Document:

Exhibit 10.2

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    

    THIS
      REGISTRATION RIGHTS AGREEMENT, is by and between WPCS International
      Incorporated, a Delaware corporation (the "Company"), and Daniel G. Lester,
      Christopher P. Lester, Michael D. Lester, Thomas A. Lester, Karl F. Eickemeyer
      and Anthony Ankersmit (individually a "Holder" and collectively the
      "Holders").

    

    WHEREAS,
      pursuant to a Stock Purchase Agreement between the Company, Southeastern
      Communication Service, Inc., a Florida corporation, and the Holders, dated
      as of
      the date hereof (the “Acquisition Agreement”), the Company issued to the Holders
      an aggregate of 10,000 shares of class A common stock, $.01 par value and 40,000
      shares of class B common stock, $.01 par value of the Company (the “Common
      Stock”); and

    

    WHEREAS,
      pursuant to the terms of and in order to induce the Holders to enter into the
      Acquisition Agreement, the Company and the Holders have agreed to enter into
      this Agreement;

    

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants contained
      herein, the Company and the Holders hereby agree as follows:

    

    1. Mandatory
      Registration.
      The
      Company shall file a registration statement with the Securities and Exchange
      Commission (the “SEC”) which seeks to register the shares of Common Stock
      issuable to the Holders upon consummation of the Acquisition Agreement (the
      "Registerable Securities") under the Securities Act of 1933 (the “1933 Act”), no
      later than thirty (30) days after the final closing date of the Acquisition
      Agreement. The Company will use its best efforts to cause such registration
      statement to be declared effective by the SEC within one hundred twenty (120)
      days after the initial filing with the SEC.

    

    2. Cooperation
      with Company.
      The
      Holders will cooperate with the Company in all respects in connection with
      this
      Agreement, including, timely supplying all information reasonably requested
      by
      the Company and executing and returning all documents reasonably requested
      in
      connection with the registration and sale of the Registerable Securities, at
      no
      expense to the Holders.

    

    3. Registration
      Procedures.
      If and
      whenever the Company is required by any of the provisions of this Agreement
      to
      use its best efforts to effect the registration of any of the Registerable
      Securities under the 1933 Act, the Company shall (except as otherwise provided
      in this Agreement), as expeditiously as possible:

    

    a. prepare
      and file with the SEC a registration statement and shall use its best efforts
      to
      cause such registration statement to become effective and remain effective
      until
      all the Registerable Securities are sold or become capable of being publicly
      sold without registration under the 1933 Act.

    

    b. prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection therewith as may be necessary
      to
      keep such registration statement effective and to comply with the provisions
      of
      the 1933 Act with respect to the sale or other disposition of all securities
      covered by such registration statement whenever the Holder or Holders of such
      securities shall desire to sell or otherwise dispose of the same (including
      prospectus supplements with respect to the sales of securities from time to
      time
      in connection with a registration statement pursuant to Rule 415 of the SEC);
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    c. furnish
      to each Holder such numbers of copies of a summary prospectus or other
      prospectus, including a preliminary prospectus or any amendment or supplement
      to
      any prospectus, in conformity with the requirements of the 1933 Act, and such
      other documents, as such Holder may reasonably request in order to facilitate
      the public sale or other disposition of the securities owned by such
      Holder;

    

    d. use
      its
      best efforts to register and qualify the securities covered by such registration
      statement under such other securities or blue sky laws of such jurisdictions
      as
      each Holder shall reasonably request, and do any and all other acts and things
      which may be necessary or advisable to enable such Holder to consummate the
      public sale or other disposition in such jurisdiction of the securities owned
      by
      such Holder, except that the Company shall not for any such purpose be required
      to qualify to do business as a foreign corporation in any jurisdiction wherein
      it is not so qualified or to file therein any general consent to service of
      process;

    

    e. use
      its
      best efforts to list such securities on any securities exchange on which any
      securities of the Company is then listed, if the listing of such securities
      is
      then permitted under the rules of such exchange;

    

    f. enter
      into and perform its obligations under an underwriting agreement, if the
      offering is an underwritten offering, in usual and customary form, with the
      managing underwriter or underwriters of such underwritten offering;

    

    g. notify
      each Holder of Registerable Securities covered by such registration statement,
      at any time when a prospectus relating thereto covered by such registration
      statement is required to be delivered under the 1933 Act, of the happening
      of
      any event of which it has knowledge as a result of which the prospectus included
      in such registration statement, as then in effect, includes an untrue statement
      of a material fact or omits to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading in the light
      of the circumstances then existing; and

    

    h. furnish,
      at the request of any Holder on the date such Registerable Securities are
      delivered to the underwriters for sale pursuant to such registration or, if
      such
      Registerable Securities are not being sold through underwriters, on the date
      the
      registration statement with respect to such Registerable Securities becomes
      effective, (i) an opinion, dated such date, of the counsel representing the
      Company for the purpose of such registration, addressed to the underwriters,
      if
      any, and to the Holder making such request, covering such legal matters with
      respect to the registration in respect of which such opinion is being given
      as
      the Holder of such Registerable Securities may reasonably request and are
      customarily included in such an opinion and (ii) letters, dated, respectively,
      (1) the effective date of the registration statement and (2) the date such
      Registerable Securities are delivered to the underwriters, if any, for sale
      pursuant to such registration from a firm of independent certified public
      accountants of recognized standing reasonably selected by the Company, addressed
      to the underwriters, if any, and to the Holder making such request, covering
      such financial, statistical and accounting matters with respect to the
      registration in respect of which such letters are being given as the Holder
      of
      such Registerable Securities may reasonably request and are customarily included
      in such letters.

