Document:

EXHIBIT 4.1
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NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: June 30, 2006
Original Conversion Price (subject to adjustment herein): $0.85

                                                                $ ______________

                        6% SECURED CONVERTIBLE DEBENTURE
                              DUE DECEMBER 28, 2008

         THIS SECURED DEBENTURE is one of a series of duly authorized and issued
6% Secured Convertible Debentures of CDKNet.com, Inc., a Delaware corporation,
having a principal place of business at 220 Old New Brunswick Road, 2nd Floor,
Piscataway, NJ 08854 (the "Company"), designated as its 6% Secured Convertible
Debenture, due December 2008 (this debenture, the "Debenture" and collectively
with the other such series of debentures, the "Debentures").

         FOR VALUE RECEIVED, the Company promises to pay to
________________________ or its registered assigns (the "Holder"), or shall have
paid pursuant to the terms hereunder, the principal sum of $_______________ by
December 28, 2008 (the "Maturity Date"), or such earlier date as this Debenture
is required to be repaid as provided hereunder, and to pay interest to the
Holder on the aggregate unconverted and then outstanding principal amount of
this Debenture in accordance with the provisions hereof. This Debenture is
subject to the following additional provisions:

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

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                  "Alternate Consideration" shall have the meaning set forth in
Section 5(d).

                  "Base Conversion Price" shall have the meaning set forth in
Section 5(b).

                  "Business Day" means any day except Saturday, Sunday and any
         day which shall be a federal legal holiday in the United States or a
         day on which banking institutions in the State of New York are
         authorized or required by law or other government action to close.
                  "Buy-In" shall have the meaning set forth in Section 4(d)(v).

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

                  "Cash Sale Redemption Amount" shall equal the sum of (i) 100%
         of the principal amount of this Debenture to be prepaid, plus all
         accrued and unpaid interest thereon, (ii) the principal amount of this
         Debenture to be prepaid, plus all other accrued and unpaid interest
         hereon, divided by the Conversion Price on the closing date of the
         applicable event multiplied by the "Effective Price" (defined below),
         and (iii) all other amounts, costs, expenses and liquidated damages due
         in respect of this Debenture. The "Effective Price" shall be the cash
         consideration paid by the acquirer in such event (less the amount set
         forth in clause (i) above) divided by the sum of; (x) the issued and
         outstanding shares of Common Stock of the Company then outstanding and
         (y) the shares of Common Stock into which the outstanding Debentures
         may be converted on the day immediately preceding the record date fixed
         for determining the holders of shares of Common Stock eligible to
         receive a distribution (or if no such date has been fixed, the date of
         the day immediately preceding the closing of the transaction) and (z)
         the number of shares deemed issuable to the Warrant holders pursuant to
         the mandatory redemption provisions

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         in the Warrants which take effect upon sale of assets for cash
         consideration whether or not any Warrant holder shall have elected to
         have their Warrants Redeemed; provided, however, that the number of
         shares of Common Stock issuable on conversion of the Debentures and
         issuable upon exercise of the Warrants for this purpose shall be
         determined on a fully converted or exercised basis and ignoring any
         conversion or exercise limitations therein).

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

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

                  "Conversion Price" shall have the meaning set forth in Section
         4(b).

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

                  "Debenture Register" shall have the meaning set forth in
         Section 2(c).

                  "Dilutive Issuance" shall have the meaning set forth in
         Section 5(b).

                  "Dilutive Issuance Notice" shall have the meaning set forth in
         Section 5(b).

                  "Effectiveness Period" shall have the meaning given to such
         term in the Registration Rights Agreement.

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

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         consummated and (ix) for a period of 20 consecutive Trading Days prior
         to the applicable date in question, the daily trading volume for the
         Common Stock on the Trading Market exceeds 200,000 shares per Trading
         Day (subject to adjustment for forward and reverse stock splits and the
         like) in the case of a Forced Conversion pursuant to Section 6.

                  "Event of Default" shall have the meaning set forth in Section
         8.

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

                  "Forced Conversion" shall have the meaning set forth in
         Section 6(b).

                  "Forced Conversion Date" shall have the meaning set forth in
         Section 6(b).

                  "Forced Conversion Notice" shall have the meaning set forth in
         Section 6(b).

                  "Forced Conversion Notice Date" shall have the meaning set
         forth in Section 6(b).

                  "Fundamental Transaction" shall have the meaning set forth in
         Section 5(d).

                  "Interest Conversion Rate" means 85% of the lesser of (i) the
         average of the VWAPs for the 10 consecutive Trading Days ending on the
         Trading Day that is immediately prior to the applicable Interest
         Payment Date or (ii) the average of the VWAPs for the 10 consecutive
         Trading Days ending on the Trading Day that is immediately prior to the
         date the applicable interest payment shares are issued and delivered if
         after the Interest Payment Date.

                  "Interest Notice Period" shall have the meaning set forth in
         Section 2(a).

                  "Interest Payment Date" shall have the meaning set forth in
         Section 2(a).

                  "Interest Share Amount" shall have the meaning set forth in
         Section 2(a).

                  "Late Fees" shall have the meaning set forth in Section 2(d).

                  "Mandatory Default Amount" shall equal the sum of (i) the
         greater of: (A) 130% of the principal amount of this Debenture to be
         prepaid, plus all accrued and unpaid interest thereon, or (B) the
         principal amount of this Debenture to be prepaid, plus all other
         accrued and unpaid interest hereon, divided by the Conversion Price on
         (x) the date the Mandatory Default Amount is demanded or otherwise due
         or (y) the date the Mandatory Default Amount is paid in full, whichever
         is less, multiplied by the average of the 15 VWAPs immediately prior to
         (x) the date the Mandatory Default Amount is demanded or otherwise due
         or (y) the date the Mandatory Default Amount is paid in full, whichever
         is greater, and (ii) all other amounts, costs, expenses and liquidated
         damages due in respect of this Debenture.

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                  "New York Courts" shall have the meaning set forth in Section
         9(d).

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

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

                  "Permitted Indebtedness" shall mean (a) the Indebtedness
         existing on the Original Issue Date and set forth on Schedule 3.1(aa)
         attached to the Purchase Agreement, (b) lease obligations and purchase
         money Indebtedness of up to $100,000, in the aggregate, incurred in
         connection with the acquisition of capital assets and lease obligations
         with respect to newly acquired or leased assets, (c) Indebtedness
         incurred pursuant to the Transaction Documents, (d) unsecured accounts
         payable incurred in the ordinary course of business, (e) indebtedness
         with respect to taxes, governmental changes or levies which are being
         contested in good faith, provided that adequate reserves are maintained
         on the books of the Company or Subsidiaries, as the case may be, in
         accordance with GAAP and (f) up to $1,000,000 of additional
         Indebtedness incurred by the Company in connection with raising capital
         for the acquisition of another entity (by merger, consolidation, the
         acquisition of all or substantially of the assets of such entity or
         similar transaction), provided that in the case of (b) and (c) above,
         such Indebtedness does not mature or require payments of principal
         prior to the Maturity Date and is made expressly subordinate in right
         of payment to the Indebtedness evidenced by this Debenture, as
         reflected in a written agreement reasonably acceptable to, and approved
         by, the Purchasers in writing.

                  "Permitted Lien" shall mean the individual and collective
         reference to the following: (a) Liens for taxes, assessments and other
         governmental charges or levies not yet due or Liens for taxes,
         assessments and other governmental charges or levies being contested in
         good faith and by appropriate proceedings for which adequate reserves
         (in the good faith judgment of the management of the Company) have been
         established in accordance with GAAP, (b) Liens prior to the Original
         Issue Date as set forth on the Disclosure Schedules, (c) Liens granted
         in connection with clauses (b) and (c) under Permitted Indebtedness
         (provided, in the case of clause (b) such Liens are not secured by
         assets of the Company or its Subsidiaries other than the assets so
         leased or acquired), and (d) Liens imposed by law which were incurred
         in the ordinary course of business, such as carriers', warehousemen's
         and mechanics' Liens, statutory landlords' Liens, and other similar
         Liens arising in the ordinary course of business, and (x) which do not
         individually or in the aggregate materially detract from the value of
         such property or assets or materially impair the use thereof in the
         operation of the business of the Company and its consolidated
         Subsidiaries or (y) which are being contested in good faith by
         appropriate proceedings, which proceedings have the effect of
         preventing the forfeiture or sale of the property or asset subject to
         such Lien.

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

                  "Purchase Agreement" means the Securities Purchase Agreement,
         dated as of June 30, 2006 to which the Company and the original Holder
         are parties, as amended, modified or supplemented from time to time in
         accordance with its terms.

