Exhibit 10.5

NEITHER THIS NOTE, NOR ANY SECURITY  ISSUABLE UPON CONVERSION  HEREOF,  HAS BEEN
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "ACT"),  OR
APPLICABLE  STATE  SECURITIES  LAWS.  NO INTEREST IN THIS NOTE MAY BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE ACT,
OR (ii) AN  EXEMPTION  FROM  REGISTRATION  UNDER THE ACT WHERE  THE  HOLDER  HAS
FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL  REASONABLY  SATISFACTORY  TO
THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.

                                 MEDIABAY, INC.

               9% CONVERTIBLE SENIOR SUBORDINATED PROMISSORY NOTE
                              DUE DECEMBER 31, 2004

$3,000,000.00                                                       May 14, 2001


     MEDIABAY,  INC.  (together with its successors,  the "Company"),  a Florida
corporation,  for value  received,  hereby  promises  to pay to Evan  Herrick or
registered  assigns (the  "Holder"),  the principal sum of THREE MILLION DOLLARS
($3,000,000) on December 31, 2004 (the "Maturity Date"),  and to pay interest on
the unpaid principal balance hereof from the date hereof to the Maturity Date at
the rate of nine percent (9.0%) per annum,  in arrears,  monthly,  commencing on
June 30, 2001; and to pay on demand interest on any overdue principal (including
any overdue partial  payment of principal and principal  payable at the maturity
hereof),  and  (to the  extent  permitted  by  applicable  law)  on any  overdue
installment of interest (the due date of such payments to be determined  without
giving  effect to any grace  period) at the rate of eleven  percent  (11.0%) per
annum.  This Note amends,  restates and  replaces the three  certain  $1,000,000
Convertible Senior Subordinated Promissory Notes Due December 31, 2004 issued by
the Company on December 29, 1999, January 7, 2000 and February 4, 2000.

1. Interest and Payment

     1.1  Interest  shall be computed  on the basis of a 360-day  year of twelve
30-day  months for the actual time  elapsed.  Subject to the  provisions of this
Section 1 and the terms of the Senior Credit Agreement (as defined herein),  all
interest  payments to be paid in cash to Holder  hereunder shall accrue until 10
days  following the date that the Senior Debt (as defined  herein) has been paid
in full.

     1.2 The Company may, at its option,  pay a scheduled  interest  payment (in
whole or in part) by delivering to the Holder a number of whole shares of common
stock,  without par value ("Common  Stock"),  of the Company,  in lieu of paying
such  interest in cash,  equal to the quotient of dividing the amount of accrued
and unpaid interest  payable on such interest payment date by an amount equal to
the then  current  Conversion  Price (as  hereinafter  defined) if the last sale
price of Common Stock on the schedule  interest payment date is greater than the
Conversion  Price in effect on such date.  If such  closing sale price of Common
Stock is not greater than such  Conversion  Price,  such interest  payment shall
accrue,  and be paid in cash  within  ten (10)  business  days  after  the first
business day on which the Company is not prohibited  from making such payment in
cash under the Senior Credit  Agreement.  No  fractional  shares of Common Stock
will be issued to the Holder in lieu of cash interest. Instead of any fractional
share which would  otherwise be issuable in lieu of cash  interest,  the Company
will calculate and pay a cash adjustment in respect of such fraction (calculated
to the nearest  1/100th of a share) in an amount  equal to the same  fraction of
the  Conversion  Price at the  close  of  business  on the  fifth  business  day
immediately

<PAGE>

preceding  such interest  payment  date.  The Company may exercise its option to
cause the  Company to issue  shares of Common  Stock,  in lieu of cash  interest
payable on an interest  payment date, by giving the Holder written notice of its
exercise  of such  option  on or prior  to such  interest  payment  date and the
Company will deliver or cause its  transfer  agent to deliver,  to the Holder or
its designee within ten (10) business days following the interest  payment date,
duly  executed  certificates  for the number of whole  shares of Common Stock so
issuable to the Holder  registered  in the  Holder's  name or such other name or
names and in such  denominations  as the  Holder  shall have  designated  in its
notice of exercise,  and, if  applicable,  a check payable to the Holder for any
cash adjustment in lieu of a fractional share.

     1.3 Except as provided in Section 1.2  hereof,  payments of  principal  and
Change in Control Purchase Price (as hereinafter  defined),  if any, and accrued
interest  shall be made in such coin or currency of the United States of America
as at the time of payment is legal  tender for the payment of public and private
Debts to the Holder  hereof at its address  shown in the register  maintained by
the Company for such purpose.

     1.4 (a) The Company shall pay all amounts payable with respect to this Note
(without any presentment of this Note) by crediting,  by federal funds bank wire
transfer,  the account of the Holder in any bank in the United States of America
as may be designated in writing by the Holder or in such other manner or to such
other address in the United States of America as may be designated in writing by
the Holder (and as to which,  absent  subsequent  notice  from the  Holder,  the
Company may conclusively  rely).  Annex 1 shall be deemed to constitute  notice,
direction  or  designation  (as  appropriate)  by the  payee of this Note to the
Company with respect to payments to be made to such payee as above provided.  In
the absence of such written direction,  all amounts payable with respect to this
Note shall be paid by check  mailed and  addressed  to the Holder at its address
shown in the register maintained by the Company pursuant to Section 2.1.

     (b) All payments received on account of this Note shall be applied first to
the  payment  of  accrued  and  unpaid  interest  on this  Note  and then to the
reduction  of the  unpaid  principal  amount of this  Note.  In case the  entire
principal  amount of this Note is paid or this Note is purchased by the Company,
this Note shall be surrendered to the Company for  cancellation and shall not be
reissued,  and no Note shall be issued in lieu of the paid  principal  amount of
any Note.

     1.5 (a) If any  payment due on account of this Note shall fall due on a day
other than a business day, then such payment shall be made on the first business
day following  the day on which such payment shall have so fallen due;  provided
that if all or any  portion  of such  payment  shall  consist  of a  payment  of
interest,  for purposes of  calculating  such  interest,  such payment  shall be
deemed to have been  originally due on such first  following  Business Day, such
interest  shall accrue and be payable to (but not  including) the actual date of
payment,  and the  amount  of the  next  succeeding  interest  payment  shall be
adjusted accordingly.

     (b) Any  payment  to be made to the Holder on account of this Note shall be
deemed to have been  made on the  business  day such  payment  actually  becomes
available  at such  Holder's  bank prior to the close of  business of such bank,
provided that interest for one day at the non-default interest rate of this Note
shall be due on the amount of any such payment that actually  becomes  available
to the Holder at the Holder's bank after 1:00 p.m. (local time of such bank).

     1.6 The Company may, upon at least three business days prior written notice
to the Holder specifying the date of the prepayment (the "Prepayment  Date") and
the principal amount to be prepaid,  prepay the unpaid principal balance of this
Note in whole at any time or in part  from  time to  time,  without  penalty  or
premium, then such principal amount) together with interest (in shares of common
stock)  on  the  principal  amount  being  prepaid  accrued  to  the  designated
Prepayment Date.

     1.7 In the  event of a Change  in  Control,  the  Company  will,  within 15
business days after the occurrence of such event,  give notice of such Change in
Control to the Holder.  Such notice shall  contain an  irrevocable  offer to the
Holder to repurchase  this Note on a date (the "Change in Control Payment


                                      -2-
<PAGE>

Date") that is not less than the later of (a) thirty (30) days and not more than
ninety  (90)  days  after  the date of such  notice  or (b) five (5) days  after
payment in full of the Debt outstanding  under the Senior Credit Facility,  at a
purchase price equal to 100% of the aggregate  principal  amount thereof and all
interest (in shares of Common Stock) accrued and unpaid on such principal amount
to the Change in Control Payment Date (the "Change in Control Purchase  Price").
Each such notice  shall:  (i) be dated the date of the  sending of such  notice;
(ii) be  executed by an  executive  officer of the  Company;  (ii)  specify,  in
reasonable  detail,  the nature and date of the Change in Control;  (iv) specify
the Change in Control  Payment Date;  (v) specify the  principal  amount of this
Note  outstanding;  (vi)  specify the  interest  that would be due on this Note,
accrued to the Change in Control  Payment Date; and (vii) specify that this Note
shall be purchased  at the Change in Control  Purchase  Price.  The Holder shall
have the option to accept or reject  such  offered  payment.  In order to accept
such offered  payment,  the Holder shall cause a notice of such acceptance to be
delivered  to the  Company  at least  five days  prior to the  Change in Control
Payment  Date. A failure to accept in writing  such written  offer of payment as
provided in this Section 1.7, or a written rejection of such offered prepayment,
shall be deemed to  constitute  a rejection of such offer.  The offered  payment
shall be made at the  Change in  Control  Purchase  Price  determined  as of the
Change in Control Payment Date.

     1.8 Upon any partial  payment of the outstanding  principal  amount of this
Note, the Holder shall mark this Note with a notation of the principal amount so
paid and the date of such payment.

2. Registration; Exercise; Substitution

     2.1 The Company will keep at its principal  executive office a register for
the  registration  and transfer of this Note. The name and address of the Holder
of this Note,  each transfer  hereof made in accordance  with Section 2.2(a) and
the name and address of each transferee of this Note shall be registered in such
register. The person in whose name this Note shall be registered shall be deemed
and  treated  as the owner and  holder  thereof,  and the  Company  shall not be
affected by any notice or knowledge to the  contrary,  other than in  accordance
with  Section  2.2(a)

     2.2 (a) Upon  surrender of this Note at the principal  executive  office of
the Company,  duly endorsed or accompanied  by a written  instrument of transfer
duly executed by the Holder or the Holder's attorney duly authorized in writing,
the Company  will  execute and  deliver,  at the  Company's  expense  (except as
provided in Section 2.2(c)), a new Note (or Notes) in exchange  therefor,  in an
aggregate  principal  amount  equal  to  the  unpaid  principal  amount  of  the
surrendered Note. Subject to Section 2.2(b), the new Note(s) shall be registered
in such name(s) as the Holder may request. Each such new Note shall be dated and
bear  interest  from the date to which  interest  shall  have  been  paid on the
surrendered Note or dated the date of the surrendered Note, if no interest shall
have been paid thereon. Each such new Note shall carry the same rights to unpaid
interest and interest to accrue on the unpaid  principal  amount thereof as were
carried by the Note so exchanged or transferred.

     (b) This Note has been acquired for investment and has not been  registered
under the securities  laws of the United States of America or any state thereof.
Accordingly,  notwithstanding Section 2.2(a), neither this Note nor any interest
thereon  may be  offered  for  sale,  sold  or  transferred  in the  absence  of
registration and  qualification of this Note under applicable  federal and state
securities laws or an opinion of counsel of the Holder  reasonably  satisfactory
to the Company that such registration and  qualification are not required.  This
Note  shall  not be  transferred  in  denominations  of less than  $100,000  and
integral multiples  thereof,  provided that the Holder may transfer this Note as
an entirety regardless of the principal amount thereof.

     (c) The Company may require  payment of a sum sufficient to cover any stamp
tax or governmental change imposed in respect of any such transfer of this Note.

     2.3 Upon  receipt by the  Company  from the Holder of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this  Note  (which  evidence  shall  be,  if  the  Holder  is  the  payee  or an
institutional investor,  notice from the payee or such institutional investor of
such loss,


                                      -3-
<PAGE>

theft, destruction or mutilation), and (a) in the case of loss, theft
or destruction,  of indemnity reasonably satisfactory to the Company;  provided,
however,  that if the  Holder is the  payee or an  institutional  investor,  the
unsecured  agreement of indemnity  of the payee or such  institutional  investor
shall be  deemed  to be  satisfactory;  or (b) in the case of  mutilation,  upon
surrender and cancellation  thereof; the Company at its own expense will execute
and deliver,  in lieu thereof,  a replacement  Note,  dated and bearing interest
from the date to which  interest  shall  have  been paid on such  lost,  stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated  Note, if no interest  shall have been paid  thereon.

     2.4 The Company will pay taxes (if any) due (but not, in any event,  income
taxes of the  Holder)  in  connection  with  and as the  result  of the  initial
issuance  of this  Note and in  connection  with  any  modification,  waiver  or
amendment of this Note and shall save the Holder harmless, without limitation as
to time, against any and all liabilities with respect to all such taxes.

