EXHIBIT 4.1

This Note,  and the securities  issuable upon the conversion of this Note,  have
not been registered  under the Securities Act of 1933, as amended (the "Act") or
applicable state law and may not be sold,  transferred or otherwise  disposed of
unless  registered  under the Act and any  applicable  state  act or unless  the
Company  receives an opinion from  counsel for the holder and is satisfied  that
this Note and the underlying  securities may be transferred without registration
under the Act.


                                CONVERTIBLE NOTE


$31,250                                                  As of January 13, 2000
                                                           Palm Beach, Florida


FOR  VALUE  RECEIVED,  CLEMENTS  GOLDEN  PHOENIX  ENTERPRISES,  INC.,  a Florida
corporation  (the  "Company"),  hereby promises to pay to the order of Bassuener
Cranberry  Corporation,  or any subsequent holder of this Note (the "Payee"), at
10976 State Highway 54 East,  Wisconsin Rapids, WI 54494, or at such other place
as may be  designated  by the Payee from time to time by notice to the  Company,
the principal sum of  Thirty-One  Thousand Two Hundred Fifty Dollars  ($31,250),
together with simple interest from the date hereof (the "Issuance  Date") on the
unpaid  principal  amount at an annual  rate equal to twelve  percent  (12%) per
annum. Such principal and interest shall be paid in accordance with the terms of
Section 1 below, to such account as the Payee shall direct.

1.   PAYMENTS.

(a) The unpaid principal amount of this Note may be converted into shares of the
Restricted  Common Stock of the Company as provided  herein on or before January
13, 2003 (the  "Maturity  Date") at the sole  option of Payee.  In the event the
unpaid  principal  amount  of this  Note is not  converted  into  shares  of the
Restricted  Common  Stock of the  Company  as  provided  herein on or before the
Maturity  Date,  it  shall  be due in the  form of a  "balloon  payment"  on the
Maturity Date.

(b) Interest on the unpaid principal  balance of this Note at the rate of twelve
percent  (12%) per annum shall  accrue from the date hereof and shall be payable
to the Payee  quarterly  either in shares of the Restricted  Common Stock of the
Company,  the number of which  shall be equal to the  product  of such  interest
payment divided by the Conversion Price, as defined herein, with the overage, if
any,  payable in cash or in cash at the sole option of Payee.  Interest shall be
calculated on the basis of a 365 day year.

(c) In the event that any payment of principal and/or interest hereunder becomes
due and payable on a Saturday,  Sunday or other day on which commercial banks in
the State of  Florida  are  authorized  or  required  by law to close,  then the
maturity  thereof  shall be  extended  to the  next  succeeding  "Business  Day"
(defined as any days on which national banks in the United States are open for

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<PAGE>



business); and during any such extension,  interest on principal amounts payable
shall accrue and be payable at the applicable rate.

2.   RANKING OF NOTE.

           Subject  at all times to the  subordination  provisions  set forth in
Section 9 hereof,  this Note shall constitute  senior  securities of the Company
and, except as provided below, shall rank pari passu with all other indebtedness
for money borrowed by the Company and senior to any other indebtedness for money
borrowed by the Company which, by its terms shall be made expressly  subject and
subordinated to this Note.

3.   PREPAYMENT OF NOTE.

           The Company shall have the right to prepay the  indebtedness  created
herein  at any time  prior to the  Maturity  Date  without  penalty.  Notice  of
prepayment is hereby waived by Payee.

4.   CONVERSION.

           The holders of the Notes shall have the following  conversion  rights
(the "Conversion Rights"):

(a)  Voluntary  Conversion.  At any  time or from  time  to time  following  the
Issuance  Date,  the holder of this Note may elect to convert up to one  hundred
(100%) percent of the original principal amount of this Note and any accrued but
unpaid  interest,  into shares of the Restricted  Common Stock of the Company at
the Conversion  Price, by written notice given to the Company in accordance with
the provisions of Section 4(f) hereof (the "Conversion Notice"). In no event may
the holder of this Note effect a conversion of less than $1,000 principal amount
of this Note.  Such  right of  Voluntary  Conversion  shall be  effected  by the
surrender of this Note to the Company for  conversion  at any time during normal
business hours at the office of the Company,  accompanied  (i) by the Conversion
Notice,  (ii) if so required by the Company,  by instruments  of transfer,  in a
form  satisfactory to the Company,  duly executed by the registered holder or by
his duly authorized  attorney and (iii) transfer tax stamps or funds  therefore,
if required pursuant to Section 4(f) herein.