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

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

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

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

                  "Threshold Period" shall have the meaning given to such term
         in Section 6(b).

                  "Trading Day" means a day on which the Common Stock is traded
         on a Trading Market.

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

                  "Transaction Documents" shall have the meaning set forth in
         the Purchase Agreement.

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

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         market value of a share of Common Stock as determined by an independent
         appraiser selected in good faith by the Holder and reasonably
         acceptable to the Company.

                  "Warrants" shall have the meaning set forth in the Purchase
         Agreement.

         SECTION 2. INTEREST.

                  a) Payment of Interest in Cash or Kind. The Company shall pay
         interest to the Holder on the aggregate unconverted and then
         outstanding principal amount of this Debenture at the rate of 6% per
         annum, payable semiannually on January 1 and July 1, beginning on
         January 1, 2007, upon a redemption event pursuant to Section 6(a) and
         on the Maturity Date (except that, if any such date is not a Business
         Day, then such payment shall be due on the next succeeding Business
         Day) (each such date, an "Interest Payment Date"), in cash or duly
         authorized, fully paid and non-assessable shares of Common Stock at the
         Interest Conversion Rate, or a combination thereof (the amount to be
         paid in shares, the "Interest Share Amount"); provided, however,
         payment in shares of Common Stock may only occur if during the 20
         Trading Days immediately prior to the applicable Interest Payment Date
         (the "Interest Notice Period") and through and including the date such
         shares of Common Stock are issued to the Holder all of the Equity
         Conditions, unless waived by the Holder in writing, have been met and
         the Company shall have given the Holder notice in accordance with the
         notice requirements set forth below.

                  b) Company's Election to Pay Interest in Kind. Subject to the
         terms and conditions herein, the decision whether to pay interest
         hereunder in shares of Common Stock or cash shall be at the sole
         discretion of the Company. Prior to the commencement of an Interest
         Notice Period, the Company shall provide the Holder with written notice
         of its election to pay interest hereunder on the applicable Interest
         Payment Date either in cash, shares of Common Stock or a combination
         thereof (the Company may indicate in such notice that the election
         contained in such notice shall continue for later periods until
         revised) and the Interest Share Amount as to the applicable Interest
         Payment Date. During any Interest Notice Period, the Company's election
         (whether specific to an Interest Payment Date or continuous) shall be
         irrevocable as to such Interest Payment Date. Subject to the
         aforementioned conditions, failure to timely provide such written
         notice shall be deemed an election by the Company to pay the interest
         on such Interest Payment Date in cash. At any time the Company delivers
         a notice to the Holder of its election to pay the interest in shares of
         Common Stock, the Company shall file a prospectus supplement pursuant
         to Rule 424 disclosing such election.

                  c) Interest Calculations. Interest shall be calculated on the
         basis of a 360-day year and shall accrue daily commencing on the
         Original Issue Date until payment in full of the principal sum,
         together with all accrued and unpaid interest and other amounts which
         may become due hereunder, has been made. Payment of interest in shares
         of Common Stock shall otherwise occur pursuant to Section 4(d)(ii) and
         only for purposes of the payment of interest in shares, the Interest
         Payment Date shall be deemed the Conversion Date. Interest shall cease
         to accrue with respect to any principal amount converted, provided that
         the Company in fact delivers the Conversion Shares within the

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         time period required by Section 4(d)(ii). Interest hereunder will be
         paid to the Person in whose name this Debenture is registered on the
         records of the Company regarding registration and transfers of this
         Debenture (the "Debenture Register"). Except as otherwise provided
         herein, if at any time the Company pays interest partially in cash and
         partially in shares of Common Stock to the holders of the Debentures,
         then such payment shall be distributed ratably among the holders of the
         Debentures based on their (or their predecessor's initial purchases of
         Debentures pursuant to the Purchase Agreement.

                  d) Late Fee. All overdue accrued and unpaid interest to be
         paid hereunder shall entail a late fee at the rate of 18% per annum (or
         such lower maximum amount of interest permitted to be charged under
         applicable law) ("Late Fees") which will accrue daily, from the date
         such interest is due hereunder through and including the date of
         payment. Notwithstanding anything to the contrary contained herein, if
         on any Interest Payment Date the Company has elected to pay interest in
         Common Stock and is not able to pay accrued interest in the form of
         Common Stock because it does not then satisfy the conditions for
         payment in the form of Common Stock set forth above, then, at the
         option of the Holder, the Company, in lieu of (and in full satisfaction
         of) delivering either shares of Common Stock pursuant to this Section 2
         or paying the regularly scheduled cash interest payment, shall deliver,
         within three Trading Days of each applicable Interest Payment Date, an
         amount in cash equal to the product of the number of shares of Common
         Stock otherwise deliverable to the Holder in connection with the
         payment of interest due on such Interest Payment Date and the highest
         VWAP during the period commencing on the Interest Payment Date and
         ending on the Trading Day prior to the date such payment is made.

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

         SECTION 3. REGISTRATION OF TRANSFERS AND EXCHANGES.

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

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

                  c) Reliance on Debenture Register. Prior to due presentment to
         the Company for transfer of this Debenture, the Company and any agent
         of the Company may treat the Person in whose name this Debenture is
         duly registered on the Debenture Register as the owner hereof for the
         purpose of receiving payment as herein provided and for all other

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         purposes, whether or not this Debenture is overdue, and neither the
         Company nor any such agent shall be affected by notice to the contrary.

         SECTION 4. CONVERSION.

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

                  b) Conversion Price. The conversion price in effect on any
         Conversion Date shall be equal to $0.85 (subject to adjustment
         herein)(the "Conversion Price").

                  c) Conversion Limitations. The Company shall not effect any
         conversion of this Debenture, and a Holder shall not have the right to
         convert any portion of this Debenture to the extent that after giving
         effect to such conversion, such Holder (together with such Holder's
         affiliates, and any other person or entity acting as a group together
         with such Holder or any of such Holder's affiliates), as set forth on
         the applicable Notice of Conversion, would beneficially own in excess
         of the Beneficial Ownership Limitation (as defined below). For purposes
         of the foregoing sentence, the number of shares of Common Stock
         beneficially owned by such Holder and its affiliates shall include the
         number of shares of Common Stock issuable upon conversion of this
         Debenture with respect to which the determination of such sentence is
         being made, but shall exclude the number of shares of Common Stock
         which would be issuable upon (A) conversion of the remaining,
         nonconverted principal amount of this Debenture beneficially owned by
         such Holder or any of its affiliates and (B) exercise or conversion of
         the unexercised or

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         nonconverted portion of any other securities of the Company (including,
         without limitation, any other Debentures or the Warrants) subject to a
         limitation on conversion or exercise analogous to the limitation
         contained herein beneficially owned by such Holder or any of its
         affiliates. Except as set forth in the preceding sentence, for purposes
         of this Section 4(c), beneficial ownership shall be calculated in
         accordance with Section 13(d) of the Exchange Act and the rules and
         regulations promulgated thereunder. To the extent that the limitation
         contained in this Section 4(c) applies, the determination of whether
         this Debenture is convertible (in relation to other securities owned by
         such Holder together with any affiliates) and of which amounts of this
         Debenture are convertible shall be in the sole discretion of such
         Holder, and the submission of a Notice of Conversion shall be deemed to
         be such Holder's determination of whether this Debenture may be
         converted (in relation to other securities owned by such Holder) and
         which amounts of this Debenture are convertible, in each case subject
         to such aggregate percentage limitations. To ensure compliance with
         this restriction, each Holder will be deemed to represent to the
         Company each time it delivers a Notice of Conversion that such Notice
         of Conversion has not violated the restrictions set forth in this
         paragraph and the Company shall have no obligation to verify or confirm
         the accuracy of such determination. In addition, a determination as to
         any group status as contemplated above shall be determined in
         accordance with Section 13(d) of the Exchange Act and the rules and
         regulations promulgated thereunder. For purposes of this Section 4(c),
         in determining the number of outstanding shares of Common Stock, a
         Holder may rely on the number of outstanding shares of Common Stock as
         reflected in the most recent of the following: (A) the Company's most
         recent Form 10-QSB or Form 10-KSB, as the case may be, (B) a more
         recent public announcement by the Company or (C) any other notice by
         the Company or the Company's transfer agent setting forth the number of
         shares of Common Stock outstanding. Upon the written request of a
         Holder, the Company shall within two Trading Days confirm in writing to
         such Holder the number of shares of Common Stock then outstanding. In
         any case, the number of outstanding shares of Common Stock shall be
         determined after giving effect to the conversion or exercise of
         securities of the Company, including this Debenture, by such Holder or
         its affiliates since the date as of which such number of outstanding
         shares of Common Stock was reported. The Company, in refraining from or
         taking actions under this Section 4(c), may rely solely upon filings
         made by the Holder under Section 13(d) of the Exchange Act or written
         representation of the Holder as to its beneficial ownership. The
         "Beneficial Ownership Limitation" shall be 4.99% of the number of
         shares of the Common Stock outstanding immediately after giving effect
         to the issuance of shares of Common Stock issuable upon conversion of
         this Debenture held by the Holder. The Beneficial Ownership Limitation
         provisions of this Section 4(c) may be waived by such Holder, at the
         election of such Holder, upon not less than 61 days' prior notice to
         the Company to change the Beneficial Ownership Limitation to 9.99% of
         the number of shares of the Common Stock outstanding immediately after
         giving effect to the issuance of shares of Common Stock upon conversion
         of this Debenture held by the Holder, and the provisions of this
         Section 4(c) shall continue to apply. Upon such a change by a Holder of
         the Beneficial Ownership Limitation from such 4.99% limitation to such
         9.99% limitation, the Beneficial Ownership Limitation may not be waived
         by such Holder. The provisions of this paragraph shall be implemented
         in a manner otherwise than in strict conformity with the terms of this

