THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.



                            VEGA-ATLANTIC CORPORATION
                           CONVERTIBLE PROMISSORY NOTE



                                                               December 15, 2000
$20,000.00                                                      Denver, Colorado


     1. Principal and Interest.

     1.1 Vega-Atlantic Corporation, a Colorado corporation (the "Company"), for
value received, hereby promises to pay to the order of Rising Sun Capital Corp.
(the "Investor" or the "Holder") the sum of $20,000.00 at the time and in the
manner hereinafter provided.

     1.2 This Convertible Promissory Note (the "Note") shall bear interest at
the rate of 9% per annum simple interest from the date of issuance of this Note
until paid in full. No payment of principal or interest under this Note shall be
due until the earlier of (i) that date upon which the shareholders of the
Company shall have approved the reverse stock split and such reverse stock split
shall been effected by the Company, or (ii) March 31, 2001 (the earlier of said
dates to be referred to herein as the "Demand Date") unless there is an Event of
Default as described in Section 2 below, in which case such payment shall be
accelerated. Commencing on the Demand Date, all principal and accrued interest
hereunder shall be payable by the Company upon demand made by the Investor.
Notwithstanding the foregoing, this Note may be prepaid by the Company without
penalty at any time. Any prepayment will be credited first against accrued
interest then principal.

     1.3 Upon payment in full of the principal hereof and accrued interest
hereunder, this Note shall be surrendered to the Company for cancellation.

     1.4 The principal of and interest on this Note shall be payable at the
principal office of the Company and shall be forwarded to the address of the
Holder hereof as such Holder shall from time to time designate.

     2. Event of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor), shall constitute an "Event of
Default" hereunder:

     (a) The Company shall fail to make any payment of principal of, or interest
on, or any other amount owing in respect of, the Note when due and payable or
declared due and payable, and such failure shall have remained unremedied for a
period of five (5) business days.

<PAGE>


     (b) A case or proceeding shall have been commenced against the Company in a
court having competent jurisdiction (i) seeking a decree or order in respect of
the Company under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) of the Company or of any
substantial part of its properties, or (iii) ordering the winding-up or
liquidation of the affairs of the Company, and any such case or proceeding shall
remain undismissed or unstayed for sixty (60) consecutive days or such court
shall enter a decree or order granting the relief sought in such case or
proceeding.

     (c) The Company shall (i) file a petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
consent to the institution of proceedings thereunder or to the filing of any
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
the Company or of any substantial part of its properties, or (iii) fail
generally to pay its debts as such debts become due.

     (d) Final judgment or judgments (after the expiration of all times to
appeal therefrom) for the payment of money in excess of $1,000,000 in the
aggregate shall be rendered against the Company and the same shall not (i) be
fully covered by insurance or bonded over, or (ii) within thirty (30) days after
the entry thereof, have been discharged or execution thereof stayed pending
appeal, or have been discharged within five (5) days after the expiration of any
such stay.

     3. Subordination.

     3.1 "Senior Indebtedness" means the principal of and premium, if any, and
interest on indebtedness of the Company for money borrowed from commercial
banks, equipment lessors or other financial institutions regularly engaged in
the business of lending money under a secured or unsecured line of credit, term
loan or equipment lease, provided that such transaction was approved by the
Board of Directors of the Company.

     3.2 The Company and the Holder agree, expressly for the benefit of the
present and future holders of Senior Indebtedness, that, except as otherwise
provided herein, and notwithstanding the occurrence of an Event of Default
hereunder, upon (a) an event of default under any Senior Indebtedness, or (b)
any dissolution, winding up or liquidation of the Company, whether or not in
bankruptcy, insolvency or receivership proceedings, the Company shall not pay,
and the Holder shall not be entitled to receive, any amount in respect of the
principal and interest of this Note unless and until the Senior Indebtedness
shall have been paid or otherwise discharged. Upon (i) an event of default under
any Senior Indebtedness, or (ii) any dissolution, winding up or liquidation of
the Company, any payment or distribution of assets of the Company which the
Holder would be entitled to receive but for the provisions hereof, shall be paid
by the liquidating trustee or agent or other person making such payment or
distribution directly to the holders of Senior Indebtedness ratably according to
the aggregate amounts remaining unpaid on Senior Indebtedness after giving
effect to any concurrent payment or distribution to the holders of Senior
Indebtedness. Subject to the payment in full of the Senior Indebtedness and
until this Note is paid in full, the Holder shall be subrogated to the rights of
the holders of the Senior Indebtedness (to the extent of payments or
distributions previously made to the holders of Senior Indebtedness pursuant to
this Section 3.2) to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness.

     3.3 In the instance of an event of default and only if the event of default
has been declared in writing with respect to any Senior Indebtedness, permitting
the holder thereof to accelerate the maturity thereof, then, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist, or all Senior Indebtedness shall have been paid in full, no payment shall
be made in respect of the principal of or interest on this Note, unless within
ninety (90) days after the happening of such event of default, the maturity of
such Senior Indebtedness shall not have been accelerated.

