THIS NOTE AND THE COMMON SHARES  ISSUABLE UPON  CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT  AS TO THIS NOTE UNDER  SAID ACT OR AN  OPINION OF COUNSEL  REASONABLY
SATISFACTORY TO LMIC, INC., THAT SUCH REGISTRATION IS NOT REQUIRED.


                                CONVERTIBLE NOTE

         FOR VALUE RECEIVED,  LMIC,  INC., a Delaware  corporation  (hereinafter
called the "Borrower"),  hereby promises to pay to LAURUS MASTER FUND, LTD., c/o
Ironshore  Corporate Services Ltd., P.O. Box 1234 G.T.,  Queensgate House, South
Church Street, Grand Cayman, Cayman Islands, Fax: 345-949-9877 (the "Holder") or
its registered assigns or successors in interest,  on order, without demand, the
sum of Six  Hundred  Thousand  Dollars  ($600,000),  with any accrued and unpaid
interest on July, 17, 2005 (the "Maturity Date").

         The following terms shall apply to this Note:


                                    ARTICLE I

                                    INTEREST

         1.1 Interest Rate. There shall be no interest  payable  hereunder until
the first anniversary of the date of the issuance of the Note. Thereafter, until
the Maturity Date, interest payable on this Note shall accrue at the annual rate
of eight  percent (8%) and be payable in arrears  commencing  one month from the
date thereof and on the first  business day of each  consecutive  calendar month
thereafter,  and on the Maturity Date, accelerated or otherwise, due and payable
as described below.

         1.2 Default Rate. A default  interest rate of sixteen percent (16%) per
annum shall apply to the amounts due and unpaid.



                                   ARTICLE II

                                  AMORTIZATION

         2.1  Monthly  Payments.  Subject to the terms of this  Article  II, the
Borrower shall repay  one-twelfth  (1/12th) of the original  principal amount of
this Note (to the extent such amount has not been converted  pursuant to Article


                                       1
<PAGE>


III below),  together  with interest and fees accrued to date on such portion of
the original principal amount (collectively the "Monthly Amount"), in accordance
with Section 2.2 below, on the first business day of each  consecutive  calendar
month (each, a "Repayment  Date"),  beginning on the first such day which occurs
following  thirteen  months from the date hereof.  This Note may be prepaid,  in
whole or in part,  by the  Borrower  at any time by paying  the Holder an amount
equal to the amount of the proposed prepayment  multiplied by 103% together with
interest accrued and fees to date on such portion of the prepayment amount.

                  2.2 Cash or Common  Stock.  Subject to the terms  hereof,  the
Borrower  has the sole  option to  determine  whether to satisfy  payment of the
Monthly  Amount in full on each  Repayment  Date  either in cash or in shares of
Common Stock, or a combination of both. The Borrower shall deliver to the Holder
a written  irrevocable  notice in the form of Exhibit B attached hereto electing
to pay such  Monthly  Amount in full on such  Repayment  Date in either  cash or
Common Stock,  or a combination  of both  ("Repayment  Election  Notice").  Such
Repayment  Election Notice shall be delivered to the Holder at least thirty (30)
days  prior to the  applicable  Repayment  Date (the date of such  notice  being
hereinafter referred to as the "Notice Date"). If such Repayment Election Notice
is not  delivered  within  the  prescribed  period  set  forth in the  preceding
sentence,  then the  repayment  shall be made in either cash or shares of Common
Stock on the same terms  hereunder at the Holder's sole option.  If the Borrower
elects or is required to repay all or a portion of the Monthly Amount in cash on
a Repayment  Date,  then on such  Repayment  Date the Borrower  shall pay to the
Holder an amount  equal to 103% of the Monthly  Amount in  satisfaction  of such
obligation.  If the  Borrower  repays all or a portion of the Monthly  Amount in
shares of  Common  Stock,  the  number  of such  shares  to be  issued  for such
Repayment Date shall be the number determined by dividing (x) the portion of the
Monthly Amount to be paid in shares of Common Stock, by (y) the Conversion Price
(as defined herein) as of such date.