3. Subordination

     3.1 Notwithstanding  any other provision  contained in this Agreement,  the
Subordinated  Debt is  subordinate  and junior in right of payment to all Senior
Debt to the extent provided in this Section 3.

     3.2  In  the  event  of:  (a)  any  insolvency,  bankruptcy,  receivership,
liquidation,   reorganization,   readjustment,   composition  or  other  similar
proceeding  relating to the Company;  (b) any  proceeding  for the  liquidation,
dissolution  or other  winding-up  of the  Company,  voluntary  or  involuntary,
whether or not involving insolvency or bankruptcy  proceedings;  (c) any general
assignment  by the  Company  for the  benefit  of  creditors;  or (d) any  other
marshaling of the assets of the Company;  all Senior Debt shall first be paid in
full, in cash or Cash  Equivalents  (as defined in Section 8 hereof and, for all
purposes of this Section 3, as so defined),  before any payment or distribution,
whether in cash,  securities or other  property,  shall be made to any holder of
any  Subordinated  Debt on  account of any  Subordinated  Debt.  Any  payment or
distribution,  whether  in  cash,  securities  or  other  property  (other  than
securities  of the Company or any other  corporation  provided  for by a plan of
reorganization or readjustment,  the payment of which is subordinated,  at least
to the extent provided in this Section 3 with respect to  Subordinated  Debt, to
the payment of all Senior  Debt at the time  outstanding  and to any  securities
issued in respect thereof under any such plan of reorganization or readjustment,
but only if the rights of the  holders of the Senior  Debt are not  impaired  by
such plan without their consent), which would otherwise (but for this Section 3)
be payable or  deliverable  in respect of  Subordinated  Debt,  shall be paid or
delivered  directly  to the  holders  of  Senior  Debt in  accordance  with  the
priorities  then existing  among such holders,  until all Senior Debt shall have
been paid in full, in cash or Cash Equivalents.

     3.3 If any  holder of  Subordinated  Debt  does not file a proper  claim or
proof of Debt  therefor  prior to 20 days before the  expiration  of the time to
file such  claim or  proof,  then the  Senior  Agent is  hereby  authorized  and
empowered (but not obligated) as the agent and  attorney-in-fact for such holder
for the specific and limited  purpose set forth in this Section 3.3 to file such
claim or proof for or on  behalf of such  holder;  provided,  however,  that the
Senior Agent shall have,  prior to taking any such  action,  given 15 days prior
written  notice (which notice may be given up to 60 days prior to the expiration
of the time to file such  claim or proof) to such  holder of  Subordinated  Debt
that it intends to file such claim or proof of Debt.  In no event may the Senior
Agent or any holder of the Senior Debt vote any claim on behalf of any holder of
the Subordinated Debt, and such agency and appointment of attorney-in-fact shall
not extend to any such right to vote any such claim.

     3.4 If (a) the Company  shall  default in the payment or  prepayment of any
principal of,  premium,  if any, or interest on, or commitment  fee or letter of
credit fee or Administrative Agent fee or indemnity under Section 2.9 or 2.11 or
11.4(c) (or comparable  sections under any  replacement  Senior Debt) in respect
of, any Senior Debt (a "Senior  Payment  Default") when the same becomes due and
payable, whether at maturity, at a date fixed for prepayment,  by declaration of
acceleration  or  otherwise,  or  shall  fail to  comply  with any  covenant  or
agreement in respect of Senior Debt which covenant or agreement  default results
in  actual   acceleration  of  the  maturity  of  such  Senior  Debt  ("Covenant


                                      -4-
<PAGE>

Acceleration");  and (b) the  Company  receives  from the Senior  Agent  written
notice of the happening of such Senior Payment Default or Covenant Acceleration,
stating that such notice is a payment  blockage  notice pursuant to this Section
3.4;  no direct or  indirect  payment (in cash,  property  or  securities  or by
set-off  or  otherwise)  shall be made or  agreed to be made on  account  of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any  redemption,  retirement,  purchase,  prepayment or other  acquisition or
payment of any Subordinated  Debt,  unless and until such Senior Payment Default
shall have been cured or waived or otherwise  shall have ceased to exist or such
Covenant  Acceleration  shall have been  rescinded and the  underlying  covenant
default shall have been cured or waived or shall have otherwise ceased to exist.

     The Company shall give prompt written notice to each holder of Subordinated
Debt of its receipt of any such notice from the Senior  Agent under this Section
3.4.

     3.5 If (a) any Significant  Nonpayment Default shall have occurred; and (b)
the Company and the Holder receive from the Senior Agent written notice (a "Stop
Payment  Notice")  of the  happening  of such  Significant  Nonpayment  Default,
stating that such notice is a payment  blockage  notice pursuant to this Section
3.5;  no direct or  indirect  payment (in cash,  property  or  securities  or by
set-off  or  otherwise)  shall be made or agreed to be made for or on account of
any  Subordinated  Debt, or as a sinking fund for any  Subordinated  Debt, or in
respect of any redemption, retirement, repurchase, prepayment, purchase or other
acquisition or payment of any Subordinated  Debt, for a period (each, a "Payment
Blockage  Period")  commencing on the date such Stop Payment Notice is delivered
to the Company and ending on the  earliest  to occur of the  following:  (a) the
time as of which each  Significant  Nonpayment  Default  which is the subject of
such Stop Payment  Notice shall have been waived or cured  (whether by amendment
of any provisions of the Senior Credit Agreement or otherwise),  (b) a number of
days shall have elapsed as is necessary to prevent the total number of days that
a Stop Payment  Notice (or Stop Payment  Notices in the event that more than one
Stop Payment Notice has been given) is in effect during any  consecutive 365 day
period  from  exceeding  180  days in the  aggregate,  and  (c) the  date of the
repayment  in  full  in cash or Cash  Equivalents  of the  Senior  Debt  and the
termination  of any  commitment  to make further loans or advances in respect of
the Senior  Debt;  provided,  however,  that (i) the Senior  Agent  shall not be
permitted to issue a Stop Payment  Notice more than six times in the  aggregate;
(ii)  only  two  Stop  Payment  Notices  may  be  issued  in any  period  of 365
consecutive  days;  (iii) Payment Blockage Periods may not be in effect for more
than 180 days  (whether or not such days are  consecutive)  during any period of
365  consecutive  days, and if any Payment  Blockage  Period is in effect on the
181st day in any period of 365 consecutive  days,  such Payment  Blockage Period
will terminate  immediately;  and (iv) no Payment Blockage Period may be imposed
as a result of a Significant Nonpayment Default which served as the basis for or
was continuing  during any previous  Payment  Blockage  Period,  unless any such
Significant  Nonpayment  Default  shall have been  cured or waived or  otherwise
ceased to exist for a period of not less than 60 consecutive days after the date
that the  previous  Stop  Payment  Notice was given.

     3.6 If, at any time during which the Senior  Credit  Facility is in effect,
the Holder  elects to exercise  any Remedies in respect of any Event of Default,
the Holder shall deliver to the Company and to the Senior Agent  written  notice
(an  "Enforcement  Notice")  specifying the Event or Events of Default which are
the basis for the exercise of such Remedies and stating that the Holder  intends
to  exercise  Remedies;  provided,  however,  that the  failure to deliver  such
Enforcement  Notice to the Senior  Agent  shall not affect the  validity  of the
Enforcement Notice as between such holder or holders and the Company.

     3.7 Notwithstanding anything contained in this Note to the contrary, for so
long as any amount is outstanding under the Senior Credit Facility including any
letter of credit reimbursement obligations or commitments,  the Holder shall not
exercise  any  Remedies  in respect  thereof  during  any period (a  "Standstill
Period") commencing on the first date the Holder, but for the provisions of this
Section 3, would have been entitled to exercise any Remedies and ending upon the
earliest of:


                                      -5-
<PAGE>

          (a) the date which is 10 business days after the Enforcement Notice is
     delivered  to the Company  and the Senior  Agent  pursuant to Section  3.6;
     provided,  however,  that if any Payment  Blockage  Period arising from the
     giving of a Stop  Payment  Notice is in  effect on such 10th  business  day
     after the  Enforcement  Notice is so  delivered,  this  clause (a) shall be
     ineffective to terminate such Standstill Period;

          (b) in the  event  that a Payment  Blockage  Period  arising  from the
     giving  of a Stop  Payment  Notice  is in  effect  on the date  which is 10
     business days after an  Enforcement  Notice is delivered to the Company and
     the Senior Agent  pursuant to Section 3.6, the  expiration  of such Payment
     Blockage Period;

          (c) the date that any holder of any Senior Debt commences the exercise
     of any Remedies in respect of such Senior Debt; and

          (d) the first date upon  which any of the Events of Default  described
     in Section 7.1(f) and (g) shall have occurred and be continuing  beyond any
     period of grace  specified  therein;  and,  in such  event,  the  automatic
     acceleration of this Note  contemplated in respect of such Event of Default
     pursuant to Section 7.2(a) shall occur  immediately upon the termination of
     the Standstill Period.

     3.8 If (a) any payment or  distribution  shall be paid to or  collected  or
received  by any holders of  Subordinated  Debt in  contravention  of any of the
terms of this Section 3 but whether or not any Stop Payment  Notice or (pursuant
to Section 3.4) payment blockage notice shall theretofore have been given (i.e.,
if paid, collected or received at a time when either such notice could have been
given had the Senior Agent been aware of circumstances  giving rise to the right
to deliver any such  notice);  and (b) the Senior Agent shall have  notified the
holders  of  Subordinated  Debt in  writing,  within 30 days after the date such
payment or distribution is made, of the facts by reason of which such payment or
collection or receipt so contravenes this Section 3 or constituted a Significant
Nonpayment  Default;  then such holders of  Subordinated  Debt will deliver such
payment or distribution,  to the extent necessary to pay all such Senior Debt in
full, in cash or Cash Equivalents, to the Senior Agent, on behalf of the holders
of the Senior Debt, and, until so delivered,  the same shall be held in trust by
such holders of Subordinated  Debt as the property of the holders of such Senior
Debt.  If any amount is delivered  to the Senior Agent  pursuant to this Section
3.8,  whether or not such  amounts  have been  applied to the  payment of Senior
Debt, and the outstanding  Senior Debt shall thereafter be paid in full, in cash
or Cash  Equivalents,  by the Company or otherwise  other than  pursuant to this
Section  3.8,  the  holders  of Senior  Debt  shall  return to such  holders  of
Subordinated  Debt an amount  equal to the amount  delivered  to such holders of
Senior Debt  pursuant to this  Section  3.8, so long as after the return of such
amounts the Senior Debt shall remain  indefeasibly paid in full, in cash or Cash
Equivalents.

     3.9  Except as  provided  in this  Section  3, the rights set forth in this
Section  3 of the  holders  of  the  Senior  Debt  as  against  each  holder  of
Subordinated  Debt shall remain in full force and effect  without regard to, and
shall not be impaired by:

          (a) any act or failure to act on the part of the Company;

          (b) any  extension or  indulgence in respect of or change in the time,
     manner or place of any payment or prepayment of the Senior Debt or any part
     thereof or in respect of any other  amount  payable to any holder of Senior
     Debt,  including,  without  limitation,  any  increase  in the Senior  Debt
     resulting  from  extension  of  additional  credit  to the  Company  or any
     subsidiary or otherwise and permitted by Section 6.3(iii) or (iv) hereof;

          (c) any amendment,  modification,  restatement,  refinancing or waiver
     of, or addition or supplement to, or deletion from, or compromise, release,
     consent or other  action in respect of, any of


                                      -6-
<PAGE>

     the terms of any Senior Debt or any other  agreement  which may be relating
     to any Senior  Debt,  other than such as would  cause all or any portion of
     such Debt to fail to meet the definition of "Senior Debt;"

          (d) any exercise or  non-exercise  by any holder of Senior Debt of any
     right, power, privilege or remedy under or in respect of any Senior Debt or
     Subordinated  Debt or any waiver of any such  right,  power,  privilege  or
     remedy or any  default in respect  of any Senior  Debt or the  Subordinated
     Debt,  any dealing with or action  against or  application of proceeds from
     any  collateral  security  therefor  or any receipt by any holder of Senior
     Debt of any  security,  or any  failure  by any  holder of  Senior  Debt to
     perfect a security  interest in, or any release by any such Senior Debt of,
     any  security  for or  guaranty  of the  payment of any Senior  Debt or any
     manner of sale or other  disposition  of any  assets of the  Company or any
     subsidiary;

          (e)  any  merger  or  consolidation  of  the  Company  or  any  of its
     subsidiaries into or with any other  subsidiaries of the Company or into or
     with any  person,  or any  transfer  of any or all of the  property  of the
     Company  or any of its  subsidiaries  to any other  person  or any  change,
     restructuring or termination of the corporate structure or existence of the
     Company or any of its subsidiaries;

          (f) the  absence  of any  notice  to, or  knowledge  by, any holder of
     Subordinated  Debt of the  existence or occurrence of any of the matters or
     events set forth in the foregoing clauses (a) through (e);

          (g) any  lack of  validity  or  enforceability  of any  instrument  or
     agreement  evidencing or securing any Senior Debt or any other agreement or
     instrument relating thereto; or

          (h) any other circumstance which might otherwise  constitute a defense
     available to, or a discharge of, the Company or any holder of  Subordinated
     Debt.

