EXHIBIT 10.4 


NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY
IS CONVERTIBLE INTO HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY SUCH SECURITIES.




Original Issue Date: November 18, 2016


Principal
Amount: $275,000.00 










	
    8% CONVERTIBLE PROMISSORY NOTE







DUE
JUNE 30, 2017




THIS
8% CONVERTIBLE PROMISSORY NOTE (the "Note") is a duly authorized and
validly issued convertible promissory note of Greenhouse Solutions Inc., a
Nevada corporation (the "Company"), issued on November 18, 2016 (the "Original
Issue Date"), and such Note is due on November 18,
2017 (the "Maturity Date").




FOR VALUE RECEIVED, the Company promises
to pay to SBI Investments LLC, 2014-1, or its registered assigns (the "Holder"),
or shall have paid pursuant to the terms hereunder, the principal sum of
$275,000.00 (the "Principal Amount") on the Maturity Date or such
earlier date as this Note is required or permitted to be repaid as provided
hereunder, and to pay interest to the Holder on the aggregate unconverted and
then outstanding principal amount of this Note in accordance with the
provisions hereof.  The full consideration paid to the Company for this Note is
$250,000.00 (the "Consideration"), due to an original issuance discount
of 10% (representing $25,000.00 of the Principal Amount) (the "OID"),
and such OID shall be applied in full at the closing of issuance of the Note on
the Original Issue Date.  At the Original Issue Date, the outstanding principal
amount under this Note shall be $275,000.00, which includes the principal
amount of the Note and the OID.  The Holder shall pay $250,000.00 to the
Company within a reasonable amount of time after the issuance of this Note.
This Note is also subject to the following additional provisions:


-1- 






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




"Alternate
Consideration" shall have the meaning set forth in Section 5(e).




"Alternate Conversion
Price" shall mean 50% of the lowest VWAP of the Common Stock during the 20
Trading Days prior to the Trading Day that is immediately prior to the
applicable Conversion Date.




"Amortization Payment
Date" shall mean the date that is six (6) months after the Original Issue
Date.




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




"Beneficial Ownership
Limitation" shall have the meaning set forth in Section 4(d). 




"Business Day"
means any day except Saturday, Sunday, any day which shall be a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental
action to close.




"Buy-In" shall
have the meaning set forth in Section 4(b)(v).




"Change of Control
Transaction" means the occurrence after the date hereof of any of (a) an
acquisition after the date hereof by an individual or legal entity or "group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 33% of the
voting securities of the Company (other than by means of conversion 



-2- 





or exercise of
the Note and the Securities issued together with the Note), (b) the Company
merges into or consolidates with any other Person, or any Person merges into or
consolidates with the Company and, after giving effect to such transaction, the
stockholders of the Company immediately prior to such transaction own less than
66% of the aggregate voting power of the Company or the successor entity of such
transaction, (c) the Company sells or transfers all or substantially all of its
assets to another Person and the stockholders of the Company immediately prior
to such transaction own less than 66% of the aggregate voting power of the
acquiring entity immediately after the transaction, (d) a replacement at one
time or within a three year period of more than one-half of the members of the
Board of Directors which is not approved by a majority of those individuals who
are members of the Board of Directors on the Original Issue Date (or by those
individuals who are serving as members of the Board of Directors on any date
whose nomination to the Board of Directors was approved by a majority of the
members of the Board of Directors who are members on the date hereof), or (e)
the execution by the Company of an agreement to which the Company  is a
party or by which it is bound, providing for any of the events set forth in
clauses (a) through (d) above.




"Common Stock"
shall mean the Company's common stock, par value $0.001 per share.




"Conversion"
shall have the meaning ascribed to such term in Section 4. 




"Conversion Date"
shall have the meaning set forth in Section 4(a).




"Conversion Schedule"
means the Conversion Schedule in the form of Schedule 1 attached hereto.




"Conversion Shares"
means, collectively, the shares of Common Stock issuable upon conversion of
this Note in accordance with the terms hereof.




"Note Register"
shall have the meaning set forth in Section 2(b).




"DTC" means the Depository Trust Company.




 




"DTC/FAST Program" means the DTC's Fast Automated
Securities Transfer Program.




 




"DWAC Eligible" means that (a) the Common Stock is
eligible at DTC for full services pursuant to DTC's Operational Arrangements,
including without limitation transfer through DTC's DWAC system, (b) the
Company has been approved (without revocation) by the DTC's underwriting
department, (c) the Transfer Agent is approved as an agent in the DTC/FAST
Program, (d) the Conversion Shares are otherwise eligible for delivery via
DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting
delivery of the Conversion Shares via DWAC.


