EXHIBIT
10.8


THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.


	
  Original Issue Date: July
  13, 2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  5,777,777.78

  	
   

  
					



 


SENIOR SECURED NOTE


DUE MARCH 13, 2010


THIS NOTE is one of a series of duly authorized and issued Senior Secured Notes of Shea Development Corp., a Nevada corporation, having a principal place of business at 1351 Dividend Drive, Suite G, Marietta, GA 30067 (the “Company”), designated as its Senior Secured Note, due March 13, 2010 (the “Note(s)”).


FOR VALUE RECEIVED, the Company promises to pay to CAMOFI
Master LDC or its registered assigns (the “Holder”), the
principal sum of $5,777,777.78 on March 13, 2010 or such earlier date as the
Notes are required or permitted to be repaid as provided hereunder (the “Maturity
Date”), and to pay interest to the Holder on the aggregate then outstanding
principal amount of this Note in accordance with the provisions hereof.  This Note is subject to the following
additional provisions:


Section 1.               Definitions.  For the purposes hereof, in addition to the
terms defined elsewhere in this Note: (a) capitalized terms not otherwise
defined herein have the meanings given to such terms in the Purchase Agreement,
and (b) the following terms shall have the following meanings:


“Alternate Consideration” shall have the meaning set forth in
Section 5(e)(iii).


“Business Day” means any day except Saturday, Sunday and any day
which shall be a federal legal holiday in the United States or a day on which
banking institutions in the State of New York are authorized or required by law
or other government action to close.


“Capital Expenditure” means, with respect to any Person for any
period, the sum of the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in “property, plant and equipment” or in a similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed
and including all Capitalized Lease Obligations paid or payable during such
period.


“Capitalized Lease” means, with respect to any Person, any lease
of real or personal



 1
 








property
by such Person as lessee which is (i) required under GAAP to be capitalized on
the balance sheet of such Person or (ii) a transaction of a type commonly known
as a “synthetic lease” (i.e.,
a lease transaction that is treated as an operating lease for accounting
purposes but with respect to which payments of rent are intended to be treated
as payments of principal and interest on a loan for Federal income tax
purposes).


“Capitalized Lease Obligations” means, with respect to any
Person, obligations of such Person and its Subsidiaries under Capitalized
Leases, and, for purposes hereof, the amount of any such obligation shall be
the capitalized amount thereof determined in accordance with GAAP.


“Change of Control Transaction” means the occurrence of any of
(i) an acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 33% of the
voting securities of the Company, or (ii) a replacement at one time or within a
three year period of more than one-half of the members of the Company’s board
of directors which is not approved by a majority of those individuals who are
members of the board of directors on the date hereof (or by those individuals
who are serving as members of the board of directors on any date whose
nomination to the board of directors was approved by a majority of the members
of the board of directors who are members on the date hereof), or (iii) Frank
Wilde shall no longer be employed by the Company as Chief Executive Officer on
a full time basis, or (iv) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any of the
events set forth above in (i) or (ii).


“Common Stock” means the common stock, par value $.001 per
share, of the Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.


“Consolidated EBITDA”
means, with respect to any Person for any period, the Consolidated Net Income
of such Person and its Subsidiaries for such period, plus (i) without
duplication, the sum of the following amounts of such Person and its
Subsidiaries for such period and to the extent deducted in determining
Consolidated Net Income of such Person for such period:  (A) Consolidated Net Interest Expense, (B)
income tax expense, (C) depreciation expense, (D) amortization expense, (E) all
rental expense determined on a consolidated basis in accordance with GAAP, less
cash rents due under Operating Lease Obligations, minus (ii) the aggregate
amount of cash lease payments paid or payable during such period in respect of
the Capitalized Leases and all non-cash charges and adjustments required by
GAAP (e.g. stock compensation expense and fair value adjustments).


“Consolidated Net Income”
means, with respect to any Person for any period, the net income (loss) of such
Person and its Subsidiaries for such period, determined on a consolidated basis
and in accordance with GAAP, but excluding from the determination of
Consolidated Net Income (without duplication) (a) any extraordinary or non
recurring gains or losses or gains or losses from Dispositions, (b)
restructuring charges, (c) any tax refunds, net operating losses or other net
tax benefits and (d) effects of discontinued operations.


