Document:

THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT. SUCH SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER
THE SECURITIES ACT.

THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THIS NOTE IN THE EVENT OF A
PARTIAL REDEMPTION, REPAYMENT OR CONVERSION. AS A RESULT, FOLLOWING ANY
REDEMPTION, REPAYMENT OR CONVERSION OF ANY PORTION OF THIS NOTE, THE
OUTSTANDING PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE
PRINCIPAL AMOUNT SET FORTH BELOW.

           6% SENIOR SECURED CONVERTIBLE NOTE DUE 2008

                                OF

                  BROADCAST INTERNATIONAL, INC.

Note No.:  __               _             Original Principal Amount:  $_______
Issuance Date:  May __, 2005                             Salt Lake City, Utah

      FOR VALUE RECEIVED, the Company hereby promises to pay to or upon the
order of _______________________ or its registered assigns or
successors-in-interest (the "Holder") the principal sum of _________________
Dollars ($___________.00), together with all accrued but unpaid interest
thereon, if any, on the Final Maturity Date, to the extent such principal
amount and interest have not been repaid or converted into shares of the
Company's Common Stock, $0.05 par value (the "Common Stock"), in accordance
with the terms hereof.  Interest on the unpaid principal balance hereof shall
accrue at the rate of 6% per annum from the date of original issuance hereof
(the "Issuance Date") until the Final Maturity Date, or such earlier date upon
acceleration or by conversion, repayment or redemption in accordance with the
terms hereof.  Interest on this Note shall accrue daily commencing on the
Issuance Date, shall be compounded semi-annually and shall be computed on the
basis of a 360-day year, 30-day months and actual days elapsed and shall be
payable in accordance with Section 2 hereof. Notwithstanding anything
contained herein, this Note shall bear interest on the outstanding Principal
Amount from and after the occurrence and during the continuance of an Event of
Default, at the rate (the "Default Rate") equal to the lower of eighteen
percent (18%) per annum or the highest rate permitted by applicable law.
Unless otherwise agreed or required by applicable law, payments will be
applied first to any unpaid collection costs, then to unpaid interest and fees
and any remaining amount to unpaid principal.

      All payments of principal of and interest on this Note shall be made in
lawful money of the United States of America by wire transfer of immediately
available funds to such account as the Holder may from time to time designate
by written notice in accordance with the provisions of this Note. This Note
may not be prepaid in whole or in part except as specifically provided herein.
Whenever any amount expressed to be due by the terms of this Note is due on
any day which is not a Business Day (as defined below), the same shall instead
be due on the next succeeding day which is a Business Day and such extension
shall be taken into account in determining the amount of interest accrued on
this Note.

      The indebtedness evidenced by this Note is senior to all other current
and future indebtedness of the Company. Payment of the indebtedness evidenced
by this Note is secured by all of the properties and assets of the Company
pursuant to that certain Security Agreement, dated as of May __, 2005, by and
between the Company and Gryphon Master Fund, L.P., as Collateral Agent for the
Purchasers (the "Security Agreement").

      The following terms and conditions shall apply to this Note:

      1.   Definitions.

      (a)  Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement.

      (b)  For purposes hereof the following terms shall have the meanings
ascribed to them below:

      "Approved Market" means one of the OTC Bulletin Board, the Nasdaq Small
Cap, the Nasdaq, the New York Stock Exchange or the American Stock Exchange.

      "Bankruptcy Event" means any of the following events: (a) the Company or
any material subsidiary commences a case or other proceeding under any
bankruptcy, reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction relating to the Company or any material subsidiary thereof; (b)
there is commenced against the Company or any material subsidiary any such
case or proceeding that is not dismissed within 60 days after commencement;
(c) the Company or any material subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such case or
proceeding is entered; (d) the Company or any material subsidiary suffers any
appointment of any trustee, custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 days; (e) the
Company or any material subsidiary makes a general assignment for the benefit
of creditors; (f) the Company or any material subsidiary fails to pay, states
that it is unable to pay, or is unable to pay, its debts (excluding those
reasonably disputed in good faith by the Company in the case of failure to pay
and for which it has reserves on its books and financial statements) generally
as they become due; (g) the Company or any material subsidiary calls a meeting
of its creditors with a view to arranging a composition, adjustment or
restructuring of its debts; or (h) the Company or any material subsidiary, by
any act or failure to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or other action
for the purpose of effecting any of the foregoing.

      "Board of Directors" means the Company's board of directors.

      "Cash" or "cash" means at any time such coin or currency of the United
States of America as shall at such time be legal tender for the payment of
public and private debts.

      "Change in Control Transaction" will be deemed to exist if (i) there
occurs any consolidation, merger, amalgamation or other business combination
of the Company with or into any other corporation or other entity or person
(whether or not the Company is the surviving corporation), or any other
corporate reorganization or transaction or series of related transactions in
which in any of such events the persons who are holders of the voting stock of
the Company immediately prior to such event cease to own more than 50% of the
voting stock, or corresponding voting equity interests, of the surviving
corporation or other entity immediately after such event (including without
limitation any "going private" transaction under Rule 13e-3 promulgated
pursuant to the Exchange Act or tender offer by the Company under Rule 13e-4
promulgated pursuant to the Exchange Act for 20% or more of the Company's
Common Stock), (ii) any person (as defined in Section 13(d) of the Exchange
Act), together with its affiliates and associates (as such terms are defined
in Rule 405 under the Securities Act), beneficially owns or is deemed to
beneficially own (as described in Rule 13d-3 under the Exchange Act without
regard to the 60-day exercise period) 50% or more of the voting power of the
Company's voting stock or corresponding voting securities, (iii) there is a
replacement of more than one-half of the members of the Board of Directors
which is not approved by a majority of those individuals who are either
members of the Board of Directors on the date thereof or individuals approved
by a majority of such members or (iv) in one or a series of related
transactions, there is a sale or transfer of all or substantially all of the
assets of the Company, determined on a consolidated basis.

      "Company Notice Date" shall have the meaning provided in Section 2(c).

      "Company Prepayment Notice" shall have the meaning provided in Section
2(c).

      "Conversion Date" shall have the meaning provided in Section 3(b).

      "Conversion Delay Payments" shall have the meaning provided in Section
3(b)(ii).

      "Conversion Notice" means either an Optional Conversion Notice or a
Mandatory Conversion Notice.

      "Conversion Price" means $2.50, subject to adjustment as set forth
herein.

      "Current Market Price" means when used with respect to the Common Stock
as of a specified date with respect to each share of Common Stock: (i) if the
principal trading market for such securities is a national or regional
securities exchange, the closing price on such exchange on such day; or (ii)
if sales prices for shares of Common Stock are reported by the NASDAQ National
Market System (or a similar system then in use), the last reported sales price
(regular way) so reported on such day; or (iii) if neither (i) nor (ii) above
are applicable, and if bid and ask prices for shares of Common Stock are
reported in the over-the-counter market by NASDAQ (or, if not so reported, by
the Pink Sheets, LLC), the average of the high bid and low ask prices so
reported on such day. Notwithstanding the foregoing, if there is no reported
closing price, last reported sales price, or bid and ask prices, as the case
may be, for the day in question, then the Current Market Price shall be
determined as of the latest date prior to such day for which such closing
price, last reported sales price, or bid and ask prices, as the case may be,
are available, unless such securities have not been traded on an exchange or
in the over-the-counter market for 5 or more days immediately prior to the day
in question, in which case the Current Market Price shall be determined by an
Independent Financial Expert (and the costs of such determination shall be
bourne entirely by the Company). An "Independent Financial Expert" shall mean
a reputable accounting, appraisal or investment banking firm that is, in the
reasonable judgment of the Board of Directors, qualified to perform the task
for which such firm has been engaged hereunder, is nationally recognized and
disinterested and Independent with respect to the Company and its affiliates
and is reasonably acceptable to the Holder. "Independent" shall mean any
person or entity that (A) is in fact independent, (B) does not have any direct
financial interest or any material indirect financial interest in the Company
or any of its subsidiaries, or in any affiliate of the Company or any of its
subsidiaries (other than as a result of holding securities of the Company in
trading accounts), and (C) is not an officer, employee, promoter, trustee,
partner, director or person performing similar functions for the Company or
any of its subsidiaries or any affiliate of the Company or any of its
subsidiaries.

      "DTC" shall have the meaning provided in Section 3(b)(ii).

      "Effective Registration" means (i) the Company has complied in all
material respects with its obligations under all the Transaction Documents
where the failure to comply by the Company would have a material adverse
effect on the ability of the Holder to publicly resell the Underlying Shares,
the Warrant Shares, the PIK Interest Shares and the AIR Shares, and no Event
of Default shall have occurred and be continuing; (ii) the resale of all
Registrable Securities (as defined in the Registration Rights Agreement) is
covered by an effective Registration Statement in accordance with the terms of
the Registration Rights Agreement and such Registration Statement is not
subject to any suspension or stop order and is expected to remain effective
and available for use by the selling stockholders named therein or in any
related prospectus supplement for at least 20 Trading Days thereafter; (iii)
the resale of such Registrable Securities may be effected pursuant to a
current and deliverable prospectus that is not subject to any blackout or
similar circumstance; (iv) such Registrable Securities are listed, or approved
for listing prior to issuance, on an Approved Market and are not subject to
any trading suspension (nor shall trading generally have been suspended on
such exchanges or markets), and the Company shall not have been notified of
any pending or threatened proceeding or other action to delist or suspend the
Common Stock on the Approved Market on which the Common Stock is then traded
or listed; (v) the requisite number of shares of Common Stock shall have been
duly authorized and shall be available for issuance as required by the terms
of the Transaction Documents; (vi) the Holder is not identified as an
underwriter in the Registration Statement; and (vii) the Company is not
subject to any Bankruptcy Event.

