THIS CONVERTIBLE TERM NOTE HAS NOT BEEN REGISTERED UNDER ANY STATE SECURITIES
LAW OR THE SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT"). THIS CONVERTIBLE
TERM NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
HYPOTHECATED, SOLD, OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR TRANSFEREE HEREOF
BE RECOGNIZED BY THE MAKER HEREOF AS HAVING ANY INTEREST IN THIS CONVERTIBLE
TERM NOTE, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO
THIS CONVERTIBLE TERM NOTE UNDER ANY APPLICABLE STATE LAW AND THE FEDERAL ACT OR
ANY OPINION OF COUNSEL SATISFACTORY TO THE MAKER HEREOF THAT SUCH REGISTRATION
IS NOT REQUIRED.

THIS CONVERTIBLE TERM NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT
CERTAIN LIFESTREAM TECHNOLOGIES, INC. SUBSCRIPTION AGREEMENT OF EVEN DATE
HEREWITH BETWEEN LIFESTREAM TECHNOLOGIES, INC. AND HOLDER, AND HOLDER AGREES AND
UNDERSTANDS THAT IT SHALL BE BOUND BY THE PROVISIONS OF SUCH AGREEMENT.

               LIFESTREAM TECHNOLOGIES, INC. CONVERTIBLE TERM NOTE


$                                                                        , 2001
 ----------                                                  -------------------



         1.       PROMISE TO PAY

                  FOR VALUE RECEIVED, the undersigned LIFESTREAM TECHNOLOGIES,
INC., a Nevada corporation (the "Company"), HEREBY PROMISES TO PAY
__________("Purchaser"), on or before July 30, 2003, the principal amount of
___________________________($), together with interest on such principal amount
at the rates per annum provided below, which payments of interest shall be made
as provided below, and the amount of any "Registration Delay Payments" (as
defined in the Registration Rights Agreement by and among the parties dated of
even date herewith (the "Registration Rights Agreement")) which Purchaser elects
not to receive in cash and which shall be added to (and shall not be in lieu of)
the amount of principal and interest accrued and payable hereunder. All
principal, interest and Registration Delay Payments hereunder are payable in
lawful money of the United States of America to Purchaser in immediately
available funds.



Page 1 of 14

<PAGE>


                  This Convertible Term Note ("the Note" or "this Note") shall
bear interest at a per annum interest rate equal to the prime rate as published
in the "Money Rates" tables of The Wall Street Journal on the first date of the
calendar quarter in which this Note is issued plus two percent (2%) and adjusted
on the first day of each subsequent calendar quarter in which the Note is
outstanding. The term of this Note shall extend until (Date) (the "Term").
Interest shall be payable upon the earlier to occur of (i) the conversion of the
Note or (ii) the expiration of the Term of the Note. Subject at all times upon
Purchaser's rights of conversion herein, the Company may prepay the Note at any
time or times, in whole or in part, on not less than 30 days' prior written
notice to Purchaser (the "Prepayment Notice"). Each Prepayment Notice shall
specify the principal amount of this Note and all other outstanding Notes to be
redeemed. Each prepayment of principal of this Note shall be accompanied by the
payment of all interest and Registration Delay Payments accrued and unpaid to
the prepayment date on the principal amount to be prepaid. In the event the
Company elects to prepay only a portion of the aggregate amount of outstanding
Notes, such prepayment shall be made on a pro rata basis to all holders of the
Notes.

         2.       CONVERSION OF NOTE

                  Purchaser shall have conversion rights as follows (the
"Conversion Rights"):


                  2.1 Right to Convert - Purchaser. Subject to and upon
compliance with the provisions of this Section 2, at any time after the date
hereof (the "Closing Date") at the option of Purchaser, the Note, or any $1,000
multiple of the principal amount thereof then outstanding, may be converted at
the outstanding principal amount hereof, or at such portion hereof, into fully
paid and non-assessable shares of registered common stock, $.001 par value, of
the Company, and stock of any other class or classes into which such common
stock or any such class may be hereafter changed or reclassified ("Common
Stock"), at the initial conversion rate of one (1) fully paid and non-assessable
share of Common Stock for each $1.00 amount of principal amount of the Note plus
any accrued and unpaid interest on such principal amount and Registration Delay
Payments ("Conversion Rate") (which $1.00 per share of Common Stock shall also
be referred to hereinafter as the "Conversion Price"); provided, however, that
the Conversion Rate shall be subject to the adjustments described below.


