Document:

THIS WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE  HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,  TRANSFERRED
OR OTHERWISE  DISPOSED OF UNLESS  REGISTERED  UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO  THE  ISSUER  THAT  REGISTRATION  OF  SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.

                      FORM OF SERIES C WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                            TOTAL LUXURY GROUP, INC.

                              Expires March 7, 2015

No.: W-C-[01]                                     Number of Shares: ____________
Date of Issuance: March 7, 2008

     FOR VALUE RECEIVED,  the undersigned,  TOTAL LUXURY GROUP, INC., an Indiana
corporation  (together with its successors  and assigns,  the "Issuer"),  hereby
certifies that  _______________________ or its registered assigns is entitled to
subscribe  for and purchase,  during the Term (as  hereinafter  defined),  up to
_____________ shares (subject to adjustment as hereinafter provided) of the duly
authorized,  validly issued,  fully paid and non-assessable  Common Stock of the
Issuer,  at an  exercise  price per share  equal to the  Warrant  Price  then in
effect,  subject,  however,  to the provisions and upon the terms and conditions
hereinafter set forth.  Capitalized terms used in this Warrant and not otherwise
defined herein shall have the respective meanings specified in Section 8 hereof.

     1. Term. The term of this Warrant shall commence on March 7, 2008 and shall
expire at 6:00  p.m.,  Eastern  Time,  on March 7, 2015 (such  period  being the
"Term").

     2. Method of  Exercise;  Payment;  Issuance of New  Warrant;  Transfer  and
Exchange.

          (a) Time of Exercise.  The purchase rights represented by this Warrant
     may be exercised in whole or in part during the Term.

          (b) Method of Exercise.  The Holder  hereof may exercise this Warrant,
     in whole or in part,  by the  surrender of this Warrant  (with the exercise
     form attached hereto duly executed) at the principal  office of the Issuer,
     and by the  payment  to the Issuer of an amount of  consideration  therefor
     equal  to the  Warrant  Price  in  effect  on the  date  of  such  exercise
     multiplied  by the number of shares of Warrant  Stock with respect to which
     this Warrant is then being exercised, payable at such Holder's election (i)
     by  certified  or  official  bank check or by wire  transfer  to an account
     designated by the Issuer,  (ii) by "cashless  exercise" in accordance  with
     the  provisions  of  subsection  (c) of  this  Section  2,  or  (iii)  by a
     combination of the foregoing  methods of payment  selected by the Holder of
     this Warrant.

          (c) Cashless  Exercise.  Notwithstanding  any provisions herein to the
     contrary and  commencing  twelve (12) months  following the Original  Issue
     Date if the (i)  Registration  Statement  (as  defined in the  Registration
     Rights  Agreement)  covering  the  Warrant  Stock  has  not  been  declared
     effective  under the Securities  Act and/or (ii) an effective  Registration
     Statement  has been  suspended  by the  Company  for any or no reason,  the
     Holder may exercise  this Warrant by a cashless  exercise and shall receive
     the  number of shares of Common  Stock  equal to an amount  (as  determined
     below) by surrender of this Warrant at the  principal  office of the Issuer
     together with the properly  endorsed  Notice of Exercise in which event the
     Issuer  shall  issue to the  Holder a number  of  shares  of  Common  Stock
     computed using the following formula:

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

Where             X =      the number of shares of Common Stock to be issued
                           to the Holder.

                  Y =      the number of shares of Common Stock purchasable
                           upon exercise of all of the Warrant or, if only a
                           portion of the Warrant is being exercised, the
                           portion of the Warrant being exercised.

                  A =      the Warrant Price.

                  B =      the Per Share Market Value of one share of
                           Common Stock.

          (d)  Issuance of Stock  Certificates.  In the event of any exercise of
     this  Warrant in  accordance  with and subject to the terms and  conditions
     hereof,  certificates for the shares of Warrant Stock so purchased shall be
     dated the date of such exercise and delivered to the Holder hereof within a
     reasonable  time, not exceeding  three (3) Trading Days after such exercise
     (the  "Delivery  Date") or, at the request of the Holder  (provided  that a
     registration statement under the Securities Act providing for the resale of
     the  Warrant  Stock  is  then  in  effect),  issued  and  delivered  to the
     Depository  Trust Company  ("DTC")  account on the Holder's  behalf via the
     Deposit  Withdrawal  Agent  Commission  System ("DWAC") within a reasonable
     time,  not exceeding  three (3) Trading Days after such  exercise,  and the
     Holder  hereof  shall be deemed  for all  purposes  to be the holder of the
     shares  of  Warrant  Stock so  purchased  as of the date of such  exercise.
     Notwithstanding  the foregoing to the contrary,  the Issuer or its transfer
     agent shall only be obligated to issue and deliver the shares to the DTC on
     a  holder's  behalf  via DWAC if the  Issuer  and its  transfer  agent  are
     participating in DTC through the DWAC system. The Holder shall deliver this
     original Warrant,  or an  indemnification  undertaking with respect to such
     Warrant in the case of its loss,  theft or  destruction,  at such time that
     this Warrant is fully exercised.  With respect to partial exercises of this
     Warrant, the Issuer shall keep written records for the Holder of the number
     of shares of Warrant Stock exercised as of each date of exercise.

                                       2
<PAGE>

          (e) Compensation for Buy-In on Failure to Timely Deliver  Certificates
     Upon Exercise.  In addition to any other rights available to the Holder, if
     the Issuer  fails to cause its  transfer  agent to transmit to the Holder a
     certificate or certificates  representing  the Warrant Stock pursuant to an
     exercise on or before the Delivery  Date, and if after such date the Holder
     is  required by its broker to purchase  (in an open market  transaction  or
     otherwise)  shares of Common Stock to deliver in  satisfaction of a sale by
     the Holder of the Warrant Stock which the Holder anticipated receiving upon
     such  exercise (a  "Buy-In"),  then the Issuer shall (1) pay in cash to the
     Holder the amount by which (x) the Holder's total purchase price (including
     brokerage commissions,  if any) for the shares of Common Stock so purchased
     exceeds (y) the amount  obtained by multiplying (A) the number of shares of
     Warrant  Stock  that the Issuer  was  required  to deliver to the Holder in
     connection with the exercise at issue times (B) the price at which the sell
     order giving rise to such purchase obligation was executed,  and (2) at the
     option of the  Holder,  either  reinstate  the  portion of the  Warrant and
     equivalent  number of shares of Warrant  Stock for which such  exercise was
     not  honored or deliver to the Holder the number of shares of Common  Stock
     that  would  have been  issued  had the  Issuer  timely  complied  with its
     exercise and delivery  obligations  hereunder.  For example,  if the Holder
     purchases  Common Stock having a total purchase price of $11,000 to cover a
     Buy-In with respect to an  attempted  exercise of the Warrant for shares of
     Common  Stock with an  aggregate  sale price  giving rise to such  purchase
     obligation  of  $10,000,  under  clause  (1) of the  immediately  preceding
     sentence the Issuer shall be required to pay the Holder $1,000.  The Holder
     shall provide the Issuer written notice  indicating the amounts  payable to
     the Holder in respect of the Buy-In, together with applicable confirmations
     and other evidence reasonably requested by the Issuer. Nothing herein shall
     limit a  Holder's  right to  pursue  any  other  remedies  available  to it
     hereunder, at law or in equity including,  without limitation,  a decree of
     specific  performance and/or injunctive relief with respect to the Issuer's
     failure to timely deliver certificates  representing shares of Common Stock
     upon exercise of this Warrant as required pursuant to the terms hereof.

          (f)  Transferability/Exchangeability  of  Warrant.  Subject to Section
     2(h) hereof,  this Warrant may be transferred  by a Holder,  in whole or in
     part,  without the consent of the Issuer.  If transferred  pursuant to this
     paragraph,  this Warrant may be  transferred  on the books of the Issuer by
     the Holder hereof in person or by duly authorized attorney,  upon surrender
     of this Warrant at the principal  office of the Issuer,  properly  endorsed
     (by the Holder  executing an assignment  in the form  attached  hereto) and
     upon payment of any  necessary  transfer tax or other  governmental  charge
     imposed upon such transfer.  This Warrant is  exchangeable at the principal
     office of the Issuer for Warrants to purchase the same aggregate  number of
     shares  of  Warrant  Stock,  each new  Warrant  to  represent  the right to
     purchase  such number of shares of Warrant Stock as the Holder hereof shall
     designate at the time of such exchange. All Warrants issued on transfers or
     exchanges  shall be dated the  Original  Issue Date and shall be  identical
     with this  Warrant  except as to the  number  of  shares of  Warrant  Stock
     issuable pursuant thereto.

          (g) Continuing Rights of Holder. The Issuer will, at the time of or at
     any time after  each  exercise  of this  Warrant,  upon the  request of the
     Holder hereof, acknowledge in writing the extent, if any, of its continuing
     obligation  to afford to such Holder all rights to which such Holder  shall
     continue to be entitled after such exercise in accordance with the terms of
     this  Warrant;  provided that if any such Holder shall fail to make, or the
     Issuer shall fail to

                                       3
<PAGE>

     honor,  any such  request,  the  failure  shall not affect  the  continuing
     obligation of the Issuer to afford such rights to such Holder.

          (h) Compliance with Securities Laws.

               (i)  The  Holder  of  this   Warrant,   by   acceptance   hereof,
          acknowledges  that this Warrant and the shares of Warrant  Stock to be
          issued upon exercise hereof are being acquired solely for the Holder's
          own  account  and  not as a  nominee  for  any  other  party,  and for
          investment,  and that the  Holder  will not offer,  sell or  otherwise
          dispose of this  Warrant  or any shares of Warrant  Stock to be issued
          upon  exercise  hereof  except  pursuant to an effective  registration
          statement, or an exemption from registration, under the Securities Act
          and any applicable state securities laws.

               (ii) Except as provided in paragraph  (iii)  below,  this Warrant
          and all certificates  representing shares of Warrant Stock issued upon
          exercise  hereof  shall be  stamped  or  imprinted  with a  legend  in
          substantially the following form:

               THIS  WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE  UPON
               EXERCISE   HEREOF  HAVE  NOT  BEEN   REGISTERED   UNDER  THE
               SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
               ANY STATE  SECURITIES LAWS AND MAY NOT BE SOLD,  TRANSFERRED
               OR  OTHERWISE   DISPOSED  OF  UNLESS  REGISTERED  UNDER  THE
               SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
               THE  ISSUER  SHALL  HAVE  RECEIVED  AN  OPINION  OF  COUNSEL
               REASONABLY  SATISFACTORY TO THE ISSUER THAT  REGISTRATION OF
               SUCH  SECURITIES  UNDER  THE  SECURITIES  ACT AND  UNDER THE
               PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT
               REQUIRED.

               (iii) The Issuer  agrees to reissue this Warrant or  certificates
          representing  any of the Warrant  Stock,  without the legend set forth
          above  if at such  time,  prior to  making  any  transfer  of any such
          securities,  the  Holder  shall  give  written  notice  to the  Issuer
          describing  the  manner  and  terms of such  transfer.  Such  proposed
          transfer  will not be  effected  until:  (a) either (i) the Issuer has
          received an opinion of counsel reasonably  satisfactory to the Issuer,
          to the  effect  that the  registration  of such  securities  under the
          Securities  Act is not  required  in  connection  with  such  proposed
          transfer,  (ii) a  registration  statement  under the  Securities  Act
          covering such proposed  disposition  has been filed by the Issuer with
          the Securities and Exchange  Commission and has become effective under
          the  Securities  Act,  (iii) the Issuer has  received  other  evidence
          reasonably  satisfactory  to the  Issuer  that such  registration  and
          qualification  under the Securities Act and state  securities laws are
          not required,  or (iv) the Holder  provides the Issuer with reasonable
          assurances  that such  security can be sold pursuant to Rule 144 under
          the  Securities  Act;  and (b) either (i) the Issuer has  received  an
          opinion of  counsel  reasonably  satisfactory  to the  Issuer,  to the
          effect that  registration  or  qualification  under the  securities or
          "blue sky" laws of any state is not required in  connection  with such
          proposed  disposition,   or  (ii)  compliance  with  applicable  state
          securities or "blue sky" laws has been  effected or a valid  exemption

                                       4
<PAGE>

          exists  with  respect  thereto.  The Issuer  will  respond to any such
          notice from a holder within three (3) Trading Days. In the case of any
          proposed  transfer  under this Section  2(h),  the Issuer will pay the
          expenses  of and use  reasonable  efforts  to  comply  with  any  such
          applicable  state securities or "blue sky" laws, but shall in no event
          be  required,  (x) to qualify to do  business in any state where it is
          not then qualified, or (y) to take any action that would subject it to
          tax or to the general  service of process in any state where it is not
          then subject.  The restrictions on transfer  contained in this Section
          2(h) shall be in  addition  to, and not by way of  limitation  of, any
          other  restrictions on transfer contained in any other section of this
          Warrant.  Whenever a  certificate  representing  the Warrant  Stock is
          required to be issued to a the Holder without a legend, at the request
          of  the  Holder,   in  lieu  of   delivering   physical   certificates
          representing  the Warrant  Stock,  the Issuer shall cause its transfer
          agent to  electronically  transmit the Warrant  Stock to the Holder by
          crediting  the account of the  Holder's  Prime Broker with DTC through
          its DWAC system (to the extent not inconsistent with any provisions of
          this Warrant or the Purchase Agreement).

               (iv)  Accredited  Investor  Status.  In no event  may the  Holder
          exercise  this  Warrant  in whole or in part  unless  the Holder is an
          "accredited  investor" as defined in Regulation D under the Securities
          Act.

     3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.

          (a) Stock Fully Paid. The Issuer represents,  warrants,  covenants and
     agrees  that all  shares of  Warrant  Stock  which  may be issued  upon the
     exercise  of this  Warrant or  otherwise  hereunder  will,  when  issued in
     accordance  with the terms of this  Warrant,  be duly  authorized,  validly
     issued,  fully paid and  non-assessable  and free from all taxes, liens and
     charges.  The Issuer  further  covenants  and agrees that during the period
     within  which this Warrant may be  exercised,  the Issuer will at all times
     have  authorized and reserved for the purpose of the issuance upon exercise
     of this Warrant a number of authorized but unissued  shares of Common Stock
     equal to at least one hundred twenty percent (120%) of the number of shares
     of Common Stock  issuable upon exercise of this Warrant  without  regard to
     any limitations on exercise.

          (b) Reservation. If any shares of Common Stock required to be reserved
     for  issuance  upon  exercise  of this  Warrant  or as  otherwise  provided
     hereunder  require  registration  or  qualification  with any  Governmental
     Authority  under any  federal  or state law  before  such  shares may be so
     issued, the Issuer will in good faith use its best efforts as expeditiously
     as possible at its  expense to cause such shares to be duly  registered  or
     qualified.  If the  Issuer  shall  list any  shares of Common  Stock on any
     securities  exchange or market it will, at its expense,  list thereon,  and
     maintain and increase when necessary such listing of, all shares of Warrant
     Stock  from  time to time  issued  upon  exercise  of  this  Warrant  or as
     otherwise  provided  hereunder  (provided  that such Warrant Stock has been
     registered  pursuant to a registration  statement  under the Securities Act
     then in  effect),  and,  to the  extent  permissible  under the  applicable
     securities  exchange rules,  all unissued shares of Warrant Stock which are
     at any time issuable hereunder, so long as any shares of Common Stock shall
     be so listed.  The Issuer will also so list on each securities  exchange or
     market,  and will maintain such listing of, any other  securities which the

                                       5
<PAGE>

     Holder of this  Warrant  shall be entitled to receive  upon the exercise of
     this  Warrant  if at the time any  securities  of the same  class  shall be
     listed on such securities exchange or market by the Issuer.

          (c)  Covenants.  Except  for  the  amendment  of  its  Certificate  of
     Incorporation  as  contemplated by the  Transaction  Documents,  the Issuer
     shall  not  by any  action  including,  without  limitation,  amending  the
     Certificate of Incorporation  or the by-laws of the Issuer,  or through any
     reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
     issue or sale of securities or any other action, avoid or seek to avoid the
     observance or performance of any of the terms of this Warrant,  but will at
     all times in good faith assist in the carrying out of all such terms and in
     the  taking of all such  actions  as may be  necessary  or  appropriate  to
     protect the rights of the Holder  hereof  against  dilution  (to the extent
     specifically   provided   herein)  or  impairment.   Without  limiting  the
     generality of the foregoing,  the Issuer will (i) not permit the par value,
     if any, of its Common  Stock to exceed the then  effective  Warrant  Price,
     (ii) not amend or modify any provision of the Certificate of  Incorporation
     or by-laws of the Issuer in any manner that would  materially and adversely
     affect  the  rights of the  Holders  of the  Warrants,  (iii) take all such
     action as may be reasonably  necessary in order that the Issuer may validly
     and legally issue fully paid and nonassessable shares of Common Stock, free
     and clear of any liens,  claims,  encumbrances and restrictions (other than
     as provided  herein)  upon the exercise of this  Warrant,  and (iv) use its
     best efforts to obtain all such authorizations, exemptions or consents from
     any public regulatory body having jurisdiction thereof as may be reasonably
     necessary  to enable  the  Issuer to  perform  its  obligations  under this
     Warrant.