-3- 






"Equity Conditions"
means, during the period in question, (a) the Company shall have duly
honored all conversions and redemptions scheduled to occur or occurring by
virtue of one or more Notices of Conversion of the Holder, if any, and no
Events of Default have otherwise occurred (b) the Company shall have paid all
liquidated damages and other amounts owing to the Holder in respect of this
Note, (c)(i) there is an effective Registration Statement
pursuant to which the Holder is permitted to utilize the prospectus thereunder
to resell all of the shares of Common Stock issuable pursuant to the
Transaction Documents (and the Company believes, in good faith, that such
effectiveness will continue uninterrupted for the foreseeable future) or (ii)
all of the Conversion Shares issuable pursuant to the Transaction Documents
(and shares issuable in lieu of cash payments of interest) may be resold
pursuant to Rule 144 without volume or manner-of-sale restrictions as
determined by the counsel to the Company as set forth in a written opinion
letter to such effect, addressed and acceptable to the Transfer Agent and the
Holder, (d) the Common Stock is trading on a Trading Market and all of the
shares issuable pursuant to the Transaction Documents are listed or quoted for
trading on such Trading Market (and the Company believes, in good faith, that
trading of the Common Stock on a Trading Market will continue uninterrupted for
the foreseeable future), (e) there is a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock for the issuance of
all of the shares then issuable pursuant to the Transaction Documents, (f)
there is no existing Event of Default and no existing event which, with the
passage of time or the giving of notice, would constitute an Event of Default,
(g) the issuance of the shares in question to the Holder would not violate the
limitations set forth in Section 4(d) herein, (h)
there has been no public announcement of a pending or proposed Fundamental
Transaction or Change of Control Transaction that has not been consummated, (i)
the applicable Holder is not in possession of any information provided by the
Company that constitutes, or may constitute, material non-public information,
(j) the Company has timely filed (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the Effective Date pursuant to the Exchange Act, (k)
on any date that the Company desires to make a payment of interest and/or
principal, the average daily dollar volume of the Common Stock for the previous
twenty (20) Trading Days must be greater than $20,000, (l) the Common Stock
must be DWAC Eligible and not subject to a "DTC chill", (m) the Conversion
Shares must be delivered via an "Automatic Conversion" of principal and/or
interest, and (n) on any date that the Company desires to make a payment of
interest and/or principal, the conversion price for such payment will be the
lower of the (i) Fixed Conversion Price or (ii) 50% of the average of the
lowest VWAP of the Common Stock in the twenty (20) Trading Days immediately
prior to such date of payment.




"Event of Default" shall have the meaning set forth in Section 6(a).




"Fixed Conversion
Price" shall have the meaning set forth in Section 4(b).




"Fundamental
Transaction" shall have the meaning set forth in Section 5(e). 




"Late Fees" shall
have the meaning set forth in Section 2(c).


-4- 






"Mandatory Default
Amount" means the payment of 125% of the outstanding principal amount of
this Note and accrued and unpaid interest hereon, in addition to the payment of
all other amounts, costs, expenses and liquidated damages due in respect of
this Note.




"NY Courts" shall
have the meaning set forth in Section 7(d).




"Notice of Conversion"
shall have the meaning set forth in Section 4(a).




"Original Issue Date"
means November ____, 2016, the date of the first issuance of this Note,
regardless of any transfers of any Note and regardless of the number of
instruments which may be issued to evidence such Note.




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




"Purchase Agreement"
means the Securities Purchase Agreement, dated as of November ____, 2016 by and
between the Company and the original Holder, as amended, modified or
supplemented from time to time in accordance with its terms.




"Registration
Statement" means a registration statement covering the resale of the
Conversion Shares by each Holder.




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




"Share Delivery Date"
shall have the meaning set forth in Section 4(c)(ii).




"Successor Entity" shall have the meaning set forth in Section 5(e).

"Trading Day" means a day on which the Common Stock is traded or quoted on a Trading Market.

"Trading Market" means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market, the OTC Markets or the OTC Bulletin Board.

"Transaction Documents" means this Note, the Purchase Agreement and any other documents or agreements executed in connection with the transactions contemplated under the Purchase Agreement.


-5- 






            Section 2.         Amortization
and Interest.            


a)                 
Payment
of Interest in Cash or Kind. The Company shall pay interest to the Holder on the
aggregate unconverted and then outstanding principal amount of this Note at the
rate of 8% per annum, which half of the base interest
amount shall be guaranteed and the total amount of interest due on the Note for
a period of six (6) months shall be deemed earned as of the Original Issue Date.
All interest payments hereunder will be payable in cash, or subject to the
Equity Conditions, in cash or common stock in the Company's discretion. Accrued
and unpaid interest shall be due and payable on each Conversion Date and on the
Maturity Date, or as otherwise set forth herein.  




b)                 
Interest
Calculations.
Interest shall be calculated on the basis of a 360-day year, consisting of
twelve 30 calendar day periods, and shall accrue daily commencing on the
Original Issue Date until payment in full of the outstanding principal,
together with all accrued and unpaid interest, liquidated damages and other
amounts which may become due hereunder, has been made.  Interest hereunder will
be paid to the Person in whose name this Note is registered on the records of
the Company regarding registration and transfers of this Note (the "Note
Register").