Page 2 of 14

<PAGE>


                  2.2 Right to Convert - Issuer (the "Company"). Subject to and
upon compliance with the provisions of this Section 2, at any time after the
date hereof (the "Closing Date") the Company can force conversion of the Note,
of principal and accrued and unpaid interest and Registration Delay Payments
then outstanding, upon the Company's common stock, as quoted by NASDAQ, or other
trading stock market, maintaining a bid price on or above $3.00 per share for
twenty consecutive trading days, into fully paid and non-assessable shares of
registered common stock, $.001 par value, of the Company, and stock of any other
class or classes into which such common stock or any such class may be hereafter
changed or reclassified ("Common Stock"), at the initial conversion rate of one
(1) fully paid and non-assessable share of Common Stock for each $1.00 amount of
principal amount of the Note plus any accrued and unpaid interest and
Registration Delay Payments on such principal amount ("Conversion Rate") (which
$1.00 per share of Common Stock shall also be referred to hereinafter as the
"Conversion Price"); provided, however, that the Conversion Rate shall be
subject to the adjustments described below.

                  2.3 Mechanics of Conversion. Before Purchaser shall be
entitled to convert this Note into shares of Common Stock, Purchaser shall
surrender the Note to the Company at its offices at its address below (or at
such other address of which the Company shall have notified Purchaser in
writing), and shall give written notice to the Company at such offices that
Purchaser elects to convert the Note, or if less than the entire principal
amount of the Note is to be converted, the portion thereof to be converted. Such
notice shall also state the name or names (with address or addresses) in which
the certificate or certificates for shares of Common Stock issuable upon such
conversion shall be issued and shall contain such representations as may
reasonably be required by the Company to the effect that the shares to be
received upon conversion are not being acquired and will not be transferred in
any way that might violate the then applicable laws. As promptly as practicable
after the receipt of such notice and the surrender of the Note as aforesaid, the
Company shall issue and shall deliver to Purchaser at the address specified by
Purchaser in the written notice of conversion a certificate or certificates for
the number of full shares issuable upon the conversion of the Note (or portion
thereof) in accordance with the provisions of this Section 2 and cash as
provided in Section 2.4 hereof. Such conversion shall be deemed to have been
effected at the close of business on the date on which such notice shall have
been received at the office of the Company and the Note shall have been
surrendered as aforesaid (the "Conversion Date"), and at such time the rights of
Purchaser as obligee shall cease as to the portion of the Note which has been
converted, and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby. Upon conversion of the Note in part only, the
Company shall execute and deliver to or on the order of Purchaser, at the
expense of the Company, a new note in principal amount equal to the unconverted
portion of the Note so converted.

                  2.4 Fractional Shares. No fractional shares of Common Stock or
scrip representing fractional shares shall be issued upon conversion of the
Note. Instead of any fractional shares which would otherwise be issuable upon
conversion of the Note or specified portions thereof, the Company shall pay to
Purchaser a cash adjustment in respect of such fraction in an amount equal to
such fraction multiplied by the Conversion Price per share of Common Stock as of
the Conversion Date.