     3.10  Each  holder  of  Subordinated  Debt and the  Company  hereby  waives
promptness, diligence, notice of appearance and any other notice with respect to
any of the Senior Debt and these  provisions and any requirement that any holder
of the Senior Debt protect,  secure,  perfect or insure any security interest or
lien or any  property  subject  thereto or exhaust  any right to take any action
against the Company or any other person or entity or any collateral.

     3.11 The Company will,  and will use its  reasonable  efforts to cause each
holder of  Subordinated  Debt to, at the  Company's  expense and at any time and
from time to time,  promptly  execute and deliver  all further  instruments  and
documents,  and take all further actions, that may be necessary or desirable, or
that any holder of any Senior Debt may reasonably  request,  in order to protect
any right or interest granted or purported to be granted under this Section 3 or
enable the holders of the Senior Debt to exercise  and enforce  their rights and
remedies under these provisions.

     3.12 Each  holder of  Subordinated  Debt  waives any and all notices of the
acceptance  of the  provisions  of this Section 3 or of the  creation,  renewal,
extension or accrual, now or at any time in the future, of any Senior Debt.

     3.13  The  obligations  of each  holder  of  Subordinated  Debt  under  the
provisions  set forth in this Section 3 shall  continue to be  effective,  or be
reinstated,  as the case may be, as to any payment in respect of any Senior Debt
that is  rescinded  or must  otherwise  be returned by the holder of such Senior
Debt  upon  the  occurrence  or  as a  result  of  any  bankruptcy  or  judicial
proceeding, all as though such payment had not been made.

     3.14  Nothing  contained  in this  Section 3 shall  impair,  as between the
Company and any holder of  Subordinated  Debt,  the obligation of the Company to
pay to such holder the  principal  thereof and interest  thereon as and when the
same shall become due and payable in  accordance  with the terms  thereof


                                      -7-
<PAGE>

and to comply with each and every  provision  of this Note or prevent any holder
of any  Subordinated  Debt from  exercising  all  rights,  powers  and  remedies
otherwise  permitted by  applicable  law or under this Note,  all subject to the
rights of the holders of the Senior Debt hereunder  including  rights to receive
cash,  securities or other  property  otherwise  payable or  deliverable  to the
holders of Subordinated Debt.

     3.15  Upon  the  payment  in  full  of all  Senior  Debt,  the  holders  of
Subordinated Debt shall be subrogated to all rights of any holder of Senior Debt
to receive any further payments or  distributions  applicable to the Senior Debt
until the  Subordinated  Debt shall have been paid in full, and such payments or
distributions  received  by the holders of  Subordinated  Debt by reason of such
subrogation, of cash, securities or other property which otherwise would be paid
or distributed to the holders of Senior Debt,  shall, as between the Company and
its creditors  other than the holders of Senior Debt,  on the one hand,  and the
holders of  Subordinated  Debt,  on the other hand, be deemed to be a payment by
the Company on account of Senior Debt and not on account of  Subordinated  Debt.
Notwithstanding  the  foregoing  provisions  of this  Section  3.15 or any other
provision of this Note each holder of  Subordinated  Debt hereby  waives any and
all exoneration  and impairment  defenses that it may at any time have by law or
otherwise in respect of subrogation rights.

     3.16 Each holder of Subordinated Debt, by its acceptance thereof,  shall be
deemed to acknowledge and agree that the foregoing subordination provisions are,
and are intended to be, an inducement to and a  consideration  of each holder of
any Senior  Debt,  whether  such Senior  Debt was created or acquired  before or
after the creation of Subordinated  Debt, to acquire and hold, or to continue to
hold,  such  Senior  Debt,  and such  holder  of  Senior  Debt  shall be  deemed
conclusively  to have relied on such  subordination  provisions in acquiring and
holding,  or in continuing to hold, such Senior Debt. Each such holder of Senior
Debt is  intended to be, and is, a third party  beneficiary  of this  Section 3.
Each holder of Subordinated Debt acknowledges and agrees that the provisions set
forth in this Section 3 shall be enforceable against such holder of Subordinated
Debt by the holders of the Senior Debt.  Notwithstanding  anything  contained in
this Note to the contrary,  none of the provisions of this Section 3 (including,
without  limitation,  this  Section  3.16 and defined  terms used  herein)  may,
directly or indirectly, be amended, modified, supplemented or waived without the
prior  written  consent of the  Senior  Agent,  on behalf of the  holders of the
Senior Debt.

     3.17  Notwithstanding  the  other  provisions  of  this  Section  3.17,  no
amendment to or  refinancing  of the Senior Debt or any  agreement or instrument
related  thereto shall be entitled to the benefits of this Section 3 without the
consent of the Holder to the extent that such amendment would prohibit  directly
and expressly the Company or any subsidiary  from making  scheduled  payments in
respect of the Subordinated  Debt in accordance with the terms of this Agreement
as in effect on the date hereof or as may be amended to the extent  permitted by
the Senior Credit Agreement;  provided that no change of financial  covenants or
increase in the restrictiveness of negative covenants or events of default under
the Senior Debt documents  (that do not by their terms refer to this Note) shall
be deemed to constitute a prohibition  from making scheduled  payments,  even if
the ultimate  effect of any such change would cause the Company to be in default
under the Senior Debt if such a scheduled payment were made.

     3.18 This Note ranks (i) pari passu with all other Senior Subordinated Debt
and (ii)  subordinate to the Senior Credit  Facility and to the Herrick  Secured
Subordinated  Note as such terms are  defined in the  Senior  Credit  Agreement.
Accordingly,  notwithstanding  any discrepancy as to the  identification in such
definition  by  date  and  amount  of  any  particular  9%  Convertible   Senior
Subordinated  Promissory  Note due  December  31,  2004,  this Note is deemed to
constitute one of the Notes comprising  "Senior  Subordinated Debt" under and as
defined in the Senior Credit Agreement and (except that this Note is not secured
by any  collateral or Subsidiary  Guarantees) is entitled to the same rights and
subject to the same restrictions as are accorded to such other Notes.

     3.19 As used  in  this  Section  3 and  elsewhere  in this  Agreement,  the
following terms have the respective meanings set forth below:


                                      -8-
<PAGE>

          "Credit  Facility"  means and  includes a credit  agreement or similar
     agreement  pursuant to which the lender or lenders  commit(s) to permit the
     Company,  subject to the  conditions  therein,  to obtain from time to time
     thereunder   term  or  revolving   loans  and/or   letters  of  credit  and
     periodically repay the same.

          "Junior  Subordinated  Debt"  means  any  Debt of the  Company  or any
     subsidiary  which is (a) issued on or after the Issue Date of this Note and
     which is  expressly  subordinated  in right of  payment  to any Debt of the
     Company, or (b) owing to any subsidiary or affiliate of the Company.

          "Remedies"  means and includes,  with respect to any Debt  (including,
     without limitation, the Senior Debt and the Subordinated Debt):

               (a) the acceleration of the maturity of any of such Debt;

               (b) the  exercise  of any put  right  or other  similar  right to
          require the Company or any  subsidiary to repurchase  any of such Debt
          prior to the stated maturity thereof;

               (c) the collection or  commencement  of  proceedings  against the
          Company,  any subsidiary thereof or any other person obligated on such
          Debt or any of their respective property, to enforce or collect any of
          such Debt;

               (d) taking possession of or foreclosing upon (whether by judicial
          proceedings or otherwise) any Liens or other  collateral  security for
          such Debt;  or causing a marshaling  of any property of the Company or
          any subsidiary;

               (e) the making of a demand in respect  of any  Guaranty  given by
          the Company or any subsidiary of the Company of such Debt;

               (f)  commencing  or joining in or causing the Company to commence
          or join in or assist the Company in commencing,  any proceeding of the
          nature referred to in Section 7.1(f) or 7.1(g); or

               (g)  exercising  any other  remedies with respect to such Debt or
          any claim with respect thereto.

          "Senior  Agent"  means,  for so long as the  Senior  Credit  Agreement
     remains  outstanding,  the  administrative  agent in  respect of the Senior
     Credit Agreement, and thereafter, any one agent or lender in respect of the
     Senior  Credit  Facility,  or a  representative  of either,  designated  in
     writing to the Holder by the Company as being the "Senior Agent".

          "Senior  Credit  Agreement"  means the  Amended  and  Restated  Credit
     Agreement dated as of the date hereof among the Company, ING (U.S.) Capital
     LLC as administrative agent (together with its successors in such capacity)
     and the banks,  financial institutions and other institutional lenders from
     time to time named therein, as it may be amended,  supplemented,  extended,
     renewed, refinanced, restated or replaced in whole or in part.

          "Senior Credit Facility" means and includes:

               (a) the Senior Credit Agreement; and

               (b) any Credit  Facility  (whether or not secured),  which Credit
          Facility has  refinanced  in whole or in part the Senior Debt governed
          by the  terms  of a Senior  Credit  Facility  which  the  Company  has
          designated  in  writing  to the  Holder  as being the  "Senior  Credit
          Facility;" provided,  however,  that, by


                                      -9-
<PAGE>

          making such designation,  the predecessor Senior Credit Facility shall
          cease to be the Senior Credit  Facility (but any Debt  outstanding  or
          incurred  thereunder  shall  continue to be Senior Debt for so long as
          such Debt meets the definition thereof).

          "Senior  Debt" means and includes  all  obligations,  liabilities  and
     indebtedness  of the Company now or hereafter  existing,  whether  fixed or
     contingent,  and whether for principal or interest  (including interest (at
     the rate specified in the applicable Senior Credit Facility) accruing after
     the  filing  of a  petition  under  the  Bankruptcy  Code,  whether  or not
     allowed), fees, expenses, indemnification or otherwise (including letter of
     credit reimbursement  obligations whether or not any draw has occurred), in
     respect of:

               (a) the Senior Credit Facility;

               (b) the 9% Convertible  Senior  Subordinated  Promissory Note due
          December 31, 2002 in the  principal  amount of $800,000  issued by the
          Company to Huntingdon Corporation on the Issue Date.

               (c) the 9% Convertible  Senior Promissory Notes due September 30,
          2002 in the aggregate  principal amount of up to $3,000,000 issued (or
          to be issued) by the Company on and after the Issue Date.

               (d) any other Debt of the  Company  owing to the Senior  Agent or
          any  lender  under the Senior  Credit  Facility  (whether  or not such
          lender  continues  to be a  lender  thereunder)  with  respect  to any
          obligations  under Bank  Hedge  Agreements  (as  defined in the Senior
          Credit  Agreement)  related to the Senior Credit Agreement that are or
          may become owed by the Company directly or indirectly, other than Debt
          incurred pursuant to a Senior Credit Facility.

     Notwithstanding the foregoing,  in no event shall "Senior Debt" include any
Subordinated Debt.

     "Senior Subordinated Debt" means this Note, the $1,984,250 principal amount
9% Convertible Senior Subordinated  Promissory Note due December 31, 2004 issued
by the Company payable to Norton Herrick and the $4,200,000  principal amount 9%
Convertible  Promissory Note issued by the Company payable to ABC Investment LLC
and any guaranties  thereof  permitted to be issued by the  Subsidiaries  of the
Company from time to time  pursuant to Section  6.2(c)(iv)  of the Senior Credit
Agreement,  as the same may be amended,  modified or  supplemented  from time to
time  consistent  with the terms of this  Agreement and any further  amendments,
restatements or assignments of any such Notes whether in different denominations
or otherwise.