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         Section 4(c) to correct this paragraph (or any portion hereof) which
         may be defective or inconsistent with the intended Beneficial Ownership
         Limitation herein contained or to make changes or supplements necessary
         or desirable to properly give effect to such limitation. The
         limitations contained in this paragraph shall apply to a successor
         holder of this Debenture.

                  d) Mechanics of Conversion

                  i. Conversion Shares Issuable Upon Conversion of Principal
         Amount. The number of shares of Common Stock issuable upon a conversion
         hereunder shall be determined by the quotient obtained by dividing (x)
         the outstanding principal amount of this Debenture to be converted by
         (y) the Conversion Price.

<PAGE>

                  ii. Delivery of Certificate Upon Conversion. Not later than
         three Trading Days after any Conversion Date, the Company will deliver
         or cause to be delivered to the Holder (A) a certificate or
         certificates representing the Conversion Shares which shall be free of
         restrictive legends and trading restrictions (other than those required
         by the Purchase Agreement) representing the number of shares of Common
         Stock being acquired upon the conversion of this Debenture (including,
         if the Company has given continuous notice pursuant to Section 2(b) for
         payment of interest in shares of Common Stock at least 20 Trading Days
         prior to the date on which the Conversion Notice is delivered to the
         Company, shares of Common Stock representing the payment of accrued
         interest otherwise determined pursuant to Section 2(a) but assuming
         that the Interest Payment Period is the 20 Trading Days period
         immediately prior to the date on which the Conversion Notice is
         delivered to the Company and (B) a bank check in the amount of accrued
         and unpaid interest (to the extent the Company is paying to pay accrued
         interest in cash). The Company shall, if available and if allowed under
         applicable securities laws, use its reasonable best efforts to deliver
         any certificate or certificates required to be delivered by the Company
         under this Section electronically through the Depository Trust
         Corporation or another established clearing corporation performing
         similar functions.

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

                  iv. Obligation Absolute; Partial Liquidated Damages. If the
         Company fails for any reason to deliver to the Holder such certificate
         or certificates pursuant to Section 4(d)(ii) by the third Trading Day
         after the Conversion Date, the Company shall pay to such Holder, in
         cash, as liquidated damages and not as a

                                       11
<PAGE>

         penalty, for each $1000 of principal amount being converted, $10 per
         Trading Day (increasing to $20 per Trading Day after 5 Trading Days
         after such damages begin to accrue) for each Trading Day after such
         third Trading Day until such certificates are delivered. The Company's
         obligations to issue and deliver the Conversion Shares upon conversion
         of this Debenture in accordance with the terms hereof are absolute and
         unconditional, irrespective of any action or inaction by the Holder to
         enforce the same, any waiver or consent with respect to any provision
         hereof, the recovery of any judgment against any Person or any action
         to enforce the same, or any setoff, counterclaim, recoupment,
         limitation or termination, or any breach or alleged breach by the
         Holder or any other Person of any obligation to the Company or any
         violation or alleged violation of law by the Holder or any other
         person, and irrespective of any other circumstance which might
         otherwise limit such obligation of the Company to the Holder in
         connection with the issuance of such Conversion Shares; provided,
         however, such delivery shall not operate as a waiver by the Company of
         any such action the Company may have against the Holder. In the event
         the Holder of this Debenture shall elect to convert any or all of the
         outstanding principal amount hereof, the Company may not refuse
         conversion based on any claim that the Holder or any one associated or
         affiliated with the Holder has been engaged in any violation of law,
         agreement or for any other reason, unless, an injunction from a court,
         on notice, restraining and or enjoining conversion of all or part of
         this Debenture shall have been sought and obtained and the Company
         posts a surety bond for the benefit of the Holder in the amount of 150%
         of the principal amount of this Debenture outstanding, which is subject
         to the injunction, which bond shall remain in effect until the
         completion of arbitration/litigation of the dispute and the proceeds of
         which shall be payable to such Holder to the extent it obtains
         judgment. In the absence of an injunction precluding the same, the
         Company shall issue Conversion Shares or, if applicable, cash, upon a
         properly noticed conversion. Nothing herein shall limit a Holder's
         right to pursue actual damages or declare an Event of Default pursuant
         to Section 8 herein for the Company's failure to deliver Conversion
         Shares within the period specified herein and such Holder shall have
         the right to pursue all remedies available to it at law or in equity
         including, without limitation, a decree of specific performance and/or
         injunctive relief. The exercise of any such rights shall not prohibit
         the Holder from seeking to enforce damages pursuant to any other
         Section hereof or under applicable law.

                  v. Compensation for Buy-In on Failure to Timely Deliver
         Certificates Upon Conversion. In addition to any other rights available
         to the Holder, if the Company fails for any reason to deliver to the
         Holder such certificate or certificates pursuant to Section 4(d)(ii) by
         the third Trading Day after the Conversion Date, and if after such
         third Trading Day the Holder is required by its brokerage firm to
         purchase (in an open market transaction or otherwise) Common Stock to
         deliver in satisfaction of a sale by such Holder of the Conversion
         Shares which the Holder anticipated receiving upon such conversion (a
         "Buy-In"), then the Company shall (A) pay in cash to the Holder (in
         addition to any remedies

                                       12
<PAGE>

         available to or elected by the Holder) the amount by which (x) the
         Holder's total purchase price (including brokerage commissions, if any)
         for the Common Stock so purchased exceeds (y) the product of (1) the
         aggregate number of shares of Common Stock that such Holder anticipated
         receiving from the conversion at issue multiplied by (2) the actual
         sale price of the Common Stock at the time of the sale (including
         brokerage commissions, if any) giving rise to such purchase obligation
         and (B) at the option of the Holder, either reissue (if surrendered)
         this Debenture in a principal amount equal to the principal amount of
         the attempted conversion or deliver to the Holder the number of shares
         of Common Stock that would have been issued had the Company timely
         complied with its delivery requirements under Section 4(d)(ii). For
         example, if the Holder purchases Common Stock having a total purchase
         price of $11,000 to cover a Buy-In with respect to an attempted
         conversion of this Debenture with respect to which the actual sale
         price of the Conversion Shares at the time of the sale (including
         brokerage commissions, if any) giving rise to such purchase obligation
         was a total of $10,000 under clause (A) of the immediately preceding
         sentence, the Company shall be required to pay the Holder $1,000. The
         Holder shall provide the Company written proof indicating the amounts
         payable to the Holder in respect of the Buy-In.

                  vi. Reservation of Shares Issuable Upon Conversion. The
         Company covenants that it will at all times reserve and keep available
         out of its authorized and unissued shares of Common Stock solely for
         the purpose of issuance upon conversion of this Debenture and payment
         of interest on this Debenture, each as herein provided, free from
         preemptive rights or any other actual contingent purchase rights of
         persons other than the Holder (and the other holders of the
         Debentures), not less than such number of shares of the Common Stock as
         shall (subject to the terms and conditions set forth in the Purchase
         Agreement) be issuable (taking into account the adjustments and
         restrictions of Section 5) upon the conversion of the outstanding
         principal amount of this Debenture and payment of interest hereunder.
         The Company covenants that all shares of Common Stock that shall be so
         issuable shall, upon issue, be duly and validly authorized, issued and
         fully paid, nonassessable.

                  vii. Fractional Shares. Upon a conversion hereunder the
         Company shall not be required to issue stock certificates representing
         fractions of shares of the Common Stock, but may if otherwise
         permitted, make a cash payment in respect of any final fraction of a
         share based on the VWAP at such time. If the Company elects not, or is
         unable, to make such a cash payment, the Holder shall be entitled to
         receive, in lieu of the final fraction of a share, one whole share of
         Common Stock.

                  viii. Transfer Taxes. The issuance of certificates for shares
         of the Common Stock on conversion of this Debenture shall be made
         without charge to the Holder hereof for any documentary stamp or
         similar taxes that may be payable

                                       13
<PAGE>

         in respect of the issue or delivery of such certificate, provided that
         the Company shall not be required to pay any tax that may be payable in
         respect of any transfer involved in the issuance and delivery of any
         such certificate upon conversion in a name other than that of the
         Holder of this Debenture so converted and the Company shall not be
         required to issue or deliver such certificates unless or until the
         person or persons requesting the issuance thereof shall have paid to
         the Company the amount of such tax or shall have established to the
         satisfaction of the Company that such tax has been paid.