Page 3 of 14

<PAGE>


                  2.5 Adjustment of Conversion Price. The Conversion Price shall
be subject to adjustment from time to time as follows:

                  (a) If the Company issues shares of Common Stock other than
(i) all shares of Common Stock issued in connection with the acquisition of
another company by the Company by merger or other reorganization whereby the
Company owns, upon consummation of such acquisition, more than fifty percent
(50%) of the voting power to elect the directors of such other company, or in
connection with the acquisition of all or substantially all of the assets of
such other company, (ii) employee stock options and (iii) and in connection with
conversion of notes, warrants and options issued pursuant to or previous to this
Note, for a consideration per share less than the Conversion Price in effect
immediately prior to the issuance of such Common Stock, the Conversion Price in
effect immediately prior to each such issuance shall forthwith be adjusted to a
price equal to the quotient obtained by dividing:

                      (i)   an amount equal to the sum of:

                           (A) the total number of shares of Common Stock
                      outstanding (including any shares of Common Stock deemed
                      to have been issued pursuant to Section 2.5(a)(iii)(C)
                      hereof  and to Section 2.5(b)) immediately prior to such
                      issuance multiplied by the Conversion Price in effect
                      immediately prior to such issuance, plus

                           (B) the consideration received by the Company upon
                      such issuance, by

                     (ii)  the total number of shares of Common Stock
                outstanding (including any shares of Common Stock deemed to
                have been issued pursuant to Section 2.5(a)(iii)(C) and to
                Section 2.5(b)) immediately after such issuance of such Common
                Stock.

                     (iii) For the purposes of any adjustment of the
                Conversion Price pursuant to this Section 2.5(a), the following
                provisions shall be applicable:

                           (A) When Common Stock is issued for cash, the
                     consideration shall be deemed to be the amount of cash
                     paid therefor after deducting therefrom any discounts,
                     commissions or other expenses allowed, paid or incurred by
                     the Company for any underwriting or otherwise in connection
                     with the issuance and sale thereof;
Page 4 of 14

<PAGE>


                           (B) When Common Stock is issued for a consideration
                     in whole or in part other than cash, the consideration
                     other than cash shall be deemed to be the fair market value
                     thereof as determined by the Board of Directors of the
                     Company (which determination shall be conclusive absent
                     manifest error), irrespective of any accounting treatment;
                     provided, however, that such fair market value determined
                     by the Board of Directors shall not exceed the aggregate
                     Current Market Price of the shares of Common Stock being
                     issued. Current Market Price shall mean the average of the
                     daily closing prices of one share of Common Stock for the
                     thirty (30) consecutive business days ending on the day
                     before the day in question and such average will be
                     adjusted for any stock dividend, split, combination or
                     reclassification that took effect during such thirty (30)
                     business day period. The closing price for each day shall
                     be the last reported sales price regular way or, in case no
                     such reported sales took place on such day, the average of
                     the last reported bid and asked prices regular way, in
                     either case on the principal national securities exchange
                     on which the Common Stock is listed or admitted to trading,
                     or if the Common Stock is not at the time listed or
                     admitted for trading on any such exchange, then such price
                     as shall be equal to the average of the last reported bid
                     and asked prices, as reported by Nasdaq on such day, or if,
                     on any day in question, the Common Stock shall not be
                     quoted on Nasdaq, then such price shall be equal to the
                     average of the last reported bid and asked prices on such
                     day as reported by Nasdaq. Notwithstanding the foregoing,
                     if the Common Stock is not traded in such manner that the
                     prices referred to above are available for the period
                     required hereunder, the Current Market Price shall be
                     determined in good faith by the Board of Directors of the
                     Company (which determination shall be conclusive absent
                     manifest error);

                           (C) In the case of the issuance of options to
                     purchase or rights to subscribe for Common Stock,
                     securities by their terms convertible into or exchangeable
                     for Common Stock, or options to purchase or rights to
                     subscribe for such convertible or exchangeable securities:

                               (1) the aggregate maximum number of shares of
                     Common Stock deliverable upon exercise of such options to
                     purchase or rights to subscribe for Common Stock shall be
                     deemed to have been issued at the time such options or
                     rights were issued and for a consideration equal to the
                     consideration (determined in the manner provided in Section
                     2.5(a)(iii)(A) and (B) above with the proviso in Section
                     2.5(a)(iii)(B) above being applied to the number of shares
                     of Common Stock deliverable upon such exercise) received by
                     the Company upon the issuance of such options or rights,
                     plus the minimum purchase price provided in such options or
                     rights for the Common Stock covered thereby;

Page 5 of 14

<PAGE>


                               (2) the aggregate maximum number of shares of
                     Common Stock deliverable upon conversion of or in exchange
                     for any such convertible or exchangeable securities or upon
                     the exercise of options to purchase or rights to subscribe
                     for such convertible or exchangeable securities and
                     subsequent conversions or exchanges thereof shall be deemed
                     to have been issued at the time such securities were issued
                     or such options or rights were issued and for a
                     consideration equal to the consideration received by the
                     Company for any such securities and related options or
                     rights (excluding any cash received on account of accrued
                     interest or accrued dividends), plus the additional
                     consideration, if any, to be received by the Company upon
                     the conversion or exchange of such securities or the
                     exercise of any related options or rights (the
                     consideration in each case to be determined in the manner
                     provided in Section 2.5(a)(iii)(A) and (B) above with the
                     proviso in Section 2.5(a)(iii)(B) above being applied to
                     the number of shares of Common Stock deliverable upon such
                     conversion, exchange or exercise);

                               (3) on any change in the number of shares of
                     Common Stock deliverable upon exercise of any such options
                     or rights or conversion of or exchange for such convertible
                     or exchangeable securities, other than a change resulting
                     from any antidilution provisions thereof, the Conversion
                     Price shall forthwith be readjusted to such Conversion
                     Price as would have obtained had the adjustment made upon
                     the issuance of such options, rights or securities not
                     converted prior to such change or options or rights related
                     to such securities not converted prior to such change been
                     made upon the basis of such change; and

                               (4) on the expiration of any such options or
                     rights, the termination of any such rights to convert or
                     exchange or the expiration of any options or rights related
                     to such convertible or exchangeable securities, the
                     Conversion Price shall forthwith be readjusted to such
                     Conversion Price as would have obtained had the adjustment
                     made upon the issuance of such options, rights, securities
                     or options or rights related to such securities been made
                     upon the basis of the issuance of only the number of shares
                     of Common Stock actually issued upon the conversion or
                     exchange of such securities or upon the exercise of the
                     options or rights related to such securities.

                  (b) If the number of shares of Common Stock outstanding is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split of shares of Common Stock, then the Conversion Price in
effect immediately prior to such stock dividend, subdivision or split shall be
proportionately decreased and the number of Conversion Shares shall be
proportionately increased.

Page 6 of 14

<PAGE>


                  (c) If the number of shares of Common Stock outstanding is
decreased by a combination of the outstanding shares of Common Stock, then the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased and the number of Conversion Shares shall be
proportionately decreased.

                  (d) If the Company shall declare a cash dividend upon its
Common Stock payable otherwise than out of earnings or earned surplus or shall
distribute to holders of the Common Stock shares of its capital stock other than
Common Stock, stock or other securities of other persons, evidences of
indebtedness issued by the Company or other persons, assets (excluding cash
dividends and distributions) or options or rights (excluding options to purchase
and rights to subscribe for Common Stock or other securities of the Company
convertible into or exchangeable for Common Stock), then, in each such case, the
Conversion Price in effect immediately prior to such dividend or distribution
shall be adjusted as follows. Immediately following the record date fixed for
the determination of holders of Common Stock entitled to receive such dividend
or distribution, the Conversion Price in effect thereafter shall be determined
by multiplying the Conversion Price in effect immediately prior to such record
date by a fraction of which the numerator shall be an amount equal to (i) the
Current Market Price of one share of Common Stock less (ii) the fair market
value (as determined by the Board of Directors of the Company, which
determination shall be conclusive absent manifest error) of the stock,
securities, evidences of indebtedness, assets, options or rights so distributed
in respect of one share of Common Stock, and of which the denominator shall be
the Current Market Price.

                  (e) All calculations under this Section 2.5 shall be made to
the nearest one-tenth (1/10) of a share.

