CONVERTIBLE
      PROMISSORY NOTE

    


    
      	
              $300,000.00

            	
              Dated:
                As of October 31,
                2007     

            


    

    


    FOR
      VALUE
      RECEIVED, the undersigned, Universal
      Bioenergy North America, Inc., a Nevada corporation
      ("Maker"),
      hereby promises to pay to the order of Mortensen
      Financial Limited
      ("Holder")
      the
      principal sum of Three Hundred Thousand Dollars ($300,000) (the “Principal
      Amount”),
      on
      or by
      October 31, 2010 (the "Maturity
      Date"),
      plus
      accrued and unpaid interest as set forth below.

    


    1. On
      April
      30, 2008
      and
      October 31, 2008, Maker shall pay to Holder all accrued and unpaid interest
      on
      the then unpaid principal balance of this promissory note (this "Note").
       Beginning
      on April 30, 2009, and semiannually thereafter to and including October 31,
      2010, Maker shall pay to Holder semiannual installments of principal, each
      in
      the amount of Seventy Five Thousand Dollars (US$75,000), each such installment
      of principal to be accompanied by payment of all accrued and unpaid interest
      on
      the then unpaid principal balance of this Note.  The
      unpaid principal amount of this Note shall become immediately due and payable
      upon the Maturity Date. Principal shall be payable in lawful money of the United
      States of America in immediately available funds, without any deduction, setoff
      or counterclaim, at the address of Holder specified herein.

    


    1. Principal
      and interest shall be payable in lawful money of the United States of America
      in
      immediately available funds, without any deduction, setoff or counterclaim,
      at
      the address of Holder specified herein.

    


    2. The
      unpaid principal amount and accrued interest of this Note shall become
      immediately due and payable upon the Maturity Date. Principal and interest
      shall
      be payable in lawful money of the United States of America in immediately
      available funds, without any deduction, setoff or counterclaim, at the address
      of Holder specified herein. This
      Note
      shall bear interest on the unpaid principal amount hereof commencing on the
      date
      hereof at a rate of 6.5% per annum. Upon
      the
      occurrence and during the continuance of an Event of Default, interest shall
      accrue on the unpaid principal amount of this Note, from the date of such
      default until the earlier of the date the principal sum is paid in full or,
      if
      applicable, the date such default is cured, at the rate of 15% per annum (but
      not higher than the applicable maximum rate provided by law). Accrued
      interest on the outstanding principal amount of this Note shall be payable
      on
      the Maturity Date,
      unless
      accelerated as a result of the occurrence of an Event of Default as set forth
      below.

    


    3. The
      principal amount of this Note may be prepaid, at the option of Maker, in whole
      at any time, together with all accrued interest upon fifteen (15) days prior
      written notice to Holder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. (a)
      Conversion. It
      is
      anticipated that Maker will enter into an agreement (“Purchase Agreement”) with
      another company which has shares traded on the an electronic quotation system
      or
      other public market (“Public Company”) whereby, in exchange for the majority of
      the issued and outstanding shares of Public Company, Public Company will acquire
      (by asset or stock acquisition, merger or otherwise) Maker and the current
      directors of Maker will, upon closing of the transactions contemplated by the
      Purchase Agreement (the “Closing”), become the directors and officers of Public
      Company. At any time prior to the Maturity Date, this Note shall, at the option
      of the Holder, be convertible into:
      (i)
      shares of Maker's common stock, share (the “Private Stock"); or (ii) if
      following the Closing, shares of common stock of Public Company (“Public Company
      Stock” and together with Private Stock, “Common Stock”), on the terms
and
      conditions set forth herein.
      Notwithstanding
      anything contained in this Note to the contrary, Holder shall have the option,
      by written notice to Maker, at any time on or prior to the Maturity Date, to
      convert this Note into that number of fully paid and non-assessable shares
      of
      Common Stock determined by dividing all of the unpaid principal due on this
      Note
      as of the date of conversion by the result of: (i) the average
      bid price of the Common Stock of the Maker over the five days prior to the
      conversion date as
      quoted
      on the OTC Bulletin Board or such other trading platform that the Common Stock
      is traded on the conversion date; multiplied by (ii) 75%. 

