Longview Fund Convertible Note December 2005


    THIS
      NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
      COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
      FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO KAIRE HOLDINGS INCORPORATED THAT SUCH REGISTRATION IS NOT
      REQUIRED.

    


    


    CONVERTIBLE
      NOTE

    


    FOR
      VALUE
      RECEIVED, KAIRE HOLDINGS INCORPORATED, a Delaware corporation (hereinafter
      called "Borrower"), hereby promises to pay to LONGVIEW
      FUND, LP, 600 Montgomery Street, 44th Floor, San Francisco, CA 94111, Fax:
      (415)
      981-5301
      (the
      "Holder") or order, without demand, the sum of One Hundred Fifty Thousand
      Dollars ($150,000), including simple interest accruing at the annual rate of
      12%, on or before December 13, 2007 (the "Maturity Date").

    


    This
      Note
      has been entered into pursuant to the terms of a subscription agreement between
      the Borrower and the Holder, dated of even date herewith (the “Subscription
      Agreement”), and shall be governed by the terms of such Subscription Agreement.
      Unless otherwise separately defined herein, all capitalized terms used in this
      Note shall have the same meaning as is set forth in the Subscription Agreement.
      The following terms shall apply to this Note:

    


    ARTICLE
      I

    


    GENERAL
      PROVISIONS

    


    1.1 Payment
      Grace Period.
      The
      Borrower shall have a ten (10) day grace period to pay any monetary amounts
      due
      under this Note, after which grace period a default interest rate of fifteen
      percent (15%) per annum shall apply to the amounts owed hereunder.

    


    1.2 Conversion
      Privileges.
      The
      Conversion Privileges set forth in Article II shall remain in full force and
      effect immediately from the date hereof and until the Note is paid in full
      regardless of the occurrence of an Event of Default. The Note shall be payable
      in full on the Maturity Date, unless previously converted into Common Stock
      in
      accordance with Article II hereof; provided, that if an Event of Default has
      occurred (whether or not such Event of Default is continuing), the Borrower
      may
      not pay this Note on or after the Maturity Date, without the consent of the
      Holder.

    


    1.3 Interest
      Rate.
      Simple
      interest payable on this Note shall accrue at the annual rate of twelve percent
      (12%) and be payable semi-annually on June 1st
      and
      December 1st
      for each
      year in which the Note is outstanding.

    


    
      
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    ARTICLE
      II

    


    CONVERSION
      RIGHTS

    


    The
      Holder shall have the right to convert the principal due under this Note into
      Shares of the Borrower's Common Stock, $.001 par value per share (“Common
      Stock”) as set forth below.

    


    2.1. Conversion
      into the Borrower's Common Stock.

    


    (a) The
      Holder shall have the right from and after the date of the issuance of this
      Note
      and then at any time until this Note is fully paid, to convert any outstanding
      and unpaid principal portion of this Note, and accrued interest, at the election
      of the Holder (the date of giving of such notice of conversion being a
      "Conversion Date") into fully paid and nonassessable shares of Common Stock
      as
      such stock exists on the date of issuance of this Note, or any shares of capital
      stock of Borrower into which such Common Stock shall hereafter be changed or
      reclassified, at the conversion price as defined in Section 2.1(b) hereof (the
      "Conversion Price"), determined as provided herein. Upon delivery to the
      Borrower of a Notice of Conversion as described in Section 6 of the Subscription
      Agreement of the Holder's written request for conversion, Borrower shall issue
      and deliver to the Holder within three business days from the Conversion Date
      (“Delivery Date”) that number of shares of Common Stock for the portion of the
      Note converted in accordance with the foregoing. At the election of the Holder,
      the Borrower will deliver accrued but unpaid interest on the Note in the manner
      provided in Section 1.3 through the Conversion Date directly to the Holder
      on or
      before the Delivery Date (as defined in the Subscription Agreement). The number
      of shares of Common Stock to be issued upon each conversion of this Note shall
      be determined by dividing that portion of the principal of the Note and interest
      to be converted, by the Conversion Price.

    


    (b)  Subject
      to adjustment as provided in Section 2.1(c) hereof until the maturity date
      of
      the Note, the Conversion Price per share shall be equal to seventy percent
      (70%)
      of the average of the five (5) lowest closing bid prices of the Common Stock
      as
      reported by Bloomberg, L.P. for the Principal Market for the twenty (20) trading
      days preceding a Conversion Date.

    


    (c) The
      number and kind of shares or other securities to be issued upon conversion
      determined pursuant to Section 2.1(a), shall be subject to adjustment from
      time
      to time upon the happening of certain events while this conversion right remains
      outstanding, as follows:

    


    A. Merger,
      Sale of Assets, etc. If the Borrower at any time shall consolidate with or
      merge
      into or sell or convey all or substantially all its assets to any other
      corporation, this Note, as to the unpaid principal portion thereof and accrued
      interest thereon, shall thereafter be deemed to evidence the right to purchase
      such number and kind of shares or other securities and property as would have
      been issuable or distributable on account of such consolidation, merger, sale
      or
      conveyance, upon or with respect to the securities subject to the conversion
      or
      purchase right immediately prior to such consolidation, merger, sale or
      conveyance. The foregoing provision shall similarly apply to successive
      transactions of a similar nature by any such successor or purchaser. Without
      limiting the generality of the foregoing, the anti-dilution provisions of this
      Section shall apply to such securities of such successor or purchaser after
      any
      such consolidation, merger, sale or conveyance.

    


    B. Reclassification,
      etc. If the Borrower at any time shall, by reclassification or otherwise, change
      the Common Stock into the same or a different number of securities of any class
      or classes, this Note, as to the unpaid principal portion thereof and accrued
      interest thereon, shall thereafter be deemed to evidence the right to purchase
      an adjusted number of such securities and kind of securities as would have
      been
      issuable as the result of such change with respect to the Common Stock
      immediately prior to such reclassification or other change.

    


    
      
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    C. Stock
      Splits, Combinations and Dividends. If the shares of Common Stock are subdivided
      or combined into a greater or smaller number of shares of Common Stock, or
      if a
      dividend is paid on the Common Stock in shares of Common Stock, the Conversion
      Price shall be proportionately reduced in case of subdivision of shares or
      stock
      dividend or proportionately increased in the case of combination of shares,
      in
      each such case by the ratio which the total number of shares of Common Stock
      outstanding immediately after such event bears to the total number of shares
      of
      Common Stock outstanding immediately prior to such event.

    


    D. Share
      Issuance. So long as this Note is outstanding, if the Borrower shall issue
      any
      shares of Common Stock except for the employee stock options, or in connection
      with the exercise of Warrants, options or upon the conversion of convertible
      instruments outstanding on the issue date of this Note and as described in
      the
      Borrower’s Reports (as defined in the Subscription Agreement) for a
      consideration less than the Fair Market Value (as defined in Section 2(c)(E)
      below) for such shares at the time of such issue, then, and thereafter
      successively upon each such issue, the Conversion Price shall be reduced as
      follows: (i) the number of shares of Common Stock outstanding immediately prior
      to such issue shall be multiplied by the Conversion Price in effect at the
      time
      of such issue and the product shall be added to the aggregate consideration,
      if
      any, received by the Borrower upon such issue of additional shares of Common
      Stock; and (ii) the sum so obtained shall be divided by the number of shares
      of
      Common Stock outstanding immediately after such issue. The resulting quotient
      shall be the adjusted Conversion Price. For purposes of this adjustment, the
      issuance of any security of the Borrower carrying the right to convert such
      security into shares of Common Stock or of any warrant, right or option to
      purchase Common Stock shall result in an adjustment to the Conversion Price
      upon
      the issuance of shares of Common Stock upon exercise of such conversion or
      purchase rights.

    


    E. For
      purposes of Section 2.1(c)(D) above, Fair Market Value of a share of Common
      Stock as of a particular date (the "Determination Date") shall mean the Fair
      Market Value of a share of the Borrower's Common Stock. Fair Market Value of
      a
      share of Common Stock as of a Determination Date shall mean: 

     

    (a) If
      the
      Borrower's Common Stock is traded on an exchange or is quoted on the National
      Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") National
      Market System, the NASDAQ SmallCap Market or the American Stock Exchange, Inc.,
      then the closing or last sale price, respectively, reported for the last
      business day immediately preceding the Determination Date. 

     

    (b) If
      the
      Borrower's Common Stock is not traded on an exchange or on the NASDAQ National
      Market System, the NASDAQ SmallCap Market or the American Stock Exchange, Inc.,
      but is traded in the over-the-counter market, then the mean of the closing
      bid
      and asked prices reported for the last business day immediately preceding the
      Determination Date.

     

    (c) Except
      as
      provided in clause (d) below, if the Borrower's Common Stock is not
      publicly traded, then as the Holder and the Borrower agree or in the absence
      of
      agreement by arbitration in accordance with the rules then standing of the
      American Arbitration Association, before a single arbitrator to be chosen from
      a
      panel of persons qualified by education and training to pass on the matter
      to be
      decided.

     

    (d) If
      the
      Determination Date is the date of a liquidation, dissolution or winding up,
      or
      any event deemed to be a liquidation, dissolution or winding up pursuant to
      the
      Borrower's charter, then all amounts to be payable per share to holders of
      the
      Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then
      issuable upon exercise of all of the Warrants are outstanding at the
      Determination Date.

     

    
      
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    (d) Whenever
      the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower
      shall promptly mail to the Holder a notice setting forth the Conversion Price
      after such adjustment and setting forth a brief statement of the facts requiring
      such adjustment.

    


    (e) During
      the period the conversion right exists, Borrower will reserve from its
      authorized and unissued Common Stock a sufficient number of shares to provide
      for the issuance of Common Stock upon the full conversion of this Note. Borrower
      represents that upon issuance, such shares will be duly and validly issued,
      fully paid and non-assessable. Borrower agrees that its issuance of this Note
      shall constitute full authority to its officers, agents, and transfer agents
      who
      are charged with the duty of executing and issuing stock certificates to execute
      and issue the necessary certificates for shares of Common Stock upon the
      conversion of this Note.

    


    (f) The
      terms
      of this Note are modifiable by the Holder pursuant to but not limited to Section
      11(c) of the Subscription Agreement.

    


    2.2 Method
      of Conversion.
      This
      Note may be converted by the Holder in whole or in part as described in Section
      2.1(a) hereof and the Subscription Agreement. Upon partial conversion of this
      Note, a new Note containing the same date and provisions of this Note shall,
      at
      the request of the Holder, be issued by the Borrower to the Holder for the
      principal balance of this Note and interest which shall not have been converted
      or paid.

    


    2.3 Maximum
      Conversion.
      The
      Holder shall not be entitled to convert on a Conversion Date that amount of
      the
      Note in connection with that number of shares of Common Stock which would be
      in
      excess of the sum of (i) the number of shares of Common Stock beneficially
      owned
      by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock
      issuable in connection with the unconverted portion of the Note, and (iii)
      the
      number of shares of Common Stock issuable upon the conversion of the Note with
      respect to which the determination of this provision is being made on a
      Conversion Date, which would result in beneficial ownership by the Holder and
      its affiliates of more than 4.99% of the outstanding shares of Common Stock
      of
      the Borrower on such Conversion Date. For the purposes of the provision to
      the
      immediately preceding sentence, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
      shall not be limited to aggregate conversions of only 4.99% and aggregate
      conversion by the Holder may exceed 4.99%. The Holder shall have the authority
      and obligation to determine whether the restriction contained in this Section
      2.3 will limit any conversion hereunder and to the extent that the Holder
      determines that the limitation contained in this Section applies, the
      determination of which portion of the Notes are convertible shall be the
      responsibility and obligation of the Holder. The Holder may void the conversion
      limitation described in this Section 2.3 upon and effective after 61 days prior
      written notice to the Borrower. The Holder may allocate which of the equity
      of
      the Borrower deemed beneficially owned by the Holder shall be included in the
      4.99% amount described above and which shall be allocated to the excess above
      4.99%.