     

    
      
        
        

      

      
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    4. Expenses.
      All
      expenses incurred in any registration of the Holders' Registerable Securities
      under this Agreement shall be paid by the Company, including, without
      limitation, printing expenses, fees and disbursements of counsel for the
      Company, expenses of any audits to which the Company shall agree or which shall
      be necessary to comply with governmental requirements in connection with any
      such registration, all registration and filing fees for the Holders'
      Registerable Securities under federal and State securities laws, and expenses
      of
      complying with the securities or blue sky laws of any jurisdictions pursuant
      to
      Section 3(h)(i); provided, however, the Company shall not be liable for (a)
      any
      discounts or commissions to any underwriter; (b) any stock transfer taxes
      incurred with respect to Registerable Securities sold in the Offering or (c)
      the
      fees and expenses of counsel for any Holder, provided that the Company will
      pay
      the costs and expenses of Company counsel when the Company's counsel is
      representing any or all selling security holders.

    

    5. Indemnification.
      In the
      event any Registerable Securities are included in a registration statement
      pursuant to this Agreement:

    

    a. Company
      Indemnity.
      Without
      limitation of any other indemnity provided to any Holder, to the extent
      permitted by law, the Company shall indemnify and hold harmless each Holder,
      the
      affiliates, officers, directors and partners of each Holder, any underwriter
      (as
      defined in the 1933 Act) for such Holder, and each person, if any, who controls
      such Holder or underwriter (within the meaning of the 1933 Act or the Securities
      Exchange Act of 1934 (the "Exchange Act"), against any losses, claims, damages
      or liabilities (joint or several) to which they may become subject under the
      1933 Act, the Exchange Act or other federal or state law, insofar as such
      losses, claims, damages or liabilities (or actions in respect thereof) arise
      out
      of or are based upon any of the following statements, omissions or violations
      (collectively a "Violation"): (i) any alleged untrue statement of a material
      fact contained in such registration statement including any preliminary
      prospectus or final prospectus contained therein or any amendments or
      supplements thereto, (ii) the alleged omission to state therein a material
      fact
      required to be stated therein, or necessary to make the statements therein
      not
      misleading, or (iii) any violation or alleged violation by the Company of the
      1933 Act, the Exchange Act, or any state securities law or any rule or
      regulation promulgated under the 1933 Act, the Exchange Act or any state
      securities law, and the Company shall reimburse each such Holder, affiliate,
      officer or director or partner, underwriter or controlling person for any legal
      or other expenses incurred by them in connection with investigating or defending
      any such loss, claim, damage, liability or action; provided, however, that
      the
      Company shall not be liable to any Holder in any such case for any such loss,
      claim, damage, liability or action to the extent that it arises out of or is
      based upon a Violation which occurs in reliance upon and in conformity with
      written information furnished expressly for use in connection with such
      registration by any such Holder or any other officer, director or controlling
      person thereof.

    

    
      
        
        

      

      
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    b. Holder
      Indemnity.
      Each
      Holder shall indemnify and hold harmless the Company, its affiliates, its
      counsel, officers, directors and representatives, any underwriter (as defined
      in
      the 1933 Act) and each person, if any, who controls the Company or the
      underwriter (within the meaning of the 1933 Act or the Exchange Act, against
      any
      losses, claims, damages or liabilities (joint or several) to which they may
      become subject under the 1933 Act, the Exchange Act or any state securities
      law,
      and the Company shall reimburse each such Holder, affiliate, officer or director
      or partner, underwriter or controlling person for any legal or other expenses
      incurred by them in connection with investigating or defending any loss, claim,
      damage, liability or action; insofar as such losses, claims, damages or
      liabilities (or actions and respect thereof) arise out of or are based upon
      any
      statements or information provided by such Holder to the Company expressly
      for
      use in connection with the offer or sale of Registerable
      Securities.

     

    c. Notice;
      Right to Defend.
      Promptly after receipt by an indemnified party under this Section 5 of notice
      of
      the commencement of any action (including any governmental action), such
      indemnified party shall, if a claim in respect thereof is to be made against
      any
      indemnifying party under this Section 5 deliver to the indemnifying party a
      written notice of the commencement thereof and the indemnifying party shall
      have
      the right to participate in and if the indemnifying party agrees in writing
      that
      it will be responsible for any costs, expenses, judgments, damages and losses
      incurred by the indemnified party with respect to such claim, jointly with
      any
      other indemnifying party similarly noticed, to assume the defense thereof with
      counsel mutually satisfactory to the parties; provided, however, that an
      indemnified party shall have the right to retain its own counsel, with the
      fees
      and expenses to be paid by the indemnifying party, if the indemnified party
      reasonably believes that representation of such indemnified party by the counsel
      retained by the indemnifying party would be inappropriate due to actual or
      potential differing interests between such indemnified party and any other
      party
      represented by such counsel in such proceeding. The failure to deliver written
      notice to the indemnifying party within a reasonable time of the commencement
      of
      any such action shall relieve such indemnifying party of any liability to the
      indemnified party under this Agreement only if and to the extent that such
      failure is prejudicial to its ability to defend such action, and the omission
      so
      to deliver written notice to the indemnifying party will not relieve it of
      any
      liability that it may have to any indemnified party otherwise than under this
      Agreement.

    

    d. Contribution.
      If the
      indemnification provided for in this Agreement is held by a court of competent
      jurisdiction to be unavailable to an indemnified party with respect to any
      loss,
      liability, claim, damage or expense referred to therein, then the indemnifying
      party, in lieu of indemnifying such indemnified party thereunder, shall
      contribute to the amount paid or payable by such indemnified party as a result
      of such loss, liability, claim, damage or expense in such proportion as is
      appropriate to reflect the responsibility of the indemnifying party on the
      one
      hand and the indemnified party on the other hand in connection with the
      statements or omissions which resulted in such loss, liability, claim, damage
      or
      expense as well as any other relevant equitable considerations. The relevant
      fault of the indemnifying party and the indemnified party shall be determined
      by
      reference to, among other things, whether the untrue or alleged untrue statement
      of a material fact or the omission to state a material fact relates to
      information supplied by the indemnifying party or by the indemnified party
      and
      the parties' relative intent, knowledge, access to information and opportunity
      to correct or prevent such statement or omission. Notwithstanding the foregoing,
      the amount any Holder shall be obligated to contribute pursuant to this
      Agreement shall be limited to an amount equal to the proceeds to such Holder
      of
      the Registerable Securities sold pursuant to the registration statement which
      gives rise to such obligation to contribute (less the aggregate amount of any
      damages which the Holder has otherwise been required to pay in respect of such
      loss, claim, damage, liability or action or any substantially similar loss,
      claim, damage, liability or action arising from the sale of such Registerable
      Securities).

    

    e. Survival
      of Indemnity.
      The
      indemnification provided by this Agreement shall be a continuing right to
      indemnification and shall survive the registration and sale of any Registerable
      Securities by any person entitled to indemnification hereunder and the
      expiration or termination of this Agreement.

     

    
      
        
        

      

      
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    6. Remedies.

    

    a. Time
      is of Essence.
      The
      Company agrees that time is of the essence of each of the covenants contained
      herein and that, in the event of a dispute hereunder, this Agreement is to
      be
      interpreted and construed in a manner that will enable the Holders to sell
      their
      Registerable Securities as quickly as possible after such Holders have indicated
      to the Company that they desire their Registerable Securities to be registered.
      Any delay on the part of the Company not expressly permitted under this
      Agreement, whether material or not, shall be deemed a material breach of this
      Agreement.

    

    b. Remedies
      Upon Default or Delay.
      The
      Company acknowledges the breach of any part of this Agreement may cause
      irreparable harm to a Holder and that monetary damages alone may be inadequate.
      The Company therefore agrees that the Holder shall be entitled to injunctive
      relief or such other applicable remedy as a court of competent jurisdiction
      may
      provide. Nothing contained herein will be construed to limit a Holder's right
      to
      any remedies at law, including recovery of damages for breach of any part of
      this Agreement.

     

    7. Notices.

    

    a. All
      communications under this Agreement shall be in writing and shall be mailed
      by
      first class mail, postage prepaid, or telegraphed or telexed with confirmation
      of receipt or delivered by hand or by overnight delivery service,

    

    b. If
      to the
      Company, at:

     

    WPCS
      International Incorporated

    One
      East
      Uwchlan Avenue, Suite 301

         Exton,
      Pennsylvania 19341 

    Attn:
      Andrew Hidalgo, President

     

    or
      at
      such other address as it may have furnished in writing to the Holders of
      Registerable Securities at the time outstanding, or

    

    c. if
      to any
      Holder of any Registerable Securities, to 2017 Cattleman Road, Sarasota, Florida
      34232.

    

    d. Any
      notice so addressed, when mailed by registered or certified mail shall be deemed
      to be given three (3) days after so mailed, when telegraphed or telexed shall
      be
      deemed to be given when transmitted, or when delivered by hand or overnight
      shall be deemed to be given when delivered.

    

    
      
        
        

      

      
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    8. Successors
      and Assigns.
      Except
      as otherwise expressly provided herein, this Agreement shall inure to the
      benefit of and be binding upon the successors and permitted assigns of the
      Company and each of the Holders.

    

    9. Amendment
      and Waiver.
      This
      Agreement may be amended, and the observance of any term of this Agreement
      may
      be waived, but only with the written consent of the Company and the Holders
      of
      securities representing a majority of the Registerable Securities; provided,
      however, that no such amendment or waiver shall take away any registration
      right
      of any Holder of Registerable Securities or reduce the amount of reimbursable
      costs to any Holder of Registerable Securities in connection with any
      registration hereunder without the consent of such Holder; further provided,
      however, that without the consent of any other Holder of Registerable
      Securities, any Holder may from time to time enter into one or more agreements
      amending, modifying or waiving the provisions of this Agreement if such action
      does not adversely affect the rights or interest of any other Holder of
      Registerable Securities. No delay on the part of any party in the exercise
      of
      any right, power or remedy shall operate as a waiver thereof, nor shall any
      single or partial exercise by any party of any right, power or remedy preclude
      any other or further exercise thereof, or the exercise of any other right,
      power
      or remedy.

    

    10. Counterparts;
      Attorney’s Fees.
      One or
      more counterparts of this Agreement may be signed by the parties, each of which
      shall be an original but all of which together shall constitute one and the
      same
      instrument. The prevailing party in any action or proceeding relating to or
      arising out of this Agreement shall recover its reasonable attorney’s fees and
      other costs from the non-prevailing party, in addition to any other relief
      to
      which such prevailing party is entitled.

    

    11. Governing
      Law.
      This
      Agreement shall be construed in accordance with and governed by the internal
      laws of the State of New York, without giving effect to conflicts of law
      principles.

    

    12. Invalidity
      of Provisions.
      If any
      provision of this Agreement is or becomes invalid, illegal or unenforceable
      in
      any respect, the validity, legality and enforceability of the remaining
      provisions contained herein shall not be affected thereby.

    

    13. Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      be deemed to alter or affect the meaning or interpretation of any provisions
      hereof.

    

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the undersigned has executed this Agreement as of the 19th
      day
      of July, 2006.

    

    

    

    WPCS
      INTERNATIONAL INCORPORATED

     

     

     

    
      	
              By: /s/
                ANDREW HIDALGO

              
                

              

              Andrew Hidalgo,

              President

            	
              /s/ DANIEL G. LESTER 

              
                

              
Daniel G. Lester
	 	 
	 	
              /s/ CHIRSTOPHER P. LESTER  

              
                
Christopher
                P. Lester

            
	 	 
	 	
              /s/ MICHAEL D. LESTER

              
                
Michael
                D. Lester

            
	 	 
	 	
              /s/ THOMAS A. LESTER

              
                
Thomas
                A. Lester

            
	 	 
	 	
              /s/ KARL F. EICKEMEYER

              
                
Karl
                F. Eickemeyer

            
	 	 
	 	
              /s/ ANTHONY ANKERSMIT

              
                
Anthony
                Ankersmit

            

    

    

        

    7<PAGE>

                                                                    EXHIBIT 10.5

THIS NOTE AND THE SECURITIES REPRESENTED BY THIS NOTE HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD OR OTHERWISE TRANSFERRED OR PLEDGED,
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR SUCH APPLICABLE STATE SECURITIES LAWS, OR IF THE PROPOSED TRANSFER MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

                                   UWINK, INC.

