THE SECURITIES REPRESENTED BY THIS DOCUMENT AND THE SHARES ISSUABLE UPON
CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE
SECURITIES ACT OR AN EXEMPTION THEREFROM AS CONFIRMED BY AN OPINION OF COUNSEL
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS
NOT REQUIRED UNDER SAID SECURITIES ACT, PROVIDED THAT NO SUCH OPINION WILL BE
REQUIRED IN CONNECTION WITH A SALE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT
IF THE HOLDER PROVIDES TO THE MAKER A CUSTOMARY REPRESENTATION LETTER. HEDGING
TRANSACTIONS INVOLVING THOSE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

$           , 2010

FOR VALUE RECEIVED, the undersigned TechniScan, Inc., a Delaware corporation
(“Maker”), does hereby promise, in accordance with the Note and Warrant Purchase
Agreement dated as of the date hereof (the “Purchase Agreement”), to pay to the
order of      (together with his heirs, successors and assigns, “Payee”) at the
address of Payee set forth in the Purchase Agreement (or at such other place as
Payee may designate from time to time in writing to Maker, in immediately
available funds of official currency of the United States, the principal sum of
       Dollars ($     ), or so much as may be outstanding hereunder from time to
time, together with interest thereon from the date of this Senior Secured
Convertible Promissory Note (this “Note”), as provided herein. Capitalized terms
used and not otherwise defined herein have the meanings set forth in the
Purchase Agreement.

This Note is one of a series of convertible promissory notes of like tenor and
ranking (except as otherwise provided in the Purchase Agreement and the Security
Documents) (collectively, the "Notes”) made by Maker in favor of certain
investors (collectively, the "Investors”). This Note is one of the Second Lien
Notes referenced in the Purchase Agreement.

By acceptance of this Note, Payee agrees that it will promptly deliver and
surrender this Note (or a lost Note affidavit in the form attached hereto as
Exhibit A) to Maker upon full payment thereof.

1. Principal Balance. This Note evidences a loan up to the maximum principal sum
specified above, less the aggregate amount of all principal repayments made
under this Note by Maker to Payee.

2. Interest Rate. Interest shall be payable on the unpaid principal balance of
this Note, as the same may exist from time to time, from the date of issuance
until paid or converted in full, in accordance with the terms herein and shall
be payable (i) on the Maturity Date (as defined below), (ii) on any earlier date
of payment or conversion of principal (in whole or in part and, if in part, as
to the portion paid or converted) and (iii) following the Maturity Date or any
earlier date of demand for payment or conversion of principal in accordance with
the terms hereof (each, an “Initial Interest Payment Date”), on the last day of
each calendar quarter (each of the foregoing an “Interest Payment Date”),
provided that if any such day is not a business day, the interest payment due on
such date shall be payable on (and shall include interest accrual through) the
next succeeding business day. Interest accruing on any portion of the principal
of this Note (from the date of issuance hereof) as to which Maker does not
timely satisfy its payment or conversion obligations in accordance with the
terms hereof shall at the option of Payee be paid in additional Notes (each of
which, if Payee is a Priority Investor, shall be a First Lien Note) having terms
identical to this Note (and providing for immediate effectiveness of all
provisions hereof that are applicable hereunder on or after the Maturity Date),
provided that Maker shall have the right to satisfy the interest accrued through
the Initial Interest Payment Date in cash, provided that timely payment is made,
notwithstanding any exercise of such option by Payee. Payee may with respect to
any Interest Payment Date after the Initial Interest Payment Date elect payment
of interest in additional Notes even if cash payment of such interest is
tendered by Maker. Interest shall accrue on the unpaid principal balance hereof
at the rate of 10% per annum from and including the date hereof to but excluding
the Maturity Date. Interest shall accrue on any principal balance that is not
paid on the earlier of the Maturity Date and the date of an Event of Default
shall accrue at the rate of 24% per annum (the “Default Rate”) from and
including the Maturity Date or the date of such Event of Default to but
excluding the date of payment. Notwithstanding the foregoing, if any portion of
the unpaid principal balance of this Note is converted into shares (“Shares”) of
Maker’s common stock, par value of $0.001 per share (“Common Stock”) pursuant to
the terms hereof, interest shall be payable with respect to such principal
portion at the rate of 12% per annum from and including the date hereof to but
excluding the earlier of the Maturity Date and the date of conversion, provided
that any principal amount that is not converted on or prior to the earlier of
the Maturity Date and the date of an Event of Default shall be payable at the
Default Rate from and including the Maturity Date or the date of such Event of
Default to but excluding the date of conversion. In no event, however, shall
interest be payable at a rate higher than the highest rate permitted by
applicable law. Interest on the principal balance outstanding will be calculated
on the basis of the actual number of days elapsed over an assumed year
consisting of 365 days, to the date of receipt by Payee at the place of payment
designated herein of any interest and/or principal.

3. Payment Terms. Any outstanding principal balance and accrued unpaid interest
shall be paid to Payee in full no later than September 30, 2010 (the “Maturity
Date”).

4. Conversion Rights.

(a) In the event Maker consummates a Qualified Financing, Maker shall provide
notice (“Maker’s Notice”) to Payee within three business days after the first
closing of the Qualified Financing and within three business days after each
subsequent closing of the Qualified Financing, and Payee shall, without
limitation of Payee’s rights under the remaining provisions of this Section 4,
have the right by notice to Maker to elect in connection with each such closing
to: (i) convert the principal amount of this Note and accrued and unpaid
interest thereon (the "Convertible Amount”) in whole or in part into QF
Securities (as defined below) at the same price and on the same terms as other
investors in the Qualified Financing in lieu of having Maker repay this Note
pursuant to Section 3 above; (ii) require Maker to immediately repay any portion
of the unconverted principal amount of this Note and pay accrued and unpaid
interest thereon to the date of payment (the “Payoff Amount”); and/or
(iii) continue to hold the portion of this Note that is not required to be
converted or repaid. For purposes herein, a “Qualified Financing” shall mean the
sale by Maker of either Shares and/or other securities that are convertible into
or exercisable for Shares (collectively, “QF Securities”) for cash for
investment purposes, pursuant to which Maker receives gross proceeds (subject
only to customary selling commissions and transaction expenses) of not less than
FIVE MILLION DOLLARS ($5,000,000) at the first closing thereof (of which a
majority of the amount invested at such first closing and in the aggregate must
be invested by persons unaffiliated with Maker). For the avoidance of doubt, if
Payee elects to convert any portion of the Convertible Amount pursuant to clause
(i) above, Payee shall be entitled to receive the number and type of QF
Securities as would be received in exchange for a cash investment in the
Qualified Financing equal to the Convertible Amount and shall be entitled to
retain the warrants being acquired by Payee pursuant to the Purchase Agreement.
If Payee does not provide written notice to Maker of Payee’s election to covert
any portion of the Note in accordance with clause (i) above or have Maker repay
any unconverted portion of this Note in accordance with clause (ii) above within
20 days of receipt of Maker’s Notice, Payee shall be deemed to have elected to
continue to hold such unpaid and unconverted portion of this Note as provided in
clause (iii) above, in which event Maker shall repay Payee pursuant to Section 3
or as otherwise provided herein. Maker shall deliver to Payee the applicable
number and type of QF Securities within three Trading Days of receipt of Payee’s
election pursuant to clause (i) above and shall deliver to Payee the Payoff
Amount within five business days of receipt of Payee’s election pursuant to
clause (ii) above. No fractional QF Securities will be issued in connection with
any conversion of the Conversion Amount, but instead will be rounded up to the
nearest whole QF Security. The date notice of conversion of all or any portion
of the Note is given by Payee to Maker (pursuant to this Section 4(a) or as
elsewhere provided in the Note) is referred to as the “Conversion Date”.

(b) The Convertible Amount is convertible at any time at the option of Payee by
notice to Maker into that number of Shares equal to the Convertible Amount
divided by $0.67, subject to adjustment as provided in the remaining provisions
of this Note (the “Conversion Price”). The Shares or other securities into which
this Note is convertible (and any Shares issued upon conversion or exercise of
any such other securities) are referred to as the “Conversion Securities”.
Except in connection with a Qualified Financing, Payee may elect to convert this
Note in part under any provision hereof permitting conversion and may elect
multiple conversions, provided that Payee shall not without Maker’s consent be
permitted to convert less than the lesser of (i) $100,000 in principal and
(ii) the remaining unconverted principal amount of this Note, in each case
together with all accrued and unpaid interest on such principal amount to be
converted.

(c) Beginning on the day following the Maturity Date, in the event that the
Maker’s Shares, on the Trading Day prior to any Conversion Date, closed at a
price per Share that is lower than ten percent (10%) higher than the then
applicable Conversion Price, then Payee shall have the right exercisable by
notice to Maker to convert the Convertible Amount into Shares at the lower of
the then applicable Conversion Price and a price per Share that is twenty
percent (20%) lower than the arithmetic mean of the three lowest prices at which
any Shares are traded during ten consecutive Trading Days ending on the Trading
Day prior to the Conversion Date (or, if the Shares did not trade on any such
Trading Day, the arithmetic mean of the three lowest prices at which any Shares
are traded during the most recent ten Trading Days on which the Shares traded,
provided that no Trading Day that is more than 20 Trading Days prior to the
Conversion Date shall be taken into account). If there has been no trading in
the Shares during the 20 Trading Days prior to the Conversion Date, in the event
that the Maker’s Shares, on the Trading Day prior to the Conversion Date, closed
at a price per Share that is lower than ten percent (10%) higher than the then
applicable Conversion Price, then Payee shall have the right exercisable by
notice to Maker to convert the Convertible Amount into Shares at the lower of
the then applicable Conversion Price and a price per Share that is twenty
percent (20%) lower than the fair market value of one Share as determined in
good faith by the Board and the Lead Investor. As used herein, “Trading Day”
means (i) a day on which the Common Stock is traded on a national securities
exchange or quoted on the OTC Bulletin Board, or (ii) if the Common Stock is not
traded on a national securities exchange or quoted on the OTC Bulletin Board, a
day on which the Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices) or in the
“pink sheets”; provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean
any day except Saturday, Sunday and any day which shall be a legal holiday or a
day on which banking institutions in the State of New York are authorized or
required by law or other government action to close.

(d) Upon conversion of any portion of this Note and delivery of the Conversion
Securities in accordance with the terms hereof, the portion of the principal
balance of this Note so converted and all accrued interest due thereon as of the
date of conversion will be deemed paid in full, and upon conversion of all
outstanding principal and interest the Note will be deemed cancelled and of no
force or effect.

(e) Not later than three (3) Trading Days after any Conversion Date, Maker or
its designated transfer agent, as applicable, shall, if requested by Payee,
issue and deliver to the Depository Trust Company (“DTC”) account on Payee’s
behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) as specified
in the conversion notice, registered in the name of Payee or its designee, the
number of Conversion Securities to which Payee shall be entitled.  Otherwise,
not later than three (3) Trading Days after any Conversion Date, Maker shall
deliver to Payee by express courier a certificate or certificates representing
the number of Conversion Securities being acquired upon the conversion (the
“Delivery Date”), which shall be free of restrictive legends unless the
Conversion Securities have not been registered for resale and are not eligible
for resale pursuant to Rule 144 without regard to volume limitations,
manner-of-sale restrictions or current public information requirements.  If in
the case of any Conversion Notice the Conversion Securities are not delivered to
or as directed by Payee by the Delivery Date, Payee shall be entitled by written
notice to Maker at any time on or before its receipt of such Conversion
Securities thereafter, to rescind such conversion, whereupon Maker and Payee
shall each be restored to their respective positions immediately prior to the
Conversion Date, except that any amounts described in Section 4(f) shall be
payable through the date notice of rescission is given to Maker and any amounts
described in Section 4 (g) shall nevertheless be payable.

