second Debenture in Sections 4.19 and 4.33 in Purchase Agreement.

      This Debenture is subject to the following additional provisions:

      Section 1.  Definitions.  Capitalized terms used and not otherwise defined
herein shall have the meanings  given such terms in the Purchase  Agreement.  As
used in this Agreement, the following terms shall have the following meanings:

      "Adjusted Conversion Price" means the lesser of the Fixed Conversion Price
or the  Floating  Conversion  Price one day prior to the record date set for the
determination  of  stockholders  entitled to receive  dividends,  distributions,
rights or warrants as provided for in Sections 4(c)(ii), (iii) and (iv).

      "Company" shall mean Reality Wireless Networks, Inc.

      "Common Stock" shall mean the common stock of Reality  Wireless  Networks,
Inc.  (as  adjusted  for  any  reverse  splits,  forward  splits,   combination,
reclassification  or stock  dividend  from the date the  Purchase  Agreement  is
signed).

      "Conversion Date" shall have the meaning set forth in Section 4(a) hereof.

                                    A 3a - 2
<PAGE>

      "Conversion Ratio" means, at any time, a fraction,  the numerator of which
is the then  outstanding  principal  amount  represented by the Debentures  plus
accrued  but  unpaid  interest  thereon,  and the  denominator  of  which is the
conversion price at such time.

      "Fixed Conversion Price" shall have the meaning set forth in Section 4(c)i
hereof.

      "Floating  Conversion  Price"  shall have the meaning set forth in Section
4(c)i hereof.

      "Notice of  Conversion"  shall have the meaning set forth in Section  4(a)
hereof.

      "Original Issuance Date" shall mean the date of the first issuance of this
Debenture regardless of the number of transfers hereof.

      Section 2.  Denominations  of  Debentures;  Interest  on  Debentures.  The
Debentures  are  exchangeable  for  an  equal  aggregate   principal  amount  of
Debentures  of different  authorized  denominations,  as requested by the Holder
surrendering  the same, but shall not be issuable in  denominations of less than
integral multiplies of One Thousand Dollars (US$1,000.00).  No service charge to
the Holder will be made for such registration of transfer or exchange.

      Section 3. Events of Default and Remedies.

      I. "Event of Default,"  when used herein,  means any one of the  following
events  (whatever  the reason and whether any such event 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):

      (a) any  default in the  payment of the  principal  of or interest on this
Debenture  as and when the same  shall  become  due and  payable  either  at the
Maturity Date, by acceleration, conversion, or otherwise;

      (b) the  Company  shall fail to observe  or  perform  any other  covenant,
agreement  or warranty  contained  in, or  otherwise  commit any breach of, this
Debenture,  and such failure or breach shall not have been remedied  within five
(5) Business Days of its receipt of notice of such failure or breach;

      (c) the  occurrence of any event or breach or default by the Company under
the  Purchase  Agreement or any other  Transaction  Document and , if there is a
cure period, such failure or breach shall not have been remedied within the cure
period provided for therein;

      (d) the Company or any of its Subsidiaries shall commence a voluntary case
under the United  States  Bankruptcy  Code as now or  hereafter in effect or any
successor  thereto (the "Bankruptcy  Code"); or an involuntary case is commenced
against  the  Company  under  the  Bankruptcy  Code  and  the  petition  is  not
controverted  within  thirty (30) days,  or is not  dismissed  within sixty (60)
days,  after  commencement  of the case;  or a  "custodian"  (as  defined in the
Bankruptcy  Code) is appointed  for, or takes charge of, all or any  substantial
part  of the  property  of  the  Company  or 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

                                    A 3a - 3
<PAGE>

jurisdiction whether now or hereafter in effect relating to the Company or there
is commenced  against the Company any such proceeding which remains  undismissed
for a period of sixty (60) days;  or 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  suffers any appointment of any custodian
or the like  for it or any  substantial  part of its  property  which  continues
undischarged  or unstayed for a period of thirty (30) days; or the Company makes
a general assignment for the benefit of creditors;  or the Company shall fail to
pay, or shall state in writing  that it is unable to pay its debts  generally as
they become due; or the  Company  shall call a meeting of its  creditors  with a
view to arranging a composition or adjustment of its debts; or the Company shall
by  any  act  or  failure  to  act  indicate  its  consent  to,  approval  of or
acquiescence in any of the foregoing;  or any corporate or other action is taken
by the Company for the purpose of effecting any of the foregoing;

      (e)  the  Company  shall  default  in  any of its  obligations  under  any
mortgage,  indenture or instrument under which there may be issued,  or by which
there may be secured or evidenced,  any indebtedness of the Company in an amount
exceeding One Hundred Thousand Dollars ($100,000.00),  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;

      (f) the Company  shall have its Common Stock  deleted or delisted,  as the
case  may be,  from  the  American  Stock  Exchange,  OTCBB  or  other  national
securities  exchange or market on which such Common  Stock is listed for trading
or suspended from trading thereon,  and shall not have its Common Stock relisted
or have such suspension lifted, as the case may be, within ten (10) Trading Days
of such deletion or delisting;

      (g)  notwithstanding  anything herein to the contrary,  but subject to the
limitations  set forth in the  Debentures,  the Company shall fail to deliver to
the Escrow Agent share  certificates  representing the shares of Common Stock to
be issued upon conversion of the Debentures within three (3) Business Days after
to the  Company's  receipt of notice from the Escrow  Agent to the Company  that
additional  shares of Common Stock are required to be placed in escrow  pursuant
to Section 4.14 of the Purchase  Agreement,  Article 2 of the Escrow  Agreement,
and/or Section 4(b) of this Debenture;

      (h) the Company shall issue a press  release,  or otherwise  make publicly
known,  that it is not honoring a properly executed and duly delivered Notice of
Conversion  complying with the terms of this Debenture,  the Purchase  Agreement
and the Escrow Agreement, for any reason whatsoever; and

      (i)  the  Company  issues  or  enters  into  an  agreement  to  issue  any
convertible security, any equity line of credit, or any security issued pursuant
to Rule 504 of Regulation D promulgated  under the Securities Act, other than to
the Purchaser or any of its Affiliates or assigns,  during the period commencing
on the date hereof and ending on the four month  anniversary of the Post-Closing
Date.

                                    A 3a - 4
<PAGE>

      II.  (a) If any  Event of  Default  occurs,  and  continues  beyond a cure
period,  if any,  then  the  Holder  may,  by  written  notice  to the  Company,
accelerate all of the payments due under this Debenture by declaring all amounts
so due under this Debenture, whereupon the same shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are waived by the Company,  notwithstanding  anything  contained herein to
the  contrary,  and the Holder may  immediately  and without  expiration  of any
additional 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 the  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.  This shall include,  but not be
limited to the right to temporary,  preliminary and permanent  injunctive relief
without the requirement of posting any bond or undertaking.

      (b) The Holder may  thereupon  proceed to protect  and  enforce its rights
either  by suit in  equity  and/or  by  action  at law or by  other  appropriate
proceedings  whether for the specific  performance  (to the extent  permitted by
law) of any covenant or agreement  contained in this  Debenture or in aid of the
exercise  of any power  granted in this  Debenture,  and  proceed to enforce the
payment of any of the  Debentures  held by it, and to enforce any other legal or
equitable right of such Holder.

      (c) Except as expressly provided for herein, the Company  specifically (i)
waives all rights it may have (A) to notice of  nonpayment,  notice of  default,
demand,  presentment,  protest and notice of protest  with respect to any of the
obligations hereunder or the shares of Common Stock and (B) notice of acceptance
hereof or of any other action taken in reliance  hereon,  notice and opportunity
to be heard  before the  exercise by the Holder of the  remedies  of  self-help,
set-off,  or other summary  procedures  and all other demands and notices of any
type or  description  except for cure  periods,  if any;  and (ii)  releases the
Holder, its officers, directors, agents, employees and attorneys from all claims
for  loss or  damage  caused  by any act or  failure  to act on the  part of the
Holder,  its officers,  attorneys,  agents,  directors and employees  except for
gross negligence or willful misconduct.

      (d) As a non-exclusive remedy, upon the occurrence of an Event of Default,
the Holder may convert the  remaining  principal  amount of the  Debentures  and
accrued  interest  thereon  at the lesser of the Fixed  Conversion  Price or the
Floating  Conversion  Price upon giving a Notice of  Conversion  to the Company.
Except as otherwise  provided  herein,  the Company  shall not have the right to
object to the conversion or the calculation of the applicable  conversion price,
absent  manifest  error and the Escrow Agent shall  release the shares of Common
Stock from escrow two (2) Business Days after upon  notifying the Company of the
conversion.

      III. To effectuate the terms and provision of this  Debenture,  the Holder
may give notice of any default to the  Attorney-in-Fact  as set forth herein and
give a copy of such notice to the Company and its counsel,  simultaneously,  and
request the  Attorney-in-Fact to comply with the terms of this Debenture and the
Purchase  Agreement  and all  agreements  entered into  pursuant to the Purchase
Agreement on behalf of the Company.

                                    A 3a - 5
<PAGE>

      Section 4. Conversion.

      (a) Except as otherwise set forth herein or in the Purchase Agreement, the
unpaid  principal  amount of this Debenture shall be convertible  into shares of
Common  Stock at the  Conversion  Ratio as  defined  above,  and  subject to the
Limitation on Conversion described in Section 4.18 of the Purchase Agreement and
subject to the  limitation  set forth in Section 4.29 of the Purchase  Agreement
and in the  paragraphs  three through five of this First  Debenture C1 following
the paragraph that begin "For Value Received",  at the option of the Holder,  in
whole or in part, at any time,  commencing on the Original  Issuance Date.  Such
shares of Common  Stock shall be without  any  restriction  and freely  tradable
pursuant to Rule 504 of Regulation D of the Securities Act. Any conversion under
this  Section 4(a) shall be for a minimum  principal  amount of $1,000.00 of the
Debentures  plus the interest  accrued and due thereon.  The Holder shall effect
conversions by  surrendering  the Debenture to be converted to the Escrow Agent,
together  with the form of notice  attached  hereto as  Appendix I  ("Notice  of
Conversion")  in the manner set forth in Section  4(j)  hereof.  Each  Notice of
Conversion  shall specify the principal amount of Debentures to be converted and
the date on which such  conversion  is to be effected  (the  "Conversion  Date")
which date shall not be less than two (2) Business  Days after the date on which
the Notice of Conversion  is delivered to the Escrow Agent.  Subject to the last
paragraph of Section 4(b) hereof,  each Notice of Conversion,  once given, shall
be  irrevocable.  If the  Holder is  converting  less than all of the  principal
amount  represented  by the  Debentures  tendered by the Holder in the Notice of
Conversion,  the Company  shall  deliver to the Holder a new  Debenture for such
principal  amount as has not been converted  within two (2) Business Days of the
Conversion  Date.  In the event that the Escrow  Agent holds the  Debentures  on
behalf of the  Holder,  the  Company  agrees  that in lieu of  surrendering  the
Debentures  upon  every  partial  conversion,  the Escrow  Agent  shall give the
Company  and the  Holder  written  notice of the amount of the  Debentures  left
unconverted.  Upon  conversion  in full of the  Debentures  or upon the Maturity
Date, the Escrow Agent shall return the  Debentures  and the Escrow  Shares,  if
any, to the Company for cancellation.

      (b) Not later than two (2) Business Days after the  Conversion  Date,  the
Escrow  Agent  shall  deliver to the Holder (i) a  certificate  or  certificates
representing  the  number  of shares of Common  Stock  being  acquired  upon the
conversion of the Debentures, and once the Debentures so converted in part shall
have been  surrendered  to the Company,  the Company shall deliver to the Holder
Debentures  in  the  principal  amount  of the  Debentures  not  yet  converted;
provided, however, that the Company shall not be obligated to issue certificates
evidencing  the  shares  of  Common  Stock  issuable  upon   conversion  of  the
Debentures,  until the  Debentures  are either  delivered for  conversion to the
Escrow Agent or the Company or any transfer  agent for the  Debentures or Common
Stock,  or the Holder  notifies the Company that such Debentures have been lost,
stolen  or  destroyed  and  provides  an  affidavit  of  loss  and an  agreement
reasonably  acceptable  to the Company  indemnifying  the Company  from any loss
incurred by it in connection with such loss,  theft or destruction.  In the case
of a  conversion  pursuant to a Notice of  Conversion,  if such  certificate  or
certificates are not delivered by the date required under this Section 4(b), the
Holder shall be entitled,  upon  providing  written notice to the Company at any
time on or before its receipt of such certificate or certificates thereafter, to
rescind such conversion,  in which event, the Company shall  immediately  return
the Debentures tendered for conversion.

                                    A 3a - 6
<PAGE>

      Subject  to any  limitations  set  forth in the  Purchase  Agreement,  the
Company agrees that at any time the conversion  price of the Debentures are such
that the  number  of Escrow  Shares  is less  than  200% of the Full  Conversion
Shares,  upon five (5) Business Days of the Company's  receipt of notice of such
circumstance from the Purchaser and/or the Escrow Agent, the Company shall issue
share  certificates  in the name of the  Purchaser  and  deliver the same to the
Escrow  Agent,  in such number that the new number of Escrow  Shares is equal to
200% of the Full Conversion Shares.

      (c)  (i)  The  conversion  price  for  the  Debentures  in  effect  on any
Conversion  Date shall be the LESSER of (a) one hundred fifty percent  (150%) of
the Fixed  Conversion  Price (as defined and computed in the First  Debenture A)
(the "Fixed Conversion  Price") or (b) one hundred percent (100%) of the average
of the three (3) lowest  closing bid prices per share of the Common Stock during
the forty (40) Trading  Days  immediately  preceding  the  Conversion  Date (the
"Floating  Conversion Price"). For purposes of determining the closing bid price
on any day,  reference  shall be to the  closing bid price for a share of Common
Stock on such date on the OTCBB (or such other exchange, market, or other system
that the Common  Stock is then traded on), as reported on  Bloomberg,  L.P.  (or
similar organization or agency succeeding to its functions of reporting prices).

      (ii)  If the  Company,  at any  time  while  any  of  the  Debentures  are
outstanding,  (a) shall pay a stock dividend or otherwise make a distribution or
distributions  on shares of its Common  Stock  payable in shares of its  capital
stock (whether  payable in shares of its Common Stock or of capital stock of any
class), (b) subdivide outstanding shares of Common Stock into a larger number of
shares, (c) combine  outstanding shares of Common Stock into a smaller number of
shares,  or (d) issue by  reclassification  any shares of  capital  stock of the
Company,  the Fixed  Conversion  Price as applied in  Section  4(c)(i)  shall be
multiplied  by a fraction,  the numerator of which shall be the number of shares
of Common Stock of the Company outstanding immediately before such event and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately  after giving effect to such event.  Any adjustment made pursuant to
this Section 4(c)(ii) 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  reclassification,  provided that no
adjustment  shall  be made if the  Company  does  not  complete  such  dividend,
distribution, subdivision, combination or reclassification.

