Document:

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                                  EXHIBIT 4.10

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
     OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
     THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
     COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                               AMBIENT CORPORATION

                          COMMON STOCK PURCHASE WARRANT

          1.   ISSUANCE; CERTAIN DEFINITIONS. In consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by AMBIENT CORPORATION, a Delaware corporation (the "Company"),
MELTON MANAGEMENT LTD. or registered assigns (the "Holder") is hereby granted
the right to purchase at any time until 5:00 P.M., New York City time, on the
Expiration Date (as defined below), Eight Hundred Thousand (800,000) fully paid
and nonassessable shares of the Company's Common Stock, $0.001 par value per
share (the "Common Stock"), at an initial exercise price per share (the
"Exercise Price") of $0.15 per share, subject to further adjustment as set forth
herein. This Warrant is being issued pursuant to the terms of that certain
Securities Purchase Agreement, dated as of September 8, 2003 (the "Agreement"),
to which the Company and Holder (or Holder's predecessor in interest) are
parties. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement.

          2.   EXERCISE OF WARRANTS.

               2.1  GENERAL.

               (a)  This Warrant is exercisable in whole or in part at any time
and from time to time. Such exercise shall be effectuated by submitting to the
Company (either by delivery to the Company or by facsimile transmission as
provided in Section 8 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate) as provided in
this paragraph. The date such Notice of Exercise is faxed to the Company shall
be the "Exercise Date," provided that the Holder of this Warrant tenders this
Warrant Certificate to the Company within five (5) business days thereafter. The
Notice of Exercise shall be executed by the Holder of this Warrant and shall
indicate (i) the number of shares then being purchased pursuant to such exercise
and (ii) if applicable (as provided below), whether the exercise is a cashless
exercise. Upon surrender of this Warrant Certificate, together with appropriate
payment of the Exercise Price for the shares of Common Stock purchased, the
Holder shall be entitled to receive a certificate or certificates for the shares
of Common Stock so purchased.

               (b)  The provisions of this Section 2.1(b) shall only be
applicable if, and only if, on the Exercise Date there is no effective
Registration Statement covering the Warrant

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Shares. If the Notice of Exercise form elects a "cashless" exercise, the Holder
shall thereby be entitled to receive a number of shares of Common Stock equal to
(w) the excess of the Current Market Value (as defined below) over the total
cash exercise price of the portion of the Warrant then being exercised, divided
by (x) the Market Price of the Common Stock as of the trading day immediately
prior to the Exercise Date. For the purposes of this Warrant, the terms (y)
"Current Market Value" shall be an amount equal to the Market Price of the
Common Stock as of the trading day immediately prior to the Exercise Date,
multiplied by the number of shares of Common Stock specified in such Notice of
Exercise Form, and (z) "Market Price of the Common Stock" shall be the closing
price of the Common Stock as reported by the Reporting Service for the relevant
date.

               (c)  If the Notice of Exercise form elects a "cash" exercise (or
if the cashless exercise referred to in the immediately preceding paragraph (b)
is not available in accordance with its terms), the Exercise Price per share of
Common Stock for the shares then being exercised shall be payable in cash or by
certified or official bank check.

               (d)  The Holder shall be deemed to be the holder of the shares
issuable to it in accordance with the provisions of this Section 2.1 on the
Exercise Date.

               2.2  LIMITATION ON EXERCISE.  Notwithstanding the provisions of
this Warrant, the Agreement or of the other Transaction Agreements, in no event
(except (i) as specifically provided in this Warrant as an exception to this
provision, (ii) during the forty-five (45) day period prior to the Expiration
Date, (iii) after the Company issues an Early Expiration Date Notice (as defined
below), or (iv) while there is outstanding a tender offer for any or all of the
shares of the Company's Common Stock) shall the Holder be entitled to exercise
this Warrant, or shall the Company have the obligation to issue shares upon such
exercise of all or any portion of this Warrant to the extent that, after such
exercise the sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of
the Warrants or other rights to purchase Common Stock or through the ownership
of the unconverted portion of the Debentures or other convertible securities),
and (2) the number of shares of Common Stock issuable upon the exercise of the
Warrants with respect to which the determination of this proviso is being made,
would result in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock (after taking into account
the shares to be issued to the Holder upon such exercise). For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), except as otherwise provided in clause (1) of
such sentence. The Holder, by its acceptance of this Warrant, further agrees
that if the Holder transfers or assigns any of the Warrants to a party who or
which would not be considered such an affiliate, such assignment shall be made
subject to the transferee's or assignee's specific agreement to be bound by the
provisions of this Section 2.2 as if such transferee or assignee were the
original Holder hereof.

                                        2
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               2.3  CERTAIN DEFINITIONS.  As used herein, each of the following
terms has the meaning set forth below, unless the context otherwise requires:

               (a)  "Closing Price" means the closing price during regular
trading hours of the Common Stock (in U.S. Dollars) on the Principal Trading
Market, as reported by the Reporting Service.

               (b)  "Expiration Date" means the earlier of September 30, 2006 or
the Early Expiration Date (as defined below).

               (c)  "Principal Trading Market" means the Over the Counter
Bulletin Board Market.

               (d)  "Reporting Service" means Bloomberg LP or if that service is
not then reporting the relevant information regarding the Common Stock, a
comparable reporting service of national reputation selected by the Holder and
reasonably acceptable to the Company.

               (e)  "Target Price" means $1.00 per share, subject to further
adjustment in the same manner as adjustments to the Exercise Price are made
herein.

               (f)  "Trading Day" means any day during which the Principal
Trading Market shall be open for business.