          (d) Loss, Theft, Destruction,  Mutilation of Warrants. Upon receipt of
     evidence  satisfactory  to the  Issuer  of the  ownership  of and the loss,
     theft,  destruction  or  mutilation  of any Warrant and, in the case of any
     such loss,  theft or  destruction,  upon  receipt of  indemnity or security
     satisfactory  to the  Issuer or, in the case of any such  mutilation,  upon
     surrender  and  cancellation  of such  Warrant,  the  Issuer  will make and
     deliver,  in lieu of such lost,  stolen,  destroyed or mutilated Warrant, a
     new Warrant of like tenor and  representing  the right to purchase the same
     number of shares of Common Stock.

          (e) Payment of Taxes. The Issuer will pay any documentary  stamp taxes
     attributable  to the initial  issuance of the Warrant  Stock  issuable upon
     exercise of this Warrant;  provided,  however, that the Issuer shall not be
     required  to pay any tax or taxes  which may be  payable  in respect of any
     transfer   involved  in  the  issuance  or  delivery  of  any  certificates
     representing  Warrant  Stock in a name  other  than  that of the  Holder in
     respect to which such shares are issued.

     4. Adjustment of Warrant Price and Number of Shares Issuable Upon Exercise.
The  Warrant  Price  and the  number  of shares  of  Warrant  Stock  that may be
purchased upon exercise of this Warrant shall be subject to adjustment from time
to time as set forth in this Section 4. The Issuer shall give the Holder  notice
of any event  described  below  which  requires an  adjustment  pursuant to this
Section 4 in accordance with the notice provisions set forth in Section 5.

          (a) Recapitalization, Reorganization, Reclassification, Consolidation,
     Merger or Sale.

               (i) In case the Issuer after the Original Issue Date shall do any
          of the following  (each,  a "Triggering  Event"):  (a)  consolidate or
          merge with or into any other  Person  and the Issuer  shall not be the

                                       6
<PAGE>

          continuing or surviving Person of such consolidation or merger, or (b)
          permit any other Person to  consolidate  with or merge into the Issuer
          and the Issuer shall be the  continuing  or  surviving  Person but, in
          connection with such consolidation or merger, any Capital Stock of the
          Issuer shall be changed into or exchanged for  Securities of any other
          Person  or  cash  or  any  other  property,  or  (c)  transfer  all or
          substantially  all of its properties or assets to any other Person, or
          (d) effect a capital reorganization or reclassification of its Capital
          Stock,  then, and in the case of each such  Triggering  Event,  proper
          provision  shall be made to the Warrant Price and the number of shares
          of Warrant  Stock that may be purchased  upon exercise of this Warrant
          so that,  upon the basis and the terms and in the manner  provided  in
          this  Warrant,  the Holder of this Warrant  shall be entitled upon the
          exercise hereof at any time after the  consummation of such Triggering
          Event,  to the  extent  this  Warrant is not  exercised  prior to such
          Triggering  Event, to receive at the Warrant Price as adjusted to take
          into account the consummation of such Triggering Event, in lieu of the
          Common Stock issuable upon such exercise of this Warrant prior to such
          Triggering  Event,  the  Securities,  cash and  property to which such
          Holder  would  have  been  entitled  upon  the  consummation  of  such
          Triggering  Event if such Holder had exercised the rights  represented
          by this Warrant  immediately  prior thereto  (including the right of a
          shareholder to elect the type of  consideration it will receive upon a
          Triggering  Event),   subject  to  adjustments   (subsequent  to  such
          corporate  action) as nearly equivalent as possible to the adjustments
          provided  for  elsewhere  in this Section 4,  provided,  however,  the
          Holder at its  option  may elect to receive an amount in cash equal to
          the  value  of  this  Warrant   calculated  in  accordance   with  the
          Black-Scholes formula. Immediately upon the occurrence of a Triggering
          Event,  the  Issuer  shall  notify  the  Holder  in  writing  of  such
          Triggering  Event and  provide the  calculations  in  determining  the
          number of shares of Warrant  Stock  issuable  upon exercise of the new
          warrant and the adjusted Warrant Price. Upon the Holder's request, the
          continuing or surviving  Person as a result of such  Triggering  Event
          shall issue to the Holder a new warrant of like tenor  evidencing  the
          right to purchase the adjusted  number of shares of Warrant  Stock and
          the adjusted  Warrant  Price  pursuant to the terms and  provisions of
          this Section 4(a)(i).  Notwithstanding  the foregoing to the contrary,
          this Section 4(a)(i) shall only apply if the surviving entity pursuant
          to  any  such  Triggering  Event  has a  class  of  equity  securities
          registered  pursuant  to  the  Securities  Exchange  Act of  1934,  as
          amended,  and its  common  stock is listed  or  quoted  on a  national
          securities  exchange,  national automated  quotation system or the OTC
          Bulletin Board. In the event that the surviving entity pursuant to any
          such  Triggering  Event is not a  public  company  that is  registered
          pursuant to the  Securities  Exchange Act of 1934, as amended,  or its
          common  stock  is  not  listed  or  quoted  on a  national  securities
          exchange,  national  automated  quotation  system or the OTC  Bulletin
          Board,  then the Holder shall have the right to demand that the Issuer
          pay to the Holder an amount in cash equal to the value of this Warrant
          calculated in accordance with the Black-Scholes formula.

               (ii) In the event  that the Holder has  elected  not to  exercise
          this Warrant prior to the  consummation of a Triggering  Event and has
          also  elected  not to  receive an amount in cash equal to the value of
          this Warrant  calculated in accordance with the Black-Scholes  formula
          pursuant to the provisions of Section  4(a)(i)  above,  so long as the
          surviving  entity  pursuant to any Triggering  Event is a company that
          has a class of equity securities registered pursuant to the Securities
          Exchange  Act of 1934,  as amended,  and its common stock is listed or

                                       7
<PAGE>

          quoted on a national securities exchange, national automated quotation
          system or the OTC Bulletin  Board,  the  surviving  entity and/or each
          Person  (other than the  Issuer)  which may be required to deliver any
          shares of Warrant Stock  (including all Securities,  cash or property)
          upon the exercise of this Warrant as provided herein shall assume,  by
          written instrument  delivered to, and reasonably  satisfactory to, the
          Holder of this Warrant,  (A) the  obligations of the Issuer under this
          Warrant  (and if the Issuer  shall  survive the  consummation  of such
          Triggering  Event,  such assumption shall be in addition to, and shall
          not release the Issuer from, any continuing  obligations of the Issuer
          under this  Warrant) and (B) the  obligation to deliver to such Holder
          such Securities, cash or property as, in accordance with the foregoing
          provisions  of this  subsection  (a), such Holder shall be entitled to
          receive,  and the surviving  entity and/or each such Person shall have
          similarly  delivered  to such  Holder an opinion  of  counsel  for the
          surviving  entity  and/or each such  Person,  which  counsel  shall be
          reasonably  satisfactory  to such  Holder,  or in the  alternative,  a
          written  acknowledgement  executed by the President or Chief Financial
          Officer of the Issuer,  stating  that this  Warrant  shall  thereafter
          continue  in full force and effect  and the terms  hereof  (including,
          without  limitation,  all of the  provisions of this  subsection  (a))
          shall  be  applicable  to the  shares  Warrant  Stock  (including  all
          Securities,  cash or property) which the surviving  entity and/or each
          such  Person may be  required  to deliver  upon any  exercise  of this
          Warrant or the exercise of any rights pursuant hereto.

          (b) Stock Dividends, Subdivisions and Combinations. If at any time the
     Issuer shall:

               (i) make or issue or set a  record  date for the  holders  of the
          Common Stock for the purpose of  entitling  them to receive a dividend
          payable in, or other distribution of, shares of Common Stock,

               (ii)  subdivide  its  outstanding  shares of Common  Stock into a
          larger number of shares of Common Stock, or

               (iii)  combine  its  outstanding  shares of Common  Stock  into a
          smaller number of shares of Common Stock,

then (1) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record  holder of the same
number of  shares  of  Common  Stock  for  which  this  Warrant  is  exercisable
immediately  prior to the  occurrence  of such event would own or be entitled to
receive  after the  happening of such event,  and (2) the Warrant  Price then in
effect  shall  be  adjusted  to  equal  (A) the  Warrant  Price  then in  effect
multiplied  by the number of shares of Common  Stock for which  this  Warrant is
exercisable  immediately  prior to the  adjustment  divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable  immediately  after
such adjustment.

          (c) Certain Other Distributions.  If at any time the Issuer shall make
     or issue or set a record date for the  holders of the Common  Stock for the
     purpose of entitling them to receive any dividend or other distribution of:

                                       8
<PAGE>

               (i) cash,

               (ii) any  evidences of its  indebtedness,  any shares of stock of
          any class or any other Securities or property of any nature whatsoever
          (other than cash,  Common Stock  Equivalents  or Additional  Shares of
          Common Stock), or

               (iii) any warrants or other  rights to subscribe  for or purchase
          any evidences of its indebtedness, any shares of stock of any class or
          any other securities or property of any nature  whatsoever (other than
          cash,  Common Stock Equivalents or Additional Shares of Common Stock),
          then (1) the number of shares of Common  Stock for which this  Warrant
          is exercisable shall be adjusted to equal the product of the number of
          shares  of  Common  Stock  for  which  this  Warrant  is   exercisable
          immediately prior to such adjustment  multiplied by a fraction (A) the
          numerator of which shall be the Per Share Market Value of Common Stock
          at the date of taking  such  record and (B) the  denominator  of which
          shall be such Per Share Market Value minus the amount allocable to one
          share of  Common  Stock of any such cash so  distributable  and of the
          fair value (as  determined  in good faith by the Board of Directors of
          the Issuer and supported by an opinion from an investment banking firm
          mutually agreed upon by the Issuer and the Holder) of any and all such
          evidences  of  indebtedness,  shares of  stock,  other  securities  or
          property  or  warrants or other  subscription  or  purchase  rights so
          distributable,  and (2) the  Warrant  Price  then in  effect  shall be
          adjusted to equal (A) the Warrant  Price then in effect  multiplied by
          the  number  of shares of Common  Stock  for  which  this  Warrant  is
          exercisable  immediately  prior to the  adjustment  divided by (B) the
          number of shares of Common Stock for which this Warrant is exercisable
          immediately after such adjustment.  A  reclassification  of the Common
          Stock  (other than a change in par value,  or from par value to no par
          value or from no par value to par value) into  shares of Common  Stock
          and shares of any other class of stock shall be deemed a  distribution
          by the Issuer to the  holders of its  Common  Stock of such  shares of
          such other class of stock within the meaning of this Section 4(c) and,
          if the  outstanding  shares of Common  Stock  shall be changed  into a
          larger or smaller  number of shares of Common  Stock as a part of such
          reclassification,  such  change  shall  be  deemed  a  subdivision  or
          combination,  as the case may be, of the outstanding  shares of Common
          Stock within the meaning of Section 4(b).

          (d) Subsequent  Common Stock and Common Stock  Equivalents  Issues. In
     the event the Company,  shall issue or sell any Additional Shares of Common
     Stock or  Common  Stock  Equivalents  (otherwise  than as  provided  in the
     foregoing  subsections  (a) through (c) of this  Section 4), at a price per
     share less than the Warrant Price,  or without  consideration,  the Warrant
     Price then in effect  upon each such  issuance  shall be  adjusted  to that
     price (rounded to the nearest cent)  determined by multiplying  the Warrant
     Price by a fraction:  (1) the  numerator of which shall be equal to the sum
     of (A) the number of shares of Common Stock  outstanding  immediately prior
     to the  issuance  of such  Additional  Shares of Common  Stock plus (B) the
     number of shares of Common Stock (rounded to the nearest whole share) which
     the aggregate  consideration for the total number of such Additional Shares
     of Common Stock so issued would  purchase at a price per share equal to the
     then Warrant Price;  and (2) the denominator of which shall be equal to the
     number of shares of Common Stock outstanding immediately after the issuance

                                       9
<PAGE>

     of such  Additional  Shares of Common Stock. No adjustment of the number of
     shares of Common  Stock shall be made upon the  issuance of any  Additional
     Shares of Common  Stock which are issued  pursuant  to the  exercise of any
     warrants  or other  subscription  or  purchase  rights or  pursuant  to the
     exercise  of  any  conversion  or  exchange  rights  in  any  Common  Stock
     Equivalents if any such adjustment shall previously have been made upon the
     issuance  of such  warrants  or other  rights or upon the  issuance of such
     Common  Stock  Equivalents  (or upon the  issuance  of any warrant or other
     rights therefore).

          (e) Other Provisions applicable to Adjustments under this Section. The
     following  provisions  shall be applicable to the making of  adjustments of
     the number of shares of Common Stock for which this Warrant is  exercisable
     and the Warrant Price then in effect provided for in this Section 4:

               (i)  Computation  of  Consideration.   To  the  extent  that  any
          Additional  Shares of Common Stock or any Common Stock Equivalents (or
          any  warrants  or other  rights  therefor)  shall be  issued  for cash
          consideration, the consideration received by the Issuer therefor shall
          be the amount of the cash received by the Issuer therefor, or, if such
          Additional  Shares of Common  Stock or Common  Stock  Equivalents  are
          offered by the Issuer for subscription, the subscription price, or, if
          such Additional Shares of Common Stock or Common Stock Equivalents are
          sold  to  underwriters  or  dealers  for  public  offering  without  a
          subscription  offering, the initial public offering price (in any such
          case  subtracting any amounts paid or receivable for accrued  interest
          or accrued dividends and without taking into account any compensation,
          discounts  or  expenses  paid or incurred by the Issuer for and in the
          underwriting  of,  or  otherwise  in  connection  with,  the  issuance
          thereof).  In connection with any merger or consolidation in which the
          Issuer is the surviving Person (other than any consolidation or merger
          in which the  previously  outstanding  shares  of Common  Stock of the
          Issuer  shall  be  changed  to or  exchanged  for the  stock  or other
          securities of another Person),  the amount of consideration  therefore
          shall be, deemed to be the fair value, as determined reasonably and in
          good faith by the Board, of such portion of the assets and business of
          the nonsurviving  Person as the Board may determine to be attributable
          to such shares of Common  Stock or Common  Stock  Equivalents,  as the
          case may be. The  consideration  for any  Additional  Shares of Common
          Stock  issuable  pursuant to any warrants or other rights to subscribe
          for or purchase  the same shall be the  consideration  received by the
          Issuer for issuing such  warrants or other rights plus the  additional
          consideration  payable to the Issuer upon exercise of such warrants or
          other rights.  The  consideration  for any Additional Shares of Common
          Stock issuable  pursuant to the terms of any Common Stock  Equivalents
          shall be the consideration received by the Issuer for issuing warrants
          or other  rights  to  subscribe  for or  purchase  such  Common  Stock
          Equivalents,  plus the consideration  paid or payable to the Issuer in
          respect of the  subscription  for or  purchase  of such  Common  Stock
          Equivalents, plus the additional consideration, if any, payable to the
          Issuer  upon the  exercise of the right of  conversion  or exchange in
          such Common Stock  Equivalents.  In the event of any  consolidation or
          merger of the Issuer in which the Issuer is not the  surviving  Person
          or in which the previously  outstanding  shares of Common Stock of the
          Issuer  shall be  changed  into or  exchanged  for the  stock or other
          securities  of another  Person,  or in the event of any sale of all or
          substantially  all of the  assets  of the  Issuer  for  stock or other
          securities of any Person,  the Issuer shall be deemed to have issued a

                                       10
<PAGE>

          number of shares of its Common Stock for stock or  securities or other
          property  of the other  Person  computed  on the  basis of the  actual
          exchange  ratio on which the  transaction  was  predicated,  and for a
          consideration  equal  to the  fair  market  value  on the date of such
          transaction  of all such stock or securities or other  property of the
          other Person.  In the event any  consideration  received by the Issuer
          for any  securities  consists  of property  other than cash,  the fair
          market  value  thereof  at  the  time  of  issuance  or  as  otherwise
          applicable  shall be as determined in good faith by the Board.  In the
          event Common Stock is issued with other shares or  securities or other
          assets  of  the  Issuer  for  consideration  which  covers  both,  the
          consideration  computed as provided in this Section  4(e)(i)  shall be
          allocated among such securities and assets as determined in good faith
          by the Board.

               (ii) When  Adjustments  to Be Made. The  adjustments  required by
          this Section 4 shall be made  whenever  and as often as any  specified
          event requiring an adjustment shall occur,  except that any adjustment
          of the  number of shares of Common  Stock for which  this  Warrant  is
          exercisable that would otherwise be required may be postponed  (except
          in the case of a subdivision  or  combination  of shares of the Common
          Stock, as provided for in Section 4(b)) up to, but not beyond the date
          of  exercise  if such  adjustment  either  by  itself  or  with  other
          adjustments  not  previously  made  adds or  subtracts  less  than one
          percent  (1%) of the shares of Common  Stock for which this Warrant is
          exercisable  immediately  prior to the making of such adjustment.  Any
          adjustment  representing  a change of less than  such  minimum  amount
          (except as aforesaid)  which is postponed shall be carried forward and
          made (x) as soon as such adjustment,  together with other  adjustments
          required by this Section 4 and not previously  made, would result in a
          minimum adjustment, or (y) on the date of exercise. For the purpose of
          any  adjustment,  any specified event shall be deemed to have occurred
          at the close of business on the date of its occurrence.

               (iii) Fractional  Interests.  In computing adjustments under this
          Section 4,  fractional  interests  in Common Stock shall be taken into
          account to the nearest one one-hundredth (1/100th) of a share.

               (iv) When  Adjustment  Not  Required.  If the Issuer shall take a
          record of the holders of its Common Stock for the purpose of entitling
          them to receive a dividend or distribution or subscription or purchase
          rights  and  shall,   thereafter  and  before  the   distribution   to
          stockholders thereof,  legally abandon its plan to pay or deliver such
          dividend,   distribution,   subscription  or  purchase  rights,   then
          thereafter no adjustment  shall be required by reason of the taking of
          such record and any such adjustment previously made in respect thereof
          shall be rescinded and annulled.

          (f) Form of Warrant after  Adjustments.  The form of this Warrant need
     not be  changed  because of any  adjustments  in the  Warrant  Price or the
     number  and  kind of  Securities  purchasable  upon  the  exercise  of this
     Warrant.

          (g)  Escrow  of  Warrant   Stock.   If  after  any  property   becomes
     distributable  pursuant  to this  Section 4 by reason of the  taking of any
     record of the holders of Common Stock,  but prior to the  occurrence of the
     event  for  which  such  record is taken,  and the  Holder  exercises  this

                                       11
<PAGE>

     Warrant,  any shares of Common Stock  issuable  upon  exercise by reason of
     such  adjustment  shall be deemed the last shares of Common Stock for which
     this  Warrant is  exercised  (notwithstanding  any other  provision  to the
     contrary  herein) and such shares or other property shall be held in escrow
     for the  Holder by the  Issuer to be issued to the  Holder  upon and to the
     extent that the event  actually  takes  place,  upon payment of the current
     Warrant Price.  Notwithstanding any other provision to the contrary herein,
     if the  event  for  which  such  record  was  taken  fails  to  occur or is
     rescinded,  then such escrowed  shares shall be cancelled by the Issuer and
     escrowed property returned.

          (h) Adjustment for Failure to Amend Certificate of Incorporation.  The
     Holder  has been  informed  by the  Issuer  that the  Issuer  does not have
     sufficient shares of Common Stock authorized for which to enable the Holder
     to exercise the purchase  rights  represented  by this Warrant.  The Issuer
     undertakes  to use its  best  efforts  to take  all  required  steps  under
     applicable  state and  federal  law to  increase  the number of  authorized
     shares of Common Stock to enable the Holder to exercise the purchase rights
     represented  by this Warrant.  In all events,  the amendment of the Maker's
     Certificate of Incorporation shall be accomplished by no later than June 1,
     2008  (the  "Charter  Amendment  Date").  In this  regard,  the  terms  and
     conditions of such increase in the number of authorized  Common Stock shall
     be subject to the Holder's prior consent.

          In the event the Issuer  does not comply with the  provisions  of this
     subsection,  then the number of shares of Warrant Stock subject to purchase
     rights represented by this Warrant shall be increased by an amount equal to
     two percent (2%) of the Warrant  Share  Number (as  adjusted in  accordance
     with  the  terms  hereof)  for  each  calendar  month  or  portion  thereof
     thereafter  from the Charter  Amendment Date until the  applicable  default
     hereunder has been cured.

     5.  Notice of  Adjustments.  Whenever  the Warrant  Price or Warrant  Share
Number  shall be adjusted  pursuant  to Section 4 hereof  (for  purposes of this
Section 5, each an  "Adjustment"),  the Issuer  shall cause its Chief  Financial
Officer to prepare  and  execute a  certificate  setting  forth,  in  reasonable
detail,  the event requiring the Adjustment,  the amount of the Adjustment,  the
method by which such  Adjustment was calculated  (including a description of the
basis on which the Board  made any  determination  hereunder),  and the  Warrant
Price and Warrant Share Number after giving effect to such Adjustment, and shall
cause copies of such  certificate  to be delivered to the Holder of this Warrant
promptly after each Adjustment. Any dispute between the Issuer and the Holder of
this Warrant with  respect to the matters set forth in such  certificate  may at
the  option  of the  Holder  of this  Warrant  be  submitted  to an  Independent
Appraiser  selected by the Holder;  provided that the Issuer shall have ten (10)
days  after  receipt  of  notice  from  such  Holder  of its  selection  of such
Independent  Appraiser to object thereto, in which case such Holder shall select
another such  Independent  Appraiser  and the Issuer shall have no such right of
objection.  The Independent  Appraiser selected by the Holder of this Warrant as
provided in the  preceding  sentence  shall be  instructed  to deliver a written
opinion as to such matters to the Issuer and such Holder within thirty (30) days
after submission to it of such dispute.  Such opinion shall be final and binding
on the parties  hereto.  The costs and expenses of the initial firm  selected as
Independent Appraiser shall be paid equally by the Issuer and the Holder and, in
the case of an objection by the Issuer, the costs and expenses of the subsequent
firm selected as Independent Appraiser shall be paid in full by the Issuer.

                                       12
<PAGE>

     6. Fractional  Shares. No fractional shares of Warrant Stock will be issued
in connection with any exercise hereof,  but in lieu of such fractional  shares,
the Issuer shall round the number of shares to be issued upon exercise up to the
nearest whole number of shares.

     7. Ownership Cap and Exercise Restriction.  Notwithstanding anything to the
contrary  set forth in this  Warrant,  at no time may a Holder  of this  Warrant
exercise  this  Warrant  if the  number of  shares of Common  Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common  Stock owned by such Holder at such time,  the number of shares of Common
Stock which would result in such Holder  beneficially  owning (as  determined in
accordance  with Section 13(d) of the Exchange Act and the rules  thereunder) in
excess of 9.99% of the then  issued  and  outstanding  shares  of Common  Stock;
provided,  however, that upon a holder of this Warrant providing the Issuer with
sixty-one (61) days notice (pursuant to Section 12 hereof) (the "Waiver Notice")
that such  Holder  would like to waive this  Section 7 with regard to any or all
shares of Common Stock  issuable upon  exercise of this Warrant,  this Section 7
will be of no force or effect  with  regard to all or a portion  of the  Warrant
referenced in the Waiver Notice;  provided,  further,  that during the sixty-one
(61) day period  prior to the  Expiration  Date of this  Warrant  the Holder may
waive this Section 7 upon  providing  the Waiver  Notice at any time during such
sixty-one (61) day period; and provided,  further, that any Waiver Notice during
the sixty-one (61) day period prior to the Expiration Date will not be effective
until the last date of the Term.

     8. Definitions.  For the purposes of this Warrant, the following terms have
the following meanings:

          "Additional  Shares of Common  Stock" means all shares of Common Stock
     issued by the Issuer after the Original Issue Date, and all shares of Other
     Common, if any, issued by the Issuer after the Original Issue Date, except:
     (i) securities issued pursuant to the conversion or exercise of convertible
     or exercisable  securities issued or outstanding on or prior to the date of
     the Purchase  Agreement or issued  pursuant to the Purchase  Agreement  (so
     long as the conversion or exercise price in such securities are not amended
     to lower such price and/or adversely affect the Holders),  (ii) the Warrant
     Stock,  (iii)  Common  Stock issued or the issuance or grants of options to
     purchase  Common  Stock  pursuant to the  Company's  stock option plans and
     employee  stock  purchase  plans  that  either (x) exist on the date of the
     Purchase  Agreement,  or  (y)  do  not  exceed  ten  percent  (10%)  of the
     outstanding  Common  Stock of the  Company  as of the date of the  Purchase
     Agreement,  (iv) any shares of Common Stock issued upon  conversion  of any
     note issued to the placement  agent and its designees for the  transactions
     contemplated by the Purchase Agreement,  and (v) any shares of Common Stock
     issued  upon the  exercise of the  warrant  issued to Donald  Jones for the
     transactions contemplated by the Purchase Agreement.

          "Board" shall mean the Board of Directors of the Issuer.

          "Capital Stock" means and includes (i) any and all shares,  interests,
     participations or other equivalents of or interests in (however designated)
     corporate  stock,  including,  without  limitation,  shares of preferred or
     preference  stock,  (ii) all  partnership  interests  (whether  general  or
     limited)  in any  Person  which  is a  partnership,  (iii)  all  membership

                                       13
<PAGE>

     interests or limited  liability  company interests in any limited liability
     company,  and (iv) all equity or  ownership  interests in any Person of any
     other type.

          "Certificate of Incorporation"  means the Certificate of Incorporation
     of the Issuer as in effect on the  Original  Issue Date,  and as  hereafter
     from time to time amended, modified, supplemented or restated in accordance
     with the terms hereof and thereof and pursuant to applicable law.

          "Common Stock" means the Common Stock,  $0.001 par value per share, of
     the ssuer and any other  Capital  Stock into which such stock may hereafter
     be changed.

          "Common Stock Equivalent"  means any Convertible  Security or warrant,
     option or other right to subscribe for or purchase any Additional Shares of
     Common Stock or any Convertible Security.

          "Convertible  Securities"  means evidences of Indebtedness,  shares of
     Capital  Stock  or  other  Securities  which  are or  may  be at  any  time
     convertible into or exchangeable for Additional Shares of Common Stock. The
     term "Convertible Security" means one of the Convertible Securities.

          "Delivery Date" shall be the date not exceeding three (3) Trading Days
     after an exercise of this Warrant.

          "DTC" means the Depository Trust Company.

          "DWAC" means the Deposit Withdrawal Agent Commission System.

          "Expiration Date" means March 7, 2015.

          "Governmental   Authority"  means  any  governmental,   regulatory  or
     self-regulatory entity, department, body, official, authority,  commission,
     board,  agency or  instrumentality,  whether  federal,  state or local, and
     whether domestic or foreign.

          "Holders"  mean  the  Persons  who  shall  from  time to time  own any
     Warrant. The term "Holder" means one of the Holders.

          "Independent   Appraiser"  means  a  nationally  recognized  or  major
     regional  investment  banking firm or firm of independent  certified public
     accountants  of recognized  standing  (which may be the firm that regularly
     examines the financial  statements of the Issuer) that is regularly engaged
     in the business of appraising  the Capital Stock or assets of  corporations
     or other  entities  as going  concerns,  and which is not  affiliated  with
     either the Issuer or the Holder of any Warrant.

          "Issuer" means Total Luxury Group, Inc., an Indiana  corporation,  and
     its successors.

                                       14
<PAGE>

          "Majority   Holders"  means  at  any  time  the  Holders  of  Warrants
     exercisable  for a majority of the shares of Warrant Stock  issuable  under
     the Warrants at the time outstanding.

          "Original Issue Date" means March 7, 2008.

          "OTC Bulletin Board" means the  over-the-counter  electronic  bulletin
     board.

          "Other  Common"  means any other  Capital  Stock of the  Issuer of any
     class which shall be  authorized at any time after the date of this Warrant
     (other than Common Stock) and which shall have the right to  participate in
     the distribution of earnings and assets of the Issuer without limitation as
     to amount.

          "Outstanding  Common  Stock" means,  at any given time,  the aggregate
     amount of  outstanding  shares of Common  Stock,  assuming  full  exercise,
     conversion or exchange (as  applicable) of all options,  warrants and other
     Securities which are convertible  into or exercisable or exchangeable  for,
     and any right to subscribe for, shares of Common Stock that are outstanding
     at such time.

          "Person" means an individual,  corporation, limited liability company,
     partnership, joint stock company, trust, unincorporated organization, joint
     venture, Governmental Authority or other entity of whatever nature.

          "Per Share  Market  Value" means on any  particular  date (a) the last
     closing  bid price per  share of the  Common  Stock on such date on the OTC
     Bulletin Board or another  registered  national stock exchange on which the
     Common  Stock is then  listed,  or if there is no such  price on such date,
     then the closing bid price on such exchange or quotation system on the date
     nearest  preceding such date, or (b) if the Common Stock is not listed then
     on the OTC Bulletin Board or any registered  national stock  exchange,  the
     last closing bid price for a share of Common Stock in the  over-the-counter
     market, as reported by the OTC Bulletin Board or in the National  Quotation
     Bureau  Incorporated or similar  organization  or agency  succeeding to its
     functions  of reporting  prices) at the close of business on such date,  or
     (c) if the Common Stock is not then  reported by the OTC Bulletin  Board or
     the National  Quotation  Bureau  Incorporated  (or similar  organization or
     agency  succeeding  to its functions of reporting  prices),  then the "Pink
     Sheet"  quotes  for the  applicable  Trading  Days  preceding  such date of
     determination,  or (d) if the Common Stock is not then publicly  traded the
     fair  market  value  of a  share  of  Common  Stock  as  determined  by  an
     Independent  Appraiser  selected  in good  faith by the  Majority  Holders;
     provided,  however,  that the Issuer, after receipt of the determination by
     such  Independent  Appraiser,  shall have the right to select an additional
     Independent Appraiser,  in which case, the fair market value shall be equal
     to the average of the  determinations  by each such Independent  Appraiser;
     and provided, further that all determinations of the Per Share Market Value
     shall be appropriately  adjusted for any stock  dividends,  stock splits or
     other similar  transactions  during such period.  The determination of fair
     market  value by an  Independent  Appraiser  shall  be based  upon the fair
     market value of the Issuer determined on a going concern basis as between a
     willing  buyer and a willing  seller and taking into  account all  relevant
     factors  determinative  of value,  and shall be final  and  binding  on all

                                       15
<PAGE>

     parties.  In  determining  the fair  market  value of any  shares of Common
     Stock, no  consideration  shall be given to any restrictions on transfer of
     the Common Stock  imposed by  agreement  or by federal or state  securities
     laws,  or to the  existence or absence of, or any  limitations  on,  voting
     rights.

          "Purchase  Agreement"  means the Stock Purchase  Agreement dated as of
     March 7, 2008, among the Issuer and the Sellers.

          "Sellers" means the sellers of the shares of Petals Decorative Accents
     Inc. common stock, par value $0.00001 pursuant to the Purchase Agreement.

          "Securities"  means  any  debt or  equity  securities  of the  Issuer,
     whether now or hereafter  authorized,  any instrument  convertible  into or
     exchangeable for Securities or a Security, and any option, warrant or other
     right to  purchase  or acquire any  Security.  "Security"  means one of the
     Securities.

          "Securities Act" means the Securities Act of 1933, as amended,  or any
     similar federal statute then in effect.

          "Subsidiary"  means any corporation at least 50% of whose  outstanding
     Voting  Stock  shall at the time be owned  directly  or  indirectly  by the
     Issuer or by one or more of its  Subsidiaries,  or by the Issuer and one or
     more of its Subsidiaries.

          "Term" has the meaning specified in Section 1 hereof.

          "Trading  Day" means (a) a day on which the Common  Stock is traded on
     the OTC Bulletin Board, or (b) if the Common Stock is not traded on the OTC
     Bulletin  Board,  a day  on  which  the  Common  Stock  is  quoted  in  the
     over-the-counter  market  as  reported  by the  National  Quotation  Bureau
     Incorporated  (or  any  similar   organization  or  agency  succeeding  its
     functions of reporting prices);  provided,  however, that in the event that
     the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
     then  Trading  Day shall mean any day except  Saturday,  Sunday and any day
     which shall be a legal  holiday or a day on which banking  institutions  in
     the State of New York are authorized or required by law or other government
     action to close.