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


d)                 
Prepayment
and Redemption. 
At any time upon ten (10) days written notice to the Holder, and provided the
Holder accepts such notice in its sole discretion, the Company may prepay any
portion of the principal amount of this Note and any accrued and unpaid interest.
If the Company exercises its right to prepay the
Note, the Company shall make payment to the Holder of an amount in cash equal
to the sum of the then outstanding principal amount of this Note and interest
multiplied by 130%. The Holder may continue to convert the Note from the
date notice of the prepayment is given until the date of the prepayment.  Upon
the occurrence of an Event of Default, which is not cured within ten (10)
Business days after the Holder provides written notice of such applicable Event
of Default to the Company, the Holder shall have the right to require the
Company to make payment to the Holder of an amount in cash equal to the sum of
the then outstanding principal amount of this Note and interest multiplied by
145%, or such maximum rate or amount permitted under applicable law.




e)                 
Amortization
and Installment Payments.  Beginning on the Amortization Payment Date, the Company
shall begin to make bi-weekly amortization payments (for the avoidance of
doubt, bi-weekly shall mean every two weeks) (each a "Bi-Weekly Payment"),
in cash to the Holder, until this Note is repaid in full.  Each Bi-Weekly
Payment shall consist of at least 1/12th of the total outstanding
amount under this Note as of the Amortization Payment Date, including the
principal and accrued and unpaid interest.  The Company may make a Bi-Weekly
Payment to the Holder in Common Stock, in the event that the Equity Conditions
detailed above are satisfied.


-6- 






Section 3.         Registration
of Transfers and Exchanges. 




a)                 
Different
Denominations.
This Note is exchangeable for an equal aggregate principal amount of
convertible promissory notes of different authorized denominations, as
requested by the Holder surrendering the same.  No service charge will be
payable for such registration of transfer or exchange.




b)                 
Investment
Representations.
This Note has been issued subject to certain investment representations of the
original Holder set forth in the Purchase Agreement and may be transferred or
exchanged only in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.  




c)                 
Reliance
on Note Register.
Prior to due presentment for transfer to the Company of this Note, the Company
and any agent of the Company may treat the Person in whose name this Note is
duly registered on the Note Register as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not
this Note is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.




Section 4.         Conversion.




a)                 
Voluntary
Conversion.
At any time, beginning six (6) months after the Original Issue Date, and until
this Note is no longer outstanding, this Note shall be convertible, in whole or
in part, into shares of Common Stock at the option of the Holder, at any time
and from time to time (subject to the conversion limitations set forth in Section 4(d)
hereof).  The Holder shall effect conversions by delivering to the Company a
Notice of Conversion, the form of which is attached hereto as Annex A
(each, a "Notice of Conversion"), specifying therein the principal
amount of this Note to be converted and the date on which such conversion shall
be effected (such date, the "Conversion Date").  If no Conversion Date
is specified in a Notice of Conversion, the Conversion Date shall be the date
that such Notice of Conversion is deemed delivered hereunder.  No ink-original
Notice of Conversion shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Notice of Conversion form be
required.  To effect conversions hereunder, the Holder shall not be
required to physically surrender this Note to the Company unless the entire
principal amount of this Note, plus all accrued and unpaid interest thereon,
has been so converted. Conversions hereunder shall have the effect of lowering
the outstanding principal amount of this Note in an amount equal to the
applicable conversion.  The Holder and the Company shall maintain a Conversion
Schedule showing the principal amount(s) converted and the date of such
conversion(s).  The Company may deliver an objection to any Notice of
Conversion within one (1) Business Day of delivery of such Notice of
Conversion.  In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error.
The Holder, and any assignee by acceptance of this Note, acknowledge and
agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Note, the unpaid and unconverted principal amount of this
Note may be less than the amount stated on the face hereof.




b)                 
Conversion
Price. 
The conversion price in effect on any Conversion Date shall be equal to 65% of
the average of the three lowest  


-7- 






VWAPs of the Common Stock for the 20
consecutive Trading Days ending on the Trading Day that is immediately prior to
the applicable Conversion Date (the "Fixed Conversion Price"). 
Notwithstanding anything herein to the contrary, at any time after the
occurrence of any Event of Default until this Note is no longer outstanding,
the Holder may require the Company to, at such Holder's option and otherwise in
accordance with the provisions for conversion herein, convert all or any part
of this Note into Common Stock at the Alternate Conversion Price. All such
determinations will be appropriately adjusted for any stock dividend, stock
split, stock combination, reclassification or similar transaction that
proportionately decreases or increases the Common Stock during such measuring
period.  Nothing herein shall limit a Holder's right to pursue actual damages
or declare an Event of Default pursuant to Section 6 hereof and the
Holder shall have the right to pursue all remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief.  The exercise of any such rights shall
not prohibit the Holder from seeking to enforce damages pursuant to any other Section
hereof or under applicable law.




c)                 
Mechanics
of Conversion.


i.  
Conversion
Shares Issuable Upon Conversion of Principal Amount.  The number of
Conversion Shares issuable upon a conversion hereunder shall be determined by
the quotient obtained by dividing (x) the outstanding principal amount of this
Note to be converted and any accrued and unpaid interest to be converted by (y)
the Fixed Conversion Price or Alternate Conversion Price, depending upon which
is in effect at that time.