                       SECURED CONVERTIBLE PROMISSORY NOTE

                                                              New York, New York
                                                                    May 14, 2003

$125,000.00

         SECTION 1. GENERAL. For value received, UWINK, INC., a Delaware
corporation (the "COMPANY"), hereby promises to pay to the order of SCIENTIFIC
GAMES CORPORATION, a Delaware corporation ("SGC"), or its registered assigns,
the principal amount of ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000.00)
or such lesser amount as shall then equal the outstanding amount hereof and any
unpaid accrued interest hereon as provided in this Note, which principal and
interest shall be due and payable on the earlier to occur of (i) May 14, 2004,
(ii) when declared due and payable by the Holder upon the occurrence of an Event
of Default as defined in Section 7(a), (b) or (c) below, or (iii) automatically
upon the occurrence of an Event of Default as defined in Section 7(d) or (e)
below. Payment for all amounts due hereunder shall be made in U.S. dollars by
wire transfer of immediately available funds to the Holder at its address as
provided to the Company.

         SECTION 2. DEFINITIONS. As used in this Note, the following terms,
unless the context otherwise requires, have the following meanings:

                  (i) "COMPANY" includes any corporation which shall succeed to
or assume the obligations of the Company under this Note.

                  (ii) "HOLDER", when the context refers to a holder of this
Note, shall mean any person who shall at the time be the registered holder of
this Note.

         SECTION 3. INTEREST. The Company shall pay interest at a rate of eight
percent (8%) per annum, compounded monthly (the "INITIAL INTEREST RATE").
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months for the actual number of days elapsed and shall accrue, beginning upon
the date hereof, on the unpaid principal of this Note and will continue to
accrue until this Note is paid in full or converted in full as provided in
Section 8. In the event that the principal amount of this Note is not paid in
full when such amount becomes due and payable, interest at the Maximum Legal
Rate (as defined below) shall continue to accrue on the balance of any unpaid
principal until such balance is paid. This Note is subject to the express
condition that at no time shall the Company be required to pay interest on the
principal balance of this Note at a rate which could subject the Holder to
either civil or criminal liability as a result of being in excess of the Maximum
Legal Rate. If by the terms of this Note, the Company is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the interest rate applicable to this Note

<PAGE>

shall be deemed to be immediately reduced to the Maximum Legal Rate and all
previous payments in excess of the Maximum Legal Rate shall be deemed to have
been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding. For purposes of this Note, "MAXIMUM LEGAL RATE" shall
mean the maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by this Note and as provided for herein, under the laws
of such governmental authority whose laws are held by any court of competent
jurisdiction to govern the interest rate provisions of this Note.

         SECTION 4. DEFENSES. The obligations of the Company to make the
payments provided for in this Note are absolute and unconditional and shall not
be subject to reduction, limitation, impairment, termination, defense, set-off,
counterclaim or recoupment for any reason.

         SECTION 5. EXTENSION OF MATURITY. Should the principal of or interest
on this Note become due and payable on other than a business day, the date on
which this Note must be paid in full shall be extended to the next succeeding
business day, and, in the case of principal, interest shall be payable thereon
at the rate per annum herein specified during such extension. For the purposes
of the preceding sentence, a business day shall be any day that is not a
Saturday, Sunday, or legal holiday in the State of New York.

         SECTION 6. PREPAYMENT. This Note may not be prepaid, in whole or in
part, without the Holder's consent.

         SECTION 7. DEFAULTS. The occurrence of any of the following events
shall constitute an "EVENT OF DEFAULT" for purposes of this Note:

         (a) Default in the payment of the principal and unpaid accrued interest
of this Note when due and payable, whether at maturity or by acceleration or
otherwise; or

         (b) Any other default by the Company of the performance of any of its
obligations hereunder, including conversion, when due;

         (c) The Company shall fail to perform or observe any of its covenants,
agreements or obligations under that certain Agreement, effective as of January
8, 2003, by and between the Company and SGC (the "EXISTING AGREEMENT") and such
default shall continue unremedied for a period of five (5) days after notice of
such default is given by SGC to the Company;

         (d) The Company shall make an assignment for the benefit of creditors,
file a petition in bankruptcy, consent to entry of an order for relief against
it in an involuntary case, be adjudicated insolvent or bankrupt, petition or
apply to any tribunal for the appointment of any receiver, trustee or similar
official for it or a substantial part of its assets, or commence any proceedings
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; there shall occur the appointment of a receiver, trustee,
assignee, liquidator, custodian or similar official of it or a substantial part
of its assets; or there shall have been filed any such petition or application
or any such proceeding shall have been commenced against it, which remains
undismissed for a period of thirty (30) days or more; the Company by any act or
omission shall indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or the appointment of any trustee for it or
any substantial part of any of its properties; or

         (e) A court of competent jurisdiction shall enter an order or decree
under any bankruptcy law that is for relief against the Company in an
involuntary case, appoints a receiver, trustee, assignee, liquidator or similar
official of the Company or for any substantial part of its property, or orders
the liquidation of the Company; and the order or decree remains unstayed and in
effect for 30 days.