“Consolidated Interest
Expense” means, with respect to any Person, for any period, gross interest
expense of such Person and its Subsidiaries for such period determined on a
consolidated basis and in accordance with GAAP (excluding the interest component
of any Capitalized Lease Obligations), less interest income determined
on a consolidated basis and in accordance with GAAP.



 2
 








“Consolidated Total Indebtedness” means, with respect to any
Person at any date, all indebtedness on the balance sheet of such Person,
determined on a consolidated basis in accordance with GAAP.


“Disposition”
means any transaction, or series of related transactions, pursuant to which any
Person or any of its Subsidiaries sells, assigns, transfers or otherwise
disposes of any property or assets (whether now owned or hereafter acquired) to
any other Person, in each case, whether or not the consideration therefor
consists of cash, securities or other assets owned by the acquiring Person.


“Effectiveness Date” shall have the meaning given to such term
in the Registration Rights Agreement.


“Effectiveness Period” shall have the meaning given to such term
in the Registration Rights Agreement.


“Event of Default” shall have the meaning set forth in Section
9.


“Exchange Act” means the Securities Exchange Act of 1934, as
amended.


“Fixed
Charge Coverage Ratio” means, with respect to any Person for any period,
the ratio of (i) Consolidated EBITDA of such Person and its Subsidiaries for
such period minus Capital Expenditures made by such Person and its
Subsidiaries during such period to (ii) the sum of (A) all principal of
indebtedness of such Person and its Subsidiaries scheduled to be paid or
prepaid during such period plus (B) any earn-out payments pursuant to
the Seller Notes plus (C) Consolidated Interest Expense of such Person
and its Subsidiaries for such period paid in cash, plus (D) income taxes
paid or payable by such Person and its Subsidiaries during such period plus
(E) any dividend payment allowed to be made pursuant to Section 7(c) hereof.


“Fundamental Transaction” shall have the meaning set forth in
Section 5(e)(iii) hereof.


“Late Fees” shall have the meaning set forth in the second
paragraph to this Note.


“Mandatory Prepayment Amount” for any Notes shall equal the sum
of (i) 125% of the principal amount of Notes to be prepaid, plus all accrued
and unpaid interest thereon, and (ii) all other amounts, costs, expenses and
liquidated damages due in respect of such Notes.


“Monthly Redemption” shall mean the redemption of the Note
pursuant to Section 6(a) hereof.


“Monthly Redemption Amount” shall mean, as to a Monthly
Redemption, 1/30th of the original principal amount in the aggregate.


“Monthly Redemption Date” means the 1st of each month, commencing January 1, 2008 and
ending upon the full redemption of this Note.


“Operating
Lease Obligations” means all obligations for the payment of rent in cash
for any real or personal property under leases or agreements to lease, other
than Capitalized Lease Obligations.



 3
 








“Original Issue Date” shall mean the date of the first issuance
of the Notes regardless of the number of transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Note.


“Permitted Investments”
means (i) marketable direct obligations issued or unconditionally guaranteed by
the United States Government or issued by any agency thereof and backed by the
full faith and credit of the United States, in each case, maturing within six
months from the date of acquisition thereof; (ii) commercial paper, maturing
not more than 270 days after the date of issue rated P 1 by Moody’s or A 1 by
Standard & Poor’s; (iii) certificates of deposit maturing not more than 270
days after the date of issue, issued by commercial banking institutions and
money market or demand deposit accounts maintained at commercial banking
institutions, each of which is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000; (iv) repurchase agreements having maturities of not more than 90
days from the date of acquisition which are entered into with major money
center banks included in the commercial banking institutions described in
clause (iii) above and which are secured by readily marketable direct obligations
of the United States Government or any agency thereof, (v) money market
accounts maintained with mutual funds having assets in excess of
$2,500,000,000; and (vi) tax exempt securities rated A or higher by Moody’s or
A+ or higher by Standard & Poor’s.


“Person” means a corporation, an association, a partnership,
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.


“Prime” shall mean the Prime Rate as reported in the Wall Street
Journal on any day.


“Purchase Agreement” means the Securities Purchase Agreement,
dated as of July 13, 2007 to
which the Company and the original Holder are parties, as amended, modified or
supplemented from time to time in accordance with its terms.


“Registration Rights Agreement” means the Registration Rights
Agreement, dated as of the date of the Purchase Agreement, to which the Company
and the original Holder are parties, as amended, modified or supplemented from
time to time in accordance with its terms.