               2.4  EARLY EXPIRATION DATE.  So long as an effective registration
statement exists with respect to the resale of the shares issuable on exercise
of this Warrant, if the Closing Price for the Common Stock is more than the
Target Price for each of twenty (20) consecutive Trading Days (the twentieth of
such consecutive Trading Days, the "Target Trading Day"), then the Company will
have the right to give the Holder a written notice (an "Early Expiration Date
Notice") within five (5) Trading Days after the Target Trading Day. The Early
Expiration Date Notice shall state that the Expiration Date shall be a date
specified in such notice (the "Early Expiration Date"), which date shall not be
earlier than sixty (60) days after the Target Trading Day.

          3.   RESERVATION OF SHARES. The Company hereby agrees that at all
times during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance upon exercise of this Warrant (the "Warrant Shares").

          4.   MUTILATION OR LOSS OF WARRANT. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.

                                        3
<PAGE>

          5.   RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.

          6.   PROTECTION AGAINST DILUTION AND OTHER ADJUSTMENTS.

               6.1  ADJUSTMENT MECHANISM.  If an adjustment of the Exercise
Price is required pursuant to this Section 6, the Holder shall be entitled to
purchase such number of shares of Common Stock as will cause (i) (x) the total
number of shares of Common Stock Holder is entitled to purchase pursuant to this
Warrant following such adjustment , multiplied by (y) the adjusted Exercise
Price per share, to equal the result of (ii) (x) the dollar amount of the total
number of shares of Common Stock Holder is entitled to purchase before
adjustment, multiplied by (y) the total Exercise Price before adjustment.1

               6.2  CAPITAL ADJUSTMENTS.  In case of any stock split or reverse
stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation (where the Company is not the
surviving entity), the provisions of this Section 6 shall be applied as if such
capital adjustment event had occurred immediately prior to the date of this
Warrant and the original Exercise Price had been fairly allocated to the stock
resulting from such capital adjustment; and in other respects the provisions of
this Section shall be applied in a fair, equitable and reasonable manner so as
to give effect, as nearly as may be, to the purposes hereof. A rights offering
to stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights.

               6.3  ADJUSTMENT FOR SPIN OFF.  If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or of a part of
its assets in a transaction (the "Spin Off") in which the Company does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then the Company shall cause (i) to be reserved
Spin Off Securities equal to the number thereof which would have been issued to
the Holder had all of the Holder's unexercised Warrants outstanding on the
record date (the "Record Date") for determining the amount and number of Spin
Off Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the trading day
immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to
be issued to the Holder on the exercise of all or any of the Outstanding
Warrants, such amount of the Reserved Spin Off Shares equal to

---------------------------------
1 Example: Assume 100,000 shares remain under Warrant at original stated
Exercise Price of $0.15. Total exercise price (clause (y) in text) is (i)
100,000 x (ii) $0.15, or $15,000. Company effects 2:1 stock split. Exercise
Price is adjusted $0.075. Number of shares covered by Warrant is adjusted to
200,000, because (applying clause (x) in text) (i) 200,000 x (ii) $0.075 =
$15,000.

                                        4
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(x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the
numerator is the amount of the Outstanding Warrants then being exercised, and
(II) the denominator is the amount of the Outstanding Warrants.

          7.   TRANSFER TO COMPLY WITH THE SECURITIES ACT; REGISTRATION RIGHTS.

               7.1  TRANSFER.  This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act relating to such security or an opinion of
counsel satisfactory to the Company that registration is not required under the
Act. Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.

               7.2  REGISTRATION RIGHTS.  Reference is made to Registration
Rights Provisions in Section 4(g) of the Securities Purchase Agreement, the
terms of which are incorporated herein by reference.

          8.   NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission or sent by certified, registered or express mail, return
receipt requested, postage pre-paid. Any such notice shall be deemed given when
so delivered personally, or sent by confirmed and acknowledged facsimile
transmission, or, if so mailed, two days after the date of deposit in the United
States mails, as follows:

               (i)   if to the Company, to:

                     AMBIENT CORPORATION
                     79 Chapel Street
                     Suite 300
                     Newton, MA 02458
                     Attn: President
                     Telephone No.: (617) 332-7680
                     Telecopier No.: (617) 332-7260

                                        5
<PAGE>

               with a copy to:

                     Aboudi & Brounstein
                     Attn: David Aboudi, Esq.
                     Rechov Gavish 3, POB 2432
                     Kfar Saba Industrial Zone 44641 Israel
                     Telephone No.: (011-972-9) 764-4833
                     Telecopier No.: (011-972-9) 764-4834

               (ii)  if to the Holder, to:

                     MELTON MANAGEMENT LTD.
                     c/o Yehuda Breitkope
                     26 Agasi St.
                     Har Nof, Jerusalem, Israel
                     Telephone No.: (011 972 2) 651-2438
                     Telecopier No.: (011 972 2) 652-1063

               with a copy to:

                     Krieger & Prager LLP, Esqs.
                     39 Broadway
                     Suite 1440
                     New York, NY 10006
                     Attn: Ronald Nussbaum, Esq.
                     Telephone No.: (212) 363-2900
                     Telecopier No.  (212) 363-2999

Any party may, by notice given in accordance with this Section to the other
parties, designate another address or person for receipt of notices hereunder.

          9.   SUPPLEMENTS AND AMENDMENTS; WHOLE AGREEMENT. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant contains the full understanding of the parties hereto with
respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.

