EXHIBIT 4.2

                                                                       EXHIBIT A

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISIBLE
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  MAY BE PLEDGED IN  CONNECTION  WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: May 2, 2005

                                                                   $3,000,000.00


                     11% SENIOR SECURED NOTE DUE MAY 2, 2008

      THIS NOTE is one of a series of duly  authorized  and  issued  11%  Senior
Secured  Notes of Knockout  Holdings,  Inc.,  a Delaware  corporation,  having a
principal place of business at 100 W. Whitehall Ave.,  Northlake,  IL 60164-2349
(the "Company"), designated as its 11% Senior Secured Note, due May 2, 2008 (the
"Note(s)").

      FOR VALUE RECEIVED, the Company promises to pay to DCOFI MASTER LDC or its
registered  assigns (the  "Holder"),  the  principal sum of $3,000,000 on May 2,
2008 or such earlier date as the Notes are required or permitted to be repaid as
provided  hereunder (the "Maturity Date"),  and to pay interest to the Holder on
the aggregate then outstanding  principal amount of this Note in accordance with
the  provisions  hereof.  This  Note  is  subject  to the  following  additional
provisions:

      Section 1. Definitions.  For the purposes hereof, in addition to the terms
defined  elsewhere in this Note:  (a)  capitalized  terms not otherwise  defined
herein have the meanings given to such terms 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(c).

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

            "Change of Control  Transaction"  means the occurrence of any of (i)
      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


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<PAGE>

      of capital stock of the Company, by contract or otherwise) of in excess of
      33% of the voting securities of the Company,  or (ii) a replacement at one
      time or within a one-year  period of more than  one-half of the members of
      the  Company's  board of directors  which is not approved by a majority of
      those  individuals  who are members of the board of  directors on the date
      hereof (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 (iii) 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 above in (i) or (ii).

            "Common  Stock" means the common  stock,  par value  $0.001,  of the
      Company and stock of any other class into which such shares may  hereafter
      have been reclassified or changed.

            "Equity  Conditions" shall mean, during the period in question,  (i)
      the Company shall have duly honored all redemptions scheduled to occur, if
      any, (ii) all liquidated damages and other amounts owing in respect of the
      Notes  shall  have been paid;  (iii)  there is an  effective  Registration
      Statement  pursuant  to which  the  Holder is  permitted  to  utilize  the
      prospectus thereunder to resell all of the shares issuable pursuant to the
      Transaction  Documents (and the Company believes, in good faith, that such
      effectiveness  will continue  uninterrupted  for the foreseeable  future),
      (iv) the  Common  Stock is trading  on the  Trading  Market and all of the
      shares  issuable  pursuant  to the  Transaction  Documents  are listed for
      trading on a 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),  (v)  there is a  sufficient
      number of  authorized  but unissued  and  otherwise  unreserved  shares of
      Common  Stock for the issuance of all of the shares  issuable  pursuant to
      the Transaction Documents, (vi) there is then existing no Event of Default
      or event  which,  with the passage of time or the giving of notice,  would
      constitute an Event of Default, (vii) all of the shares issued or issuable
      pursuant to the transaction proposed would not violate the limitations set
      forth in  Section  4, and  (viii) no public  announcement  of a pending or
      proposed  Fundamental  Transaction,   Change  of  Control  Transaction  or
      acquisition transaction has occurred that has not been consummated.

            "Escrow  Agreement" shall mean the escrow agreement,  in the form of
      Exhibit E attached to the Purchase Agreement.

            "Event of Default" shall have the meaning set forth in Section 8.

            "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
      amended.

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

            "Interest  Conversion  Rate" means 85% the  average  VWAP for the 20
      days immediately prior to the applicable Interest Payment Date.

            "Late Fees" shall have the meaning set forth in the second paragraph
      to this Note.

            "Mandatory  Prepayment  Amount"  shall  equal the sum of 115% of the
      principal  amount of the Notes  outstanding,  plus all  accrued and unpaid
      interest thereon.


                                       2
<PAGE>

            "Monthly  Redemption" shall mean the redemption of the Note pursuant
      to Section 6(a) hereof.