     "Significant Nonpayment Default" means and includes:

          (a) an event of default under the Senior Credit Facility in respect of
     the  failure  of the  Company  to  comply  with any  material  covenant  or
     agreement in respect of the Senior Credit Facility or documents executed or
     delivered in connection  therewith (it being understood that the provisions
     of Sections 2.13,  5.2, 5.5, 5.6, 5.7 and 5.13,  Article 6 and Article 8 of
     the  Senior  Credit  Agreement,  as in  effect on the date  hereof  and any
     comparable  provisions  in effect  after  the date  hereof,  are  "material
     covenants" for such purpose);  and any event of default under Sections 9.2,
     9.5, 9.7 through 9.14  (inclusively)  under the Senior Credit Agreement (or
     any comparable provision in effect after the date hereof); and

          (b) an event of  default in  respect  of the  Senior  Credit  Facility
     arising out of any Event of Default in respect of this Note.


                                      -10-
<PAGE>

     "Subordinated  Debt" means and includes all  obligations,  liabilities  and
indebtedness  of the  Company  now  or  hereafter  existing,  whether  fixed  or
contingent,  and whether for principal,  interest  (including  interest accruing
after the filing of a petition under the Federal  Bankruptcy Code, to the extent
allowed), fees, expenses,  indemnification or otherwise, that is subordinated to
the obligations of the Company under any Senior Debt, and shall include, without
limitation,  all  obligations,  in respect of this  Note,  and all other  Senior
Subordinated Debt.

4. Conversion

     4.1 The Holder may convert the outstanding  principal  amount of this Note,
and  accrued  and unpaid  interest  thereon  (or a portion  of such  outstanding
principal  amount as provided in Section 4.3) into fully paid and  nonassessable
shares of Common Stock of the Company ("Conversion Shares") at any time prior to
the time the outstanding  principal  amount of this Note, and accrued and unpaid
interest thereon is paid in full, at the Conversion Price then in effect, except
that if this  Note is to be  prepaid  in  full or  repurchased  pursuant  to the
provisions  hereof,  such  conversion  right  shall  terminate  at the  close of
business on the Prepayment  Date or the Change in Control  Purchase Date, as the
case may be. The number of shares of Common Stock  issuable  upon  conversion of
this Note shall be determined by dividing the principal  amount (and accrued and
unpaid  interest,  if any) to be converted by the conversion  price in effect on
the Conversion Date (the "Conversion  Price").  The initial  Conversion Price is
$.56 and is subject to adjustment as provided in this Section 4.

     The  provisions of this Note that apply to  conversion  of the  outstanding
principal amount of this Note and accrued and unpaid interest thereon also apply
to a partial  conversion of this Note.  The Holder is not entitled to any rights
of a holder of Conversion  Shares until the Holder has converted this Note (or a
portion thereof) into Conversion  Shares,  and only to the extent that this Note
is deemed to have been converted into Conversion Shares under this Section 4.

     4.2 To convert all or a portion of this Note,  the Holder must (a) complete
and sign a notice of  election  to  convert  substantially  in the form  annexed
hereto (each, a "Conversion Notice"), (b) surrender the Note to the Company, (c)
furnish  appropriate  endorsements  or  transfer  documents  if  required by the
Company and (d) pay any transfer or similar tax, if required.  The date on which
the  Holder  satisfies  all of such  requirements  is the  conversion  date (the
"Conversion  Date").  As soon as practicable,  and in any event within three (3)
business days, after the Conversion Date, the Company will deliver,  or cause to
be  delivered,  to the Holder a certificate  for the number of whole  Conversion
Shares issuable upon such  conversion and a check for any fractional  Conversion
Share  determined  pursuant to Section 4.4 and for interest on this Note accrued
and unpaid  through the  Conversion  Date  (unless  such  interest has also been
converted  as  permitted  by this  Section  4).  The  person  in whose  name the
certificate  for  Conversion  Shares  is  to  be  registered  shall  become  the
shareholder of record on the Conversion Date and, as of the Conversion Date, the
rights  of the  Holder  shall  cease as to the  portion  thereof  so  converted;
provided,  however,  that no  surrender  of a Note on any date  when  the  stock
transfer  books of the Company  shall be closed shall be effective to constitute
the person entitled to receive the Conversion Shares upon such conversion as the
shareholder of record of such Conversion Shares on such date, but such surrender
shall be effective to constitute the person  entitled to receive such Conversion
Shares as the  shareholder  of record  thereof for all  purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
provided further that such conversion shall be at the Conversion Price in effect
on the date that this Note shall have been surrendered for conversion, as if the
stock transfer books of the Company had not been closed.

     4.3 In the case of a partial conversion of this Note, upon such conversion,
the Company  shall  execute  and  deliver to the  Holder,  at the expense of the
Company,  a new Note in an aggregate  principal  amount equal to the unconverted
portion  of the  principal  amount.  This  Note  may be  converted  in part in a
principal  amount  equal to  $100,000  (or a lesser  amount  with the  Company's
written  consent)  or an  integral  multiple  thereof,  unless  the  outstanding
principal  amount of this Note is less than $100,000,  in


                                      -11-
<PAGE>

which  case,  only such  outstanding  principal  amount and  accrued  and unpaid
interest thereon is convertible into Conversion Shares.

     4.4 No fractional Conversion Shares shall be issued upon conversion of this
Note.  Instead of any  fractional  Conversion  Share  which would  otherwise  be
issuable  upon  conversion of this Note,  the Company shall  calculate and pay a
cash  adjustment in respect of such fraction  (calculated to the nearest 1/100th
of a share) in an amount equal to the same fraction of the  Conversion  Price at
the close of business on the Conversion Date.

     4.5 The issuance of certificates for Conversion  Shares upon the conversion
of any Security shall be made without charge to the Holder for such certificates
or for  any tax in  respect  of the  issuance  of such  certificates,  and  such
certificates shall be issued in the name of, or in such names as may be directed
by, the  Holder;  provided,  however,  that in the event that  certificates  for
Conversion Shares are to be issued in a name or names other than the name of the
Holder,  such Note, when surrendered for conversion,  shall be accompanied by an
instrument of transfer,  in form  satisfactory to the Company,  duly executed by
the Holder or his duly authorized attorney; and provided further, moreover, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer  involved in the issuance and delivery of any such  certificates
in a name or names other than that of the Holder,  and the Company  shall not be
required  to issue or deliver  such  certificates  unless or until the person or
persons  requesting  the  issuance  thereof  shall have paid to the  Company the
amount of such tax or shall have  established to the satisfaction of the Company
that such tax has been paid or is not applicable.

     4.6  (a) In  case  the  Company  shall  pay or  make a  dividend  or  other
distribution  to all holders of its Common Stock in shares of Common Stock,  the
Conversion  Price in effect at the opening of business on the day next following
the date fixed for the  determination  of shareholders  entitled to receive such
dividend or other  distribution  shall be reduced by multiplying such Conversion
Price by a  fraction,  of which the  numerator  shall be the number of shares of
Common  Stock  outstanding  at the close of  business on the date fixed for such
determination,  and the  denominator  shall be the sum of the  numerator and the
total number of shares  constituting such dividend or other  distribution,  such
reduction to become effective  immediately  after the opening of business on the
day next  following the date fixed for such  determination.  For the purposes of
this  Section  4.6(a),  the  number  of  shares  of  Common  Stock  at any  time
outstanding shall not include shares of Common Stock held in the treasury of the
Company.  The  Company  will not pay any  dividend or make any  distribution  on
shares of Common Stock held in the treasury of the Company.

     (b) In the event that the Company shall at any time prior to the conversion
in full of the Note declare a dividend (other than a dividend  consisting solely
of shares of Common  Stock or a cash  dividend  or  distribution  payable out of
current or retained  earnings) or otherwise  distribute to its holders of Common
Stock  any  monies,  assets,   property,   rights,  evidences  of  indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity,  or any other thing of value, the Holder or Holders
of the Note to the extent of the unconverted portion thereof shall thereafter be
entitled,  in  addition  to the  shares  of  Common  Stock or  other  securities
receivable  upon the conversion  thereof,  to receive,  upon  conversion of such
unconverted  portion of the Note,  the same monies,  property,  assets,  rights,
evidences  of  indebtedness,  securities  or any other  thing of value that they
would  have  been   entitled  to  receive  at  the  time  of  such  dividend  or
distribution.  At the time of any such  dividend  or  distribution,  the Company
shall  make  appropriate  reserves  to  ensure  the  timely  performance  of the
provisions of this Subsection.

     (c) In case the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock,  the  Conversion  Price in effect at
the opening of business on


                                      -12-
<PAGE>

the day following the day upon which such subdivision becomes effective shall be
proportionately  reduced,  and,  conversely,  in case the outstanding  shares of
Common  Stock shall each be combined  into a smaller  number of shares of Common
Stock,  the  Conversion  Price in effect at the  opening of  business on the day
following  the day  upon  which  such  combination  becomes  effective  shall be
proportionately  increased,  such reduction or increase,  as the case may be, to
become effective  immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.

     (d) In case the  Company  shall fail to take a record of the holders of its
shares of Common Stock for the purpose of  entitling  them to receive a dividend
or other  distribution  payable in shares of Common Stock, then such record date
shall be deemed to be the date of the issue of the shares of Common Stock deemed
to have been  issued as a result of the  declaration  of such  dividend or other
distribution  or the  date of the  granting  of such  right of  subscription  or
purchase, as the case may be.

     4.7 No adjustment  in the  Conversion  Price shall be required  unless such
adjustment  would require an increase or decrease of at least one cent ($.01) in
the Conversion Price; provided, however, that any adjustments which by reason of
this Section 4.7 are not required to be made shall be carried  forward and taken
into account in any subsequent adjustment.

     4.8 Notice of Certain Events.  (a) In the event that: (i) the Company takes
any action which would require an adjustment in the Conversion  Price;  (ii) the
Company takes any action described in Section 4.9(a), (b) or (c); or (iii) there
is a dissolution or  liquidation of the Company;  the Holder may wish to convert
this Note into shares of  Conversion  Shares prior to the record date for or the
effective date of the transaction so that such Holder may receive the securities
or assets  which a holder of  shares of Common  Stock on that date may  receive.
Therefore,  the Company shall give notice to the Holder in  accordance  with the
provisions of this Section 4.8 stating the proposed record or effective date, as
the case may be, which  notice  shall be given prior to the  proposed  record or
effective  date and, in any case,  no later than notice of such  transaction  is
given to holders  of Common  Stock.  Failure  to give such  notice or any defect
therein shall not affect the validity of any  transaction  referred to in clause
(i), (ii) or (iii) of this Section.

     (b)  Upon  the  occurrence  of  each  adjustment  or  readjustment  of  the
Conversion Price pursuant to this Section 4, the Company, at its expense,  shall
promptly  compute such  adjustment or  readjustment in accordance with the terms
hereof and prepare and furnish to each Holder a  statement,  signed by its chief
financial officer,  setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
The Company shall,  upon the written request at any time of any Holder,  furnish
or cause to be furnished  to such Holder a like  certificate  setting  forth (i)
such  adjustment  and  readjustment,  (ii) the  Conversion  Price at the time in
effect,  and (iii) the number of shares of Common Stock and the amount,  if any,
of other property which at the time would be received upon the Conversion of the
portion of this Note specified in such request.