“Registration Statement” means a registration statement meeting
the requirements set forth in the Registration Rights Agreement, covering among
other things the resale of the Warrant Shares and naming the Holder as a “selling
stockholder” thereunder.


“Securities Act” means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.


“Seller Notes” means the Convertible Subordinated Notes
aggregating $5,000,000 issued to the former shareholders of Riptide.


“Subsidiary” shall have the meaning given to such term in the
Purchase Agreement.


“Trading Day” means a day on which the Common Stock is traded on
a Trading Market.


“Trading
Market” means the following markets or exchanges on which the Common Stock
is listed or quoted for trading on the date in question: the Nasdaq SmallCap
Market, the



 4
 








American
Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the
OTC Bulletin Board.


“Transaction Documents” shall have the meaning set forth in the
Purchase Agreement.


“VWAP” means, for any date, the price determined by the first of
the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the primary
Trading Market on which the Common Stock is then listed or quoted as reported
by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. EST to 4:02
p.m. Eastern Time) using the VAP function; (b) if the Common Stock is not then
listed or quoted on the Trading Market and if prices for the Common Stock are
then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a
similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported;
or (c) in all other cases, the fair market value of a share of Common
Stock as determined by a nationally recognized-independent appraiser selected
in good faith by Holders holding a majority of the principal amount of Notes
then outstanding.


Section 2.               Interest.


a)             Payment of
Interest in Cash. The Company shall pay interest to the Holder on the
aggregate and then outstanding principal amount of this Note at the rate Prime
(as adjusted monthly on the first Business Day of each month) plus 4.00% per
annum, payable quarterly in arrears beginning on October 1, 2007, on the
Maturity Date (except that, if any such date is not a Business Day, then such
payment shall be due on the next succeeding Business Day) and on each Monthly
Redemption Date (as to that principal amount then being redeemed) (each such
date, an “Interest Payment Date”), in cash.


b)            Reserved


c)             Interest
Calculations. Interest shall be calculated on the basis of a 360-day year
and shall accrue daily commencing on the Original Issue Date until payment in
full of the principal sum, together with all accrued and unpaid interest and
other amounts which may become due hereunder, has been made.  Interest shall be compounded monthly.  Interest hereunder will be paid to the Person
in whose name this Note is registered on the records of the Company regarding
registration and transfers of Notes (the “Note Register”). Except as
otherwise provided herein, if at any time the Company pays interest partially
in cash and partially in shares of Common Stock, then such payment shall be
distributed ratably among the Holders based upon the principal amount of Notes
held by each Holder.


d)            Late Fee.  All overdue accrued and unpaid interest to be
paid hereunder shall entail a late fee at the rate of 18% per annum (or such
lower maximum amount of interest permitted to be charged under applicable law)
(“Late Fee”) which will accrue daily, from the date such interest is due
hereunder through and including the date of payment. Notwithstanding anything
to the contrary contained herein, if on any Interest Payment Date the Company
has elected to pay interest in Common Stock and is not able to pay accrued
interest in the form of Common Stock because it does not then satisfy the
conditions for payment in the form of Common Stock set forth above, then, the
Company shall pay cash.



 5
 








e)             Optional
Prepayment.  The Company shall have
the right to prepay, in cash, all or a portion of the Notes at any time at 110%
of the principal amount thereof plus accrued interest to the date of repayment.


f)             Mandatory
Repayment.  If the Company (i) shall
be a party to any Change of Control Transaction or Fundamental Transaction or
(ii) shall agree to sell or dispose any of its assets in one or more
transactions (whether or not such sale would constitute a Change of Control
Transaction), the Company will be required to offer to repay, in cash, the
aggregate principal amount of the Notes at 115% of the principal amount thereof
plus accrued interest to such date of repayment.


Section 3.                 Registration of Transfers and
Exchanges.


a)             Different
Denominations. This Note is exchangeable for an equal aggregate principal
amount of Notes of different authorized denominations as requested by the
Holder surrendering the same.  No service
charge will be made for such registration of transfer or exchange.


b)            Investment
Representations. This Note has been issued subject to certain investment
representations of the original Holder set forth in the Purchase Agreement and
may be transferred or exchanged only in compliance with the Purchase Agreement
and applicable federal and state securities laws and regulations.


c)             Reliance on Note
Register. Prior to due presentment to the Company for transfer of this
Note, the Company and any agent of the Company may treat the Person in whose
name this Note is duly registered on the Note Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note is overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.


Section 4.               Reserved.