                  2.3 No Effective Registration. Notwithstanding anything to the
contrary  herein,  the Borrower shall be prohibited from exercising its right to
repay the Monthly  Amount in shares of Common  Stock (and must  deliver  cash in
respect thereof) on the applicable Repayment Date if at any time from the Notice
Date until the time at which the Holder receive such shares there fails to exist
an effective  registration  statement or an Event of Default hereunder exists or
occurs,  unless otherwise waived in writing by the Holder in whole or in part at
the Holder's option.

                  2.4 Share Price/Issuance Limitations. Notwithstanding anything
to the contrary herein,  if the closing price of the Common Stock as reported by
Bloomberg,  L.P. on the Principal  Market for the average of the 11 trading days
preceding a Repayment Date was less than 125% of the Fixed Conversion Price, and
the Borrower has elected to pay all or a portion of the Monthly Amount in shares
of Common Stock, then, in lieu of the Borrower delivering the required number of
shares of Common Stock on the Repayment  Date, the Borrower will have the option
to repay the amount in cash or to convert up to the  Monthly  Amount  during the
succeeding month that is payable in shares of Common Stock at a Conversion Price
of 80% of the average of the three (3) lowest closing prices during the ten (10)
trading immediately preceding the Repayment Date. Any part of the Monthly Amount
not  converted  by the  Borrower  into shares of Common  Stock by the  following
Repayment Date shall be paid by the Borrower in cash on such following Repayment
Date. At any time during the relevant month,  the Borrower has the option to pay
the Monthly Amount, or the unconverted part thereof,  in cash and the Conversion
Price set forth in this  Section  2.4  shall no  longer  be  applicable.  If the
closing  price of the  Common  Stock  as  reported  by  Bloomberg,  L.P.  on the
Principal  Market for the average 11 trading days preceding a Repayment Date was
greater  than 125% of the Fixed  Conversion  Price,  then the  Borrower  will be
permitted  to pay the full  amount  of the  Monthly  Amount  in shares of Common
Stock.



                                       2
<PAGE>

                  By way of example, for the Repayment Date of October 1, if the
Borrower  delivers a Repayment  Election  Notice on August 27 to pay the Monthly
Amount in shares of Common  Stock and if on  September  20 through 30, the stock
price  was less  than  125% the  Fixed  Conversion  Price,  the  Holder  will be
permitted  to convert  during the month of October  the  portion of the  Monthly
Amount that the Borrower has  determined is payable in shares of Common Stock at
the  following  Conversion  Price:  80% of the three (3) lowest  closing  prices
during the ten (10) trading days  immediately  preceding  October 1, or repay in
cash at the Borrower's  choice. Any portion of the Monthly Amount originally due
October 1 that the  Holder  has not  converted  into  shares of Common  Stock by
November 1 shall be due in cash on November 1.

                  2.5 Deemed Conversions. Any repayment of the Monthly Amount in
shares of Common  Stock  pursuant to the terms hereof  shall  constitute  and be
deemed a conversion of such portion of the applicable  principal  amount of this
Note for all purposes under this Note.

                   2.6  Deemed  Ownership.  In the case of the  exercise  of the
conversion  rights  or  payment  of the  Monthly  Amount  set forth  herein  the
conversion  privilege  shall be deemed to have been  exercised and the shares of
Common Stock issuable upon such  conversion or Repayment shall be deemed to have
been issued upon the date of receipt by the Borrower of the Notice of Conversion
or Repayment  Election Notice, as the case may be. The person or entity entitled
to receive Common Stock issuable upon such  conversion  shall,  on the date such
conversion privilege is deemed to have been exercised and thereafter, be treated
for all purposes as the record holder of such Common Stock.



                                       3
<PAGE>

                                   ARTICLE III

                                CONVERSION RIGHTS


         3.1. Conversion into the Borrower's Common Stock.

         (a) Subject to the  provisions  set forth above,  the Holder shall have
the right,  but not the obligation,  from and after the one year  anniversary of
the issuance date hereof, and then at any time until this Note is fully paid, to
convert  the  principal  portion of this Note and/or  interest  and fees due and
payable into fully paid and nonassessable shares of common stock of the Borrower
as such stock  exists on the date of  issuance  of this  Note,  or any shares of
capital stock of the Borrower  into which such stock shall  hereafter be changed
or  reclassified  (the "Common  Stock") at the conversion  price set forth below
(the "Conversion Price").

         Upon  delivery to the Borrower of a Notice of  Conversion  (the date of
giving such notice of conversion being a "Conversion  Date"), the Borrower shall
issue and deliver to the Holder within three  business days from the  Conversion
Date that number of shares of Common Stock for the portion of the Note converted
in  accordance  with the  foregoing.  The number of shares of Common Stock to be
issued upon each  conversion  of this Note shall be  determined by dividing that
portion of the principal of the Note to be converted  and  interest,  if any, by
the  Fixed  Conversion  Price as of the  Conversion  Date.  In the  event of any
conversions of outstanding  principal amount under this Note in part pursuant to
this Article III, such conversions shall be deemed to constitute  conversions of
outstanding principal amount applying to Monthly Amounts for the Repayment Dates
in chronological  order. By way of example,  if the original principal amount of
this  Note is  $600,000  and the  Holder  converted  $100,000  of such  original
principal  amount  prior to the first  Repayment  Date,  then (1) the  principal
amount of the Monthly Amount due on the first Repayment Date would equal $0, (2)
the  principal  amount of the Monthly  Amount due on the second  Repayment  Date
would equal $0 and (3) the principal amount of the Monthly Amount due on each of
the remaining Repayment Dates would be $50,000.

         (b) Subject to adjustment  as provided in Section  3.1(c)  hereof,  the
Conversion  Price per share  shall be 100% of the average  closing  price of the
Common  Stock for the twenty  (20) days prior to the first  Repayment  Date (the
"Fixed Conversion Price"). If an Event of Default has occurred and be continuing
hereunder then the Conversion Price shall be equal to the lower of (i) the Fixed
Conversion  Price;  or (ii) eighty  percent  (80%) of the average of the 11 days
closing prices for the Common Stock on NASD OTC Bulletin Board,  NASDAQ SmallCap
Market,  NASDAQ  National Market System,  American Stock  Exchange,  or New York
Stock Exchange  (whichever of the foregoing is at the time the principal trading
exchange or market for the Common  Stock,  the  "Principal  Market"),  or on any
securities exchange or other securities market on which the Common Stock is then
being  listed or  traded,  for the  twenty  (20)  trading  days prior to but not
including the Conversion Date.

         (c) The  Conversion  Price  and  number  and  kind of  shares  or other
securities to be issued upon  conversion  determined  pursuant to Section 3.1(a)
and 3.1(b),  shall be subject to adjustment from time to time upon the happening
of certain events while this conversion right remains outstanding, as follows:




                                       4
<PAGE>

              A. Merger,  Sale of Assets, etc. If the Borrower at any time shall
consolidate  with or merge into or sell or convey all or  substantially  all its
assets to any other  corporation,  this Note, as to the unpaid principal portion
thereof and accrued interest thereon, shall thereafter be deemed to evidence the
right to  purchase  such  number  and kind of  shares  or other  securities  and
property  as would  have been  issuable  or  distributable  on  account  of such
consolidation, merger, sale or conveyance, upon or with respect to the number of
shares of Common Stock the Holder could have acquired  immediately prior to such
consolidation, merger, sale or conveyance based on the Fixed Conversion Price or
the Conversion  Price,  as the case may be, as of the closing date thereof.  The
foregoing  provision  shall  similarly  apply to  successive  transactions  of a
similar  nature  by any  such  successor  or  purchaser.  Without  limiting  the
generality of the foregoing,  the provisions of this Section shall apply to such
securities of such successor or purchaser after any such consolidation,  merger,
sale or conveyance.

              B.  Reclassification,  etc. If the Borrower at any time shall,  by
reclassification  or  otherwise,  change  the  Common  Stock  into the same or a
different  number of  securities  of any class or classes,  this Note, as to the
unpaid principal portion thereof and accrued interest thereon,  shall thereafter
be  deemed  to  evidence  the  right to  purchase  an  adjusted  number  of such
securities  and kind of  securities as would have been issuable as the result of
such change with  respect to the number of shares of Common Stock into which the
Note would have been convertible  immediately prior to such  reclassification or
other change at the Fixed Conversion Price or the Conversion  Price, as the case
may be, as of the effective date for such reclassification or change.

              C. Stock  Splits,  Combinations  and  Dividends.  If the shares of
Common  Stock are  subdivided  or combined  into a greater or smaller  number of
shares of Common  Stock,  or if a dividend is paid on the Common Stock in shares
of Common Stock, the Fixed Conversion Price or the Conversion Price, as the case
may be, shall be  proportionately  reduced in case of  subdivision  of shares or
stock  dividend  or  proportionately  increased  in the case of  combination  of
shares,  in each  such case by the  ratio  which  the total  number of shares of
Common Stock outstanding  immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event.

              D. Share Issuance.  Subject to the provisions of this Section,  if
the  Borrower  at any time shall  issue any shares of Common  Stock prior to the
conversion of the entire  principal  amount of the Note  (otherwise than as: (i)
provided in Sections 3.1(c)A, 3.1(c)B or 3.1(c)C or this subparagraph D; or (ii)
pursuant  to  warrants  or options  that may be granted in the future  under any
option plan of the Borrower, or any employment agreement, joint venture, credit,
leasing or other  financing  agreement or any joint  venture or other  strategic
arrangement, in each case now or hereinafter entered into by the Borrower, (iii)
pursuant to any agreement entered into by the Company or any of its subsidiaries
for the  acquisition  of all or a part of  another  business  (whether  by stock
purchase or asset purchase, merger or otherwise; ((i), (ii) and (iii) above, are
hereinafter  referred to as the "Excluded  Issuances")) for a consideration less
than the  Fixed  Conversion  Price  that  would be in effect at the time of such
issue,  then,  and  thereafter  successively  upon  each such  issue,  the Fixed
Conversion Price shall be reduced as follows: (i) the number of shares of Common
Stock  outstanding  immediately  prior to such issue shall be  multiplied by the
Fixed Conversion Price in effect at the time of such issue and the product shall
be added to the aggregate  consideration,  if any, received by the Borrower upon
such issue of additional  shares of Common  Stock;  and (ii) the sum so obtained
shall be divided by the number of shares of Common Stock outstanding immediately
after such issue. The resulting  quotient shall be the adjusted Fixed Conversion
Price.  Except for the Excluded  Issuances for purposes of this adjustment,  the
issuance of any  security of the  Borrower  carrying  the right to convert  such
security  into  shares of  Common  Stock or of any  warrant,  right or option to
purchase  Common Stock shall  result in an  adjustment  to the Fixed  Conversion
Price  upon the  issuance  of shares  of  Common  Stock  upon  exercise  of such
conversion or purchase rights.



                                       5
<PAGE>

              (d) During the period the  conversion  right exists,  the Borrower
will reserve from its authorized and unissued  Common Stock a sufficient  number
of shares to provide for the issuance of Common  Stock upon the full  conversion
of this Note. The Borrower  represents  that upon issuance,  such shares will be
duly and validly issued, fully paid and non-assessable. The Borrower agrees that
its  issuance of this Note shall  constitute  full  authority  to its  officers,
agents,  and  transfer  agents who are charged  with the duty of  executing  and
issuing stock  certificates to execute and issue the necessary  certificates for
shares of Common Stock upon the conversion of this Note.

              3.2 Method of Conversion. This Note may be converted by the Holder
in whole or in part. Upon partial conversion of this Note, a new Note containing
the same date and  provisions of this Note shall,  at the request of the Holder,
be issued by the Borrower to the Holder for the  principal  balance of this Note
and interest which shall not have been converted or paid.