ii. 
Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after
each Conversion Date (the "Share Delivery Date"), the Company shall
deliver, or cause to be delivered, to the Holder (A) a certificate or
certificates representing the Conversion Shares which, on or after the date on
which such Conversion Shares are eligible to be sold under Rule 144 without the
need for current public information and the Company has received an opinion of
counsel to such effect reasonably acceptable to the Company (which opinion the
Company will be responsible for obtaining) shall be free of restrictive legends
and trading restrictions (other than those which may then be required by the
Purchase Agreement) representing the number of Conversion Shares being acquired
upon the conversion of this Note, and (B) a bank check in the amount of accrued
and unpaid interest (if the Company has elected or is required to pay accrued
interest in cash). All certificate or certificates required to be delivered by
the Company under this Section 4(d) shall be delivered electronically
through the Depository Trust Company or another established clearing
corporation performing similar functions. If the Conversion Date is prior to
the date on which such Conversion Shares are eligible to be sold under Rule 144
without the need for current public information the Conversion Shares shall
bear a restrictive legend in the following form, as appropriate:

-8- 





"NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY THE SECURITIES."


 


Notwithstanding
the foregoing, commencing on such date that the Conversion Shares are eligible
for sale under Rule 144 subject to current public information requirements, the
Company, upon request of the Holder, shall obtain a legal opinion to allow for
such sales under Rule 144.


iii.                       
Failure
to Deliver Certificates.  If, in the case of any Notice of Conversion, such
certificate or certificates are not delivered to or as directed by the
applicable Holder by the Share Delivery Date, the Holder shall be entitled to
elect by written notice to the Company at any time on or before its receipt of
such certificate or certificates, to rescind such Conversion, in which event
the Company shall promptly return to the Holder any original Note delivered to
the Company and the Holder shall promptly return to the Company the Common
Stock certificates issued to such Holder pursuant to the rescinded Conversion
Notice. 




iv.                       
Obligation
Absolute; Partial Liquidated Damages.  The Company's obligations to issue and
deliver the Conversion Shares upon conversion of this Note in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other  



-9- 





Person, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to the Holder in
connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Company of any such
action the Company may have against the Holder.  In the event the Holder of
this Note shall elect to convert any or all of the outstanding principal  or
interest amount hereof, the Company may not refuse conversion based on any
claim that the Holder or anyone associated or affiliated with the Holder has
been engaged in any violation of law, agreement or for any other reason, unless
an injunction from a court, on notice to Holder, restraining and or enjoining
conversion of all or part of this Note shall have been sought and obtained, and
the Company posts a surety bond for the benefit of the Holder in the amount of
150% of the outstanding principal amount of this Note, which is subject to the
injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to the Holder to the extent it obtains judgment.  In the
absence of such injunction, the Company shall issue Conversion Shares or, if
applicable, cash, upon a properly noticed conversion.  If the Company fails for
any reason to deliver to the Holder such certificate or certificates pursuant
to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, $1,000 per
Trading Day for each Trading Day after such Share Delivery Date until such
certificates are delivered or Holder rescinds such conversion. Nothing herein
shall limit a Holder's right to pursue actual damages or declare an Event of
Default pursuant to Section 6 hereof for the Company's failure to
deliver Conversion Shares within the period specified herein and the Holder
shall have the right to pursue all remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.  The exercise of any such rights shall not prohibit
the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.




v.                       
Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any
other rights available to the Holder, if the Company fails for any reason to
deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date
the Holder is required by its brokerage firm to purchase (in an open market
transaction or otherwise), or the Holder's brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Conversion Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a "Buy-In"), then the Company
shall (A) pay in cash to the Holder (in addition to any other remedies
available to or elected by the Holder) the amount, if any, by which (x) the
Holder's total purchase price (including any brokerage commissions) for the
Common Stock so purchased exceeds (y) the product of (1) the aggregate number
of shares of Common Stock that the Holder was entitled to receive from the
conversion at issue multiplied by (2) the actual sale price at which the sell
order giving rise to such purchase obligation was executed (including any
brokerage commissions) and (B) at the option of the Holder, either reissue (if
surrendered) this Note in a principal amount equal to the principal amount of
the attempted conversion (in which case such conversion shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that
would have been  



-10- 





issued if the Company had timely complied with its delivery
requirements under Section 4(c)(ii).  For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of this Note with respect to
which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Company shall be
required to pay the Holder $1,000.  The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. 
Nothing herein shall limit a Holder's right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Company's failure to timely deliver certificates representing shares of Common
Stock upon conversion of this Note as required pursuant to the terms hereof.




vi.                       
Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all
times reserve and keep available out of its authorized and unissued shares of
Common Stock a number of shares of Common Stock at least equal to 300% of the
total amount of Common Stock that this Note would be convertible into, in full
and irrespective of beneficial ownership limitations, at any time, for the sole purpose of issuance upon conversion of this
Note and payment of interest on this Note, each as herein provided, free from
preemptive rights or any other actual contingent purchase rights of Persons
other than the Holder (and the other holders of the Note), not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms
and conditions set forth in the Purchase Agreement) be issuable (taking into
account the adjustments and restrictions of Section 5) upon the
conversion of the then outstanding principal amount of this Note and payment of
interest hereunder.  The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable, and, at such times as the Registration Statement
covering such shares is then effective under the Securities Act, will be
registered for public resale in accordance with such Registration Statement.