      (iii) If, at any time while any of the  Debentures  are  outstanding,  the
Company  issues or sells shares of Common Stock,  or options,  warrants or other
rights to subscribe for or purchase shares of Common Stock (excluding  shares of
Common Stock issuable upon the conversion of the Debentures or upon the exercise
of options,  warrants or conversion rights granted prior to the date hereof) and
at a price per share  less than the Per Share  Market  Value (as  defined in the
Purchase  Agreement) of the Common Stock at the issue date mentioned  below, the
Fixed Conversion Price shall be multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock  (excluding  treasury  shares,  if
any)  outstanding on the date of issuance of such shares,  options,  warrants or
rights plus the number of shares which the aggregate offering price of the total
number of shares so offered would  purchase at such Per Share Market Value,  and
the  denominator  of  which  shall be the  number  of  shares  of  Common  Stock
(excluding  treasury shares, if any) outstanding on the date of issuance of such
options,

                                    A 3a - 7
<PAGE>

rights or warrants plus the number of additional  shares of Common Stock offered
for  subscription  or purchase.  Such  adjustment  shall be made  whenever  such
options,  rights or warrants  are issued  (and if such  adjustment  is made,  no
further  adjustment  will be made when such  options,  rights  or  warrants  are
exercised), and shall become effective immediately after the record date for the
determination  of  stockholders  entitled  to receive  such  options,  rights or
warrants.  However,  upon the  expiration  of any  options,  right or warrant to
purchase  Common Stock,  the issuance of which  resulted in an adjustment in the
conversion  price  designated in Section 4(c)(i) hereof pursuant to this Section
4(c)(iii), if any such options, right or warrant shall expire and shall not have
been  exercised,   the  Fixed  Conversion  Price  shall  immediately  upon  such
expiration  be  recomputed  and effective  immediately  upon such  expiration be
increased  to the  price  which it would  have been  (but  reflecting  any other
adjustments  in the  conversion  price made  pursuant to the  provisions of this
Section 4 after the issuance of such rights or warrants)  had the  adjustment of
the conversion price made upon the issuance of such options,  rights or warrants
been made on the basis of offering for subscription or purchase only that number
of shares of Common Stock actually  purchased upon the exercise of such options,
rights or warrants  actually  exercised.  There will be no adjustment under this
Section  4(c)(iii) if Common Stock is issued due to the exercise of (x) employee
stock options that were issued to such employee, or (y) other options,  warrants
or rights to  subscribe  for or  purchase  that,  in any case,  are issued at an
exercise or subscription price equal to Per Share Market Value.

      (iv)  If,  at any time  while  Debentures  are  outstanding,  the  Company
distributes  to all holders of Common  Stock (and not to holders of  Debentures)
evidences of Company  indebtedness or assets, or rights or warrants to subscribe
for or purchase any security  (excluding those referred to in Section  4(c)(iii)
hereof),  then, in each such case, the conversion  price at which each Debenture
then  outstanding  shall  thereafter  be  convertible  shall  be  determined  by
multiplying (A) the Fixed  Conversion Price in effect  immediately  prior to the
record date fixed for  determination  of  stockholders  entitled to receive such
distribution by a fraction, the numerator of which shall be the Per Share Market
Value of the Common Stock  determined as of the record date mentioned above less
the then fair market  value at such record date of the portion of such assets or
evidence of indebtedness so distributed  applicable to one outstanding  share of
Common  Stock as  determined  by the Board of  Directors  in good  faith and the
denominator  of which shall be the Per Share Market Value of the Common Stock on
such  record  date;  provided,  however,  that in the  event  of a  distribution
exceeding ten percent  (10%) of the net assets of the Company,  such fair market
value  shall  be  determined  by  a  nationally  recognized  or  major  regional
investment  banking firm or firm of independent  certified public accountants of
nationally  recognized  standing (which may be the firm that regularly  examines
the financial statements of the Company) (an "Appraiser") selected in good faith
by the  holders of a majority of the  principal  amount of the  Debentures  then
outstanding;  and  provided,  further,  that the Company,  after  receipt of the
determination  by such  Appraiser,  shall have the right to select an additional
Appraiser, in which case such fair market value shall be equal to the average of
the determinations by each such Appraiser.  In either case the adjustments shall
be  described  in a statement  provided  to the Holder and all other  holders of
Debentures of the portion of assets or evidences of  indebtedness so distributed
or such  subscription  rights  applicable  to one  share of Common  Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective  immediately  after the record date mentioned above. The Company shall
pay all fees and expenses of any Appraiser selected under this Section 4(c)(iv).

                                    A 3a - 8
<PAGE>

      (v) All  calculations  under this  Section 4 shall be made to the  nearest
1/1000th of a cent or the nearest  1/1000th of a share,  as the case may be. Any
calculation  equal to or over .005 shall be rounded up to the next cent or share
and any calculation less than .005 shall be rounded down to the previous cent or
share.

      (vi) In the event the conversion price is not adjusted pursuant to Section
4(c)(ii) or (v),  within two (2) Business Days  following  the  occurrence of an
event  described  therein and, in the case of Section  4c(iv),  within three (3)
Business  Days  following  the  determination  of the fair  market  value by the
Appraiser(s),  the Holder  shall have the right to require the Company to redeem
the Debentures at 140% of the Purchase Price and  simultaneously pay such amount
and all accrued  interest and  dividends  to the Holder  pursuant to the written
instructions provided by the Holder. The Company will have two (2) Business Days
to make the  appropriate  adjustment  from the time the Company is provided with
written notice from the Holder of a failure to comply with this Section 4.

      (vii) Whenever the Fixed Conversion Price is adjusted  pursuant to Section
4(c)(ii),(iii) or (iv), the Company shall within two (2) Business Days after the
determination  of the new Fixed Conversion Price mail and fax (in the manner set
forth in  Section  4(j)  hereof)  to the  Holder  and to each  other  holder  of
Debentures,  a notice ("Company Notice of Conversion Price Adjustment")  setting
forth the Fixed Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

      (viii)  In  case  of  any   reclassification  of  the  Common  Stock,  any
consolidation or merger of the Company with or into another person,  the sale or
transfer  of  all or  substantially  all of the  assets  of the  Company  or any
compulsory  share exchange  pursuant to which the Common Stock is converted into
other  securities,  cash or  property,  then  each  holder  of  Debentures  then
outstanding shall have the right thereafter to convert such Debentures only into
the shares of stock and other securities and property  receivable upon or deemed
to  be  held  by  holders  of  Common  Stock  following  such  reclassification,
consolidation, merger, sale, transfer or share exchange (except in the event the
property is cash, then the Holder shall have the right to convert the Debentures
and receive cash in the same manner as other stockholders), and the Holder shall
be entitled  upon such event to receive such amount of securities or property as
the holder of shares of the Common Stock into which such  Debentures  could have
been  converted  immediately  prior  to  such  reclassification,  consolidation,
merger, sale, transfer or share exchange would have been entitled.  The terms of
any such consolidation,  merger,  sale, transfer or share exchange shall include
such terms so as to  continue  to give to the  Holder  the right to receive  the
securities or property set forth in this Section  4(c)(viii) upon any conversion
following such consolidation,  merger,  sale,  transfer or share exchange.  This
provision shall similarly apply to successive reclassifications, consolidations,
mergers, sales, transfers or share exchanges;

      (ix) If:

            (A)   the   Company   shall   declare  a  dividend   (or  any  other
                  distribution) on its Common Stock; or

                                    A 3a - 9
<PAGE>

            (B)   the  Company  shall  declare  a  special   non-recurring  cash
                  dividend redemption of its Common Stock; or

            (C)   the Company  shall  authorize  the grant to all holders of the
                  Common Stock  rights or warrants to subscribe  for or purchase
                  any shares of capital stock of any class or of any rights; or

            (D)   the  approval  of any  stockholders  of the  Company  shall be
                  required in connection with any reclassification of the Common
                  Stock of the Company  (other than a subdivision or combination
                  of the outstanding  shares of Common Stock), any consolidation
                  or  merger  to  which  the  Company  is a  party,  any sale or
                  transfer  of all or  substantially  all of the  assets  of the
                  Company,  or any compulsory  share exchange whereby the Common
                  Stock is converted into other securities, cash or property; or

            (E)   the Company  shall  authorize  the  voluntary  or  involuntary
                  dissolution,  liquidation  or winding-up of the affairs of the
                  Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Debentures,  and shall cause to be mailed and faxed
to the Holder and each other holder of the  Debentures  at their last  addresses
and facsimile  number set forth in the  Debenture  Register at least twenty (20)
calendar  days prior to the  applicable  record or  effective  date  hereinafter
specified,  a notice  stating  (x) the date on which a record is to be taken for
the purpose of such dividend,  distribution,  redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distributions,  redemption, rights or
warrants are to be determined,  or (y) the date on which such  reclassification,
consolidation,  merger, sale, transfer, share exchange, dissolution, liquidation
or  winding-up is expected to become  effective,  and the date as of which it is
expected  that  holders of Common  Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property  deliverable  upon
such reclassification,  consolidation,  merger, sale, transfer,  share exchange,
dissolution,  liquidation or winding-up;  provided, however, that the failure to
mail such  notice or any defect  therein  or in the  mailing  thereof  shall not
affect the  validity of the  corporate  action  required to be specified in such
notice.

      (d) If at any time  conditions  shall arise by reason of action or failure
to act by the  Company,  which  action or failure to act,  in the opinion of the
Board of  Directors  of the  Company,  is not  adequately  covered  by the other
provisions  hereof and which might materially and adversely affect the rights of
the Holder and all other  holders of Debentures  (different  or  distinguishable
from the effect  generally  on rights of  holders of any class of the  Company's
capital  stock),  the Company shall, at least twenty (20) calendar days prior to
the effective date of such action,  mail and fax a written notice to each holder
of  Debentures  briefly  describing  the action  contemplated,  and an Appraiser
selected  by the  holders of majority  in  principal  amount of the  outstanding
Debentures shall give its opinion as to the adjustment, if any (not inconsistent
with the standards  established  in this Section 4 and the terms of the Purchase
Agreement and the Debentures), of the conversion price (including, if necessary,
any  adjustment as to the  securities  into which  Debentures  may thereafter be
convertible)  and any  distribution  which is or would be

                                   A 3a - 10
<PAGE>

required to preserve  without  diluting the rights of the holders of Debentures;
provided,  however, that the Company, after receipt of the determination by such
Appraiser, shall have the right to select an additional Appraiser, in which case
the adjustment  shall be equal to the average of the adjustments  recommended by
each  such  Appraiser.  The  Company  shall  pay all  fees and  expenses  of any
Appraiser  selected  under this  Section  4(d).  The Board of  Directors  of the
Company shall make the adjustment recommended forthwith upon the receipt of such
opinion or opinions or the taking of any such action  contemplated,  as the case
may be; provided, however, that no such adjustment of the conversion price shall
be made which, in the opinion of the Appraiser(s)  giving the aforesaid  opinion
or  opinions,  would  result in an  increase of the  conversion  price above the
conversion price then in effect.

      (e) Subject to the terms and  limitations  set forth in the Debentures and
the Purchase Agreement, including without limitation,  Sections 4.14, 4.28, 4.29
and 4.30 thereof,  the Company covenants and agrees that it shall, at all times,
reserve and keep  available  out of its  authorized  and  unissued  Common Stock
solely for the purpose of issuance upon  conversion of the  Debentures as herein
provided,  free from preemptive rights or any other actual  contingent  purchase
rights of persons  other than the Holder of the  Debentures,  two (2) times such
number of shares of Common  Stock as shall be issuable  (taking into account the
adjustments  and  restrictions of Section 4(c) and Section 4(d) hereof) upon the
conversion of the aggregate principal amount of the outstanding Debentures.  The
Company  covenants  that,  subject to the  limitations set forth in this Section
4(e),  all shares of Common Stock that shall be issuable upon  conversion of the
Debentures shall, upon issuance,  be duly and validly  authorized and issued and
fully paid and non-assessable.

      (f) No  fractional  shares  of  Common  Stock  shall  be  issuable  upon a
conversion  hereunder  and the number of shares to be issued shall be rounded up
to the nearest  whole share.  If a  fractional  share  interest  arises upon any
conversion hereunder, the Company shall eliminate such fractional share interest
by issuing to the Holder an additional full share of Common Stock.

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

      (h) The  Debentures  converted  into Common  Stock shall be canceled  upon
conversion.

      (i)  On  the  Maturity  Date,  the  unconverted  principal  amount  of the
Debentures  and all interest due thereon shall either be paid off in full by the
Company  or, if payment in full is not  received  within two (2)  Business  Days
after the Maturity Date,  convert  automatically  into shares

                                   A 3a - 11
<PAGE>

of Common  Stock at the lesser of the Fixed  Conversion  Price and the  Floating
Conversion Price as set forth in Section 4(c)(i).

      (j) Each Notice of  Conversion  shall be given by  facsimile to the Escrow
Agent no later than 4:00 pm New York time on any Business  Day.  Upon receipt of
such  Notice of  Conversion,  the Escrow  Agent  shall  forward  such  Notice of
Conversion  to the Company by facsimile by 6:00 p.m. New York time on the day on
which the Escrow  Agent  receives  the Notice of  Conversion,  at the  facsimile
telephone  number and address of the principal place of business of the Company.
Any such notice shall be deemed given and  effective  upon the  transmission  of
such  facsimile  at the  facsimile  telephone  number  specified in the Purchase
Agreement  (with printed  confirmation of  transmission).  In the event that the
Escrow Agent receives the Notice of Conversion  after 4:00 p.m. New York time or
the Company  receives the Notice of Conversion  after 6:00 p.m. New York time on
such  day,  or the  Holder  receives  the  Company  Notice of  Conversion  Price
Adjustment  after 6:00 p.m.  New York time,  any such notice  shall be deemed to
have been given on the next Business Day.

      Section 5.  Redemption of Debentures.  (a) At any time after the Execution
Date,  so long as no Event of Default  has  occurred  and,  if a cure  period is
provided,  has not been cured,  the Company  shall have the option to redeem any
unconverted amount of the Debentures, either in part or whole, upon no less than
thirty (30) days written  notice  thereof given to the Holder with a copy to the
Escrow Agent (the "Redemption Notice"), at one hundred fifteen percent (115%) of
the  unconverted  amount of the Debentures  plus accrued  interest  thereon (the
"Redemption Price").  Notwithstanding anything contained herein to the contrary,
if the  Company  decides  to  redeem  the  outstanding  principal  amount of the
Debenture  under the second proviso in the first sentence of Section  4(c)(i) of
this  Debenture,  the  Company  shall  have three (3)  Business  Days from their
decision to redeem the Debenture in order to effectuate  the  redemption of such
principal amount of the outstanding Debenture.