            "Monthly  Redemption Amount" shall mean, as to a Monthly Redemption,
      1/21st the original principal amount in the aggregate among all Holders.

            "Monthly  Redemption  Date"  means  the first  Business  Day of each
      month,  commencing 15 months after the Original Issue Date and ending upon
      the full redemption of this Note.

            "Original  Issue Date" shall mean the date of the first  issuance of
      the Notes regardless of the number of transfers of any Note and regardless
      of the number of instruments which may be issued to evidence such Note.

            "Person"  means  a  corporation,   an  association,  a  partnership,
      organization,  a  business,  an  individual,  a  government  or  political
      subdivision thereof or a governmental agency.

            "Prepayment  Amount"  for any Notes  shall  equal the sum of (i) (A)
      108% of the principal amount of Notes to be prepaid,  plus all accrued and
      unpaid interest  thereon if such  prepayment  shall occur on or before one
      year from the date hereof, or (B) 105% of the principal amount of Notes to
      be  prepaid,  plus  all  accrued  and  unpaid  interest  thereon  if  such
      prepayment  shall  occur after one year but before two years from the date
      hereof,  or (C) 102% of the  principal  amount of the Notes to be prepaid,
      plus all  accrued and unpaid  interest  thereon if such  prepayment  shall
      occur  after two years but before  three years from the date  hereof,  and
      (ii) all other  amounts,  costs,  expenses and  liquidated  damages due in
      respect of such Notes.

            "Purchase Agreement" means the Securities Purchase Agreement,  dated
      as of May 2,  2005,  to which the  Company  and the  original  Holder  are
      parties,  as  amended,  modified  or  supplemented  from  time  to time in
      accordance with its terms.

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

            "Subsidiary"  shall  have  the  meaning  given  to such  term in the
      Purchase Agreement.

            "Trading  Day" means a day on which the Common  Stock is traded 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  SmallCap  Market,  the American Stock  Exchange,  the New York
      Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

            "Transaction  Documents"  shall  have the  meaning  set forth in the
      Purchase Agreement.


                                       3
<PAGE>

            "VWAP" means, for any date, the price determined by the first of the
      following clauses that applies:  (a) if the Common Stock is then listed or
      quoted on a Trading Market, the daily volume weighted average price of the
      Common Stock for such date (or the nearest  preceding date) on the primary
      Trading  Market  on which  the  Common  Stock is then  listed or quoted as
      reported by  Bloomberg  Financial  L.P.  (based on a Trading Day from 9:30
      a.m. EST to 4:02 p.m.  Eastern  Time) using the VAP  function;  (b) if the
      Common  Stock is not then  listed or quoted on the  Trading  Market and if
      prices  for the  Common  Stock  are then  reported  in the  "Pink  Sheets"
      published by the Pink  Sheets,  LLC (or a similar  organization  or agency
      succeeding  to its  functions  of reporting  prices),  the most recent bid
      price  per  share of the  Common  Stock so  reported;  or (c) in all other
      cases, the fair market value of a share of Common Stock as determined by a
      nationally  recognized-independent  appraiser  selected  in good  faith by
      Purchasers  holding a  majority  of the  principal  amount  of Notes  then
      outstanding.


      Section 2. Interest and Prepayments.

            a)    Payment of  Interest in Cash or Kind.  The  Company  shall pay
      interest to the Holder on the aggregate then outstanding  principal amount
      of this Note at the rate of 11% per annum,  payable  quarterly in arrears,
      beginning on the first such date after the Original  Issue Date and on the
      Maturity  Date (except  that, if any such date is not a Business Day, then
      such payment shall be due on the next succeeding Business Day) and on each
      Monthly  Redemption Date (as to that principal amount then being redeemed)
      (each  such date,  an  "Interest  Payment  Date"),  in cash.  The first 15
      months'  interest  shall be held in  escrow  pursuant  to the terms of the
      Escrow  Agreement.  After the  expiration  of 15 months from the  Original
      Issue  Date,  the  Company  shall have the option to pay the  interest  in
      shares of Common  Stock at the Interest  Conversion  Rate,  or cash,  or a
      combination thereof; provided,  however, payment in shares of Common Stock
      may only  occur if during  the 20 Trading  Days  immediately  prior to the
      applicable  Interest  Payment Date all of the Equity  Conditions have been
      met,  the  payment in shares of Common  Stock  would not exceed 25% of the
      trading  volume for any of the  previous  10 Trading  Days and the Company
      shall  have  given  the  Holder  notice  in  accordance  with  the  notice
      requirements set forth below.