<PAGE>


     3.4 This Section 3 is not intended to impair, as between the Company, its
creditors (other than the holders of Senior Indebtedness) and the Holder, the
unconditional and absolute obligation of the Company to pay the principal of and
interest on the Note or affect the relative rights of the Holder and the other
creditors of the Company, other than the holders of Senior Indebtedness. Nothing
in this Note shall prevent the Holder from exercising all remedies otherwise
permitted by applicable law upon an Event of Default hereunder, subject to the
rights, if any, of the holders of Senior Indebtedness in respect to cash,
property or securities of the Company received upon the exercise of any such
remedy.

     4. Attorney's Fees. If the indebtedness represented by this Note or any
part thereof is collected in bankruptcy, receivership or other judicial
proceedings or if this Note is placed in the hands of attorneys for collection
after default, the Company agrees to pay, in addition to the principal and
interest payable hereunder, reasonable attorneys' fees and costs incurred by the
Investor.

     5. Prepayment. The Company may at any time prepay in whole or in part, the
principal sum, plus accrued interest to date of payment, of this Note upon ten
(10) days prior written notice to the Holder. The Holder may convert all or part
of the principal or accrued interest on the Note during said ten (10) day period
in accordance with Section 6 hereof, and any such principal or interest
converted shall be attributed, first, to the amount of interest to be prepaid,
second, to the amount of principal to be prepaid, and third, to principal which
is not subject to the prepayment notice.

     6. Conversion.

     6.1 Voluntary Conversion. The Holder shall have the right, exercisable in
whole or in part, to convert the outstanding principal and accrued interest
hereunder into a number of fully paid and nonassessable whole shares of the
Company's $0.00001 par value common stock ("Common Stock") determined in
accordance with Section 6.2 below.

     6.2 Shares Issuable. The number of whole shares of Common Stock into which
this Note may be voluntarily converted ("Conversion Shares") shall be determined
by dividing the aggregate principal amount borrowed hereunder together with all
accrued interest to the date of conversion by $.12 (the "Note Conversion
Price").

     6.3 Notice and Conversion Procedures. After receipt of demand for
repayment, the Company agrees to give the Holder notice at least five (5)
business days prior to the time that the Company repays this Note. If the Holder
elects to convert this Note, the Holder shall provide the Company with a written
notice of conversion setting forth the amount to be converted. The notice must
be delivered to the Company together with this Note. Within twenty (20) business
days of receipt of such notice, the Company shall deliver to the Holder
certificate(s) for the Common Stock issuable upon such conversion and, if the
entire principal amount hereunder was not so converted, a new note representing
such balance. The shares of Common Stock issuable upon such conversion shall be
deemed issued and outstanding upon receipt of the notice of conversion.

     6.4 Anti-Dilution Provisions.

     (a) Adjustment of Note Conversion Price. In the event the Company shall in
any manner, subsequent to the issuance of this Note, approve a reclassification
involving a reverse stock split and subdivision of the Company's issued and
outstanding shares of Common Stock, the Note Conversion Price shall forthwith be
adjusted by proportionately decreasing the Note Conversion Price on the date
that such subdivision shall become effective.

<PAGE>


     (b) Adjustment of Number of Shares. Upon an adjustment of the Note
Conversion Price, the Holder shall thereafter be entitled to purchase, at the
new Note Conversion Price, the number of shares, calculated to the nearest full
share, obtained by multiplying the number of shares of Common Stock initially
issuable upon conversion of this Note by the Note Conversion Price in effect on
the date hereof and dividing the product so obtained by the new Note Conversion
Price.

     (c) Common Stock Defined. Whenever reference is made in this Note to the
shares of Common Stock, the term "Common Stock" shall mean the Common Stock of
the Company authorized as of the date hereof, and any other class of stock
ranking on a parity with such Common Stock. Shares issuable upon conversion
hereof shall include only shares of Common Stock of the Company.

     6.5 No Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of this Note. In lieu of the Company issuing any
fractional shares to the Holder upon the conversion of this Note, the Company
shall pay to the Holder the amount of outstanding principal and interest
hereunder that is not so converted.

     7. Representations, Warranties and Covenants of the Company. The Company
represents, warrants and covenants with the Holder as follows:

     (a) Authorization; Enforceability. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Note and the performance of all
obligations of the Company hereunder has been taken, and this Note constitutes a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.

     (b) Governmental Consents. No consent, approval, qualification, order or
authorization of, or filing with, any local, state or federal governmental
authority is required on the part of the Company in connection with the
Company's valid execution, delivery or performance of this Note except any
notices required to be filed with the Securities and Exchange Commission under
Regulation D of the Securities Act of 1933, as amended (the "1933 Act"), or such
filings as may be required under applicable state securities laws, which will be
timely filed within the applicable periods therefor.

     (c) No Violation. The execution, delivery and performance by the Company of
this Note and the consummation of the transactions contemplated hereby will not
result in a violation of its Certificate of Incorporation or Bylaws, in any
material respect of any provision of any mortgage, agreement, instrument or
contract to which it is a party or by which it is bound or, to the best of its
knowledge, of any federal or state judgment, order, writ, decree, statute, rule
or regulation applicable to the Company or be in material conflict with or
constitute, with or without the passage of time or giving of notice, either a
material default under any such provision or an event that results in the
creation of any material lien, charge or encumbrance upon any assets of the
Company or the suspension, revocation, impairment, forfeiture or nonrenewal of
any material permit, license, authorization or approval applicable to the
Company, its business or operations, or any of its assets or properties.

<PAGE>


     8. Representations and Covenants of the Holder. The Company has entered
into this Note in reliance upon the following representations and covenants of
the Holder:

     (a) Investment Purpose. This Note and the Common Stock issuable upon
conversion of the Note are acquired for investment and not with a view to the
sale or distribution of any part thereof, and the Holder has no present
intention of selling or engaging in any public distribution of the same except
pursuant to a registration or exemption.

     (b) Private Issue. The Holder understands (i) that this Note and the Common
Stock issuable upon conversion of this Note are not registered under the 1933
Act or qualified under applicable state securities laws, and (ii) that the
Company is relying on an exemption from registration predicated on the
representations set forth in this Section 8.

     (c) Financial Risk. The Holder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.

     (d) Risk of No Registration. The Holder understands that if the Company
does not register with the Securities and Exchange Commission pursuant to
Section 12 of the Securities Exchange Act of 1934 (the "1934 Act"), or file
reports pursuant to Section 15(d) of the 1934 Act, or if a registration
statement covering the securities under the 1933 Act is not in effect when it
desires to sell the Common Stock issuable upon conversion of the Note, it may be
required to hold such securities for an indefinite period. The Holder also
understands that any sale of the Note or the Common Stock which might be made by
it in reliance upon Rule 144 under the 1933 Act may be made only in accordance
with the terms and conditions of that Rule.

     9. Assignment. Subject to the restrictions on transfer described in Section
12 below, the rights and obligations of the Company and the Holder shall be
binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.

     10. Waiver and Amendment. Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and the Holder.

     11. No Other Notes. The parties hereto agree that this Note shall supercede
any and all Notes previously issued by the Company to the Holder.

     12. Transfer of This Note or Securities Issuable on Conversion Hereof. With
respect to any offer, sale or other disposition of this Note or securities into
which this Note may be converted, the Holder will give written notice to the
Company prior thereto, describing briefly the manner thereof. Unless the Company
reasonably determines that such transfer would violate applicable securities
laws, or that such transfer would adversely affect the Company's ability to
account for future transactions to which it is a party as a pooling of
interests, and notifies the Holder thereof within five (5) business days after
receiving notice of the transfer, the Holder may effect such transfer. The Note
thus transferred and each certificate representing the securities thus
transferred shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with the 1933 Act, unless in the
opinion of counsel for the Company such legend is not required in order to
ensure compliance with the 1933 Act. The Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions.

     13. Notices. Any notice, other communication or payment required or
permitted hereunder shall be in writing and shall be deemed to have been given
upon delivery if personally delivered or three (3) business days after deposit
if deposited in the United States mail for mailing by certified mail, postage
prepaid, and addressed as follows:

<PAGE>


     If to Investor:      INVESTOR
                          96 Front Street
                          Hamilton, Bermuda  HM12

     If to Company:       Vega-Atlantic Corporation
                          4600 South Ulster Street, Suite 240
                          Denver, CO  80237
                          Attention:  Grant Atkins, President
                          Phone:  (800) 209-2260   Facsimile:  (360) 332-1643

Each of the above addressees may change its address for purposes of this Section
by giving to the other addressee notice of such new address in conformance with
this Section.

     14. Governing Law. This Note is being delivered in and shall be construed
in accordance with the laws of the State of Colorado, without regard to the
conflicts of laws provisions thereof.

     15. Heading; References. All headings used herein are used for convenience
only and shall not be used to construe or interpret this Note. Except as
otherwise indicated, all references herein to Sections refer to Sections hereof.

     16. Waiver by the Company. The Company hereby waives demand, notice,
presentment, protest and notice of dishonor.

     17. Delays. No delay by the Holder in exercising any power or right
hereunder shall operate as a waiver of any power or right.

     18. Severability. If one or more provisions of this Note are held to be
unenforceable under applicable law, such provision shall be excluded from this
Note and the balance of the Note shall be interpreted as if such provision was
so excluded and shall be enforceable in accordance with its terms.

     19. No Impairment. The Company will not, by any 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 Note and in the taking
of all such action as may be necessary or appropriate in order to protect the
rights of the Holders of this Note against impairment.


     IN WITNESS WHEREOF, Vega-Atlantic Corporation has caused this Note to be
executed in its corporate name and this Note to be dated, issued and delivered,
all on the date first above written.

                                        VEGA-ATLANTIC CORPORATION


                                        By  /s/ Grant Atkins
                                           -------------------------------------
                                           Grant Atkins, President


                                        INVESTOR




                                        By
                                           -------------------------------------
                                           Rising Sun Capital Corp.