      (b) Within three (3) Business Days prior to the date fixed for  redemption
in the Redemption Notice, the Company shall deposit the Redemption Price by wire
transfer to the IOLA account of the Escrow Agent. Upon receipt of the Redemption
Price,  on such  redemption  date, the Escrow Agent shall release the Redemption
Price to the  Holder  and return the  remaining  Debentures,  Escrow  Shares and
Underlying Shares to the Company.

      (c) In the event that the Company fails to deposit the Redemption Price in
the Escrow Agent's IOLA account number within the time allocated in Section 5(b)
hereof, then the redemption shall be declared null and void.

      Section 6. Intentionally Omitted.

      Section 7. Absolute Payment Obligation;  Limitation on Prepayment.  Except
as expressly provided herein, in the Purchase  Agreement,  or in the Note C1, no
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and  unconditional,  to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed. This Debenture is a direct obligation of the Company. This Debenture
ranks pari passu with all other  Debentures  now or  hereafter  issued under the
terms  set  forth  herein.  The  Company  may  not  prepay  any  portion  of the
outstanding

                                   A 3a - 12
<PAGE>

principal  amount on the  Debentures  except  in  accordance  with the  Purchase
Agreement or Sections 4(c)(i) or 5 hereof.

      Section 8. No Rights of Stockholders.  Except as otherwise provided herein
or in the Purchase Agreement, 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 on or  consent  to any  action,  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.

      Section 9. Loss, Theft, Mutilation or Destruction. 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 an affidavit of such loss, theft or
destruction of such Debenture, and, if requested by the Company, an agreement to
indemnity the Company in form reasonably acceptable to the Company.

      Section  10.  Governing  Law.  This  Debenture  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York without regard to the principles of conflicts of law thereof. Any action to
enforce  the  terms of this  Debenture,  the  Purchase  Agreement  or any  other
Transaction  Document shall be  exclusively  brought in the state and/or federal
courts in the state and county of New York.  Service of process in any action by
the Holder to enforce the terms of this  Debenture may be made by serving a copy
of the summons and complaint,  in addition to any other relevant  documents,  by
commercial  overnight  courier to the  Company at its  address  set forth in the
Purchase Agreement.

      Section  11.  Notices.  Any  notice,  request,  demand,  waiver,  consent,
approval or other  communication  which is required or  permitted to be given to
any party  hereunder  shall be in writing and shall be deemed duly given only if
delivered  to the  party  personally  or sent to the  party  by  facsimile  upon
electronic  confirmation  receipt (promptly followed by a hard-copy delivered in
accordance  with this Section 12) or three days after being mailed by registered
or certified mail (return receipt  requested),  with postage and registration or
certification  fees  thereon  prepaid,  or  if  sent  by  nationally  recognized
overnight  courier,  one day after being  mailed,  addressed to the party at its
address  as set forth in Section  7.3 of the  Purchase  Agreement  or such other
address as may be designated  hereafter by notice given pursuant to the terms of
this Section 11.

      Section 12. Waiver. Any waiver by the Company or the Holder of a breach of
any  provision  of this  Debenture  shall not operate as or be construed to be a
waiver  of any  other  breach of such  provision  or of any  breach of any other
provision of this Debenture.  The failure of the Company or the Holder to insist
upon strict  adherence to any term of this  Debenture  on one or more  occasions
shall not be  considered a waiver or deprive that party of the right  thereafter
to insist upon strict adherence to that term or any other term of this Debenture
in any other occasion. Any waiver must be in writing.

      Section 13.  Invalidity.  If any provision of this Debenture is held to be
invalid, illegal or unenforceable, the balance of this Debenture shall remain in
effect,  and if any  provision  is

                                   A 3a - 13
<PAGE>

held to be inapplicable  to any person or  circumstance,  it shall  nevertheless
remain applicable to all other persons and circumstances.

      Section  14.  Payment  Dates.  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 following Business Day.

      Section 15. Transfer; Assignment. This Debenture may not be transferred or
assigned,  in  whole  or in part,  at any  time,  except  in  compliance  by the
transferor and the transferee with applicable federal and state securities laws.

      Section  16.  Future  Financing.   If,  at  any  time  this  Debenture  is
outstanding,  the  Company,  or its  successors  in  interest  due  to  mergers,
consolidations and/or acquisitions (the "Successors-in-Interest"),  is funded an
amount equal to or exceeding Five Million  United States  dollars  ($5,000,000),
the Company or the Successors-in-Interest, as the case may be, agrees to pay the
Purchaser  an  amount  equal to One  Hundred  Fifty  Percent  (150%) of the then
outstanding Debenture (the "Lump Sum Payment").  Upon the Purchaser's receipt of
the Lump Sum Payment, any and all remaining obligations then outstanding between
the Company or the Successors-in-Interest,  as the case may be, and Purchaser in
connection  with  the  Purchase  Agreement  and  this  Debenture  shall  be deem
satisfied,  and the Purchase  Agreement and this Debenture  shall be terminated.
This provision shall survive both Closing and Post-Closing.

      Section 17. Fees of  Enforcement.  In the event any Party  commences legal
action to enforce its rights  under this  Debenture,  the  non-prevailing  party
shall pay all  reasonable  costs and  expenses  (including  but not  limited  to
reasonable   attorney's   fees,   accountant's   fees,   appraiser's   fees  and
investigative fees) incurred in enforcing such rights.

                            [Signature Page Follows]

                                   A 3a - 14
<PAGE>

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

                                     REALITY WIRELESS NETWORKS, INC.

Attest: ______________________       By: ______________________________
                                         Name: Steve Careaga
                                         Title: CEO

                                   A 3a - 15
<PAGE>

                                   APPENDIX I

                              NOTICE OF CONVERSION
                          AT THE ELECTION OF THE HOLDER

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

Except as provided by Section 4(b) of the  Debentures,  the  undersigned  hereby
irrevocably  elects to convert  the  attached  Debenture  into  shares of Common
Stock,  par value $0.001 per share (the  "Common  Stock"),  of Reality  Wireless
Networks,  Inc. (the "Company"),  according to the provisions  hereof, as of the
date  written  below.  If shares are to be issued in the name of a person  other
than  undersigned,  the  undersigned  will pay all transfer  taxes  payable with
respect  thereto and is delivering  herewith such  certificates  and opinions as
reasonably requested by the Company in accordance therewith.  A fee of $400 will
be charged by the Escrow Agent to the Holder for each conversion.  No other fees
will be charged to the Holder, except for transfer taxes, if any.

Conversion calculations:          ----------------------------------------------
                                  Date to Effect Conversion

                                  ----------------------------------------------
                                  Principal Amount of Debentures to be Converted

                                  ----------------------------------------------
                                  Interest to be Converted or Paid

                                  ----------------------------------------------
                                  Applicable Conversion Price
                                  (Pursuant to Section 4(c)(v))

                                  ----------------------------------------------
                                  Number of Shares to be Issued Upon Conversion

                                  ----------------------------------------------
                                  Signature

                                  ----------------------------------------------
                                  Name

                                  ----------------------------------------------
                                  Address

                                   A 3a - 16
<PAGE>

                                  EXHIBIT A-3b

                               FIRST DEBENTURE C2

NEITHER THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE  SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER  RULE  504  OF  REGULATION  D  PROMULGATED  UNDER  THE  U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS.

US $100,000                                                     October 27, 2003

                  1% CONVERTIBLE DEBENTURE DUE OCTOBER 26, 2008

      THIS DEBENTURE of Reality Wireless  Networks.,  a Nevada  corporation (the
"Company") in the aggregate principal amount of One Hundred Thousand Dollars (US
$100,000),  is designated as its $100,000,  1% Convertible Debenture due October
26, 2008 (the "Debentures").

      FOR VALUE  RECEIVED,  except as  otherwise  provided  herein,  the Company
promises  to pay to HEM Mutual  Assurance  LLC or its  registered  assigns  (the
"Holder"),  the principal sum of One Hundred Thousand Dollars (US $100,000),  on
or prior to October 26, 2008 (the  "Maturity  Date") and to pay  interest to the
Holder on the principal sum at the rate of one percent (1%) per annum. Except as
otherwise  provided  herein,  interest  shall  accrue  daily  commencing  on the
Original  Issuance  Date (as  defined in Section 1 below) in the form of cash or
common stock of the Company  selected by the Holder subject to the provisions of
Section 2(b) hereof,  until payment in full of the principal sum,  together with
all accrued and unpaid  interest,  has been made or duly provided for. If at any
time after the  Original  Issuance  Date an Event of Default has occurred and is
continuing, interest shall accrue at the rate of fifteen percent (15%) per annum
from the date of the Event of Default and the applicable cure period through and
including the date of payment.  Interest due and payable hereunder shall be paid
to the person in whose name this Debenture (or one or more successor Debentures)
is registered on the records of the Company regarding registration and transfers
of the  Debentures  (the  "Debenture  Register");  provided,  however,  that the
Company's  obligation to a transferee of this Debenture shall arise only if such
transfer,  sale or other  disposition  is made in accordance  with the terms and
conditions  hereof and of the  Convertible  Debenture  Purchase  Agreement  (the
"Purchase Agreement") by and between the Company and the Purchaser (as such term
is defined in the Purchase  Agreement),  dated as of October 27, 2003, as may be
amended  from time to time.  A transfer  of the right to receive  principal  and
interest under this Debenture shall be transferable  only through an appropriate
entry in the Debenture Register as provided herein.

      Notwithstanding  anything contained herein, in the Purchase Agreement,  or
in the  Note C2 to the  contrary,  this  First  Debenture  C2 shall  not  accrue
interest, shall not be convertible, and

                                    A 3b- 1
<PAGE>

shall not be subject to repayment by the Company at its  maturity,  and the Note
C2 shall not be due and payable  and shall not be deemed  part of the  "Purchase
Price" for purposes of Section 4.25 of the Purchase Agreement, unless and until:

      (ii)  the Holder elects that Note C2 shall become due and payable; and

      (ii)  the number of Escrow  Shares for the aggregate  principal  amount of
            the Debentures  then  outstanding  and this First Debenture C2 is at
            least  200% of the number of shares of common  stock of the  Company
            that  would  be  needed  to  satisfy  full  conversion  of all  such
            unconverted Debentures,

provided,  however,  that if subparagraph (i) is satisfied and subparagraph (ii)
is not,  the  Company  shall  increase  in  accordance  with and  subject to the
provisions  of  Section  4.14 of the  Purchase  Agreement,  the number of Escrow
Shares to cover 200% of the number of shares of common stock of the Company that
would be needed to satisfy full conversion of all of such Debenture  pursuant to
the  procedures set forth in Section 4.14 of the Purchase  Agreement;  provided,
further, that,  notwithstanding the foregoing, this First Debenture C2 shall not
accrue interest,  shall not be convertible and shall not be subject to repayment
by the Company at its maturity,  and the Note C2 shall not be deemed part of the
"Purchase Price" for purposes of Section 4.25 of the Purchase Agreement,  unless
and  until  the  Note C2 is paid in full by the  Holder  or its  successors  and
assigns.

      If the  Note C2 has not been  paid in full by the  Holder  to the  Company
(whether  or not it is  otherwise  then due or  payable by its  terms),  (i) any
payments  from the Company to the Holder  pursuant to Sections  4.19 and 4.33 of
the Purchase Agreement will be offset by the principal amount of the Note C2 and
(ii) "Debentures" shall specifically refer to First Debenture A, First Debenture
B, First Debenture C1, First Debenture C2, First Debenture C3, First Debenture D
and the Second Debenture in Sections 4.19 and 4.33 in Purchase Agreement.

      This Debenture is subject to the following additional provisions:

      Section 1.  Definitions.  Capitalized terms used and not otherwise defined
herein shall have the meanings  given such terms in the Purchase  Agreement.  As
used in this Agreement, the following terms shall have the following meanings:

      "Adjusted Conversion Price" means the lesser of the Fixed Conversion Price
or the  Floating  Conversion  Price one day prior to the record date set for the
determination  of  stockholders  entitled to receive  dividends,  distributions,
rights or warrants as provided for in Sections 4(c)(ii), (iii) and (iv).

      "Company" shall mean Reality Wireless Networks, Inc.

      "Common Stock" shall mean the common stock of Reality  Wireless  Networks,
Inc.  (as  adjusted  for  any  reverse  splits,  forward  splits,   combination,
reclassification  or stock  dividend  from the date the  Purchase  Agreement  is
signed).

                                    A 3b- 2
<PAGE>

      "Conversion Date" shall have the meaning set forth in Section 4(a) hereof.

      "Conversion Ratio" means, at any time, a fraction,  the numerator of which
is the then  outstanding  principal  amount  represented by the Debentures  plus
accrued  but  unpaid  interest  thereon,  and the  denominator  of  which is the
conversion price at such time.

      "Fixed Conversion Price" shall have the meaning set forth in Section 4(c)i
hereof.

      "Floating  Conversion  Price"  shall have the meaning set forth in Section
4(c)i hereof.

      "Notice of  Conversion"  shall have the meaning set forth in Section  4(a)
hereof.

      "Original Issuance Date" shall mean the date of the first issuance of this
Debenture regardless of the number of transfers hereof.

      Section 2.  Denominations  of  Debentures;  Interest  on  Debentures.  The
Debentures  are  exchangeable  for  an  equal  aggregate   principal  amount  of
Debentures  of different  authorized  denominations,  as requested by the Holder
surrendering  the same, but shall not be issuable in  denominations of less than
integral multiplies of One Thousand Dollars (US$1,000.00).  No service charge to
the Holder will be made for such registration of transfer or exchange.

      Section 3. Events of Default and Remedies.