Section 5.               Reserved.


Section 6.               Monthly Redemption


a)             Monthly Redemption. 
Beginning January 1, 2008, on each Monthly Redemption Date the Company
shall redeem the Holder’s Monthly Redemption Amount plus accrued but unpaid
interest, the sum of all liquidated damages and any other amounts then owing to
such Holder in respect of the Note.  The
Monthly Redemption Amount due on each Monthly Redemption Date shall be paid in
cash.


b)            Redemption Procedure. 
The payment of cash pursuant to a Monthly Redemption shall be made on
the Monthly Redemption Date.  If any
portion of the cash payment for a Monthly Redemption shall not be paid by the
Company by the respective due date, interest shall accrue thereon at the rate
of 18% per annum (or the maximum rate permitted by applicable law, whichever is
less) until the payment of the Monthly Redemption Amount, plus all amounts
owing thereon is paid in full. 
Alternatively, if any portion of the Monthly Redemption Amount remains
unpaid after such date, the Holders subject to such redemption may elect, by
written notice to the Company given at any time thereafter, to invalidate ab
initio such redemption, notwithstanding anything herein contained to the
contrary.



 6
 








Section 7.               Negative Covenants. So
long as any portion of this Note is outstanding, the Company will not and will
not permit any of its Subsidiaries to directly or indirectly:


a)             enter into, create, incur, assume
or suffer to exist any indebtedness or liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom that is senior to, subordinated to
or pari  passu with, in any respect, the Company’s obligations
under the Notes, other than the Seller Notes;


b)            amend its articles of incorporation,
create or amend any certificate of designations, bylaws or other charter
documents;


c)             repay, repurchase or offer to
repay, repurchase, make any payment in respect of or otherwise acquire any of
its Common Stock, Preferred Stock, or other equity securities other than to the
extent permitted or required under the Transaction Documents or as otherwise
permitted by the Transaction Documents, provided, however, that after March 31,
2008, the Company may make cash dividend payments (not to exceed a rate of 4 1⁄2
% per annum) to the holders of its Series A and Series B Preferred Stock if at
the end of the most recently ended fiscal quarter the Company’s Fixed Charge
Coverage Ratio (pro forma for such dividend payment) would have been greater
than 2.0;


d)            make any loan, advance guarantee of
obligations, other extension of credit or capital contributions to, or hold or
invest in, or purchase or otherwise acquire any shares of the capital stock,
bonds, notes, debentures or other securities of, or make any other investment
in, any other Person, or permit any of its Subsidiaries to do any of the
foregoing, except for:  (i) investments
existing on the date hereof, as set forth on Disclosure Schedule, but not any
increase in the amount thereof as set forth in such Disclosure Schedule or any
other modification of the terms thereof; and (ii) Permitted Investments;


e)             make Capital Expenditures in excess
of $250,000 for any given year;


f)             create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary
(i) to pay dividends or to make any other distribution on any shares of
capital stock of such Subsidiary owned by the Company or any of its
Subsidiaries other than as set forth in the Subordination Agreement,
(ii) to pay or prepay or to subordinate any indebtedness owed to the
Company or any of its Subsidiaries, (iii) to make loans or advances to the
Company or any of its Subsidiaries or (iv) to transfer any of its property
or assets to the Company or any of its Subsidiaries, or permit any of its
Subsidiaries to do any of the foregoing;


g)            engage in any transactions with any
officer, director, employee or any affiliate of the Company, including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, in each case in excess of $10,000 other than (i)
for payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) for
other employee benefits, including stock option agreements under any stock option
plan of the Company; or


h)            create or acquire any Subsidiary
after the date hereof unless (i) such Subsidiary is a wholly-owned Subsidiary
of the Company and (ii) such Subsidiary becomes party to the



 7
 








Security Agreement and the Subsidiary Guaranty (either by executing a
counterpart thereof or an assumption or joinder agreement in respect thereof)
and, to the extent required by the Purchaser, satisfied each condition of this
Agreement and the Transaction Documents as if such Subsidiary were a Subsidiary
on the Closing Date;


i)              enter into any agreement with any
holder of the Company’s securities without the prior written consent of the
Holder;


j)              re-price, cancel and reissue or
otherwise amend any option or warrant in a manner that would have the effect of
lowering the exercise price of such option or warrant;


k)             make any payments in respect of the
Seller Notes;


l)              enter into any agreement with
respect to any of the foregoing.


Section 8.               Other
Covenants.


a)             Within sixty days
from the Closing Date, the Company will obtain a key man life insurance policy
on the life of Frank Wilde in an amount not less than the aggregate principal
amount of the Notes, naming the Note Holders as beneficiaries.


b)            Within 180 days from
the Closing Date, the Company will authorize and approve a reverse stock split
of the Common Stock whereby after such split the Company will have no more than
25,000,000 shares of Common Stock outstanding.


c)             So long as any
principal or interest on the Notes shall remain unpaid, the Company and its Subsidiaries
shall not permit the ratio of Consolidated Total Indebtedness to Consolidated
EBITDA of the Company and its Subsidiaries as of the end of each period of four
(4) consecutive fiscal quarters of the Company and its Subsidiaries (the “Leverage
Ratio”) for which the last quarter ends on a date set forth below to be
greater than the applicable ratio set forth below:


	
  Fiscal Quarter End

  	
   

  	
  Leverage Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  2.40

  	
  x

  
	
  March 31, 2008

  	
   

  	
  2.20

  	
  x

  
	
  July 30, 2008

  	
   

  	
  2.00

  	
  x

  
	
  September 30, 2008

  	
   

  	
  1.70

  	
  x

  
	
  December 31, 2008

  	
   

  	
  1.60

  	
  x

  
	
  March 31, 2009

  	
   

  	
  1.30

  	
  x

  
	
  July 30, 2009

  	
   

  	
  1.20

  	
  x

  
	
  September 30, 2009

  	
   

  	
  1.10

  	
  x

  
	
  December 31, 2009

  	
   

  	
  1.00

  	
  x

  



 


Provided, however, that for the fiscal quarter ended December 31, 2007,
the EBITDA shall be calculated as twice the EBITDA for the prior two
consecutive fiscal quarters and for the fiscal quarter ended March 31, 2008,
the EBITDA shall be calculated as four-thirds the EBITDA for the prior three
consecutive fiscal quarters.


d)            So
long as any principal or interest on the Notes shall remain unpaid, the Company
and its Subsidiaries shall not permit the Fixed Charge Coverage Ratio of the
Company



 8
 








and its Subsidiaries for each period of four (4) consecutive fiscal
quarters of the Company and its Subsidiaries for which the last quarter ends on
a date set forth below to be less than the amount set forth opposite such date:


	
  Fiscal Quarter End

  	
   

  	
  Fixed Charge Coverage Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  2.50

  	
  x

  
	
  March 31, 2008

  	
   

  	
  1.45

  	
  x

  
	
  July 30, 2008

  	
   

  	
  1.40

  	
  x

  
	
  September 30, 2008

  	
   

  	
  1.35

  	
  x

  
	
  December 31, 2008

  	
   

  	
  1.20

  	
  x

  
	
  March 31, 2009

  	
   

  	
  1.40

  	
  x

  
	
  July 30, 2009

  	
   

  	
  1.55

  	
  x

  
	
  September 30, 2009

  	
   

  	
  1.70

  	
  x

  
	
  December 31, 2009

  	
   

  	
  2.00

  	
  x

  



 


Provided, however, that for the fiscal quarter ended December 31, 2007,
the EBITDA shall be calculated as twice the EBITDA for the prior two
consecutive fiscal quarters and for the fiscal quarter ended March 31, 2008,
the EBITDA shall be calculated as four-thirds the EBITDA for the prior three
consecutive fiscal quarters.


e)             Within thirty (30)
calendar days over the end of each such fiscal quarter, the Company shall
deliver to Holder’s General Counsel a certificate from its Principal Accounting
Officer certifying compliance with the ratios set forth in 8(c) and 8(d) above
(including the calculations evidencing such compliance).


Section 9.               Events
of Default.


a)             “Event of
Default”, wherever used herein, means any one of the following events
(whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative or
governmental body):


i.             any default in the
payment of (A) the principal of amount of any Note, or (B) interest (including
Late Fees) on, or liquidated damages in respect of, any Note, in each case free
of any claim of subordination, as and when the same shall become due and
payable (whether on the Maturity Date or by acceleration or otherwise) which
default, solely in the case of an interest payment or other default under
clause (B) above, is not cured, within 3 Trading Days;


ii.             the Company shall
fail to observe or perform any other covenant or agreement contained in this
Note or any of the other Transaction Documents which failure is not cured, if
possible to cure, within the earlier to occur of (A) 5 Trading Days after
notice of such default sent by the Holder or by any other Holder and (B) 10
Trading Days after the Company shall become or should have become aware of such
failure;


iii.             a default or event
of default (subject to any grace or cure period provided for in the applicable
agreement, document or instrument) shall occur under (A) any of the Transaction
Documents other than the Notes, or (B) any other material agreement, lease,
document or instrument to which the Company or any Subsidiary is bound, which
default, solely in the case of a default under clause (B) above, is not cured,
within 10 Trading Days;