vii.                       
Fractional
Shares.
No fractional shares or scrip representing fractional shares shall be issued
upon the conversion of this Note.  As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such conversion, the
Company shall at its election, either pay a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the Fixed
Conversion Price or Alternate Conversion Price, whichever is in effect, or
round up to the next whole share.




viii.                       
Transfer
Taxes and Expenses.  The issuance of certificates for shares of the
Common Stock on conversion of this Note shall be made without charge to the
Holder hereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificates, provided that, the
Company shall not be required to pay any tax that may be payable in respect 


-11- 






of any transfer
involved in the issuance and delivery of any such certificate upon conversion in
a name other than that of the Holder of this Note so converted and the Company
shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.  The Company shall pay all Transfer
Agent fees required for same-day processing of any Notice of Conversion.




d)                 
Holder's
Conversion Limitations.  The Company shall not effect any conversion of principal
and/or interest of this Note, and a Holder shall not have the right to convert
any principal and/or interest of this Note, to the extent that after giving
effect to the conversion set forth on the applicable Notice of Conversion, the
Holder (together with the Holder's Affiliates, and any Persons acting as a
group together with the Holder or any of the Holder's Affiliates) would
beneficially own in excess of the Beneficial Ownership Limitation (as defined
below).  For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its Affiliates shall include
the number of shares of Common Stock issuable upon conversion of this Note with
respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which are issuable upon (i) conversion of the
remaining, unconverted principal amount of this Note beneficially owned by the
Holder or any of its Affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
subject to a limitation on conversion or exercise analogous to the limitation
contained herein (including, without limitation, any other promissory notes or
the warrants as further defined in the Purchase Agreement) beneficially owned
by the Holder or any of its Affiliates.  Except as set forth in the
preceding sentence, for purposes of this Section 4(d), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder.  To the extent that
the limitation contained in this Section 4(d) applies, the determination
of whether this Note is convertible (in relation to other securities owned by
the Holder together with any Affiliates) and of which principal amount of this
Note is convertible shall be in the sole discretion of the Holder, and the
submission of a Notice of Conversion shall be deemed to be the Holder's
determination of whether this Note may be converted (in relation to other
securities owned by the Holder together with any Affiliates) and which
principal amount of this Note is convertible, in each case subject to the
Beneficial Ownership Limitation. To ensure compliance with this restriction,
the Holder will be deemed to represent to the Company each time it delivers a
Notice of Conversion that such Notice of Conversion has not violated the
restrictions set forth in this paragraph and the Company shall have no
obligation to verify or  


-12- 






confirm the accuracy of such determination.  In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.  
For purposes of this Section 4(d), in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as stated in the most recent of the
following: (i) the Company's most recent periodic or annual report filed with
the Commission, as the case may be, (ii) a more recent public announcement by
the Company, or (iii) a more recent written notice by the Company or the
Company's transfer agent setting forth the number of shares of Common Stock
outstanding.  Upon the written or oral request of a Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding.  In any case, the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
this Note, by the Holder or its Affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The "Beneficial
Ownership Limitation" shall be 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon conversion of this Note held by the Holder.  The
Holder, upon not less than 61 days' prior notice to the Company, may increase
or decrease the Beneficial Ownership Limitation provisions of this Section
4(d), provided that the Beneficial Ownership Limitation in no event exceeds
9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon conversion of this
Note held by the Holder and the Beneficial Ownership Limitation provisions of
this Section 4(d) shall continue to apply.  Any such increase or
decrease will not be effective until the 61st day after such notice
is delivered to the Company.  The Beneficial Ownership Limitation provisions of this
paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 4(d) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation contained herein or to make
changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in
this paragraph shall apply to a successor holder of this Note.


Section 5.         Certain
Adjustments.




a)                 
Stock
Dividends and Stock Splits.  If the Company, at any time while this Note is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions payable in shares of Common Stock on shares of Common Stock or
any Common Stock Equivalents (which, for avoidance of doubt, shall not include
any shares of Common Stock issued by the Company upon conversion of, or payment
of interest on, the Note), (ii) subdivides outstanding shares of Common Stock
into a larger number of shares, (iii) combines (including by way of a reverse
stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) issues, in the event of a reclassification of shares of the Common
Stock, any shares of capital stock of the Company, then the Fixed Conversion
Price or Alternate Conversion Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding any
treasury shares of the Company) outstanding immediately before such event, and
of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event.  Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of
a subdivision, combination or re‐classification.




b)                 
Intentionally
Omitted.