<PAGE>

         Upon the occurrence of any of the Events of Default specified in
Sections 7(a), (b) or (c) above, the Holder of this Note may, so long as such
condition exists, declare the entire unpaid principal of this Note, together
with all accrued and unpaid interest hereon, immediately due and payable without
presentation, presentment, protest or further demand or notice of any kind, all
of which are hereby expressly waived, and shall be entitled to pursue all
remedies which it may have, at law or in equity, for the enforcement and
collection hereof.

         Upon the occurrence of any of the Events of Default specified in
Sections 7(d) or (e) above, the entire unpaid principal of this Note, together
with all accrued and unpaid interest hereon, shall automatically become
immediately due and payable without presentation, presentment, protest or
further demand or notice of any kind, all of which are hereby expressly waived,
and shall be entitled to pursue all remedies which it may have, at law or in
equity, for the enforcement and collection hereof.

         SECTION 8. CONVERSION.

         8.1 VOLUNTARY CONVERSION. Any Holder of this Note has the right, at the
Holder's option, at any time prior to payment in full of the principal balance
of this Note, to convert the principal balance of this Note, together with all
accrued but unpaid interest thereon, in accordance with the provisions of
Section 8.3 hereof, in whole or in part, into fully paid and nonassessable
shares of common stock, par value $0.0001 per share, of the Company (the "COMMON
STOCK"). The number of shares of Common Stock into which this Note may be
converted ("CONVERSION SHARES") shall be determined by dividing the aggregate
principal amount, together with all accrued but unpaid interest to the date of
conversion, by the Conversion Price (as defined below) in effect at the time of
such conversion. The initial Conversion Price shall be equal to $.50 per share.

         8.2 AUTOMATIC CONVERSION. The entire principal amount of this Note,
together with all accrued but unpaid interest to the date of conversion, shall
be automatically converted into shares of Common Stock at the Conversion Price
at the time in effect immediately prior to (i) any consolidation or merger of
the Company with or into any other corporation or other entity or person, or any
other corporate reorganization in which the Company shall not be the continuing
or surviving entity of such consolidation, merger or reorganization or any
transaction or series of related transactions by the Company in which in excess
of 50% of the Company's voting power is transferred, or a sale of all or
substantially all of the assets of the Company or (ii) the closing of a firmly
underwritten public offering pursuant to a registration statement filed by the
Company under the Securities Act of 1933, as amended (the "SECURITIES ACT");
provided that any shares of Common Stock issued to the Holder of this Note upon
automatic conversion of this Note pursuant to this Section 8.2 shall be entitled
to piggy-back registration rights with respect to the registration of such
shares under the Securities Act that are at least as favorable to the Holder of
this Note, including with respect to underwriter cutbacks, payment of expenses,
and other material provisions, as the most favorable piggy-back registration
rights granted by the Company to any other holder of the Company's capital
stock.

         8.3 CONVERSION PROCEDURE.

                  8.3.1 NOTICE OF CONVERSION PURSUANT TO SECTION 8.1. Before the
Holder shall be entitled to convert this Note into shares of Common Stock, it
shall surrender this Note at the office of the Company and shall give written
notice by mail, postage prepaid, to the Company at its principal corporate
office, of the election to convert the same pursuant to this Section 8.3, and
shall state therein the name or names in which the certificate or certificates
for shares of Common Stock are to be issued. The Company shall, as soon as
practicable thereafter and in no event later than 14 business days thereafter,
issue and deliver at such office to the Holder of this Note a certificate or
certificates for the number of shares of Common Stock to which the Holder of
this Note shall be entitled as aforesaid. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of this Note, and the person or persons entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock as of such date.

<PAGE>

                  8.3.2 NOTICE OF CONVERSION PURSUANT TO SECTION 8.2. If this
Note is automatically converted, written notice shall be delivered to the Holder
of this Note at the address last shown on the records of the Company for the
Holder or given by the Holder to the Company for the purpose of notice or, if no
such address appears or is given, at the place where the principal executive
office of the Company is located, notifying the Holder of the conversion to be
effected, specifying the Conversion Price, the principal amount of the Note to
be converted, the amount of accrued interest to be converted, the date on which
such conversion will occur and calling upon such Holder to surrender to the
Company, in the manner and at the place designated, this Note.

         8.4 DELIVERY OF STOCK CERTIFICATES. As promptly as practicable after
the conversion of this Note and in no event later than 14 business days after
such conversion, the Company at its expense will issue and deliver to the Holder
of this Note a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion.

         8.5 MECHANICS AND EFFECT OF CONVERSION. No fractional shares of Common
Stock shall be issued upon conversion of this Note. In lieu of the Company
issuing any fractional shares to the Holder upon the conversion of this Note,
the Company shall pay to the Holder the amount of outstanding principal that is
not so converted, such payment to be in the form as provided below. Upon the
conversion of this Note pursuant to Section 8.3 above, the Holder shall
surrender this Note, duly endorsed, at the principal office of the Company. At
its expense, the Company shall, as soon as practicable thereafter (and in no
event later than 14 business days thereafter), issue and deliver to such Holder
at such principal office a certificate or certificates for the number of shares
of such Common Stock to which the Holder shall be entitled upon such conversion,
together with any other securities and property to which the Holder is entitled
upon such conversion under the terms of this Note, including a check payable to
the Holder for any cash amounts payable as described above. In the event of any
conversion of this Note pursuant to Section 8.3 above, on and after such date
the Holder of this Note entitled to receive the shares of such Common Stock
issuable upon such conversion shall be treated for all purposes as the record
Holder of such shares. Upon conversion of this Note, the Company shall be
forever released from all its obligations and liabilities under this Note,
except that the Company shall be obligated to pay the Holder, within ten (10)
days after the date of such conversion, any principal and interest accrued and
unpaid or unconverted to and including the date of such conversion.

         SECTION 9. CONVERSION PRICE ADJUSTMENTS.