      I. "Event of Default,"  when used herein,  means any one of the  following
events  (whatever  the reason and whether any such event 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):

      (a) any  default in the  payment of the  principal  of or interest on this
Debenture  as and when the same  shall  become  due and  payable  either  at the
Maturity Date, by acceleration, conversion, or otherwise;

      (b) the  Company  shall fail to observe  or  perform  any other  covenant,
agreement  or warranty  contained  in, or  otherwise  commit any breach of, this
Debenture,  and such failure or breach shall not have been remedied  within five
(5) Business Days of its receipt of notice of such failure or breach;

      (c) the  occurrence of any event or breach or default by the Company under
the  Purchase  Agreement or any other  Transaction  Document and , if there is a
cure period, such failure or breach shall not have been remedied within the cure
period provided for therein;

      (d) the Company or any of its Subsidiaries shall commence a voluntary case
under the United  States  Bankruptcy  Code as now or  hereafter in effect or any
successor  thereto (the "Bankruptcy  Code"); or an involuntary case is commenced
against  the  Company  under  the  Bankruptcy  Code  and  the  petition  is  not
controverted  within  thirty (30) days,  or is not  dismissed  within sixty (60)
days,  after  commencement  of the case;  or a  "custodian"  (as  defined in the
Bankruptcy  Code) is appointed  for, or takes charge of, all or any  substantial
part  of the  property  of  the  Company  or the  Company  commences  any  other
proceeding under any reorganization,

                                    A 3b- 3
<PAGE>

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 there is  commenced  against the Company any
such  proceeding  which remains  undismissed for a period of sixty (60) days; or
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
suffers any  appointment of any custodian or the like for it or any  substantial
part of its property which  continues  undischarged  or unstayed for a period of
thirty (30) days; or the Company makes a general  assignment  for the benefit of
creditors;  or the Company  shall fail to pay, or shall state in writing that it
is unable to pay its debts  generally  as they become due; or the Company  shall
call a meeting  of its  creditors  with a view to  arranging  a  composition  or
adjustment  of its  debts;  or the  Company  shall by any act or  failure to act
indicate its consent to, approval of or acquiescence in any of the foregoing; or
any  corporate  or other  action  is taken by the  Company  for the  purpose  of
effecting any of the foregoing;

      (e)  the  Company  shall  default  in  any of its  obligations  under  any
mortgage,  indenture or instrument under which there may be issued,  or by which
there may be secured or evidenced,  any indebtedness of the Company in an amount
exceeding One Hundred Thousand Dollars ($100,000.00),  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;

      (f) the Company  shall have its Common Stock  deleted or delisted,  as the
case  may be,  from  the  American  Stock  Exchange,  OTCBB  or  other  national
securities  exchange or market on which such Common  Stock is listed for trading
or suspended from trading thereon,  and shall not have its Common Stock relisted
or have such suspension lifted, as the case may be, within ten (10) Trading Days
of such deletion or delisting;

      (g)  notwithstanding  anything herein to the contrary,  but subject to the
limitations  set forth in the  Debentures,  the Company shall fail to deliver to
the Escrow Agent share  certificates  representing the shares of Common Stock to
be issued upon conversion of the Debentures within three (3) Business Days after
to the  Company's  receipt of notice from the Escrow  Agent to the Company  that
additional  shares of Common Stock are required to be placed in escrow  pursuant
to Section 4.14 of the Purchase  Agreement,  Article 2 of the Escrow  Agreement,
and/or Section 4(b) of this Debenture;

      (h) the Company shall issue a press  release,  or otherwise  make publicly
known,  that it is not honoring a properly executed and duly delivered Notice of
Conversion  complying with the terms of this Debenture,  the Purchase  Agreement
and the Escrow Agreement, for any reason whatsoever; and

      (i)  the  Company  issues  or  enters  into  an  agreement  to  issue  any
convertible security, any equity line of credit, or any security issued pursuant
to Rule 504 of Regulation D promulgated  under the Securities Act, other than to
the Purchaser or any of its Affiliates or assigns,  during the period commencing
on the date hereof and ending on the four month  anniversary of the Post-Closing
Date.

                                    A 3b- 4
<PAGE>

      II.  (a) If any  Event of  Default  occurs,  and  continues  beyond a cure
period,  if any,  then  the  Holder  may,  by  written  notice  to the  Company,
accelerate all of the payments due under this Debenture by declaring all amounts
so due under this Debenture, whereupon the same shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are waived by the Company,  notwithstanding  anything  contained herein to
the  contrary,  and the Holder may  immediately  and without  expiration  of any
additional 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 the  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.  This shall include,  but not be
limited to the right to temporary,  preliminary and permanent  injunctive relief
without the requirement of posting any bond or undertaking.

      (b) The Holder may  thereupon  proceed to protect  and  enforce its rights
either  by suit in  equity  and/or  by  action  at law or by  other  appropriate
proceedings  whether for the specific  performance  (to the extent  permitted by
law) of any covenant or agreement  contained in this  Debenture or in aid of the
exercise  of any power  granted in this  Debenture,  and  proceed to enforce the
payment of any of the  Debentures  held by it, and to enforce any other legal or
equitable right of such Holder.

      (c) Except as expressly provided for herein, the Company  specifically (i)
waives all rights it may have (A) to notice of  nonpayment,  notice of  default,
demand,  presentment,  protest and notice of protest  with respect to any of the
obligations hereunder or the shares of Common Stock and (B) notice of acceptance
hereof or of any other action taken in reliance  hereon,  notice and opportunity
to be heard  before the  exercise by the Holder of the  remedies  of  self-help,
set-off,  or other summary  procedures  and all other demands and notices of any
type or  description  except for cure  periods,  if any;  and (ii)  releases the
Holder, its officers, directors, agents, employees and attorneys from all claims
for  loss or  damage  caused  by any act or  failure  to act on the  part of the
Holder,  its officers,  attorneys,  agents,  directors and employees  except for
gross negligence or willful misconduct.

      (d) As a non-exclusive remedy, upon the occurrence of an Event of Default,
the Holder may convert the  remaining  principal  amount of the  Debentures  and
accrued  interest  thereon  at the lesser of the Fixed  Conversion  Price or the
Floating  Conversion  Price upon giving a Notice of  Conversion  to the Company.
Except as otherwise  provided  herein,  the Company  shall not have the right to
object to the conversion or the calculation of the applicable  conversion price,
absent  manifest  error and the Escrow Agent shall  release the shares of Common
Stock from escrow two (2) Business Days after upon  notifying the Company of the
conversion.

      III. To effectuate the terms and provision of this  Debenture,  the Holder
may give notice of any default to the  Attorney-in-Fact  as set forth herein and
give a copy of such notice to the Company and its counsel,  simultaneously,  and
request the  Attorney-in-Fact to comply with the terms of this Debenture and the
Purchase  Agreement  and all  agreements  entered into  pursuant to the Purchase
Agreement on behalf of the Company.

                                    A 3b- 5
<PAGE>

      Section 4. Conversion.

      (a) Except as otherwise set forth herein or in the Purchase Agreement, the
unpaid  principal  amount of this Debenture shall be convertible  into shares of
Common  Stock at the  Conversion  Ratio as  defined  above,  and  subject to the
Limitation on Conversion described in Section 4.18 of the Purchase Agreement and
subject to the  limitation  set forth in Section 4.29 of the Purchase  Agreement
and in the  paragraphs  three through five of this First  Debenture C2 following
the paragraph that begin "For Value Received",  at the option of the Holder,  in
whole or in part, at any time,  commencing on the Original  Issuance Date.  Such
shares of Common  Stock shall be without  any  restriction  and freely  tradable
pursuant to Rule 504 of Regulation D of the Securities Act. Any conversion under
this  Section 4(a) shall be for a minimum  principal  amount of $1,000.00 of the
Debentures  plus the interest  accrued and due thereon.  The Holder shall effect
conversions by  surrendering  the Debenture to be converted to the Escrow Agent,
together  with the form of notice  attached  hereto as  Appendix I  ("Notice  of
Conversion")  in the manner set forth in Section  4(j)  hereof.  Each  Notice of
Conversion  shall specify the principal amount of Debentures to be converted and
the date on which such  conversion  is to be effected  (the  "Conversion  Date")
which date shall not be less than two (2) Business  Days after the date on which
the Notice of Conversion  is delivered to the Escrow Agent.  Subject to the last
paragraph of Section 4(b) hereof,  each Notice of Conversion,  once given, shall
be  irrevocable.  If the  Holder is  converting  less than all of the  principal
amount  represented  by the  Debentures  tendered by the Holder in the Notice of
Conversion,  the Company  shall  deliver to the Holder a new  Debenture for such
principal  amount as has not been converted  within two (2) Business Days of the
Conversion  Date.  In the event that the Escrow  Agent holds the  Debentures  on
behalf of the  Holder,  the  Company  agrees  that in lieu of  surrendering  the
Debentures  upon  every  partial  conversion,  the Escrow  Agent  shall give the
Company  and the  Holder  written  notice of the amount of the  Debentures  left
unconverted.  Upon  conversion  in full of the  Debentures  or upon the Maturity
Date, the Escrow Agent shall return the  Debentures  and the Escrow  Shares,  if
any, to the Company for cancellation.

      (b) Not later than two (2) Business Days after the  Conversion  Date,  the
Escrow  Agent  shall  deliver to the Holder (i) a  certificate  or  certificates
representing  the  number  of shares of Common  Stock  being  acquired  upon the
conversion of the Debentures, and once the Debentures so converted in part shall
have been  surrendered  to the Company,  the Company shall deliver to the Holder
Debentures  in  the  principal  amount  of the  Debentures  not  yet  converted;
provided, however, that the Company shall not be obligated to issue certificates
evidencing  the  shares  of  Common  Stock  issuable  upon   conversion  of  the
Debentures,  until the  Debentures  are either  delivered for  conversion to the
Escrow Agent or the Company or any transfer  agent for the  Debentures or Common
Stock,  or the Holder  notifies the Company that such Debentures have been lost,
stolen  or  destroyed  and  provides  an  affidavit  of  loss  and an  agreement
reasonably  acceptable  to the Company  indemnifying  the Company  from any loss
incurred by it in connection with such loss,  theft or destruction.  In the case
of a  conversion  pursuant to a Notice of  Conversion,  if such  certificate  or
certificates are not delivered by the date required under this Section 4(b), the
Holder shall be entitled,  upon  providing  written notice to the Company at any
time on or before its receipt of such certificate or certificates thereafter, to
rescind such conversion,  in which event, the Company shall  immediately  return
the Debentures tendered for conversion.

                                    A 3b- 6
<PAGE>

      Subject  to any  limitations  set  forth in the  Purchase  Agreement,  the
Company agrees that at any time the conversion  price of the Debentures are such
that the  number  of Escrow  Shares  is less  than  200% of the Full  Conversion
Shares,  upon five (5) Business Days of the Company's  receipt of notice of such
circumstance from the Purchaser and/or the Escrow Agent, the Company shall issue
share  certificates  in the name of the  Purchaser  and  deliver the same to the
Escrow  Agent,  in such number that the new number of Escrow  Shares is equal to
200% of the Full Conversion Shares.

      (c)  (i)  The  conversion  price  for  the  Debentures  in  effect  on any
Conversion  Date shall be the LESSER of (a) one hundred fifty percent  (150%) of
the Fixed  Conversion  Price (as defined and computed in the First  Debenture A)
(the "Fixed Conversion  Price") or (b) one hundred percent (100%) of the average
of the three (3) lowest  closing bid prices per share of the Common Stock during
the forty (40) Trading  Days  immediately  preceding  the  Conversion  Date (the
"Floating  Conversion Price"). For purposes of determining the closing bid price
on any day,  reference  shall be to the  closing bid price for a share of Common
Stock on such date on the OTCBB (or such other exchange, market, or other system
that the Common  Stock is then traded on), as reported on  Bloomberg,  L.P.  (or
similar organization or agency succeeding to its functions of reporting prices).

      (ii)  If the  Company,  at any  time  while  any  of  the  Debentures  are
outstanding,  (a) shall pay a stock dividend or otherwise make a distribution or
distributions  on shares of its Common  Stock  payable in shares of its  capital
stock (whether  payable in shares of its Common Stock or of capital stock of any
class), (b) subdivide outstanding shares of Common Stock into a larger number of
shares, (c) combine  outstanding shares of Common Stock into a smaller number of
shares,  or (d) issue by  reclassification  any shares of  capital  stock of the
Company,  the Fixed  Conversion  Price as applied in  Section  4(c)(i)  shall be
multiplied  by a fraction,  the numerator of which shall be the number of shares
of Common Stock of the Company outstanding immediately before such event and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately  after giving effect to such event.  Any adjustment made pursuant to
this Section 4(c)(ii) 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  reclassification,  provided that no
adjustment  shall  be made if the  Company  does  not  complete  such  dividend,
distribution, subdivision, combination or reclassification.

      (iii) If, at any time while any of the  Debentures  are  outstanding,  the
Company  issues or sells shares of Common Stock,  or options,  warrants or other
rights to subscribe for or purchase shares of Common Stock (excluding  shares of
Common Stock issuable upon the conversion of the Debentures or upon the exercise
of options,  warrants or conversion rights granted prior to the date hereof) and
at a price per share  less than the Per Share  Market  Value (as  defined in the
Purchase  Agreement) of the Common Stock at the issue date mentioned  below, the
Fixed Conversion Price shall be multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock  (excluding  treasury  shares,  if
any)  outstanding on the date of issuance of such shares,  options,  warrants or
rights plus the number of shares which the aggregate offering price of the total
number of shares so offered would  purchase at such Per Share Market Value,  and
the  denominator  of  which  shall be the  number  of  shares  of  Common  Stock
(excluding  treasury shares, if any) outstanding on the date of issuance of such
options,

                                    A 3b- 7
<PAGE>

rights or warrants plus the number of additional  shares of Common Stock offered
for  subscription  or purchase.  Such  adjustment  shall be made  whenever  such
options,  rights or warrants  are issued  (and if such  adjustment  is made,  no
further  adjustment  will be made when such  options,  rights  or  warrants  are
exercised), and shall become effective immediately after the record date for the
determination  of  stockholders  entitled  to receive  such  options,  rights or
warrants.  However,  upon the  expiration  of any  options,  right or warrant to
purchase  Common Stock,  the issuance of which  resulted in an adjustment in the
conversion  price  designated in Section 4(c)(i) hereof pursuant to this Section
4(c)(iii), if any such options, right or warrant shall expire and shall not have
been  exercised,   the  Fixed  Conversion  Price  shall  immediately  upon  such
expiration  be  recomputed  and effective  immediately  upon such  expiration be
increased  to the  price  which it would  have been  (but  reflecting  any other
adjustments  in the  conversion  price made  pursuant to the  provisions of this
Section 4 after the issuance of such rights or warrants)  had the  adjustment of
the conversion price made upon the issuance of such options,  rights or warrants
been made on the basis of offering for subscription or purchase only that number
of shares of Common Stock actually  purchased upon the exercise of such options,
rights or warrants  actually  exercised.  There will be no adjustment under this
Section  4(c)(iii) if Common Stock is issued due to the exercise of (x) employee
stock options that were issued to such employee, or (y) other options,  warrants
or rights to  subscribe  for or  purchase  that,  in any case,  are issued at an
exercise or subscription price equal to Per Share Market Value.