-13- 





c)                 
Intentionally
Omitted.


d)                 
Intentionally
Omitted.


e)                 
Fundamental
Transaction.
If, at any time while this Note is outstanding, (i) the Company, directly or
indirectly, in one or more related transactions effects any merger or consolidation of
the Company with or into another Person, (ii) the Company, directly or
indirectly, effects
any sale, lease,
license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more
of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more
related transactions
effects any reclassification, reorganization or recapitalization of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property,
(v) the Company, directly or
indirectly, in one or more related transactions consummates a stock or
share purchase agreement or
other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party
to, such stock or share purchase agreement or other business combination) (each a "Fundamental
Transaction"), then, upon any subsequent conversion of this Note, the
Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of
such Fundamental Transaction (without regard to any limitation in Section
4(d) on the conversion of this Note), the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the "Alternate
Consideration") receivable as a result of such Fundamental Transaction by a
holder of the number of shares of Common Stock for which this Note is
convertible immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 4(d) on the conversion of this Note).  For
purposes of any such conversion, the determination of the applicable conversion
price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one (1)
share of Common Stock in such Fundamental Transaction, and the Company shall
apportion the applicable conversion price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration.  If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Note following such
Fundamental Transaction.  The Company shall cause any successor entity in a
Fundamental Transaction in which the Company is not the survivor (the "Successor
Entity") to assume in writing all of the obligations of the Company under
this Note and the other Transaction Documents (as defined in the Purchase
Agreement) in  



-14- 





accordance with the provisions of this Section 5(e)
pursuant to written agreements in form and substance reasonably satisfactory to
the Holder and approved by the Holder (without unreasonable delay) prior to
such Fundamental Transaction and shall, at the option of the holder of this
Note, deliver to the Holder in exchange for this Note a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Note which is convertible for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon
conversion of this Note (without regard to any limitations on the conversion of
this Note) prior to such Fundamental Transaction, and with a conversion price
which applies the conversion price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of
capital stock, such number of shares of capital stock and such conversion price
being for the purpose of protecting the economic value of this Note immediately
prior to the consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon the
occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Note and the other Transaction
Documents referring to the "Company" shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Note and the other Transaction
Documents with the same effect as if such Successor Entity had been named as
the Company herein.




f)                   
Calculations.  All calculations
under this Section 5 shall be made to the nearest cent or the nearest
1/100th of a share, as the case may be.  For purposes of this Section 5,
the number of shares of Common Stock deemed to be issued and outstanding as of
a given date shall be the sum of the number of shares of Common Stock
(excluding any treasury shares of the Company) issued and outstanding.


g)                 
Notice
to the Holder.




i.                       
Adjustment
to Conversion Price. 
Whenever the Fixed Conversion Price is adjusted pursuant to any provision of
this Section 5, the Company shall promptly deliver to each Holder a
notice setting forth the Fixed Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.  




 ii.                       
Notice
to Allow Conversion by Holder.  If (A) the Company shall declare a dividend (or
any other distribution in whatever form) on the Common Stock, (B) the Company
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock, (C) the Company shall authorize the granting to all holders of
the Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any
stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, 


-15- 






cash or property or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall
appear upon the Note Register, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be
taken, the date as of which the holders of the Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice.  To the extent that any notice provided hereunder constitutes,
or contains, material, non-public information regarding the Company or any of
the Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain
entitled to convert this Note during the 20-day period commencing on the date
of such notice through the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein. 




            Section 6.         Events
of Default.  




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




i.                       
any default in the payment of (A) the
principal amount of any Note or (B) interest, liquidated damages and other
amounts owing to a Holder on any Note, as and when the same shall become due
and payable (whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise) which default, solely in the case of an interest
payment or other default under clause (B) above, is not cured within 3 Trading
Days;




ii.                       
the Company shall materially fail to observe or
perform any other covenant or agreement contained in the Note (other than a
breach by the Company of its obligations to deliver shares of Common Stock to
the Holder upon conversion, which breach is addressed in clause (xi) below)
which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 
Trading 



-16- 





Days after
notice of such failure sent by the Holder or by any other Holder to the Company
and (B) 10 Trading Days after the Company has become or should have become aware
of such failure;




iii.                       
a default or event of default (subject to any
grace or cure period provided in the applicable agreement, document or
instrument) shall occur under any of the Transaction Documents.




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





v.                       
the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X)  shall be subject to a Bankruptcy Event;




 vi.                       
the Company or any Subsidiary shall default on any of its obligations under any
mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issued, or by which there
may be secured or evidenced, any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement that (a) involves an
obligation greater than $50,000, whether such indebtedness now exists or shall
hereafter be created, and (b) results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable; 




                     vii.                       
the Common Stock shall not be eligible for
listing or quotation for trading on a Trading Market and shall not be eligible
to resume listing or quotation for trading thereon within five Trading Days or
the transfer of shares of Common Stock through the Depository Trust Company
System is no longer available or "chilled";




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




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


-17- 






                     x.                       
the Company fails to file with the Commission
any required reports under Section 13 or 15(d) of the Exchange Act such that it
is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);




                     xi.                       
if the Company or any Significant Subsidiary
shall: (i) apply for or consent to the appointment of a receiver, trustee,
custodian or liquidator of it or any of its properties, (ii) admit in writing
its inability to pay its debts as they mature, (iii) make a general assignment
for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be
the subject of an order for relief under Title 11 of the United States Code or
any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute of any other jurisdiction or foreign country, or
(v) file a voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage or any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such law, or (vi) take
or permit to be taken any action in furtherance of or for the purpose of
effecting any of the foregoing;