          10.  GOVERNING LAW. This Warrant shall be deemed to be a contract made
under the laws of the State of Delaware for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of Wilmington or
the state courts of the State of Delaware sitting in the City of Wilmington in
connection with any dispute arising under this Warrant and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
FORUM NON CONVENIENS,

                                        6
<PAGE>

to the bringing of any such proceeding in such jurisdictions. To the extent
determined by such court, the Company shall reimburse the Holder for any
reasonable legal fees and disbursements incurred by the Buyer in enforcement of
or protection of any of its rights under any of the Transaction Agreements.

          11.  JURY TRIAL WAIVER. The Company and the Holder hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out or in
connection with this Warrant.

          12.  COUNTERPARTS. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

          13.  DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
8th day of September, 2003.

                                           AMBIENT CORPORATION

                                           By:  /s/ John J. Joyce
                                              --------------------------------
                                                John J. Joyce

                                           -----------------------------------
                                           (Print Name)
                                                   CEO

                                           -----------------------------------
                                           (Title)

                                        7
<PAGE>

                          NOTICE OF EXERCISE OF WARRANT

     The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate dated as of ________________, 20___ , to
purchase ___________ shares of the Common Stock, $0.001 par value, of AMBIENT
CORPORATION and tenders herewith payment in accordance with Section 1 of said
Common Stock Purchase Warrant.

[ ]  CASH: $                                = (Exercise Price x Exercise Shares)
            -------------------------------

          Payment is being made by:
               [ ]  enclosed check
               [ ]  wire transfer
               [ ]  other

[ ]  CASHLESS EXERCISE

          Net number of Warrant Shares to be issued to Holder :          *
                                                                ---------

          * based on:  Current Market Value - (Exercise Price x Exercise Shares)
                       ---------------------------------------------------------
                                     Market Price of Common Stock

          where:
          Market Price of Common Stock ["MP"]         =        $
                                                                ---------------
          Current Market Value [MP x Exercise Shares] =        $
                                                                ---------------

     It is the intention of the Holder to comply with the provisions of Section
2.2 of the Warrant regarding certain limits on the Holder's right to exercise
thereunder. Based on the analysis on the attached Worksheet Schedule, the Holder
believe this exercise complies with the provisions of said Section 2.2.
Nonetheless, to the extent that, pursuant to the exercise effected hereby, the
Holder would have more shares than permitted under said Section, this notice
should be amended and revised, ab initio, to refer to the exercise which would
result in the issuance of shares consistent with such provision. Any exercise
above such amount is hereby deemed void and revoked.

<PAGE>

     Please deliver the stock certificate to:

Dated:
       ----------------------

-----------------------------
[Name of Holder]

By:
    -------------------------

<PAGE>

                          NOTICE OF EXERCISE OF WARRANT
                               WORKSHEET SCHEDULE

1. Current Common Stock holdings of Holder and Affiliates
                                                             -----------------
2. Shares to be issued on current exercise
                                                             -----------------

3. Other shares eligible to be acquired without restriction
                                                             -----------------

4. Total [sum of Lines 1 through 3]
                                                             -----------------

5. Outstanding shares of Common Stock*
                                                             -----------------

6. Adjustments to Outstanding

         a. Shares known to Holder as previously issued
            to Holder or others but not included in Line 5
                                                             -----------------

         b. Shares to be issued per Line 2
                                                             -----------------

         c. Total Adjustments [Lines 6a and 6b]
                                                             -----------------

7. Total Adjusted Outstanding [Lines 5 plus 6c]
                                                             -----------------

8. Holder's Percentage [Line 4 divided by Line 7]                             %
                                                             -----------------

[Note: Line 8 not to be above 4.99%]

* Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent<PAGE>

                                  EXHIBIT 4.11

                                FORM OF DEBENTURE

          THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
          SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
          STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER
          EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
          REQUIRED.

NNo. 03-2- 1                                              US $_____________
     ------ ------
                               AMBIENT CORPORATION

           6% CONVERTIBLE DEBENTURE SERIES 03-2 DUE __________, 200_2

     THIS DEBENTURE is one of a duly authorized issue of up to $_________3 in
Debentures of AMBIENT CORPORATION, a corporation organized and existing under
the laws of the State of Delaware (the "Company") designated as its 6%
Convertible Debentures Series 03-2.

     FOR VALUE RECEIVED, the Company promises to pay to , the registered holder
hereof (the "Holder"), the principal sum of and 00/100 Dollars (US $ ) on
______________, 200_4 (the "Maturity Date") and to pay interest, on a simple
non-compound basis, on the principal sum outstanding from time to time in
arrears at the rate of 6% per annum, accruing from ______________, 200_5 , the
date of initial issuance of this Debenture (the "Issue Date"), on the date
(each, an "Interest Payment Date") which is the earlier of (i) a Conversion Date
(as defined below) or (ii) the Maturity Date, as the case may be. Accrual of
interest shall commence on the first such business day to occur after the Issue
Date and shall continue to accrue on a daily basis until payment in full of the
principal sum has been made or duly provided for. Additional provisions
regarding the payment of interest are provided in Section 4(D) below (the terms
of which shall govern as if this sentence were not included in this Debenture).

     This Debenture is being issued pursuant to the terms of the Securities
Purchase Agreement-A, dated _____________, 2003 (the "Securities Purchase
Agreement"), to which the

--------------------
1 Insert unique Debenture number for each issuance.

2 Insert date which is third anniversary of the relevant Closing Date

3 Insert Total Purchase Price

4 See footnote 2

5 Insert the relevant Closing Date.

<PAGE>

Company and the Holder (or the Holder's predecessor in interest) are parties.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Securities Purchase Agreement.