     

    (b) Issuance
      of Securities on Conversion. As soon as practicable after conversion of this
      Note, Maker, at its expense, will cause to be issued in the name of and
      delivered to the Holder of this Note, a certificate or certificates representing
      the number of fully paid and nonassessable shares of Common Stock to which
      Holder shall be entitled on such conversion. No fractional shares will be issued
      on conversion of this Note. If Holder would otherwise be entitled to a
      fractional share, Holder shall receive a cash payment equal to the per share
      price of the Common Stock (subject to adjustment, as applicable) multiplied
      by
      the fractional share the Holder would otherwise be entitled to
      receive.

     

    (c) Termination
      of Rights.
      All
      rights with respect to this Note shall terminate upon (i) the issuance of shares
      of Common Stock (as applicable) upon conversion of this Note pursuant to this
      Section 4; or (ii) upon payment, whether or not this Note has been surrendered.
      Notwithstanding the foregoing, the Holder agrees to surrender this Note to
      Maker
      for cancellation as soon as is practicable following conversion of this
      Note.

    


    5. This
      Note, the Working Capital Note and any ancillary documents entered into in
      connection therewith, each as amended, extended or modified from time to time,
      are referred to collectively herein as the "Transaction
      Documents".

    


    6. The
      unpaid principal amount of this Note, the accrued interest thereon and all
      other
      obligations of Maker hereunder and under the Promissory Note of Maker in favor
      of Holder dated the same date (the "Working
      Capital Note")
      (collectively, the "Obligations"),
      at
      the option of Holder, shall become immediately due and payable upon the
      occurrence of any of the following events of default ("Events
      of Default"):

    


    (a) Maker
      shall fail to pay: (i) any principal or accrued interest under this Note
      within fifteen (15) days after the Maturity Date; or (ii) any of the other
      monetary obligations to be paid by it under this Note or any of the other
      Transaction Documents within 10 days of the due date for payment of
      same.

    


    (b) Maker
      shall default in the observance or performance of any material agreements,
      covenants or conditions contained in this Note or in any other document or
      instrument referred to herein or therein (except the failure to pay monetary
      obligations) and fail to cure such default within 10 business days of the
      date Maker obtains notice thereof whether from Holder or otherwise.

     

    
      
         

      

      
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    (c) Any
      present or future representation or warranty made by or on behalf of Maker
      whether contained herein or in any of the other Transaction Documents shall
      be
      false or incorrect in any material respect when such representation or warranty
      is made.

    


    (d) The
      occurrence of any of the following with respect to Maker: dissolution;
      termination of existence; insolvency; business cessation; calling of a meeting
      of creditors; appointment of a receiver for any property; assignment for the
      benefit of creditors or admit in writing its inability to pay its debts as
      they
      become due; voluntary commencement of any proceeding under any bankruptcy or
      insolvency law; commencement of any involuntary proceeding under any bankruptcy
      or insolvency law and if any such involuntary proceeding is not dismissed within
      45 days or the relief requested is granted; entry of a court order which enjoins
      or restrains the conduct of business in the ordinary course.

    


    7. Maker
      shall reimburse Holder for all costs and expenses incurred by Holder and shall
      pay the reasonable fees, disbursements and out of pocket expenses of counsel
      to
      Holder in connection with the enforcement of Holder's rights hereunder. Maker
      shall also pay any and all taxes (other than taxes on or measured by net income
      of the holder of this Note) recording fees, filing charges, search fees or
      similar items incurred or payable in connection with the execution and delivery
      of this Note.

    


    8. Maker
      waives demand, presentment, protest and notice of any kind and consents to
      the
      release, surrender or substitution of any and all security or guarantees for
      the
      obligations evidenced hereby or other indulgence with respect to this Note,
      all
      without notice.

    


    9. Maker
      shall indemnify, defend and save Holder harmless from and against any and all
      claims, liabilities, losses, costs and expenses (including, without limitation,
      reasonable attorneys' fees, disbursements and out of pocket expenses) of any
      nature whatsoever which may be asserted against or incurred by Holder arising
      out of or in any manner occasioned by or any failure by Maker to perform any
      of
      its obligations hereunder or pursuant to the Transaction Documents.

