================================================================================

                              SOLPOWER CORPORATION


                                 NOTE AGREEMENT


                            FOR THE ISSUANCE OF UP TO
                         $1,500,000 6% CONVERTIBLE NOTES

================================================================================
<PAGE>
                                TABLE OF CONTENTS

SECTION                                                                     PAGE

                                 [TO BE ADDED]







                                        i
<PAGE>
                                 NOTE AGREEMENT


     THIS NOTE AGREEMENT (this "AGREEMENT") is made effective as of the ____ day
of September,  1999,  among  SOLPOWER  CORPORATION,  a Nevada  corporation  (the
"COMPANY"),  and the Persons who shall execute a counterpart  acknowledgment  to
this Agreement and become parties hereto.

                                    RECITALS:

     A. Pursuant to a  Confidential  Private  Placement  Memorandum  dated as of
September ___, 1999 (the "MEMORANDUM"), the Company has offered up to $1,500,000
of its 6% Convertible Notes (the "OFFERING").

     B. The Company desires to provide for the form and provisions of the Notes,
the terms upon which the Notes shall be issued and exercised, and the respective
rights,  limitation of rights and  immunities of the Company and the  registered
holders of the Notes.

     C. All acts and things necessary to make the Notes, when executed on behalf
of the Company,  the valid, binding and legal obligations of the Company, and to
authorize  the  execution  and  delivery of this  Agreement,  have been done and
performed.

                                   AGREEMENT:

     NOW, THEREFORE, it is hereby agreed as follows:
<PAGE>
                                    SECTION 1
                         DEFINITIONS AND INTERPRETATION

     1.1  DEFINITIONS.  In addition to the terms otherwise  defined herein,  the
following terms shall mean:

     AFFILIATE:  any Person  (other  than a  Subsidiary)  (i) that  directly  or
indirectly through one or more intermediaries  controls, or is controlled by, or
is under common control with, the Company, (ii) which beneficially owns or holds
10% or more of any class of the voting stock of the Company or (iii) 10% or more
of the voting stock (or in the case of a Person which is not a corporation, five
percent or more of the equity  interest) of which is beneficially  owned or held
by the  Company  or a  Subsidiary.  The term  "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
stock, by contract or otherwise.

     BUSINESS DAY: any day other than (i) a Saturday or Sunday, or (ii) a day on
which  banking  institutions  in Arizona are  authorized  or obligated by law or
executive order to be closed.

     CLOSING  DATE:  September 30, 1999 unless  extended by the Company,  in its
sole discretion, to October 15, 1999.

     COMMISSION:  the Securities and Exchange  Commission,  or any other federal
agency at the time  administering  the Securities Act or the Trust Indenture Act
of 1939, as amended, as the case may be.

     COMMON  STOCK:  any class of capital  stock of the Company now or hereafter
authorized,  the right of which to share in distributions  either of earnings or
assets of the Company is without limit as to any amount or percentage; PROVIDED,
HOWEVER,  that the shares of Common Stock  deliverable  upon  conversion  of the
Notes shall include only the Common Stock of the Company  authorized at the date
hereof and any class of Common Stock issued in substitution therefor.

     COMPANY: Solpower Corporation, a Nevada corporation.

     CONVERSION  NOTICE:  the notice set forth on the reverse  side of the Notes
given by Holders to convert  the Notes to shares of Common  Stock as provided in
Section 6.1 hereof.

     CONVERSION  PRICE:  $1.00 or such  other  amount as  adjusted  pursuant  to
Section 6.4 hereof.

     CONVERSION  SHARES:  the shares of Common Stock of the Company  issued upon
the conversion of any of the Notes.

                                       1
<PAGE>
     DEFAULT:  any event or condition the  occurrence  of which would,  with the
lapse of time or the giving of notice,  or both,  constitute an Event of Default
as defined in Section 4.1.

     EXCHANGE  ACT:  the  Securities  Exchange Act of 1934,  as amended,  or any
similar  federal  statute,  and the  rules  and  regulations  of the  Commission
thereunder, all as they may be in effect at the time.

     GAAP:  generally accepted  accounting  principles at the time in the United
States.

     HOLDER: any Person that is, at the time of reference, the registered Holder
of any Note or any Conversion Shares.

     INTEREST PAYMENT DATE: March 31, 2000 and the Maturity Date.

     MATURITY DATE: September 30, 2000.

     NOTE:  any 6%  Convertible  Note  issued  pursuant  to the  terms  of  this
Agreement which is evidenced by a promissory note in the form attached hereto as
Exhibit A.

     NOTE AGENT:  any Person  appointed by the Holders to act as Note Agent upon
the occurrence of an event of Default as defined in Section 4.1.

     NOTE REGISTER: the register of the Holders of Notes issued pursuant to this
Agreement.

     OFFERING:  the offering for private  placement  by the  Placement  Agent on
behalf of the Company of up to $1,500,000 of the Notes.

     PERSON: an individual,  partnership,  corporation,  trust or unincorporated
organization, and a government or agency or political subdivision thereof.

     RECORD DATE: March 15, 2000 and September 15, 2000.

     REGISTRATION  EXPENSES:  All  registration  and filing  fees,  all fees and
expenses of compliance with  securities or blue sky laws  (including  reasonable
fees  and  disbursements  of one  firm  of  counsel  for  the  holders  and  any
underwriters  in  connection  with  blue sky  qualifications  of the  Conversion
Shares), printing expenses,  messenger and delivery expenses,  internal expenses
(including,  without  limitation,  all salaries and expenses of the officers and
employees of the Company performing legal or accounting duties),  and reasonable
fees and  disbursement of counsel for the Company and its independent  certified
public  accountants  (including the reasonable  expenses of any special audit or
comfort letters  required by or incident to such  performance),  securities acts
liability  insurance  (if the  Company  elects to obtain  such  insurance),  the
reasonable fees and expenses of any special  experts  retained by the Company in
connection  with such  registration,  reasonable  fees and expenses of any other

                                       2
<PAGE>
persons  retained by the Company and the fees and expenses  associated  with any
required filing with the National Association of Securities Dealers, Inc.

     SECURITIES  ACT: the  Securities  Act of 1933,  as amended,  or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

     1.2  ACCOUNTING  PRINCIPLES.  Where the character or amount of any asset or
liability  or item of income or  expense is  required  to be  determined  or any
accounting  computation  is  required  to be  made  for  the  purposes  of  this
Agreement,  the same  shall  be done in  accordance  with  GAAP,  to the  extent
applicable,  except where such principles are inconsistent with the requirements
of this Agreement.

     1.3 DIRECTLY OR INDIRECTLY. Where any provision of this Agreement refers to
action  to be taken by any  Person,  or which  such  Person is  prohibited  from
taking,  such  provision  shall be applicable  whether the action in question is
taken  directly or indirectly by such Person or any  Subsidiary or agent of such
Person or otherwise at the request, direction or for the benefit of such Person.

                                       3
<PAGE>
                                    SECTION 2
                                    THE NOTES

     2.1 ISSUANCE OF DEFINITIVE  NOTES.  On the Closing  Date,  the Company will
issue Notes to all  qualified  Persons whose  subscriptions  are accepted by the
Company in the Offering.  Notes shall be issued in minimum  principal amounts of
$250,000 and integral multiples of $25,000 in excess thereof.  The Company shall
have the option in its sole discretion to issue Notes in principal  amounts less
than $250,000. The Notes shall be numbered,  lettered or otherwise distinguished
in such manner or in accordance with such plan as the Company may determine. The
Notes  shall be dated as of the date of the Closing  Date,  except that any Note
issued upon the  transfer,  exchange or  substitution  of another  Note shall be
dated the date of its original authentication.

     2.2  PREPAYMENT.  The Notes are subject to  prepayment at the option of the
Company  at any  time  on or  prior  to  October  31,  1999.  If less  than  all
outstanding  Notes  are  prepaid  by the  Company,  the  selection  of Notes for
prepayment  may be made on a pro rata or random lot basis as  determined  by the
Company.

     2.3 NO SINKING  FUND.  The  Company  shall not be  required to set aside or
earmark funds to make required payments with respect to the Notes.

     2.4 PERSONS ENTITLED TO NOTE INTEREST PAYMENTS.  The person in whose name a
Note is registered at the close of business on any Record Date shall be entitled
to receive  any  interest  payable  with  respect  to such Note on the  Interest
Payment Date next following such Record Date,  notwithstanding  the cancellation
of such Note upon any registration of transfer or exchange thereof subsequent to
such Record Date and prior to such Interest Payment Date. The Holder of any Note
issued upon the transfer, exchange or substitution of another Note shall only be
entitled to receive  interest  payable  with respect to that Note from and after
the Interest  Payment Date next following the first Record Date occurring  after
the issuance of such Note.

     2.5 PAYMENT OF PRINCIPAL  AND  INTEREST.  Interest  shall be payable on the
Interest Payment Dates; and principal shall be payable on the Maturity Date. The
Company shall pay the interest on the unpaid  principal  balance of the Notes as
provided herein. The entire remaining principal amount of the Notes shall become
due and payable on the Maturity Date.

     2.6 APPLICATION OF PAYMENT.  All payments  received shall be applied to the
payment of the Notes in the  following  order of  priority:  (a)  first,  to the
payment of accrued  interest,  (b) second, to the payment of principal then due,
and (c) third, to the payment of premium, if any.

                                       4
<PAGE>
                                    SECTION 3
                                COMPANY COVENANTS

     3.1 CORPORATE EXISTENCE.  Except as otherwise permitted herein, the Company
will at all times  preserve  and keep in full  force and  effect  its  corporate
existence, rights and franchises.

     3.2  PAYMENT  OF TAXES AND  CLAIMS.  The  Company  will pay (a) all  taxes,
assessments  and  other  governmental  charges  imposed  upon  it or  any of its
properties or assets or in respect of any of its franchises, business, income or
profits,  (b) all trade accounts  payable in accordance with usual and customary
business terms, and (c) all claims (including,  without  limitation,  claims for
labor, services,  inventory,  materials and supplies) for sums which have become
due and payable and which by law have or might  become a lien or charge upon any
of its properties or assets;  PROVIDED,  that no such tax,  assessment,  charge,
account  payable  or claim  need be paid if  being  contested  in good  faith by
appropriate  proceedings promptly initiated and diligently conducted and if such
reserve or other  appropriate  provisions,  if any, as shall be required by GAAP
shall have been made therefor.

     3.3  MAINTENANCE  OF  PROPERTIES;  BUSINESS  INSURANCE.  The  Company  will
maintain or cause to be maintained  in good repair,  working order and condition
all properties  (whether owned in fee or a leasehold interest) used or useful in
the  business of the Company  and,  from time to time,  will make or cause to be
made all appropriate  repairs,  renewals and replacements  thereof.  The Company
will maintain or cause to be maintained,  with  financially  sound and reputable
insurers,  insurance with respect to its properties and business against loss or
damage of the kinds  customarily  insured against by corporations of established
reputation  engaged in the same or similar business and similarly  situated,  of
such  types  and in  such  amounts  as are  customarily  carried  under  similar
circumstances by such other corporations.

                                    SECTION 4
                      EVENTS OF DEFAULT & REMEDIES THEREFOR

     4.1 EVENTS OF DEFAULT. Any one or more of the following shall constitute an
"EVENT OF DEFAULT" as the term is used herein:

          (a)  Default in the  payment of the  principal  of any Note or premium
     thereon, if any, at the expressed or any accelerated maturity date;

          (b)  Default in the  payment of interest on any Note when due and such
     default shall continue for more than 15 days;

          (c) Default in the  observance or performance of any other covenant or
     provision of this Agreement or the Note that is not remedied within 30 days
     after  written  notice to the  Company  from the holders of at least 25% in
     aggregate principal amount of the Notes then outstanding;

                                       5
<PAGE>
          (d) A judgement  or order is  obtained  for the payment of money in an
     aggregate  amount in  excess of  $1,000,000  (net of  applicable  insurance
     coverage  that is  acknowledged  in writing  by the  insurer)  having  been
     rendered  against the Company and such  judgement  or order shall  continue
     unsatisfied and unstayed for a period of 60 days;

          (e) The Company becomes insolvent or bankrupt, is generally not paying
     its debts as they  become  due or makes an  assignment  for the  benefit of
     creditors,  or the  Company  causes or  suffers  an order for  relief to be
     entered  with  respect to it under  applicable  federal  bankruptcy  law or
     applies for or  consents  to the  appointment  of a  custodian,  trustee or
     receiver  for the  Company  or for the major  part of the  property  of the
     Company;

          (f) A custodian,  liquidator, trustee or receiver is appointed for the
     Company  or any  Subsidiary  or for the major part of the  property  of the
     Company and is not discharged within 30 days after such appointment;

          (g) Bankruptcy, reorganization, arrangement or insolvency proceedings,
     or other proceedings for relief under any bankruptcy or similar law or laws
     for the relief of debtors, are instituted by or against the Company and, if
     instituted against the Company are consented to or are not dismissed within
     60 days after such institution; or

          (h) Any representation or warranty made by the Company herein, or made
     by the Company in any written  statement  or  certificate  furnished by the
     Company in connection with the consummation of the issuance and delivery of
     the Notes on the Offering or furnished by the Company pursuant  hereto,  is
     untrue in any  material  respect as of the date of the  issuance  or making
     thereof.