(f) Maker understands that a delay in the delivery of the Conversion Securities
upon conversion of this Note beyond the Delivery Date could result in economic
loss to Payee.  If Maker fails to deliver to Payee such Conversion Securities
via DWAC (or, if applicable, certificates) by the Delivery Date, Maker shall pay
to Payee, in cash, an amount per Trading Day for each Trading Day until such
Conversion Securities are delivered via DWAC or certificates are delivered,
together with interest on such amount at a rate of 10% per annum, accruing until
such amount and any accrued interest thereon is paid in full, equal to (A) 1% of
the aggregate principal amount of the Note requested to be converted for the
first five (5) Trading Days after the Delivery Date and (ii) 2% of the aggregate
principal amount of the Note requested to be converted for each Trading Day
thereafter (payable as liquidated damages and not as a penalty).  Nothing herein
shall limit Payee’s right to pursue actual damages for Maker’s failure to
deliver certificates representing Conversion Securities upon conversion within
the period specified herein and Payee shall have the right to pursue all
remedies available to it at law or in equity (including, without limitation, a
decree of specific performance and/or injunctive relief).  

(g) In addition to any other rights available to Payee, if Maker fails to cause
its transfer agent to transmit via DWAC or, if applicable, transmit to Payee a
certificate or certificates representing the shares of Common Stock issuable
upon conversion of this Note on or before the Delivery Date, and if after such
date Payee 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
Payee of Conversion Securities issuable upon conversion of this Note which Payee
anticipated receiving upon such exercise (a “Buy-In”), then Maker shall (1) pay
in cash to Payee the amount by which (x) Payee’s total purchase price (including
brokerage commissions, if any) for the Conversion Securities so purchased
exceeds (y) the amount obtained by multiplying (A) the number of Conversion
Securities issuable upon conversion of this Note that Maker was required to
deliver to Payee in connection with the conversion at issue times (B) the
price(s) at which the sell order(s) giving rise to such purchase obligation were
executed, and (2) at the option of Payee, either reinstate the portion of the
Note for which such conversion was not honored or deliver to Payee the number of
Conversion Securities that would have been issued had Maker timely complied with
its conversion and delivery obligations hereunder.  For example, if Payee
purchases Conversion Securities having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted conversion into Conversion
Securities with an aggregate sale price giving rise to such purchase obligation
of $10,000, under clause (1) of the immediately preceding sentence the Issuer
shall be required to pay Payee $1,000. Payee shall provide Maker written notice
indicating the amounts payable to Payee in respect of the Buy-In, together with
applicable confirmations and other evidence reasonably requested by
Maker.  Nothing herein shall limit Payee’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 Maker’s
failure to timely deliver certificates representing Conversion Securities upon
conversion of this Note as required pursuant to the terms hereof.

(h) Notwithstanding anything to the contrary set forth in this Note, at no time
may Payee convert all or a portion of this Note if the number of Conversion
Securities to be issued pursuant to such conversion would exceed, when
aggregated with all other Conversion Securities owned by Payee at such time, the
number of Conversion Securities which would result in Payee beneficially owning
(as determined in accordance with Section 13(d) of the Exchange Act and the
rules thereunder) more than 4.9% of all of the Common Stock outstanding at such
time; provided, however, that upon Payee providing Maker with sixty-one
(61) days’ notice that Payee would like to waive this Section 4(h) with regard
to any or all Conversion Securities issuable upon conversion of this Note, this
Section 4(h) will be of no force or effect with regard to all or a portion of
the Note referenced in such notice.

(i) Notwithstanding anything to the contrary set forth in this Note, at no time
may Payee convert all or a portion of this Note if the number of Conversion
Securities to be issued pursuant to such conversion, when aggregated with all
other Conversion Securities owned by Payee at such time, would result in Payee
beneficially owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) in excess of 9.9% of all of the Common
Stock outstanding at such time; provided, however, that upon Payee providing
Maker with sixty-one (61) days’ notice that Payee would like to waive Section
4(i) of this Note with regard to any or all Conversion Securities issuable upon
conversion of this Note, this Section 4(i) shall be of no force or effect with
regard to all or a portion of the Note referenced in such notice.

5. Additional Matters Relating to Conversion; Inability to Convert. (a) Until
the Note has been paid in full or converted in full, the Conversion Price shall
be subject to adjustment from time to time as follows (but shall not be
increased, other than pursuant to Section 5(a)(i) hereof):

(i) If Maker shall effect a stock split of the outstanding Common Stock, the
applicable Conversion Price in effect immediately prior to the stock split shall
be proportionately decreased. If Maker shall combine the outstanding shares of
Common Stock, the applicable Conversion Price in effect immediately prior to the
combination shall be proportionately increased.

(ii) If the Maker shall at any time make or issue or set a record date for the
determination of holders of securities entitled to receive a dividend or other
distribution payable in shares of Common Stock, then, and in each event, the
applicable Conversion Price in effect immediately prior to such event shall be
decreased as of the time of such issuance or, in the event such record date
shall have been fixed, as of the close of business on such record date, by
multiplying, the applicable Conversion Price then in effect by a fraction:

(1) the numerator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date; and

(2) the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution.

(iii) If the Maker shall at any time make or issue or set a record date for the
determination of holders of securities entitled to receive a dividend or other
distribution or securities or other property other than as described in
paragraph (ii) above or in paragraph (vii) below, then, and in each event, an
appropriate revision to the applicable Conversion Price shall be made and
provision shall be made (by adjustments of the Conversion Price or otherwise) so
that Payee shall receive upon conversion hereof, in addition to the number of
Shares receivable thereon, the securities (of Maker or any other applicable
issuer) and other property which they would have received had this Note been
converted on the date of such event and had they thereafter, during the period
from the date of such event to and including the Conversion Date, retained such
securities and other property (together with any distributions payable thereon
during such period), giving application to all adjustments called for during
such period under this Section 5(a) with respect to the rights of Payee.

(iv) If the Shares issuable upon conversion of this Note shall be changed to the
same or different number of shares of any class or classes of stock or other
securities, whether by reclassification, exchange, substitution or otherwise
(other than as provided in paragraphs (i) through (iii) above or (v) below),
then an appropriate revision to the Conversion Price shall be made and
provisions shall be made (by adjustments of the Conversion Price or otherwise)
so that Payee shall have the right thereafter to convert this Note into the kind
and amount of shares of stock and other securities receivable upon
reclassification, exchange, substitution or other change, by holders of the
number of Shares into which such Note might have been converted immediately
prior to such reclassification, exchange, substitution or other change, all
subject to further adjustment as provided herein.

(v) If at any time or form time to time there shall be a capital reorganization
of Maker (other than as described in paragraphs (i) through (iv) above) or there
shall be a Liquidity Event (as defined below), then without limitation of
Maker’s obligations under Section 6(a), as a part of such capital reorganization
or Liquidity Event, provision shall be made (by adjustments of the Conversion
Price or otherwise) so that Payee shall have the right thereafter to convert
this Note into the kind and amount of shares of stock and other securities or
property of Maker or any successor corporation that would have been receivable
in respect of the aggregate Shares into which such Note might have been
converted immediately prior to such capital reorganization or Liquidity Event,
all subject to further adjustment as provided herein.

(vi) In the event Maker, shall, at any time, from time to time, issue or sell
any additional shares of Common Stock (other than as provided in paragraphs
(i) through (v) above, but including in any Qualified Financing) (“Additional
Shares of Common Stock”), at a price per share less than the Conversion Price
then in effect or without consideration, then the Conversion Price upon each
such issuance shall be reduced to a price equal to the consideration per share
paid for such Additional Shares of Common Stock. No adjustment of the Conversion
Price shall be made under this Section 5(a)(vi) upon the issuance of any
Additional Shares of Common Stock which are issued pursuant to the exercise or
conversion of any Common Stock Equivalents if any such adjustment shall
previously have been made upon the issuance of such Common Stock Equivalents or
upon the issuance of any warrant or other rights therefor pursuant to
Section 4(a)(vii).

(vii) If (A) Maker shall issue or sell (including in any Qualified Financing)
any securities convertible into or exchangeable for, directly or indirectly,
Common Stock (“Convertible Securities”) or (B) any rights or warrants or options
to purchase any such Common Stock or Convertible Securities (collectively, the
“Common Stock Equivalents”) shall be issued or sold, and the price per share for
which Additional Shares of Common Stock may be issuable pursuant to any such
Common Stock Equivalent shall be less than the applicable Conversion Price then
in effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable thereafter
is amended or adjusted, and such price as so amended shall be less than the
applicable Conversion Price in effect at the time of such amendment or
adjustment, then the applicable Conversion Price upon each such issuance or
amendment shall be reduced to a price equal to the lowest price per share for
which Additional Shares of Common Stock may be issuable pursuant to such Common
Stock Equivalent.

(viii) If, at any time after any adjustment of the Conversion Price then in
effect shall have been made pursuant to Section 4(a)(vii) as the result of any
issuance of warrants, other rights or Common Stock Equivalents, and such
warrants or other rights, or the right of conversion or exchange in such other
Common Stock Equivalents, shall expire, and all or a portion of such warrants or
other rights, or the right of conversion or exchange with respect to all or a
portion of such other Common Stock Equivalents, as the case may be shall not
have been exercised, such previous adjustment shall be rescinded and annulled
and the Additional Shares of Common Stock which were deemed to have been issued
by virtue of the computation made in connection with the adjustment so rescinded
and annulled shall no longer be deemed to have been issued by virtue of such
computation. Upon the occurrence of an event set forth in this
Section 4(a)(viii), there shall be a recomputation made of the effect of such
Common Stock Equivalents on the basis of treating the number of Additional
Shares of Common Stock or other property, if any, theretofore actually issued or
issuable pursuant to the previous exercise of any such warrants or other rights
or any such right of conversion or exchange, as having been issued on the date
or dates of any such exercise and for the consideration actually received and
receivable therefor.

(ix) If Maker shall, directly or indirectly through a Subsidiary or otherwise,
purchase, redeem or otherwise acquire any shares of Common Stock at a price per
share greater than the Per Share Market Value, then the Conversion Price upon
each such purchase, redemption or acquisition shall be adjusted to that price
determined by multiplying such Conversion Price by a fraction (i) the numerator
of which shall be the number of shares of Common Stock outstanding immediately
prior to such purchase, redemption or acquisition minus the number of shares of
Common Stock which the aggregate consideration for the total number of such
shares of Common Stock so purchased, redeemed or acquired would purchase at the
Per Share Market Value; and (ii) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such purchase, redemption
or acquisition. For the purposes of this subsection 4(a)(ix), a purchase,
redemption or acquisition of a Common Stock Equivalent shall be deemed to be a
purchase of the underlying Common Stock, and the computation herein required
shall be made on the basis of the full exercise, conversion or exchange of such
Common Stock Equivalent on the date as of which such computation is required
hereby to be made, whether or not such Common Stock Equivalent is actually
exercisable, convertible or exchangeable on such date. For purposes of this
Agreement, “Per Share Market Value” means on any particular date (a) the last
trading price on any national securities exchange on which the Common Stock is
listed, or, if there is no such price, the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its functions of reporting prices) at the close of
business on such date, or (b) if the Common Stock is not then traded on any
national securities exchange or reported by the OTC Bulletin Board or the
National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices), then the average of the “Pink
Sheet” quotes for the Common Stock on such date, or (c) if the Per Share Market
Value cannot be determined as aforesaid, the fair market value of a share of
Common Stock on such date as determined by the Board of Directors of Maker and
the Lead Investor in good faith, without discount for lack of liquidity or
minority interest.

(x) In case any Shares or any Common Stock Equivalents shall be issued or sold
in connection with any merger or consolidation in which Maker is the surviving
corporation (other than any consolidation or merger in which the previously
outstanding Shares shall be changed to or exchanged for the stock or other
securities of another corporation), the amount of consideration therefor shall
be, deemed to be the fair value, as determined reasonably and in good faith by
the Board of Directors of Maker, of such portion of the assets and business of
the nonsurviving corporation as such Board may determine to be attributable to
such Shares or Common Stock Equivalents.

(xi) Anything herein to the contrary notwithstanding, Maker shall not be
required to make any adjustment to the Conversion Price in connection with a
Permitted Financing.