     This Debenture is subject to the following additional provisions:

     1.   The Debentures will initially be issued in denominations determined by
the Company, but are exchangeable for an equal aggregate principal amount of
Debentures of different denominations, as requested by the Holder surrendering
the same. No service charge will be made for such registration or transfer or
exchange.

     2.   The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.

     3.   This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended (the "Act"), and other
applicable state and foreign securities laws and the terms of the Securities
Purchase Agreement. In the event of any proposed transfer of this Debenture, the
Company may require, prior to issuance of a new Debenture in the name of such
other person, that it receive reasonable transfer documentation that is
sufficient to evidence that such proposed transfer complies with the Act and
other applicable state and foreign securities laws and the terms of the
Securities Purchase Agreement. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.

     4.   A.   (i)   At any time on or after the Issue Date and prior to the
time this Debenture is paid in full in accordance with its terms (including,
without limitation, after the Prepayment Date and after the occurrence of an
Event of Default, as those terms are defined below, or, if the Debenture is not
fully paid or converted after the Maturity Date), the Holder of this Debenture
is entitled, at its option, subject to the following provisions of this Section
4, to convert this Debenture at any time into shares of Common Stock, $0.001 par
value ("Common Stock"), of the Company of the Company at the Conversion Price
(as defined below).

               (ii)  The term "Conversion Price" means US $0.12 (which amount is
subject to adjustment as provided herein).

          B.   Conversion shall be effectuated by faxing a Notice of Conversion
(as defined below) to the Company as provided in this paragraph. The Notice of
Conversion shall

<PAGE>

be executed by the Holder of this Debenture and shall evidence such Holder's
intention to convert this Debenture or a specified portion hereof in the form
annexed hereto as Exhibit A. If paid in Common Stock as contemplated hereby,
interest accrued or accruing from the Issue Date to the relevant Interest
Payment Date shall be paid in Common Stock at the Conversion Price applicable as
of such Interest Payment Date. No fractional shares of Common Stock or scrip
representing fractions of shares will be issued on conversion, but the number of
shares issuable shall be rounded to the nearest whole share. The date on which
notice of conversion is given (the "Conversion Date") shall be deemed to be the
date on which the Holder faxes or otherwise delivers the conversion notice
("Notice of Conversion") to the Company so that it is received by the Company on
or before such specified date, provided that, if such conversion would convert
the entire remaining principal of this Debenture, the Holder shall deliver to
the Company the original Debentures being converted no later than five (5)
business days thereafter. Facsimile delivery of the Notice of Conversion shall
be accepted by the Company at facsimile number (617) 332-7260, Attn: President,
provided a copy is sent on the same date to Company counsel at facsimile number
(011-972-9) 764-4834, Attn: David Aboudi, Esq. Certificates representing Common
Stock upon conversion ("Conversion Certificates") will be delivered to the
Holder at the address specified in the Notice of Conversion (which may be the
Holder's address for notices as contemplated by the Securities Purchase
Agreement or a different address), via express courier, by electronic transfer
or otherwise, within five (5) business days (such fifth business day, the
"Delivery Date") after the date on which the Notice of Conversion is delivered
to the Company as contemplated in this paragraph B, and, if interest is paid by
Common Stock, the Interest Payment Date. The Holder shall be deemed to be the
holder of the shares issuable to it in accordance with the provisions of this
Section 4(B) on the Conversion Date.

          C.   Notwithstanding any other provision hereof or of any of the other
Transaction Agreements, in no event (except (i) as specifically provided herein
as an exception to this provision, or (ii) while there is outstanding a tender
offer for any or all of the shares of the Company's Common Stock) shall the
Holder be entitled to convert any portion of this Debenture, or shall the
Company have the obligation to convert such Debenture (and the Company shall not
have the right to pay interest hereon in shares of Common Stock) to the extent
that, after such conversion or issuance of stock in payment of interest, the sum
of (1) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Debentures or other convertible securities or of the unexercised portion of
warrants or other rights to purchase Common Stock), and (2) the number of shares
of Common Stock issuable upon the conversion of the Debentures with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock (after taking into account the shares to be
issued to the Holder upon such conversion). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, except as otherwise provided in clause (1) of such sentence. The
Holder, by its acceptance of this Debenture, further agrees that if the Holder
transfers or assigns any of the Debentures to a party who or which would not be
considered such an affiliate, such assignment shall be made subject

<PAGE>

to the transferee's or assignee's specific agreement to be bound by the
provisions of this Section 4(C) as if such transferee or assignee were the
original Holder hereof. Nothing herein shall preclude the Holder from disposing
of a sufficient number of other shares of Common Stock beneficially owned by the
Holder so as to thereafter permit the continued conversion of this Debenture.

          D.   (i)   Subject to the terms of Section 4(C) and to the other terms
of this Section 4(D), interest on the principal amount of this Debenture
converted pursuant to a Notice of Conversion shall be due and payable, at the
option of the Company, in cash or Common Stock on the Interest Payment Date.

               (ii)  If the interest is to be paid in cash, the Company shall
make such payment within three (3) business days of the Interest Payment Date.
If the interest is not paid by such third business day, the interest must be
paid in Common Stock in accordance with the provisions of Section 4(D)(i)
hereof, unless the Holder consents otherwise in each specific instance.

               (iii) Notwithstanding the foregoing, the Company's right to issue
shares in payment of such interest is applicable only to the extent the Holder
converts principal of this Debenture as provided herein.

               (iv)  The number of shares of Common Stock to be issued in
payment of such interest shall be determined by dividing the dollar amount of
the interest to be so paid by the Conversion Price on the relevant Interest
Payment Date. Such Common Stock shall be delivered to the Holder, or per
Holder's instructions, on the Delivery Date for the related Conversion
Certificates pursuant to Section 4(B) hereof.

               (v)   If the Company elects to have the interest paid in cash in
connection with a conversion, the Company shall make such payment within three
(3) business days of the Interest Payment Date. If such payment is not made in
cash by such date, it shall be deemed that, subject to the provisions of Section
4(C) hereof, the Company has elected to pay the interest in stock.

          E.   (i)   Reference is made to the provisions of Section 4(g) of the
Securities Purchase Agreement, the terms of which are incorporated herein by
reference. The Conversion Price and other provisions of this Debenture shall be
adjusted as provided in the applicable provisions of said Section 4(g) of the
Securities Purchase Agreement.

               (ii)  In addition, and not in lieu of the foregoing, in the event
the provisions of Section 4(g)(ii) of the Securities Purchase Agreement are
applicable (the event giving rise to such applicability, a "Trigger Event;" it
being understood that a Specified New Transaction or an Excluded New Transaction
contemplated by said Section 4(g) is not a Trigger Event), are applicable, the
Holder may require the Company to immediately redeem all or any part of the
outstanding portion of this Debenture for an amount equal to the Redemption
Amount (as defined below).

<PAGE>

               (iii) The term "Unconverted Debenture" means the principal amount
of this Debenture which has not been converted as of the relevant date.

               (iv)  The term "Redemption Payment Date" means the date on which
the Company actually pays the Redemption Amount.

               (v)   The term "Redemption Amount" means the amount equal to:

                      V              x              M
               -----------------
                      CP

     where:

          "V" means the principal of an Unconverted Debenture plus any accrued
     but unpaid interest thereon;

          "CP" means the Conversion Price in effect on the date (the "Redemption
     Notice Date") of the Redemption Notice (as defined below); and

          "M" means the highest closing price per share of the Common Stock
     during the period beginning on the Redemption Notice Date and ending on the
     Redemption Payment Date.

               (vi)  The Holder of an Unconverted Debenture may elect to redeem
a portion of such Unconverted Debenture without electing to redeem the balance
of the Unconverted Debenture. The Holder's option to redeem all or part of the
Unconverted Debenture shall be exercised by the Holder giving written notice of
the exercise of this provision by the Holder (a "Redemption Notice") at any time
after a Trigger Event has occurred. The Redemption Notice shall specify (a) the
date (the "Redemption Due Date") on which the Redemption Amount shall be paid,
which date shall be at least five (5) business days after the date (a
"Redemption Notice Date") on which the Holder Redemption Notice is given, and
(b) the wire instructions for the account to which the Redemption Amount is to
be paid; provided, however, that the Company shall have the right to accelerate
the date of such payment.

               (vii) If all of the Unconverted Debentures are being redeemed
pursuant to this Section 4(E), then, upon payment in full of the Redemption
Amount for all of the Unconverted Debentures in accordance with the provisions
of this Section 4(E), the Holder shall deliver the Debenture to the Company
marked "paid in full".

               (viii) If the Redemption Amount is not timely paid by the
Company, the Redemption Amount computed as of such date will bear interest at
the rate of eighteen percent (18%) or the highest rate allowed by law, whichever
is lower, from the date it was due until and including the date actually paid.
The failure of the Company to timely pay the Redemption Amount shall be an Event
of Default.

<PAGE>

          F.   (i)   The term "Mandatory Conversion Date" means either (x) the
Maturity Date or (y) an Elective Mandatory Conversion Date (as defined below).
On the Mandatory Conversion Date, without further action by the Holder, the
outstanding principal and accrued by but unpaid interest on this Debenture shall
be deemed converted into Common Stock at the Conversion Price in effect on such
Mandatory Conversion Date. Any such mandatory conversion shall be subject to the
following terms and conditions of this Section F to the extent relevant.

               (ii)  So long as

     (x) an effective Registration Statement covering the resale of the shares
     issuable on conversion of this Debenture,

     (y) the Company is not in default of any material obligation under any of
     the Transaction Agreements, and

     (z) the Common Stock of the Company, including the Conversion Shares to be
     issued on the Mandatory Conversion Date, are eligible for trading on an
     Acceptable Trading Market (as defined below),

then, if the Bid Price for the Common Stock is more than the Target Price (as
defined below) for each of twenty (20) consecutive Trading Days (the twentieth
of such consecutive Trading Days, the "Target Trading Day"), then the Company
will have the right to give the Holder a written notice (an "Elective Mandatory
Conversion Notice") within five (5) Trading Days after the Target Trading Day.
The Elective Mandatory Conversion Notice shall state that the date specified in
such notice (the "Elective Mandatory Conversion Date"), which date shall not be
no later than sixty (60) days after the Target Trading Day, shall be deemed a
Mandatory Conversion Date.

               (iii) The term "Target Price" means $0.50 per share, subject to
further adjustment in the same manner as adjustments to the Conversion Price are
made herein

               (iv)  The term "Acceptable Trading Market" means any of the
following: (w) the Over the Counter Bulletin Board Market, (x) the
NASDAQ/SmallCap or National Market, (y) the American Stock Exchange or (z) the
New York Stock Exchange.

               (v)   If the Company gives an Elective Mandatory Conversion
Notice, then, if, but only if, the conditions referred in clauses (x), (y) and
(z) of subparagraph (ii) above are satisfied on the Elective Mandatory
Conversion Date, the conversion contemplated by the Elective Mandatory
Conversion Notice will be effected, subject to the provisions of subparagraph
(vi) below. If any of these conditions is not true on the Elective Mandatory
Conversion Date, the Elective Mandatory Conversion Notice shall be deemed
canceled ab initio.

<PAGE>

               (vi)  The provisions of Section 4(C) shall apply on the Mandatory
Conversion Date. If, as a result of such provisions, the entire Debenture is not
converted on the Mandatory Conversion Date, the Company, without further notice
to the Holder, shall be deemed to have timely given one or more Mandatory
Conversion Notices providing for successive Mandatory Conversion Dates, each of
which is ten (10) Trading Days after the immediately preceding Mandatory
Conversion Date, until this Debenture is fully converted or paid in full (or
some combination thereof).

               (vii) After receiving a Mandatory Conversion Notice, the Holder
shall continue to have the right to convert any outstanding portion of this
Debenture in accordance with its terms until it is fully converted.

          G.   (i)   Anything in the other provisions of this Debenture or any
of the other Transaction Agreements to the contrary notwithstanding, if, but
only if, the conditions referred in clauses (x), (y) and (z) of Section 4(F)(ii)
are satisfied on the date of the issuance of the Prepayment Notice and through
the Prepayment Date (as those terms are defined below), the Company shall have
the right to prepay the outstanding principal of this Debenture, together with
all accrued interest thereon, in whole or in part, on the terms and conditions
provided in this Section 4(G).

               (ii)  The Company may give the Holder a written notice (the
"Prepayment Notice") no earlier than the first anniversary of the Issue Date.
The Prepayment Notice shall specify (x) the principal amount of the Debenture
being prepaid by the Company (the "Prepayment Principal Amount"), (y) the date
(the "Prepayment Date"), which shall be not less than forty-five (45) days after
the Prepayment Notice is received by the Holder, on which such prepayment will
be made, and (z) identify the bank (the "Prepayment Bank") where the Prepayment
Funds (as defined below) will be deposited prior to the issuance of the
Confirmation Notice (as defined below).

               (iii) No later than ten (10) business days prior to the
Prepayment Date, the Company will send a notice (the "Confirmation Notice") to
the Holder that funds (the "Prepayment Funds") equal to the Prepayment Principal
Amount plus all accrued but unpaid interest thereon through the Prepayment Date
have been deposited with the Prepayment Bank, together with confirmation of such
deposit by the Prepayment Bank. The Confirmation Notice will also include
instructions for the method by which the Holder can provide instructions to the
Prepayment Bank to make payment by check or wire, as specified by the Holder, on
the Prepayment Date.

               (iv)  Even after the issuance of a Prepayment Notice, the Holder
may continue to convert this Debenture as provided in the other provisions of
this Debenture until this Debenture is paid in full. If the Holder converts any
portion of this Debenture after the date of the Prepayment Notice and prior to
the payment of the Prepayment Funds to the Holder, so that the then outstanding
principal of this Debenture is less than the Prepayment Principal Amount,

<PAGE>

the Holder shall notify the Prepayment Bank of the then outstanding principal of
this Debenture. The Prepayment Funds will then be adjusted to and be deemed to
be equal such outstanding principal plus all accrued but unpaid interest thereon
through the Prepayment Date.

               (v)   If the Confirmation Notice is not timely given or if the
Prepayment Funds are not timely paid or made available to the Holder, the Holder
will have the option, exercisable at any time prior to the actual payment of the
Prepayment Funds (together with any additional interest accruing on the
Prepayment Principal Amount after the Prepayment Date) to effect either or both
of the following actions: (x) cancellation, ab initio, of the prepayment
contemplated by the Prepayment Notice and (y) cancellation of the Company's
prepayment right under this Section 4(G).

     5.   Subject to the terms of the Securities Purchase Agreement, 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 and all other Debentures now or hereafter issued of
similar terms are direct obligations of the Company.

     6.   No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.

     7.   All payments contemplated hereby to be made "in cash" shall be made in
immediately available good funds of United States of America currency by wire
transfer to an account designated in writing by the Holder to the Company (which
account may be changed by notice similarly given). All payments of cash and each
delivery of shares of Common Stock issuable to the Holder as contemplated hereby
shall be made to the Holder at the address last appearing on the Debenture
Register of the Company as designated in writing by the Holder from time to
time; except that the Holder can designate, by notice to the Company, a
different delivery address for any one or more specific payments or deliveries.

     8.   If, for as long as this Debenture remains outstanding, the Company
enters into a merger (other than where the Company is the surviving entity) or
consolidation with another corporation or other entity or a sale or transfer of
all or substantially all of the assets of the Company to another person
(collectively, a "Sale"), the Company will require, in the agreements reflecting
such transaction, that the surviving entity expressly assume the obligations of
the Company hereunder. Notwithstanding the foregoing, if the Company enters into
a Sale and the holders of the Common Stock are entitled to receive stock,
securities or property in respect of or in exchange for Common Stock, then as a
condition of such Sale, the Company and any such successor, purchaser or
transferee will agree that the Debenture may thereafter be converted on the
terms and subject to the conditions set forth above into the kind and amount of
stock,

<PAGE>

securities or property receivable upon such merger, consolidation, sale or
transfer by a holder of the number of shares of Common Stock into which this
Debenture might have been converted immediately before such merger,
consolidation, sale or transfer, subject to adjustments which shall be as nearly
equivalent as may be practicable. In the event of any such proposed Sale, (i)
the Holder hereof shall have the right to convert by delivering a Notice of
Conversion to the Company within fifteen (15) days of receipt of notice of such
Sale from the Company, except that Section 4(C) shall not apply to such
conversion.

     9.   If, at any time while any portion of this Debenture remains
outstanding, the Company spins off or otherwise divests itself of a part of its
business or operations or disposes of all or of a part of its assets in a
transaction (the "Spin Off") in which the Company, in addition to or in lieu of
any other compensation received and retained by the Company for such business,
operations or assets, causes securities of another entity (the "Spin Off
Securities") to be issued to security holders of the Company, the Company shall
cause (i) to be reserved Spin Off Securities equal to the number thereof which
would have been issued to the Holder had all of the Holder's Debentures
outstanding on the record date (the "Record Date") for determining the amount
and number of Spin Off Securities to be issued to security holders of the
Company (the "Outstanding Debentures") been converted as of the close of
business on the Trading Day immediately before the Record Date (the "Reserved
Spin Off Shares"), and (ii) to be issued to the Holder on the conversion of all
or any of the Outstanding Debentures, such amount of the Reserved Spin Off
Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction,
of which (I) the numerator is the principal amount of the Outstanding Debentures
then being converted, and (II) the denominator is the principal amount of the
Outstanding Debentures.

     10.  If, at any time while any portion of this Debenture remains
outstanding, the Company effectuates a stock split or reverse stock split of its
Common Stock or issues a dividend on its Common Stock consisting of shares of
Common Stock, the Conversion Price and any other amounts calculated as
contemplated hereby or by any of the other Transaction Agreements shall be
equitably adjusted to reflect such action. By way of illustration, and not in
limitation, of the foregoing, (i) if the Company effectuates a 2:1 split of its
Common Stock, thereafter, with respect to any conversion for which the Company
issues shares after the record date of such split, the Conversion Price shall be
deemed to be one-half of what it had been immediately prior to such split; (ii)
if the Company effectuates a 1:10 reverse split of its Common Stock, thereafter,
with respect to any conversion for which the Company issues shares after the
record date of such reverse split, the Conversion Price shall be deemed to be
ten times what it had been calculated to be immediately prior to such split; and
(iii) if the Company declares a stock dividend of one share of Common Stock for
every 10 shares outstanding, thereafter, with respect to any conversion for
which the Company issues shares after the record date of such dividend, the
Conversion Price shall be deemed to be such amount multiplied by a fraction, of
which the numerator is the number of shares (10 in the example) for which a
dividend share will be issued and the denominator is such number of shares plus
the dividend share(s) issuable or issued thereon (11 in the example).

     11.  The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is

<PAGE>

being acquired for investment and that such Holder will not offer, sell or
otherwise dispose of this Debenture or the shares of Common Stock issuable upon
conversion thereof except under circumstances which will not result in a
violation of the Act or any applicable state Blue Sky or foreign laws or similar
laws relating to the sale of securities.

     12.  This Debenture shall be governed by and construed in accordance with
the laws of the State of Delaware for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the parties consents to the exclusive jurisdiction of the
federal courts whose districts encompass any part of the City of Wilmington or
the state courts of the State of Delaware sitting in the City of Wilmington in
connection with any dispute arising under this Debenture and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on FORUM NON COVENIENS, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, the Company shall
reimburse the Holder for any reasonable legal fees and disbursements incurred by
the Holder in enforcement of or protection of any of its rights under any of
this Debenture.

     13.  JURY TRIAL WAIVER. The Company and the Holder hereby waive a trial by
jury in any action, proceeding or counterclaim brought by either of the Parties
hereto against the other in respect of any matter arising out of or in
connection with this Debenture.

     14.  (i)  Prior to a Mandatory Conversion Date, the following shall
constitute an "Event of Default":

          a.   The Company shall default in the payment of principal or interest
               on this Debenture or any other amount due hereunder, and, in any
               such instance, the same shall continue for a period of five (5)
               business days; or

          b.   Any of the representations or warranties made by the Company
               herein, in the Securities Purchase Agreement or any of the other
               Transaction Agreements or in any certificate or financial or
               other written statements heretofore or hereafter furnished by the
               Company in connection with the execution and delivery of this
               Debenture or the Securities Purchase Agreement shall be false or
               misleading in any material respect at the time made; or

          c.   Subject to the terms of the Securities Purchase Agreement, the
               Company fails to authorize or to cause its Transfer Agent to
               issue shares of Common Stock upon exercise by the Holder of the
               conversion rights of the Holder in accordance with the terms of
               this Debenture (provided, however, that for purposes of this
               provision, such failure to cause the Transfer Agent to issue such
               shares shall not be deemed to occur until two (2) business days
               after the Delivery Date), fails to transfer or to cause its
               Transfer Agent to transfer any certificate for shares of Common
               Stock issued to the Holder

<PAGE>

               upon conversion of this Debenture and when required by this
               Debenture or any other Transaction Agreement, and such transfer
               is otherwise lawful, or fails to remove any restrictive legend on
               any certificate or fails to cause its Transfer Agent to remove
               such restricted legend, in each case where such removal is
               lawful, as and when required by this Debenture, or any other
               Transaction Agreement, and any such failure shall continue
               uncured for ten (10) business days; or

          d.   The Company shall fail to perform or observe, in any material
               respect, any other covenant, term, provision, condition,
               agreement or obligation of any Debenture in this series and such
               failure shall continue uncured for a period of thirty (30) days
               after written notice from the Holder of such failure; or

          e.   The Company shall fail to perform or observe, in any material
               respect, any covenant, term, provision, condition, agreement or
               obligation of the Company under any of the Transaction Agreements
               and such failure shall continue uncured for a period of thirty
               (30) days after written notice from the Holder of such failure;
               or

          f.   The Company shall (1) admit in writing its inability to pay its
               debts generally as they mature; (2) make an assignment for the
               benefit of creditors or commence proceedings for its dissolution;
               or (3) apply for or consent to the appointment of a trustee,
               liquidator or receiver for its or for a substantial part of its
               property or business; or

          g.   A trustee, liquidator or receiver shall be appointed for the
               Company or for a substantial part of its property or business
               without its consent and shall not be discharged within sixty (60)
               days after such appointment; or

          h.   Any governmental agency or any court of competent jurisdiction at
               the instance of any governmental agency shall assume custody or
               control of the whole or any substantial portion of the properties
               or assets of the Company and shall not be dismissed within sixty
               (60) days thereafter; or

          i.   Any money judgment, writ or warrant of attachment, or similar
               process in excess of Five Hundred Thousand ($500,000) Dollars in
               the aggregate shall be entered or filed against the Company or
               any of its properties or other assets and shall remain unpaid,
               unvacated, unbonded or unstayed for a period of sixty (60) days
               or in any event later than five (5) days prior to the date of any
               proposed sale thereunder; or

          j.   Bankruptcy, reorganization, insolvency or liquidation proceedings
               or other proceedings for relief under any bankruptcy law or any
               law for the relief

<PAGE>

                of debtors shall be instituted by or against the Company and, if
                instituted against the Company, shall not be dismissed within
                sixty (60) days after such institution or the Company shall by
                any action or answer approve of, consent to, or acquiesce in any
                such proceedings or admit the material allegations of, or
                default in answering a petition filed in any such proceeding; or

          k.    The Company shall have its Common Stock suspended from trading
                on, or delisted from, the Principal Trading Market for in excess
                of ten (10) Trading Days.

          (ii)  After a Mandatory Conversion Date, the term "Event of Default"
shall mean: a. The Company shall default in the payment of principal or interest
on this Debenture or any other amount due hereunder, and, in any such instance,
the same shall continue for a period of five (5) business days, but only to the
extent that the Company had an obligation to pay such amount to the Holder prior
to the Mandatory Conversion Date or based on a notice given by the Holder prior
to the Mandatory Conversion Date; or

          b.    Subject to the terms of the Securities Purchase Agreement, the
                Company fails to authorize or to cause its Transfer Agent to
                issue shares of Common Stock upon exercise by the Holder of the
                conversion rights of the Holder in accordance with the terms of
                this Debenture (provided, however, that for purposes of this
                provision, such failure to cause the Transfer Agent to issue
                such shares shall not be deemed to occur until two (2) business
                days after the Delivery Date), fails to transfer or to cause its
                Transfer Agent to transfer any certificate for shares of Common
                Stock issued to the Holder upon conversion of this Debenture and
                when required by this Debenture or any other Transaction
                Agreement, and such transfer is otherwise lawful, or fails to
                remove any restrictive legend on any certificate or fails to
                cause its Transfer Agent to remove such restricted legend, in
                each case where such removal is lawful, as and when required by
                this Debenture, or any other Transaction Agreement, and any such
                failure shall continue uncured for ten (10) business days.

          (iii) If an Event of Default shall have occurred and is continuing,
then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been cured or waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default), at the
option of the Holder and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable (and the Maturity Date shall
be accelerated accordingly; provided, however, that such accelerated Maturity
Date [the "Default Maturity Date"] shall not be a Mandatory Conversion Date),
without presentment, demand, protest or notice of any kinds, all of which are
hereby expressly waived, anything herein or in

<PAGE>

any note or other instruments contained to the contrary notwithstanding, and the
Holder may immediately enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law, including, but
not necessarily limited to, the equitable remedy of specific performance and
injunctive relief. In furtherance of the foregoing and not in limitation
thereof, the Holder will be entitled to receive payment in cash in full of the
outstanding principal and accrued interest on the Debenture on the Default
Maturity Date.

     15.  Nothing contained in this Debenture shall be construed as conferring
upon the Holder the right to vote or to receive dividends or to consent or
receive notice as a shareholder in respect of any meeting of shareholders or any
rights whatsoever as a shareholder of the Company, unless and to the extent
converted in accordance with the terms hereof.

                   [Balance of page intentionally left blank]

<PAGE>

     16.  In the event for any reason, any payment by or act of the Company or
the Holder shall result in payment of interest which would exceed the limit
authorized by or be in violation of the law of the jurisdiction applicable to
this Debenture, then IPSO FACTO the obligation of the Company to pay interest or
perform such act or requirement shall be reduced to the limit authorized under
such law, so that in no event shall the Company be obligated to pay any such
interest, perform any such act or be bound by any requirement which would result
in the payment of interest in excess of the limit so authorized. In the event
any payment by or act of the Company shall result in the extraction of a rate of
interest in excess of a sum which is lawfully collectible as interest, then such
amount (to the extent of such excess not returned to the Company) shall, without
further agreement or notice between or by the Company or the Holder, be deemed
applied to the payment of principal, if any, hereunder immediately upon receipt
of such excess funds by the Holder, with the same force and effect as though the
Company had specifically designated such sums to be so applied to principal and
the Holder had agreed to accept such sums as an interest-free prepayment of this
Debenture. If any part of such excess remains after the principal has been paid
in full, whether by the provisions of the preceding sentences of this Section or
otherwise, such excess shall be deemed to be an interest-free loan from the
Company to the Holder, which loan shall be payable immediately upon demand by
the Company. The provisions of this Section shall control every other provision
of this Debenture.

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

Dated: _________________, _______

                                         AMBIENT CORPORATION

                                         By:
                                            ------------------------------------

                                         ---------------------------------------
                                         (Print Name)

                                         ---------------------------------------
                                         (Title)

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