         9.1 ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS. In the event the
Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (hereinafter referred to as "COMMON STOCK EQUIVALENTS")
without payment of any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise thereof), then, as of such
record date (or the date of such dividend distribution, split or subdivision if
no record date is fixed), the Conversion Price of this Note shall be
appropriately decreased so that the number of shares of Common Stock issuable
upon conversion of this Note shall be increased in proportion to such increase
of outstanding shares.

         9.2 ADJUSTMENTS FOR REVERSE STOCK SPLITS. If the number of shares of
Common Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for this Note shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion hereof shall be decreased in proportion to such decrease in
outstanding shares.

         9.3 ADJUSTMENT UPON ISSUANCE OF ADDITIONAL SHARES.

<PAGE>

                  9.3.1 In the event the Company, at any time after the date of
this Note shall issue any Additional Shares (as defined below) without
consideration or for a consideration per share less than the Conversion Price in
effect immediately prior to the issuance of such Additional Shares, the
Conversion Price in effect immediately prior to each such issuance shall
automatically be adjusted to a price equal to the per share issuance price for
such Additional Shares.

                  9.3.2 For the purpose of the above calculation, "ADDITIONAL
SHARES" shall mean any shares of Common Stock issued (or deemed to have been
issued pursuant to Section 9.3.4 below) by the Company after the date of this
Note, other than:

                           (A) Common Stock issued pursuant to stock dividends,
stock splits or similar transactions, as described in Section 9.1 of this Note,

                           (B) After the date of this Note, up to an aggregate
of _______ shares of Common Stock (as adjusted for stock splits, stock
combinations, reclassifications and the like) issuable or issued to employees,
consultants or directors of the Company pursuant to a stock option plan or
restricted stock plan or other compensation arrangement approved by the Board of
Directors of the Company,

                           (C) Capital stock, or options or warrants to purchase
capital stock, issued to financial institutions or lessors in connection with
commercial credit arrangements, commercial property lease transactions,
equipment financings or similar transactions approved by the Board of Directors
of the Company,

                           (D) Shares of Common Stock or preferred stock
issuable upon exercise of options or other convertible securities outstanding as
of the date of this Note,

                           (E) Capital stock, options or warrants to purchase
capital stock issued in connection with bona fide acquisitions, mergers or
similar transactions, the terms of which are approved by the Board of Directors
of the Company, or

                           (F) Shares of Common Stock issued or issuable upon
conversion of any preferred stock of the Company that is issued and outstanding
as of the date of this Note.

                  9.3.3 DETERMINATION OF CONSIDERATION. In the case of the
issuance of Additional Shares for cash, the consideration shall be deemed to be
the amount of cash paid therefor before deducting any discounts, commissions or
other expenses allowed, paid or incurred by the Company for any underwriting or
otherwise in connection with the issuance and sale thereof. In the case of the
issuance of the Additional Shares for a consideration in whole or in part other
than cash, the consideration other than cash shall be deemed to be the fair
value thereof as determined by the Board of Directors of the Company
irrespective of any accounting treatment. The consideration per share received
by the Company for Additional Shares deemed to have been issued pursuant to
Section 9.3.4 relating to options or rights or convertible or exchangeable
securities, shall be the minimum aggregate amount of additional consideration
(as set forth in instruments relating thereto) payable to the Company upon the
exercise of such options or rights and the conversion or exchange of such
convertible or exchangeable securities (as the case may be), including the
amounts received by the Company as consideration for the issuance of such
securities.

                  9.3.4 DEEMED ISSUANCE OF ADDITIONAL SHARES. In the case of the
issuance (whether before, on or after the date hereof) of options to purchase or
rights to subscribe for Common Stock, securities by their terms convertible into
or exchangeable for Common Stock or options to purchase or rights to subscribe
for such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this Section 9.3:

<PAGE>

                           (A) The aggregate maximum number of shares of Common
Stock deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in Section 9.3.3),
if any, received by the Company upon the issuance of such options or rights plus
the minimum exercise price provided in such options or rights (without taking
into account potential antidilution adjustments) for the Common Stock covered
thereby.

                           (B) The aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange for (assuming the
satisfaction of any conditions to convertibility or exchangeability, including,
without limitation, the passage of time, but without taking into account
potential antidilution adjustments) any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to subscribe
for such convertible or exchangeable securities and subsequent conversion or
exchange thereof shall be deemed to have been issued at the time such securities
were issued or such options or rights were issued and for a consideration equal
to the consideration, if any, received by the Company for any such securities
and related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional consideration, if
any, to be received by the Company (without taking into account potential
antidilution adjustments) upon the conversion or exchange of such securities or
the exercise of any related options or rights (the conversion in each such case
to be determined in the manner provided in Section 9.3.3).

                           (C) In the event of any change in the number of
shares of Common Stock deliverable or in the consideration payable to the
Company upon exercise of such options or rights or upon conversion of or in
exchange for such convertible or exchangeable securities, including, but not
limited to, a change resulting from the antidilution provisions thereof, the
Conversion Price, to the extent in any way affected by or computed using such
options, rights or securities, shall be recomputed to reflect such change, but
no further adjustment shall be made for the actual issuance of Common Stock or
any payment of such consideration upon the exercise of any such options or
rights or the conversion or exchange of such securities.

                           (D) Upon the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the Conversion Price, to the extent in any way affected by or
computed using such options, rights or securities or options or rights related
to such securities, shall be recomputed to reflect the issuance of only the
number of shares of Common Stock (and convertible or exchangeable securities
which remain in effect) actually issued upon the exercise of such option or
rights, upon the conversion or exchange of such securities or upon the exercise
of the options or rights related to such securities.

                           (E) The number of shares of Common Stock deemed
issued and the consideration deemed paid therefore pursuant to 9.3.4(A) and
9.3.4(B) shall be appropriately adjusted to reflect any change, termination or
expiration of the type described in either Section 9.3.4(C) or 9.3.4(D).