      "Event of Default" shall have the meaning provided in Section 4(a).

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Final Maturity Date" means May __, 2008.

      "Force Majeure Event" means an event or circumstance that prevents the
Company from performing its obligations under this Note or that prevents an
act or event required hereunder from happening or occurring (including,
without limitation, an act of God, war, insurrection, riot, nuclear disaster,
labor strike or threat of violence, labor and material shortage, fire,
explosion, flood, river freeze-up, breakdown or damage to mines, plant,
equipment, or facilities (including a forced outage or an extension of a
scheduled outage of equipment or facilities to make repairs to avoid
breakdowns thereof or damage thereto), interruption to or slowdown in
transportation, railcar shortage, barge shortage, embargo, order, or act of
civil or military authority, law, regulation, or administrative ruling, or
total or partial interruption of the Company's operations which are due to any
enforcement action or other administrative or judicial action arising from an
environmental law or regulation), but in any case which is not within the
reasonable control of, or the result of the negligence of, the Company, and
which by the exercise of due diligence, the Company is unable to overcome or
avoid or cause to be avoided or is unable in good faith to obtain a substitute
acceptable to the Holder therefor.

      "Holder Share Notice" shall have the meaning provided in Section
3(b)(ii).

      "Mandatory Conversion Notice" shall have the meaning provided in Section
3(a).

      "Optional Conversion Notice" shall have the meaning provided in Section
3(a).

      "PIK Interest" shall have the meaning provided in Section 2(a).

      "PIK Interest Notice" shall have the meaning provided in Section 2(a).

       "PIK Interest Price" means 0.85 multiplied by the daily volume weighted
average price of the Common Stock for the ten (10) Trading Days immediately
preceding (but not including) the applicable Interest Payment Date, as
reported by Bloomberg Financial Markets using the VWAP function.

      "PIK Interest Shares" shall have the meaning provided in Section 2(a).

      "Principal Amount" means at any time the sum of (i) the outstanding
principal amount of this Note at such time, (ii) all accrued but unpaid
interest hereunder to such time, and (iii) any default payments owing at such
time to the Holder under the Transaction Documents but not theretofore paid or
added to the Principal Amount.

      "Principal Market" means the OTC Bulletin Board or such other U.S.
market or exchange which is the principal market on which the Common Stock is
then listed for trading.

      "Purchase Agreement" means the Securities Purchase Agreement, dated as
of May 16, 2005, by and among the Company and the Purchasers named therein,
pursuant to which this Note was originally issued.

      "QIB" means a qualified institutional buyer as defined in Rule 144A.

      "Reset Date" means the earlier of (i) the later of (A) the Effectiveness
Date (as defined in the Registration Rights Agreement), and (B) the nine-month
anniversary of the Closing Date, or (ii) the one-year anniversary of the
Closing Date.

      "Rule 144A" means Rule 144A as promulgated by the SEC under the
Securities Act or any successor thereto.

      "SEC" means the United States Securities and Exchange Commission.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Trading Day" means a day on which the Principal Market is open for the
general trading of securities.

      "Underlying Shares" means the shares of Common Stock issued or issuable
upon conversion of, in lieu of cash payment of principal of, or interest on,
as repayment of principal under, or otherwise pursuant to, this Note in
accordance with the terms hereof and the Purchase Agreement.

      Section 2.  Payments of Principal and Interest.

      (a)   Interest. The Company shall pay interest accruing on this Note
(from the date hereof) on all principal outstanding at the Interest Rate,
semi-annually on the Interest Payment Dates, commencing on November __, 2005,
in cash; provided that the Default Rate shall apply in the circumstances set
forth above. Notwithstanding the foregoing, if (and only if) there is
Effective Registration on the applicable Interest Payment Date, then the
Company may pay such interest, at the Company's option, (i) in fully paid and
nonassessable shares of Common Stock (such interest paid in such form being
herein called "PIK Interest") or (ii) in cash. PIK Interest shall be paid by
delivering to the Holder a number of shares of Common Stock ("PIK Interest
Shares") determined by dividing (x) the total aggregate dollar amount of
interest due on the applicable Interest Payment Date (rounded to the nearest
whole cent) by (y) the applicable PIK Interest Price. In order to deliver PIK
Interest Shares in lieu of cash on an Interest Payment Date, the Company must
deliver, on or before the fifteenth (15th) calendar day immediately prior to
such date, written notice to the Holder stating that the Company wishes to do
so (a "PIK Interest Notice"); in the event that the Company does not deliver a
PIK Interest Notice on or before such fifteenth (15th) day, the Company will
be deemed to have elected to pay the related interest in cash. The Holder
shall promptly thereafter deliver to the Company instructions designating
whether the Holder wishes to receive delivery of its PIK Interest Shares in
physical certificates (and, if so, at what address) or through DTC (similar to
that described in Section 3(b)(ii)), as long as no legend is required by the
terms of the Purchase Agreement to be imprinted on such PIK Interest Shares
(and, if so, the account number to be credited). If the Company wishes to
deliver PIK Interest Shares in lieu of cash with respect to accrued interest,
it must do so with respect to all (but not less than all) of such interest. A
PIK Interest Notice, once delivered by the Company, shall be irrevocable
unless there is not Effective Registration on the applicable Interest Payment
Date, in which case such notice shall be deemed revoked and the interest to
which such notice relates shall be payable in cash on the Interest Payment
Date. The Company shall not issue fractional shares of Common Stock to which
the Holder may become entitled pursuant to this subparagraph, but in lieu
thereof, the Company shall round the number of shares to be issued up to the
next whole number.

      (b)   Principal. The entire Principal Amount of this Note, plus any and
all default payments owing under the Transaction Documents but not previously
paid, shall become due and payable on the Final Maturity Date. Any principal
of this Note that is converted pursuant to Section 3 shall be applied to
reduce the principal payable under this Section 2(b).

      (c)   Prepayment.  At any time following the first anniversary of the
Issuance Date, upon delivery of a written notice to the Holder (a "Company
Prepayment Notice" and the date such notice is delivered by the Company, the
"Company Notice Date"), the Company shall be entitled to prepay all or any
portion of the outstanding Principal Amount of this Note, plus any accrued and
unpaid interest thereon, for an amount in cash equal to the sum of (i) 125% of
the Principal Amount of this Note to be prepaid, plus all accrued and unpaid
interest thereon, and (ii) all other amounts, costs, expenses and liquidated
damages due in respect of this Note.  Notwithstanding the foregoing, the
Company shall be entitled to deliver a Company Prepayment Notice and prepay
this Note pursuant to the terms of this subsection (c) only if (i) there is
Effective Registration on the Company Notice Date and it is expected that
Effective Registration will continue for at least 20 Trading Days after the
Company Notice Date, and (ii) conversion by the Holder pursuant to Section 3
of the portion of this Note that is being prepaid would not cause the Holder's
beneficial ownership of shares of Common Stock to exceed the limits set forth
in Section 3.13 of the Purchase Agreement, and (iii) the average daily trading
volume for the Common Stock during the 20 consecutive Trading Days immediately
preceding (but not including) the date that the Holder receives the Company
Prepayment Notice exceeded 200,000 shares. The Holder may, within ten Trading
Days of its receipt of the Company Prepayment Notice, convert pursuant to
Section 3, at the then effective Conversion Price, any portion of the
outstanding principal amount of this Note being prepaid and any accrued and
unpaid interest thereon subject to the Company Prepayment Notice.

      Section 3.  Conversion.

      (a)   Conversion Rights.  Upon the terms and subject to the conditions
hereof, the Holder shall have the right, at the Holder's option, to convert
the outstanding Principal Amount and accrued and unpaid interest thereon into
Common Stock, in whole at any time or in part from time to time, by delivering
to the Company a duly executed notice of conversion in the form attached
hereto as Exhibit A (the "Optional Conversion Notice"), which may be
transmitted by telephone line facsimile transmission. In addition, upon
written notice by the Company to the Holder (the "Mandatory Conversion
Notice"), the Company may cause the Holder to convert all (but not less than
all) of the outstanding Principal Amount and accrued and unpaid interest
thereon into Common Stock, if (and only if) (i) there is Effective
Registration on the date that the Holder receives the Mandatory Conversion
Notice, and (ii) the closing price of the Common Stock exceeded 200% of the
Conversion Price then in effect for any 20 out of 30 consecutive Trading Days
immediately preceding (but not including) the date that the Holder receives
the Mandatory Conversion Notice, and (iii) the average daily trading volume
for the Common Stock during the 20 consecutive Trading Days immediately
preceding (but not including) the date that the Holder receives the Mandatory
Conversion Notice exceeded 200,000 shares. Notwithstanding anything to the
contrary herein, this Note and the outstanding Principal Amount hereunder
shall not be convertible into Common Stock at any time to the extent, and only
to the extent, that such conversion at such time would result in the Holder
exceeding the limitation contained in, or otherwise violating the provisions
of, Section 3.13 of the Purchase Agreement.

