EXHIBIT 10.8

THE RIGHTS OF THE HOLDER OF THIS CONVERTIBLE  PROMISSORY NOTE, COMMON STOCK WITH
RESPECT  TO THE  SALE,  TRANSFER,  ASSIGNMENT,  PLEDGE OR OTHER  ENCUMBRANCE  OR
DISPOSITION OF THIS  CONVERTIBLE  PROMISSORY  NOTE OR OF THE COMMON STOCK OF THE
COMPANY  ISSUABLE UPON  CONVERSION  HEREOF ARE SUBJECT TO THE  RESTRICTIONS  SET
FORTH IN SECTION 5 OF THIS CONVERTIBLE PROMISSORY NOTE.


                    CONVERTIBLE PROMISSORY NOTE-COMMON STOCK

$1,199,885.55                                              Miami, Florida
                                                    Effective September 28, 2007


FOR VALUE RECEIVED,  subject to the terms and conditions  hereinafter set forth,
the  undersigned,  TX Holdings,  Inc., a Georgia  corporation  (the  "Company"),
hereby  promises to pay to the order of Mark S. Neuhaus (the  "Holder"),  at its
office  their  address  ______________,  Miami,  Florida  ______,  or such other
address as the Holder shall specify in writing to the Borrower,  in lawful money
of the United States and in immediately available funds, the principal amount of
One Million One Hundred  Ninety-Nine  Thousand Eight Hundred Eighty-Five Dollars
and fifty-Five Cents  ($1,199,885.55)  or the aggregate unpaid principal balance
of all  amounts  from  time to time  outstanding  hereunder  as set forth in the
Schedule to Convertible Promissory Note attached hereto as Exhibit "A".

SECTION 1. PAYMENT  OBLIGATION.  If not sooner  converted into "Common Stock" of
the Company in accordance  with Section 2 below,  the  principal  amount of this
Convertible  Promissory Note shall be due and payable on September 30, 2009 (the
"Maturity Date". The outstanding principal balance hereunder shall bear interest
from the date of this Note until paid in full at the rate of Eight  Percent (8%)
per annum.

SECTION 2. CONVERSION.

2.1 Automatic Conversion.  Subject to and upon compliance with the provisions of
this  Section  2. 1, on the date (the  "Conversion  Date")  on which the  Holder
receives the  "Certificate  of  Satisfaction"  (as defined in Section 2.2 below)
this Convertible  Promissory Note shall, without any action required on the part
of either the  Borrowers  or the Holder,  automatically  convert  into,  and the
Holder  shall be  entitled  to receive  in lieu of  payment of the  indebtedness
evidenced  hereby, a number of shares of "Common Stock" (as defined below) equal
to the quotient of (i) a sum equal to the entire outstanding principal amount of
this  Convertible  Promissory Note,  divided by (ii) the "Conversion  Price" (as
defined in Section 2.7 below) in effect at the Conversion  Date. As used in this
Convertible Promissory Note, the term "Common Stock" means, as of the applicable
time, the Common Stock of the Company.

2.2 Conversion  Conditions.  The Board of Directors and the  Shareholders of the
Majority  of the  outstanding  Common  shares of the Company  have duly  adopted
resolutions approving the terms of this Convertible Promissory Note. The Company
has determined  that this is in the best interest of the Company in that (i) the
Company does not currently have the liquidity to pay this  obligation;  (ii) the
Note is  unsecured;  (iii)  the  Note is for a two  year  period;  and  (iv) the
interest rate of 8% is substantially  below the rate available to the Company to
borrow

2.3  Issuance  of  Certificates.  As  promptly  after  the  Conversion  Date  as
reasonably  practicable,  the Company shall instruct its transfer agent to issue
and  deliver  to the  Holder  at the  address  of the  Holder  set  forth on the
Company's  records,   without  any  charge  to  the  Holder,  a  certificate  or
certificates  (issued in the name of the Holder or, subject to the provisions of
Section hereof, in such name as the Holder may designate) for the number of full
shares of Common  Stock of the  Company  issuable  upon the  conversion  of this
Convertible Promissory Note.