                  9.3.5 NO INCREASED CONVERSION PRICE. Notwithstanding any other
provisions of this Section 9.3, except to the limited extent provided for in
Section 9.3.4(C) and 9.3.4(D), no adjustment of the Conversion Price pursuant to
this Section 9.3 shall have the effect of increasing the Conversion Price above
the Conversion Price in effect immediately prior to such adjustment.

         9.4 RECAPITALIZATIONS. If at any time or from time to time there shall
be a recapitalization, reorganization, merger or consolidation of the Company
(other than a subdivision or combination provided for elsewhere in this Section
9), provision shall be made so that the Holder of this Note shall thereafter be
entitled to receive upon conversion of this Note, the number of shares of stock
or other securities or property of the Company or otherwise, to which a holder
of the Common Stock deliverable upon conversion of this Note would have been
entitled on such recapitalization, reorganization, merger or consolidation.

<PAGE>

         9.5 CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 9, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder of this Note a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request, at any time, of any such Holder, furnish or cause to be
furnished to such Holder a like certificate setting forth: (i) such adjustments
and readjustments; (ii) the Conversion Price at the time of effect; and (iii)
the number of shares and the amount, if any, of other property that at the time
would be received upon the exercise of this Note.

         9.6 NO IMPAIRMENT. The Company will not, by amendment of its
certificate of incorporation or through any reorganization, recapitalization,
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
Company, but will at all times in good faith assist in the carrying out of all
the provisions of Section 8 and Section 9 of this Note and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the Holder of this Note against impairment.

         9.7 NOTICES OF RECORD DATE, ETC, In the event of:

                  (A) any taking by the Company of a record of the holders of
any class of securities of the Company for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution,
or any right to subscribe for, purchase or otherwise acquire any shares of stock
of any class or any other securities or property, or to receive any other right,

                  (B) any stock split, reverse stock split, subdivision,
consolidation or other capital reorganization, reclassification or other
recapitalization of the capital stock of the Company,

                  (C) any merger, consolidation, transfer of all or
substantially all of the assets of the Company,

                  (D) any dissolution, liquidation or other winding up of the
Company, or

                  (E) the issuance by the Company of any Additional Shares, the
Company will mail to the holder of this Note at least twenty (20) days prior to
the earliest date specified therein, a notice specifying, as applicable:

                  (A) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right,

                  (B) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective and the record date for determining
stockholders entitled to vote thereon, or

                  (C) the date on which such issuance of Additional Shares is
expected to be consummated and the resulting adjustment to the Conversion Price
in accordance with Section 9.3 of this Note.

         9.8 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company shall at
all times reserve and keep available out of its authorized but unissued shares
of Common Stock solely for the purpose of effecting the conversion of this Note
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of this Note; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of the entire outstanding principal amount of this Note,
in addition to such other remedies as shall be available to the holder of this
Note, the Company will use its best efforts to take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes.

<PAGE>

         SECTION 10. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder
represents and warrants to the Company that such Holder is acquiring this Note
for its own account for the purpose of investment and not with a view to, or for
sale in connection with, any distribution hereof. The Holder further represents
that such Holder is an "accredited investor" within the meaning of Rule 501
promulgated under Regulation D of the Securities Act and that such Holder
understands that (i) this Note has not been registered under the Securities Act
by reason of its issuance in a transaction exempt from the registration
requirements of the Securities Act, and that the Company's reliance on such
exemption is predicated on the Holder's representations set forth herein, (ii)
no public market now exists or may ever exist for this Note, (iii) this Note and
any securities issued upon conversion hereof, must be held indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration, and (iv) this Note and any such securities will
bear a legend to such effect. In particular, the Holder is aware that this Note
and any securities issued upon conversion of this Note may not be sold pursuant
to Rule 144 promulgated under the Securities Act unless all of the conditions of
that rule are met, including without limitation the availability to the public
of current information about the Company, which information is not now
available.

         SECTION 11. SECURITY INTEREST.

                  11.1 COLLATERAL. As collateral security for the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the Company's obligations under this Note, the Company hereby pledges, grants,
assigns, conveys and transfers to the Holder of this Note a security interest in
all of the Company's right, title and interest in, to and under any and all
Intellectual Property (as hereinafter defined) developed by the Company pursuant
to the Existing Agreement or otherwise developed through funding provided by the
Company, in each case whether now owned by the Company or hereafter acquired,
whether now existing or hereafter coming into existence and wherever located
(collectively, the "COLLATERAL").

                  11.2 FURTHER ASSURANCES. The Company agrees that from time to
time, at the sole cost and expense of the Company, the Company will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary, or that the Holder may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Holder to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Company will: (i) use its best efforts to
obtain any necessary consents of third parties to the assignment and perfection
of a security interest to the Holder with respect to any Collateral, (ii)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary, or as the
Holder may reasonably request, in order to perfect and preserve the security
interests granted or purported to be granted hereby, (iii) at the Holder's
reasonable request, appear in and defend any action or proceeding that may
affect the Company's title to or the Holder's security interest in all or any
part of the Collateral, and (iv) furnish to the Holder from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Holder may
reasonably request, all in reasonable detail and in form reasonably satisfactory
to the Holder. The Company shall promptly notify the Holder in writing of any
new copyright application or registration, patent or trademark application or
registration acquired or made by the Company after the date hereof and of any
trademark registrations issued after the date hereof. Promptly after the filing
of an application for any trademark, patent and copyright registration, the
Company shall execute and deliver to the Holder and record in all relevant
offices, a security interest supplement or such other documentation as the
Holder shall request, pursuant to which the Company shall grant to the Holder a
security interest to the extent of its interest in such Collateral.