            b)    Company's  Election to Pay  Interest  in Kind.  Subject to the
      terms and  conditions  herein,  after the expiration of 15 months from the
      Original Issue Date hereof, the decision whether to pay interest hereunder
      in  shares  of  Common  Stock or cash  shall be at the  discretion  of the
      Company.  Not less than 10  Trading  Days prior to each  Interest  Payment
      Date,  the Company  shall  provide the Holder with  written  notice of its
      election  to pay  interest  hereunder  either  in cash or shares of Common
      Stock (the Company may indicate in such notice that the election contained
      in such notice shall continue for later periods until revised).  Within 10
      Trading Days prior to an Interest  Payment Date,  the  Company's  election
      (whether  specific to an Interest  Payment  Date or  continuous)  shall be
      irrevocable   as  to  such   Interest   Payment   Date.   Subject  to  the
      aforementioned  conditions,  failure to timely provide such written notice
      shall be deemed an  election  by the  Company to pay the  interest on such
      Interest Payment Date in cash.

            c)    Interest  Calculations.  Interest  shall be  calculated on the
      basis of a 360-day year and shall accrue daily  commencing on the Original
      Issue Date until payment in full of the principal  sum,  together with all
      accrued  and  unpaid  interest  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


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<PAGE>

      registration  and  transfers  of Notes  (the "Note  Register").  Except as
      otherwise  provided  herein,  if at any time  the  Company  pays  interest
      partially  in cash and  partially  in shares of  Common  Stock,  then such
      payment  shall be  distributed  ratably  among the Holders  based upon the
      principal amount of Notes held by each Holder.

            d)    Late Fee. All overdue  accrued and unpaid  interest to be paid
      hereunder  shall  entail a late fee at the rate of 20% per  annum (or such
      lower maximum amount of interest  permitted to be charged under applicable
      law) ("Late Fee") which will accrue daily,  from the date such interest is
      due hereunder  through and including the date of payment.  Notwithstanding
      anything to the contrary contained herein, if on any Interest Payment Date
      the Company has elected to pay interest in Common Stock and is not able to
      pay accrued  interest in the form of Common Stock because it does not then
      satisfy the  conditions  for payment in the form of Common Stock set forth
      above,  then,  at the  option  of the  Holder,  the  Company,  in  lieu of
      delivering  either  shares of Common  Stock  pursuant to this Section 2 or
      paying the regularly  scheduled  cash  interest  payment,  shall  deliver,
      within three  Trading Days of each  applicable  Interest  Payment Date, an
      amount  in cash  equal to the  product  of the  number of shares of Common
      Stock  otherwise  deliverable to the Holder in connection with the payment
      of interest due on such Interest  Payment Date and the highest VWAP during
      the  period  commencing  on the  Interest  Payment  Date and ending on the
      Trading Day prior to the date such payment is made.

            e)    Optional  Prepayment.  The  Company  shall  have the  right to
      prepay, in cash, all or a portion of the Notes for an amount equal to such
      percentage of the principal amount to be repaid as set forth in (i), (ii),
      and (iii) below, plus all accrued and unpaid interest thereon:

                  (i)   In the event  that the Notes are  prepaid on or prior to
      one year from the date hereof, the prepayment shall be 108%.

                  (ii)  In the event that the Notes are  prepaid  after one year
      but on or before two years from the date hereof,  the prepayment  shall be
      105%.

                  (iii) In the event that the Notes are prepaid  after two years
      but on or before three years from the date hereof, the prepayment shall be
      102%.

      Section 3. Registration of Transfers and Exchanges.

            a)    Different  Denominations.  This  Note is  exchangeable  for an
      equal  aggregate  principal  amount  of  Notes  of  different   authorized
      denominations,  as  requested  by the  Holder  surrendering  the same.  No
      service charge will be made 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  to the
      Company  for  transfer  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.


