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EXHIBIT 10.3

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:  _________ __, 2006
Original Conversion Price (subject to adjustment herein): $0.12

                                                               $---------------

                     ____(1)% SECURED CONVERTIBLE DEBENTURE
                            DUE _________ ____, 2008

         THIS SECURED CONVERTIBLE DEBENTURE is one of a series of duly
authorized and validly issued Secured Convertible Debentures of Armor Electric
Inc., a Florida corporation, having its principal place of business at
_____________________________ (the "COMPANY"), designated as its ___% Secured
Convertible Debenture, due _________ ___, 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, if paid on or before
_________ ___, 2007 $_______________(2) and if paid after _________ ___, 2007,
$_______(3) (any reference in the transactions documents to principal amount
shall automatically adjust upward after _________ __, 2007), or such earlier
date as this Debenture is required or permitted to be repaid as provided
hereunder (the "MATURITY DATE"), 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:

_________________________
(1)   Prime plus 3% as of the date of the Purchase Agreement
(2)   100% of the Subscription Amount
(3)   The Principal Amount

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         SECTION 1. DEFINITIONS. For the purposes hereof, in addition to the
terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement and
(b) the following terms shall have the following meanings:

                  "ALTERNATE CONSIDERATION" shall have the meaning set forth in
         Section 5(e).

                  "BANKRUPTCY EVENT" means any of the following events: (a) the
         Company or any Significant Subsidiary (as such term is defined in Rule
         1-02(w) of Regulation S-X) thereof commences a case or other proceeding
         under any bankruptcy, reorganization, arrangement, adjustment of debt,
         relief of debtors, dissolution, insolvency or liquidation or similar
         law of any jurisdiction relating to the Company or any Significant
         Subsidiary thereof; (b) there is commenced against the Company or any
         Significant Subsidiary thereof any such case or proceeding that is not
         dismissed within 60 days after commencement; (c) the Company or any
         Significant Subsidiary thereof is adjudicated insolvent or bankrupt or
         any order of relief or other order approving any such case or
         proceeding is entered; (d) the Company or any Significant Subsidiary
         thereof suffers any appointment of any custodian or the like for it or
         any substantial part of its property that is not discharged or stayed
         within 60 calendar days after such appointment; (e) the Company or any
         Significant Subsidiary thereof makes a general assignment for the
         benefit of creditors; (f) the Company or any Significant Subsidiary
         thereof calls a meeting of its creditors with a view to arranging a
         composition, adjustment or restructuring of its debts; or (g) the
         Company or any Significant Subsidiary thereof, by any act or failure to
         act, expressly indicates its consent to, approval of or acquiescence in
         any of the foregoing or takes any corporate or other action for the
         purpose of effecting any of the foregoing.

                  "BASE CONVERSION PRICE" shall have the meaning set forth in
         Section 5(b).

                  "BUSINESS DAY" means any day except Saturday, Sunday, any day
         which shall be a federal legal holiday in the United States or any day
         on which banking institutions in the State of New York are authorized
         or required by law or other governmental 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 33% of the voting securities
         of the Company (other than by means of conversion or exercise of the
         Debentures and the Securities issued together with the Debentures), or
         (ii) the Company merges into or consolidates with any other Person, or

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         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 66% of the
         aggregate voting power of the Company or the successor entity of such
         transaction, or (iii) the Company sells or transfers all or
         substantially all of its assets to another Person and the stockholders
         of the Company immediately prior to such transaction own less than 66%
         of the aggregate voting power of the acquiring entity immediately after
         the transaction, or (iv) a replacement at one time or within a three
         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 in clauses (i) through (iv) above.

                  "COMMON STOCK" means the common stock, par value $.001 per
         share, of the Company and stock of any other class of securities into
         which such securities may hereafter be 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, collectively, the shares of Common
         Stock issuable upon conversion of this Debenture in accordance with the
         terms hereof.

                  "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 set forth 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 Notices of
         Conversion of the Holder, if any, (ii) the Company shall have paid all
         liquidated damages and other amounts owing to the Holder in respect of
         this Debenture, (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

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         such effectiveness will continue uninterrupted for the foreseeable
         future), (iv) the Common Stock is trading on a Trading Market and all
         of the shares issuable pursuant to the Transaction Documents are listed
         for trading on such 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 no existing Event
         of Default or no existing 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 herein, (viii) there has been no
         public announcement of a pending or proposed Fundamental Transaction or
         Change of Control Transaction that has not been consummated, (ix) the
         Holder is not in possession of any information that constitutes, or may
         constitute, material non-public information and (x) 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 principal Trading
         Market exceeds _________ shares per Trading Day (subject to adjustment
         for forward and reverse stock splits and the like).