      (b)   Common Stock Issuance Upon Conversion.

            (i)   Conversion Procedures. Upon any conversion of this Note
pursuant to Section 3(a) above, the outstanding Principal Amount being
converted and accrued and unpaid interest thereon to the applicable Conversion
Date shall be converted into such number of fully paid, validly issued and
non-assessable shares of Common Stock, free of any liens, claims and
encumbrances, as is determined by dividing the outstanding Principal Amount
being converted and accrued and unpaid interest thereon to the applicable
Conversion Date by the then applicable Conversion Price. The date of any
Conversion Notice hereunder shall be referred to herein as the "Conversion
Date".  If a conversion under this Note cannot be effected in full for any
reason, or if the Holder is converting less than all of the outstanding
Principal Amount hereunder pursuant to a Conversion Notice, the Company shall,
upon request of the Holder, promptly deliver to the Holder (but no later than
five Trading Days after the surrender of this Note to the Company) a new Note
having a Principal Amount equal to the amount of such outstanding Principal
Amount as has not been converted. The Holder shall not be required physically
to surrender this Note to the Company upon any conversion unless the full
outstanding Principal Amount of this Note is being converted or repaid. The
Holder and the Company shall maintain records showing the outstanding
Principal Amount so converted and repaid and the dates of such conversions or
repayments or shall use such other method, reasonably satisfactory to the
Holder and the Company, so as not to require physical surrender of this Note
upon each such conversion or repayment. The Holder agrees that, if the
outstanding Principal Amount of this Note is less than the Principal Amount
stated on the face of this Note, the Holder will not voluntarily transfer this
Note at any time when no Event of Default has occurred and is continuing
without first surrendering this Note to the Company for issuance, without
charge to the Holder, of a replacement instrument that reflects the
outstanding Principal Amount of this Note. The Company will deliver such
replacement instrument to the Holder as promptly as practical, but in no event
later than three Trading Days, after surrender by the Holder.

            (ii)   Stock Certificates or DWAC.  The Company will deliver to
the Holder not later than three (3) Trading Days after a particular Conversion
Date, a certificate or certificates, which shall be free of restrictive
legends and trading restrictions (except to the extent permitted under Article
V of the Purchase Agreement), for the number of shares of Common Stock
issuable upon such conversion of this Note.  In lieu of delivering physical
certificates for the shares of Common Stock issuable upon any conversion of
this Note, provided the Company's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder, the Company shall use commercially
reasonable efforts to cause its transfer agent electronically to transmit such
shares issuable upon conversion to the Holder (or its designee), by crediting
the account of the Holder's (or such designee's) broker with DTC through its
Deposit Withdrawal Agent Commission system (provided that the same time
periods herein as for stock certificates shall apply).  If in the case of any
conversion hereunder, such shares are not delivered to or as directed by the
Holder by the third Trading Day after the applicable Conversion Date, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such shares, to rescind such conversion, in which event
the Company shall immediately return this Note to the Holder if the Holder has
tendered it to the Company in connection with such conversion. If the Holder
notifies the Company that the Holder has not received such shares (free of any
restrictions on transfer or legends except as permitted by Article V of the
Purchase Agreement) within three Trading Days after a particular Conversion
Date (each, a "Holder Share Notice") and the Holder does not receive such
shares (free of any restrictions on transfer or legends except as permitted by
Article V of the Purchase Agreement) within two Trading Days after giving such
Holder Share Notice, then, in addition to any other liability the Company may
have, the Company shall pay to the Holder, in cash, an amount, computed at the
rate of 2% of the outstanding Principal Amount per month, for the period such
failure continues (the "Conversion Delay Payments"). A Holder Share Notice may
be given by telephone, confirmed in writing, or e-mail to the Company's Chief
Financial Officer or General Counsel or Chief Executive Officer. The Company's
obligation to issue and deliver such shares of Common Stock upon conversion of
this Note shall be absolute and unconditional, irrespective of the absence of
any action by the Holder to enforce the same, of any waiver or consent with
respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, any failure or delay in the
enforcement of any other obligation of the Company to the Holder, or any
setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to the
Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with such
exercise.

            (iii)   Liability for Late Delivery; Force Majeure.  If in any
case the Company shall fail to issue and deliver the shares of Common Stock to
the Holder pursuant to this Note on the due date therefor, in addition to any
other liabilities the Company may have hereunder and under applicable law (A)
the Company shall pay or reimburse the Holder on demand for all out-of-pocket
expenses, including, without limitation, reasonable fees and expenses of legal
counsel, incurred by the Holder as a result of such failure, so long as the
Holder shall have given the Company a Holder Share Notice with respect to such
shares of Common Stock, (B) if as a result of such failure the Holder shall
suffer any direct damages or liabilities from such failure (including, without
limitation, margin interest and the cost of purchasing securities to cover a
sale (whether by the Holder or the Holder's securities broker) or borrowing of
shares of Common Stock by the Holder for purposes of settling any trade
involving a sale of shares of Common Stock made by the Holder during the
period beginning on the Issuance Date and ending on the date the Company
delivers or causes to be delivered to the Holder such shares of Common Stock),
then the Company shall upon demand of the Holder pay to the Holder an amount
equal to the actual, direct out-of-pocket damages and liabilities suffered by
the Holder by reason thereof which the Holder documents to the reasonable
satisfaction of the Company, so long as the Holder shall have given the
Company a Holder Share Notice with respect to such shares of Common Stock, and
(C) the Holder may by written notice (which may be given by mail, courier,
personal service or telephone line facsimile transmission) or oral notice
(promptly confirmed in writing), given at any time prior to delivery to the
Holder of the shares of Common Stock issuable in connection with any exercise
of the Holder's rights by reason of which such shares are deliverable, rescind
such exercise in whole or in part, in which case the Holder shall thereafter
be entitled to exercise its rights with respect to that portion of this Note
as to which such exercise is so rescinded and to exercise its other rights and
remedies with respect to such failure by the Company.  Notwithstanding the
foregoing and Section 3(b)(ii), (x) the Company shall not be liable to the
Holder under clauses (A) and (B) of the immediately preceding sentence or (y)
for Conversion Delay Payments, in either such case of the preceding clause (x)
or (y) to the extent the failure of the Company to deliver or to cause to be
delivered such shares of Common Stock results from a Force Majeure Event (it
being understood that the action or failure to act of the Company's Transfer
Agent shall not be deemed a Force Majeure Event unless outside the control of
such Transfer Agent or resulting from the bankruptcy, liquidation or
reorganization of such Transfer Agent under any bankruptcy, insolvency or
other similar law). The Holder shall notify the Company in writing (or by
telephone conversation, confirmed in writing) as promptly as practicable
following the third Trading Day after the due date for delivery to it of
shares of Common Stock under this Note if the Holder becomes aware that such
shares of Common Stock so issuable have not been received as provided herein,
but any failure so to give such notice shall not affect the Holder's rights
under this Note or otherwise. If pursuant to this Section 3(b)(iii) the
Company is relieved of its obligation to make Conversion Delay Payments, then
the Principal Amount of this Note for which a Conversion Notice has been given
and for which the Company has not issued the shares of Common Stock within the
period provided in Section 3(b)(ii) shall continue to bear interest at the
applicable rate provided in this Note from the applicable Conversion Date to
the date the Company so issues such shares of Common Stock.

      (c)   Conversion Price Adjustments.

            (i)   Stock Dividends, Splits and Combinations. In the event that
the Company shall (A) pay a dividend or make a distribution to all its
stockholders, in shares of Common Stock, on any class of capital stock of the
Company or any subsidiary which is not directly or indirectly wholly owned by
the Company, (B) split or subdivide its outstanding Common Stock into a
greater number of shares, or (C) combine its outstanding Common Stock into a
smaller number of shares, then in each such case the Conversion Price in
effect immediately prior thereto shall be adjusted so that the Holder of this
Note thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock that such Holder would have owned or have
been entitled to receive after the occurrence of any of the events described
above had this Note been fully converted immediately prior to the occurrence
of such event. An adjustment made pursuant to this Section 3(c)(i) shall
become effective immediately after the close of business on the record date in
the case of a dividend or distribution and shall become effective immediately
after the close of business on the effective date in the case of such
subdivision, split or combination, as the case may be. Any shares of Common
Stock issuable in payment of a dividend shall be deemed to have been issued
immediately prior to the close of business on the record date for such
dividend for purposes of calculating the number of outstanding shares of
Common Stock under clause (ii) below.

            (ii)   Adjustment for Certain Issuances.