                                       5
<PAGE>

      Section 4. Share Issuance Limitations; Holder's Restriction on Shares. The
Company's right to pay interest or a monthly  redemption through the issuance of
shares of Common  Stock  pursuant  to Sections  2(a),  (b),  and 6(a),  shall be
limited  to the  extent  that  after the  issuance  of such  shares,  the Holder
(together with the Holder's affiliates) would beneficially own in excess of 9.9%
of the number of shares of the Common Stock  outstanding  immediately after such
issuance.  Except as set forth in the preceding  sentence,  for purposes of this
Section 4,  beneficial  ownership shall be calculated in accordance with Section
13(d) of the Exchange  Act. For purposes of this Section 4, in  determining  the
number of outstanding  shares of Common Stock, the Holder may rely on the number
of  outstanding  shares of Common Stock as reflected in (x) the  Company's  most
recent Form 10-QSB or Form 10-KSB,  as the case may be, (y) a more recent public
announcement  by the  Company  or (z) any  other  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 the 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,  by the Holder or its
affiliates  since  the date as of which  such  number of  outstanding  shares of
Common Stock was reported. The provisions of this Section 4 may be waived by the
Holder upon, at the election of the Holder,  not less than 61 days' prior notice
to the Company,  and the  provisions  of this Section 4 shall  continue to apply
until such 61st day (or such later date, as determined by the Holder,  as may be
specified in such notice of waiver).

      Section 5. Certain Adjustments.

            a)    Stock Dividends and Stock Splits. If the Company,  at any time
      while the  Notes  are  outstanding:  (A)  shall  pay a stock  dividend  or
      otherwise make a  distribution  or  distributions  on shares of its Common
      Stock or any other  equity  or equity  equivalent  securities  payable  in
      shares of Common Stock, (B) subdivide  outstanding  shares of Common Stock
      into a larger number of shares,  (C) combine  (including by way of reverse
      stock split)  outstanding  shares of Common Stock into a smaller number of
      shares, or (D) issue by reclassification of shares of the Common Stock any
      shares of capital stock of the Company,  then the Warrant  Shares shall be
      adjusted  accordingly.  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)    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. The number of shares of Common Stock outstanding at any given time
      shall  not  include  shares of  Common  Stock  owned or held by or for the
      account of the Company,  and the  description of any such shares of Common
      Stock shall be considered one issue or sale of Common Stock.  For purposes
      of this  Section  4, 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  treasury shares,  if any) issued and
      outstanding.


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<PAGE>

            c)    Fundamental  Transaction.  If, at any time  while this Note is
      outstanding,  (A) the Company effects any sale of all or substantially all
      of its assets in one or a series of related  transactions,  (B) any tender
      offer or exchange  offer  (whether  by the  Company or another  Person) is
      completed  pursuant  to which  holders of Common  Stock are  permitted  to
      tender or exchange their shares for other securities, cash or property, or
      (C) the Company  effects any  reclassification  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  (in any such  case,  a  "Fundamental  Transaction"),  then  upon
      issuance  of the  Warrant  Shares,  the  Holder  shall  have the  right to
      receive,  for each  Underlying  Share that would have been issuable absent
      such Fundamental Transaction, the same kind and amount of securities, cash
      or property as it would have been entitled to receive upon the  occurrence
      of such Fundamental  Transaction if it had been, immediately prior to such
      Fundamental  Transaction,  the  holder of one share of Common  Stock  (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 issuance of the Warrant
      Shares following such Fundamental Transaction.  To the extent necessary to
      effectuate  the  foregoing  provisions,  any  successor  to the Company or
      surviving entity in such Fundamental Transaction shall issue to the Holder
      a new note  consistent  with the  foregoing  provisions.  The terms of any
      agreement  pursuant to which a Fundamental  Transaction  is effected shall
      include terms  requiring any such successor or surviving  entity to comply
      with the  provisions of this paragraph (c) and insuring that this Note (or
      any  such  replacement  security)  will be  similarly  adjusted  upon  any
      subsequent transaction analogous to a Fundamental Transaction.

