EX-4.18

                       FORM OF UNSECURED CONVERTIBLE NOTE

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
NOR THE  SECURITIES  INTO  WHICH  THESE  SECURITIES  ARE  CONVERTIBLE  HAVE BEEN
REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR
THE SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR (B) AN OPINION
OF COUNSEL,  IN A GENERALLY  ACCEPTABLE FORM, THAT  REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD  PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING  THE  FOREGOING,  SUBJECT TO  COMPLIANCE  WITH  APPLICABLE
SECURITIES  LAWS, THE  SECURITIES MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
ANY  TRANSFEREE  OF THIS NOTE  SHOULD  CAREFULLY  REVIEW THE TERMS OF THIS NOTE,
INCLUDING  SECTIONS 3(C)(III) AND 18(A) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED
BY THIS NOTE AND,  ACCORDINGLY,  THE SECURITIES  ISSUABLE UPON CONVERSION HEREOF
MAY BE LESS THAN THE AMOUNTS  SET FORTH ON THE FACE  HEREOF  PURSUANT TO SECTION
3(C)(III)  OF THIS  NOTE.  THIS  INSTRUMENT  IS  SUBJECT  TO THE  TERMS OF A (I)
INTERCREDITOR  AGREEMENT BY AND BETWEEN  FORTRESS CREDIT CORP., AS AGENT (OR ANY
SUCCESSOR OR REPLACEMENT  AGENT) FOR CERTAIN OTHER FINANCIAL  INSTITUTIONS UNDER
THE SENIOR LOAN AGREEMENT (HEREINAFTER DEFINED), AND LAW DEBENTURE TRUST COMPANY
OF NEW YORK (OR ANY  SUCCESSOR  OR  REPLACEMENT  ADMINISTRATIVE  AGENT),  IN ITS
CAPACITY AS ADMINISTRATIVE AGENT (IN SUCH CAPACITY, THE "ADMINISTRATIVE AGENT"),
FOR THE HOLDER OF THIS NOTE AND THE OTHER  UNSECURED  CONVERTIBLE  NOTES OF LIKE
TENOR  DATED  AS OF MAY __,  2007 (AS THE  SAME  MAY BE  AMENDED,  SUPPLEMENTED,
RESTATED,  NOVATED OR REPLACED  (INCLUDING IN CONNECTION WITH REPLACEMENT SENIOR
FINANCING) FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") AND (II) WAIVER AND
AMENDMENT NO. 1 TO REGISTRATION  RIGHTS AGREEMENT,  EFFECTIVE AS OF MAY __, 2007
BY AND BETWEEN THE INVESTORS  PARTY THERETO AND COMPANY,  AS AMENDED,  RESTATED,
SUPPLEMENTED AND/OR MODIFIED FROM TIME TO TIME.



                          SUMMIT GLOBAL LOGISTICS, INC.


                           UNSECURED CONVERTIBLE NOTE


Issuance Date:  May __, 2007               Principal Amount: U.S. $_____________
<PAGE>


        FOR  VALUE  RECEIVED,   Summit  Global   Logistics,   Inc.,  a  Delaware
corporation (formerly known as Aerobic Creations,  Inc., the "COMPANY"),  hereby
promises  to pay to the  order of  [_________]or  registered  permitted  assigns
("HOLDER") the amount set out above as the Principal Amount (as reduced pursuant
to the terms  hereof  pursuant to  redemption  (or  prepayment),  conversion  or
otherwise, the "PRINCIPAL") when due, whether upon the Maturity Date (as defined
below),  acceleration,  redemption (or prepayment) or otherwise (in each case in
accordance  with the  terms  hereof)  and to pay  interest  ("INTEREST")  on any
outstanding  Principal at the applicable  Interest Rate,  from the Issuance Date
(the  "INTEREST  COMMENCEMENT  DATE")  until the same  becomes due and  payable,
whether  upon  an  Interest  Date  (as  defined   below),   the  Maturity  Date,
acceleration,  conversion, redemption (or prepayment) or otherwise (in each case
in accordance with the terms hereof). This Unsecured Convertible Note (including
all  Unsecured  Convertible  Notes issued in exchange,  transfer or  replacement
hereof, as amended, restated,  supplemented and/or modified from time to time in
accordance  with  the  provisions  hereof,  this  "NOTE")  is one of an issue of
Unsecured Convertible Notes issued pursuant to Waiver and Amendment No. 1 to the
Registration  Rights  Agreement  dated  May  __,  2007  (as  amended,  restated,
supplemented  and/or modified from time to time, the "OTHER NOTES";  as amended,
restated,  supplemented  and/or  modified  from time to time,  together with the
Note, the "NOTES",  as further defined  hereinafter).  Certain capitalized terms
used herein are defined in Section 28.

        (1)     MATURITY.  On the Maturity  Date,  the Company  shall pay to the
Holder an amount in cash  representing  all outstanding  Principal,  accrued and
unpaid  Interest  and  accrued  and unpaid Late  Charges on such  Principal  and
Interest.  The "MATURITY  DATE" shall be May __, 2012, as may be extended at the
option  of the  Holder  (i) in the event  that,  and for so long as, an Event of
Default (as defined in Section  4(a)) shall have  occurred and be  continuing on
the Maturity  Date (as may be extended  pursuant to this Section 1) or any event
that shall have occurred and be continuing that with the passage of time and the
failure to cure would  result in an Event of Default  and (ii)  through the date
that is ten (10) Business Days after the  consummation of a Change of Control in
the event that a Change of Control is publicly  announced or a Change of Control
Notice (as defined in Section  5(b)) is delivered  prior to the  Maturity  Date.
Except  as  specifically  set  forth  in  Section  8  hereof,  this  Note is not
voluntarily prepayable.

        (2)     INTEREST;   INTEREST   RATE.   (a)  Interest  on  the  Principal
then-outstanding under this Note (i) shall accrue interest at the Interest Rate,
commencing  on the  Interest  COMMENCEMENT  Date,  in arrears for each  Calendar
Quarter  on the first day of the  succeeding  Calendar  Quarter,  (ii)  shall be
computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day
months and (iii) shall be payable on the Maturity  Date (the  "INTEREST  DATE").
Interest on this Note shall accrue from the Interest Commencement Date until the
earlier  to occur of the date (i) the  Principal  Amount is paid or, if a paying
agent  is  engaged  by the  Company,  transferred  to  such  paying  agent  with
instructions  to pay the same and (ii) all amounts  outstanding  under this Note
are converted to Common Stock in accordance with the provisions hereof. Interest
shall be payable or accrue,  as applicable in accordance with this Section 2(a),
on each  Interest  Date to the  record  holder  of this  Note on the  applicable
Interest  Date,  and to the  extent  that any  principal  amount of this Note is
converted prior to such Interest Date, accrued and unpaid Interest in respect of
such converted  principal  amount and accrued and unpaid Late Charges in respect
of such converted  principal amount and Interest shall be paid on the

                                       2
<PAGE>


Conversion  Date (as  defined  below) to the  record  holder of this Note on the
applicable Conversion Date, in cash.

                (b)     Interest on this Note that is payable, and is punctually
paid or duly  provided  for, on any Interest Date shall be paid to the Person in
whose name this Note is  registered  at the close of business on the record date
for such  interest  at the office or agency of the Company  maintained  for such
purpose  or at the  office of a payment  agent  located in the state of New York
engaged by the Company for the purpose of making  payments under this Note. Each
payment of interest on this Note shall be made by check mailed to the address of
the Holder specified in the register of Notes;  PROVIDED,  HOWEVER, that, at the
request  of the  Holder in  writing to the  Company,  interest  on the  Holder's
Note(s)  shall  be paid by wire  transfer  in  immediately  available  funds  in
accordance  with the written wire  transfer  instruction  supplied by the Holder
from time to time to the  Company at least ten (10)  Business  Days prior to the
applicable Interest Date or Conversion Date.

                (c)     From and after the occurrence and during the continuance
of an Event of Default,  the  Interest  Rate shall be  increased  to two percent
(2.0%) in excess of the Interest  Rate  otherwise  payable at such time provided
that Company has received notice from the Administrative Agent (at the direction
of the Required Holders) indicating that the Interest Rate is so increasing.  In
the event  that such  Event of Default  is  subsequently  cured or  waived,  the
adjustment  referred to in the preceding sentence shall cease to be effective as
of the date of such cure or waiver;  PROVIDED  that,  the Interest as calculated
and  unpaid at such  increased  rate  during  the  continuance  of such Event of
Default  shall  continue  to apply to the extent  relating to the days after the
occurrence  of such Event of Default to but excluding the date of cure or waiver
of such Event of Default.  For purposes of this Section 2(c),  the period of the
Event of Default in respect of Section  4(a)(i) only,  shall  commence the first
day after the grace periods  specified  therein  expire and shall end on the day
upon which the applicable Registration Statement (as defined in the Registration
Rights Agreement) becomes effective or again becomes available, as applicable.

        (3)     CONVERSION OF NOTES.  This Note shall be convertible into shares
of the Company's  common stock, par value $0.001 per share (the "COMMON STOCK"),
on the terms and conditions set forth in this Section 3.

                (a)     CONVERSION  RIGHT.  Subject to the provisions of Section
3(d),  at any time or times on or after the Issuance  Date,  the Holder shall be
entitled to convert all or any portion of the  Principal  then-outstanding  into
fully paid and  nonassessable  shares of Common Stock in accordance with Section
3(c), at the Conversion Rate (as defined below). The Company shall not issue any
fraction of a share of Common Stock upon any  conversion.  If the issuance would
result in the  issuance  of a fraction of a share of Common  Stock,  the Company
shall round such fraction of a share of Common Stock up or down, as  applicable,
to the nearest whole share.  The Company shall pay any and all taxes that may be
payable in respect of the  issuance  and delivery of shares of Common Stock upon
conversion of any Principal.

                (b)     CONVERSION  RATE.  The number of shares of Common  Stock
issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the Conversion Price
(the "CONVERSION RATE").

                                       3
<PAGE>


                        (i)     "CONVERSION  AMOUNT"  means the  portion  of the
Principal  to be  converted,  redeemed  or  otherwise  in  respect  of which the
applicable determination is being made.

                        (ii)    "CONVERSION  PRICE" means,  as of any Conversion
Date (as  defined  below)  or other  date of  determination,  $5.50 per share of
Common Stock.

                (c)     MECHANICS OF CONVERSION.

                        (i)     OPTIONAL  CONVERSION.  To convert any Conversion
Amount into shares of Common Stock on any date (a "CONVERSION DATE"), the Holder
shall (A) transmit by facsimile (or otherwise deliver),  for receipt on or prior
to 11:59 p.m.,  New York Time,  on such date,  a copy of an  executed  notice of
conversion in the form attached hereto as EXHIBIT I (the "CONVERSION NOTICE") to
the Company and (B) if required by Section  3(c)(iii),  surrender this Note to a
common  carrier  for  delivery  to the  Company  as  soon as  practicable  on or
following such date (or an  indemnification  undertaking in respect of this Note
in the case of its loss,  theft or  destruction).  On or before the second (2nd)
Trading Day  following the date of receipt of a Conversion  Notice,  the Company
shall transmit by facsimile a confirmation of receipt of such Conversion  Notice
to the Holder and the Company's  transfer  agent (the "TRANSFER  AGENT"),  which
confirmation  shall  constitute an  instruction to the Transfer Agent to process
such Conversion  Notice in accordance with the terms herein (the "SHARE DELIVERY
DATE"),  and (X)  provided  that  the  Transfer  Agent is  participating  in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer Program, the
applicable registration statement is effective under the Securities Act of 1933,
as amended  ("1933  ACT") and  provided  that the Holder is  eligible to receive
shares of Common Stock through DTC,  credit such  aggregate  number of shares of
Common  Stock to which the  Holder  shall be  entitled  to the  Holder's  or its
designee's  balance  account  with DTC  through  its  Deposit  Withdrawal  Agent
Commission  system, or (Y) if the Transfer Agent is not participating in the DTC
Fast  Automated  Securities  Transfer  Program or the Holder is not  eligible to
receive  shares of Common Stock through DTC, issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
Holder or its  designee,  for the number of shares of Common  Stock to which the
Holder  shall be  entitled,  pay to the  Holder in cash an  amount  equal to the
accrued and unpaid Interest and Late Charges (as defined in Section  24(b)),  if
any, on the  Conversion  Amount up to and including  the  Conversion  Date.  The
Holder  undertakes that whenever the Company credits  securities as set forth in
clause  (1)(X) of the  preceding  sentence,  (A) upon receipt of notice from the
Company  that the  applicable  registration  statement  is not, or no longer is,
effective  in  respect  of the resale of such  securities,  the Holder  will not
transfer such securities (other than (I) in connection with a transfer,  wherein
the  Holder  provides  the  Company  with  an  opinion  of  counsel   reasonably
satisfactory to the Company, in a generally  acceptable form, to the effect that
such transfer may be made without registration under the applicable requirements
of the 1933  Act,  or (II) the  Holder  provides  the  Company  with  assurances
reasonably  acceptable to the Company that the transfer may be effected pursuant
to Rule 144 (as hereinafter defined) or Rule 144) until the Company notifies the
Holder that the applicable registration statement becomes effective (again), and
(B) the Holder shall indemnify and hold the Company  harmless  against any claim
of securities  laws  violations in respect of the transfer (after the receipt of
the first notice from the Company  provided  for in clause (A) of this  sentence
but prior to the receipt of the second  notice from the Company  provided for in
clause  (A) of this  sentence)  by the Holder of any  security  as

                                       4
<PAGE>


to which  such  credit  at DTC has been  effected.  If this  Note is  physically
surrendered for conversion as required by Section  3(c)(iii) and the outstanding
Principal of this Note is greater than the Principal being  converted,  then the
Company  shall,  as soon as  practicable  and in no event  later  than three (3)
Business Days after receipt of this Note (the "NOTE  DELIVERY  DATE") and at its
own  expense,  issue and  deliver to the holder a new Note (in  accordance  with
Section 18(d)) representing the outstanding Principal not converted.  The Person
or Persons  entitled  to  receive  the shares of Common  Stock  issuable  upon a
conversion  of this Note shall be treated for all purposes as the record  holder
or holders of such shares of Common Stock on the Conversion Date.

                        (ii)    COMPANY'S FAILURE TO TIMELY CONVERT.

                        (A)     CONVERSION  FAILURE.  Subject  to the  terms and
        conditions  of  this  Note,  if  the  Company  shall  fail  to  issue  a
        certificate  to the Holder or credit the Holder's  balance  account with
        DTC for the  number of shares  of  Common  Stock to which the  Holder is
        entitled  upon  conversion of any  Conversion  Amount on or prior to the
        date  which is three  (3)  Trading  Days  after the  Conversion  Date (a
        "CONVERSION  FAILURE"),  and if on or after such  Trading Day the Holder
        purchases (in an open market  transaction or otherwise)  Common Stock to
        deliver in satisfaction of a sale by the Holder of Common Stock issuable
        upon such  conversion  that the Holder  anticipated  receiving  from the
        Company (a "BUY-IN"),  then, in addition to all other remedies available
        to the Holder,  the Company shall,  within three (3) Business Days after
        the Holder's request and in the Holder's discretion, either (i) pay cash
        to the Holder in an amount equal to the Holder's  total  purchase  price
        (including  reasonable out of pocket  brokerage  commissions,  and other
        reasonable  out-of-pocket  expenses,  if any) for the  shares  of Common
        Stock so purchased  (the "BUY-IN  PRICE"),  at which point the Company's
        obligation to deliver such  certificate (and to issue such Common Stock)
        shall terminate, or (ii) promptly honor its obligation to deliver to the
        Holder a certificate or certificates  representing such Common Stock and
        pay cash to the Holder in an amount  equal to the excess (if any) of the
        Buy-In  Price over the  product  of (A) such  number of shares of Common
        Stock, times (B) the Closing Bid Price on the Conversion Date.

                        (B)     NOTICE  OF  VOID   CONVERSION;   ADJUSTMENT   TO
        CONVERSION  PRICE.  If for any reason the Holder has not received all of
        the shares of Common Stock prior to the tenth (10th)  Business Day after
        the Share  Delivery Date in respect of a conversion of this Note,  other
        than due to the pendency of a dispute being resolved in accordance  with
        Section 23 (a  "CONVERSION  FAILURE"),  then the  Holder,  upon  written
        notice to the Company, may void its Conversion Notice in respect of, and
        retain or have  returned,  as the case may be, any  portion of this Note
        that has not been converted pursuant to the Holder's Conversion Notice.