    


    10. Maker
      agrees to do such further acts and to execute and deliver to Holder such
      additional agreements, instruments and documents as Holder may reasonably
      require or deem advisable to effectuate the purposes of this Note, or to confirm
      to Holder its rights, powers and remedies under this Note.

    


    11. (a)
      Any
      notice or other communication required or permitted hereunder shall be in
      writing and shall be delivered or transmitted personally by messenger, by
      recognized overnight courier, telecopied or mailed (by registered or certified
      mail, postage prepaid) as follows: 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (i) If
      to
      Maker, one copy to:

    


    Universal
      Bioenergy North America, Inc. 

    128
      Biodiesel Drive

    Nettleton,
      MS 38858

    


    
      
        (ii)
          If
          to the
          Holder: 

      

    

    


    Mortensen
      Financial Limited, 

    [insert
      address]

     

    (b) Each
      such
      notice or other communication shall be effective: (i) if given by telecopier,
      when such telecopy is transmitted to the telecopier number specified in Section
      11(a) (with confirmation of transmission received by the sender); or (ii) if
      given by any other means, when received at the address specified in Section
      11(a). Any party by notice given in accordance with this Section 11 to the
      other
      party may designate another address (or telecopier number) or person for receipt
      of notices hereunder.

     

    12. This
      Note
      contains the entire agreement between the parties with respect to the subject
      matter hereof and supersedes all prior agreements, written or oral, with respect
      thereto.

    


    13. This
      Note
      may be amended, superseded, cancelled, renewed or extended only by a written
      instrument signed by Holder and Maker. Any provisions hereof may be waived
      by a
      party but any such waiver must be in writing signed by such party and any such
      waiver shall be effective only in the specific instance and for the specific
      purpose for which given. No delay on the part of any party in exercising any
      right, power or privilege hereunder shall operate as a waiver thereof, nor
      shall
      any waiver on the part of any party of any such right, power or privilege,
      nor
      any single or partial exercise of any such right, power or privilege, preclude
      any further exercise thereof or the exercise of any other such right, power
      or
      privilege. The rights and remedies herein provided are cumulative and are not
      exclusive of any rights or remedies that any party may otherwise have at law
      or
      in equity. 

    


    14. This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Nevada applicable to agreements made and to be performed entirely
      within such State, without regard to the conflict of laws rules
      thereof.

    


    15. Maker
      irrevocably: (a) agrees that any suit, action or other legal proceeding arising
      out of this Agreement may be brought in the courts of the State of Nevada or
      the
      courts of the United States located in Nevada; (b) consents to the jurisdiction
      of each court in any such suit, action or proceeding; (c) waives any objection
      which it may have to the laying of venue of any such suit, action or proceeding
      in any of such courts; (d) waives the right to assert any counterclaim in
      any such suit, action and proceeding; and (e) waives the right to a trial by
      jury in any such suit, action or other legal proceeding. 

    


    16. This
      Note
      and all of its provisions, rights and obligations shall be binding upon and
      shall inure to the benefit of the parties hereto and their respective
      successors, assigns and legal representatives. Nothing herein express or implied
      is intended or shall be construed to confer upon or to give anyone other than
      the parties hereto and their respective heirs, legal representatives and
      successors any rights or benefits under or by reason of this Agreement and
      no
      other party shall have any right to enforce any of the provisions of this
      Agreement. 

     

    
      
         

      

      
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    17. If
      any
      provision of this Note for any reason shall be held to be illegal, invalid
      or
      unenforceable, such illegality shall not affect any other provision of this
      Note, but this Note shall be construed as if such illegal, invalid or
      unenforceable provision had never been included herein.

    


    IN
      WITNESS WHEREOF, the undersigned has executed this Secured Promissory Note
      as of
      the date first written above.

    


    
      	
              ATTEST:

            	 
	 	
              MAKER:

            
	 	
              Universal
                Bioenergy North America, Inc.

            
	 	 
	
              ___________/s/________________

            	
              By:_____________/s/_______________

            
	 	
              Name:

            	
              James
                E. Earnest

            
	 	
              Title:

            	
              President

            


    

    


    
      
         

      

      
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