         SECTION 5. CERTAIN ADJUSTMENTS.

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

                  b) Subsequent Equity Sales.

                  i. If the Company or any Subsidiary thereof, as applicable, at
         any time while this Debenture is outstanding, shall sell, grant any
         option to purchase, sell or grant any right to reprice its securities,
         or otherwise dispose of or issue any Common Stock or Common Stock
         Equivalents entitling any Person to acquire shares of Common Stock, at
         an effective price per share less than the then Conversion Price (such
         lower price, the "Base Conversion Price" and such issuances
         collectively, a "Dilutive Issuance"), as adjusted hereunder (if the
         holder of the Common Stock or Common Stock Equivalents so issued shall
         at any time, whether by operation of purchase price adjustments, reset
         provisions, floating conversion, exercise or exchange prices or
         otherwise, or due to warrants, options or rights per share which is
         issued in connection with such issuance, be entitled to receive shares
         of Common Stock at an effective price per share which is less than the
         Conversion Price, such issuance shall be deemed to have occurred for
         less

                                       14
<PAGE>

         than the Conversion Price on such date of the Dilutive Issuance), then
         the Conversion Price shall be reduced to equal the Base Conversion
         Price.

                  ii. The Company or any Subsidiary there, as applicable, at any
         time while this Debenture is outstanding, shall offer, sell, grant any
         option to purchase or offer, sell or grant any right to reprice its
         securities, or otherwise dispose of or issue (or announce any offer,
         sale, grant or any option to purchase or other disposition) any Common
         Stock or Common Stock Equivalents entitling any Person to acquire
         shares of Common Stock, at an effective price per share less than the
         VWAP on either the Trading Day immediately prior to the date agreements
         for such issuance are entered into or the date such issuance is
         consummated, whichever results in a higher VWAP, but more than the then
         effective Conversion Price (which is addressed in 5(b)(i) above) (such
         lower price, the "Market Base Conversion Price" and such issuances
         collectively, a "Market Dilutive Issuance"), as adjusted hereunder (if
         the holder of the Common Stock or Common Stock Equivalents so issued
         shall at any time, whether by operation of purchase price adjustments,
         reset provisions, floating conversion, exercise or exchange prices or
         otherwise, or due to warrants, options or rights per share which is
         issued in connection with such issuance, be entitled to receive shares
         of Common Stock at an effective price per share which is less than the
         Conversion Price, such issuance shall be deemed to have occurred for
         less than the Conversion Price on such date of the Market Dilutive
         Issuance) then the Conversion Price shall be reduced to a price
         determined by multiplying the then effective Conversion Price by a
         fraction, the numerator of which is the number of shares of Common
         Stock issued and outstanding immediately prior to the Market Dilutive
         Issuance plus the number of shares of Common Stock which the aggregate
         offering price for such Market Dilutive Issuance would purchase at the
         then Market Base Conversion Price, and the denominator of which shall
         be the sum of the number of shares of Common Stock issued and
         outstanding immediately prior to the Market Dilutive Issuance plus the
         number of shares of Common Stock so issued or issuable in connection
         with the Market Dilutive Issuance

                  iii. Such adjustments under this Section 5(b) shall be made
         whenever such Common Stock or Common Stock Equivalents are issued.
         Notwithstanding the foregoing, no adjustment will be made under this
         Section 5(b) in respect of an Exempt Issuance. The Company shall notify
         the Holder in writing, no later than the Business Day following the
         issuance of any Common Stock or Common Stock Equivalents subject to
         this section, indicating therein the applicable issuance price, or of
         applicable reset price, exchange price, conversion price and other
         pricing terms (such notice the "Dilutive Issuance Notice"). For
         purposes of clarification, whether or not the Company provides a
         Dilutive Issuance Notice pursuant to this Section 5(b), immediately
         after the occurrence of any Dilutive Issuance or Market Dilutive
         Issuance, after the date of such Dilutive Issuance or Market Dilutive
         Issuance the Holder is entitled to receive a number of Conversion

                                       15
<PAGE>

         Shares based upon the Base Conversion Price or the price determined
         pursuant to 5(b)(ii), as applicable, regardless of whether the Holder
         accurately refers to the Base Conversion Price or the price determined
         pursuant to 5(b)(ii) in the Notice of Conversion.

                  iv. Notwithstanding the foregoing, no adjustment shall be made
         pursuant to this Section 5(b) for an Exempt Issuance (defined in the
         Purchase Agreement.

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

                  d) Fundamental Transaction. If, at any time while this
         Debenture is outstanding, (A) the Company effects any merger or
         consolidation of the Company with or into another Person, (B) the
         Company effects any sale of all or substantially all of its assets in
         one or a series of related transactions, (C) any tender offer or
         exchange offer (whether by the Company or another Person) is completed
         pursuant to which holders of Common Stock are permitted to tender or
         exchange their shares for other securities, cash or property, or (D)
         the Company effects any reclassification of the Common Stock or any
         compulsory share exchange pursuant to which the Common Stock is
         effectively converted into or exchanged for other securities, cash or
         property (in any such case, a "Fundamental Transaction"), then upon any
         subsequent conversion of this Debenture, the Holder shall have the
         right to receive, for each Conversion Share that would have been
         issuable upon such conversion immediately prior to the occurrence of
         such Fundamental Transaction, the same kind and amount of securities,
         cash or property as it would have been entitled to receive upon the
         occurrence of such Fundamental Transaction if it had been, immediately
         prior to such Fundamental Transaction, the holder of one share of
         Common Stock (the "Alternate Consideration"). For purposes of any such
         conversion, the determination of the Conversion Price shall be
         appropriately adjusted to apply to such Alternate Consideration based
         on the amount of Alternate Consideration issuable in respect of one
         share of Common Stock in such Fundamental Transaction, and the

                                       16
<PAGE>

         Company shall apportion the Conversion Price among the Alternate
         Consideration in a reasonable manner reflecting the relative value of
         any different components of the Alternate Consideration. If holders of
         Common Stock are given any choice as to the securities, cash or
         property to be received in a Fundamental Transaction, then the Holder
         shall be given the same choice as to the Alternate Consideration it
         receives upon any conversion of this Debenture following such
         Fundamental Transaction. To the extent necessary to effectuate the
         foregoing provisions, any successor to the Company or surviving entity
         in such Fundamental Transaction shall issue to the Holder a new
         debenture consistent with the foregoing provisions and evidencing the
         Holder's right to convert such debenture into Alternate Consideration.
         The terms of any agreement pursuant to which a Fundamental Transaction
         is effected shall include terms requiring any such successor or
         surviving entity to comply with the provisions of this paragraph (d)
         and insuring that this Debenture (or any such replacement security)
         will be similarly adjusted upon any subsequent transaction analogous to
         a Fundamental Transaction.

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

                  f) Notice to the Holder.