2.4 Status on Conversion.  Upon conversion of this Convertible  Promissory Note,
the  Holder  shall be deemed to have  become  the  stockholder  of record of the
shares of Common Stock into which this Convertible  Promissory Note is converted
on the  Conversion  Date (unless the transfer books of the Company are closed on
that  date,  in which  event  the  Holder  shall be deemed  to have  become  the
stockholder of record on the next succeeding day on which the transfer books are
open and the conversion shall be at the rate in effect on such date).


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2.5 Taxes Upon  Conversion.  The Company shall pay any and all taxes (other than
taxes in respect of income or gross  receipts) that may be payable in respect of
the  issuance or delivery of any shares of Common  Stock on  conversion  of this
Convertible  Promissory Note. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and  delivery of shares of Common Stock in a name other than that of the Holder,
and the Company  shall not be required to issue or deliver such shares of Common
Stock  unless or until the person or persons  requesting  the  issuance  thereof
shall  have  paid to the  Company  the  amount  of any such  tax or  shall  have
established to the  satisfaction  of the Company that such taxes have been paid,
if any.

2.6 Elimination of Fractional  Interests.  No fractional  shares of Common Stock
shall be issued upon conversion of this  Convertible  Promissory Note, nor shall
the Company be required to pay cash in lieu of  fractional  interests,  it being
the intent of the parties that all fractional  interests shall be eliminated and
that all  issuances  of Common  Stock shall be rounded up to the  nearest  whole
share.

2.7  Conversion  Price.  The  initial   Conversion  Price  of  this  Convertible
Promissory  Note shall be Twenty Eight Cents ($0.28) per share.  The  Conversion
Price shall be adjusted from time to time as follows:

                        (a) if the  Company  shall  at any time  after  the date
            hereof  (i) issue  any  shares of  Common  Stock (or  "Common  Stock
            Equivalents", as defined in Section 9. 1 below) by way of a dividend
            or other  distribution  on any  stock  of the  Company  and  without
            consideration,  or (ii) subdivide or combine its outstanding  shares
            of Common Stock or Common Stock  Equivalents,  the Conversion  Price
            shall be adjusted (to the nearest full cent) by multiplying  (x) the
            Conversion  Price in effect  immediately  prior to the adjustment by
            (y) a fraction, the numerator of which is the total number of shares
            of  Common  Stock,  or  Common  Stock  Equivalents,  as  applicable,
            outstanding  immediately  before the  issuance  of  shares,  and the
            denominator  of which is the total number of shares of Common Stock,
            or Common Stock Equivalents, as applicable,  outstanding immediately
            after such issuance or sale. For the purposes of any  computation to
            be made in accordance  with this Section 2., shares of Common Stock,
            or Common  Stock  Equivalents,  issuable by way of dividend or other
            distribution  on any  stock of the  Company  shall be deemed to have
            been  issued  immediately  after the  opening of business on the day
            following  the record  date for the  determination  of  stockholders
            entitled to receive such dividend or other distribution.