                  "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.

                  "FORCED CONVERSION DATE" shall have the meaning set forth in
         Section 6.

                  "FORCED CONVERSION NOTICE" shall have the meaning set forth in
         Section 6.

                  "FORCED CONVERSION NOTICE DATE" shall have the meaning set
         forth in Section 6.

                  "FUNDAMENTAL TRANSACTION" shall have the meaning set forth in
         Section 5(e).

                  "LATE FEES" shall have the meaning set forth in Section 2(d).

                  "MANDATORY DEFAULT AMOUNT" means the sum of (i) the greater of
         (A) 130% of the outstanding principal amount of this Debenture, plus
         all accrued and unpaid interest hereon, or (B) the outstanding
         principal amount of this Debenture, plus all accrued and unpaid
         interest hereon, divided by the Conversion Price on the date the
         Mandatory Default Amount is either (a) demanded (if demand or notice is
         required to create an Event of Default) or otherwise due or (b) paid in
         full, whichever has a lower Conversion Price, multiplied by the VWAP on
         the date the Mandatory Default Amount is either (x) demanded or
         otherwise due or (y) paid in full, whichever has a higher VWAP, and
         (ii) all other amounts, costs, expenses and liquidated damages due in
         respect of this Debenture.

                  "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).

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                  "ORIGINAL ISSUE DATE" means the date of the first issuance of
         the Debentures, regardless of any transfers of any Debenture and
         regardless of the number of instruments which may be issued to evidence
         such Debentures.

                  "PERMITTED INDEBTEDNESS" means: (1) the Indebtedness existing
         on the Original Issue Date and set forth on SCHEDULE 3.1(GG) attached
         to the Purchase Agreement, and (2) additional Indebtedness incurred by
         the Company that does not mature or require payments of principal prior
         to the 2 year anniversary of the Original Issue Date and is made
         expressly subordinate in right of payment to the Indebtedness evidenced
         by this Debenture, as reflected in a written agreement acceptable to
         the Holder and approved by the Holder in writing.

                  "PERMITTED LIEN" means 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 and (b) Liens imposed by law which
         were incurred in the ordinary course of the Company's business, such as
         carriers', warehousemen's and mechanics' Liens, statutory landlords'
         Liens, and other similar Liens arising in the ordinary course of the
         Company's business, and which (x) 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) are being
         contested in good faith by appropriate proceedings, which proceedings
         have the effect of preventing for the foreseeable future the forfeiture
         or sale of the property or asset subject to such Lien.

                  "PERSON" means an individual or corporation, partnership,
         trust, incorporated or unincorporated association, joint venture,
         limited liability company, joint stock company, government (or an
         agency or subdivision thereof) or other entity of any kind.

                  "PURCHASE AGREEMENT" means the Securities Purchase Agreement
         among the Company and the original Holders, dated as of April __, 2006
         as amended, modified or supplemented from time to time in accordance
         with its terms.

                  "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
         Agreement among the Company and the original Holders, dated as of the
         date of the Purchase Agreement, as amended, modified or supplemented
         from time to time in accordance with its terms.

                  "REGISTRATION STATEMENT" means a registration statement that
         registers the resale of all Conversion Shares of the Holder, who shall
         be named as a "selling stockholder" therein, and meets the requirements
         of the Registration Rights Agreement.

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

                  "SHARE DELIVERY DATE" shall have the meaning set forth in
         Section 4(d).

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

                  "TRADING DAY" means a day on which the principal Trading
         Market is open for business.

                  "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 American Stock Exchange, the Nasdaq Capital Market, the
         Nasdaq National Market, the New York Stock Exchange 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 for trading as reported by Bloomberg L.P. (based on a Trading
         Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
         time); (b) if the OTC Bulletin Board is not a Trading Market, the
         volume weighted average price of the Common Stock for such date (or the
         nearest preceding date) on the OTC Bulletin Board; (c) if the Common
         Stock is not then quoted for trading on the OTC Bulletin Board and if
         prices for the Common Stock are then reported in the "Pink Sheets"
         published by 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 (d) in all other
         cases, the fair 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.

         SECTION 2.        INTEREST.
         ---------         --------

                  a) PAYMENT OF INTEREST IN CASH. The Company shall pay interest
         to the Holder on the aggregate unconverted and then outstanding
         principal amount of this Debenture at the rate of ___(4) % per annum,
         payable annually, on each Conversion Date (as to that principal amount
         then being converted) 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.