(b)  Conversion  Price.  Subject to adjustment  from time to time as provided in
Section 4(d) below,  the term  "Conversion  Price" shall mean $3.00 per share of
Common Stock.

(c) Adjustments of Conversion Price. The Conversion Price in effect from time to
time shall be,  subject to adjustment in accordance  with the provisions of this
Section 4(c).

           (i)  Adjustments  for Stock Splits and  Combinations.  If the Company
shall at any time or from time to time after the Issuance  Date,  effect a stock
split  of  the  outstanding   Common  Stock,  the  Conversion  Price  in  effect
immediately prior to the stock split shall be proportionately  decreased. If the
Company shall at any time or from time to time after the Issuance Date,  combine
the  outstanding  shares  of  Common  Stock,  the  Conversion  Price  in  effect
immediately prior to the combination  shall be  proportionately  increased.  Any
adjustments  under  this  Section  4(c)(i)  shall be  effective  at the close of
business on the date the stock split or combination occurs.

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<PAGE>





           (ii)  Adjustments  for Certain  Dividends and  Distributions.  If the
Company shall at any time or from time after the Issuance Date, make or issue or
set a record date for the  determination  of holders of Common Stock entitled to
receive a dividend  or other  distribution  payable  in shares of Common  Stock,
then, and in each event,  the Conversion  Price in effect  immediately  prior to
such event shall be decreased  as of the time of such  issuance or, in the event
such a record  date shall have been  fixed,  as of the close of business on such
record date, by multiplying the Conversion Price then in effect by a fraction;

                     (A) the  numerator  of  which  shall be the total number of
shares of Common Stock issued and outstanding  immediately  prior to the time of
such issuance or the close of business on such record date; and

                     (B) the  denominator  of which shall be the total number of
shares of Common Stock issued and outstanding  immediately  prior to the time of
such  issuance  or the close of  business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution.

           (iii)  Adjustments  for Other  Dividends  and  Distributions.  If the
Company shall at any time or from time to time after the Issuance Date,  make or
issue or set a record  date for the  determination  of holders  of Common  Stock
entitled  to  receive a  dividend  or other  distribution  payable in other than
shares of Common Stock, then, and in each event, an appropriate  revision to the
Conversion  Price shall be made and provision  shall be made (by  adjustments of
the Conversion Price or otherwise) so that the holder of this Note shall receive
upon  conversions  thereof,  in addition to the number of shares of Common Stock
receivable  thereon,  the number of  securities  of the Company which they would
have received had this Note been converted into Common Stock on the date of such
event and had  thereafter,  during the period from the date of such event to and
including the  Conversion  Date,  retained such  securities  (together  with any
distributions  payable  thereon during such period),  giving  application to all
adjustments  called for during such period  under this  Section  4(d)(iii)  with
respect to the rights of the holders of the Note.

           (iv) Adjustments for Reclassification,  Exchange or Substitution.  If
the Common Stock issuable upon  conversion of this Note at any time or from time
to time after the  Issuance  Date shall be changed  into the same or a different
number of shares of any class or classes of stock,  whether by reclassification,
exchange,  substitution  or  otherwise  (other  than by way of a stock  split or
combination of shares or stock dividends provided for in Sections 4(c)(i),  (ii)
and  (iii),  or a  reorganization,  merger,  consolidation,  or sale  of  assets
provided  for in Section  4(c)(v)),  then,  and in each  event,  an  appropriate
revision to the Conversion  Price shall by made and provisions shall be made (by
adjustments  of the  Conversion  Price of  otherwise) so that the holder of this
Note shall  have the right  thereafter  to  convert  such Note into the kind and
amount  of  shares  of  stock  and  other   securities   receivable   upon  such
reclassification,  exchange,  substitution  or other  change,  by holders of the
number of shares of Common Stock into which such Note might have been  converted
immediately  prior to such  reclassification,  exchange,  substitution  or other
change, all subject to further adjustment as provided herein.