                  (f) Whenever the Conversion Price shall be adjusted as
provided in this Section 2.5, the Company shall prepare a statement showing the
facts requiring such adjustment and the Conversion Price and the number of
Conversion Shares that shall be in effect after such adjustment. The Company
shall cause a copy of such statement to be sent to the Purchaser. Where
appropriate, such copy may be given in advance and may be included as part of
the notice required to be mailed under the provisions of Section 2.5(h) hereof.

                  (g) Adjustments made pursuant to Sections 2.5(b), (c) and (d)
shall be made on the date such dividend, subdivision, split, combination or
distribution is made, and shall become effective at the opening of business on
the business day next following the record date for the determination of
shareholders entitled to such dividend, subdivision, split, combination or
distribution.
                  (h) In the event the Company shall propose to take any action
of the types described in Sections 2.5(b), (c), or (d) the Company shall
forward, at the same time and in the same manner, to the Purchaser such notice,
if any, that the Company shall give to the holders of capital stock of the
Company. Failure to give such notice, or any defect therein, shall not affect
the legality or validity of any such action.

Page 7 of 14

<PAGE>

                  (i) Whenever the provisions of this Section 2.5 shall require
that an adjustment shall become effective immediately after the record date for
an event and the Purchaser exercises its Conversion after such record date and
before the occurrence of such event, the Company may defer until the occurrence
of such event issuing to the Purchaser the additional shares of Common Stock
issuable upon such exercise by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such exercise before
giving effect to such adjustment; provided, however, that the Company shall
deliver to such Purchaser a due bill or other appropriate instrument evidencing
such Purchaser's right to receive such additional shares upon the occurrence of
the event requiring such adjustment.

                  (j) The sale or other disposition of any Common Stock
theretofore held in the treasury of the Company shall be deemed to be an
issuance thereof.

                  2.6 No Impairment. The Company will not, by amendment of its
Articles of Incorporation or Bylaws or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will
at all time in good faith assist in the carrying out of all the provisions of
this Section 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of Purchaser of the Note
against impairment.

                  2.7 Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Rate pursuant to this Section 2,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof, and in any event, prepare and
furnish to Purchaser a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based. The Company shall, upon the written request at any time of Purchaser,
furnish or cause to be furnished to Purchaser a like certificate setting forth
(a) such adjustments and readjustments, (b) the Conversion Rate at that time in
effect, and (c) the number of shares of Common Stock and the amount, if any, of
other property which at that time would be received upon the conversion of the
Note.

                  2.8 Notices of Record Date. In the event of any taking by the
Company of a record of the holders of any class of securities other than this
Note for the purpose of determining the holders thereof who are entitled to
receive any dividend or other distribution, any common stock equivalents or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right, other
than a right to vote at a meeting of shareholders, the Company shall mail to
Purchaser at least ten (10) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or rights, and the amount and character of such
dividend, distribution or rights.

                  2.9 Reservation of Stock Issuable Upon Conversion;
Registration Rights Agreement. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock solely for
the purpose of effecting the conversion of this Note such number of its shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of this Note, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect such
conversion, the Company will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
The parties expressly acknowledge and agree that the Common Stock is subject to
registration pursuant to the Registration Rights Agreement.

Page 8 of 14

<PAGE>


                  2.10 Conversion of Note and Effect on Beneficial Ownership.
Notwithstanding anything contained herein to the contrary, the Company shall not
effect any conversion of Notes, and no Purchaser of Notes shall have the right
to convert any Notes, to the extent that after giving effect to such conversion,
the beneficial owner of such shares (together with such person's affiliates)
would have acquired, through conversion of Notes or otherwise, beneficial
ownership of a number of shares of Common Stock during the 60-day period ending
on and including the date of such conversion (the "60-Day Period"), that, when
added to the number of shares of Common Stock beneficially owned by such person
(together with such person's affiliates) at the beginning of the 60-Day Period,
exceeds 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to such conversion. For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by a person and its
affiliates shall include the number of shares of Common Stock issuable upon
conversion of the Notes with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (A) conversion of the remaining, non-converted Notes
beneficially owned by such person or any of its affiliates and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company (including, without limitation, any warrants) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by such person or any of its affiliates. Except as set
forth in the preceding sentence, for purposes of this Section 2.10, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended. For purposes of this Section 2.10, in
determining the number of outstanding shares of Common Stock, a holder may rely
on the number of outstanding shares of Common Stock as reflected in (1) the
Company's most recent Form 10-Q, Form 10-K or other public filing with the SEC,
as the case may be, (2) a more recent public announcement by the Company, or (3)
any other notice by the Company or its transfer agent setting forth the number
of shares of Common Stock outstanding. Upon the written request of any holder,
the Company shall promptly, but in no event later than one (1) Business Day
following the receipt of such notice, confirm in writing to any such 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 the
conversion of the Notes and exercise of the Warrants, by such holder or its
affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.

         3.       LIQUIDATION

                  3.1 Liquidation. For purposes of this Section 3, a liquidation
shall be deemed to be: (a) an assignment by the Company of substantially all of
its assets for the benefit of creditors, or (b) any reorganization, composition,
arrangement, liquidation or other debtor relief pursuant to any federal or state
law or through the action of any trustee or receiver of substantially all of the
assets of the Company, or (c) the Company's sale of all or substantially all of
its assets or the acquisition of the Company by another entity by way of merger
or consolidation resulting in the exchange of the outstanding shares of the
Company for securities or consideration issued, or caused to be issued, by the
acquiring corporation or its parent or subsidiary (the transactions described in
this Section 3.1 herein defined as "Sale or Merger").


Page 9 of 14

<PAGE>

                   3.2 Liquidation Rights. In the event of liquidation (as
described in Section 3.1), dissolution or winding up of the Company (a
"Liquidation Event"), Purchaser shall at its election, be entitled to receive in
exchange for and in redemption of the Note or any portion of the principal
amount thereof then outstanding, prior and in preference to any distribution of
any of the assets or surplus funds of the Company to the holders of the Common
Stock or any preferred class of stock of the Company by reason of their
ownership thereof, an amount equal to the outstanding principal amount or of
such portion thereof plus all accrued but unpaid interest thereon and
Registration Delay Payments.

                  3.3 Payments. All of the amounts to be paid to Purchaser under
this Section 3 shall be paid or set apart for payment before the consummation of
a Liquidation Event, or before the payment or setting apart for payment of any
amount for, or the distribution of any assets of the Company to the holders of
the Common Stock or any class of preferred stock in connection with any
Liquidation Event. If the assets or surplus funds to be distributed to the
holders of all notes, including this Note, are insufficient to permit the
payment to such holders of their full preferential amount, the assets and
surplus funds legally available for distribution shall be distributed ratably
among the holders of the notes and this Note in proportion to the full
preferential amount each such holder is otherwise entitled to receive.

                  3.4 Notice of Liquidation Event. If the Board of Directors of
the Company shall declare a liquidation event (as described in Section 3.1), the
Company shall mail notice thereof to the Purchaser hereof not more than ten (10)
days following such declaration by the Board of Directors.

         4.       EVENTS OF DEFAULT AND REMEDIES

                  4.1 Events of Default. The following shall constitute Events
of Default (for purposes of this Section 4, the term "Company" shall include
Lifestream Technologies, Inc. and any majority-owned subsidiary of Lifestream
Technologies, Inc.):

                  (a) default in the due and punctual payment of the principal
of the Note, or any interest accrued thereon and Registration Delay Payments,
when and as such payment shall become due and payable, whether at maturity or by
acceleration or otherwise if such payment is not made within five (5) days or
written notice given to the Company by Purchaser specifying such default; or

                  (b) any material representation or warranty of the Company in
this Note that is untrue in any material respect as of the date made; or

                  (c) default in the performance or observance of any covenant
or agreement of the Company in this Note and the continuance of such default for
a period of thirty (30) days after there has been given to the Company by
Purchaser written notice specifying such default and requiring that it be
remedied. or