                        (b) if the Company  shall sell or issue  Common Stock or
            Common  Stock  Equivalents  (other  than  pursuant  to  transactions
            described in Section 2.7(a) above), or rights, options,  warrants or
            convertible   securities   (or  options  to   purchase   convertible
            securities) containing the right to subscribe for or purchase shares
            of Common Stock or Common Stock Equivalents,  without  consideration
            or for a  consideration  per share less than the "Market  Value" (as
            defined  in  Section  9.1  below)  per  share  of the  Common  Stock
            immediately  prior to the date of such sale or issuance (which date,
            in the event of distribution to stockholders,  shall be deemed to be
            the  record  date  set  by the  Company  to  determine  stockholders
            entitled to participate in such distribution),  the Conversion Price
            shall be adjusted (to the nearest full cent) so that the  Conversion
            Price shall equal the price determined by multiplying the Conversion
            Price  in  effect  immediately  prior  to the  date of such  sale or
            issuance (which date, in the event of distribution to  stockholders,
            shall  be  deemed  to be the  record  date  set by  the  Company  to
            determine stockholders entitled to participate in such distribution)
            by a  fraction,  the  numerator  of which shall be (x) the number of
            shares of Common Stock and Common Stock  Equivalents  outstanding on
            the date of such sale or issuance, plus (y) the number of additional
            shares  of Common  Stock  and  Common  Stock  Equivalents  which the
            aggregate  consideration  received by the Company upon such issuance
            or sale (plus the aggregate of any additional  amount to be received
            by the Company  upon the  exercise  or  conversion  of such  rights,
            options,  warrants,  convertible  securities  or options to purchase
            convertible securities) would purchase at the Market Value per share
            of the Common Stock;  and the  denominator of which shall be (x) the
            number  of  shares of Common  Stock  and  Common  Stock  Equivalents
            outstanding  on the  date of such  issuance  or  sale,  plus (y) the
            number  of  additional  shares  of Common  Stock  and  Common  Stock
            Equivalents  offered for subscription or purchase (or into which the
            Common Stock Equivalents so offered are  convertible).  For purposes
            of the foregoing adjustment, the consideration per share in the case
            of rights, options,  warrants and convertible securities (or options
            to purchase convertible securities), shall be determined by dividing
            (i) the total  amount  received  or  receivable  by the  Company  in
            consideration  of the  sale  or  issuance  of the  rights,  options,
            warrants  and   convertible   securities  (or  options  to  purchase
            convertible  securities) plus the total consideration payable to the
            Company  upon  conversion  or  exercise  thereof,  by (ii) the total
            number  of  shares  of  Common  Stock  covered  by (or  issuable  on
            conversion of the Common Stock Equivalents  covered by) such rights,
            options, warrants and convertible securities. Such adjustments shall
            be made successively whenever such warrants or rights are issued. To
            the extent that shares of Common Stock or Common  Stock  Equivalents
            are not  delivered  after the  expiration  of such rights,  options,
            warrants or  conversion  features  of  convertible  securities,  the
            Conversion  Price shall be readjusted  (to the nearest full cent) to
            the  Conversion  Price  which  would  then  be  in  effect  had  the
            adjustments  made  upon the  issuance  of such  rights,  options  or
            warrants  been made upon the basis of delivery of only the number of
            shares  of Common  Stock  (or  Common  Stock  Equivalents)  actually
            delivered.


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                        (c) in case the  Company  hereafter  shall  fix a record
            date for making a  distribution  to the  holders of Common  Stock of
            assets or evidences of its indebtedness (excluding cash dividends or
            distributions   out  of  earnings  and  dividends  or  distributions
            referred to in Section 2.7(a) above) or subscription rights, options
            or warrants for Common Stock or Common Stock Equivalents  (excluding
            those referred to in Section  2.7(b) above),  then in each such case
            the  Conversion  Price in effect  after  such  record  date shall be
            adjusted to the price determined by multiplying the Conversion Price
            in effect immediately prior thereto by a fraction,  the numerator of
            which shall be the "Market  Value" (as defined in Section 9.1 below)
            per share of Common Stock, less the fair market value (as reasonably
            determined  by the  Company's  Board of Directors) of said assets or
            evidences of  indebtedness  so  distributed  or of such Common Stock
            subscription  rights,  options and  warrants or of such Common Stock
            Equivalents  applicable  to one  share  of  Common  Stock,  and  the
            denominator  of which shall be such Market Value per share of Common
            Stock.  Such  adjustment  shall be made  successively  whenever  the
            record  date  for  such  distribution  is  fixed  and  shall  become
            effective immediately after such record date.

2.8  Effect of  Reclassification.  Consolidation,  Merger,  etc,  In case of the
reclassification  or change of outstanding  shares of Common Stock (other than a
change in par value,  or from no par value to par value or vice  versa,  or as a
result of a subdivision or combination),  or in the case of any consolidation or
merger of the Company with or into a corporation  (other than a consolidation or
merger into which the Company is the  surviving  corporation  and which does not
result in any  reclassification  or change of outstanding shares of Common Stock
except a change as a result of a subdivision  or combination of such shares or a
change in par value as described  above), or in the case of a sale or conveyance
to another corporation of all or substantially all of the assets of the Company,
this Convertible  Promissory Note shall be converted on the Conversion Date into
the kind and  number of shares of stock  and/or  other  securities  or  property
receivable upon such reclassification,  change,  consolidation,  merger, sale or
conveyance  by a holder of the number of shares of Common  Stock into which this
Convertible  Promissory  Note might have been converted  immediately  before the
time of  determination  of the  stockholders of the Company entitled to- receive
such shares of stock and/or other  securities or property.  The Company shall be
obligated to retain and set aside, or otherwise make fair provision for exercise
of the  right of the  Holder  to  receive,  the  shares  of stock  and/or  other
securities or property provided for in this Section 2.8.

2.9 Certificate  Concerning Adjusted  Conversion Price.  Whenever the Conversion
Price is adjusted  pursuant to this Section 2.8, the Company promptly shall: (i)
place on file at its principal executive office an officer's  certificate signed
by the  chief  financial  officer  or  controller  of  the  Company  showing  in
appropriate detail the facts requiring such adjustment, the computation thereof,
and the adjusted  Conversion  Price, and shall exhibit the certificate from time
to time to the Holder of this Convertible  Promissory Note if the Holder desires
to inspect the same;  and (ii) mail or cause to be mailed to the Holder,  in the
manner provided for giving notice pursuant to this Convertible  Promissory Note,
a notice  stating  that  such  adjustment  has been made and  setting  forth the
adjusted Conversion Price.

2.10  Reservation  and Listing of Shares for Issuance.  The Company shall at all
times  from and after the first  date on which  the  Conversion  Conditions  are
satisfied,  reserve and keep available out of its authorized and unissued shares
of Common Stock, for the purpose of effecting the conversion of this Convertible
Promissory Note, such number of its duly authorized shares as shall from time to
time be sufficient to effect the conversion of this Convertible Promissory Note.
The Company  covenants that all shares of Common Stock issued upon conversion of
this  Convertible  Promissory  Note in compliance  with the terms hereof will be
duly and validly  issued and fully paid and  non-assessable.  From and after the
first date on which the Conversion Conditions are satisfied, and as long as this
Convertible  Promissory  Note shall be  outstanding,  the Company  shall use its
reasonable  best  efforts  to cause all  shares of Common  Stock  issuable  upon
conversion of this Convertible Promissory note to be listed (subject to official
notice of  issuance)  on all  securities  exchanges on which the Common Stock is
then listed.


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SECTION 3. SECURITY.

           This Convertible Promissory Note is unsecured.

SECTION 4. TRANSFER, EXCHANGE AND REPLACEMENT OF NOTE.

This Convertible Promissory Note shall be transferable only on the note register
of the Company  maintained at the office of the Company's  transfer  agent or at
the  principal  executive  office of the  Company,  upon  delivery  thereof duly
endorsed by, or accompanied  (if required by the Company) by proper  evidence of
succession,  assignment or authority to transfer executed by the Holder, in each
case accompanied by any necessary transfer tax imposed upon transfer or evidence
thereof. In addition, prior to such transfer the Holder (and, if applicable, the
proposed  transferee)  shall  comply  with the  terms  of  Section  6.  Upon any
registration  of  transfer,  the  Borrowers  shall  execute  a  new  Convertible
Promissory Note to the person entitled thereto. The Borrowers may deem and treat
the person in whose name this  Convertible  Promissory Note is registered as the
absolute,  true and lawful  owner of this  Convertible  Promissory  Note for all
purposes.  Upon receipt by the Borrowers of evidence reasonably  satisfactory to
them  of  the  loss,  theft,  destruction  or  mutilation  of  this  Convertible
Promissory  Note,  the  Borrowers  shall  make  and  deliver  a new  Convertible
Promissory Note of like tenor, in lieu of this  Convertible  Promissory Note, if
(i) in case of loss, theft or destruction,  the Borrowers  receive  indemnity or
security reasonably  satisfactory to them, (ii) the Borrowers are reimbursed for
all  reasonable  expenses  incidental  to  such  replacement,   and  (iii)  this
Convertible Promissory Note is surrendered and cancelled, if mutilated.

SECTION 5. PREPAYMENT.

The principal amount of this Convertible  Promissory Note may not be prepaid, in
whole or in part, without the written consent of the Holder.