                        (iii)   BOOK-ENTRY.   Notwithstanding  anything  to  the
contrary  set forth  herein,  upon  conversion  of any  portion  of this Note in
accordance with the terms hereof, the Holder shall not be required to physically
surrender  this Note to the  Company  unless (A) all of the  Principal  is being
converted or (B) the Holder has provided the Company with prior  written  notice
(which notice may be included in a Conversion Notice)  requesting  reissuance of
this Note upon physical surrender of this Note. The Holder and the Company shall
maintain  records

                                       5
<PAGE>


showing the  Principal  converted  (and the  Interest  and Late  Charges paid in
respect  thereof)  and the dates of such  conversions  or shall  use such  other
method,  reasonably  satisfactory  to the Holder and the  Company,  so as not to
require  physical  surrender of this Note upon conversion.  Notwithstanding  the
foregoing,  if this Note is converted or redeemed as  aforesaid,  the Holder may
not transfer this Note unless the Holder first  physically  surrenders this Note
to the Company,  whereupon the Company will forthwith issue and deliver upon the
order of the  Holder a new Note of like  tenor,  registered  as the  Holder  may
request,  representing in the aggregate the remaining  Principal  represented by
this Note. The Holder and any assignee, by acceptance of this Note,  acknowledge
and agree  that,  by  reason  of the  provisions  of this  paragraph,  following
conversion or redemption of any portion of this Note, the Principal of this Note
may be less than the principal amount stated on the face hereof.

                        (iv)    PRO RATA CONVERSION; DISPUTES. In the event that
the Company receives a Conversion  Notice from more than one holder of Notes for
the same  Conversion Date and the Company can convert some, but not all, of such
portions of the Notes submitted for conversion,  the Company, subject to Section
3(d),  shall convert from each holder of Notes electing to have Notes  converted
on such date a pro rata amount of such holder's  portion of its Notes  submitted
for conversion  based on the principal  amount of Notes submitted for conversion
on such date by such holder  relative to the aggregate  principal  amount of all
Notes submitted for conversion on such date. In the event of a dispute as to the
number of shares of Common  Stock  issuable to the Holder in  connection  with a
conversion  of this Note,  the  Company  shall issue to the Holder the number of
shares of Common  Stock not in dispute and resolve  such  dispute in  accordance
with Section 23.

                (d)     LIMITATIONS ON CONVERSIONS.

                        (i)     BENEFICIAL  OWNERSHIP.  The  Company  shall  not
effect any  conversion of this Note,  and the Holder of this Note shall not have
the right to convert any portion of this Note  pursuant to Section  3(a), to the
extent that after giving effect to such  conversion,  the Holder  (together with
the Holder's affiliates) would beneficially own in excess of 9.99% (the "MAXIMUM
PERCENTAGE")  of the number of shares of Common  Stock  outstanding  immediately
after giving effect to such conversion;  PROVIDED,  HOWEVER,  that following the
Optional  Redemption  Notice  Date (as  defined  in  Section  8(a)) the  Maximum
Percentage  shall be of no further  force and effect on the Optional  Redemption
Date, solely for purposes of effecting a Optional Redemption pursuant to Section
8. For purposes of the foregoing  sentence,  the  aggregate  number of shares of
Common Stock  beneficially  owned by the Holder and its affiliates shall include
the number of shares of Common Stock  issuable  upon  conversion of this Note in
respect of which the  determination  of such  sentence is being made,  but shall
exclude the number of shares of Common  Stock  which would be issuable  upon (A)
conversion  of the  remaining,  nonconverted  portion of this Note  beneficially
owned by the Holder or any of its  affiliates  and (B) exercise or conversion of
the unexercised or nonconverted  portion of any other  securities of the Company
(including,  without  limitation,  any Other Notes)  subject to a limitation  on
conversion or exercise analogous to the limitation contained herein beneficially
owned  by the  Holder  or any of its  affiliates.  Except  as set  forth  in the
preceding sentence,  for purposes of this Section 3(d)(i),  beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities  Exchange
Act of 1934,  as amended  (the  "EXCHANGE  ACT").  For  purposes of this Section
3(d)(i),  in determining the number of outstanding  shares of Common Stock,  the
Holder

                                       6
<PAGE>


may rely on the number of outstanding shares of Common Stock as reflected in (x)
the Company's most recent Form 10-K, Form 10-KSB, Form 10-Q, Form 10-QSB or Form
8-K, as the case may be, (y) a more recent public announcement by the Company or
(z) any other  notice by the Company or the  Transfer  Agent  setting  forth the
number of shares of Common Stock  outstanding.  For any reason at any time, upon
the written or oral request of the Holder, the Company shall promptly, but in no
event no later than two (2) Business Days,  confirm orally and in writing to the
Holder the number of shares of Common Stock then  outstanding.  In any case, the
number of  outstanding  shares of Common Stock shall be determined  after giving
effect to the  conversion or exercise of  securities  of the Company,  including
this  Note,  by the  Holder or its  affiliates  since the date as of which  such
number of outstanding shares of Common Stock was reported.  By written notice to
the Company,  the Holder may increase or decrease the Maximum  Percentage to any
other percentage not in excess of 9.99% specified in such notice;  provided that
(i) any such increase  will not be effective  until the  sixty-first  (61st) day
after such notice is  delivered to the  Company,  and (ii) any such  increase or
decrease will apply only to the Holder and not to any other holder of Notes.

                        (ii)    PRINCIPAL MARKET  REGULATION.  The Company shall
not be  obligated to issue any shares of Common  Stock upon  conversion  of this
Note,  and the  Holder of this Note  shall  not have the right to  receive  upon
conversion  of this Note any shares of Common  Stock,  if the  issuance  of such
shares of Common  Stock would  exceed the  aggregate  number of shares of Common
Stock which the Company may issue upon conversion or exercise, as applicable, of
the  Notes  without  breaching  the  Company's  obligations  under  the rules or
regulations of the applicable Eligible Market (the number of shares which may be
issued without violating such rules and regulations, the "EXCHANGE CAP"), except
that such  limitation  shall not apply in the event that the Company (A) obtains
the approval of its  stockholders  as required by the  applicable  rules of such
Eligible Market for issuances of shares of Common Stock in excess of such amount
(the  "STOCKHOLDER  APPROVAL")  or (B) obtains a written  opinion  from  outside
counsel to the Company that such approval is not  required,  which opinion shall
be  reasonably  satisfactory  to the  Required  Holders.  Unless  and until such
Stockholder  Approval or written opinion is obtained,  no purchaser of the Notes
(each,  a  "PURCHASER")  shall be issued in the  aggregate,  upon  conversion of
Notes,  shares of Common  Stock in an amount  greater  than the  product  of the
Exchange Cap  multiplied by a fraction,  the numerator of which is the principal
amount of Notes issued to such  Purchaser  and the  denominator  of which is the
aggregate  principal  amount of all Notes and the  Secured  Notes (in respect of
each Purchaser, the "EXCHANGE CAP ALLOCATION").  In the event that any Purchaser
shall sell or otherwise  transfer any of such Purchaser's  Notes, the transferee
shall  be  allocated  a pro  rata  portion  of  such  Purchaser's  Exchange  Cap
Allocation,  and the  restrictions  of the prior  sentence  shall  apply to such
transferee in respect of the portion of the Exchange Cap Allocation allocated to
such transferee. In the event that any holder of Notes shall convert all of such
holder's Notes into a number of shares of Common Stock which,  in the aggregate,
is less than such holder's Exchange Cap Allocation,  then the difference between
such holder's  Exchange Cap  Allocation and the number of shares of Common Stock
actually issued to such holder shall be allocated to the respective Exchange Cap
Allocations of the remaining  holders of Notes on a pro rata basis in proportion
to the aggregate principal amount of the Notes then held by each such holder.

                                       7
<PAGE>


        (4)     RIGHTS UPON EVENT OF DEFAULT.

                (a)     EVENT OF DEFAULT.  Each of the  following  events  shall
constitute an "EVENT OF DEFAULT":

                        (i)     the  failure  of  the  applicable   Registration
Statement required to be filed pursuant to the Registration  Rights Agreement to
be declared effective by the SEC on or prior to the date that is sixty (60) days
after the  applicable  Effectiveness  Deadline  (as defined in the  Registration
Rights Agreement),  or, while the applicable  Registration Statement is required
to be  maintained  effective  pursuant to the terms of the  Registration  Rights
Agreement, the effectiveness of the applicable Registration Statement lapses for
any reason (including,  without limitation,  the issuance of a stop order) or is
unavailable  to any  holder  of the  Notes  for  sale  of all of  such  holder's
Registrable  Securities  (as defined in the  Registration  Rights  Agreement) in
accordance with the terms of the Registration  Rights Agreement,  and such lapse
or  unavailability  continues for a period of ten (10)  consecutive  days or for
more than three  times in any 365-day  period  that does not exceed  thirty (30)
days in the aggregate  (other, in each case, than days during an Allowable Grace
Period or a  Maintenance  Grace  Period (as defined in the  Registration  Rights
Agreement));

                        (ii)    the  suspension  from  trading or failure of the
Common  Stock to be quoted or listed on an Eligible  Market for a period of five
(5)  consecutive  Trading Days or for more than an aggregate of ten (10) Trading
Days in any 365-day period;

                        (iii)   the  Company's  (A) failure to cure a Conversion
Failure by delivery,  subject to the conversion limitations set forth in Section
3(d),  of the  required  number of shares of Common  Stock  within  fifteen (15)
Business Days after the applicable  Conversion Date or (B) written notice to any
holder of the Notes,  including by way of public  announcement or through any of
its  agents,  at any time,  of its  intention  not to comply  with a request for
conversion  of any Notes  into  shares  of  Common  Stock  that is  tendered  in
accordance  with the  provisions  of the Notes,  other than  pursuant to Section
3(d);

                        (iv)    at  any  time  following  the  twentieth  (20th)
consecutive  Business Day that the Holder's  Authorized Share Allocation is less
than the number of shares of Common  Stock that the Holder  would be entitled to
receive upon a conversion  of the full  Conversion  Amount of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or otherwise);

                        (v)     the  Company's  failure to pay to the Holder any
amount of Principal  (including,  without limitation,  any redemption payments),
Interest,  Late Charges or other  amounts when and as due under this Note or any
other  agreement,   document,  certificate  or  other  instrument  delivered  in
connection with the  transactions  contemplated  hereby and thereby to which the
Holder is a party,  except, (A) in the case of a failure to pay Interest or Late
Charges  when and as due,  in which case only if such  failure  continues  for a
period of at least five (5) Business  Days and (B) if such payment is prohibited
by the  Intercreditor  Agreement  due  solely  to the  existence  of an Event of
Default occurring under any of the Senior Loan Documents  triggered  pursuant to
the Intercreditor  Agreement or the Senior Loan Agreement by the Holder's breach
of this Note;

                                       8
<PAGE>


                        (vi)    the Company's or any Subsidiary's failure to pay
any  principal of or interest or premium on any of its  Indebtedness  (excluding
Indebtedness  under the Senior  Loan and  Indebtedness  evidenced  by any of the
Secured Notes or Other Notes), to the extent that the aggregate principal amount
of all such  Indebtedness  exceeds  $5,000,000,  when due  (whether by scheduled
maturity,  required  prepayment,  acceleration,  demand or  otherwise)  and such
failure shall continue after the applicable grace period,  if any,  specified in
the agreement or instrument relating to such Indebtedness,  or any other default
under any  agreement or  instrument  relating to any such  Indebtedness,  or any
other event,  shall occur and shall continue after the applicable  grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to  accelerate,  or to permit the  acceleration  of, the maturity of
such  Indebtedness;  or any such  Indebtedness  shall be  declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment),  redeemed,  purchased  or defeased  or an offer to prepay,  redeem,
purchase or defease  such  Indebtedness  shall be  required to be made,  in each
case, prior to the stated maturity thereof, except, if such failure is caused by
the Holder's breach of this Note;

                        (vii)   the Company or any of its Subsidiaries (A) shall
institute any  proceeding or voluntary case seeking to adjudicate it bankrupt or
insolvent,  or seeking  dissolution,  liquidation,  winding up,  reorganization,
arrangement,  adjustment,  protection,  relief or composition of it or its debts
under any law relating to bankruptcy,  insolvency,  reorganization  or relief of
debtors,  or seeking  the entry of an order for relief or the  appointment  of a
receiver, administrative receiver, administrator, trustee, custodian, liquidator
or other similar official for any such Person or for any substantial part of its
property, or any other Insolvency Proceeding,  (B) shall be generally not paying
its debts as such debts  become due or shall admit in writing its  inability  to
pay its debts  generally  or shall be unable to pay its debts,  (C) shall make a
general assignment for the benefit of creditors, or (D) shall take any action to
authorize or effect any of the actions set forth above in this subsection (vii);

                        (viii)  any proceeding  shall be instituted  against the
Company  or any  of its  Subsidiaries  seeking  to  adjudicate  it  bankrupt  or
insolvent,  or seeking  dissolution,  liquidation,  winding up,  reorganization,
arrangement,  adjustment, protection, relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,  administrative  receiver,
administrator,  trustee, custodian, liquidator or other similar official for any
such Person or for any substantial part of its property, or any other Insolvency
Proceeding  shall be instituted  against the Company or any Subsidiary,  and any
such proceeding shall remain undismissed or unstayed for a period of thirty (30)
days  or any of the  actions  sought  in  such  proceeding  (including,  without
limitation,  the entry of an order for  relief  against  any such  Person or the
appointment  of a receiver,  administrative  receiver,  administrator,  trustee,
custodian,  liquidator or other similar  official for it or for any  substantial
part of its property) shall occur;

                        (ix)    any  provision of any Note shall at any time for
any reason (other than pursuant to the express terms  thereof) cease to be valid
and  binding  on or  enforceable  against  the  Company  intended  to be a party
thereto,  or the validity or  enforceability  thereof  shall be contested by any
party  thereto,  or a  proceeding  shall  be  commenced  by the  Company  or any
Governmental  Authority  having  jurisdiction  over  any  of  them,  seeking  to
establish the invalidity or unenforceability  thereof, or the Company shall deny
in writing that it has any liability or obligation purported to be created under
this Note;

                                       9
<PAGE>


                        (x)     the  loss,   suspension  or  revocation  of,  or
failure to renew,  any license or permit now held or  hereafter  acquired by the
Company,  if such  license or permit is not replaced  with a similar  license or
permit and,  after giving  effect to such  replacement  license or permit,  such
loss,  suspension,  revocation  or failure to renew has or could  reasonably  be
expected to have a Material Adverse Effect;

                        (xi)    the indictment of the Company under any criminal
statute,  or commencement of criminal or civil proceedings  against the Company,
pursuant to which statute or  proceedings  the  penalties or remedies  sought or
available  include  forfeiture  to any  Governmental  Authority  of any material
portion of the property of the Company;

                        (xii)   a Change of Control shall have occurred;

                        (xiii)  a  breach,   default,   event  of   default   or
termination  shall  occur  under  any  Acquisition  Document  or other  Material
Contract after giving effect to applicable grace periods,  if any,  contained in
any such  Acquisition  Document or other Material  Contract that gives any third
party the right to terminate  any such  Acquisition  Document or other  Material
Contract  or that  otherwise  could  reasonably  be  expected to have a Material
Adverse Effect;

                        (xiv)   one or more  final  judgments  or orders for the
payment of money is rendered against any the Company or any Subsidiary in excess
of $2,000,000 in the aggregate (provided that, any judgment covered by insurance
where the insurer has assumed  responsibility  in writing for such  judgment and
acknowledged  that the Company or Subsidiary,  as  applicable,  will receive the
proceeds of such  insurance  within thirty (30) days of the issuance of a final,
non-appealable judgment and execution thereon is effectively stayed shall not be
included in calculating such amount) and shall remain  undischarged or unvacated
for a period in excess of sixty (60) days or execution  shall at any time not be
effectively  stayed,  or any final judgment other than for the payment of money,
or  injunction,  attachment,  garnishment  or execution is rendered  against the
Company or any  Subsidiary  and shall remain  undischarged  or  unvacated  for a
period  in  excess  of sixty  (60)  days or  execution  shall at any time not be
effectively stayed;

                        (xv)    (A) Any  representation  or warranty made by the
Company or any  Subsidiary  herein (a)  containing a materiality  threshold,  is
incorrect or misleading  when made or (b) in respect of any such  representation
or  warranty  which  does  not  contain  a  materiality  threshold,  the same is
materially  misleading  or  materially  incorrect  when made or (B) the  Company
breaches any covenant  (other than the covenants set forth in Section 14 of this
Note), except, in the case of a breach of a covenant, term or condition which is
curable,  only if such  breach  continues  for a period of at least  twenty (20)
consecutive Business Days after notice thereof;

                        (xvi)   any breach or  failure in any  respect to comply
with Section 14 of this Note;

                        (xvii)  any Event of  Default  (as  defined in the Other
Notes) occurs in respect of any Other Note;

                                       10
<PAGE>


                        (xviii) the  occurrence  of any  acceleration  under the
Senior  Loan  Documents  or  the  Secured  Notes  in  respect  of   Indebtedness
outstanding thereunder;

                        (xix)   the Company is  enjoined,  restrained  or in any
way  prevented  by the order of any  court or any  Governmental  Authority  from
conducting  all or any material part of its business for more than ten (10) days
provided that such  curtailment  could reasonably be expected to have a Material
Adverse Effect;

                        (xx)    any  material  damage  to,  or  loss,  theft  or
destruction of, any facility,  whether or not insured,  or any strike,  lockout,
labor  dispute,  embargo,  condemnation,  act of God or public  enemy,  or other
casualty which causes, for more than ten (10) days, the cessation or substantial
curtailment of revenue producing  activities at any facility of Company,  if any
such  event  or  circumstance  has or could  reasonably  be  expected  to have a
Material Adverse Effect; or

                        (xxi)   any  cessation  of a  substantial  part  of  the
business of the Company for a period which could  reasonably be expected to have
a Material Adverse Effect.

                (b)     REDEMPTION RIGHT. Upon the Company's obtaining knowledge
of the  occurrence  of an Event of  Default in respect of this Note or any Other
Note, the Company shall,  as soon as possible,  but in any event,  in accordance
with  the  applicable  securities  laws,  deliver  written  notice  thereof  via
facsimile  and overnight  courier (an "EVENT OF DEFAULT  NOTICE") to the Holder.
Subject to the provisions of the Intercreditor  Agreement, at any time after the
earlier of the Holder's receipt of such Event of Default Notice and the Holder's
becoming  aware of such an Event of Default in respect of this Note or any Other
Note, the Required  Holders may require the Company to redeem all or any portion
of the Notes by  delivering  written  notice  thereof  (the  "EVENT  OF  DEFAULT
REDEMPTION  NOTICE") to the Company,  which Event of Default  Redemption  Notice
shall  indicate  the portion of the Notes the  Required  Holders are electing to
redeem.  Each portion of the Notes subject to redemption by the Company pursuant
to this Section 4(b) shall be redeemed as provided in Section  12(a),  (provided
that the Event of  Default  giving  rise to such  redemption  right has not been
cured or waived on or before the second (2nd)  Business Day after the expiration
of the  payments  standstill  period  set forth in the  Intercreditor  Agreement
(notwithstanding  any shorter cure period set forth in Section 4(a) or any other
provision  hereof))  by the  Company at a price  equal to the greater of (x) the
product of (i) the  Conversion  Amount to be redeemed  together with accrued and
unpaid  Interest  and Late  Charges,  if any  incurred up to and  including  the
Conversion  Date, in respect of such  Conversion  Amount and (ii) the Redemption
Premium or (y) the product of (A) the Closing  Sale Price of the Common Stock on
the date  immediately  preceding  such  Event of Default  multiplied  by (B) the
number of shares of Common  Stock  into which the amount set forth in clause (x)
would have converted into in accordance with Section 3(a) (the "EVENT OF DEFAULT
REDEMPTION  PRICE").  For purposes of this Section  4(b) and Section  12(a),  an
Event of Default  occurring  under Section  4(a)(i) hereof shall be deemed to be
cured  on the day upon  which  the  applicable  Registration  Statement  becomes
effective or again becomes available,  as applicable.  To the extent redemptions
required by this Section 4(b) are deemed or  determined  by a court of competent
jurisdiction  to be  prepayments  of the Note by the Company,  such  redemptions
shall be deemed to be voluntary  prepayments.  The parties  hereto agree that in
the event of the  Company's  redemption  of any  portion  of the Note under this
Section 4(b), the Holder's  damages would be uncertain and difficult to estimate

                                       11
<PAGE>


because of the  parties'  inability  to predict  future  interest  rates and the
uncertainty of the availability of a suitable substitute investment  opportunity
for the Holder. Accordingly,  any Redemption Premium due under this Section 4(b)
is intended by the parties to be, and shall be deemed, a reasonable  estimate of
the Holder's actual loss of its investment opportunity and not as a penalty.

        (5)     RIGHTS UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.

                (a)     ASSUMPTION. The Company shall not enter into or be party
to a Fundamental Transaction unless, in the case of a Fundamental Transaction of
the type described in clause (ii), (iii), (iv), or (v) of the definition thereof
if the Successor Entity in such  Fundamental  Transaction is a person other than
the Company, (i) such Successor Entity assumes in writing all of the obligations
of the Company under this Note in accordance with the provisions of this Section
5(a)  pursuant  to  written   agreements   in  form  and  substance   reasonably
satisfactory  to the Required  Holders  including  agreements to deliver to each
holder of Notes in exchange  for such Notes a security of the  Successor  Entity
evidenced by a written instrument substantially similar in form and substance to
the Notes, including, without limitation, having a principal amount and interest
rate equal to the principal  amounts then  outstanding and the interest rates of
the Notes held by such holder, having similar conversion rights as the Notes and
having similar ranking to the Notes, and reasonably satisfactory to the Required
Holders  and (ii) such  Successor  Entity (or its  Parent  Entity) is a publicly
traded  corporation  whose common stock is quoted on or listed for trading on an
Eligible Market (other than the Initial Principal  Market).  Upon the occurrence
of any Fundamental  Transaction,  such Successor Entity shall succeed to, and be
substituted  for  (so  that  from  and  after  the  date  of  such   Fundamental
Transaction,  the provisions of this Note referring to the "Company" shall refer
instead to such Successor Entity), and may exercise every right and power of the
Company and shall assume all of the  obligations  of the Company under this Note
with the same effect as if such  Successor  Entity had been named as the Company
herein. Upon consummation of the Fundamental Transaction,  such Successor Entity
shall  deliver  to the  Holder  confirmation  that  there  shall be issued  upon
conversion or redemption of this Note at any time after the  consummation of the
Fundamental Transaction, in lieu of the shares of the Company's Common Stock (or
other securities,  cash, assets or other property)  issuable upon the conversion
or redemption of the Notes prior to such Fundamental Transaction, such shares of
the publicly traded common stock (or their  equivalent) of the Successor  Entity
(including its Parent Entity),  as adjusted in accordance with the provisions of
this Note. The  provisions of this Section shall apply  similarly and equally to
successive  Fundamental  Transactions and shall be applied without regard to any
limitations on the conversion or redemption of this Note.

                (b)     REDEMPTION  RIGHT.  No sooner than fifteen (15) days nor
later than ten (10) days prior to the  consummation of a Change of Control,  but
not prior to the public  announcement  of such  Change of  Control,  the Company
shall deliver written notice thereof via facsimile and overnight  courier to the
Holder (a "CHANGE OF CONTROL  NOTICE").  At any time during the period beginning
after the Holder's  receipt of a Change of Control Notice and ending twenty (20)
Trading  Days after the  consummation  of such Change of Control,  the  Required
Holders  may  require  the  Company to redeem all or any portion of the Notes by
delivering written notice thereof ("CHANGE OF CONTROL REDEMPTION NOTICE") to the
Company, which

                                       12
<PAGE>


Change of Control  Redemption  Notice shall indicate the  Conversion  Amount the
Required  Holders are  electing to redeem.  The portion of the Notes  subject to
redemption  pursuant to this  Section 5 shall be redeemed by the Company in cash
at a price  equal the  product  of (i) the sum of the  Conversion  Amount  being
redeemed plus accrued and unpaid  Interest and Late Charges,  if any, in respect
of such  Conversion  Amount up to and including the date of redemption  and (ii)
the greater of (x) the quotient  determined  by dividing (A) the greatest of the
Closing Sale Price of the Common Stock  immediately prior to the consummation of
the Change of Control,  the Closing Sale Price of the Common  Stock  immediately
following the public  announcement  of such  proposed  Change of Control and the
Closing  Sale  Price  of the  Common  Stock  immediately  prior  to  the  public
announcement of such proposed Change of Control by (B) the Conversion Price, and
(y) the  Change of  Control  Premium  (such  product,  the  "CHANGE  OF  CONTROL
REDEMPTION  PRICE").  Redemptions  required  by this  Section 5 shall be made in
accordance  with the  provisions  of  Section 12 and shall  have  priority  over
payments to stockholders  in connection with a Change of Control.  To the extent
redemptions required by this Section 5(b) are deemed or determined by a court of
competent  jurisdiction  to be  prepayments  of the  Note by the  Company,  such
redemptions  shall  be  deemed  to  be  voluntary  prepayments.  Notwithstanding
anything to the contrary in this Section 5, but subject to Section  3(d),  until
the Change of Control  Redemption  Price is paid in full, the Conversion  Amount
submitted for redemption  under this Section 5(c) may be converted,  in whole or
in part,  by the Holder  into  Common  Stock  pursuant to Section 3. The parties
hereto agree that in the event of the Company's redemption of any portion of the
Note under this Section  5(b),  the  Holder's  damages  would be  uncertain  and
difficult  to  estimate  because of the  parties'  inability  to predict  future
interest rates and the uncertainty of the availability of a suitable  substitute
investment opportunity for the Holder.  Accordingly,  any redemption premium due
under this Section 5(b) is intended by the parties to be, and shall be deemed, a
reasonable  estimate of the Holder's  actual loss of its investment  opportunity
and not as a  penalty,  and the  receipt  by the Holder of the Change of Control
Redemption Price shall  constitute full  satisfaction of the amount requested to
be redeemed pursuant to this Section 5.

        (6)     RIGHTS  UPON  ISSUANCE OF  PURCHASE  RIGHTS AND OTHER  CORPORATE
EVENTS.

                (a)     PURCHASE RIGHTS. If at any time after the Issuance Date,
the Company  grants,  issues or sells any  Options,  Convertible  Securities  or
rights to purchase stock, warrants, securities or other property pro rata to the
record  holders  of any  class of  Common  Stock  (collectively,  the  "PURCHASE
RIGHTS"), then the Holder will be entitled to acquire, upon the terms applicable
to such Purchase  Rights,  the aggregate  Purchase Rights which the Holder could
have  acquired  if the  Holder  had held the  number of  shares of Common  Stock
acquirable  upon complete  conversion of this Note (without  taking into account
any limitations or restrictions on the  convertibility of this Note) immediately
before  the date on which a record is taken for the grant,  issuance  or sale of
such Purchase  Rights,  or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights.

                (b)     OTHER  CORPORATE  EVENTS.  In  addition  to  and  not in
substitution  for any other rights  hereunder,  but without  duplication  of the
consideration  issuable  pursuant to Section 5(a),  prior to the consummation of
any Fundamental  Transaction pursuant to which

                                       13
<PAGE>


holders of shares of Common  Stock are entitled to receive  securities  or other
assets in respect of or in  exchange  for shares of Common  Stock (a  "CORPORATE
EVENT"), the Company shall make appropriate  provision to insure that the Holder
will thereafter have the right to receive upon a conversion of this Note, (i) in
addition to the shares of Common Stock  receivable  upon such  conversion,  such
securities  or other  assets to which the  Holder  would have been  entitled  in
respect of such shares of Common Stock had such shares of Common Stock been held
by the Holder upon the consummation of such Corporate Event (without taking into
account any limitations or restrictions on the  convertibility  of this Note) or
(ii) in lieu of the  shares  of  Common  Stock  otherwise  receivable  upon such
conversion, such securities or other assets received by the holders of shares of
Common Stock in connection with the consummation of such Corporate Event in such
amounts  as the  Holder  would  have  been  entitled  to  receive  had this Note
initially been issued with conversion rights for the form of such  consideration
(as  opposed  to  shares  of  Common  Stock)  at  a  conversion  rate  for  such
consideration  commensurate with the Conversion Rate. Provision made pursuant to
the  preceding  sentence  shall be in a form and substance  satisfactory  to the
Required  Holders.  The  provisions  of this Section  shall apply  similarly and
equally to successive  Corporate  Events and shall be applied  without regard to
any limitations on the conversion or redemption of this Note.

        (7)     RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

                (a)     ADJUSTMENT OF  CONVERSION  PRICE UPON ISSUANCE OF COMMON
STOCK.  If and whenever on or after the Issuance Date, the Company (i) issues or
sells, or in accordance with this Section 7(a) is deemed to have issued or sold,
any shares of Common Stock  (including  the issuance or sale of shares of Common
Stock owned or held by or for the account of the Company,  but excluding  shares
of Excluded  Securities  and Common  Stock deemed to have been issued or sold by
the Company in connection with any Excluded Security), Convertible Securities or
Options  entitling the recipient  thereof to subscribe for or purchase shares of
Common  Stock for a  consideration  per share of Common  Stock or (ii)  amend or
otherwise  modify the terms of any Convertible  Securities or Options to a price
per share of Common  Stock (such  issuance,  subscription  or purchase  price or
amended or modified  price being  referred to as the "NEW ISSUANCE  PRICE") less
than a price (the  "APPLICABLE  PRICE") equal to the Conversion  Price in effect
immediately  prior  to such  issue  or  sale or  deemed  issuance  or sale  (the
foregoing a "DILUTIVE ISSUANCE"), then immediately after such Dilutive Issuance,
the Conversion Price then in effect shall be:

                        (i)     if  such  issuance  occurs  prior  to the  first
anniversary of the Issuance Date, adjusted to equal the New Issuance Price, and

                        (ii)    if such  issuance  occurs  on or after the first
anniversary of the Issuance  Date,  reduced to an amount equal to the product of
(x) the Conversion Price in effect  immediately  prior to such Dilutive Issuance
and (y) the  quotient  determined  by  dividing  (1) the sum of (I) the  product
derived by multiplying the Conversion Price in effect  immediately prior to such
Dilutive  Issuance and the number of shares of Common  Stock Deemed  Outstanding
immediately prior to such Dilutive Issuance plus (II) the consideration, if any,
received by the Company upon such Dilutive Issuance,  by (2) the product derived
by multiplying  (I) the  Conversion  Price in effect  immediately  prior to such
Dilutive  Issuance  by  (II)  the  number  of  shares  of  Common  Stock  Deemed
Outstanding immediately after such Dilutive Issuance.

                                       14
<PAGE>


                (b)     CERTAIN  DISTRIBUTIONS  TO HOLDERS OF COMMON  STOCK.  In
case  the  Company  shall  at any time or from  time to  time,  on or after  the
Issuance Date and prior to conversion of this Note, distribute to all holders of
shares of Common Stock (including any such  distribution made in connection with
a merger or  consolidation  in which the Company is the  resulting  or surviving
Person and the Common  Stock is not changed or  exchanged)  cash,  evidences  of
indebtedness of the Company, any Subsidiary or another issuer, securities of the
Company (including Convertible Securities),  any Subsidiary or another issuer or
other assets  (excluding  dividends  payable in shares of Common Stock for which
adjustment  is  made  under  another   paragraph  of  this  Section  7  and  any
distribution  in  connection  with the issuance of any Excluded  Securities)  or
Options to subscribe for or purchase of any of the foregoing,  then, and in each
such case, the Conversion  Price then in effect shall be adjusted (and any other
appropriate actions shall be taken by the Company) by multiplying the Conversion
Price in effect immediately prior to the date of such distribution by a fraction
(x) the  numerator  of which shall be the Weighted  Average  Price of the Common
Stock for the five (5) consecutive Trading Days immediately prior to the date of
distribution  less the then fair market value (as  determined  by the  Company's
board of directors  ("BOARD OF  DIRECTORS")  in the exercise of their  fiduciary
duties with the concurrence of the Required Holders) of the portion of the cash,
evidences of indebtedness,  securities or other assets so distributed or of such
Options  to  subscribe  applicable  to one  share of  Common  Stock  and (y) the
denominator of which shall be the Weighted Average Price of the Common Stock for
the  five  (5)  consecutive  Trading  Days  immediately  prior  to the  date  of
distribution  (but such fraction shall not be greater than one). Such adjustment
shall be made whenever any such  distribution is made and shall become effective
retroactively  to a date  immediately  following  the close of  business  on the
record date for the  determination  of  stockholders  entitled  to receive  such
distribution.

                (c)     DIVIDENDS  AND  CERTAIN  OTHER  EVENTS IN RESPECT OF THE
COMMON  STOCK.  In the event that the Company  shall at any time or from time to
time,  on or after the Issuance  Date and prior to the  conversion of this Note,
(A) pay a dividend or make a  distribution  payable in shares of Common Stock on
any  class  of  shares  of  capital  stock of the  Company,  (B)  subdivide  its
outstanding  shares of Common Stock into a greater number of shares, (C) combine
its  outstanding  shares of Common Stock into a smaller  number of shares or (D)
issue any shares of capital  stock by  reclassification  of its shares of Common
Stock,  the  Conversion  Price in effect at the  opening of  business on the day
following  the date fixed for the  determination  of  stockholders  entitled  to
receive such dividend or  distribution  or at the opening of business on the day
following the day on which such  subdivision,  combination  or  reclassification
becomes  effective,  as the case may be, shall be adjusted so that the holder of
any Notes thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common  Stock that such holder would have owned or have been
entitled to receive after the happening of any of the events described above had
such Notes been converted  immediately prior to the record date in the case of a
dividend or  distribution  or the effective  date in the case of a  subdivision,
combination  or  reclassification.  An adjustment  made pursuant to this Section
7(c) shall become effective  immediately upon the opening of business on the day
next  following the record date (subject to Section 7(e) below) in the case of a
dividend or distribution and shall become effective immediately upon the opening
of  business  on the day  next  following  the  effective  date in the case of a
subdivision, combination or reclassification.

                                       15
<PAGE>


                (d)     TENDER  OFFERS.  In the event that the Company  shall at
any time or from time to time,  on or after the  Issuance  Date and prior to the
conversion of this Note,  make a payment of cash or other  consideration  to the
holders  of shares of Common  Stock in  respect  of a tender  offer or  exchange
offer,  other  than  an  odd-lot  offer,  and  the  value  of the sum of (i) the
aggregate cash and other consideration paid for such shares of Common Stock, and
(ii) any other  consent or other fees paid to holders of shares of Common  Stock
in respect of such tender  offer or exchange  offer  expressed  as an amount per
share of Common  Stock  validly  tendered or  exchanged  pursuant to such tender
offer or exchange offer,  exceeds the Weighted Average Price of the Common Stock
on the  Trading  Day  immediately  prior to the date  any such  tender  offer or
exchange offer is first publicly announced (the "ANNOUNCEMENT  DATE"),  then the
Conversion Price shall be adjusted in accordance with the formula:

        R' = R x     O' x P

        F + (P x O)

        For purposes of the foregoing formula:

        R = the Conversion  Price in effect at the expiration time of the tender
offer  or  exchange  offer  that  is the  subject  of  this  Section  7(d)  (the
"EXPIRATION TIME");

        R' = the  Conversion  Price in effect  immediately  after the Expiration
Time;

        F = the fair market  value (as  determined  by the Board of Directors in
the  exercise of their  fiduciary  duties with the  concurrence  of the Required
Holders) of the aggregate value of all cash and any other  consideration paid or
payable for shares of Common Stock validly tendered or exchanged  (including any
consent  or other  fees) and not  withdrawn  prior to the  Expiration  Time (the
"PURCHASED SHARES OF COMMON STOCK");

        O = the number of shares of Common Stock  outstanding  immediately after
the Expiration Time less any Purchased Shares of Common Stock;

        O' = the number of shares of Common Stock outstanding  immediately after
the Expiration Time, plus any Purchased Shares of Common Stock; and

        P = the  Weighted  Average  Price  of the  Common  Stock on the five (5)
consecutive  Trading Days beginning two (2) Trading Days after the  Announcement
Date.

Such decrease,  if any, shall become  effective  immediately upon the opening of
business on the day next  following the  Expiration  Time. In the event that the
Company is obligated to purchase  shares  pursuant to any tender offer,  but the
Company is prevented by applicable  law from effecting any such purchases or all
such  purchases are rescinded,  the Conversion  Price shall again be adjusted to
the  Conversion  Price that would then be in effect if such  tender or  exchange
offer had not been made. If the  application  of this Section 7(d) to any tender
or exchange  offer  would  result in an increase  in the  Conversion  Price,  no
adjustment  shall be made for such tender or exchange  offer under this  Section
7(d).

                                       16
<PAGE>


                (e)     OTHER   EVENTS.   If  any  event   occurs  of  the  type
contemplated by the provisions of this Section 7 but not expressly  provided for
by such  provisions  (including,  without  limitation,  the  granting  of  stock
appreciation rights, phantom stock rights or other rights with equity features),
then  the  Board  of  Directors  will  make  an  appropriate  adjustment  in the
Conversion  Price so as to protect  the  rights of the  Holder  under this Note;
provided that no such adjustment will increase the Conversion Price as otherwise
determined pursuant to this Section 7.

        (8)     COMPANY'S RIGHT OF OPTIONAL REDEMPTION.

                (a)     OPTIONAL  REDEMPTION.  If on any Trading Day on or after
the third  anniversary  of the Issuance Date and prior to the Maturity Date, the
Weighted  Average  Price of the shares of Common  Stock has  equaled or exceeded
180% of the Conversion  Price then in effect for each of 20 consecutive  Trading
Days ending on the  redemption  period end day and provided that the  applicable
Eligible Market is not the Initial Principal Market,  the Company shall have the
right to redeem all or any portion of the Conversion Amount then remaining under
this Note (an  "OPTIONAL  REDEMPTION").  The  portion  of this Note  subject  to
redemption  pursuant to this  Section 8 shall be redeemed by the Company in cash
at a price equal to the sum of (i) the  Principal  being  redeemed  and (ii) the
amount of any accrued and unpaid Late Charges on such  Principal and any accrued
and unpaid  Interest  through the date of redemption  (the "OPTIONAL  REDEMPTION
PRICE").  The Company may exercise its redemption  right under this Section 8 by
delivering a written notice thereof by confirmed facsimile and overnight courier
to all,  but not less than all, of the holders of Notes and the  Transfer  Agent
(the "OPTIONAL  REDEMPTION  NOTICE" and the date such notice is delivered to all
the  holders is referred  to as the  "OPTIONAL  REDEMPTION  NOTICE  DATE").  The
Optional Redemption Notice shall be irrevocable.  The Optional Redemption Notice
shall  state (A) the date on which the  Optional  Redemption  shall  occur  (the
"OPTIONAL  REDEMPTION  DATE") which date shall be not less than 30 days nor more
than 60 days after the Optional  Redemption  Notice Date,  and (B) the aggregate
principal  amount  (the  "OPTIONAL  REDEMPTION  AMOUNT")  of the Notes which the
Company has elected to be subject to Optional Redemption from all of the holders
of the Notes  pursuant to this  Section 8 (and  analogous  provisions  under the
Other Notes) on the  Optional  Redemption  Date.  The Company will make a public
announcement  containing the  information  set forth in the Optional  Redemption
Notice on or before the Optional  Redemption  Notice  Date.  The Company may not
effect  more  than one  Optional  Redemption.  Notwithstanding  anything  to the
contrary in this  Section 8, until the  Optional  Redemption  Price is paid,  in
full, the Optional  Redemption Amount may be converted,  in whole or in part, by
the Holders  into shares of Common Stock  pursuant to Section 3. All  Conversion
Amounts converted by the Holder after the Optional  Redemption Notice Date shall
reduce  the  Conversion  Amount  of this Note  required  to be  redeemed  on the
Optional  Redemption Date.  Redemptions made pursuant to this Section 8 shall be
made in accordance with Section 12 to the extent applicable.

                (b)     PRO RATA REDEMPTION  REQUIREMENT.  If the Company elects
to  cause  an  Optional  Redemption  pursuant  to  Section  8(a),  then  it must
simultaneously  take the same  action  in  respect  of the Other  Notes.  If the
Company  elects to cause an Optional  Redemption  pursuant  to Section  8(a) (or
similar  provisions  under the Other  Notes) in  respect of less than all of the
principal amount of the Notes then  outstanding,  then the Company shall require
redemption  of a  principal  amount from the Holder and each holder of the Other
Notes equal to the product of (i) the aggregate  principal amount of Notes which
the Company has

                                       17
<PAGE>


elected to cause to be redeemed pursuant to Section 8(a), multiplied by (ii) the
fraction,  the numerator of which is the sum of the initial  principal amount of
Notes  purchased  by such  holder and the  denominator  of which is the  initial
principal  amounts of Notes purchased by all holders holding  outstanding  Notes
(such  fraction  in respect of each  holder is  referred  to as its  "REDEMPTION
ALLOCATION PERCENTAGE", and such amount in respect of each holder is referred to
as its "PRO  RATA  REDEMPTION  AMOUNT");  provided  that in the  event  that the
initial  holder  of any  Notes  has sold or  otherwise  transferred  any of such
holder's  Notes,  the  transferee  shall be allocated a pro rata portion of such
holder's Redemption Allocation Percentage and Pro Rata Redemption Amount.

        (9)     SECURITY. This Note and the Other Notes are unsecured.

        (10)    NONCIRCUMVENTION.  The Company hereby  covenants and agrees that
the Company will not, by amendment of its Certificate of  Incorporation,  Bylaws
or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of  this  Note,  and  will  at all  times  in good  faith  carry  out all of the
provisions  of this Note and take all action as may be  required  to protect the
rights of the Holder of this Note subject to the Intercreditor Agreement.

        (11)    RESERVATION OF AUTHORIZED SHARES.

                (a)     RESERVATION.  The Company shall initially reserve out of
its authorized and unissued  Common Stock a number of shares of Common Stock for
each of the  Notes  equal  to  130% of the  Conversion  Rate in  respect  of the
Conversion  Amount of each such Note as of the Issuance Date. For so long as any
of the Notes are  outstanding,  the Company  shall take all action  necessary to
reserve and keep  available  out of its  authorized  and unissued  Common Stock,
solely for the purpose of effecting  the  conversion  of the Notes,  130% of the
number  of shares of Common  Stock as shall  from time to time be  necessary  to
effect the conversion of all of the Notes then outstanding;  provided that at no
time shall the  number of shares of Common  Stock so  reserved  be less than the
number of shares  required  to be  reserved by the  previous  sentence  (without
regard to any limitations on conversions) (the "REQUIRED  RESERVE AMOUNT").  The
initial number of shares of Common Stock  reserved for  conversions of the Notes
and each  increase in the number of shares so reserved  shall be  allocated  pro
rata among the holders of the Notes based on the  principal  amount of the Notes
held by each holder on the  Issuance  Date or increase in the number of reserved
shares,  as the case may be (the "AUTHORIZED  SHARE  ALLOCATION").  In the event
that a holder shall sell or otherwise  transfer any of such holder's Notes, each
transferee  shall be  allocated a pro rata portion of such  holder's  Authorized
Share  Allocation.  Any shares of Common  Stock  reserved  and  allocated to any
Person  which  ceases  to hold any Notes  shall be  allocated  to the  remaining
holders of Notes,  pro rata based on the principal amount of the Notes then held
by such holders.

                (b)     INSUFFICIENT AUTHORIZED SHARES. If at any time while any
of the Notes remain  outstanding,  the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon conversion of the Notes at least a number of shares of
Common  Stock  equal  to the  Required  Reserve  Amount  (an  "AUTHORIZED  SHARE
FAILURE"),  then the Company  shall  immediately  take

                                       18
<PAGE>


all action necessary to increase the Company's authorized shares of Common Stock
to an amount  sufficient  to allow the Company to reserve the  Required  Reserve
Amount for the Notes then  outstanding.  Without  limiting the generality of the
foregoing  sentence,  as soon as practicable after the date of the occurrence of
an Authorized  Share  Failure,  but in no event later than sixty (60) days after
the  occurrence  of such  Authorized  Share  Failure,  the Company  shall hold a
meeting of its  stockholders  for the  approval  of an increase in the number of
authorized shares of Common Stock. In connection with such meeting,  the Company
shall  provide each  stockholder  with a proxy  statement and shall use its best
efforts to solicit its  stockholders'  approval of such  increase in  authorized
shares of Common  Stock and to cause its board of  directors to recommend to the
stockholders that they approve such proposal.

        (12)    HOLDER'S REDEMPTIONS.

                (a)     MECHANICS.  The Company  shall  deliver  the  applicable
Event of Default  Redemption  Price to the Holder  within five (5) Business Days
after the Company's receipt of the Required Holder's Event of Default Redemption
Notice,  if the  Intercreditor  Agreement  does not  prohibit the payment by the
Company  of the Event of  Default  Redemption  Price at such  time,  and if such
payment  is then so  prohibited,  on the third  (3rd)  Business  Day after  such
prohibition lapses;  provided that if the Event(s) of Default giving rise to the
redemption  right shall have been cured or waived on or before the second  (2nd)
Business  Day after such  prohibition's  lapsing,  such  redemption  right shall
terminate. If the Required Holders have submitted a Change of Control Redemption
Notice in accordance with Section 5(b), the Company shall deliver the applicable
Change  of  Control  Redemption  Price  to  the  Holder  concurrently  with  the
consummation  of such Change of Control if such notice is received  prior to the
consummation  of such Change of Control and within five (5) Business  Days after
the Company's receipt of such notice otherwise.  In the event of a redemption of
less than all of the Conversion  Amount of this Note, the Company shall promptly
cause to be issued and  delivered to the Holder a new Note (in  accordance  with
Section  18(d))  representing  the  outstanding  Principal  which  has not  been
redeemed.  In the event that the Company does not pay the applicable  Redemption
Price to the Holder within the time period required,  at any time thereafter and
until the Company pays such unpaid  Redemption  Price in full,  the Holder shall
have the  option,  in lieu of  redemption,  to require  the  Company to promptly
return to the Holder all or any portion of this Note representing the Conversion
Amount that was submitted for redemption and for which the applicable Redemption
Price  (together  with any Late  Charges  thereon)  has not been paid.  Upon the
Company's  receipt of such notice,  (x) the Redemption  Notice shall be null and
void in respect of such  Conversion  Amount,  (y) the Company shall  immediately
return this Note, or issue a new Note (in accordance  with Section 18(d)) to the
Holder  representing such Conversion Amount and (z) the Conversion Price of this
Note or such new Notes  shall be  adjusted  to the lesser of (A) the  Conversion
Price as in effect on the date on which the Redemption  Notice is voided and (B)
the lowest Closing Bid Price of the Common Stock during the period  beginning on
and  including  the date on which  the  Redemption  Notice is  delivered  to the
Company and ending on and including the date on which the  Redemption  Notice is
voided.  The  Holder's  delivery  of a notice  voiding a  Redemption  Notice and
exercise  of its rights  following  such notice  shall not affect the  Company's
obligations to make any payments of Late Charges which have accrued prior to the
date of such notice in respect of the Conversion Amount subject to such notice.

                                       19
<PAGE>


                (b)     REDEMPTION BY OTHER HOLDERS.  Upon the Company's receipt
of notice from any of the holders of the Other Notes for redemption or repayment
as a result of an event or  occurrence  substantially  similar  to the events or
occurrences described in Section 4(b) (each, an "OTHER REDEMPTION NOTICE"),  the
Company  shall  immediately,  but no later than one (1)  Business  Day after its
receipt  thereof,  forward to the Holder by facsimile a copy of such notice.  If
the  Company  receives a  Redemption  Notice  and one or more  Other  Redemption
Notices, during the seven (7) Business Day period beginning on and including the
date  which is three (3)  Business  Days prior to the  Company's  receipt of the
Holder's  Redemption  Notice and ending on and including the date which is three
(3) Business Days after the Company's receipt of the Holder's  Redemption Notice
and the Company is unable to redeem all  principal,  interest and other  amounts
designated in such Redemption Notice and such Other Redemption  Notices received
during such seven (7) Business Day period,  then the Company  shall redeem a pro
rata amount from each holder of the Notes  (including  the Holder)  based on the
principal  amount  of the  Notes  submitted  for  redemption  pursuant  to  such
Redemption  Notice and such Other  Redemption  Notices  received  by the Company
during such seven Business Day period.

        (13)    VOTING  RIGHTS.  The Holder  shall have no voting  rights as the
holder of this Note, except as required by law,  including,  but not limited to,
the General  Corporation Law of the State of Delaware and as expressly  provided
in this Note.

        (14)    COVENANTS.

                (a)     RANK; SUBORDINATION.

                        (i)     The Company  covenants and agrees and Holder, by
Holder's  acceptance  hereof,  likewise covenants and agrees, for itself and any
future holder of this Note or the indebtedness  evidenced  hereby,  that, to the
extent and in the  manner  set forth  below in this  Section  14(a),  the Senior
Obligations  will be senior in right of payment to all  payments  due under this
Note and the Other Notes.  Holder,  by  accepting  this Note,  acknowledges  and
agrees that the  subordination  provisions  set forth in this Section 14(a) are,
and are intended to be, an inducement and a consideration  to each holder of any
Senior Obligation, whether such Senior Obligation was created or acquired before
or after the  issuance  of this Note,  to acquire and  continue  to hold,  or to
continue to hold, such Senior  Obligation and such holder of Senior  Obligations
shall be deemed conclusively to have relied on such subordination  provisions in
acquiring  and   continuing  to  hold,  or  continuing  to  hold,   such  Senior
Obligations.

                        (ii)    As used  herein,  "senior  in right of  payment"
means that:

                                (1)     no part of the indebtedness evidenced by

                this Note shall have any claim to the assets of the Company on a
                parity with or prior to the claim of the Senior Obligations;

                                (2)     unless and until the Senior  Obligations
                have  been  paid in full,  without  the  express  prior  written
                consent of all holders of such Senior  Obligations,  Holder will
                not take,  demand  (including  by means of any legal  action) or
                receive from the Company, and the Company will not make, give or
                permit, directly or indirectly, by set-off, redemption,

                                       20
<PAGE>


                purchase or in any other manner,  any payment of or security for
                the  whole or any  part of the  indebtedness  evidenced  by this
                Note; provided,  however,  that (x) at any time, the Company may
                make, and Holder may receive,  scheduled payments of interest on
                account of the indebtedness evidenced by this Note provided that
                such payments shall be made in the form of additional Notes.

                        (iii)   Any  payment  or  distribution  of assets of the
Company,  whether in cash,  property or  securities,  to which  Holder  would be
entitled except for the provisions hereof, shall be paid or delivered by Holder,
or any receiver, trustee in bankruptcy, liquidating trustee, disbursing agent or
other Person making such payment or  distribution,  to the holders of the Senior
Obligations  or their  representative,  ratably in  accordance  with the amounts
thereof, to the extent necessary to pay in full all Senior  Obligations,  before
any payment or distribution shall be made to Holder.

                        (iv)    The   expressions   "prior   payment  in  full,"
"payment  in full,"  and "paid in full" and any other  similar  terms or phrases
when used herein with respect to the Senior  Obligations  shall mean the payment
in full in cash, in immediately  available funds, of all the Senior  Obligations
and the expression  "any payment of or security for the whole or any part of the
indebtedness evidenced by this Note" and any other similar terms of phrases when
used herein shall not be deemed to include a payment or distribution of stock or
securities  of  the  Company  provided  for  by  a  plan  or  reorganization  or
readjustment  authorized  by  an  order  or  decree  of  a  court  of  competent
jurisdiction in a reorganization  proceeding under any applicable bankruptcy law
or of any  other  corporation  provided  for by such plan of  reorganization  or
readjustment,  which stock or securities are subordinated in right of payment to
all then outstanding Senior Obligations to substantially the same extent as this
Note is so subordinated as provided in this Section 14(a).

                        (v)     If  any   payment   or   distribution,   whether
consisting of money, property or securities,  be collected or received by Holder
in respect  of the  indebtedness  evidenced  by this Note,  except  payments  of
principal or interest  permitted  hereunder,  Holder forthwith shall deliver the
same to the holders of the Senior Obligations or their  representative,  ratably
in accordance with the amounts thereof,  in the form received,  duly endorsed to
such holders or such representative,  if required,  to be applied to the payment
or prepayment of the Senior Obligations until the Senior Obligations are paid in
full. Until so delivered, such payment or distribution shall be held in trust by
Holder as the property of such holders of Senior  Obligations,  segregated  from
other funds and property held by Holder.

                        (vi)    As used herein,  "Senior Obligations" shall mean
collectively  the  unpaid  principal  of,  premium,  if  any,  and  interest  on
(including, without limitation, interest accruing after the maturity thereof and
interest  accruing  after  the  filing of any  petition  in  bankruptcy,  or the
commencement of any insolvency,  reorganization or like proceeding,  relating to
the Company, whether or not a claim for post-filing or post-petition interest is
allowed in such  proceeding) the Senior Loan and all  Indebtedness  evidenced by
the  Senior  Notes,  any other  debentures  for which  the  Senior  Notes may be
exchangeable,  and all other  Indebtedness  of the  Company  having  an  initial
principal amount in excess of $5,000,000,  whether direct or indirect,  absolute
or contingent, due or to become due, now existing or

                                       21
<PAGE>


hereafter  incurred,  in each case  whether  on account  of  principal,  premium
interest,  reimbursement  obligations,  fees,  indemnities,  costs,  expenses or
otherwise.

                (b)     PRESERVATION OF EXISTENCE, ETC. Until this Note has been
converted,  redeemed or otherwise  satisfied in accordance with its terms (other
than in respect of contingent indemnification obligations in respect of which no
claim has been asserted), the Company shall maintain and preserve its existence,
rights and privileges,  and become or remain duly qualified and in good standing
in each jurisdiction in which the character of the properties owned or leased by
it or in  which  the  transaction  of  its  business  makes  such  qualification
necessary,  where the failure to qualify or be in good standing could reasonably
be expected to have a Material Adverse Effect.

                (c)     KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Until this Note
has been converted, redeemed or otherwise satisfied in accordance with its terms
(other than in respect of contingent  indemnification  obligations in respect of
which no claim has been asserted), the Company shall keep, and cause each of its
Subsidiaries  to keep,  adequate  records  and books of account,  with  complete
entries made to permit the  preparation  of financial  statements  in accordance
with GAAP.

                (d)     FISCAL  YEAR.   Until  this  Note  has  been  converted,
redeemed or  otherwise  satisfied  in  accordance  with its terms (other than in
respect of contingent  indemnification  obligations in respect of which no claim
has been  asserted),  the Company shall cause the Fiscal Year of the Company and
its Subsidiaries to end on or about December 31 of each calendar year unless the
agent under the Senior Loan  Agreement  consents to a change in such Fiscal Year
(and appropriate related changes to the Senior Loan Agreement), which change, if
so approved, shall automatically become applicable to the Notes.

                (e)     FEDERAL  RESERVE  REGULATIONS.  Until this Note has been
converted,  redeemed or otherwise  satisfied in accordance with its terms (other
than in respect of contingent indemnification obligations in respect of which no
claim has been asserted),  neither the Company nor any of its Subsidiaries shall
permit any of the Indebtedness under or the proceeds of this Note to be used for
any  purpose  that would cause such  Indebtedness  to be a margin loan under the
provisions of Regulation T, U or X of the Federal Reserve Board.

                (f)     INVESTMENT COMPANY ACT OF 1940. Until this Note has been
converted,  redeemed or otherwise  satisfied in accordance with its terms (other
than in respect of contingent indemnification obligations in respect of which no
claim has been asserted),  neither the Company nor any of its Subsidiaries shall
engage in any business,  enter into any transaction,  use any securities or take
any other action,  or permit any of its Subsidiaries to do any of the foregoing,
that would cause it to become subject to the  registration  requirements  of the
Investment  Company Act of 1940, as amended,  by virtue of being an  "investment
company" or a company "controlled" by an "investment company" not entitled to an
exemption within the meaning of such Act.

                (g)     NO VIOLATION OF ANTI-TERRORISM LAWS. Until this Note has
been  converted,  redeemed or otherwise  satisfied in accordance  with its terms
(other than in respect of contingent  indemnification  obligations in respect of
which no claim has been  asserted),  the

                                       22
<PAGE>


Company  shall not, and shall not permit any  Subsidiary  to: (i) violate any of
the prohibitions set forth in the Anti-Terrorism  Laws applicable to any of them
or the business  that they  conduct,  (ii) require the  Administrative  Agent or
Holders to take any action that would cause the Administrative  Agent or Holders
to be in violation of the prohibitions set forth in the Anti-Terrorism  Laws, it
being understood that the Administrative Agent or any Holder can refuse to honor
any such request or demand  otherwise  validly made by a the Company  under this
Note, (iii) knowingly  conduct any business or engage in making or receiving any
contribution of funds, goods or services to or for the benefit of any Designated
Person or any other Person  identified in any List,  (iv)  knowingly deal in, or
otherwise  engage in any  transaction  relating to, any property or interests in
property  blocked pursuant to any  Anti-Terrorism  Law, (v) repay the Notes with
any funds derived from any unlawful  activity with the result that the making of
the Notes would be in violation of law, or (vi) knowingly  engage in or conspire
to engage in any  transaction  that  evades or  avoids,  or has the  purpose  of
evading or avoiding,  or attempts to violate,  any of the prohibitions set forth
in any  Anti-Terrorism  Law (and the  Company  shall  deliver  to the Holder any
certification or other evidence requested from time to time by the Holder in its
reasonable discretion, confirming compliance with this Section 14(r).

                (h)     TYPE OF  BUSINESS.  Until this Note has been  converted,
redeemed or  otherwise  satisfied  in  accordance  with its terms (other than in
respect of contingent  indemnification  obligations in respect of which no claim
has been  asserted),  the  Company  shall  not,  and shall not permit any of its
Subsidiaries  to,  engage in any  business,  other  than the  businesses  of the
Company and/or such Subsidiary on the Issuance Date and any business  reasonably
related,  similar,  ancillary  or  complementary  to the  business  in which the
Company or the Subsidiaries of the Company or are engaged on the Issuance Date;

                (i)     COMPLIANCE   WITH   LAWS.   Until  this  Note  has  been
converted,  redeemed or otherwise  satisfied in accordance with its terms (other
than in respect of contingent indemnification obligations in respect of which no
claim has been  asserted),  the  Company  shall  comply,  and cause  each of its
Subsidiaries to comply, with all applicable laws, rules, regulations,  judgments
and orders (including, without limitation, all Environmental Laws (as defined in
the Securities Purchase  Agreement)) in each case material to the conduct of its
business  and  operations,  except  where the  failure  to so  comply  could not
reasonably be expected to have a Material Adverse Effect.

        (15)    PARTICIPATION.  The Holder, as the holder of this Note, shall be
entitled to receive such dividends paid and distributions made to the holders of
Common  Stock to the same extent as if the Holder had  converted  this Note into
Common  Stock  (without  regard  to any  limitations  on  conversion  herein  or
elsewhere)  and had held such shares of Common Stock on the record date for such
dividends and distributions. Payments under the preceding sentence shall be made
concurrently with the dividend or distribution to the holders of Common Stock.

        (16)    VOTE TO  ISSUE,  OR  CHANGE  THE  TERMS  OF,  NOTES.  Except  as
otherwise provided herein, no amendment, modification or waiver of any provision
of a Note, or consent to any departure by Company or Holder therefrom,  shall in
any event be  effective  unless the same  shall be in writing  and signed by the
Required  Holders and the Company;  provided  that no  amendment,  modification,
termination  or waiver  shall,  unless in writing  and signed by each

                                       23
<PAGE>


holder of Notes  directly  affected  thereby,  (i)  reduce  the  Principal  and,
provided,  further,  that no amendment,  modification or waiver shall, unless in
writing  and  signed by all  Holders,  (x) change the  definition  of  "Required
Holders" or the percentage of Holders  required to take any action  hereunder or
(y) modify this Section 16 and provided further that to reduce the interest rate
or any fees or extend the time of payment of  Principal,  interest  or any fees,
the consent of each holder of the Notes directly affected thereby is required.

        (17)    TRANSFER.   This  Note  may  be  offered,   sold,   assigned  or
transferred  by the Holder  without the consent of the Company,  subject only to
the  provisions  of this Section 17 provided  that Holder  and/or  assignee give
Company  written notice of such  assignment  within ten (10) Business Days after
the  consummation of such  assignment.  Such Holder  understands  that except as
provided in the Registration Rights Agreement: (i) this Note has not been and is
not being  registered  under the 1933 Act or any state  securities laws, and may
not be offered for sale, sold,  assigned or transferred  unless (A) subsequently
registered thereunder, (B) Holder shall have delivered to the Company an opinion
of counsel,  in a form reasonably  acceptable to the Company, to the effect that
this Note may be sold,  assigned or  transferred  pursuant to an exemption  from
such registration,  or (C) Holder provides the Company with assurance reasonably
acceptable  to the Company that this Note can be sold,  assigned or  transferred
pursuant  to Rule 144 or Rule 144A  promulgated  under the 1933 Act, as amended,
(or a successor rule thereto) (collectively,  "RULE 144"); (ii) any sale of this
Note made in reliance on Rule 144 may be made only in accordance  with the terms
of Rule 144 and further, if Rule 144 is not applicable,  any resale of this Note
under  circumstances in which the seller (or the Person through whom the sale is
made) may be deemed to be an  underwriter  (as that term is  defined in the 1933
Act) may require  compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC thereunder; and (iii) neither of the Company or
any other Person is under any  obligation  to register  this Note under the 1933
Act or any state  securities  laws or to comply with the terms and conditions of
any  exemption  thereunder.   Notwithstanding  the  foregoing,  and  subject  to
compliance  with  applicable  securities  laws,  this  Note  may be  pledged  in
connection  with  a  bona  fide  margin  account  or  other  loan  or  financing
arrangement  secured  by this Note and such  pledge  of this  Note  shall not be
deemed to be a  transfer,  sale or  assignment  of this Note  hereunder,  unless
required  by law,  and no Buyer  effecting  a pledge of this  Note  shall not be
required to provide the Company with any notice  thereof or  otherwise  make any
delivery to the Company pursuant to this Note.

        (18)    REISSUANCE OF THIS NOTE.

                (a)     TRANSFER. If this Note is to be transferred,  the Holder
shall  surrender this Note to the Company,  whereupon the Company will forthwith
issue and deliver  upon the order of the Holder a new Note (in  accordance  with
Section  18(d)),  registered  as  the  Holder  may  request,   representing  the
outstanding  Principal  being  transferred  by the Holder  and, if less then the
entire  outstanding  Principal is being  transferred,  a new Note (in accordance
with Section 18(d)) to the Holder  representing  the  outstanding  Principal not
being transferred.  The Holder and any permitted assignee, by acceptance of this
Note,  acknowledge  and  agree  that,  by reason of the  provisions  of  Section
3(c)(iii)  following  conversion or redemption of any portion of this Note,  the
outstanding  Principal  represented  by this Note may be less than the Principal
stated on the face of this Note.

                                       24
<PAGE>


                (b)     LOST,  STOLEN OR  MUTILATED  NOTE.  Upon  receipt by the
Company of evidence  reasonably  satisfactory to the Company of the loss, theft,
destruction  or  mutilation  of this Note,  and,  in the case of loss,  theft or
destruction,  of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation,  upon surrender and  cancellation
of this Note, the Company shall execute and deliver to the Holder a new Note (in
accordance with Section 18(d)) representing the outstanding Principal.

                (c)     NOTE EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Note
is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Note or Notes (in accordance with Section 18(d) and in
principal  amounts  of at  least  $1,000)  representing  in  the  aggregate  the
outstanding  Principal of this Note,  and each such new Note will represent such
portion of such outstanding Principal as is designated by the Holder at the time
of such surrender.

                (d)     ISSUANCE OF NEW NOTES.  Whenever the Company is required
to issue a new Note pursuant to the terms of this Note,  such new Note (i) shall
be of like tenor with this Note, (ii) shall represent,  as indicated on the face
of such new Note, the Principal  remaining  outstanding (or in the case of a new
Note being issued  pursuant to Section  18(a) or Section  18(c),  the  principal
designated by the Holder which,  when added to the principal  represented by the
other new Notes issued in  connection  with such  issuance,  does not exceed the
Principal  remaining  outstanding  under  this  Note  immediately  prior to such
issuance of new Notes), (iii) shall have an original issuance date, as indicated
on the face of such new  Note,  which is the same as the  Issuance  Date of this
Note, (iv) shall have the same rights and conditions as this Note, and (v) shall
represent  accrued and unpaid  Interest  and Late Charges on the  Principal  and
Interest of this Note, if any, from the Interest Commencement Date.

        (19)    REMEDIES,  CHARACTERIZATIONS,  OTHER  OBLIGATIONS,  BREACHES AND
INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in
addition  to all other  remedies  available  under this Note at law or in equity
(including a decree of specific performance and/or other injunctive relief), and
nothing herein shall limit the Holder's right to pursue actual and consequential
damages  for any  failure by the  Company to comply with the terms of this Note.
Amounts set forth or provided for herein in respect of payments,  conversion and
the like (and the  computation  thereof)  shall be the amounts to be received by
the  Holder  and  shall  not,  except  as  expressly  provided  herein or in the
Intercreditor  Agreement,  be subject to any other obligation of the Company (or
the performance  thereof).  The Company  acknowledges that a breach by it of its
obligations  hereunder  will cause  irreparable  harm to the Holder and that the
remedy at law for any such  breach  may be  inadequate.  The  Company  therefore
agrees that,  in the event of any such breach or threatened  breach,  the Holder
shall be entitled, in addition to all other available remedies, to an injunction
restraining  any breach,  without the  necessity  of showing  economic  loss and
without any bond or other security being required.  The Holder  acknowledges and
agrees that only the Required Holders shall have the right to enforce rights and
remedies under this Note and that the  Administrative  Agent shall act on behalf
of and in accordance  with the  direction of the Required  Holders in connection
with exercising such rights and remedies.

        (20)    PAYMENT OF COLLECTION,  ENFORCEMENT AND OTHER COSTS. If (a) this
Note is placed in the hands of an attorney for  collection or  enforcement or is

                                       25
<PAGE>


collected or enforced through any legal proceeding or the Holder otherwise takes
action to collect  amounts due under this Note or to enforce the  provisions  of
this Note or (b) there occurs any  bankruptcy,  reorganization,  receivership of
the  Company  or other  proceedings  affecting  Company  creditors'  rights  and
involving a claim under this Note,  then the  Company  shall pay the  reasonable
costs  incurred by the Holder for such  collection,  enforcement or action or in
connection  with  such   bankruptcy,   reorganization,   receivership  or  other
proceeding,  including,  but not limited to, reasonable attorneys' and financial
advisory fees and disbursements.

        (21)    CONSTRUCTION;  HEADINGS. This Note shall be deemed to be jointly
drafted by the Company and all the Purchasers and shall not be construed against
any person as the drafter hereof.  The headings of this Note are for convenience
of reference and shall not form part of, or affect the  interpretation  of, this
Note.

        (22)    FAILURE OR  INDULGENCE  NOT  WAIVER.  No failure or delay on the
part of the Holder 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.

        (23)    DISPUTE  RESOLUTION.  In  the  case  of  a  dispute  as  to  the
determination  of the Closing Bid Price,  the Closing Sale Price or the Weighted
Average  Price  or the  arithmetic  calculation  of the  Conversion  Rate or any
Redemption  Price,  the Company  shall  submit the  disputed  determinations  or
arithmetic  calculations  via facsimile within two (2) Business Days of receipt,
or deemed receipt,  of the Conversion Notice or Redemption Notice or other event
giving rise to such  dispute,  as the case may be, to the Holder.  If the Holder
and the  Company  are unable to agree  upon such  determination  or  calculation
within  one  (1)  Business  Day of such  disputed  determination  or  arithmetic
calculation being submitted to the Holder,  then the Company shall, within three
(3) Business  Days submit via facsimile  (a) the disputed  determination  of the
Closing Bid Price,  the Closing Sale Price or the Weighted  Average  Price to an
independent,  reputable  investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic  calculation of the Conversion Rate or
any  Redemption  Price to the Company's  independent,  outside  accountant.  The
Company,  at the  Company's  expense,  shall  cause the  investment  bank or the
accountant,  as the case may be, to perform the  determinations  or calculations
and notify  the  Company  and the  Holder of the  results no later than five (5)
Business  Days from the time such  investment  bank or  accountant  receives the
disputed determinations or calculations.  Such investment bank's or accountant's
determination  or  calculation,  as the case may be,  shall be binding  upon all
parties absent demonstrable error.

        (24)    NOTICES; PAYMENTS.

                (i)     NOTICES.  Any  notices,   consents,   waivers  or  other
communications  required or  permitted  to be given under the terms of this Note
must be in writing and will be deemed to have been delivered:  (i) upon receipt,
when delivered personally provided same is on a Business Day and, if not, on the
next  Business Day; (ii) upon  receipt,  when sent by facsimile  (provided  that
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending  party)  provided  same is on a Business Day and, if
not, on the next Business Day;  (iii) one (1) Business Day after deposit with an
overnight  courier  service,  in each case  properly  addressed  to the party to
receive the same; or (iv) if sent by certified mail,  return receipt

                                       26
<PAGE>


requested,  when  received  or three  (3) days  after  deposited  in the  mails,
whichever   occurs  first.   The  addresses  and  facsimile   numbers  for  such
communications shall be:

                If to the Company:

                Maritime Logistics US Holdings Inc.
                547 Boulevard
                Kenilworth, NJ 07033
                Telephone:    (908) 497-0280
                Facsimile:    (908) 497-0295
                Attention:    Robert Agresti

                with a copy to:

                Brown Rudnick Berlack Israels LLP
                One Financial Center
                Boston, MA 02111
                Telephone:    (617) 856-8200
                Facsimile:    (617) 856-8201
                Attention:    Raymer McQuiston, Esq.
                              David D. Gammell, Esq.

If to a Holder,  to its address and facsimile  number provided in writing to the
Company.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the  recipient  party has  specified by written  notice given to
each  other  party  five (5) days  prior to the  effectiveness  of such  change.
Written  confirmation  of receipt  (A) given by the  recipient  of such  notice,
consent,  waiver or other  communication,  (B)  mechanically  or  electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and an image of the first  page of such  transmission  or (C)
provided  by an  overnight  courier  service  shall be  rebuttable  evidence  of
personal  service,  receipt by facsimile  or receipt  from an overnight  courier
service in accordance  with clause (i), (ii) or (iii) above,  respectively.  The
Company  shall  provide  the Holder with  prompt  written  notice of each of the
following actions taken pursuant to this Note,  including in reasonable detail a
description of such action and the reason  therefor:  confirmation of receipt of
Conversion  Notice  (as  required  by  Section  3(c)(i));  notice of the  credit
Conversion  Shares  on  DTC  (if  so  credited  pursuant  to  Section  3(c)(i));
confirmation  of number of shares of Common  Stock  outstanding  (as required by
Section 3(d)(i)); delivery of an Event of Default Notice (as required by Section
4(b));  delivery of a Change of Control  Notice (as  required by Section  5(b));
notice of Purchase Rights (whenever such right arises pursuant to Section 6(a));
notice of other Corporate Events (whenever such events,  as set forth in Section
6(b) occur);  notice of adjustment of Conversion Price (whenever such adjustment
is required to be calculated pursuant to Section 7(a)); delivery of the Optional
Redemption  Notice (as required by Section 8(a));  notice of and/or  delivery of
Event of  Default  Redemption  Price  or  Change  of  Control  Redemption  Price
(pursuant to Section 12(a)); delivery of an Other Redemption Notice (as required
by Section 12(b));  determinations  and/or  calculations (as required by Section
23);  other  notices  required by this  Section 24, and  disclosure  of material
nonpublic information (as required by Section 29). The Company will give written

                                       27
<PAGE>


notice to the Holder (i) promptly  following any  adjustment  of the  Conversion
Price,  setting forth in reasonable detail,  and certifying,  the calculation of
such  adjustment  and (ii) at least  twenty (20) days prior to the date on which
the Company closes its books or takes a record (A) in respect of any dividend or
distribution  upon the Common Stock, (B) in respect of any pro rata subscription
offer to  holders  of  Common  Stock or (C) for  determining  rights  to vote in
respect of any Fundamental Transaction,  dissolution or liquidation, provided in
each case that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.

                (b)     PAYMENTS.  Whenever any payment of cash is to be made by
the Company to any Person  pursuant to this Note,  such payment shall be made in
lawful money of the United  States of America by a check drawn on the account of
the Company or any payment agent located in the state of New York engaged by the
Company for purposes of making  payments under this Note and the Other Notes and
sent via overnight  courier service to such Person at such address as previously
provided  to the  Company in  writing;  provided  that the Holder of Note(s) may
elect to receive a payment of cash via wire  transfer of  immediately  available
funds by  providing  the  Company  with prior  written  notice  setting out such
request  and the  Holder's  wire  transfer  instructions.  Whenever  any  amount
expressed  to be due by the  terms of this Note is due on any day which is not a
Business Day, the same shall instead be due on the next  succeeding day which is
a Business  Day and, in the case of any  Interest  Date which is not the date on
which this Note is paid in full, the extension of the due date thereof shall not
be taken into account for purposes of determining  the amount of Interest due on
such date. Any amount of Principal  which is not paid when due shall result in a
late charge  being  incurred  and payable by the  Company on the  Maturity  Date
(unless paid sooner in Company's  discretion)  in an amount equal to interest on
such  amount at the rate of five  percent  (5.0%)  per annum  from the date such
amount was due until the same is paid in full ("LATE CHARGE").

        (25)    CANCELLATION.  After all Principal,  accrued  Interest and other
amounts  at any time  owed on this  Note  have  been  paid in full  (other  than
contingent  indemnification  obligations  in  respect of which no claim has been
asserted) or all remaining amounts outstanding hereunder are converted to Common
Stock, this Note shall automatically be deemed canceled, shall be surrendered to
the Company for cancellation and shall not be reissued.

        (26)    WAIVER  OF  NOTICE.  Except  as  otherwise  expressly  set forth
herein,  to the extent  permitted  by law,  the Company  hereby  waives  demand,
notice,  protest  and all other  demands  and  notices  in  connection  with the
delivery, acceptance, performance, default or enforcement of this Note.

        (27)    GOVERNING LAW; JURISDICTION; SEVERABILITY; JURY TRIAL. This Note
shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Note shall be
governed by, the internal laws of the State of New York,  without  giving effect
to any choice of law or conflict of law  provision or rule (whether of the State
of New York or any other  jurisdictions) that would cause the application of the
laws of any  jurisdictions  other than the State of New York. The Company hereby
irrevocably  submits  to the  exclusive  jurisdiction  of the state and  federal
courts  sitting  in  The  City  of New  York,  Borough  of  Manhattan,  for  the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed

                                       28
<PAGE>


herein,  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,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. 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  enforceability  of any other provision
of this Note.  Nothing  contained  herein shall be deemed or operate to preclude
the Holder from bringing  suit or taking other legal action  against the Company
in any other jurisdiction to collect on the Company's obligations to the Holder,
to realize on any collateral or any other security for such  obligations,  or to
enforce a judgment  or other court  ruling in favor of the  Holder.  THE COMPANY
HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,  A
JURY TRIAL FOR THE  ADJUDICATION OF ANY DISPUTE  HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

        (28)    CERTAIN  DEFINITIONS.  For purposes of this Note,  the following
terms shall have the following meanings:

                (a)     "ACQUISITIONS"  shall have the  meaning set forth in the
Securities Purchase Agreement.

                (b)     "AFFILIATE"  shall  have the  meaning  set  forth in the
Securities Purchase Agreement.

                (c)     "ANTI-TERRORISM   LAWS"   means   the   OFAC   Laws  and
Regulations and the Executive Orders as each of such terms is defined in Section
5.32 of the Senior Loan Agreement and the USA Patriot Act.

                (d)     "APPLICABLE  MARGIN"  means  the  amount  determined  as
follows:

        Ratio of Net Senior
        Indebtedness toConsolidated
        EBITDA                              Applicable Margin

        Greater than 3.0:1.0                            4.50%

        Equal to or less than 3.0:1.0 but               4.25%
        greater than 2.5:1.0

                                       29
<PAGE>


        Ratio of Net Senior
        Indebtedness toConsolidated
        EBITDA                              Applicable Margin

        Equal to or less than 2.5:1.0 but               4.00%
        greater than 2.0:1.0

        Equal to or less than 2.0:1.0 but               3.75%
        greater than 1.5:1.0

        Equal to or less than 1.5:1.0                   3.50%


provided  that, (a) the  Applicable  Margin shall be calculated and  established
once each  Fiscal  Quarter  based on the ratio of Net  Senior  Indebtedness  (as
defined in the Senior Loan Agreement) to Consolidated  EBITDA (as defined in the
Securities  Purchase  Agreement)  of the  Company and its  Subsidiaries  for the
immediately  preceding twelve (12) month period ending as of the last day of the
immediately  preceding  fiscal quarter and shall remain in effect until adjusted
thereafter after the end of the next fiscal quarter,  (b) each adjustment to the
Applicable  Margin shall be effective on the date that the financial  statements
of  the  Company  and  its  Subsidiaries   become  publicly  available  for  the
immediately  preceding  Fiscal Quarter and shall remain in effect until adjusted
thereafter  during  the next  Fiscal  Quarter,  (c) in the event that any of the
information  provided to the  Holders  which is used in the  calculation  of the
Applicable  Margin  for any  period is  subsequently  restated  or is  otherwise
changed  thereafter,  then if the Applicable  Margin for the  applicable  period
would have  resulted in a higher rate,  the Company  shall pay to the Holder any
additional  amount in respect of interest that would have been required based on
the higher  Applicable  Margin on the subsequent  interest payment date, and (d)
notwithstanding  anything to the contrary set forth herein,  until the effective
date set forth in clause (b) above that  follows the last day of the fourth full
Fiscal Quarter after the November 8, 2006, the Applicable  Margin shall be equal
to the  greater of (i) the amount  determined  as set forth  above  based on the
ratio of Net Senior  Indebtedness to Consolidated  EBITDA of the Company and its
Subsidiaries for the immediately preceding twelve (12) month period ending as of
the last day of each Fiscal  Quarter prior thereto after giving pro forma effect
to the  Acquisitions,  the Senior Loan and the other  transactions  contemplated
hereunder and (ii) four and one half percent (4.50%) per annum.

                (e)     "APPROVED  STOCK PLAN" means any  employee  benefit plan
(including,  without limitation,  any equity compensation plan, restricted stock
plan and/or  employee stock ownership plan) or agreement which has been approved
by the Board of  Directors,  pursuant to which the Company's  securities  may be
issued to any employee, consultant, officer or director for services provided to
the Company or any Subsidiary.

                                       30
<PAGE>


                (f)     "BANKRUPTCY  CODE"  means the United  States  Bankruptcy
Code (11 U.S.C. ss. 101, et seq.), as amended, and any successor statute.

                (g)     "BLOOMBERG" means Bloomberg Financial Markets.

                (h)     "BUSINESS DAY" means any day other than Saturday, Sunday
or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

                (i)     "CASH   EQUIVALENTS"  means  (i)  securities  issued  or
directly and fully  guaranteed  or insured by the United States or any agency or
instrumentality  thereof  (provided that the full faith and credit of the United
States is pledged in support  thereof)  having  maturities  of not more than one
year  from the date of  acquisition,  (ii) time  deposits  and  certificates  of
deposit of any commercial bank, or which is the principal banking  subsidiary of
a bank holding company  organized  under the laws of the United States,  and any
State  thereof,  the  District of Columbia or any foreign  jurisdiction,  having
capital,  surplus and undivided  profits  aggregating in excess of $500,000,000,
with  maturities of not more than one year from the date of  acquisition by such
Person,  (iii)  repurchase  obligations with a term of not more than ninety (90)
days for  underlying  securities  of the types  described  in  clause  (i) above
entered into with any bank meeting the  qualifications  specified in clause (ii)
above,  (iv)  commercial  paper issued by any Person  incorporated in the United
States rated at least A-1 or the  equivalent  thereof by Standard & Poors Rating
Services or at least P-1 or the equivalent there of by Moody's Investor Service,
Inc.  and in each  case  maturing  not  more  than one  year  after  the date of
acquisition  by  such  Person,   or  (v)   investments  in  money  market  funds
substantially  all of whose  assets are  comprised  of  securities  of the types
described in clauses (i) through (iv) above.

                (j)     "CALENDAR  QUARTER" means each of: the period  beginning
on and  including  January 1 and  ending on and  including  March 31; the period
beginning  on and  including  April 1 and ending on and  including  June 30; the
period  beginning on and including July 1 and ending on and including  September
30;  and the  period  beginning  on and  including  October 1 and  ending on and
including December 31.

                (k)     "CAPITALIZED LEASE" means, in respect of any Person, any
lease  of real or  personal  property  by such  Person  as  lessee  which is (a)
required under GAAP to be capitalized on the balance sheet of such Person or (b)
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 in
respect of which  payments  of rent are  intended  to be treated as  payments of
principal and interest on a loan for federal income tax purposes).

                (l)     "CAPITALIZED LEASE OBLIGATIONS" means, in respect of 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.

                (m)     "CHANGE OF CONTROL"  means any  Fundamental  Transaction
other  than (i) any  reorganization,  recapitalization  or  reclassification  of
Common Stock, in which holders of the Company's voting power  immediately  prior
to such reorganization,

                                       31
<PAGE>


recapitalization  or  reclassification   continue  after  such   reorganization,
recapitalization  or  reclassification  to hold publicly traded  securities and,
directly or  indirectly,  the voting power of the  surviving  entity or entities
necessary to elect a majority of the members of the board of directors (or their
equivalent  if other than a  corporation)  of such entity or  entities;  or (ii)
pursuant to a migratory  merger  effected solely for the purpose of changing the
jurisdiction of incorporation of the Company.

                (n)     "CHANGE  OF CONTROL  PREMIUM"  means (i) in the first 18
months  following the Issuance Date, 120%, (ii) in the period starting 18 months
from the Issuance Date and ending 42 months from the Issuance  Date,  115%;  and
(iii) thereafter, 110%.

                (o)     "CLOSING BID PRICE" and "CLOSING SALE PRICE" means,  for
any security as of any date,  the last closing bid price and last closing  trade
price,  respectively,  for such security on the Principal Market, as reported by
Bloomberg,  or, if the Principal  Market begins to operate on an extended  hours
basis and does not  designate  the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade  price,  respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal  securities exchange or trading
market  for such  security,  the last  closing  bid price or last  trade  price,
respectively,  of such security on the principal  securities exchange or trading
market where such security is listed or traded as reported by  Bloomberg,  or if
the  foregoing  do not apply,  the last  closing bid price or last trade  price,
respectively,  of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade  price,  respectively,  is  reported  for such  security  by
Bloomberg,  the average of the bid prices, or the ask prices,  respectively,  of
any market  makers for such  security as  reported in the "pink  sheets" by Pink
Sheets LLC (formerly the National  Quotation  Bureau,  Inc.). If the Closing Bid
Price or the  Closing  Sale  Price  cannot be  calculated  for a  security  on a
particular  date on any of the  foregoing  bases,  the  Closing Bid Price or the
Closing Sale Price,  as the case may be, of such  security on such date shall be
the fair market value as mutually  determined by the Company and the Holder.  If
the  Company  and the Holder are unable to agree upon the fair  market  value of
such security,  then such dispute shall be resolved  pursuant to Section 23. All
such determinations to be appropriately  adjusted for any stock dividend,  stock
split,  stock  combination  or other similar  transaction  during the applicable
calculation period.

