<PAGE>

                                                                    EXHIBIT 99.2

     FORM OF NOTE


THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY SATISFACTORY TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT.  ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW
THE TERMS OF THIS NOTE, INCLUDING SECTION 2(e)(viii) HEREOF.  THE PRINCIPAL
AMOUNT AND THE INTEREST THEREON REPRESENTED BY THIS NOTE MAY BE LESS THAN THE
AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 2(e)(viii) OF THIS
NOTE.



                               CONVERTIBLE NOTE
                               ----------------


                       _______ __, ______  $____________

     FOR VALUE RECEIVED, RoweCom Inc., a Delaware corporation (the "Company"),
hereby promises to pay to the order of __________________ or registered assigns
("Holder") the principal amount of ___________________ Dollars
($________________), on the Maturity Date (as defined below), and to pay simple
interest ("Interest") on the unpaid principal balance hereof at the rate of 6.0%
per annum from the date hereof until the same becomes due and payable, whether
at, maturity or upon acceleration or by conversion or redemption in accordance
with the terms hereof or otherwise.  Interest on this Note shall commence
accruing on the Issuance Date and shall be computed on the basis of a 365-day
year and actual days elapsed and shall be payable at the time of optional or
mandatory conversion or redemption of the principal to which such interest
relates in accordance with Section 1 hereof.  Any amount of interest on this
Note which is not paid when due shall bear interest at the rate of 18% per annum
from the date thereof until the same is paid ("Default Interest").
<PAGE>

     1.   Payments of Principal and Interest.  All payments of principal and
          ----------------------------------
interest on this Note (to the extent such principal and/or interest is not
converted into Common Stock in accordance with the terms hereof) shall be made
in lawful money of the United States of America by wire transfer of immediately
available funds to such account as the Holder may from time to time designate by
written notice in accordance with the provisions of this Note.  Whenever any
amount expressed to be due by the terms of this Note is due on any day which is
not a Business Day (as defined below), the same shall instead be due on the next
succeeding day which is a Business Day and, in the case of any interest payment
date which is not the date on which this Note is paid in full, the extension of
the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date.  For purposes of this Note, "Business
Day" shall mean any day other than a Saturday, Sunday or a day on which
commercial banks in The City of New York are authorized or required by law or
executive order to remain closed.  Each capitalized term used herein, and not
otherwise defined, shall have the meaning ascribed thereto in the Securities
Purchase Agreement, dated October __, 1999, pursuant to which this Note and the
Other Notes (as defined below) were originally issued (the "Securities Purchase
Agreement").  This Note and the Other Notes issued by the Company pursuant to
the Securities Purchase Agreement are collectively referred to in this Note as
the "Notes."

     2.   Conversion of Notes. This Note shall be convertible into shares of the
          -------------------
Company's common stock, $0.01 par value per share (the "Common Stock"), on the
terms and conditions set forth in this Section 2.

          (a)  Certain Defined Terms.  For purposes of this Note, the following
               ---------------------
     terms shall have the following meanings:

               (i)    "Additional Amount" means, with respect to any principal
          amount of Notes, the sum of (A) accrued and unpaid Interest on such
          principal amount and (B) Default Interest, if any, on the interest
          referred to in the immediately preceding clause (A).

               (ii)   "Approved Stock Plan" means any employee benefit plan
          which has been approved by the Board of Directors of the Company,
          pursuant to which the Company's securities may be issued to any
          employee, officer, director or consultant for services provided to the
          Company.

               (iii)  "Closing Sale Price" means, for any security as of any
          date, the last closing trade price for such security on the Principal
          Market as reported by Bloomberg, or, if the Principal Market is not
          the principal securities exchange or trading market for such security,
          the last closing trade price of such security on the principal
          securities exchange or trading market where such security is listed or
          traded as reported by Bloomberg, or if the foregoing do not apply, the
          last closing trade price of such security in the over-the-counter
          market on the electronic bulletin board for such security as reported
          by Bloomberg, or, if no last closing trade price is reported for such
          security by Bloomberg, the last
<PAGE>

          closing ask price of such security as reported by Bloomberg, or, if no
          last closing ask price is reported for such security by Bloomberg, the
          average of the lowest ask price and the lowest bid price of any market
          makers for such security as reported in the "pink sheets" by the
          National Quotation Bureau, Inc. If the Closing Sale Price cannot be
          calculated for such security on such date on any of the foregoing
          bases, the Closing Sale Price of such security on such date shall be
          the fair market value as mutually determined by the Company and the
          holders of Notes. If the Company and the holders of Notes are unable
          to agree upon the fair market value of the Common Stock, then such
          dispute shall be resolved pursuant to Section 2(e)(iii) below with the
          term "Closing Sale Price" being substituted for the term "Weighted
          Average Price." All such determinations to be appropriately adjusted
          for any stock dividend, stock split or other similar transaction
          during such period.

               (iv)   "Conversion Price" means, as of any Conversion Date (as
          defined  below) or other date of determination (including, but not
          limited to the Company Election Conversion Date (as defined in Section
          hereof)), 93% of the Weighted Average Price of the Common Stock (the
          "Daily Market Price"), provided that in no event shall the Conversion
          Price exceed the Fixed Conversion Price, each in effect as of such
          date and subject in each case to adjustment as provided herein.

               (v)    "Weighted Average Price" means, for any security as of any
          date, the dollar volume-weighted average price for such security on
          the Principal Market (as reported by Bloomberg through its "Volume at
          Price" function) or, if the Principal Market is not the principal
          securities exchange or trading market for such security, the dollar
          volume-weighted average price of such security on the principal
          securities exchange or trading market where such security is listed or
          traded (as reported by Bloomberg through its "Volume at Price"
          function), or if the foregoing do not apply, the dollar volume-
          weighted average price of such security in the over-the-counter market
          on the electronic bulletin board for such security as reported by
          Bloomberg, or, if no dollar volume-weighted average price is reported
          for such security by Bloomberg, the average of the bid prices of each
          of the market makers for such security as reported in the "pink
          sheets" by the National Quotation Bureau, Inc.  If the Weighted
          Average Price cannot be calculated for such security on such date on
          any of the foregoing bases, the Weighted Average Price of such
          security on such date shall be the fair market value as mutually
          determined by the Company and the holders of the Notes.  If the
          Company and the holders of the Notes are unable to agree upon the fair
          market value of the Common Stock, then such dispute shall be resolved
          pursuant to Section 2(e)(iii) below.  All such determinations to be
          appropriately adjusted for any stock dividend, stock split or other
          similar transaction during such period.

               (vi)   "Conversion Amount" means the sum of (A) the principal
          amount of this Note to be converted, redeemed or otherwise with
          respect to

                                       3
<PAGE>

          which this determination is being made and (B) the Additional Amount
          with respect to such principal amount, provided that the Company has
          not elected to pay such Additional Amount in cash as described in
          Section 2(c)(ii).

               (vii)   "Fixed Conversion Price" means, with respect to any Note,
          (A) as of any Conversion Date or other date of determination prior to
          and including the date which is 457 days after the Initial Issuance
          Date, $53.00 and (B) as of any Conversion Date or other date of
          determination after the date which is 457 days after the Initial
          Issuance Date, the arithmetic average of the Closing Sale Price of the
          Common Stock on the 10 consecutive trading days immediately preceding
          the date which is 457 days after the Initial Issuance Date, in each
          case subject to adjustment as provided herein.

               (viii)  "Initial Issuance Date" means the first date on which any
          Notes are issued pursuant to the Securities Purchase Agreement.

               (ix)    "Issuance Date" means, with respect to each Note, the
          date of issuance of the applicable Note.

               (x)     "Maturity Date" means (i) for any Notes issued on the
          Initial Issuance Date, the date which is 640 days after the Initial
          Issuance Date and (ii) for any Notes issued after the Initial Issuance
          Date, the later of (A) the date which is 640 days after the Initial
          Issuance Date and (B) the date which is 365 days after the Issuance
          Date of such Notes, subject to extension pursuant to Section
          2(e)(vii).

               (xi)    "Other Notes" means the convertible notes, other than
          this Note, issued by the Company pursuant to the Securities Purchase
          Agreement.

               (xii)   "Person" means an individual, a limited liability
          company, a partnership, a joint venture, a corporation, a trust, an
          unincorporated organization and a government or any department or
          agency thereof.

               (xiii)  "Principal Market" means the Nasdaq National Market.

               (xiv)   "Options" means any rights, warrants or options to
          subscribe for or purchase Common Stock or Convertible Securities.

               (xv)    "Convertible Securities" means any stock or securities
          (other than Options) directly or indirectly convertible into or
          exchangeable for Common Stock.

     (b)  Holder's Conversion Right; Mandatory Conversion.   Subject to the
          -----------------------------------------------
provisions of Sections 2(d) and 7, at any time or times on or after the Issuance
Date (as defined below), the Holder shall be entitled to convert any part of the
outstanding and unpaid Conversion Amount of this Note into fully paid and
nonassessable shares of Common Stock in accordance with Section 2(d), at the
Conversion Rate (as defined below).  If any Conversion Amount of

                                       4
<PAGE>

this Note remains outstanding on the Maturity, then, pursuant to Section
2(e)(vii), all of such Conversion Amount shall be converted at the Conversion
Rate as of such date in accordance with Section 2(d) or redeemed by the Company.
The Company shall not issue any fraction of a share of Common Stock upon any
conversion. All shares of Common Stock (including fractions thereof) issuable
upon conversion of this Note by the Holder shall be aggregated for purposes of
determining whether the conversion would result in the issuance of a fraction of
a share of Common Stock. If, after the aforementioned aggregation, the issuance
would result in the issuance of a fraction of a share of Common Stock, the
Company shall round such fraction of a share of Common Stock up or down to the
nearest whole share.

          (c)  Conversion.
               ----------

               (i)  Conversion Rate.  The number of shares of Common Stock
                    ---------------
     issuable upon conversion of a Conversion Amount of this Note pursuant to
     Section 2(b) shall be determined according to the following formula (the
     "Conversion Rate"):

                               Conversion Amount
                               -----------------
                               Conversion Price

               (ii) Cash Payment of Additional Amount.  Subject to the notice
                    ---------------------------------
     provisions of this Section 2(c)(ii), upon conversion pursuant to Sections
     2(b) or 2(e)(vii), the Company shall have the right to elect to pay the
     Additional Amount in cash, in lieu of conversion to Common Stock.  If the
     Company elects to pay the Additional Amount in cash, such cash shall be
     paid simultaneously with the delivery to the holder of the certificates
     representing the Common Stock issuable upon conversion in accordance with
     Section 2(e)(ii).  In order to exercise its right to pay any Additional
     Amount in cash, the Company must advise each Holder of the Notes in writing
     (the "Cash Payment Notice") that the Additional Amount shall be paid in
     cash until such time as the Company shall terminate the Cash Payment Notice
     by providing at least five (5) Business Days prior written notice of such
     termination (the "Termination Notice").  The Cash Payment Notice shall set
     forth the effective date of the Cash Payment Notice, which date shall be at
     least five (5) Business Days after the date the Cash Payment Notice is
     deemed to have been delivered pursuant to Section 25.  The Termination
     Notice shall be effective on the fifth Business Day after the date the
     Termination Notice is deemed to have been delivered pursuant to Section 25
     unless a later date shall be specified in the Termination Notice.

                                       5
<PAGE>

          (d)  Limitations on Beneficial Ownership. The Company shall not effect
               -----------------------------------
     any conversion of this Note and no Holder shall have the right to convert
     any portion of this Note pursuant to Section 2(b) to the extent that after
     giving effect to such conversion such Person (together with such Person's
     affiliates) would beneficially own in excess of 4.99% of the outstanding
     shares of the Common Stock following 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 this Note 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 (i) conversion of
     the remaining, nonconverted portion of this Note beneficially owned by such
     Person and its affiliates and (ii) 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 and its affiliates.  Except as set forth
     in the preceding sentence, for purposes of this Section 2(d), 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(d), in determining the number of outstanding shares 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 or Form 10-K, 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.  For any reason at any time, upon the
     written or oral request of the Holder, the Company shall promptly confirm
     orally and in writing to the Holder the number of shares Common Stock then
     outstanding.  In any case, the number of outstanding shares Common Stock
     shall be determined after giving effect to exercises of Warrants (as
     defined in the Securities Purchase Agreement) and conversions of the Notes
     by the Holder and its affiliates since the date as of which such number of
     outstanding shares of Common Stock was reported.

     (e)  Mechanics of Conversion.  The conversion of this Note at the option of
          -----------------------
the Holder shall be conducted in the following manner:

               (i)  Holder's Delivery Requirements.  To convert this Note into
                    ------------------------------
          shares of Common Stock on any date (the "Conversion Date"), the Holder
          hereof shall (A) transmit by facsimile (or otherwise deliver), for
          receipt on or prior to 11:59 p.m., Eastern Time on such date, a copy
          of a fully executed notice of conversion in the form attached hereto
          as Exhibit I (the "Conversion Notice") to the Company with a copy
          thereof to the Company's designated transfer agent (the "Transfer
          Agent") and (B) if required by Section 2(e)(viii), surrender to a
          common carrier for delivery to the Company as soon as practicable
          following such date the original Note being converted (or an
          indemnification undertaking with respect to such Note in the case of
          its loss, theft or destruction).  The Holder shall use its best
          efforts to deposit with an overnight courier service a copy of each
          Conversion Notice within one (1) Business Day of facsimile
          transmission of such Conversion Notice; provided,

                                       6
<PAGE>

          however, that the failure of any Holder to satisfy its obligations
          under this sentence shall not effect the Conversion Date or the
          obligations of the Company for any conversion of Notes.

               (ii)   Company's Response.  Upon receipt by the Company of a copy
                      ------------------
          of a Conversion Notice, the Company (1) shall promptly, and in no
          event later than one business day after receipt, immediately send, via
          facsimile, a confirmation of receipt of such Conversion Notice to such
          Holder and the Transfer Agent,  which confirmation shall constitute an
          instruction to the Transfer Agent to process such Conversion Notice in
          accordance with the terms herein and (2) on or before the second
          Business Day following the date of receipt by the Company of such
          Conversion Notice (the "Share Delivery Date"), (A) issue and deliver
          to the address as specified in the Conversion Notice, a certificate,
          registered in the name of the Holder or its designee, for the number
          of shares of Common Stock to which the Holder shall be entitled, or
          (B) provided the Transfer Agent is participating in The Depository
          Trust Company ("DTC") Fast Automated Securities Transfer Program, upon
          the request of the holder, credit such aggregate number of shares of
          Common Stock to which the Holder shall be entitled to the holder's or
          its designee's balance account with DTC through its Deposit Withdrawal
          Agent Commission system.  Subject to Section 2(e)(viii), if less than
          the Conversion Amount of this Note is submitted for conversion, then
          the Company shall, as soon as practicable and in no event later than
          three (3) Business Days after receipt of the Note (the "Note Delivery
          Date") and at its own expense, issue and deliver to the Holder a new
          Note for the outstanding principal amount not converted.

               (iii)  Dispute Resolution.  In the case of a dispute as to the
                      ------------------
          determination of the Weighted Average Price or the arithmetic
          calculation of the Conversion Rate, the Company shall instruct the
          Transfer Agent to issue to the Holder the number of shares of Common
          Stock that is not disputed and shall submit the disputed
          determinations or arithmetic calculations to the Holder via facsimile
          within one (1) Business Day of receipt of such holder's Conversion
          Notice.  If such Holder and the Company are unable to agree upon the
          determination of the Weighted Average Price or arithmetic calculation
          of the Conversion Rate within one (1) Business Day of such disputed
          determination or arithmetic calculation being submitted to the Holder,
          then the Company shall within one (1) Business Day submit via
          facsimile (A) the disputed determination of the Weighted Average Price
          to an independent, reputable investment bank selected by the Company
          and approved by the Holders of the Notes representing a majority of
          the Conversion Amounts of the Notes then outstanding or (B) the
          disputed arithmetic calculation of the Conversion Rate to the
          Company's independent, outside accountant.  The Company shall use its
          best efforts to cause the investment bank or the accountant, as the
          case may be, to perform the determinations or calculations and notify
          the Company and the Holders of the results no later than three (3)
          Business Days from the time it receives the disputed determinations or
          calculations.  Such investment bank's or accountant's

                                       7
<PAGE>

          determination or calculation, as the case may be, shall be binding
          upon all parties absent manifest error.

               (iv)  Record Holder.  The person or persons entitled to receive
                     -------------
          the shares of Common Stock issuable upon a conversion of this Note
          shall be treated for all purposes as the record holder or holders of
          such shares of Common Stock on the Conversion Date.

               (v)   Company's Failure to Timely Convert.
                     -----------------------------------

                     (A)  Cash Damages.  If within five (5) Business Days after
                          ------------
               the Company's receipt of a facsimile or other copy of the
               Conversion Notice the Company shall fail to issue a certificate
               to the Holder or credit the Holder's balance account with DTC for
               the number of shares of Common Stock to which such Holder is
               entitled upon such Holder's conversion of this Note or, subject
               to Section 2(e)(viii), the Company shall fail to issue a new Note
               representing the principal amount to which such Holder is
               entitled, if any, pursuant to Section 2(e)(ii), in addition to
               all other available remedies which such Holder may pursue
               hereunder and under the Securities Purchase Agreement (including
               indemnification pursuant to Section 8 thereof), the Company shall
               pay additional damages to such Holder for each date after the
               Share Delivery Date such conversion is not timely effected and/or
               each date after the Note Delivery Date such new Note is not
               delivered in an amount equal to 0.5% of the product of (I) the
               sum of the number of shares of Common Stock not issued to the
               Holder on or prior to the Share Delivery Date and to which such
               Holder is entitled and, in the event the Company has failed to
               deliver a new Note to the Holder on or prior to the Note Delivery
               Date, the number of shares of Common Stock issuable upon
               conversion of the Conversion Amount represented by new Note, as
               of the Note Delivery Date and (II) the Closing Sale Price of the
               Common Stock on the Share Delivery Date, in the case of the
               failure to deliver Common Stock, or the Note Delivery Date, in
               the case of failure to deliver a new Note.  If the Company fails
               to pay the additional damages set forth in this Section 2(e)(v)
               within five Business Days of the date incurred, then the Holder
               entitled to such payments shall have the right at any time, so
               long as the Company continues to fail to make such payments, to
               require the Company, upon written notice, to immediately issue,
               in lieu of such cash damages, the number of shares of Common
               Stock equal to the quotient of (X) the aggregate amount of the
               damages payments described herein divided by (Y) the Conversion
               Price in effect on such Conversion Date as specified by the
               Holder in the Conversion Notice.

                    (B)  Void Conversion Notice; Adjustment to Conversion Price.
                         ------------------------------------------------------
               If for any reason the Holder has not received all of the shares
               of Common Stock prior to the tenth (10th) Business Day after the
               expiration

                                       8
<PAGE>

               of the Share Delivery Date with respect to a conversion of this
               Note, then the Holder, upon written notice to the Company, may
               void its Conversion Notice with respect to, and retain or have
               returned, as the case may be, any principal amount of this Note
               that has not been converted pursuant to such Holder's Conversion
               Notice; provided that the voiding of a Holder's Conversion Notice
                       --------
               shall not effect the Company's obligations to make any payments
               which have accrued prior to the date of such notice pursuant to
               Section 2(e)(v)(A) or otherwise. Thereafter, the Fixed Conversion
               Price of the principal amount of this Note returned or retained
               by the Holder for failure to timely convert shall be adjusted to
               the lesser of (I) the Fixed Conversion Price as in effect on the
               date on which the Holder voided the Conversion Notice and (II)
               the lowest Closing Sale Price during the period beginning on the
               Conversion Date and ending on the date such Holder voided the
               Conversion Notice, subject to further adjustment as provided in
               this Note.

                     (C)  Redemption.  If for any reason the Holder has not
                          ----------
               received all of the shares of Common Stock prior to the tenth
               (10th) Business Day after the Share Delivery Date with respect to
               a conversion of this Note (a "Conversion Failure"), then the
               Holder, upon written notice to the Company, may require that the
               Company redeem all of the Conversion Amount of this Note,
               including the Conversion Amount previously submitted for
               conversion and with respect to which the Company has not
               delivered shares of Common Stock, in accordance with Section 3.

               (vi)  Pro Rata Conversion and Redemption.  In the event the
                     ----------------------------------
          Company receives a Conversion Notice from more than one Holder of the
          Notes for the same Conversion Date and the Company can convert some,
          but not all, of the Notes submitted for conversion, the Company shall
          convert from each Holder electing to have Notes converted at such time
          a pro rata amount of such holder's Conversion Amount submitted for
          conversion based on the principal amount of the Notes submitted for
          conversion on such date by such Holder relative to the Conversion
          Amount of all Notes submitted for conversion on such date.

               (vii)  Mandatory Conversion or Redemption at Maturity.  If any
                      ----------------------------------------------
          Conversion Amount of this Note remains outstanding on the Maturity
          Date, then all of the Conversion Amount, at the  Company's option,
          either (i) shall be converted at the Conversion Price for the Common
          Stock as of such date as if the Holder  had given the Conversion
          Notice on the Maturity Date (a "Maturity Date Mandatory Conversion"),
          or (ii) shall be redeemed as of such date (a "Maturity Date Mandatory
          Redemption") for an amount in cash equal to the Conversion Amount on
          the Maturity Date (the "Maturity Date Redemption Price"). The Company
          shall be deemed to have elected a Maturity Date Mandatory Redemption
          unless it delivers written notice to the Holder at least 20

                                       9
<PAGE>

          Business Days prior to the Maturity Date of its election to effect a
          Maturity Date Mandatory Conversion. If the Company elects a Maturity
          Date Mandatory Redemption, then on the Maturity Date the Company shall
          pay to each the Holder outstanding on the Maturity Date, by wire
          transfer of immediately available funds, an amount equal to the
          Maturity Date Redemption Price. If the Company elects a Maturity Date
          Mandatory Redemption and shall fail to redeem all of the Conversion
          Amount of this Note outstanding on the Maturity Date by payment of the
          Maturity Date Redemption Price, then in addition to any remedy the
          Holder may have under this Note, the Securities Purchase Agreement and
          the Registration Rights Agreement, the Holder shall have the option to
          require the Company to convert any or all of the Conversion Amount
          that the Company elected to redeem under this Section 2(e)(vii) and
          for which the Maturity Date Redemption Price (together with any
          interest thereon) has not been paid into the number of shares of
          Common Stock the Holder would have received if the Holder had given a
          Conversion Notice for such Conversion Amount on the Maturity Date.

               (viii)  Book-Entry.  Notwithstanding anything to the contrary set
                       ----------
          forth herein, upon conversion of any portion of this Note in
          accordance with the terms hereof, the Holder thereof shall not be
          required to physically surrender this Note to the Company unless the
          full Conversion Amount represented by this Note is being converted.
          The Holder and the Company shall maintain records showing the
          Conversion Amount so converted and the dates of such conversions or
          shall use such other method, reasonably satisfactory to the Holder and
          the Company, so as not to require physical surrender of this Note upon
          each such conversion.  In the event of any dispute or discrepancy,
          such records of the Company shall be controlling and determinative in
          the absence of manifest error.  Notwithstanding the foregoing, if this
          Note is converted as aforesaid, the Holder may not transfer this Note
          unless the Holder first physically surrenders this Note to the
          Company, whereupon the Company will forthwith issue and deliver upon
          the order of the Holder a new Note of like tenor, registered as the
          Holder may request, representing in the aggregate the remaining
          Conversion Amount represented by this Note.  The Holder and any
          assignee, by acceptance of a this Note or such new Note, acknowledge
          and agree that, by reason of the provisions of this paragraph,
          following conversion of any portion of this Note, the Conversion
          Amount (including the principal of this Note) represented by this Note
          may be less than the principal amount and the accrued interest set
          forth on the face hereof.

          (f)  Taxes.  The Company shall pay any and all taxes that may be
               -----
     payable with respect to the issuance and delivery of Common Stock upon the
     conversion of Notes.

          (g)  Adjustments to Conversion Price -- Dilution and Other Events.  In
               ------------------------------------------------------------
     addition to any other adjustments provided herein, the Conversion Price
     will be subject to adjustment from time to time as provided in this Section
     2(g).

                                       10
<PAGE>

               (i)    Adjustment of Fixed Conversion Price upon Subdivision or
                      --------------------------------------------------------
          Combination of Common Stock.  If the Company at any time subdivides
          ---------------------------
          (by any stock split, stock dividend, recapitalization or otherwise)
          one or more classes of its outstanding shares of Common Stock into a
          greater number of shares, the Fixed Conversion Price in effect
          immediately prior to such subdivision will be proportionately reduced.
          If the Company at any time combines (by combination, reverse stock
          split or otherwise) one or more classes of its outstanding shares of
          Common Stock into a smaller number of shares, the Fixed Conversion
          Price in effect immediately prior to such combination will be
          proportionately increased.