SECTION 6.  ACQUISITION FOR INVESTMENT AND RESTRICTIONS. ON TRANSFER.

6.1         Investment Intent.

                        (a)  The  Holder,  by  acceptance  of  this  Convertible
            Promissory Note,  represents that this  Convertible  Promissory Note
            and any shares of Common Stock  issuable.  upon  conversion  of this
            Convertible  Promissory  Note are being and will be acquired for the
            Holder's own account for  investment  and not with a view to, or for
            resale in connection with, the distribution  thereof in violation of
            applicable  securities  laws,  and that the  Holder  has no  present
            intention of distributing or reselling this  Convertible  Promissory
            Note or any such shares of Common Stock.

                        (b)  The  Holder,  by  acceptance  of  this  Convertible
            Promissory Note,  further represents that it has not offered or sold
            this Convertible Promissory Note, or any shares of Common Stock into
            which this Convertible  Promissory Note is convertible,  directly or
            indirectly  to any other  "Person," as defined in Section 9.1 below,
            and that the Holder is not  acquiring  this  Convertible  Promissory
            Note or any such Common Stock for the account of any other Person.

6.2 Restrictions on Transfer.  The Holder, by the acceptance of this Convertible
Promissory Note, agrees that the Holder will not sell, transfer, assign, pledge,
hypothecate or otherwise  dispose of this Convertible  Promissory Note or any of
the  shares  of  Common  Stock  issuable  upon  conversion  of this  Convertible
Promissory  Note,  or  any  interest  in the  same  unless:  (i) a  registration
statement under the Securities Act of 1933, as amended (the "Act"), covering the
sale or transfer  of this  Convertible  Promissory  Note or the shares of Common
Stock issuable upon conversion of this  Convertible  Promissory Note as the case
may be, is in effect; (ii) the Holder first provides the Company with an opinion
of counsel (which may be counsel for the Company)  reasonably  acceptable to the
Company  to  the  effect   that  such  sale,   transfer,   assignment,   pledge,
hypothecation or other  disposition will be exempt from the registration and the
prospectus  delivery  requirements  of the Act;  or (iii) such  sale,  transfer,
assignment,  pledge,  hypothecation  or  other  disposal  shall  be  made  to  a
corporation or other entity which is  wholly-owned by the Holder or by which the
Holder  is  wholly-owned.   Any  such  sale,   transfer,   assignment,   pledge,
hypothecation  or other  disposition  shall also  comply with  applicable  state
securities or "Blue Sky" laws.


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6.3  Legends.  Certificates  evidencing  shares of Common  Stock  issuable  upon
conversion of this Convertible Promissory Note shall bear the following legend:

"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT  PURPOSES ONLY AND NOT
WITH A VIEW TO THE  DISTRIBUTION  THEREOF IN VIOLATION OF APPLICABLE  SECURITIES
LAWS,  AND SUCH  SECURITIES  MAY NOT BE SOLD OR  TRANSFERRED  UNLESS THERE IS AN
EFFECTIVE  REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR THE
COMPANY  RECEIVES AN OPINION OF COUNSEL  (WHICH MAY BE COUNSEL FOR THE  COMPANY)
REASONABLY  ACCEPTABLE  TO THE  COMPANY  STATING  THAT SUCH SALE OR  TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

The certificates  representing such shares of Common Stock, and each certificate
issued upon  transfer  thereof,  also shall bear any legend  required  under any
applicable  state  securities  or "Blue Sky" laws.  The Holder  consents  to the
Company's  making a  notation  on its  records  or  giving  instructions  to any
transfer  agent of the Common Stock in order to implement  the  restrictions  on
transfer of this Convertible Promissory Note and shares of Common Stock issuable
upon  conversion  hereof set forth  herein.  The Company shall remove any legend
endorsed on this Convertible  Promissory Note or on such a certificate,  and any
stock  transfer   instructions   and  record  notations  with  respect  to  this
Convertible  Promissory  Note and shams of Common Stock issuable upon conversion
hereof,  and shall issue a  Convertible  Promissory  Note or such a  certificate
without such legend to the Holder if. (i) this  Convertible  Promissory  Note or
any Common Stock issuable upon conversion hereof is registered under the Act and
under any  applicable  state  securities  laws,  as the case may be; or (ii) the
Holder provides the Company with an opinion of counsel (which may be counsel for
the Company)  reasonably  acceptable  to the Company to the effect that a public
sale or transfer of this  Convertible  Promissory  Note or such shares of Common
Stock may be made  without  registration  under the Act or under any  applicable
state securities laws, as the case may be.