                  (d) actual acceleration of the maturity of indebtedness upon
the occurrence of a default under any bond, note, debenture, lease or other
evidence of indebtedness of the Company (other than the Note and similar notes
of like tenor issued in the same offering as the Note) or under any indenture or
other instrument under which any such evidence of indebtedness has been issued
or by which it is governed in an aggregate amount of at least $100,000.00,
provided, however, that, (i) if such acceleration is rescinded, then the Event
of Default hereunder by reason of such default shall be deemed likewise to have
been thereupon cured or waived, or (ii) if such accelerated indebtedness in the
aggregate does not exceed $100,000.00 or if such acceleration is being contested
by the Company in good faith, then such acceleration shall not be deemed to be
an Event of Default; or

Page 10 of 14

<PAGE>


                  (e) insolvency (as defined in the Uniform Commercial Code as
in effect from time to time) of the Company; the making of an assignment for the
benefit of creditors; the filing or acquiescence in the filing of a petition
instituting any state or federal insolvency, bankruptcy, reorganization,
arrangement, composition, or other debtor relief proceeding; the petition of or
application to any tribunal for a receiver or trustee for itself or for any
substantial part of any of its property; the commencement of any proceeding
under any reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any federal or state jurisdiction, whether now or
hereafter in effect, or the commencement against the Company of any such
proceeding or the appointment of a receiver or any trustee for the Company or
any part of the Company's property; or

                  (f) the entry of any judgment against the Company or the
attachment, seizure of, or levy against the Company with respect to a claim for
any amount in excess of $100,000.00 that remains unpaid, unstayed, undischarged,
unbonded, or undismissed for a period of thirty days; or

                  (g) the filing of record of any notice of lien, levy or
assessment with respect to any or all of the Company's assets by the United
States Government, or any department, agency or instrumentality thereof, or by
any state, county, municipal or other governmental authority, or the automatic
imposition of a lien, whether coate or otherwise, because of failure to pay any
taxes or debt owing at any time hereafter to any one or more of such entities,
upon any or all of the Company's assets, which lien is not paid on the payment
date thereof unless such lien, levy or assessment is contested in good faith and
for which adequate reserves have been maintained.

                  4.2      Acceleration of Maturity, Rescission and Annulment.

                  (a) If an Event of Default occurs and is continuing then and
in any such case Purchaser may declare the outstanding principal amount of the
Note to be due and payable immediately, without advance notice to the Company,
and, upon any such declaration, the outstanding principal amount of the Note,
and the interest accrued thereon and Registration Delay Payments, together with
all costs of collection, shall immediately become due and payable.

                  (b) At any time after any declaration of acceleration has been
made as provided in this Section 4.2, Purchaser may, by written notice to the
Company, rescind and annul such declaration and its consequences. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.

                  4.3 Suits for Enforcement. In case any one or more Events of
Default shall have occurred and be continuing, Purchaser may proceed to protect
and enforce Purchaser's rights either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant or agreement
contained herein or in aid of the exercise of any power granted herein or
proceed to enforce the payment of the Note or to enforce any other legal or
equitable right of Purchaser.

Page 11 of 14

<PAGE>

                  4.4 Remedies Cumulative. No remedy herein conferred upon
Purchaser is intended to be exclusive of any other remedy and each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise.


                  4.5 Remedies Not Waived. No course of dealing between the
Company and Purchaser or any delay in exercising any rights hereunder shall
operate as a waiver by Purchaser.

         5.       AMENDMENT AND WAIVER

                  5.1 Procedure for Amendment and Waiver. Any term, covenant,
agreement or condition hereof may be amended by the Company and Purchaser or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively) by Purchaser; provided, however, that
any such amendment shall be effective only if made in writing and executed by
both the Company and Purchaser, and any such waiver shall be effective only if
made in writing and executed by Purchaser; and, further provided that no such
waiver shall extend to or affect any obligation which is not expressly so
waived.