          "Voting  Stock"  means,  as  applied  to  the  Capital  Stock  of  any
     corporation,  Capital  Stock of any class or classes  (however  designated)
     having  ordinary voting power for the election of a majority of the members
     of the Board of Directors (or other  governing  body) of such  corporation,
     other than Capital  Stock having such power only by reason of the happening
     of a contingency.

          "Warrants"   means  the  Warrants  issued  pursuant  to  the  Purchase
     Agreement,  including,  without  limitation,  this  Warrant,  and any other
     warrants of like tenor issued in  substitution  or exchange for any thereof
     pursuant to the  provisions of Section 2(c),  2(d) or 2(e) hereof or of any
     of such other Warrants.

                                       16
<PAGE>

          "Warrant  Price"  initially means $0.10, as such price may be adjusted
     from time to time as shall  result from the  adjustments  specified in this
     Warrant, including Section 4 hereto.

          "Warrant  Share  Number"  means at any time the  aggregate  number  of
     shares of Warrant  Stock which may at such time be purchased  upon exercise
     of this Warrant, after giving effect to all prior adjustments and increases
     to such number made or required to be made under the terms hereof.

          "Warrant  Stock"  means  Common Stock  issuable  upon  exercise of any
     Warrant or  Warrants  or  otherwise  issuable  pursuant  to any  Warrant or
     Warrants  and/or  Securities,  cash and property to which such Holder would
     have been  entitled  upon the  occurrence  of  certain  events set forth in
     Section 4.

     9. Other Notices. In case at any time:

                    (A)  the Issuer shall make any  distributions to the holders
                         of Common Stock; or

                    (B)  the Issuer shall  authorize the granting to all holders
                         of its  Common  Stock of  rights  to  subscribe  for or
                         purchase  any shares of  Capital  Stock of any class or
                         other rights; or

                    (C)  there  shall  be any  reclassification  of the  Capital
                         Stock of the Issuer; or

                    (D)  there  shall  be  any  capital  reorganization  by  the
                         Issuer; or

                    (E)  there  shall  be  any  (i)   consolidation   or  merger
                         involving  the Issuer or (ii) sale,  transfer  or other
                         disposition of all or substantially all of the Issuer's
                         property,  assets or business (except a merger or other
                         reorganization   in  which  the  Issuer  shall  be  the
                         surviving  corporation  and its shares of Capital Stock
                         shall  continue to be  outstanding  and  unchanged  and
                         except a consolidation, merger, sale, transfer or other
                         disposition involving a wholly-owned Subsidiary); or

                    (F)  there shall be a voluntary or involuntary  dissolution,
                         liquidation  or winding-up of the Issuer or any partial
                         liquidation of the Issuer or distribution to holders of
                         Common Stock;

then, in each of such cases,  the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer  shall close or a record  shall
be taken for such dividend,  distribution  or  subscription  rights or (ii) such
reorganization,    reclassification,    consolidation,    merger,   disposition,
dissolution,  liquidation or  winding-up,  as the case may be, shall take place.
Such notice also shall  specify the date as of which the holders of Common Stock
of record shall  participate  in such  dividend,  distribution  or  subscription

                                       17
<PAGE>

rights, or shall be entitled to exchange their certificates for Common Stock for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification,  consolidation, merger, disposition,  dissolution, liquidation
or  winding-up,  as the case may be. Such notice  shall be given at least twenty
(20) days prior to the action in question  and not less than ten (10) days prior
to the record date or the date on which the Issuer's  transfer  books are closed
in respect  thereto.  This Warrant  entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Common Stock.

     10.  Amendment  and Waiver;  Failure or  Indulgence  Not Waiver.  Any term,
covenant,  agreement or condition in this Warrant may be amended,  or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively),  by a written instrument or written instruments
executed by the Issuer and the Majority Holders; provided, however, that no such
amendment or waiver shall reduce the Warrant Share Number,  increase the Warrant
Price,  shorten the period  during which this Warrant may be exercised or modify
any  provision  of this  Section  10 without  the  consent of the Holder of this
Warrant.  No  consideration  shall be  offered or paid to any person to amend or
consent to a waiver or  modification of any provision of this Warrant unless the
same consideration is also offered to all holders of the Warrants. No failure or
delay on the part of the Holder in the exercise of any power, right or privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise thereof or of any other right, power or privilege, nor shall any waiver
by the Holder of any such right or rights on any one occasion be deemed a waiver
of the same right or rights on any future occasion.

     11. Governing Law; Jurisdiction. The parties acknowledge and agree that any
claim,  controversy,  dispute or action relating in any way to this agreement or
the subject matter of this agreement shall be governed solely by the laws of the
State of Delaware, without regard to any conflict of laws doctrines. The parties
irrevocably consent to being served with legal process issued from the state and
federal  courts  located in New York and  irrevocably  consent to the  exclusive
personal  jurisdiction  of the federal and state courts situated in the State of
New  York.  The  parties  irrevocably  waive  any  objections  to  the  personal
jurisdiction  of these  courts.  Said  courts  shall  have  sole  and  exclusive
jurisdiction over any and all claims, controversies,  disputes and actions which
in any way relate to this agreement or the subject matter of this agreement. The
parties also  irrevocably  waive any objections that these courts  constitute an
oppressive,  unfair, or inconvenient forum and agree not to seek to change venue
on these grounds or any other grounds.

TO THE FULLEST  EXTENT  PERMITTED BY APPLICABLE  LAW, EACH OF THE PARTIES HERETO
WAIVES TRIAL BY JURY WITH RESPECT TO ANY CLAIM,  CONTROVERSY,  DISPUTE OR ACTION
RELATING IN ANY WAY TO THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT.

     12.  Notices Any notice,  demand,  request,  waiver or other  communication
required or  permitted  to be given  hereunder  shall be in writing and shall be
effective  (a) upon hand  delivery by telecopy  or  facsimile  at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following

                                       18
<PAGE>

such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be  received)  or (b) on the second  business  day
following  the date of  mailing  by  express  courier  service,  fully  prepaid,
addressed to such address,  or upon actual  receipt of such  mailing,  whichever
shall first occur. The addresses for such communications shall be:

If to the Issuer:                   Total Luxury Group, Inc.
                                    11900 Biscayne Blvd Suite #621
                                    Miami, Florida  33181
                                    Attention: Steven Heller
                                    Tel. No.: 954-741-6300
                                    Fax No.: 954-741-6555

If to any Holder:                   At the  address  of  such  Holder  set
                                    forth  on  Exhibit  A to  the  Purchase

                                    Agreement, with copies to:

                                    Gersten Savage LLP
                                    600 Lexington Avenue, 9th Floor
                                    New York, New York 10022
                                    Attention: David Danovitch, Esq.
                                    Tel. No.: (212) 752-9700
                                    Fax No.: (212) 980-5192

     Any party  hereto may from time to time  change its  address for notices by
giving written notice of such changed address to the other party hereto.

     13. Warrant Agent. The Issuer may, by written notice to each Holder of this
Warrant, appoint an agent having an office in New York, New York for the purpose
of issuing  shares of Warrant Stock on the exercise of this Warrant  pursuant to
Section 2(e) hereof,  exchanging this Warrant pursuant to Section 2(e) hereof or
replacing this Warrant pursuant to Section 3(d) hereof, or any of the foregoing,
and thereafter any such issuance,  exchange or replacement,  as the case may be,
shall be made at such office by such agent.

     14. Remedies. The remedies provided in this Warrant shall be cumulative and
in addition to all other  remedies  available  under this Warrant,  at law or in
equity (including,  without limitation,  a decree of specific performance and/or
other injunctive relief), no remedy contained herein shall be deemed a waiver of
compliance  with the  provisions  giving rise to such remedy and nothing  herein
shall  limit a Holder's  right to pursue  actual  damages for any failure by the
Issuer to comply with the terms of this  Warrant.  Amounts set forth or provided
for herein with respect to payments,  exercise and the like (and the computation
thereof) shall be the amounts to be received by the Holder hereof and shall not,
except as expressly  provided herein,  be subject to any other obligation of the
Issuer (or the performance thereof). The Issuer acknowledges that a breach by it
of its  obligations  hereunder will cause  irreparable  and material harm to the
Holder  and  that  the  remedy  at law for any such  breach  may be  inadequate.
Therefore  the Issuer agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled,  in addition to all other available rights
and remedies,  at law or in equity,  to seek and obtain such  equitable  relief,
including  but not  limited  to an  injunction  restraining  any such  breach or

                                       19
<PAGE>

threatened  breach,  without the necessity of showing  economic loss and without
any bond or other security being required.

     15.  Successors and Assigns.  This Warrant and the rights  evidenced hereby
shall inure to the benefit of and be binding upon the  successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant  Stock issued  pursuant  hereto,  and shall be  enforceable  by any such
Holder or Holder of Warrant Stock.

     16. Construction. This Warrant shall be deemed to be jointly drafted by the
Company and all the Holders and shall not be construed against any person as the
drafter hereof.

     17.  Headings.  The  headings  of the  Sections  of  this  Warrant  are for
convenience of reference  only and shall not, for any purpose,  be deemed a part
of this Warrant.

     18.  Registration  Rights.  The Holder of this  Warrant is  entitled to the
benefit of certain  registration  rights  with  respect to the shares of Warrant
Stock  issuable upon the exercise of this Warrant  pursuant to the  Registration
Rights  Agreement  and the  registration  rights  with  respect to the shares of
Warrant  Stock  issuable  upon the  exercise of this  Warrant by any  subsequent
Holder may only be assigned in accordance  with the terms and  provisions of the
Registrations Rights Agreement and Section 2(f) hereof.

     19. Enforcement  Expenses.  The Issuer agrees to pay all costs and expenses
of the Holder  incurred as a result of enforcement  of this Warrant,  including,
without limitation, reasonable attorneys' fees and expenses.

     20. Binding Effect.  The obligations of the Issuer and the Holder set forth
herein  shall be binding  upon the  successors  and  assigns of each such party,
whether or not such successors or assigns are permitted by the terms hereof.

                  [remainder of page intentionally left blank]

                                       20
<PAGE>

     IN WITNESS WHEREOF, the Issuer has executed this Series C Warrant as of the
day and year first above written.

                                                 TOTAL LUXURY GROUP, INC.

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

                                       21
<PAGE>

                                  EXERCISE FORM
                                SERIES C WARRANT
                            TOTAL LUXURY GROUP, INC.

The  undersigned  _______________,  pursuant  to the  provisions  of the  within
Warrant,  hereby elects to purchase _____ shares of Common Stock of Total Luxury
Group, Inc. covered by the within Warrant.

Dated: _________________            Signature ________________________________

                                   Address ___________________________________
                                           ___________________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: _________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

The  undersigned  intends  that  payment of the  Warrant  Price shall be made as
(check one):

                  Cash Exercise_______

                  Cashless Exercise_______

If the  Holder has  elected a Cash  Exercise,  the  Holder  shall pay the sum of
$________  by  certified  or official  bank check (or via wire  transfer) to the
Issuer in accordance with the terms of the Warrant.

If the Holder has elected a Cashless Exercise,  a certificate shall be issued to
the  Holder for the number of shares  equal to the whole  number  portion of the
product of the  calculation set forth below,  which is ___________.  The Company
shall pay a cash adjustment in respect of the fractional  portion of the product
of the  calculation  set forth  below in an amount  equal to the  product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise, which product is ____________.

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

The   number  of  shares   of   Common   Stock  to  be  issued  to  the   Holder
__________________("X").

The number of shares of Common  Stock  purchasable  upon  exercise of all of the
Warrant or, if only a portion of the Warrant is being exercised,  the portion of
the Warrant being exercised ___________________________ ("Y"). The Warrant Price
______________ ("A").

The Per Share Market  Value of one share of Common  Stock_________________("B").

                                        i
<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED,  _________________  hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________            Signature _________________________________

                                    Address ___________________________________
                                            ___________________________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED,  _________________  hereby sells, assigns and transfers unto
__________________  the right to  purchase  _________  shares of  Warrant  Stock
evidenced  by the within  Warrant  together  with all rights  therein,  and does
irrevocably  constitute and appoint  ___________________,  attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________            Signature _________________________________

                                    Address ___________________________________
                                            ___________________________________

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-___ canceled (or  transferred or exchanged) this _____ day of
___________,  _____,  shares  of Common  Stock  issued  therefor  in the name of
_______________,  Warrant No.  W-_____ issued for ____ shares of Common Stock in
the name of _______________.

                                       ii
<PAGE>THIS NOTE AND THE  SECURITIES  ISSUABLE  UPON  CONVERSION  HEREOF  HAVE NOT BEEN
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "ACT"),  OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH  REGISTRATION  OR RECEIPT BY THE COMPANY OF A
WRITTEN  OPINION  OF  COUNSEL  IN  THE  FORM,  SUBSTANCE  AND  SCOPE  REASONABLY
SATISFACTORY  TO THE COMPANY  THAT THIS NOTE AND THE  SECURITIES  ISSUABLE  UPON
CONVERSION HEREOF MAY BE SOLD,  TRANSFERRED,  OR OTHERWISE DISPOSED OF, UNDER AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.

THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBJECT TO THE INTERCREDITOR
AGREEMENT, DATED AS OF MARCH 7, 2008, AMONG ACCELERANT PARTNERS LLC, THE SELLERS
LISTED THERETO, SOUTHRIDGE INVESTMENT GROUP LLC AND TOTAL LUXURY GROUP, INC.

                            TOTAL LUXURY GROUP, INC.

          Junior Subordinated Unsecured 9% Convertible Promissory Note

Date: March 7, 2008                                                   $2,000,000

     For value received,  TOTAL LUXURY GROUP, INC., an Indiana  corporation (the
"Maker" or the  "Company")  hereby  promises  to pay to the order of  SOUTHRIDGE
INVESTMENT  GROUP  LLC  (together  with  its  successors,  representatives,  and
permitted  assigns,  the  "Holder"),  in accordance  with the terms  hereinafter
provided,  the principal amount of Two Million  ($2,000,000)  dollars,  together
with interest thereon. The Maker is issuing this junior unsecured 9% convertible
promissory  note to the Holder  pursuant to the  Placement  Agent  Agreement (as
defined in Section 1.1 hereof). The (i) senior secured 9% convertible promissory
notes  issued to  Accelerant  Partners LLC in the  principal  amount of Nineteen
Million  ($19,000,000) dollars pursuant to the Stock Purchase Agreement dated as
of the  date  hereof  between  the  Company  and  Accelerant  Partners  LLC (the
"Accelerant  Purchase  Agreement"),  and the (ii) junior  secured 9% convertible
promissory notes issued to  [___________]  in the aggregate  principal amount of
One Million Twelve Thousand Five Hundred  ($1,012,500)  dollars  pursuant to the
Stock Purchase Agreement dated as of the date hereof between the Company and the
Sellers listed therein, together shall hereinafter be referred to as the "Senior
Notes" and such  Holders as the "Senior  Note  Holders".  Any other notes issued
pursuant to the Stock Purchase  Agreements  shall  hereinafter be referred to as
the "Other Notes" and such Holders as the "Other  Holders;"  collectively,  this
note and the Other Notes are referred to as the "Notes."

     All payments  under or pursuant to this Note shall be made in United States
Dollars  in  immediately  available  funds to the  Holder at the  address of the
Holder as set forth in the  Placement  Agreement  or at such other  place as the
Holder  may  designate  from  time to time in  writing  to the  Maker or by wire
transfer of funds to the Holder's  account,  instructions for which are attached
hereto as Exhibit A. The outstanding principal balance of this Note shall be due
and payable on the thirty-month  anniversary of the Issuance Date (the "Maturity
Date") or at such earlier time as provided herein.

<PAGE>

                                   ARTICLE I

     Section 1.1 Placement Agreement.  This Note has been executed and delivered
pursuant  to the  Placement  Agent  Agreement  dated as of March  7,  2008  (the
"Placement Agreement") by and among the Maker and the Holder.  Capitalized terms
used and not otherwise defined herein shall have the meanings set forth for such
terms in the Placement Agreement.