                     
xii.                       
if any order, judgment or decree shall be
entered, without the application, approval or consent of the Company or any
Significant Subsidiary, by any court of competent jurisdiction, approving a
petition seeking liquidation or reorganization of the Company or any Subsidiary,
or appointing a receiver, trustee, custodian or liquidator of the Company or
any Subsidiary, or of all or any substantial part of its assets, and such
order, judgment or decree shall continue unstayed and in effect for any period
of sixty (60) days;




                     xiii.                       
the occurrence of any levy upon or seizure or
attachment of, or any uninsured loss of or damage to, any property of the
Company or any Subsidiary having an aggregate fair value or repair cost (as the
case may be) in excess of $100,000 individually or in the aggregate, and any
such levy, seizure or attachment shall not be set aside, bonded or discharged
within thirty (30) days after the date thereof;




                     xiv.                       
the Company shall fail to maintain sufficient
reserved shares pursuant to Section 4 of the Purchase Agreement; 




                     xv.                       
any monetary judgment, writ or similar final
process shall be entered or filed against the Company, any subsidiary or any of
their respective property or other assets for more than $50,000, and such
judgment, writ or similar final process shall remain unvacated, unbonded or
unstayed for a period of 45 calendar days; 




                     
xvi.                       
 a breach or default by the Company of any
covenant or other term or condition contained in any of the other financial
instrument currently issued or hereafter issued by the Company, to the Holder,
including but not limited to promissory notes (the "Other Agreements"),
after the passage of all applicable notice and cure or grace periods, shall, at
the option of the Holder, 



-18- 






be considered a default under this Note, in which event the Holder shall be
entitled (but in no event required) to apply all rights and remedies of the
Holder under the terms of this Note by reason of a default under said Other
Agreement; or




                     xvii.                       
any attempt by the Company or its officers,
directors, and/or affiliates to transmit, convey, disclose, or any actual
transmittal, conveyance, or disclosure by the Company or its officers,
directors, and/or affiliates of, material non-public information concerning the
Company, to the Holder or its successors and assigns, which is not immediately
cured by Company's filing of a Form 8-K pursuant to Regulation FD on that same
date.




b)                 
Remedies
Upon Event of Default.
Subject to the Beneficial Ownership Limitation as set forth in Section 4(d),
if any Event of Default occurs, then the outstanding principal amount of this
Note, plus accrued but unpaid interest, liquidated damages and other amounts
owing in respect thereof through the date of acceleration, shall become, at the
Holder's election, immediately due and payable in cash at the Mandatory Default
Amount.  After the occurrence of any Event of Default that results in the
eventual acceleration of this Note, the interest rate on this Note shall accrue
at an additional interest rate equal to the lesser of 2% per month (24% per
annum) or the maximum rate permitted under applicable law.  Upon the payment in
full of the Mandatory Default Amount, the Holder shall promptly surrender this
Note to or as directed by the Company.  In connection with such acceleration
described herein, the Holder need not provide, and the Company hereby waives,
any presentment, demand, protest or other notice of any kind, and the Holder
may immediately and without expiration of any grace period enforce any and all
of its rights and remedies hereunder and all other remedies available to it
under applicable law.  Such acceleration may be rescinded and annulled by
Holder at any time prior to payment hereunder and the Holder shall have all
rights as a holder of the Note until such time, if any, as the Holder receives
full payment pursuant to this Section 6(b).  No such rescission or
annulment shall affect any subsequent Event of Default or impair any right
consequent thereon.




            Section 7.         Miscellaneous. 





a)                 
Notices.  Any and all notices
or other communications or deliveries to be provided by the Holder hereunder,
including, without limitation, any Notice of Conversion, shall be in writing
and delivered personally, by e-mail with electronic receipt confirmation, or
sent by a nationally recognized overnight courier service, addressed to the
Company, at the address set forth below, or such other facsimile number or
address as the Company may specify for such purposes by notice to the Holder
delivered in accordance with this Section 7(a): 




If to the Company, to: 




GREENHOUSE SOLUTIONS INC.


8400 E. Crescent Pkwy.


Suite 600


Greenwood Village, CO 80111

-19- 





Attention: John George Michak, III, Chief Operating Officer


E-mail: ______________




If to the Holder, to:




                        SBI
INVESTMENTS LLC, 2014-1


369 Lexington Avenue, 2nd Floor


New York, NY 10017


Attention: Peter Wisniewski; Jonathan Juchno


E-mail: pw@seaotterglobal.com;
jjuchno@seaotterglobal.com


With a copy to (that shall not constitute
notice):




K&L Gates, LLP


200 S. Biscayne Boulevard, Ste. 3900


Miami, FL 33139


Attention: John D. Owens III, Esq. 