            (A)   In the event that the Company shall commit to issue or
distribute New Securities, in any such case at a price per share less than the
Current Market Price per share on the earliest of (1) the date the Company
shall enter into a firm contract for such issuance or distribution, (2) the
record date for the determination of stockholders entitled to receive any such
New Securities, if applicable, or (3) the date of actual issuance or
distribution of any such New Securities (provided that the issuance of Common
Stock upon the exercise of New Securities that are rights, warrants, options
or convertible or exchangeable securities ("New Derivative Securities") will
not cause an adjustment in the Conversion Price if no such adjustment would
have been required at the time such New Derivative Security was issued), then
the Conversion Price in effect immediately prior to such earliest date shall
be adjusted so that the new Conversion Price shall equal the price determined
by multiplying the Conversion Price in effect immediately prior to such
earliest date by the fraction:

     (x) whose numerator shall be (I) the number of shares of Common Stock
     outstanding on such date (on a fully-diluted basis after giving effect to
     any securities (other than this Note) convertible or exchangeable into
     Common Stock) plus (II) the number of shares of Common Stock which the
     aggregate offering price of the total number of New Securities so offered
     would have purchased at such Current Market Price (such amount, with
     respect to any New Derivative Securities, determined by multiplying the
     total number of shares of Common Stock subject thereto by the exercise
     price of such New Derivative Securities, and dividing the product so
     obtained by such Current Market Price), and

     (y) whose denominator shall be (I) the number of shares of Common Stock
     outstanding on such date (on a fully-diluted basis after giving effect to
     any securities (other than this Note) convertible or exchangeable into
     Common Stock) plus (II) the number of additional shares of Common Stock
     to be issued or distributed or receivable upon exercise of any such New
     Derivative Security.

Such adjustment shall be made successively whenever any such New Securities
are issued. In determining whether any New Derivative Securities entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of
shares of Common Stock so issued, there shall be taken into account any
consideration received by the Company for such Common Stock or New Derivative
Securities, the value of such consideration, if other than cash, to be
determined by the Board of Directors, whose determination shall be conclusive
and described in a certificate filed with the records of corporate proceedings
of the Company. If any New Derivative Security to purchase or acquire Common
Stock, the issuance of which resulted in an adjustment in the Conversion Price
pursuant to this subsection (A) shall expire and shall not have been
exercised, the Conversion Price shall immediately upon such expiration be
recomputed to the Conversion Price which would have been in effect had the
adjustment of the Conversion Price made upon the issuance of such New
Derivative Security been made on the basis of offering for subscription,
purchase or issuance, as the case may be, only of that number of shares of
Common Stock actually purchased or issued upon the actual exercise of such New
Derivative Security.

            (B) In the event that the 30-day moving average closing price of
the Common Stock ending on the Reset Date is less than the Conversion Price in
effect immediately prior to the Reset Date, then the Conversion Price shall be
adjusted so that the Conversion Price immediately following the Reset Date
shall equal such 30-day moving average closing price of the Common Stock.
Notwithstanding the foregoing, in no event shall the Conversion Price be
adjusted pursuant to this subsection (B) below $0.50, subject to adjustment
for stock splits, subdivisions, combinations and the like effected after the
Issuance Date.

            (C)   In the event that the Company shall issue or distribute New
Securities, in any such case at a price per share less than $2.50 or that
would entitle the holders of the New Securities to subscribe for or purchase
shares of Common Stock at less than $2.50 per share (provided that the
issuance of Common Stock upon the exercise of New Derivative Securities will
not cause an adjustment in the Conversion Price if no such adjustment would
have been required at the time such New Derivative Security was issued), then
the Conversion Price in effect immediately prior thereto shall be adjusted so
that the Conversion Price shall equal the price at which the Company issues or
distributes such New Securities (or the price at which the holders of the New
Securities are entitled to subscribe for or purchase shares of Common Stock).
Each such adjustment shall be made successively whenever any such New
Securities are issued. In determining whether any New Derivative Securities
entitle the holders to subscribe for or purchase shares of Common Stock at
less than $2.50 per share, there shall be taken into account any consideration
received by the Company for such New Derivative Securities, the value of such
consideration, if other than cash, to be determined in good faith by the Board
of Directors, whose determination shall be conclusive and described in a
certificate filed with the records of corporate proceedings of the Company.
Notwithstanding the foregoing, in no event shall an adjustment be made under
this subsection (C) if such adjustment would result in raising the
then-effective Conversion Price.

            (iii)   Rounding of Adjustments. No adjustment in the Conversion
Price shall be required unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Price then in effect; provided,
however, that any adjustments that by reason of this Section 3(c) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 3 or Section 2
shall be made to the nearest cent or nearest 1/100th of a share.

            (iv)   Notice of Adjustments. Whenever the Conversion Price is
adjusted pursuant to this Section 3(c), the Company shall promptly deliver to
the Holder a notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment,
provided that any failure to so provide such notice shall not affect the
automatic adjustment hereunder.

            (v)   Change in Control Transactions. In case of any Change in
Control Transaction, the Holder shall have the right thereafter, at its
option, (A) to convert this Note, in whole or in part, at the then applicable
Conversion Price into the shares of stock and other securities, cash and/or
property receivable upon or deemed to be held by holders of Common Stock
following such Change in Control Transaction, and the Holder shall be entitled
upon such event to receive such amount of securities, cash or property as the
shares of the Common Stock of the Company into which this Note could have been
converted immediately prior to such Change in Control Transaction would have
been entitled if such conversion were permitted (determined without regard to
any limitations contained in Section 3.13 of the Purchase Agreement), subject
to such further applicable adjustments set forth in this Section 3, or (B) to
require the Company or its successor to redeem this Note, in whole or in part,
at a redemption price equal to 125% of the outstanding Principal Amount being
redeemed, plus accrued interest thereon. The terms of any such Change in
Control Transaction shall include such terms so as to continue to give to the
Holder the right to receive the amount of securities, cash and/or property
upon any conversion or redemption following such Change in Control Transaction
to which a holder of the number of shares of Common Stock deliverable upon
conversion of this Note immediately prior to such Change in Control
Transaction would have been entitled to receive in such Change in Control
Transaction and if such Holder had continued to hold such securities, cash
and/or property until the date of such conversion or redemption, and interest
payable hereunder after such Change in Control Transaction shall be paid in
cash or such new securities and/or property, at the Holder's option. This
provision shall similarly apply to successive reclassifications,
consolidations, mergers, amalgamations, sales, transfers or share exchanges.

            (vi)   Notice of Certain Events.  If:

                   A.   the Company shall declare a dividend (or any other
distribution) on its Common Stock; or

                   B.   the Company shall declare a special nonrecurring cash
dividend on or a tender offer for, offer to purchase or redemption of its
Common Stock; or

                   C.   the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights; or

                   D.   the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock of the
Company, any consolidation, amalgamation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the
Company, of any compulsory share of exchange whereby the Common Stock is
converted into other securities, cash or property; or

                   E.   the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; or

                   F.   there exists an agreement to which the Company is a
party or by which it is bound providing for a Change in Control Transaction,
or a Change in Control Transaction has occurred;

then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of this Note, and shall cause to be mailed to
the Holder at its last address as it shall appear upon the books of the
Company, on or prior to the date notice of such matter to the Company's
stockholders generally is given, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, tender
offer, offer to purchase, redemption, rights or warrants, or if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distributions, tender offer, offer to purchase,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, amalgamation, merger, sale, transfer,
share exchange or Change in Control Transaction is expected to become
effective or close, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, amalgamation, merger, sale, transfer, share
exchange or Change in Control Transaction.

      (d)   Reservation and Issuance of Underlying Securities. The Company
covenants that it will at all times reserve from its authorized and unissued
Common Stock a sufficient number of shares solely for the purpose of issuance
upon conversion in full of this Note, free from preemptive rights or any other
actual contingent purchase rights of persons other than the Holder (subject to
any additional requirements of the Company as to reservation of such shares
set forth in the Purchase Agreement and taking into account the adjustments
under this Section 3, but determined without regard to any ownership
limitations contained in the Purchase Agreement).  The Company represents,
warrants and covenants that all shares of Common Stock that shall be so
issuable shall, upon issue, be duly authorized, validly issued, fully paid,
and nonassessable.

      (e)   No Fractions. Upon a conversion hereunder the Company shall not be
required to issue stock certificates for a fraction of a share of Common
Stock, but may if otherwise permitted, make a cash payment in respect of any
fraction of a share based on the Current Market Price of a share of Common
Stock at such time.  If the Company elects not, or is unable, to make such a
cash payment, the Holder shall be entitled to receive, in lieu of the fraction
of a share, one whole share of Common Stock.

      (f)   Charges, Taxes and Expenses.  Issuance of shares of Common Stock
upon the conversion of this Note shall be made without charge to the Holder
for any issue or transfer tax or other incidental expense in respect of the
issuance of such shares, all of which taxes and expenses shall be paid by the
Company, and such shares shall be issued in the name of the Holder or in such
name or names as may be directed by the Holder; provided, however, that in the
event certificates for shares of Common Stock are to be issued in a name other
than the name of the Holder, the applicable Conversion Notice, when given for
such conversion shall be accompanied or followed by an assignment form for the
applicable portion of this Note or such shares, as the case may be; and
provided further, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any such transfer.

      (g)   Cancellation. After the entire Principal Amount (including accrued
but unpaid interest and default payments at any time owed on this Note) has
been paid in full or converted into Common Stock, this Note shall
automatically be deemed canceled and the Holder shall promptly surrender this
Note to the Company at the Company's principal executive offices; provided,
however, that the failure to surrender this Note shall not delay or limit such
cancellation.