    


    
      
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    ARTICLE
      III

    


    EVENT
      OF DEFAULT

    


    The
      occurrence of any of the following events of default ("Event of Default") shall,
      at the option of the Holder hereof, make all sums of principal and interest
      then
      remaining unpaid hereon and all other amounts payable hereunder immediately
      due
      and payable, upon demand, without presentment, or grace period, all of which
      hereby are expressly waived, except as set forth below:

    


    3.1 Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay any installment of principal, interest or other sum due
      under this Note when due and such failure continues for a period of ten (10)
      days after the due date. The ten (10) day period described in this Section
      3.1
      is the same ten (10) day period described in Section 1.1 hereof.

    


    3.2 Breach
      of Covenant.
      The
      Borrower breaches any material covenant or other term or condition of the
      Subscription Agreement or this Note in any material respect and such breach,
      if
      subject to cure, continues for a period of ten (10) business days after written
      notice to the Borrower from the Holder.

    


    3.3 Breach
      of Representations and Warranties.
      Any
      material representation or warranty of the Borrower made herein, in the
      Subscription Agreement, or in any agreement, statement or certificate given
      in
      writing pursuant hereto or in connection therewith shall be false or misleading
      in any material respect as of the date made and the Closing Date.

    


    3.4 Receiver
      or Trustee.
      The
      Borrower shall make an assignment for the benefit of creditors, or apply for
      or
      consent to the appointment of a receiver or trustee for it or for a substantial
      part of its property or business; or such a receiver or trustee shall otherwise
      be appointed.

    


    3.5 Judgments.
      Any
      money judgment, writ or similar final process shall be entered or filed against
      Borrower or any of its property or other assets for more than $50,000, and
      shall
      remain unvacated, unbonded or unstayed for a period of forty-five (45)
      days.

    


    3.6 Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of
      any notice in relation to such event, for the relief of debtors shall be
      instituted by or against the Borrower and if instituted against Borrower are
      not
      dismissed within 45 days of initiation.

    


    3.7  Delisting.
      Delisting of the Common Stock from the OTC Bulletin Board (“OTCBB”) or such
      other principal exchange on which the Common Stock is listed for trading;
      failure to comply with the requirements for continued listing on the OTCBB
      for a
      period of three consecutive trading days; or notification from the OTC Bulletin
      Board or any Principal Market that the Borrower is not in compliance with the
      conditions for such continued listing on the OTCBB or other Principal
      Market.

    


    3.8 Stop
      Trade.
      An SEC
      or judicial stop trade order or Principal Market trading suspension that lasts
      for five or more consecutive trading days.

    


    3.9 Failure
      to Deliver Common Stock or Replacement Note.
      Borrower's failure to timely deliver Common Stock to the Holder pursuant to
      and
      in the form required by this Note and Sections 6 and 10 of the Subscription
      Agreement, or, if required, a replacement Note.

    


    3.10 Non-Registration
      Event.
      The
      occurrence of a Non-Registration Event as described in Section 9 of the
      Subscription Agreement.

    


    
      
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    3.11 Reverse
      Splits.
      The
      Borrower effectuates a reverse split of its common stock without ten days prior
      written notice to the Holder.

    


    3.12 Non-Payment.
      A
      default by the Borrower under any one or more obligations in an aggregate
      monetary amount in excess of $75,000 for more than twenty days after the due
      date, unless the Borrower is contesting the validity of such obligation in
      good
      faith.

    


    3.13 Reservation
      Default.
      Failure
      by the Borrower to have reserved for issuance upon conversion of the Note the
      amount of Common stock as set forth in this Note and the Subscription
      Agreement.

    


    3.14 Cross
      Default.
      A
      default by the Borrower of a material term, covenant, warranty or undertaking
      of
      any other agreement to which the Borrower and Holder are parties, or the
      occurrence of a material event of default under any such other agreement, in
      each case, which is not cured after any required notice and/or cure
      period.

    


    ARTICLE
      IV

    


    MISCELLANEOUS

    


    4.1 Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    


    4.2 Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Borrower to: Kaire
      Holdings Incorporated, 552
      Sespe
      Avenue, Suite D, Fillmore, CA 93015, telecopier number: (805) 524-2344, with
      a
      copy by telecopier only to: Owen M. Naccarato, Esq., Naccarato & Associates,
      18301 Von Karman Avenue, Suite 430, Irvine, CA 92612, telecopier: (949)
      851-9262, and (ii) if to the Holder, to the name, address and telecopy number
      set forth on the front page of this Note, with a copy by telecopier only to
      Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
      10176, telecopier number: (212) 697-3575.

    


    4.3 Amendment
      Provision.
      The
      term "Note" and all reference thereto, as used throughout this instrument,
      shall
      mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented.

    


    
      
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    4.4 Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to the benefit of the Holder and its successors and
      assigns.

    


    4.5 Cost
      of Collection.
      If
      default is made in the payment of this Note, Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys'
      fees.

    


    4.6 Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New York. Any action brought by either party against the other concerning
      the
      transactions contemplated by this Agreement shall be brought only in the state
      courts of New York or in the federal courts located in the state of New York.
      Both parties and the individual signing this Agreement on behalf of the Borrower
      agree to submit to the jurisdiction of such courts. The prevailing party shall
      be entitled to recover from the other party its reasonable attorney's fees
      and
      costs.

    


    4.7 Maximum
      Payments.
      Nothing
      contained herein shall be deemed to establish or require the payment of a rate
      of interest or other charges in excess of the maximum permitted by applicable
      law. In the event that the rate of interest required to be paid or other charges
      hereunder exceed the maximum permitted by such law, any payments in excess
      of
      such maximum shall be credited against amounts owed by the Borrower to the
      Holder and thus refunded to the Borrower.

    


    4.8 Shareholder
      Status.
      The
      Holder shall not have rights as a shareholder of the Borrower with respect
      to
      unconverted portions of this Note. However, the Holder will have the right
      of a
      shareholder of the Borrower with respect to the Shares of Common Stock to be
      received after delivery by the Holder of a Conversion Notice to the
      Borrower.

    



    
      
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    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by an authorized officer
      as of the 13th day of December, 2005.

    


    KAIRE
      HOLDINGS INCORPORATED

    


    /s/
      Steven Westlund

    


    By:________________________________

    Name:
      

    Title:
      

     

    WITNESS:

    


    


    


    ______________________________________


    
      
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    NOTICE
      OF CONVERSION

    


    (To
      be
      executed by the Registered Holder in order to convert the Note)

    


    


    The
      undersigned hereby elects to convert $_________ of the principal and $_________
      of the interest due on the Note issued by KAIRE HOLDINGS INCORPORATED on
      December ____, 2005 into Shares of Common Stock of KAIRE HOLDINGS INCORPORATED
      (the "Borrower") according to the conditions set forth in such Note, as of
      the
      date written below.

    


    


    


    Date
      of
      Conversion:____________________________________________________________________

    


    


    Conversion
      Price:______________________________________________________________________

    


    


    Shares
      To
      Be
      Delivered:_________________________________________________________________

    


    


    Signature:____________________________________________________________________________

    


    


    Print
      Name:__________________________________________________________________________

    


    


    Address:_____________________________________________________________________________

    


    ____________________________________________________________________________

     

    
      
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