                                        3

<PAGE>




           (v) Adjustments for Reorganization, Merger, Consolidation or Sales of
Assets.  If at any time or from time to time after the Issuance Date there shall
be a capital  reorganization  of the Company (other than by way of a stock split
or combination  of shares or stock  dividends or  distributions  provided for in
Section 4(c)(i), (ii) and (iii), or a reclassification, exchange or substitution
of shares provided for in Section 4(c)(iv)), or a merger or consolidation of the
Company with or into another  corporation,  or the sale of all or  substantially
all of the Company's properties or assets to any other person, then as a part of
such reorganization,  merger, consolidation, or sale, an appropriate revision to
the Conversion  Price shall be made and provision  shall be made (by adjustments
of the Conversion Price or otherwise) so that the holder of this Note shall have
the right  thereafter to convert this Note into the kind and amount of shares of
stock  and  other  securities  or  property  of the  Company  or  any  successor
corporation resulting from such reorganization,  merger, consolidation, or sale,
to which a holder of Common Stock  deliverable  upon  conversion  of such shares
would have been entitled upon such  reorganization,  merger,  consolidation,  or
sale. In any such case,  appropriate adjustment shall be made in the application
of the  provisions  of this  Section  4(c)(v)  with respect to the rights of the
holders of this Note after the reorganization, merger, consolidation, or sale to
the end that the provisions of this Section 4(c)(v) (including any adjustment in
the  Conversion  Price then in effect and the number of shares of stock or other
securities deliverable upon conversion of this Note) shall be applied after that
event in as nearly an equivalent manner as may be practicable.

(d) No  Impediment.  The Company shall not, by amendment of its  Certificate  of
Incorporation or through any reorganization,  transfer of assets, consolidation,
merger, dissolution,  issue or sale of securities or any other voluntary action,
avoid or seek to avoid the  observance or  performance of any of the terms to be
observed or performed  hereunder  by the Company,  but will at all times in good
faith, assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such action as may be  necessary  or  appropriate  in order to
protect  the  conversion  rights  of the  holders  of the Note set forth in this
Section 4 against impairment.

(e)  Certificate  as to  Adjustments.  Upon  occurrence  of each  adjustment  or
readjustment  of the  Conversion  Price or number  of  shares  of  Common  Stock
issuable upon  conversion of the Note pursuant to this Section 4, the Company at
its  expense,   shall  promptly  compute  such  adjustment  or  readjustment  in
accordance  with the terms hereof and furnish notice to the holder of this Note,
a certificate setting forth such adjustment and readjustment,  showing in detail
the facts upon which such  adjustment  or  readjustment  is based.  The  Company
shall, upon written request of the holder of this Note, at any time,  furnish or
cause to be  furnished  to such  holder a like  certificate  setting  forth such
adjustments and readjustments,  the applicable Conversion Price in effect at the
time and the number of shares of Common  Stock and the amount,  if any, of other
securities or property  which at the time would be received upon the  conversion
of such Note.  Notwithstanding the foregoing, the Company shall not be obligated
to deliver a certificate  unless such  certificate  would reflect an increase or
decrease of at least one percent (1%) of such adjusted amount.

(f) Issue  Taxes.  The  Company  shall  pay any and all  issue and other  taxes,
excluding  federal,  state or local income taxes, that may be payable in respect
of any issue or delivery of shares of Common  Stock on  conversion  of this Note
pursuant hereto;  provided,  however, that the Company shall not be obligated to
pay any transfer taxes  resulting  from any transfer  requested by any holder in
connection with any such conversion.

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<PAGE>





(g)  Notices  and  Delivery  of Shares.  All  notices  and other  communications
hereunder shall be in writing and shall be deemed given (i) on the same date, if
delivered  personally  or by facsimile by not later than 5:00 p.m.  Florida time
(provided,  that a copy of such facsimile shall be simultaneously sent to Donald
F. Mintmire,  Esq. at  (561)659-5371,  or (ii) three (3) business days following
being mailed by certified or registered mail,  postage  prepaid,  return-receipt
requested, addressed to the party in accordance with Section 7 hereof. Not later
than  seven (7)  Business  Days  following  receipt of notice of  conversion  as
provided herein (the "Delivery Date"),  the Company shall deliver to the holders
of  this  Note,  against  delivery  of this  Note  surrendered  for  conversion,
certificates evidencing all shares of Common Stock into which this Note shall be
converted.

(h) Fractional Shares. No fractional shares of Common Stock shall be issued upon
conversion  of the Note.  In lieu of any  fractional  shares to which the holder
would otherwise be entitled,  the Company shall pay cash equal to the product of
such fraction  multiplied by the Conversion  Price of one share of the Company's
Common Stock on the applicable Conversion Date.