E-mail: john.owens@klgates.com




Any and all notices or
other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by facsimile, or sent by a
nationally recognized overnight courier service addressed to each Holder at the
facsimile number or address of the Holder appearing on the books of the
Company, or if no such facsimile number or address appears on the books of the
Company, at the principal place of business of such Holder, as set forth in the
Purchase Agreement.  Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to
12:00 p.m. (EST time) on any date, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 12:00 p.m. (EST time) on any Trading Day,
(iii) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (iv) upon actual receipt by
the party to whom such notice is required to be given.




b)                 
Absolute
Obligation.
Except as expressly provided herein, no provision of this Note shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, liquidated damages and accrued interest, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein
prescribed.  This Note is a direct debt obligation of the Company.  This Note
ranks pari passu with all other promissory notes now or hereafter
issued under the terms set forth herein.           




c)                 
Lost
or Mutilated Note.  If this Note shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Note, or in lieu of or in substitution
for a lost, stolen or destroyed Note, a new Note for the 



-20- 





principal amount
of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of
evidence of such loss, theft or destruction of such Note, and of the ownership
hereof, reasonably satisfactory to the Company.




d)                 
Governing
Law. 
All questions concerning the construction, validity, enforcement and
interpretation of this Note shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the principles of conflict of laws thereof.  Each party agrees that all legal
proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in New York, New York (the "NY Courts").  Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the NY
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such NY
Courts, or such NY Courts are improper or inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Note and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this Note
or the transactions contemplated hereby. If any party shall commence an action
or proceeding to enforce any provisions of this Note, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
attorneys fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.




e)                 
Waiver.  Any waiver by the
Company or the Holder of a breach of any provision of this Note shall not
operate as or be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Note.  The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Note on any other occasion.  Any waiver by the Company or
the Holder must be in writing.  




f)                   
Severability.  If any provision of this Note is invalid, illegal or
unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless
remain applicable to all other Persons and circumstances.  If it shall be
found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due
hereunder 


-21- 






shall
automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Note, and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefits or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Holder, but will suffer
and permit the execution of every such as though no such law has been enacted.




g)                 
Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies
provided in this Note shall be cumulative and in addition to all other remedies
available under this Note and any of the other Transaction Documents at law or
in equity (including a decree of specific performance and/or other injunctive
relief), and nothing herein shall limit the Holder's right to pursue actual and
consequential damages for any failure by the Company to comply with the terms
of this Note.  The Company covenants to the Holder that there shall be no
characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion
and the like (and the computation thereof) shall be the amounts to be received
by the Holder and shall not, except as expressly provided herein, be subject to
any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any such breach or any
such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide
all information and documentation to the Holder that is requested by the Holder
to enable the Holder to confirm the Company's compliance with the terms and
conditions of this Note.




h)                 
Next
Business Day. 
Whenever any payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day.




i)                   
Headings.  The headings
contained herein are for convenience only, do not constitute a part of this
Note and shall not be deemed to limit or affect any of the provisions hereof.




j)                   
Section
3(a)(9) and 3(a)(10) Transactions.  The express written consent of the
Holder must be obtained by the Company, if at any time while this Note is
outstanding, the Company seeks to enter into a transaction structured in
accordance with, based upon, or related or pursuant to, in 


-22- 






whole or in
part, Section 3(a)(9) or 3(a)(10) of the Securities Act, except with respect to
the conversion of any convertible securities issued by the Company held by any
existing holder of such convertible securities pursuant to terms thereof already
in existence as of the Effective Date.




            




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




(Signature Pages Follow)




 




 




 




 




 


-23- 







IN WITNESS
WHEREOF, the Company has caused this Note to be duly executed by a duly
authorized officer as of the Original Issue Date.












	
  Greenhouse
  Solutions Inc.



  
	
   
	
  By:/s/ John G. Michak,
  III

  Name: John George
  Michak, III

  Title: Chief Operating
  Officer

  Facsimile No. for
  delivery of Notices: 919-373-5340

  
	

  
	

  






-24- 












 ANNEX
A


 


NOTICE OF CONVERSION


                                                                              




            The
undersigned hereby elects to convert principal under the 8% convertible
promissory note due November ____, 2017 of Greenhouse Solutions Inc., a Nevada
corporation (the "Company"), into shares of common stock (the "Common
Stock"), of the Company according to the conditions hereof, as of the date
written below.  If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and
opinions as reasonably requested by the Company in accordance therewith.  No
fee will be charged to the holder for any conversion, except for such transfer
taxes, if any.




            By the
delivery of this Notice of Conversion the undersigned represents and warrants
to the Company that its ownership of the Common Stock does not exceed the
amounts specified under Section 4 of this Note, as determined in accordance
with Section 13(d) of the Exchange Act.




            The
undersigned agrees to comply with the prospectus delivery requirements under
the applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock.  




Conversion
calculations: 


Date to
Effect Conversion:




 




Principal
Amount of Note to be Converted:




 




Payment
of Interest in Common Stock __ yes  __ no


 


If yes,
$_____ of Interest Accrued on Account of Conversion at Issue.


 


Number of
shares of Common Stock to be issued:


                                                            


Signature:


                                                                                                


Name:


               



Delivery Instructions:




                                                            







 


Schedule 1




CONVERSION
SCHEDULE




This 8% convertible
promissory note due on November __, 2017 in the original principal amount of
$275,000.00 is issued by Greenhouse Solutions Inc., a Nevada corporation.  This
Conversion Schedule reflects conversions made under Section 4 of the
above referenced Note.




Dated: 






	

   Date of Conversion

   (or for first entry,
   Original Issue Date)

   	

   Amount of Conversion

   	

   Aggregate Principal
   Amount Remaining Subsequent to Conversion

   (or original
   Principal Amount)

   	

   Company Attest