     4.9 If any of the following shall occur, namely:

          (a) any  reclassification  or change of  outstanding  shares of Common
     Stock  issuable  upon  conversion  of this Note (other than a change in par
     value,  or from par  value  to no par  value,  or from no par  value to par
     value, or as a result of a subdivision or combination);

          (b) any consolidation or merger to which the Company is a party, other
     than a merger in which the Company is the continuing  corporation and which
     does not result in any  reclassification of, or change (other than a change
     in name,  or par value,  or from par value to no par value,  or from no par
     value to par  value or as a result of a  subdivision  or  combination)  in,
     outstanding


                                      -13-
<PAGE>

     shares of Common Stock; or

          (c) any sale or conveyance of all or substantially all of the property
     or business of the Company and its subsidiaries as an entirety;

then the Company, or such successor or purchasing  corporation,  as the case may
be,  shall,  as  a  condition  precedent  to  such   reclassification,   change,
consolidation, merger, sale or conveyance, execute and deliver to the Holder, an
agreement in form  satisfactory  to the Holder  providing  that the Holder shall
have the right to convert  this Note into the kind and amount of shares of stock
and  other  securities  and  property  (including  cash)  receivable  upon  such
reclassification,  change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of this Note
immediately prior to such reclassification,  change, consolidation, merger, sale
or conveyance.  Such agreement  shall provide for  adjustments of the Conversion
Price  which  shall  be as  nearly  equivalent  as  may  be  practicable  to the
adjustments of the  Conversion  Price provided for in this Section 4. If, in the
case of any such consolidation,  merger, sale or conveyance,  the stock or other
securities and property  (including  cash)  receivable  thereupon by a holder of
Common  Stock  includes  shares of stock or other  securities  and property of a
corporation other than the successor or purchasing corporation,  as the case may
be, in such consolidation, merger, sale or conveyance, then such agreement shall
also be executed by such other  corporation  and shall  contain such  additional
provisions  to protect  the  interests  of the Holder as the Board of  Directors
shall reasonably  consider necessary by reason of the foregoing.  The provisions
of this  Section  4.9 shall  similarly  apply to  successive  reclassifications,
changes, consolidations, mergers, sales or conveyances.

     4.10 The Company shall at all times reserve and keep  available,  free from
preemptive rights,  out of its authorized and unissued Common Stock,  solely for
the  purpose  of  effecting  the  conversion  of this Note,  the full  number of
Conversion Shares then issuable upon the conversion in full of this Note.

     4.11 If the Company or an affiliate of the Company  shall at any time after
the date hereof and prior to the conversion of the Note in full issue any rights
to subscribe  for shares of Common Stock or any other  securities of the Company
or of such affiliate to all the  shareholders of the Company,  the Holder of the
unconverted portion of the Note shall be entitled,  in addition to the shares of
Common Stock or other  securities  receivable  upon the Conversion  thereof,  to
receive  such  rights  at the time  such  rights  are  distributed  to the other
shareholders of the Company.

5. Affirmative Covenants

     The Company  covenants  that on and after the Issue Date and so long as any
portion of the Note shall be outstanding:

     5.1 The  Company  will,  and will  cause each of its  Subsidiaries  to, pay
before they  become  delinquent:  (a) all taxes,  assessments  and  governmental
charges or levies imposed upon it or its property; and (b) all claims or demands
of materialmen,  mechanics, carriers, warehousemen, vendors, landlords and other
like  persons  that,  if unpaid,  might by law become a Lien upon its  property;
provided,  that items of the foregoing  description  need not be paid so long as
such items are being contested in good faith and by appropriate  proceedings and
as to which  appropriate  reserves in accordance with GAAP have been established
and  maintained  with  respect  thereto,  unless  and until  any Lien  resulting
therefrom attaches to its property and becomes enforceable,  unless such Lien is
effectively stayed or fully bonded pending the disposition of such proceedings.

     5.2 The Company will, and will cause each of its subsidiaries to:

          (a) maintain its property that is reasonably  necessary in the conduct
     of its business as it is  currently be conducted in good working  order and
     condition, ordinary wear and tear, obsolescence and insured casualty losses
     excepted;


                                      -14-
<PAGE>

          (b) maintain,  with  insurers  reasonably  believed to be  financially
     sound and  reputable,  insurance  with respect to its property and business
     against  such  casualties  and  contingencies,  of such  types  and in such
     amounts as is customary in the case of corporations  engaged in the same or
     a similar business and similarly situated;

          (c) keep proper books of record and account, in which full and correct
     entries shall be made of all dealings and transactions of or in relation to
     the properties and business thereof;

          (d) do or cause to be done all things reasonably necessary to preserve
     and keep in full force and effect its corporate existence, corporate rights
     (charter and  statutory) and corporate  franchises,  except as permitted by
     Section 6.1;

          (e) comply, in all material respects,  with all applicable laws, rules
     and regulations (including,  without limitation,  ERISA, Environmental Laws
     and Environmental Permits) and obtain all licenses, permits, franchises and
     other  governmental  authorizations  necessary  for  the  ownership  of its
     properties and the conduct of its business,  except where its obligation to
     so comply being contested in good faith and by appropriate  proceedings and
     adequate resources have been established are being maintained in accordance
     with GAAP,  and except  where  failure to comply  could not  reasonably  be
     expected to have a Material Adverse Effect; and

          (f) conduct its business so as not to become  subject to any liability
     under any Environmental Law that,  individually or in the aggregate,  could
     reasonably be expected to have a Material  Adverse  Effect and except where
     any  such  liability  is  being  contested  in good  faith  by  appropriate
     proceedings  and  adequate  reserves  have been  established  and are being
     maintained in accordance with GAAP.

     5.3 The  Company  will  conduct,  and  cause  each of its  subsidiaries  to
conduct,  all  transactions  otherwise  permitted by this Note with any of their
Affiliates on terms that are fair and  reasonable  and no less  favorable to the
Company or any such subsidiary than it could obtain in a comparable  arms-length
transaction with a person not an Affiliate; provided, however, that this Section
5.3 shall not be deemed to prohibit any transactions  solely between the Company
and  its  wholly-owned  subsidiaries  carried  out in  the  ordinary  course  of
business, subject, however, to any applicable provisions of Section 6.

     5.4 The Company will make all payments and otherwise perform,  or cause the
relevant subsidiary of the Company to pay or otherwise perform,  all obligations
in  respect of all leases of real  property  to which the  Company or any of its
subsidiaries is a party, keep such leases in full force and effect and not allow
such leases to lapse or be  terminated  or any rights to renew such leases to be
forfeited  or  canceled,  notify  the  Holder of any  default  by any party with
respect  to such  leases  (except  during  any period in which the Holder or any
Affiliate  thereof is serving as a director or executive officer of the Company)
and  cooperate  with the Holder in all  respects to cure any such  default,  and
cause each of its  subsidiaries to do so except,  in any case, where the failure
to do so,  either  individually  or in the  aggregate,  could not  reasonably be
expected to have a Material Adverse Effect and except where its failure to do so
is being contested in good faith and by proper proceedings.

     5.5  The  Company  will  perform  and  observe,   and  cause  each  of  its
subsidiaries to perform and observe, all of the material terms and provisions of
each Material  Contract (as that term is defined in the Senior Credit Agreement)
to which it is a party to be  performed or observed by it,  maintain,  and cause
each of its subsidiaries to maintain, each such Material Contract to which it is
a  party  in  full  force  and  effect,  and  enforce,  and  cause  each  of its
subsidiaries to enforce,  each such Material  Contract to which it is a party in
accordance  with its  terms,  except  where  the  failure  to do so would not be
reasonably likely to have a Material Adverse Effect and except where its failure
to do so is being contested in good faith and by proper proceedings.


                                      -15-
<PAGE>

6. Negative Covenants

     6.1 The Company  will not, and will not permit any  subsidiary  thereof to,
(a) merge with or into or  consolidate  with any other person,  permit any other
person to merge or consolidate with or into it, or (b) sell all or substantially
all of its property to any other person;  provided,  however, that the foregoing
restriction  does not apply to the merger or  consolidation  of the Company with
another  corporation or transfer of all or substantially  all of the property of
the Company to any other person if: (i) the  corporation  that results from such
merger or consolidation or to which all or substantially  all of the property of
the Company is transferred (the "Surviving  Corporation") (x) is organized under
the  laws  of,  and  conducts   substantially   all  of  its  business  and  has
substantially all of its properties  within, the United States of America or any
jurisdiction  or  jurisdictions   thereof  and  (y)  has  shareholders'   equity
immediately  after  such  transaction  that is  equal  to or  greater  than  the
shareholders' equity of the Company immediately prior to such transaction;  (ii)
the due and  punctual  payment of the  principal  of, and interest on this Note,
according to their tenor, and the due and punctual performance and observance of
all the covenants in this Note, to be performed or observed by the Company,  are
expressly assumed pursuant to such assumption agreements and instruments in such
forms as shall be approved  reasonably by the Holder, or assumed by operation of
law,  by  the  Surviving  Corporation;  and  (iii)  immediately  prior  to,  and
immediately  after the consummation of the transaction,  and after giving effect
thereto,  no Default or Event of Default exists or would exist.  Notwithstanding
the foregoing, a subsidiary of the Company may merge into the Company so long as
the Company is the Surviving  Corporation,  and a subsidiary of the Company, may
merge with or into a  wholly-owned  subsidiary  of the Company,  so long as such
wholly-owned subsidiary is the Surviving Corporation.  Notwithstanding  anything
contained herein to the contrary,  the Company may (i) sell all or substantially
all of its  property  to, or enter  into a merger  transaction  with,  any other
person if such sale or merger  follows and is the result of an  acceleration  of
the Senior Debt and the  transaction  has been  approved by the Senior Agent and
the banks which are parties to the Senior Credit Agreement.

     6.2 The Company will not, and will not permit any subsidiary of the Company
to,  sell,  lease as lessor,  transfer  or  otherwise  dispose  of its  property
(collectively,   "Transfers"),   except:

          (A)  Transfers of inventory and of  unnecessary,  obsolete or worn-out
     assets,  in each case in the ordinary  course of business of the Company or
     such subsidiary;

          (B)  Transfers  from a  subsidiary  of the Company to the Company or a
     wholly-owned   subsidiary  of  the  Company,  or  from  the  Company  to  a
     wholly-owned  subsidiary of the Company  provided such subsidiary  issues a
     guaranty of the Company's  obligations  under this Note consistent with the
     provisions of Section 5.11;

          (C) any other  Transfer  at any time of any  property  to a person for
     such  consideration as determined,  in each case by the Board of Directors,
     in its good faith opinion, to be in the best interest of the Company and to
     reflect the fair market value of such property if the conditions  specified
     in each of the  following  clauses  (A) and (B)  would  be  satisfied  with
     respect  to such  Transfer:  (A) the sum of:  (1) the  book  value  of such
     property at the time of Transfer;  plus (2) the aggregate book value of all
     other property Transferred (other than in transactions described in clauses
     (A) and  (B)  above),  after  the  Issue  Date,  would  not  exceed  25% of
     consolidated  total assets of the Company and its subsidiaries  (determined
     in  accordance  with GAAP)  measured as of the last day of the  immediately
     preceding  fiscal quarter of the Company;  and (B)  immediately  before and
     after the consummation of the Transfer, and after giving effect thereto, no
     Default or Event of Default would exist;

          (D) any other  Transfer of property to the extent that the proceeds of
     such Transfer,  net of transaction costs and expenses incurred and actually
     paid in connection with such Transfer  (including sales,  transfer or gains
     taxes),  within 365 days after such  Transfer are applied by the Company or
     such subsidiary (A) to fund its working capital and capital  expenditure or
     acquisitions  requirements,  and/or (B) to pay or prepay a principal amount
     of Debt  of the  Company  or any  subsidiary


                                      -16-
<PAGE>

     thereof (other than Junior  Subordinated  Debt) equal to the amount of such
     net proceeds;  and, in connection with any such payment,  the Company shall
     pay all  accrued  interest  thereon and any  premium or  make-whole  amount
     required to be paid in connection therewith; provided, however, that in the
     event that any Debt so prepaid is not Senior Debt,  then the Company  shall
     prepay,  together with such  prepayment of such other Debt, a  proportional
     and ratable principal amount of this Note pursuant to Section 1.6.;

          (E) any Transfers pursuant to the Acquisition Obligations; and

          (F) any other  Transfer  permitted to be made by the Company or any of
     its  subsidiaries  consistent with the terms of the Senior Credit Agreement
     as in effect on the Issue Date.