SECTION 7. DEFAULTS AND REMEDIES.

7.1 Events of Default.  The occurrence and continuance of any one or more of the
following events shall constitute an "Event of Default" hereunder:

                        (a) the Borrowers  fail to pay any amount due under this
            Convertible Promissory Note within two days of the date when due;

                        (b) the  Borrowers  fail to  observe,  perform or comply
            with any covenant,  agreement or term contained in this  Convertible
            Promissory Note and, if subject to remedy,  the same is not remedied
            within 30 days  after  written  notice  from the  Holder;  provided,
            however, that such 30-day period shall be extended for an additional
            30 days so long as within such initial  30-day  period the Borrowers
            have commenced to cure and are proceeding with due diligence to cure
            such failure; or

                        (c) either  Borrower makes a general  assignment for the
            benefit of  creditors;  any  proceeding  is instituted by or against
            either  Borrower  seeking to  adjudicate it a bankrupt or insolvent,
            seeking  liquidation,   winding  up,  reorganization,   arrangement,
            adjustment,  protection,  relief or  composition  of it or its debts
            under any law relating to bankruptcy,  insolvency or  reorganization
            or relief of debts,  or seeking  the entry of an order for relief or
            the appointment of a receiver, trustee or other similar official for
            it or for any  substantial  part of its property,  provided that, in
            any such case, if the same is dismissed or vacated within 60 days of
            being  instituted,  then any such default shall be deemed cured;  or
            either  Borrower takes any corporate  action to authorize any of the
            actions set forth above.

7.2 Remedies.  Upon any "Event of Default" as defined in Section 7.1 above,  the
Holder  may, at its sole  option,  declare the entire  amount of  principal  and
accrued,   unpaid  interest  on  this  Convertible   Promissory  Note  (if  any)
immediately due and payable, by written notice to the Borrowers,  in which event
the Borrowers  immediately  shall pay to the Holder the entire unpaid  principal
balance of this  Convertible  Promissory  Note  together  with  accrued,  unpaid
interest thereon to the date of such payment. No delay or omission of the Holder
to exercise  any right or power  occurring  upon any Event of Default  hereunder
shall  impair any such right or power or shall be  construed  as a waiver of any
such  Event  of  Default  or an  acquiescence  therein.  To the  fullest  extent
permitted  by law,  the  Holder's  rights and  remedies  under this  Convertible
Promissory Note shall be cumulative,  and the Holder shall have all other rights
and  remedies  not  inconsistent  herewith  as are  provided  under the  Uniform
Commercial Code as in effect in the relevant jurisdictions, by law or in equity.
No exercise by the Holder of one right or remedy shall be deemed an election, no
waiver by the Holder of any default on the part of the Borrowers shall be deemed
a  continuing  waiver,  and no delay by the Holder  shall  constitute  a waiver,
election or acquiescence by it.

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7.3 Waivers. The Borrowers waive presentment, demand, notice of dishonor, notice
of  default  or  delinquency,  notice of  acceleration,  notice of  protest  and
nonpayment,  notice of costs, expenses or losses and interest thereon, notice of
interest on interest  and  delinquence  in taking any action to collect any sums
owing under this Convertible  Promissory Note or in a proceeding  against any of
the rights or interests in or to properties securing payment of this Convertible
Promissory Note.

SECTION 8. REGISTRATION RIGHTS.

The  Company  and the  Holder  (for  itself and all  subsequent  holders of this
Convertible   Promissory  Note  and  of  the  Common  Stock  into  which  it  is
convertible),  by acceptance of this Convertible  Promissory Note, agree that if
he Company  Registers  any Common Stock of the Company will  register the Common
Shares if the Holder  elects to convert this Note to Common  Shares prior to the
Registration.


SECTION 9. MISCELLANEOUS.

9.1  Definitions.  As used herein the  following  terms shall have the following
meanings:

                        "Closing  Price" on a given day shall mean the last sale
            price regular way or, in case no such  reported  sales take place on
            such  day,  the  average  of the last  reported  bid and ask  price,
            regular  way, in either case on the  principal  national  securities
            exchange or the NASDAQ/National Market System on which the shares of
            Common  Stock  are  admitted  to  trading  or  listed,  or if not so
            admitted or listed, the representative closing bid price as reported
            by  NASDAQ  or other  similar  organization  if  NASDAQ is no longer
            reporting such information or, if not so available,  the fair market
            price as  reasonably  determined  by the Board of  Directors  of the
            Company.

"Common Stock  Equivalents"  shall mean securities that are convertible  into or
exchangeable or exercisable for shares of Common Stock.

"Market  Value" per share of Common  Stock at any date shall mean the average of
the daily  Closing  Price for the Common Stock for the 5 rading Days before such
date.

"Person" shall mean any individual or entity,  including without  Limitation any
corporation, partnership, joint venture or trust.

"Subsidiary"  shall mean any corporation or association -of which the Company or
one or more of its  Subsidiaries  owns at least a  majority  of the  outstanding
voting stock or other equity  interest having by its terms ordinary voting power
to  elect  a  majority  of  the  board  of  directors  of  such  corporation  or
association.

"Trading  Day"  shall  mean a day on which  the  principal  national  securities
exchange on which  shares of Common  Stock of the Company are listed or admitted
to trading is open for the  transaction  of  business  or, if the shares of such
Common  Stock are not listed or admitted to trading on any  national  securities
exchange,  a Monday,  Tuesday,  Wednesday,  Thursday or Friday on which  banking
institutions  in the Borough of Manhattan,  City and State of New York,  are not
authorized or obligated by law or executive order to close.


                                       70
<PAGE>

9.2  Merger,  Consolidation  and Sale.  Nothing  contained  in this  Convertible
Promissory Note shall prevent any  consolidation or merger of a Borrower with or
into any other  corporation or corporations  (whether or not affiliated with the
Borrowers)  or successive  consolidations  or mergers in which a Borrower or its
successor or successors  shall be a party or parties,  or shall prevent any sale
or conveyance of all or any  substantial  portion of the assets of a Borrower to
any other corporation (whether or not affiliated with the Borrowers)  authorized
to acquire and operate the same.

9.3 Notices. Any and all notices,  requests,  demands,  designations,  consents,
offers,  acceptances or any other communications to be given by any party to any
other party under the terms and conditions of this  Convertible  Promissory Note
shall be in writing  and  personally  delivered,  or sent by first  class  mail,
registered  or  certified,  postage  pre-paid,  or sent by  reputable  overnight
courier service, facsimile,  telecopy or telex, addressed as follows, or to such
other address as may be designated in writing by the party to which notice is to
be sent:

If to the Borrowers, to:

TX Holdings, Inc.


Miami, Florida
Attention: Jose Fuentes



With a copy to:

Dexter & Dexter Attorneys at Law, PC
1360 South 740 East
Orem, Utah 84097
Attention: Michael A. Cederstrom, Esq.

If to the Holder, to:

Mark s. Neuhaus

Miami, Florida
Attention: Mark S. Neuhaus

Each  such or other  communication  notice  shall be deemed to be given (a) when
received if personally  delivered or sent by facsimile,  telecopy or telex;  (b)
three days after deposit in the United States mail,  first class,  registered or
certified,  postage pre-paid and addressed as set forth herein,  or (c) 48 hours
after deposit with a reputable  overnight courier service,  charges pre-paid and
addressed as set forth herein. Notwithstanding the foregoing, the failure of the
Holder to provide Heller, Ehrman, White & McAuliffe with a copy of any notice or
other  communication  given to the  Borrowers  hereunder  shall not  affect  the
validity of enforceability thereof.

9.4 Successors.  All the covenants,  agreements,  representations and warranties
contained in this Convertible  Promissory Note shall bind the parties hereto and
their respective heirs, executors, administrators,  distributees, successors and
assigns.