(xii) To the extent that any Additional Shares of Common Stock or any Common
Stock Equivalents (or any warrants or other rights therefor) shall be issued for
cash consideration, the consideration received by Maker therefor shall be the
amount of the cash received by Maker therefor, or, if such Additional Shares of
Common Stock or Common Stock Equivalents are offered by Maker for subscription,
the subscription price, or, if such Additional Shares of Common Stock or Common
Stock Equivalents are sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest or accrued
dividends and without taking into account any compensation, discounts or
expenses paid or incurred by Maker for and in the underwriting of, or otherwise
in connection with, the issuance thereof). To the extent that such issuance
shall be for a consideration other than cash, then, except as herein otherwise
expressly provided, the amount of such consideration shall be deemed to be the
fair value of such consideration at the time of such issuance as mutually
determined in good faith by the Board of Directors of Maker and the Lead
Investor. The consideration for each Additional Share of Common Stock issuable
pursuant to any warrants or other rights to subscribe for or purchase the same
shall be the consideration received by Maker for issuing all such warrants or
other rights divided by the number of shares of Common Stock issuable upon the
exercise of such warrants or rights; plus the additional consideration payable
to Maker upon exercise of such warrant or other right for one share of Common
Stock. The consideration for any Additional Shares of Common Stock issuable
pursuant to the terms of any Common Stock Equivalents shall be the consideration
received by Maker for issuing such Common Stock Equivalent, divided by the
number of shares of Common Stock issuable upon the conversion or other exercise
of such Common Stock Equivalent, plus the additional consideration, if any,
payable to Maker upon the exercise of the right of conversion or exchange in
such Common Stock Equivalent for one share of Common Stock. In case of the
issuance at any time of any Additional Shares of Common Stock or Common Stock
Equivalents in payment or satisfaction of any dividends upon any class of stock
other than Common Stock, Maker shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a consideration
equal to the amount of such dividend so paid or satisfied.

(xiii) If Maker shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or distribution or subscription
or purchase rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no adjustment
shall be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.

(b) Maker shall not, by amendment of 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 to be observed or
performed hereunder by Maker, but will at all times in good faith, assist in the
carrying out of all the provisions of this Note, including the conversion
provisions hereof. If any event shall occur which is dilutive to the holder of
this Note but which is not accounted for in the preceding provisions of this
Section 5, the principles of this Section 5 shall be applied to that event in as
nearly an equivalent manner as may be practicable in order to confer upon Payee
the protections intended to be provided hereby.

(c) Upon occurrence of each adjustment or readjustment of the Conversion Price
or number of Shares issuable upon conversion of this Note, Maker at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to Payee a certificate setting forth such adjustment
and readjustment, showing in detail the facts upon which such adjustment or
readjustment is based. Notwithstanding the foregoing, Maker shall not be
obligated to deliver a certificate unless such certificate would reflect an
increase or decrease of at least one percent (1%) of such adjusted amount (but
such increase or decrease shall nevertheless be efffective).

(d) Maker shall pay any and all issue and other taxes, excluding federal, state
or local income taxes, that may be payable in respect of any issue or delivery
of Shares on conversion of this Note pursuant thereto; provided, however, that
Maker shall not be obligated to pay any transfer taxes resulting from any
transfer requested by Payee in connection with any such conversion.

(e) Maker shall at all times when this Note shall be outstanding, reserve and
keep available out of its authorized but unissued Common Stock the total number
of Shares for which this Note and all interest accrued thereon are at any time
convertible (without regard to limitations on exercisability set forth in
Sections 4(h) and 4(i)).

(f) If, upon Maker’s receipt of a conversion notice, Maker cannot issue
Conversion Shares registered for resale under the Registration Statement for any
reason in full satisfaction of such conversion, including, without limitation,
because Maker (w) does not have a sufficient number of Shares authorized and
available, (x) is otherwise prohibited by applicable law or by the rules or
regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over Maker or any of its
securities from issuing all of the Shares which are to be issued to Payee
pursuant to a conversion notice or (y) fails to have a sufficient number of
Shares registered for resale under the Registration Statement, then Maker shall
issue as many registered Shares as it is able to issue in accordance with
Payee’s conversion notice and, with respect to the unconverted portion of this
Note, Payee, solely at Payee’s option, can elect to:

(i) require Maker to prepay that portion of this Note for which Maker is unable
to issue registered Shares in accordance with Payee’s conversion notice at a
price per share equal to the Triggering Event Prepayment Price (as defined
below) as of the requested conversion date;

(ii) if Maker’s inability to fully convert is pursuant to clause (y) above,
require Maker to issue restricted Shares;

(iii) rescind its conversion notice and retain the Note; and

(iv) exercise Buy-In rights in accordance with the terms of Section 4(g) of this
Note.

6. Additional Prepayment Provisions. (a) Notwithstanding anything contained
herein to the contrary, this Note is subject to prepayment in whole at any time
at the sole and absolute option of Maker, upon five Trading Days’ prior written
notice to Payee provided that the Equity Conditions are satisfied at the time
the prepayment notice is given to Payee and continue to be satisfied during such
five Trading Day Period. The conversion rights of Payee shall continue to be
exercisable during such five Trading Day Period and thereafter until payment is
made. In the event of prepayment pursuant to this Section 6(a), Maker shall pay
to Payee 110% of the outstanding principal balance of the Note, plus any accrued
interest due thereon as of the date of such prepayment. Any prepayment by Maker
pursuant to this Section 6(a) must be made in connection with the prepayment in
whole of all Notes issued by Maker. As used herein, “Equity Conditions” means
during the period in question that (i) Maker shall have duly honored all
conversions as to which a Conversion Notice was given by Payee, (ii) (A) there
is an effective Registration Statement pursuant to which Payee is permitted to
utilize the prospectus thereunder to resell all of the Conversion Securities or
(B) all of the Registrable Securities may be resold pursuant to Rule 144 without
volume limitations, manner-of-sale restrictions or current public information
requirements as determined by the counsel to Maker pursuant to a written opinion
letter to such effect, addressed and acceptable to the Transfer Agent and Payee,
(iii) the Common Stock is listed on at least one of the OTC Bulletin Board, the
American Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Select
Market, the Nasdaq Capital Market or The New York Stock Exchange, Inc. and all
of the Registrable Securities are listed or quoted for trading on such market
(and Maker believes, in good faith, that trading of the Common Stock on at least
one such market will continue uninterrupted for the foreseeable future),
(iv) there is a sufficient number of authorized but unissued and otherwise
unreserved shares of Common Stock for the issuance of all of the Registrable
Securities, (v) the issuance of the shares in question to Payee would not
violate the limitations set forth in Section 4(h) and 4(i) herein and (vi) Payee
is not in possession of any information provided by Maker that constitutes, or
may constitute, material non-public information. Prepayment under any provision
of this Note shall not impair Payee’s right to liquidated damages or other
amounts due in excess of the prepayment amount and all such amounts must be paid
as part of the prepayment.

(b) After a Triggering Event (as defined below), Payee shall have the right, at
Payee’s option, to require Maker to prepay (a “Triggering Event Repayment”) all
or a portion of this Note in cash at a price equal to the sum of (i) the greater
of (A) one hundred and twenty five percent (125%) of the aggregate principal
amount of this Note plus all accrued and unpaid interest and (B) the aggregate
principal amount of this Note plus all accrued but unpaid interest hereon,
divided by the Conversion Price on (x) the date Triggering Event Prepayment is
demanded or otherwise due or (y) the date the Triggering Event Prepayment is
made in full, whichever is less, multiplied by the VWAP on (x) the date
Triggering Event Prepayment is demanded or otherwise due or (y) the date the
Triggering Event Prepayment is made in full, whichever is greater, and (ii) all
other amounts, costs, expenses and liquidated damages due in respect of this
Note and the other Transaction Documents (the “Triggering Event Prepayment
Price”). Maker acknowledges that to the extent the Triggering Event Prepayment
Price exceeds the then outstanding principal of and accrued and unpaid interest
under this Note, such excess shall be paid as liquidated damages, and not as a
penalty, in recognition of the uncertainty inherent in calculating the damages
suffered by Payee upon the occurrence of a Triggering Event. For purposes of
this Note, “VWAP” means, for any date, (i) the daily volume weighted average
price of the Common Stock for such date on a national securities exchange or the
OTC Bulletin Board as reported by Bloomberg Financial L.P. (based on a Trading
Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common
Stock is not then listed or quoted on a national securities exchange or the OTC
Bulletin Board and if prices for the Common Stock are then reported in the “Pink
Sheets” published by the Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (iii) 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 Lead Investor and reasonably acceptable
to Maker. A “Triggering Event” shall be deemed to have occurred at the time of
any of the following events:  

(i) the failure of the Common Stock to be listed on at least one of the OTC
Bulletin Board, the American Stock Exchange, the Nasdaq Global Select Market,
the Nasdaq Select Market, the Nasdaq Capital Market or The New York Stock
Exchange, Inc.;  

(ii) Maker fails to or is unable to (including by reason of Maker having
insufficient authorized capital), or notifies Payee, including by way of public
announcement, at any time, that it does not intend to, comply with proper
requests for conversion of Notes or the exercise of warrants acquired by the
Investors under the Purchase Agreement;  

(iii) the Maker’s failure to comply with a Conversion Notice tendered in
accordance with the provisions of this Note within three (3) Trading Days after
the Conversion Notice is given;  

(iv) (A) Maker fails to be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act or otherwise to comply with any of the conditions
set forth in Rule 144(i) under the Securities Act, (B) on or after October 1,
2010, the Common Stock is not registered under Section 12(g) of the Exchange Act
or (C) on or after October 1, 2010, there is not available with respect to the
Common Stock in each State of the United States an exemption from all blue sky
and other trading limitations for secondary transactions;  

(v) the Maker shall fail to file the Registration Statement within 45 days from
the date hereof or the Registration Statement fails to become effective for any
reason within 105 days from the date hereof or, if the Registration Statement
receives full review by the Securities and Exchange Commission, within 150 days
from the date hereof, or Maker shall fail to respond to comments from the
Securities and Exchange Commission within 30 days of the receipt of the same;

(vi) so long as any Notes are outstanding, the effectiveness of the Registration
Statement, after it becomes effective, (a) lapses for any reason (including,
without limitation, the issuance of a stop order) or (b) after the Registration
Statement becomes effective, it is unavailable to the Holder for sale of the
shares of Common Stock, and such lapse or unavailability continues for a period
of five (5) consecutive Trading Days or for more than an aggregate of ten
(10) Trading Days in any 365-day period;  

(vii) any event described in clause (w), (x) or (y) of Section 5(f).  

(c) If Maker shall fail to make any prepayment required to be made pursuant to
Section 4(a), Section 5(f), Section 6(b) or Section 7 within five (5) business
days following Maker’s receipt of Payee’s notice requesting prepayment, or if
Maker fails to prepay the Note within five (5) business days following Payee’s
receipt of Maker’s notice electing prepayment pursuant to Section 6(a), in
addition to any remedy Payee may have under this Note and the Purchase
Agreement, such unpaid amount shall bear interest at the rate of two percent
(2%) per month (prorated for partial months) until paid in full.  Until the
prepayment is made in full to Payee, Payee shall not be prevented from
converting the Note into Conversion Securities by virtue of any prepayment
demand or election (whether Payee or Maker is in possession of the Note).

7. Liquidity Event. If a Liquidity Event (as defined herein) occurs while this
Note is outstanding, Maker will pay to Payee 110% of the outstanding principal
balance of the Note, plus any accrued interest due thereon as of the date of the
closing of such Liquidity Event. For purposes herein, a “Liquidity Event” shall
mean any of the following: (a) a merger of Maker with or into any other Person
(as defined herein), if, and only if, after such merger holders of a majority of
the Maker’s voting securities immediately prior to the merger do not hold a
majority of the voting securities of the successor entity; (b) a sale or
conveyance of all or substantially all of Maker’s assets or common stock to any
other Person; or (c) the closing of a purchase, tender or exchange offer made to
the holders of more than fifty percent (50%) of the outstanding shares of Common
Stock in which more than fifty percent (50%) of the outstanding shares of Common
Stock were tendered and accepted. For purposes herein, “Person” is defined as an
individual, partnership, corporation, business trust, limited liability company,
limited liability partnership, joint stock company, trust, unincorporated
association, joint venture, or governmental body.