     Section 1.2  Interest.  Beginning  on the  issuance  date of this Note (the
"Issuance  Date"),  the  outstanding  principal  balance of this Note shall bear
interest  ("Interest"),  in arrears,  at a rate per annum equal to nine  percent
(9%),  payable  quarterly  commencing on March 31, 2008 and on the last business
day of each  June,  September,  December,  and March  thereafter  so long as any
principal amount evidenced by this Note remains  outstanding.  Interest shall be
computed on the basis of a 360-day  year of twelve (12) 30-day  months and shall
accrue commencing on the Issuance Date.  Furthermore,  upon the occurrence of an
Event of  Default  (as  defined  in  Section  2.1  hereof),  then to the  extent
permitted by law, the Maker will pay interest in cash to the Holder,  payable on
demand,  on the outstanding  principal balance of this Note from the date of the
Event of Default through the Maturity Date at a new rate of the lesser of twelve
percent (12%) and the maximum applicable legal rate per annum.

     Section 1.3 Cash or Stock. At the option of the Maker, Interest may be paid
in cash or registered  shares of Common Stock of the Maker.  Upon the payment of
Interest in registered  shares of Common  Stock,  the number of shares of Common
Stock to be issued to the Holder shall be an amount equal to the quotient of (x)
the  Interest  payment  due  (y)  multiplied  by  1.2  and  (z)  divided  by (z)
one-hundred  percent (100%) of the average of the VWAP (as defined below) of the
closing  trading price for the ten (10) trading days  immediately  preceding the
date the Interest  payment is due. For purposes  hereof,  "VWAP" shall mean, for
any date,  (i) the daily volume  weighted  average price of the Common Stock for
such date on the OTC  Bulletin  Board as reported by  Bloomberg  Financial  L.P.
("Bloomberg")  (based on a trading day from 9:30 a.m.  Eastern Time to 4:02 p.m.
Eastern Time);  (ii) if the Common Stock is not then listed or quoted on the OTC
Bulletin Board and if prices for the Common Stock are then reported in the "Pink
Sheets" published by the Pink Sheets,  LLC (or a similar  organization or agency
succeeding to its functions of reporting prices),  the most recent bid price per
share of the Common  Stock so reported;  or (iii) in all other  cases,  the fair
market  value  of a share  of  Common  Stock  as  determined  by an  independent
appraiser selected in good faith by the Holder and reasonably  acceptable to the
Maker.

     Section 1.4 Ranking and Covenants.

          (a) Except as set forth in Schedule 1.4(a),  no indebtedness of any of
     the Maker is senior to this Note in right of payment,  whether with respect
     to interest,  damages or upon  liquidation  or dissolution or otherwise and
     the Maker will not,  and will not permit any  Subsidiary  to,  directly  or
     indirectly,  incur any Lien on or with  respect to any of its  property  or
     assets  now owned or  hereafter  acquired  or any  interest  therein or any
     income or  profits  therefrom  without  the prior  written  consent  of the
     Holder.

                                       2
<PAGE>

          (b) So long as any  Notes are  outstanding,  none of the Maker nor any
     Subsidiary shall,  directly or indirectly without the prior written consent
     of the  Holder,  (i)  redeem,  purchase  or  otherwise  acquire  any of the
     Company's  capital  stock or set aside any  monies  for such a  redemption,
     purchase  or other  acquisition;  (ii)  issue any  options  or  convertible
     securities  with an  exercise  price or a  conversion  price or a number of
     underlying  shares that floats or resets or otherwise  varies or is subject
     to adjustment based (directly or indirectly) on market prices of the Common
     Stock;  or (iii) issue any  securities  having any rights,  privileges,  or
     preferences superior to or in pari passu with the rights,  privileges,  and
     preferences of the Holder.

     Section 1.5 Payment on Non-Business  Days.  Whenever any payment to be made
shall be due on a  Saturday,  Sunday or a public  holiday  under the laws of the
State of New York, such payment may be due on the next  succeeding  business day
and such next  succeeding day shall be included in the calculation of the amount
of accrued interest payable on such date.

     Section 1.6 Transfer.  This Note may be transferred or sold, subject to the
provisions  of Section 4.8 of this Note, or pledged,  hypothecated  or otherwise
granted as security by the Holder.

     Section 1.7  Replacement.  Upon receipt of a duly  executed,  notarized and
unsecured  written  statement from the Holder with respect to the loss, theft or
destruction of this Note (or any  replacement  hereof) and a standard  indemnity
reasonably  satisfactory  to the Maker,  or, in the case of a mutilation of this
Note, upon surrender and  cancellation of such Note, the Maker shall issue a new
Note,  of like tenor and  amount,  in lieu of such lost,  stolen,  destroyed  or
mutilated Note.

                                   ARTICLE II

                           EVENTS OF DEFAULT; REMEDIES

     Section  2.1 Events of  Default.  The  occurrence  of any of the  following
events shall be an "Event of Default" under this Note:

          (a) the Maker shall fail to make any  principal  or interest  payments
     due under this Note on the date such  payments  are due and such default is
     not  fully  cured  within  three (3)  business  days  after the  occurrence
     thereof; or

          (b) At any time  subsequent to the  suspension  from listing,  without
     subsequent  listing on any one of, or the failure of the Common Stock to be
     listed  or  quoted on at least one of the Pink  Sheets  LLC,  OTC  Bulletin
     Board,  the American Stock Exchange,  the NASDAQ Global Market,  the NASDAQ
     Capital  Market or The New York Stock  Exchange,  Inc.  for a period of ten
     (10) consecutive Trading Days; or

          (c) the  Company's  notice to the Holder,  including  by way of public
     announcement, at any time, of its inability to comply (including for any of
     the reasons  described in Section  3.8(a)  hereof) or its  intention not to
     comply  with proper  requests  for  conversion  of this Note into shares of
     Common Stock; or

                                       3
<PAGE>

          (d) either (i) the Maker  shall fail to timely  deliver  the shares of
     Common Stock upon  conversion  of the Note, or (ii) the Maker shall fail to
     make the payment of any fees and/or  liquidated  damages under this Note or
     the  Placement  Agreement,  which  failure is not remedied  within ten (10)
     business days after the incurrence thereof; or

          (e) default shall be made in the  performance or observance of (i) any
     covenant, condition or agreement contained in this Note and such default is
     not fully cured  within ten (10)  business  days after the Holder  delivers
     written notice to the Maker of the occurrence thereof or (ii) any covenant,
     condition or  agreement  contained in the  Placement  Agreement,  the Other
     Notes, the Warrant or any other  Transaction  Document which is not covered
     by any other  provisions  of this Section 2.1 and such default is not fully
     cured  within ten (10)  business  days after the  Holder  delivers  written
     notice to the Maker of the occurrence thereof; or

          (f) any  material  representation  or  warranty  made by either of the
     Maker herein or in the Placement  Agreement,  the Other Notes, the Warrant,
     or any  other  Transaction  Document  shall  prove  to have  been  false or
     incorrect  or breached  in a material  respect on the date as of which made
     and the  Holder  delivers  written  notice to the  Maker of the  occurrence
     thereof; or

          (g) the Maker shall after the Issuance Date (A) default in any payment
     of any amount or amounts of  principal  of or interest on any  indebtedness
     (other than the indebtedness  hereunder) the aggregate  principal amount of
     which  indebtedness  is in  excess  of  $100,000  or  (B)  default  in  the
     observance or performance of any other  agreement or condition  relating to
     any indebtedness or contained in any instrument or agreement evidencing, or
     relating  thereto,  or any other event shall occur or condition  exist, the
     effect of which  default or other  event or  condition  is to cause,  or to
     permit  the  holder or  holders or  beneficiary  or  beneficiaries  of such
     indebtedness  to  cause  with  the  giving  of  notice  if  required,  such
     indebtedness to become due prior to its stated maturity; or

          (h) the Maker shall (i) apply for or consent to the appointment of, or
     the taking of possession by, a receiver,  custodian,  trustee or liquidator
     of itself or of all or a substantial  part of its property or assets,  (ii)
     make a general assignment for the benefit of its creditors,  (iii) commence
     a  voluntary  case  under  the  United  States  Bankruptcy  Code (as now or
     hereafter  in  effect)  or under the  comparable  laws of any  jurisdiction
     (foreign or domestic),  (iv) file a petition  seeking to take  advantage of
     any bankruptcy, insolvency, moratorium, reorganization or other similar law
     affecting the enforcement of creditors' rights generally,  (v) acquiesce in
     writing  to any  petition  filed  against it in an  involuntary  case under
     United States  Bankruptcy Code (as now or hereafter in effect) or under the
     comparable laws of any jurisdiction (foreign or domestic),  or (vi) issue a
     notice of  bankruptcy  or winding down of its  operations  or issue a press
     release regarding same; or

          (i) a  proceeding  or case shall be commenced in respect of the Maker,
     without its application or consent, in any court of competent jurisdiction,
     seeking  (i)  the  liquidation,  reorganization,  moratorium,  dissolution,
     winding  up,  or  composition  or  readjustment  of  its  debts,  (ii)  the

                                       4
<PAGE>

     appointment of a trustee, receiver, custodian, liquidator or the like of it
     or of all or any  substantial  part of its  assets in  connection  with its
     liquidation  or  dissolution or (iii) similar relief in respect of it under
     any law  providing for the relief of debtors,  and such  proceeding or case
     described  in clause (i),  (ii) or (iii)  shall  continue  undismissed,  or
     unstayed  and in effect,  for a period of thirty (30) days or any order for
     relief  shall  be  entered  in an  involuntary  case  under  United  States
     Bankruptcy  Code (as now or  hereafter  in effect) or under the  comparable
     laws of any jurisdiction  (foreign or domestic) against either of the Maker
     or  action  under  the  laws  of any  jurisdiction  (foreign  or  domestic)
     analogous to any of the foregoing  shall be taken with respect to either of
     the Maker and shall continue  undismissed,  or unstayed and in effect for a
     period of thirty (30) days; or

          (j) the  failure of the  Company to  instruct  its  transfer  agent to
     remove any legends  from shares of Common  Stock  eligible to be sold under
     Rule 144 of the Securities Act and issue such  unlegended  certificates  to
     the Holder within five (5) business days of the Holder's request so long as
     the Holder has provided  reasonable  assurances  to the Company,  and based
     thereon the Company has determined, that such shares of Common Stock can be
     sold pursuant to Rule 144; or

          (k) the  failure  of the Maker to pay any  amounts  due to the  Holder
     herein or any other  Transaction  Document within five (5) business days of
     the date such  payments  are due and such default is not fully cured within
     five (5)  business  days after the Holder  delivers  written  notice to the
     Maker of the occurrence thereof; or

          (l) the occurrence of an event of default under any other  Transaction
     Document.

     Section 2.2 Remedies Upon An Event of Default. If an Event of Default shall
have occurred and shall be  continuing,  the Holder of this Note may at any time
at its option,  (a) declare the entire  unpaid  principal  balance of this Note,
together with all interest accrued hereon, due and payable,  and thereupon,  the
same shall be accelerated and so due and payable,  without presentment,  demand,
protest,  or  notice,  all of which are  hereby  expressly  unconditionally  and
irrevocably waived by the Maker; provided,  however, that upon the occurrence of
an Event of Default  described  in (i) Sections  2.1(h) or (i), the  outstanding
principal balance and accrued interest  hereunder shall be automatically due and
payable and (ii) Sections 2.1(b)-(g),  or (j)-(l), demand the prepayment of this
Note  pursuant to Section 3.7 hereof,  (b) demand that the  principal  amount of
this Note then  outstanding  shall be converted into shares of Common Stock at a
Conversion  Price per share  calculated  pursuant to Section 3.1 hereof assuming
that the date  that the  Event of  Default  occurs  is the  Conversion  Date (as
defined in Section  3.1  hereof),  (c)  appoint a majority of the members of the
entire board of directors of the Maker, or (d) exercise or otherwise enforce any
one or more of the Holder's rights, powers,  privileges,  remedies and interests
under this Note, the Placement Agreement,  or applicable law. No course of delay
on the part of the  Holder  shall  operate  as a  waiver  thereof  or  otherwise
prejudice the right of the Holder. No remedy conferred hereby shall be exclusive
of any other remedy referred to herein or now or hereafter  available at law, in
equity, by statute or otherwise. In connection with the Holder's exercise of any
of its  remedies  hereunder,  the Maker shall use its best  efforts to cooperate
with  the  Holder  to the  end  that  the  Holder's  rights  hereunder  will  be
effectuated.

                                       5
<PAGE>

                                  ARTICLE III

                 CONVERSION; ANTIDILUTION; PREPAYMENT; COVENANTS

     Section 3.1  Conversion.  At any time on or after the Issuance  Date,  this
Note  shall be  convertible  (in whole or in part),  at the option of the Holder
(the "Optional  Conversion"),  into such number of fully paid and non-assessable
shares of Common Stock (the "Conversion  Rate") as is determined by dividing (x)
that portion of the  outstanding  principal  balance  under this Note as of such
date that the Holder elects to convert by (y) the  Conversion  Price (as defined
in Section 3.2(a) hereof),  then in effect on the date on which the Holder faxes
a notice of conversion (the "Optional Conversion Notice"), duly executed, to the
Company (facsimile number (___) __-______,  Attn.: _____________) (the "Optional
Conversion Date"); provided, however, that the Conversion Price shall be subject
to adjustment as described in Section 3.6 of this Note. The Holder shall deliver
this Note to the Company at the address designated in the Placement Agreement as
soon as  practicable  after  such time that this Note is fully  converted.  With
respect to partial  conversions  of this Note, the Company shall keep and attach
hereto  written  records  of the  amount  of  this  Note  converted  as of  each
Conversion Date.

     Section 3.2 Conversion Price.

          (a)  The  term  "Conversion  Price"  shall  mean  $0.04,   subject  to
     adjustment under Section 3.6 hereof.

          (b) The term  "Conversion  Shares"  shall  mean such  shares of Common
     Stock issuable upon Conversion of this Note.

     Section 3.3 Mechanics of Conversion.

          (a)  Not  later  than  three  (3)  Trading  Days  after  any  Optional
     Conversion  Date (the  "Delivery  Date"),  the  Company  or its  designated
     transfer  agent,  as applicable,  shall 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 Optional
     Conversion  Notice,  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, in the alternative, not later than
     the Delivery Date,  the Company shall deliver to the  applicable  Holder by
     express  courier  a  certificate  or  certificates  which  shall be free of
     restrictive legends and trading  restrictions (other than those required by
     Section 5.1 of the Purchase Agreement) representing the number of shares of
     Common Stock being  acquired upon the  conversion of this Note.  If, in the
     case of any  Optional  Conversion,  such DWAC  transfer or  certificate  or
     certificates  are not delivered to or as directed by the applicable  Holder
     by the Delivery Date, the Holder shall be entitled by written notice to the
     Company  at any  time on or  before  its  receipt  of such  certificate  or
     certificates  thereafter,  to rescind such  conversion,  in which event the
     Company  shall  immediately  return  this  Note  tendered  for  conversion,
     whereupon  the  Company  and the  Holder  shall each be  restored  to their
     respective  positions  immediately  prior to the delivery of such notice of
     revocation,  except that any amounts  described in Sections  3.3(b) and (c)

                                       6
<PAGE>

     shall be payable  through  the date  notice of  rescission  is given to the
     Maker.

          (b) The Company understands that a delay in the delivery of the shares
     of Common Stock upon conversion of this Note beyond the Delivery Date could
     result in economic  loss to the Holder.  If the Company fails to deliver to
     the Holder such shares via DWAC or a certificate or  certificates  pursuant
     to this Section hereunder by the Delivery Date, the Maker shall pay to such
     Holder,  in cash, an amount per Trading Day for each Trading Day until such
     shares are delivered via DWAC or certificates are delivered,  together with
     interest  on such  amount at a rate of 10% per annum,  accruing  until such
     amount  and any  accrued  interest  thereon  is paid in full,  equal to the
     greater  of (A)  (i) 1% of the  aggregate  principal  amount  of the  Notes
     requested  to be  converted  for the first five (5) Trading  Days after the
     Delivery  Date and (ii) 2% of the aggregate  principal  amount of the Notes
     requested to be converted  for each Trading Day  thereafter  and (B) $5,000
     per day (which  amount  shall be paid as  liquidated  damages  and not as a
     penalty).  Nothing  herein  shall limit a Holder's  right to pursue  actual
     damages  for the  Company's  failure to deliver  certificates  representing
     shares of  Common  Stock (as the case may be) upon  conversion  within  the
     period  specified herein and such Holder shall have the right to pursue all
     remedies  available  to  it  at  law  or  in  equity  (including,   without
     limitation,  a decree of specific  performance  and/or injunctive  relief).
     Notwithstanding anything to the contrary contained herein, the Holder shall
     be  entitled  to withdraw  an  Optional  Conversion  Notice,  and upon such
     withdrawal the Maker shall only be obligated to pay the liquidated  damages
     accrued  in  accordance  with  this  Section  3.3(b)  through  the date the
     Optional Conversion Notice is withdrawn.

          (c) In addition to any other rights  available  to the Holder,  if the
     Company  fails to cause its  transfer  agent to  transmit  to the  Holder a
     certificate  or  certificates  representing  the  shares  of  Common  Stock
     issuable upon  conversion of this Note on or before the Delivery  Date, and
     if after such date the Holder is required by its broker to purchase  (in an
     open market  transaction or otherwise) shares of Common Stock to deliver in
     satisfaction of a sale by the Holder of the shares of Common Stock issuable
     upon  conversion of this Note which the Holder  anticipated  receiving upon
     such  exercise  (a  "Buy-In"),  then the Maker shall (1) pay in cash to the
     Holder the amount by which (x) the Holder's total purchase price (including
     brokerage commissions,  if any) for the shares of Common Stock so purchased
     exceeds (y) the amount  obtained by multiplying (A) the number of shares of
     Common Stock  issuable  upon  conversion  of this Note that the Company was
     required  to deliver to the Holder in  connection  with the  conversion  at
     issue  multiplied  by (B) the price at which the sell order  giving rise to
     such purchase obligation was executed, and (2) at the option of the Holder,
     either reinstate the portion of the Note and equivalent number of shares of
     Common  Stock for which such  conversion  was not honored or deliver to the
     Holder the number of shares of Common Stock that would have been issued had
     the Company timely  complied with its  conversion and delivery  obligations
     hereunder. For example, if the Holder purchases Common Stock having a total
     purchase  price of $11,000 to cover a Buy-In with  respect to an  attempted
     conversion  of shares of Common Stock with an  aggregate  sale price giving
     rise to such  purchase  obligation  of  $10,000,  under  clause  (1) of the
     immediately  preceding  sentence  the Maker  shall be  required  to pay the
     Holder $1,000. The Holder shall provide the Maker written notice indicating

                                       7
<PAGE>

     the amounts  payable to the Holder in respect of the Buy-In,  together with
     applicable  confirmations  and other evidence  reasonably  requested by the
     Maker.  Nothing  herein  shall  limit a Holder's  right to pursue any other
     remedies available to it hereunder, at law or in equity including,  without
     limitation,  a decree of specific performance and/or injunctive relief with
     respect  to  the   Company's   failure  to  timely   deliver   certificates
     representing  shares  of  Common  Stock  upon  conversion  of this  Note as
     required pursuant to the terms hereof.

     Section   3.4   Ownership   Cap  and   Certain   Conversion   Restrictions.
Notwithstanding anything to the contrary set forth in Section 3 of this Note, at
no time may the  Holder  convert  all or a portion of this Note if the number of
shares of Common Stock to be issued  pursuant to such  conversion  would exceed,
when  aggregated  with all other  shares of Common  Stock owned by the Holder at
such time, the number of shares of Common Stock which would result in the Holder
beneficially  owning (as  determined  in  accordance  with Section  13(d) of the
Exchange  Act and the rules  thereunder)  more than  9.99% of all of the  Common
Stock outstanding at such time;  provided,  however,  that upon a Holder of this
Note providing the Company with sixty-one (61) days notice  (pursuant to Section
4.1 hereof)  (the  "Waiver  Notice")  that such Holder  would like to waive this
Section  3.4 with  regard to any or all  shares of Common  Stock  issuable  upon
conversion  of this Note,  this  Section  3.4 will be of no force or effect with
regard  to all or a  portion  of  the  Note  referenced  in the  Waiver  Notice;
provided,  further,  that  during the  sixty-one  (61) day  period  prior to the
Maturity Date of this Note the Holder may waive this Section 3.4 upon  providing
the  Waiver  Notice at any time  during  such  sixty-one  (61) day  period;  and
provided,  further,  that any Waiver Notice during the sixty-one (61) day period
prior to the Maturity Date will not be effective until the Maturity Date.

     Section 3.5 [Intentionally omitted.]

     Section 3.6 Adjustment of Conversion Price.

          (a) The Conversion  Price shall be subject to adjustment  from time to
     time as follows:

               (i) Adjustments for Stock Splits and Combinations. If the Company
          shall at any time or from time to time after the Issuance Date, effect
          a  stock  split  of  the  outstanding  Common  Stock,  the  applicable
          Conversion Price in effect  immediately prior to the stock split shall
          be proportionately decreased. If the Company shall at any time or from
          time to time after the Issuance Date,  combine the outstanding  shares
          of Common Stock, the applicable Conversion Price in effect immediately
          prior to the  combination  shall  be  proportionately  increased.  Any
          adjustments  under this  Section  3.6(a)(i)  shall be effective at the
          close of business on the date the stock split or combination occurs.

               (ii) Adjustments for Certain Dividends and Distributions.  If the
          Company  shall at any time or from  time to time  after  the  Issuance
          Date,  make or  issue or set a record  date for the  determination  of
          holders  of Common  Stock  entitled  to  receive a  dividend  or other
          distribution  payable  in shares of Common  Stock,  then,  and in each
          event, the applicable  Conversion Price in effect immediately prior to
          such event shall be decreased  as of the time of such  issuance or, in

                                       8
<PAGE>

          the event such record  date shall have been fixed,  as of the close of
          business on such record date, by multiplying the applicable Conversion
          Price then in effect by a fraction:

                    (1) the  numerator  of which  shall be the  total  number of
               shares of Common Stock issued and outstanding  immediately  prior
               to the time of such  issuance  or the close of  business  on such
               record date; and

                    (2) the  denominator  of which shall be the total  number of
               shares of Common Stock issued and outstanding  immediately  prior
               to the time of such  issuance  or the close of  business  on such
               record date plus the number of shares of Common Stock issuable in
               payment of such dividend or distribution.

               (iii)  Adjustment for Other Dividends and  Distributions.  If the
          Company  shall at any time or from  time to time  after  the  Issuance
          Date,  make or  issue or set a record  date for the  determination  of
          holders  of Common  Stock  entitled  to  receive a  dividend  or other
          distribution  payable in other than shares of Common Stock,  then, and
          in each event,  an appropriate  revision to the applicable  Conversion
          Price shall be made and provision shall be made (by adjustments of the
          Conversion  Price or otherwise) so that the holders of this Note shall
          receive upon conversions  thereof, in addition to the number of shares
          of Common Stock  receivable  thereon,  the number of securities of the
          Company  which they would have  received had this Note been  converted
          into Common Stock on the date of such event and had thereafter, during
          the period from the date of such event to and including the Conversion
          Date,  retained  such  securities  (together  with  any  distributions
          payable  thereon  during  such  period),  giving  application  to  all
          adjustments   called  for  during  such  period   under  this  Section
          3.6(a)(iii) with respect to the rights of the holders of this Note and
          the Other  Notes;  provided,  however,  that if such record date shall
          have  been  fixed  and  such  dividend  is not  fully  paid or if such
          distribution  is not  fully  made  on the  date  fixed  therefor,  the
          Conversion  Price shall be adjusted to the Conversion  Price in effect
          immediately  prior to such adjustment until the time of actual payment
          of such dividends or distributions.

               (iv) Adjustments for Reclassification,  Exchange or Substitution.
          If the Common Stock issuable upon  conversion of this Note at any time
          or from time to time after the  Issuance  Date shall be changed to the
          same or  different  number of shares of any class or classes of stock,
          whether  by  reclassification,  exchange,  substitution  or  otherwise
          (other than by way of a stock split or  combination of shares or stock
          dividends  provided for in Sections  3.6(a)(i),  (ii) and (iii),  or a
          reorganization,  merger, consolidation, or sale of assets provided for
          in  Section  3.6(a)(v)),  then,  and in  each  event,  an  appropriate
          revision to the Conversion Price shall be made and provisions shall be
          made (by adjustments of the Conversion Price or otherwise) so that the
          Holder shall have the right  thereafter  to convert this Note into the
          kind and  amount of shares  of stock and other  securities  receivable
          upon  reclassification,  exchange,  substitution  or other change,  by
          holders of the  number of shares of Common  Stock into which such Note
          might have been converted immediately prior to such  reclassification,
          exchange,  substitution  or  other  change,  all  subject  to  further
          adjustment as provided herein.

               (v)  Adjustments for  Reorganization,  Merger,  Consolidation  or
          Sales  of  Assets.  If at any  time or from  time  to time  after  the
          Issuance Date there shall be a capital  reorganization  of the Company
          (other than by way of a stock split or  combination of shares or stock

                                       9
<PAGE>

          dividends or distributions provided for in Section 3.6(a)(i), (ii) and
          (iii),  or a  reclassification,  exchange  or  substitution  of shares
          provided for in Section  3.6(a)(iv)),  or a merger or consolidation of
          the  Company  with or into  another  corporation  where the holders of
          outstanding  voting  securities of the Company prior to such merger or
          consolidation  do not own over fifty percent (50%) of the  outstanding
          voting  securities of the merged or consolidated  entity,  immediately
          after  such   merger  or   consolidation,   or  the  sale  of  all  or
          substantially  all of the Company's  properties or assets to any other
          person (an "Organic  Change"),  then as a part of such Organic Change,
          (A) if the  surviving  entity in any such  Organic  Change is a public
          company that is registered  pursuant to the Securities Exchange Act of
          1934,  as  amended,  and its  common  stock is  listed  or quoted on a
          national  exchange or the OTC Bulletin Board, an appropriate  revision
          to the Conversion  Price shall be made and provision shall be made (by
          adjustments of the Conversion Price) so that the Holder shall have the
          right  thereafter  to  convert  such Note into the kind and  amount of
          shares of stock and other securities or property of the Company or any
          successor  corporation  as it would have  received as a result of such
          Organic  Change  if it had  converted  this  Note  into  Common  Stock
          immediately  prior to such Organic  Change,  and (B) if the  surviving
          entity  in any such  Organic  Change is not a public  company  that is
          registered  pursuant  to  the  Securities  Exchange  Act of  1934,  as
          amended,  or its  common  stock is not  listed or quoted on a national
          exchange or the OTC Bulletin Board, the Holder shall have the right to
          demand prepayment pursuant to Section 3.7(b) hereof. In any such case,
          appropriate  adjustment  shall  be  made  in  the  application  of the
          provisions of this Section 3.6(a)(v) with respect to the rights of the
          Holder after the Organic Change to the end that the provisions of this
          Section   3.6(a)(v)   (including  any  adjustment  in  the  applicable
          Conversion  Price  then in effect and the number of shares of stock or
          other  securities  deliverable  upon conversion of this Note) shall be
          applied after that event in as nearly an  equivalent  manner as may be
          practicable.

               (vi) Subsequent Common Stock and Common Stock Equivalents Issues.
          In the event the  Company,  shall,  at any time after the Full Ratchet
          Period,  issue or sell any Additional Shares of Common Stock or Common
          Stock  Equivalents  (otherwise  than  as  provided  in  the  foregoing
          subsections  of this Section  3.6), at a price per share less than the
          Conversion Price, or without consideration,  the Conversion Price then
          in effect  upon each such  issuance  shall be  adjusted  to that price
          (rounded to the nearest cent) determined by multiplying the Conversion
          Price by a fraction:  (1) the numerator of which shall be equal to the
          sum  of  (A)  the  number  of  shares  of  Common  Stock   outstanding
          immediately  prior to the issuance of such Additional Shares of Common
          Stock plus (B) the number of shares of Common  Stock  (rounded  to the
          nearest whole share) which the aggregate  consideration  for the total
          number  of such  Additional  Shares of  Common  Stock so issued  would
          purchase at a price per share equal to the then Conversion  Price; and
          (2) the denominator of which shall be equal to the number of shares of
          Common  Stock  outstanding  immediately  after  the  issuance  of such
          Additional  Shares of Common  Stock.  No  adjustment  of the number of
          shares  of  Common  Stock  shall  be made  upon  the  issuance  of any
          Additional  Shares of Common  Stock  which are issued  pursuant to the
          exercise of any warrants or other  subscription  or purchase rights or
          pursuant to the exercise of any  conversion or exchange  rights in any
          Common Stock  Equivalents if any such adjustment shall previously have
          been made upon the  issuance of such  warrants or other rights or upon
          the issuance of such Common Stock Equivalents (or upon the issuance of
          any warrant or other rights therefore).

               (vii) Consideration for Stock. In case any shares of Common Stock

                                       10
<PAGE>

          or any Common Stock Equivalents shall be issued or sold:

                    (1) in connection with any merger or  consolidation in which
               the  Company  is  the  surviving   corporation  (other  than  any
               consolidation  or  merger  in which  the  previously  outstanding
               shares of Common  Stock of the  Company  shall be  changed  to or
               exchanged   for  the  stock  or  other   securities   of  another
               corporation),  the  amount of  consideration  therefor  shall be,
               deemed to be the fair market value, as determined  reasonably and
               in good  faith by the  board of  directors  of the  Company  (the
               "Board"),  of such  portion  of the assets  and  business  of the
               nonsurviving  corporation  as  the  Board  may  determine  to  be
               attributable   to  such  shares  of  Common  Stock,   Convertible
               Securities, rights or warrants or options, as the case may be; or

                    (2) in the  event  of any  consolidation  or  merger  of the
               Company in which the Company is not the surviving  corporation or
               in which the previously outstanding shares of Common Stock of the
               Company shall be changed into or exchanged for the stock or other
               securities of another corporation, or in the event of any sale of
               all or  substantially  all of the assets of the Company for stock
               or other  securities  of any  corporation,  the Company  shall be
               deemed to have issued a number of shares of its Common  Stock for
               stock or  securities or other  property of the other  corporation
               computed on the basis of the actual  exchange  ratio on which the
               transaction was predicated,  and for a consideration equal to the
               fair  market  value on the date of such  transaction  of all such
               stock or securities or other  property of the other  corporation.
               If any such  calculation  results in adjustment of the applicable
               Conversion  Price,  or the  number  of  shares  of  Common  Stock
               issuable upon conversion of the Notes,  the  determination of the
               applicable  Conversion  Price or the  number  of shares of Common
               Stock issuable upon conversion of the Notes  immediately prior to
               such merger,  consolidation  or sale,  shall be made after giving
               effect to such adjustment of the number of shares of Common Stock
               issuable upon  conversion of the Notes. In the event Common Stock
               is issued with other shares or  securities or other assets of the
               Company for  consideration  which covers both, the  consideration
               computed as provided in this Section  3.6(vii) shall be allocated
               among such  securities  and assets as determined in good faith by
               the Board.

          (b) Record Date.  In case the Company shall take record of the holders
     of its Common Stock for the purpose of entitling  them to subscribe  for or
     purchase Common Stock or Convertible Securities, then the date of the issue
     or sale of the  shares of Common  Stock  shall be deemed to be such  record
     date.

          (c)  Certain  Issues   Excepted.   Anything  herein  to  the  contrary
     notwithstanding,  the Company shall not be required to make any  adjustment
     to the Conversion  Price in connection with (i) securities  issued pursuant
     to the  conversion or exercise of  convertible  or  exercisable  securities
     issued or outstanding on or prior to the date of the Placement Agreement or
     issued  pursuant to the Placement  Agreement (so long as the  conversion or
     exercise  price in such  securities  are not  amended  to lower  such price
     and/or  adversely  affect the Holder),  (ii) the Conversion  Shares,  (iii)
     Common Stock issued or the issuance or grants of options to purchase Common
     Stock  pursuant to the  Company's  stock option  plans and  employee  stock
     purchase  plans  that  either  (x)  exist  on the  date  of  the  Placement
     Agreement, or (y) do not exceed ten percent (10%) of the outstanding Common
     Stock of the Company as of the date of the  Placement  Agreement,  and (iv)

                                       11
<PAGE>

     any shares of Common Stock  issued upon the exercise of the warrant  issued
     to  Donald  Jones  for  the  transactions  contemplated  by the  Accelerant
     Purchase Agreement.

          (d)  No  Impairment.  The  Company  shall  not,  by  amendment  of its
     Certificate of  Incorporation  or through any  reorganization,  transfer of
     assets, consolidation,  merger, dissolution, issue or sale of securities or
     any  other  voluntary  action,  avoid or seek to avoid  the  observance  or
     performance  of any of the terms to be observed or  performed  hereunder by
     the  Company,  but will at all times in good faith,  assist in the carrying
     out of all the provisions of this Section 3.6 and in the taking of all such
     action  as  may be  necessary  or  appropriate  in  order  to  protect  the
     conversion rights of the Holder against  impairment.  In the event a Holder
     shall  elect to convert any Notes as provided  herein,  the Company  cannot
     refuse conversion based on any claim that such Holder or any one associated
     or  affiliated  with such Holder has been engaged in any  violation of law,
     violation of an agreement to which such Holder is a party or for any reason
     whatsoever,  unless, an injunction from a court, or notice, restraining and
     or adjoining  conversion  of all or of said Notes shall have issued and the
     Company  posts a surety  bond for the  benefit of such  Holder in an amount
     equal to one hundred  percent  (100%) of the amount of the Notes the Holder
     has  elected  to  convert,  which  bond  shall  remain in effect  until the
     completion  of  arbitration/litigation  of the dispute and the  proceeds of
     which shall be payable to such Holder (as liquidated  damages) in the event
     it obtains judgment.

          (e) Certificates as to Adjustments. Upon occurrence of each adjustment
     or readjustment of the Conversion Price or number of shares of Common Stock
     issuable  upon  conversion  of this Note  pursuant to this Section 3.6, the
     Company  at  its  expense  shall  promptly   compute  such   adjustment  or
     readjustment  in accordance with the terms hereof and furnish to the Holder
     a certificate  setting forth such adjustment and  readjustment,  showing in
     detail the facts upon which such adjustment or  readjustment is based.  The
     Company shall, upon written request of the Holder, at any time,  furnish or
     cause to be furnished to the Holder a like  certificate  setting forth such
     adjustments and readjustments, the applicable Conversion Price in effect at
     the time, and the number of shares of Common Stock and the amount,  if any,
     of other  securities  or property  which at the time would be received upon
     the conversion of this Note.  Notwithstanding  the  foregoing,  the Company
     shall not be obligated  to deliver a  certificate  unless such  certificate
     would  reflect an increase or decrease of at least one percent (1%) of such
     adjusted amount.

          (f)  Issue  Taxes.  The  Maker  shall  pay any and all issue and other
     taxes,  excluding federal, state or local income taxes, that may be payable
     in respect of any issue or delivery of shares of Common Stock on conversion
     of this Note pursuant thereto; provided,  however, that the Maker shall not
     be  obligated  to pay  any  transfer  taxes  resulting  from  any  transfer
     requested by the Holder in connection with any such conversion.

          (g) Fractional  Shares.  No fractional shares of Common Stock shall be
     issued upon  conversion of this Note. In lieu of any  fractional  shares to
     which the Holder  would  otherwise  be  entitled,  the Maker shall pay cash
     equal to the product of the fraction that would  evidence  such  fractional
     shares multiplied by one-hundred  percent (100%) of the average of the VWAP
     for the  ten  (10)  consecutive  Trading  Days  immediately  preceding  the
     Conversion Date.

          (h)  Reservation of Common Stock.  The Company shall at all times when
     this Note  shall be  outstanding,  reserve  and keep  available  out of its
     authorized but unissued Common Stock,  one hundred twenty percent (120%) of

                                       12
<PAGE>

     such  number  of  shares  of  Common  Stock as shall  from  time to time be
     sufficient to effect the conversion of this Note.  The Company shall,  from
     time to time in accordance with Indiana law, increase the authorized number
     of shares of Common Stock if at any time the unissued  number of authorized
     shares shall not be sufficient to satisfy the Company's  obligations  under
     this Section 3.6(h).

          (i)  Regulatory  Compliance.  If any  shares  of  Common  Stock  to be
     reserved for the purpose of conversion of this Note require registration or
     listing with or approval of any governmental  authority,  stock exchange or
     other  regulatory  body  under any  federal or state law or  regulation  or
     otherwise  before  such  shares may be  validly  issued or  delivered  upon
     conversion,  the Company shall, at its sole cost and expense, in good faith
     and as  expeditiously  as possible,  endeavor to secure such  registration,
     listing or approval, as the case may be.

     Section 3.7 Prepayment.

          (a) Prepayment Upon an Event of Default.  Notwithstanding  anything to
     the contrary contained herein,  upon the occurrence of an Event of Default,
     the Holder shall have the right,  at such Holder's  option,  to require the
     Maker to prepay in cash all or a portion  of this Note at a price  equal to
     one hundred percent (100%) of the aggregate  principal  amount of this Note
     plus  all  accrued  and  unpaid  interest  applicable  at the  time of such
     request.  Nothing in this Section  3.7(a)  shall limit the Holder's  rights
     under Section 2.2 hereof.

          (b) Prepayment Option Upon Major Transaction. In addition to all other
     rights of the Holder contained herein,  simultaneous with the occurrence of
     a Major Transaction (as defined below), the Holder shall have the right, at
     the  Holder's  option,  to  require  the  Maker to  prepay in cash all or a
     portion  of the  Holder's  Notes  at a price  equal to one  hundred  twenty
     percent  (120%)  of the  aggregate  principal  amount of this Note plus all
     accrued and unpaid interest (the "Major Transaction Prepayment Price").

          (c) Prepayment  Option Upon Triggering Event. In addition to all other
     rights of the Holder contained herein, after a Triggering Event (as defined
     below), the Holder shall have the right, at the Holder's option, to require
     the Maker to prepay all or a portion of this Note in cash at a price  equal
     to one hundred twenty percent (120%) of the aggregate  principal  amount of
     this Note plus all  accrued  and unpaid  interest  (the  "Triggering  Event
     Prepayment Price," and, collectively with the Major Transaction  Prepayment
     Price, the "Prepayment Price").

          (d) "Major Transaction." A "Major Transaction" shall be deemed to have
     occurred at such time as any of the following events:

               (i) the  consolidation,  merger or other business  combination of
          the Company  with or into  another  Person (as defined in Section 4.13
          hereof) (other than (A) pursuant to a migratory merger effected solely
          for the purpose of changing the  jurisdiction of  incorporation of the
          Company or (B) a consolidation,  merger or other business  combination
          in which holders of the Company's  voting power  immediately  prior to
          the transaction  continue after the  transaction to hold,  directly or
          indirectly,  the  voting  power of the  surviving  entity or  entities
          necessary to elect a majority of the members of the board of directors
          (or their  equivalent if other than a  corporation)  of such entity or
          entities); or

                                       13
<PAGE>

               (ii) the sale or transfer of more than fifty percent (50%) of the
          Company's assets (based on the fair market value as determined in good
          faith by the Board) other than  inventory  in the  ordinary  course of
          business in one or a related series of transactions; or

               (iii) closing of a purchase, tender or exchange offer made to the
          holders of more than fifty percent (50%) of the outstanding  shares of
          Common Stock in which more than fifty percent (50%) of the outstanding
          shares of Common Stock were tendered and accepted; or

               (iv) a change in more than  fifty  percent  (50%) of the  current
          members of the Company's Board of Directors as of the Issuance Date.

               (v) the occurrence of a "Qualified Financing" which shall mean an
          underwritten public offering of the Company's common stock pursuant to
          which the gross proceeds of at least $5 million is raised.

          (e) "Triggering  Event." A "Triggering  Event" shall be deemed to have
     occurred at such time as any of the following events:

               (i) the suspension from listing,  without  subsequent  listing on
          any one of,  or the  failure  of the  Common  Stock to be listed on at
          least one of the Pink  Sheets,  the OTC Bulletin  Board,  the American
          Stock Exchange, the Nasdaq Global Market, the Nasdaq Capital Market or
          The  New  York  Stock  Exchange,  Inc.,  for  a  period  of  ten  (10)
          consecutive Trading Days;

               (ii) the  Company's  notice to the  Holder or any Other  Holders,
          including by way of public announcement, at any time, of its inability
          to comply  (including  for any of the  reasons  described  in  Section
          3.8(a) hereof) or its intention not to comply with proper requests for
          conversion of any Notes into shares of Common Stock; or

               (iii) the  Company's  failure to comply with a Conversion  Notice
          tendered in  accordance  with the  provisions of this Note within five
          (5) Trading  Days after the  receipt by the Company of the  Conversion
          Notice; or

                    (iv) the Company  deregisters its shares of Common Stock and
               as a result  such shares of Common  Stock are no longer  publicly
               traded; or

                    (v) the Company  consummates a "going  private"  transaction
               and as a result the Common  Stock is no longer  registered  under
               Sections 12(b) or 12(g) of the Exchange Act; or

                    (vi)  the  Maker  breaches  any  representation,   warranty,
               covenant or other term or condition of the  Placement  Agreement,
               this Note, or any other agreement, document, certificate or other
               instrument   delivered  in  connection   with  the   transactions
               contemplated  thereby or hereby,  except to the extent  that such
               breach  would not have a Material  Adverse  Effect (as defined in
               the Accelerant  Purchase  Agreement) and except, in the case of a
               breach  of a  covenant  which  is  curable,  only if such  breach
               continues for a period of a least twenty (20) business days.

                                       14
<PAGE>

          (f)   Mechanics  of   Prepayment   at  Option  of  Holder  Upon  Major
     Transaction.  No sooner than fifteen (15) days nor later than ten (10) days
     prior to the consummation of a Major Transaction,  but in no event prior to
     the public announcement of such Major Transaction,  the Maker shall deliver
     written  notice  thereof via facsimile and  overnight  courier  ("Notice of
     Major  Transaction")  to the Holder of this Note and the Other Holders.  At
     any time after receipt of a Notice of Major Transaction (or, in the event a
     Notice of Major  Transaction  is not delivered at least ten (10) days prior
     to a Major Transaction, at any time during the ten (10) day period prior to
     a Major Transaction),  the Holder of this Note and the Other Holders of the
     Other Notes then  outstanding  may  require the Maker to prepay,  effective
     immediately prior to the consummation of such Major Transaction, all or any
     portion of this Note then outstanding by delivering  written notice thereof
     via  facsimile and  overnight  courier  ("Notice of Prepayment at Option of
     Holder Upon Major Transaction") to the Maker, which Notice of Prepayment at
     Option of Holder Upon Major  Transaction  shall  indicate (i) the principal
     amount of this Note that the Holder is  electing  to have  prepaid and (ii)
     the applicable Major Transaction  Prepayment Price, as calculated  pursuant
     to Section 3.7(b) above.

          (g) Mechanics of Prepayment at Option of Holder Upon Triggering Event.
     Within three (3) business days after the occurrence of a Triggering  Event,
     the Maker shall deliver  written notice thereof via facsimile and overnight
     courier ("Notice of Triggering Event") to the Holder and the Other Holders.
     At any time  after  the  earlier  of the  Holder's  receipt  of a Notice of
     Triggering  Event and the Holder becoming aware of a Triggering  Event, the
     Holder  of  this  Note  and the  Other  Holders  of the  Other  Notes  then
     outstanding may require the Maker to prepay all or any portion of this Note
     then  outstanding  by delivering  written  notice thereof via facsimile and
     overnight   courier  ("Notice  of  Prepayment  at  Option  of  Holder  Upon
     Triggering  Event") to the Maker,  which Notice of  Prepayment at Option of
     Holder Upon Triggering Event shall indicate (i) the amount of the Note that
     the Holder is electing to have prepaid and (ii) the  applicable  Triggering
     Event Prepayment Price, as calculated pursuant to Section 3.7(c) above. The
     Holder  shall only be  permitted  to require  the Maker to prepay this Note
     pursuant to Section 3.7 hereof for the greater of a period of ten (10) days
     after receipt by the Holder of a Notice of Triggering  Event or for so long
     as such Triggering Event is continuing.

          (h) [Reserved.]

          (i) [Reserved.]

          (j)  Payment  of  Prepayment  Price.  Upon  the  Maker'  receipt  of a
     Notice(s)  of  Prepayment  at Option of Holder Upon  Triggering  Event or a
     Notice(s) of Prepayment at Option of Holder Upon Major Transaction from the
     Holder or the Other  Holders,  the Maker  shall  notify  the Holder or such
     Other  Holder,  as the case may be, by facsimile of the Maker's  receipt of
     such Notice(s) of Prepayment at Option of Holder Upon  Triggering  Event or
     Notice(s) of Prepayment at Option of Holder Upon Major  Transaction  within
     two (2) business days of the Maker'  receipt of the same and the Holder and
     each Other Holder which has sent such a notice  shall  promptly  thereafter
     submit to the Maker this Note (or  certificates  representing  a portion of
     this Note if the Holder elects not to have all of the outstanding principal
     and accrued interest hereunder prepaid) or the Other Notes (or certificates
     representing a portion of the Other Notes if the Other Holders elect not to
     have  all of the  outstanding  principal  and  accrued  interest  hereunder
     prepaid)  which  the  Holder  or Other  Holders,  as the case may be,  have
     elected to have prepaid. The Maker shall deliver the applicable  Triggering

                                       15
<PAGE>

     Event Prepayment  Price to the Holder,  within five (5) business days after
     the Maker' receipt of this Note or the certificates related thereto, as the
     case may be, and, in the case of a prepayment  pursuant to Section  3.7(f),
     the Maker shall deliver the applicable Major  Transaction  Prepayment Price
     immediately  prior to the consummation of the Major  Transaction;  provided
     that the Holder's  original Note or the Other Holders' original Other Note,
     or the certificates  related  thereto,  shall have been so delivered to the
     Maker;  provided  further  that if the Maker is unable to prepay all of the
     Notes to be  prepaid,  the Maker  shall  prepay an amount to the Holder and
     each Other Holder of this Note and the Other Notes being  prepaid  equal to
     such  holder's  pro rata  amount of all Notes being  prepaid.  If the Maker
     shall fail to prepay all of the Notes submitted for prepayment  (other than
     pursuant to a dispute as to the  arithmetic  calculation  of the Prepayment
     Price),  in  addition to any remedy such holder of the Notes may have under
     this Note and the Placement  Agreement,  the  applicable  Prepayment  Price
     payable in respect of such Notes not  prepaid  shall bear  interest  at the
     rate of two percent (2%) per month (prorated for partial months) until paid
     in full.  Until the Maker pay such unpaid  applicable  Prepayment  Price in
     full to a holder of the Notes submitted for  prepayment,  such holder shall
     have the option  (the "Void  Optional  Prepayment  Option")  to, in lieu of
     prepayment,  require the Maker to promptly  return to such holder(s) all of
     the Notes that were submitted for  prepayment by such holder(s)  under this
     Section  3.7 and for which  the  applicable  Prepayment  Price has not been
     paid, by sending  written  notice  thereof to the Maker via facsimile  (the
     "Void Optional  Prepayment  Notice").  Upon the Maker' receipt of such Void
     Optional  Prepayment  Notice(s) and prior to payment of the full applicable
     Prepayment Price to such holder,  (i) the Notice(s) of Prepayment at Option
     of Holder Upon Triggering Event or the Notice(s) of Prepayment at Option of
     Holder Upon Major  Transaction,  as the case may be, shall be null and void
     ab initio with  respect to those Notes  submitted  for  prepayment  and for
     which the  applicable  Prepayment  Price has not been paid,  (ii) the Maker
     shall  immediately  return  any such Notes  submitted  to the Maker by each
     holder for  prepayment  under  this  Section  and for which the  applicable
     Prepayment  Price has not been paid and (iii) the Conversion  Price of such
     returned Notes shall be adjusted to the lesser of (A) the Conversion  Price
     as in effect on the date on which the applicable  Void Optional  Prepayment
     Notice(s) is  delivered  to the Maker and (B) the lowest  closing bid price
     during  the  period  beginning  on the  date  on  which  the  Notice(s)  of
     Prepayment of Option of Holder Upon Major  Transaction  or the Notice(s) of
     Prepayment at Option of Holder Upon  Triggering  Event, as the case may be,
     is delivered to the Maker and ending on the date on which the Void Optional
     Prepayment Notice(s) is delivered to the Maker; provided that no adjustment
     shall  be  made if such  adjustment  would  result  in an  increase  of the
     Conversion  Price then in effect.  A holder's  delivery of a Void  Optional
     Prepayment  Notice and exercise of its rights  following  such notice shall
     not effect the Maker'  obligations  to make any payments which have accrued
     prior to the date of such notice. Payments provided for in this Section 3.7
     shall have priority to payments to other  stockholders in connection with a
     Major Transaction.

     Section 3.8 Inability to Fully Convert.

          (a)  Holder's  Option if Maker  Cannot  Fully  Convert.  If,  upon the
     Company's receipt of a Conversion  Notice,  the Company cannot issue shares
     of Common Stock for any reason, including, without limitation,  because the
     Company  (x) does not have a  sufficient  number of shares of Common  Stock
     authorized  and available or (y) is otherwise  prohibited by applicable law
     or by the rules or regulations of any stock exchange, interdealer quotation

                                       16
<PAGE>

     system or other  self-regulatory  organization  with  jurisdiction over the
     Company or any of its securities from issuing all of the Common Stock which
     is to be issued to the Holder  pursuant to a  Conversion  Notice,  then the
     Company shall issue as many shares of Common Stock,  as it is able to issue
     in accordance with the Holder's  Conversion Notice and, with respect to the
     unconverted  portion of this Note, the Holder,  solely at Holder's  option,
     can elect to:

               (i)  require  the Maker to prepay  that  portion of this Note for
          which the Company is unable to issue Common Stock in  accordance  with
          the Holder's Conversion Notice (the "Mandatory Prepayment") at a price
          per share equal to the Triggering  Event  Prepayment  Price as of such
          Conversion Date (the "Mandatory Prepayment Price");

               (ii) void its Conversion  Notice and retain or have returned,  as
          the case may be,  this Note (or the  portion  thereof)  that was to be
          converted  pursuant  to  the  Conversion  Notice  (provided  that  the
          Holder's  voiding its  Conversion  Notice shall not affect the Maker's
          obligations  to make any payments which have accrued prior to the date
          of such notice); or

               (iii)  exercise its Buy-In  rights  pursuant to and in accordance
          with the terms and provisions of Section 3.3(c) of this Note.

          (b)  Mechanics  of  Fulfilling  Holder's  Election.  Upon receipt of a
     facsimile copy of a Conversion Notice from the Holder which cannot be fully
     satisfied as described in Section  3.8(a)  above,  the Company shall within
     two (2)  Trading  Days  send via  facsimile  to the  Holder a notice of the
     Company's  inability to fully satisfy the Conversion Notice (the "Inability
     to Fully Convert  Notice").  Such  Inability to Fully Convert  Notice shall
     indicate  (i) the reason why the  Company  is unable to fully  satisfy  the
     Holder's  Conversion  Notice,  (ii) the amount of this Note which cannot be
     converted and (iii) the applicable  Mandatory  Prepayment Price. The Holder
     shall notify the Maker of its election  pursuant to Section 3.8(a) above by
     delivering  written  notice via facsimile to the Maker ("Notice in Response
     to Inability to Convert").

          (c) Payment of Prepayment Price. If the Holder shall elect to have its
     Notes prepaid pursuant to Section  3.8(a)(i) above, the Maker shall pay the
     Mandatory  Prepayment  Price to the Holder  within  thirty (30) days of the
     Maker's receipt of the Holder's Notice in Response to Inability to Convert,
     provided  that,  prior to the  Maker's  receipt of the  Holder's  Notice in
     Response to Inability to Convert the Company has not  delivered a notice to
     the Holder stating,  to the  satisfaction of the Holder,  that the event or
     condition  resulting  in the  Mandatory  Prepayment  has been cured and all
     Conversion  Shares  issuable to the Holder can and will be delivered to the
     Holder in  accordance  with the terms of this Note. If the Maker shall fail
     to pay the applicable  Mandatory Prepayment Price to the Holder on the date
     that is three (3)  business  days  following  the  Maker's  receipt  of the
     Holder's Notice in Response to Inability to Convert (other than pursuant to
     a dispute as to the  determination  of the  arithmetic  calculation  of the
     Prepayment Price), in addition to any remedy the Holder may have under this
     Note and the Placement Agreement, such unpaid amount shall bear interest at
     the rate of two percent (2%) per month  (prorated for partial months) until
     paid in full. Until the full Mandatory  Prepayment Price is paid in full to
     the Holder,  the Holder may (i) void the Mandatory  Prepayment with respect
     to that portion of the Note for which the full Mandatory  Prepayment  Price
     has not been paid,  (ii) receive back such Note, and (iii) require that the
     Conversion Price of such returned Note be adjusted to the lesser of (A) the
     Conversion  Price as in effect on the date on which the  Holder  voided the

                                       17
<PAGE>

     Mandatory Prepayment and (B) the lowest VWAP during the period beginning on
     the Conversion  Date and ending on the date the Holder voided the Mandatory
     Prepayment.

          (d)  Pro-rata  Conversion  and  Prepayment.  In the event the  Company
     receives a Conversion  Notice from the Holder and the Other  Holders on the
     same day and the Company can convert and prepay some,  but not all, of this
     Note  pursuant to this Section 3.8,  the Company  shall  convert and prepay
     from the Holder  and each Other  Holder  electing  to have its Other  Notes
     converted  and  prepaid at such time an amount  equal to the Holder or such
     Other  Holder's  pro rata amount of all the Notes and the Other Notes being
     converted and prepaid at such time.

     Section 3.9 No Rights as Stockholder.  Nothing contained in this Note shall
be construed as  conferring  upon the Holder,  prior to the  conversion  of this
Note,  the right to vote or to  receive  dividends  or to  consent or to receive
notice as a  stockholder  in respect  of any  meeting  of  stockholders  for the
election of directors of the Company or of any other matter, or any other rights
as a stockholder of the Company.

                                   ARTICLE IV

                                  MISCELLANEOUS

     Section  4.1  Notices.  Any  notice,  demand,   request,  waiver  or  other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be  effective  (a) upon hand  delivery,  telecopy or  facsimile at the
address or number  designated  in the  Placement  Agreement  (if  delivered on a
business day during normal  business hours where such notice is to be received),
or the first business day following such delivery (if delivered  other than on a
business day during normal  business  hours where such notice is to be received)
or (b) on the  second  business  day  following  the date of  mailing by express
courier  service,  fully  prepaid,  addressed  to such  address,  or upon actual
receipt  of such  mailing,  whichever  shall  first  occur.  The Maker will give
written  notice to the  Holder at least ten (10) days prior to the date on which
the Company takes a record (x) with respect to any dividend or distribution upon
the Common Stock, (y) with respect to any pro rata subscription offer to holders
of  Common  Stock or (z) for  determining  rights to vote  with  respect  to any
Organic  Change,  dissolution,  liquidation  or winding-up but in no event shall
such notice be provided to the Holder prior to such information being made known
to the public.  The Maker also will give  written  notice to the Holder at least
ten  (10)  days  prior to the date on which  any  Organic  Change,  dissolution,
liquidation  or winding-up  will take place but in no event shall such notice be
provided to the Holder prior to such information being made known to the public.
The Maker shall promptly  notify the Holder of any notices sent or received,  or
any actions taken with respect to the Other Notes.

     Section 4.2 Governing Law; Consent to Jurisdiction. The parties acknowledge
and agree that any claim, controversy,  dispute or action relating in any way to
this agreement or the subject matter of this agreement  shall be governed solely
by the laws of the State of  Delaware,  without  regard to any  conflict of laws
doctrines.  The parties  irrevocably  consent to being served with legal process
issued from the state and  federal  courts  located in New York and  irrevocably
consent to the exclusive  personal  jurisdiction of the federal and state courts
situated in the State of New York. The parties  irrevocably waive any objections
to the personal  jurisdiction  of these courts.  Said courts shall have sole and

                                       18
<PAGE>

exclusive  jurisdiction  over any and all claims,  controversies,  disputes  and
actions which in any way relate to this  agreement or the subject matter of this
agreement.  The parties also irrevocably  waive any objections that these courts
constitute an oppressive, unfair, or inconvenient forum and agree not to seek to
change venue on these grounds or any other grounds.  Nothing in this Section 4.2
shall affect or limit any right to serve  process in any other manner  permitted
by law.

     Section  4.3  Headings.  Article  and  section  headings  in this  Note are
included  herein for purposes of  convenience  of  reference  only and shall not
constitute a part of this Note for any other purpose.

     Section 4.4 Remedies,  Characterizations,  Other Obligations,  Breaches and
Injunctive Relief. The remedies provided in this Note shall be cumulative and in
addition to all other  remedies  available  under this Note, at law or in equity
(including,  without limitation,  a decree of specific  performance and/or other
injunctive  relief),  no  remedy  contained  herein  shall be deemed a waiver of
compliance  with the  provisions  giving rise to such remedy and nothing  herein
shall  limit a Holder's  right to pursue  actual  damages for any failure by the
Maker to comply with the terms of this Note.  Amounts set forth or provided  for
herein with respect to payments,  conversion  and the like (and the  computation
thereof) shall be the amounts to be received by the Holder hereof and shall not,
except as expressly  provided herein,  be subject to any other obligation of the
Maker (or the performance thereof). Each of the Maker acknowledges that a breach
by it of its obligations  hereunder will cause  irreparable and material harm to
the  Holder and that the  remedy at law for any such  breach may be  inadequate.
Therefore  each Maker agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled,  in addition to all other available rights
and remedies,  at law or in equity,  to seek and obtain such  equitable  relief,
including  but not  limited  to an  injunction  restraining  any such  breach or
threatened  breach,  without the necessity of showing  economic loss and without
any bond or other security being required.

     Section 4.5  Enforcement  Expenses.  The Maker  agrees to pay all costs and
expenses  of the  Holder  incurred  as a result  of  enforcement  of this  Note,
including, without limitation, reasonable attorneys' fees and expenses.

     Section 4.6 Binding Effect. The obligations of the Maker and the Holder set
forth  herein  shall be binding  upon the  successors  and  assigns of each such
party,  whether or not such  successors  or assigns are  permitted  by the terms
hereof.

     Section  4.7  Amendments.  This Note may not be  modified or amended in any
manner except in writing executed by the Maker and the Holder.

     Section  4.8  Compliance  with  Securities  Laws.  The  Holder of this Note
acknowledges  that this  Note is being  acquired  solely  for the  Holder's  own
account and not as a nominee for any other party,  and for investment,  and that
the Holder shall not offer,  sell or otherwise  dispose of this Note.  This Note
and any Note issued in substitution or replacement  therefor shall be stamped or
imprinted with a legend in substantially the following form:

       "THIS NOTE AND THE  SECURITIES  ISSUABLE UPON  CONVERSION  HEREOF
       HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS

                                       19
<PAGE>

       AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS, AND MAY
       NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
       RECEIPT  BY THE  COMPANY  OF A WRITTEN  OPINION OF COUNSEL IN THE
       FORM, SUBSTANCE AND SCOPE REASONABLY  SATISFACTORY TO THE COMPANY
       THAT THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
       MAY BE SOLD, TRANSFERRED,  HYPOTHECATED OR OTHERWISE DISPOSED OF,
       UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH STATE
       SECURITIES LAWS."

     Section 4.9 Accredited  Investor Status. In no event may the Holder convert
this Note in whole or in part unless the Holder is an  "accredited  investor" as
defined in Regulation D under the Act.

     Section 4.10 Parties in Interest. This Note shall be binding upon, inure to
the benefit of and be enforceable by the Maker,  the Holder and their respective
successors and permitted assigns.

     Section 4.11 Failure or Indulgence  Not Waiver.  No failure or delay on the
part of the Holder in the exercise of any power,  right or  privilege  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right,  power or  privilege,  nor shall any waiver by the Holder of
any such  right or  rights  on any one  occasion  be deemed a waiver of the same
right or rights on any future occasion.

     Section 4.12 Maker's Waivers.

          (a) Except as otherwise  specifically  provided herein,  the Maker and
     all others  that may become  liable for all or any part of the  obligations
     evidenced  by this  Note,  hereby  waive  presentment,  demand,  notice  of
     nonpayment,  protest and all other demands' and notices in connection  with
     the delivery, acceptance,  performance and enforcement of this Note, and do
     hereby  consent  to any number of  renewals  of  extensions  of the time or
     payment  hereof and agree that any such renewals or extensions  may be made
     without notice to any such persons and without  affecting  their  liability
     herein and do further  consent to the release of any person liable  hereon,
     all without  affecting the liability of the other  persons,  firms or Maker
     liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.

          (b) THE MAKER  ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS
     A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE
     LAW,  HEREBY  WAIVES ITS RIGHT TO NOTICE AND  HEARING  WITH  RESPECT TO ANY
     PREJUDGMENT REMEDY WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE
     TO USE.

                                       20
<PAGE>

     Section 4.13  Definitions.  For the purposes  hereof,  the following  terms
shall have the following meanings:

     "Convertible  Securities"  means  any  convertible  securities,   warrants,
options or other rights to subscribe for or to purchase or exchange for,  shares
of Common Stock or Common Stock Equivalents.

     "Options"  shall mean any rights,  warrants or options to subscribe  for or
purchase Common Stock or Convertible Securities of the Company.

     "Person"  means  an  individual  or  a  corporation,   partnership,  trust,
incorporated or  unincorporated  association,  joint venture,  limited liability
company, joint stock company,  government (or an agency or political subdivision
thereof) or other entity of any kind.

     "Trading  Day" means (a) a day on which the  Common  Stock is traded on the
Pink Sheets, OTC Bulletin Board, or (b) if the Common Stock is not traded on the
OTC  Bulletin  Board,  a day  on  which  the  Common  Stock  is  quoted  in  the
over-the-counter  market  as  reported  by  Pink  Sheets  LLC  (or  any  similar
organization or agency succeeding its functions of reporting prices);  provided,
however,  that in the event that the Common Stock is not listed or quoted as set
forth in (a) or (b) hereof, then Trading Day shall mean any day except Saturday,
Sunday  and any day which  shall be a legal  holiday  or a day on which  banking
institutions in the State of New York are authorized or required by law or other
government action to close.

     Section  4.14 Usury.  All  agreements  between the Maker and the Holder are
hereby expressly  limited to provide that in no contingency or event whatsoever,
whether by reason of  acceleration  of  maturity of the  indebtedness  evidenced
hereby or  otherwise,  shall the amount  paid or agreed to be paid to the Holder
for the use,  forbearance  or detention  of the  indebtedness  evidenced  hereby
exceed the  maximum  amount  which the  Holder is  permitted  to  receive  under
applicable  law.  If,  from any  circumstances  whatsoever,  fulfillment  of any
provision hereof or of the Placement  Agreement or any document  thereunder,  at
the time performance of such provision shall be due, shall involve  transcending
the limit of validity  prescribed by law, then, ipso facto, the obligation to be
fulfilled shall  automatically be reduced to the limit of such validity,  and if
from any  circumstance the Holder shall ever receive as interest an amount which
would  exceed the highest  lawful  rate,  such amount  which would be  excessive
interest  shall be applied to the reduction of the  principal  balance of any of
the  Maker's  obligations  to the  Holder,  and not to the  payment of  interest
hereunder. To the extent permitted by applicable law, all sums paid or agreed to
be paid for the use,  forbearance or detention of the indebtedness  evidenced by
this Note shall be amortized, prorated, allocated and spread throughout the full
term of such  indebtedness  until  payment in full,  to the end that the rate or
amount  of  interest  on  account  of such  indebtedness  does  not  exceed  any
applicable usury ceiling.  As used herein,  the term "applicable law" shall mean
the law in effect as of the date hereof,  provided,  however,  that in the event
there is a change  in the law  which  results  in a higher  permissible  rate of
interest,  then this Note shall be governed by such new law as of its  effective
date.  This  provision  shall  control every other  provision of all  agreements
between the Maker and the Holder.

                                       21
<PAGE>

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

                                                TOTAL LUXURY GROUP, INC.

                                                By:  ___________________________
                                                     Name:
                                                     Title:

                                       22
<PAGE>

                                    EXHIBIT A

                                WIRE INSTRUCTIONS

Payee: _________________________________________________________

Bank:  _________________________________________________________

Address: _______________________________________________________

         _______________________________________________________

Bank No.: ______________________________________________________

Account No.:  __________________________________________________

Account Name: __________________________________________________

                                       23
<PAGE>

                                     FORM OF

            NOTICE OF OPTIONAL CONVERSION INTO SHARES OF COMMON STOCK

          (To be Executed by the Registered Holder in order to Convert
                     the Note into Shares of Common Stock)

The undersigned hereby  irrevocably elects to convert $ ________________  of the
principal  amount of the above Note No. ___ into shares of Common Stock of TOTAL
LUXURY GROUP, INC. (the "Company") according to the conditions hereof, as of the
date written below.

Date of Conversion _________________________________________________________

Applicable Conversion Price __________________________________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the Date of Conversion: _________________________

Signature___________________________________________________________________

         [Name]

Address:__________________________________________________________________

        __________________________________________________________________

                                       24
<PAGE>

                                 Schedule 1.4(a)

1.       Senior Secured 9% Convertible Promissory Note issued to Accelerant
         Partners LLC in the principal amount of nineteen million ($19,000,000)
         dollars dated March 7, 2008.

2.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

3.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

4.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

5.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

6.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

7.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

8.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

9.       Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

10.      Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

11.      Junior Unsecured 9% Convertible Promissory Note issued to [insert
         Series C Holder] in the principal amount of [________] ($____________)
         dollars dated March 7, 2008.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}]]