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

                  ii. Notice to Allow Conversion by Holder. If (A) the Company
         shall declare a dividend (or any other distribution) on the Common
         Stock; (B) the Company shall declare a special nonrecurring cash
         dividend on or a redemption of the Common Stock; (C) the Company shall
         authorize the granting to all holders of the Common Stock rights or
         warrants to subscribe for or purchase any shares of capital stock of
         any class or of any rights; (D) the approval of any stockholders of the
         Company shall be required in connection with any reclassification of
         the Common Stock, any consolidation or merger to which the Company is a
         party, any sale or transfer of all or substantially all of the assets
         of the Company, of any compulsory share exchange whereby the Common
         Stock is converted into other securities, cash or property; (E) the
         Company shall authorize the voluntary or involuntary dissolution,
         liquidation or winding up of the affairs of the Company;

                                       17
<PAGE>

         then, in each case, the Company shall cause to be filed at each office
         or agency maintained for the purpose of conversion of this Debenture,
         and shall cause to be mailed to the Holder at its last addresses as it
         shall appear upon the stock books of the Company, at least 20 calendar
         days prior to the applicable record or effective date hereinafter
         specified, a notice stating (x) the date on which a record is to be
         taken for the purpose of such dividend, distribution, redemption,
         rights or warrants, or if a record is not to be taken, the date as of
         which the holders of the Common Stock of record to be entitled to such
         dividend, distributions, redemption, rights or warrants are to be
         determined or (y) the date on which such reclassification,
         consolidation, merger, sale, transfer or share exchange is expected to
         become effective or close, and the date as of which it is expected that
         holders of the Common Stock of record shall be entitled to exchange
         their shares of the Common Stock for securities, cash or other property
         deliverable upon such reclassification, consolidation, merger, sale,
         transfer or share exchange; provided that the failure to mail such
         notice or any defect therein or in the mailing thereof shall not affect
         the validity of the corporate action required to be specified in such
         notice. The Holder is entitled to convert this Debenture during the
         20-day period commencing the date of such notice to the effective date
         of the event triggering such notice.

         SECTION 6. REDEMPTION AND FORCED CONVERSION.

                  a) Redemption at Election of Holder. If the Company shall
         agree to sell substantially all of its assets in one or more
         transactions in which the consideration consists solely of cash, cash
         equivalents, assumption of indebtedness, or any combination thereof,
         the Holder shall have the right to require the Company, by written
         notice to the Company, to redeem this Debentures, in full and in cash,
         at the closing of such Change of Control Transaction, Fundamental
         Transaction or sale of assets. The aggregate amount payable upon such
         Change of Control Transaction, Fundamental Transaction or sale of
         assets shall be equal to the Cash Sale Redemption Amount. In the event
         that the Company fails to pay the Cash Sale Redemption Amount on or
         prior to the applicable closing date, the interest rate on this
         Debenture shall accrue at the rate of 18% per annum, or such lower
         maximum amount of interest permitted to be charged under applicable
         law, until the Cash Sale Redemption Amount is paid in full.
         Concurrently with the payment in full of the Cash Sale Redemption
         Amount, the Holder shall surrender this Debenture to or as directed by
         the Company (or the successor company). The Holder may elect to convert
         the outstanding principal amount of the Debenture pursuant to Section 4
         prior to actual payment in cash for the redemption under this Section 6
         by fax delivery of a Notice of Conversion to the Company.

                  b). Forced Conversion. Notwithstanding anything herein to the
         contrary, if after the Effective Date, each of the VWAPs for any 20
         consecutive Trading Days (such period commencing only after the
         Effective Date, such period the "Threshold Period") exceeds 400% of the
         then effective Conversion Price, the Company may, within 1 Trading Day
         of the end of any such period, deliver a notice to the Holder (a
         "Forced

                                       18
<PAGE>

         Conversion Notice" and the date such notice is received by the Holder,
         the "Forced Conversion Notice Date") to cause the Holder to convert, at
         the Company's sole discretion, all or part of the then outstanding
         principal amount of Debentures pursuant to Section 4, it being
         understood that the "Conversion Date" for purposes of Section 4 shall
         be deemed to occur on the thirtieth Trading Day following the Forced
         Conversion Notice Date (such thirtieth Trading Day being referred to as
         the "Forced Conversion Date"). The Company may not deliver a Forced
         Conversion Notice, and any Forced Conversion Notice delivered by the
         Corporation shall not be effective, unless all of the Equity Conditions
         are met on each Trading Day occurring during the 10 Trading Days
         immediately prior to the applicable Threshold Period, during the
         applicable Threshold Period and from the end of the Threshold Period
         through and including the later of the Forced Conversion Date and the
         date such Conversion Shares pursuant to such conversion are delivered
         to the Holder. Any Forced Conversion shall be applied ratably to all
         Holders based on their initial purchases of Debentures pursuant to the
         Purchase Agreement. For purposes of clarification, a Forced Conversion
         shall be subject to all of the provisions of Section 4, including,
         without limitation, the provision requiring payment of liquidated
         damages and limitations on conversions.

         SECTION 7. NEGATIVE COVENANTS. So long as any portion of this Debenture
is outstanding, the Company will not and will not permit any of its Subsidiaries
to directly or indirectly without the prior written consent of the holders of at
least 60% of the principal amount of Debentures and Prior Debentures then
outstanding:

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

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

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

                  d) repay, repurchase or offer to repay, repurchase or
         otherwise acquire more than a de minimis number of shares of Common
         Stock or Common Stock Equivalents other than (i) as to the Conversion
         Shares to the extent permitted or required under the Transaction
         Documents, (ii) as otherwise permitted by the Transaction Documents or
         (iii) shares of Common Stock held by former employees of the Company
         which the Company is entitled to repurchased from such employees
         pursuant to the contractual rights relating to their termination of
         employment but not to exceed $50,000 in any 12 month period;

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

                                       19
<PAGE>

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

                  g) enter into any Fundamental Transaction or Change of Control
         Transaction without the consent of the Holders of 60% of the
         outstanding principal amount of the Debentures, Except with respect to
         a sale of assets of the Company pursuant to which the Company is
         required to (i) redeem all outstanding Debentures under Section 6(a)
         hereof and (ii) redeem all the Warrants pursuant to Section 1(f)
         therof.

         SECTION 8. EVENTS OF DEFAULT.

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

                  i. any default in the payment of (A) the principal amount of
         any Debenture, or (B) interest (including Late Fees) on, or liquidated
         damages in respect of, any Debenture, as and when the same shall become
         due and payable (whether on a Conversion Date or the Maturity Date or
         by acceleration or otherwise) which default is not cured within 3
         Trading Days after written notice from the Holder;

                  ii. the Company shall materially fail to observe or perform
         any other covenant or agreement contained in this Debenture or any
         other Debenture (other than a breach by the Company of its obligations
         to deliver shares of Common Stock to the Holder upon conversion which
         breach is addressed in clause (xi) below) which failure is not cured,
         if possible to cure, within the earlier to occur of (A) 10 Trading Days
         after notice of such default sent by the Holder or by any other Holder
         and (B)15 Trading Days after the Company shall become or should have
         become aware of such failure;

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

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

                                       20
<PAGE>

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

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

                  vii. the Common Stock shall not be eligible for quotation on
         or quoted for trading on a Trading Market for at least five consecutive
         Trading Days (other than as a result of events that affect the Trading
         Market in general);

                  viii. the Company shall redeem or repurchase more than a de
         minimis number of its outstanding shares of Common Stock or other
         equity securities of the Company (other than redemptions of Conversion
         Shares and repurchases of

                                       21
<PAGE>

         shares of Common Stock or other equity securities of departing officers
         and directors of the Company, provided that such repurchases shall not
         exceed $200,000, in the aggregate, for all officers, directors and
         employees during any 12 month period);

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

                  x. any monetary judgment, writ or similar final process shall
         be entered or filed against the Company, any Subsidiary or any of their
         respective property or other assets for than $100,000, and shall remain
         unvacated, unbonded or unstayed for a period of 45 calendar days. i.

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

         SECTION 9. MISCELLANEOUS.

                  a) Notices. Any and all notices or other communications or
         deliveries to be provided by the Holder hereunder, including, without
         limitation, any Notice of Conversion, shall be in writing and delivered
         personally, by facsimile, sent by a nationally recognized overnight
         courier service, addressed to the Company, at the address set forth
         above, facsimile number (908) 769-0206, ATTN: OLEG LOGVINOV or such
         other address or facsimile number as the Company may specify for such
         purposes by notice to the Holder delivered in accordance with this
         Section. Any and all notices or other

                                       22
<PAGE>

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

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

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

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

                                       23
<PAGE>

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

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

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

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

                                       24
<PAGE>

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

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

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

                                       25
<PAGE>

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

                                          CDKNET.COM, INC.

                                          By: __________________________
                                              Name: Oleg Logvinov
                                              Title: Chief Executive Officer

                                       26
<PAGE>

                                     ANNEX A

                              NOTICE OF CONVERSION

         The undersigned hereby elects to convert principal under the 6% Secured
Convertible Debenture of CDKNet.Com, Inc., a Delaware corporation (the
"Company"), due on December 28 , 2008 into shares of common stock, par value
$.0001 per share (the "Common Stock"), of the Company according to the
conditions hereof, as of the date written below. If shares are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for
such transfer taxes, if any.

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

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

Conversion calculations:
                                Date to Effect Conversion:

                                Principal Amount of Debenture to be Converted:

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

                                Number of shares of Common Stock to be issued:

                                Signature:

                                Name:

                                Address:

                                       27
<PAGE>

                                   SCHEDULE 1

                               CONVERSION SCHEDULE

The 6% Secured Convertible Debentures due on December 28, 2008 in the aggregate
principal amount of $________ issued by CDKNet.com, Inc. This Conversion
Schedule reflects conversions made under Section 4 of the above referenced
Debenture.

                                     Dated:

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

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

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

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

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

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

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

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

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

                                       28EXHIBIT 4.2
                                                                     -----------

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

                          COMMON STOCK PURCHASE WARRANT

                 To Purchase ________ Shares of Common Stock of

                                CDKNET.COM, INC.

                  THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies
that, for value received, _____________ (the "Holder"), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the "Initial Exercise Date")
and on or prior to the close of business on the _____(1) (the "Termination
Date") but not thereafter, to subscribe for and purchase from CDKNet.com, Inc.,
a Delaware corporation (the "Company"), up to ______ shares (the "Warrant
Shares") of Common Stock, par value $.0001 per share, of the Company (the
"Common Stock"). The purchase price of one share of Common Stock under this
Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

         SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the "Purchase Agreement"), dated June 30, 2006, among the
Company and the purchasers signatory thereto.

         SECTION 2. EXERCISE.

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

_____________________
(1) December 28, 2010 as to Long Term Warrants and the earlier of December 28,
2010 or the 12 month anniversary of the Effective Date as to Short Term
Warrants.

                                        1
<PAGE>

         registered Holder at the address of such Holder appearing on the books
         of the Company); provided, however, within 5 Trading Days of the date
         said Notice of Exercise is delivered to the Company, if this Warrant is
         exercised in full, the Holder shall have surrendered this Warrant to
         the Company and the Company shall have received payment of the
         aggregate Exercise Price of the shares thereby purchased by wire
         transfer or cashier's check drawn on a United States bank.
         Notwithstanding anything herein to the contrary, the Holder shall not
         be required to physically surrender this Warrant to the Company until
         the Holder has purchased all of the Warrant Shares available hereunder
         and the Warrant has been exercised in full. Partial exercises of this
         Warrant resulting in purchases of a portion of the total number of
         Warrant Shares available hereunder shall have the effect of lowering
         the outstanding number of Warrant Shares purchasable hereunder in an
         amount equal to the applicable number of Warrant Shares purchased. The
         Holder and the Company shall maintain records showing the number of
         Warrant Shares purchased and the date of such purchases. The Company
         shall deliver any objection to any Notice of Exercise Form within 1
         Business Day of receipt of such notice. In the event of any dispute or
         discrepancy, the records of the Holder shall be controlling and
         determinative in the absence of manifest error. The Holder and any
         assignee, by acceptance of this Warrant, acknowledge and agree that, by
         reason of the provisions of this paragraph, following the purchase of a
         portion of the Warrant Shares hereunder, the number of Warrant Shares
         available for purchase hereunder at any given time may be less than the
         amount stated on the face hereof.

                  b) Exercise Price. The exercise price of the Common Stock
         under this Warrant shall be $_____(2), subject to adjustment hereunder
         (the "Exercise Price").

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

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

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

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

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

___________________
(2) $0.85 as to Short Term Warrants and $1.00 as to Long Term Warrants.

                                        2
<PAGE>

                  d) Exercise Limitations. The Company shall not effect any
         exercise of this Warrant, and a Holder shall not have the right to
         exercise any portion of this Warrant, pursuant to Section 2(c) or
         otherwise, to the extent that after giving effect to such issuance
         after exercise, such Holder (together with such Holder's affiliates,
         and any other person or entity acting as a group together with such
         Holder or any of such Holder's affiliates), as set forth on the
         applicable Notice of Exercise, would beneficially own in excess of the
         Beneficial Ownership Limitation (as defined below). For purposes of the
         foregoing sentence, the number of shares of Common Stock beneficially
         owned by such Holder and its affiliates shall include the number of
         shares of Common Stock issuable upon exercise of this Warrant with
         respect to which the determination of such sentence is being made, but
         shall exclude the number of shares of Common Stock which would be
         issuable upon (A) exercise of the remaining, nonexercised portion of
         this Warrant beneficially owned by such Holder or any of its affiliates
         and (B) exercise or conversion of the unexercised or nonconverted
         portion of any other securities of the Company (including, without
         limitation, any other Debentures or Warrants) subject to a limitation
         on conversion or exercise analogous to the limitation contained herein
         beneficially owned by such Holder or any of its affiliates. Except as
         set forth in the preceding sentence, for purposes of this Section 2(d),
         beneficial ownership shall be calculated in accordance with Section
         13(d) of the Exchange Act and the rules and regulations promulgated
         thereunder, it being acknowledged by a Holder that the Company is not
         representing to such Holder that such calculation is in compliance with
         Section 13(d) of the Exchange Act and such Holder is solely responsible
         for any schedules required to be filed in accordance therewith. To the
         extent that the limitation contained in this Section 2(d) applies, the
         determination of whether this Warrant is exercisable (in relation to
         other securities owned by such Holder) and of which a portion of this
         Warrant is exercisable shall be in the sole discretion of a Holder, and
         the submission of a Notice of Exercise shall be deemed to be each
         Holder's determination of whether this Warrant is exercisable (in
         relation to other securities owned by such Holder) and of which portion
         of this Warrant is exercisable, in each case subject to such aggregate
         percentage limitation, and the Company shall have no obligation to
         verify or confirm the accuracy of such determination. In addition, a
         determination as to any group status as contemplated above shall be
         determined in accordance with Section 13(d) of the Exchange Act and the
         rules and regulations promulgated thereunder. For purposes of this
         Section 2(d), in determining the number of outstanding shares of Common
         Stock, a Holder may rely on the number of outstanding shares of Common
         Stock as reflected in (x) the Company's most recent Form 10-QSB or Form
         10-KSB, as the case may be, (y) a more recent public announcement by
         the Company or (z) any other notice by the Company or the Company's
         Transfer Agent setting forth the number of shares of Common Stock
         outstanding. Upon the written or oral request of a Holder, the Company
         shall within two Trading Days confirm orally and in writing to such
         Holder the number of shares of Common Stock then outstanding. In any
         case, the number of outstanding shares of Common Stock shall be
         determined after giving effect to the conversion or exercise of
         securities of the Company, including this Warrant, by such Holder or
         its affiliates since the date as of which such number of outstanding
         shares of Common Stock was reported. The "Beneficial Ownership
         Limitation" shall be 4.99% of the number of shares of the Common Stock
         outstanding immediately after giving effect to the issuance of shares
         of Common Stock issuable upon

                                        3
<PAGE>

         exercise of this Warrant. The Beneficial Ownership Limitation
         provisions of this Section 2(d) may be waived by such Holder, at the
         election of such Holder, upon not less than 61 days' prior notice to
         the Company to change the Beneficial Ownership Limitation to 9.99% of
         the number of shares of the Common Stock outstanding immediately after
         giving effect to the issuance of shares of Common Stock upon exercise
         of this Warrant, and the provisions of this Section 2(d) shall continue
         to apply. Upon such a change by a Holder of the Beneficial Ownership
         Limitation from such 4.99% limitation to such 9.99% limitation, the
         Beneficial Ownership Limitation may not be waived by such Holder. The
         provisions of this paragraph shall be implemented in a manner otherwise
         than in strict conformity with the terms of this Section 2(d) to
         correct this paragraph (or any portion hereof) which may be defective
         or inconsistent with the intended Beneficial Ownership Limitation
         herein contained or to make changes or supplements necessary or
         desirable to properly give effect to such limitation. The limitations
         contained in this paragraph shall apply to a successor holder of this
         Warrant.

                  e) Mechanics of Exercise.

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

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

                  iii. Delivery of New Warrants Upon Exercise. If this Warrant
         shall have been exercised in part, the Company shall, at the request of
         a Holder and upon surrender of this Warrant certificate, at the time of

                                        4
<PAGE>

         delivery of the certificate or certificates representing Warrant
         Shares, deliver to Holder a new Warrant evidencing the rights of Holder
         to purchase the unpurchased Warrant Shares called for by this Warrant,
         which new Warrant shall in all other respects be identical with this
         Warrant.