      (h)   Notice Procedures. Any and all notices or other communications or
deliveries to be provided by the Holder under this Note, including, without
limitation, any Conversion Notice, shall be in writing and delivered
personally, by confirmed facsimile, or by a nationally recognized overnight
courier service to the Company at the facsimile telephone number or address of
the principal place of business of the Company as set forth in, or provided
pursuant to, the Purchase Agreement.  Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be
in writing and delivered personally, by facsimile, or by a nationally
recognized overnight courier service addressed to the Holder at the facsimile
telephone number or address of the Holder appearing on the books of the
Company, or if no such facsimile telephone number or address appears, at the
principal place of business of the Holder. Any notice or other communication
or deliveries hereunder shall be deemed delivered (i) upon receipt, when
delivered personally, (ii) when sent by facsimile, upon receipt if received on
a Business Day prior to 5:00 p.m. (Mountain Time), or on the first Business
Day following such receipt if received on a Business Day after 5:00 p.m.
(Mountain Time) or on a day that is not a Business Day or (iii) upon receipt,
when deposited with a nationally recognized overnight courier service.

      Section 4.   Defaults and Remedies.

      (a)   Events of Default.   An "Event of Default" is:  (i) a failure to
pay any Principal Amount of this Note when due, whether at the Final Maturity
Date or otherwise, (ii) a failure to pay any interest due on this Note on the
date such payment is due, which failure continues for two Business Days (or
ten Business Days if such failure results from a Force Majeure Event or if the
Company can prove that funds were in fact wired from the Company's account by
the due date); (iii) a failure timely to issue Underlying Shares upon and in
accordance with terms hereof, which failure continues for ten Business Days
after the Company has received written notice from the Holder informing the
Company that it has failed to issue shares or deliver stock certificates prior
to the fifth Business Day following the applicable Conversion Date; (iv)
failure by the Company for 20 days (or 90 days if such failure results from a
Force Majeure Event) after written notice has been received by the Company
from the Holder to comply with any material provision (other than as provided
in the immediately preceding clauses (i), (ii) and (iii)) of any of this Note
or any other Transaction Document (including, without limitation, the failure
to redeem this Note upon the Holder's request following a Change in Control
Transaction pursuant to Section 3(c)(v)); (v) a material breach by the Company
of its representations or warranties in this Note or in any other Transaction
Document that continues for 10 days after written notice to the Company; (vi)
any default after any cure period under, or acceleration prior to maturity of,
any note, mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money borrowed
by the Company for in excess of $1 million, or for money borrowed the
repayment of which is guaranteed by the Company for in excess of $1 million,
whether such indebtedness or guarantee now exists or shall be created
hereafter; (vii) if the Company is subject to any Bankruptcy Event; (viii) if
the Registration Statement required by Section 2 of the Registration Rights
Agreement is not declared effective by the SEC within 150 days following the
Closing Date; (ix) any security interest or lien purported to be created by
the Security Agreement shall cease to be in full force and effect with respect
to a material portion of the collateral thereunder or any such security
interest or lien shall be asserted by the Company or any Subsidiary of the
Company not to be a valid, perfected, first priority (except as otherwise
permitted by the Transaction Documents) security interest in or lien on the
collateral covered thereby, and such security interest or lien is not restored
to full force and effect within 10 days after notice to the Company; or (x)
any Transaction Document or any material provisions thereof shall at any time
and for any reason be declared by a court of competent jurisdiction to be null
and void, or the Company or any Subsidiary of the Company shall repudiate or
deny any portion of its liabilities or obligations thereunder.

      (b)   Remedies. If an Event of Default occurs and is continuing, the
Holder may declare all of the then outstanding Principal Amount of this Note,
and any accrued and unpaid interest thereon, to be due and payable immediately
in cash, except that in the case of an Event of Default arising from events
described in clauses (vi) and (vii) of Section 4(a), this Note shall become
automatically due and payable without further action or notice, and the Holder
may exercise all other rights and remedies available at law or in equity. In
the event of such acceleration, the amount due and owing to the Holder shall
be 125% of the outstanding Principal Amount of this Note (plus all accrued and
unpaid interest, if any). In any event the Company shall pay interest on such
amount in cash at the Default Rate to the Holder if such amount is not paid
within one Business Day after such acceleration. The remedies under this Note
shall be cumulative.

      Section 5.   Certain Covenants; General.

      (a)   Rule 144A Information Requirement. Within the period prior to the
expiration of the holding period applicable to sales hereof under Rule 144(k)
under the Securities Act (or any successor provision), the Company covenants
and agrees that it shall, during any period in which it is not subject to
Section 13 or 15(d) under the Exchange Act, make available to the Holder and
any prospective purchaser of this Note from the Holder, the information
required pursuant to Rule 144A(d)(4) under the Securities Act upon the request
of the Holder and it will take such further action as the Holder may
reasonably request, all to the extent required from time to time to enable the
Holder to sell this Note without registration under the Securities Act within
the limitations of the exemption provided by Rule 144A, as Rule 144A may be
amended from time to time.  Upon the request of the Holder, the Company will
deliver to the Holder a written statement as to whether it has complied with
such requirements.

      (b)   Payment of Expenses. The Company agrees to pay all charges and
expenses, including attorneys' fees and expenses, which may be incurred by the
Holder in seeking to enforce this Note.

      (c)   Savings Clause. In case any provision of this Note is held by a
court of competent jurisdiction to be excessive in scope or otherwise invalid
or unenforceable, such provision shall be adjusted rather than voided, if
possible, so that it is enforceable to the maximum extent possible, and the
validity and enforceability of the remaining provisions of this Note will not
in any way be affected or impaired thereby.  In no event shall the amount of
interest paid hereunder exceed the maximum rate of interest on the unpaid
principal balance hereof allowable by applicable law.  If any sum is collected
in excess of the applicable maximum rate, the excess collected shall be
applied to reduce the principal debt.  If the interest actually collected
hereunder is still in excess of the applicable maximum rate, the interest rate
shall be reduced so as not to exceed the maximum allowable under law.

      (d)   Amendment. Neither this Note nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the Company and Holder.

      (e)   Assignment, Etc. The Holder may assign or transfer this Note,
subject to compliance with applicable securities laws, without the consent of
the Company. The Holder shall notify the Company of any such assignment or
transfer promptly. The Company may not assign its rights or obligations under
this Note.  This Note shall be binding upon the Company and its successors and
shall inure to the benefit of the Holder and its successors and permitted
assigns.

      (f)   No Waiver.  No failure on the part of the Holder to exercise, and
no delay in exercising any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Holder of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power.  Each and every right, remedy or power hereby
granted to the Holder or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the Holder
from time to time.

      (g)   Governing Law; Jurisdiction.

            (i)   Governing Law.  THIS NOTE WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

            (ii)   Jurisdiction. The Company (i) hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court sitting in the
Northern District of Texas and the courts of the State of Texas located in
Dallas, Texas, for the purposes of any suit, action or proceeding arising out
of or relating to this Note or the transactions contemplated hereby, 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. The
Company consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to the Company 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 5(g)(ii) shall affect or limit any right to serve
process in any other manner permitted by law. The Company hereby agrees that
if the Holder is the prevailing party in any suit, action or proceeding
arising out of or relating to this Note, the Holder shall be entitled to
reimbursement for legal fees from the Company.

            (iii)   NO JURY TRIAL. The Company knowingly and voluntarily
waives any and all rights it may have to a trial by jury with respect to any
litigation based on, or arising out of, under, or in connection with, this
Note.

      (h)   Replacement Notes. This Note may be exchanged by Holder at any
time and from time to time for a Note or Notes with different denominations
representing an equal aggregate outstanding Principal Amount, as reasonably
requested by Holder, upon surrendering the same.  No service charge will be
made for such registration or exchange.  In the event that Holder notifies the
Company that this Note has been lost, stolen or destroyed, a replacement Note
identical in all respects to the original Note (except for registration number
and Principal Amount, if different than that shown on the original Note),
shall be issued to the Holder, without requirement for any surety bond,
provided that the Holder executes and delivers to the Company an agreement
reasonably satisfactory to the Company to indemnify the Company from any loss
incurred by it in connection with this Note.

                     [Signature Page Follows]

      IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
on the day and in the year first above written.

                               BROADCAST INTERNATIONAL, INC.

                               By:   /S/ Rodney M. Tiede
                                   ______________________________________
                                     Rodney M. Tiede,
                                     President & CEO

                            ASSIGNMENT

      For value received___________________________ hereby sell(s), assign(s)
and transfer(s) unto _______________________  (Please insert social security
or other Taxpayer Identification Number of assignee: _____________________)
the within Note, and hereby irrevocably constitutes and appoints
________________ attorney to transfer the said Note on the books of Broadcast
International, Inc., a Utah corporation (the "Company"), with full power of
substitution in the premises.

      In connection with any transfer of the Note within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the Securities Act), the undersigned confirms that such Note is being
transferred:

      [   ]   To the Company or a subsidiary thereof; or

      [   ]   To a QIB pursuant to and in compliance with Rule 144A; or

      [   ]   To an "accredited investor" pursuant to and in compliance with
              the Securities Act; or

      [   ]   Pursuant to and in compliance with Rule 144 under the Securities
              Act;

and unless the box below is checked, the undersigned confirms that, to the
knowledge of the undersigned, such Note is not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").

      [   ]   The transferee is an Affiliate of the Company.

      Capitalized terms used in this Assignment and not defined in this
Assignment shall have the respective meanings provided in the Note.