      (iv)  If,  at any time  while  Debentures  are  outstanding,  the  Company
distributes  to all holders of Common  Stock (and not to holders of  Debentures)
evidences of Company  indebtedness or assets, or rights or warrants to subscribe
for or purchase any security  (excluding those referred to in Section  4(c)(iii)
hereof),  then, in each such case, the conversion  price at which each Debenture
then  outstanding  shall  thereafter  be  convertible  shall  be  determined  by
multiplying (A) the Fixed  Conversion Price in effect  immediately  prior to the
record date fixed for  determination  of  stockholders  entitled to receive such
distribution by a fraction, the numerator of which shall be the Per Share Market
Value of the Common Stock  determined as of the record date mentioned above less
the then fair market  value at such record date of the portion of such assets or
evidence of indebtedness so distributed  applicable to one outstanding  share of
Common  Stock as  determined  by the Board of  Directors  in good  faith and the
denominator  of which shall be the Per Share Market Value of the Common Stock on
such  record  date;  provided,  however,  that in the  event  of a  distribution
exceeding ten percent  (10%) of the net assets of the Company,  such fair market
value  shall  be  determined  by  a  nationally  recognized  or  major  regional
investment  banking firm or firm of independent  certified public accountants of
nationally  recognized  standing (which may be the firm that regularly  examines
the financial statements of the Company) (an "Appraiser") selected in good faith
by the  holders of a majority of the  principal  amount of the  Debentures  then
outstanding;  and  provided,  further,  that the Company,  after  receipt of the
determination  by such  Appraiser,  shall have the right to select an additional
Appraiser, in which case such fair market value shall be equal to the average of
the determinations by each such Appraiser.  In either case the adjustments shall
be  described  in a statement  provided  to the Holder and all other  holders of
Debentures of the portion of assets or evidences of  indebtedness so distributed
or such  subscription  rights  applicable  to one  share of Common  Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective  immediately  after the record date mentioned above. The Company shall
pay all fees and expenses of any Appraiser selected under this Section 4(c)(iv).

                                    A 3b- 8
<PAGE>

      (v) All  calculations  under this  Section 4 shall be made to the  nearest
1/1000th of a cent or the nearest  1/1000th of a share,  as the case may be. Any
calculation  equal to or over .005 shall be rounded up to the next cent or share
and any calculation less than .005 shall be rounded down to the previous cent or
share.

      (vi) In the event the conversion price is not adjusted pursuant to Section
4(c)(ii) or (v),  within two (2) Business Days  following  the  occurrence of an
event  described  therein and, in the case of Section  4c(iv),  within three (3)
Business  Days  following  the  determination  of the fair  market  value by the
Appraiser(s),  the Holder  shall have the right to require the Company to redeem
the Debentures at 140% of the Purchase Price and  simultaneously pay such amount
and all accrued  interest and  dividends  to the Holder  pursuant to the written
instructions provided by the Holder. The Company will have two (2) Business Days
to make the  appropriate  adjustment  from the time the Company is provided with
written notice from the Holder of a failure to comply with this Section 4.

      (vii) Whenever the Fixed Conversion Price is adjusted  pursuant to Section
4(c)(ii),(iii) or (iv), the Company shall within two (2) Business Days after the
determination  of the new Fixed Conversion Price mail and fax (in the manner set
forth in  Section  4(j)  hereof)  to the  Holder  and to each  other  holder  of
Debentures,  a notice ("Company Notice of Conversion Price Adjustment")  setting
forth the Fixed Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

      (viii)  In  case  of  any   reclassification  of  the  Common  Stock,  any
consolidation or merger of the Company with or into another person,  the sale or
transfer  of  all or  substantially  all of the  assets  of the  Company  or any
compulsory  share exchange  pursuant to which the Common Stock is converted into
other  securities,  cash or  property,  then  each  holder  of  Debentures  then
outstanding shall have the right thereafter to convert such Debentures only into
the shares of stock and other securities and property  receivable upon or deemed
to  be  held  by  holders  of  Common  Stock  following  such  reclassification,
consolidation, merger, sale, transfer or share exchange (except in the event the
property is cash, then the Holder shall have the right to convert the Debentures
and receive cash in the same manner as other stockholders), and the Holder shall
be entitled  upon such event to receive such amount of securities or property as
the holder of shares of the Common Stock into which such  Debentures  could have
been  converted  immediately  prior  to  such  reclassification,  consolidation,
merger, sale, transfer or share exchange would have been entitled.  The terms of
any such consolidation,  merger,  sale, transfer or share exchange shall include
such terms so as to  continue  to give to the  Holder  the right to receive  the
securities or property set forth in this Section  4(c)(viii) upon any conversion
following such consolidation,  merger,  sale,  transfer or share exchange.  This
provision shall similarly apply to successive reclassifications, consolidations,
mergers, sales, transfers or share exchanges;

      (ix) If:

            (A)   the   Company   shall   declare  a  dividend   (or  any  other
                  distribution) on its Common Stock; or

                                    A 3b- 9
<PAGE>

            (B)   the  Company  shall  declare  a  special   non-recurring  cash
                  dividend redemption of its Common Stock; or

            (C)   the Company  shall  authorize  the grant to all holders of the
                  Common Stock  rights or warrants to subscribe  for or purchase
                  any shares of capital stock of any class or of any rights; or

            (D)   the  approval  of any  stockholders  of the  Company  shall be
                  required in connection with any reclassification of the Common
                  Stock of the Company  (other than a subdivision or combination
                  of the outstanding  shares of Common Stock), any consolidation
                  or  merger  to  which  the  Company  is a  party,  any sale or
                  transfer  of all or  substantially  all of the  assets  of the
                  Company,  or any compulsory  share exchange whereby the Common
                  Stock is converted into other securities, cash or property; or

            (E)   the Company  shall  authorize  the  voluntary  or  involuntary
                  dissolution,  liquidation  or winding-up of the affairs of the
                  Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Debentures,  and shall cause to be mailed and faxed
to the Holder and each other holder of the  Debentures  at their last  addresses
and facsimile  number set forth in the  Debenture  Register at least twenty (20)
calendar  days prior to the  applicable  record or  effective  date  hereinafter
specified,  a notice  stating  (x) the date on which a record is to be taken for
the purpose of such dividend,  distribution,  redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distributions,  redemption, rights or
warrants are to be determined,  or (y) the date on which such  reclassification,
consolidation,  merger, sale, transfer, share exchange, dissolution, liquidation
or  winding-up is expected to become  effective,  and the date as of which it is
expected  that  holders of Common  Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property  deliverable  upon
such reclassification,  consolidation,  merger, sale, transfer,  share exchange,
dissolution,  liquidation or winding-up;  provided, however, that the failure to
mail such  notice or any defect  therein  or in the  mailing  thereof  shall not
affect the  validity of the  corporate  action  required to be specified in such
notice.

      (d) If at any time  conditions  shall arise by reason of action or failure
to act by the  Company,  which  action or failure to act,  in the opinion of the
Board of  Directors  of the  Company,  is not  adequately  covered  by the other
provisions  hereof and which might materially and adversely affect the rights of
the Holder and all other  holders of Debentures  (different  or  distinguishable
from the effect  generally  on rights of  holders of any class of the  Company's
capital  stock),  the Company shall, at least twenty (20) calendar days prior to
the effective date of such action,  mail and fax a written notice to each holder
of  Debentures  briefly  describing  the action  contemplated,  and an Appraiser
selected  by the  holders of majority  in  principal  amount of the  outstanding
Debentures shall give its opinion as to the adjustment, if any (not inconsistent
with the standards  established  in this Section 4 and the terms of the Purchase
Agreement and the Debentures), of the conversion price (including, if necessary,
any  adjustment as to the  securities  into which  Debentures  may thereafter be
convertible)  and any  distribution  which is or would be

                                    A 3b- 10
<PAGE>

required to preserve  without  diluting the rights of the holders of Debentures;
provided,  however, that the Company, after receipt of the determination by such
Appraiser, shall have the right to select an additional Appraiser, in which case
the adjustment  shall be equal to the average of the adjustments  recommended by
each  such  Appraiser.  The  Company  shall  pay all  fees and  expenses  of any
Appraiser  selected  under this  Section  4(d).  The Board of  Directors  of the
Company shall make the adjustment recommended forthwith upon the receipt of such
opinion or opinions or the taking of any such action  contemplated,  as the case
may be; provided, however, that no such adjustment of the conversion price shall
be made which, in the opinion of the Appraiser(s)  giving the aforesaid  opinion
or  opinions,  would  result in an  increase of the  conversion  price above the
conversion price then in effect.

      (e) Subject to the terms and  limitations  set forth in the Debentures and
the Purchase Agreement, including without limitation,  Sections 4.14, 4.28, 4.29
and 4.30 thereof,  the Company covenants and agrees that it shall, at all times,
reserve and keep  available  out of its  authorized  and  unissued  Common Stock
solely for the purpose of issuance upon  conversion of the  Debentures as herein
provided,  free from preemptive rights or any other actual  contingent  purchase
rights of persons  other than the Holder of the  Debentures,  two (2) times such
number of shares of Common  Stock as shall be issuable  (taking into account the
adjustments  and  restrictions of Section 4(c) and Section 4(d) hereof) upon the
conversion of the aggregate principal amount of the outstanding Debentures.  The
Company  covenants  that,  subject to the  limitations set forth in this Section
4(e),  all shares of Common Stock that shall be issuable upon  conversion of the
Debentures shall, upon issuance,  be duly and validly  authorized and issued and
fully paid and non-assessable.

      (f) No  fractional  shares  of  Common  Stock  shall  be  issuable  upon a
conversion  hereunder  and the number of shares to be issued shall be rounded up
to the nearest  whole share.  If a  fractional  share  interest  arises upon any
conversion hereunder, the Company shall eliminate such fractional share interest
by issuing to the Holder an additional full share of Common Stock.

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

      (h) The  Debentures  converted  into Common  Stock shall be canceled  upon
conversion.

      (i)  On  the  Maturity  Date,  the  unconverted  principal  amount  of the
Debentures  and all interest due thereon shall either be paid off in full by the
Company  or, if payment in full is not  received  within two (2)  Business  Days
after the Maturity Date,  convert  automatically  into shares

                                    A 3b- 11
<PAGE>

of Common  Stock at the lesser of the Fixed  Conversion  Price and the  Floating
Conversion Price as set forth in Section 4(c)(i).

      (j) Each Notice of  Conversion  shall be given by  facsimile to the Escrow
Agent no later than 4:00 pm New York time on any Business  Day.  Upon receipt of
such  Notice of  Conversion,  the Escrow  Agent  shall  forward  such  Notice of
Conversion  to the Company by facsimile by 6:00 p.m. New York time on the day on
which the Escrow  Agent  receives  the Notice of  Conversion,  at the  facsimile
telephone  number and address of the principal place of business of the Company.
Any such notice shall be deemed given and  effective  upon the  transmission  of
such  facsimile  at the  facsimile  telephone  number  specified in the Purchase
Agreement  (with printed  confirmation of  transmission).  In the event that the
Escrow Agent receives the Notice of Conversion  after 4:00 p.m. New York time or
the Company  receives the Notice of Conversion  after 6:00 p.m. New York time on
such  day,  or the  Holder  receives  the  Company  Notice of  Conversion  Price
Adjustment  after 6:00 p.m.  New York time,  any such notice  shall be deemed to
have been given on the next Business Day.

      Section 5.  Redemption of Debentures.  (a) At any time after the Execution
Date,  so long as no Event of Default  has  occurred  and,  if a cure  period is
provided,  has not been cured,  the Company  shall have the option to redeem any
unconverted amount of the Debentures, either in part or whole, upon no less than
thirty (30) days written  notice  thereof given to the Holder with a copy to the
Escrow Agent (the "Redemption Notice"), at one hundred fifteen percent (115%) of
the  unconverted  amount of the Debentures  plus accrued  interest  thereon (the
"Redemption Price").  Notwithstanding anything contained herein to the contrary,
if the  Company  decides  to  redeem  the  outstanding  principal  amount of the
Debenture  under the second proviso in the first sentence of Section  4(c)(i) of
this  Debenture,  the  Company  shall  have three (3)  Business  Days from their
decision to redeem the Debenture in order to effectuate  the  redemption of such
principal amount of the outstanding Debenture.

      (b) Within three (3) Business Days prior to the date fixed for  redemption
in the Redemption Notice, the Company shall deposit the Redemption Price by wire
transfer to the IOLA account of the Escrow Agent. Upon receipt of the Redemption
Price,  on such  redemption  date, the Escrow Agent shall release the Redemption
Price to the  Holder  and return the  remaining  Debentures,  Escrow  Shares and
Underlying Shares to the Company.

      (c) In the event that the Company fails to deposit the Redemption Price in
the Escrow Agent's IOLA account number within the time allocated in Section 5(b)
hereof, then the redemption shall be declared null and void.

      Section 6. Intentionally Omitted.

      Section 7. Absolute Payment Obligation;  Limitation on Prepayment.  Except
as expressly provided herein, in the Purchase  Agreement,  or in the Note C2, no
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and  unconditional,  to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed. This Debenture is a direct obligation of the Company. This Debenture
ranks pari passu with all other  Debentures  now or  hereafter  issued under the
terms  set  forth  herein.  The  Company  may  not  prepay  any  portion  of the
outstanding

                                    A 3b- 12
<PAGE>

principal  amount on the  Debentures  except  in  accordance  with the  Purchase
Agreement or Sections 4(c)(i) or 5 hereof.

      Section 8. No Rights of Stockholders.  Except as otherwise provided herein
or in the Purchase Agreement, 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 on or  consent  to any  action,  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.

      Section 9. Loss, Theft, Mutilation or Destruction. 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 an affidavit of such loss, theft or
destruction of such Debenture, and, if requested by the Company, an agreement to
indemnity the Company in form reasonably acceptable to the Company.

      Section  10.  Governing  Law.  This  Debenture  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York without regard to the principles of conflicts of law thereof. Any action to
enforce  the  terms of this  Debenture,  the  Purchase  Agreement  or any  other
Transaction  Document shall be  exclusively  brought in the state and/or federal
courts in the state and county of New York.  Service of process in any action by
the Holder to enforce the terms of this  Debenture may be made by serving a copy
of the summons and complaint,  in addition to any other relevant  documents,  by
commercial  overnight  courier to the  Company at its  address  set forth in the
Purchase Agreement.

      Section  11.  Notices.  Any  notice,  request,  demand,  waiver,  consent,
approval or other  communication  which is required or  permitted to be given to
any party  hereunder  shall be in writing and shall be deemed duly given only if
delivered  to the  party  personally  or sent to the  party  by  facsimile  upon
electronic  confirmation  receipt (promptly followed by a hard-copy delivered in
accordance  with this Section 12) or three days after being mailed by registered
or certified mail (return receipt  requested),  with postage and registration or
certification  fees  thereon  prepaid,  or  if  sent  by  nationally  recognized
overnight  courier,  one day after being  mailed,  addressed to the party at its
address  as set forth in Section  7.3 of the  Purchase  Agreement  or such other
address as may be designated  hereafter by notice given pursuant to the terms of
this Section 11.