     6.3 The Company will not, and will not permit any subsidiary  to,  directly
or indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to, any Debt, other than:

          (A) this Note;

          (B) Debt owing by the Company to any  wholly-owned  subsidiary  of the
     Company and Debt of a subsidiary  of the Company  owing to the Company or a
     wholly-owned subsidiary of the Company;

          (C) Debt existing or incurred on the Issue Date and listed on Schedule
     6.3 (including Debt under the Senior Credit Agreement);

          (D) Debt incurred  under the Senior Credit  Facility from time to time
     following the Issue Date;

          (E) Debt incurred or created to refinance any of the Debt permitted by
     clauses (C) and (D) of this Section 6.3;

          (F) Debt (other  than this Note) owing by the Company or a  subsidiary
     thereof to Norton  Herrick,  Evan Herrick,  Michael  Herrick  and/or Howard
     Herrick  (together,  the "Herricks")  and/or any of their family members or
     respective Affiliates;

          (G) Debt  incurred by the Company or a  subsidiary  thereof to finance
     the payment of the Change in Control Purchase Price of this Note;

          (H) Debt,  in  addition  to the Debt  permitted  to be incurred by the
     clauses (A) through (I) of this Section 6.3, in the principal amount at any
     time outstanding not to exceed $20,000,000;

          (I) Any Guaranties  made or issued by the Company of Debt permitted to
     be incurred by any of its  subsidiaries  pursuant to clauses (E), (F), (G),
     and (H) above and clauses (J) and (K) below and  Guaranties  made or issued
     by  subsidiaries  of the  Company of Debt  permitted  to be incurred by the
     Company  pursuant to clauses  (C),  (D),  (E),  (F),  (G) and (H) above and
     clauses (J) and (K) below; and

          (J) Up to  $500,000  of  additional  Debt  on the  same  terms  as the
     $2,500,000 Convertible Senior Promissory Note Due September 30, 2002 issued
     to Huntingdon Corporation on the date hereof; and


                                      -17-
<PAGE>

          (K) Any other Debt  permitted  to be incurred by the Company or any of
     its  subsidiaries  consistent with the terms of the Senior Credit Agreement
     as in effect on the Issue Date.

     6.4 Except for Debt listed on Schedule  6.3, the Company will not, and will
not permit any subsidiary  thereof to, incur,  assume or Guaranty any Debt which
is  subordinated  in right of payment  to any other  Debt of the  Company or any
subsidiary thereof, unless such Debt is also subordinated in right of payment to
the  obligations  of the  Company in  respect  of this Note on terms  reasonably
acceptable  to the Holder.  Except for Debt listed on Schedule 6.3 and permitted
by  Section  6.3(K)  hereof,  the  Company  will not,  and will not  permit  any
subsidiary  thereof  to,  incur or create any Debt in favor of an  Affiliate  or
another  subsidiary  (other than Debt in favor of the Company or a  wholly-owned
subsidiary  thereof  which  is a  guarantor  of Debt  under  the  Senior  Credit
Facility)  unless  such Debt is also  subordinated  in right of  payment  to the
obligations  of the  Company  in  respect  of  this  Note  on  terms  reasonably
acceptable to the Holders.

     6.5 The Company  will not, and will not permit any  subsidiary  thereof to,
engage in any  business if, as a result,  the general  nature of the business in
which the Company and its subsidiaries,  taken as a whole, would then be engaged
would be substantially  changed from the general nature of the business in which
the Company  and the  Subsidiaries,  taken as a whole,  are engaged on the Issue
Date.

7. Events of Default

     7.1 An "Event of Default" exists at any time if any of the following occurs
(whether  such  occurrence  shall be  voluntary  or come about or be effected by
operation of law or otherwise):

          (a) The Company  defaults in the payment of the principal of this Note
     when due (whether at the Maturity  Date or any  Prepayment  Date) or in the
     payment of the Change in Control Purchase Price when due or defaults in the
     payment  of any  accrued  interest  on this Note when due and such  default
     continues  for a period of 30  business  days after the date such  interest
     became due;

          (b) The Company or any subsidiary  thereof defaults in the performance
     or  observance  of any of the  covenants  contained  in  Section  5.2(d) or
     Section 6 hereof or defaults in the performance or observance of any of the
     covenants  contained  in Sections  5.2(e),  5.3, 5.4 (e) or 5.10 hereof and
     such default remains uncured for more than 30 days;

          (c) The Company or any subsidiary  thereof defaults in the performance
     of any covenants  contained in this Note, and such default remains uncured,
     after notice and an opportunity to cure, for more than 60 days;

          (d) Any warranty, representation or other statement by or on behalf of
     the  Company  contained  in  this  Note  or in any  certificate,  financial
     statement,  report or  notice  furnished  after  the date  hereof to Holder
     pursuant  to  the  terms  of  this  Note,  or  in  any  written  amendment,
     supplement,  modification or waiver with respect to any such document shall
     be false or misleading in any material respect when made;

          (e) Either (i) the Company or any subsidiary thereof fails to pay when
     due and within any applicable  period of grace,  any principal of, premium,
     if any,  or  interest  in  respect  of any Debt for  borrowed  money of the
     Company or such subsidiary in the aggregate principal amount of $2 million;
     or (ii) any event  shall occur or any  condition  shall exist in respect of
     such Debt, or under any agreement securing or relating to such Debt, and in
     either  case,  as a result  thereof:  (A) the  maturity of such Debt,  or a
     material  portion  thereof,  is accelerated,  or (B) any one or more of the
     holders  thereof or a trustee  therefor is permitted to require the Company
     or such  subsidiary to repurchase such Debt from the holders  thereof,  and
     any such trustee or holder  exercises  such option;  or (C) any such one or
     more of such  holders  or such  trustee  declares  an  acceleration  of the
     maturity of such Debt;


                                      -18-
<PAGE>

          (f) a receiver, liquidator, custodian or trustee of the Company or any
     subsidiary  thereof or of all or any  substantial  part of the  property of
     either is  appointed  by court  order and such order  remains in effect for
     more than 60 days;  or an order for relief is entered  with  respect to the
     Company or any such subsidiary, or the Company or any subsidiary thereof is
     adjudicated a bankrupt or insolvent;  or all or any substantial part of the
     property of the Company or any  subsidiary  thereof is sequestered by court
     order  and such  order  remains  in  effect  for more  than 60 days;  or an
     involuntary  case or  proceeding  is  commenced  against the Company or any
     subsidiary   thereof  under  the  Federal  Bankruptcy  Code  or  any  other
     bankruptcy reorganization,  arrangement,  insolvency, readjustment of debt,
     dissolution  or  liquidation  law  of  any  jurisdiction,  whether  now  or
     hereafter in effect, and is not dismissed within 60 days after such filing;

          (g) The Company or any subsidiary  thereof:  (i) commences a voluntary
     case or  proceeding  or seeks  relief  under any  provision  of the Federal
     Bankruptcy  Code  or any  other  bankruptcy,  reorganization,  arrangement,
     insolvency,  readjustment  of debt,  dissolution or liquidation  law of any
     jurisdiction, whether now or hereafter in effect, or consents to the filing
     of any petition  against it under any such law; or (ii) makes an assignment
     for the benefit of creditors,  or admits in writing its inability or fails,
     to pay  its  debts  generally  as  they  become  due,  or  consents  to the
     appointment  of a  receiver,  liquidator  or  trustee  of the  Company or a
     subsidiary thereof or of all or a substantial part of its property; or

          (h)  A  final,   non-appealable  judgment  or  final,   non-appealable
     judgments  for the payment of money  aggregating  in excess of $2.0 million
     (in excess of any insurance  relating to such judgments or judgments or any
     claim or claims  underlying  such  judgment or  judgments  and the relevant
     insurer or insurers shall not have denied liability under such insurance or
     rejected  any  claims  made with  respect  thereto)  is or are  outstanding
     against one or more of the Company and its subsidiaries and any one of such
     judgments  shall have been  outstanding for more than 60 days from the date
     of its entry and shall not have been discharged in full or stayed; or

          (i) The Note  shall  cease to be in full  force and effect or shall be
     declared  by a court of  competent  jurisdiction  to be void,  voidable  or
     unenforceable,  or the  validity  or  enforceability  of the Note  shall be
     contested by the Company or any Affiliate,  or the Company or any Affiliate
     shall deny that the Company has any further  liability or obligation  under
     the Note.

7.2 Default Remedies

     (a) If any Event of Default specified in Section 7.1(f) or (g) shall exist,
the  principal  amount  of this  Note at the  time  outstanding,  together  with
interest accrued and unpaid thereon, shall automatically  immediately become due
and payable, without presentment,  demand, protest or notice of any kind, all of
which are hereby expressly waived.

     (b) Subject to Section 3.6 and Section 3.7, if any Event of Default,  other
than those specified in Section 7.1(a), shall exist, the Holder may exercise any
right,  power or  Remedy  permitted  to such  Holder by law,  and shall  have in
particular,  without  limiting the  generality  of the  foregoing,  the right to
declare the entire  principal  of, and all interest  accrued and unpaid on, this
Note then outstanding to be, and this Note shall thereupon become, forthwith due
and payable,  without any  presentment,  demand,  protest or other notice of any
kind, all of which are hereby expressly waived,  and the Company shall forthwith
pay to the Holder such principal and interest.

     (c) Subject to Sections 3.6 and 3.7,  during the continuance of an Event of
Default  described in Section 7.1(a) and  irrespective of whether the Note shall
have become due and payable  pursuant to Section 7.2(b),  the Holder may, at the
Holder's  option,  by notice in writing to the  Company,  declare the  principal
amount of this Note at the time  outstanding,  and accrued  and unpaid  interest
thereon,


                                      -19-
<PAGE>

to be, and the same shall thereupon become,  forthwith due and payable,  without
any presentment,  demand,  protest or other notice of any kind, all of which are
hereby expressly waived,  and the Company shall forthwith pay to the Holder such
principal and interest.

     (d)  During the  continuance  of an Event or Default  and  irrespective  of
whether this Note shall become due and payable  pursuant to Section 7.2(a),  (b)
or (c) and irrespective of whether the Holder shall otherwise have pursued or be
pursuing any other  rights or Remedies,  subject to Section 3.6 and Section 3.7,
the Holder may  proceed to protect  and  enforce  its rights  under this Note by
exercising  such  Remedies as are  available  to such holder in respect  thereof
under  applicable  law,  either by suit in equity or by action at law,  or both,
whether for specific  performance of any agreement contained herein or in aid of
the exercise of any power granted herein.

     (e) No course of dealing on the part of the Holder nor any delay or failure
on the part of the Holder to  exercise  any right  shall  operate as a waiver of
such right or otherwise prejudice the Holder's rights, powers and Remedies.  All
rights  and  Remedies  of the  Holder  hereunder  and under  applicable  law are
cumulative  to, and not  exclusive  of, any other  rights or Remedies the Holder
would otherwise have.

     (f) The rights of the Holder to receive  payments  in respect of this Note,
and to exercise  any  Remedies,  solely as between the Holder and the holders of
the Senior Debt,  shall be subject in all respects to the  provisions of Section
3;  provided,  however,  that all such rights  shall  remain  unconditional  and
absolute as between the Holder and the Company.

     7.3 If a declaration  is made pursuant to Section 7.2(b) arising solely out
of an Event of Default  described in Section  7.1(e)  regarding the Senior Debt,
then and in every  such  case,  if the  holders  of the  Senior  Debt waive such
default in respect of the Senior Debt or such default is cured,  and the holders
of the Senior Debt rescind or annul any and all accelerations of the maturity of
all or any portion of the Senior Debt and any required or demanded repurchase of
all or any portion  thereof,  then,  upon  written  notice to the Holder of such
events with respect to the Senior Debt, any declaration made pursuant to Section
7.2(b) and the consequences thereof, shall automatically and without any further
action on the part of the Holder, be annulled and rescinded;  provided, however,
that at the time such  declaration  is deemed  annulled  and  rescinded:  (i) no
judgment or decree  shall have been entered for the payment of any moneys due on
or pursuant to this Note; and (ii) no other Default or Event of Default shall be
continuing;  provided further that no such rescission and annulment shall extend
to or affect  any  subsequent  Default  or Event of  Default or impair any right
consequent thereon.