      Section 6. Monthly Redemption

            a)    Monthly  Redemption.  On each  Monthly  Redemption  Date,  the
      Company  shall  redeem  each  Holder's  Pro Rata  Portion  of the  Monthly
      Redemption  Amount  plus  accrued  but  unpaid  interest,  the  sum of all
      liquidated  damages  and any other  amounts  then owing to such  Holder in
      respect of the Note. For purposes of this  subsection 6(a) only, "Pro Rata
      Portion"  is the  ratio of (x) the  principal  amount  of this Note on the
      Original  Issue Date to (y) the sum of the  aggregate  original  principal
      amounts of the Notes issued to all Holders.  If any Holder shall no longer
      hold Notes,  then the Pro Rata Portion  shall be  recalculated  to exclude
      such  Holder's  principal  amount  from  clause (y) above and the  Monthly
      Redemption Amount shall be allocated pro-rata among the remaining Holders.
      The Monthly Redemption Amount due on each Monthly Redemption Date shall be
      paid in cash; provided,  however, as to any Monthly Redemption and upon 10
      Trading  Days'  prior  written  irrevocable  notice,  in  lieu  of a  cash
      redemption  payment,  the  Company  may  elect  to pay  100% of a  Monthly
      Redemption in shares of Common Stock based on a conversion  price equal to
      85% of the average of the 20 consecutive  VWAPs  immediately  prior to the
      applicable  Monthly  Redemption  Date (subject to adjustment for any stock
      dividend,  stock split, stock combination or other similar event affecting
      the Common Stock during such 20 Trading Day  period);  provided,  however,
      that the Company may not pay the  Monthly  Redemption  Amount in shares of
      Common  Stock  unless,  on the Monthly  Redemption  Date and during the 20
      Trading Day period  immediately prior to the Monthly  Redemption Date, the
      Equity  Conditions have been satisfied and the payment in shares of Common
      Stock would not exceed 25% of the trading  volume for any of the  previous
      10 Trading Days.


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<PAGE>

            b)    Redemption  Procedure.  The payment of cash and/or issuance of
      Common Stock, as the case may be, pursuant to a Monthly  Redemption  shall
      be made on the Monthly Redemption Date. If any portion of the cash payment
      for a  Monthly  Redemption  shall  not  be  paid  by  the  Company  by the
      respective due date,  interest shall accrue thereon at the rate of 20% per
      annum (or the maximum rate permitted by applicable law, whichever is less)
      until the payment of the Monthly Redemption Amount, plus all amounts owing
      thereon is paid in full.  Alternatively,  if any  portion  of the  Monthly
      Redemption  Amount remains unpaid after such date, the Holders  subject to
      such  redemption may elect,  by written notice to the Company given at any
      time thereafter, to invalidate ab initio such redemption,  notwithstanding
      anything herein contained to the contrary.

      Section  7.  Negative  Covenants.  So long as any  portion of this Note is
outstanding, the Company will not and will not permit any of its Subsidiaries to
directly or indirectly, without the prior written approval of the Holder:

            a)    enter  into,  create,  incur,  assume  or  suffer to exist any
      indebtedness  of any kind  other  than (i)  indebtedness  in the  ordinary
      course of business and in an amount less than $25,000,  (ii)  indebtedness
      the net proceeds from which is used to prepay the Note in full pursuant to
      Section 2(e);

            b)    enter into, create, incur, assume or suffer to exist any liens
      of any kind, on or with respect to any of its property or assets now owned
      or  hereafter  acquired or any  interest  therein or any income or profits
      therefrom other than in connection with (i)  indebtedness the net proceeds
      from which is used to prepay the Note in full pursuant to Section 2(e); c)
      amend its certificate of incorporation,  bylaws or other charter documents
      so as to adversely affect any rights of the Holder;

            d)    repay,  repurchase or offer to repay,  repurchase or otherwise
      acquire  any of  its  Common  Stock,  Preferred  Stock,  or  other  equity
      securities; or

            e)    enter into any agreement with respect to any of the foregoing.

      The Holders acknowledge that the Company intends to enter into a customary
      inventory  and  receivables  bank  financing  and  upon  receipt  of  such
      financing, the Holders and the Company will negotiate in good faith and in
      a timely manner in respect of making such modifications to the Transaction
      Documents as are necessary to permit such financing.