(i) Reservation of Common Stock. The Company shall at all times reserve and keep
available, out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the  conversion of the Note,  the full number of shares
deliverable upon conversion of all the Note from time to time  outstanding.  The
Company shall,  from time to time in accordance  with the Florida  Statutes,  as
amended, increase the authorized number of shares of Common Stock if at any time
the unissued  number of authorized  shares shall not be sufficient to permit the
conversion of all of the Note at the time outstanding.  In such connection,  the
Company  shall hold a special  meeting of  stockholders  not later than 180 days
after any date in which the  Company  shall have  insufficient  shares of Common
Stock so reserved  for the purpose of  authorizing  additional  shares of Common
Stock.

(j)  Retirement  of Note.  Conversion  of this Note shall be deemed to have been
effected on the  applicable  Conversion  Date.  The  converting  holder shall be
deemed  to have  become a  stockholder  of  record  of the  Common  Stock on the
applicable  Conversion Date. Upon conversion of only a portion of this Note, the
Company  shall issue and deliver to such holder,  at the expense of the Company,
against receipt of the original Note delivered for partial  cancellation,  a new
Note representing the unconverted portion of this Note so surrendered and Common
Stock equal to the portion converted.

(k)  Regulatory Compliance.

           (i) If any shares of Common  Stock to be reserved  for the purpose of
conversion  of this Note  require  mandatory  registration  or  listing  with or
approval of any government  authority,  stock exchange or other  regulatory body
under any federal or state law or regulation or otherwise before such shares may
be validly issued or delivered upon  conversion,  the Company shall, at its sole
cost and expense,  in good faith and as expeditiously  as possible,  endeavor to
secure such registration, listing or approval, as the case may be.


                                        5

<PAGE>



           (ii) The shares of Common Stock issuable upon the election to convert
shall be Rule 144 Restricted shares (the "Restricted Securities").

           (iii)  The holder of such shares shall have no registration rights.

           (iv)  Neither  this  Note  nor the  Shares  underlying  it have  been
registered under the Securities Act of 1933, as amended (the "Act").  Unless and
until registered  under the Act, this Note and all replacement  Notes shall bear
the following legend:

           This Note,  and the  securities  issuable upon the conversion of this
           Note, have not been  registered  under the Securities Act of 1933, as
           amended  (the  "Act")  or  applicable  state law and may not be sold,
           transferred or otherwise  disposed of unless registered under the Act
           and any applicable  state act or unless the Company is satisfied that
           this Note and the underling  securities  may be  transferred  without
           registration under the Act.

           (v) This offering is being conducted  pursuant to Section 4(2) of the
Securities  Act of 1933,  as amended (the "Act"),  and Rule 506 of  Regulation D
promulgated  thereunder  ("Rule  506") or other  applicable  provisions  and the
shares  issuable  upon  conversion  of this  Note  shall be Rule 144  Restricted
shares.

5.   EVENTS OF DEFAULT.

The  occurrence and  continuance  of any one or more of the following  events is
herein referred to as an Event of Default:

(a) If the Company shall default in converting the applicable  principal  amount
of this Note into Common Stock and delivering  stock  certificates in respect of
such conversion  within thirty (30) Business Days from the Company's  receipt of
the applicable notice of conversion  pursuant to the provisions hereof,  whether
on the Maturity Date or otherwise; or

(b) If the Company shall default in the payment of any  installment  of interest
on this Note when  payable in  accordance  with the terms  thereof for more than
sixty (60)  calendar  days after the same shall  become due if the Payee has not
elected to take such interest in Common  Stock;  and if the Payee has elected to
take such interest in Common  Stock,  if the Company shall default in delivering
stock  certificates  in respect of such election within sixty (60) Business Days
from the Company's receipt of the notice of such election; or

(c) If the  Company  shall not,  at the time of receipt of a  Conversion  Notice
hereunder,  have a sufficient  number of authorized  and unissued  shares of its
Common Stock  available for issuance to the holder of this Note upon  conversion
of all or any portion of this Note in accordance with the terms hereof, and such
default shall not have been remedied  within one hundred  eighty (180)  calendar
days from the date of such Conversion Notice; or


                                        6

<PAGE>


(d) If the Company shall default in the performance of or compliance with any of
its material covenants or agreements contained herein and such default shall not
have been remedied within thirty (30) calendar days after written notice thereof
shall  have  been  delivered  to the  Company  by the  holder  of  this  Note in
accordance with the notice provisions herein; or