               (ii)   Holder's Right of Alternative Variable Conversion Price
                      -------------------------------------------------------
          Following Issuance of Convertible Securities.  If the Company in any
          --------------------------------------------
          manner issues or sells Convertible Securities or Options that are
          convertible into or exchangeable for Common Stock at a price which
          varies or may vary with the market price of the Common Stock,
          including by way of periodic resets to a fixed price (each of the
          formulations for such variable price being herein referred to as, a
          "Variable Price"), and such Variable Price is not calculated using the
          same formula used to calculate the Daily Market Price in effect
          immediately prior to the time of  such issue or sale, the Company
          shall provide written notice thereof via facsimile and overnight
          courier to each Holder of the Notes ("Variable Notice") on the date of
          issuance of such Convertible Securities or Options.  If the holders of
          Notes representing at least 2/3 of the aggregate Conversion Amount of
          Notes then outstanding provide written notice to the Company via
          facsimile and overnight courier (the "Variable Price Election Notice")
          within 10 Business Days of receiving a Variable Notice that such
          holders desire to replace the Daily Market Price then in effect with
          the Variable Price described in such Variable Notice, then, from and
          after the date of the Company's receipt of the Variable Price Election
          Notice, the Daily Market Price will automatically be replaced with the
          Variable Price.  In the event that a Holder delivers a Conversion
          Notice after the Company's issuance of Convertible Securities with a
          Variable Price but before such Holder's receipt of the Company's
          Variable Notice, then such Holder shall have the option by written
          notice to the Company to rescind such Conversion Notice or to have the
          Conversion Price be equal to such Variable Price for the conversion
          effected by such Conversion Notice.

               (iii)  Other Events.  If any event occurs of the type
                      ------------
          contemplated by the provisions of this Section 2(g) but not expressly
          provided for by such provisions (including, without limitation, the
          granting of stock appreciation rights, phantom stock rights or other
          rights with equity features), then the Company's Board of Directors
          will make an appropriate adjustment in the Conversion Price so as to
          protect the rights of the holders of the Notes; provided that no such
          adjustment will increase the Conversion Price as otherwise determined
          pursuant to this Section 2(g).

                                       11
<PAGE>

               (iv)   Notices.
                      --------

                      (A) Promptly upon any adjustment of the Conversion Price,
               and in no event later than two (2) Business Days after such
               adjustment, the Company will give written notice thereof to each
               Holder of the Notes setting forth in reasonable detail, and
               certifying, the calculation of such adjustment.

                      (B) The Company will give written notice to each Holder of
               the Notes at least ten (10) days prior to the date on which the
               Company closes its books or takes a record (I) with respect to
               any dividend or distribution upon the Common Stock, (II) with
               respect to any pro rata subscription offer to holders of Common
               Stock or (III) for determining rights to vote with respect to any
               Organic Change (as defined in Section 4(a)), dissolution or
               liquidation, provided that such information shall be made known
               to the public prior to or in conjunction with such notice being
               provided to each such holder.

                      (C) The Company will also give written notice to each
               Holder of the Notes at least ten (10) days prior to the date on
               which any Organic Change, dissolution or liquidation will take
               place, provided that such information shall be made known to the
               public prior to or in conjunction with such notice being provided
               to each such holder.

     3.   Redemption at Option of Holder.
          ------------------------------

          (a) Redemption Option Upon Triggering Event.  In addition to all other
              ---------------------------------------
     rights of the Holder contained herein, after a Triggering Event (as defined
     below), the Holder shall have the right, at the Holder's option, to require
     the Company to redeem all or a portion of this Note at a price equal to the
     greater of (i) 120% of the Conversion Amount and (ii) the product of (A)
     the Conversion Rate for the Conversion Amount to be redeemed in effect at
     such time as such Holder delivers a Notice of Redemption at Option of Buyer
     (as defined below) and (B) the Weighted Average Price of the Common Stock
     on the date immediately preceding such Triggering Event on which the
     Principal Market, or the market or exchange where the Common Stock is then
     traded, is open for trading ("Redemption Price").

          (b) "Triggering Event".  A "Triggering Event" shall be deemed to have
              ------------------
     occurred at such time as any of the following events:

              (i)  the failure of the Registration Statement to be declared
          effective by the SEC on or prior to the date that is 30 days after the
          applicable Effectiveness Deadline (as defined in the Registration
          Rights Agreement);

              (ii) while the Registration Statement is required to be
          maintained effective pursuant to the terms of the Registration Rights
          Agreement, the

                                       12
<PAGE>

          effectiveness of the Registration Statement lapses for any reason
          (including, without limitation, the issuance of a stop order) or is
          unavailable to the Holder for sale of all of such Holder's Registrable
          Securities (as defined in the Registration Rights Agreement) in
          accordance with the terms of the Registration Rights Agreement (other
          than due to any Allowable Grace Period (as defined in the Registration
          Rights Agreement)), and such lapse or unavailability continues for a
          period of five consecutive trading days; provided that such five (5)
          day period shall be extended to a total of 15 consecutive trading days
          in the event that the Company makes an acquisition which is required
          to be reported under Item 2 of Form 8-K and for which pro forma
          financial information is required to be reported pursuant to Article
          11 of Regulation S-X promulgated under the 1933 Act.

               (iii)  the suspension from trading or failure of the Common Stock
          to be listed on the Nasdaq National Market or The New York Stock
          Exchange, Inc. or for a period of five consecutive trading days or for
          more than an aggregate of 10 trading days in any 365-day period;

               (iv)   the Company's or the Transfer Agent's (at the Company's
          direction) notice to any Holder of Notes, including by way of public
          announcement, at any time, of its intention not to comply with a
          request for conversion of any Notes into shares of Common Stock that
          is tendered in accordance with the provisions of the Notes;

               (v)    a Conversion Failure (as defined in Section 2(e)(v)(B));

               (vi)   upon the Company's receipt of a Conversion Notice, the
          Company shall not be obligated to issue the shares of Common Stock
          issuable upon such conversion of Notes due to the provisions of
          Section 12; or

               (vii)  the Company breaches any representation, warranty,
          covenant or other term or condition of the Securities Purchase
          Agreement, the Registration Rights Agreement, the Warrants, this Note
          or any other agreement, document, certificate or other instrument
          delivered in connection with the transactions contemplated thereby and
          hereby, except to the extent that such breach would not have a
          Material Adverse Effect (as defined in Section 3(a) of the Securities
          Purchase Agreement) and except, in the case of a breach of a covenant
          which is curable, only if such breach continues for a period of at
          least 10 days.

          (c)  Mechanics of Redemption at Option of Buyer.  Within one (1) day
               ------------------------------------------
     after the occurrence of a Triggering Event, the Company shall deliver
     written notice thereof via facsimile and overnight courier ("Notice of
     Triggering Event") to each Holder of the Notes.  At any time after the
     earlier of the Holder's receipt of a Notice of Triggering Event and the
     Holder becoming aware of a Triggering Event, the Holder may require the
     Company to redeem all of such Holder's Notes by delivering written notice
     thereof via facsimile and overnight courier ("Notice of Redemption at
     Option

                                       13
<PAGE>

     of Buyer") to the Company, which Notice of Redemption at Option of Buyer
     shall indicate the Conversion Amount of the Notes that the Holder is
     electing to redeem.

          (d) Payment of Redemption Price.  Upon the Company's receipt of a
              ---------------------------
     Notice(s) of Redemption at Option of Buyer from any Holder of Notes, the
     Company shall promptly, and in no event later than one (1) Business Day
     after receipt of such notice, notify each Holder of Notes by facsimile of
     the Company's receipt of such notices.  The Company shall deliver the
     applicable Redemption Price to the Holder within five Business Days after
     the Company's receipt of a Notice of Redemption at Option of Buyer;
     provided that the Holder's Notes shall have been so delivered to the
     Transfer Agent.  If more than one Holder of Notes submits Notes for
     redemption and the Company is unable to redeem all of the Notes submitted
     for redemption, the Company shall redeem a pro rata amount from each Holder
     of Notes based on the Conversion Amount represented by the Notes submitted
     for redemption by such Holder relative to the aggregate Conversion Amounts
     of all Notes for redemption by all holders of Notes.

          (e) Void Redemption.  In the event that the Company does not pay the
              ---------------
     Redemption Price within the time period set forth in Section 3(d), at any
     time thereafter and until the Company pays such unpaid applicable
     Redemption Price in full, the Holder shall have the option (the "Void
     Optional Redemption Option") to, in lieu of redemption, require the Company
     to promptly return to the Holder the Note that was submitted for redemption
     by such Holder under this Section 3 and for which the applicable Redemption
     Price (together with any interest thereon) has not been paid, by sending
     written notice thereof to the Company via facsimile (the "Void Optional
     Redemption Notice").  Upon the Company's receipt of such Void Optional
     Redemption Notice, (i) the Notice of Redemption at Option of Buyer shall be
     null and void with respect to that portion of the Note subject to the Void
     Optional Redemption Notice, and (ii) the Company shall promptly, and in no
     event later than one (1) Business Day after receipt of such notice, return
     the Note subject to the Void Optional Redemption Notice, and (iii) the
     Fixed Conversion Price of such portion of the Note shall be adjusted to the
     lesser of (A) the Conversion Price as in effect on the date on which the
     Void Optional Redemption Notice is delivered to the Company and (B) the
     lowest Closing Sale Price during the period beginning on the date on which
     the Notice of Redemption at Option of Buyer is delivered to the Company and
     ending on the date on which the Void Optional Redemption Notice is
     delivered to the Company.

          (f) Disputes; Miscellaneous.  In the event of a dispute as to the
              -----------------------
     determination of the Weighted Average Price, the Closing Sale Price or the
     arithmetic calculation of the Redemption Price, such dispute shall be
     resolved pursuant to Section 2(e)(iii) above with the term "Closing Sale
     Price" being substituted for the term "Weighted Average Price" and the term
     "Redemption Price" being substituted for the term "Conversion Rate".  The
     Holder's delivery of a Void Optional Redemption Notice and exercise of its
     rights following such notice shall not effect the Company's obligations to
     make any payments which have accrued prior to the date of such notice.  In
     the event of a redemption pursuant to this Section 3 of less than all of
     the Conversion

                                       14
<PAGE>

     Amount of this Note, the Company shall promptly cause to be issued and
     delivered to the Holder a new Note representing the remaining Conversion
     Amount which has not been redeemed.

     4.   Other Rights of Holders.
          -----------------------

               (a)  Reorganization, Reclassification, Consolidation, Merger or
                    ----------------------------------------------------------
Sale. Any recapitalization, reorganization, reclassification, consolidation,
----
merger, sale of all or substantially all of the Company's assets to another
Person or other transaction which is effected in such a way that holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock is referred to herein as "Organic Change." Prior to the
consummation of any (i) sale of all or substantially all of the Company's assets
to an acquiring Person or (ii) other Organic Change following which the Company
is not a surviving entity, the Company will secure from the Person purchasing
such assets or the successor resulting from such Organic Change (in each case,
the "Acquiring Entity") a written agreement (in form and substance reasonably
satisfactory to the holders of the Notes representing a majority of the
Conversion Amounts of the Notes then outstanding) to deliver to the Holder in
exchange for this Note, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to this Note, and
reasonably satisfactory to the holders the Notes representing a majority of the
Conversion Amounts of the Notes then outstanding. Prior to the consummation of
any other Organic Change, the Company shall make appropriate provision (in form
and substance reasonably satisfactory to the holders of Notes representing a
majority of the Conversion Amounts of the Notes then outstanding) to insure that
each of the Holder will thereafter have the right to acquire and receive in lieu
of or in addition to (as the case may be) the shares of Common Stock immediately
theretofore acquirable and receivable upon the conversion of this Note such
shares of stock, securities or assets that would have been issued or payable in
such Organic Change with respect to or in exchange for the number of shares of
Common Stock which would have been acquirable and receivable upon the conversion
of this Note as of the date of such Organic Change (without taking into account
any limitations or restrictions on the convertibility of this Note).

               (b)  Optional Redemption Upon Change of Control. In addition to
                    ------------------------------------------
the rights of the Holder under Section 4(a), upon a Change of Control (as
defined below) of the Company the Holder shall have the right, at the Holder's
option, to require the Company to redeem all or a portion of the Conversion
Amount represented by this Note equal to the Conversion Amount ("Change of
Control Redemption Price"). No sooner than 15 days nor later than 10 days prior
to the consummation of a Change of Control, but not prior to the public
announcement of such Change of Control, the Company shall deliver written notice
thereof via facsimile and overnight courier (a "Notice of Change of Control") to
the Holder. At any time during the period beginning after receipt of a Notice of
Change of Control (or, in the event a Notice of Change of Control is not
delivered at least 10 days prior to a Change of Control, at any time on or after
the date which is 10 days prior to a Change of Control) and ending on the date
of such Change of Control, the Holder may require the Company to redeem all or a
portion of the Conversion Amount of this Note then outstanding by delivering
written notice thereof via facsimile and overnight courier (a "Notice of
Redemption Upon Change of

                                       15
<PAGE>

Control") to the Company, which Notice of Redemption Upon Change of Control
shall indicate (i) the Conversion Amount the Holder is submitting for
redemption, and (ii) the applicable Change of Control Redemption Price, as
calculated pursuant to this Section 4(b). Upon the Company's receipt of a
Notice(s) of Redemption Upon Change of Control from any Holder of Notes, the
Company shall promptly, but in no event later than one (1) Business Day
following such receipt, notify the Holder of this Note by facsimile of the
Company's receipt of such Notice(s) of Redemption Upon Change of Control. The
Company shall deliver the applicable Change of Control Redemption Price
simultaneous with the consummation of the Change of Control; provided that, if
required by Section 2(e)(viii), this Note shall have been so delivered to the
Company. Payments provided for in this Section 4(b) shall have priority to
payments to other stockholders in connection with a Change of Control. For
purposes of this Section 4(b), "Change of Control" means (i) the consolidation,
merger or other business combination of the Company with or into another Person
(other than (A) a consolidation, merger or other business combination in which
holders of the Company's voting power immediately prior to the transaction
continue after the transaction to hold, directly or indirectly, the voting power
of the surviving entity or entities necessary to elect a majority of the members
of the board of directors (or their equivalent if other than a corporation) of
such entity or entities, or (B) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company),
(ii) the sale or transfer of all or substantially all of the Company's assets,
or (iii) a purchase, tender or exchange offer made to and accepted by the
holders of more than the 50% of the outstanding shares of Common Stock.

               (c)  Purchase Rights.  If at any time the Company grants, issues
                    ---------------
or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "Purchase Rights"), then, at the option of the
Company, either (i) the conversion restrictions set forth in Section 7 below
shall not apply or (ii) the Holder will be entitled to acquire either (A)
immediately or (B) upon conversion of the Note, at the option of the Company,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete conversion of this Note (without taking
into account any limitations or restrictions on the convertibility of this Note)
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.

     5.   Redemption at the Company's Election.  At any time or times during the
          ------------------------------------
period beginning on the Issuance Date and ending on and including the date which
is  457 days after the Initial Issuance Date, the Company shall have the right,
in its sole discretion, to require that some or all of the outstanding
Conversion Amount of the outstanding Notes issued on such Issuance Date be
redeemed ("Redemption at Company's Election") for consideration equal to the (i)
in the event of a Redemption at Company's election prior to the date which is
180 days after the Issuance Date, the Conversion Amount of such Notes to be
redeemed on the Company Election Redemption Date (as defined below) or (ii) in
the event of a Redemption at Company's Election on or after the date which is
180 days after the applicable Issuance Date, 107% of the Conversion Amount of
such Notes to be redeemed on the Company Election

                                       16
<PAGE>

Redemption Date (the "Company's Election Redemption Price"); provided that the
Conditions to Redemption at the Company's Election (as set forth below) are
satisfied. The Company shall exercise its right to Redemption at Company's
Election by providing each Holder of Notes issued on such Issuance Date written
notice ("Notice of Redemption at Company's Election") at least 15 Business Days
but not more than 20 Business Days prior to the date of consummation of such
redemption ("Company's Election Redemption Date"). If the Company elects to
require redemption of some, but not all, of the Conversion Amount of the Notes
issued on the Issuance Date then outstanding, the Company shall require
redemption of the pro rata amount from each Holder of such Notes based on the
principal amount of Notes purchased by such Holder on the Issuance Date relative
to the aggregate principal amount of all Notes purchased on such Issuance Date
(such amount with respect to the Holder being referred to herein as its "Pro
Rata Redemption Amount"). The Notice of Redemption at Company's Election shall
indicate (x) the Conversion Amount of the Notes the Company has elected to
redeem from all Holder of Notes, (y) the Company's Election Redemption Date, and
(z) each holder's pro rata share of Conversion Amounts of the Notes selected for
redemption as determined in accordance with the immediately preceding sentence.
If the Company has exercised its right of Redemption at Company's Election and
the conditions of this Section 5, including the Conditions to Redemption at
Company's Election, have been satisfied, then each Holder's Pro Rata Redemption
Amount shall be redeemed as of the Company's Election Redemption Date by payment
by the Company to each Holder of the Notes of the Company's Election Redemption
Price. If required by Section 2(e)(viii), all holders of the Notes shall
thereupon and within two Business Days after the Company's Election Redemption
Date or such earlier date as the Company and each Holder of Notes mutually
agree, surrender all Notes being redeemed on such date to the Company. If the
Company fails to pay the full Company's Election Redemption Price with respect
to this Note then the Redemption at Company's Election shall to that extent be
null and void with respect to this Note and the Holder shall be entitled to all
the rights of a Holder of outstanding Notes. "Conditions to Redemption at the
Company's Election" means the following conditions: (i) during the period
beginning on the Issuance Date and ending on and including the Company's
Election Redemption Date, the Company shall have delivered Conversion Shares
upon conversion of the Notes to the holders of the Notes on a timely basis as
set forth in Section 2(e)(ii) of this Note; (ii) on each day during the period
beginning 30 days prior to the date of Notice of Redemption at Company's
Election and ending on and including the Company's Election Redemption Date the
Registration Statement shall be effective and available for the sale of at least
all of the Registrable Securities (as defined in the Registration Rights
Agreement); (iii) on each day during the period beginning 30 days prior to the
date of Notice of Redemption at Company's Election and ending on and including
the Company's Election Redemption Date, the Common Stock is designated for
quotation on the Nasdaq National Market or listed on The New York Stock
Exchange, Inc. and is not suspended from trading (excluding suspensions of not
more than one day resulting from business announcements by the Company); (iv)
during the period beginning on and including the date which is 30 days prior to
the date of Notice of Redemption at the Company's Election and ending on and
including the Company's Election Redemption Date, there shall not have occurred
a Triggering Event (which in the case of a Triggering Event pursuant to
Section 3(b)(vii) hereof, has not been cured or waived, provided the Company
delivered a Notice of Triggering Event in a timely manner pursuant to Section
3(c) to each holder of Notes with respect to any Triggering Event prior to the
date which is 30 days

                                       17
<PAGE>

prior to the date of the Notice of Redemption at Company's Election); (v) the
Company shall not be entitled to deliver a Notice of Redemption at Company's
Election and no Company's Election Redemption Date may occur during a Company's
Mandatory Conversion Period (as defined in Section 7); and (vi) the Company
otherwise has satisfied its obligations in all material respects and is not in
default in any material respect under this Note, the Securities Purchase
Agreement, the Warrants and the Registration Rights Agreement. Notwithstanding
the above, but subject to Section 2(d) and Section 7, the Holder may convert any
Conversion Amount (including Conversion Amounts selected for redemption) into
Common Stock pursuant to Section 2(a) on or prior to the date immediately
preceding the Company's Election Redemption Date. If the Company fails to timely
pay any Company's Election Redemption Price in accordance with this Section 5,
then the Company shall not be permitted to submit another Notice of Redemption
at Company's Election without the prior written consent of the holders of the
Notes representing at least two-thirds (2/3) of the Conversion Amounts of the
Notes then outstanding.

     6.   Conversion at the Company's Election.  On any date during the period
          ------------------------------------
beginning on the date which is 10 days after the Registration Statement has been
declared effective by the SEC and ending on the date which is 457 days after the
Initial Issuance Date, the Company shall have the right, in its sole discretion,
to require that all or portion of the outstanding Conversion Amount of this Note
be converted ("Company's Conversion Election") at the applicable Conversion
Rate; provided that the Conditions to Conversion at the Company's Election (as
set forth below) are satisfied.  The Company shall exercise its right to
Company's Conversion Election by providing each Holder of the Notes written
notice ("Company's Conversion Election Notice") on such date by facsimile and
overnight courier.  The date on which each of the holders of the Notes issued on
the Issuance Date receives the Company's Conversion Election Notice is referred
to in this Note as the "Company's Conversion Election Notice Date").  If the
Company elects to require conversion of some, but not all, of the Conversion
Amounts of the Notes issued on the Issuance Date then outstanding, the Company
shall require conversion of the pro rata amount from each Holder of such Notes
based on the principal amount of Notes purchased by such Holder on the Issuance
Date relative to the aggregate principal amount of all Notes purchased on such
Issuance Date (such amount with respect to the Holder being referred to herein
as its "Pro Rata Conversion Amount").  The Company's Conversion Election Notice
shall indicate (x) the Conversion Amount of Notes held by each Holder of Notes
the Company has selected for conversion, (y) the date selected by the Company
for conversion ("Company's Election Conversion Date"), which date shall be not
less than 20 or more than 60 Business Days after the Company's Conversion
Election Notice Date, and (z) each holder's pro rata share of Conversion Amounts
of the Notes selected for conversion as determined in accordance with the
immediately preceding sentence.  Subject to the satisfaction of all the
conditions of this Section 6, on the Company's Election Conversion Date the
Holder of this Note will be deemed to have submitted a Conversion Notice in
accordance with Section 2(e)(i) for a Conversion Amount equal to the result of
(a) the Holder's Pro Rata Conversion Amount, minus (b) the Conversion Amount of
this Note converted by the Holder during the Company's Mandatory Conversion
Period (as defined below); provided, however, in no event shall the Holder be
required to convert a Conversion Amount during any Company's Mandatory
Conversion Period into a number of shares of Common Stock in excess of the pro
rata amount (determined in the same

                                       18
<PAGE>

manner as the Pro Rata Conversion Amount above) of 15% of the trading volume of
the Common Stock on the Principal Market (as reported by Bloomberg) during the
Company's Mandatory Conversion Period. The Company may terminate a Conversion at
Company's Election prior to the Company's Election Conversion Date with respect
to Conversion Amounts not submitted for conversion prior to the effective date
of such termination by delivering written notice ("Company's Mandatory
Conversion Period Termination Notice") to each Holder of Notes issued on the
Issuance Date at least five Business Days prior to the effective date of such
termination, provided that the Company has not previously delivered two
Company's Mandatory Conversion Period Termination Notices. "Conditions to
Conversion at the Company's Election" means the following conditions: (i) on
each day (other than days during an Allowable Grace Period (as defined in the
Registration Rights Agreement) during the period beginning the date the SEC
declares the Registration Statement registering the Registrable Securities
effective and ending on and including the date which is 31 days prior to the
Company's Conversion Election Notice Date, the Registration Statement shall be
effective and available for the sale of no less than all of the Registrable
Securities; (ii) on each day (including days during a Grace Period (as defined
in the Registration Rights Agreement) during the period beginning on and
including the date which is 30 days prior to the Company's Conversion Election
Notice Date and ending on and including the Company's Election Conversion Date,
the Registration Statement shall be effective and available for the sale of no
less than all of the Registrable Securities; (iii) on each day during the period
beginning on and including the date which is 30 days prior to the Company's
Conversion Election Notice Date and ending on and including the Company's
Election Conversion Date, the Common Stock is designated for quotation on the
Nasdaq National Market or listed on The New York Stock Exchange, Inc. and shall
not have been suspended from trading on such exchanges (other than suspensions
of not more than one (1) day due to business announcements by the Company) nor
shall delisting or suspension by such exchanges have been threatened either (A)
in writing by such exchanges or (B) by falling below the minimum listing
maintenance requirements of such exchanges; (iv) during the period beginning on
the Issuance Date and ending on and including the Company's Election Conversion
Date, there shall not have occurred an event constituting a Triggering Event
(which, in the case of a Triggering Event pursuant to Section 3(d)(vii) hereof,
has not been cured or waived); (v) the aggregate Conversion Amounts of the Notes
issued on the Issuance Date selected for conversion by the Company as reflected
in the Company's Conversion Election Notice is at least $1,000,000; (vi) during
the period beginning on the Issuance Date and ending on and including the
Company's Election Conversion Date, the Company shall have delivered shares of
Common Stock upon conversion of the this Note and upon exercise of the Warrants
to the Holder on a timely basis as set forth in Section 2(e)(ii) of this Note
and Sections 2(a) and 2(b) of the Warrants, respectively; (vii) the Company
shall not be entitled to deliver a Company's Conversion Election Notice during
any Company's Mandatory Conversion Period; and (viii) the Company otherwise has
satisfied its obligations in all material respects and is not in default in any
material respect under this Note, the Securities Purchase Agreement, the
Warrants and the Registration Rights Agreement. "Company's Mandatory Conversion
Period" means, with respect to any Company's Conversion Election, the period
beginning on and including the Company's Conversion Election Notice Date and
ending on and including the earlier of (i) the Company's Election Conversion
Date and (ii) the effective date of a Company's Mandatory Conversion Period

                                       19
<PAGE>

Termination Notice, which effective date shall not be fewer than five (5)
Business Days after each of the Holder of the Notes receipt of such Notes.

     7.   Restrictions on Conversions.  The right of a Holder to convert this
          ---------------------------
Note pursuant to Section 2(a) shall be limited as set forth below.  Subject to
the exceptions described below, without the prior written consent of the
Company, the Holder shall not be entitled to convert any Conversion Amount of
this Note during the period beginning on the Issuance Date of this Note and
ending on and including the date which is 456 days after the Initial Issuance
Date.  Notwithstanding the foregoing, the conversion restrictions set forth in
this Section 7 shall not apply:  (a) during a Company's Mandatory Conversion
Period, but only with respect to the Conversion Amount set forth in a Company's
Election Conversion Notice for the Holder with respect to such Company Mandatory
Conversion Period; (b) on and after any date on which the Common Stock is not
listed or quoted on the Nasdaq National Market or The New York Stock Exchange,
Inc. or has been suspended from trading on any such exchange (excluding
suspensions of not more than one day resulting from business announcements by
the Company), or any such delisting or suspension is threatened or pending
either (I) in writing by such exchanges or (II) by falling below the minimum
listing maintenance requirements of such exchanges; (c) on or after any date on
which there shall have occurred an event constituting a Change of Control or a
Triggering Event or an event that with the passage of time and without being
cured would constitute a Triggering Event; (d) on or after any date on which
there shall have been an announcement of a pending Change of Control; (e) on or
after any date on which the Company issues or sells or is deemed to have issued
or sold any Convertible Securities that are convertible into or exercisable or
exchangeable for shares of Common Stock at a conversion or exercise price which
varies or may vary with the market price of the Common Stock, including by way
of periodic resets to a fixed price; (f) on or after any date on which the
Company fails to pay the Company's Election Redemption Price for any portion of
this Note in a timely manner in accordance with a Redemption at Company's
Election pursuant to Section 5; (g) on or after the date after the Issuance Date
on which the Closing Sale Price of the Common Stock is less than $10.00 (subject
to adjustment for stock splits, stock dividends, stock combinations or other
similar events) on any ten (10) trading days during the 15 consecutive trading
days immediately preceding such date of determination; (h) with respect to any
conversion of this Note at a price greater than or equal to the Fixed Conversion
Price then in effect; or (i) on or after the date the Company issues or sells
any shares of Common Stock or any Convertible Securities or Options (other than
upon conversion of the Notes or the Warrants or in connection with any Approved
Stock Plan or a firm commitment underwritten public offering), with respect to a
principal amount of Notes representing an aggregate Conversion Amount equal to
the lesser of (I) such holder's pro rata portion (determined in the same manner
as Pro Rata Conversion Amount in Section 5) of the consideration received by the
Company in connection with such issuance or sale and (II) the aggregate
Conversion Amount represented by such holder's Preferred Shares.

     8.   Reservation of Shares.  The Company shall, so long as any principal
          ---------------------
amount of the Note is outstanding, reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of the Notes, such number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all of the principal
amount of the Notes then outstanding; provided that the number of shares of

                                       20
<PAGE>

Common Stock so reserved shall at no time be less than 200% of the number of
shares of Common Stock for which the principal amount of the Notes are at any
time convertible.  The initial number of shares of Common Stock reserved for
conversions of the Notes and each increase in the number of shares so reserved
shall be allocated pro rata among the Holders of the Notes based on the
principal amount of the Notes held by each Holder at the time of issuance of the
Notes or increase in the number of reserved shares, as the case may be.  In the
event a Holder shall sell or otherwise transfer any of such Holder's Notes, each
transferee shall be allocated a pro rata portion of the number of reserved
shares of Common Stock reserved for such transferor.  Any shares of Common Stock
reserved and allocated to any Person which ceases to hold any Notes shall be
allocated to the remaining Holders, pro rata based on the principal amount of
the Notes then held by such Holders.

     9.   Voting Rights; Rank.  Holders shall have no voting rights, except as
          -------------------
required by law, including but not limited to the General Corporation Law of the
State of Delaware, and as expressly provided in this Note.  Payments of
principal and interest and other payments due under this Note, except as
otherwise provided herein, shall rank pari passu with and shall not be
subordinated to any other unsecured debt obligations of the Company.

     10.  Restriction on Redemption and Cash Dividends.  Until all of the
          --------------------------------------------
Conversion Amount of this Note has been converted, redeemed or otherwise
satisfied as provided herein, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, its capital
stock without the prior express written consent of the holders of Notes
representing at least fifty-one percent (51%) of the Conversion Amount of the
Notes then outstanding, except for payments on convertible securities of the
Company outstanding on the Issuance Date pursuant to the terms of such
convertible securities as in effect on the Issuance Date.

     11.  Restriction on Hedging Activity.  Subject to the exceptions described
          -------------------------------
below, during the period beginning on the Initial Closing Date (as defined in
the Securities Purchase Agreement) and ending on the date which is 457 days
after the Initial Issuance Date, neither such Buyer nor any of its affiliates
shall engage, directly or  indirectly, in any transaction constituting a "short
sale" (as defined in rule 3b-3 of the Securities Exchange Act of 1934, as
amended, of the Common Stock or similar hedge of the Common Stock (collectively,
"Short Sales"); provided, however, that the Holder and its affiliates are
entitled to engage in transactions which constitute Short Sales to the extent
that following such transaction the aggregate short position of the Holder and
its affiliates does not exceed the sum of (a) the number shares of Common Stock
equal to the sum of which the Holder and its affiliates have the right to
acquire upon exercise of the Warrants held by the Holder and its affiliates
(without regard to any limitations on exercises of the Warrants), plus (b)
during the period beginning the first day of a Company Mandatory Conversion
Period and ending on and including the date which is last day of such Company
Mandatory Conversion Period, that number of shares of Common Stock equal to the
quotient of (i) the Conversion Amount set forth in a Company's Notice of
Mandatory Conversion for such Holder and its affiliates with respect to such
Company Mandatory Conversion Period, divided by (ii) 93% of the average of the
Weighted Average Price of the Common Stock on each trading day during the period
beginning on the first day of such Company Mandatory Conversion Period and
ending on and including the

                                       21
<PAGE>

earlier of (A) the last trading day of such Company Mandatory Conversion Period
and (B) the date as of which the determination is being made for purposes of
this Section 11. Notwithstanding the foregoing, the restriction on Short Sales
set forth in the first sentence of this Section 11 shall not apply (a) on and
after the first date on which there shall have occurred a Triggering Event or an
Event of Default or an event that with the passage of time would constitute a
Triggering Event or an Event of Default, assuming it is not cured, (b) on or
after any date on which the Company issues or sells or is deemed to have issued
or sold any Convertible Securities that are convertible into or exercisable or
exchangeable for shares of Common Stock at a conversion or exercise price which
varies or may vary with the market price of the Common Stock, including by way
of periodic resets to a fixed price (unless such Convertible Securities have
hedging restrictions more restrictive than the hedging restrictions contained in
this Section 11) or (c) with respect to a Short Sale so long as the Holder of
this Note delivers a Conversion Notice within two (2) Business Days of such
Short Sale entitling such Holder to receive a number of shares of Common Stock
at least equal to the number of shares of Common Stock sold or otherwise hedged
in such Short Sale.

     12.  Limitation on Number of Conversion Shares. The Company shall not be
          -----------------------------------------
obligated to issue any shares of Common Stock upon conversion of this Note if
the issuance of such shares of Common Stock would exceed that number of shares
of Common Stock which the Company may issue upon Conversion of this Note (the
"Exchange Cap") without breaching the Company's obligations under the rules or
regulations of the Principal Market, or the market or exchange where the Common
Stock is then traded, except that such limitation shall not apply in the event
that the Company (a) obtains the approval of its stockholders as required by the
applicable rules of the Principal Market, or the market or exchange where the
Common Stock is then traded, (or any successor rule or regulation) for issuances
of Common Stock in excess of such amount, or (b) obtains a written opinion from
outside counsel to the Company that such approval is not required, which opinion
shall be reasonably satisfactory to the holders of a majority of the principal
amount of the Notes then outstanding.  Until such approval or written opinion is
obtained, or such action is taken by the required number of holders of the
Notes, no purchaser of Notes pursuant to the Securities Purchase Agreement (the
"Purchasers") shall be issued, upon conversion of this Note, shares of Common
Stock in an amount greater than the product of (i) the Exchange Cap amount
multiplied by (ii) a fraction, the numerator of which is the principal amount of
the Notes issued to such Purchaser pursuant to the Securities Purchase Agreement
and the denominator of which is the aggregate principal amount of all Notes
issued to the Purchasers pursuant to the Securities Purchase Agreement (the "Cap
Allocation Amount").  In the event that any Purchaser shall sell or otherwise
transfer any of such Purchaser's Notes, the transferee shall be allocated a pro
rata portion of such Purchaser's Cap Allocation Amount.  In the event that any
Holder of Notes, shall convert all of such holder's Notes into a number of
shares of Common Stock which, in the aggregate, is less than such holder's Cap
Allocation Amount, then the difference between such holder's Cap Allocation
Amount and the number of shares of Common Stock actually issued to such Holder
shall be allocated to the respective Cap Allocation Amounts of the remaining
Holders of Notes on a pro rata basis in proportion to Conversion Amount of Notes
then held by each such Holder.

                                       22
<PAGE>

     13.  Reissuance of Notes.  Subject to Section 2(e)(viii) in the event of a
          -------------------
conversion or redemption pursuant to this Note of less than all of the
Conversion Amount represented by this Note, the Company shall promptly cause to
be issued and delivered to the Holder, upon tender by the Holder of the Note
converted or redeemed, a new note of like tenor representing the remaining
principal amount of this Note which has not been so converted or redeemed.

     14.  Defaults and Remedies.
          ---------------------

          (a)  Events of Default.  An "Event of Default" is:  (i) default for
               -----------------
     thirty (30) days in payment of interest or Default Interest on this Note on
     or after the Maturity Date; (ii) default in payment of the principal amount
     of this Note when and as due; (iii) failure by the Company for thirty (30)
     days after notice to it to comply with any other material provision of this
     Note; (iv) any default under or acceleration prior to maturity of any
     mortgage, indenture or instrument under which there may be issued or by
     which there may be secured or evidenced any indebtedness for money borrowed
     of at least $500,000 by the Company or for money borrowed the repayment of
     at least $500,000 of which is guaranteed by the Company, whether such
     indebtedness or guarantee now exists or shall be created hereafter, (v) if
     the Company pursuant to or within the meaning of any Bankruptcy Law; (A)
     commences a voluntary case; (B) consents to the entry of an order for
     relief against it in an involuntary case; (C) consents to the appointment
     of a Custodian of it or for all or substantially all of its property; (D)
     makes a general assignment for the benefit of its creditors; or (E) admits
     in writing that it is generally unable to pay its debts as the same become
     due; or (vi) a court of competent jurisdiction enters an order or decree
     under any Bankruptcy Law that:  (1) is for relief against the Company in an
     involuntary case; (2) appoints a Custodian of the Company or for all or
     substantially all of its property; or (3) orders the liquidation of the
     Company or any subsidiary, and the order or decree remains unstayed and in
     effect for ninety (90) days.  The Term "Bankruptcy Law" means Title 11,
     U.S. Code, or any similar Federal or State Law for the relief of debtors.
     The term "Custodian" means any receiver, trustee, assignee, liquidator or
     similar official under any Bankruptcy Law.

          (b)  Remedies.  If an Event of Default occurs and is continuing, the
               --------
     Holder of this Note may declare all of this Note, including any interest
     and Default Interest and other amounts due, to be due and payable
     immediately, except that in the case of an Event of Default arising from
     events described in clauses (iv) and (v) of Section 13(a), this Note shall
     become due and payable without further action or notice.  Holder may not
     enforce the provisions of this Section 14 except as provided in this
     Section 14.  In addition to any remedy such Holder of the Notes may have
     under this Note and the Securities Purchase Agreement, such unpaid amount
     shall bear interest at the rate of 1.5% per month (prorated for partial
     months) until paid in full

     15.  Vote to Change the Terms of  Notes.  This Note and any provision
          ----------------------------------
hereof may only be amended by an instrument in writing signed by the Company and
holders of Notes representing at least two-thirds (2/3) of the aggregate
Conversion Amount of the Notes then outstanding.  The term "Note" and all
reference thereto, as used throughout this instrument, shall mean this
instrument (and the other Notes issued pursuant to the Securities Purchase

                                       23
<PAGE>

Agreement) as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

     16.  Lost or Stolen Notes.  Promptly upon receipt by the Company of
          --------------------
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Note, and, in the case of loss, theft or destruction, of an
indemnification undertaking by the Holder to the Company in a form reasonably
acceptable to the Company and, in the case of mutilation, upon surrender and
cancellation of the Notes, the Company shall execute and deliver new notes of
like tenor and date; provided, however, the Company shall not be obligated to
re-issue notes if the Holder contemporaneously requests the Company to convert
such remaining principal amount into Common Stock.

     17.  Payment of Collection, Enforcement and Other Costs.  If: (i) this Note
          --------------------------------------------------
is placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding; or (ii) an attorney is
retained to represent the Holder of this Note in any bankruptcy, reorganization,
receivership of the Company or other proceedings affecting Company creditors'
rights and involving a claim under this Note.

     18.  Cancellation.  After all principal and accrued interest at any time
          ------------
owed on this Note has been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall not be
reissued.

     19.  Note Exchangeable for Different Denominations.  This Note is
          ---------------------------------------------
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Note or Notes (in principal amounts of at least $100,000)
containing the same terms and conditions and representing in the aggregate the
principal amount of this Note, and each such new Note will represent such
portion of such principal amount as is designated by the Holder at the time of
such surrender.  The date the Company initially issues this Note will be deemed
to be the "Issuance Date" hereof regardless of the number of times a new Note
shall be issued.

     20.  Waiver of Notice.  To the extent permitted by law, the Company hereby
          ----------------
waives demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note
and the Securities Purchase Agreement.

     21.  Governing Law.  This Note shall be construed and enforced in
          -------------
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the laws of
the State of New York, without giving effect to provisions thereof regarding
conflict of laws.

     22.  Remedies, Characterizations, Other Obligations, Breaches and
          ------------------------------------------------------------
Injunctive Relief.  The remedies provided in this Note shall be cumulative and
-----------------
in addition to all other remedies available under this Note, at law or in equity
(including a decree of specific performance and/or other injunctive relief), no
remedy contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit a holder's
right to pursue actual damages for any failure by the Company to comply with the

                                       24
<PAGE>

terms of this Note.  The Company covenants to each Holder of Notes that there
shall be no characterization concerning this instrument other than as expressly
provided herein.  Amounts set forth or provided for herein with respect to
payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the Holder thereof and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof).  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holders of the Notes
and that the remedy at law for any such breach may be inadequate.  The Company
therefore agrees that, in the event of any such breach or threatened breach, the
holders of the Notes shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being required.

     23.  Specific Shall Not Limit General; Construction.  No specific provision
          ----------------------------------------------
contained in this Note shall limit or modify any more general provision
contained herein.  This Note shall be deemed to be jointly drafted by the
Company and all holders and shall not be construed against any person as the
drafter hereof.

     24.  Failure or Indulgence Not Waiver.  No failure or delay on the part of
          --------------------------------
this Note in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.

     25.  Notices.  Whenever notice is required to be given under this Note,
          -------
unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement.

                                   * * * * *

                                       25
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Note to be signed by
___________________, its [President and Chief Executive Officer], as of the ____
day of ____________,  ______.

                                    ROWECOM INC.


                                    By:_____________________________________
                                         Louis Hernandez, Jr.
                                         Executive Vice President and
                                         Chief Financial Officer

                                       26
<PAGE>

                                   EXHIBIT I

                                 ROWECOM INC.
                               CONVERSION NOTICE

Reference is made to the Note issued by RoweCom Inc. (the "Company").  In
accordance with and pursuant to the Note, the undersigned hereby elects to
convert the Conversion Amount (as defined in the Note) of the Note, indicated
below into shares of Common Stock, par value $0.01 per share (the "Common
Stock"), of the Company as of the date specified below.

     Date of Conversion:             _________

     Aggregate Conversion Amount to be converted: ________

     Note no(s). of Note to be converted: _________

Please confirm the following information:

     Conversion Price:               _________

     Number of shares of Common Stock to be issued: _________

     Is the alternative Variable Conversion Price being relied on pursuant to
     Section 2(g)(ii) of the Note?  (check one)  YES ____    No ____

Please issue the Common Stock into which the Note is being converted and, if
applicable, any check drawn on an account of the Company in the following name
and to the following address:

     Issue to:                       _________
                                     _________
                                     _________

     Facsimile Number:               _________

     Authorization:         _________
                              By: ____________
                              Title: _________

     Dated:                 _________

     Account Number:
      (if electronic book entry transfer): _________

     Transaction Code Number
      (if electronic book entry transfer): _________
<PAGE>

                                ACKNOWLEDGMENT
                                --------------


     The Company hereby acknowledges this Conversion Notice and hereby directs
[TRANSFER AGENT] to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated ___________ ___, 1999
from the Company and acknowledged and agreed to by [TRANSFER AGENT].


                                        ROWECOM INC.



                                        By: ___________________________________

                                        Name:  Louis Hernandez, Jr.
                                        Title: Executive Vice President and
                                               Chief Financial Officer