      Section 8. Events of Default.

            a)    "Event of Default", wherever used herein, means any one of the
      following events (whatever the reason and whether it 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  of amount
            of any Note, or (B) interest (including Late Fees) on, or damages in
            respect   of,  any  Note,   in  each  case  free  of  any  claim  of
            subordination,  as and when the same shall  become  due and  payable
            (whether on 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 2 Trading Days;


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<PAGE>

                  ii. the  Company  shall  fail to observe or perform  any other
            covenant  or  agreement  contained  in this Note or any of the other
            Transaction  Documents  which  failure is not cured,  if possible to
            cure, within the earlier to occur of (A) 5 Trading Days after notice
            of such default sent by the Holder or by any other Holder and (B) 10
            Trading  Days after the Company  shall  become or should have become
            aware of such failure;

                  iii. a default or event of  default  (subject  to any grace or
            cure period  provided for in the applicable  agreement,  document or
            instrument)  shall occur under (A) any of the Transaction  Documents
            other than the Notes,  or (B) any other material  agreement,  lease,
            document or  instrument  to which the Company or any  Subsidiary  is
            bound;

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

                  v. (i) the Company or any of its Subsidiaries  shall commence,
            or  there  shall  be  commenced  against  the  Company  or any  such
            Subsidiary,  a case under any  applicable  bankruptcy  or insolvency
            laws as now or hereafter in effect or any successor thereto,  or the
            Company or any Subsidiary  commences any other  proceeding under any
            reorganization,  arrangement, adjustment of debt, relief of debtors,
            dissolution,  insolvency  or  liquidation  or  similar  law  of  any
            jurisdiction  whether  now or  hereafter  in effect  relating to the
            Company or any Subsidiary thereof or (ii) there is commenced against
            the  Company  or  any  Subsidiary   thereof  any  such   bankruptcy,
            insolvency  or other  proceeding  which  remains  undismissed  for a
            period of 60 days; or (iii) the Company or any Subsidiary thereof is
            adjudicated  by a  court  of  competent  jurisdiction  insolvent  or
            bankrupt;  or any order of relief or other order  approving any such
            case or proceeding is entered; or (iv) the Company or any Subsidiary
            thereof  suffers any appointment of any custodian or the like for it
            or any substantial part of its property which continues undischarged
            or  unstayed  for a period  of 60 days;  or (v) the  Company  or any
            Subsidiary  thereof  makes a general  assignment  for the benefit of
            creditors;  or (vi) the  Company  shall fail to pay,  or shall state
            that it is  unable  to pay,  or shall be  unable  to pay,  its debts
            generally as they become due; or (vii) the Company or any Subsidiary
            thereof  shall  call a  meeting  of  its  creditors  with a view  to
            arranging a composition,  adjustment or  restructuring of its debts;
            or (viii) the Company or any Subsidiary  thereof shall by any act or
            failure to act  expressly  indicate  its consent to,  approval of or
            acquiescence in any of the foregoing; or (ix) any corporate or other
            action is taken by the  Company or any  Subsidiary  thereof  for the
            purpose of effecting any of the foregoing;

                  vi. the Company or any Subsidiary  shall default in 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


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<PAGE>

            long term  leasing or  factoring  arrangement  of the  Company in an
            amount exceeding  $50,000,  whether such  indebtedness now exists or
            shall  hereafter  be created and such  default  shall result 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  quotation on
            or quoted  for  trading  on a Trading  Market and shall not again be
            eligible  for and quoted or listed for trading  thereon  within five
            Trading Days;

                  viii.  the  Company  shall be a party to any Change of Control
            Transaction  or  Fundamental  Transaction,  shall  agree  to sell or
            dispose  of all or in  excess  of 33% of its  assets  in one or more
            transactions  (whether or not such sale would constitute a Change of
            Control  Transaction)  or shall redeem or repurchase  more than a de
            minimis  number of its  outstanding  shares of Common Stock or other
            equity  securities of the Company (other than  repurchases of shares
            of Common Stock or other equity securities of departing officers and
            directors of the Company; provided such repurchases shall not exceed
            $50,000, in the aggregate, for all officers and directors during the
            term of this Note);