8. Interpretation of this Note

     8.1 As used herein,  the following  terms have the respective  meanings set
forth below or set forth in the Section hereof following such term:

          "Affiliate"  means and  includes  with  respect to any person,  at any
     time,  each other  person  (other  than,  with  respect to the  Company,  a
     subsidiary of the Company):  (a) that directly or indirectly through one or
     more  intermediaries  controls,  or is  controlled  by, or is under  common
     control with, such person; (b) that beneficially owns or holds five percent
     or more of any class of the Voting Stock of such  person;  (c) five percent
     or more of the Voting Stock (or if such other person is not a  corporation,
     five percent or more of the equity interest) of which is beneficially owned
     or held by such person; or (d) that is an officer or director of or holds a
     position of comparable  authority with such person; at such time; provided,
     however,  that no  person  holding  this  Note  shall  be  deemed  to be an
     "Affiliate"  of the  Company  solely  by virtue  of the  ownership  of such
     securities.  As used in this  definition:  "control"  means the possession,
     directly or  indirectly,  of the power to direct or cause the  direction of
     the management and policies of a person,  whether  through the ownership of
     voting securities, by contract or otherwise.


                                      -20-
<PAGE>

          "Applicable  Interest Law" means any present or future law (including,
     without limitation, the laws of the State of New York and the United States
     of  America)  which has  application  to the  interest  and  other  charges
     pursuant to this Note.

          "Board of Directors" means, at any time, the board of directors of the
     Company or any committee  thereof  that,  in the  instance,  shall have the
     lawful  power  to  exercise  the  power  and  authority  of such  board  of
     directors.

          "Capital  Lease"  means,  at any time,  a lease of any  property  with
     respect to which the lessee is required to recognize the  acquisition of an
     asset and the incurrence of a liability in accordance with GAAP.

          "Cash  Equivalents"  means,  for all  purposes  of  Section  3 hereof,
     equivalents  of  cash  that  are  acceptable  to the  Senior  Agent  in its
     reasonable business judgment.

          "Change in Control"  means,  at any time,  an  occurrence  or event or
     failure  of an event to  occur,  as a result  of which a person or group of
     related  persons  (other  than the  Herricks,  an  Affiliate  of any of the
     Herricks,  or any trust for the  benefit of any of the  Herricks)  acquires
     more than 50% of the Voting Stock of the Company.

          "Debt" with respect to any person,  means,  without  duplication,  the
     liabilities  of such person with  respect to: (a) borrowed  money;  (b) the
     deferred  purchase  price of property  acquired  by such person  (excluding
     accounts  payable and accrued  expenses  arising in the ordinary  course of
     business,  but  including  all  liabilities  created or  arising  under any
     conditional  sale or other title  retention  agreement  with respect to any
     such property); (c) borrowed money secured by any Lien existing on property
     owned by such person (whether or not such  liabilities  have been assumed);
     (d)  Capital  Leases  of  such  person;  (e)  letters  of  credit,  bankers
     acceptances or similar  instruments  serving a similar  function  issued or
     accepted by banks and other financial  institutions for the account of such
     person (whether or not representing  obligations for borrowed money), other
     than undrawn  trade  letters of credit in the ordinary  course of business;
     (f)  Swaps of such  person;  and (g) any  Guaranty  of such  person  of any
     obligation or liability of another person of obligations of the type listed
     in clause (a) through clause (f) of this definition of Debt; provided that,
     with  respect  to  the  Company,   Debt  shall  not  include  any  unfunded
     obligations  which may now or  hereafter  exist with  respect to  Company's
     Plans.  As used in this  definition,  "Swaps"  means,  with  respect to any
     person,  obligations with respect to interest rate swaps and currency swaps
     and similar  obligations  obligating such person to make payments,  whether
     periodically  or upon the  happening of a  contingency,  except that if any
     agreement  relating to such obligation  provides for the netting of amounts
     payable by and to such person thereunder or if any such agreement  provides
     for the simultaneous payment of amounts by and to such person, then in each
     such case, the amount of such obligations  shall be the net amount thereof.
     The  aggregate  net  obligation of Swaps at any time shall be the aggregate
     amount of the  obligations of such person under all Swaps assuming all such
     Swaps  had been  terminated  by such  person as of the end of the then most
     recently  ended  fiscal  quarter  of such  person.  If such  net  aggregate
     obligation  shall be an amount owing to such person,  then the amount shall
     be deemed to be zero. Unless the context otherwise  requires,  "Debt" means
     Debt of the Company or of a subsidiary of the Company.

          "Default"  means any  event  which,  with the  giving of notice or the
     passage of time, or both, would become an Event of Default.

          "Environmental  Law" means any law,  statute or regulation  enacted by
     any governmental authority in connection with or relating to the protection
     or regulation of the  environment,  including,  without  limitation,  those
     laws,   statutes  and   regulations   regulating  the  disposal,   removal,
     production,  storing,  refining,  handling,  transferring,   processing  or
     transporting of Hazardous  Materials and any applicable orders,  decrees or
     judgments issued by any court of competent  jurisdiction in connection with


                                      -21-
<PAGE>

     any of the foregoing.

          "Environmental  Permit"  means any  permit,  approval,  identification
     number or other authorization required by any Environmental Law.

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
     amended from time to time.

          "ERISA  Affiliate"  means  any  trade  or  business  (whether  or  not
     incorporated)  that is  treated  as a  single  employer  together  with the
     Company under Section 414 of the IRC.

          "GAAP" means accounting principles as promulgated from time to time in
     statements,  opinions  and  pronouncements  by the  American  Institute  of
     Certified Public Accountants and the Financial  Accounting  Standards Board
     and in such statements,  opinions and pronouncements of such other entities
     with respect to financial  accounting  of  for-profit  entities as shall be
     accepted  by a  substantial  segment of the  accounting  profession  in the
     United States.

          "Guaranty"  means with respect to any person (for the purposes of this
     definition,  the "Guarantor") any obligation (except the endorsement in the
     ordinary  course of  business  of  negotiable  instruments  for  deposit or
     collection)  of such  person  guaranteeing  or in effect  guaranteeing  any
     indebtedness,  dividend  or  other  obligation  of any  other  person  (the
     "Primary   Obligor")  in  any  manner,   whether  directly  or  indirectly,
     including,  without limitation,  obligations incurred through an agreement,
     contingent  or  otherwise,   by  the   Guarantor:   (a)  to  purchase  such
     indebtedness or obligation or any property  constituting security therefor;
     (b) to  advance  or supply  funds (i) for the  purchase  or payment of such
     indebtedness,  dividend or obligation;  or (ii) to maintain working capital
     or other balance sheet condition or any income  statement  condition of the
     Primary  Obligor or  otherwise to advance or make  available  funds for the
     purchase or payment of such  indebtedness,  dividend or obligation;  (c) to
     lease  property or to  purchase  securities  or other  property or services
     primarily  for the purpose of assuring  the owner of such  indebtedness  or
     obligation  of the  ability of the Primary  Obligor to make  payment of the
     indebtedness  or  obligation;  or (d)  otherwise to assure the owner of the
     indebtedness  or obligation of the Primary  Obligor against loss in respect
     thereof.

          "Hazardous Material" means all or any of the following: (a) substances
     that are defined or listed in, or  otherwise  classified  pursuant  to, any
     applicable   Environmental  Laws  as  "hazardous  substances",   "hazardous
     materials", "hazardous wastes", "toxic substances" or any other formulation
     intended to define,  list or classify  substances by reason of  deleterious
     properties such as ignitability,  corrosivity, reactivity, carcinogenicity,
     reproductive toxicity, "TLCP toxicity" or "EP toxicity"; (b) oil, petroleum
     or  petroleum  derived  substances,  natural  gas,  natural  gas liquids or
     synthetic  gas and  drilling  fluids,  produced  waters  and  other  wastes
     associated  with the  exploration,  development or production of crude oil,
     natural  gas or  geothermal  resources;  (c) any  flammable  substances  or
     explosives or any radioactive materials;  (d) asbestos or urea formaldehyde
     in any form; and (e) dielectric fluid containing levels of  polychlorinated
     biphenyls in excess of fifty parts per million.

          "IRC" means the Internal Revenue Code of 1986, together with all rules
     and regulations promulgated pursuant thereto, as amended from time to time.

          "Issue  Date"  means the tenth  (10th)  day  following  the  Company's
     issuance of a press release and written notice to its  shareholders  of the
     transactions contemplated hereby in accordance with the Rules of the Nasdaq
     Stock Market.

          "Lien" means any interest in property  securing an obligation owed to,
     or a claim by, a person other than the owner of such property (for purposes
     of this  definition,  the  "Owner"),  whether such


                                      -22-
<PAGE>

     interest is based on the common law, statute or contract,  and includes but
     is not limited to: (a) the security  interest lien arising from a mortgage,
     encumbrance,  pledge,  conditional  sale  or  trust  receipt  or  a  lease,
     consignment  or  bailment  for  security  purposes,  and the  filing of any
     financing  statement under the Uniform Commercial Code of any jurisdiction,
     or an agreement to give any of the foregoing; (b) reservations, exceptions,
     encroachments,    easements,    rights-of-way,    covenants,    conditions,
     restrictions,  leases and other title exceptions and encumbrances affecting
     real  property;  and (c) any  interest  in any  property  held by the owner
     evidenced  by  a  conditional  sale  agreement,   Capital  Lease  or  other
     arrangement  pursuant to which title to such  property has been retained by
     or vested in some other person for security purposes.  The term "Lien" does
     not  include  negative  pledge  clauses  in loan  agreements  and equal and
     ratable security clauses in loan agreements.

          "Material  Adverse  Effect"  means,  with  respect  to  any  event  or
     circumstance (either individually or in the aggregate with all other events
     and  circumstances),  an effect caused thereby or resulting  therefrom that
     would be  materially  adverse  as to, or in respect  of: (a) the  business,
     operations,  profits,  financial condition or properties of the Company and
     its  subsidiaries,  taken as a whole;  (b) the  ability  of the  Company to
     perform  its   obligations   under  this  Note;  or  (c)  the  validity  or
     enforceability of this Note.

          "Note" means this $3,000,000  principal  amount 9% Convertible  Senior
     Subordinated Note due December 31, 2004 issued by the Company,  as the same
     may be amended, modified,  supplemented,  refunded,  refinanced or extended
     from time to time.

          "Plan" means an "employee benefit plan" (as defined in section 3(3) of
     ERISA) that is or, within the preceding five years, has been established or
     maintained,  or to which  contributions  are or, within the preceding  five
     years,  have been made or required to be made,  by the Company or any ERISA
     Affiliate or with respect to which the Company or any ERISA  Affiliate  may
     have any liability.

          "Voting  Stock" means with respect to any  corporation,  any shares of
     stock  of such  corporation  whose  holders  are  entitled  under  ordinary
     circumstances  to vote for the election of  directors  of such  corporation
     (irrespective  of  whether  at the time any  stock  of any  other  class or
     classes shall have or might have voting power by reason of the happening of
     any contingency), and, in the case of the Company, shall include the Common
     Stock.  Except as otherwise  provided,  references herein to "Voting Stock"
     shall mean Voting Stock of the Company.

          8.2 (a)  Whenever  accounting  amounts of a group of persons are to be
     determined  "on a  consolidated  basis" it shall mean  that,  as to balance
     sheet amounts to be determined as of a specific time, the amount that would
     appear on a consolidated  balance sheet of such persons prepared as of such
     time,  and as to income  statement  amounts to be determined for a specific
     period, the amount that would appear on a consolidated  income statement of
     such  persons  prepared  in respect of such  period,  in each case with all
     transactions among such persons eliminated, and prepared in accordance with
     GAAP except as otherwise required hereby.

          (b) Where  any  provision  herein  refers to action to be taken by any
     person,  or which such person is  prohibited  from taking,  such  provision
     shall be applicable  whether such action is taken directly or indirectly by
     such person,  including actions taken by or on behalf of any partnership in
     which such person is a general  partner.

          (c) The  titles of the  Sections  of this  Note  appear as a matter of
     convenience  only, do not constitute a part hereof and shall not affect the
     construction hereof. The words "herein," "hereof," "hereunder" and "hereto"
     refer to this Note as a whole and not to any  particular  Section  or other
     subdivision.  References  to Annexes and  Sections  are,  unless  otherwise
     specified,  references to Sections of


                                      -23-
<PAGE>

     this Note.  References  to Annexes  and  Schedules  are,  unless  otherwise
     specified, references to Schedules attached to this Note.