8. Events of Default. Any of the following shall constitute an “Event of
Default” under this Note, and shall give rise to the remedies provided in
Section 9 herein.

(a) Maker defaults in the payment of principal of or interest on this Note when
due, including upon any prepayment provided for herein.

(b) The failure of any applicable Registration Statement (as defined in the
Registration Rights Agreement) to be filed with the Commission on or prior to
the date that is ten (10) days after the applicable Filing Deadline (as defined
in the Registration Rights Agreement) or the failure of the applicable
Registration Statement to be declared effective by the Commission on or prior to
the date that is ten (10) days after the applicable Effectiveness Date (as
defined in the Registration Rights Agreement).

(c) While the applicable Registration Statement is required to be maintained
effective pursuant to the terms of the Registration Rights Agreement, the
effectiveness of the applicable Registration Statement lapses for any reason
(including, without limitation, the issuance of a stop order) or such
Registration Statement (or the prospectus contained therein) is unavailable to
any holder of Registrable Securities (as defined in the Registration Rights
Agreement) for sale of all of such holder’s Registrable Securities in accordance
with the terms of the Registration Rights Agreement, and such lapse or
unavailability continues for a period of five (5) consecutive Trading Days or
for more than an aggregate of ten (10) Trading Days in any 365-day period.

(d) The failure of the Common Stock to be listed on at least one of the OTC
Bulletin Board, the American Stock Exchange, the Nasdaq Global Select Market,
the Nasdaq Select Market, the Nasdaq Capital Market or The New York Stock
Exchange, Inc. for a period of five (5) consecutive Trading Days or for more
than an aggregate of ten (10) Trading Days in any 365-day period.

(e) Maker fails to or is unable to (including by reason of Maker having
insufficient authorized capital), or notifies Payee, including by way of public
announcement, at any time, that it does not intend to, comply with proper
requests for conversion of Notes or the exercise of warrants acquired by the
Investors under the Purchase Agreement.

(f) Maker fails to instruct its transfer agent to remove any legends from
Conversion Securities eligible to be sold under Rule 144 of the Securities Act
and issue such unlegended certificates to Payee (or Payee’s transferee, if such
request is made in connection with a transfer of Conversion Securities), or to
cause to be provided to such transfer agent any opinion of counsel and/or
certification of Maker required in order for such transfer agent to comply with
such instructions, within three (3) Trading Days of Payee’s request so long as
Payee has provided a customary representation letter to Maker that provides a
reasonable basis to conclude, to the extent such conclusion is dependent upon
matters to be confirmed by the Investor, that such shares of Common Stock can be
sold pursuant to Rule 144.

(g) Any provision of any Transaction Document shall at any time for any reason
(other than pursuant to the express terms thereof) in any material respect cease
to be valid and binding on or enforceable against the parties thereto, or the
validity or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by Maker or any subsidiary of Maker or any
governmental authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or Maker or any subsidiary
of Maker shall deny in writing that it has any liability or obligation purported
to be created under any Transaction Document.

(h) The Security Documents shall for any reason fail or cease to create (i) a
valid and perfected first priority security interest in the Collateral (as
defined in the Security Agreement) in favor of the Collateral Agent on behalf of
the First Lien Noteholders or (ii) a valid and perfected second priority
security interest in the Collateral in favor of the Collateral Agent on behalf
of the Second Lien Noteholders.

(i) Maker or any of its subsidiaries shall be a party to or otherwise
participate in or recommend a transaction that, if consummated, would constitute
a Liquidity Event in which holders of Shares are to receive or may elect to
receive consideration other than cash or securities of a publicly traded
corporation whose common stock is quoted or listed for trading on at least one
of the OTC Bulletin Board, the American Stock Exchange, the Nasdaq Global Select
Market, the Nasdaq Select Market, the Nasdaq Capital Market or The New York
Stock Exchange, Inc. or in which the Successor Entity has not agreed to assume
in writing all obligations of Maker hereunder; or, other than pursuant to a
permitted Liquidity Event, Maker or any of its subsidiaries shall directly or
indirectly transfer sell, lease or otherwise dispose of any of its assets or
rights other than sales of inventory in the ordinary course of business. For
purposes herein, “Successor Entity” means the Person (or, if so elected by
Payee, the parent entity) formed by, resulting from or surviving any Liquidity
Event or the Person (or, if so elected by Payee, the parent entity) with which
such Liquidity Event shall have been or is anticipated to be entered into.

(j) Maker defaults in the compliance with any other term contained in this Note
or any other Transaction Document (which default is not described in paragraphs
(a) through (i) above) and such default is not remedied or waived within 10
business days after receipt by Maker of notice from Payee of such default.

(k) Maker or any Significant Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) shall be subject to a Bankruptcy Event. For purposes hereof,
“Bankruptcy Event” means any of the following events: (a) Maker or any
Significant Subsidiary 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 Maker or any Significant Subsidiary thereof, (b) there is commenced
against Maker or any Significant Subsidiary thereof any such case or proceeding
that is not dismissed within 60 days after commencement, (c) Maker 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) Maker 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) Maker
or any Significant Subsidiary thereof makes a general assignment for the benefit
of creditors, (f) Maker 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) Maker 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.

(l) A final judgment or judgments for the payment of money aggregating in excess
of $150,000 are rendered against Maker and/or any subsidiary of Maker and which
judgments are not, within thirty (30) days after the entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within thirty
(30) days after the expiration of such stay; provided, however, any judgment
which is covered by insurance or an indemnity from a credit worthy party shall
not be included in calculating the $150,000 amount set forth above so long as
Maker provides the Holder a written statement from such insurer or indemnity
provider (which written statement shall be reasonably satisfactory to the
Holder) to the effect that such judgment is covered by insurance or an indemnity
and Maker or such subsidiary of Maker (as the case may be) will receive the
proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment.

(m) The Company and/or any subsidiary of Maker, individually or in the
aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $150,000 due
to any third party (other than, with respect to unsecured Indebtedness only,
payments contested by Maker and/or such subsidiary of Maker (as the case may be)
in good faith by proper proceedings and with respect to which adequate reserves
have been set aside for the payment thereof in accordance with GAAP) or is
otherwise in breach or violation of any agreement for monies owed or owing in an
amount in excess of $150,000, which breach or violation permits the other party
thereto to declare a default or otherwise accelerate amounts due thereunder, or
(ii) suffer to exist any other circumstance or event that would, with or without
the passage of time or the giving of notice, result in a default or event of
default under any agreement binding Maker or any subsidiary of Maker, which
default or event of default would or is likely to have a material adverse effect
on the business, assets, operations (including results thereof), liabilities,
properties, condition (including financial condition) or prospects of Maker or
any of its Subsidiaries, individually or in the aggregate.

9. Remedies on Event of Default; Power to Confess Judgment. (a) If any Event of
Default will occur, Payee shall, in addition to any and all other available
rights and remedies, have the right, at Payee’s option, to: (a) declare the
entire unpaid outstanding principal balance of this Note, together with all
interest accrued thereon, and all other sums due by Maker hereunder (including
without limitation any applicable prepayment premium or liquidated damages if
such Event of Default is an event otherwise giving rise to payment of such
prepayment premium or liquidated damages), to be immediately due and payable
without presentment, demand, protest, or notice, all of which are hereby
expressly unconditionally and irrevocably waived by Maker, provided that upon
the occurrence of an Event of Default described in Section 8(k), the entire
unpaid outstanding principal balance of this Note, together with all interest
accrued thereon, and all other sums due by Maker hereunder, shall be immediately
due and payable without any declaration or other act by Payee; and (b) pursue
any and all available remedies for the collection of such principal and interest
and all other sums due by Maker hereunder and to enforce its rights as described
herein and in the Security Documents; and in such case Payee may also recover
all costs of suit and other expenses in connection therewith, including
reasonable attorney’s fees for collection and the right to equitable relief to
enforce Payee’s rights as set forth herein without the requirement to post any
bond or other financial surety. The remedies provided in this Note may be
exercised by Payee without notice to Maker (to the extent permitted by law and
except as notice is herein expressly required), and will be in addition to and
not in substitution for the rights and remedies which would otherwise be vested
in Payee for the recovery of damages or otherwise in the event of a breach of
any of the undertakings of Maker hereunder. No failure by Payee to exercise and
no delay in exercising any right, power or privilege under this Note will
operate as a waiver thereof, nor will any single or partial exercise of any
right, power or privilege hereunder preclude any other, further or additional
exercise thereof. Notwithstanding the foregoing, the exercise of remedies by
Payee shall in all respects be subject to Sections 7.16 through 7.18 of the
Purchase Agreement.

(b) Maker hereby empowers any attorney of any court of record, after the
occurrence of any Event of Default hereunder, to appear for Maker and, with or
without complaint filed, confess judgment, or a series of judgments, against the
Maker in favor of Payee or any holder hereof for the entire principal balance of
this Note, all accrued interest and all other amounts due hereunder, together
with costs of suit and an attorney’s commission equal to twenty (20%) of such
principal and interest added as a reasonable attorneys’ fee (provided, however,
that Payee shall only seek to recover those reasonable attorneys’ fees incurred
by it from time to time), and for doing so, this Note or a copy verified by
affidavit shall be a sufficient warrant. Maker hereby forever waives and
releases all errors in said proceedings and all rights of appeal and all relief
from any and all appraisement, stay or exemption laws of any state now in force
or hereafter enacted. Interest on any such judgment shall accrue at the Default
Rate

No single exercise of the foregoing power to confess judgment, or a series of
judgments, shall be deemed to exhaust the power, whether or not any such
exercise shall be held by any court to be invalid, voidable, or void, but the
power shall continue undiminished and it may be exercised from time to time as
often as Payee shall elect until such time as Payee shall have received payment
in full of the debt, interest and costs. Notwithstanding the attorney’s
commission provided for in the preceding paragraph (which is included in the
warrant for purposes of establishing a sum certain), the amount of attorneys’
fees that Payee may recover from Maker shall not exceed the actual attorneys’
fees incurred by Payee.

10. Governing Law; Venue; Waiver of Jury Trial. This Note shall be governed by
and construed in accordance with the laws of the State of Delaware applied to
contracts to be performed wholly within the State of Delaware, without regard to
conflicts of laws principles. Any judicial proceeding brought against Maker with
respect to this Note or any related agreement may be brought in any court
located in the State of Delaware, United States of America, and, by execution
and delivery of this Note, Maker accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Note. Maker hereby waives personal service of
any and all process upon it and consents that all such service of process may be
made by registered mail (return receipt requested) directed to Maker at its
address set forth in the Note Purchase Agreement and service so made shall be
deemed completed five (5) days after the same shall have been so deposited in
the mails of the United States of America. Nothing herein shall affect the right
to serve process in any manner permitted by law or shall limit the right of
Payee to bring proceedings against Maker in the courts of any other
jurisdiction. Maker waives any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. Any judicial
proceeding by Maker against Payee involving, directly or indirectly, any matter
or claim in any way arising out of, related to or connected with this Note or
any related agreement, shall be brought only in a federal or state court located
in the State of Delaware.

MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS NOTE OR ANY OTHER INSTRUMENT,
DOCUMENT OR NOTE EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY
HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS NOTE MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

11. Amendment. Neither any provision of this Note nor any performance hereunder
may be amended or waived orally, but only by an agreement in writing and signed
by the party against whom enforcement of any waiver, change, modification or
discharge is sought.

12. Security Interest. This Note is secured by the Security Documents.

13. Binding Effect. The rights and obligations of Maker under this Note will be
binding upon its successors, assigns, heirs, administrators and transferees.

14. Notices. All notices and other communications required or permitted
hereunder will be provided and become effective as set forth in Section 7.4 of
the Purchase Agreement.

EXECUTED as of the date first set forth above.

 
MAKER:
TECHNISCAN, INC., a Delaware corporation
By:
David C. Robinson, CEO