 9
 








iv.           any representation
or warranty made herein, in any other Transaction Document, in any written
statement pursuant hereto or thereto, or in any other report, financial
statement or certificate made or delivered to the Holder or any other holder of
Notes shall be untrue or incorrect in any material respect as of the date when
made or deemed made;


v.           either of (i) the
key-man life insurance policy (once obtained) or (ii) the director’s and
officer’s liability insurance policy shall lapse, no longer be in full force
and effect or have its face-value reduced.


vi.           (i) the Company or
any of its Subsidiaries shall commence, or there shall be commenced against the
Company or any such Subsidiary, a case under any applicable bankruptcy or
insolvency laws as now or hereafter in effect or any successor thereto, or the
Company or any Subsidiary commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or any Subsidiary
thereof or (ii) there is commenced against the Company or any Subsidiary
thereof any such bankruptcy, insolvency or other proceeding which remains
undismissed for a period of 60 days; or (iii) the Company or any Subsidiary
thereof is adjudicated by a court of competent jurisdiction insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or (iv) the Company or any Subsidiary thereof suffers
any appointment of any custodian or the like for it or any substantial part of
its property which continues undischarged or unstayed for a period of 60 days;
or (v) the Company or any Subsidiary thereof makes a general assignment for the
benefit of creditors; or (vi) the Company shall fail to pay, or shall state
that it is unable to pay, or shall be unable to pay, its debts generally as
they become due; or (vii) the Company or any Subsidiary thereof shall call a
meeting of its creditors with a view to arranging a composition, adjustment or
restructuring of its debts; or (viii) the Company or any Subsidiary thereof
shall by any act or failure to act expressly indicate its consent to, approval
of or acquiescence in any of the foregoing; or (ix) any corporate or other
action is taken by the Company or any Subsidiary thereof for the purpose of
effecting any of the foregoing;


vii.            the Company or any
Subsidiary shall default in any of its obligations under any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be secured or
evidenced any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of the Company in an amount exceeding $50,000,
whether such indebtedness now exists or shall hereafter be created and such
default shall result in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise become due and payable;


viii.           the Common Stock
shall not be eligible for quotation on or quoted for trading on a Trading
Market and shall not again be eligible for and quoted or listed for trading
thereon within five Trading Days;


ix.            the Company shall
redeem or repurchase any of its outstanding shares of Common Stock or other
equity securities of the Company;



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x.            a Registration
Statement shall not have been declared effective by the Commission on or prior
to the 150th calendar day after the Closing Date;


xi.            if, during the
Effectiveness Period (as defined in the Registration Rights Agreement), the
effectiveness of the Registration Statement lapses for any reason or the Holder
shall not be permitted to resell Registrable Securities (as defined in the
Registration Rights Agreement) under the Registration Statement, in either
case, for more than 10 consecutive Trading Days or 15 non-consecutive Trading
Days during any 12 month period; provided, however, that in the
event that the Company is negotiating a merger, consolidation, acquisition or
sale of all or substantially all of its assets or a similar transaction and in
the written opinion of counsel to the Company, the Registration Statement,
would be required to be amended to include information concerning such
transactions or the parties thereto that is not available or may not be
publicly disclosed at the time, the Company shall be permitted an additional 10
consecutive Trading during any 12 month period relating to such an event;


xii.            an Event (as
defined in the Registration Rights Agreement) shall not have been cured to the
satisfaction of the Holder prior to the expiration of thirty days from the
Event Date (as defined in the Registration Rights Agreement) relating thereto
(other than an Event resulting from a failure of an Registration Statement to
be declared effective by the Commission on or prior to the Effectiveness Date
(as defined in the Registration Rights Agreement), which shall be covered by
Section 8(a)(ix); or


xiii.            the Company shall
fail for any reason to pay in full the amount of cash due pursuant to a Buy-In
within 5 Trading Days after notice therefor is delivered hereunder or shall
fail to pay all amounts owed on account of an Event of Default within five days
of the date due.


b)            Remedies Upon
Event of Default. If any Event of Default occurs, the full principal amount
of this Note, together with interest and other amounts owing in respect
thereof, to the date of acceleration shall become, at the Holder’s election,
immediately due and payable in cash.  
The aggregate amount payable upon an Event of Default shall be equal to
the Mandatory Prepayment Amount. 
Commencing 5 days after the occurrence of any Event of Default that
results in the eventual acceleration of this Note, the interest rate on this
Note shall accrue at the rate of 18% per annum, or such lower maximum amount of
interest permitted to be charged under applicable law.  All Notes for which the full Mandatory
Prepayment Amount hereunder shall have been paid in accordance herewith shall
promptly be surrendered to or as directed by the Company.  The Holder need not provide and the Company
hereby waives any presentment, demand, protest or other notice of any kind, and
the Holder may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. 
Such declaration may be rescinded and annulled by Holder at any time
prior to payment hereunder and the Holder shall have all rights as a Note
holder until such time, if any, as the full payment under this Section shall
have been received by it.  No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.


Section 10.             Miscellaneous.


a)             Notices.  Any and all notices or other communications
or deliveries to be provided by the Holders hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service, addressed to the Company, at the address set



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forth above, facsimile number 770-919-7277, Attn: 
Francis Wilde, Chairman
and Chief Executive Officer, or such other address or facsimile
number as the Company may specify for such purposes by notice to the Holders
delivered in accordance with this Section. 
Any and all notices or other communications or deliveries to be provided
by the Company hereunder shall be in writing and delivered personally, by
facsimile, sent by a nationally recognized overnight courier service addressed
to each Holder at the facsimile telephone number or address of such Holder
appearing on the books of the Company, or if no such facsimile telephone number
or address appears, at the principal place of business of the Holder.  Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. (New York City time), (ii) the date after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such
date, (iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.


b)            Absolute
Obligation. Except as expressly provided herein, no provision of this Note
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, interest and liquidated damages (if
any) on, this Note at the time, place, and rate, and in the coin or currency,
herein prescribed.  This Note is a direct
debt obligation of the Company.  This
Note ranks pari  passu with all other Notes now or hereafter
issued under the terms set forth herein.


c)             Lost or
Mutilated Note.  If this Note shall
be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or
in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note
for the principal amount of this Note so mutilated, lost, stolen or destroyed
but only upon receipt of evidence of such loss, theft or destruction of such
Note, and of the ownership hereof, and indemnity, if requested, all reasonably
satisfactory to the Company.


d)            Security Interest.  This Note is a direct debt obligation of the
Company and, pursuant to the Security Agreement is secured by a first priority
perfected security interest in all of the assets of the Company for the benefit
of the Holders.


e)             Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, or such New
York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or certified



 12
 








mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Note and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Note or the transactions
contemplated hereby. If either party shall commence an action or proceeding to
enforce any provisions of this Note, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its attorney’s fees
and other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.


f)             Waiver.  Any waiver by the Company or the Holder of a
breach of any provision of this Note shall not operate as or be construed to be
a waiver of any other breach of such provision or of any breach of any other
provision of this Note.  The failure of
the Company or the Holder to insist upon strict adherence to any term of this
Note on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Note.  Any waiver
must be in writing.


g)            Severability.  If any provision of this Note is invalid,
illegal or unenforceable, the balance of this Note shall remain in effect, and
if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.  If it shall be found that any interest or
other amount deemed interest due hereunder violates applicable laws governing
usury, the applicable rate of interest due hereunder shall automatically be lowered
to equal the maximum permitted rate of interest. The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of or interest on
this Note as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this indenture, and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefits or advantage of any such law, and covenants that
it will not, by resort to any such law, hinder, delay or impeded the execution
of any power herein granted to the Holder, but will suffer and permit the
execution of every such as though no such law has been enacted.


h)            Next
Business Day.  Whenever any payment
or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.


i)             Headings.  The headings contained herein are for
convenience only, do not constitute a part of this Note and shall not be deemed
to limit or affect any of the provisions hereof.


j)             Seniority.  This Note is senior in right of payment to
any and all other indebtedness of the Company.


*********************



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IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed by a duly authorized officer as of the date first above indicated.


	
   

  	
  SHEA DEVELOPMENT CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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