      Section 12. Waiver. Any waiver by the Company or the Holder of a breach of
any  provision  of this  Debenture  shall not operate as or be construed to be a
waiver  of any  other  breach of such  provision  or of any  breach of any other
provision of this Debenture.  The failure of the Company or the Holder to insist
upon strict  adherence to any term of this  Debenture  on one or more  occasions
shall not be  considered a waiver or deprive that party of the right  thereafter
to insist upon strict adherence to that term or any other term of this Debenture
in any other occasion. Any waiver must be in writing.

      Section 13.  Invalidity.  If any provision of this Debenture is held to be
invalid, illegal or unenforceable, the balance of this Debenture shall remain in
effect,  and if any  provision  is

                                    A 3b- 13
<PAGE>

held to be inapplicable  to any person or  circumstance,  it shall  nevertheless
remain applicable to all other persons and circumstances.

      Section  14.  Payment  Dates.  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 following Business Day.

      Section 15. Transfer; Assignment. This Debenture may not be transferred or
assigned,  in  whole  or in part,  at any  time,  except  in  compliance  by the
transferor and the transferee with applicable federal and state securities laws.

      Section  16.  Future  Financing.   If,  at  any  time  this  Debenture  is
outstanding,  the  Company,  or its  successors  in  interest  due  to  mergers,
consolidations and/or acquisitions (the "Successors-in-Interest"),  is funded an
amount equal to or exceeding Five Million  United States  dollars  ($5,000,000),
the Company or the Successors-in-Interest, as the case may be, agrees to pay the
Purchaser  an  amount  equal to One  Hundred  Fifty  Percent  (150%) of the then
outstanding Debenture (the "Lump Sum Payment").  Upon the Purchaser's receipt of
the Lump Sum Payment, any and all remaining obligations then outstanding between
the Company or the Successors-in-Interest,  as the case may be, and Purchaser in
connection  with  the  Purchase  Agreement  and  this  Debenture  shall  be deem
satisfied,  and the Purchase  Agreement and this Debenture  shall be terminated.
This provision shall survive both Closing and Post-Closing.

      Section 17. Fees of  Enforcement.  In the event any Party  commences legal
action to enforce its rights  under this  Debenture,  the  non-prevailing  party
shall pay all  reasonable  costs and  expenses  (including  but not  limited  to
reasonable   attorney's   fees,   accountant's   fees,   appraiser's   fees  and
investigative fees) incurred in enforcing such rights.

                            [Signature Page Follows]

                                    A 3b- 14
<PAGE>

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

                                     REALITY WIRELESS NETWORKS, INC.

Attest: ______________________       By: ______________________________
                                         Name: Steve Careaga
                                         Title: CEO

                                    A 3b- 15
<PAGE>

                                   APPENDIX I

                              NOTICE OF CONVERSION
                          AT THE ELECTION OF THE HOLDER

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

Except as provided by Section 4(b) of the  Debentures,  the  undersigned  hereby
irrevocably  elects to convert  the  attached  Debenture  into  shares of Common
Stock,  par value $0.001 per share (the  "Common  Stock"),  of Reality  Wireless
Networks,  Inc. (the "Company"),  according to the provisions  hereof, as of the
date  written  below.  If shares are to be issued in the name of a person  other
than  undersigned,  the  undersigned  will pay all transfer  taxes  payable with
respect  thereto and is delivering  herewith such  certificates  and opinions as
reasonably requested by the Company in accordance therewith.  A fee of $400 will
be charged by the Escrow Agent to the Holder for each conversion.  No other fees
will be charged to the Holder, except for transfer taxes, if any.

Conversion calculations:          ----------------------------------------------
                                  Date to Effect Conversion

                                  ----------------------------------------------
                                  Principal Amount of Debentures to be Converted

                                  ----------------------------------------------
                                  Interest to be Converted or Paid

                                  ----------------------------------------------
                                  Applicable Conversion Price
                                  (Pursuant to Section 4(c)(v))

                                  ----------------------------------------------
                                  Number of Shares to be Issued Upon Conversion

                                  ----------------------------------------------
                                  Signature

                                  ----------------------------------------------
                                  Name

                                  ----------------------------------------------
                                  Address

                                    A 3b- 16
<PAGE>

                                  EXHIBIT A-3c

                               FIRST DEBENTURE C3

NEITHER THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE  SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER  RULE  504  OF  REGULATION  D  PROMULGATED  UNDER  THE  U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS.

US $60,000                                                      October 27, 2003

                  1% CONVERTIBLE DEBENTURE DUE OCTOBER 26, 2008

      THIS DEBENTURE of Reality Wireless  Networks.,  a Nevada  corporation (the
"Company")  in the  aggregate  principal  amount of Sixty  Thousand  Dollars (US
$60,000), is designated as its $60,000, 1% Convertible Debenture due October 26,
2008 (the "Debentures").

      FOR VALUE  RECEIVED,  except as  otherwise  provided  herein,  the Company
promises  to pay to HEM Mutual  Assurance  LLC or its  registered  assigns  (the
"Holder"), the principal sum of Sixty Thousand Dollars (US $60,000), on or prior
to October 26, 2008 (the  "Maturity  Date") and to pay interest to the Holder on
the principal sum at the rate of one percent (1%) per annum. Except as otherwise
provided herein, interest shall accrue daily commencing on the Original Issuance
Date (as defined in Section 1 below) in the form of cash or common  stock of the
Company selected by the Holder subject to the provisions of Section 2(b) hereof,
until payment in full of the principal sum, together with all accrued and unpaid
interest,  has been made or duly provided for. If at any time after the Original
Issuance Date an Event of Default has occurred and is continuing, interest shall
accrue at the rate of fifteen percent (15%) per annum from the date of the Event
of Default and the  applicable  cure period  through and  including  the date of
payment. Interest due and payable hereunder shall be paid to the person in whose
name this Debenture (or one or more  successor  Debentures) is registered on the
records of the Company  regarding  registration  and transfers of the Debentures
(the "Debenture Register");  provided, however, that the Company's obligation to
a transferee of this Debenture shall arise only if such transfer,  sale or other
disposition is made in accordance  with the terms and  conditions  hereof and of
the Convertible  Debenture Purchase Agreement (the "Purchase  Agreement") by and
between the Company and the  Purchaser  (as such term is defined in the Purchase
Agreement), dated as of October 27, 2003, as may be amended from time to time. A
transfer of the right to receive  principal  and interest  under this  Debenture
shall be  transferable  only  through  an  appropriate  entry  in the  Debenture
Register as provided herein.

                                    A 3c- 1
<PAGE>

      Notwithstanding  anything contained herein, in the Purchase Agreement,  or
in the  Note C3 to the  contrary,  this  First  Debenture  C3 shall  not  accrue
interest, shall not be convertible, and shall not be subject to repayment by the
Company at its maturity,  and the Note C3 shall not be due and payable and shall
not be deemed part of the  "Purchase  Price" for purposes of Section 4.25 of the
Purchase Agreement, unless and until:

      (iii) the Holder elects that Note C3 shall become due and payable; and

      (ii)  the number of Escrow  Shares for the aggregate  principal  amount of
            the Debentures  then  outstanding  and this First Debenture C3 is at
            least  200% of the number of shares of common  stock of the  Company
            that  would  be  needed  to  satisfy  full  conversion  of all  such
            unconverted Debentures,

provided,  however,  that if subparagraph (i) is satisfied and subparagraph (ii)
is not,  the  Company  shall  increase  in  accordance  with and  subject to the
provisions  of  Section  4.14 of the  Purchase  Agreement,  the number of Escrow
Shares to cover 200% of the number of shares of common stock of the Company that
would be needed to satisfy full conversion of all of such Debenture  pursuant to
the  procedures set forth in Section 4.14 of the Purchase  Agreement;  provided,
further, that,  notwithstanding the foregoing, this First Debenture C3 shall not
accrue interest,  shall not be convertible and shall not be subject to repayment
by the Company at its maturity,  and the Note C3 shall not be deemed part of the
"Purchase Price" for purposes of Section 4.25 of the Purchase Agreement,  unless
and  until  the  Note C3 is paid in full by the  Holder  or its  successors  and
assigns.

      If the  Note C3 has not been  paid in full by the  Holder  to the  Company
(whether  or not it is  otherwise  then due or  payable by its  terms),  (i) any
payments  from the Company to the Holder  pursuant to Sections  4.19 and 4.33 of
the Purchase Agreement will be offset by the principal amount of the Note C3 and
(ii) "Debentures" shall specifically refer to First Debenture A, First Debenture
B, First Debenture C1, First Debenture C2, First Debenture C3, First Debenture D
and the Second Debenture in Sections 4.19 and 4.33 in Purchase Agreement.

      This Debenture is subject to the following additional provisions:

      Section 1.  Definitions.  Capitalized terms used and not otherwise defined
herein shall have the meanings  given such terms in the Purchase  Agreement.  As
used in this Agreement, the following terms shall have the following meanings:

      "Adjusted Conversion Price" means the lesser of the Fixed Conversion Price
or the  Floating  Conversion  Price one day prior to the record date set for the
determination  of  stockholders  entitled to receive  dividends,  distributions,
rights or warrants as provided for in Sections 4(c)(ii), (iii) and (iv).

      "Company" shall mean Reality Wireless Networks, Inc.

                                    A 3c- 2
<PAGE>

      "Common Stock" shall mean the common stock of Reality  Wireless  Networks,
Inc.  (as  adjusted  for  any  reverse  splits,  forward  splits,   combination,
reclassification  or stock  dividend  from the date the  Purchase  Agreement  is
signed).

      "Conversion Date" shall have the meaning set forth in Section 4(a) hereof.

      "Conversion Ratio" means, at any time, a fraction,  the numerator of which
is the then  outstanding  principal  amount  represented by the Debentures  plus
accrued  but  unpaid  interest  thereon,  and the  denominator  of  which is the
conversion price at such time.

      "Fixed Conversion Price" shall have the meaning set forth in Section 4(c)i
hereof.

      "Floating  Conversion  Price"  shall have the meaning set forth in Section
4(c)i hereof.

      "Notice of  Conversion"  shall have the meaning set forth in Section  4(a)
hereof.

      "Original Issuance Date" shall mean the date of the first issuance of this
Debenture regardless of the number of transfers hereof.

      Section 2.  Denominations  of  Debentures;  Interest  on  Debentures.  The
Debentures  are  exchangeable  for  an  equal  aggregate   principal  amount  of
Debentures  of different  authorized  denominations,  as requested by the Holder
surrendering  the same, but shall not be issuable in  denominations of less than
integral multiplies of One Thousand Dollars (US$1,000.00).  No service charge to
the Holder will be made for such registration of transfer or exchange.

      Section 3. Events of Default and Remedies.

      I. "Event of Default,"  when used herein,  means any one of the  following
events  (whatever  the reason and whether any such event 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):

      (a) any  default in the  payment of the  principal  of or interest on this
Debenture  as and when the same  shall  become  due and  payable  either  at the
Maturity Date, by acceleration, conversion, or otherwise;

      (b) the  Company  shall fail to observe  or  perform  any other  covenant,
agreement  or warranty  contained  in, or  otherwise  commit any breach of, this
Debenture,  and such failure or breach shall not have been remedied  within five
(5) Business Days of its receipt of notice of such failure or breach;

      (c) the  occurrence of any event or breach or default by the Company under
the  Purchase  Agreement or any other  Transaction  Document and , if there is a
cure period, such failure or breach shall not have been remedied within the cure
period provided for therein;

                                    A 3c- 3
<PAGE>

      (d) the Company or any of its Subsidiaries shall commence a voluntary case
under the United  States  Bankruptcy  Code as now or  hereafter in effect or any
successor  thereto (the "Bankruptcy  Code"); or an involuntary case is commenced
against  the  Company  under  the  Bankruptcy  Code  and  the  petition  is  not
controverted  within  thirty (30) days,  or is not  dismissed  within sixty (60)
days,  after  commencement  of the case;  or a  "custodian"  (as  defined in the
Bankruptcy  Code) is appointed  for, or takes charge of, all or any  substantial
part  of the  property  of  the  Company  or 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 there
is commenced  against the Company any such proceeding which remains  undismissed
for a period of sixty (60) days;  or 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  suffers any appointment of any custodian
or the like  for it or any  substantial  part of its  property  which  continues
undischarged  or unstayed for a period of thirty (30) days; or the Company makes
a general assignment for the benefit of creditors;  or the Company shall fail to
pay, or shall state in writing  that it is unable to pay its debts  generally as
they become due; or the  Company  shall call a meeting of its  creditors  with a
view to arranging a composition or adjustment of its debts; or the Company shall
by  any  act  or  failure  to  act  indicate  its  consent  to,  approval  of or
acquiescence in any of the foregoing;  or any corporate or other action is taken
by the Company for the purpose of effecting any of the foregoing;

      (e)  the  Company  shall  default  in  any of its  obligations  under  any
mortgage,  indenture or instrument under which there may be issued,  or by which
there may be secured or evidenced,  any indebtedness of the Company in an amount
exceeding One Hundred Thousand Dollars ($100,000.00),  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;

      (f) the Company  shall have its Common Stock  deleted or delisted,  as the
case  may be,  from  the  American  Stock  Exchange,  OTCBB  or  other  national
securities  exchange or market on which such Common  Stock is listed for trading
or suspended from trading thereon,  and shall not have its Common Stock relisted
or have such suspension lifted, as the case may be, within ten (10) Trading Days
of such deletion or delisting;

      (g)  notwithstanding  anything herein to the contrary,  but subject to the
limitations  set forth in the  Debentures,  the Company shall fail to deliver to
the Escrow Agent share  certificates  representing the shares of Common Stock to
be issued upon conversion of the Debentures within three (3) Business Days after
to the  Company's  receipt of notice from the Escrow  Agent to the Company  that
additional  shares of Common Stock are required to be placed in escrow  pursuant
to Section 4.14 of the Purchase  Agreement,  Article 2 of the Escrow  Agreement,
and/or Section 4(b) of this Debenture;

                                    A 3c- 4
<PAGE>

      (h) the Company shall issue a press  release,  or otherwise  make publicly
known,  that it is not honoring a properly executed and duly delivered Notice of
Conversion  complying with the terms of this Debenture,  the Purchase  Agreement
and the Escrow Agreement, for any reason whatsoever; and

      (i)  the  Company  issues  or  enters  into  an  agreement  to  issue  any
convertible security, any equity line of credit, or any security issued pursuant
to Rule 504 of Regulation D promulgated  under the Securities Act, other than to
the Purchaser or any of its Affiliates or assigns,  during the period commencing
on the date hereof and ending on the four month  anniversary of the Post-Closing
Date.

      II.  (a) If any  Event of  Default  occurs,  and  continues  beyond a cure
period,  if any,  then  the  Holder  may,  by  written  notice  to the  Company,
accelerate all of the payments due under this Debenture by declaring all amounts
so due under this Debenture, whereupon the same shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are waived by the Company,  notwithstanding  anything  contained herein to
the  contrary,  and the Holder may  immediately  and without  expiration  of any
additional 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 the  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.  This shall include,  but not be
limited to the right to temporary,  preliminary and permanent  injunctive relief
without the requirement of posting any bond or undertaking.

      (b) The Holder may  thereupon  proceed to protect  and  enforce its rights
either  by suit in  equity  and/or  by  action  at law or by  other  appropriate
proceedings  whether for the specific  performance  (to the extent  permitted by
law) of any covenant or agreement  contained in this  Debenture or in aid of the
exercise  of any power  granted in this  Debenture,  and  proceed to enforce the
payment of any of the  Debentures  held by it, and to enforce any other legal or
equitable right of such Holder.

      (c) Except as expressly provided for herein, the Company  specifically (i)
waives all rights it may have (A) to notice of  nonpayment,  notice of  default,
demand,  presentment,  protest and notice of protest  with respect to any of the
obligations hereunder or the shares of Common Stock and (B) notice of acceptance
hereof or of any other action taken in reliance  hereon,  notice and opportunity
to be heard  before the  exercise by the Holder of the  remedies  of  self-help,
set-off,  or other summary  procedures  and all other demands and notices of any
type or  description  except for cure  periods,  if any;  and (ii)  releases the
Holder, its officers, directors, agents, employees and attorneys from all claims
for  loss or  damage  caused  by any act or  failure  to act on the  part of the
Holder,  its officers,  attorneys,  agents,  directors and employees  except for
gross negligence or willful misconduct.

      (d) As a non-exclusive remedy, upon the occurrence of an Event of Default,
the Holder may convert the  remaining  principal  amount of the  Debentures  and
accrued

                                    A 3c- 5
<PAGE>

interest  thereon at the lesser of the Fixed  Conversion  Price or the  Floating
Conversion  Price upon giving a Notice of Conversion  to the Company.  Except as
otherwise provided herein, the Company shall not have the right to object to the
conversion  or  the  calculation  of the  applicable  conversion  price,  absent
manifest  error and the Escrow  Agent shall  release the shares of Common  Stock
from  escrow  two (2)  Business  Days after upon  notifying  the  Company of the
conversion.

      III. To effectuate the terms and provision of this  Debenture,  the Holder
may give notice of any default to the  Attorney-in-Fact  as set forth herein and
give a copy of such notice to the Company and its counsel,  simultaneously,  and
request the  Attorney-in-Fact to comply with the terms of this Debenture and the
Purchase  Agreement  and all  agreements  entered into  pursuant to the Purchase
Agreement on behalf of the Company.

      Section 4. Conversion.

      (a) Except as otherwise set forth herein or in the Purchase Agreement, the
unpaid  principal  amount of this Debenture shall be convertible  into shares of
Common  Stock at the  Conversion  Ratio as  defined  above,  and  subject to the
Limitation on Conversion described in Section 4.18 of the Purchase Agreement and
subject to the  limitation  set forth in Section 4.29 of the Purchase  Agreement
and in the  paragraphs  three through five of this First  Debenture C3 following
the paragraph that begin "For Value Received",  at the option of the Holder,  in
whole or in part, at any time,  commencing on the Original  Issuance Date.  Such
shares of Common  Stock shall be without  any  restriction  and freely  tradable
pursuant to Rule 504 of Regulation D of the Securities Act. Any conversion under
this  Section 4(a) shall be for a minimum  principal  amount of $1,000.00 of the
Debentures  plus the interest  accrued and due thereon.  The Holder shall effect
conversions by  surrendering  the Debenture to be converted to the Escrow Agent,
together  with the form of notice  attached  hereto as  Appendix I  ("Notice  of
Conversion")  in the manner set forth in Section  4(j)  hereof.  Each  Notice of
Conversion  shall specify the principal amount of Debentures to be converted and
the date on which such  conversion  is to be effected  (the  "Conversion  Date")
which date shall not be less than two (2) Business  Days after the date on which
the Notice of Conversion  is delivered to the Escrow Agent.  Subject to the last
paragraph of Section 4(b) hereof,  each Notice of Conversion,  once given, shall
be  irrevocable.  If the  Holder is  converting  less than all of the  principal
amount  represented  by the  Debentures  tendered by the Holder in the Notice of
Conversion,  the Company  shall  deliver to the Holder a new  Debenture for such
principal  amount as has not been converted  within two (2) Business Days of the
Conversion  Date.  In the event that the Escrow  Agent holds the  Debentures  on
behalf of the  Holder,  the  Company  agrees  that in lieu of  surrendering  the
Debentures  upon  every  partial  conversion,  the Escrow  Agent  shall give the
Company  and the  Holder  written  notice of the amount of the  Debentures  left
unconverted.  Upon  conversion  in full of the  Debentures  or upon the Maturity
Date, the Escrow Agent shall return the  Debentures  and the Escrow  Shares,  if
any, to the Company for cancellation.

      (b) Not later than two (2) Business Days after the  Conversion  Date,  the
Escrow  Agent  shall  deliver to the Holder (i) a  certificate  or  certificates
representing  the  number  of shares of Common  Stock  being  acquired  upon the
conversion of the

                                    A 3c- 6
<PAGE>

Debentures,  and once the  Debentures  so  converted  in part  shall  have  been
surrendered to the Company,  the Company shall deliver to the Holder  Debentures
in the principal amount of the Debentures not yet converted;  provided, however,
that the Company  shall not be obligated to issue  certificates  evidencing  the
shares of Common Stock  issuable upon  conversion of the  Debentures,  until the
Debentures  are either  delivered  for  conversion  to the  Escrow  Agent or the
Company or any transfer agent for the Debentures or Common Stock,  or the Holder
notifies the Company that such  Debentures  have been lost,  stolen or destroyed
and provides an affidavit of loss and an agreement reasonably  acceptable to the
Company indemnifying the Company from any loss incurred by it in connection with
such loss,  theft or  destruction.  In the case of a  conversion  pursuant  to a
Notice of Conversion,  if such  certificate or certificates are not delivered by
the date required  under this Section 4(b),  the Holder shall be entitled,  upon
providing  written notice to the Company at any time on or before its receipt of
such  certificate or certificates  thereafter,  to rescind such  conversion,  in
which event, the Company shall  immediately  return the Debentures  tendered for
conversion.

      Subject  to any  limitations  set  forth in the  Purchase  Agreement,  the
Company agrees that at any time the conversion  price of the Debentures are such
that the  number  of Escrow  Shares  is less  than  200% of the Full  Conversion
Shares,  upon five (5) Business Days of the Company's  receipt of notice of such
circumstance from the Purchaser and/or the Escrow Agent, the Company shall issue
share  certificates  in the name of the  Purchaser  and  deliver the same to the
Escrow  Agent,  in such number that the new number of Escrow  Shares is equal to
200% of the Full Conversion Shares.

      (c)  (i)  The  conversion  price  for  the  Debentures  in  effect  on any
Conversion Date shall be $0.001 (the "Conversion Price").

      (ii)  If the  Company,  at any  time  while  any  of  the  Debentures  are
outstanding,  (a) shall pay a stock dividend or otherwise make a distribution or
distributions  on shares of its Common  Stock  payable in shares of its  capital
stock (whether  payable in shares of its Common Stock or of capital stock of any
class), (b) subdivide outstanding shares of Common Stock into a larger number of
shares, (c) combine  outstanding shares of Common Stock into a smaller number of
shares,  or (d) issue by  reclassification  any shares of  capital  stock of the
Company,  the Fixed  Conversion  Price as applied in  Section  4(c)(i)  shall be
multiplied  by a fraction,  the numerator of which shall be the number of shares
of Common Stock of the Company outstanding immediately before such event and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately  after giving effect to such event.  Any adjustment made pursuant to
this Section 4(c)(ii) 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  reclassification,  provided that no
adjustment  shall  be made if the  Company  does  not  complete  such  dividend,
distribution, subdivision, combination or reclassification.

      (iii) If, at any time while any of the  Debentures  are  outstanding,  the
Company  issues or sells shares of Common Stock,  or options,  warrants or other
rights to

                                    A 3c- 7
<PAGE>

subscribe  for or purchase  shares of Common Stock  (excluding  shares of Common
Stock  issuable upon the  conversion  of the  Debentures or upon the exercise of
options,  warrants or conversion rights granted prior to the date hereof) and at
a price  per  share  less than the Per Share  Market  Value (as  defined  in the
Purchase  Agreement) of the Common Stock at the issue date mentioned  below, the
Fixed Conversion Price shall be multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock  (excluding  treasury  shares,  if
any)  outstanding on the date of issuance of such shares,  options,  warrants or
rights plus the number of shares which the aggregate offering price of the total
number of shares so offered would  purchase at such Per Share Market Value,  and
the  denominator  of  which  shall be the  number  of  shares  of  Common  Stock
(excluding  treasury shares, if any) outstanding on the date of issuance of such
options, rights or warrants plus the number of additional shares of Common Stock
offered for  subscription or purchase.  Such  adjustment  shall be made whenever
such options,  rights or warrants are issued (and if such adjustment is made, no
further  adjustment  will be made when such  options,  rights  or  warrants  are
exercised), and shall become effective immediately after the record date for the
determination  of  stockholders  entitled  to receive  such  options,  rights or
warrants.  However,  upon the  expiration  of any  options,  right or warrant to
purchase  Common Stock,  the issuance of which  resulted in an adjustment in the
conversion  price  designated in Section 4(c)(i) hereof pursuant to this Section
4(c)(iii), if any such options, right or warrant shall expire and shall not have
been  exercised,   the  Fixed  Conversion  Price  shall  immediately  upon  such
expiration  be  recomputed  and effective  immediately  upon such  expiration be
increased  to the  price  which it would  have been  (but  reflecting  any other
adjustments  in the  conversion  price made  pursuant to the  provisions of this
Section 4 after the issuance of such rights or warrants)  had the  adjustment of
the conversion price made upon the issuance of such options,  rights or warrants
been made on the basis of offering for subscription or purchase only that number
of shares of Common Stock actually  purchased upon the exercise of such options,
rights or warrants  actually  exercised.  There will be no adjustment under this
Section  4(c)(iii) if Common Stock is issued due to the exercise of (x) employee
stock options that were issued to such employee, or (y) other options,  warrants
or rights to  subscribe  for or  purchase  that,  in any case,  are issued at an
exercise or subscription price equal to Per Share Market Value.

      (iv)  If,  at any time  while  Debentures  are  outstanding,  the  Company
distributes  to all holders of Common  Stock (and not to holders of  Debentures)
evidences of Company  indebtedness or assets, or rights or warrants to subscribe
for or purchase any security  (excluding those referred to in Section  4(c)(iii)
hereof),  then, in each such case, the conversion  price at which each Debenture
then  outstanding  shall  thereafter  be  convertible  shall  be  determined  by
multiplying (A) the Fixed  Conversion Price in effect  immediately  prior to the
record date fixed for  determination  of  stockholders  entitled to receive such
distribution by a fraction, the numerator of which shall be the Per Share Market
Value of the Common Stock  determined as of the record date mentioned above less
the then fair market  value at such record date of the portion of such assets or
evidence of indebtedness so distributed  applicable to one outstanding  share of
Common  Stock as  determined  by the Board of  Directors  in good  faith and the
denominator  of which shall be the Per Share Market Value of the Common Stock on
such  record  date;

                                    A 3c- 8
<PAGE>

provided,  however,  that in the event of a  distribution  exceeding ten percent
(10%)  of the net  assets  of the  Company,  such  fair  market  value  shall be
determined by a nationally  recognized or major regional investment banking firm
or firm of independent  certified  public  accountants of nationally  recognized
standing (which may be the firm that regularly examines the financial statements
of the  Company)  (an  "Appraiser")  selected  in good faith by the holders of a
majority  of the  principal  amount  of the  Debentures  then  outstanding;  and
provided,  further, that the Company, after receipt of the determination by such
Appraiser, shall have the right to select an additional Appraiser, in which case
such fair market  value shall be equal to the average of the  determinations  by
each such  Appraiser.  In either case the  adjustments  shall be  described in a
statement  provided  to the Holder and all other  holders of  Debentures  of the
portion  of  assets  or  evidences  of   indebtedness  so  distributed  or  such
subscription  rights  applicable to one share of Common Stock.  Such  adjustment
shall be made whenever any such  distribution is made and shall become effective
immediately  after the record date  mentioned  above.  The Company shall pay all
fees and expenses of any Appraiser selected under this Section 4(c)(iv).

      (v) All  calculations  under this  Section 4 shall be made to the  nearest
1/1000th of a cent or the nearest  1/1000th of a share,  as the case may be. Any
calculation  equal to or over .005 shall be rounded up to the next cent or share
and any calculation less than .005 shall be rounded down to the previous cent or
share.

      (vi) In the event the conversion price is not adjusted pursuant to Section
4(c)(ii) or (v),  within two (2) Business Days  following  the  occurrence of an
event  described  therein and, in the case of Section  4c(iv),  within three (3)
Business  Days  following  the  determination  of the fair  market  value by the
Appraiser(s),  the Holder  shall have the right to require the Company to redeem
the Debentures at 140% of the Purchase Price and  simultaneously pay such amount
and all accrued  interest and  dividends  to the Holder  pursuant to the written
instructions provided by the Holder. The Company will have two (2) Business Days
to make the  appropriate  adjustment  from the time the Company is provided with
written notice from the Holder of a failure to comply with this Section 4.