(e) If any  representation  or  warranty  made in writing by or on behalf of the
Company in connection with the transactions  contemplated  hereby shall prove to
have been false or  incorrect  in any  material  respect on the date as of which
made; or

(f) If the Company or any of its "Significant  Subsidiaries" (as defined herein)
shall make an assignment for the benefit of creditors, or shall admit in writing
its  inability  to pay its debts as they  become  due, or shall file a voluntary
petition in  bankruptcy  or shall have an order for relief under the  Bankruptcy
Act granted against it or them, or shall be adjudicated a bankrupt or insolvent,
or shall file any  petition  or answer  seeking  for itself any  reorganization,
arrangement,  composition,  readjustment,  liquidation,  dissolution  or similar
relief under any present or future statute, law or regulation, or shall file any
answer admitting or not contesting the material  allegations of a petition filed
against  the  Company  or any  of  its  Significant  Subsidiaries  in  any  such
proceeding,  or shall seek or consent to or acquiesce in the  appointment of any
trustee,  custodian,  receiver  or  liquidator  of the  Company or of all or any
substantial  part of the  properties  of the  Company or any of its  Significant
Subsidiaries,  or the Company or its directors  shall take any action looking to
the  dissolution  or  liquidation  of the  Company  or  any  of its  Significant
Subsidiaries. For purposes of this Section 5(f), the term Significant Subsidiary
shall mean and include any other person,  firm or corporation  (i) more than 50%
of the  common  stock or  equity  interests  of which are owned of record by the
Company or any  Subsidiary of the Company,  and (ii) the net income before taxes
or total assets of which represent more than 15% of the  consolidated net income
before taxes or consolidated  assets of the Company and all of its Subsidiaries;
or

(g) If, within sixty (60) days after the commencement of any proceeding  against
the  Company  or  any  Significant   Subsidiary   seeking  any   reorganization,
arrangement,  composition,  readjustment,  liquidation,  dissolution  or similar
relief under any present or future statute,  law or regulation,  such proceeding
shall  not have  been  dismissed,  or if,  within  sixty  (60)  days  after  the
appointment,  without  the  consent  or  acquiescence  of  the  Company  or  any
Significant Subsidiary, of any trustee, receiver or liquidator of the Company or
any Significant  Subsidiary or of all or any substantial  part of the properties
of the Company or any Significant  Subsidiary,  such appointment  shall not have
been vacated.

6.   REMEDIES ON DEFAULT; ACCELERATION.

           Upon  the  occurrence  and  during  the  continuance  of an  Event of
Default,  the entire unpaid  balance of principal  and accrued  interest on this
Note may be accelerated  and declared to be  immediately  due and payable by the
holder in Rule 144  Restricted  Shares of the  Company's  Common  Stock.  Unless
waived by the written consent of the holder,  such holder may proceed to protect
and enforce its rights by an action at law, suit in equity or other  appropriate
proceeding,  whether for the specific  performance  of any  agreement  contained
herein, or for an injunction  against a violation of any of the terms hereof, or
in aid of the  exercise  of  any  power  granted  hereby  or by  law.  Upon  the
occurrence  of an Event of Default,  the Company  agrees to pay to the holder of
this Note such further

                                        7

<PAGE>



amount as shall be  sufficient  to cover  the cost and  expense  of  collection,
including,  without  limitation,  reasonable  attorneys'  fees and expenses.  No
course  of  dealing  and no  delay  on the part of the  holder  of this  Note in
exercising  any right,  power or remedy  shall  operate  as a waiver  thereof or
otherwise prejudice such holder's rights,  powers and remedies.  No right, power
or remedy  conferred  hereby upon the holder  hereof  shall be  exclusive of any
other right,  power or remedy referred to herein nor now or hereafter  available
at law, in equity, by statute or otherwise.