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

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

                                        5
<PAGE>

                  vi. No Fractional Shares or Scrip. No fractional shares or
         scrip representing fractional shares shall be issued upon the exercise
         of this Warrant. As to any fraction of a share which Holder would
         otherwise be entitled to purchase upon such exercise, the Company shall
         pay a cash adjustment in respect of such final fraction in an amount
         equal to such fraction multiplied by the Exercise Price.

                  vii. Charges, Taxes and Expenses. Issuance of certificates for
         Warrant Shares shall be made without charge to the Holder for any issue
         or transfer tax or other incidental expense in respect of the issuance
         of such certificate, all of which taxes and expenses shall be paid by
         the Company, and such certificates shall be issued in the name of the
         Holder or in such name or names as may be directed by the Holder;
         provided, however, that in the event certificates for Warrant Shares
         are to be issued in a name other than the name of the Holder, this
         Warrant when surrendered for exercise shall be accompanied by the
         Assignment Form attached hereto duly executed by the Holder; and the
         Company may require, as a condition thereto, the payment of a sum
         sufficient to reimburse it for any transfer tax incidental thereto.

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

                  f) Redemption at Election of Holder. If the Company shall
         agree to sell substantially all of its assets in one or more
         transactions in which the consideration consists solely of cash, cash
         equivalents, assumption of indebtedness, or any combination thereof,
         the Holder shall have the right to require the Company, by written
         notice to the Company, to redeem this Warrant, in full and in cash, at
         the closing of such sale of assets. The aggregate amount payable in
         full redemption of the Warrants required to be redeemed upon such sale
         of assets shall be equal to the Warrant Cash Sale Redemption Amount (as
         defined below). In the event that the Company fails to pay the Warrant
         Cash Sale Redemption Amount within three business days of the closing
         of the sale transaction, interest shall accrue on the unpaid Warrant
         Cash Redemption Amount at the rate of 18% per annum, or such lower
         maximum amount of interest permitted to be charged under applicable
         law, until the Warrant Cash Sale Redemption Amount is paid in full.
         Concurrently with the payment in full of the Warrant Cash Sale
         Redemption Amount, the Holder shall surrender this Warrant to or as
         directed by the Company (or the successor company). The Holder may
         elect to exercise this Warrant pursuant to Sections 2(a) or 2(c) hereof
         prior to actual payment in cash for the redemption.

                  g) Definitions Applicable to Section 2(f). For the purposes of
         Section 2(f):

                           i. "Warrant Cash Sale Redemption Amount" shall equal
                  the sum of (i) all unexercised Warrant Shares underlying this
                  Warrant if the Warrants were issued pursuant to a cashless
                  exercise exercised on the date the redemption right hereunder
                  is exercised based on the Effective Price (as defined below)
                  and (ii) all

                                        6
<PAGE>

                  other amounts, costs, expenses and liquidated damages due in
                  respect of this Debenture The "Effective Price" shall be the
                  cash consideration paid by the acquirer in such event (less
                  the amount paid in redemption of the Debentures in clause (i)
                  of the definition of Cash Sale Redemption Amount set forth
                  therein) divided by the sum of; (x) the issued and outstanding
                  shares of Common Stock of the Company then outstanding and (y)
                  the shares of Common Stock into which the outstanding
                  Debentures may be converted on the day immediately preceding
                  the record date fixed for determining the holders of shares of
                  Common Stock eligible to receive a distribution (or if no such
                  date has been fixed, the date of the day immediately preceding
                  the closing of the transaction) and (z) the number of shares
                  deemed issuable to the Warrant holders pursuant to the
                  mandatory redemption provisions in this and the other Warrants
                  which take effect upon sale of assets for cash consideration
                  whether or not any Warrant holder shall have elected to have
                  their Warrants Redeemed; provided, however, that the number of
                  shares of Common Stock issuable on conversion of the
                  Debentures and issuable upon exercise of the Warrants for this
                  purpose shall be determined on a fully converted or exercised
                  basis and ignoring any conversion or exercise limitations
                  therein.

         SECTION 3. CERTAIN ADJUSTMENTS.

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

                  b) Subsequent Equity Sales.

                  i. If the Company or any Subsidiary thereof, as applicable, at
         any time while this Warrant is outstanding, shall (except for an Exempt
         Issuance) offer, sell, grant any option to purchase or offer, sell or
         grant any right to reprice its securities, or otherwise dispose of or
         issue (or announce any offer, sale, grant or any option to purchase or
         other disposition) any Common Stock or Common

                                        7
<PAGE>

         Stock Equivalents entitling any Person to acquire shares of Common
         Stock, at an effective price per share less than the then Exercise
         Price (such lower price, the "Base Share Price" and such issuances
         collectively, a "Dilutive Issuance"), as adjusted hereunder (if the
         holder of the Common Stock or Common Stock Equivalents so issued shall
         at any time, whether by operation of purchase price adjustments, reset
         provisions, floating conversion, exercise or exchange prices or
         otherwise, or due to warrants, options or rights per share which is
         issued in connection with such issuance, be entitled to receive shares
         of Common Stock at an effective price per share which is less than the
         Exercise Price, such issuance shall be deemed to have occurred for less
         than the Exercise Price on such date of the Dilutive Issuance), then
         the Exercise Price shall be reduced and only reduced to equal the Base
         Share Price and the number of Warrant Shares issuable hereunder shall
         be increased such that the aggregate Exercise Price payable hereunder,
         after taking into account the decrease in the Exercise Price, shall be
         equal to the aggregate Exercise Price prior to such adjustment.

                  ii. If the Company or any Subsidiary there, as applicable, at
         any time while this Warrant is outstanding, shall offer, sell, grant
         any option to purchase or offer, sell or grant any right to reprice its
         securities, or otherwise dispose of or issue (or announce any offer,
         sale, grant or any option to purchase or other disposition) any Common
         Stock or Common Stock Equivalents entitling any Person to acquire
         shares of Common Stock, at an effective price per share less than the
         VWAP on either the Trading Day immediately prior to the date agreements
         for such issuance are entered into or the date such issuance is
         consummated, whichever results in a higher VWAP, but more than the then
         effective Exercise Price (which is addressed in 3(b)(i) above) (such
         lower price, the "Market Base Price" and such issuances collectively, a
         "Market Dilutive Issuance"), as adjusted hereunder (if the holder of
         the Common Stock or Common Stock Equivalents so issued shall at any
         time, whether by operation of purchase price adjustments, reset
         provisions, floating conversion, exercise or exchange prices or
         otherwise, or due to warrants, options or rights per share which is
         issued in connection with such issuance, be entitled to receive shares
         of Common Stock at an effective price per share which is less than the
         Exercise Price, such issuance shall be deemed to have occurred for less
         than the Exercise Price on such date of the Market Dilutive Issuance)
         then the Exercise Price shall be reduced to a price determined by
         multiplying the then effective Exercise Price by a fraction, the
         numerator of which is the number of shares of Common Stock issued and
         outstanding immediately prior to the Market Dilutive Issuance plus the
         number of shares of Common Stock which the aggregate offering price for
         such Market Dilutive Issuance would purchase at the then Market Base
         Price, and the denominator of which shall be the sum of the number of
         shares of Common Stock issued and outstanding immediately prior to the
         Market Dilutive Issuance plus the number of shares of Common Stock so
         issued or issuable in connection with the Market Dilutive Issuance and
         the number of Warrant Shares issuable hereunder shall be increased such
         that the aggregate Exercise Price payable hereunder, after taking into
         account the decrease in the Exercise Price, shall be equal to the
         aggregate Exercise Price prior to such adjustment.