_________________________

(4)      Prime plus 3% as of the date of the Purchase Agreement.

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                  b) 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, liquidated damages and
         other amounts which may become due hereunder, has been made. 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").

                  c) LATE FEE. All overdue accrued and unpaid interest to be
         paid hereunder shall entail a late fee at an interest rate equal to the
         lesser of 18% per annum or the maximum rate permitted by applicable law
         ("LATE FEES") which shall accrue daily from the date such interest is
         due hereunder through and including the date of payment in full.

                  d) 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 payable 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
         for transfer to the Company 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
         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, in whole or in part, into shares of Common Stock
         at the option of the Holder, at any time and from time to time (subject
         to the conversion limitations set forth in Section 4(c) hereof). The
         Holder shall effect conversions by delivering to the Company a Notice
         of Conversion, the form of which is 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
         shall 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 deemed delivered hereunder. 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

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         thereon has been paid. 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(s) converted and
         the date of such conversion(s). The Company may deliver an objection to
         any Notice of Conversion within 1 Business Day of delivery of such
         Notice of Conversion. 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 $0.12 (subject to adjustment herein)
         (the "CONVERSION PRICE").

                  c) HOLDER'S RESTRICTION ON CONVERSION. 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 the conversion set forth on the applicable
         Notice of 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) 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 such determination is being
         made, but shall exclude the number of shares of Common Stock which are
         issuable upon (A) conversion of the remaining, unconverted principal
         amount of this Debenture beneficially owned by such Holder or any of
         its Affiliates and (B) exercise or conversion of the unexercised or
         unconverted portion of any other securities of the Company subject to a

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         limitation on conversion or exercise analogous to the limitation
         contained herein (including, without limitation, any other Debentures
         or the Warrants) 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)(i), 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)(i) 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 principal amount
         of this Debenture is 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
         together with any Affiliates) and which principal amount of this
         Debenture is 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)(i), in determining the
         number of outstanding shares of Common Stock, a Holder may rely on the
         number of outstanding shares of Common Stock as stated 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) a more recent 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 Debenture, 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 conversion of this Debenture held by the
         Holder. The Beneficial Ownership Limitation provisions of this Section
         4(c)(i) 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)(i) 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 further
         waived by such Holder. The provisions of this paragraph shall be
         construed and implemented in a manner otherwise than in strict
         conformity with the terms of this Section 4(c)(i) 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. i.

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                         ii. DELIVERY OF CERTIFICATE UPON CONVERSION. Not later
                         than three Trading Days after each Conversion Date (the
                         "SHARE DELIVERY DATE"), the Company shall deliver, or
                         cause to be delivered, to the Holder (A) a certificate
                         or certificates representing the Conversion Shares
                         which, on or after the Effective Date, shall be free of
                         restrictive legends and trading restrictions (other
                         than those which may then be required by the Purchase
                         Agreement) representing the number of shares of Common
                         Stock being acquired upon the conversion of this
                         Debenture and (B) a bank check in the amount of accrued
                         and unpaid interest. On or after the Effective Date,
                         the Company shall use its best efforts to deliver any
                         certificate or certificates required to be delivered by
                         the Company under this Section 4 electronically through
                         the Depository Trust Company 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 the
                         Conversion Date, the Holder shall be entitled to elect
                         by written notice to the Company at any time on or
                         before its receipt of such certificate or certificates,
                         to rescind such Conversion, in which event the Company
                         shall promptly return to the Holder any original
                         Debenture delivered to the Company and the Holder shall
                         promptly return the Common Stock certificates
                         representing the principal amount of this Debenture
                         tendered for conversion to the Company.

                         iv. OBLIGATION ABSOLUTE; PARTIAL LIQUIDATED DAMAGES.
                         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, that 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 anyone 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 to Holder, 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 outstanding principal amount
                         of this Debenture, which is subject to the injunction,
                         which bond shall remain in effect until the completion
                         of arbitration/litigation of the underlying dispute and

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                         the proceeds of which shall be payable to such Holder
                         to the extent it obtains judgment. In the absence of
                         such injunction, the Company shall issue Conversion
                         Shares or, if applicable, cash, upon a properly noticed
                         conversion. 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 penalty, for each $1000 of principal amount being
                         converted, $10 per Trading Day (increasing to $20 per
                         Trading Day on the fifth Trading Day after such
                         liquidated damages begin to accrue) for each Trading
                         Day after such third Trading Day until such
                         certificates are delivered. Nothing herein shall limit
                         a Holder's right to pursue actual damages or declare an
                         Event of Default pursuant to Section 8 hereof 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
                         hereunder, 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 by the Share Delivery Date
                         pursuant to Section 4(d)(ii), and if after such Share
                         Delivery Date the Holder is required by its brokerage
                         firm to purchase (in an open market transaction or
                         otherwise) shares of Common Stock to deliver in
                         satisfaction of a sale by such Holder of the Conversion
                         Shares which the Holder was entitled to receive upon
                         the conversion relating to such Share Delivery Date (a
                         "BUY-IN"), then the Company shall (A) pay in
                         cash to the Holder (in addition to any other remedies
                         available to or elected by the Holder) the amount by
                         which (x) the Holder's total purchase price (including
                         any brokerage commissions) for the Common Stock so
                         purchased exceeds (y) the product of (1) the aggregate
                         number of shares of Common Stock that such Holder was
                         entitled to receive from the conversion at issue
                         multiplied by (2) the actual sale price at which the
                         sell order giving rise to such purchase obligation was
                         executed (including any brokerage commissions) 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 if the Company had
                         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 (including
                         any brokerage commissions) giving rise to such purchase

                                       11

<PAGE>

                         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 notice indicating the
                         amounts payable to the Holder in respect of the Buy-In
                         and, upon request of the Company, evidence of the
                         amount of such loss. 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 conversion of this Debenture as
                         required pursuant to the terms hereof.

                         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 for the sole 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 aggregate 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. The Company
                         covenants that all shares of Common Stock that shall be
                         so issuable shall, upon issue, be duly authorized,
                         validly issued, fully paid and nonassessable and, if
                         the Registration Statement is then effective under the
                         Securities Act, shall be registered for public sale in
                         accordance with such Registration Statement.

                         vii. FRACTIONAL SHARES. Upon a conversion hereunder the
                         Company shall not be required to issue stock
                         certificates representing fractions of shares of 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, 1 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 in respect of the issue or delivery of
                         such certificates, 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.

                                       12

<PAGE>

         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 payable in shares of
         Common Stock on shares of Common Stock or any Common Stock Equivalents
         (which, for avoidance of doubt, shall not include any shares of Common
         Stock issued by the Company upon conversion of this Debenture); (B)
         subdivides outstanding shares of Common Stock into a larger number of
         shares; (C) combines (including by way of a reverse stock split)
         outstanding shares of Common Stock into a smaller number of shares; or
         (D) issues, in the event of a 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 any treasury shares of
         the Company) 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. If the Company or any Subsidiary
         thereof, as applicable, at any time while this Debenture is
         outstanding, sells or grants any option to purchase or sells or grants
         any right to reprice its securities, or otherwise disposes of or issues
         (or announces any 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 that is lower than the then Conversion Price (such lower price,
         the "BASE CONVERSION PRICE" and such issuances collectively, a
         "DILUTIVE ISSUANCE") (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 are issued in connection with such issuance,
         be entitled to receive shares of Common Stock at an effective price per
         share that is lower than the Conversion Price, such issuance shall be
         deemed to have occurred for less than the Conversion Price on such date
         of the Dilutive Issuance), then the Conversion Price shall be reduced
         to equal the Base Conversion Price. Such adjustment 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 5(b), indicating therein the applicable issuance price, or
         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), upon the
         occurrence of any Dilutive Issuance, the Holder is entitled to receive
         a number of Conversion Shares based upon the Base Conversion Price on
         or after the date of such Dilutive Issuance, regardless of whether the
         Holder accurately refers to the Base Conversion Price in the Notice of
         Conversion.

                                       13

<PAGE>

                  c) SUBSEQUENT RIGHTS OFFERINGS. If the Company, at any time
         while the Debenture is outstanding, shall issue rights, options or
         warrants to all holders of Common Stock (and not to Holders) entitling
         them to subscribe for or purchase shares of Common Stock at a price per
         share that is lower than the VWAP on the record date referenced below,
         then the Conversion Price shall be multiplied by a fraction of which
         the denominator shall be the number of shares of the Common Stock
         outstanding on the date of issuance of such rights or warrants plus the
         number of additional shares of Common Stock offered for subscription or
         purchase, and of which the numerator shall be the number of shares of
         the Common Stock outstanding on the date of issuance of such rights or
         warrants plus the number of shares which the aggregate offering price
         of the total number of shares so offered (assuming delivery to the
         Company in full of all consideration payable upon exercise of such
         rights, options or warrants) would purchase at such VWAP. Such
         adjustment shall be made whenever such rights or warrants are issued,
         and shall become effective immediately after the record date for the
         determination of stockholders entitled to receive such rights, options
         or warrants.

                  d) PRO RATA DISTRIBUTIONS. If the Company, at any time while
         this Debenture is outstanding, distributes to all holders of Common
         Stock (and not to the Holders) 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 5(b)), 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 1 outstanding share of the Common Stock as determined by
         the Board of Directors of the Company in good faith. In either case the
         adjustments shall be described in a statement delivered to the Holder
         describing the portion of assets or evidences of indebtedness so
         distributed or such subscription rights applicable to 1 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.

                  e) 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 transaction 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,

                                       14

<PAGE>

         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 1 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 1 share
         of Common Stock in such Fundamental Transaction, and the 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 Section 5(e) and insuring that this Debenture
         (or any such replacement security) will be similarly adjusted upon any
         subsequent transaction analogous to a Fundamental Transaction.

                  f) 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 any
         treasury shares of the Company) issued and outstanding.

                  g) NOTICE TO THE HOLDER.

                         i. ADJUSTMENT TO CONVERSION PRICE. Whenever the
                         Conversion Price is adjusted pursuant to any provision
                         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 in whatever form) 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 of 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

                                       15

<PAGE>

                         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 or
                         (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 filed at each office or
                         agency maintained for the purpose of conversion of this
                         Debenture, and shall cause to be delivered to the
                         Holder at its last address as it shall appear upon the
                         Debenture Register, 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 deliver such notice or any defect
                         therein or in the delivery 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 on the date of such notice through the
                         effective date of the event triggering such notice.

                         h) ADJUSTMENT UPON EFFECTIVE DATE. In the event that
                         the average of the VWAPs for the 10 Trading Days
                         immediately prior to the Effective Date (the "TRIGGER
                         PRICE") is less than the then effective Conversion
                         Price, the Conversion Price shall be reduced to equal
                         the Trigger Price commencing on the Trading Day
                         immediately following the Effective Date.
                         Notwithstanding the foregoing, in no event shall the
                         Conversion Price be reduced pursuant to this Section
                         5(h) to a price less than $0.04 (subject to adjustment
                         for forward and reverse stock splits, stock dividends,
                         recapitalizations and the like).

         SECTION 6. FORCED CONVERSION. Notwithstanding anything herein to the
contrary, if after the Effective Date, the VWAPs for each of any 20 consecutive
Trading Days, which period shall have commenced only after the Effective Date,
such period the "THRESHOLD PERIOD")) exceeds $0.50 (subject to adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the Original Issue
Date), the Company may, within 1 Trading Day after the end of any such Threshold
Period, deliver a written notice to the Holder (a "FORCED CONVERSION NOTICE" and
the date such notice is delivered to the Holder, the "FORCED CONVERSION NOTICE
DATE") to cause the Holder to convert all or part of up to 25% of the then
outstanding principal amount of Debentures plus, if so specified in the Forced
Conversion Notice, accrued but unpaid interest, liquidated damages and other

                                       16

<PAGE>

amounts owing to the Holder pursuant to Section 4, it being agreed that the
"Conversion Date" for purposes of Section 4 shall be deemed to occur on the
third Trading Day following the Forced Conversion Notice Date (such third
Trading Day, the "FORCED CONVERSION DATE"). If during a Threshold Period the
VWAPs for each of any 20 consecutive Trading Days exceeds $1.00 (subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the Original Issue Date), the Company may, on the Forced Conversion Notice Date
applicable to such a Threshold Period, deliver a Forced Conversion Notice to
cause the Holder to convert all or part of up to 50% of the then outstanding
principal amount of Debentures plus, if so specified in the Forced Conversion
Notice, accrued but unpaid interest, liquidated damages and other amounts owing
to the Holder pursuant to Section 4 on the applicable the Forced Conversion
Date. Notwithstanding anything herein to the contrary, the maximum amount of
this Debenture that may be subject to this Section 6 shall not exceed, in the
aggregate among all such Forced Conversion Notices, $____________(5). The
Company may not deliver a Forced Conversion Notice, and any Forced Conversion
Notice delivered by the Company shall not be effective, unless all of the Equity
Conditions are met on each Trading Day occurring during the applicable Threshold
Period through and including the later of the Forced Conversion Date and the
Trading Day after 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, provided that any voluntary conversions by a Holder shall be
applied against such Holder's pro-rata allocation, thereby decreasing the
aggregate amount forcibly converted hereunder if only a portion of this
Debenture is forcibly converted. 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. As long as any portion of this Debenture
remains outstanding, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:

                  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 charter documents, including without limitation,
         the certificate of incorporation and bylaws, in any manner that
         materially and adversely affects any rights of the Holder;

_________________________
(5)   50% of the original principal amount of this Debenture.

                                       17

<PAGE>

                  d) repay, repurchase or offer to repay, repurchase or
         otherwise acquire more than a DE MINIMIS number of shares of its Common
         Stock or Common Stock Equivalents other than as to (a) the Conversion
         Shares or Warrant Shares as permitted or required under the Transaction
         Documents and (b) repurchases of Common Stock or Common Stock
         Equivalents of departing officers and directors of the Company,
         provided that such repurchases shall not exceed an aggregate of
         $100,000 for all officers and directors during the term of this
         Debenture);

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

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

         SECTION 8.          EVENTS OF DEFAULT.
         ---------           -----------------

                  a) "EVENT OF DEFAULT" means, wherever used herein, any of the
         following events (whatever the reason for such event and whether such
         event shall be voluntary or involuntary or effected by operation of law
         or pursuant to any judgment, decree or order of any court, or any
         order, rule or regulation of any administrative or governmental body):

                         i. any default in the payment of (A) the principal
                         amount of any Debenture or (B) interest, liquidated
                         damages and other amounts owing to a Holder on 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,
                         solely in the case of an interest payment or other
                         default under clause (B) above, is not cured within 3
                         Trading Days;

                         ii. the Company shall fail to observe or perform any
                         other covenant or agreement contained in the Debentures
                         (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) 5 Trading Days after
                         notice of such failure sent by the Holder or by any
                         other Holder and (B) 10 Trading Days after the Company
                         has become or should have become aware of such failure;

                         iii. a default or event of default (subject to any
                         grace or cure period provided 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 obligated (and
                         not covered by clause (vi) below);

                                       18

<PAGE>

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

                         v. the Company or any Significant Subsidiary shall be
                         subject to a Bankruptcy Event;

                         vi. the Company or any Subsidiary shall default on any
                         of its obligations 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 that (a)
                         involves an obligation greater than $150,000, whether
                         such indebtedness now exists or shall hereafter be
                         created, and (b) results in such indebtedness becoming
                         or being declared due and payable prior to the date on
                         which it would otherwise become due and payable;

                         vii. the Common Stock shall not be eligible for listing
                         or quotation for trading on a Trading Market and shall
                         not be eligible to resume listing or quotation for
                         trading thereon within five Trading Days;

                         viii. the Company shall be a party to any Change of
                         Control Transaction or Fundamental Transaction or shall
                         agree to sell or dispose of all or in excess of 33% of
                         its assets in one transaction or a series of related
                         transactions (whether or not such sale would constitute
                         a Change of Control Transaction);

                         ix. a Registration Statement shall not have been
                         declared effective by the Commission on or prior to the
                         210th calendar day after the Closing Date;

                         x. if, during the Effectiveness Period (as defined in
                         the Registration Rights Agreement), either (a) the
                         effectiveness of the Registration Statement lapses for
                         any reason or (b) the Holder shall not be permitted to
                         resell Registrable Securities (as defined in the
                         Registration Rights Agreement) under the Registration
                         Statement for a period of more than 20 consecutive
                         Trading Days or 30 non-consecutive Trading Days during
                         any 12 month period; PROVIDED, HOWEVER, that if the
                         Company is negotiating a merger, consolidation,
                         acquisition or sale of all or substantially all of its
                         assets or a similar transaction and, in the written
                         opinion of counsel to the Company, the Registration
                         Statement would be required to be amended to include
                         information concerning such pending transaction(s) or
                         the parties thereto which information is not available
                         or may not be publicly disclosed at the time, the
                         Company shall be permitted an additional 10 consecutive
                         Trading Days during any 12 month period pursuant to
                         this Section 8(a)(x);

                                       19

<PAGE>

                         xi. the Company shall fail for any reason to deliver
                         certificates to a Holder prior to the fifth Trading Day
                         after a Conversion Date pursuant to Section 4(d) or the
                         Company shall provide at any time notice to the Holder,
                         including by way of public announcement, of the
                         Company's intention to not honor requests for
                         conversions of any Debentures in accordance with the
                         terms hereof; or

                         xii. 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 more than $50,000, and such judgment,
                         writ or similar final process shall remain unvacated,
                         unbonded or unstayed for a period of 45 calendar days.

                  b) REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
         occurs, the outstanding principal amount of this Debenture, plus
         accrued but unpaid interest, liquidated damages and other amounts owing
         in respect thereof through the date of acceleration, shall become, at
         the Holder's election, immediately due and payable in cash at 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 an
         interest rate equal to the lesser of 18% per annum or the maximum rate
         permitted under applicable law. Upon the payment in full of the
         Mandatory Default Amount, the Holder shall promptly surrender this
         Debenture to or as directed by the Company. In connection with such
         acceleration described herein, 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 acceleration may be rescinded and annulled by Holder at any time
         prior to payment hereunder and the Holder shall have all rights as a
         holder of the Debenture until such time, if any, as the Holder receives
         full payment pursuant to this Section 8(b). 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, or sent by a nationally recognized overnight
         courier service, addressed to the Company, at the address set forth
         above, facsimile number ______________, ATTN:
         ______________________________________or such other facsimile number or
         address as the Company may specify for such purpose by notice to the
         Holder delivered in accordance with this Section 9. Any and all notices
         or other communications or deliveries to be provided by the Company
         hereunder shall be in writing and delivered personally, by facsimile,
         or sent by a nationally recognized overnight courier service addressed
         to each Holder at the facsimile number or address of such Holder
         appearing on the books of the Company, or if no such facsimile 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

                                       20

<PAGE>

         transmission, if such notice or communication is delivered via
         facsimile at the facsimile number specified in this Section 9 prior to
         5:30 p.m. (New York City time), (ii) the date immediately following the
         date of transmission, if such notice or communication is delivered via
         facsimile at the facsimile number specified in this Section 9 between
         5:30 p.m. (New York City time) and 11:59 p.m. (New York City time) on
         any 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, liquidated damages and accrued interest, as applicable, 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, 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
         conflict of laws thereof. Each party agrees that all legal proceedings
         concerning the interpretation, 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 such New York Courts, or such New York Courts are
         improper or inconvenient venue for such proceeding. 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

                                       21

<PAGE>

         to serve process in any other manner permitted by applicable 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 in 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
         by the Company or the Holder 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 the applicable law
         governing usury, the applicable rate of interest due hereunder shall
         automatically be lowered to equal the maximum rate of interest
         permitted under applicable law. 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.

                  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 any surviving
         entity in a Fundamental Transaction shall (i) assume, prior to such
         Fundamental Transaction, 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) and (ii) 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 amount and the interest rate of
         this Debenture and having similar ranking to this Debenture, which
         shall be 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.

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

                                       22

<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.

                                   ARMOR ELECTRIC INC.

                                   By:__________________________________________
                                      Name:
                                      Title:

                                       23

<PAGE>

                                     ANNEX A

                              NOTICE OF CONVERSION

         The undersigned hereby elects to convert principal under the _ %
Secured Convertible Debenture of Armor Electric Inc., a Florida corporation (the
"COMPANY"), due on _________ ___, 2008, into shares of common stock, par value
$.001 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:

                                       24

<PAGE>

                                   SCHEDULE 1

                               CONVERSION SCHEDULE

The [____________ % Secured Convertible Debentures due on _________ ___, 2008 in
the aggregate principal amount of $____________ issued by Armor Electric Inc.
This Conversion Schedule reflects conversions made under Section 4 of the above
referenced Debenture.

                                     Dated:

<TABLE>

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

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

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

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

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

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

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

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

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

</TABLE>

                                       25<PAGE>

EXHIBIT 10.4

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

                               ARMOR ELECTRIC 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 seven year anniversary of the
Initial Exercise Date (the "TERMINATION DATE") but not thereafter, to subscribe
for and purchase from Armor Electric Inc., a Florida corporation (the
"COMPANY"), up to ______ shares (the "WARRANT SHARES") of Common Stock, par
value $.001 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 April 26, 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 registered Holder at the address of such Holder
         appearing on the books of the Company); and, within 3 Trading Days of
         the date said Notice of Exercise is delivered to the Company, the

                                       1

<PAGE>

         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, in which case, the Holder shall surrender this Warrant to the
         Company for cancellation within 3 Trading Days of the date the final
         Notice of Exercise is delivered to the Company. 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 per share of the Common
         Stock under this Warrant shall be $_____, 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).

                  d) HOLDER'S RESTRICTIONS. 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 as set forth on the applicable Notice of Exercise, such
         Holder (together with such Holder's Affiliates, and any other person or

                                       2

<PAGE>

         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 such
         determination 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)(i), 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 together with any Affiliates) 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 together with any
         Affiliates) 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 exercise of
         this Warrant. The Beneficial Ownership Limitation provisions of this

                                       3

<PAGE>

         Section 2(d)(i) 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 further waived by such
         Holder. The provisions of this paragraph shall be construed and
         implemented in a manner otherwise than in strict conformity with the
         terms of this Section 2(d)(i) 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
                  created by the Company 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 (or by cashless exercise, if permitted) 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 delivery of the certificate or

                                       4

<PAGE>

                  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 and, upon request of the Company,
                  evidence of the amount of such loss. 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 at its election, either
                  pay a cash adjustment in respect of such final fraction in an
                  amount equal to such fraction multiplied by the Exercise Price
                  or round up to the next whole share.

                           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.

         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 upon exercise
         of 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.

                                       6

<PAGE>

                  b) SUBSEQUENT EQUITY SALES. If the Company or any Subsidiary
         thereof, as applicable, at any time while this Warrant is outstanding,
         shall sell or grant any option to purchase or 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 then Exercise Price (such lower price, the "BASE
         SHARE PRICE" and such issuances collectively, a "DILUTIVE ISSUANCE")
         (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 are 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. Such adjustment 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
         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, after the date of such Dilutive
         Issuance the Holder is entitled to receive a number of Warrant Shares
         based upon the Base Share Price regardless of whether the Holder
         accurately refers to the Base Share Price in the Notice of Exercise.

                  c) SUBSEQUENT RIGHTS OFFERINGS. If the Company, at any time
         while the Warrant is outstanding, shall issue rights, options or
         warrants to all holders of Common Stock (and not to Holders) entitling
         them to subscribe for or purchase shares of Common Stock at a price per
         share less than the VWAP at the record date mentioned below, then the
         Exercise Price shall be multiplied by a fraction, of which the
         denominator shall be the number of shares of the Common Stock
         outstanding on the date of issuance of such rights or warrants plus the
         number of additional shares of Common Stock offered for subscription or
         purchase, and of which the numerator shall be the number of shares of
         the Common Stock outstanding on the date of issuance of such rights or
         warrants plus the number of shares which the aggregate offering price
         of the total number of shares so offered (assuming receipt by the
         Company in full of all consideration payable upon exercise of such
         rights, options or warrants) would purchase at such VWAP. Such
         adjustment shall be made whenever such rights or warrants are issued,
         and shall become effective immediately after the record date for the
         determination of stockholders entitled to receive such rights, options
         or warrants.

                                       7

<PAGE>

                  d) 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.

                  e) 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 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

                                       8

<PAGE>

         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.

                  f) 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.

                  g) 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.

                  h) NOTICE TO HOLDERS.

                           i. ADJUSTMENT TO EXERCISE PRICE. Whenever the
                  Exercise Price is adjusted pursuant to any provision of 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 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 in
                  whatever form) 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

                                       9

<PAGE>

                  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 Section 4(d) hereof and
         to the provisions of Section 4.1 of the Purchase Agreement, this
         Warrant and all rights hereunder (including, without limitation, any
         registration rights) are transferable, in whole or in part, upon
         surrender of this Warrant at the principal office of the Company or its
         designated agent, 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 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.

                                       10

<PAGE>

                  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) 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 the exercise hereof as set forth in
         Section 2(e)(ii).

                  b) 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.

                  c) 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 not be a Business Day, then such
         action may be taken or such right may be exercised on the next
         succeeding Business Day.

                  d) 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

                                       11

<PAGE>

                  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 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.

                  e) 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.

                  f) 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.

                  g) 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

                                       12

<PAGE>

         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.

                  h) 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.

                  i) LIMITATION OF LIABILITY. No provision hereof, in the
         absence of any affirmative action by Holder to exercise this Warrant to
         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.

                  j) 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 and not to assert the defense
         in any action for specific performance that a remedy at law would be
         adequate.

                  k) 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.

                  l) AMENDMENT. This Warrant may be modified or amended or the
         provisions hereof waived with the written consent of the Company and
         the Holder.

                  m) 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.

                  n) 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.

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

                                       13

<PAGE>

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

Dated:   __________ __, 2006

                                   ARMOR ELECTRIC INC.

                                   By:__________________________________________
                                   Name:
                                   Title:

                                       14

<PAGE>

                               NOTICE OF EXERCISE

TO:      ARMOR ELECTRIC 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

                           [ ] [if permitted] 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 DWAC Account Number or by
physical delivery of a certificate to:

                      _______________________________

                      _______________________________

                      _______________________________

                  (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, [____] all of or [_______] shares of 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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