9.5 Governing Law. This Convertible Promissory Note is delivered in the State of
Florida and shall be construed and enforced in accordance with, and governed by,
the laws of the State of Florida  without  application  of the  conflict of laws
provisions  or  principles  thereof.  All  persons  and  entities  in any manner
obligated  under  this  Convertible   Promissory  Note  hereby  consent  to  the
jurisdiction  of any federal or state court  within the State of Florida  having
proper venue,  and also consent to service of process by any means authorized by
federal or Florida law.

9.6  Headings.  The Section  headings in this  Convertible  Promissory  Note are
inserted for purposes of  convenience  only, and shall not affect in any way the
meaning or interpretation hereof.


                                       71
<PAGE>

9.7  Attorneys'  Fees. If any action at law or in equity is necessary to enforce
or interpret  the terms of this  Convertible  Promissory  Note or the rights and
duties of the parties in relation hereto, the prevailing party will be entitled,
in addition to any other relief granted,  to all costs and expenses  incurred by
such prevailing party, including,  without limitation, all reasonable attorneys'
fees.

9.8 Time of the Essence.  Time is of the essence with respect to every provision
hereof.

9.9 Usury.  Notwithstanding  any other provision of this Convertible  Promissory
Note to the  contrary,  all  agreements  among the  Borrowers and the Holder are
expressly  limited,  so that in no event or contingency  whatsoever,  whether by
reason of the advancement of the proceeds of this  Convertible  Promissory Note,
acceleration  of  maturity  of the unpaid  principal  balance,  the  addition of
accrued  interest to principal or otherwise,  shall the amount paid or agreed to
be paid to the Holder for the use,  forbearance  or detention of the money to be
advanced under this  Convertible  Promissory Note exceed the highest lawful rate
permissible under applicable usury laws. If, under any circumstances whatsoever,
fulfillment of any provision of this  Convertible  Promissory  Note or any other
agreement   pertaining  to  this  Convertible   Promissory  Note,  after  timely
performance of such provision is due,  shall involve  transcending  the Limit of
validity  prescribed  by law  which  a court  of  competent  jurisdiction  deems
applicable,  then the  obligations to be fulfilled shall be reduced to the limit
of such validity, and if, under any circumstances  whatsoever,  the Holder shall
ever  receive as interest an amount that exceeds the highest  lawful  rate,  the
amount that would be excessive  interest shall not be required to be paid by the
Borrowers,  and the Holder shall hold in trust and return to the  Borrowers  any
interest paid hereunder in excess of the highest lawful rate.

9.10  Endorsement  of Schedule.  The  Borrowers  hereby  authorize the Holder to
endorse on the  Schedule  all loans made to the  Borrowers  evidenced  hereby in
accordance with the Debt Conversion Agreement,  which endorsements shall, in the
absence of manifest error, be conclusive as to the outstanding principal balance
under this Convertible  Promissory Note; provided,  however, that the failure to
make an  endorsement  or the  inaccuracy of any  endorsement  shall not limit or
otherwise  affect the  obligations  of the Borrowers  under the Debt  Conversion
Agreement or this Convertible Promissory Note.

IN WITNESS WHEREOF,  the parties have executed this Convertible  Promissory Note
effective as of the date first above written.

Borrower:

TX HOLDINGS, INC> a Georgia corporation


By: /s/ Michael A. Cederstrom
    -------------------------
Michael A. Cederstrom
Its: Chief Financial Officer


Holder


    /s/ Mark S. Neuhaus
    -------------------------
Mark S. Neuhaus, Individually


                                       72
<PAGE>

                                                         EXHIBIT A
                                                         ---------

                                         SCHEDULE TO CONVERTIBLE PROMISSORY NOTE
                                         ---------------------------------------

<TABLE>
<CAPTION>

========================================================================================================================
                                         Unpaid Principal Balance       Borrowing Availability
                                         of Convertible Promissory      Under Convertible          Name of Person Making
                                         Note                           Promissory Note            Notation
Date              Amount of Loan
========================================================================================================================
<S>               <C>                    <C>                            <C>                        <C>
9/30/07           $1,199,885.55          $1,199,885.55                  $0.00
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========================================================================================================================

</TABLE>

                                                           73