            b)    Remedies  Upon  Event of  Default.  If any  Event  of  Default
      occurs, the full principal amount of this Note, together with interest and
      other amounts owing in respect thereof,  to the date of acceleration shall
      become, at the Holder's election, immediately due and payable in cash. The
      aggregate  amount  payable upon an Event of Default  shall be equal to the
      Mandatory Prepayment Amount. Commencing 5 days 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 the rate of 20% per annum,
      or such lower  maximum  amount of interest  permitted to be charged  under
      applicable law. All Notes for which the full Mandatory  Prepayment  Amount
      hereunder  shall have been paid in accordance  herewith  shall promptly be
      surrendered to or as directed by the Company.  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 declaration may be rescinded and annulled by Holder at any time prior
      to payment hereunder and the Holder shall have all rights as a Note holder
      until such time, if any, as the full payment under this Section shall have
      been  received by it. No such  rescission  or  annulment  shall affect any
      subsequent Event of Default or impair any right consequent thereon.

      Section 9. Miscellaneous.

            a)    Notices.  Any and  all  notices  or  other  communications  or
      deliveries to be provided by the Holders hereunder shall be in writing and
      delivered  personally,  by  facsimile,  sent  by a  nationally  recognized
      overnight  courier service,  addressed to the Company,  at the address set
      forth above,  facsimile number (708) 273-6901,  ATTN: OSCAR TURNER,  CHIEF
      FINANCIAL  OFFICER,  or such  other  address  or  facsimile  number as the
      Company may specify for such  purposes by notice to the Holders  delivered
      in  accordance   with  this   Section.   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, sent by a nationally
      recognized  overnight  courier  service  addressed  to each  Holder at the
      facsimile  telephone  number or address of such  Holder  appearing  on the
      books of the Company,  or if no such facsimile telephone number or address
      appears,  at the principal place of business of the Holder.  Any notice or


                                       10
<PAGE>

      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  telephone
      number  specified in this Section prior to 5:30 p.m. (New York City time),
      (ii)  the  date  after  the  date  of  transmission,  if  such  notice  or
      communication is delivered via facsimile at the facsimile telephone number
      specified in this Section later than 5:30 p.m. (New York City time) on any
      date and earlier than 11:59 p.m. (New York City time) on such date,  (iii)
      the  second  Business  Day  following  the  date  of  mailing,  if sent by
      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,
      interest and liquidated damages (if any) 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 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 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, and indemnity,  if requested,  all
      reasonably satisfactory to the Company.

            d)    Security  Interest.  This Note is a direct debt  obligation of
      the  Company  and,  pursuant  to the  Security  Agreement  is secured by a
      perfected  security  interest  in all of the assets of the Company for the
      benefit of the Holders.  The Holder  agrees that it will  subordinate  its
      perfected  security  interest to any security  interest in connection with
      inventory and receivables bank financing that the Company obtains.

            e)    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 conflicts of law
      thereof.  Each party  agrees  that all legal  proceedings  concerning  the
      interpretations,  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 the City of New  York,  Borough  of  Manhattan  (the "New York
      Courts").  Each party hereto hereby  irrevocably  submits to the exclusive
      jurisdiction  of the New York 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 any such court, or such
      New York 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 manner  permitted by 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


                                       11
<PAGE>

      out of or relating to this Note or the transactions  contemplated  hereby.
      If either  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 with the investigation,  preparation
      and prosecution of such action or proceeding.

            f)    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. Any waiver must be in writing.

            g)    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  applicable laws governing  usury,
      the  applicable  rate of interest due  hereunder  shall  automatically  be
      lowered to equal the  maximum  permitted  rate of  interest.  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 indenture, 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 impeded 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.

            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.


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


                                       12
<PAGE>

      IN WITNESS  WHEREOF,  the Company has caused this Note to be duly executed
by a duly authorized officer as of the date first above indicated.


                                              KNOCKOUT HOLDINGS, INC.


                                              /s/ Oscar Turner
                                              ----------------------------------
                                              Oscar Turner,
                                              Chief Financial Officer


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