      (vii) Whenever the Fixed Conversion Price is adjusted  pursuant to Section
4(c)(ii),(iii) or (iv), the Company shall within two (2) Business Days after the
determination  of the new Fixed Conversion Price mail and fax (in the manner set
forth in  Section  4(j)  hereof)  to the  Holder  and to each  other  holder  of
Debentures,  a notice ("Company Notice of Conversion Price Adjustment")  setting
forth the Fixed Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

      (viii)  In  case  of  any   reclassification  of  the  Common  Stock,  any
consolidation or merger of the Company with or into another person,  the sale or
transfer  of  all or  substantially  all of the  assets  of the  Company  or any
compulsory  share exchange  pursuant to which the Common Stock is converted into
other  securities,  cash or  property,  then  each  holder  of  Debentures  then
outstanding shall have the right thereafter to convert

                                    A 3c- 9
<PAGE>

such Debentures only into the shares of stock and other  securities and property
receivable  upon or deemed to be held by holders of Common Stock  following such
reclassification,  consolidation,  merger,  sale,  transfer  or  share  exchange
(except in the event the property is cash,  then the Holder shall have the right
to  convert  the  Debentures  and  receive  cash in the  same  manner  as  other
stockholders),  and the Holder shall be entitled upon such event to receive such
amount of  securities  or property  as the holder of shares of the Common  Stock
into which such Debentures could have been converted  immediately  prior to such
reclassification,  consolidation, merger, sale, transfer or share exchange would
have been entitled. The terms of any such consolidation,  merger, sale, transfer
or share  exchange  shall  include  such terms so as to  continue to give to the
Holder the right to receive the securities or property set forth in this Section
4(c)(viii)  upon any conversion  following  such  consolidation,  merger,  sale,
transfer or share  exchange.  This provision shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges;

      (ix) If:

            (A)   the   Company   shall   declare  a  dividend   (or  any  other
                  distribution) on its Common Stock; or

            (B)   the  Company  shall  declare  a  special   non-recurring  cash
                  dividend redemption of its Common Stock; or

            (C)   the Company  shall  authorize  the grant to all holders of the
                  Common Stock  rights or warrants to subscribe  for or purchase
                  any shares of capital stock of any class or of any rights; or

            (D)   the  approval  of any  stockholders  of the  Company  shall be
                  required in connection with any reclassification of the Common
                  Stock of the Company  (other than a subdivision or combination
                  of the outstanding  shares of Common Stock), any consolidation
                  or  merger  to  which  the  Company  is a  party,  any sale or
                  transfer  of all or  substantially  all of the  assets  of the
                  Company,  or any compulsory  share exchange whereby the Common
                  Stock is converted into other securities, cash or property; or

            (E)   the Company  shall  authorize  the  voluntary  or  involuntary
                  dissolution,  liquidation  or winding-up of the affairs of the
                  Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Debentures,  and shall cause to be mailed and faxed
to the Holder and each other holder of the  Debentures  at their last  addresses
and facsimile  number set forth in the  Debenture  Register at least twenty (20)
calendar  days prior to the  applicable  record or  effective  date  hereinafter
specified,  a notice  stating  (x) the date on which a record is to be taken for
the purpose of such dividend,  distribution,  redemption, rights or warrants, or

                                    A 3c- 10
<PAGE>

if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distributions,  redemption, rights or
warrants are to be determined,  or (y) the date on which such  reclassification,
consolidation,  merger, sale, transfer, share exchange, dissolution, liquidation
or  winding-up is expected to become  effective,  and the date as of which it is
expected  that  holders of Common  Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property  deliverable  upon
such reclassification,  consolidation,  merger, sale, transfer,  share exchange,
dissolution,  liquidation or winding-up;  provided, however, that the failure to
mail such  notice or any defect  therein  or in the  mailing  thereof  shall not
affect the  validity of the  corporate  action  required to be specified in such
notice.

      (d) If at any time  conditions  shall arise by reason of action or failure
to act by the  Company,  which  action or failure to act,  in the opinion of the
Board of  Directors  of the  Company,  is not  adequately  covered  by the other
provisions  hereof and which might materially and adversely affect the rights of
the Holder and all other  holders of Debentures  (different  or  distinguishable
from the effect  generally  on rights of  holders of any class of the  Company's
capital  stock),  the Company shall, at least twenty (20) calendar days prior to
the effective date of such action,  mail and fax a written notice to each holder
of  Debentures  briefly  describing  the action  contemplated,  and an Appraiser
selected  by the  holders of majority  in  principal  amount of the  outstanding
Debentures shall give its opinion as to the adjustment, if any (not inconsistent
with the standards  established  in this Section 4 and the terms of the Purchase
Agreement and the Debentures), of the conversion price (including, if necessary,
any  adjustment as to the  securities  into which  Debentures  may thereafter be
convertible)  and any  distribution  which is or would be  required  to preserve
without  diluting the rights of the holders of  Debentures;  provided,  however,
that the Company,  after receipt of the  determination by such Appraiser,  shall
have the right to select an additional  Appraiser,  in which case the adjustment
shall  be equal to the  average  of the  adjustments  recommended  by each  such
Appraiser. The Company shall pay all fees and expenses of any Appraiser selected
under this Section  4(d).  The Board of Directors of the Company  shall make the
adjustment recommended forthwith upon the receipt of such opinion or opinions or
the  taking  of any such  action  contemplated,  as the  case may be;  provided,
however, that no such adjustment of the conversion price shall be made which, in
the opinion of the Appraiser(s) giving the aforesaid opinion or opinions,  would
result in an increase of the conversion price above the conversion price then in
effect.

      (e) Subject to the terms and  limitations  set forth in the Debentures and
the Purchase Agreement, including without limitation,  Sections 4.14, 4.28, 4.29
and 4.30 thereof,  the Company covenants and agrees that it shall, at all times,
reserve and keep  available  out of its  authorized  and  unissued  Common Stock
solely for the purpose of issuance upon  conversion of the  Debentures as herein
provided,  free from preemptive rights or any other actual  contingent  purchase
rights of persons  other than the Holder of the  Debentures,  two (2) times such
number of shares of Common  Stock as shall be issuable  (taking into account the
adjustments  and  restrictions of Section 4(c) and Section 4(d) hereof) upon the
conversion of the aggregate principal amount of the outstanding Debentures.  The
Company  covenants  that,  subject to the  limitations set forth in this Section
4(e),  all shares of Common Stock that shall be issuable upon  conversion of the

                                    A 3c- 11
<PAGE>

Debentures shall, upon issuance,  be duly and validly  authorized and issued and
fully paid and non-assessable.

      (f) No  fractional  shares  of  Common  Stock  shall  be  issuable  upon a
conversion  hereunder  and the number of shares to be issued shall be rounded up
to the nearest  whole share.  If a  fractional  share  interest  arises upon any
conversion hereunder, the Company shall eliminate such fractional share interest
by issuing to the Holder an additional full share of Common Stock.

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

      (h) The  Debentures  converted  into Common  Stock shall be canceled  upon
conversion.

      (i)  On  the  Maturity  Date,  the  unconverted  principal  amount  of the
Debentures  and all interest due thereon shall either be paid off in full by the
Company  or, if payment in full is not  received  within two (2)  Business  Days
after the Maturity Date,  convert  automatically  into shares of Common Stock at
the lesser of the Fixed  Conversion  Price and the Floating  Conversion Price as
set forth in Section 4(c)(i).

      (j) Each Notice of  Conversion  shall be given by  facsimile to the Escrow
Agent no later than 4:00 pm New York time on any Business  Day.  Upon receipt of
such  Notice of  Conversion,  the Escrow  Agent  shall  forward  such  Notice of
Conversion  to the Company by facsimile by 6:00 p.m. New York time on the day on
which the Escrow  Agent  receives  the Notice of  Conversion,  at the  facsimile
telephone  number and address of the principal place of business of the Company.
Any such notice shall be deemed given and  effective  upon the  transmission  of
such  facsimile  at the  facsimile  telephone  number  specified in the Purchase
Agreement  (with printed  confirmation of  transmission).  In the event that the
Escrow Agent receives the Notice of Conversion  after 4:00 p.m. New York time or
the Company  receives the Notice of Conversion  after 6:00 p.m. New York time on
such  day,  or the  Holder  receives  the  Company  Notice of  Conversion  Price
Adjustment  after 6:00 p.m.  New York time,  any such notice  shall be deemed to
have been given on the next Business Day.

      Section 5.  Redemption of Debentures.  (a) At any time after the Execution
Date,  so long as no Event of Default  has  occurred  and,  if a cure  period is
provided,  has not been cured,  the Company  shall have the option to redeem any
unconverted amount of

                                    A 3c- 12
<PAGE>

the  Debentures,  either in part or whole,  upon no less than  thirty  (30) days
written  notice thereof given to the Holder with a copy to the Escrow Agent (the
"Redemption  Notice"),  at one hundred fifteen percent (115%) of the unconverted
amount of the Debentures plus accrued interest thereon (the "Redemption Price").
Notwithstanding  anything  contained  herein  to the  contrary,  if the  Company
decides to redeem the  outstanding  principal  amount of the Debenture under the
second proviso in the first sentence of Section 4(c)(i) of this  Debenture,  the
Company  shall have three (3)  Business  Days from their  decision to redeem the
Debenture in order to effectuate the redemption of such principal  amount of the
outstanding Debenture.

      (b) Within three (3) Business Days prior to the date fixed for  redemption
in the Redemption Notice, the Company shall deposit the Redemption Price by wire
transfer to the IOLA account of the Escrow Agent. Upon receipt of the Redemption
Price,  on such  redemption  date, the Escrow Agent shall release the Redemption
Price to the  Holder  and return the  remaining  Debentures,  Escrow  Shares and
Underlying Shares to the Company.

      (c) In the event that the Company fails to deposit the Redemption Price in
the Escrow Agent's IOLA account number within the time allocated in Section 5(b)
hereof, then the redemption shall be declared null and void.

      Section 6. Intentionally Omitted.

      Section 7. Absolute Payment Obligation;  Limitation on Prepayment.  Except
as expressly provided herein, in the Purchase  Agreement,  or in the Note C3, no
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and  unconditional,  to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed. This Debenture is a direct obligation of the Company. This Debenture
ranks pari passu with all other  Debentures  now or  hereafter  issued under the
terms  set  forth  herein.  The  Company  may  not  prepay  any  portion  of the
outstanding  principal  amount on the Debentures  except in accordance  with the
Purchase Agreement or Sections 4(c)(i) or 5 hereof.

      Section 8. No Rights of Stockholders.  Except as otherwise provided herein
or in the Purchase Agreement, 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 on or  consent  to any  action,  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.

      Section 9. Loss, Theft, Mutilation or Destruction. 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 an affidavit of such loss, theft or
destruction of such Debenture, and, if requested by the

                                    A 3c- 13
<PAGE>

Company, an agreement to indemnity the Company in form reasonably  acceptable to
the Company.

      Section  10.  Governing  Law.  This  Debenture  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York without regard to the principles of conflicts of law thereof. Any action to
enforce  the  terms of this  Debenture,  the  Purchase  Agreement  or any  other
Transaction  Document shall be  exclusively  brought in the state and/or federal
courts in the state and county of New York.  Service of process in any action by
the Holder to enforce the terms of this  Debenture may be made by serving a copy
of the summons and complaint,  in addition to any other relevant  documents,  by
commercial  overnight  courier to the  Company at its  address  set forth in the
Purchase Agreement.

      Section  11.  Notices.  Any  notice,  request,  demand,  waiver,  consent,
approval or other  communication  which is required or  permitted to be given to
any party  hereunder  shall be in writing and shall be deemed duly given only if
delivered  to the  party  personally  or sent to the  party  by  facsimile  upon
electronic  confirmation  receipt (promptly followed by a hard-copy delivered in
accordance  with this Section 12) or three days after being mailed by registered
or certified mail (return receipt  requested),  with postage and registration or
certification  fees  thereon  prepaid,  or  if  sent  by  nationally  recognized
overnight  courier,  one day after being  mailed,  addressed to the party at its
address  as set forth in Section  7.3 of the  Purchase  Agreement  or such other
address as may be designated  hereafter by notice given pursuant to the terms of
this Section 11.

      Section 12. Waiver. Any waiver by the Company or the Holder of a breach of
any  provision  of this  Debenture  shall not operate as or be construed to be a
waiver  of any  other  breach of such  provision  or of any  breach of any other
provision of this Debenture.  The failure of the Company or the Holder to insist
upon strict  adherence to any term of this  Debenture  on one or more  occasions
shall not be  considered a waiver or deprive that party of the right  thereafter
to insist upon strict adherence to that term or any other term of this Debenture
in any other occasion. Any waiver must be in writing.

      Section 13.  Invalidity.  If any provision of this Debenture is held to be
invalid, illegal or unenforceable, the balance of this Debenture shall remain in
effect,  and if any  provision  is  held to be  inapplicable  to any  person  or
circumstance,  it shall nevertheless  remain applicable to all other persons and
circumstances.

      Section  14.  Payment  Dates.  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 following Business Day.

      Section 15. Transfer; Assignment. This Debenture may not be transferred or
assigned,  in  whole  or in part,  at any  time,  except  in  compliance  by the
transferor and the transferee with applicable federal and state securities laws.

                                    A 3c- 14
<PAGE>

      Section  16.  Future  Financing.   If,  at  any  time  this  Debenture  is
outstanding,  the  Company,  or its  successors  in  interest  due  to  mergers,
consolidations and/or acquisitions (the "Successors-in-Interest"),  is funded an
amount equal to or exceeding Five Million  United States  dollars  ($5,000,000),
the Company or the Successors-in-Interest, as the case may be, agrees to pay the
Purchaser  an  amount  equal to One  Hundred  Fifty  Percent  (150%) of the then
outstanding Debenture (the "Lump Sum Payment").  Upon the Purchaser's receipt of
the Lump Sum Payment, any and all remaining obligations then outstanding between
the Company or the Successors-in-Interest,  as the case may be, and Purchaser in
connection  with  the  Purchase  Agreement  and  this  Debenture  shall  be deem
satisfied,  and the Purchase  Agreement and this Debenture  shall be terminated.
This provision shall survive both Closing and Post-Closing.

      Section 17. Fees of  Enforcement.  In the event any Party  commences legal
action to enforce its rights  under this  Debenture,  the  non-prevailing  party
shall pay all  reasonable  costs and  expenses  (including  but not  limited  to
reasonable   attorney's   fees,   accountant's   fees,   appraiser's   fees  and
investigative fees) incurred in enforcing such rights.

                            [Signature Page Follows]

                                    A 3c- 15
<PAGE>

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

                                     REALITY WIRELESS NETWORKS, INC.

Attest: ______________________       By: ______________________________
                                         Name: Steve Careaga
                                         Title: CEO

                                    A 3c- 16
<PAGE>

                                   APPENDIX I

                              NOTICE OF CONVERSION
                          AT THE ELECTION OF THE HOLDER

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

Except as provided by Section 4(b) of the  Debentures,  the  undersigned  hereby
irrevocably  elects to convert  the  attached  Debenture  into  shares of Common
Stock,  par value $0.001 per share (the  "Common  Stock"),  of Reality  Wireless
Networks,  Inc. (the "Company"),  according to the provisions  hereof, as of the
date  written  below.  If shares are to be issued in the name of a person  other
than  undersigned,  the  undersigned  will pay all transfer  taxes  payable with
respect  thereto and is delivering  herewith such  certificates  and opinions as
reasonably requested by the Company in accordance therewith.  A fee of $400 will
be charged by the Escrow Agent to the Holder for each conversion.  No other fees
will be charged to the Holder, except for transfer taxes, if any.

Conversion calculations:          ----------------------------------------------
                                  Date to Effect Conversion

                                  ----------------------------------------------
                                  Principal Amount of Debentures to be Converted

                                  ----------------------------------------------
                                  Interest to be Converted or Paid

                                  ----------------------------------------------
                                  Applicable Conversion Price
                                  (Pursuant to Section 4(c)(v))

                                  ----------------------------------------------
                                  Number of Shares to be Issued Upon Conversion

                                  ----------------------------------------------
                                  Signature

                                  ----------------------------------------------
                                  Name

                                  ----------------------------------------------
                                  Address

                                       1

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