7.   NOTICES.

All notices,  requests,  demands or other  communications  hereunder shall be in
writing and  personally  addressed or sent by  telecopier  or by  registered  or
certified  mail,  return  receipt  requested,  postage  pre- paid,  addressed or
telecopied  as follows or to such other  address or  telecopier  number of which
notice has been given pursuant hereto:

    If to the Company:         Clements Golden Phoenix Enterprises, Inc.
                               3135 Southwest Mapp Road, P.O. Box 268
                               Palm City, FL 34991
                               Phone: (561) 287-5958
                               Fax: (561) 287-9776

with copy (which shall
not constitute notice) to:     Mintmire & Associates
                               265 Sunrise Avenue, Suite 204
                               Palm Beach, FL  33480
                               Attn:  Donald F. Mintmire, Esq.
                               Telephone: (561) 832-5696
                               Fax: (561) 659-5371


If to the Holder:   to such  Holder at the  address  set forth on the records of
                    the  Company.  In  addition,  copies of all such  notices or
                    other communications shall be concurrently  delivered by the
                    person   giving  the  same  to  each  person  who  has  been
                    identified  to the Company by such Holder as a person who is
                    to receive copies of such notices.

8.   GOVERNING LAW.

This Note shall be governed by, and  construed  and  interpreted  in  accordance
with, the laws of the State of Florida, without giving effect to conflict of law
principles.

9.   SUBORDINATION TO SENIOR DEBT.

(a) Payment of the  principal of and interest on this Note is  subordinated,  to
the  extent  and in the  manner  provided  herein,  to the prior  payment of all
indebtedness of the Company and/or all  Subsidiaries  of the Company,  for money
borrowed or other obligations which is now or may hereafter

                                        8

<PAGE>



be owed (collectively,  "Senior Debt") to any bank,  commercial finance company,
factor,  insurance company or other institution the lending  activities of which
are regulated by law (individually, a "Senior Lender" and collectively,  "Senior
Lenders"),  which may,  hereafter on any one or more occasions provide financing
to the Company or any of its Subsidiaries, secured by liens on any of the assets
and properties of the Company and/or any of its Subsidiaries  (individually  and
collectively, an "Institutional Borrower").

(b)  Upon  any  payment  or   distribution   of  assets  or  securities  of  the
Institutional Borrower, as the case may be, of any kind or character, whether in
cash,  property or  securities,  upon any  dissolution or winding up or total or
partial  liquidation or reorganization of the  Institutional  Borrower,  whether
voluntary or  involuntary or in bankruptcy,  insolvency,  receivership  or other
proceedings,  all amounts  payable under Senior Debt shall first be paid in full
in cash, or payment provided for in cash or cash equivalents,  before the holder
hereof  shall be entitled to receive any payment on account of  principal  of or
interest  on this Note.  Before  any  payment  may be made by the  Institutional
Borrower of the principal of or interest on this Note upon any such  dissolution
or winding up or liquidation or  reorganization,  any payment or distribution of
assets or  securities  of the  Institutional  Borrower of any kind of character,
whether in cash,  property or  securities,  to which the holder  hereof would be
entitled,  except  for the  provisions  of this  Section 9, shall be made by the
Institutional  Borrower or by any receiver,  trustee in bankruptcy,  liquidating
trustee, agent or other person making such payment or distribution,  directly to
the holders of Senior Debt or their  representatives  to the extent necessary to
pay all such Senior Debt in full after giving effect to any  concurrent  payment
or distribution to the holders of such Senior Debt.

(c) Upon the happening of any default in payment of the principal of or interest
on any Senior Debt, then, unless and until such default shall have been cured or
waived or shall have  ceased to exist,  no direct or  indirect  payment in cash,
property or securities,  by set-off or otherwise,  shall be made or agreed to be
made by the Institutional Borrower on account of the principal of or interest on
this Note.

(d) Upon the  happening of an event of default  (other than under  circumstances
when the terms of Section 9(c) above are applicable)  with respect to any Senior
Debt  pursuant to which the holder  thereof is entitled  under the terms of such
Senior Debt to accelerate the maturity thereof,  and upon written notice thereof
given to each of the Institutional  Borrower and the holder of this Note by such
holder of Senior Debt ("Payment  Notice"),  then, unless and until such event of
default shall have been cured or waived or shall have ceased to exist, no action
shall or may be taken for  collection  of any  amounts  under this Note,  and no
direct or  indirect  payment  in cash,  property  or  securities,  by set-off or
otherwise,  shall be made or agreed to be made by the Institutional  Borrower an
account of the  principal of or interest on this Note until such Senior Debt has
been paid in full accordance with its terms.

(e) In the event that,  notwithstanding  the  provisions  of this Section 9, any
payment shall be made on account of the principal of or interest on this Note in
contravention  of such  provisions,  then  such  payment  shall  be held for the
benefit of, and shall be paid over and  delivered to, the holders of such Senior
Debt  remaining  unpaid to the extent  necessary  to pay in full in cash or cash
equivalents the principal of and interest on such Senior Debt in accordance with
its terms after giving effect to any

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<PAGE>



concurrent payment or distribution to the holders of such Senior Debt.