         6.       MISCELLANEOUS

                  6.1 Successors and Assigns and Bound by Covenants. All
covenants, stipulations, promises and agreements herein contained shall bind and
inure to the benefit of the Company and Purchaser and their respective permitted
successors and assigns.

                  6.2 Severability. If any one or more of the provisions of this
Note shall be determined to be invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and the remaining provisions hereof shall not in any way
be impaired.

                  6.3 Headings. The headings in this Note are inserted for
convenience only and do not constitute a part of this Note.

                  6.4 Governing Law. This Note shall be construed in accordance
with and governed by the laws of the State of New York.

                  6.5 Loss, Theft, Destruction or Mutilation of Notes. Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Note and, in the case of any such loss, theft
or destruction, upon receipt of any indemnity bond in such reasonable amount as
the Company may determine or, in the case of any such mutilation, upon surrender
and cancellation of the Note, the Company shall make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Note, a new Note of like tenor and
unpaid principal amount and dated as of the date to which interest and
Registration Delay Payments have been paid on the Note so lost, stolen,
destroyed or mutilated.

                  6.6 Survival of Covenants, Representations and Warranties. All
representations, warranties, covenants and agreements of the Company contained
in the Note shall survive the execution and delivery of the Note and shall
continue in full force and effect thereafter.

Page 12 of 14

<PAGE>


                  6.7 Assignment. Subject to applicable securities laws,
Purchaser may assign or sell or otherwise convey the Note or any and all of the
rights and interests inuring to its benefit hereunder with the consent of the
Company, which consent may not be unreasonably withheld. In the event that, with
the consent of the Company, Purchaser proposes to assign the Note to more than
one person to hold same as tenants-in-common or any similar joint ownership, the
provisions of the Note shall be modified by agreement of the Company and
Purchaser to reflect such proposed assignment, including a modification of
Section 5 hereof to provide for amendment or waiver by the Company and the
holders of two-thirds (2/3) of the outstanding principal amount.

                  6.8 Interest Rights Preserved. A Note delivered upon transfer
of or in exchange for or in lieu of this Note shall carry all the rights to
interest accrued and unpaid and Registration Delay Payments, and to accrue, that
were carried by this Note, and each such Note shall be so dated that neither
gain nor loss in interest or Registration Delay Payments shall result from such
transfer, exchange or substitution.

                  6.9 Notices. Any notice or other document required or
permitted to be given or delivered to the Purchaser shall be delivered at, or
sent by certified or registered mail, postage prepaid, to the Purchaser's
address as set forth in the Company's records, or to such other address as shall
have been furnished to the Company in writing by the Purchaser, and a copy of
any such notice shall be provided to Purchaser's counsel as notified from time
to time by Purchaser to the Company. Any notice or other document required or
permitted to be given or delivered to the Company shall be delivered at, or sent
by certified or registered mail, postage prepaid, to, the address of the Company
as set forth following its signature below, or to such other address as shall
have been furnished to the Purchaser in writing by the Company. Any notice or
other document so addressed and mailed by registered or certified mail shall be
deemed to be given when so mailed. Any notice so addressed and otherwise
delivered shall be deemed to be given when actually received by the addressee.
The addresses and facsimile numbers for such communications shall be:

         If to the Company:

                  Lifestream Technologies, Inc.
                  510 West Clearwater Loop, Suite 101
                  Post Falls, Idaho 83854
                  Attention:        Brett Sweezy

         If to Purchaser:

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

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

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

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


Page 13 of 14


<PAGE>


         IN WITNESS WHEREOF, the Company has caused this Note to be executed in
its corporate name, all as of the _th day of _________, 2001.

[CORPORATE SEAL]                            LIFESTREAM TECHNOLOGIES, INC.


Attest:                                     By:
       ------------------------------          ---------------------------------
         Title:                                   Title:

                                                  510 Clearwater Loop
                                                  Suite 101
                                                  Post Falls, ID 83854








Page 14 of 14