Dated:                NAME: ___________________________________

                            ___________________________________
                                         Signature(s)

                            EXHIBIT A

                    FORM OF CONVERSION NOTICE

(To be executed by the Holder in order
to convert 6% Senior Secured Convertible Note Due 2008)

Re:   6% Senior Secured Convertible Note Due 2008 issued by BROADCAST
      INTERNATIONAL, INC. identified below (the "Note")

The undersigned hereby elects to convert the outstanding Principal Amount (as
defined in the Note) indicated below of the Note into shares of Common Stock,
of BROADCAST INTERNATIONAL, INC., a Utah corporation (the "Company"),
according to the terms hereof and of the Note, as of the date written below.
If shares are to be issued in the name of a person other than undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates and opinions as reasonably requested by
the Company in accordance therewith. No fee will be charged to the Holder for
any conversion, except for such transfer taxes, if any.

Conversion information:      _____________________________________________
                             Note Number

                             _____________________________________________
                             Conversion Date

                             ___________________________________________
                             Principal Amount of Note Being Converted

                             ___________________________________________
                             Number of Shares of Common Stock to Be Issued

                             _____________________________________________
                             Applicable Conversion Price

                             ___________________________________________
                             Signature

                             _____________________________________________
                             Name

                             _____________________________________________
                             AddressTHE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON
EXERCISE OF THE WARRANT REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT. SUCH SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER
THE SECURITIES ACT.

 THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.

                  Broadcast International, Inc.

                         Series A Warrant
            for the Purchase of Shares of Common Stock
                   (par value $0.05 per share)

No. A-___                                                       ______ Shares

THIS CERTIFIES that, for value received, _____________, whose address is
_________________________ (together with any person or entity to which this
Series A Warrant (or any portion hereof) may be transferred, the "Holder"), is
entitled to subscribe for and purchase from Broadcast International, Inc., a
Utah corporation (the "Company"), upon the terms and conditions set forth
herein, ______ shares of the Company's common stock, par value $0.05 per share
("Common Stock"), at a price of $2.50 per share (the "Exercise Price"). As
used herein the term "this Warrant" shall mean and include this Series A
Warrant and any Common Stock or warrants hereafter issued as a consequence of
the exercise or transfer of this Series A Warrant in whole or in part.

The number of shares of Common Stock issuable upon exercise of the Warrants
(the "Warrant Shares") and the Exercise Price may be adjusted from time to
time as hereinafter set forth. The Warrant Shares are entitled to the
benefits, and subject to the obligations, set forth in the Registration Rights
Agreement among the Company, the Holder and certain other parties dated
concurrently herewith (the "Registration Rights Agreement").

     1.  Exercise Period.  This Warrant may be exercised at any time or from
time to time during the period commencing at 10:00 A.M. Mountain time on May
__, 2005 and ending at 5:00 P.M. Mountain Time on May __, 2010 (the "Exercise
Period").

     2.  Procedure for Exercise; Effect of Exercise.

         (a)     Cash Exercise. This Warrant may be exercised, in whole or in
part, by  the Holder during normal business hours on any business day during
the Exercise Period by (i) the presentation and surrender of this Warrant to
the Company at its principal executive office along with a duly executed
Notice of Exercise (in the form attached hereto) specifying the number of
Warrant Shares to be purchased, and (ii) delivery of payment to the Company of
the Exercise Price for the number of Warrant Shares specified in the Notice of
Exercise by cash, wire transfer of immediately available funds to a bank
account specified by the Company, or by certified or bank cashier's check.

         (b)     Cashless Exercise. This Warrant may also be exercised by the
Holder through a cashless exercise, as described in this Section 2(b). In such
case, this Warrant may be exercised, in whole or in part, by the Holder during
normal business hours on any business day during the Exercise Period by the
presentation and surrender of this Warrant to the Company at its principal
office along with a duly executed Notice of Exercise specifying the number of
Warrant Shares to be applied to such exercise. The number of shares of Common
Stock to be issued upon exercise of this Warrant pursuant to this Section 2(b)
shall equal the value of this Warrant (or the portion thereof being canceled)
computed as of the date of delivery of this Warrant to the Company using the
following formula:

          X = Y(A-B)
              -----
                A

     Where:

             X  =  the number of shares of Common Stock to be issued to Holder
                   under this Section 2(b);

             Y  =  the number of Warrant Shares identified in the Notice of
                   Exercise as being applied to the subject exercise;

             A  =  the Current Market Price on such date; and

             B  =  the Exercise Price on such date

For purposes of this Section 2(b), Current Market Price shall have the
definition provided in Section 6(g).

The Company acknowledges and agrees that this Warrant was issued on the date
set forth at the end of this Warrant. Consequently, the Company acknowledges
and agrees that, if the Holder conducts a cashless exercise pursuant to this
Section 2(b), the period during which the Holder held this Warrant may, for
purposes of Rule 144 promulgated under the Securities Act of 1933, as amended
(the "Securities Act"), be "tacked" to the period during which the Holder
holds the Warrant Shares received upon such cashless exercise.

Notwithstanding the foregoing, the Holder may conduct a cashless exercise
pursuant to this Section 2(b) only after the first anniversary of the initial
issuance date of this Warrant, and then only in the event that a registration
statement covering the resale of the Warrant Shares is not then effective at
the time that the Holder wishes to conduct such cashless exercise.

         (c)     Company's Response; Effect of Exercise. Upon receipt by the
Company of a copy of a Notice of Exercise (including a copy received via
facsimile), the Company shall immediately send to the Holder, via facsimile, a
confirmation of receipt of such Notice of Exercise. Upon receipt by the
Company of this Warrant and the original Notice of Exercise, together with
proper payment of the Exercise Price, as provided in this Section 2, the
Company or its designated transfer agent (the "Transfer Agent"), as
applicable, shall, within three (3) business days following the date of
receipt by the Company of the original Notice of Exercise (so long as this
Warrant and the proper payment of the Exercise Price are received by the
Company on or before such third business day), issue and deliver to the
Depository Trust Company ("DTC") account on the Holder's behalf via the
Deposit Withdrawal Agent Commission System ("DWAC") as specified in the Notice
of Exercise, registered in the name of the Holder or its designee, for the
number  of shares of Common Stock to which the Holder shall be entitled.
Notwithstanding the foregoing to the contrary, the Company or its Transfer
Agent shall only be obligated to issue and deliver the shares to the DTC on
the Holder's behalf via DWAC if (A) a registration statement covering the
resale of the Warrant Shares has been declared effective by the Securities and
Exchange Commission, (B) the exercise of this Warrant is in connection with a
sale, and (C) the Holder has complied with the applicable prospectus delivery
requirements. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the right of the Holder to purchase the balance of the
Warrant Shares subject to purchase hereunder. Upon receipt by the Company of
this Warrant and a Notice of Exercise, together with proper payment of the
Exercise Price, as provided in this Section 2, the Company agrees that such
Warrant Shares shall be deemed to be issued to the Holder as the record holder
of such Warrant Shares as of the close of business on the date on which this
Warrant has been surrendered and payment has been made for such Warrant Shares
in accordance with this Warrant and the Holder shall be deemed to be the
holder of record of the Warrant Shares, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder.

     3.  Registration of Warrants; Transfer of Warrants. Any Warrants issued
upon the transfer or exercise in part of this Warrant shall be numbered and
shall be registered in a Warrant Register as they are issued. The Company
shall be entitled to treat the registered holder of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes and shall not be bound
to recognize any equitable or other claim to or interest in such Warrant on
the part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by its duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer.  In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority
shall be produced.  Upon any registration of transfer, the Company shall
deliver a new Warrant or Warrants to the person entitled thereto. This Warrant
may be exchanged, at the option of the Holder thereof, for another Warrant, or
other Warrants of different denominations, of like tenor and representing in
the aggregate the right to purchase a like number of Warrant Shares, upon
surrender to the Company or its duly authorized agent.

     4.  Restrictions on Transfer. (a) The Holder, as of the date of issuance
hereof, represents to the Company that such Holder is acquiring the Warrants
for its own account and not with a view to the distribution thereof or of the
Warrant Shares.  Notwithstanding any provisions contained in this Warrant to
the contrary, this Warrant and the related Warrant Shares shall not be
transferable except pursuant to the proviso contained in the following
sentence or upon the conditions specified in this Section 4, which conditions
are intended, among other things, to insure compliance with the provisions of
the Securities Act and applicable state law in respect of the transfer of this
Warrant or such Warrant Shares. The Holder by acceptance of this Warrant
agrees that the Holder will not transfer this Warrant or the related Warrant
Shares prior to delivery to the Company of an opinion of the Holder's counsel
(as such opinion and such counsel are described in Section 4(b) hereof) or
until registration of such Warrant Shares under the Securities Act has become
effective or after a sale of such Warrant or Warrant Shares has been
consummated pursuant to Rule 144 or Rule 144A under the Securities Act;
provided, however, that the Holder may freely transfer this Warrant or such
Warrant Shares (without delivery to the Company of an opinion of counsel) (i)
to one of its nominees, affiliates or a nominee thereof, (ii) to a pension or
profit-sharing fund established and maintained for its employees or for the
employees of any affiliate,  (iii) from a nominee to any of the aforementioned
persons as beneficial owner of this Warrant or such Warrant Shares, (iv) to a
qualified institutional buyer, so long as such transfer is effected in
compliance with Rule 144A under the Securities Act, or (v) to an accredited
investor (as such term is defined in Regulation D under the Securities Act).

         (b)     The Holder, by its acceptance hereof, agrees that prior to
any transfer of this Warrant or of the related Warrant Shares (other than as
permitted by Section 4(a) hereof or pursuant to a registration under the
Securities Act), the Holder will give written notice to the Company of its
intention to effect such transfer, together with an opinion of such counsel
for the Holder, to the effect that the proposed transfer of this Warrant
and/or such Warrant Shares may be effected without registration under the
Securities Act.  Upon delivery of such notice and opinion to the Company, the
Holder shall be entitled to transfer this Warrant and/or such Warrant Shares
in accordance with the intended method of disposition specified in the notice
to the Company.

         (c)     Each stock certificate representing Warrant Shares issued
upon exercise or exchange of this Warrant shall bear the following legend
unless the opinion of counsel referred to in Section 4(b) states such legend
is not required:

        "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
        REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
        SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
        FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
        SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
        THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
        OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
        OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
        SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
        TRANSFEROR TO SUCH EFFECT. SUCH SECURITIES MAY BE PLEDGED IN
        CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
        BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS
        AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE
        SECURITIES ACT."

The Holder understands that the Company may place, and may instruct any
transfer agent or depository for the Warrant Shares to place, a stop transfer
notation in the securities records in respect of the Warrant Shares.

     5.  Reservation of Shares. The Company shall at all times during the
Exercise Period reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of providing for the exercise of the
rights to purchase all Warrant Shares granted pursuant to the Warrants, such
number of shares of Common Stock as shall, from time to time, be sufficient
therefor.  The Company covenants that all shares of Common Stock issuable upon
exercise of this Warrant, upon receipt by the Company of the full Exercise
Price therefor, and all shares of Common Stock issuable upon conversion of
this Warrant, shall be validly issued, fully paid, non-assessable, and free of
preemptive rights, and free from all taxes, claims, liens, charges and other
encumbrances.

     6.  Exercise Price Adjustments.  The Exercise Price shall be subject to
adjustment from time to time as follows:

         (a) (i)  In the event that the Company shall (A) pay a dividend or
make a distribution to all its stockholders, in shares of Common Stock, on any
class of capital stock of the Company or any subsidiary which is not directly
or indirectly wholly owned by the Company, (B) split or subdivide its
outstanding Common Stock into a greater number of shares, or (C) combine its
outstanding Common Stock into a smaller number of shares, then in each such
case the Exercise Price in effect immediately prior thereto shall be adjusted
so that the Holder of a Warrant thereafter surrendered for Exercise shall be
entitled to receive the number of shares of Common Stock that such Holder
would have owned or have been entitled to receive after the occurrence of any
of the events described above had such Warrant been exercised immediately
prior to the occurrence of such event. An adjustment made pursuant to this
Section 6(a)(i) shall become effective immediately after the close of business
on the record date in the case of a dividend or distribution (except as
provided in Section 6(e) below) and shall become effective immediately after
the close of business on the effective date in the case of such subdivision,
split or combination, as the case may be. Any shares of Common Stock issuable
in payment of a dividend shall be deemed to have been issued immediately prior
to the close of business on the record date for such dividend for purposes of
calculating the number of outstanding shares of Common Stock under clauses
(ii), (iii) and (iv) below.

             (ii)     In the event that the Company shall commit to issue or
distribute New Securities (as defined in the Securities Purchase Agreement, of
even date herewith, among the Company, the Holder and certain other Purchasers
named therein), in any such case at a price per share less than the Current
Market Price per share on the earliest of (A) the date the Company shall enter
into a firm contract for such issuance or distribution, (B) the record date
for the determination of stockholders entitled to receive any such New
Securities, if applicable, or (C) the date of actual issuance or distribution
of any such New Securities (provided that the issuance of Common Stock upon
the exercise of New Securities that are rights, warrants, options or
convertible or exchangeable securities ("New Derivative Securities") will not
cause an adjustment in the Exercise Price if no such adjustment would have
been required at the time such New Derivative Security was issued), then the
Exercise Price in effect immediately prior to such earliest date shall be
adjusted so that the Exercise Price shall equal the price determined by
multiplying the Exercise Price in effect immediately prior to such earliest
date by the fraction:

        (x) whose numerator shall be (I) the number of shares of Common  Stock
        outstanding on such date (on a fully-diluted basis after giving effect
        to any securities (other than the Warrants) convertible or
        exchangeable into Common Stock) plus (II) the number of shares of
        Common Stock which the aggregate offering price of the total number of
        New Securities so offered would have purchased at such Current Market
        Price (such amount, with respect to any New Derivative Securities,
        determined by multiplying the total number of shares of Common Stock
        subject thereto by the exercise price of such New Derivative
        Securities, and dividing the product so obtained by such Current
        Market Price), and

        (y) whose denominator shall be (I) the number of shares of Common
        Stock outstanding on such date (on a fully-diluted basis after giving
        effect to any securities (other than the Warrants) convertible or
        exchangeable into Common Stock) plus (II) the number of additional
        shares of Common Stock to be issued or distributed or receivable upon
        exercise of any such New Derivative Security.

Such adjustment shall be made successively whenever any such New Securities
are issued. In determining whether any New Derivative Securities entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of
shares of Common Stock so issued, there shall be taken into account any
consideration received by the Company for such Common Stock or New Derivative
Securities, the value of such consideration, if other than cash, to be
determined by the board of directors of the Company (the "Board of
Directors"), whose determination shall be conclusive and described in a
certificate filed with the records of corporate proceedings of the Company. If
any New Derivative Security to purchase or acquire Common Stock, the issuance
of which resulted in an adjustment in the Exercise Price pursuant to this
subsection (ii) shall expire and shall not have been exercised, the Exercise
Price shall immediately upon such expiration be recomputed to the Exercise
Price which would have been in effect had the adjustment of the Exercise Price
made upon the issuance of such New Derivative Security been made on the basis
of offering for subscription, purchase or issuance, as the case may be, only
of that number of shares of Common Stock actually purchased or issued upon the
actual exercise of such New Derivative Security.

             (iii)     In the event that the 30-day moving average closing
price of the Common Stock ending on the earlier of (A) the later of (1) the
Effectiveness Date (as defined in the Registration Rights Agreement), and (2)
the nine-month anniversary of the Closing Date (as defined in the Securities
Purchase Agreement, of even date herewith, among the Company, the Holder and
certain other Purchasers named therein), or (B) the one-year anniversary of
the Closing Date ((A) or (B) above, the "Reset Date"), is less than the
Exercise Price in effect immediately prior to the Reset Date, then the
Exercise Price shall be adjusted so that the Exercise Price immediately
following the Reset Date shall equal such 30-day moving average closing price
of the Common Stock. Notwithstanding the foregoing, in no event shall the
Exercise Price be adjusted pursuant to this subsection (iii) below $0.50,
subject to adjustment for stock splits, subdivisions, combinations and the
like effected after the initial issuance date of this Warrant.

             (iv)     In the event that the Company shall issue or distribute
New Securities, in any such case at a price per share less than $2.50 or that
would entitle the holders of the New Securities to subscribe for or purchase
shares of Common Stock at less than $2.50 per share (provided that the
issuance of Common Stock upon the exercise of New Derivative Securities will
not cause an adjustment in the Exercise Price if no such adjustment would have
been required at the time such New Derivative Security was issued), then the
Exercise Price in effect immediately prior thereto shall be adjusted so that
the Exercise Price shall equal the price at which the Company issues or
distributes such New Securities (or the price at which the holders of the New
Securities are entitled to subscribe for or purchase shares of Common Stock).
Each such adjustment shall be made successively whenever any such New
Securities are issued. In determining whether any New Derivative Securities
entitle the holders to subscribe for or purchase shares of Common Stock at
less than $2.50 per share, there shall be taken into account any consideration
received by the Company for such New Derivative Securities, the value of such
consideration, if other than cash, to be determined in good faith by the Board
of Directors, whose determination shall be conclusive and described in a
certificate filed with the records of corporate proceedings of the Company.
Notwithstanding the foregoing, in no event shall an adjustment be made under
this subsection (iv) if such adjustment would result in raising the
then-effective Exercise Price.

             (v)     No adjustment in the Exercise Price shall be required
unless the adjustment would require an increase or decrease of at least 1% in
the Exercise Price then in effect; provided, however, that any adjustments
that by reason of this Section 6(a) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.  All
calculations under this Section 6(a) shall be made to the nearest cent or
nearest 1/100th of a share.

             (vi)     The Company from time to time may reduce the Exercise
Price by any amount for any period of time in the discretion of the Board of
Directors. A voluntary reduction of the Exercise Price does not change or
adjust the Exercise Price otherwise in effect for purposes of this Section
6(a).

             (vii)     In the event that, at any time as a result of an
adjustment made pursuant to Sections 6(a)(i) through 6(a)(v) above, the Holder
of any Warrant thereafter surrendered for exercise shall become entitled to
receive any shares of the Company other than shares of the Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
such Warrant shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Sections 6(a)(i) through 6(a)(vi) above, and the
other provisions of this Section 6(a) with respect to the Common Stock shall
apply on like terms to any such other shares.