                                        8
<PAGE>

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

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

                  d) Fundamental Transaction. If, at any time while this Warrant
         is outstanding, (A) the Company effects any merger or consolidation of
         the Company with or into another Person, (B) the Company effects any
         sale of all or substantially all of its assets in one or a series of
         related transactions, (C) any tender offer or exchange offer (whether
         by the Company or another Person) is completed pursuant to which
         holders of Common Stock are permitted to tender or exchange their
         shares for other securities, cash or property, or (D) the Company
         effects any reclassification of the Common Stock or any compulsory
         share exchange pursuant to which the Common Stock is effectively
         converted into or exchanged for other securities, cash or property (in
         any such case, a "Fundamental Transaction"), then, upon any subsequent
         exercise of this Warrant, the Holder shall have the right to receive,
         for each Warrant Share that would have been

                                        9
<PAGE>

         issuable upon such exercise immediately prior to the occurrence of such
         Fundamental Transaction, at the option of the Holder, (a) upon exercise
         of this Warrant, the number of shares of Common Stock of the successor
         or acquiring corporation or of the Company, if it is the surviving
         corporation, and any additional consideration (the "Alternate
         Consideration") receivable upon or as a result of such reorganization,
         reclassification, merger, consolidation or disposition of assets by a
         Holder of the number of shares of Common Stock for which this Warrant
         is exercisable immediately prior to such event or (b) if the Company is
         acquired in an all cash transaction, cash equal to the value of this
         Warrant as determined in accordance with the Black-Scholes option
         pricing formula. For purposes of any such exercise, the determination
         of the Exercise Price shall be appropriately adjusted to apply to such
         Alternate Consideration based on the amount of Alternate Consideration
         issuable in respect of one share of Common Stock in such Fundamental
         Transaction, and the Company shall apportion the Exercise Price among
         the Alternate Consideration in a reasonable manner reflecting the
         relative value of any different components of the Alternate
         Consideration. If holders of Common Stock are given any choice as to
         the securities, cash or property to be received in a Fundamental
         Transaction, then the Holder shall be given the same choice as to the
         Alternate Consideration it receives upon any exercise of this Warrant
         following such Fundamental Transaction. To the extent necessary to
         effectuate the foregoing provisions, any successor to the Company or
         surviving entity in such Fundamental Transaction shall issue to the
         Holder a new warrant consistent with the foregoing provisions and
         evidencing the Holder's right to exercise such warrant into Alternate
         Consideration. The terms of any agreement pursuant to which a
         Fundamental Transaction is effected shall include terms requiring any
         such successor or surviving entity to comply with the provisions of
         this Section 3(d) and insuring that this Warrant (or any such
         replacement security) will be similarly adjusted upon any subsequent
         transaction analogous to a Fundamental Transaction.

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

                  f) Voluntary Adjustment By Company. The Company may at any
         time during the term of this Warrant reduce the then current Exercise
         Price to any amount and for any period of time deemed appropriate by
         the Board of Directors of the Company.

                  g) Notice to Holders.

                  i. Adjustment to Exercise Price. Whenever the Exercise Price
         is adjusted pursuant to this Section 3, the Company shall promptly mail
         to each Holder a notice setting forth the Exercise Price after such
         adjustment and setting forth a brief statement of the facts requiring
         such adjustment. If the Company issues a variable rate security,
         despite the prohibition thereon in the Purchase Agreement, the Company
         shall be deemed to have issued Common Stock or Common Stock Equivalents
         at the lowest

                                       10
<PAGE>

         possible conversion or exercise price at which such securities may be
         converted or exercised in the case of a Variable Rate Transaction (as
         defined in the Purchase Agreement).

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

         SECTION 4. TRANSFER OF WARRANT.

                  a) Transferability. Subject to compliance with any applicable
         securities laws and the conditions set forth in Sections 5(a) and 4(d)
         hereof and to the provisions of Section 4.1 of the Purchase Agreement,
         this Warrant and all rights hereunder are transferable, in whole or in
         part, upon surrender of this Warrant at the principal office of the
         Company, together with a written assignment of this Warrant
         substantially in the form attached hereto duly executed by the Holder
         or its agent or attorney and funds sufficient to pay any transfer taxes
         payable upon the making of such transfer. Upon such surrender

                                       11
<PAGE>

         and, if required, such payment, the Company shall execute and deliver a
         new Warrant or Warrants in the name of the assignee or assignees and in
         the denomination or denominations specified in such instrument of
         assignment, and shall issue to the assignor a new Warrant evidencing
         the portion of this Warrant not so assigned, and this Warrant shall
         promptly be cancelled. A Warrant, if properly assigned, may be
         exercised by a new holder for the purchase of Warrant Shares without
         having a new Warrant issued.

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

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

                  d) Transfer Restrictions. If, at the time of the surrender of
         this Warrant in connection with any transfer of this Warrant, the
         transfer of this Warrant shall not be registered pursuant to an
         effective registration statement under the Securities Act and under
         applicable state securities or blue sky laws, the Company may require,
         as a condition of allowing such transfer (i) that the Holder or
         transferee of this Warrant, as the case may be, furnish to the Company
         a written opinion of counsel (which opinion shall be in form, substance
         and scope customary for opinions of counsel in comparable transactions)
         to the effect that such transfer may be made without registration under
         the Securities Act and under applicable state securities or blue sky
         laws, (ii) that the holder or transferee execute and deliver to the
         Company an investment letter in form and substance acceptable to the
         Company and (iii) that the transferee be an "accredited investor" as
         defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
         promulgated under the Securities Act or a qualified institutional buyer
         as defined in Rule 144A(a) under the Securities Act.

         SECTION 5. MISCELLANEOUS.

                  a) Title to Warrant. Prior to the Termination Date and subject
         to compliance with applicable laws and Section 4 of this Warrant, this
         Warrant and all rights hereunder are transferable, in whole or in part,
         at the office or agency of the Company by the Holder in person or by
         duly authorized attorney, upon surrender of this Warrant together with
         the Assignment Form annexed hereto properly endorsed. The transferee
         shall sign an investment letter in form and substance reasonably
         satisfactory to the Company.

                  b) No Rights as Shareholder Until Exercise. This Warrant does
         not entitle the Holder to any voting rights or other rights as a
         shareholder of the Company prior to

                                       12
<PAGE>

         the exercise hereof. Upon the surrender of this Warrant and the payment
         of the aggregate Exercise Price (or by means of a cashless exercise),
         the Warrant Shares so purchased shall be and be deemed to be issued to
         such Holder as the record owner of such shares as of the close of
         business on the later of the date of such surrender or payment.

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

                  d) Saturdays, Sundays, Holidays, etc. If the last or appointed
         day for the taking of any action or the expiration of any right
         required or granted herein shall be a Saturday, Sunday or a legal
         holiday, then such action may be taken or such right may be exercised
         on the next succeeding day not a Saturday, Sunday or legal holiday.

                  e) Authorized Shares.

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

                           Except and to the extent as waived or consented to by
                  the Holder, the Company shall not by any action, including,
                  without limitation, amending its certificate of incorporation
                  or through any reorganization, transfer of assets,
                  consolidation, merger, dissolution, issue or sale of
                  securities or any other voluntary action, avoid or seek to
                  avoid the observance or performance of any of the terms of
                  this Warrant, but will at all times in good faith assist in
                  the carrying out of all such terms and in the taking of all
                  such actions as may be necessary or appropriate to protect the
                  rights of Holder as set forth in this Warrant against
                  impairment. Without limiting the generality of the foregoing,
                  the Company will (a) not increase the par value of any Warrant
                  Shares above the amount payable therefor upon such exercise
                  immediately prior to such increase in par value, (b) take all
                  such action as may be necessary or appropriate in order that
                  the Company

                                       13
<PAGE>

                  may validly and legally issue fully paid and nonassessable
                  Warrant Shares upon the exercise of this Warrant, and (c) use
                  commercially reasonable efforts to obtain all such
                  authorizations, exemptions or consents from any public
                  regulatory body having jurisdiction thereof as may be
                  necessary to enable the Company to perform its obligations
                  under this Warrant.

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

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

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

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

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

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

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

                                       14
<PAGE>

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

                  m) Amendment. This Warrant may be modified or amended or the
         provisions hereof waived with the written consent of the Company and
         the Holders of [60%] of the then outstanding Warrants.

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

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

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

                                       15
<PAGE>

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

Dated:  June __, 2006

                                        CDKNET.COM, INC.

                                        By: ____________________________
                                            Name: Oleg Logvinov
                                            Title: Chief Executive Officer

                                       16
<PAGE>

                               NOTICE OF EXERCISE

TO: CDKNET.COM, INC.

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

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

         [ ] in lawful money of the United States; or

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

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

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

The Warrant Shares shall be delivered to the following:

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

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

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

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

[SIGNATURE OF HOLDER]
---------
Name of Investing Entity: _____________________________________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: ________________________
Name of Authorized Signatory: _________________________________________________
Title of Authorized Signatory: ________________________________________________
Date: _________________________________________________________________________

<PAGE>

                                 ASSIGNMENT FORM

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

         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

________________________________________________________________.

________________________________________________________________

                                             Dated:  ______________, _______

                  Holder's Signature: ___________________________

                  Holder's Address: _____________________________

                                    _____________________________

Signature Guaranteed: ___________________________________________

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

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