                                   ARTICLE IV

                                EVENT OF DEFAULT

                  The  occurrence of any of the following  events is an Event of
Default ("Event of Default"):

                  4.1 Failure to Pay  Principal,  Interest  or other  Fees.  The
Borrower  fails to pay any  installment  of  principal,  interest  or other fees
hereon when due and such  failure  continues  for a period in excess of five (5)
business days opportunity to cure.

                  4.2 Breach of  Covenant.  The  Borrower  breaches any material
covenant or other term or  condition  of this Note in any  material  respect and
such  breach,  if subject to cure,  continues  for a period of five (5) business
days after written notice to the Borrower from the Holder.

                  4.3 Breach of  Representations  and  Warranties.  Any material
representation  or warranty of the Borrower  made herein,  or in any  agreement,
statement  or  certificate  given in writing  pursuant  hereto or in  connection
herewith shall be materially false or misleading.

                  4.4 Receiver or Trustee. The Borrower shall make an assignment
for the benefit of creditors,  or apply for or consent to the  appointment  of a
receiver  or  trustee  for it or for a  substantial  part  of  its  property  or
business; or such a receiver or trustee shall otherwise be appointed.



                                       6
<PAGE>

                  4.5  Judgments.  Any money  judgment,  writ or  similar  final
process shall be entered or filed against the Borrower or any of its property or
other assets for more than  $250,000,  and shall remain  unvacated,  unbonded or
unstayed for a period of ninety (90) days.

                  4.6  Bankruptcy.  Bankruptcy,  insolvency,  reorganization  or
liquidation  proceedings or other proceedings or relief under any bankruptcy law
or any law for the  relief of debtors  shall be  instituted  by or  against  the
Borrower,  and in the  case  of any  such  action  against  the  Borrower,  such
proceeding shall remain undismissed,  unvacated,  or unstayed for a period of 90
days.

                  4.7 Stop Trade.  An SEC stop trade order or  Principal  Market
trading suspension of the Common Stock for 5 consecutive days or 5 days during a
period  of 10  consecutive  days,  excluding  in all cases a  suspension  of all
trading on a Principal Market.


                                    ARTICLE V

                                 DEFAULT PAYMENT


              5.1 Default Payment. If an Event of Default occurs, the Holder, at
its  option,  may  elect to  require  the  Borrower  to make a  Default  Payment
("Default  Payment").  The  Default  Payment  shall  be 130% of the  outstanding
principal amount of the Note, plus accrued but unpaid  interest,  all other fees
then remaining unpaid, and all other amounts payable hereunder.

              5.2 Default  Payment Date and Default Notice  Period.  The Default
Payment shall be due and payable on the 20th business day after the date written
notice is sent from the Holder to the Borrower of an Event of Default as defined
in Article IV  ("Default  Payment  Date").  The period  between  the date of the
written  notice  from the Holder to the  Borrower of an Event of Default and the
Default Payment Date shall be the "Default Notice Period." If during the Default
Notice  Period,  the Borrower  cures the Event of Default,  the Event of Default
will no longer  exist and any rights the Holder had  pertaining  to the Event of
Default  will no longer  exist.  If the Event of Default is not cured during the
Default Notice Period, all amounts payable hereunder shall be due and payable on
the Default Payment Date, all without further demand,  presentment or notice, or
grace period, all of which hereby are expressly waived.

              5.3  Cumulative  Remedies.  The remedies  under this Note shall be
cumulative.


                                   ARTICLE VI

                                  MISCELLANEOUS

              6.1 Failure or Indulgence  Not Waiver.  No failure or delay on the
part of the  Holder  hereof in the  exercise  of any power,  right or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.



                                       7
<PAGE>

              6.2 Notices.  Any notice herein  required or permitted to be given
shall be in writing and shall be deemed  effectively  given:  (a) upon  personal
delivery to the party notified, (b) when sent by confirmed telex or facsimile if
sent during normal  business  hours of the  recipient,  if not, then on the next
business  day, (c) five days after having been sent by  registered  or certified
mail, return receipt  requested,  postage prepaid,  or (d) one day after deposit
with a nationally  recognized  overnight courier,  specifying next day delivery,
with written  verification of receipt.  All communications  shall be sent to the
Borrower  at the  address as set forth on the  signature  page here,  and to the
Holder at the address set forth on the  signature  page for such Holder,  with a
copy to John Tucker,  Esq., 152 West 57th Street,  4th Floor, New York, New York
10019, facsimile number (212) 541-4434, or at such other address as the Borrower
or the Holder may  designate  by ten days  advance  written  notice to the other
parties  hereto.  A Notice of Conversion  shall be deemed given when made to the
Borrower.

              6.3  Amendment  Provision.  The  term  "Note"  and  all  reference
thereto,  as used  throughout  this  instrument,  shall mean this  instrument as
originally executed, or if later amended or supplemented,  then as so amended or
supplemented.

              6.4  Assignability.  This Note shall be binding  upon the Borrower
and its successors and assigns, and shall inure to the benefit of the Holder and
its successors and assigns, and may be assigned by the Holder.

              6.5 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York,  without regard to principles
of  conflicts  of laws.  Any action  brought by either  party  against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York.  Both  parties and the  individual  signing this Note on behalf of the
Borrower  agree to submit to the  jurisdiction  of such courts.  The  prevailing
party  shall  be  entitled  to  recover  from the  other  party  its  reasonable
attorney's  fees and  costs.  In the event  that any  provision  of this Note is
invalid or unenforceable  under any applicable statute or rule of law, then such
provision  shall  be  deemed  inoperative  to the  extent  that it may  conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any such provision which may prove invalid or  unenforceable  under any law
shall not affect the validity or unenforceability of any other provision of this
Note.

              6.6 Maximum Payments.  Nothing contained herein shall be deemed to
establish  or require  the  payment of a rate of  interest  or other  charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest  required  to be paid or other  charges  hereunder  exceed the  maximum
permitted by such law, any payments in excess of such maximum  shall be credited
against  amounts  owed by the  Borrower  to the Holder and thus  refunded to the
Borrower.

              6.7 Construction.  Each party  acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction  that  ambiguities are to be resolved  against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.



                                       8
<PAGE>

         IN WITNESS  WHEREOF,  the Borrower has caused this Note to be signed in
its name effective as of this 17th day of July __, 2003.



                                   LMIC, INC.


                                   By:________________________________




WITNESS:



-------------------------------





                                       9
<PAGE>

                              NOTICE OF CONVERSION

(To be executed by the Holder in order to convert the Note)


         The  undersigned  hereby elects to convert  $_________ of the principal
and $_________ of the interest due on the Note issued by LMIC,  INC. on ________
___, 2003 into Shares of Common Stock of LMIC, INC. (the "Company") according to
the conditions set forth in such Note, as of the date written below.



Date of Conversion:____________________________________________________________


Conversion Price:______________________________________________________________


Shares To Be Delivered:_________________________________________________________


Signature:_____________________________________________________________________


Print Name:____________________________________________________________________


Address:_______________________________________________________________________


            --------------------------------------------------------------------


<PAGE>



                                    EXHIBIT B

                        FORM OF REPAYMENT ELECTION NOTICE

To:      [HOLDER AT HOLDER'S ADDRESS]

         Pursuant  to Section 2.2 of the Note of LMIC,  Inc.  issued on ________
__, 2003,  we hereby  notify you that we are  irrevocably  electing to repay the
outstanding  Monthly  Amount (as defined in the Note) due on the Repayment  Date
(as defined in the Note) which occurs on ______, 20__ (CHECK ONE):

         _____ In full in cash on such Repayment Date.

         _____ In full in shares of the Company's  Common Stock within three (3)
trading days following such Repayment Date.

         _____ In part in cash in the amount of $______ on such Repayment  Date,
and in part in shares of the  Company's  Common  Stock (in the  amount of ______
shares) within three (3) trading days following such Repayment Date.

         ________ In shares,  but the Holder will be  permitted to convert up to
the Monthly  Amount that is payable in shares of Common  Stock during the period
until the next Repayment Date.


                                   LMIC, Inc.

                                   By:
                                       --------------------------------------
                                       Name:
                                       Title: