Document:

EXHIBIT 10(G)

                               SECURITY AGREEMENT
     SECURITY AGREEMENT (this "Agreement"), dated as of January 22, 2002, by and
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among  IMAGING TECHNOLOGIES CORPORATION, a Delaware corporation ("Company"), and
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the secured parties signatory hereto and their respective endorsees, transferees
and  assigns  (collectively,  the  "Secured  Party").
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W  I  T  N  E  S  S  E  T  H:
     WHEREAS, pursuant to a Securities Purchase Agreement, dated the date hereof
between  Company  and  the Secured Party (the "Purchase Agreement"), Company has
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agreed  to  issue  to  the  Secured  Party  and  the Secured Party has agreed to
purchase  from  Company  certain  of Company's 8% Secured Convertible Debentures
(the "Debentures"), which are convertible into shares of Company's Common Stock,
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$0.005  par  value (the "Common Stock").  In connection therewith, Company shall
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issue  the  Secured Party certain Common Stock purchase warrants dated as of the
date  hereof  to  purchase  the number of shares of Common Stock indicated below
each  Secured  Party's  name  on  the  Purchase  Agreement (the "Warrants"); and
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WHEREAS,  in  order  to  induce  the  Secured  Party to purchase the Debentures,
Company  has  agreed  to execute and deliver to the Secured Party this Agreement
for  the  benefit of the Secured Party and to grant to it a security interest in
certain  property  of  Company  to  secure  the  prompt payment, performance and
discharge  in  full  of  all  of  Company's obligations under the Debentures and
exercise  and  discharge  in  full  of Company's obligations under the Warrants.
NOW,  THEREFORE,  in  consideration  of  the agreements herein contained and for
other  good  and valuable consideration, the receipt and sufficiency of which is
hereby  acknowledged,  the  parties  hereto  hereby  agree  as  follows:
Certain  Definitions.  As used in this Agreement, the following terms shall have
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the  meanings set forth in this Section 1.  Terms used but not otherwise defined
in  this  Agreement  that  are defined in Article 9 of the UCC (such as "general
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intangibles" and "proceeds") shall have the respective meanings given such terms
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in  Article  9  of  the  UCC.
"Collateral"  means  the  collateral  in  which  the  Secured Party is granted a
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security  interest  by  this  Agreement  and  which shall include the following,
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whether  presently  owned  or  existing  or  hereafter  acquired  or coming into
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existence,  and  all  additions and accessions thereto and all substitutions and
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replacements  thereof,  and  all  proceeds,  products  and  accounts  thereof,
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including,  without  limitation,  all  proceeds from the sale or transfer of the
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Collateral  and  of  insurance  covering  the  same  and  of  any tort claims in
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connection  therewith:
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All  Goods  of  the  Company,  including,  without  limitations,  all machinery,
equipment,  computers,  motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices
and  other  equipment  of  every kind and nature and wherever situated, together
with  all  documents of title and documents representing the same, all additions
and  accessions  thereto,  replacements  therefor,  all  parts therefor, and all
substitutes  for  any  of  the  foregoing and all other items used and useful in
connection  with  the  Company's  businesses  and  all  improvements  thereto
(collectively,  the  "Equipment");  and
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All  Inventory  of  the  Company;  and
All of the Company's contract rights and general intangibles, including, without
limitation,  all  partnership  interests,  stock  or other securities, licenses,
distribution and other agreements, computer software development rights, leases,
franchises,  customer  lists,  quality  control  procedures,  grants and rights,
goodwill,  trademarks, service marks, trade styles, trade names, patents, patent
applications,  copyrights,  deposit  accounts,  and  income  tax  refunds
(collectively,  the  "General  Intangibles");  and
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All  Receivables  of the Company including all insurance proceeds, and rights to
refunds  or indemnification whatsoever owing, together with all instruments, all
documents  of  title  representing  any  of  the  foregoing,  all  rights in any
merchandising, goods, equipment, motor vehicles and trucks which any of the same
may  represent,  and  all  right, title, security and guaranties with respect to
each  Receivable,  including  any  right  of  stoppage  in  transit;  and
All  of  the Company's documents, instruments and chattel paper, files, records,
books  of  account,  business  papers,  computer  programs  and the products and
proceeds of all of the foregoing Collateral set forth in clauses (i)-(iv) above.
"Company"  shall  mean,  collectively,  Company  and  all of the subsidiaries of
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Company,  a  list  of  which  is  contained  in  Schedule  A,  attached  hereto.
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"Obligations"  means  all  of the Company's obligations under this Agreement and
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the  Debentures,  in  each case, whether now or hereafter existing, voluntary or
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involuntary,  direct  or  indirect,  absolute  or  contingent,  liquidated  or
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unliquidated,  whether  or not jointly owed with others, and whether or not from
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time to time decreased or extinguished and later decreased, created or incurred,
and  all or any portion of such obligations or liabilities that are paid, to the
extent  all  or  any  part  of  such payment is avoided or recovered directly or
indirectly  from  the  Secured  Party  as  a  preference, fraudulent transfer or
otherwise  as such obligations may be amended, supplemented, converted, extended
or  modified  from  time  to  time.
"Senior  Debt" shall mean all indebtedness owed by the Company to CoAmerica Bank
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(formerly  Imperial Bank), pursuant to the Settlement Agreement dated as of June
6,  2000  and  the  Amended  and Restated Security Agreement dated as of June 6,
2000.
"UCC"  means the Uniform Commercial Code, as currently in effect in the State of
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New  York.
Grant  of  Security  Interest.  Subject to the rights and remedies of the Senior
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Debt,  as  an inducement for the Secured Party to purchase the Debentures and to
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secure  the  complete  and timely payment, performance and discharge in full, as
the  case may be, of all of the Obligations, the Company hereby, unconditionally
and  irrevocably,  pledges,  grants  and  hypothecates  to  the Secured Party, a
continuing security interest in, a continuing lien upon, an unqualified right to
possession  and  disposition  of and a right of set-off against, in each case to
the  fullest  extent  permitted  by  law,  all of the Company's right, title and
interest  of  whatsoever kind and nature in and to the Collateral (the "Security
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Interest").
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Representations,  Warranties,  Covenants  and  Agreements  of  the Company.  The
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Company  represents  and warrants to, and covenants and agrees with, the Secured
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Party  as  follows:
The  Company  has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations thereunder.  The execution,
delivery  and  performance  by  the  Company  of  this Agreement and the filings
contemplated  therein  have  been duly authorized by all necessary action on the
part  of  the  Company  and  no further action is required by the Company.  This
Agreement  constitutes  a  legal,  valid  and  binding obligation of the Company
enforceable  in  accordance  with  its  terms,  except  as enforceability may be
limited  by  bankruptcy,  insolvency, reorganization, moratorium or similar laws
affecting  the  enforcement  of  creidtor's  rights  generally.
The  Company represents and warrants that it has no place of business or offices
where  its  respective  books  of  account  and  records  are  kept  (other than
temporarily  at  the  offices  of  its attorneys or accountants) or places where
Collateral  is  stored  or  located,  except as set forth on Schedule A attached
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hereto;
The  Company  is  the  sole  owner  of  the Collateral (except for non-exclusive
licenses  granted  by  the Company in the ordinary course of business), free and
clear  of  any liens, security interests, encumbrances, rights or claims, and is
fully authorized to grant the Security Interest in and to pledge the Collateral,
except  as  set forth on Schedule Cattached hereto.  There is not on file in any
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governmental  or  regulatory  authority, agency or recording office an effective
financing  statement,  security  agreement, license or transfer or any notice of
any  of  the  foregoing  (other  than those that have been filed in favor of the
Secured  Party  pursuant  to  this  Agreement)  covering or affecting any of the
Collateral,  except  as set forth on Schedule Cattached hereto.  So long as this
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Agreement  shall  be  in  effect,  the  Company  shall not execute and shall not
knowingly  permit  to be on file in any such office or agency any such financing
statement  or  other  document  or  instrument  (except  to  the extent filed or
recorded in favor of the Secured Party pursuant to the terms of this Agreement).
No  part of the Collateral has been judged invalid or unenforceable.  No written
claim  has  been  received  that  any  Collateral  or  the  Company's use of any
Collateral  violates  the  rights  of any third party. There has been no adverse
decision  to  the  Company's claim of ownership rights in or exclusive rights to
use  the  Collateral  in  any jurisdiction or to the Company's right to keep and
maintain  such  Collateral  in full force and effect, and there is no proceeding
involving  said  rights  pending  or,  to  the  best  knowledge  of the Company,
threatened before any court, judicial body, administrative or regulatory agency,
arbitrator  or  other  governmental  authority.
The  Company  shall  at  all  times  maintain  its  books of account and records
relating to the Collateral at its principal place of business and its Collateral
at  the  locations  set forth on Schedule A attached hereto and may not relocate
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such  books  of account and records or tangible Collateral unless it delivers to
the  Secured  Party at least 30 days prior to such relocation (i) written notice
of such relocation and the new location thereof (which must be within the United
States)  and  (ii)  evidence  that  appropriate  financing  statements and other
necessary documents have been filed and recorded and other steps have been taken
to  perfect the Security Interest to create in favor of the Secured Party valid,
perfected  and  continuing  liens  in  the  Collateral.
This  Agreement  creates in favor of the Secured Party a valid security interest
in  the  Collateral securing the payment and performance of the Obligations and,
upon  making  the  filings  described  in  the immediately following sentence, a
perfected  security  interest  in  such  Collateral.  Except  for  the filing of
financing statements on Form-1 under the UCC with the jurisdictions indicated on
Schedule  B,  attached hereto, no authorization or approval of or filing with or
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notice  to  any governmental authority or regulatory body is required either (i)
for  the grant by the Company of, or the effectiveness of, the Security Interest
granted  hereby or for the execution, delivery and performance of this Agreement
by the Company or (ii) for the perfection of or exercise by the Secured Party of
its  rights  and  remedies  hereunder.
On  the  date  of  execution  of this Agreement, the Company will deliver to the
Secured  Party  one  or  more  executed  UCC financing statements on Form-1 with
respect  to the Security Interest for filing with the jurisdictions indicated on
Schedule  B, attached hereto and in such other jurisdictions as may be requested
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by  the  Secured  Party.
The execution, delivery and performance of this Agreement does not conflict with
or  cause  a  breach or default, or an event that with or without the passage of
time  or  notice,  shall  constitute a breach or default, under any agreement to
which  the  Company  is  a  party  or by which the Company is bound.  No consent
(including,  without limitation, from stock holders or creditors of the Company)
is required for the Company to enter into and perform its obligations hereunder.
The Company shall at all times maintain the liens and Security Interest provided
for  hereunder  as  valid  and  perfected  liens  and  security interests in the
Collateral  in  favor of the Secured Party until this Agreement and the Security
Interest  hereunder  shall terminate pursuant to Section 11.  The Company hereby
agrees  to  defend  the  same  against  any  and all persons.  The Company shall
safeguard  and  protect all Collateral for the account of the Secured Party.  At
the  request  of  the  Secured  Party,  the Company will sign and deliver to the
Secured  Party at any time or from time to time one or more financing statements
pursuant  to  the  UCC  (or  any  other  applicable  statute) in form reasonably
satisfactory  to  the  Secured Party and will pay the cost of filing the same in
all  public offices wherever filing is, or is deemed by the Secured Party to be,
necessary or desirable to effect the rights and obligations provided for herein.
Without  limiting  the  generality  of  the foregoing, the Company shall pay all
fees,  taxes  and  other  amounts  necessary  to maintain the Collateral and the
Security  Interest  hereunder,  and  the Company shall obtain and furnish to the
Secured  Party  from  time  to  time,  upon  demand,  such  releases  and/or
subordinations  of  claims  and  liens  which  may  be  required to maintain the
priority  of  the  Security  Interest  hereunder.
The Company will not transfer, pledge, hypothecate, encumber, license (except in
the  ordinary  course  of  business),  sell  or  otherwise dispose of any of the
Collateral  without  the  prior  written  consent  of  the  Secured  Party.
The  Company shall keep and preserve its Equipment, Inventory and other tangible
Collateral  in  good condition, repair and order and shall not operate or locate
any  such  Collateral  (or cause to be operated or located) in any area excluded
from  insurance  coverage.
The  Company  shall, within ten (10) days of obtaining knowledge thereof, advise
the  Secured  Party promptly, in sufficient detail, of any substantial change in
the  Collateral,  and of the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the Secured Party's security
interest  therein.
The Company shall promptly execute and deliver to the Secured Party such further
deeds,  mortgages,  assignments,  security  agreements,  financing statements or
other  instruments, documents, certificates and assurances and take such further
action  as  the  Secured Party may from time to time request and may in its sole
discretion  deem  necessary to perfect, protect or enforce its security interest
in the Collateral including, without limitation, the execution and delivery of a
separate  security agreement with respect to the Company's intellectual property
("Intellectual Property Security Agreement") in which the Secured Party has been
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granted a security interest hereunder, substantially in a form acceptable to the
Secured  Party,  which  Intellectual  Property Security Agreement, other than as
stated  therein,  shall  be  subject  to all of the terms and conditions hereof.
The Company shall permit the Secured Party and its representatives and agents to
inspect  the Collateral at any time, and to make copies of records pertaining to
the  Collateral  as  may  be  requested  by the Secured Party from time to time.
The  Company  will  take all steps reasonably necessary to diligently pursue and
seek  to  preserve, enforce and collect any rights, claims, causes of action and
accounts  receivable  in  respect  of  the  Collateral.
The  Company  shall  promptly notify the Secured Party in sufficient detail upon
becoming  aware of any attachment, garnishment, execution or other legal process
levied  against  any  Collateral  and  of  any other information received by the
Company  that  may  materially  affect the value of the Collateral, the Security
Interest  or  the  rights  and  remedies  of  the  Secured  Party  hereunder.
All information heretofore, herein or hereafter supplied to the Secured Party by
or  on  behalf  of  the  Company  with respect to the Collateral is accurate and
complete  in  all  material  respects  as  of  the  date  furnished.
Schedule  A  attached  hereto  contains  a  list  of  all of the subsidiaries of
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Company.
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Defaults.  The  following  events  shall  be  "Events  of  Default":
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The  occurrence  of an Event of Default (as defined in the Debentures) under the
Debentures;
Any  representation  or  warranty  of  the  Company  in this Agreement or in the
Intellectual  Property  Security Agreement shall prove to have been incorrect in
any  material  respect  when  made;
The  failure  by  the  Company  to  observe  or  perform  any of its obligations
hereunder  or  in the Intellectual Property Security Agreement for ten (10) days
after  receipt  by the Company of notice of such failure from the Secured Party;
and
Any  breach  of,  or  default  under,  the  Warrants.
Duty  To  Hold In Trust.  Upon the occurrence of any Event of Default and at any
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time thereafter, the Company shall, upon receipt by it of any revenue, income or
other  sums  subject  to  the Security Interest, whether payable pursuant to the
Debentures or otherwise, or of any check, draft, note, trade acceptance or other
instrument  evidencing an obligation to pay any such sum, hold the same in trust
for  the Secured Party and shall forthwith endorse and transfer any such sums or
instruments,  or  both, to the Secured Party for application to the satisfaction
of  the  Obligations.
Rights  and  Remedies  Upon  Default.  Subject to the rights and remedies of the
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Senior Debt, upon occurrence of any Event of Default and at any time thereafter,
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the Secured Party shall have the right to exercise all of the remedies conferred
hereunder  and  under  the  Debentures, and the Secured Party shall have all the
rights and remedies of a secured party under the UCC and/or any other applicable
law  (including  the  Uniform  Commercial  Code of any jurisdiction in which any
Collateral  is  then located).  Without limitation, the Secured Party shall have
the  following  rights  and  powers:
The Secured Party shall have the right to take possession of the Collateral and,
for that purpose, enter, with the aid and assistance of any person, any premises
where  the  Collateral,  or any part thereof, is or may be placed and remove the
same, and the Company shall assemble the Collateral and make it available to the
Secured Party at places which the Secured Party shall reasonably select, whether
at the Company's premises or elsewhere, and make available to the Secured Party,
without  rent,  all  of the Company's respective premises and facilities for the
purpose  of  the  Secured  Party  taking  possession of, removing or putting the
Collateral  in  saleable  or  disposable  form.
The  Secured  Party  shall have the right to operate the business of the Company
using  the  Collateral  and  shall  have  the  right  to  assign, sell, lease or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private  sale  or  otherwise,  either  with  or  without  special  conditions or
stipulations,  for  cash  or on credit or for future delivery, in such parcel or
parcels  and  at  such  time or times and at such place or places, and upon such
terms  and conditions as the Secured Party may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived)
advertisement  or demand upon or notice to the Company or right of redemption of
the  Company,  which  are  hereby expressly waived.  Upon each such sale, lease,
assignment  or  other  transfer  of  Collateral,  the  Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Company, which are hereby waived and released.
Applications  of  Proceeds.  The  proceeds  of  any  such  sale,  lease or other
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disposition  of the Collateral hereunder shall be applied first, to the expenses
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of  retaking,  holding, storing, processing and preparing for sale, selling, and
the  like  (including,  without  limitation,  any  taxes,  fees  and other costs
incurred  in  connection  therewith)  of  the  Collateral,  to  the  reasonable
attorneys'  fees  and  expenses  incurred  by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral,  and  then to satisfaction of the Obligations, and to the payment of
any  other  amounts  required  by  applicable law, after which the Secured Party
shall  pay  to  the  Company  any  surplus proceeds.  To the extent permitted by
applicable  law,  the Company waives all claims, damages and demands against the
Secured Party arising out of the repossession, removal, retention or sale of the
Collateral,  unless  due  to  the  gross negligence or willful misconduct of the
Secured  Party.
Costs  and Expenses.     The Company agrees to pay all out-of-pocket fees, costs
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and  expenses  incurred  in  connection  with  any  filing  required  hereunder,
including without limitation, any financing statements, continuation statements,
partial  releases  and/or termination statements related thereto or any expenses
of  any  searches  reasonably  required by the Secured Party.  The Company shall
also  pay  all  other  claims and charges which in the reasonable opinion of the
Secured Party might prejudice, imperil or otherwise affect the Collateral or the
Security  Interest  therein.  The  Company  will  also,  upon demand, pay to the
Secured  Party  the  amount  of  any  and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the  Secured  Party  may  incur  in  connection with (i) the enforcement of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or  other  realization  upon,  any  of  the Collateral, or (iii) the exercise or
enforcement  of  any  of  the  rights of the Secured Party under the Debentures.
Until so paid, any fees payable hereunder shall be added to the principal amount
of  the  Debentures  and  shall  bear  interest  at  the  rate of 15% per annum.
Responsibility  for  Collateral.  The  Company  assumes  all  liabilities  and
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responsibility  in  connection  with  all Collateral, and the obligations of the
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Company  hereunder  or  under the Debentures and the Warrants shall in no way be
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affected  or  diminished  by reason of the loss, destruction, damage or theft of
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any  of  the  Collateral  or  its  unavailability  for  any  reason.
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Security Interest Absolute.  All rights of the Secured Party and all Obligations
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of  the Company hereunder, shall be absolute and unconditional, irrespective of:
(a)  any  lack  of validity or enforceability of this Agreement, the Debentures,
the  Warrants or any agreement entered into in connection with the foregoing, or
any  portion  hereof  or thereof; (b) any change in the time, manner or place of
payment  or  performance  of,  or  in  any  other  term  of,  all  or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from  the  Debentures,  the  Warrants  or  any  other  agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of  the  Collateral,  or  any  release  or  amendment or waiver of or consent to
departure from any other collateral for, or any guaranty, or any other security,
for  all  or  any  of  the  Obligations;  (d) any action by the Secured Party to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters  made  or  arising  in  connection with the Collateral; or (e) any other
circumstance  which  might  otherwise  constitute any legal or equitable defense
available  to  the  Company,  or  a discharge of all or any part of the Security
Interest  granted  hereby.  Until  the  Obligations  shall  have  been  paid and
performed  in  full,  the rights of the Secured Party shall continue even if the
Obligations  are  barred  for  any  reason,  including,  without limitation, the
running  of  the  statute  of  limitations or bankruptcy.  The Company expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand  for  performance.  In  the  event  that  at any time any transfer of any
Collateral  or  any  payment  received  by  the Secured Party hereunder shall be
deemed  by  final  order  of  a  court  of competent jurisdiction to have been a
voidable  preference or fraudulent conveyance under the bankruptcy or insolvency
laws  of  the United States, or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's obligations
hereunder  shall  survive  cancellation  of  this  Agreement,  and  shall not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement,  but  shall  remain  a  valid  and  binding obligation enforceable in
accordance  with  the terms and provisions hereof.  The Company waives all right
to require the Secured Party to proceed against any other person or to apply any
Collateral  which  the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy.  The Company waives any defense arising by reason
of  the  application  of  the  statute  of limitations to any obligation secured
hereby.
Term  of Agreement.  This Agreement and the Security Interest shall terminate on
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the  date  on which all payments under the Debentures have been made in full and
all  other Obligations have been paid or discharged.  Upon such termination, the
Secured  Party,  at  the request and at the expense of the Company, will join in
executing  any  termination  statement  with  respect to any financing statement
executed  and  filed  pursuant  to  this  Agreement.
POWER  OF  ATTORNEY;  FURTHER  ASSURANCES.
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The  Company  authorizes the Secured Party, and does hereby make, constitute and
appoint it, and its respective officers, agents, successors or assigns with full
power  of  substitution, as the Company's true and lawful attorney-in-fact, with
power,  in  its own name or in the name of the Company, to, after the occurrence
and  during  the  continuance  of  an  Event  of Default, (i) endorse any notes,
checks,  drafts,  money  orders,  or  other  instruments  of  payment (including
payments  payable  under or in respect of any policy of insurance) in respect of
the  Collateral that may come into possession of the Secured Party; (ii) to sign
and endorse any UCC financing statement or any invoice, freight or express bill,
bill  of  lading,  storage  or  warehouse  receipts,  drafts  against  debtors,
assignments,  verifications  and  notices in connection with accounts, and other
documents  relating  to  the Collateral; (iii) to pay or discharge taxes, liens,
security  interests  or  other  encumbrances  at any time levied or placed on or
threatened  against  the  Collateral;  (iv)  to  demand,  collect,  receipt for,
compromise,  settle and sue for monies due in respect of the Collateral; and (v)
generally,  to  do,  at  the  option  of the Secured Party, and at the Company's
expense,  at  any  time,  or  from  time  to time, all acts and things which the
Secured  Party  deems  necessary  to  protect,  preserve  and  realize  upon the
Collateral  and  the  Security  Interest  granted therein in order to effect the
intent  of  this  Agreement,  the  Debentures and the Warrants, all as fully and
effectually  as  the  Company might or could do; and the Company hereby ratifies
all  that  said attorney shall lawfully do or cause to be done by virtue hereof.
This  power of attorney is coupled with an interest and shall be irrevocable for
the  term  of  this  Agreement  and thereafter as long as any of the Obligations
shall  be  outstanding.
On  a  continuing  basis,  the Company will make, execute, acknowledge, deliver,
file  and  record, as the case may be, in the proper filing and recording places
in  any jurisdiction, including, without limitation, the jurisdictions indicated
on  Schedule  B, attached hereto, all such instruments, and take all such action
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as  may  reasonably be deemed necessary or advisable, or as reasonably requested
by  the  Secured  Party,  to perfect the Security Interest granted hereunder and
otherwise  to  carry  out  the  intent  and  purposes  of this Agreement, or for
assuring  and  confirming  to  the  Secured  Party  the grant or perfection of a
security  interest  in  all  the  Collateral.
The  Company  hereby  irrevocably  appoints  the  Secured Party as the Company's
attorney-in-fact,  with full authority in the place and stead of the Company and
in the name of the Company, from time to time in the Secured Party's discretion,
to  take  any  action  and to execute any instrument which the Secured Party may
deem  necessary  or  advisable  to  accomplish  the  purposes of this Agreement,
including  the  filing,  in  its  sole  discretion,  of one or more financing or
continuation  statements  and  amendments  thereto,  relative  to  any  of  the
Collateral  without  the  signature  of  the  Company  where  permitted  by law.
Notices.  All  notices,  requests,  demands  and  other communications hereunder
-------
shall  be  in writing, with copies to all the other parties hereto, and shall be
----
deemed to have been duly given when (i) if delivered by hand, upon receipt, (ii)
if sent by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally  recognized  overnight delivery service (receipt requested), the next
business  day  or  (iv)  if  mailed by first-class registered or certified mail,
return  receipt  requested, postage prepaid, four days after posting in the U.S.
mails,  in  each  case  if  delivered  to  the  following  addresses:
If  to  the  Company:     Imaging  Technologies  Corporation
15175  Innovation  Drive
San  Diego,  California  92128
Attention:  President  and  Chief  Executive  Officer
Facsimile:  858-207-6505

With  copies  to:     Jenkens  &  Gilchrist  Parker  Chapin,  LLP
     The  Chrysler  Building
405  Lexington  Avenue
New  York,  NY  10174
Attention:  Christopher  S.  Auguste,  Esq.
Facsimile:  212-704-6288

If  to  the  Secured  Party:
Bristol  Investment  Fund,  Ltd.
     Caledonian  House
Jennett  Street
George  Town
Attention:  Administrator
Facsimile:  441-295-2305

With  copies  to:
Bristol  DLP,  LLC
6363  Sunset  Boulevard,  Fifth  Floor
Hollywood,  California  90028
Attention:  Amy  Wang
Facsimile:  323-468-8307

Other Security.  To the extent that the Obligations are now or hereafter secured
--------------
by  property  other  than  the  Collateral  or  by the guarantee, endorsement or
property  of  any  other  person,  firm,  corporation  or other entity, then the
Secured  Party  shall  have  the  right,  in  its  sole  discretion,  to pursue,
relinquish,  subordinate,  modify or take any other action with respect thereto,
without  in any way modifying or affecting any of the Secured Party's rights and
remedies  hereunder.
Miscellaneous.
-------------
No  course of dealing between the Company and the Secured Party, nor any failure
to  exercise, nor any delay in exercising, on the part of the Secured Party, any
right,  power  or privilege hereunder or under the Debentures shall operate as a
waiver  thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or  the  exercise  of  any  other  right,  power  or  privilege.
All  of  the  rights  and  remedies  of  the  Secured  Party with respect to the
Collateral,  whether  established  hereby  or  by the Debentures or by any other
agreements,  instruments  or  documents or by law shall be cumulative and may be
exercised  singly  or  concurrently.
This  Agreement  constitutes the entire agreement of the parties with respect to
the  subject  matter hereof and is intended to supersede all prior negotiations,
understandings  and agreements with respect thereto.  Except as specifically set
forth  in  this  Agreement,  no  provision  of this Agreement may be modified or
amended  except  by a written agreement specifically referring to this Agreement
and  signed  by  the  parties  hereto.
In  the  event  that  any  provision  of  this  Agreement is held to be invalid,
prohibited  or  unenforceable  in  any  jurisdiction for any reason, unless such
provision is narrowed by judicial construction, this Agreement shall, as to such
jurisdiction,  be  construed  as  if  such  invalid, prohibited or unenforceable
provision  had  been  more narrowly drawn so as not to be invalid, prohibited or
unenforceable.  If,  notwithstanding  the  foregoing,  any  provision  of  this
Agreement  is  held  to  be  invalid,  prohibited  or  unenforceable  in  any
jurisdiction,  such  provision, as to such jurisdiction, shall be ineffective to
the  extent  of  such  invalidity,  prohibition  or  unenforceability  without
invalidating  the remaining portion of such provision or the other provisions of
this  Agreement  and  without  affecting  the validity or enforceability of such
provision  or  the other provisions of this Agreement in any other jurisdiction.
No  waiver  of  any breach or default or any right under this Agreement shall be
considered  valid  unless in writing and signed by the party giving such waiver,
and  no such waiver shall be deemed a waiver of any subsequent breach or default
or  right,  whether  of  the  same  or  similar  nature  or  otherwise.
This  Agreement  shall  be  binding  upon and inure to the benefit of each party
hereto  and  its  successors  and  assigns.
Each  party  shall take such further action and execute and deliver such further
documents  as  may  be  necessary  or  appropriate  in  order  to  carry out the
provisions  and  purposes  of  this  Agreement.
This  Agreement  shall  be construed in accordance with the laws of the State of
New  York,  except  to  the  extent the validity, perfection or enforcement of a
security  interest  hereunder  in respect of any particular Collateral which are
governed  by  a jurisdiction other than the State of New York in which case such
law  shall  govern.  Each  of  the  parties  hereto  irrevocably  submit  to the
exclusive  jurisdiction  of  any  New  York State or United States Federal court
sitting  in  Manhattan  county  over  any action or proceeding arising out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all  claims  in respect of such action or proceeding may be heard and determined
in  such New York State or Federal court.  The parties hereto agree that a final
judgment  in  any  such  action  or  proceeding  shall  be conclusive and may be
enforced  in  other jurisdictions by suit on the judgment or in any other manner
provided by law.  The parties hereto further waive any objection to venue in the
State  of  New York and any objection to an action or proceeding in the State of
New  York  on the basis of forum non conveniens.  The parties further agree that
the  successful  or  prevailing  party  in  any  proceeding shall be entitled to
recover  attorneys'  fees  and  other  costs  incurred  in  such  proceeding.
EACH  PARTY  HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL
OF  ANY  CLAIM  OR  CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT
MAY  BE  FILED  IN  ANY  COURT  AND  THAT  RELATE  TO  THE SUBJECT MATER OF THIS
AGREEMENT,  INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY  CLAIMS  AND  ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO
ACKNOWLEDGES  THAT  THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER
INTO  A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER
IN  ENTERING  INTO  THIS  AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON
THIS  WAIVER  IN  THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS  THAT  IT  HAS  REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH  PARTY  HAS  KNOWINGLY  AND  VOLUNTARILY  WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING  SUCH  CONSULTATION.  THIS  WAIVER  IS  IRREVOCABLE,  MEANING  THAT,
NOTWITHSTANDING  ANYTHING  HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY  OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS  AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  IN THE EVENT OF A
LITIGATION,  THIS  AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
This Agreement may be executed in any number of counterparts, each of which when
so  executed  shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement.  In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation  of  the  party  executing  (or  on  whose  behalf  such signature is
executed) the same with the same force and effect as if such facsimile signature
were  the  original  thereof.
     IN  WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to  be  duly  executed  on  the  day  and  year  first  above  written.
IMAGING  TECHNOLOGIES  CORPORATION
By:_____________________________________
     Brian  Bonar
     President  and  Chief  Executive  Officer

BRISTOL  INVESTMENT  FUND,  LTD.
By:_____________________________________
Diana  Derycz  Kessler
Director

<PAGE>EXHIBIT 10(H)

THIS  NOTE  HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE  "ACT"),  OR  APPLICABLE  STATE  SECURITIES  LAWS,  AND  MAY  NOT  BE SOLD,
TRANSFERRED,  PLEDGED  OR  HYPOTHECATED  IN  THE ABSENCE OF SUCH REGISTRATION OR
RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE REASONABLY
ACCEPTABLE  TO  THE  MAKER  )  IN  THE  FORM,  SUBSTANCE  AND  SCOPE  REASONABLY
SATISFACTORY  TO THE MAKER THAT THIS NOTE MAY BE SOLD, TRANSFERRED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
SUCH  STATE  SECURITIES  LAWS.
IMAGING  TECHNOLOGIES  CORPORATION
Convertible  Promissory  Note
due  November  7,  2004

No.  CN-1     $200,000.00
Dated:  November  7,  2001

For  value  received,  IMAGING  TECHNOLOGIES CORPORATION, a Delaware corporation
(the  "Maker"),  hereby  promises  to  pay  to  the order of STONESTREET LIMITED
       -----
PARTNERSHIP  (together  with  its  successors,  representatives,  and  permitted
assigns,  the  "Holder"), in accordance with the terms hereinafter provided, the
                ------
principal  amount  of  Two Hundred Thousand Dollars ($200,000.00), together with
interest  thereon.
All  payments  under  or  pursuant  to  this Note shall be made in United States
Dollars  in  immediately  available  funds  to  the Holder at the address of the
Holder  first set forth above or at such other place as the Holder may designate
from  time  to  time in writing to the Maker or by wire transfer of funds to the
Holder's  account, instructions for which are attached hereto as Exhibit A.  The
                                                                 ---------
outstanding  principal balance of this Note shall be due and payable on November
7,  2004  (the "Maturity Date") or at such earlier time as provided herein. This
                -------------
Note  may  not  be  prepaid  by  the  Maker.
     Purchase  Agreement.  This Note has been executed and delivered pursuant to
the  Convertible  Note  Purchase  Agreement,  dated  as of November 7, 2001 (the
"Purchase Agreement"), by and among the Maker and the Holder.  Capitalized terms
used and not otherwise defined herein shall have the meanings set forth for such
terms  in  the  Purchase  Agreement.
-Interest.  Beginning  on  the date hereof, the outstanding principal balance of
this  Note  shall  bear interest, in arrears, at a rate per annum equal to eight
percent  (8%), payable quarterly unless earlier converted or prepaid as provided
herein.  Interest  shall  be  computed  on the basis of a 360-day year of twelve
(12) 30-day months and shall accrue commencing on the issuance date of this Note
(the  "Issuance  Date").  The  interest  shall  be payable, at the option of the
Holder, in cash or shares of the Maker's common stock, par value $.005 per share
(the  "Common  Stock");  provided,  that  if  the  Holder  elects to receive any
interest  in  Common  Stock,  the Maker shall issue to the Holder registered and
freely tradable shares of Common Stock.  The number of shares of Common Stock to
be  issued  as  payment  of  accrued  and unpaid interest shall be determined by
dividing  (a)  the  total  amount of accrued and unpaid interest to be converted
into Common Stock by the lesser of (i) $.0266 and (ii) an amount equal to 70% of
the average Per Share Market Value (as defined in Section 3.2(b) hereof) for the
three (3) Trading Days (as defined in Section 4.13 hereof) having the lowest Per
Share  Market  Value  during  the thirty (30) Trading Days prior to the date the
interest  payment  is  due.  Furthermore,  upon  the  occurrence  of an Event of
Default (as defined in Section 2.1 hereof), then to the extent permitted by law,
the Maker will pay interest to the Holder, payable on demand, on the outstanding
principal  balance  of  the  Note  from  the  date of the Event of Default until
payment  in  full  at  the  rate  of  fifteen  percent  (15%)  per  annum.
Payment on Non-Business Days.  Whenever any payment to be made shall be due on a
Saturday,  Sunday  or  a public holiday under the laws of the State of New York,
such  payment  may  be  due  on  the  next succeeding business day and such next
succeeding  day  shall  be  included in the calculation of the amount of accrued
interest  payable  on  such  date.
-Transfer.  This  Note  may be transferred or sold, subject to the provisions of
Section  4.5  of  this  Note,  or  pledged, hypothecated or otherwise granted as
security  by  the  Holder.
-Replacement.  Upon  receipt of a duly executed, notarized and unsecured written
statement from the Holder with respect to the loss, theft or destruction of this
Note  (or  any  replacement  hereof), and without requiring an indemnity bond or
other security, or, in the case of a mutilation of this Note, upon surrender and
cancellation  of  such Note, the Maker shall issue a new Note, of like tenor and
amount,  in  lieu  of  such  lost,  stolen,  destroyed  or  mutilated  Note.
EVENTS  OF  DEFAULT;  REMEDIES
     -Events of Default.  The occurrence of any of the following events shall be
an  "Event  of  Default"  under  this  Note:
the  Maker shall fail to make the payment of any amount of principal outstanding
on  the  date  such  payment  is  due  hereunder;  or
the  Maker  shall  fail to make any payment of interest for a period of five (5)
days  after  the  date  such  interest  is  due;  or
the  failure  of  the  Registration  Statement  to  be declared effective by the
Securities  and Exchange Commission ("SEC") on or prior to the date which is one
hundred  fifty  (150) days after the Filing Date (as defined in the Registration
Rights  Agreement);  or
the  suspension  from listing or the failure of the Common Stock to be listed on
the  OTC  Bulletin  Board  for a period of five (5) consecutive Trading Days; or
the  Maker's  notice  to the Holder, including by way of public announcement, at
any time, of its inability to comply (including for any of the reasons described
in  Section  3.8(a)  hereof) or its intention not to comply with proper requests
for  conversion  of  this  Note  into  shares  of  Common  Stock;  or
the  Maker  shall  fail  to  (i) timely delivery the shares of Common Stock upon
conversion  of the Note or any interest accrued and unpaid, (ii) timely file the
Registration  Statement  (as  defined  in  the Registration Rights Agreement) or
(iii)  make  the  payment of any fees and/or liquidated damages under this Note,
the  Purchase  Agreement  or the Registration Rights Agreement, which failure in
the  case  of  items (i) and (iii) of this Section 2.1(f) is not remedied within
seven  (7)  business  days  after  the  incurrence  thereof;  or
while the Registration Statement is required to be maintained effective pursuant
to  the  terms  of  the  Registration Rights Agreement, the effectiveness of the
Registration Statement lapses for any reason (including, without limitation, the
issuance  of  a  stop  order)  or  is  unavailable to the Holder for sale of the
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 Trading Days,
provided  that  the  cause of such lapse or unavailability is not due to factors
 -------
solely  within  the  control  of  Holder;  or
 -
default  shall  be  made  in  the performance or observance of (i) any covenant,
condition or agreement contained in this Note (other than as set forth in clause
(f)  of  this  Section 2.1) and such default is not fully cured within three (3)
business  days  after  the  occurrence  thereof  or  (ii) any material covenant,
condition  or  agreement contained in the Purchase Agreement or the Registration
Rights  Agreement  which  is not covered by any other provisions of this Section
2.1 and such default is not fully cured within seven (7) business days after the
occurrence  thereof;  or
any  material  representation  or  warranty  made  by the Maker herein or in the
Purchase Agreement or the Registration Rights Agreement shall prove to have been
false  or  incorrect  or  breached in a material respect on the date as of which
made;  or
the Maker shall issue any debt securities which are not subordinate to this Note
on  such terms as are acceptable to the Holders of a majority of the outstanding
principal  amount  of this Note and the other Notes purchased under the Purchase
Agreement;  or
the  consummation  of  any of the following transactions: (i) the consolidation,
merger  or  other  business  combination  of  the Maker with or into a person or
entity  (other  than  (A) pursuant to a migratory merger effected solely for the
purpose  of  changing  the  jurisdiction  of incorporation of the Maker or (B) a
consolidation,  merger  or  other  business  combination in which holders of the
Maker's  voting  power  immediately  prior to the transaction continue after the
transaction  to  hold, 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),  except  if  in  the case of a consolidation merger or other business
combination  of  the  Maker, the Maker shall have given the Holder not less than
fifteen  (15)  business  days  prior  written  notice  thereof (the "Transaction
                                                                     -----------
Notice") and shall have furnished the Holder with such information regarding the
consolidation,  merger  or  other  business  combination  (including,  without
limitation,  the counterparties thereto) as the Holder may reasonably request in
order  for  the  Holder  to  determine if it will exercise its conversion rights
hereunder  prior  to  the  consummation  of  such consolidation, merger or other
business  combination;  (ii) the sale or transfer of all or substantially all of
the  Maker's assets; or (iii) the consummation of a purchase, tender or exchange
offer  made  to the holders of more than 30% of the outstanding shares of Common
Stock.
the  Maker  shall  (i)  default  in  any payment of any amount or amounts (x) of
principal  of  or  interest  on  any  Indebtedness  (other than the Indebtedness
hereunder)  the aggregate principal amount of which Indebtedness is in excess of
$75,000  or (ii) default in the observance or performance of any other agreement
or  condition  relating  to  any  Indebtedness or contained in any instrument or
agreement  evidencing,  securing  or  relating thereto, or any other event shall
occur  or  condition  exist,  the  effect  of  which  default  or other event or
condition  is  to  cause,  or  to permit the holder or holders or beneficiary or
beneficiaries  of  such  Indebtedness  to  cause  with  the  giving of notice if
required,  such  Indebtedness  to  become  due  prior to its stated maturity; or
the Maker shall (i) apply for or consent to the appointment of, or the taking of
possession  by, a receiver, custodian, trustee or liquidator of itself or of all
or  a substantial part of its property or assets, (ii) make a general assignment
for  the  benefit  of  its  creditors, (iii) commence a voluntary case under the
United  States  Bankruptcy  Code  (as  now  or hereafter in effect) or under the
comparable  laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking  to  take  advantage  of  any  bankruptcy,  insolvency,  moratorium,
reorganization  or  other  similar  law  affecting the enforcement of creditors'
rights  generally,  (v) acquiesce in writing to any petition filed against it in
an  involuntary case under United States Bankruptcy Code (as now or hereafter in
effect)  or under the comparable laws of any jurisdiction (foreign or domestic),
or (vi) take any action under the laws of any jurisdiction (foreign or domestic)
analogous  to  any  of  the  foregoing;  or
a  proceeding  or  case  shall be commenced in respect of the Maker, without its
application  or consent, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, moratorium, dissolution, winding up, or composition
or  readjustment  of  its  debts,  (ii)  the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets in connection with the liquidation or dissolution of the Company or (iii)
similar  relief  in  respect  of  it  under  any law providing for the relief of
debtors,  and  such  proceeding  or  case described in clause (i), (ii) or (iii)
shall  continue  undismissed,  or  unstayed and in effect, for a period of sixty
(60)  days or any order for relief shall be entered in an involuntary case under
United  States  Bankruptcy  Code  (as  now  or hereafter in effect) or under the
comparable  laws  of any jurisdiction (foreign or domestic) against the Maker or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of  the  foregoing  shall  be taken with respect to the Maker and shall continue
undismissed,  or  unstayed  and  in  effect  for  a  period  of sixty (60) days.
     -Remedies  Upon  An  Event  of  Default.  If an Event of Default shall have
occurred and shall be continuing, the Holder of this Note may at any time at its
option  (a)  declare  the entire unpaid principal balance of this Note, together
with all interest accrued hereon, due and payable, and thereupon, the same shall
be  accelerated and so due and payable, without presentment, demand, protest, or
notice, all of which are hereby expressly unconditionally and irrevocably waived
by the Maker; provided, however, that upon the occurrence of an Event of Default
described in (i) Sections 2.1 (l), (m) or (n), the outstanding principal balance
and  accrued  interest hereunder shall be automatically due and payable and (ii)
Sections 2.1 (c)-(k), demand the prepayment of this Note pursuant to Section 3.7
hereof,  (b)  demand that the principal amount of this Note then outstanding and
all accrued and unpaid interest thereon shall be converted into shares of Common
Stock  at a conversion price per share calculated pursuant to Section 3.1 hereof
assuming  that  the date that the Event of Default occurs is the Conversion Date
(as defined in Section 3.1 hereof), or (c) exercise or otherwise enforce any one
or more of the Holder's rights, powers, privileges, remedies and interests under
this  Note,  the  Purchase  Agreement,  the  Registration  Rights  Agreement  or
applicable law.  No course of delay on the part of the Holder shall operate as a
waiver  thereof  or  otherwise  prejudice  the  right  of the Holder.  No remedy
conferred  hereby  shall  be exclusive of any other remedy referred to herein or
now  or  hereafter  available  at  law,  in  equity,  by  statute  or otherwise.
-CONVERSION;  ANTIDILUTION;  PREPAYMENT
     -Conversion  Option.  At  any  time  on or after October 9, 2001, this Note
shall  be  convertible  (in  whole or in part), at the option of the Holder (the
"Conversion  Option"),  into such number of fully paid and non-assessable shares
of  Common  Stock  (the "Conversion Rate") as is determined by dividing (x) that
portion  of  the  outstanding principal balance plus accrued and unpaid interest
under  the  Note  as  of  such date that the Holder elects to convert by (y) the
Conversion  Price  (as  hereinafter defined) then in effect on the date on which
the  Holder  faxes  a  notice  of  conversion  (the  "Conversion  Notice"), duly
executed, to the Maker (facsimile number (858) 207-6505, Attn.: General Counsel)
(the  "Conversion  Date"), provided, however, that the Conversion Price shall be
subject  to  adjustment  as  described  in  Section  3.6  below.
CONVERSION  PRICE.
     (a)     The  term  "Conversion  Price"  shall mean the lesser of (A) $.0266
                         -----------------
(the  "Fixed Conversion Price") and (B) an amount equal to seventy percent (70%)
       ----------------------
of  the average Per Share Market Value for the three (3) Trading Days having the
lowest  Per  Share Market Value during the thirty (30) Trading Days prior to the
Conversion  Date,  except  that  if  during any period (a "Black-out Period"), a
                                                           ----------------
Holder is unable to trade any Common Stock issued or issuable upon conversion of
the  Notes  immediately due to the postponement of filing or delay or suspension
of  effectiveness of a registration statement or because the Maker has otherwise
informed  such Holder that an existing prospectus cannot be used at that time in
the sale or transfer of such Common Stock, such Holder shall have the option but
not the obligation on any Conversion Date within ten (10) Trading Days following
the  expiration of the Black-out Period of using the Conversion Price applicable
on  such  Conversion  Date  or any Conversion Price selected by such Holder that
would  have  been  applicable  had such Conversion Date been at any earlier time
during  the  Black-out  Period  or  within the ten (10) Trading Days thereafter.
          (b)     The term "Per Share Market Value" means on any particular date
                            ----------------------
(a)  the  closing bid price of the Common Stock on such date on the OTC Bulletin
Board,  The  Nasdaq  Small-Cap  Market,  the  Nasdaq  National  Market  or other
registered  national  stock exchange on which the Common Stock is then listed or
if  there  is  no  such  price  on such date, then the closing bid price on such
exchange  or quotation system on the date nearest preceding such date, or (b) if
the  Common  Stock is not listed then on The Nasdaq Small-Cap Market, the Nasdaq
National Market or any registered national stock exchange, the closing bid price
for  a  share  of  Common  Stock  in the over-the-counter market, as reported by
NASDAQ  or in the National Quotation Bureau Incorporated or similar organization
or  agency  succeeding  to  its  functions  of reporting prices) at the close of
business  on  such date, then the average of the three (3) lowest closing bid or
closing  prices,  if  applicable,  of  the  "Pink Sheet" quotes for the relevant
                                             ----------
thirty  (30)  day  trading conversion period, as determined in good faith by the
Holder,  or  (d) if the Common Stock is not then publicly traded the fair market
value  of  a share of Common Stock as determined by an Independent Appraiser (as
defined  in  Section  4.13  hereof)  selected  in good faith by the Holders of a
majority  in  interest  of  the  Notes; provided, however, that the Maker, after
                                        --------  -------
receipt of the determination by such Independent Appraiser, shall have the right
to  select  an  additional Independent Appraiser, in which case, the fair market
value  shall  be  equal  to  the  average  of  the  determinations  by each such
Independent  Appraiser; and provided, further that all determinations of the Per
                            --------  -------
Share  Market  Value  shall  be  appropriately adjusted for any stock dividends,
stock  splits  or  other  similar  transactions  during  such  period.  The
determination  of  fair  market value by an Independent Appraiser shall be based
upon  the fair market value of the Issuer determined on a going concern basis as
between  a  willing  buyer  and  a  willing  seller  and taking into account all
relevant  factors  determinative of value, and shall be final and binding on all
parties.  In determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common Stock
imposed by agreement or by federal or state securities laws, or to the existence
or  absence  of,  or  any  limitations  on,  voting  rights.
     MECHANICS  OF  CONVERSION.
Not  later than three (3) Trading Days after any Conversion Date, the Maker will
deliver  to  the  applicable  Holder  by  express  courier  (A) a certificate or
certificates which shall be free of restrictive legends and trading restrictions
(other  than  those  required  by  Section  5.1  of  the  Purchase  Agreement)
                                   ------------
representing  the  number  of  shares  of  Common  Stock being acquired upon the
conversion of the Notes and (B) one or more certificates representing the amount
of  Notes  not  converted.  If  in  the  case  of  any  Conversion  Notice  such
certificate  or  certificates  are  not  delivered  to  or  as  directed  by the
applicable  Holder  by  the  third  Trading  Day  after the Conversion Date (the
"Delivery Date"), the Holder shall be entitled by written notice to the Maker at
      --------
any  time  on  or  before  its  receipt  of  such  certificate  or  certificates
thereafter,  to  rescind  such  conversion,  in  which  event  the  Maker  shall
immediately  return  the  certificates  representing  the  Notes  tendered  for
conversion,  whereupon  the Maker and the Holder shall each be restored to their
respective  positions  immediately  prior  to  the  delivery  of  such notice of
revocation,  except  that any amounts described in Sections 3.3(b) and (c) shall
be  payable  through  the  date  notice  of  rescission  is  given to the Maker.
The Maker understands that a delay in the delivery of the shares of Common Stock
upon  conversion  of  the Notes and failure to deliver certificates representing
the  unconverted  shares  of  the Notes beyond the Delivery Date could result in
economic  loss  to the Holder.  If the Maker fails to deliver to the Holder such
certificate  or  certificates pursuant to this Section hereunder by the Delivery
Date, the Maker shall pay to such Holder, in cash, an amount per Trading Day for
each  Trading  Day until such certificates are delivered, together with interest
on  such  amount  at a rate of 10% per annum, accruing until such amount and any
accrued  interest  thereon  is  paid  in  full, equal to (i) 1% of the aggregate
principal  amount  of the Notes requested to be converted for the first five (5)
Trading  Days  after  the  Delivery  Date and (ii) 2% of the aggregate principal
amount  of  the  Notes requested to be converted for each Trading Day thereafter
(which  amounts  shall  be  paid  as  liquidated  damages and not as a penalty).
Nothing  herein  shall  limit  a Holder's right to pursue actual damages for the
Maker's failure to deliver certificates representing shares of Common Stock upon
conversion  within  the  period specified herein (including, without limitation,
damages  relating  to  any  purchase of shares of Common Stock by such Holder to
make  delivery  on  a  sale  effected  in anticipation of receiving certificates
representing  shares  of  Common Stock upon conversion, such damages to be in an
amount  equal  to (A) the aggregate amount paid by such Holder for the shares of
Common  Stock  so  purchased  minus (B) the aggregate amount of net proceeds, if
any,  received by such Holder from the sale of the shares of Common Stock issued
by  the Maker pursuant to such conversion), and such Holder shall have the right
to  pursue  all remedies available to it at law or in equity (including, without
limitation,  a  decree  of  specific  performance  and/or  injunctive  relief).
Notwithstanding  anything  to the contrary contained herein, the Holder shall be
entitled  to  withdraw  a  Conversion Notice, and upon such withdrawal the Maker
shall only be obligated to pay the liquidated damages accrued in accordance with
this  Section  3.3(b)  through  the  date  the  Conversion  Notice is withdrawn.
In  addition  to any other rights available to the Holder, if the Maker fails to
deliver  to  the  Holder  such  certificate  or certificates pursuant to Section
3.3(a)  by the Delivery Date and if after the Delivery Date the Holder purchases
(in  an  open market transaction or otherwise) shares of Common Stock to deliver
in  satisfaction  of  a  sale  by such Holder of the Conversion Shares which the
Holder  anticipated  receiving upon such conversion (a "Buy-In"), then the Maker
                                                        ------
shall  pay  in  cash  to the Holder (in addition to any remedies available to or
elected by the Holder) the amount by which (A) the Holder's total purchase price
(including  brokerage  commissions,  if  any)  for the shares of Common Stock so
purchased exceeds (B) the aggregate principal amount of the Notes for which such
conversion  was  not timely honored, together with interest thereon at a rate of
15%  per  annum,  accruing until such amount and any accrued interest thereon is
paid  in  full  (which  amount  shall be paid as liquidated damages and not as a
penalty).  For  example, if the Holder purchases shares of Common Stock having a
total  purchase  price of $11,000 to cover a Buy-In with respect to an attempted
conversion  of  $10,000 aggregate principal amount of the Notes, the Maker shall
be  required  to pay the Holder $1,000, plus interest.  The Holder shall provide
the Maker written notice indicating the amounts payable to the Holder in respect
of  the  Buy-In.
     Ownership  Cap.  Notwithstanding  anything  to  the  contrary  set forth in
Section  3  of this Note, at no time may a holder of this Note convert this Note
if the number of shares of Common Stock to be issued pursuant to such conversion
would  exceed,  when  aggregated  with all other shares of Common Stock owned by
such  holder  at  such  time,  the  number of shares of Common Stock which would
result  in  such  holder  owning  more  than  9.99%  of  all of the Common Stock
outstanding  at  such  time;  provided, however, that upon a holder of this Note
providing  the Company with 75 days notice (pursuant to Section 4.1 hereof) (the
"Waiver  Notice")  that  such  holder  would like to waive this Section 3.4 with
regard  to  any  or  all shares of Common Stock issuable upon conversion of this
Note,  this  Section  3.4  will be of no force or effect with regard to all or a
portion  of  the  Note  referenced  in  the  Waiver  Notice.
Intentionally  Omitted.
-ADJUSTMENT  OF  CONVERSION  PRICE.
The  Fixed  Conversion Price shall be subject to adjustment from time to time as
follows:
Adjustments  for  Stock Splits and Combinations.  If the Maker shall at any time
-----------------------------------------------
or  from  time  to  time  after  the  Issuance Date, effect a stock split of the
outstanding  Common  Stock,  the  applicable  Fixed  Conversion  Price in effect
immediately prior to the stock split shall be proportionately decreased.  If the
Maker  shall  at  any time or from time to time after the Issuance Date, combine
the outstanding shares of Common Stock, the applicable Fixed Conversion Price in
effect  immediately prior to the combination shall be proportionately increased.
Any  adjustments under this Section 3.6(a)(i) shall be effective at the close of
business  on  the  date  the  stock  split  or  combination  occurs.
     (ii)     Adjustments for Certain Dividends and Distributions.  If the Maker
              ---------------------------------------------------
shall at any time or from time to time after the Issuance Date, make or issue or
set  a  record date for the determination of holders of Common Stock entitled to
receive  a  dividend  or  other  distribution payable in shares of Common Stock,
then,  and  in  each  event,  the  applicable  Fixed  Conversion Price in effect
immediately  prior  to  such  event  shall  be  decreased as of the time of such
issuance  or,  in  the  event  such record date shall have been fixed, as of the
close  of  business  on  such  record  date,  by multiplying, as applicable, the
applicable  Fixed  Conversion  Price  then  in  effect  by  a  fraction:
     (1)     the  numerator  of  which  shall  be  the total number of shares of
Common  Stock  issued  and  outstanding  immediately  prior  to the time of such
issuance  or  the  close  of  business  on  such  record  date;  and
(2)     the  denominator  of which shall be the total number of shares of Common
Stock  issued  and outstanding immediately prior to the time of such issuance or
the  close  of  business on such record date plus the number of shares of Common
Stock  issuable  in  payment  of  such  dividend  or  distribution.
     (iii)     Adjustment  for  Other Dividends and Distributions.  If the Maker
               --------------------------------------------------
shall at any time or from time to time after the Issuance Date, make or issue or
set  a  record date for the determination of holders of Common Stock entitled to
receive  a dividend or other distribution payable in other than shares of Common
Stock,  then, and in each event, an appropriate revision to the applicable Fixed
Conversion  Price  shall  be made and provision shall be made (by adjustments of
the  Conversion  Price  or  otherwise)  so  that  the holders of the Notes shall
receive  upon conversions thereof, in addition to the number of shares of Common
Stock receivable thereon, the number of securities of the Maker which they would
have  received  had  their Notes been converted into Common Stock on the date of
such  event and had thereafter, during the period from the date of such event to
and  including  the Conversion Date, retained such securities (together with any
distributions  payable  thereon  during  such period), giving application to all
adjustments  called  for  during such period under this Section 3.6(a)(iii) with
respect  to  the  rights  of  the  holders  of  the  Notes.
     (iv)     Adjustments  for  Reclassification,  Exchange or Substitution.  If
              -------------------------------------------------------------
the  Common Stock issuable upon conversion of the Notes at any time or from time
to time after the Issuance Date shall be changed to the same or different number
of  shares  of  any  class  or  classes  of  stock, whether by reclassification,
exchange,  substitution  or  otherwise  (other  than  by way of a stock split or
combination  of  shares  or  stock dividends provided for in Sections 3.6(a)(i),
(ii)  and  (iii),  or a reorganization, merger, consolidation, or sale of assets
provided  for  in  Section  3.6(a)(v)),  then, and in each event, an appropriate
revision  to  the  Fixed  Conversion Price shall be made and provisions shall be
made (by adjustments of the Conversion Price or otherwise) so that the holder of
each  of the Notes shall have the right thereafter to convert such Note into the
kind  and  amount  of  shares  of  stock  and  other  securities receivable upon
reclassification,  exchange,  substitution  or  other  change, by holders of the
number  of shares of Common Stock into which such Note might have been converted
immediately  prior  to  such  reclassification,  exchange, substitution or other
change,  all  subject  to  further  adjustment  as  provided  herein.
     (v)     Adjustments  for  Reorganization, Merger, Consolidation or Sales of
             -------------------------------------------------------------------
Assets.  If at any time or from time to time after the Issuance Date there shall
 -----
be  a capital reorganization of the Maker (other than by way of a stock split or
combination  of  shares  or  stock  dividends  or  distributions provided for in
Section  3.6(a)(i),  (ii)  and  (iii),  or  a  reclassification,  exchange  or
substitution  of  shares  provided  for  in  Section 3.6(a)(iv)), or a merger or
consolidation  of the Maker with or into another corporation, or the sale of all
or substantially all of the Maker's properties or assets to any other person (an
"Organic Change"), then as a part of such Organic Change an appropriate revision
 --------------
to  the  Conversion  Price  shall  be  made  and  provision  shall  be  made (by
adjustments  of  the  Conversion  Price or otherwise) so that the holder of each
Note  shall  have  the  right  thereafter to convert such Note into the kind and
amount  of  shares of stock and other securities or property of the Maker or any
successor  corporation  resulting  from  Organic  Change.  In  any  such  case,
appropriate  adjustment  shall  be  made in the application of the provisions of
this  Section  3.6(a)(v)  with respect to the rights of the holders of the Notes
after  the  Organic  Change  to  the  end  that  the  provisions of this Section
3.6(a)(v)  (including  any adjustment in the applicable Conversion Price then in
effect  and  the  number of shares of stock or other securities deliverable upon
conversion  of  the  Notes)  shall  be  applied after that event in as nearly an
equivalent  manner  as  may  be  practicable.
(vi)     Adjustments  for Issuance of Additional Shares of Common Stock.  If the
         ---------------------------------------------------------------
Maker, at any time after the Issuance Date, shall issue any additional shares of
Common  Stock  (otherwise  than  as  provided  in  the foregoing subsections (i)
through (v) of this Section 3.6) (the "Additional Shares of Common Stock"), at a
                                       ---------------------------------
price  per  share less than the applicable Fixed Conversion Price then in effect
or  without  consideration, then the applicable Fixed Conversion Price upon each
such  issuance  shall  be  adjusted  to that price (rounded to the nearest cent)
determined  by  multiplying the applicable Fixed Conversion Price then in effect
by  a  fraction:
     (1)     the  numerator of which shall be equal to the sum of (A) the number
of  shares of Common Stock outstanding immediately prior to the issuance of such
Additional  Shares of Common Stock plus (B) the number of shares of Common Stock
                                   ----
(rounded  to  the nearest whole share) which the aggregate consideration for the
total  number of such Additional Shares of Common Stock so issued would purchase
at  a  price  per  share  equal to the applicable Fixed Conversion Price then in
effect,  and
(2)     the  denominator  of  which  shall  be  equal to the number of shares of
Common  Stock  outstanding  immediately  after  the  issuance of such Additional
Shares  of  Common  Stock.
The  provisions  of  this  subsection  (vi)  shall  not  apply  under any of the
circumstances  for  which  an  adjustment  is provided in subsections (i), (ii),
(iii),  (iv)  or  (v)  of  this Section 3.6(a).  No adjustment of the applicable
Fixed  Conversion  Price  shall  be  made under this subsection (a)(iv) upon the
issuance  of  any Additional Shares of Common Stock which are issued pursuant to
any  Common  Stock  Equivalent  (as  defined below) if upon the issuance of such
Common  Stock  Equivalent  (x)  any  adjustment shall have been made pursuant to
subsection  (vii)  of  this  Section  3.6(a)  or  (y) no adjustment was required
pursuant  to  subsection  (vii)  of  this  Section 3.6(a).  No adjustment of the
applicable Fixed Conversion Price shall be made under this subsection (vi) in an
amount  less  than  $.005  per  share,  but  any such lesser adjustment shall be
carried  forward  and  shall  be  made  at  the  time and together with the next
subsequent  adjustment,  if  any, which together with any adjustments so carried
forward  shall  amount  to  $.005  per  share  or  more;  provided that upon any
                                                          --------
adjustment  of the applicable Fixed Conversion Price as a result of any dividend
or  distribution  payable  in Common Stock or Convertible Securities (as defined
below)  or the reclassification, subdivision or combination of Common Stock into
a  greater  or smaller number of shares, the foregoing figure of $.005 per share
(or  such  figure  as  last adjusted) shall be adjusted (to the nearest one-half
cent)  in proportion to the adjustment in the applicable Fixed Conversion Price.
     (vii)     Issuance  of Common Stock Equivalents.  If the Maker, at any time
               -------------------------------------
after  the  Issuance  Date,  shall  issue  any  securities  convertible  into or
exchangeable  for,  directly  or  indirectly,  Common  Stock  ("Convertible
                                                                -----------
Securities"),  other  than  this  Note,  or any rights or warrants or options to
purchase  any  such  Common  Stock or Convertible Securities, shall be issued or
sold  (collectively, the "Common Stock Equivalents") and the price per share for
                          ------------------------
which  Additional  Shares of Common Stock may be issuable thereafter pursuant to
such  Common Stock Equivalent shall be less than the applicable Fixed Conversion
Price  then  in  effect,  or  if,  after  any  such  issuance  of  Common  Stock
Equivalents, the price per share for which Additional Shares of Common Stock may
be  issuable  thereafter  is  amended  or adjusted, and such price as so amended
shall  be  less than the applicable Fixed Conversion Price in effect at the time
of  such  amendment,  then  the applicable Fixed Conversion Price upon each such
issuance  or  amendment  shall  be adjusted as provided in the first sentence of
subsection  (vi) of this Section 3.6(a) on the basis that (1) the maximum number
of  Additional Shares of Common Stock issuable pursuant to all such Common Stock
Equivalents  shall  be  deemed  to  have been issued (whether or not such Common
Stock  Equivalents are actually then exercisable, convertible or exchangeable in
whole  or  in  part)  as of the earlier of (A) the date on which the Maker shall
enter  into a firm contract for the issuance of such Common Stock Equivalent, or
(B)  the  date  of  actual issuance of such Common Stock Equivalent, and (2) the
aggregate  consideration  for such maximum number of Additional Shares of Common
Stock  shall be deemed to be the minimum consideration received or receivable by
the Maker for the issuance of such Additional Shares of Common Stock pursuant to
such  Common Stock Equivalent.  No adjustment of the applicable Fixed Conversion
Price  shall  be  made  under  this  subsection  (vii)  upon the issuance of any
Convertible Security which is issued pursuant to the exercise of any warrants or
other  subscription  or  purchase  rights  therefor,  if  any  adjustment  shall
previously  have been made to the exercise price of such warrants then in effect
upon  the  issuance of such warrants or other rights pursuant to this subsection
(vii).  If  no  adjustment is required under this subsection (vii) upon issuance
of  any  Common  Stock  Equivalent  or  once  an  adjustment  is made under this
subsection  (vii) based upon the Per Share Market Value in effect on the date of
such adjustment, no further adjustment shall be made under this subsection (vii)
based  solely  upon  a  change  in  the  Per Share Market Value after such date.
(viii)     Consideration  for  Stock.  In case any shares of Common Stock or any
           -------------------------
Common  Stock  Equivalents  shall  be  issued  or  sold:
(1)     in connection with any merger or consolidation in which the Maker is the
surviving  corporation  (other  than  any  consolidation  or merger in which the
previously  outstanding  shares of Common Stock of the Maker shall be changed to
or  exchanged  for  the  stock  or other securities of another corporation), the
amount  of  consideration  therefore  shall  be, deemed to be the fair value, as
determined  reasonably and in good faith by the Board of Directors of the Maker,
of  such  portion  of the assets and business of the nonsurviving corporation as
such  Board  may  determine  to  be attributable to such shares of Common Stock,
Convertible  Securities,  rights  or warrants or options, as the case may be; or
(2)     in  the  event  of any consolidation or merger of the Maker in which the
Maker  is  not  the surviving corporation or in which the previously outstanding
shares  of  Common Stock of the Maker shall be changed into or exchanged for the
stock or other securities of another corporation, or in the event of any sale of
all  or  substantially  all  of  the  assets  of  the  Maker  for stock or other
securities of any corporation, the Maker shall be deemed to have issued a number
of  shares  of its Common Stock for stock or securities or other property of the
other  corporation  computed  on the basis of the actual exchange ratio on which
the transaction was predicated, and for a consideration equal to the fair market
value  on  the date of such transaction of all such stock or securities or other
property  of  the  other  corporation.  If  any  such  calculation  results  in
adjustment  of the applicable Fixed Conversion Price, or the number of shares of
Common  Stock  issuable  upon  conversion of the Notes, the determination of the
applicable  Fixed  Conversion  Price  or  the  number  of shares of Common Stock
issuable  upon  conversion  of  the  Notes  immediately  prior  to  such merger,
consolidation  or  sale, shall be made after giving effect to such adjustment of
the  number  of  shares  of  Common Stock issuable upon conversion of the Notes.
     (b)     Record Date.  In case the Maker shall take record of the holders of
             -----------
its  Common Stock for the purpose of entitling them to subscribe for or purchase
Common  Stock  or  Convertible Securities, then the date of the issue or sale of
the  shares  of  Common  Stock  shall  be  deemed  to  be  such  record  date.
          (c)     Certain  Issues  Excepted.  Anything  herein  to  the contrary
                  -------------------------
notwithstanding,  the  Maker shall not be required to make any adjustment of the
number  of shares of Common Stock issuable upon conversion of the Notes upon the
grant  after  the  Issuance Date of, or the exercise after the Issuance Date of,
options or warrants or rights to purchase stock under the Maker's existing stock
option  plan  or  options  or  warrants  or  rights  to purchase stock issued to
officers  and/or  directors  of  the  Company.
          (d)     No  Impairment.  The  Maker  shall  not,  by  amendment of its
                  --------------
Certificate  of Incorporation or through any reorganization, transfer of assets,
consolidation,  merger,  dissolution,  issue  or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the  terms  to  be observed or performed hereunder by the Maker, but will at all
times  in  good  faith, assist in the carrying out of all the provisions of this
Section  3.6  and  in  the  taking  of  all  such  action as may be necessary or
appropriate  in  order  to  protect  the Conversion Rights of the Holder against
impairment.  In  the event a Holder shall elect to convert any Notes as provided
herein,  the  Maker cannot refuse conversion based on any claim that such Holder
or  any  one  associated  or affiliated with such Holder has been engaged in any
violation  of  law, violation of an agreement to which such Holder is a party or
for  any  reason  whatsoever,  unless,  an  injunction  from a court, on notice,
restraining  and or adjoining conversion of all or of said Notes shall have been
issued  and  the  Maker posts a surety bond for the benefit of such Holder in an
amount  equal  to  130%  of  the  amount  of the Notes the Holder has elected to
convert  plus  the  amount  of the Notes outstanding, which bond shall remain in
effect  until  the  completion  of arbitration/litigation of the dispute and the
proceeds  of  which  shall  be  payable  to  such Holder in the event it obtains
judgment.
     (e)     Certificates as to Adjustments.  Upon occurrence of each adjustment
             ------------------------------
or  readjustment  of  the  Fixed  Conversion Price or number of shares of Common
Stock  issuable  upon  conversion of this Note pursuant to this Section 3.6, the
Maker  at  its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Holder a certificate setting
forth  such  adjustment and readjustment, showing in detail the facts upon which
such adjustment or readjustment is based.  The Maker shall, upon written request
of  the  Holder,  at any time, furnish or cause to be furnished to such holder a
like  certificate  setting  forth  such  adjustments  and  readjustments,  the
applicable  Fixed  Conversion  Price  in  effect  at the time, and the number of
shares  of  Common Stock and the amount, if any, of other securities or property
which  at  the  time  would  be  received  upon  the  conversion  of  this Note.
Notwithstanding  the  foregoing,  the  Maker shall not be obligated to deliver a
certificate  unless such certificate would reflect an increase or decrease of at
least  one  percent  (1%)  of  such  adjusted  amount.
(f)     Issue  Taxes.  The  Maker  shall  pay any and all issue and other taxes,
        ------------
excluding  federal,  state or local income taxes, that may be payable in respect
of  any  issue  or delivery of shares of Common Stock on conversion of this Note
pursuant  thereto;  provided,  however, that the Maker shall not be obligated to
                    --------   -------
pay  any  transfer  taxes resulting from any transfer requested by any holder in
connection  with  any  such  conversion.
(g)     Fractional Shares.  No fractional shares of Common Stock shall be issued
        -----------------
upon  conversion  of  this  Note.  In lieu of any fractional shares to which the
Holder  would  otherwise  be  entitled,  the  Maker  shall pay cash equal to the
product  of  such  fraction  multiplied  by  the average of the Per Share Market
Values of the Common Stock for the five (5) consecutive Trading Days immediately
preceding  the  Conversion  Date.
(h)     Reservation  of  Common  Stock.  The  Maker shall at all times when this
        ------------------------------
Note  shall be outstanding, reserve and keep available out of its authorized but
unissued  Common  Stock, such number of share of Common Stock as shall from time
to  time  be  sufficient  to effect the conversion of this Note and all interest
accrued  thereon; provided that the number of shares of Common Stock so reserved
                  --------
shall  at  no time be less than 150% of the number of shares of Common Stock for
which  this  Note  and all interest accrued thereon are at any time convertible.
The  Maker  shall,  from  time  to  time in accordance with the Delaware General
Corporation  Law, as amended, increase the authorized number of shares of Common
Stock  if  at  any  time  the  unissued number of authorized shares shall not be
sufficient  to  satisfy  the  Maker's  obligations  under  this  Section 3.6(h).
     (i)     -Regulatory  Compliance.  If  any  shares  of  Common  Stock  to be
              ----------------------
reserved  for  the  purpose  of  conversion of this Note or any interest accrued
thereon  require  registration  or  listing with or approval of any governmental
authority,  stock  exchange  or other regulatory body under any federal or state
law  or  regulation  or  otherwise  before  such shares may be validly issued or
delivered  upon  conversion,  the  Maker shall, at its sole cost and expense, in
good  faith  and  as  expeditiously  as  possible,  endeavor  to  secure  such
registration,  listing  or  approval,  as  the  case  may  be.
     Section  3.7     Prepayment.
     (a)     Prepayment  Upon  an Event of Default.  Notwithstanding anything to
             -------------------------------------
the  contrary  contained  herein,  upon  the  occurrence  of an Event of Default
described  in  Sections  2.1(c)-(k)  hereof, the Holder shall have the right, at
such  Holder's  option,  to require the Maker to prepay all or a portion of this
Note  at  a price equal to Prepayment Price (as defined in Section 3.7(c) below)
applicable  at  the  time of such request.  Nothing in this Section 3.7(a) shall
limit  the  Holder's  rights  under  Section  2.2  hereof.
     (b)     Prepayment Option Upon Major Transaction.  In addition to all other
rights  of  the  holders  of  the  Notes contained herein, simultaneous with the
occurrence  of  a Major Transaction (as defined below), each holder of the Notes
shall  have  the  right, at such holder's option, to require the Maker to prepay
all  or  a portion of such holder's Notes at a price equal to the greater of (i)
115%  of the aggregate principal amount of the Notes and (ii) the product of (A)
the  Conversion  Rate  and (B) the Per Share Market Value of the Common Stock on
the Trading Day immediately preceding such Major Transaction ("Major Transaction
Prepayment  Price").
(c)     Prepayment  Option  Upon  Triggering  Event.  In  addition  to all other
rights  of  the  holders of the Notes contained herein, after a Triggering Event
(as  defined  below),  each  holder  of  the Notes shall have the right, at such
holder's  option,  to  require  the  Maker  to  prepay  all or a portion of such
holder's  Notes  at  a  price  equal to the greater of (i) 130% of the aggregate
principal amount of the Notes and (ii) the product of (A) the Conversion Rate at
such  time  and (B) the Per Share Market Value of the Common Stock calculated as
of the date immediately preceding such Triggering Event on which the exchange or
market on which the Common Stock is traded is open ("Triggering Event Prepayment
Price"  and,  collectively  with  "Major  Transaction  Prepayment  Price,"  the
"Prepayment  Price").
(d)     "Major  Transaction."  A  "Major  Transaction"  shall  be deemed to have
occurred  at  such  time  as  any  of  the  following  events:
     (i)     the  consolidation,  merger  or  other  business combination of the
Maker  with  or  into  another Person (as defined in Section 4.13 hereof) (other
than  (A)  pursuant  to  a  migratory  merger effected solely for the purpose of
changing  the jurisdiction of incorporation of the Maker or (B) a consolidation,
merger  or  other  business  combination  in which holders of the Maker's voting
power  immediately  prior  to  the transaction continue after the transaction to
hold,  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).
(ii)     the sale or transfer of all or substantially all of the Maker's assets;
or
(iii)     consummation  of  a  purchase,  tender  or  exchange offer made to the
holders  of  more  than  30%  of  the  outstanding  shares  of  Common  Stock.
     (e)     "Triggering  Event."  A  "Triggering Event" shall be deemed to have
occurred  at  such  time  as  any  of  the  following  events:
     (i)     the  failure of the Registration Statement to be declared effective
by  the  SEC  on  or prior to the date which is 270 days after the Closing Date,
provided  that  the  Maker  has  failed to file the Registration Statement on or
   -----
before  the  Filing  Date  (as  defined in the Registration Rights Agreement) or
   -
respond  to  any  and each of the SEC's comments within fifteen (15) days of the
   -
Maker's  receipt  of  each  of  the  SEC's  comments;
(ii)     while the Registration Statement is required to be maintained effective
pursuant to the terms of the Registration Rights Agreement, the effectiveness of
the Registration Statement lapses for any reason (including, without limitation,
the  issuance  of a stop order) or is unavailable to the holder of the Notes for
sale  of  the  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
Trading  Days, provided that the cause of such lapse or unavailability is due to
               --------
factors within the control of the Maker and not due to factors solely within the
control  of  such  holder  of  the  Notes;
(iii)     the  suspension  from trading or the failure of the Common Stock to be
traded  on  the  OTC  Bulletin  Board for a period of five (5) consecutive days,
provided,  that  such  suspension from listing or failure to be listed is due to
    ----
factors  within the control of the Maker, including, but not limited to, failure
to  timely file all reports required to be filed with the SEC or to meet the net
tangible  assets  requirements  for  listing,  if  any;
(iv)     the  Maker's  notice  to  any  holder of the Notes, including by way of
public  announcement, at any time, of its inability to comply (including for any
of  the  reasons  described  in Section 3.8) or its intention not to comply with
proper  requests for conversion of any of the Notes into shares of Common Stock;
(v)     the  Maker's  failure to comply with a Conversion Notice tendered within
ten  (10)  business days after the receipt by the Maker of the Conversion Notice
and  the  certificates  representing  the  Notes;  or
(vi)     the Maker breaches any representation, warranty, covenant or other term
or condition of the Purchase Agreement, the Registration Rights Agreement or any
other  agreement,  document,  certificate  or  other  instrument  delivered  in
connection  with  the  transactions  contemplated  thereby  or  hereby.
     (f)     Mechanics  of Prepayment at Option of Buyer Upon Major Transaction.
No  sooner  than  fifteen  (15)  days  nor later than ten (10) days prior to the
consummation of a Major Transaction, but not prior to the public announcement of
such  Major  Transaction,  the  Maker  shall  deliver written notice thereof via
facsimile  and  overnight courier ("Notice of Major Transaction") to each holder
of  the  Notes.  At any time after receipt of a Notice of Major Transaction (or,
in  the  event  a Notice of Major Transaction is not delivered at least ten (10)
days  prior  to a Major Transaction, at any time within ten (10) days prior to a
Major  Transaction),  any  holder  of the Notes then outstanding may require the
Maker  to  prepay, effective immediately prior to the consummation of such Major
Transaction,  all  of  the holder's Notes then outstanding by delivering written
notice  thereof  via  facsimile  and overnight courier ("Notice of Prepayment at
Option  of  Buyer  Upon  Major  Transaction")  to  the  Maker,  which  Notice of
Prepayment  at  Option  of  Buyer  Upon Major Transaction shall indicate (i) the
number  of  Notes that such holder is electing to prepay and (ii) the applicable
Major  Transaction  Prepayment  Price,  as calculated pursuant to Section 3.7(b)
above.
(g)     Mechanics  of  Prepayment  at  Option  of  Buyer  Upon Triggering Event.
Within  one  (1) day after the occurrence of a Triggering Event, the Maker shall
deliver  written  notice thereof via facsimile and overnight courier ("Notice of
Triggering  Event")  to each holder of the Notes.  At any time after the earlier
of  a  holder's receipt of a Notice of Triggering Event and such holder becoming
aware  of  a  Triggering  Event,  any  holder  of the Notes then outstanding may
require  the  Maker  to  prepay  all  of  the Notes by delivering written notice
thereof  via facsimile and overnight courier ("Notice of Prepayment at Option of
Buyer Upon Triggering Event") to the Maker, which Notice of Prepayment at Option
of  Buyer Upon Triggering Event shall indicate (i) the number of Notes that such
holder is electing to prepay and (ii) the applicable Triggering Event Prepayment
Price,  as  calculated  pursuant  to  Section  3.7(c)  above.
(h)     Payment of Prepayment Price.  Upon the Maker's receipt of a Notice(s) of
Prepayment at Option of Buyer Upon Triggering Event or a Notice(s) of Prepayment
at  Option  of  Buyer  Upon  Major Transaction from any holder of the Notes, the
Maker  shall  immediately  notify  each  holder of the Notes by facsimile of the
Maker's  receipt  of  such  Notice(s)  of  Prepayment  at  Option  of Buyer Upon
Triggering  Event  or  Notice(s)  of  Prepayment  at  Option of Buyer Upon Major
Transaction  and  each holder which has sent such a notice shall promptly submit
to the Maker such holder's certificates representing the Notes which such holder
has  elected to have prepaid.  The Maker shall deliver the applicable Triggering
Event  Prepayment Price, in the case of a prepayment pursuant to Section 3.7(g),
to  such  holder  within  five  (5) business days after the Maker's receipt of a
Notice  of  Prepayment at Option of Buyer Upon Triggering Event and, in the case
of  a  prepayment  pursuant  to  Section  3.7(f),  the  Maker  shall deliver the
applicable  Major  Transaction  Prepayment  Price  immediately  prior  to  the
consummation  of  the  Major  Transaction; provided that a holder's certificates
representing  the  Notes  shall  have  been  so delivered to the Maker; provided
further  that  if  the Maker is unable to prepay all of the Notes to be prepaid,
the  Maker  shall  prepay  an amount from each holder of the Notes being prepaid
equal  to  such  holder's  pro-rata amount (based on the number of Notes held by
such  holder  relative  to  the  number of Notes outstanding) of all Notes being
prepaid.  If  the  Maker  shall  fail  to  prepay all of the Notes submitted for
prepayment (other than pursuant to a dispute as to the arithmetic calculation of
the  Prepayment  Price),  in addition to any remedy such holder of the Notes may
have under this Note and the Purchase Agreement, the applicable Prepayment Price
payable  in respect of such Notes not prepaid shall bear interest at the rate of
2.0%  per  month  (prorated  for  partial months) until paid in full.  Until the
Maker  pays  such  unpaid applicable Prepayment Price in full to a holder of the
Notes  submitted  for  prepayment,  such holder shall have the option (the "Void
Optional  Prepayment  Option")  to,  in lieu of prepayment, require the Maker to
promptly  return  to  such  holder(s)  all  of the Notes that were submitted for
prepayment by such holder(s) under this Section 3.7 and for which the applicable
Prepayment  Price  has  not  been paid, by sending written notice thereof to the
Maker  via facsimile (the "Void Optional Prepayment Notice").   Upon the Maker's
receipt  of  such Void Optional Prepayment Notice(s) and prior to payment of the
full applicable Prepayment Price to such holder, (i) the Notice(s) of Prepayment
at  Option  of  Buyer  Upon  Triggering  Event or the Notice(s) of Prepayment at
Option  of  Buyer  Upon Major Transaction, as the case may be, shall be null and
void  with  respect  to  those  Notes submitted for prepayment and for which the
applicable  Prepayment Price has not been paid, (ii) the Maker shall immediately
return any Notes submitted to the Maker by each holder for prepayment under this
Section  3.7(h)  and for which the applicable Prepayment Price has not been paid
and  (iii)  the Conversion Price of such returned Notes shall be adjusted to the
lesser  of  (A)  the Conversion Price as in effect on the date on which the Void
Optional  Prepayment  Notice(s) is delivered to the Maker and (B) the lowest Per
Share  Market  Value  during  the  period  beginning  on  the  date on which the
Notice(s)  of  Prepayment  of  Option  of  Buyer  Upon  Major Transaction or the
Notice(s)  of  Prepayment  at Option of Buyer Upon Triggering event, as the case
may  be,  is  delivered  to  the  Maker and ending on the date on which the Void
Optional  Prepayment  Notice(s)  is  delivered  to  the  Maker; provided that no
adjustment  shall  be made if such adjustment would result in an increase of the
Conversion  Price  then  in  effect.  A  holder's  delivery  of  a Void Optional
Prepayment  Notice  and  exercise  of its rights following such notice shall not
effect  the Maker's obligations to make any payments which have accrued prior to
the  date  of such notice.  Payments provided for in this Section 3.7 shall have
priority  to  payments  to  other  stockholders  in  connection  with  a  Major
Transaction.
     SECTION  3.8     INABILITY  TO  FULLY  CONVERT.
                      -----------------------------
     (a)     Holder's  Option  if  Maker  Cannot  Fully  Convert.  If,  upon the
             ---------------------------------------------------
Maker's  receipt of a Conversion Notice, the Maker cannot issue shares of Common
Stock  registered  for  resale  under the Registration Statement for any reason,
including,  without limitation, because the Maker (w) does not have a sufficient
number  of  shares  of  Common  Stock authorized and available, (x) is otherwise
prohibited  by  applicable  law  or  by  the  rules  or regulations of any stock
exchange,  interdealer  quotation  system  or other self-regulatory organization
with  jurisdiction  over  the Maker or any of its securities from issuing all of
the  Common  Stock  which is to be issued to the Holder pursuant to a Conversion
Notice  or  (y)  fails  to  have  a  sufficient number of shares of Common Stock
registered  for  resale  under  the Registration Statement, then the Maker shall
issue  as  many shares of Common Stock as it is able to issue in accordance with
the  Holder's  Conversion Notice and, with respect to the unconverted portion of
the  Note,  the  Holder,  solely  at  Holder's  option,  can  elect  to:
(i)     require the Maker to prepay that portion of the Note for which the Maker
     is  unable to issue Common Stock in accordance with the Holder's Conversion
Notice (the "Mandatory Prepayment") at a price per share equal to the Prepayment
             --------------------
Price  as  of  such  Conversion  Date  (the  "Mandatory  Prepayment  Price");
                                              ----------------------------
     if  the Maker's inability to fully convert is pursuant to Section 3.8(a)(y)
above, require the Maker to issue restricted shares of Common Stock equal to one
hundred  twenty percent (120%) of the number of shares of Common Stock the Maker
is  unable  to  deliver  in  accordance  with  such  holder's Conversion Notice;
void  its Conversion Notice and retain or have returned, as the case may be, the
Note  that  was to be converted pursuant to the Conversion Notice (provided that
the  Holder's  voiding  its  Conversion  Notice  shall  not  effect  the Maker's
obligations  to  make  any payments which have accrued prior to the date of such
notice).
     (b)     Mechanics  of  Fulfilling  Holder's  Election.  The  Maker  shall
             ---------------------------------------------
immediately  send  via facsimile to the Holder, upon receipt of a facsimile copy
of  a  Conversion  Notice  from  the  Holder  which cannot be fully satisfied as
described  in  Section  3.8(a) above, a notice of the Maker's inability to fully
satisfy  the  Conversion Notice (the "Inability to Fully Convert Notice").  Such
                                      ---------------------------------
Inability to Fully Convert Notice shall indicate (i) the reason why the Maker is
unable  to fully satisfy such holder's Conversion Notice, (ii) the amount of the
Note  which  cannot  be  converted and (iii) the applicable Mandatory Prepayment
Price.  The  Holder  shall  notify the Maker of its election pursuant to Section
3.8(a) above by delivering written notice via facsimile to the Maker ("Notice in
                                                                       ---------
Response  to  Inability  to  Convert").
------------------------------------
(c)     Payment  of  Prepayment  Price.  If  the  Holder shall elect to have its
        ------------------------------
shares  prepaid  pursuant  to  Section  3.8(a)(i) above, the Maker shall pay the
Mandatory  Prepayment  Price  in  cash to the Holder within five (5) days of the
Maker's  receipt  of  the  Holder's  Notice in Response to Inability to Convert,
provided that prior to the Maker's receipt of the Holder's Notice in Response to
    ----
Inability to Convert the Maker has not delivered a notice to the Holder stating,
to  the satisfaction of the Holder, that the event or condition resulting in the
Mandatory  Prepayment  has  been cured and all Conversion Shares issuable to the
Holder  can  and will be delivered to the Holder in accordance with the terms of
this  Note.  If  the Maker shall fail to pay the applicable Mandatory Prepayment
Price to the Holder on a timely basis as described in this Section 3.8(c) (other
than pursuant to a dispute as to the determination of the arithmetic calculation
of  the  Prepayment  Price), in addition to any remedy the Holder may have under
this  Note and the Purchase Agreement, such unpaid amount shall bear interest at
the  rate  of  2.0%  per month (prorated for partial months) until paid in full.
Until  the  full  Mandatory  Prepayment Price is paid in full to the Holder, the
Holder may (i) void the Mandatory Prepayment with respect to that portion of the
Note  for  which  the  full  Mandatory  Prepayment Price has not been paid, (ii)
receive  back  such  Note,  and  (iii) require that the Conversion Price of such
returned Note be adjusted to the lesser of (A) the Conversion Price as in effect
on  the  date  on  which  the Holder voided the Mandatory Prepayment and (B) the
lowest Per Share Market Value during the period beginning on the Conversion Date
and  ending  on  the  date  the  Holder  voided  the  Mandatory  Prepayment.
     Section  3.9     No  Rights as Shareholder.  Nothing contained in this Note
shall  be  construed  as  conferring upon the Holder, prior to the conversion of
this Note, the right to vote or to receive dividends or to consent or to receive
notice  as  a  shareholder  in  respect  of  any meeting of shareholders for the
election  of  directors of the Maker or of any other matter, or any other rights
as  a  shareholder  of the Maker.  Upon the issuance of a Conversion Notice, the
Holder  shall  have  all  rights  as  a  shareholder  of  the  Maker.
-MISCELLANEOUS
     -Notices.  Any  notice,  demand,  request,  waiver  or  other communication
required  or  permitted  to  be given hereunder shall be in writing and shall be
effective  (a)  upon hand delivery by telex (with correct answer back received),
telecopy  or  facsimile  at  the  address  or  number designated in the Purchase
Agreement  (if  delivered  on  a business day during normal business hours where
such  notice  is  to  be  received),  or  the  first business day following such
delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such
address,  or  upon  actual receipt of such mailing, whichever shall first occur.
The Maker will give written notice to the Holder at least twenty (20) days prior
to  the  date  on  which  the  Maker closes its books or takes a record (x) with
respect  to any dividend or distribution upon the Common Stock, (y) with respect
to  any  pro  rata  subscription  offer  to  holders  of Common Stock or (z) for
determining  rights  to  vote  with  respect to any Organic Change, dissolution,
liquidation  or winding-up and in no event shall such notice be provided to such
holder prior to such information being made known to the public.  The Maker will
also  give  written  notice to the Holder at least twenty (20) days prior to the
date  on  which  any Organic Change, dissolution, liquidation or winding-up will
take  place and in no event shall such notice be provided to the Holder prior to
such  information  being  made  known  to  the  public.
Governing  Law.  This Note shall be governed by and construed in accordance with
the  internal laws of the State of New York, without giving effect to the choice
of  law  provisions.  This  Note  shall not be interpreted or construed with any
presumption  against  the  party  causing  this  Note  to  be  drafted.
-Headings.  Article  and  section  headings in this Note are included herein for
purposes  of  convenience  of  reference only and shall not constitute a part of
this  Note  for  any  other  purpose.
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,
without  limitation,  a  decree  of specific performance and/or other injunctive
relief),  no remedy contained herein shall be deemed a waiver of compliance with
the  provisions  giving  rise  to  such  remedy and nothing herein shall limit a
holder's  right  to pursue actual damages for any failure by the Maker to comply
with  the  terms  of  this  Note.  Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall
be  the  amounts  to  be received by the holder thereof and shall not, except as
expressly  provided  herein, be subject to any other obligation of the Maker (or
the  performance  thereof).  The  Maker  acknowledges that a breach by it of its
obligations hereunder will cause irreparable and material harm to the Holder and
that  the  remedy  at  law  for any such breach may be inadequate. Therefore the
Maker  agrees  that,  in  the event of any such breach or threatened breach, the
Holder  shall  be  entitled,  in  addition  to  all  other  available rights and
remedies,  at  law  or  in  equity,  to  seek  and obtain such equitable relief,
including  but  not  limited  to  an  injunction  restraining any such breach or
threatened  breach,  without  the necessity of showing economic loss and without
any  bond  or  other  security  being  required.
-Enforcement  Expenses.  The  Maker  agrees  to  pay  all  costs and expenses of
enforcement  of  this Note, including, without limitation, reasonable attorneys'
fees  and  expenses.
-Binding  Effect.   The obligations of the Maker and the Holder set forth herein
shall  be binding upon the successors and assigns of each such party, whether or
not  such  successors  or  assigns  are  permitted  by  the  terms  hereof.
-Amendments.  This  Note  may not be modified or amended in any manner except in
writing  executed  by  the  Maker  and  the  Holder.
-Compliance  with  Securities  Laws.  The  Holder of this Note acknowledges that
this  Note  is  being  acquired solely for the Holder's own account and not as a
nominee  for  any other party, and for investment, and that the Holder shall not
offer, sell or otherwise dispose of this Note.  This Note and any Note issued in
substitution  or  replacement  therefore  shall  be  stamped or imprinted with a
legend  in  substantially  the  following  form:
" THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE  "ACT"),  OR  APPLICABLE  STATE  SECURITIES  LAWS,  AND  MAY  NOT  BE SOLD,
TRANSFERRED,  PLEDGED  OR  HYPOTHECATED  IN  THE ABSENCE OF SUCH REGISTRATION OR
RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE REASONABLY
ACCEPTABLE  TO  THE  MAKER)  IN  THE  FORM,  SUBSTANCE  AND  SCOPE  REASONABLY
SATISFACTORY  TO THE MAKER THAT THIS NOTE MAY BE SOLD, TRANSFERRED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
SUCH  STATE  SECURITIES  LAWS."
-Consent  to  Jurisdiction.  Each  of  the  Maker  and  the  Holder  (i)  hereby
irrevocably  submits to the exclusive jurisdiction of the United States District
Court  sitting  in the Southern District of New York and the courts of the State
of  New  York located in New York county for the purposes of any suit, action or
proceeding  arising  out of or relating to this Note and (ii) hereby waives, and
agrees  not  to assert in any such suit, action or proceeding, any claim that it
is  not  personally  subject  to  the jurisdiction of such court, that the suit,
action  or  proceeding  is brought in an inconvenient forum or that the venue of
the  suit,  action  or proceeding is improper.  Each of the Maker and the Holder
consents  to  process  being  served  in  any such suit, action or proceeding by
mailing  a copy thereof to such party at the address in effect for notices to it
under  the Purchase Agreement and agrees that such service shall constitute good
and  sufficient  service of process and notice thereof.  Nothing in this Section
4.9  shall  affect  or  limit  any  right  to  serve process in any other manner
permitted  by  law.
     -Parties  in  Interest.  This  Note  shall  be  binding  upon, inure to the
benefit  of  and  be  enforceable  by the Maker, the Holder and their respective
successors  and  permitted  assigns.
-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.
-Maker Waivers.  Except as otherwise specifically provided herein, the Maker and
all  others  that  may  become  liable  for  all  or any part of the obligations
evidenced  by this Note, hereby waive presentment, demand, notice of nonpayment,
protest  and  all  other  demands'  and notices in connection with the delivery,
acceptance,  performance  and enforcement of this Note, and do hereby consent to
any  number  of  renewals  of extensions of the time or payment hereof and agree
that  any  such  renewals  or  extensions may be made without notice to any such
persons  and  without affecting their liability herein and do further consent to
the  release of any person liable hereon, all without affecting the liability of
the  other  persons,  firms or Maker liable for the payment of this Note, AND DO
HEREBY  WAIVE  TRIAL  BY  JURY.
No  delay  or  omission on the part of the Holder in exercising its rights under
this  Note,  or  course of conduct relating hereto, shall operate as a waiver of
such rights or any other right of the Holder, nor shall any waiver by the Holder
of  any  such right or rights on any one occasion be deemed a waiver of the same
right  or  rights  on  any  future  occasion.
THE  MAKER  ACKNOWLEDGES  THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A
COMMERCIAL  TRANSACTION,  AND  TO  THE  EXTENT ALLOWED BY APPLICABLE LAW, HEREBY
WAIVES  ITS  RIGHT  TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY
WHICH  THE  HOLDER  OR  ITS  SUCCESSORS  OR  ASSIGNS  MAY  DESIRE  TO  USE.
     Section 4.13     Definitions.  For the purposes hereof, the following terms
                      -----------
shall  have  the  following  meanings:
     "Independent  Appraiser"  means  a  nationally recognized or major regional
      ----------------------
investment  banking  firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements  of  the  Issuer)  that  is  regularly  engaged  in  the  business of
appraising  the  Capital  Stock  or  assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the Holder
of  any  Warrant.
     "Person"  means  an  individual  or  a  corporation,  partnership,  trust,
      ------
incorporated  or  unincorporated  association,  joint venture, limited liability
      --
company,  joint stock company, government (or an agency or political subdivision
thereof)  or  other  entity  of  any  kind.
      "Trading  Day"  means (a) a day on which the Common Stock is traded on The
       ------------
Nasdaq Small-Cap Market, the Nasdaq National Market or other registered national
stock  exchange  on which the Common Stock has been listed, or (b) if the Common
Stock  is  not listed on The Nasdaq Small-Cap Market, the Nasdaq National Market
or  any  registered  national stock exchange, a day or which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or
(c)  if the Common Stock is not quoted on the OTC Bulletin Board, a day on which
the  Common  Stock  is  quoted in the over-the-counter market as reported by the
National  Quotation  Bureau  Incorporated (or any similar organization or agency
succeeding  its  functions  of reporting prices); provided, however, that in the
                                                  --------  -------
event that the Common Stock is not listed or quoted as set forth in (a), (b) and
(c)  hereof, then Trading Day shall mean any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State  of  New York are authorized or required by law or other government action
to  close.
     IMAGING  TECHNOLOGIES  CORPORATION
By:  ______________________________
             Name:  Brian  Bonar
             Title:   Chief  Executive  Officer

<PAGE>

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