     4.2 NOTICE TO HOLDERS.  When any Event of Default  described in Section 4.1
has occurred,  the Company shall give notice  thereof within three business days
thereafter  of such event to the  Holders.  Upon  receipt of such  notice of the
occurrence  of an Event of Default,  the Holders of a majority of the  principal
amount of the Notes then outstanding  shall appoint a Note Agent which shall act
on behalf of the Holders as provided herein and shall,  within 20 days after the
receipt of such notice,  mail to all Holders, as the names and addresses of such
Holders  appear  upon the  registration  books  of the  Company,  notice  of all
Defaults  known to the Note Agent,  unless such  Defaults  shall have been cured
before the giving of such notice; PROVIDED, HOWEVER, that, except in the case of
Default in the payment of the principal of or interest on any of the Notes,  the
Note  Agent  shall  be  protected  in  withholding  such  notice  if Note  Agent
determines in good faith that the withholding of such notice is in the interests
of the Holders.

                                       6
<PAGE>
     4.3 ACCELERATION; RESCISSION AND ANNULMENT.

          (a) If an Event of Default occurs and is continuing, then and in every
such case the Note Agent or the Holders of Notes  representing not less than 25%
of the  aggregate  principal  amount of the  outstanding  Notes may  declare the
unpaid  principal,  premium,  if any, and accrued and unpaid interest of all the
Notes to be due and payable  immediately,  by a notice in writing to the Company
(and to the Note Agent if given by Holders),  and upon any such declaration such
principal,  premium,  if any,  and  accrued  and unpaid  interest  shall  become
immediately  due  and  payable,   notwithstanding  anything  contained  in  this
Agreement  or the Notes to the  contrary.  If an Event of Default  specified  in
Section 4.1(e),  (f) or (g) above occurs,  all unpaid  principal of, and accrued
interest on, the Notes then outstanding will become due and payable, without any
declaration or other act on the part of the Note Agent or any Holder.

          (b) At any time after such a declaration of acceleration has been made
and before a judgment or decree for  payment of the money due has been  obtained
by the Note Agent as hereinafter  provided,  the Holders of Notes representing a
majority of the  aggregate  in principal  amount of the  outstanding  Notes,  by
written  notice to the Company  and the Note  Agent,  may rescind and annul such
declaration and its consequences if

               (i) the Company has paid or  deposited  with the Note Agent a sum
sufficient to pay;

                    (A) all overdue installments of interest on all Notes,

                    (B) the  principal  of (and  premium,  if any, on) any Notes
               which  have  become due  otherwise  than by such  declaration  of
               acceleration and interest thereon at the rate borne by the Notes,
               and

                    (C) all sums paid or  advanced  by the Note Agent  hereunder
               and the  reasonable  compensation,  expenses,  disbursements  and
               advances of the Note Agent, its agents and counsel; and

               (ii) all  Events of  Default,  other than the  nonpayment  of the
principal of Notes which have become due solely by such acceleration,  have been
cured or waived as provided herein.

No such  rescission  shall  affect  any  subsequent  Default or impair any right
consequent thereon.

     4.4 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY NOTE AGENT.

          (a) The Company covenants that if:

               (i) Default is made in the payment of any installment of interest
on any  Notes  when such  interest  becomes  due and  payable  and such  Default
continues for a period of 15 days, or

                                       7
<PAGE>
               (ii)  Default  is made on the  payment  of the  principal  of (or
premium, if any, on) any Notes at the Maturity Date thereof,

the Company will,  upon demand of the Note Agent,  pay to it, for the benefit of
the Holders of such Notes,  the whole  amount then due and payable on such Notes
for principal (and premium, if any) and interest, with interest upon the overdue
principal (and premium, if any) and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Note Agent,
its agents and counsel.

          (b) If the  Company  fails to pay such  amounts  forthwith  upon  such
demand,  the Note Agent, in its own name and as trustee of an express trust, may
institute  a  judicial  proceeding  for the  collection  of the  sums so due and
unpaid,  and may prosecute such proceeding to judgment or final decree,  and may
enforce the same  against the  Company or any other  obligor  upon the Notes and
collect the moneys  adjudged or decreed to be payable in the manner  provided by
law out of the  property  of the  Company or any other  obligor  upon the Notes,
wherever situated.

          (c) If an Event of Default  occurs and is  continuing,  the Note Agent
may in its  discretion  proceed to protect and enforce its rights and the rights
of the Holders by such appropriate  judicial proceedings as the Note Agent shall
deem most  effectual  to protect and enforce  any such  rights,  whether for the
specific enforcement of any covenant or agreement in this Agreement or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.

     4.5 NOTE AGENT MAY FILE PROOFS OF CLAIM.

          (a)  In  case  of  the  pendency  of  any  receivership,   insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial  proceeding relative to the Company or any other obligor upon the
Note or the property of the Company or of such other obligor or their creditors,
the Note Agent (irrespective of whether the principal of the Notes shall then be
due and  payable  as  therein  expressed  or by  declaration  or  otherwise  and
irrespective of whether the Note Agent shall have made any demand on the Company
for the  payment  of  overdue  principal  or  interest)  shall be  entitled  and
empowered, by intervention in such proceeding or otherwise;

          (i) to file  and  prove  a claim  for the  amount  of  principal  (and
     premium,  if any) and interest owing and unpaid in respect of the Notes and
     to file such other  papers or documents as may be necessary or advisable in
     order to have the  claims of the Note  Agent  (including  any claim for the
     reasonable compensation,  expenses,  disbursements and advances of the Note
     Agent,  its agents and counsel) and of the Holders allowed in such judicial
     proceeding; and

                                       8
<PAGE>
          (ii) to collect and receive  any moneys or other  property  payable or
     deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator,  sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Note Agent, and in the event that the Note Agent shall
consent to the making of such  payments  directly to the Holders,  to pay to the
Note  Agent any  amount  due to it for the  reasonable  compensation,  expenses,
disbursements  and advances of the Note Agent,  its agents and counsel,  and any
other amounts due the Note Agent under this Agreement.

          (b) The Note  Agent  shall  not be  required  to join the  Holders  as
necessary  parties to any such  judicial  proceeding,  provided,  however,  that
nothing  herein  contained  shall be  deemed  to  authorize  the  Note  Agent to
authorize and consent to or accept, or adopt on behalf of any Holder any plan of
reorganization,  arrangement,  adjustment or composition  affecting the Notes or
the  rights of any Holder  thereof,  or to  authorize  the Note Agent to vote in
respect of the claim of any Holder in any such proceeding.

     4.6 NOTE AGENT MAY ENFORCE CLAIMS WITHOUT  POSSESSION OF NOTES.  All rights
of action and claims  under this  Agreement or the Notes may be  prosecuted  and
enforced  by the Note Agent  without the  possession  of any of the Notes or the
production thereof in any proceeding  relating thereto,  and any such proceeding
instituted  by the Note Agent  shall be brought in its own name as trustee of an
express  trust,  and any recovery of judgment  shall,  after  provision  for the
payment of the reasonable compensation,  expenses, disbursements and advances of
the Note  Agent,  its  agents and  counsel,  be for the  ratable  benefit of the
Holders of the Notes in respect of which such judgment has been recovered.

     4.7 APPLICATION OF MONEY  COLLECTED.  Any money collected by the Note Agent
pursuant to this Section 4 shall be applied in the following  order, at the date
or dates filed by the Note Agent and, in case of the  distribution of such money
on account of principal (or premium,  if any) or interest,  upon presentation of
the Notes and the  notation  thereon of the payment if  partially  paid and upon
surrender thereof if fully paid;

          FIRST:  To the  payment of all  amounts  due the Note Agent under this
Agreement;

          SECOND:  To the  payment of the  amounts  then due and unpaid upon the
Notes for  principal  and  interest,  in respect of which or for the  benefit of
which such money has been collected,  ratably, without preference or priority of
any kind,  according to the amounts due and payable on such Notes, for principal
and interest; and

          THIRD: To the Company.

                                       9
<PAGE>
     4.8  LIMITATION  ON SUITS.  Except as provided in Section 4.9, no Holder of
any Note  shall  have  any  right  to  institute  any  proceeding,  judicial  or
otherwise,  with respect to this Agreement, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:

          (a) such Holder has previously  given written notice to the Note Agent
of a continuing Event of Default;

          (b) the Holders of not less than 25% of the aggregate principal amount
of the  outstanding  Note shall have made  written  request to the Note Agent to
institute  proceedings  in  respect  of such Event of Default in its own name as
Note Agent hereunder;

          (c) such Holder or Holders have  offered to the Note Agent  reasonable
indemnity  against  the  costs,  expenses  and  liabilities  to be  incurred  in
compliance with such request;

          (d) the Note  Agent for 60 days  after  its  receipt  of such  notice,
request and offer of indemnity has failed to institute any such proceeding; and

          (e) no direction inconsistent with such written request has been given
to the Note Agent during such 60-day  period by the Holders of a majority of the
aggregate principal amount of the outstanding Notes;

it being understood and intended that no one or more Holders of Notes shall have
any right in any manner  whatever by virtue of, or by availing of, any provision
of this  Agreement to affect,  disturb or prejudice the rights of any Holders of
Notes,  or to obtain or to seek to obtain  priority or preference over any other
Holders  or to enforce  any right  under  this  Agreement,  except in the manner
herein  provided  and for the equal and  ratable  benefit of all the  Holders of
Notes.

     4.9  UNCONDITIONAL  RIGHT OF HOLDERS TO RECEIVE  PRINCIPAL,  AND  INTEREST.
Notwithstanding  any other provision in this  Agreement,  the Holder of any Note
shall have the right which is absolute and  unconditional  to receive payment of
the principal of and interest on such Note on the Maturity Date and to institute
suit for the  enforcement  of any such  payment,  and such  right  shall  not be
impaired without the consent of such Holder.

     4.10  RESTORATION  OF RIGHTS AND REMEDIES.  If the Note Agent or any Holder
has  instituted  any  proceeding  to  enforce  any  right or remedy  under  this
Agreement and such proceeding has been discontinued or abandoned for any reason,
or has been determined  adversely to the Note Agent or to such Holder,  then and
in every such case the Company, the Note Agent and the Holders shall, subject to
any determination in such proceeding,  be restored severally and respectively to
their former positions hereunder,  and thereafter all rights and remedies of the
Note Agent and the Holders shall continue as though no such  proceeding had been
instituted.

     4.11 RIGHTS AND REMEDIES  CUMULATIVE.  No right or remedy herein  conferred
upon or reserved to the Note Agent or to the Holders is intended to be exclusive
of any other right or remedy,  and every right and remedy  shall,  to the extent
permitted by law, be cumulative  and in addition to every other right and remedy

                                       10
<PAGE>
given  hereunder or now or hereafter  existing at law or in equity or otherwise.
The assertion or employment of any right or remedy  hereunder or otherwise shall
not prevent the  concurrent  assertion or  employment  of any other  appropriate
right or remedy.

     4.12 DELAY OR OMISSION  NOT WAIVER.  No delay or omission of the Note Agent
or of any Holder to  exercise  any right or remedy  occurring  upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an  acquiescence  therein.  Every right and remedy  given by
this  Agreement or by law to the Note Agent or to Holders may be exercised  from
time to time and as often as may be deemed expedient by the Note Agent or by the
Holders, as the case may be.

     4.13  CONTROL  BY  HOLDERS.  The  Holders of a  majority  of the  aggregate
principal  amount of the  outstanding  Notes  shall have the right to direct the
time,  method and place of conducting any proceeding for any remedy available to
the Note Agent or  exercising  any trust or power  conferred  on the Note Agent,
provided that:

          (a) such  direction  shall not be in conflict  with any rule of law or
with this Agreement; and

          (b) the Note Agent may take any other action deemed proper by the Note
Agent which is not inconsistent with such direction.