(f)        Nothing contained in this Section 9 shall:

           (i) impair the conversion rights of  the holder hereof referred to in
Section 4 above,

           (ii) impair,  as between the Company and the holder of this Note, the
obligation of the Company,  which is absolute and  unconditional,  to pay to the
holder  hereof  principal and interest as the same shall become due and payable,
or

           (iii) prevent the holder hereof from  exercising  all rights,  powers
and remedies  otherwise provided herein or by applicable law, all subject to the
express limitations provided herein.

(g) Upon the occurrence of an Event of Default, if any Senior Debt shall then be
outstanding,  no  acceleration  of the  maturity of this Note shall be effective
until the earlier of (i) ten (10) days shall have passed  following  the date of
delivery to the  Institutional  Borrower by a Senior Lender(s) of written notice
of acceleration of any Senior Debt, or (ii) the maturity of any then outstanding
Senior  Debt  shall have been  accelerated  by reason of a default  hereon.  The
Company may pay the holder  hereof any  defaulted  payment and all other amounts
due following any such acceleration of the maturity of this Note if this Section
9 would not prohibit such payment to be made at that time.

(h) Upon  payment  in full of all Senior  Debt,  the Payee of this Note shall be
subrogated  to the rights of the holder or holders of Senior Debt to receive all
payments or  distributions  applicable  on such Senior Debt to the extent of the
prior  application  thereto  of moneys or other  assets  which  would  have been
received in respect of this Note, but for these subordination provisions,  until
the principal of, and interest on, this Note shall have been paid in full.

(i)        The Payee, by accepting this Note:

           (i) shall be bound by all of the foregoing subordination provisions;

           (ii)  agrees  expressly  for the  benefit of the  present  and future
holders of Senior Debt that this Note is subject to the foregoing  subordination
provisions;

           (iii)  authorizes  such persons as shall be designated by all holders
of Senior Debt at any given  time,  on his or its benefit to execute and deliver
such agreements, assignments, proofs of claim and other documents appropriate to
effectuate the foregoing subordination provisions; and

            (iv) hereby appoints the person so  designated his or its  attorney-
in-fact for such purpose.

(j) The  foregoing  subordination  provisions  shall be for the  benefit  of all
holders of Senior Debt from time to time  outstanding,  and each of such holders
may proceed to enforce such provisions either directly against the holder hereof
or in any other manner provided by law.



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<PAGE>


10.  PERMITTED PAYMENTS.

Notwithstanding  the  provisions of Section 9 of this Note, and provided that no
default or event of default (or event which,  with the passage of time or giving
of notice  or both)  has  occurred,  will  occur as a result  of the  "Permitted
Payment" (herein  defined),  or will occur with the passage of time or giving of
notice or both,  under any document or instrument  evidencing  such Senior Debt,
the Company may pay to the Payee,  and the Payee shall  accept from the Company,
the  principal  payments  of,  and/or  interest  payments  on,  the  outstanding
principal  amount  of this  Note  when due on an  unaccelerated  basis  (herein,
"Permitted Payments");  it being understood and agreed by the Payee by accepting
this Note that neither:

(a)        the payment terms set forth in Section l of this Note;

(b)        the subordination provisions contained in Section 9 of this Note, nor

(c)        the  provisions  of this Section 10 of this Note,  may be modified or
           amended without the prior written consent of each and every holder of
           Senior Debt.

11.        SUCCESSORS AND ASSIGNS.

This Note shall be binding  upon and inure to the benefit of the Company and the
holder hereof and their respective  successors and permitted assigns;  provided,
however,  that the  Company  may not  transfer  or assign  any of its  rights or
obligations  hereunder  without the prior written  consent of the holder hereof;
and  provided,  further,  that  transfer  or  assignment  by  the  holder  is in
accordance with the rules governing Restricted Securities.

IN WITNESS WHEREOF,  the Company has caused this Note to be executed by its duly
authorized officers as of the date first set forth above.


                         CLEMENTS GOLDEN PHOENIX ENTERPRISES, INC.


                         By:  /s/ Henry T. Clements
                         ----------------------------------------------
                         Henry T. Clements, Chairman, President and CEO

                         Attest: /s/ Bonnie Ludlum
                         -----------------------------------



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