          (d) Each  covenant  contained  herein  shall be  construed  (absent an
     express  contrary  provision  herein)  as being  independent  of each other
     covenant  contained herein,  and compliance with any one covenant shall not
     (absent such an express contrary  provision) be deemed to excuse compliance
     with one or more other covenants.

     8.3 THIS  NOTE  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  AND  ENFORCED  IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA,  WITHOUT REGARD TO ANY CHOICE
OF LAW  RULES  WHICH  WOULD  REQUIRE  THE  APPLICATION  OF THE LAW OF ANY  OTHER
JURISDICTION.  IN ADDITION,  THE PARTIES HERETO  SELECT,  TO THE EXTENT THEY MAY
LAWFULLY  DO SO, THE  INTERNAL  LAWS OF THE STATE OF  FLORIDA AS THE  APPLICABLE
INTEREST LAW.

9. Miscellaneous

     9.1 All  communications  under this Note  shall be in writing  and shall be
delivered either by nationwide  overnight  courier or by facsimile  transmission
(confirmed  by delivery by nationwide  overnight  courier sent on the day of the
sending of such facsimile transmission).  Communications to the Company shall be
addressed as set forth on Annex 1, or at such other address of which the Company
shall have notified the Holder.  Communications to the Holder shall be addressed
as set forth on Annex 1, or at such other  address of which  such  Holder  shall
have  notified  the Company  (and the Company  shall  record such address in the
register  for the  registration  and transfer of this Note).  Any  communication
addressed and delivered as herein  provided  shall be deemed to be received when
actually  delivered to the address of the addressee  (whether or not delivery is
accepted)  or  received  by  the  telecopy   machine  of  the   recipient.   Any
communication   not  so   addressed   and   delivered   shall  be   ineffective.
Notwithstanding the foregoing provisions of this Section 9.1, service of process
in any suit, action or proceeding arising out of or relating to this Note or any
transaction  contemplated  hereby,  or any  action or  proceeding  to execute or
otherwise  enforce any judgment in respect of any breach  hereunder or under any
document  hereby,  shall be delivered in the manner  provided in Section 9.6(c).

     9.2 All warranties, representations, statements of fact, certifications and
covenants  contained in this Note or in any  certificate,  financial  statement,
report or notice  delivered or provided  hereunder  shall be  considered to have
been  relied upon by the other party  hereto and shall  survive the  delivery to
such party  regardless  of any  investigation  made by or on behalf of any party
hereto.  All  statements  in any  certificate,  delivered  pursuant to the terms
hereof  shall  constitute   warranties  and   representations   hereunder.   All
obligations  hereunder (other than payment of this Note, but including,  without
limitation,  reimbursement  obligations in respect of costs,  expenses and fees)
shall survive the payment of this Note and the  termination  hereof.  Subject to
the preceding, this Note embodies the entire agreement and understanding between
the  Company  and  the  Holder,   and  supersedes   all  prior   agreements  and
understandings, relating to the subject matter hereof.

     9.3 The provisions hereof are intended to be for the benefit of the Holder,
from time to time,  of this Note,  and shall be  enforceable  by any such Holder
whether or not an express  assignment to such Holder of rights  hereunder  shall
have been made by the payee or his successors or assigns.  In the event that the
payee named herein  transfers  or assigns  less than all of this Note,  the term
"Holder" as used herein shall be deemed to refer to the assignor and assignee or
assignees  hereof,  collectively,  and any action  permitted  to be taken by the
Holder  hereunder  shall be taken only upon the  consent or  approval of persons
comprising the Holder that own that percentage  interest in the principal amount
of this Note as shall be  designated  by the payee  named  herein at the time of
such assignment.  Anything  contained in this Section 9.3  notwithstanding,  the
Company  may not  assign any of its  respective  rights,  duties or  obligations
hereunder other without the prior written consent of the Holder. For purposes of
the avoidance


                                      -24-
<PAGE>

of doubt,  the Holder of this Note  shall be  permitted  to pledge or  otherwise
grant a lien in and to this Note;  provided,  however,  that any such pledgee or
holder of a Lien shall not be considered a Holder  hereunder until it shall have
foreclosed  upon this Note in accordance  with  applicable  law and informed the
Company, in writing, of the same.

     9.4 This Note may be amended,  and the observance of any term hereof may be
waived,  with (and only with) the written consent of the Company and the Holder,
provided,  however,  that  without the written  consent of the holders of Senior
Debt, no amendment,  supplement or  modification of the provisions of Section 3,
or any defined  term to the extent used  therein,  shall be  effective as to any
holder of Senior Debt who has not  consented to such  amendment,  supplement  or
modification.

     Any amendment or waiver  consented to as provided in this Section 9.4 shall
be binding upon the then current Holder and upon each future holder of this Note
and upon the Company whether or not this Note shall have been marked to indicate
such amendment or waiver.  No such amendment or waiver shall extend to or affect
any obligation,  covenant,  agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon.

     9.5 The Company  shall pay when billed the  reasonable  costs and  expenses
(including reasonable attorneys' fees) incurred by the Holder in connection with
the  consideration,  negotiation,  preparation  or execution of any  amendments,
waivers,  consents,  standstill  agreements  and other similar  agreements  with
respect to this Note  (whether or not any such  amendments,  waivers,  consents,
standstill agreements or other similar agreements are executed).

     9.6  At  any  time  when  the  Company   and  the  Holder  are   conducting
restructuring or workout  negotiations in respect hereof,  or a Default or Event
of Default  exists,  the Company shall pay when billed the reasonable  costs and
expenses  (including  reasonable  attorneys'  fees and the fees of  professional
advisors) incurred by the Holder in connection with the assessment,  analysis or
enforcement  of any  rights  or  remedies  that are or may be  available  to the
Holder.

     9.7 If the Company shall fail to pay when due any principal of, or interest
on, this Note, the Company shall pay to the Holder,  to the extent  permitted by
law,  such  amounts  as shall be  sufficient  to cover the  costs and  expenses,
including but not limited to reasonable  attorneys' fees, incurred by the Holder
in collecting any sums due on this Note.

     9.8 THE PARTIES HERETO VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  ARISING  OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR TRANSACTIONS CONTEMPLATED HEREBY.

     9.9 ANY SUIT, ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THIS NOTE
OR  TRANSACTIONS  CONTEMPLATED  HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR
OTHERWISE  ENFORCE ANY  JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS NOTE MAY BE
BROUGHT BY SUCH PARTY IN ANY FEDERAL  DISTRICT COURT LOCATED IN NEW YORK COUNTY,
NEW YORK,  OR ANY NEW YORK STATE COURT  LOCATED IN NEW YORK COUNTY,  NEW YORK AS
SUCH PARTY MAY IN ITS SOLE DISCRETION  ELECT,  AND BY THE EXECUTION AND DELIVERY
OF THIS NOTE, THE PARTIES HERETO IRREVOCABLY AND  UNCONDITIONALLY  SUBMIT TO THE
NON-EXCLUSIVE  IN  PERSONAM  JURISDICTION  OF EACH SUCH  COURT,  AND EACH OF THE
PARTIES  HERETO  IRREVOCABLY  WAIVES AND AGREES NOT TO ASSERT IN ANY  PROCEEDING
BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT
IT IS NOT  SUBJECT  TO THE IN  PERSONAM  JURISDICTION  OF  ANY  SUCH  COURT.  IN
ADDITION,  EACH OF THE PARTIES HERETO IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT


                                      -25-
<PAGE>

PERMITTED BY LAW, ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE IN ANY SUIT,  ACTION OR  PROCEEDING  ARISING OUT OF OR RELATING TO THIS
NOTE OR TRANSACTION  CONTEMPLATED  HEREBY BROUGHT IN ANY SUCH COURT,  AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     9.10 EACH PARTY HERETO IRREVOCABLY AGREES THAT PROCESS PERSONALLY SERVED OR
SERVED BY U.S. EXPRESS,  REGISTERED OR CERTIFIED MAIL OR BY NATIONWIDE OVERNIGHT
COMMERCIAL  COURIER OR DELIVERY  SERVICE AT THE  ADDRESSES  PROVIDED  HEREIN FOR
NOTICES SHALL  CONSTITUTE,  TO THE EXTENT PERMITTED BY LAW,  ADEQUATE SERVICE OF
PROCESS IN ANY SUIT,  ACTION OR  PROCEEDING  ARISING  OUT OF OR RELATING TO THIS
NOTE OR TRANSACTION  CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING TO EXECUTE
OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER. RECEIPT OF
PROCESS SO SERVED  SHALL BE  CONCLUSIVELY  PRESUMED AS  EVIDENCED  BY A DELIVERY
RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY
SERVICE.

     9.11 NOTHING  HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY
HOLDER OF THIS NOTE TO SERVE ANY  WRITS,  PROCESS  OR  SUMMONSES  IN ANY  MANNER
PERMITTED BY APPLICABLE LAW OR TO OBTAIN  JURISDICTION  OVER THE COMPANY IN SUCH
OTHER JURISDICTION,  AND IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE
LAW.

     IN WITNESS WHEREOF,  the Company has caused this Promissory Note to be duly
executed   and   delivered   by  one  of  its  duly   authorized   officers   or
representatives.


                                    MEDIABAY, INC.



                                    By:
                                       -----------------------------------------
                                         Name:  John Levy
                                         Title: Executive Vice President and
                                                Chief Financial Officer


                                      -26-
<PAGE>
                                     Annex I

1.   Holder's Payment Instructions

              Citibank
              153 E. 53rd Street
              New York, N.Y. 10043
              ABA #021000089
              Credit: Evan Herrick
              Account: 37045501

2.   Addresses for Notices

     (a)  If to the Company, to:

                       MediaBay, Inc.
                       2 Ridgedale Avenue
                       Cedar Knolls, NJ 07927
                       Attention: Chief Financial Officer
                       Telephone No.: 973-539-9528
                       Facsimile No.: 973-539-1273

                       with a copy to:

                       Blank Rome Tenzer Greenblatt LLP
                       405 Lexington Avenue
                       New York, New York 10174
                       Attention: Robert J. Mittman, Esq.
                       Telephone No.: (212) 885-5555
                       Facsimile No.: (212) 885-5001

     (b)      If to the payee, to:

                       Mr. Evan Herrick
                       North Hartford Realty, Inc.
                       2 Ridgedale Avenue
                       Cedar Knolls, NJ  07927
                       Telephone No. (973) 539-1390
                       Facsimile No. (973) 539-0596


                                      -27-
<PAGE>


                          [FORM OF ELECTION TO CONVERT]

     The undersigned hereby  irrevocably elects to exercise its right,  pursuant
to the 9% Convertible Senior Subordinated  Promissory Note due December 31, 2004
(the "Note") of MediaBay,  Inc.  (the  "Company") in the  outstanding  principal
amount of $_________, which Note is tendered herewith, to convert $__________ of
the amount outstanding under the Note to __________________ shares of the common
stock of the Company (the  "Shares"),  all in  accordance  with the terms of the
Note. The undersigned  requests that a Certificate for such Shares be registered
in the name of  ______________,  whose  address is  ____________,  and that such
Certificate    be   delivered   to    ________________,    whose    address   is
_________________,  [and  that a  replacement  Note in the  principal  amount of
$___________,  representing  the  balance of the  principal  amount  outstanding
thereunder  after giving effect to this  conversion,  be issued in the amount of
$_________ and delivered to ___________, whose address is ____________].

Dated:                        Signature: _______________________________________

                              (Signature must conform in all respects to name of
                              holder as specified on the face of the Note.)

                              _____________________________________________

                              _____________________________________________
                                    (Insert Social Security or Other
                                    Identifying Number of Holder)


                                      -28-
<PAGE>


                                  Schedule 6.3


1.   Debt incurred under the $1,984,250  principal amount of Convertible  Senior
     Subordinated  Promissory  Notes  due  December  31 2004  issued  to  Norton
     Herrick.

2.   Debt incurred under the $4,200,000  principal amount of Convertible  Senior
     Subordinated   Promissory  Notes  due  December  31,  2004  issued  to  ABC
     Investment, L.L.C.

3.   Debt incurred under the $2,500,000  Convertible  Senior Promissory Note Due
     September 30, 2002 issued to Huntingdon Corporation

4.   Debt incurred under the $800,000 Convertible Senior Subordinated Promissory
     Note Due December 31, 2002 issued to Huntingdon Corporation


                                      -29-