                  11.3. DEFINITION. For purposes of this Note, "INTELLECTUAL
PROPERTY" shall mean:

<PAGE>

                           (A) all right, title and interest in and to all
trademarks, service marks, designs, logos, indicia, tradenames, trade dress,
corporate names, company names, business names, fictitious business names, trade
styles, Internet domain names and/or other source and/or business identifiers
and applications pertaining thereto, as the same may be amended from time to
time, all registrations that have been or may hereafter be issued or applied for
thereon in the United States, any state thereof, in international registries,
and in foreign countries, all common law and other rights in and to the
trademarks in the United States and any state thereof and in foreign countries,
and all goodwill of the Company's business symbolized by any of the foregoing
and associated therewith, including all proceeds thereof (such as, by way of
example and not by limitation, license royalties and proceeds of infringement
suits) and the right (but not the obligation) to sue for past, present and
fixture infringements in the name of such Company or in the name of the Holder;

                           (B) all rights, titles and interests in and to all
patents and patent applications under any domestic, international, or foreign
law that are presently, or in the future may be, owned or held in whole or in
part by the Company, and all reissues, divisions, continuations, renewals,
extensions and continuations in part thereof including all proceeds thereof
(such as, by way of example and not by limitation, license royalties and
proceeds of infringement suits) and the right (but not the obligation), to sue
for past, present, and future infringements in the name of the Company or in the
name of the Holder; and

                           (C) all rights, titles and interests under copyright
in published and unpublished works of authorship including, without limitation,
computer programs, computer data bases, other computer software, layouts, trade
dress, drawings, designs, writings, and formulas owned by the Company, all
copyright registrations issued to the Company and applications for copyright
registration that have been or may hereafter be issued or applied for thereon by
the Company in the United States, in international registries and in foreign
countries, all common law and other rights in and to copyrights in the United
States and in foreign countries, including all copyright licenses (but with
respect to such copyright licenses, only to the extent permitted by such
licensing arrangements), and all renewals and extensions thereof, throughout the
world, the right to renew and extend such copyrights or copyright registrations
and to register works protectable by copyright including all proceeds thereof
(such as, by way of example and not by limitation, license royalties and
proceeds of infringement suits) and the right (but not the obligation) to sue
for past, present and future infringements of the copyrights in the name of the
Company or in the name of the Holder.

         SECTION 12. ACKNOWLEDGMENT OF PLEDGE. The Company hereby agrees,
acknowledges and consents to the pledge by SGC to certain creditors of SGC of
its rights under this Note (including the right to receive payments of principal
and interest hereunder) as collateral security for the payment and performance
by SGC under certain credit facilities of SGC. The Company further agrees that,
from time to time upon the written request of SGC, the Company will execute and
deliver such further documents and do such other acts and things as SGC may
reasonably request in order fully to effect the granting of such pledge and/or
security interest.

         SECTION 13. ASSIGNMENT. Subject to the restrictions on transfer
described in Section 15 below, the rights and obligations of the Company and the
Holder of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties.

         SECTION 14. AMENDMENTS AND WAIVERS. Any provision of this Note may be
amended only with the express written consent of both the Company and the
Holder. The observance of any term may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
express written consent of the party waiving the application of such term. Any
amendment or waiver affected in accordance with this Section 14 shall be binding
on each future Holder and the Company.

         SECTION 15. TRANSFER OF THIS NOTE; RESTRICTIONS. This Note may be
transferred only in compliance with applicable federal and state securities laws
and only upon surrender of the original Note for registration of transfer, duly
endorsed, or accompanied by duly executed written instrument of transfer in a
form reasonably satisfactory to the Company. A new Note for like principal
amount and interest will be issued to, and registered in the name of, the
transferee. Interest and principal are payable only to the registered holder of
this Note.

<PAGE>

         SECTION 16. NOTICES. All notices, requests, demands and other
communications to any party hereunder shall be in writing (including telecopier
or similar writing) and shall be given to such party at its address or
telecopier number set forth below or such other address or telecopier number as
such party may hereafter specify by notice to the other parties listed below.

                  If to Company:     uWink, Inc.
                                     5443 Beethoven Street
                                     Los Angeles, CA 90066
                                     Telecopier: (310) 827-7633
                                     Telephone: (310) 827-6900
                                     Attention: Nolan Bushnell

                  If to Holder:      Scientific Games Corporation
                                     750 Lexington Avenue
                                     New York, NY 10022
                                     Telecopier:  (212) 754-2372
                                     Telephone:  (212) 754-2233
                                     Attention: David Pyle

Each such notice, request or other communication shall be effective (i) if given
by telecopier or other form of facsimile transmission, when the recipient
confirms legible transmission thereof, or (ii) if given by any other means, when
delivered at the address specified in this Section 16.

         SECTION 17. ATTORNEYS' AND COLLECTION FEES. Should the indebtedness
evidenced by this Note or any part hereof be collected at law or in equity or in
bankruptcy, receivership or other court proceedings, the Company agrees to pay,
in addition to principal and interest due and payable hereon, all costs of
collection, including reasonable attorneys' fees and expenses, incurred by the
Holder in collecting or enforcing this Note.

         SECTION 18. NO STOCKHOLDER RIGHTS. Nothing contained in this Note shall
be construed as conferring upon the Holder or any other person the right to vote
or to consent or to receive notice as a stockholder in respect of meetings of
stockholders for the election of directors of the Company or any other matters
or any rights whatsoever as a stockholder of the Company; and no dividends or
interest shall be payable or accrued in respect of this Note or the interest
represented hereby or the Conversion Shares obtainable hereunder until, and only
to the extent that, this Note shall have been converted.

         SECTION 19. GOVERNING LAW. This Note is made and delivered in, and
shall be governed by and construed in accordance with the laws of, the State of
New York (without giving effect to principles of conflicts of laws of the State
of New York or any other state).

         SECTION 20. HEADING; REFERENCES. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.

                            [signature page follows]

<PAGE>

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

                        UWINK, INC.

                        By: ____________________________
                            Name:
                            Title:

ACKNOWLEDGED & AGREED:

SCIENTIFIC GAMES CORPORATION

By: _________________________
    Name:
    Title:

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