                (p)     "COMMON STOCK DEEMED  OUTSTANDING"  means,  at any given
time, the number of shares of Common Stock  outstanding  at such time,  plus the
number of shares of Common  Stock deemed to be  outstanding  pursuant to Section
7(a)(ii) hereof regardless of whether the Options or Convertible  Securities are
actually  exercisable at such time, but excluding any Common Stock owned or held
by or for the account of the Company or issuable upon conversion or exercise, as
applicable, of the Notes and the Warrants.

                (q)     "CONTINGENT OBLIGATION" means, in respect of any Person,
any  obligation  of such  Person  guaranteeing  or  intended  to  guarantee  any
Indebtedness,  leases, dividends or other obligations ("primary obligations") of
any other  Person (the  "primary  obligor") in any manner,  whether  directly or
indirectly,  including, without limitation, (i) the direct or indirect guaranty,
endorsement  (other than for  collection  or deposit in the  ordinary  course of
business),  co-making,  discounting  with recourse or sale with recourse by such
Person

                                       32
<PAGE>


of the obligation of a primary obligor,  (ii) the obligation to make take-or-pay
or similar  payments,  if required,  regardless of  nonperformance  by any other
party or parties to an agreement,  (iii) any obligation of such Person,  whether
or not contingent,  (w) to purchase any such primary  obligation or any property
constituting  direct or  indirect  security  therefor,  (x) to advance or supply
funds (A) for the purchase or payment of any such primary  obligation  or (B) to
maintain  working  capital or equity capital of the primary obligor or otherwise
to maintain  the net worth or solvency of the primary  obligor,  (y) to purchase
property,  assets,  securities or services primarily for the purpose of assuring
the owner of any such primary  obligation of the ability of the primary  obligor
to make payment of such primary  obligation  or (z)  otherwise to assure or hold
harmless the holder of such primary  obligation against loss in respect thereof;
provided that, the term  "Contingent  Obligation"  shall not include any product
warranties  extended  in the  ordinary  course of  business.  The  amount of any
Contingent  Obligation  shall be deemed to be an amount  equal to the  stated or
determinable  amount  of  the  primary  obligation  in  respect  of  which  such
Contingent  Obligation is made (or, if less,  the maximum amount of such primary
obligation  for which  such  Person may be liable  pursuant  to the terms of the
instrument  evidencing  such  Contingent   Obligation)  or,  if  not  stated  or
determinable,  the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder),  as determined by such
Person in good faith.

                (r)     "CONVERSION  SHARES"  shall  mean the  shares  of Common
Stock into which the Notes are convertible.

                (s)     "CONVERTIBLE  SECURITIES"  means any stock or securities
(other than Options)  directly or indirectly  convertible into or exercisable or
exchangeable for Common Stock.

                (t)     "DEFAULT"  means any event that with  notice or lapse of
time, or both, would give rise to an Event of Default.

                (u)     "DESIGNATED  PERSON"  means a Person either (i) included
within the term  "designated  national" as defined in the Cuban  Assets  Control
Regulations,  31 C.F.R.  Part 515, or (ii) designated under Sections 1(a), 1(b),
1(c) or 1(d) of  Executive  Order  No.  13224,  66 Fed.  Reg.  49079  (published
September  25,  2001)  or  similarly   designated  under  any  related  enabling
legislation or any other similar executive orders.

                (v)     "ELIGIBLE  MARKET" means the Initial  Principal  Market,
The New York Stock  Exchange,  Inc.,  the American  Stock  Exchange,  The NASDAQ
Global Select Market, The NASDAQ Global Market or The NASDAQ Capital Market.

                (w)     "EQUITY  INTERESTS" means, in respect of any Person, all
of the shares of capital  stock of (or other  ownership or profit  interests in)
such Person,  all of the  warrants,  options or other rights for the purchase or
acquisition  from such Person of shares of capital stock of (or other  ownership
or profit interests in) such Person,  all of the securities  convertible into or
exchangeable  for  shares  of  capital  stock of (or other  ownership  or profit
interests  in) such Person or  warrants,  rights or options for the  purchase or
acquisition from such Person of such shares (or such other  interests),  and all
of  the  other  ownership  or  profit   interests  in  such  Person   (including
partnership,  member or trust interests  therein),  whether voting or

                                       33
<PAGE>


nonvoting,  and whether or not such shares,  warrants,  options, rights or other
interests are outstanding on any date of determination.

                (x)     "ERISA" means the Employee  Retirement  Income  Security
Act of 1974,  as  amended,  and any  successor  statute of similar  import,  and
regulations thereunder, in each case, as in effect from time to time. References
to sections of ERISA shall be construed also to refer to any successor sections.

                (y)     "ERISA  AFFILIATE" means (a) any Person subject to ERISA
whose employees are treated as employed by the same employer as the employees of
the Company or any of its  Subsidiaries  under  Internal  Revenue  Code  Section
414(b),  (b) any trade or business  subject to ERISA whose employees are treated
as employed by the same  employer as the  employees of the Company or any of its
Subsidiaries under Internal Revenue Code Section 414(c), (c) solely for purposes
of Section  302 of ERISA and  Section  412 of the  Internal  Revenue  Code,  any
organization subject to ERISA that is a member of an affiliated service group of
which the Company or any of its  Subsidiaries is a member under Internal Revenue
Code  Section  414(m),  or (d) solely for  purposes  of Section 302 of ERISA and
Section 412 of the Internal  Revenue Code, any Person subject to ERISA that is a
party to an arrangement  with the Company or any of its  Subsidiaries  and whose
employees  are  aggregated  with  the  employees  of the  Company  or any of its
Subsidiaries under Internal Revenue Code Section 414(o).

                (z)     "EXCLUDED SECURITIES" means any Common Stock, Options or
Convertible  Securities,  stock appreciation  rights or other rights with equity
features  issued or issuable:  (i) in connection  with any Approved  Stock Plan;
(ii) upon  conversion  of the Secured Notes or PIPE Notes or the exercise of the
Warrants or the Common PIPE  Warrants  (as  defined in the  Securities  Purchase
Agreement); (iii) in connection with any Acquisitions or Permitted Acquisitions,
whether through an acquisition of shares or a merger of any business,  assets or
technologies,  the primary  purpose of which is not to raise equity  capital and
(iv)  upon  conversion  of any  Options  or  Convertible  Securities  which  are
outstanding  on the Issuance  Date,  provided  that the terms of such Options or
Convertible  Securities  are not  amended,  modified  or changed on or after the
Issuance Date.

                (aa)    "FISCAL  QUARTER"  means  each  of the  fiscal  quarters
adopted by the Company for financial  reporting  purposes that correspond to the
Company's  "FISCAL YEAR" that ends on December 31, or such other fiscal  quarter
adopted by the Company for financial reporting purposes in accordance with GAAP.

                (bb)    "FUNDAMENTAL  TRANSACTION" means that the Company shall,
directly or  indirectly,  in one or more  related  transactions,  after the date
hereof (i) be dissolved or liquidated or be the subject of a plan of dissolution
or liquidation  adopted by its  stockholders;  (ii) consolidate or merge with or
into (whether or not the Company is the surviving corporation) another Person or
Persons;  (iii) sell,  assign,  transfer,  convey or otherwise dispose of all or
substantially  all of the properties or assets of the Company to another Person;
(iv) allow another  Person to make a purchase,  tender or exchange offer that is
accepted by the holders of more than the 50% of the outstanding shares of Voting
Stock (not  including  any shares of Voting  Stock held by the Person or Persons
making or party to, or associated or affiliated with the Persons making or party
to, such purchase,  tender or exchange  offer),  (v) consummate a stock purchase

                                       34
<PAGE>


agreement  or other  business  combination  (including,  without  limitation,  a
reorganization,  recapitalization,  spin-off  or  scheme  of  arrangement)  with
another  Person  whereby  such  other  Person  acquires  more  than  50%  of the
outstanding  shares of Voting  Stock (not  including  any shares of Voting Stock
held by the other Person or other  Persons  making or party to, or associated or
affiliated  with the  other  Persons  making or party to,  such  stock  purchase
agreement or other business combination); (vi) any "person" or "group" (as these
terms are used for purposes of Sections  13(d) and 14(d) of the Exchange Act) is
or shall  become  the  "beneficial  owner" (as  defined in Rule 13d-3  under the
Exchange Act),  directly or indirectly,  of 50% of the aggregate ordinary voting
power  represented by issued and outstanding  Common Stock;  (vii) cease to have
during any period of two (2) years,  as the  majority of its Board of  Directors
individuals  who at the  beginning  of such  period  constituted  the  Board  of
Directors  (together  with any new directors  whose  nomination for election was
approved by a vote of at least a majority of the directors  then still in office
who were either  directors at the beginning of such period or whose  election or
nomination  for election was  previously so  approved);  or (viii) fails to own,
directly or indirectly, one hundred (100%) percent of the voting power (directly
or indirectly) of the total outstanding  voting stock of each of the Company and
the  Subsidiaries  other than (A)  pursuant to a sale of the voting stock of the
Company or any  Subsidiary  permitted  hereunder,  (B) pursuant to a transfer of
such voting  stock to a  Subsidiary  permitted  herein,  or (C) in the case of a
Subsidiary is acquired after the date hereof pursuant to a Permitted Acquisition
where less than one  hundred  (100%)  percent  of the voting  power of the total
outstanding voting stock of such Subsidiary is acquired.

                (cc)    "GAAP" means United States generally accepted accounting
principles, consistently applied.

                (dd)    "GOVERNMENTAL AUTHORITY" means any nation or government,
any foreign,  Federal, State, city, town,  municipality,  county, local or other
political subdivision thereof or thereto and any department,  commission, board,
bureau,   instrumentality,   agency  or  other  entity   exercising   executive,
legislative,  judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

                (ee)    "HEDGING  AGREEMENT"  means any interest  rate,  foreign
currency,  commodity  or  equity  swap,  collar,  cap,  floor  or  forward  rate
agreement,  or other  agreement  or  arrangement  designed  to  protect  against
fluctuations  in  interest  rates  or  currency,   commodity  or  equity  values
(including,  without  limitation,  any option in respect of any of the foregoing
and any  combination  of the  foregoing  agreements  or  arrangements),  and any
confirmation executed in connection with any such agreement or arrangement.

                (ff)    "INDEBTEDNESS" means, in respect of any Person,  without
duplication,  (i) all  indebtedness of such Person for borrowed money;  (ii) all
obligations  of such  Person for the  deferred  purchase  price of  property  or
services  (provided  that  neither  trade  payables  or other  accounts  payable
incurred in the ordinary  course of such Person's  business and not  outstanding
for more than  ninety (90) days after such  payable  was due under its  original
terms nor such trade payables , if outstanding  longer, that are being contested
or  disputed  by such  Person in good faith in the  ordinary  course of business
shall be deemed to  constitute  Indebtedness)  and  including  any  earn-outs or
similar  arrangements  in connection  with any acquisition of businesses by such
Person, whether contingent or otherwise subject to any

                                       35
<PAGE>


conditions or  limitations;  (iii) all  obligations of such Person  evidenced by
bonds,  debentures,  notes or other similar  instruments  or upon which interest
payments  are  customarily  made;  (iv)  all  reimbursement,  payment  or  other
obligations  and  liabilities  of such  Person  created  or  arising  under  any
conditional sales or other title retention agreement in respect of property used
and/or  acquired  by such  Person,  even  though the rights and  remedies of the
lessor,  seller and/or lender  thereunder may be limited to repossession or sale
of such property and all obligations and liabilities  arising in connection with
factoring  arrangements  or  other  arrangements  in  respect  of  the  sale  of
receivables;  (v) that portion of Capitalized  Lease  Obligations of such Person
that is (or is required to be) classified as a liability on its balance sheet in
conformity  with GAAP;  (vi) all  obligations  and  liabilities,  contingent  or
otherwise,  of such  Person,  in respect of letters of credit,  acceptances  and
similar  facilities;  (vii) all net obligations and liabilities,  of such Person
under Hedging Agreements;  (viii) all Contingent  Obligations;  (ix) liabilities
incurred  under  Title  IV of  ERISA  in  respect  of  any  plan  (other  than a
Multiemployer Plan) covered by Title IV of ERISA and maintained for employees of
such Person or any of its ERISA Affiliates;  (x) withdrawal  liability  incurred
under  ERISA by such  Person or any of its ERISA  Affiliates  in  respect of any
Multiemployer Plan; and (xi) all obligations  referred to in clauses (i) through
(x) of this  definition of another Person secured by (or for which the holder of
such Indebtedness has an existing right,  contingent or otherwise, to be secured
by) a Lien upon property  owned by such Person,  even though such Person has not
assumed or become liable for the payment of such Indebtedness.  The Indebtedness
of any Person shall  include the  Indebtedness  of any  partnership  of or joint
venture in which such  Person is a general  partner or a joint  venturer  to the
extent such Person is liable  therefor  as a result of such  Person's  ownership
interest  in such  entity,  except to the extent the terms of such  Indebtedness
expressly  provide  that such  Person is not  liable  therefor.  None of (1) any
Approved  Stock Plan, (2) the Summit Global  Logistics,  Inc.  Equity  Incentive
Plan, (3) the Summit Global Logistics,  Inc. Management  Incentive Plan, (4) the
Summit Global  Logistics,  Inc.  Severance Benefit Plan or (5) the Summit Global
Logistics,  Inc. Supplemental Executive Retirement Plan or any obligations under
any of them shall be "Indebtedness" for purposes hereof.

                (gg)    "INITIAL    PRINCIPAL   MARKET"   means   the   National
Association of Securities Dealers Inc.'s OTC Bulletin Board.

                (hh)    "INSOLVENCY  PROCEEDING"  means (a) any proceeding by or
against any Person seeking to adjudicate it a bankrupt or insolvent,  or seeking
dissolution,   liquidation,   winding   up,   reorganization,    administration,
arrangement,  adjustment,  protection,  relief or composition of it or its debts
under any law relating to bankruptcy,  insolvency,  reorganization  or relief of
debtors  (including,  but not limited to, any case in respect of any such Person
under any provision of the  Bankruptcy  Code),  or seeking the entry of an order
for  relief  or  the  appointment  of  a  receiver,   administrative   receiver,
administrator,  manager, examiner, trustee, custodian, liquidator,  sequestrator
or other similar official for any such Person or for any substantial part of its
property under any provision of the Bankruptcy  Code or under any other Federal,
State or other foreign  bankruptcy,  insolvency,  receivership,  liquidation  or
similar law now or hereafter in effect,  or (b) the  appointment  of a receiver,
administrative receiver, administrator,  manager, examiner, trustee, liquidator,
custodian,  sequestrator  or similar  official for such Person or a  substantial
part of its assets shall occur under any Federal,  State or foreign  bankruptcy,
insolvency, receivership, liquidation or similar law now or hereafter in effect.

                                       36
<PAGE>


                (ii)    "INTEREST  PERIOD"  means  (i)  initially,   the  period
commencing  on the  Interest  Commencement  Date and  ending  on the nine  month
anniversary of the Interest  Commencement  Date and (b) thereafter,  each period
commencing  on the last day of the  immediately  preceding  Interest  Period and
ending nine months thereafter.

                (jj)    "INTEREST  RATE"  means,  in  respect  of  any  Interest
Period,  a rate per annum  equal to LIBOR  plus the  Applicable  Margin  then in
effect.

                (kk)    "LIBOR",  in respect of any Interest Period,  shall mean
the nine-month London Interbank  Offered Rate for deposits in U.S.  dollars,  as
quoted from time to time on Bloomberg  as of  approximately  11:00 a.m.,  London
time, on the second Business Day prior to the first day of such Interest Period.

                (ll)    "LIEN" means any mortgage, deed of trust, deed to secure
debt or similar  instrument,  pledge,  lien  (statutory or otherwise),  security
interest,  charge,  attachment,  assignment or other  encumbrance or security or
preferential  arrangement  of any nature,  including,  without  limitation,  any
conditional sale or title retention  arrangement,  any Capitalized Lease and any
assignment,  deposit  arrangement or financing  lease intended as, or having the
effect of, security.

                (mm)    "LIST" means that certain list  maintained by the Office
of Foreign Assets Control  ("OFAC"),  Department of the Treasury,  and/or on any
other similar list maintained by the OFAC pursuant to any  authorizing  statute,
executive order or regulation.

                (nn)    "MATERIAL  ADVERSE  EFFECT"  means any material  adverse
effect on the business, properties, assets, operations, results of operations or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole,  or on the  transactions  contemplated  hereby,  or on the authority or
ability of the Company or any Subsidiary to perform its obligations hereunder.