     4.14 WAIVER OF PAST  DEFAULTS.  The Holders of a majority of the  aggregate
principal  amount of the  outstanding  Notes may on behalf of the Holders of all
the Notes  waive  any past  Default  hereunder  and its  consequences,  except a
default:

          (a) in the  payment  of the  principal  of (or  premium,  if  any)  or
interest on any Note, or

          (b) in respect of a covenant  or  provision  hereof  which  under this
Agreement  cannot be  modified  or amended  without the consent of the Holder of
each outstanding Note affected.

Upon any such  waiver,  such  Default  shall  cease to  exist,  and any Event of
Default arising  therefrom shall be deemed to have been cured, for every purpose
of this  Agreement;  but no such waiver shall extend to any  subsequent or other
Default or impair any right consequent thereon.

     4.15  UNDERTAKING FOR COSTS.  All parties to this Agreement agree, and each
Holder of any Note by his  acceptance  thereof  shall be deemed to have  agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Agreement,  or in any suit against the Note Agent
for any action  taken or omitted  by it as Note  Agent,  the filing by any party
litigant in such suit of an  undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs,  including  reasonable
attorneys' fees,  against any party litigant in such suit,  having due regard to
the merits and good faith of the claims or defenses made by such party litigant.

                                       11
<PAGE>
     4.16 WAIVER OF STAY OR EXTENSION LAWS. The Company covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon,  or plead,
or in any manner  whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted,  now or at any time hereafter in force, which
may affect the covenants or the performance of this  Agreement;  and the Company
(to the extent that it may lawfully do so) hereby  expressly  waives all benefit
or  advantage of any such law,  and  covenants  that it or they will not hinder,
delay or impede the execution of any power herein granted to the Note Agent, but
will suffer and permit the  execution  of every such power as though no such law
had been enacted.

                                    SECTION 5
                         AMENDMENTS, WAIVERS & CONSENTS

     5.1 CONSENT REQUIRED.

          (a)  Except as  otherwise  provided  in this  Section  5.1,  any term,
covenant,  agreement  or  condition  of this  Agreement  may be  amended  by the
Company,  without consent of the Holders in order to: (either  generally or in a
particular  instance and either  retroactively  or  prospectively)  (i) cure any
ambiguity, omission, defect or inconsistency of this Agreement, (ii) provide for
the  assumption of the  obligations of the Company under this Agreement upon the
merger,  consolidation or sale or other  disposition of all or substantially all
of the  assets of the  Company,  or (iii) make any  change  that  would  provide
additional rights or benefits to the holders of Notes or that does not adversely
affect the rights of any holder of Notes in any material respect.

          (b)  Notwithstanding  anything  herein to the  contrary,  the  written
consent of all of the  Holders of Notes shall be required to (i) extend the time
of payment of the principal of or the interest,  including  default  interest on
any Note or reduce the principal  amount  thereof or change the rate of interest
thereon,  (ii)  change any of the  provisions  of Section 6 or Section 8 hereof,
(iii) change the  percentage of Holders  required to consent to any such waiver,
amendment,  alteration or  modification of any of the provisions of Section 3 or
Section 4 hereof,  (iv) make any Note  payable in money  other than that  stated
herein,  (v)  impair  the right to  institute  suit for the  enforcement  of any
payment of principal of, or premium, if any, or interest on, any Note, (vi) make
any change in the  percentage  of principal  amount of Notes  necessary to waive
compliance  with any  provision of this  Agreement,  or (vii) waive a continuing
Default or Event of Default in the payment of principal of, premium,  if any, or
interest on the Notes.

     5.2 EFFECT OF AMENDMENT OR WAIVER. Any such amendment or waiver shall apply
equally to all of the Holders and shall be binding  upon them,  upon each future
Holder and upon the  Company,  whether or not any Note shall have been marked to
indicate such  amendment or waiver.  No such amendment or waiver shall extend to
or affect any  obligation  not  expressly  amended or waived or impair any right
consequent thereon.

                                       12
<PAGE>
     5.3  SOLICITATION  OF HOLDERS.  The Company  will not  solicit,  request or
negotiate for or with respect to any proposed  waiver or amendment of any of the
provisions of this  Agreement or the Notes unless each Holder  (irrespective  of
the amount of Notes then owned by it) shall be concurrently  informed thereof by
the Company and shall be afforded the  opportunity of  considering  the same and
shall be supplied by the Company  with  sufficient  information  to enable it to
make an informed  decision  with respect  thereto.  Executed or true and correct
copies of any waiver or consent  effected  pursuant  to the  provisions  of this
Section 5 shall be delivered by the Company to each Holder  forthwith  following
the date on which the same shall have been  executed and delivered by the Holder
or Holders of the requisite  percentage of outstanding  Notes.  The Company will
not,  directly  or  indirectly,  pay  or  cause  to be  paid  any  fee  (whether
denominated  as servicing  fee or otherwise)  or other  remuneration,  including
supplemental or additional interest,  expenses or other amount, to any Holder as
consideration  for or as an  inducement  to the  consideration  or  review of or
entering  into by such Holder of any waiver or amendment of any of the terms and
provisions of this Agreement (or any proposed waiver or amendment hereof) unless
such  remuneration  is  concurrently  paid,  on the same  terms,  ratably to all
Holders.

                                    SECTION 6
                               CONVERSION OF NOTES

     6.1  CONVERSION  RIGHTS AND MANNER OF EXERCISE.  Upon  compliance  with the
provisions  hereof,  any Holder shall have the right, after October 31, 1999, to
convert  all or a portion  of the Notes  held by such  Holder  into one share of
Common  Stock of the Company for each $1.00  (subject to Section  6.5) of unpaid
principal  amount of the Note or, in case an  adjustment of such price has taken
place  pursuant to the following  provisions  hereof,  then at the price as last
adjusted and in effect at the date such Note or portion  thereof is  surrendered
for conversion.  To exercise such conversion privilege, the Holder thereof shall
surrender  such Note to the Company at its  principal  office  accompanied  by a
completed Conversion Notice designating the unpaid principal amount of such Note
to be  converted  and  stating  the name and address of the Person in whose name
certificates for shares of Common Stock are to be registered.

     6.2  AUTOMATIC  CONVERSION.  Upon the  closing  bid price of the  Company's
Common  Stock (as  quoted  on the OTC BB or other  recognized  market  quotation
system or exchange) being at or above $1.75 per share for 10 consecutive trading
days, the outstanding Notes shall automatically convert into one share of Common
Stock for each $1.00 (subject and Section 6.5) of unpaid principal amount of the
Notes or, in case an  adjustment  of such price has taken place  pursuant to the
following  provisions  hereof,  then at the  price as last  adjusted  and in the
effect at the date such Note or portion  thereof is surrendered  for conversion.
Upon such automatic  conversion,  the Company shall promptly  notify the Holders
and the Holders  shall  surrender  their  Notes to the Company at its  principal
office.

     6.3 ISSUANCE OF COMMON STOCK CERTIFICATES.  As promptly as practicable (but
in any event within 10 business  days) after the receipt of a Conversion  Notice
or an automatic  conversion  described in Section 6.2 and surrender of the Notes
as provided in Sections 6.1 and 6.2, the Company shall issue and deliver to such

                                       13
<PAGE>
Holder,  issued in the name of such  Holder or such  other  Person or Persons as
such Holder may reasonably request, a certificate or certificates for the number
of full shares of Common Stock  issuable  upon the  conversion of such Notes (or
specified  portion  thereof).  Such  conversion  shall be  deemed  to have  been
effected  and the  Conversion  Price  shall  be  determined  as of the  close of
business on the date on which such Conversion Notice shall have been received by
the Company (or as of the close of business on the tenth consecutive trading day
in which the  Company's  Common  Stock trades at or above $1.75 per share in the
case of an  automatic  conversion  pursuant to Section 6.2) and at such time the
rights of the Holder (or specified  portion thereof) as such Holder shall cease,
and the Person or Persons in whose name or names any certificate or certificates
for shares of Common  Stock  shall be  issuable  upon such  conversion  shall be
deemed to have  become  the  holder or holders of record of the shares of Common
Stock represented thereby.

     6.4 CASH ADJUSTMENTS ON CONVERSION.  No payment or adjustment shall be made
upon any conversion on account of any cash dividends  declared for payment as of
a record  date prior to the date of  conversion  on the  shares of Common  Stock
issued upon  conversion  of a Note. In the case of any Note that is converted in
part only, the Company shall,  upon such conversion,  execute and deliver to the
Holder thereof,  at the expense of the Company,  a new Note in principal  amount
equal to the unconverted  portion of the Note  surrendered and otherwise of like
tenor  therewith.  No  fractional  share of Common  Stock  shall be issued  upon
conversion of any Note, but if the conversion  results in a fraction,  an amount
equal to such fraction  multiplied by the applicable  Conversion  Price shall be
paid in cash to the Holder of the Note being converted.

     6.5 ANTIDILUTION ADJUSTMENTS.

          (a) In the event the  Company  at any time or from time to time  after
the issuance of any Notes shall declare or pay any dividend on its capital stock
payable  in  Common  Stock,  or  effect  a  subdivision  or  combination  of the
outstanding  shares of Common Stock (by  reclassification  or otherwise  than by
payment  of a  dividend  in  Common  Stock),  then  and in any such  event,  the
Conversion  Price shall be adjusted by multiplying the Conversion Price prior to
the adjustment by the number of shares of Common Stock  outstanding  immediately
prior to the effective  time of such event and dividing the result by the number
of shares of Common Stock  outstanding  immediately  after the effective time of
such event, effective in the case of such dividend,  immediately after the close
of business on the record date for the determination of holders of capital stock
entitled  to  receive  such  dividend,  or  in  the  case  of a  subdivision  or
combination,  at the close of business  immediately prior to the date upon which
such corporate action becomes effective.

          (b) In the event the  Company at any time or from time to time  makes,
or fixes a record date for the determination of holders of Common Stock entitled
to  receive a dividend  or other  distribution  payable in capital  stock of the
Company other than shares of Common Stock, then and in each such event provision
shall be made so that the Holders receive upon conversion  thereof,  in addition
to the  number of shares of Common  Stock  receivable  thereupon,  the amount of
securities  which such Holders would have received had the Notes been  converted
prior to such effective record date.

          (c) Whenever the Conversion  Price shall be adjusted  pursuant to this
Section 6.5, the Company  shall  promptly  deliver a  certificate  signed by the
President or a Vice President and by the Treasurer or an Assistant  Treasurer or
the  Secretary or an  Assistant  Secretary of the  Company,  setting  forth,  in
reasonable  detail,  the  event  requiring  the  adjustment,  the  amount of the
adjustment,  the method by which such  adjustment  was  calculated  (including a
description of the basis on which the Board of Directors of the Company made any
determination hereunder), by first class mail postage prepaid to each Holder.

                                       14
<PAGE>
     6.6 MERGERS,  CONSOLIDATIONS,  SALES. In the case of any  consolidation  or
merger of the Company with another entity,  or the sale of all or  substantially
all of its assets to another entity, or any  reorganization or  reclassification
of the  Common  Stock  or other  equity  securities  of the  Company  (except  a
subdivision  or  combination  provision  for  which  is made in  Section  6.5(a)
hereof),   then,   as  a  condition  of  such   consolidation,   merger,   sale,
reorganization or reclassification,  lawful and adequate provision shall be made
whereby the Holders  shall  thereafter  have the right to receive upon the basis
and upon the terms and conditions  specified herein and in lieu of the shares of
Common Stock immediately  theretofore receivable upon conversion of their Notes,
such  shares of  stock,  securities,  assets  or cash as may (by  virtue of such
consolidation,  merger,  sale,  reorganization or reclassification) be issued or
payable  with respect to or in exchange  for a number of  outstanding  shares of
Common  Stock  equal  to the  number  of  shares  of  Common  Stock  immediately
theretofore  so  receivable  hereunder  had such  consolidation,  merger,  sale,
reorganization  or  reclassification  not  taken  place,  and in any  such  case
appropriate provisions shall be made with respect to the rights and interests of
the Holders to the end that the provisions of this Section 6 (including, without
limitation,  provisions for adjustment of the per share Conversion  Price) shall
thereafter  be  applicable  as nearly as may be, in  relation  to any  shares of
stock, securities, assets or cash thereafter deliverable upon conversion of such
Notes.  The  Company  shall not effect any such  consolidation,  merger or sale,
unless prior to or simultaneously with the consummation  thereof,  the successor
entity (if other than the Company)  resulting from such  consolidation or merger
or the entity purchasing such assets shall assume by written instrument executed
and mailed or delivered to each Holder, the obligation to deliver to such Holder
such  shares of stock,  securities,  assets or cash as, in  accordance  with the
foregoing provisions, such Holder may be entitled to receive.

     6.7 DISSOLUTION OR LIQUIDATION.  In the event of any proposed  distribution
of the  assets of the  Company  in  dissolution  or  liquidation  (except  under
circumstances  when  Section 6.5 shall be  applicable),  the Company  shall mail
notice  thereof to the Holders and shall make no  distribution  to  shareholders
until the expiration of 30 days from the date of mailing such notice and, in any
such case, the Holders may exercise the conversion  rights with respect to their
Notes within 30 days from the date of mailing such notice and all rights  herein
granted not so exercised within such 30 day period shall thereafter  become null
and void.

                                       15
<PAGE>
     6.8 NOTICE OF  EXTRAORDINARY  DIVIDENDS.  If the Board of  Directors of the
Company  shall  declare any dividend or other  distribution  on its Common Stock
except out of retained  earnings or by way of a stock dividend payable in shares
of its Common Stock on its Common Stock,  the Company shall mail notice  thereof
to the  registered  Holders not less than 15 days prior to the record date fixed
for determining  shareholders  entitled to participate in such dividend or other
distribution  and the Holders  shall not  participate  in such dividend or other
distribution  or be  entitled  to any rights on  account or as a result  thereof
(except adjustments as provided in Section 6.5(b)) unless and to the extent that
such  conversion  rights are exercised prior to such record date. The provisions
of this Section 6.8 shall not apply to  distributions  covered by Section 6.4(a)
or made in connection with transactions covered by Section 6.6 hereof.

     6.9 RESERVATION OF COMMON STOCK.  The Company will at all times reserve and
keep available such number of authorized shares of its Common Stock,  solely for
the purpose of issue upon the  conversion  of Notes as herein  provided  for, as
shall then be issuable upon the conversion of all outstanding Notes.

     6.10 FULLY PAID STOCK;  TAXES.  The Company  covenants  and agrees that the
shares of stock  represented by each and every  certificate for its Common Stock
to be delivered on the exercise of the  conversion  rights  herein  provided for
shall,  at the time of such delivery,  be validly issued and  outstanding and be
fully paid and  nonassessable.  The Company further covenants and agrees that it
will pay when due and payable  any and all  federal and state taxes  (other than
income taxes) that may be payable in respect of the Notes or any Common Stock or
certificates therefor upon the exercise of the conversion rights herein provided
for  pursuant to the  provisions  hereof.  The Company  shall not,  however,  be
required to pay any tax that may be payable in respect of any transfer  involved
in the transfer and delivery of stock  certificates  in the name other than that
of the  Holder  of the Note  converted,  and any such tax  shall be paid by such
Holder at the time of presentation.

                                    SECTION 7
                         RESTRICTIONS ON TRANSFERABILITY

     7.1 RESTRICTIONS ON  TRANSFERABILITY.  The Notes and the Conversion  Shares
shall not be  transferable  except upon the  conditions  hereinafter  specified,
which  conditions are intended to ensure  compliance  with the provisions of the
Securities  Act and any  applicable  state  securities  laws,  in respect of the
transfer of any Notes or any such Conversion Shares.

     7.2 RESTRICTIVE LEGENDS.

          (a) Each Note  initially  issued  under this  Agreement  and each Note
issued  in  exchange   therefor   shall  bear  on  the  face  thereof  a  legend
substantially as follows:

                                       16
<PAGE>
         THIS NOTE AND THE  SHARES  OF COMMON  STOCK  ISSUABLE  UPON  CONVERSION
         HEREOF HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933,
         AS  AMENDED,  AND MAY BE  OFFERED  OR SOLD  ONLY  IF  REGISTERED  UNDER
         APPLICABLE  SECURITIES LAWS OR IF AN EXEMPTION  THEREFROM IS AVAILABLE.
         THIS NOTE AND THE  SHARES  OF COMMON  STOCK  ISSUABLE  UPON  CONVERSION
         HEREOF ARE TRANSFERABLE ONLY UPON THE CONDITIONS  SPECIFIED IN THE NOTE
         AGREEMENT  REFERRED  TO HEREIN.  A COPY OF THE NOTE  AGREEMENT  WILL BE
         PROVIDED TO THE REGISTERED HOLDER THEREOF UPON REQUEST TO THE COMPANY.

          (b) Each  certificate for shares of Common Stock initially issued upon
the  conversion  of any Note and each  certificate  for  shares of Common  Stock
issued to a subsequent  transferee of such certificate  shall,  unless otherwise
permitted by the  provisions of this Section 7 bear on the face thereof a legend
substantially as follows:

         THE SHARES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED
         PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,  AND MAY BE OFFERED
         OR SOLD ONLY IF REGISTERED UNDER APPLICABLE  SECURITIES LAW OR PURSUANT
         TO AN OPINION OF COUNSEL  SATISFACTORY TO THE COMPANY STATING THAT SUCH
         REGISTRATION IS NOT REQUIRED. THE TRANSFER OF SUCH SHARES IS SUBJECT TO
         CERTAIN  CONDITIONS,  THE  PROVISIONS  OF WHICH WILL BE PROVIDED TO THE
         REGISTERED  HOLDER HEREOF UPON REQUEST BY THE COMPANY,  AND NO TRANSFER
         OF SUCH SHARES SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS  SHALL
         HAVE BEEN FULFILLED.

In the event that a registration  statement covering any Conversion Shares shall
become  effective  under  the  Securities  Act and under  any  applicable  state
securities laws or in the event that the Company shall receive an opinion of its
counsel  that,  in the  opinion of such  counsel,  such  legend is not, or is no
longer,  necessary or required with respect to such shares  (including,  without
limitation, because of the availability of the exemption afforded by Rule 144 of
the general rules and regulations of the Commission), the Company shall or shall
instruct  its transfer  agents and  registrars  to,  remove such legend from the
certificates evidencing such Conversion Shares or issue new certificates without
such  legend in lieu  thereof.  Upon the  written  request  of any Holder or the
holder of any Conversion  Shares,  the Company covenants and agrees forthwith to
request its counsel to render an opinion with respect to the matters  covered by
this  paragraph and to bear all expenses in connection  with such opinion of its
counsel.

     7.3 NOTICE OF PROPOSED TRANSFER;  REGISTRATION NOT REQUIRED.  The Holder of
each Note or any Conversion Shares, by acceptance thereof,  agrees to give prior
written  notice to the Company of such Holder's  intention to transfer such Note
or such  Conversion  Shares (or any  portion  thereof),  describing  briefly the
manner and circumstances of the proposed  transfer,  together with an opinion of

                                       17
<PAGE>
counsel  to the  effect  that the  proposed  transfer  may be  effected  without
registration or qualification under any federal or state law. Unless the Company
shall have received an opinion from counsel to the Company  (which opinion shall
be obtained  by the  Company  not more than ten days after  notice of a proposed
transfer) that the proposed transfer may not be effected without registration or
qualification  under  federal or state law,  such  Holder  shall be  entitled to
transfer such Note or such Conversion  Shares,  all in accordance with the terms
of the notice delivered by such holder to the Company.  All fees and expenses of
counsel for the Company in connection with the rendition of the opinion provided
for in this Section 7.3 shall be paid by the Company.

     7.4 TRANSFER OF NOTES.  If in the opinion of either counsel  referred to in
Section 7.3 a proposed  transfer of a Note or Conversion Shares requested by the
Holder thereof may not be effected without  registration or qualification  under
applicable  federal or state law, the Company shall promptly give written notice
to the Holder who  proposes to transfer the Note or such  Conversion  Shares (or
any portion thereof) that the Holder shall not consummate the proposed  transfer
and the reasons therefor.  No Note or Conversion Shares (or any portion thereof)
for  which  a  transfer  has  been  proposed  pursuant  to  Section  7.3  may be
transferred in the manner proposed if registration  thereof under the Securities
Act would be required in the opinion of either counsel mentioned above.

                                    SECTION 8
                        REGISTRATION OF CONVERSION SHARES

     8.1  REGISTRATION.  The Company  shall use its  reasonable  best efforts to
cause to be filed with the Commission no later than three months after the final
closing of the Offering a shelf  registration  statement on an appropriate  form
providing  for the sale by the  Holders of the  Conversion  Shares.  The Company
shall use its reasonable best efforts to have such shelf registration  statement
declared  effective by the Commission as soon as practicable  after such filing.
The Company  agrees to use its best efforts to keep the  registration  statement
continuously  effective  (and to  take  any and  all  other  actions  reasonably
necessary in order to permit public resale of the  Conversion  Shares covered by
such  registration  statement in accordance with this Agreement) for a period of
two years after the registration  statement is declared  effective.  The Company
further agrees, if necessary, to supplement or amend the registration statement,
if  required  by  the  rules,  regulations  or  instructions  applicable  to the
registration form used by the Company for such shelf  registration  statement or
by the  Securities  Act or by any other  rules and  regulations  thereunder  for
registration, and the Company agrees to furnish notice thereof to the Holders of
the Conversion Shares.

                                       18
<PAGE>
     8.2 CONDITIONS RELATING TO SHELF REGISTRATION.

          (a) Subject to paragraph  (b) of this  Section  8.2, the  registration
rights of the Holders  pursuant to this  Agreement  and the ability to offer and
sell Conversion Shares pursuant to the registration statement are subject to the
following  conditions and  limitations,  and each Holder agrees with the Company
that:

               (i) If the Company determines in its good faith judgment that the
     filing of the registration statement under Section 8.1 hereof or the use of
     any prospectus would require the disclosure of important  information which
     the Company has a bona fide business purpose for preserving as confidential
     or the disclosure of which would impede the Company's ability to consummate
     a significant transaction, upon written notice of such determination by the
     Company,  the  rights of the  Holders  to  offer,  sell or  distribute  any
     securities pursuant to the registration statement or to require the Company
     to take action with respect to the  registration  or sale of any securities
     pursuant to the registration  statement  (including any action contemplated
     by Section  8.4  hereof)  will for up to 60 days in any 12 month  period be
     suspended  until the date upon which the  Company  notifies  the Holders in
     writing  that  suspension  of such rights for the grounds set forth in this
     Section 8.2(a)(i) is no longer necessary.

               (ii) If all reports  required to be filed by the Company pursuant
     to the Exchange Act have not been filed by the required date without regard
     to any extension,  or if  consummation  of any business  combination by the
     Company has occurred or is probable for purposes of Rule 3-05 or Article 11
     of Regulation S-X under the Securities  Act, upon written notice thereof by
     the Company to the  Holders,  the rights of the  Holders to offer,  sell or
     distribute  any  securities  pursuant to the  registration  statement or to
     require the Company to take action with respect to the registration or sale
     of any securities  pursuant to the  registration  statement  (including any
     action contemplated by Section 8.4 hereof) will for up to 60 days in any 12
     month period be  suspended  until the date upon which the Company has filed
     such reports or obtained the financial information required by Rule 3-05 or
     Article 11 of Regulation S-X to be included in the registration statement.

               (iii) In the case of the registration of any underwritten primary
     equity  offering  initiated by the Company (other than any  registration by
     the Company on Form S-8, or a successor or  substantially  similar form, of
     (A) an employee  stock option,  stock purchase or  compensation  plan or of
     securities  issued or issuable pursuant to any such plan, or (B) a dividend
     reinvestment  plan),  each Holder  agrees,  if  requested in writing by the
     managing  underwriter or underwriters  administering such offering,  not to
     effect any offer,  sale or  distribution  of  securities  (or any option or
     right to acquire  securities)  during the period commencing on the 10th day
     prior to the effective  date of the  registration  statement  covering such
     underwritten  primary  equity  offering and ending on the date specified by
     such managing  underwriter  in such written  request to such Holder,  which
     period may be of a duration of 90 days or more.

                                       19
<PAGE>
               (iv) In the event that the Company plans to repurchase or bid for
     securities of the Company in the open market,  on a private solicited basis
     or otherwise,  and the Company  determines,  in its  reasonable  good faith
     judgment and based upon the advice of counsel to the Company (which counsel
     shall be experienced in securities laws matters),  that any such repurchase
     or bid may not,  under Rule 10b-6 under the Exchange  Act, or any successor
     or similar  rule, be commenced or  consummated  due to the existence or the
     possible  commencement  of a  "DISTRIBUTION"  (within  the  meaning of Rule
     10b-6) as a result  of any  offers or sales by  Holders  of any  Conversion
     Shares, as the case may be, under any registration statement filed pursuant
     to this Agreement,  the Company shall be entitled,  for a period of 90 days
     or more,  to request  that  Holders  of  Conversion  Shares,  to suspend or
     postpone such  distribution  pursuant to such registration  statement.  The
     Company  shall,  as  promptly as  practicable,  give such Holder or Holders
     written  notice of such  election,  stating  the  basis  for the  Company's
     determination.  As promptly as practicable  following the  determination by
     the Company that the Holders may commence or recommence their  distribution
     pursuant to the registration statement without causing the Company to be in
     violation  of Rule  10b-6,  the  Company  shall give such Holder or Holders
     written notice of such determination.

          (b)  Notwithstanding  the  provisions  of Section  8.2(a)  above,  the
aggregate number of days (whether or not  consecutive)  during which the Company
may delay the effectiveness of the registration  statement or prevent offerings,
sales or distribution by the Holders thereunder pursuant to Section 8.2(a) shall
in no event exceed 180 days during any 12-month period.

          (c) The Company may require each selling Holder of Conversion  Shares,
as a condition to the inclusion of the Conversion  Shares of such selling Holder
in the shelf registration  statement or in any offering thereunder,  as the case
may be, to furnish to the Company such information  regarding the Holder and the
distribution  of such securities as the Company may from time to time reasonably
request  (which  request  shall be  confirmed  in  writing if  requested  by the
Company) in order to comply with  applicable  law and such other  information as
may be legally  required in connection with such  registration or offering,  and
the Holder shall promptly  provide such information and a written consent to the
inclusion of such information in the registration statement or any prospectus or
supplement  thereto;  PROVIDED  that the  failure of any Holder to provide  such
information  to the Company shall not in any way affect the  obligations  of the
Company hereunder with respect to any other Holder.

     8.3  REGISTRATION  PROCEDURES.  In connection  with the  obligations of the
Company with respect to a registration  statement pursuant to Section 8.1 hereof
and subject to Section 8.2 hereof, the Company shall:

          (a) (i) prepare and file with the Commission a registration  statement
on the  appropriate  form  under the  Securities  Act,  (A) which  form shall be
selected by the Company and shall be  available  for the sale of the  Conversion
Shares in accordance  with the intended method or methods of distribution by the

                                       20
<PAGE>
selling Holders thereof  (PROVIDED that the Company shall not be required to use
any form other than Form S-1, S-2,  S-3, SB-1 or SB-2 or any successor  form and
shall not be  required  to file more than one  registration  statement  with the
Commission) and (B) which registration  statement shall comply as to form in all
material  respects with the  requirements  of the applicable form and include or
incorporate by reference all financial  statements required by the Commission to
be so included or  incorporated by reference,  FURTHER  PROVIDED that subject to
the  registration   statement  and  prospectus  being  in  compliance  with  the
requirements of the Securities Act and the Exchange Act (including all rules and
regulations of the Commission  thereunder),  the Company has the sole discretion
to determine  the form,  substance  and  presentation  of any financial or other
information  included in any registration  statement or prospectus,  and whether
such  information   should  be  included  in  such  registration   statement  or
prospectus;  and (ii) use its reasonable best efforts to cause such registration
statement to become  effective and remain  effective in accordance  with Section
8.1 hereof;

          (b)  prepare  and  file  with  the  Commission   such  amendments  and
post-effective  amendments to the registration  statement as may be necessary to
keep such registration  statement effective for the applicable period; and cause
each prospectus to be supplemented by any required prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Securities Act;

          (c) in the event that any  federal  law or  regulation  binding on the
Company and adopted after the date hereof so requires (and would also so require
if the Conversion Shares were being offered in a primary offering by the Company
rather  than by the  Holders),  use its  reasonable  best  efforts to cause such
Conversion  Shares to be  registered  with or  approved  by such  other  federal
governmental  agencies or authorities  in the United  States,  if any, as may be
required by virtue of the business and  operations  of the Company to enable the
selling Holders to consummate the disposition of such Conversion Shares;

          (d) furnish to each Holder of  Conversion  Shares and to each managing
underwriter of an underwritten offering of Conversion Shares pursuant to Section
4(1) of the  Securities  Act,  if any,  without  charge,  as many copies of each
prospectus,   including  each  preliminary  prospectus,  and  any  amendment  or
supplement  thereto as such Holder or  underwriter  may reasonably  request,  in
order to  facilitate  the public  sale or other  disposition  of the  Conversion
Shares;

          (e) use its  reasonable  best  efforts  to  register  or  qualify  the
Conversion  Shares under all applicable  state  securities or "BLUE SKY" laws of
such  jurisdictions as any Holder of Conversion  Shares of such class covered by
the registration  statement  shall, on 20 days prior written notice,  reasonably
request in writing.  Such notice to be sent at any time prior to the  applicable
registration  statement being declared effective by the Commission.  The Company
shall  maintain  such   registration  or  qualification  in  effect  during  the
applicable period provided in Section 8.1 hereof;  PROVIDED,  HOWEVER,  that the
Company  shall not be required to (i)  qualify  generally  to do business in any
jurisdiction  where it would not  otherwise  be required to qualify but for this

                                       21
<PAGE>
Section 8.3;  (ii) subject  itself to taxation in any such  jurisdiction;  (iii)
make any change to its  Articles  or  Incorporation  or Bylaws;  or (iv)  become
subject to general service of process in any  jurisdiction  where it is not then
so subject;

          (f) notify each Holder of Conversion Shares as promptly as practicable
after becoming aware thereof and (if requested by any such Holder)  confirm such
notice in writing (i) when the  registration  statement has become effective and
when any  post-effective  amendments and supplements  thereto become  effective;
(ii) of any request by the  Commission  or any state  securities  authority  for
amendments and supplements to the  registration  statement and any prospectus or
for additional information relating to the Conversion Shares or the registration
or qualification thereof after the registration  statement has become effective;
(iii) of the issuance by the Commission or any state securities authority of any
stop order suspending the  effectiveness  of the  registration  statement or the
initiation of any proceedings for that purpose;  (iv) if the representations and
warranties of the Company  contained in any underwriting  agreement,  securities
sales agreement or other similar  agreement,  if any, relating to the Conversion
Shares cease to be true and correct in any material respect prior to the closing
date  specified in such  agreement  (PROVIDED such notice shall be given only to
Holders   which  are   parties  to  the   agreements   pursuant  to  which  such
representations  and  warranties  are  made),  or if the  Company  receives  any
notification  with  respect  to  the  suspension  of  the  qualification  of the
Conversion  Shares  for  sale  in  any  jurisdiction  or the  initiation  of any
proceeding  for such  purpose;  and (v) of the happening of any event during the
period  (other than any  suspension  period  referred to in Section  8.2) during
which the  registration  statement  is required  hereunder  to be effective as a
result of which the  registration  statement or any prospectus  would contain an
untrue  statement of material fact or omit to state a material fact necessary in
order to make the statements  therein,  in light of the  circumstances  in which
they were made, not misleading;

          (g) use its  reasonable  best efforts to obtain the  withdrawal of any
order  suspending  the  effectiveness  of  the  registration  statement  or  the
qualification of the Conversion  Shares for sale in any jurisdiction as promptly
as practicable;

          (h) furnish to each Holder of Conversion  Shares,  without charge,  at
least one conformed copy of the  registration  statement and any  post-effective
amendment  thereto  (without  documents  incorporated  therein by  reference  or
exhibits thereto, unless requested in writing);

          (i) cooperate with the Holders of Conversion  Shares to facilitate the
timely preparation and delivery of certificates  representing  Conversion Shares
to  be  sold  pursuant  to  the  registration  statement  and  not  bearing  any
restrictive   legends;   and  enable  such  Conversion  Shares  to  be  in  such
denominations and registered in such names as the selling Holders may reasonably
request (in each case,  PROVIDED such  certificates  are requested in writing at
least three business days prior to any delivery thereof);

          (j) upon the occurrence of any event contemplated by Section 8.3(f)(v)
hereof,  use its  reasonable  best efforts as promptly as practicable to prepare
and file with the  Commission a supplement  or  post-effective  amendment to the
registration  statement or the related  prospectus or any document  incorporated

                                       22
<PAGE>
therein by reference or file any other required  document so that, as thereafter
delivered to the purchasers of the Conversion  Shares,  such prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading;

          (k)  otherwise  use its  reasonable  best  efforts to comply  with all
applicable  rules and regulations of the  Commission,  and make available to its
security  Holders,  as soon as  reasonably  practicable,  an earnings  statement
covering  a period  of 12  months,  beginning  within  three  months  after  the
effective date of the  registration  statement,  which earnings  statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 under
the Securities Act;

          (l) use its reasonable best efforts to (i) cause all Conversion Shares
to be listed or quoted on any securities  exchange or quotation  system on which
the Company's outstanding Common Stock is then listed or quoted; and

          (m) obtain a CUSIP number for all Conversion Shares not later than the
effective date of the registration statement.

Each  Holder  agrees  that,  upon  receipt of any notice from the Company of the
happening of any event of the kind described in Section 8.3 hereof,  such Holder
will  forthwith  discontinue  disposition of Conversion  Shares  pursuant to the
registration  statement  covering  such  Conversion  Shares until such  Holder's
receipt of the copies of the supplemented or amended prospectus  contemplated by
Section 8.3(j) hereof, or until it is advised in writing by the Company that the
use of such  prospectus may be resumed and, if so directed by the Company,  such
Holder will deliver to the Company (at the Company's expense) all copies,  other
than permanent file copies then in such Holder's  possession,  of the prospectus
covering such  Conversion  Shares current at the time of receipt of such notice;
PROVIDED,  HOWEVER,  that the Company shall use its  reasonable  best efforts to
promptly prepare and provide to the Holders a supplemented or amended prospectus
contemplated by such Section 8.4(j) hereof.  In the event the Company shall give
any such notice,  the period during which such  registration  statement shall be
maintained  effective  shall be extended by the number of days during the period
from and  including  the date of the giving of such  notice  pursuant to Section
8.4(f)(v)  hereof to including  the date when each Holder of  Conversion  Shares
covered by such  registration  statement  shall have  received the copies of the
supplemented or amended prospectus contemplated by Section 8.4(j) hereof.

                                       23
<PAGE>
     8.4 REGISTRATION EXPENSES.

          (a)  The  Company  will  bear  all  reasonable  Registration  Expenses
incident to the  performance of or compliance  with its  obligations  under this
Agreement. Notwithstanding the foregoing, the Company is not required to pay any
fees or expenses of Holders,  underwriters,  the  Holder's or any  underwriter's
counsel  (other than blue sky  counsel)  or  accountant  or any other  advisers,
including any transfer  taxes,  underwriting,  brokerage and other discounts and
commissions  and finders' and similar fees payable in the respect of  Conversion
Shares.

          (b) Each  Holder  shall pay all costs and  expenses  incurred  by such
Holder,  including  all  transfer  taxes,  underwriting,   brokerage  and  other
discounts  and  commissions  and finders' and similar fees payable in respect of
Conversion  Shares.  To the extent that any Registration  Expenses are incurred,
assumed  or paid by any  Holder or any  placement  or sales  agent  therefor  or
underwriter thereof with the Company's prior written consent,  the Company shall
reimburse  such  person  for the full  amount of the  Registration  Expenses  so
incurred,  assumed or paid within a reasonable  time after  receipt of a written
request therefor.  Any Registration Expenses submitted by any Holder,  placement
or sales agent or underwriter or on behalf of any such person for payment by the
Company shall be itemized in detail and contain  clear and accurate  receipts of
all expenditures made by such parties.

     8.5 INDEMNIFICATION; CONTRIBUTION.

          (a) The Company  agrees to indemnify and hold harmless each Holder and
each  "PERSON," if any,  that controls such Holder within the meaning of Section
15 of the  Securities  Act for,  from and against  any and all loss,  liability,
claim,  damage and expense  (including  attorneys' fees) to the extent resulting
from any  untrue  statement  or alleged  untrue  statement  of a  material  fact
contained in any registration statement pursuant to which Conversion Shares were
registered  under the Securities Act (or any amendment  thereto),  including all
documents  incorporated  therein by  reference,  or from the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the  statement  therein  not  misleading  or  arising  out of any untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
prospectus  (or any  amendment or supplement  thereto),  including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact  necessary in order to make the  statements  therein,  in the
light of the  circumstances  under which they were made, not misleading,  except
insofar as any such misstatement or omission or alleged misstatement or omission
is made therein in reliance upon and in conformity with information furnished to
the  Company  by such  Holder in  writing  expressly  for use in a  registration
statement  (or any  amendment  thereto) or any  prospectus  (or any amendment or
supplement  thereto) relating to the Conversion  Shares. As used in this Section
8.5(a), the term "HOLDER" shall include its officers, directors and agents.

          (b) Each Holder agrees to indemnify and hold harmless the Company, its
directors  and  officers  and each  "PERSON,"  if any,  who controls the Company
within the meaning of Section 15 of the Securities Act to the same extent as the

                                       24
<PAGE>
foregoing  indemnity  from the Company to such Holder,  but only with respect to
information  furnished  in writing  by such  Holder or on such  Holder's  behalf
expressly for use in any  registration  statement (or any amendment  thereto) or
any  prospectus  (or  any  amendment  or  supplement  thereto)  relating  to the
Conversion  Shares,  or any amendment or supplement  thereto;  PROVIDED that the
obligations  or any  Holder to  indemnify  the  Company  and the  other  persons
referred to above shall be limited to the proceeds  received by such Holder from
the sale of such Conversion Shares pursuant to such registration statement.

          (c)  If  any  action  or  proceeding   (including   any   governmental
investigation)  shall be brought or  asserted  against  any person  entitled  to
indemnification  hereunder,  the  indemnified  party shall give  prompt  written
notice to the indemnifying  party,  and the indemnifying  party shall assume the
defense thereof,  including the employment of counsel reasonably satisfactory to
the  indemnified  party,  and  shall  assume  the  payment  of all  expenses  in
connection with such defense. The indemnified party or any controlling person of
such  indemnified  party shall have the right to employ separate  counsel in any
such action and to participate in the defense thereof, but the fees and expenses
of such  counsel  shall  be at the  expense  of the  indemnified  party  or such
controlling  person unless (i) the  indemnifying  party shall have agreed to pay
such fees and  expenses;  or (ii) the  indemnifying  party  shall have failed to
assume  the  defense  for  such  action  or  proceeding  and to  employ  counsel
reasonably  satisfactory  to  the  indemnified  party  in  any  such  action  or
proceeding;  or (iii)  the  named  parties  to any  such  action  or  proceeding
(including any impleaded  parties)  include both the  indemnified  party or such
controlling  person and the indemnifying  party,  and such indemnified  party or
such controlling person shall have been advised by counsel that counsel employed
by the indemnifying party would, under applicable professional standards, have a
conflict in representing  both the indemnifying  party and the indemnified party
or such controlling  person,  in which case, if such indemnified  person or such
controlling  person notifies the indemnifying party in writing that it elects to
employ  separate  counsel  at  the  expense  of  the  indemnifying   party,  the
indemnifying party shall not have the right to assume the defense of such action
or  proceeding  of  separate  but  substantially  similar or related  actions or
proceedings in the same jurisdiction arising out of the same general allegations
or  circumstances,  and shall not be liable for the reasonable fees and expenses
of more than one separate firm of attorneys  (together  with  appropriate  local
counsel) at any time for such indemnified  party and such  controlling  persons,
which firm shall be designated,  if the Holders (or their  controlling  persons)
are the  indemnified  parties,  in writing by the  Holders of a majority  of the
outstanding  Conversion  Shares  owned by Holders who are then  entitled to such
indemnity in connection with such action or proceeding and if the Company is the
indemnified  party, by the Company.  No party shall be liable for any settlement
of any such action or proceeding  effected  without its written  consent  (which
consent  shall not be  unreasonably  withheld),  but if settled with its written
consent, or if there is a final judgment for the plaintiff in any such action or
proceeding,  the  indemnifying  party agrees to indemnify and hold harmless such
indemnified  party and such  controlling  person  from and  against  any loss or
liability (to the extent stated above) by reason of such settlement or judgment.

          (d) (i) If the  indemnification  provided  for in this  Section 8.5 is
unavailable to an indemnified party hereunder in respect of any losses,  claims,
damages,  liabilities or expenses, then each such indemnifying party, in lieu of
indemnifying  such  indemnified  party,  shall  contribute to the amount paid or
payable by such indemnified party as a result of such losses,  claims,  damages,

                                       25
<PAGE>
liabilities  and expenses in such  proportion as is  appropriate  to reflect the
relative fault of the indemnified party and the indemnifying party in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnified party and the indemnifying  party shall be
determined by reference  to, among other  things,  whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information  supplied by such party, and the parties'
relative intent, knowledge,  access to information and opportunity to correct or
prevent such statement or omission.

               (ii) The  parties  hereto  agree  that it  would  not be just and
equitable if contribution pursuant to this Section 8.5(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of  the  equitable  considerations  referred  to in  the  immediately  preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, expenses, liabilities, or judgements referred to in the
immediately  preceding  paragraph  shall be deemed to  include,  subject  to the
limitations set forth above, any legal or other expenses  reasonably incurred by
such  indemnified  party in connection with  investigating or defending any such
action or claim.  Notwithstanding  the  provisions  of this Section  8.5(d),  no
Holder  shall be  required to  contribute  any amount in excess of the amount by
which the total price at which the Conversion Shares of such selling Holder were
offered to the public pursuant to such registration statement exceeds the amount
of any damages which such selling  Holder has otherwise  been required to pay by
reason of such  untrue or  alleged  untrue  statement  or  omission  or  alleged
omission.  No  person  found  guilty  by a court of  competent  jurisdiction  of
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities  Act) shall be entitled to  contribution  from any person who was not
found  guilty  by  a  court  of  competent   jurisdiction   of  such  fraudulent
misrepresentation.

          (e) Neither the  Company  nor the  Holders  shall have any  obligation
under this  Agreement  (other than as set forth in this  Section 8.5) to provide
the other with indemnification or contribution in respect of any losses, claims,
damages,  liabilities  or expenses  referred to in this Section  8.5;  PROVIDED,
HOWEVER,  that  the  provisions  of  this  Section  8.5  shall  not  relieve  an
indemnifying  party from  liability  which it may have to an  indemnified  party
other than with respect to the matters referred to in this Section 8.5.

     8.6 COMMISSION FILINGS. The Company covenants that it will file the reports
required to be filed by it under the Exchange Act and the rules and  regulations
adopted  by the  Commission  thereunder  in a timely  manner  as  determined  by
applicable  rules and  interpretations  under the Exchange Act. Upon the written
request of any Holder of  Conversion  Shares,  the Company  will deliver to such
Holder a written statement as to whether it has complied with such requirements.

     8.7  LOCK-UP  AGREEMENT.  Upon the registration  statement  related to the
Conversion  Shares being declared  effective,  the Holders of Conversion  Shares
shall not offer, sell, dispose of, transfer or otherwise reduce market risk with

                                       26
<PAGE>
respect to such  Registerable  Securities,  directly or indirectly,  without the
prior consent of the Company and except for transfers  occurring by operation of
law. The foregoing notwithstanding, the percentage of Conversion Shares shall be
released from the above restrictions at the time periods as follows:

                 Time                     Cumulative Percentage Transferable
                 ----                     ----------------------------------
     Effective Date of Registration                    25%

     Three Months After Effective Date                 50%

     Six Months After Effective Date                   75%

     Nine Months After Effective Date                 100%

The Company may  accelerate  the  release of the  Conversion  Shares in its sole
discretion.

                                    SECTION 9
                                   NOTE AGENT

     9.1 DUTIES AND LIABILITIES OF NOTE AGENT.

          (a) The Note Agent upon  appointment  shall  undertake to perform such
duties and only such duties as are specifically set forth in this Agreement.  In
case an Event of Default has occurred (which has not been cured), the Note Agent
shall  exercise such of the rights and powers vested in it by this Agreement and
use the same  degree of care and skill in its  exercise  as a prudent  man would
exercise or use under the circumstances in the conduct of his own affairs.

          (b) No provision of this  Agreement  shall be construed to relieve the
Note Agent from liability for its own gross  negligence in acting or omitting to
act, or its own willful misconduct, except that:

               (i) prior to the occurrence of an Event of Default which may have
          occurred:

                    (A) the duties and  obligations  of the Note Agent  shall be
               determined  solely by the express  provisions of this  Agreement,
               and the Note Agent shall not be liable except for the performance
               of such duties and obligations as are  specifically  set forth in
               this Agreement,  and no implied covenants or obligations shall be
               read into this Agreement against the Note Agent; and

                                       27
<PAGE>
                    (B) in the  absence  of bad  faith  on the  part of the Note
               Agent, the Note Agent may  conclusively  rely, as to the truth of
               the  statements  and the  correctness  of the opinions  expressed
               therein,  upon any certificates or opinions furnished to the Note
               Agent and conforming to the  requirements of this Agreement;  but
               in the  case of any such  certificates  or  opinions  that by any
               provision hereof arc specifically required to bc furnished to the
               Note  Agent,  the Note Agent shall be under a duty to examine the
               same to determine whether or not they conform to the requirements
               of this Agreement.

               (ii) the Note Agent shall not be liable for any error of judgment
          made in good faith,  unless it shall be proved that the Note Agent was
          grossly negligent in ascertaining the pertinent facts;

               (iii) the Note  Agent  shall not be liable  with  respect  to any
          action taken or omitted to be taken by it in good faith in  accordance
          with the direction of the Holders of a majority in aggregate principal
          amount of the Notes then outstanding  relating to the time, method and
          place of conducting  any  proceeding  for any remedy  available to the
          Holders,  or exercising any power conferred upon the Note Agent, under
          this Agreement; and

               (iv) none of the provisions of this  Agreement  shall require the
          Note  Agent to  expend or risk its own  funds or  otherwise  incur any
          personal  financial  liability in the performance of any of its duties
          hereunder,  or in the  exercise of any of its rights or powers,  if it
          shall have  reasonable  grounds for believing  that  repayment of such
          funds or adequate  indemnity  against  such risk or  liability  is not
          reasonably assured to it.

          (c) Whether or not herein  expressly so provided,  every  provision of
this  Agreement  relating  to the  conduct  or  affecting  the  liability  of or
affording  protection  to the Note Agent shall be subject to the  provisions  of
this Section 9.

     9.2 RELIANCE ON DOCUMENTS,  OPINIONS,  ETC. Except as otherwise provided in
Section 9.1:

          (a) the Note Agent may rely and shall be  protected in acting upon any
resolution,   certificate,   statement,  instrument,  opinion,  report,  notice,
request, consent, order, note, bond. note, or other paper or document reasonably
believed by it to be genuine and to have been signed or  presented by the proper
party or parties;

          (b) whenever in the administration of the provisions of this Agreement
the Note Agent shall deem it necessary  or desirable  that a matter be proved or
established  prior to taking or  omitting  any  action  hereunder,  such  matter
(unless other  evidence in respect  thereof be herein  specifically  prescribed)
may,  in the  absence of gross  negligence  or bad faith on the part of the Note
Agent,  be deemed to be  conclusively  proved and  established  by a certificate
signed by the Company and delivered to the Note Agent, and such certificate,  in
the  absence  of gross  negligence  or bad faith on the part of the Note  Agent,
shall be full  warrant to Note Agent for any action taken or omitted by it under
the provisions of this Agreement upon the faith thereof;

                                       28
<PAGE>
          (c) any request,  direction,  order or demand of the Company mentioned
herein shall be  sufficiently  evidenced by a certificate of the Company (unless
other evidence in respect thereof be herein specifically prescribed);

          (d) the Note Agent may consult  with legal  counsel and any opinion of
Counsel shall be full and complete  authorization  and  protection in respect of
any action taken or omitted by it hereunder in good faith and in accordance with
such opinion of Counsel;

          (e) the Note Agent shall be under no obligation to exercise any of the
rights  or  powers  vested  in it by this  Agreement  at the  request,  order or
direction of any of the Holders,  pursuant to the provisions of this  Agreement,
unless such Holders shall have offered to the Note Agent reasonable  security or
indemnify  against the costs,  expenses  and  liabilities  which may be incurred
therein or thereby;  nothing herein contained shall,  however,  relieve the Note
Agent of the obligations, upon the occurrence of any Event of Default (which has
not been cured),  to exercise such of the rights and powers vested in it by this
Agreement  and to use the same  degree of care and skill in their  exercise as a
prudent man would exercise or use under the  circumstances in the conduct of his
own affairs;

          (f) the Note Agent shall not be liable for any action taken or omitted
by it in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;

          (g) prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of  Default,  the Note Agent shall not be bound to make
any  investigation   into  the  facts  or  matters  stated  in  the  resolution,
certificate,  statement,  instrument, opinion, report, notice, request, consent,
order, note, bond note, or other paper or document,  unless requested in writing
so to do by the Holders of more than one half in aggregate  principal  amount of
the Notes then  outstanding;  provided  that if the payment  within a reasonable
time to the Note  Agent of the  costs,  expenses  or  liabilities  likely  to be
incurred by it in the making of such investigation is not, in the opinion of the
Note Agent,  reasonably assured to the Note Agent by the security afforded to it
by the terms of this Agreement,  the Note Agent may require reasonable indemnity
against  such  expense  or  liability  as a  condition  to  so  proceeding,  the
reasonable  expense of every such examination shall be paid by the Company,  or,
if paid by the Note Agent, shall be repaid by the Company upon demand; and

          (h) the Note Agent may execute  any of the rights or powers  hereunder
or perform  any duties  hereunder  either  directly  or by or through  agents or
attorneys.

     9.3 NO RESPONSIBILITY FOR RECITALS,  ETC. The recitals contained herein and
in the Note shall be taken as the  statements  of the Company and the Note Agent
assumes no responsibility  for the correctness of the same. The Note Agent makes

                                       29
<PAGE>
no representations as to the validity or sufficiency of this Agreement or of the
Notes. The Note Agent shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Note Agent in conformity with the provisions of this Agreement.

     9.4  MONEYS TO BE HELD IN TRUST.  All  moneys  received  by the Note  Agent
shall,  until  used or  applied  as  herein  provided,  be held in trust for the
purposes for which they are received.

     9.5 EXPENSES OF NOTE AGENT.  The Company  shall pay or  reimburse  the Note
Agent upon its request for all reasonable  expenses,  disbursements and advances
incurred or made by the Note Agent in connection  with the  performance  of Note
Agent's  obligations  with  respect  to a Default by Company or by reason of the
occurrence of an Event of Default  (including  the reasonable  compensation  and
expenses and  disbursements  of its counsel and of all persons not  regularly in
its employ) except any such expense,  disbursement  or advance as may arise from
its gross  negligence,  willful  misconduct or bad faith. The Company also shall
indemnify the Note Agent for, and hold it harmless against,  any loss, liability
or expense  incurred  without  gross  negligence or bad faith on the part of the
Note  Agent  and  arising  out  of or  in  connection  with  the  acceptance  or
administration  of this agency,  including the reasonable  costs and expenses of
defending itself against any claim of liability in the premises.

     9.6 RESIGNATION OR REMOVAL OF NOTE AGENT.

          (a) The Note Agent may at any time resign by giving  written notice of
such  resignation to the Company and by mailing notice thereof to the Holders at
their addresses as they shall appear on the registry books of the Company.  Upon
receiving such notice of resignation, the Holders of a majority of the principal
amount of the Notes  then  outstanding  may  appoint a  successor  agent.  If no
successor Note Agent shall have been so appointed and have accepted  appointment
within  60 days  after  the  publication  of such  notice  of  resignation,  the
resigning  Note Agent may petition any court of competent  jurisdiction  for the
appointment  of a successor  Note Agent,  or any Holder who has been a bona fide
holder of a Note or Notes for at least six months  may on behalf of himself  and
all others similarly situated,  petition any such court for the appointment of a
successor Note Agent. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe,  appoint a successor Note Agent. In the event the
Event of  Default  causing  the  appointment  of the  Note  Agent  is  cured,  a
substitute Note Agent need not be appointed  until the subsequent  occurrence of
an additional Event of Default.

          (b) In case at any time the  Note  Agent  shall  become  incapable  of
acting; or in connection with the performance of its obligations hereunder shall
have  acted in bad  faith,  shall  have been  grossly  negligent  or shall  have
willfully breached this Agreement; or shall be adjudged a bankrupt or insolvent,
or a receiver of the Note Agent or of its property  shall be  appointed,  or any
public officer shall take charge or control of the Note Agent or of its property
or affairs for the purpose of rehabilitation,  conservation or liquidation, then
in any such case the Holders of a majority of the principal  amount of the Notes

                                       30
<PAGE>
then  outstanding  may remove the Note Agent and appoint a successor Note Agent,
or any  Holder  who has been a bona fide  holder of a Note or Notes for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of  competent  jurisdiction  for the removal of the Note Agent and the
appointment  of a successor  Note Agent.  Such court may  thereupon,  after such
notice,  if any, as it may deem proper and prescribe,  remove the Note Agent and
appoint a successor Note Agent.

          (c) Any  resignation or removal of the Note Agent and appointment of a
successor Note Agent pursuant to any of the provisions of this Section 9.6 shall
become effective upon acceptance of appointment by the successor Note Agent.

                                   SECTION 10
                                  MISCELLANEOUS

     10.1 REGISTERED  NOTES. The Company shall cause to be kept at its principal
office the Note  Register and the Company will  register or transfer or cause to
be registered or transferred as hereinafter provided any Note issued pursuant to
this  Agreement.  The  Company  will serve as its own  registrar  for the Notes.
Subject to the restrictions on  transferability of the Notes pursuant to Section
7, upon  surrender  for  registration  of transfer of any Note at its  principal
place of business,  the Company  shall  execute and deliver,  in the name of the
transferee or  transferees,  a new Note or Notes for a like aggregate  principal
amount of authorized  denominations.  Notes to be exchanged shall be surrendered
at the principal place of business of the Company, which shall execute and shall
deliver  in  exchange  therefor  the Note or Notes  that the  Holder  making the
exchange  shall  be  entitled  to  receive,  bearing  serial  numbers  not  then
outstanding.  All Notes  presented  for  registration  of transfer,  exchange or
payment  shall,  if so  required  by the  Company,  be  duly  endorsed  by or be
accompanied  by  a  written  instrument  or  instruments  of  transfer  in  form
satisfactory  to the Company,  duly executed by the registered  Holder or by the
Holder's duly  authorized  attorney.  Any exchange or  registration  of transfer
shall be without  charge,  except that the Company may require  payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
relation thereto.

     10.2  EXCHANGE OF NOTES.  At any time and from time to time,  upon not less
than ten days' notice to that effect  given by any Holder of any Note  initially
delivered or of any Note  substituted  therefor  pursuant to Section 10.1,  this
Section  10.2 or Section  10.3 and upon  surrender of any Note to the Company at
its office,  the Company will deliver in exchange  therefor,  without expense to
such Holder,  except as set forth below, Notes for the same aggregate  principal
amount as the then  unpaid  principal  amount of the Note so  surrendered,  in a
denomination  equal to the Note so  surrendered  or in such  other  denomination
equal to or in excess of $5,000 as such Holder  shall  specify,  dated as of the
date to which  interest  has been  paid on the Note so  surrendered  or, if such
surrender is prior to the payment of any interest thereon,  then dated as of the
date of  issue,  registered  in the name of such  Person  or  Persons  as may be
designated by such Holder,  and otherwise of the same form and tenor as the Note
so  surrendered  for  exchange.  The  Company  may  require the payment of a sum
sufficient  to cover any  stamp tax or  governmental  charge  imposed  upon such
exchange or transfer.

                                       31
<PAGE>
     10.3 LOSS, THEFT, ETC. OF NOTES.

          (a) If any  Note  shall  become  mutilated  or be  destroyed,  lost or
stolen,  the  Company  shall,  upon the written  request of the Holder  thereof,
execute and deliver a new Note, bearing a serial number not then outstanding, in
exchange and  substitution for the mutilated Note or in lieu of and substitution
for the Note  destroyed,  lost or stolen;  PROVIDED,  HOWEVER,  that the Company
shall not be obligated  to execute and deliver a new Note  unless,  (i) in every
case, the applicant  requesting a substituted  Note shall furnish to the Company
such  security  or  indemnity  as may be  reasonably  required  by it to save it
harmless,  and (ii) in every case of destruction,  loss or theft, such applicant
shall also furnish to the Company evidence reasonably  satisfactory to it of the
destruction, loss or theft of such Note and of the ownership thereof.

          (b) Upon the issuance of any substituted Note, the Company may require
the payment of a sum  sufficient to cover any tax or other  governmental  charge
that may be  imposed  in  relation  thereto  and any  other  expenses  connected
therewith,  including,  without limitation,  counsel fees of the Company and the
Note Agent.  In case any Note that has matured or is about to mature  shall have
become  mutilated or be  destroyed,  lost or stolen,  the Company may,  with the
consent of the applicant, instead of issuing a substitute Note, pay or authorize
the  payment of the same  (without  surrender  thereof,  except in the case of a
mutilated  Note),  if the  applicant  for such payment shall furnish the Company
with such security or indemnity as it may reasonably require to save it harmless
and, in case of destruction,  loss or theft, evidence reasonably satisfactory to
the Company of the destruction,  loss or theft of such Note and of the ownership
thereof.  Every  substituted  Note  issued  pursuant to the  provisions  of this
Section by virtue of the fact that any Note is destroyed,  lost or stolen, shall
constitute an additional contractual  obligation of the Company,  whether or not
the  destroyed,  lost or stolen  Note  shall be found at any time,  and shall be
entitled to all of the benefits of this  Agreement  equally and  proportionately
with any and all other Notes duly issued hereunder.  All Notes shall be held and
owned upon the express  condition  that the foregoing  provisions  are exclusive
with respect to the  replacement  or payment of  mutilated,  destroyed,  lost or
stolen  Notes  and  shall  preclude  any  and all  other  rights  and  remedies,
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the  replacement  or payment of negotiable  instruments or other
securities without their surrender.

     10.4  CANCELLATION  OF NOTES;  ACQUISITION  OF NOTES BY COMPANY.  All Notes
surrendered for the purpose of payment, redemption,  exchange or registration of
transfer  shall be  delivered  to the Company for  cancellation  and the Company
shall cancel such Notes and all Notes that have been surrendered directly to the
Company for cancellation, and no Notes shall be issued in lieu thereof except as
expressly  permitted by any of the  provisions  of this  Agreement.  The Company
shall  indicate  clearly on the face and on each and every page of such canceled
Notes the fact that such Notes are canceled. If the Company shall acquire any of
the Notes, such acquisition shall not operate as a redemption or satisfaction of
the  indebtedness  represented  by such  Notes,  unless  and  until the same are
canceled,  and the  Company  shall not be  entitled  to vote or  participate  in
directing  the  activities  of the Note Agent  pursuant to this  Agreement  with
respect to any such acquired Notes.

                                       32
<PAGE>
     10.5 TRANSFER OF NOTE. Any Holder to which this Section 10.5 applies agrees
that in the  event  it shall  sell or  transfer  any Note it will,  prior to the
delivery of such Note (unless it has already done so),  make a notation  thereon
of all  principal,  if any,  prepaid on such Note and will also note thereon the
date to which interest has been paid on such Note,  and it will promptly  notify
the  Company  of  the  name  and  address  of the  transferee  of  any  Note  so
transferred.  With  respect to Notes to which this  Section  10.5  applies,  the
Company  shall be entitled  to presume  conclusively  that the  original or such
subsequent  Holder as shall have requested the provisions hereof to apply to its
Note  remains  the Holder of such Notes until the  Company  shall have  received
notice in writing of the transfer of such Notes,  and of the name and address of
the  transferee,  or such Notes  shall  have been  presented  to the  Company as
evidence of the transfer.

     10.6  EXPENSES;  STAMP TAX  INDEMNITY.  The Company will pay the  following
expenses in connection  with this  Agreement and the  transactions  contemplated
hereby:  (a)  duplicating and printing costs and charges for shipping the Notes,
adequately  insured to each  original  Holder's  home or office or at such other
place as such Holder may  designate,  and (b) all such expenses  relating to any
amendment,  waivers or  consents  (whether or not  consummated)  pursuant to the
provisions hereof, including,  without limitation,  any amendments,  waivers, or
consents resulting from any work-out, renegotiation or restructuring relating to
the performance by the Company of its  obligations  under this Agreement and the
Notes.  The Company will pay, and  indemnify  each Holder  against any liability
for,  brokerage  fees and  commissions  payable  or claimed to be payable to any
Person in connection  with the  transactions  contemplated by this Agreement and
resulting  from an agreement or alleged  agreement  between the Company and such
Person.  As a condition  to  transferring  the  ownership  of a Note on the Note
Register,  the Company may require  that the Holder of the Note first pay to the
Company the amount of any tax or governmental  charge applicable to the transfer
of the Note.

     10.7 ACTS OF HOLDERS; EVIDENCE OF OWNERSHIP OF NOTES.

          (a) Any action to be taken by Holders may be  evidenced by one or more
concurrent  written  instruments  of similar  tenor  signed or  executed by such
Holders in person or by an agent appointed in writing.  The fact and date of the
execution by any person or any such instrument may be proved by  acknowledgement
before a Notary Public or other officer empowered to take  acknowledgements,  or
by an affidavit of a witness to such execution.

          (b) Prior to due presentment of any Note for registration of transfer,
the Company may deem the person in whose name the Note shall be registered  upon
the books of the Company as the absolute owner of such Note (whether or not such
Notes shall be overdue and  notwithstanding any notation of ownership or writing
thereon by anyone other than the Company),  for the purpose of receiving payment
of or on account of the principal of, interest on, and premium,  if any, on such
Note and for all other  purposes,  and the Company  shall not be affected by any
notice to the contrary.  Payment of or on account of the principal of,  interest

                                       33
<PAGE>
on, and premium, if any, on such Note shall be made only to or upon the order in
writing of the registered  owner thereof.  All such payments shall be valid and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Note.

          (c) Any action taken by the holders of more than one half in aggregate
principal  amount of the Notes  specified in this  Agreement in connection  with
such action shall be conclusively  binding upon the Company and the Holders. Any
action by any Holder  shall bind all future  Holders of the same Note in respect
of anything done or suffered by the Company in pursuance thereof.

     10.8  HOLDERS'  LIST.  The Company  covenants  and agrees that it and every
obligor  upon the Notes will furnish or cause to be furnished to the Note Agent,
within  three  days of  appointment,  a list in such form as the Note  Agent may
reasonably  require  containing all  information in the possession or control of
the Company as to the name and addresses of the Holders obtained (in the case of
each  list  other  than the  first  list)  since  the date as of which  the next
previous list was furnished.  Any such list may be dated as of the date not more
than 15 days  before  the time any  information  is  furnished  or  caused to be
furnished and need not include  information  received  after such date. The Note
Agent shall  preserve,  in as current a form as is reasonably  practicable,  all
information  as to the names and addresses of the Holders  contained in the most
recent list  furnished to it as provided in this Section 10.8 and received by it
hereunder.  The Note Agent may destroy any list  furnished  to it as provided in
this Section upon receipt of a new list as provided herein.

     10.9 POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE. No delay or failure
on the part of any Holder in the exercise of any power or right shall operate as
a waiver thereof;  nor shall any single or partial exercise of the same preclude
any other or further  exercise  thereof,  or the  exercise of any other power or
right,  and the rights and remedies of each Holder are cumulative to and are not
exclusive of any rights or remedies any such Holder would otherwise have, and no
waiver  or  consent,  given  or  extended  pursuant  to the  provisions  of this
Agreement,  shall  extend to or affect  any  obligation  or right not  expressly
waived or consented to.

     10.10  NOTICES.  All  communications  provided  for  hereunder  shall be in
writing and, if to a Holder or the Note Agent,  delivered  or mailed  prepaid by
registered  or  certified  mail  or  overnight  air  courier,  or  by  facsimile
communication,  in each case  addressed  to such  Holder at the  address  of the
Holder on the  registration  books of the  Company,  or to the Note Agent at the
address as the Note Agent may  designate,  and if to the  Company,  delivered or
mailed by registered  or certified  mail or overnight  courier,  or by facsimile
communication, to the Company at the address of its corporate offices; PROVIDED,
HOWEVER,  that a notice to a Holder  by  overnight  air  courier  shall  only be
effective if delivered to such Holder at a street  address  designated  for such
purpose in accordance  with this Section  10.10,  and a notice to such Holder by
facsimile   communication   shall  only  be   effective  if  made  by  confirmed
transmission to such Holder at a telephone number designated for such purpose in
accordance  with this Section  10.10 and  promptly  followed by delivery of such
notice by  registered or certified  mail or overnight air courier,  as set forth
above.

                                       34
<PAGE>
     10.11  SUCCESSORS  AND ASSIGNS.  This  Agreement  shall be binding upon the
Company  and its  successors  and assigns and shall inure to the benefit of each
Holder and its successors and assigns, including each successive Holder.

     10.12 DISCHARGE AND  TERMINATION.  The Company may, at any time,  terminate
its obligations hereunder and the Notes by irrevocably  depositing in trust cash
or obligations  of the United States  government and its agencies for payment of
principal of, premium,  if any, and interest on, the Notes to maturity.  In such
event,  this Note  Agreement  shall  cease to have any  effect  except as to (a)
rights of  registration  of transfer,  substitution  and exchange of Notes,  (b)
rights of holders to receive  payments  of  principal  or premium,  of any,  and
interest  on the Notes,  (c) the right to convert  Notes into  shares of Company
Common  Stock,  and (d) the  rights,  obligations  and  immunities  of the  Note
Agreement.

     10.13   SURVIVAL  OF  COVENANTS   AND   REPRESENTATIONS.   All   covenants,
representations   and  warranties   made  by  the  Company  herein  and  in  any
certificates  delivered  pursuant hereto,  whether or not in connection with any
Closing  Date,  will survive the closing and the delivery of this  Agreement and
the Notes.

     10.14  SEVERABILITY.  Should any part of this  Agreement  for any reason be
declared invalid or unenforceable, such decision will not affect the validity or
unenforceability  of any remaining portion,  which remaining portion will remain
in force and effect as if this  Agreement  had been  executed  with the  invalid
portion  thereof  eliminated  and it is hereby  declared  the  intention  of the
parties  hereto  that they would have  executed  the  remaining  portion of this
Agreement  without including therein any such part or portion which may, for any
reason, be hereafter declared invalid or unenforceable.

     10.15 GOVERNING LAW. This Agreement and the Notes issued and sold hereunder
shall be governed by and construed in  accordance  with the laws of the State of
Arizona.

     10.16 CAPTIONS.  The descriptive  headings of the various Sections or parts
of this Agreement are for  convenience  only and shall not affect the meaning or
construction of any of the provisions hereof.

     10.17 BENEFITS OF PROVISIONS OF THIS  AGREEMENT.  Nothing in this Agreement
or in the Notes,  expressed  or implied,  shall give or be construed to give any
person, firm or corporation, other than the parties thereto and the Holders, any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or  under  any  covenant,  condition  or  provision  herein  contained,  all the
covenants, conditions and provisions contained in this Agreement or in the Notes
being for the sole benefit of the parties hereto and the Holders.

     10.18  COUNTERPARTS.  This  Agreement  may be  executed  in any  number  of
counterparts,  each  executed  counterpart  constituting  an  original  but  all
together only one agreement.

                                       35
<PAGE>
SOLPOWER CORPORATION                       DOMINION CAPITAL PTY LTD.



/s/ James H. Hirst                         /s/ Peter Voss
----------------------------------         -------------------------------------
By: James H. Hirst                         By: Peter Voss


A1 FINANCIAL PLANNERS PTY LTD.             INTAVEST PTY. LTD.


/s/ Peter Voss                             /s/ Peter Voss
----------------------------------         -------------------------------------
By: Peter Voss                             By: Peter Voss


MARINO INVESTMENTS SERVICES                BELL CAPITAL CORPORATION
LIMITED


/s/ Michael Macey                          /s/ Michael Macey
----------------------------------         -------------------------------------
By: Michael Macey                          By: Michael Macey


RAYMOND STEWART and MARGARET STEWART JT TEN WROS


/s/ Raymond Stewart                        /s/ Margaret Stewart
----------------------------------         -------------------------------------
By: Raymond Stewart                        By: Margaret Stewart


GREG STEWART                                         TRACY STEWART


/s/ Gregg Stewart                          /s/ Tracy Stewart
----------------------------------         -------------------------------------
By: Greg Stewart                           By: Tracy Stewart

                                       36
<PAGE>
                                    EXHIBIT A


THIS NOTE AND THE SHARES OF COMMON STOCK  ISSUABLE UPON  CONVERSION  HEREOF HAVE
NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,  AND MAY
BE OFFERED OR SOLD ONLY IF REGISTERED UNDER APPLICABLE  SECURITIES LAWS OR IF AN
EXEMPTION  THEREFROM  IS  AVAILABLE.  THIS NOTES AND THE SHARES OF COMMON  STOCK
ISSUABLE  UPON  CONVERSION  HEREOF  ARE  TRANSFERABLE  ONLY UPON THE  CONDITIONS
SPECIFIED  IN THE  NOTES  AGREEMENT  REFERRED  TO  HEREIN.  A COPY  OF THE  NOTE
AGREEMENT WILL BE PROVIDED TO THE  REGISTERED  HOLDER HEREOF UPON REQUEST TO THE
COMPANY.

                              SOLPOWER CORPORATION

                                Convertible Note

No.  R-*[insert Note number]                                *[insert issue date]
$*[insert principal amount]

     Solpower  Corporation.,  a Nevada  corporation (the  "COMPANY"),  for value
received,  hereby  promises  to pay to  [insert  name(s) of Note  holder(s)]  or
registered  assigns on the  Maturity  Date,  the  principal  amount of  *[insert
principal amount of Note written out] DOLLARS ($[insert principal amount of Note
in  numbers])  and to pay  interest  (computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time remaining unpaid
heron at an  annual  rate of six  percent  (6%) on March  31,  2000,  and on the
Maturity  Date.  The "MATURITY  DATE" shall mean  September  30, 1999.  Interest
payments  shall be paid to the person  listed as the  registered  holder of this
Note on the books of the  Company as of the close of business on the 15th day of
the month in which the interest  payment date occurs.  Both the principal hereof
and interest hereon are payable at the principal office of the Company,  in coin
or currency of the United States of America,  which at the time of payment shall
be legal tender for the payment of public and private  debts.  The Company shall
have the option to pay  interest  payments in the form of a check  mailed to the
registered address of the person entitled thereto.

     This Note is one of the Notes of the  Company  in the  aggregate  principal
amount of up to  $1,500,000  issued or to be issued  under and  pursuant  to the
terms and  provisions  of the Note  Agreement,  dated as of September  30, 1999,
entered  into by the Company  and the Note  holders and this Note and the holder
hereof are  entitled  equally  and  ratably  with the holders of all other Notes
outstanding under the Note Agreement to all the benefits provided for thereby or
referred to therein,  to which Note  Agreement  reference is hereby made for the
statement thereof.

     This Note and the other Notes  outstanding  under the Note Agreement may be
declared due before their expressed  maturity dates and certain  prepayments are
required to be made thereon,  all in the events,  on the terms and in the manner
and amounts as provided in the Note Agreement.

                                       A-1
<PAGE>
     Subject to and upon  compliance  with the provisions of the Note Agreement,
the holder  hereof  shall have the right and option at any time prior to October
31, 1999 to convert the principal  hereof or any portion  hereof into fully paid
and  nonassessable  shares of Common Stock of the Company at a conversion  price
per share of $1.00.  Such  conversion  price is subject to adjustment in certain
events as more fully set forth in the Note Agreement.

     The Notes are  subject to  prepayment  at the  option of the  Company on or
before October 31, 1999.

     This Note is  registered  on the books of the Company  and is  transferable
only by surrender  thereof at the principal  office of the Company duly endorsed
or  accompanied  by a  written  instrument  of  transfer  duly  executed  by the
registered  holder of this Note or its  attorney  duly  authorized  in  writing.
Payment of or on account of  principal,  premium,  if any,  and interest on this
Note  shall be made  only to or upon  the  order in  writing  of the  registered
holder.

                                        SOLPOWER CORPORATION



                                        By
                                          -------------------------------------
                                        Name
                                            -----------------------------------
                                        Title
                                             ----------------------------------

                                       A-2
<PAGE>
                       FORM OF REVERSE SIDE OF CERTIFICATE

                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to: (Insert  Assignee's Social Security or
Tax Identification No.)

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

--------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ______________________________ as agent to transfer this
Note on the books of the Company.  The agent may  substitute  another to act for
him.

Date:                            Your Signature:
     ------------------------                   --------------------------------
 (Sign exactly as your name appears on the other side of this Note Certificate)

Signature Guarantee:
                    ------------------------------------------------------------


By
  --------------------------------
The signature should be guaranteed by an eligible guarantor institution (a bank,
stockbroker,  savings and loan association or credit union with membership in an
approved signature  guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.


                                       A-3
<PAGE>
                                CONVERSION NOTICE
                (To be completed and signed only upon conversion
                        of the Notes in whole or in part)

TO: SOLPOWER CORPORATION


       The undersigned,  Holder of the attached Note, hereby  irrevocably elects
to convert $_______  principal amount of the Note for shares of Common Stock (as
such terms are defined in the Note Agreement dated September ____,  1999),  from
Solpower Corporation.  (or other securities or property). The undersigned hereby
requests that the  Certificate(s)  for such  securities be issued in the name(s)
and delivered to the address(es) as follows:

Name:
     ---------------------------------------------------------------------------
Address:
        ------------------------------------------------------------------------
Deliver to:
           ---------------------------------------------------------------------
Address:
        ------------------------------------------------------------------------

         If the foregoing  Conversion Notice evidences a conversion of less than
the total principal amount of this Note, please issue a new Note, of like tenor,
for the  remaining  principal  balance (or other  securities or property) in the
name(s), and deliver the same to the address(es), as follows:

Name:
     ---------------------------------------------------------------------------
Address:
        ------------------------------------------------------------------------

Dated:                      , 19__.
      ----------------------

                                   ---------------------------------------------
                                   (Name of Holder)

                                   ---------------------------------------------
                                   (Signature of Holder or Authorized Signatory)

                                   ---------------------------------------------
                                   (Social Security or Taxpayer Identification
                                   Number of Holder)


                                      A-4