         (b) In case of any reclassification of the Common Stock (other than
in a transaction to which Section 6(a)(i) applies), any consolidation of the
Company with, or merger of the Company into, any other entity, any merger of
another entity into the Company (other than a merger that does not result in
any reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock of the Company), any sale or transfer of all or
substantially all of the assets of the Company or any compulsory share
exchange, pursuant to which share exchange the Common Stock is converted into
other securities, cash or other property (any such reclassification,
consolidation, merger, sale, transfer or exchange shall be referred to herein
as a "Reorganization Transaction"), there shall thereafter be deliverable upon
exercise of any Warrant (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock that would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Reorganization Transaction if such Warrant had been
exercised in full immediately prior to such Reorganization Transaction.  In
case of any Reorganization Transaction, appropriate adjustment, as reasonably
determined in good faith by the Board of Directors shall be made in the
application of the provisions herein set forth with respect to the rights and
interests of the Holder so that the provisions set forth herein shall
thereafter be applicable, as nearly as possible, in relation to any such
shares or other securities or property thereafter deliverable upon exercise of
Warrants. The Company shall not effect any Reorganization Transaction unless
prior to or simultaneously with the consummation thereof the successor
corporation or other entity (if other than the Company) resulting from such
Reorganization Transaction or the corporation or other entity purchasing such
assets shall expressly assume, by a supplemental warrant or other
acknowledgment executed and delivered to the Holder, the obligation to deliver
to the Holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such Holder may be entitled to purchase, and
the due and punctual performance and observance of each and every covenant,
condition, obligation and liability under this Warrant to be performed and
observed by the Company in the manner prescribed herein. The provisions of
this Section 6(b) shall similarly apply to successive reclassifications,
consolidations, mergers, sales, transfers or share exchanges.

         (c) If:

             (i)   the Company shall take any action which would require an
adjustment in the Exercise Price pursuant to Section 6(a); or

             (ii)  the Company shall authorize the granting to the holders of
its Common Stock generally of rights, warrants or options to subscribe for or
purchase any shares of any class or any other rights, warrants or options; or

             (iii) there shall be any reclassification or change of the Common
Stock (other than a subdivision or combination of its outstanding Common Stock
or a change in par value) or any consolidation, merger or statutory share
exchange to which the Company is a party and for which approval of any
stockholders of the Company is required, or the sale or transfer of all or
substantially all of the assets of the Company; or

             (iv)  there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in each such case, the Company shall cause to be filed with the transfer
agent for the Warrants and shall cause to be mailed to each Holder at such
Holder's address as shown on the books of the transfer agent for the Warrants,
as promptly as possible, but at least 30 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to
be taken for the purpose of such dividend, distribution or granting of rights,
warrants or options, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution or rights, warrants or options are to be determined, or (B) the
date on which such reclassification, change, consolidation, merger, statutory
share exchange, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective or occur, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, statutory share exchange,
sale, transfer, dissolution, liquidation or winding up.  Failure to give such
notice or any defect therein shall not affect the legality or validity of the
proceedings described in this Section 6(c).

         (d)  Whenever the Exercise Price is adjusted as herein provided, the
Company shall promptly file with the transfer agent for the Warrants a
certificate of an officer of the Company setting forth the Exercise Price
after the adjustment and setting forth a brief statement of the facts
requiring such adjustment and a computation thereof.  The Company shall
promptly cause a notice of the adjusted Exercise Price to be mailed to each
Holder.

         (e)  In any case in which Section 6(a) provides that an adjustment
shall become effective immediately after a record date for an event and the
date fixed for such adjustment pursuant to Section 6(a) occurs after such
record date but before the occurrence of such event, the Company may defer
until the actual occurrence of such event (i) issuing to the Holder of any
Warrants exercised after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common
Stock issuable upon such exercise before giving effect to such adjustment, and
(ii) paying to such holder any amount in cash in lieu of any fraction pursuant
to Section 6(i).

         (f)  In case the Company shall take any action affecting the Common
Stock, other than actions described in this Section 6, which in the opinion of
the Board of Directors would materially adversely affect the exercise right of
the Holders, the Exercise Price may be adjusted, to the extent permitted by
law, in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances.

         (g)  For the purpose of any computation under Section 2(b) or this
Section 6, the "Current Market Price" per share of Common Stock on any day
shall mean: (i) if the principal trading market for such securities is a
national or regional securities exchange, the closing price on such exchange
on such day; or (ii) if sales prices for shares of Common Stock are reported
by the NASDAQ National Market System (or a similar system then in use), the
last reported sales price (regular way) so reported on such day; or (iii) if
neither (i) nor (ii) above are applicable, and if bid and ask prices for
shares of Common Stock are reported in the over-the-counter market by NASDAQ
(or, if not so reported, by the National Quotation Bureau), the average of the
high bid and low ask prices so reported on such day. Notwithstanding the
foregoing, if there is no reported closing price, last reported sales price,
or bid and ask prices, as the case may be, for the day in question, then the
Current Market Price shall be determined as of the latest date prior to such
day for which such closing price, last reported sales price, or bid and ask
prices, as the case may be, are available, unless such securities have not
been traded on an exchange or in the over-the-counter market for 5 or more
days immediately prior to the day in question, in which case the Current
Market Price shall be determined by an Independent Financial Expert (and the
costs of such determination shall be bourne entirely by the Company).   An
"Independent Financial Expert" shall mean a reputable accounting, appraisal or
investment banking firm that is, in the reasonable judgment of the Board of
Directors, qualified to perform the task for which such firm has been engaged
hereunder, is nationally recognized and disinterested and Independent with
respect to the Company and its affiliates and is reasonably acceptable to the
Holder. "Independent" shall mean any person or entity that (A) is in fact
independent, (B) does not have any direct financial interest or any material
indirect financial interest in the Company or any of its subsidiaries, or in
any affiliate of the Company or any of its subsidiaries (other than as a
result of holding securities of the Company in trading accounts), and (C) is
not an officer, employee, promoter, trustee, partner, director or person
performing similar functions for the Company or any of its subsidiaries or any
affiliate of the Company or any of its subsidiaries.

         (h)  Upon each adjustment of the Exercise Price (other than an
adjustment under Section 6(a)(iii) or (iv)), this Warrant shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
shares (calculated to the nearest thousandth) obtained by dividing (i) the
product obtained by multiplying the number of shares purchasable upon exercise
of this Warrant prior to adjustment of the number of shares by the Exercise
Price in effect prior to adjustment of the Exercise Price, by (ii) the
Exercise Price in effect after such adjustment of the Exercise Price.

         (i)  The Company shall not be required to issue fractions of shares
of Common Stock or other capital stock of the Company upon the exercise of
this Warrant.  If any fraction of a share would be issuable on the exercise of
this Warrant (or specified portions thereof), the Company shall purchase such
fraction for an amount in cash equal to the same fraction of the Current
Market Price of such share of Common Stock on the date of exercise of this
Warrant.

     7.  Transfer Taxes. The issuance of any shares or other securities upon
the exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of
any certificate in a name other than that of the Holder and the Company shall
not be required to issue or deliver any such certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

     8.  Loss or Mutilation of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant (and upon surrender of any Warrant if mutilated), and upon
reimbursement of the Company's reasonable incidental expenses, the Company
shall execute and deliver to the Holder thereof a new Warrant of like date,
tenor, and denomination.

     9.  No Rights as a Stockholder. The Holder of any Warrant shall not have,
solely on account of such status, any rights of a stockholder of the Company,
either at law or in equity, or to any notice of meetings of stockholders or of
any other proceedings of the Company, except as provided in this Warrant.

     10. Governing Law.  This Warrant shall be construed in accordance with
the laws of the State of Texas applicable to contracts made and performed
within such State, without regard to principles of conflicts of law.

                              * * *

Dated:     May __, 2005

                                  BROADCAST INTERNATIONAL, INC.

                              By: __________________________________
                                   Rodney M. Tiede, President & CEO

                        FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer
the attached Warrant.)

         FOR VALUE RECEIVED,_______________________________ hereby sells,
assigns, and transfers unto _______________________________ a Warrant to
purchase _____ shares of Common Stock, par value $0.05 per share, of Broadcast
International, Inc. (the "Company"), together with all right, title, and
interest therein, and does hereby irrevocably constitute and appoint
_______________________ attorney to transfer such Warrant on the books of the
Company, with full power of substitution.

                                    Dated:____________________________

                                    By:_____________________________________
                                               Signature

     The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.

To:       Broadcast International, Inc.
          7050 Union Park Avenue, Suite 600
          Salt Lake City, Utah  84047
          Attention:  President

NOTICE OF EXERCISE

     The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in
the amount of $_________ by [tendering cash or delivering a certified check or
bank cashier's check, payable to the order of the Company] [surrendering
______ shares of Common Stock received upon exercise of the attached Warrant,
which shares have a Current Market Price equal to such payment] in accordance
with the terms thereof.

               _______________________________________
               _______________________________________
               _______________________________________
              (Print Name, Address and Social Security
               or Tax Identification Number)

Holder requests delivery to be made: (check one)

[ ]   By delivery of physical certificates in the name above and delivered to
      the above address

[ ]   Through Depository Trust Corporation
      (Account__________________________)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the address stated below.

                                 Dated:_____________________________

                                 By: _______________________________
                                             Print Name

                                     ________________________________
                                             Signature
Address:

     _______________________________

     _______________________________

     _______________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]