                (oo)    "MATERIAL CONTRACT" means (i) the Acquisition  Documents
(as  defined  in the  Securities  Purchase  Agreement),  (ii) each  contract  or
agreement to which the Company or any of their Subsidiaries is a party involving
aggregate  consideration  payable to or by such Person of  $1,000,000 or more in
any twelve month period and (iii) all other contracts or agreements  material to
the  business,  operations,  condition  (financial or  otherwise),  performance,
prospects or properties of the Company and its Subsidiaries (taken as a whole).

                (pp)    "MULTIEMPLOYER  PLAN"  means a  "multiemployer  plan" as
defined  in  Section  4001(a)(3)  of ERISA to which  the  Company  or any  ERISA
Affiliates has contributed to, or has been obligated to contribute.

                (qq)    "NET SENIOR INDEBTEDNESS" means in respect of any Person
at any  date,  the  amount  equal  to:  (a)  the  sum of  (i)  the  Consolidated
Indebtedness  (as defined in the Securities  Purchase  Agreement) of such Person
plus (ii) the aggregate amount of all then outstanding and unpaid trade payables
and other obligations of such Person which are outstanding more than ninety (90)
days past due  under its  original  terms and which are not being  contested  or
disputed by such Person in good faith in the ordinary  course of business  minus
(b) in the case of the Company and its Subsidiaries,  the sum of (i) cash on the
balance sheet of such

                                       37
<PAGE>


Person as set forth in such Person's financial statements in the form filed with
the SEC for the  fiscal  quarter  immediately  prior to such  date plus (ii) the
Subordinated  Indebtedness of such Person plus (iii) the Indebtedness  evidenced
by the Notes plus (iv) the Indebtedness evidenced by the Secured Notes.

                (rr)    "NOTES" has the same  meaning as "PIPE  Notes" set forth
herein.

                (ss)    Intentionally Omitted.

                (tt)    "OPTIONS"  means any  rights,  warrants  or  options  to
subscribe for or purchase shares of Common Stock or Convertible Securities.

                (uu)    Intentionally Omitted.

                (vv)    "PARENT  ENTITY"  of a  Person  means  an  entity  that,
directly or indirectly, controls the applicable Person and whose common stock or
equivalent  equity  security is quoted or listed on an Eligible  Market,  or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market  capitalization as of the date of consummation of
the Fundamental Transaction.

                (ww)    "PERMITTED ACQUISITION" shall have the meaning set forth
in the Secured Notes.

                (xx)    "PERSON"  means  an  individual,   a  limited  liability
company,  a  partnership,   a  joint  venture,   a  corporation,   a  trust,  an
unincorporated organization, any other entity and a government or any department
or agency thereof.

                (yy)    "PIPE NOTES" means those certain  unsecured  convertible
notes issued by Company to the Common PIPE Buyers (as defined in the  Securities
Purchase  Agreement)  on the date  hereof in the  aggregate  original  principal
amount of $1,000,000.

                (zz)    "PRINCIPAL   MARKET"  means,  from  time  to  time,  the
Eligible  Market  upon  which  the  Common  Stock  is  admitted  or  listed  and
principally trades.

                (aaa)   "REAL  PROPERTY"  means  all  now  owned  and  hereafter
acquired real property of the Company and each Subsidiary,  including  leasehold
interests,  together  with all  buildings,  structures,  and other  improvements
located thereon and all licenses,  easements and appurtenances relating thereto,
wherever located.

                (bbb)   "REDEMPTION NOTICES" means,  collectively,  the Event of
Default  Redemption  Notices,  the Change of Control  Redemption Notices and the
Optional  Redemption Notice, each of the foregoing,  individually,  a Redemption
Notice.

                (ccc)   "REDEMPTION PREMIUM" means (i) in the case of the Events
of Default described in Section 4(a)(i) - (vi) and (ix) - (xix), 120% or (ii) in
the case of the Events of Default described in Section 4(a)(vii) - (viii), 100%.

                                       38
<PAGE>


                (ddd)   "REDEMPTION  PRICES" means,  collectively,  the Event of
Default  Redemption  Price,  Optional  Redemption  Price and  Change of  Control
Redemption Price and, each of the foregoing, individually, a Redemption Price.

                (eee)   "REGISTRATION   RIGHTS  AGREEMENT"  means  that  certain
registration  rights  agreement  dated as of  November  8, 2006 by and among the
Company and the initial  holders of the Notes  relating to, among other  things,
the  registration for resale of the Common Stock issuable upon conversion of the
Notes and exercise of the Warrants as amended by Waiver and  Amendment  No. 1 to
the  Registration  Rights  Agreement  dated May __, 2007 as the foregoing may be
amended, restated, supplemented and/or modified from time to time.

                (fff)   "REQUIRED   HOLDERS"   means   the   holders   of  Notes
representing at least a majority of the aggregate  principal amount of the Notes
then outstanding.

                (ggg)   "REQUIREMENTS  OF  LAW"  means,  as to any  Person,  any
United  States  or  foreign  law,  statute,  treaty,  rule,  regulation,  right,
privilege, qualification, license or franchise or determination of an arbitrator
or a court or other Governmental Entity, in each case applicable or binding upon
such  Person  or any of its  property  or to  which  such  Person  or any of its
property is subject or pertaining to any or all of the transactions contemplated
or referred to herein.

                (hhh)   "SEC" means the United  States  Securities  and Exchange
Commission.

                (iii)   "SECURED  NOTES"  means the senior  secured  convertible
notes and amended and restated senior secured  convertible notes issued pursuant
to the Securities Purchase Agreement.

                (jjj)   "SECURITIES   PURCHASE  AGREEMENT"  means  that  certain
Securities  Purchase  Agreement (Notes and Warrants) dated as of the November 8,
2006 by and among Maritime Logistics US Holdings Inc. (and the Company, pursuant
to a Joinder  Agreement  dated as of  November  8, 2006) and the  holders of the
Notes,  pursuant  to which the  Company  issued  the  Notes,  as amended by that
certain First Amendment to Securities  Purchase  Agreement  (Notes and Warrants)
dated as of January 26, 2007 and that certain  Second  Amendment  to  Securities
Purchase  Agreement  (Notes and  Warrants)  and the First  Amendment  to Joinder
Agreement  dated as of May __, 2007, as the foregoing may be amended,  restated,
supplemented and/or modified from time to time.

                (kkk)   "SENIOR  LOAN" the  principal  of,  interest on, and all
fees  and  other  amounts  (including,   without   limitation,   any  reasonable
out-of-pocket costs,  enforcement expenses (including  reasonable  out-of-pocket
legal  fees  and  disbursements),   collateral  protection  expenses  and  other
reimbursement or indemnity  obligations  relating thereto) and all other amounts
payable by the Company  and/or any of its  Subsidiaries,  whether as  principal,
surety,  endorser,  guarantor  or  otherwise,  whether now existing or hereafter
arising, whether arising before or after the commencement of any case in respect
of the Company and/or any of its Subsidiaries under the U.S.  Bankruptcy Code or
any  other  insolvency  proceeding  (and  including,   without  limitation,  any
principal, interest, fees, costs, expenses and other amounts, whether or

                                       39
<PAGE>


not such amounts are  allowable  either in whole or in part, in any such case or
similar proceeding),  whether direct or indirect, absolute or contingent,  joint
or several,  due or not due,  primary or secondary,  liquidated or unliquidated,
secured or  unsecured,  arising  under or in  connection  with the  Senior  Loan
Agreement and all  agreements,  documents and  instruments  at any time executed
and/or  delivered by the Company and/or any of its  Subsidiaries  to, with or in
favor of the agent under the Senior Loan  Agreement in  connection  therewith or
related thereto,  as all of the foregoing now exist or may hereafter be amended,
modified,  supplemented,  extended, renewed, restated,  refinanced,  replaced or
restructured  (in whole or in part and including any  agreements  with, to or in
favor  of any  other  agent or  lender  or  group  of  lenders  that at any time
refinances,  replaces or  succeeds  to all or any portion of such  obligations),
provided that the principal amount  outstanding at any time thereunder shall not
exceed the Maximum Senior Debt (as defined in the Intercreditor Agreement).

                (lll)   "SENIOR   LOAN   AGREEMENT"   means  that  certain  Loan
Agreement  dated as of November 8, 2006 by and among Fortress  Credit Corp.,  in
its capacity as administrative  agent for the lenders party thereto, the lenders
party  thereto  (such  lenders  and their  respective  successors  and  assigns,
together with Fortress Credit Corp., as administrative agent or any successor or
replacement  agent,  being  collectively,  "SENIOR  LENDERS"),  the  Company and
certain  of the  Subsidiaries  as  amended  to date  and as  amended,  restated,
supplemented and/or modified from time to time.

                (mmm)   "SENIOR  LOAN  DOCUMENTS"  has the same meaning as "LOAN
DOCUMENTS" set forth in the Senior Loan Agreement.

                (nnn)   "SUBORDINATED  INDEBTEDNESS" means Indebtedness (secured
or  unsecured)  incurred by the  Company  and/or its  Subsidiaries  that is made
expressly subordinate in right of payment to the Indebtedness  evidenced by this
Note, as reflected in a written agreement  acceptable to the Holder and approved
by the Holder in writing provided that no such Indebtedness shall provide at any
time for the payment, prepayment,  repayment, repurchase or defeasance, directly
or indirectly,  of any principal or premium,  if any,  thereon until  ninety-one
(91) days after the Maturity Date or later.

                (ooo)   Intentionally blank.

                (ppp)   "SUBSIDIARY"  means,  from time to time,  any  entity in
which the Company directly or indirectly, owns any of the capital stock or holds
an equity or similar interest.

                (qqq)   "SUCCESSOR  ENTITY"  means the Person,  which may be the
Company,  formed by, resulting from or surviving any Fundamental  Transaction or
the  Person  with  which  such  Fundamental  Transaction  shall  have been made,
provided that if such Person is not a publicly  traded entity whose common stock
or  equivalent  equity  security  is quoted or listed for trading on an Eligible
Market, Successor Entity shall mean such Person's Parent Entity.

                (rrr)   "TRADING DAY" means any day on which the Common Stock is
traded on the Principal Market, or, if the Principal Market is not the principal
trading  market for the Common Stock,  then on the Eligible  Market which is the
principal  securities exchange or

                                       40
<PAGE>


securities  market on which  the  Common  Stock is then  traded;  provided  that
"Trading  Day" shall not include any day on which the Common  Stock is scheduled
to trade on such  exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended  from trading during the final hour of trading on such
exchange or market (or if such  exchange or market does not designate in advance
the closing  time of trading on such  exchange  or market,  then during the hour
ending at 4:00:00 p.m., New York Time).

                (sss)   "VOTING  STOCK" of a Person means  capital stock of such
Person of the class or classes  pursuant to which the holders  thereof  have the
general  voting  power to elect,  or the general  power to  appoint,  at least a
majority  of the  board  of  directors,  managers  or  trustees  of such  Person
(irrespective  of whether or not at the time capital stock of any other class or
classes  shall have or might have voting power by reason of the happening of any
contingency).

                (ttt)   "WARRANTS" has the meaning  ascribed to such term in the
Securities Purchase Agreement, and shall include all warrants issued in exchange
therefor or replacement thereof.

                (uuu)   "WEIGHTED  AVERAGE PRICE" means,  for any security as of
any date,  the dollar  volume-weighted  average  price for such  security on the
Principal  Market during the period beginning at 9:30:01 a.m., New York Time (or
such other time as the Principal Market publicly  announces is the official open
of trading),  and ending at 4:00:00  p.m.,  New York Time (or such other time as
the Principal  Market  publicly  announces is the official  close of trading) as
reported  by  Bloomberg  through  its  "Volume at Price"  functions,  or, if the
foregoing  does not apply,  the  dollar  volume-weighted  average  price of such
security in the  over-the-counter  market on the  electronic  bulletin board for
such security  during the period  beginning at 9:30:01  a.m.,  New York Time (or
such  other time as such  market  publicly  announces  is the  official  open of
trading),  and ending at 4:00:00 p.m., New York Time (or such other time as such
market  publicly  announces  is the  official  close of  trading) as reported by
Bloomberg,  or, if no dollar volume-weighted  average price is reported for such
security by  Bloomberg  for such hours,  the average of the highest  closing bid
price and the  lowest  closing  ask price of any of the  market  makers for such
security  as  reported in the "pink  sheets" by Pink  Sheets LLC  (formerly  the
National  Quotation  Bureau,  Inc.).  If the  Weighted  Average  Price cannot be
calculated  for a security on a particular  date on any of the foregoing  bases,
the  Weighted  Average  Price of such  security  on such date  shall be the fair
market  value as mutually  determined  by the  Company  and the  Holder.  If the
Company  and the Holder are unable to agree upon the fair  market  value of such
security,  then such dispute shall be resolved  pursuant to Section 23. All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.

        (29)    DISCLOSURE.  Notwithstanding  any  other  provisions  set  forth
herein   (including,   without   limitation,   any   reporting   and/or   notice
requirements),  the Company shall not, and shall cause its Subsidiaries and each
of their respective officers,  directors,  employees and agents, not to, provide
the Holder with any material,  nonpublic information  regarding,  the Company or
any if its  Subsidiaries  without the express  written consent of the Holder and
such Holder's delivery to Company of a confidentiality agreement with respect to
such  information  to be  disclosed.  If the Holder  has,  or  believes  it has,
received from the Company any such material, nonpublic information regarding the
Company or any of the Subsidiaries, it shall provide the

                                       41
<PAGE>


Company with written notice thereof.  The Company shall, within four (4) Trading
Days of  receipt  of such  notice,  make  public  disclosure  of such  material,
nonpublic  information  unless (i) the Company has in good faith determined that
the  matters  relating  to such  notice do not  constitute  material  non-public
information  about the Company or (ii) the notice is received from a Holder that
is an Affiliate,  shareholder,  officer,  director or employee of the Company or
any of its Subsidiaries.  In the event of a breach of the foregoing  covenant by
the  Company,  any of its  Subsidiaries,  or any of their  respective  officers,
directors,  employees  and  agents,  in addition  to any other  remedy  provided
herein, the Holder shall have the right to make a public disclosure, in the form
of a press  release,  public  advertisement  or  otherwise,  of  such  material,
nonpublic  information with the prior approval by the Company.  Holder shall not
have any  liability to the  Company,  any of its  Subsidiaries,  or any of their
respective officers, directors,  employees,  stockholders or agents for any such
disclosure.  Subject  to  the  foregoing,  none  of  the  Company,  any  of  its
Subsidiaries  or the Holder  shall issue any press  releases or any other public
statements  in  respect  of  the  transactions  contemplated  hereby;  PROVIDED,
HOWEVER,  that the Company shall be entitled,  without the prior approval of the
Holder,  to make any press release or other public disclosure in respect of such
transactions as is required by applicable Requirements of Law.

        (30)    INTERCREDITOR  AGREEMENT.  This Note and each of the  provisions
hereof shall be subject to the Intercreditor Agreement.

                            [Signature Page Follows]

                                       42
<PAGE>


               IN WITNESS  WHEREOF,  the Company has caused this Note to be duly
executed as of the Issuance Date set out above.


                              SUMMIT GLOBAL LOGISTICS, INC.,
                              By:_________________________________________
                                 Name:
                                 Title:

<PAGE>


                                    EXHIBIT I

                                     COMPANY

                                CONVERSION NOTICE

Reference is made to the Unsecured  Convertible  Note (the "NOTE") issued to the
undersigned  by  Company.  In  accordance  with and  pursuant  to the Note,  the
undersigned  hereby elects to convert the  Conversion  Amount (as defined in the
Note) of the Note  indicated  below into shares of Common Stock par value $0.001
per share (the "COMMON STOCK") of the Company, as of the date specified below.


        Date of Conversion:_____________________________________________________

        Aggregate Conversion Amount to be converted:____________________________

Please confirm the following information:

        Conversion Price:_______________________________________________________

        Number of shares of Common Stock to
        be issued:______________________________________________________________

        Installment Amounts to be reduced and
        amount of reduction:____________________________________________________

Please  issue the Common  Stock into  which the Note is being  converted  in the
following name and to the following address:

        Issue to:_______________________________________________________________

                 _______________________________________________________________

                 _______________________________________________________________

        Facsimile Number:_______________________________________________________

        Authorization:__________________________________________________________

             By:________________________________________________________________

                  Title:________________________________________________________

Dated:__________________________________________________________________________

        Account Number:_________________________________________________________
          (if electronic book entry transfer)

        Transaction Code Number:________________________________________________
          (if electronic book entry transfer)
<PAGE>


                                 ACKNOWLEDGMENT

               The Company hereby acknowledges this Conversion Notice and hereby
directs  the  Transfer  Agent to issue the above  indicated  number of shares of
Common Stock in accordance  with the Transfer Agent  Instructions  dated _______
__, 200_ from the Company and acknowledged and agreed to by [Continental]


                          SUMMIT GLOBAL LOGISTICS, INC.
                          By:_________________________________________
                             Name:
                             Title: