Document:

Exhibit 10.6

NEITHER THIS NOTE, NOR ANY SECURITY  ISSUABLE UPON CONVERSION  HEREOF,  HAS BEEN
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "ACT"),  OR
APPLICABLE  STATE  SECURITIES  LAWS.  NO INTEREST IN THIS NOTE MAY BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE ACT,
OR (ii) AN  EXEMPTION  FROM  REGISTRATION  UNDER THE ACT WHERE  THE  HOLDER  HAS
FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL  REASONABLY  SATISFACTORY  TO
THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.

                                 MEDIABAY, INC.

                       CONVERTIBLE SENIOR PROMISSORY NOTE
                             DUE SEPTEMBER 30, 2002

$2,500,000                                                          May 14, 2001

     MEDIABAY,  INC.  (together with its successors,  the "Company"),  a Florida
corporation,   for  value  received,   hereby  promises  to  pay  to  Huntingdon
Corporation  or  registered  assigns (the  "Holder"),  the  principal sum of TWO
MILLION FIVE HUNDRED  THOUSAND  DOLLARS  ($2,500,000) on September 30, 2002 (the
"Maturity  Date"),  and to pay interest on the unpaid  principal  balance hereof
from the date hereof to the Maturity Date at the rate of two percent  (2.0%) per
annum  above the higher of (i) the rate of  interest  announced  publicly by The
Wall Street Journal as the "base rate on corporate  loans posted by at least 75%
of the nation's 30 largest banks" (or, if The Wall Street Journal ceases quoting
a base  rate of the type  described,  the  highest  per annum  rate of  interest
published by the Federal  Reserve Board in Federal Reserve  statistical  release
H.15 (519) entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent)  or (ii) 1/2 of one percent (0.5%) per annum above the Federal Funds
Rate (as the case may be,  the  "Prime  Rate"),  subject  to the terms set forth
herein and the  Intercreditor  Agreement (as hereinafter  defined),  in arrears,
quarterly  on March 31,  June 30,  September  30 and  December  31 in each year,
commencing on June 30, 2001,  until the principal amount hereof shall become due
and payable;  and to pay on demand interest on any overdue principal  (including
any overdue partial  payment of principal and principal  payable at the maturity
hereof)  and  (to  the  extent  permitted  by  applicable  law)  on any  overdue
installment of interest (the due date of such payments to be determined  without
giving effect to any grace period) at the rate of four percent  (4.0%) per annum
above the Prime Rate.

1. Interest and Payment

     1.1 Interest  shall be computed on the basis of a 360 day year of twelve 30
day months for the  actual  time  elapsed.  Subject  to the  provisions  of this
Section 1 and the terms of the Senior Credit Agreement, all interest payments to
be paid in cash to Holder  hereunder  shall accrue until

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ten (10) days following the date that the Senior Debt (as  hereinafter  defined)
has been paid in full.

     1.2 At the  option of the  Holder  and  subject  to the terms of the Senior
Credit  Agreement,  in lieu of paying a scheduled  interest payment in cash, the
Company  shall pay such  interest  either (a) by the  issuance  to Holder of its
convertible  promissory  note in the form of this Note (each  such note  defined
herein as an "Interest  Payment Note") in the principal  amount of the scheduled
interest  payment  due on such  interest  payment  date upon the same  terms and
conditions  of this  Note or (b) in a number of whole  shares  of common  stock,
without par value  ("Common  Stock"),  of the Company,  equal to the quotient of
dividing  the amount of accrued  and unpaid  interest  payable on such  interest
payment date by an amount equal to the then current  Market Price "Market Price"
shall be deemed to mean the  average of the daily  closing  prices of a share of
Common  Stock  for the 10  consecutive  trading  days  immediately  prior to the
interest  payment  date.  The  closing  price for each day shall be (a) the last
reported  sales price or, in the case no such  reported sale takes place on such
day, the average of the reported closing bid and asked prices, in either case on
the principal national  securities  exchange on which the Common stock is listed
or  admitted  to trading  or, if the Common  Stock is not listed or  admitted to
trading on any national  securities  exchange,  on The Nasdaq Stock Market, Inc.
("Nasdaq"),  (b) if the Common Stock is not listed or admitted to trading on any
national securities exchange or quoted on Nasdaq, the average of the closing bid
and asked  prices in the  over-the-counter  market as  furnished by any New York
Stock Exchange member firm reasonably  selected from time to time by the Company
for that  purpose,  or (c) if the  Common  Stock is not  listed or  admitted  to
trading on any national  securities exchange or quoted on Nasdaq and the average
price cannot be determined as  contemplated by clause (b), the fair market value
of the Common Stock as determined in good faith by resolution of the independent
directors of the Company.  For the purposes of the preceding sentence,  the term
"trading day" shall mean each Monday, Tuesday,  Wednesday,  Thursday and Friday,
other than any day on which  securities  are not traded on such  exchange  or in
such market.  No fractional  shares of Common Stock will be issued to the Holder
in lieu of cash interest.  Instead of any fractional share which would otherwise
be issuable in lieu of cash interest,  the Company will calculate and pay a cash
adjustment in respect of such fraction  (calculated to the nearest  1/100th of a
share) in an amount equal to the same  fraction of the Market Price at the close
of  business on the fifth  business  day  immediately  preceding  such  interest
payment date.  The Holder may exercise its option to cause the Company to either
(i) issue its  Interest  Payment  Note in lieu of cash  interest  for the amount
payable on the interest payment date or (ii) to issue shares of Common Stock, in
lieu of cash interest payable on an interest payment date, by giving the Company
written  notice of either of its exercise of such option at least five  business
days prior to such  interest  payment date and the Company will deliver or cause
its transfer  agent to deliver,  to the Holder or its designee on such  interest
payment  date,  either its Interest  Payment Note in the amount of such interest
payment or duly executed  certificates  for the number of whole shares of Common
Stock so issuable to the Holder  registered  in the Holder's  name or such other
name or names and in such  denominations  as the Holder shall have designated in
its notice of exercise, as the case may be, and, if applicable,  a check payable
to the Holder for any cash adjustment in lieu of a fractional share.

     1.3 Except as provided in Section 1.2 hereof, payments of principal, Change
in Control Purchase Price (as hereinafter defined), if any, and accrued interest
shall be made in such

                                      -2-
<PAGE>

coin or  currency  of the United  States of America as at the time of payment is
legal tender for the payment of public and private Debts to the Holder hereof at
its address shown in the register maintained by the Company for such purpose.

     1.4 (a) The Company shall pay all amounts payable with respect to this Note
(without any presentment of this Note) by crediting,  by federal funds bank wire
transfer,  the account of the Holder in any bank in the United States of America
as may be designated in writing by the Holder or in such other manner or to such
other address in the United States of America as may be designated in writing by
the Holder (and as to which,  absent  subsequent  notice  from the  Holder,  the
Company may conclusively  rely).  Annex 1 shall be deemed to constitute  notice,
direction  or  designation  (as  appropriate)  by the  payee of this Note to the
Company with respect to payments to be made to such payee as above provided.  In
the absence of such written direction,  all amounts payable with respect to this
Note shall be paid by check  mailed and  addressed  to the Holder at its address
shown in the register maintained by the Company pursuant to Section 2.1.

     (b) All payments received on account of this Note shall be applied first to
the  payment  of  accrued  and  unpaid  interest  on this  Note  and then to the
reduction  of the  unpaid  principal  amount of this  Note.  In case the  entire
principal  amount of this Note is paid or this Note is purchased by the Company,
this Note shall be surrendered to the Company for  cancellation and shall not be
reissued,  and no Note shall be issued in lieu of the paid  principal  amount of
any Note.

     1.5 (a) If any  payment due on account of this Note shall fall due on a day
other than a business day, then such payment shall be made on the first business
day following  the day on which such payment shall have so fallen due;  provided
that if all or any  portion  of such  payment  shall  consist  of a  payment  of
interest,  for purposes of  calculating  such  interest,  such payment  shall be
deemed to have been  originally due on such first  following  business day, such
interest  shall accrue and be payable to (but not  including) the actual date of
payment,  and the  amount  of the  next  succeeding  interest  payment  shall be
adjusted accordingly.

     (b) Any  payment  to be made to the Holder on account of this Note shall be
deemed to have been  made on the  business  day such  payment  actually  becomes
available  at such  Holder's  bank prior to the close of  business of such bank,
provided that interest for one day at the non-default interest rate of this Note
shall be due on the amount of any such payment that actually  becomes  available
to the Holder at the Holder's bank after 1:00 p.m. (local time of such bank).

     1.6  Subject  to the  terms of the  Senior  Credit  Agreement  (as  defined
herein), the Company may, upon at least three business days prior written notice
to the Holder specifying the date of the prepayment (the "Prepayment  Date") and
the principal amount to be prepaid,  prepay the unpaid principal balance of this
Note in whole at any time or in part  from  time to  time,  without  penalty  or
premium,  in multiples of $100,000 (or if the  outstanding  principal  amount is
less than  $100,000 at such time,  then such  principal  amount)  together  with
interest  on the  principal  amount  being  prepaid  accrued  to the  designated
Prepayment Date.

                                      -3-
<PAGE>

     1.7 In the  event of a Change  in  Control,  the  Company  will,  within 15
business days after the occurrence of such event,  give notice of such Change in
Control to the Holder.  Such notice shall  contain an  irrevocable  offer to the
Holder to repurchase  this Note on a date (the "Change in Control Payment Date")
that is not less than the later of (a) thirty (30) days and not more than ninety
(90) days after the date of such  notice or (b) five (5) days  after  payment in
full of the Debt  outstanding  under the Senior Credit  Facility,  at a purchase
price equal to 100% of the aggregate  principal  amount thereof and all interest
accrued  and unpaid on such  principal  amount to the Change in Control  Payment
Date (the "Change in Control  Purchase  Price").  Each such notice shall: (i) be
dated the date of the sending of such  notice;  (ii) be executed by an executive
officer of the Company;  (ii) specify, in reasonable detail, the nature and date
of the Change in Control;  (iv) specify the Change in Control  Payment Date; (v)
specify the principal amount of this Note outstanding; (vi) specify the interest
that would be due on this Note,  accrued to the Change in Control  Payment Date;
and (vii)  specify  that this Note shall be  purchased  at the Change in Control
Purchase  Price.  The  Holder  shall  have the  option to accept or reject  such
offered payment. In order to accept such offered payment, the Holder shall cause
a notice of such  acceptance  to be  delivered to the Company at least five days
prior to the Change in Control Payment Date. A failure to accept in writing such
written offer of payment as provided in this Section 1.7, or a written rejection
of such offered  prepayment,  shall be deemed to  constitute a rejection of such
offer. The offered payment shall be made at the Change in Control Purchase Price
determined as of the Change in Control Payment Date.

     1.8 Upon any partial  payment of the outstanding  principal  amount of this
Note, the Holder shall mark this Note with a notation of the principal amount so
paid and the date of such payment.

2. Registration; Exercise; Substitution

     2.1 The Company will keep at its principal  executive office a register for
the  registration  and transfer of this Note. The name and address of the Holder
of this Note,  each transfer  hereof made in accordance  with Section 2.2(a) and
the name and address of each transferee of this Note shall be registered in such
register. The person in whose name this Note shall be registered shall be deemed
and  treated  as the owner and  holder  thereof,  and the  Company  shall not be
affected by any notice or knowledge to the  contrary,  other than in  accordance
with Section 2.2(a)

     2.2 (a) Upon  surrender of this Note at the principal  executive  office of
the Company,  duly endorsed or accompanied  by a written  instrument of transfer
duly executed by the Holder or the Holder's attorney duly authorized in writing,
the Company  will  execute and  deliver,  at the  Company's  expense  (except as
provided in Section 2.2(c)), a new Note (or Notes) in exchange  therefor,  in an
aggregate  principal  amount  equal  to  the  unpaid  principal  amount  of  the
surrendered Note. Subject to Section 2.2(b), the new Note(s) shall be registered
in such name(s) as the Holder may request. Each such new Note shall be dated and
bear  interest  from the date to which  interest  shall  have  been  paid on the
surrendered Note or dated the date of the surrendered Note, if no interest shall
have been paid thereon. Each such new Note shall carry the same rights to unpaid
interest and interest to accrue on the unpaid  principal  amount thereof as were
carried by the Note so exchanged or transferred.

                                      -4-
<PAGE>

     (b) This Note has been acquired for investment and has not been  registered
under the securities  laws of the United States of America or any state thereof.
Accordingly,  notwithstanding Section 2.2(a), neither this Note nor any interest
thereon  may be  offered  for  sale,  sold  or  transferred  in the  absence  of
registration and  qualification of this Note under applicable  federal and state
securities laws or an opinion of counsel of the Holder  reasonably  satisfactory
to the Company that such registration and  qualification are not required.  This
Note  shall  not be  transferred  in  denominations  of less than  $100,000  and
integral multiples  thereof,  provided that the Holder may transfer this Note as
an entirety regardless of the principal amount thereof.

     (c) The Company may require  payment of a sum sufficient to cover any stamp
tax or governmental change imposed in respect of any such transfer of this Note.

     2.3 Upon  receipt by the  Company  from the Holder of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this  Note  (which  evidence  shall  be,  if  the  Holder  is  the  payee  or an
institutional investor,  notice from the payee or such institutional investor of
such loss, theft, destruction or mutilation), and (a) in the case of loss, theft
or destruction,  of indemnity reasonably satisfactory to the Company;  provided,
however,  that if the  Holder is the  payee or an  institutional  investor,  the
unsecured  agreement of indemnity  of the payee or such  institutional  investor
shall be  deemed  to be  satisfactory;  or (b) in the case of  mutilation,  upon
surrender and cancellation  thereof; the Company at its own expense will execute
and deliver,  in lieu thereof,  a replacement  Note,  dated and bearing interest
from the date to which  interest  shall  have  been paid on such  lost,  stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note, if no interest shall have been paid thereon.

     2.4 The Company will pay taxes (if any) due (but not, in any event,  income
taxes of the  Holder)  in  connection  with  and as the  result  of the  initial
issuance  of this  Note and in  connection  with  any  modification,  waiver  or
amendment of this Note and shall save the Holder harmless, without limitation as
to time, against any and all liabilities with respect to all such taxes.

3. Senior Credit Agreement and Intercreditor Agreement

     The repayment of this Note shall be subject to the terms and  conditions of
the Senior  Credit  Agreement  and the rights and  priority  with respect to any
collateral security for the indebtedness under this Note shall be subject to the
terms  and  conditions  of  the  Intercreditor   Agreement  (the  "Intercreditor
Agreement")  dated the date hereof by and among  Holder,  the Company and Senior
Lender Agent (as defined therein).

4. Conversion

     4.1 The Holder may convert the outstanding  principal  amount of this Note,
and  accrued  and unpaid  interest  thereon  (or a portion  of such  outstanding
principal  amount as provided in Section 4.3) into fully paid and  nonassessable
shares of Common Stock of the Company ("Conversion Shares") at any time prior to
the time the outstanding  principal  amount of this Note, and accrued and unpaid
interest thereon is paid in full, at the Conversion Price then

                                      -5-
<PAGE>

in effect,  except  that if this Note is to be  prepaid  in full or  repurchased
pursuant to the provisions hereof,  such conversion right shall terminate at the
close of business on the Prepayment Date or the Change in Control Purchase Date,
as the case  may be.  The  number  of  shares  of  Common  Stock  issuable  upon
conversion of this Note shall be  determined  by dividing the  principal  amount
(and accrued and unpaid  interest,  if any) to be  converted  by the  conversion
price in effect on the Conversion  Date (the  "Conversion  Price").  The initial
Conversion  Price is $.56 and is  subject  to  adjustment  as  provided  in this
Section 4.

     The  provisions of this Note that apply to  conversion  of the  outstanding
principal amount of this Note and accrued and unpaid interest thereon also apply
to a partial  conversion of this Note.  The Holder is not entitled to any rights
of a holder of Conversion  Shares until the Holder has converted this Note (or a
portion thereof) into Conversion  Shares,  and only to the extent that this Note
is deemed to have been converted into Conversion Shares under this Section 4.

     4.2 To convert all or a portion of this Note,  the Holder must (a) complete
and sign a notice of  election  to  convert  substantially  in the form  annexed
hereto (each, a "Conversion Notice"), (b) surrender the Note to the Company, (c)
furnish  appropriate  endorsements  or  transfer  documents  if  required by the
Company and (d) pay any transfer or similar tax, if required.  The date on which
the  Holder  satisfies  all of such  requirements  is the  conversion  date (the
"Conversion  Date").  As soon as practicable,  and in any event within three (3)
business days, after the Conversion Date, the Company will deliver,  or cause to
be  delivered,  to the Holder a certificate  for the number of whole  Conversion
Shares issuable upon such  conversion and a check for any fractional  Conversion
Share  determined  pursuant to Section 4.4 and for interest on this Note accrued
and unpaid  through the  Conversion  Date  (unless  such  interest has also been
converted  as  permitted  by this  Section  4).  The  person  in whose  name the
certificate  for  Conversion  Shares  is  to  be  registered  shall  become  the
shareholder of record on the Conversion Date and, as of the Conversion Date, the
rights  of the  Holder  shall  cease as to the  portion  thereof  so  converted;
provided,  however,  that no  surrender  of a Note on any date  when  the  stock
transfer  books of the Company  shall be closed shall be effective to constitute
the person entitled to receive the Conversion Shares upon such conversion as the
shareholder of record of such Conversion Shares on such date, but such surrender
shall be effective to constitute the person  entitled to receive such Conversion
Shares as the  shareholder  of record  thereof for all  purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
provided further that such conversion shall be at the Conversion Price in effect
on the date that this Note shall have been surrendered for conversion, as if the
stock transfer books of the Company had not been closed.

     4.3 In the case of a partial conversion of this Note, upon such conversion,
the Company  shall  execute  and  deliver to the  Holder,  at the expense of the
Company,  a new Note in an aggregate  principal  amount equal to the unconverted
portion  of the  principal  amount.  This  Note  may be  converted  in part in a
principal  amount equal  $100,000 or an integral  multiple  thereof,  unless the
outstanding  principal amount of this Note is less than $100,000, in which case,
only such  outstanding  principal amount and accrued and unpaid interest thereon
is convertible into Conversion Shares.

                                      -6-
<PAGE>

     4.4 No fractional Conversion Shares shall be issued upon conversion of this
Note.  Instead of any  fractional  Conversion  Share  which would  otherwise  be
issuable  upon  conversion of this Note,  the Company shall  calculate and pay a
cash  adjustment in respect of such fraction  (calculated to the nearest 1/100th
of a share) in an amount equal to the same fraction of the  Conversion  Price at
the close of business on the Conversion Date.

     4.5 The issuance of certificates for Conversion  Shares upon the conversion
of any security shall be made without charge to the Holder for such certificates
or for  any tax in  respect  of the  issuance  of such  certificates,  and  such
certificates shall be issued in the name of, or in such names as may be directed
by, the  Holder;  provided,  however,  that in the event that  certificates  for
Conversion Shares are to be issued in a name or names other than the name of the
Holder,  such Note, when surrendered for conversion,  shall be accompanied by an
instrument of transfer,  in form  satisfactory to the Company,  duly executed by
the Holder or his duly authorized attorney; and provided further, moreover, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer  involved in the issuance and delivery of any such  certificates
in a name or names other than that of the Holder,  and the Company  shall not be
required  to issue or deliver  such  certificates  unless or until the person or
persons  requesting  the  issuance  thereof  shall have paid to the  Company the
amount of such tax or shall have  established to the satisfaction of the Company
that such tax has been paid or is not applicable.

     4.6 (a) In case the Company  shall at any time after the date hereof issue,
grant or sell any Additional Stock (as hereinafter defined) for a consideration,
exercise or conversion  price per share less than the Conversion Price in effect
immediately  prior to the issuance or sale of such Additional  Stock, or without
consideration,  then forthwith upon such issuance or sale, the Conversion  Price
shall (upon such issuance or sale) be reduced to a price  determined by dividing
(i) an amount equal to the sum of (a) the total number of shares of Common Stock
outstanding  immediately  prior  to  such  issuance  or sale  multiplied  by the
Conversion Price then in effect, plus (b) the consideration, if any, received by
the Company  upon such  issuance or sale,  by (ii) the total number of shares of
Common Stock  outstanding  immediately  after such  issuance or sale;  provided,
however,  that in no event shall the  Conversion  Price be adjusted  pursuant to
this  computation  to an  amount in  excess  of the  Conversion  Price in effect
immediately  prior to such  computation,  except as provided  in 4.6(d)  hereof.
"Additional Stock" shall mean Common Stock or options,  warrants or other rights
to acquire or securities  convertible  into or exchangeable for shares of Common
Stock,  including  shares held in the Company's  treasury,  and shares of Common
Stock issued upon the  exercise of any options,  rights or warrants to subscribe
for shares of Common  Stock and shares of Common Stock issued upon the direct or
indirect  conversion or exchange of securities for shares of Common Stock, other
than:

          (A) This Note.

          (B) Common Stock issued or issuable upon conversion of this Note.

          (C) Common Stock issued or issuable upon the conversion or exercise of
     options,  warrants, rights and other securities or debt convertible into or
     exercisable or exchangeable for Common Stock outstanding on the date hereof
     or issued on date hereof;

                                      -7-
<PAGE>

          (D) Common Stock or options,  warrants,  stock appreciation  rights or
     other rights  available for future grant under the  Company's  stock option
     plan or any future stock option or incentive plan approved by the Company's
     shareholders;

          (E) Common Stock  issuable upon exercise of options,  warrants,  stock
     appreciation  rights or other rights  outstanding  or available  for future
     grant under the Company's stock option plans or stock incentive plan or any
     future  stock  option  or  incentive   plan   approved  by  the   Company's
     shareholders;

          (F) Common Stock or options,  warrants,  rights or other securities or
     debt convertible into, or exercisable or exchangeable for, Common Stock (or
     shares of Common Stock issuable upon the conversion or exercise thereof) in
     connection with future acquisitions.

          (G) Common Stock, or options,  warrants, rights or other securities or
     debt  convertible into or exercisable for shares of Common Stock (or shares
     of Common Stock issuable upon  conversion or exercise  thereof) issued as a
     result of anti-dilution adjustments to any options, warrants, debt or other
     securities issued or outstanding on the date hereof; and

          (H) Common Stock or options,  warrants,  rights or other securities or
     debt  convertible  into, or exercisable (or shares of Common Stock issuable
     upon  conversion  or  exercise  thereof)  which are  issued  pursuant  to a
     Financing  Transaction.  The term  "Financing  Transaction"  shall mean any
     transaction  consummated by the Company the primary  purpose of which is to
     raise capital for the Company.

     (b) For the  purpose  of any  computation  to be  made in  accordance  with
Section 4.6(a), the following provisions shall apply:

          (i) In case of the  issuance  or sale of shares of Common  Stock for a
     consideration  part or all of which  shall be cash,  the amount of the cash
     consideration therefor shall be deemed to be the amount of cash received by
     the Company  for such shares (or, if shares of Common  Stock are offered by
     the  Company  for  subscription,   the  subscription  price,  or,  if  such
     securities  shall be sold to  underwriters  or dealers for public  offering
     without a subscription  offering, the initial public offering price) before
     deducting  therefrom any compensation paid or discount allowed in the sale,
     underwriting  or  purchase  thereof  by  underwriters  or dealers or others
     performing  similar  services,  or  any  expenses  incurred  in  connection
     therewith.

          (ii) In the case of the issuance or sale (otherwise than as a dividend
     or other  distribution  on any  stock of the  Company)  of shares of Common
     Stock for a  consideration  part or all of which  shall be other than cash,
     the amount of the consideration therefor other than cash shall be deemed to
     be the fair market value of such  consideration as determined in good faith
     by the Board of Directors.

          (iii) The  reclassification  of  securities  of the Company other than
     shares of Common  Stock into  securities  including  shares of Common Stock
     shall be deemed to involve the  issuance of such shares of Common Stock for
     a consideration  other than cash immediately prior to the close of business
     on the date fixed for the  determination  of security  holders  entitled to
     receive such shares,  and the value of the consideration  allocable to such
     shares  of  Common

                                      -8-
<PAGE>

     Stock shall be determined as provided in Section 4.6(b)(ii).

          (iv) In the case of the  issuance of options,  rights,  or warrants to
     purchase or subscribe  for shares of Common Stock,  securities  convertible
     into or  exchangeable  for shares of Common  Stock,  or options,  rights or
     warrants to purchase or subscribe for any such  convertible or exchangeable
     securities, the following provisions shall apply:

               (A) The  aggregate  maximum  number of  shares  of  Common  Stock
          issuable under such options,  rights or warrants shall be deemed to be
          issued and  outstanding  at the time such options,  rights or warrants
          were  issued,  and shall be deemed  to be issued  for a  consideration
          equal to the minimum  purchase  price per share  provided  for in such
          options,  rights  or  warrants  at  the  time  of  issuance  plus  the
          consideration, if any, received by the Company in connection with sale
          or issuance of such options,  rights or warrants;  provided,  however,
          that upon the expiration or other termination of such options,  rights
          or warrants, if any thereof shall not have been exercised,  the number
          of shares of Common Stock deemed to be issued and outstanding pursuant
          to this subsection (A) shall be reduced by such number of shares as to
          which options, warrants and/or rights shall have expired or terminated
          unexercised, and such number of shares of Common Stock shall no longer
          be deemed to be issued and outstanding,  and the Conversion Price then
          in effect shall  forthwith be readjusted  and  thereafter be the price
          which it would have been had such adjustment been made on the basis of
          the  issuance  only of  shares  of  Common  Stock  actually  issued or
          issuable upon the exercise of those options,  rights or warrants as to
          which the  exercise  of rights  shall not have  expired or  terminated
          unexercised.

               (B) The  aggregate  maximum  number of  shares  of  Common  Stock
          issuable   upon   conversion  or  exchange  of  any   convertible   or
          exchangeable  securities  shall be deemed to be issued and outstanding
          at the time of issuance of such securities,  and shall be deemed to be
          issued for a consideration equal to the consideration  received by the
          Company  in  connection  with  the  sale of such  securities  plus the
          consideration,  if any,  receivable by the Company upon the conversion
          or exchange thereof;  provided,  however, that upon the termination of
          the right to convert or  exchange  such  convertible  or  exchangeable
          securities (whether by reason of redemption or otherwise),  the number
          of  shares  deemed  to be  issued  and  outstanding

                                      -9-
<PAGE>

          pursuant  to this  subsection  (B) shall be reduced by such  number of
          shares  as to which the  conversion  or  exchange  rights  shall  have
          expired or terminated unexercised,  and such number of shares shall no
          longer be deemed to be issued and outstanding and the Conversion Price
          then in effect shall  forthwith be  readjusted  and  thereafter be the
          price  which it would have been had such  adjustment  been made on the
          basis of the issuance only of shares  actually issued or issuable upon
          the  conversion  or  exchange  of those  convertible  or  exchangeable
          securities  as to which the  conversion  or exchange  rights shall not
          have expired or terminated unexercised.

               (C) If any change shall occur in the price per share provided for
          in any of the  options,  rights or  warrants  referred  to in  Section
          4.6(b)(iv)(A),  or in the  price  per  share at which  the  securities
          referred to in Section  4.6(b)(iv)(B) are convertible or exchangeable,
          such options,  rights or warrants or conversion or exchange rights, as
          the case may be, shall be deemed to have expired or  terminated on the
          date when such price change became  effective in respect of shares not
          theretofore  issued pursuant to the exercise or conversion or exchange
          thereof, and the Company shall be deemed to have issued upon such date
          new  options,  rights  or  warrants  or  convertible  or  exchangeable
          securities  at the new  price  in  respect  of the  number  of  shares
          issuable upon the exercise of such options,  rights or warrants or the
          conversion or exchange of such convertible or exchangeable securities.

               (D) Except as  otherwise  provided  in this  Section  4.6(b),  no
          adjustment  of the  Conversion  Price  shall be made  upon the  actual
          issuance of such  Common  Stock upon  exercise  of options,  rights or
          warrants  or upon  the  actual  issuance  of such  Common  Stock  upon
          conversion or exchange of any convertible or exchangeable securities.

     (c) In case the Company shall pay or make a dividend or other  distribution
to all holders of its Common  Stock in shares of Common  Stock,  the  Conversion
Price in effect at the opening of business  on the day next  following  the date
fixed for the determination of shareholders entitled to receive such dividend or
other  distribution  shall be reduced by multiplying  such Conversion Price by a
fraction,  of which the numerator  shall be the number of shares of Common Stock
outstanding  at the close of business on the date fixed for such  determination,
and the  denominator  shall be the sum of the  numerator and the total number of
shares  constituting  such  dividend or other  distribution,  such  reduction to
become  effective  immediately  after the  opening of  business  on the day next
following the date fixed for such

                                      -10-
<PAGE>

determination.  For the purposes of this Section 4.6(c), the number of shares of
Common Stock at any time  outstanding  shall not include  shares of Common Stock
held in the  treasury of the  Company.  The Company will not pay any dividend or
make any  distribution  on shares of Common  Stock held in the  treasury  of the
Company.

     (d) In the event that the Company shall at any time prior to the conversion
in full of the Note declare a dividend (other than a dividend  consisting solely
of shares of Common  Stock or a cash  dividend  or  distribution  payable out of
current or retained  earnings) or otherwise  distribute to its holders of Common
Stock  any  monies,  assets,   property,   rights,  evidences  of  indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity,  or any other thing of value, the Holder or Holders
of the Note to the extent of the unconverted portion thereof shall thereafter be
entitled,  in  addition  to the  shares  of  Common  Stock or  other  securities
receivable  upon the conversion  thereof,  to receive,  upon  conversion of such
unconverted  portion of the Note,  the same monies,  property,  assets,  rights,
evidences  of  indebtedness,  securities  or any other  thing of value that they
would  have  been   entitled  to  receive  at  the  time  of  such  dividend  or
distribution.  At the time of any such  dividend  or  distribution,  the Company
shall  make  appropriate  reserves  to  ensure  the  timely  performance  of the
provisions of this Subsection.

     (e) In case the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock,  the  Conversion  Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely, in case the
outstanding  shares of Common Stock shall each be combined into a smaller number
of shares of Common  Stock,  the  Conversion  Price in effect at the  opening of
business  on the day  following  the day upon  which  such  combination  becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become  effective  immediately  after the opening of business on
the day following the day upon which such  subdivision  or  combination  becomes
effective.

     (f) In case the  Company  shall fail to take a record of the holders of its
shares of Common Stock for the purpose of  entitling  them to receive a dividend
or other  distribution  payable in shares of Common Stock, then such record date
shall be deemed to be the date of the issue of the shares of Common Stock deemed
to have been  issued as a result of the  declaration  of such  dividend or other
distribution  or the  date of the  granting  of such  right of  subscription  or
purchase, as the case may be.

     4.7 No adjustment  in the  Conversion  Price shall be required  unless such
adjustment  would require an increase or decrease of at least one cent ($.01) in
the Conversion Price; provided, however, that any adjustments which by reason of
this Section 4.7 are not required to be made shall be carried  forward and taken
into account in any subsequent adjustment.

     4.8 Notice of Certain Events.

     (a) In the event that: (i) the Company takes any action which would require
an  adjustment  in the  Conversion  Price;  (ii) the  Company  takes any  action
described  in Section  4.9(a),  (b) or (c); or (iii) there is a  dissolution  or
liquidation of the Company; the Holder may

                                      -11-
<PAGE>

wish to convert this Note into shares of  Conversion  Shares prior to the record
date for or the  effective  date of the  transaction  so that  such  Holder  may
receive the  securities  or assets  which a holder of shares of Common  Stock on
that date may receive. Therefore, the Company shall give notice to the Holder in
accordance  with the provisions of this Section 4.8 stating the proposed  record
or effective  date, as the case may be, which notice shall be given prior to the
proposed record or effective date and, in any case, no later than notice of such
transaction is given to holders of Common Stock.  Failure to give such notice or
any defect therein shall not affect the validity of any transaction  referred to
in clause (i), (ii) or (iii) of this Section.

     (b)  Upon  the  occurrence  of  each  adjustment  or  readjustment  of  the
Conversion Price pursuant to this Section 4, the Company, at its expense,  shall
promptly  compute such  adjustment or  readjustment in accordance with the terms
hereof and prepare and furnish to each Holder a  statement,  signed by its chief
financial officer,  setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
The Company shall,  upon the written request at any time of any Holder,  furnish
or cause to be furnished  to such Holder a like  certificate  setting  forth (i)
such  adjustment  and  readjustment,  (ii) the  Conversion  Price at the time in
effect,  and (iii) the number of shares of Common Stock and the amount,  if any,
of other property which at the time would be received upon the Conversion of the
portion of this Note specified in such request.

     4.9 If any of the following shall occur, namely:

          (a) any  reclassification  or change of  outstanding  shares of Common
     Stock  issuable  upon  conversion  of this Note (other than a change in par
     value,  or from par  value  to no par  value,  or from no par  value to par
     value, or as a result of a subdivision or combination);

          (b) any consolidation or merger to which the Company is a party, other
     than a merger in which the Company is the continuing  corporation and which
     does not result in any  reclassification of, or change (other than a change
     in name,  or par value,  or from par value to no par value,  or from no par
     value to par  value or as a result of a  subdivision  or  combination)  in,
     outstanding shares of Common Stock; or

          (c) any sale or conveyance of all or substantially all of the property
     or business of the Company and its subsidiaries as an entirety;

then the Company, or such successor or purchasing  corporation,  as the case may
be,  shall,  as  a  condition  precedent  to  such   reclassification,   change,
consolidation, merger, sale or conveyance, execute and deliver to the Holder, an
agreement in form  satisfactory  to the Holder  providing  that the Holder shall
have the right to convert  this Note into the kind and amount of shares of stock
and  other  securities  and  property  (including  cash)  receivable  upon  such
reclassification,  change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of this Note
immediately prior to such reclassification,  change, consolidation, merger, sale
or conveyance.  Such agreement  shall provide for  adjustments of the Conversion
Price  which  shall  be as  nearly  equivalent  as  may  be  practicable  to the
adjustments of the  Conversion  Price provided for in this Section 4. If, in the
case of any such consolidation,  merger, sale or conveyance,  the stock or other
securities and property  (including  cash)  receivable

                                      -12-
<PAGE>

thereupon  by a  holder  of  Common  Stock  includes  shares  of  stock or other
securities and property of a corporation  other than the successor or purchasing
corporation,  as the  case  may  be,  in  such  consolidation,  merger,  sale or
conveyance, then such agreement shall also be executed by such other corporation
and shall  contain such  additional  provisions  to protect the interests of the
Holder as the Board of Directors shall reasonably  consider  necessary by reason
of the foregoing.  The provisions of this Section 4.9 shall  similarly  apply to
successive  reclassifications,   changes,  consolidations,   mergers,  sales  or
conveyances.

          4.10 The Company shall at all times reserve and keep  available,  free
     from  preemptive  rights,  out of its authorized and unissued Common Stock,
     solely for the purpose of effecting the  conversion of this Note,  the full
     number of Conversion  Shares then  issuable upon the  conversion in full of
     this Note.

          4.11 If the Company or an affiliate  of the Company  shall at any time
     after the date hereof and prior to the conversion of the Note in full issue
     any rights to subscribe for shares of Common Stock or any other  securities
     of the Company or of such affiliate to all the shareholders of the Company,
     the Holder of the  unconverted  portion of the Note shall be  entitled,  in
     addition to the shares of Common Stock or other securities  receivable upon
     the Conversion  thereof, to receive such rights at the time such rights are
     distributed to the other shareholders of the Company.

5. Affirmative Covenants

     The Company  covenants  that on and after the Issue Date and so long as any
portion of the Note shall be outstanding:

     5.1 The  Company  will,  and will  cause each of its  Subsidiaries  to, pay
before they  become  delinquent:  (a) all taxes,  assessments  and  governmental
charges or levies imposed upon it or its property; and (b) all claims or demands
of materialmen,  mechanics, carriers, warehousemen, vendors, landlords and other
like  persons  that,  if unpaid,  might by law become a Lien upon its  property;
provided,  that items of the foregoing  description  need not be paid so long as
such items are being contested in good faith and by appropriate  proceedings and
as to which  appropriate  reserves in accordance with GAAP have been established
and  maintained  with  respect  thereto,  unless  and until  any Lien  resulting
therefrom attaches to its property and becomes enforceable,  unless such Lien is
effectively stayed or fully bonded pending the disposition of such proceedings.

     5.2 The Company will, and will cause each of its subsidiaries to:

          (a) maintain its property that is reasonably  necessary in the conduct
     of its business as it is currently  being  conducted in good working  order
     and condition,  ordinary wear and tear,  obsolescence  and insured casualty
     losses excepted;

          (b) maintain,  with  insurers  reasonably  believed to be  financially
     sound and  reputable,  insurance  with respect to its property and business
     against  such  casualties  and  contingencies,  of such  types  and in such
     amounts as is customary in the case of corporations  engaged in the same or
     a similar business and similarly situated;

                                      -13-
<PAGE>

          (c) keep proper books of record and account, in which full and correct
     entries shall be made of all dealings and transactions of or in relation to
     the properties and business thereof;

          (d) do or cause to be done all things reasonably necessary to preserve
     and keep in full force and effect its corporate existence, corporate rights
     (charter and  statutory) and corporate  franchises,  except as permitted by
     Section 6.1;

          (e) comply, in all material respects,  with all applicable laws, rules
     and regulations (including,  without limitation,  ERISA, Environmental Laws
     and Environmental Permits) and obtain all licenses, permits, franchises and
     other  governmental  authorizations  necessary  for  the  ownership  of its
     properties and the conduct of its business,  except where its obligation to
     so comply being contested in good faith and by appropriate  proceedings and
     adequate resources have been established are being maintained in accordance
     with GAAP,  and except  where  failure to comply  could not  reasonably  be
     expected to have a Material Adverse Effect; and

          (f) conduct its business so as not to become  subject to any liability
     under any Environmental Law that,  individually or in the aggregate,  could
     reasonably be expected to have a Material  Adverse  Effect and except where
     any  such  liability  is  being  contested  in good  faith  by  appropriate
     proceedings  and  adequate  reserves  have been  established  and are being
     maintained in accordance with GAAP.

     5.3 The Company will make all payments and otherwise perform,  or cause the
relevant subsidiary of the Company to pay or otherwise perform,  all obligations
in  respect of all leases of real  property  to which the  Company or any of its
subsidiaries is a party, keep such leases in full force and effect and not allow
such leases to lapse or be  terminated  or any rights to renew such leases to be
forfeited  or  canceled,  notify  the  Holder of any  default  by any party with
respect  to such  leases  (except  during  any period in which the Holder or any
Affiliate  thereof is serving as a director or executive officer of the Company)
and  cooperate  with the Holder in all  respects to cure any such  default,  and
cause each of its  subsidiaries to do so except,  in any case, where the failure
to do so,  either  individually  or in the  aggregate,  could not  reasonably be
expected to have a Material Adverse Effect and except where its failure to do so
is being contested in good faith and by proper proceedings.

     5.4  The  Company  will  perform  and  observe,   and  cause  each  of  its
subsidiaries to perform and observe, all of the material terms and provisions of
the Senior  Credit  Agreement  and of each  Material  Contract  (as that term is
defined in the Senior  Credit  Agreement) to which it is a party to be performed
or observed by it,  maintain,  and cause each of its  subsidiaries  to maintain,
each such Material Contract to which it is a party in full force and effect, and
enforce,  and cause each of its  subsidiaries  to  enforce,  each such  Material
Contract to which it is a party in accordance  with its terms,  except where the
failure  to do so would  not be  reasonably  likely to have a  Material  Adverse
Effect and except  where its failure to do so is being  contested  in good faith
and by proper proceedings.

                                      -14-
<PAGE>

6. Negative Covenants

     6.1 The Company  will not, and will not permit any  subsidiary  thereof to,
(a) merge with or into or  consolidate  with any other person,  permit any other
person to merge or consolidate with or into it, or (b) sell all or substantially
all of its property to any other person;  provided,  however, that the foregoing
restriction  does not apply to the merger or  consolidation  of the Company with
another  corporation or transfer of all or substantially  all of the property of
the Company to any other person if: (i) the  corporation  that results from such
merger or consolidation or to which all or substantially  all of the property of
the Company is transferred (the "Surviving  Corporation") (x) is organized under
the  laws  of,  and  conducts   substantially   all  of  its  business  and  has
substantially all of its properties  within, the United States of America or any
jurisdiction  or  jurisdictions   thereof  and  (y)  has  shareholders'   equity
immediately  after  such  transaction  that is  equal  to or  greater  than  the
shareholders' equity of the Company immediately prior to such transaction;  (ii)
the due and  punctual  payment of the  principal  of, and interest on this Note,
according to their tenor, and the due and punctual performance and observance of
all the covenants in this Note, to be performed or observed by the Company,  are
expressly assumed pursuant to such assumption agreements and instruments in such
forms as shall be approved  reasonably by the Holder, or assumed by operation of
law,  by  the  Surviving  Corporation;  and  (iii)  immediately  prior  to,  and
immediately  after the consummation of the transaction,  and after giving effect
thereto,  no Default or Event of Default exists or would exist.  Notwithstanding
the foregoing, a subsidiary of the Company may merge into the Company so long as
the Company is the Surviving  Corporation,  and a subsidiary of the Company, may
merge with or into a  wholly-owned  subsidiary  of the Company,  so long as such
wholly-owned subsidiary is the Surviving Corporation.  Notwithstanding  anything
contained herein to the contrary,  the Company may (i) sell all or substantially
all of its  property  to, or enter  into a merger  transaction  with,  any other
person if such sale or merger  follows and is the result of an  acceleration  of
the Company's Debt pursuant to the Senior Credit  Agreement or this Note and the
transaction  has been  approved  by the  Senior  Agent and the  banks  which are
parties to the Senior Credit Agreement and the Holder.

     6.2 The Company will not, and will not permit any subsidiary of the Company
to,  sell,  lease as lessor,  transfer  or  otherwise  dispose  of its  property
(collectively, "Transfers"), except:

          (A)  Transfers of inventory and of  unnecessary,  obsolete or worn-out
     assets,  in each case in the ordinary  course of business of the Company or
     such  subsidiary,  including but not limited to any remainder  sales of the
     Company;

          (B)  Transfers  from a  subsidiary  of the Company to the Company or a
     wholly-owned   subsidiary  of  the  Company,  or  from  the  Company  to  a
     wholly-owned  subsidiary of the Company  provided such subsidiary  issues a
     guaranty of the Company's  obligations  under this Note consistent with the
     provisions of Section 5.11;

          (C) any other  Transfer  at any time of any  property  to a person for
     such  consideration as determined,  in each case by the Board of Directors,
     in its good faith opinion, to be in the best interest of the Company and to
     reflect the fair market value of such property if the

                                      -15-
<PAGE>

     conditions  specified in each of the following clauses (A) and (B) would be
     satisfied with respect to such Transfer: (A) the sum of: (1) the book value
     of such property at the time of Transfer; plus (2) the aggregate book value
     of all other property Transferred (other than in transactions  described in
     clauses (A) and (B) above),  after the Issue Date,  would not exceed 25% of
     consolidated  total assets of the Company and its subsidiaries  (determined
     in  accordance  with GAAP)  measured as of the last day of the  immediately
     preceding  fiscal quarter of the Company;  and (B)  immediately  before and
     after the consummation of the Transfer, and after giving effect thereto, no
     Default or Event of Default would exist;

          (D) any other  Transfer of property to the extent that the proceeds of
     such Transfer,  net of transaction costs and expenses incurred and actually
     paid in connection with such Transfer  (including sales,  transfer or gains
     taxes),  within 365 days after such  Transfer are applied by the Company or
     such subsidiary (A) to fund its working capital and capital  expenditure or
     acquisitions  requirements,  and/or (B) to pay or prepay a principal amount
     of Debt  of the  Company  or any  subsidiary  thereof  (other  than  Junior
     Subordinated  Debt)  equal to the  amount  of such net  proceeds;  and,  in
     connection  with  any such  payment,  the  Company  shall  pay all  accrued
     interest  thereon and any premium or make-whole  amount required to be paid
     in  connection   therewith;   then  the  Company  shall,   subject  to  the
     Intercreditor  Agreement,  prepay,  together  with such  prepayment of such
     other  Debt,  a  proportional  and  ratable  principal  amount of this Note
     pursuant to Section 1.6.; and

          (E) any other  Transfer  permitted to be made by the Company or any of
     its  subsidiaries  consistent with the terms of the Senior Credit Agreement
     as in effect on the Issue  Date.  6.3 The  Company  will not,  and will not
     permit any subsidiary to, directly or indirectly,  create,  incur,  assume,
     guarantee,  or otherwise become directly or indirectly  liable with respect
     to, any Debt, other than:

               (A) this Note and any guaranties thereof;

               (B) Debt owing by the Company to any  wholly-owned  subsidiary of
          the  Company  and Debt of a  subsidiary  of the  Company  owing to the
          Company or a wholly-owned subsidiary of the Company;

               (C) Debt  existing  or  issued on the  Issue  Date and  listed on
          Schedule 6.3 (including Debt under the Senior Credit Agreement;

               (D) Debt incurred  under the Senior Credit  Facility from time to
          time following the Issue Date;

               (E)  Debt  incurred  or  created  to  refinance  any of the  Debt
          permitted by clauses (C) and (D) of this Section 6.3, provided that in
          the case of Debt  listed on  Schedule  6.3 (other  than Debt under the
          Senior Credit Facility and refinancing thereof),  the principal amount
          does not exceed the principal amount of Debt being refinanced;

               (F)  Debt  (other  than  this  Note)  owing by the  Company  or a
          subsidiary

                                      -16-
<PAGE>

          thereof to Norton Herrick, Evan Herrick, Michael Herrick and/or Howard
          Herrick  (together,  the  "Herricks")  and/or any of their  respective
          Affiliates;

               (G) Debt  incurred  by the  Company  or a  subsidiary  thereof to
          finance  the payment of the Change in Control  Purchase  Price of this
          Note;

               (H) Up to $500,000 of  additional  Debt on the same terms as this
          Note; and

               (I) Debt, in addition to the Debt permitted to be incurred by the
          clauses (A) through (H) of this Section 6.3, in the  principal  amount
          at any time outstanding not to exceed $1,000,000;

               (J)  Any  Guaranties  made  or  issued  by the  Company  of  Debt
          permitted  to be  incurred  by  any of its  subsidiaries  pursuant  to
          clauses  (E),  (F),  (G),  (H) and (I) above and  clause (k) below and
          Guaranties  made or  issued by  subsidiaries  of the  Company  of Debt
          permitted to be incurred by the Company  pursuant to clauses (C), (D),
          (E), (F), (G), (H) and (I) above and clause (K) below;

               (K) Any other Debt permitted to be incurred by the Company or any
          of its  subsidiaries  consistent  with the terms of the Senior  Credit
          Agreement as in effect on the Issue Date.

     6.4 The Company  will not, and will not permit any  subsidiary  thereof to,
incur,  assume or Guaranty any Debt which is subordinated in right of payment to
any other Debt of the  Company or any  subsidiary  thereof,  unless such Debt is
also  subordinated  in right of payment  to the  obligations  of the  Company in
respect of this Note on terms reasonably acceptable to the Holder.

     6.5 The Company  will not, and will not permit any  subsidiary  thereof to,
engage in any  business if, as a result,  the general  nature of the business in
which the Company and its subsidiaries,  taken as a whole, would then be engaged
would be substantially  changed from the general nature of the business in which
the Company  and the  Subsidiaries,  taken as a whole,  are engaged on the Issue
Date.

7. Events of Default

     7.1 An "Event of Default" exists at any time if any of the following occurs
(whether  such  occurrence  shall be  voluntary  or come about or be effected by
operation of law or otherwise):

          (a) The Company  defaults in the payment of the principal of this Note
     when due (whether at the Maturity  Date or any  Prepayment  Date) or in the
     payment of the Change in Control Purchase Price when due or defaults in the
     payment  of any  accrued  interest  on this Note when due and such  default
     continues  for a period of 30  business  days after the date such  interest
     became due;

                                      -17-
<PAGE>

          (b) The Company or any subsidiary  thereof defaults in the performance
     or  observance  of any of the  covenants  contained  in  Section  5.2(d) or
     Section 6 hereof or defaults in the performance or observance of any of the
     covenants  contained  in Section  5.2(e)  hereof and such  default  remains
     uncured for more than 30 days;

          (c) The Company or any subsidiary  thereof defaults in the performance
     of any covenants  contained in this Note, and such default remains uncured,
     after notice and an opportunity to cure, for more than 60 days;

          (d) Any warranty, representation or other statement by or on behalf of
     the  Company  contained  in  this  Note  or in any  certificate,  financial
     statement,  report or  notice  furnished  after  the date  hereof to Holder
     pursuant  to  the  terms  of  this  Note,  or  in  any  written  amendment,
     supplement,  modification or waiver with respect to any such document shall
     be false or misleading in any material respect when made;

          (e) Either (i) the Company or any subsidiary thereof fails to pay when
     due and within any applicable  period of grace,  any principal of, premium,
     if any,  or  interest  in  respect  of any Debt for  borrowed  money of the
     Company  or such  subsidiary  in the  aggregate  principal  amount  of $[2]
     million;  or (ii) any event  shall  occur or any  condition  shall exist in
     respect of such Debt, or under any  agreement  securing or relating to such
     Debt,  and in either case,  as a result  thereof:  (A) the maturity of such
     Debt, or a material portion thereof, is accelerated, or (B) any one or more
     of the holders  thereof or a trustee  therefor is  permitted to require the
     Company  or such  subsidiary  to  repurchase  such  Debt  from the  holders
     thereof,  and any such trustee or holder exercises such option;  or (C) any
     such one or more of such holders or such trustee  declares an  acceleration
     of the maturity of such Debt;

          (f) a receiver, liquidator, custodian or trustee of the Company or any
     subsidiary  thereof or of all or any  substantial  part of the  property of
     either is  appointed  by court  order and such order  remains in effect for
     more than 60 days;  or an order for relief is entered  with  respect to the
     Company or any such subsidiary, or the Company or any subsidiary thereof is
     adjudicated a bankrupt or insolvent;  or all or any substantial part of the
     property of the Company or any  subsidiary  thereof is sequestered by court
     order  and such  order  remains  in  effect  for more  than 60 days;  or an
     involuntary  case or  proceeding  is  commenced  against the Company or any
     subsidiary   thereof  under  the  Federal  Bankruptcy  Code  or  any  other
     bankruptcy reorganization,  arrangement,  insolvency, readjustment of debt,
     dissolution  or  liquidation  law  of  any  jurisdiction,  whether  now  or
     hereafter in effect, and is not dismissed within 60 days after such filing;

          (g) The Company or any subsidiary  thereof:  (i) commences a voluntary
     case or  proceeding  or seeks  relief  under any  provision  of the Federal
     Bankruptcy  Code  or any  other  bankruptcy,  reorganization,  arrangement,
     insolvency,  readjustment  of debt,  dissolution or liquidation  law of any
     jurisdiction, whether now or hereafter in effect, or consents to the filing
     of any petition  against it under any such law; or (ii) makes an assignment
     for the benefit of creditors,  or admits in writing its inability or fails,
     to pay  its  debts  generally  as  they  become  due,  or  consents  to the
     appointment  of a  receiver,  liquidator  or  trustee  of the  Company or a
     subsidiary thereof or of all or a substantial part of its property; or

                                      -18-
<PAGE>

          (h)  A  final,   non-appealable  judgment  or  final,   non-appealable
     judgments  for the payment of money  aggregating  in excess of $2.0 million
     (in excess of any insurance  relating to such judgments or judgments or any
     claim or claims  underlying  such  judgment or  judgments  and the relevant
     insurer or insurers shall not have denied liability under such insurance or
     rejected  any  claims  made with  respect  thereto)  is or are  outstanding
     against one or more of the Company and its subsidiaries and any one of such
     judgments  shall have been  outstanding for more than 60 days from the date
     of its entry and shall not have been discharged in full or stayed; or

          (i) The Note  shall  cease to be in full  force and effect or shall be
     declared  by a court of  competent  jurisdiction  to be void,  voidable  or
     unenforceable,  or the  validity  or  enforceability  of the Note  shall be
     contested by the Company or any Affiliate,  or the Company or any Affiliate
     shall deny that the Company has any further  liability or obligation  under
     the Note.

7.2 Default Remedies

     (a)  Subject  to the  Intercreditor  Agreement,  if any  Event  of  Default
specified in Section  7.1(f) or (g) shall exist,  the  principal  amount of this
Note at the time outstanding, together with interest accrued and unpaid thereon,
shall  automatically  immediately become due and payable,  without  presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived.

     (b) Subject to the Intercreditor  Agreement, if any Event of Default, other
than those specified in Section 7.1(a), shall exist, the Holder may exercise any
right,  power or  Remedy  permitted  to such  Holder by law,  and shall  have in
particular,  without  limiting the  generality  of the  foregoing,  the right to
declare the entire  principal  of, and all interest  accrued and unpaid on, this
Note then outstanding to be, and this Note shall thereupon become, forthwith due
and payable,  without any  presentment,  demand,  protest or other notice of any
kind, all of which are hereby expressly waived,  and the Company shall forthwith
pay to the Holder such principal and interest.

     (c) Subject to the  Intercreditor  Agreement,  during the continuance of an
Event of Default  described in Section  7.1(a) and  irrespective  of whether the
Note shall have become due and payable  pursuant to Section  7.2(b),  the Holder
may, at the Holder's  option,  by notice in writing to the Company,  declare the
principal  amount of this Note at the time  outstanding,  and accrued and unpaid
interest thereon, to be, and the same shall thereupon become,  forthwith due and
payable,  without any presentment,  demand, protest or other notice of any kind,
all of which are hereby expressly waived, and the Company shall forthwith pay to
the Holder such principal and interest.

     (d)  During the  continuance  of an Event or Default  and  irrespective  of
whether this Note shall become due and payable  pursuant to Section 7.2(a),  (b)
or (c) and irrespective of whether the Holder shall otherwise have pursued or be
pursuing any other rights or Remedies,  subject to Subject to the  Intercreditor
Agreement,  the Holder may proceed to protect and enforce its rights  under this
Note by  exercising  such  Remedies as are  available  to such holder in respect
thereof under  applicable  law, either by suit in equity or by action at law, or
both, whether for

                                      -19-
<PAGE>

specific performance of any agreement contained herein or in aid of the exercise
of any power granted herein.

     (e) No course of dealing on the part of the Holder nor any delay or failure
on the part of the Holder to  exercise  any right  shall  operate as a waiver of
such right or otherwise prejudice the Holder's rights, powers and Remedies.  All
rights  and  Remedies  of the  Holder  hereunder  and under  applicable  law are
cumulative  to, and not  exclusive  of, any other  rights or Remedies the Holder
would otherwise have.

     (f) The rights of the Holder to receive  payments  in respect of this Note,
and to exercise  any  Remedies,  solely as between the Holder and the holders of
the Debt under the Senior Credit Agreement,  shall be subject in all respects to
the provisions of the Senior Credit Agreement and the  Intercreditor  Agreement;
provided,  however, that all such rights shall remain unconditional and absolute
as between the Holder and the Company.

     7.3 If a declaration  is made pursuant to Section 7.2(b) arising solely out
of an Event of Default  described in Section 7.1(e) regarding the Debt under the
Senior Credit Facility,  then and in every such case, if the holders of the such
Debt waive such  default in respect of such Debt or such  default is cured,  and
the  holders  of such Debt  rescind  or annul any and all  accelerations  of the
maturity  of all or any  portion  of such  Debt  and any  required  or  demanded
repurchase  of all or any portion  thereof,  then,  upon  written  notice to the
Holder of such events with respect to such Debt, any  declaration  made pursuant
to Section 7.2(b) and the consequences thereof,  shall automatically and without
any  further  action  on the part of the  Holder,  be  annulled  and  rescinded;
provided,  however,  that at the time such  declaration  is deemed  annulled and
rescinded:  (i) no judgment or decree shall have been entered for the payment of
any moneys due on or pursuant to this Note;  and (ii) no other  Default or Event
of Default shall be  continuing;  provided  further that no such  rescission and
annulment  shall extend to or affect any subsequent  Default or Event of Default
or impair any right consequent thereon.

8. Interpretation of this Note

     8.1 As used herein,  the following  terms have the respective  meanings set
forth below or set forth in the Section hereof following such term:

     "Affiliate"  means and includes  with  respect to any person,  at any time,
each other person (other than, with respect to the Company,  a subsidiary of the
Company):  (a) that  directly or indirectly  through one or more  intermediaries
controls, or is controlled by, or is under common control with, such person; (b)
that  beneficially owns or holds five percent or more of any class of the Voting
Stock of such  person;  (c) five percent or more of the Voting Stock (or if such
other person is not a corporation,  five percent or more of the equity interest)
of which is beneficially owned or held by such person; or (d) that is an officer
or director of or holds a position of comparable  authority with such person; at
such time; provided,  however,  that no person holding this Note shall be deemed
to be an  "Affiliate"  of the Company  solely by virtue of the ownership of such
securities. As used in this definition: "control" means the possession, directly
or  indirectly,  of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting securities, by
contract or otherwise.

                                      -20-
<PAGE>

     "Applicable  Interest  Law" means any  present  or future  law  (including,
without  limitation,  the laws of the State of New York and the United States of
America)  which has  application  to the interest and other charges  pursuant to
this Note.

     "Board of  Directors"  means,  at any time,  the board of  directors of the
Company or any committee  thereof  that, in the instance,  shall have the lawful
power to exercise the power and authority of such board of directors.

     "Capital Lease" means, at any time, a lease of any property with respect to
which the lessee is required to recognize  the  acquisition  of an asset and the
incurrence of a liability in accordance with GAAP.

     "Change in Control"  means,  at any time, an occurrence or event or failure
of an event to occur,  as a result of which a person or group of related persons
(other than the Herricks,  an Affiliate of any of the Herricks, or any trust for
the benefit of any of the  Herricks)  acquires more than 50% of the Voting Stock
of the Company.

     "Credit  Facility"  means  and  includes  a  credit  agreement  or  similar
agreement  pursuant  to which the  lender or  lenders  commit(s)  to permit  the
Company,  subject  to the  conditions  therein,  to  obtain  from  time  to time
thereunder  term or revolving  loans and/or  letters of credit and  periodically
repay the same.

     "Debt"  with  respect  to  any  person,  means,  without  duplication,  the
liabilities of such person with respect to: (a) borrowed money; (b) the deferred
purchase price of property acquired by such person  (excluding  accounts payable
and accrued expenses  arising in the ordinary course of business,  but including
all  liabilities  created or arising under any  conditional  sale or other title
retention  agreement  with respect to any such  property);  (c)  borrowed  money
secured by any Lien  existing on property  owned by such person  (whether or not
such  liabilities  have been assumed);  (d) Capital  Leases of such person;  (e)
letters of credit,  bankers acceptances or similar instruments serving a similar
function  issued or accepted by banks and other financial  institutions  for the
account of such person  (whether or not  representing  obligations  for borrowed
money),  other than undrawn  trade  letters of credit in the ordinary  course of
business;  (f) Swaps of such person;  and (g) any Guaranty of such person of any
obligation or liability of another  person of  obligations of the type listed in
clause (a) through clause (f) of this  definition of Debt;  provided that,  with
respect to the Company,  Debt shall not include any unfunded  obligations  which
may now or  hereafter  exist with respect to  Company's  Plans.  As used in this
definition,  "Swaps" means, with respect to any person, obligations with respect
to interest  rate swaps and currency  swaps and similar  obligations  obligating
such person to make payments,  whether  periodically  or upon the happening of a
contingency,  except that if any agreement relating to such obligation  provides
for the netting of amounts  payable by and to such person  thereunder  or if any
such agreement  provides for the simultaneous  payment of amounts by and to such
person,  then in each such case, the amount of such obligations shall be the net
amount  thereof.  The aggregate net obligation of Swaps at any time shall be the
aggregate  amount of the obligations of such person under all Swaps assuming all
such  Swaps had been  terminated  by such  person as of the end of the then most
recently ended fiscal quarter of such person.  If such net aggregate  obligation
shall be an

                                      -21-
<PAGE>

amount owing to such person,  then the amount shall be deemed to be zero. Unless
the  context  otherwise  requires,  "Debt"  means  Debt of the  Company  or of a
subsidiary of the Company.

     "Default"  means any event which,  with the giving of notice or the passage
of time, or both, would become an Event of Default.

     "Environmental  Law" means any law,  statute or  regulation  enacted by any
governmental  authority  in  connection  with or relating to the  protection  or
regulation  of the  environment,  including,  without  limitation,  those  laws,
statutes and regulations regulating the disposal, removal, production,  storing,
refining,  handling,  transferring,  processing  or  transporting  of  Hazardous
Materials and any applicable orders, decrees or judgments issued by any court of
competent jurisdiction in connection with any of the foregoing.

     "Environmental Permit" means any permit, approval, identification number or
other authorization required by any Environmental Law.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time.

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under Section 414
of the IRC.

     "GAAP" means  accounting  principles  as  promulgated  from time to time in
statements,  opinions and  pronouncements by the American Institute of Certified
Public  Accountants  and the Financial  Accounting  Standards  Board and in such
statements,  opinions and  pronouncements of such other entities with respect to
financial   accounting  of  for-profit  entities  as  shall  be  accepted  by  a
substantial segment of the accounting profession in the United States.

     "Guaranty"  means  with  respect to any person  (for the  purposes  of this
definition,  the  "Guarantor")  any  obligation  (except the  endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other  obligation of any other person (the "Primary  Obligor") in any manner,
whether  directly or  indirectly,  including,  without  limitation,  obligations
incurred through an agreement, contingent or otherwise, by the Guarantor: (a) to
purchase such indebtedness or obligation or any property  constituting  security
therefor; (b) to advance or supply funds (i) for the purchase or payment of such
indebtedness,  dividend or obligation;  or (ii) to maintain  working  capital or
other balance sheet condition or any income  statement  condition of the Primary
Obligor or  otherwise  to advance or make  available  funds for the  purchase or
payment of such indebtedness,  dividend or obligation;  (c) to lease property or
to purchase  securities or other property or services  primarily for the purpose
of assuring the owner of such  indebtedness  or obligation of the ability of the
Primary  Obligor  to make  payment of the  indebtedness  or  obligation;  or (d)
otherwise to assure the owner of the  indebtedness  or obligation of the Primary
Obligor against loss in respect thereof.

     "Hazardous Material" means all or any of the following: (a) substances that
are defined or listed in, or otherwise  classified  pursuant to, any  applicable
Environmental Laws as "hazardous substances",  "hazardous materials", "hazardous
wastes", "toxic substances" or any

                                      -22-
<PAGE>

other formulation  intended to define,  list or classify substances by reason of
deleterious   properties   such  as   ignitability,   corrosivity,   reactivity,
carcinogenicity,  reproductive toxicity,  "TLCP toxicity" or "EP toxicity";  (b)
oil, petroleum or petroleum derived substances, natural gas, natural gas liquids
or  synthetic  gas  and  drilling  fluids,  produced  waters  and  other  wastes
associated with the exploration, development or production of crude oil, natural
gas or geothermal  resources;  (c) any flammable substances or explosives or any
radioactive  materials;  (d) asbestos or urea  formaldehyde in any form; and (e)
dielectric fluid  containing  levels of  polychlorinated  biphenyls in excess of
fifty parts per million.

     "Intercreditor Agreement" means the Intercreditor Agreement dated April __,
2001 by and among Holder, Company and Senior Lender Agent (as defined therein).

     "IRC" means the Internal Revenue Code of 1986,  together with all rules and
regulations promulgated pursuant thereto, as amended from time to time.

     "Issue Date" means the tenth (10th) day following the Company's issuance of
a press  release  and written  notice to its  shareholders  of the  transactions
contemplated hereby in accordance with the Rules of the Nasdaq Stock Market.

     "Junior  Subordinated Debt" means any Debt of the Company or any subsidiary
which is (a)  issued  on or  after  the  Issue  Date of this  Note and  which is
expressly  subordinated  in right of payment to any Debt of the Company,  or (b)
owing to any subsidiary or affiliate of the Company.

     "Lien" means any interest in property  securing an obligation owed to, or a
claim by, a person other than the owner of such  property  (for purposes of this
definition,  the  "Owner"),  whether  such  interest is based on the common law,
statute or  contract,  and  includes  but is not  limited  to: (a) the  security
interest lien arising from a mortgage, encumbrance,  pledge, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes, and the
filing of any  financing  statement  under the  Uniform  Commercial  Code of any
jurisdiction,  or an agreement to give any of the foregoing;  (b)  reservations,
exceptions,  encroachments,  easements,  rights-of-way,  covenants,  conditions,
restrictions,  leases and other title exceptions and encumbrances affecting real
property;  and (c) any interest in any property held by the owner evidenced by a
conditional sale agreement, Capital Lease or other arrangement pursuant to which
title to such  property has been  retained by or vested in some other person for
security  purposes.  The term "Lien" does not include negative pledge clauses in
loan agreements and equal and ratable security clauses in loan agreements.

     "Material  Adverse Effect" means, with respect to any event or circumstance
(either   individually   or  in  the   aggregate   with  all  other  events  and
circumstances),  an effect caused  thereby or resulting  therefrom that would be
materially  adverse  as to, or in  respect  of:  (a) the  business,  operations,
profits,  financial condition or properties of the Company and its subsidiaries,
taken as a whole;  (b) the  ability of the  Company to perform  its  obligations
under this Note; or (c) the validity or enforceability of this Note.

                                      -23-
<PAGE>

     "Note" means this  $2,500,000 9% Convertible  Senior Note due September 30,
2002 issued by the Company, as the same may be amended, modified,  supplemented,
refunded, refinanced or extended from time to time.

     "Plan"  means an  "employee  benefit  plan" (as defined in section  3(3) of
ERISA) that is or,  within the preceding  five years,  has been  established  or
maintained,  or to which  contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA  Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.

     "Remedies" means and includes, with respect to any Debt (including, without
limitation, the Senior Debt and the Subordinated Debt):

          (a) the acceleration of the maturity of any of such Debt;

          (b) the  exercise of any put right or other  similar  right to require
     the Company or any  subsidiary to repurchase  any of such Debt prior to the
     stated maturity thereof;

          (c) the collection or commencement of proceedings against the Company,
     any subsidiary thereof or any other person obligated on such Debt or any of
     their respective property, to enforce or collect any of such Debt;

          (d) taking  possession  of or  foreclosing  upon  (whether by judicial
     proceedings or otherwise) any Liens or other  collateral  security for such
     Debt;  or  causing a  marshaling  of any  property  of the  Company  or any
     subsidiary;

          (e) the  making of a demand in respect  of any  Guaranty  given by the
     Company or any subsidiary of the Company of such Debt;

          (f)  commencing  or joining in or causing  the  Company to commence or
     join in or assist the Company in  commencing,  any proceeding of the nature
     referred to in Section 7.1(f) or 7.1(g); or

          (g)  exercising  any other  remedies  with respect to such Debt or any
     claim with respect thereto.

     "Senior Agent" means,  for so long as the Senior Credit  Agreement  remains
outstanding, the administrative agent in respect of the Senior Credit Agreement,
and  thereafter,  any one  agent or  lender  in  respect  of the  Senior  Credit
Facility, or a representative of either,  designated in writing to the Holder by
the Company as being the "Senior Agent".

     "Senior Credit  Agreement"  means the Amended and Restated Credit Agreement
dated as of the date hereof among the Company, as administrative agent (together
with its successors in such capacity) and the banks,  financial institutions and
other  institutional  lenders  from  time to time  named  therein,  as it may be
amended,  supplemented,  extended, renewed, refinanced,  restated or replaced in
whole or in part.

                                      -24-
<PAGE>

     "Senior Credit Facility" means and includes:

          (i) the Senior Credit Agreement; and

          (ii) any  Credit  Facility  (whether  or not  secured),  which  Credit
     Facility has  refinanced in whole or in part the Debt governed by the terms
     of a Senior Credit  Facility which the Company has designated in writing to
     the Holder as being the "Senior Credit Facility;" provided,  however, that,
     by making such  designation,  the predecessor  Senior Credit Facility shall
     cease  to be the  Senior  Credit  Facility  (but any  Debt  outstanding  or
     incurred  thereunder  shall  continue to be Senior Debt for so long as such
     Debt meets the definition thereof).

     "Senior  Debt"  means  and  includes  all   obligations,   liabilities  and
indebtedness  of the  Company  now  or  hereafter  existing,  whether  fixed  or
contingent,  and whether for principal or interest  (including  interest (at the
rate  specified in the  applicable  Senior Credit  Facility)  accruing after the
filing of a petition under the Bankruptcy Code,  whether or not allowed),  fees,
expenses, indemnification or otherwise (including letter of credit reimbursement
obligations whether or not any draw has occurred), in respect of:

          (i) the Senior Credit Facility;

          (ii) this Note;

          (iii) up to $500,000 of additional Debt on the same terms as this Note
     to be issued by the Company to Huntingdon Corporation; and

          (iv) any other Debt of the  Company  owing to the Senior  Agent or any
     lender  under  the  Senior  Credit  Facility  (whether  or not such  lender
     continues to be a lender  thereunder) with respect to any obligations under
     Bank Hedge Agreements (as defined in the Senior Credit  Agreement)  related
     to the Senior Credit  Agreement  that are or may become owed by the Company
     directly  or  indirectly,  other than Debt  incurred  pursuant  to a Senior
     Credit Facility.

     Notwithstanding the foregoing,  in no event shall "Senior Debt" include any
Junior Subordinated Debt.

     "Voting Stock" means with respect to any  corporation,  any shares of stock
of such corporation  whose holders are entitled under ordinary  circumstances to
vote for the election of directors of such corporation  (irrespective of whether
at the time any stock of any other  class or  classes  shall  have or might have
voting power by reason of the happening of any contingency), and, in the case of
the Company,  shall  include the Common  Stock.  Except as  otherwise  provided,
references herein to "Voting Stock" shall mean Voting Stock of the Company.

     8.2  (a)  Unless  otherwise  provided  herein,  all  financial   statements
delivered in connection herewith will be prepared in accordance with GAAP. Where
the  character or amount of any asset or liability or item of income or expense,
or any consolidation or other accounting  computation is required to be made for
any  purpose  hereunder,  it shall be done in  accordance

                                      -25-
<PAGE>

with GAAP;  provided,  however,  that if any term  defined  herein  includes  or
excludes  amounts,  items or concepts  that would not be included in or excluded
from such term if such term were defined  with  reference  solely to GAAP,  such
term will be deemed to include or exclude such amounts, items or concepts as set
forth herein.

     (b) Whenever  accounting amounts of a group of persons are to be determined
"on a consolidated  basis" it shall mean that, as to balance sheet amounts to be
determined as of a specific time, the amount that would appear on a consolidated
balance  sheet  of such  persons  prepared  as of such  time,  and as to  income
statement amounts to be determined for a specific period,  the amount that would
appear on a consolidated income statement of such persons prepared in respect of
such period, in each case with all transactions  among such persons  eliminated,
and prepared in accordance with GAAP except as otherwise required hereby.

     8.3 Where any provision  herein refers to action to be taken by any person,
or which  such  person  is  prohibited  from  taking,  such  provision  shall be
applicable  whether such action is taken  directly or indirectly by such person,
including  actions taken by or on behalf of any partnership in which such person
is a general partner.

     8.4 (a) The  titles  of the  Sections  of this  Note  appear as a matter of
convenience  only,  do not  constitute  a part  hereof  and shall not affect the
construction  hereof.  The words  "herein,"  "hereof,"  "hereunder" and "hereto"
refer  to this  Note  as a whole  and not to any  particular  Section  or  other
subdivision. References to Annexes and Sections are, unless otherwise specified,
references to Sections of this Note.  References  to Annexes and Schedules  are,
unless otherwise specified, references to Schedules attached to this Note.

     (b) Each covenant  contained  herein shall be construed  (absent an express
contrary provision herein) as being independent of each other covenant contained
herein,  and compliance  with any one covenant shall not (absent such an express
contrary  provision)  be  deemed  to excuse  compliance  with one or more  other
covenants.

     8.5 THIS  NOTE  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  AND  ENFORCED  IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA,  WITHOUT REGARD TO ANY CHOICE
OF LAW  RULES  WHICH  WOULD  REQUIRE  THE  APPLICATION  OF THE LAW OF ANY  OTHER
JURISDICTION.  IN ADDITION,  THE PARTIES HERETO  SELECT,  TO THE EXTENT THEY MAY
LAWFULLY  DO SO, THE  INTERNAL  LAWS OF THE STATE OF  FLORIDA AS THE  APPLICABLE
INTEREST LAW.

9. Miscellaneous

     9.1 All  communications  under this Note  shall be in writing  and shall be
delivered either by nationwide  overnight  courier or by facsimile  transmission
(confirmed  by delivery by nationwide  overnight  courier sent on the day of the
sending of such facsimile transmission).  Communications to the Company shall be
addressed as set forth on Annex 1, or at such other address of which the Company
shall have notified the Holder.  Communications to the Holder shall

                                      -26-
<PAGE>

be  addressed  as set forth on Annex 1, or at such  other  address of which such
Holder  shall have  notified  the  Company  (and the Company  shall  record such
address in the register  for the  registration  and transfer of this Note).  Any
communication  addressed and delivered as herein  provided shall be deemed to be
received when actually delivered to the address of the addressee (whether or not
delivery is accepted) or received by the telecopy machine of the recipient.  Any
communication   not  so   addressed   and   delivered   shall  be   ineffective.
Notwithstanding the foregoing provisions of this Section 9.1, service of process
in any suit, action or proceeding arising out of or relating to this Note or any
transaction  contemplated  hereby,  or any  action or  proceeding  to execute or
otherwise  enforce any judgment in respect of any breach  hereunder or under any
document hereby, shall be delivered in the manner provided in Section 9.6(c).

     9.2 All warranties, representations, statements of fact, certifications and
covenants  contained in this Note or in any  certificate,  financial  statement,
report or notice  delivered or provided  hereunder  shall be  considered to have
been  relied upon by the other party  hereto and shall  survive the  delivery to
such party  regardless  of any  investigation  made by or on behalf of any party
hereto.  All  statements  in any  certificate,  delivered  pursuant to the terms
hereof  shall  constitute   warranties  and   representations   hereunder.   All
obligations  hereunder (other than payment of this Note, but including,  without
limitation,  reimbursement  obligations in respect of costs,  expenses and fees)
shall survive the payment of this Note and the  termination  hereof.  Subject to
the preceding, this Note embodies the entire agreement and understanding between
the  Company  and  the  Holder,   and  supersedes   all  prior   agreements  and
understandings, relating to the subject matter hereof.

     9.3 The provisions hereof are intended to be for the benefit of the Holder,
from time to time,  of this Note,  and shall be  enforceable  by any such Holder
whether or not an express  assignment to such Holder of rights  hereunder  shall
have been made by the payee or his successors or assigns.  In the event that the
payee named herein  transfers  or assigns  less than all of this Note,  the term
"Holder" as used herein shall be deemed to refer to the assignor and assignee or
assignees  hereof,  collectively,  and any action  permitted  to be taken by the
Holder  hereunder  shall be taken only upon the  consent or  approval of persons
comprising the Holder that own that percentage  interest in the principal amount
of this Note as shall be  designated  by the payee  named  herein at the time of
such assignment.  Anything  contained in this Section 9.3  notwithstanding,  the
Company  may not  assign any of its  respective  rights,  duties or  obligations
hereunder other without the prior written consent of the Holder. For purposes of
the avoidance of doubt,  the Holder of this Note shall be permitted to pledge or
otherwise  grant a lien in and to this Note;  provided,  however,  that any such
pledgee or holder of a Lien shall not be considered a Holder  hereunder until it
shall have  foreclosed  upon this Note in  accordance  with  applicable  law and
informed the Company, in writing, of the same.

     9.4 (a) This Note may be amended, and the observance of any term hereof may
be waived,  with (and only with) the  written  consent  of the  Company  and the
Holder,  provided,  how-ever, that without the written consent of the holders of
Debt under the Senior Credit Facility, no amendment,  supplement or modification
of the  provisions of Section 3, or any defined term to the extent used therein,
shall be effective as to any holder of Debt under the Senior Credit Facility who
has not consented to such amendment, supplement or modification.

                                      -27-
<PAGE>

         Any  amendment  or waiver  consented to as provided in this Section 9.4
shall be binding  upon the then  current  Holder and upon each future  holder of
this Note and upon the  Company  whether or not this Note shall have been marked
to indicate such  amendment or waiver.  No such amendment or waiver shall extend
to or affect any obligation,  covenant,  agreement,  Default or Event of Default
not expressly amended or waived or impair any right consequent thereon.

     9.5 (a) The Company shall pay when billed the reasonable costs and expenses
(including reasonable attorneys' fees) incurred by the Holder in connection with
the  considera-tion,  negotiation,  preparation or execution of any  amendments,
waivers,  consents,  standstill  agreements  and other similar  agreements  with
respect to this Note  (whether or not any such  amendments,  waivers,  consents,
standstill agreements or other similar agreements are executed).

     (b)  At  any  time  when  the  Company   and  the  Holder  are   conducting
restructuring or workout  negotiations in respect hereof,  or a Default or Event
of Default  exists,  the Company shall pay when billed the reasonable  costs and
expenses  (including  reasonable  attorneys'  fees and the fees of  professional
advisors) incurred by the Holder in connection with the assessment,  analysis or
enforcement  of any  rights  or  remedies  that are or may be  available  to the
Holder.

     (c) If the Company shall fail to pay when due any principal of, or interest
on, this Note, the Company shall pay to the Holder,  to the extent  permitted by
law,  such  amounts  as shall be  sufficient  to cover the  costs and  expenses,
including but not limited to reasonable  attorneys' fees, incurred by the Holder
in collecting any sums due on this Note.

     9.6 (a) THE PARTIES HERETO  VOLUNTARILY AND  INTENTIONALLY  WAIVE ANY RIGHT
ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS NOTE OR TRANSACTIONS CONTEMPLATED HEREBY.

     (b) ANY SUIT, ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THIS NOTE
OR  TRANSACTIONS  CONTEMPLATED  HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR
OTHERWISE  ENFORCE ANY  JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS NOTE MAY BE
BROUGHT BY SUCH PARTY IN ANY FEDERAL  DISTRICT COURT LOCATED IN NEW YORK COUNTY,
NEW YORK,  OR ANY NEW YORK STATE COURT  LOCATED IN NEW YORK COUNTY,  NEW YORK AS
SUCH PARTY MAY IN ITS SOLE DISCRETION  ELECT,  AND BY THE EXECUTION AND DELIVERY
OF THIS NOTE, THE PARTIES HERETO IRREVOCABLY AND  UNCONDITIONALLY  SUBMIT TO THE
NON-EXCLUSIVE  IN  PERSONAM  JURISDICTION  OF EACH SUCH  COURT,  AND EACH OF THE
PARTIES  HERETO  IRREVOCABLY  WAIVES AND AGREES NOT TO ASSERT IN ANY  PROCEEDING
BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT
IT IS NOT  SUBJECT  TO THE IN  PERSONAM  JURISDICTION  OF  ANY  SUCH  COURT.  IN
ADDITION,  EACH OF THE PARTIES HERETO IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE IN ANY SUIT,  ACTION OR  PROCEEDING  ARISING OUT OF OR RELATING TO THIS
NOTE OR

                                      -28-
<PAGE>

TRANSACTION   CONTEMPLATED   HEREBY  BROUGHT  IN  ANY  SUCH  COURT,  AND  HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     (c) EACH PARTY HERETO  IRREVOCABLY AGREES THAT PROCESS PERSONALLY SERVED OR
SERVED BY U.S. EXPRESS,  REGISTERED OR CERTIFIED MAIL OR BY NATIONWIDE OVERNIGHT
COMMERCIAL  COURIER OR DELIVERY  SERVICE AT THE  ADDRESSES  PROVIDED  HEREIN FOR
NOTICES SHALL  CONSTITUTE,  TO THE EXTENT PERMITTED BY LAW,  ADEQUATE SERVICE OF
PROCESS IN ANY SUIT,  ACTION OR  PROCEEDING  ARISING  OUT OF OR RELATING TO THIS
NOTE OR TRANSACTION  CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING TO EXECUTE
OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER. RECEIPT OF
PROCESS SO SERVED  SHALL BE  CONCLUSIVELY  PRESUMED AS  EVIDENCED  BY A DELIVERY
RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY
SERVICE.

     (d) NOTHING  HEREIN  SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY
HOLDER OF THIS NOTE TO SERVE ANY  WRITS,  PROCESS  OR  SUMMONSES  IN ANY  MANNER
PERMITTED BY APPLICABLE LAW OR TO OBTAIN  JURISDICTION  OVER THE COMPANY IN SUCH
OTHER JURISDICTION,  AND IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE
LAW.

     IN WITNESS WHEREOF,  the Company has caused this Promissory Note to be duly
executed   and   delivered   by  one  of  its  duly   authorized   officers   or
representatives.

                              MEDIABAY, INC.

                              By:
                                 -----------------------------------------------
                                       Name: John Levy
                                       Title: Executive Vice President and Chief
                                                Financial Officer

                                      -29-
<PAGE>

                                     Annex I

1.   Holder's Payment Instructions
              Citibank
              153 E. 53rd Street
              New York, NY 10043
              ABA # 021000089
              Credit: Norton Herrick
              Account #  37101489

2.   Addresses for Notices
     (a)  If to the Company, to:
              MediaBay, Inc.
              2 Ridgedale Avenue - Suite 300
              Cedar Knolls, NJ 07927
              Attention: Chief Financial Officer
              Telephone No.: 973-539-9528
              Facsimile No.: 973-539-1273

              with a copy to:

              Blank Rome Tenzer Greenblatt LLP
              405 Lexington Avenue
              New York, New York 10174
              Attention: Robert J. Mittman, Esq.
              Telephone No.: (212) 885-5555
              Facsimile No.: (212) 885-5001

     (b)      If to the payee, to:
              Mr. Norton Herrick
              2 Ridgedale Avenue- Suite 300
              Cedar Knolls, NJ 07927
              Telephone No.: 973-539-9528
              Facsimile No.: 973-539-1237

<PAGE>

                          [FORM OF ELECTION TO CONVERT]

     The undersigned hereby  irrevocably elects to exercise its right,  pursuant
to the Convertible Senior Promissory Note due September 30, 2002 (the "Note") of
MediaBay,   Inc.  (the  "Company")  in  the  outstanding   principal  amount  of
$_________,  which Note is  tendered  herewith,  to convert  $__________  of the
amount  outstanding  under the Note to  __________________  shares of the common
stock of the Company (the  "Shares"),  all in  accordance  with the terms of the
Note. The undersigned  requests that a Certificate for such Shares be registered
in the name of  ______________,  whose  address is  ____________,  and that such
Certificate    be   delivered   to    ________________,    whose    address   is
_________________,  [and  that a  replacement  Note in the  principal  amount of
$___________,  representing  the  balance of the  principal  amount  outstanding
thereunder  after giving effect to this  conversion,  be issued in the amount of
$_________ and delivered to ___________, whose address is ____________].

Dated:                        Signature: _______________________________________

                              (Signature must conform in all respects to name of
                              holder as specified on the face of the Note.)

                              ____________________________________________

                              ____________________________________________
                                     (Insert Social Security or Other
                                     Identifying Number of Holder)

<PAGE>

                                  Schedule 6.3

1.   Debt incurred under the $1,984,250  principal amount of Convertible  Senior
     Subordinated  Promissory  Note due  December  31,  2004  issued  to  Norton
     Herrick.

2.   Debt incurred under the $3,000,000  principal amount of Convertible  Senior
     Subordinated Promissory Note due December 31, 2004 issued to Evan Herrick.

3.   Debt incurred under the $4,200,000  principal amount of Convertible  Senior
     Subordinated   Promissory  Notes  due  December  31,  2004  issued  to  ABC
     Investment, L.L.C.

4.   Debt incurred under the $800,000 Convertible Senior Subordinated Promissory
     Note Due December 31, 2002 issued to Huntingdon Corporation.Exhibit 10.7

NEITHER THIS NOTE, NOR ANY SECURITY  ISSUABLE UPON CONVERSION  HEREOF,  HAS BEEN
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "ACT"),  OR
APPLICABLE  STATE  SECURITIES  LAWS.  NO INTEREST IN THIS NOTE MAY BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE ACT,
OR (ii) AN  EXEMPTION  FROM  REGISTRATION  UNDER THE ACT WHERE  THE  HOLDER  HAS
FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL  REASONABLY  SATISFACTORY  TO
THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.

                                 MEDIABAY, INC.

                 CONVERTIBLE SENIOR SUBORDINATED PROMISSORY NOTE
                              DUE DECEMBER 31, 2002

$800,000                                                            May 14, 2001

     MEDIABAY,  INC.  (together with its successors,  the "Company"),  a Florida
corporation,   for  value  received,   hereby  promises  to  pay  to  Huntingdon
Corporation  or registered  assigns (the  "Holder"),  the principal sum of EIGHT
HUNDRED THOUSAND DOLLARS  ($800,000) on December 31, 2002 (the "Maturity Date"),
and to pay interest on the unpaid principal balance hereof from the date of each
Advance set forth on Schedule A attached hereto to the Maturity Date at the rate
of twelve percent (12.0%) per annum, in arrears, quarterly on March 31, June 30,
September 30 and December 31 in each year,  commencing  on June 30, 2002,  until
the principal  amount hereof shall become due and payable;  and to pay on demand
interest on any overdue  principal  (including  any overdue  partial  payment of
principal  and  principal  payable at the  maturity  hereof)  and (to the extent
permitted by  applicable  law) on any overdue  installment  of interest (the due
date of such  payments  to be  determined  without  giving  effect  to any grace
period) at the rate of fourteen percent (14.0%) per annum.

1. Interest and Payment

     1.1 Interest  shall be computed on the basis of a 360 day year of twelve 30
day months for the  actual  time  elapsed.  Subject  to the  provisions  of this
Section 1, all interest  payments to be paid in cash to Holder  hereunder  shall
accrue  until  ten  days  following  the date the  Senior  Debt (as  hereinafter
defined) has been paid in full.

     1.2 At the  option of the  Holder in lieu of  paying a  scheduled  interest
payment in cash,  the Company shall pay such interest  payment either (a) by the
issuance to Holder of its  convertible  promissory note in the form of this Note
(each such note defined  herein as an "Interest  Payment Note") in the principal
amount of the scheduled  interest  payment due on such interest payment due date
upon the same  terms  and  conditions  of this  Note or (b) in a number of whole
shares of common  stock,  without par value  ("Common  Stock"),  of the Company,
equal to the  quotient  of dividing  the amount of accrued  and unpaid  interest
payable on such  interest  payment  date by an amount  equal to the then current
Market  Price.  "Market  Price" shall be

<PAGE>

deemed  to mean the  average  of the daily  closing  prices of a share of Common
Stock for the 10  consecutive  trading  days  immediately  prior to the interest
payment  date.  The  closing  price for each day shall be (a) the last  reported
sales price or, in the case no such  reported  sale takes place on such day, the
average of the  reported  closing  bid and asked  prices,  in either case on the
principal  national  securities  exchange on which the Common stock is listed or
admitted to trading or, if the Common Stock is not listed or admitted to trading
on  any  national  securities  exchange,   on  The  Nasdaq  Stock  Market,  Inc.
("Nasdaq"),  (b) if the Common Stock is not listed or admitted to trading on any
national securities exchange or quoted on Nasdaq, the average of the closing bid
and asked  prices in the  over-the-counter  market as  furnished by any New York
Stock Exchange member firm reasonably  selected from time to time by the Company
for that  purpose,  or (c) if the  Common  Stock is not  listed or  admitted  to
trading on any national  securities exchange or quoted on Nasdaq and the average
price cannot be determined as  contemplated by clause (b), the fair market value
of the Common Stock as determined in good faith by resolution of the independent
directors of the Company.  For the purposes of the preceding sentence,  the term
"trading day" shall mean each Monday, Tuesday,  Wednesday,  Thursday and Friday,
other than any day on which  securities  are not traded on such  exchange  or in
such market.  No fractional  shares of Common Stock will be issued to the Holder
in lieu of cash interest.  Instead of any fractional share which would otherwise
be issuable in lieu of cash interest,  the Company will calculate and pay a cash
adjustment in respect of such fraction  (calculated to the nearest  1/100th of a
share) in an amount equal to the same  fraction of the Market Price at the close
of  business on the fifth  business  day  immediately  preceding  such  interest
payment date.  The Holder may exercise its option to cause the Company to either
(i) issue its  Interest  Payment  Note in lieu of cash  interest  in the  amount
payable on the interest payment date or (ii) to issue shares of Common Stock, in
lieu of cash interest payable on an interest payment date, by giving the Company
written  notice of its exercise of such option at least five business days prior
to such interest payment date and the Company will deliver or cause its transfer
agent to deliver,  to the Holder or its designee on such  interest  payment date
either a Interest  Payment Note in the amount of such  interest  payment or duly
executed certificates for the number of whole shares of Common Stock so issuable
to the Holder registered in the Holder's name or such other name or names and in
such  denominations  as the  Holder  shall  have  designated  in its  notice  of
exercise, as the case may be, and, if applicable,  a check payable to the Holder
for any cash adjustment in lieu of a fractional share.

     1.3 Except as provided in Section 1.2 hereof, payments of principal, Change
in Control Purchase Price (as hereinafter defined), if any, and accrued interest
shall be made in such coin or currency of the United States of America as at the
time of payment is legal  tender for the payment of public and private  Debts to
the Holder hereof at its address shown in the register maintained by the Company
for such purpose.

     1.4 (a) The Company shall pay all amounts payable with respect to this Note
(without any presentment of this Note) by crediting,  by federal funds bank wire
transfer,  the account of the Holder in any bank in the United States of America
as may be designated in writing by the Holder or in such other manner or to such
other address in the United States of America as may be designated in writing by
the Holder (and as to which,  absent  subsequent  notice  from the  Holder,  the
Company may conclusively  rely).  Annex 1 shall be deemed to constitute  notice,
direction  or  designation  (as  appropriate)  by the  payee of this Note to the

                                      -2-
<PAGE>

Company with respect to payments to be made to such payee as above provided.  In
the absence of such written direction,  all amounts payable with respect to this
Note shall be paid by check  mailed and  addressed  to the Holder at its address
shown in the register maintained by the Company pursuant to Section 2.1.

     (b) All payments received on account of this Note shall be applied first to
the  payment  of  accrued  and  unpaid  interest  on this  Note  and then to the
reduction  of the  unpaid  principal  amount of this  Note.  In case the  entire
principal  amount of this Note is paid or this Note is purchased by the Company,
this Note shall be surrendered to the Company for  cancellation and shall not be
reissued,  and no Note shall be issued in lieu of the paid  principal  amount of
any Note.

     1.5 (a) If any  payment due on account of this Note shall fall due on a day
other than a business day, then such payment shall be made on the first business
day following  the day on which such payment shall have so fallen due;  provided
that if all or any  portion  of such  payment  shall  consist  of a  payment  of
interest,  for purposes of  calculating  such  interest,  such payment  shall be
deemed to have been  originally due on such first  following  business day, such
interest  shall accrue and be payable to (but not  including) the actual date of
payment,  and the  amount  of the  next  succeeding  interest  payment  shall be
adjusted accordingly.

     (b) Any  payment  to be made to the Holder on account of this Note shall be
deemed to have been  made on the  business  day such  payment  actually  becomes
available  at such  Holder's  bank prior to the close of  business of such bank,
provided that interest for one day at the non-default interest rate of this Note
shall be due on the amount of any such payment that actually  becomes  available
to the Holder at the Holder's bank after 1:00 p.m. (local time of such bank).

     1.6  Subject to Section 3 hereof,  the  Company  may,  upon at least  three
business  days prior  written  notice to the Holder  specifying  the date of the
prepayment  (the  "Prepayment  Date") and the  principal  amount to be  prepaid,
prepay the unpaid principal balance of this Note in whole at any time or in part
from time to time,  without penalty or premium,  in multiples of $100,000 (or if
the outstanding  principal  amount is less than $100,000 at such time, then such
principal  amount)  together with interest on the principal amount being prepaid
accrued to the designated Prepayment Date.

     1.7 In the  event of a Change  in  Control,  the  Company  will,  within 15
business days after the occurrence of such event,  give notice of such Change in
Control to the Holder.  Such notice shall  contain an  irrevocable  offer to the
Holder to repurchase  this Note on a date (the "Change in Control Payment Date")
specified in such notice that is not less than the later of (a) thirty (30) days
and not more than ninety (90) days after the date of such notice or (b) five (5)
days after  payment  in full of the Debt  outstanding  under the  Senior  Credit
Facility,  at a purchase price equal to 100% of the aggregate  principal  amount
thereof  and all  interest  accrued and unpaid on such  principal  amount to the
Change in Control Payment Date (the "Change in Control  Purchase  Price").  Each
such notice shall: (i) be dated the date of the sending of such notice;  (ii) be
executed by an executive  officer of the Company;  (ii)  specify,  in reasonable
detail, the nature and date of the Change in Control; (iv) specify the Change in
Control Payment Date; (v) specify

                                      -3-
<PAGE>

the principal  amount of this Note  outstanding;  (vi) specify the interest that
would be due on this Note,  accrued to the Change in Control  Payment Date;  and
(vii)  specify  that this  Note  shall be  purchased  at the  Change in  Control
Purchase  Price.  The  Holder  shall  have the  option to accept or reject  such
offered payment. In order to accept such offered payment, the Holder shall cause
a notice of such  acceptance  to be  delivered to the Company at least five days
prior to the Change in Control Payment Date. A failure to accept in writing such
written offer of payment as provided in this Section 1.7, or a written rejection
of such offered  prepayment,  shall be deemed to  constitute a rejection of such
offer. The offered payment shall be made at the Change in Control Purchase Price
determined as of the Change in Control Payment Date.

     1.8 Upon any partial  payment of the outstanding  principal  amount of this
Note, the Holder shall mark this Note with a notation of the principal amount so
paid and the date of such payment.

2. Registration; Exercise; Substitution

     2.1 The Company will keep at its principal  executive office a register for
the  registration  and transfer of this Note. The name and address of the Holder
of this Note,  each transfer  hereof made in accordance  with Section 2.2(a) and
the name and address of each transferee of this Note shall be registered in such
register. The person in whose name this Note shall be registered shall be deemed
and  treated  as the owner and  holder  thereof,  and the  Company  shall not be
affected by any notice or knowledge to the  contrary,  other than in  accordance
with Section 2.2(a)

     2.2 (a) Upon  surrender of this Note at the principal  executive  office of
the Company,  duly endorsed or accompanied  by a written  instrument of transfer
duly executed by the Holder or the Holder's attorney duly authorized in writing,
the Company  will  execute and  deliver,  at the  Company's  expense  (except as
provided in Section 2.2(c)), a new Note (or Notes) in exchange  therefor,  in an
aggregate  principal  amount  equal  to  the  unpaid  principal  amount  of  the
surrendered Note. Subject to Section 2.2(b), the new Note(s) shall be registered
in such name(s) as the Holder may request. Each such new Note shall be dated and
bear  interest  from the date to which  interest  shall  have  been  paid on the
surrendered Note or dated the date of the surrendered Note, if no interest shall
have been paid thereon. Each such new Note shall carry the same rights to unpaid
interest and interest to accrue on the unpaid  principal  amount thereof as were
carried by the Note so exchanged or transferred.

     (b) This Note has been acquired for investment and has not been  registered
under the securities  laws of the United States of America or any state thereof.
Accordingly,  notwithstanding Section 2.2(a), neither this Note nor any interest
thereon  may be  offered  for  sale,  sold  or  transferred  in the  absence  of
registration and  qualification of this Note under applicable  federal and state
securities laws or an opinion of counsel of the Holder  reasonably  satisfactory
to the Company that such registration and  qualification are not required.  This
Note  shall  not be  transferred  in  denominations  of less than  $100,000  and
integral multiples  thereof,  provided that the Holder may transfer this Note as
an entirety regardless of the principal amount thereof.

                                      -4-
<PAGE>

     (c) The Company may require  payment of a sum sufficient to cover any stamp
tax or governmental change imposed in respect of any such transfer of this Note.

     2.3 Upon  receipt by the  Company  from the Holder of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this  Note  (which  evidence  shall  be,  if  the  Holder  is  the  payee  or an
institutional investor,  notice from the payee or such institutional investor of
such loss, theft, destruction or mutilation), and (a) in the case of loss, theft
or destruction,  of indemnity reasonably satisfactory to the Company;  provided,
however,  that if the  Holder is the  payee or an  institutional  investor,  the
unsecured  agreement of indemnity  of the payee or such  institutional  investor
shall be  deemed  to be  satisfactory;  or (b) in the case of  mutilation,  upon
surrender and cancellation  thereof; the Company at its own expense will execute
and deliver,  in lieu thereof,  a replacement  Note,  dated and bearing interest
from the date to which  interest  shall  have  been paid on such  lost,  stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note, if no interest shall have been paid thereon.

     2.4 The Company will pay taxes (if any) due (but not, in any event,  income
taxes of the  Holder)  in  connection  with  and as the  result  of the  initial
issuance  of this  Note and in  connection  with  any  modification,  waiver  or
amendment of this Note and shall save the Holder harmless, without limitation as
to time, against any and all liabilities with respect to all such taxes.

3. Subordination

     3.1 Notwithstanding  any other provision  contained in this Agreement,  the
Subordinated  Debt is  subordinate  and junior in right of payment to all Senior
Debt to the extent provided in this Section 3 and in the Intercreditor Agreement
(the  "Intercreditor  Agreement")  dated  as of  April , 2001 by and  among  the
Holder, the Company and Senior Lender Agent (as defined therein).

     3.2  In  the  event  of:  (a)  any  insolvency,  bankruptcy,  receivership,
liquidation,   reorganization,   readjustment,   composition  or  other  similar
proceeding  relating to the Company;  (b) any  proceeding  for the  liquidation,
dissolution  or other  winding-up  of the  Company,  voluntary  or  involuntary,
whether or not involving insolvency or bankruptcy  proceedings;  (c) any general
assignment  by the  Company  for the  benefit  of  creditors;  or (d) any  other
marshaling of the assets of the Company;  all Senior Debt shall first be paid in
full, in cash or Cash  Equivalents  (as defined in Section 8 hereof and, for all
purposes of this Section 3, as so defined),  before any payment or distribution,
whether in cash,  securities or other  property,  shall be made to any holder of
any  Subordinated  Debt on  account of any  Subordinated  Debt.  Any  payment or
distribution,  whether  in  cash,  securities  or  other  property  (other  than
securities  of the Company or any other  corporation  provided  for by a plan of
reorganization or readjustment,  the payment of which is subordinated,  at least
to the extent provided in this Section 3 with respect to  Subordinated  Debt, to
the payment of all Senior  Debt at the time  outstanding  and to any  securities
issued in respect thereof under any such plan of reorganization or readjustment,
but only if the rights of the  holders of the Senior  Debt are not  impaired  by
such plan without their consent), which would otherwise (but for this Section 3)
be payable or  deliverable  in respect of

                                      -5-
<PAGE>

Subordinated  Debt, shall be paid or delivered directly to the holders of Senior
Debt in accordance with the priorities  then existing among such holders,  until
all Senior Debt shall have been paid in full, in cash or Cash Equivalents.

     3.3 If any  holder of  Subordinated  Debt  does not file a proper  claim or
proof of Debt  therefor  prior to 20 days before the  expiration  of the time to
file such claim or proof,  then either the Senior Agent or if there is no Senior
Credit  Agreement  in  place,  then any other  holder  of Senior  Debt is hereby
authorized and empowered  (but not obligated) as the agent and  attorney-in-fact
for such holder for the specific  and limited  purpose set forth in this Section
3.3 to file  such  claim or proof for or on  behalf  of such  holder;  provided,
however,  that the Senior  Agent or the holder of the  Senior  Debt shall  have,
prior to taking any such  action,  given 15 days  prior  written  notice  (which
notice  may be given up to 60 days prior to the  expiration  of the time to file
such claim or proof) to such holder of Subordinated Debt that it intends to file
such  claim or  proof  of Debt.  Other  than as  provided  in the  Intercreditor
Agreement,  in no event may the Senior  Agents or any holder of the Senior  Debt
vote any claim on behalf of any holder of the Subordinated Debt, and such agency
and appointment of  attorney-in-fact  shall not extend to any such right to vote
any such claim.

     3.4 If (a) the Company  shall  default in the payment or  prepayment of any
principal of, premium, if any, or interest on, or, if applicable, commitment fee
or letter of credit fee or  Administrative  Agent fee or indemnity under Section
2.9, 2.11 or 11.4(c) of the Senior  Credit  Agreement  (or  comparable  sections
under any  replacement  Senior  Debt) in respect  of, any Senior Debt (a "Senior
Payment Default") when the same becomes due and payable, whether at maturity, at
a date fixed for prepayment,  by declaration of  acceleration  or otherwise,  or
shall fail to comply with any  covenant or  agreement  in respect of Senior Debt
which  covenant  or  agreement  default  results in actual  acceleration  of the
maturity  of such  Senior Debt  ("Covenant  Acceleration");  and (b) the Company
receives from the Senior Agent or any other holder of Senior Debt written notice
of the  happening  of such  Senior  Payment  Default or  Covenant  Acceleration,
stating that such notice is a payment  blockage  notice pursuant to this Section
3.4;  no direct or  indirect  payment (in cash,  property  or  securities  or by
set-off  or  otherwise)  shall be made or  agreed to be made on  account  of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any  redemption,  retirement,  purchase,  prepayment or other  acquisition or
payment of any Subordinated  Debt,  unless and until such Senior Payment Default
shall have been cured or waived or otherwise  shall have ceased to exist or such
Covenant  Acceleration  shall have been  rescinded and the  underlying  covenant
default shall have been cured or waived or shall have otherwise ceased to exist.

     The Company shall give prompt written notice to each holder of Subordinated
Debt of its receipt of any such notice from the Senior Agent or any other holder
of Senior Debt under this Section 3.4.

     3.5 If (a) any Significant  Nonpayment Default shall have occurred; and (b)
the Company and the Holder  receive from the Senior Agent or any other holder of
Senior Debt written  notice (a "Stop  Payment  Notice") of the happening of such
Significant  Nonpayment Default,  stating that such notice is a payment blockage
notice  pursuant to this  Section  3.5; no direct or indirect  payment (in cash,
property or securities or by set-off or otherwise) shall be

                                      -6-
<PAGE>

made or agreed to be made for or on account of any  Subordinated  Debt,  or as a
sinking  fund  for any  Subordinated  Debt,  or in  respect  of any  redemption,
retirement,  repurchase, prepayment, purchase or other acquisition or payment of
any  Subordinated  Debt,  for a  period  (each,  a  "Payment  Blockage  Period")
commencing on the date such Stop Payment  Notice is delivered to the Company and
ending on the earliest to occur of the following:  (a) the time as of which each
Significant  Nonpayment Default which is the subject of such Stop Payment Notice
shall have been waived or cured  (whether by amendment of any  provisions of the
Senior Credit  Agreement or otherwise),  (b) a number of days shall have elapsed
as is necessary  to prevent the total number of days that a Stop Payment  Notice
(or Stop Payment Notices in the event that more than one Stop Payment Notice has
been given) is in effect during any  consecutive  365 day period from  exceeding
180 days in the aggregate,  and (c) the date of the repayment in full in cash or
Cash  Equivalents  of the Senior Debt and the  termination  of any commitment to
make further loans or advances in respect of the Senior Debt; provided, however,
that (i) neither the Senior  Agent nor any other  holder of Senior Debt shall be
permitted to issue a Stop Payment  Notice more than six times in the  aggregate;
(ii)  only  two  Stop  Payment  Notices  may  be  issued  in any  period  of 365
consecutive  days;  (iii) Payment Blockage Periods may not be in effect for more
than 180 days  (whether or not such days are  consecutive)  during any period of
365  consecutive  days, and if any Payment  Blockage  Period is in effect on the
181st day in any period of 365 consecutive  days,  such Payment  Blockage Period
will terminate  immediately;  and (iv) no Payment Blockage Period may be imposed
as a result of a Significant Nonpayment Default which served as the basis for or
was continuing  during any previous  Payment  Blockage  Period,  unless any such
Significant  Nonpayment  Default  shall have been  cured or waived or  otherwise
ceased to exist for a period of not less than 60 consecutive days after the date
that the previous Stop Payment Notice was given.

     3.6 If, at any time during  which either the Senior  Credit  Facility is in
effect or there are any  amounts  outstanding  under the  Huntingdon  Note,  the
Holder, subject to the Intercreditor Agreement,  elects to exercise any Remedies
in respect of any Event of Default,  the Holder shall deliver to the Company and
to  the  Senior  Agent  and  any  holder  of  Senior  Debt  written  notice  (an
"Enforcement  Notice")  specifying  the Event or Events of Default which are the
basis for the exercise of such  Remedies and stating that the Holder  intends to
exercise  Remedies;   provided,  however,  that  the  failure  to  deliver  such
Enforcement  Notice to the Senior  Agents  shall not affect the  validity of the
Enforcement Notice as between such holder or holders and the Company.

     3.7  Notwithstanding  anything contained in this Note to the contrary,  and
subject to the terms of the Intercreditor  Agreement,  for so long as any amount
is outstanding under the Senior Credit Facility,  including any letter of credit
reimbursement  obligations or  commitments,  or under the  Huntingdon  Note, the
Holder shall not exercise any Remedies in respect  thereof  during any period (a
"Standstill  Period")  commencing  on the  first  date the  Holder,  but for the
provisions  of this Section 3, would have been entitled to exercise any Remedies
and ending upon the earliest of:

          (a) the date which is 10 business days after the Enforcement Notice is
     delivered to the Company and the Senior Agent and any holder of Senior Debt
     pursuant to Section 3.6;  provided,  however,  that if any Payment Blockage
     Period  arising  from the giving of a

                                      -7-
<PAGE>

     Stop  Payment  Notice  is in effect  on such  10th  business  day after the
     Enforcement Notice is so delivered, this clause (a) shall be ineffective to
     terminate such Standstill Period;

          (b) in the  event  that a Payment  Blockage  Period  arising  from the
     giving  of a Stop  Payment  Notice  is in  effect  on the date  which is 10
     business days after an  Enforcement  Notice is delivered to the Company and
     the Senior Agent and any holder of Senior Debt pursuant to Section 3.6, the
     expiration of such Payment Blockage Period;

          (c) the date that any holder of any Senior Debt commences the exercise
     of any Remedies in respect of such Senior Debt; and

          (d) the first date upon  which any of the Events of Default  described
     in Section 7.1(f) and (g) shall have occurred and be continuing  beyond any
     period of grace  specified  therein;  and,  in such  event,  the  automatic
     acceleration of this Note  contemplated in respect of such Event of Default
     pursuant to Section 7.2(a) shall occur  immediately upon the termination of
     the Standstill Period.

     3.8 If (a) any payment or  distribution  shall be paid to or  collected  or
received  by any holders of  Subordinated  Debt in  contravention  of any of the
terms of this Section 3 but whether or not any Stop Payment  Notice or (pursuant
to Section 3.4) payment blockage notice shall theretofore have been given (i.e.,
if paid, collected or received at a time when either such notice could have been
given had the Senior  Agent,  or if there is no Credit  Agreement  in effect any
holder of Senior Debt, been aware of  circumstances  giving rise to the right to
deliver  any such  notice);  and (b)  Senior  Agent,  or if  there is no  Credit
Agreement in effect any holder of Senior Debt,  shall have  notified the holders
of Subordinated  Debt in writing,  within 30 days after the date such payment or
distribution is made, of the facts by reason of which such payment or collection
or receipt so contravenes this Section 3 or constituted a Significant Nonpayment
Default;  then such  holders of  Subordinated  Debt will deliver such payment or
distribution,  to the extent  necessary to pay all such Senior Debt in full,  in
cash  or Cash  Equivalents,  to the  Senior  Agent,  or if  there  is no  Credit
Agreement in effect any other holder of Senior Debt, on behalf of the holders of
the Senior Debt,  and,  until so  delivered,  the same shall be held in trust by
such holders of Subordinated  Debt as the property of the holders of such Senior
Debt. If any amount is delivered to the Senior  Agent,  or if there is no Credit
Agreement  in effect  and any other  holder of  Senior  Debt,  pursuant  to this
Section  3.8,  whether or not such  amounts  have been applied to the payment of
Senior Debt, and the outstanding  Senior Debt shall  thereafter be paid in full,
in cash or Cash Equivalents,  by the Company or otherwise other than pursuant to
this  Section  3.8,  the holders of Senior Debt shall  return to such holders of
Subordinated  Debt an amount  equal to the amount  delivered  to such holders of
Senior Debt  pursuant to this  Section  3.8, so long as after the return of such
amounts the Senior Debt shall remain  indefeasibly paid in full, in cash or Cash
Equivalents.

     3.9  Except as  provided  in this  Section  3, the rights set forth in this
Section  3 of the  holders  of  the  Senior  Debt  as  against  each  holder  of
Subordinated  Debt shall remain in full force and effect  without regard to, and
shall not be impaired by:

          (a) any act or failure to act on the part of the Company;

                                      -8-
<PAGE>

          (b) any  extension or  indulgence in respect of or change in the time,
     manner or place of any payment or prepayment of the Senior Debt or any part
     thereof or in respect of any other  amount  payable to any holder of Senior
     Debt,  including,  without  limitation,  any  increase  in the Senior  Debt
     resulting  from  extension  of  additional  credit  to the  Company  or any
     subsidiary or otherwise and permitted by Section 6.3(iii) or (iv) hereof;

          (c) any amendment,  modification,  restatement,  refinancing or waiver
     of, or addition or supplement to, or deletion from, or compromise, release,
     consent or other  action in respect of, any of the terms of any Senior Debt
     or any other agreement which may be relating to any Senior Debt, other than
     such as would  cause  all or any  portion  of such Debt to fail to meet the
     definition of "Senior Debt;"

          (d) any exercise or  non-exercise  by any holder of Senior Debt of any
     right, power, privilege or remedy under or in respect of any Senior Debt or
     Subordinated  Debt or any waiver of any such  right,  power,  privilege  or
     remedy or any  default in respect  of any Senior  Debt or the  Subordinated
     Debt,  any dealing with or action  against or  application of proceeds from
     any  collateral  security  therefor  or any receipt by any holder of Senior
     Debt of any  security,  or any  failure  by any  holder of  Senior  Debt to
     perfect a security  interest in, or any release by any such Senior Debt of,
     any  security  for or  guaranty  of the  payment of any Senior  Debt or any
     manner of sale or other  disposition  of any  assets of the  Company or any
     subsidiary;

          (e)  any  merger  or  consolidation  of  the  Company  or  any  of its
     subsidiaries into or with any other  subsidiaries of the Company or into or
     with any  person,  or any  transfer  of any or all of the  property  of the
     Company  or any of its  subsidiaries  to any other  person  or any  change,
     restructuring or termination of the corporate structure or existence of the
     Company or any of its subsidiaries;

          (f) the  absence  of any  notice  to, or  knowledge  by, any holder of
     Subordinated  Debt of the  existence or occurrence of any of the matters or
     events set forth in the foregoing clauses (a) through (e).

          (g) any  lack of  validity  or  enforceability  of any  instrument  or
     agreement  evidencing or securing any Senior Debt or any other agreement or
     instrument relating thereto; or

          (h) any other circumstances which might otherwise constitute a defense
     available to, or a discharge of, the Company or any holder of  Subordinated
     Debt.

     3.10  Each  holder  of  Subordinated  Debt and the  Company  hereby  waives
promptness, diligence, notice of appearance and any other notice with respect to
any of the Senior Debt and these  provisions and any requirement that any holder
of the Senior Debt protect,  secure,  perfect or insure any security interest or
lien or any  property  subject  thereto or exhaust  any right to take any action
against the Company or any other person or entity or any collateral.

     3.11 The Company will,  and will use its  reasonable  efforts to cause each
holder of  Subordinated  Debt to, at the  Company's  expense and at any time and
from time to time,  promptly  execute and deliver  all further  instruments  and
documents,  and take all further actions, that may be necessary or desirable, or
that any holder of any Senior Debt may reasonably

                                      -9-
<PAGE>

request,  in order to protect any right or interest  granted or  purported to be
granted  under  this  Section 3 or enable  the  holders  of the  Senior  Debt to
exercise and enforce their rights and remedies under these provisions.

     3.12 Each  holder of  Subordinated  Debt  waives any and all notices of the
acceptance  of the  provisions  of this Section 3 or of the  creation,  renewal,
extension or accrual, now or at any time in the future, of any Senior Debt.

     3.13  The  obligations  of each  holder  of  Subordinated  Debt  under  the
provisions  set forth in this Section 3 shall  continue to be  effective,  or be
reinstated,  as the case may be, as to any payment in respect of any Senior Debt
that is  rescinded  or must  otherwise  be returned by the holder of such Senior
Debt  upon  the  occurrence  or  as a  result  of  any  bankruptcy  or  judicial
proceeding, all as though such payment had not been made.

     3.14  Nothing  contained  in this  Section 3 shall  impair,  as between the
Company and any holder of  Subordinated  Debt,  the obligation of the Company to
pay to such holder the  principal  thereof and interest  thereon as and when the
same shall become due and payable in  accordance  with the terms  thereof and to
comply with each and every  provision  of this Note or prevent any holder of any
Subordinated  Debt from  exercising  all rights,  powers and remedies  otherwise
permitted by applicable law or under this Note, all subject to the rights of the
holders  of  the  Senior  Debt  hereunder  including  rights  to  receive  cash,
securities or other property  otherwise payable or deliverable to the holders of
Subordinated Debt.

     3.15  Upon  the  payment  in  full  of all  Senior  Debt,  the  holders  of
Subordinated Debt shall be subrogated to all rights of any holder of Senior Debt
to receive any further payments or  distributions  applicable to the Senior Debt
until the  Subordinated  Debt shall have been paid in full, and such payments or
distributions  received  by the holders of  Subordinated  Debt by reason of such
subrogation, of cash, securities or other property which otherwise would be paid
or distributed to the holders of Senior Debt,  shall, as between the Company and
its creditors  other than the holders of Senior Debt,  on the one hand,  and the
holders of  Subordinated  Debt,  on the other hand, be deemed to be a payment by
the Company on account of Senior Debt and not on account of  Subordinated  Debt.
Notwithstanding  the  foregoing  provisions  of this  Section  3.15 or any other
provision of this Note each holder of  Subordinated  Debt hereby  waives any and
all exoneration  and impairment  defenses that it may at any time have by law or
otherwise in respect of subrogation rights.

     3.16 Each holder of Subordinated Debt, by its acceptance thereof,  shall be
deemed to acknowledge and agree that the foregoing subordination provisions are,
and are intended to be, an inducement to and a  consideration  of each holder of
any Senior  Debt,  whether  such Senior  Debt was created or acquired  before or
after the creation of Subordinated  Debt, to acquire and hold, or to continue to
hold,  such  Senior  Debt,  and such  holder  of  Senior  Debt  shall be  deemed
conclusively  to have relied on such  subordination  provisions in acquiring and
holding,  or in continuing to hold, such Senior Debt. Each such holder of Senior
Debt is  intended to be, and is, a third party  beneficiary  of this  Section 3.
Each holder of Subordinated Debt acknowledges and agrees that the provisions set
forth in this Section 3 shall be enforceable against such holder of Subordinated
Debt by the holders of the Senior Debt.  Notwithstanding  anything  contained in
this

                                      -10-
<PAGE>

Note to the  contrary,  none of the  provisions  of this  Section 3  (including,
without  limitation,  this  Section  3.16 and defined  terms used  herein)  may,
directly or indirectly, be amended, modified, supplemented or waived without the
prior written  consent of the Senior Agents and any other holder of Senior Debt,
on behalf of the holders of the Senior Debt.

     3.17  Notwithstanding  the  other  provisions  of  this  Section  3.17,  no
amendment to or  refinancing  of the Senior Debt or any  agreement or instrument
related  thereto shall be entitled to the benefits of this Section 3 without the
consent of the Holder to the extent that such amendment would prohibit  directly
and expressly the Company or any subsidiary  from making  scheduled  payments in
respect of the Subordinated  Debt in accordance with the terms of this Agreement
as in effect on the date hereof or as may be amended to the extent  permitted by
the Senior Credit Agreement or the Huntingdon  Note;  provided that no change of
financial  covenants or increase in the restrictiveness of negative covenants or
events of default  under the Senior Debt  documents  (that do not by their terms
refer to this Note)  shall be deemed to  constitute  a  prohibition  from making
scheduled  payments,  even if the ultimate effect of any such change would cause
the Company to be in default  under the Senior Debt if such a scheduled  payment
were made.

     3.18 As used  in  this  Section  3 and  elsewhere  in this  Agreement,  the
following terms have the respective meanings set forth below:

          "Credit  Facility"  means and  includes a credit  agreement or similar
     agreement  pursuant to which the lender or lenders  commit(s) to permit the
     Company,  subject to the  conditions  therein,  to obtain from time to time
     thereunder   term  or  revolving   loans  and/or   letters  of  credit  and
     periodically repay the same.

          "Huntingdon Note" means the Convertible Senior Promissory Notes of the
     Company in the aggregate  principal  amount of up to  $3,000,000  issued to
     Huntingdon Corporation on and after the Issue Date.

          "Junior  Subordinated  Debt"  means  any  Debt of the  Company  or any
     subsidiary other than the Senior Debt and the Debt under this Note which is
     (a)  existing  as of the date hereof or issued on or after the date of this
     Note and which is expressly subordinated in right of payment to any Debt of
     the Company,  including but not limited to all Debt referenced as items 1-3
     on  Schedule  6.3,  or (b)  owing to any  subsidiary  or  affiliate  of the
     Company.

          "Remedies"  means and includes,  with respect to any Debt  (including,
     without limitation, the Senior Debt and the Subordinated Debt):

               (i) the acceleration of the maturity of any of such Debt;

               (ii) the  exercise  of any put  right or other  similar  right to
          require the Company or any  subsidiary to repurchase  any of such Debt
          prior to the stated maturity thereof;

               (iii) the collection or commencement  of proceedings  against the
          Company,  any subsidiary thereof or any other person obligated on

                                      -11-
<PAGE>

          such Debt or any of their respective  property,  to enforce or collect
          any of such Debt;

               (iv)  taking  possession  of  or  foreclosing  upon  (whether  by
          judicial  proceedings  or  otherwise)  any  Liens or other  collateral
          security for such Debt; or causing a marshaling of any property of the
          Company or any subsidiary;

               (v) the making of a demand in respect  of any  Guaranty  given by
          the Company or any subsidiary of the Company of such Debt;

               (vi)  commencing or joining in or causing the Company to commence
          or join in or assist the Company in commencing,  any proceeding of the
          nature referred to in Section 7.1(f) or 7.1(g); or

               (vii)  exercising any other remedies with respect to such Debt or
          any claim with respect thereto.

          "Senior Agent" means,  (i) for so long as the Senior Credit  Agreement
     remains  outstanding,  ING (U.S.) Capital LLC (together with its successors
     in such capacity) as  administrative  agent in respect of the Senior Credit
     Agreement, and thereafter, any one agent or lender in respect of the Senior
     Credit Facility,  or a representative  of either,  designated in writing to
     the Holder by the Company as being a "Senior Agent".

          "Senior  Credit  Agreement"  means the  Amended  and  Restated  Credit
     Agreement dated as of the date hereof among the Company, ING (U.S.) Capital
     LLC (together with its successors in such capacity) as administrative agent
     (together with its  successors in such  capacity) and the banks,  financial
     institutions  and  other  institutional  lenders  from  time to time  named
     therein, as it may be amended, supplemented, extended, renewed, refinanced,
     restated or replaced in whole or in part.

          "Senior Credit Facility" means and includes:

               (i) the Senior Credit Agreement; and

               (ii) any Credit Facility  (whether or not secured),  which Credit
          Facility has  refinanced  in whole or in part the Senior Debt governed
          by the  terms  of a Senior  Credit  Facility  which  the  Company  has
          designated  in  writing  to the  Holder  as being the  "Senior  Credit
          Facility;" provided,  however,  that, by making such designation,  the
          predecessor Senior Credit Facility shall cease to be the Senior Credit
          Facility  (but any  Debt  outstanding  or  incurred  thereunder  shall
          continue  to be  Senior  Debt  for so  long  as such  Debt  meets  the
          definition thereof).

          "Senior  Debt" means and includes  all  obligations,  liabilities  and
     indebtedness  of the Company now or hereafter  existing,  whether  fixed or
     contingent,  and whether for principal or

                                      -12-
<PAGE>

     interest  (including  interest  (at the rate  specified  in the  applicable
     Senior Credit  Facility)  accruing after the filing of a petition under the
     Bankruptcy Code, whether or not allowed),  fees, expenses,  indemnification
     or otherwise (including letter of credit reimbursement  obligations whether
     or not any draw has occurred), in respect of:

               (i) the Senior Credit Facility;

               (ii) the Huntingdon Note; and

               (iii) any other Debt of the Company  owing to the Senior Agent or
          any  lender  under the Senior  Credit  Facility  (whether  or not such
          lender  continues  to be a  lender  thereunder)  with  respect  to any
          obligations  under Bank  Hedge  Agreements  (as  defined in the Senior
          Credit  Agreement)  related to the Senior Credit Agreement that are or
          may become owed by the Company directly or indirectly, other than Debt
          incurred pursuant to a Senior Credit Facility.

     Notwithstanding the foregoing,  in no event shall "Senior Debt" include any
Junior Subordinated Debt.

     "Significant Nonpayment Default" means and includes:

          (i) an event of  default  under  the  Senior  Credit  Facility  or the
     Huntingdon Note in respect of the failure of the Company to comply with any
     material  covenant  or  agreement  in respect of the (A) the Senior  Credit
     Facility or documents  executed or delivered in  connection  therewith  (it
     being  understood that the provisions of Sections 2.13, 5.2, 5.5, 5.6, 5.7,
     and 5.13,  Article 6 and Article 8 of the Senior  Credit  Agreement,  as in
     effect on the date hereof and any comparable provisions in effect after the
     date  hereof,  are  "material  covenants"  for  such  purpose)  or (B)  the
     Huntingdon  Note;  and any event of default  under  Sections  9.2, 9.5, 9.7
     through  9.14  (inclusively)  under the  Senior  Credit  Agreement  (or any
     comparable  provision in effect after the date hereof) and Sections 7.1 and
     7.2 of the Huntingdon Note, as the case may be; and

          (ii) an event of default in respect of the Senior  Credit  Facility or
     the Huntingdon  Note arising out of any Event of Default in respect of this
     Note.

     "Subordinated  Debt" means and includes all  obligations,  liabilities  and
indebtedness  of the  Company  now  or  hereafter  existing,  whether  fixed  or
contingent,  and whether for principal,  interest  (including  interest accruing
after the filing of a petition under the Federal  Bankruptcy Code, to the extent
allowed), fees, expenses, indemnification or otherwise, in respect of this Note.

                                      -13-
<PAGE>

4. Conversion

     4.1 The Holder may convert the outstanding  principal  amount of this Note,
and  accrued  and unpaid  interest  thereon  (or a portion  of such  outstanding
principal  amount as provided in Section 4.3) into fully paid and  nonassessable
shares of Common Stock of the Company ("Conversion Shares") at any time prior to
the time the outstanding  principal  amount of this Note, and accrued and unpaid
interest thereon is paid in full, at the Conversion Price then in effect, except
that if this  Note is to be  prepaid  in  full or  repurchased  pursuant  to the
provisions  hereof,  such  conversion  right  shall  terminate  at the  close of
business on the Prepayment  Date or the Change in Control  Purchase Date, as the
case may be. The number of shares of Common Stock  issuable  upon  conversion of
this Note shall be determined by dividing the principal  amount (and accrued and
unpaid  interest,  if any) to be converted by the conversion  price in effect on
the Conversion Date (the "Conversion  Price").  The initial  Conversion Price is
$.56 and is subject to adjustment as provided in this Section 4.

     The  provisions of this Note that apply to  conversion  of the  outstanding
principal amount of this Note and accrued and unpaid interest thereon also apply
to a partial  conversion of this Note.  The Holder is not entitled to any rights
of a holder of Conversion  Shares until the Holder has converted this Note (or a
portion thereof) into Conversion  Shares,  and only to the extent that this Note
is deemed to have been converted into Conversion Shares under this Section 4.

     4.2 To convert all or a portion of this Note,  the Holder must (a) complete
and sign a notice of  election  to  convert  substantially  in the form  annexed
hereto (each, a "Conversion Notice"), (b) surrender the Note to the Company, (c)
furnish  appropriate  endorsements  or  transfer  documents  if  required by the
Company and (d) pay any transfer or similar tax, if required.  The date on which
the  Holder  satisfies  all of such  requirements  is the  conversion  date (the
"Conversion  Date").  As soon as practicable,  and in any event within three (3)
business days, after the Conversion Date, the Company will deliver,  or cause to
be  delivered,  to the Holder a certificate  for the number of whole  Conversion
Shares issuable upon such  conversion and a check for any fractional  Conversion
Share  determined  pursuant to Section 4.4 and for interest on this Note accrued
and unpaid  through the  Conversion  Date  (unless  such  interest has also been
converted  as  permitted  by this  Section  4).  The  person  in whose  name the
certificate  for  Conversion  Shares  is  to  be  registered  shall  become  the
shareholder of record on the Conversion Date and, as of the Conversion Date, the
rights  of the  Holder  shall  cease as to the  portion  thereof  so  converted;
provided,  however,  that no  surrender  of a Note on any date  when  the  stock
transfer  books of the Company  shall be closed shall be effective to constitute
the person entitled to receive the Conversion Shares upon such conversion as the
shareholder of record of such Conversion Shares on such date, but such surrender
shall be effective to constitute the person  entitled to receive such Conversion
Shares as the  shareholder  of record  thereof for all  purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
provided further that such conversion shall be at the Conversion Price in effect
on the date that this Note shall have been surrendered for conversion, as if the
stock transfer books of the Company had not been closed.

                                      -14-
<PAGE>

     4.3 In the case of a partial conversion of this Note, upon such conversion,
the Company  shall  execute  and  deliver to the  Holder,  at the expense of the
Company,  a new Note in an aggregate  principal  amount equal to the unconverted
portion  of the  principal  amount.  This  Note  may be  converted  in part in a
principal  amount equal  $100,000 or an integral  multiple  thereof,  unless the
outstanding  principal amount of this Note is less than $100,000, in which case,
only such  outstanding  principal amount and accrued and unpaid interest thereon
is convertible into Conversion Shares.

     4.4 No fractional Conversion Shares shall be issued upon conversion of this
Note.  Instead of any  fractional  Conversion  Share  which would  otherwise  be
issuable  upon  conversion of this Note,  the Company shall  calculate and pay a
cash  adjustment in respect of such fraction  (calculated to the nearest 1/100th
of a share) in an amount equal to the same fraction of the  Conversion  Price at
the close of business on the Conversion Date.

     4.5 The issuance of certificates for Conversion  Shares upon the conversion
of any Security shall be made without charge to the Holder for such certificates
or for  any tax in  respect  of the  issuance  of such  certificates,  and  such
certificates shall be issued in the name of, or in such names as may be directed
by, the  Holder;  provided,  however,  that in the event that  certificates  for
Conversion Shares are to be issued in a name or names other than the name of the
Holder,  such Note, when surrendered for conversion,  shall be accompanied by an
instrument of transfer,  in form  satisfactory to the Company,  duly executed by
the Holder or his duly authorized attorney; and provided further, moreover, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer  involved in the issuance and delivery of any such  certificates
in a name or names other than that of the Holder,  and the Company  shall not be
required  to issue or deliver  such  certificates  unless or until the person or
persons  requesting  the  issuance  thereof  shall have paid to the  Company the
amount of such tax or shall have  established to the satisfaction of the Company
that such tax has been paid or is not applicable.

     4.6 (a) In case the Company  shall at any time after the date hereof issue,
grant or sell any Additional Stock (as hereinafter defined) for a consideration,
exercise or conversion  price per share less than the Conversion Price in effect
immediately  prior to the issuance or sale of such Additional  Stock, or without
consideration,  then forthwith upon such issuance or sale, the Conversion  Price
shall (upon such issuance or sale) be reduced to a price  determined by dividing
(i) an amount equal to the sum of (a) the total number of shares of Common Stock
outstanding  immediately  prior  to  such  issuance  or sale  multiplied  by the
Conversion Price then in effect, plus (b) the consideration, if any, received by
the Company  upon such  issuance or sale,  by (ii) the total number of shares of
Common Stock  outstanding  immediately  after such  issuance or sale;  provided,
however,  that in no event shall the  Conversion  Price be adjusted  pursuant to
this  computation  to an  amount in  excess  of the  Conversion  Price in effect
immediately  prior to such  computation,  except as provided  in 4.6(d)  hereof.
"Additional Stock" shall mean Common Stock or options,  warrants or other rights
to acquire or securities  convertible  into or exchangeable for shares of Common
Stock,  including  shares held in the Company's  treasury,  and shares of Common
Stock issued upon the  exercise of any options,  rights or warrants to subscribe
for shares of Common  Stock and shares of Common Stock issued upon the direct or
indirect  conversion or exchange of securities for shares of Common Stock, other
than:

                                      -15-
<PAGE>

          (A) This Note;

          (B) Common Stock issued or issuable upon conversion of this Note;

          (C) Common Stock issued or issuable upon the conversion or exercise of
     options,  warrants, rights and other securities or debt convertible into or
     exercisable or exchangeable for Common Stock outstanding on the date hereof
     or issued on the date hereof;

          (D) The Common Stock,  warrants,  stock  appreciation  rights or other
     rights  available for future grant under the Company's stock option plan or
     any  future  stock  option or  incentive  plan  approved  by the  Company's
     shareholders;

          (E) Common Stock  issuable upon exercise of options,  warrants,  stock
     appreciation  rights or other rights  outstanding  or available  for future
     grant under the  Company's  stock option plan or any future stock option or
     incentive plan approved by the Company's shareholders;

          (F) Common Stock or options,  warrants,  rights or other securities or
     debt convertible into, or exercisable or exchangeable for, Common Stock (or
     shares of Common Stock issuable upon the conversion or exercise thereof) in
     connection with future acquisitions; and

          (G) Common Stock or options,  warrants,  rights or other securities or
     debt  convertible or  exercisable  for shares of Common Stock (or shares of
     Common Stock  issuable  upon  conversion or exercise  thereof)  issued as a
     result of anti-dilution adjustments to any options, warrants, debt or other
     securities issued or outstanding on the date hereof.

     (b) For the  purpose  of any  computation  to be  made in  accordance  with
Section 4.6(a), the following provisions shall apply:

          (i) In case of the  issuance  or sale of shares of Common  Stock for a
     consideration  part or all of which  shall be cash,  the amount of the cash
     consideration therefor shall be deemed to be the amount of cash received by
     the Company  for such shares (or, if shares of Common  Stock are offered by
     the  Company  for  subscription,   the  subscription  price,  or,  if  such
     securities  shall be sold to  underwriters  or dealers for public  offering
     without a subscription  offering, the initial public offering price) before
     deducting  therefrom any compensation paid or discount allowed in the sale,
     underwriting  or  purchase  thereof  by  underwriters  or dealers or others
     performing  similar  services,  or  any  expenses  incurred  in  connection
     therewith.

          (ii) In the case of the issuance or sale (otherwise than as a dividend
     or other  distribution  on any  stock of the  Company)  of shares of Common
     Stock for a  consideration  part or all of which  shall be other than cash,
     the amount of the consideration therefor other than cash shall be deemed to
     be the fair market value of such  consideration as determined in good faith
     by the Board of Directors.

          (iii) The  reclassification  of  securities  of the Company other than
     shares of Common  Stock into  securities  including  shares of Common Stock
     shall be deemed to involve

                                      -16-
<PAGE>

     the issuance of such shares of Common Stock for a consideration  other than
     cash  immediately  prior to the close of business on the date fixed for the
     determination of security holders entitled to receive such shares,  and the
     value of the  consideration  allocable to such shares of Common Stock shall
     be determined as provided in Section 4.6(b)(ii).

          (iv) In the case of the  issuance of options,  rights,  or warrants to
     purchase or subscribe  for shares of Common Stock,  securities  convertible
     into or  exchangeable  for shares of Common  Stock,  or options,  rights or
     warrants to purchase or subscribe for any such  convertible or exchangeable
     securities, the following provisions shall apply:

               (A) The  aggregate  maximum  number of  shares  of  Common  Stock
          issuable under such options,  rights or warrants shall be deemed to be
          issued and  outstanding  at the time such options,  rights or warrants
          were  issued,  and shall be deemed  to be issued  for a  consideration
          equal to the minimum  purchase  price per share  provided  for in such
          options,  rights  or  warrants  at  the  time  of  issuance  plus  the
          consideration, if any, received by the Company in connection with sale
          or issuance of such options,  rights or warrants;  provided,  however,
          that upon the expiration or other termination of such options,  rights
          or warrants, if any thereof shall not have been exercised,  the number
          of shares of Common Stock deemed to be issued and outstanding pursuant
          to this subsection (A) shall be reduced by such number of shares as to
          which options, warrants and/or rights shall have expired or terminated
          unexercised, and such number of shares of Common Stock shall no longer
          be deemed to be issued and outstanding,  and the Conversion Price then
          in effect shall  forthwith be readjusted  and  thereafter be the price
          which it would have been had such adjustment been made on the basis of
          the  issuance  only of  shares  of  Common  Stock  actually  issued or
          issuable upon the exercise of those options,  rights or warrants as to
          which the  exercise  of rights  shall not have  expired or  terminated
          unexercised.

               (B) The  aggregate  maximum  number of  shares  of  Common  Stock
          issuable   upon   conversion  or  exchange  of  any   convertible   or
          exchangeable  securities  shall be deemed to be issued and outstanding
          at the time of issuance of such securities,  and shall be deemed to be
          issued for a consideration equal to the consideration  received by the
          Company  in  connection  with  the  sale of such  securities  plus the
          consideration,  if any,  receivable by the Company upon the conversion
          or exchange thereof;  provided,  however, that upon the termination of
          the right to convert or  exchange  such  convertible  or  exchangeable
          securities (whether by reason of redemption or otherwise),  the number
          of  shares  deemed  to be  issued  and  outstanding  pursuant  to this
          subsection  (B) shall be reduced by such  number of shares as to which
          the  conversion  or exchange  rights shall have expired or  terminated
          unexercised, and such number of shares shall no longer be deemed to be
          issued and outstanding  and the Conversion  Price then in effect shall
          forthwith be  readjusted  and  thereafter  be the price which it would
          have been had such  adjustment  been made on the basis of the issuance
          only of shares  actually  issued or issuable  upon the  conversion  or
          exchange of those  convertible or exchangeable  securities as to which
          the conversion or exchange rights shall not have expired or terminated
          unexercised.

               (C) If any change shall occur in the price per share provided for
          in any of the  options,  rights or  warrants  referred  to in  Section
          4.6(b)(iv)(A),  or in the  price  per  share at which  the  securities
          referred to in Section  4.6(b)(iv)(B) are convertible or exchangeable,
          such options,  rights or warrants or conversion or exchange rights, as
          the case may be, shall be deemed

                                      -17-
<PAGE>

          to have  expired  or  terminated  on the date when such  price  change
          became effective in respect of shares not theretofore  issued pursuant
          to the exercise or  conversion  or exchange  thereof,  and the Company
          shall be deemed to have issued upon such date new  options,  rights or
          warrants or convertible or exchangeable securities at the new price in
          respect of the number of shares  issuable  upon the  exercise  of such
          options,  rights or  warrants  or the  conversion  or exchange of such
          convertible or exchangeable securities.

               (D) Except as  otherwise  provided  in this  Section  4.6(b),  no
          adjustment  of the  Conversion  Price  shall be made  upon the  actual
          issuance of such  Common  Stock upon  exercise  of options,  rights or
          warrants  or upon  the  actual  issuance  of such  Common  Stock  upon
          conversion or exchange of any convertible or exchangeable securities.

     (c) In case the Company shall pay or make a dividend or other  distribution
to all holders of its Common  Stock in shares of Common  Stock,  the  Conversion
Price in effect at the opening of business  on the day next  following  the date
fixed for the determination of shareholders entitled to receive such dividend or
other  distribution  shall be reduced by multiplying  such Conversion Price by a
fraction,  of which the numerator  shall be the number of shares of Common Stock
outstanding  at the close of business on the date fixed for such  determination,
and the  denominator  shall be the sum of the  numerator and the total number of
shares  constituting  such  dividend or other  distribution,  such  reduction to
become  effective  immediately  after the  opening of  business  on the day next
following  the date  fixed  for such  determination.  For the  purposes  of this
Section  4.6(c),  the number of shares of Common  Stock at any time  outstanding
shall not include  shares of Common  Stock held in the  treasury of the Company.
The  Company  will not pay any  dividend or make any  distribution  on shares of
Common Stock held in the treasury of the Company.

     (d) In the event that the Company shall at any time prior to the conversion
in full of the Note declare a dividend (other than a dividend  consisting solely
of shares of Common  Stock or a cash  dividend  or  distribution  payable out of
current or retained  earnings) or otherwise  distribute to its holders of Common
Stock  any  monies,  assets,   property,   rights,  evidences  of  indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity,  or any other thing of value, the Holder or Holders
of the Note to the extent of the unconverted portion thereof shall thereafter be
entitled,  in  addition  to the  shares  of  Common  Stock or  other  securities
receivable  upon the conversion  thereof,  to receive,  upon  conversion of such
unconverted  portion of the Note,  the same monies,  property,  assets,  rights,
evidences  of  indebtedness,  securities  or any other  thing of value that they
would  have  been   entitled  to  receive  at  the  time  of  such  dividend  or
distribution.  At the time of any such  dividend  or  distribution,  the Company
shall  make  appropriate  reserves  to  ensure  the  timely  performance  of the
provisions of this Subsection.

     (e) In case the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock,  the  Conversion  Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely, in case the
outstanding  shares of Common Stock shall each be combined into a smaller number
of shares of Common  Stock,  the  Conversion  Price in effect at the  opening of
business  on the day  following  the day upon  which  such  combination

                                      -18-
<PAGE>

becomes  effective  shall  be  proportionately   increased,  such  reduction  or
increase,  as the case may be, to become effective immediately after the opening
of  business  on the day  following  the day  upon  which  such  subdivision  or
combination becomes effective.

     (f) In case the  Company  shall fail to take a record of the holders of its
shares of Common Stock for the purpose of  entitling  them to receive a dividend
or other  distribution  payable in shares of Common Stock, then such record date
shall be deemed to be the date of the issue of the shares of Common Stock deemed
to have been  issued as a result of the  declaration  of such  dividend or other
distribution  or the  date of the  granting  of such  right of  subscription  or
purchase, as the case may be.

     4.7 No adjustment  in the  Conversion  Price shall be required  unless such
adjustment  would require an increase or decrease of at least one cent ($.01) in
the Conversion Price; provided, however, that any adjustments which by reason of
this Section 4.7 are not required to be made shall be carried  forward and taken
into account in any subsequent adjustment.

     4.8 Notice of Certain Events.

     (a) In the event that: (i) the Company takes any action which would require
an  adjustment  in the  Conversion  Price;  (ii) the  Company  takes any  action
described  in Section  4.9(a),  (b) or (c); or (iii) there is a  dissolution  or
liquidation of the Company; the Holder may wish to convert this Note into shares
of Conversion  Shares prior to the record date for or the effective  date of the
transaction  so that such Holder may receive the  securities  or assets  which a
holder  of  shares of Common  Stock on that  date may  receive.  Therefore,  the
Company  shall give notice to the Holder in  accordance  with the  provisions of
this Section 4.8 stating the proposed  record or effective date, as the case may
be, which notice shall be given prior to the proposed  record or effective  date
and, in any case, no later than notice of such  transaction  is given to holders
of Common  Stock.  Failure to give such notice or any defect  therein  shall not
affect the validity of any transaction  referred to in clause (i), (ii) or (iii)
of this Section.

     (b)  Upon  the  occurrence  of  each  adjustment  or  readjustment  of  the
Conversion Price pursuant to this Section 4, the Company, at its expense,  shall
promptly  compute such  adjustment or  readjustment in accordance with the terms
hereof and prepare and furnish to each Holder a  statement,  signed by its chief
financial officer,  setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
The Company shall,  upon the written request at any time of any Holder,  furnish
or cause to be furnished  to such Holder a like  certificate  setting  forth (i)
such  adjustment  and  readjustment,  (ii) the  Conversion  Price at the time in
effect,  and (iii) the number of shares of Common Stock and the amount,  if any,
of other property which at the time would be received upon the Conversion of the
portion of this Note specified in such request.

     4.9 If any of the following shall occur, namely:

          (a) any  reclassification  or change of  outstanding  shares of Common
     Stock  issuable  upon  conversion  of this Note (other than a change in par
     value,  or from par  value  to no par  value,  or from no par  value to par
     value, or as a result of a subdivision or combination);

                                      -19-
<PAGE>

          (b) any consolidation or merger to which the Company is a party, other
     than a merger in which the Company is the continuing  corporation and which
     does not result in any  reclassification of, or change (other than a change
     in name,  or par value,  or from par value to no par value,  or from no par
     value to par  value or as a result of a  subdivision  or  combination)  in,
     outstanding shares of Common Stock; or

          (c) any sale or conveyance of all or substantially all of the property
     or business of the Company and its subsidiaries as an entirety;

then the Company, or such successor or purchasing  corporation,  as the case may
be,  shall,  as  a  condition  precedent  to  such   reclassification,   change,
consolidation, merger, sale or conveyance, execute and deliver to the Holder, an
agreement in form  satisfactory  to the Holder  providing  that the Holder shall
have the right to convert  this Note into the kind and amount of shares of stock
and  other  securities  and  property  (including  cash)  receivable  upon  such
reclassification,  change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of this Note
immediately prior to such reclassification,  change, consolidation, merger, sale
or conveyance.  Such agreement  shall provide for  adjustments of the Conversion
Price  which  shall  be as  nearly  equivalent  as  may  be  practicable  to the
adjustments of the  Conversion  Price provided for in this Section 4. If, in the
case of any such consolidation,  merger, sale or conveyance,  the stock or other
securities and property  (including  cash)  receivable  thereupon by a holder of
Common  Stock  includes  shares of stock or other  securities  and property of a
corporation other than the successor or purchasing corporation,  as the case may
be, in such consolidation, merger, sale or conveyance, then such agreement shall
also be executed by such other  corporation  and shall  contain such  additional
provisions  to protect  the  interests  of the Holder as the Board of  Directors
shall reasonably  consider necessary by reason of the foregoing.  The provisions
of this  Section  4.9 shall  similarly  apply to  successive  reclassifications,
changes, consolidations, mergers, sales or conveyances.

     4.10 The Company shall at all times reserve and keep  available,  free from
preemptive rights,  out of its authorized and unissued Common Stock,  solely for
the  purpose  of  effecting  the  conversion  of this Note,  the full  number of
Conversion Shares then issuable upon the conversion in full of this Note.

     4.11 If the Company or an affiliate of the Company  shall at any time after
the date hereof and prior to the conversion of the Note in full issue any rights
to subscribe  for shares of Common Stock or any other  securities of the Company
or of such affiliate to all the  shareholders of the Company,  the Holder of the
unconverted portion of the Note shall be entitled,  in addition to the shares of
Common Stock or other  securities  receivable  upon the Conversion  thereof,  to
receive  such  rights  at the time  such  rights  are  distributed  to the other
shareholders of the Company.

5. Affirmative Covenants

     The Company  covenants  that on and after the Issue Date and so long as any
portion of the Note shall be outstanding:

                                      -20-
<PAGE>

     5.1 The  Company  will,  and will  cause each of its  Subsidiaries  to, pay
before they  become  delinquent:  (a) all taxes,  assessments  and  governmental
charges or levies imposed upon it or its property; and (b) all claims or demands
of materialmen,  mechanics, carriers, warehousemen, vendors, landlords and other
like  persons  that,  if unpaid,  might by law become a Lien upon its  property;
provided,  that items of the foregoing  description  need not be paid so long as
such items are being contested in good faith and by appropriate  proceedings and
as to which  appropriate  reserves in accordance with GAAP have been established
and  maintained  with  respect  thereto,  unless  and until  any Lien  resulting
therefrom attaches to its property and becomes enforceable,  unless such Lien is
effectively stayed or fully bonded pending the disposition of such proceedings.

     5.2 The Company will, and will cause each of its subsidiaries to:

          (a) maintain its property that is reasonably  necessary in the conduct
     of its  business as it is currently  conducted  in good  working  order and
     condition, ordinary wear and tear, obsolescence and insured casualty losses
     excepted;

          (b) maintain,  with  insurers  reasonably  believed to be  financially
     sound and  reputable,  insurance  with respect to its property and business
     against  such  casualties  and  contingencies,  of such  types  and in such
     amounts as is customary in the case of corporations  engaged in the same or
     a similar business and similarly situated;

          (c) keep proper books of record and account, in which full and correct
     entries shall be made of all dealings and transactions of or in relation to
     the properties and business thereof;

          (d) do or cause to be done all things reasonably necessary to preserve
     and keep in full force and effect its corporate existence, corporate rights
     (charter and  statutory) and corporate  franchises,  except as permitted by
     Section 6.1;

          (e) comply, in all material respects,  with all applicable laws, rules
     and regulations (including,  without limitation,  ERISA, Environmental Laws
     and Environmental Permits) and obtain all licenses, permits, franchises and
     other  governmental  authorizations  necessary  for  the  ownership  of its
     properties and the conduct of its business,  except where its obligation to
     so comply being contested in good faith and by appropriate  proceedings and
     adequate resources have been established are being maintained in accordance
     with GAAP,  and except  where  failure to comply  could not  reasonably  be
     expected to have a Material Adverse Effect; and

          (f) conduct its business so as not to become  subject to any liability
     under any Environmental Law that,  individually or in the aggregate,  could
     reasonably be expected to have a Material  Adverse  Effect and except where
     any  such  liability  is  being  contested  in good  faith  by  appropriate
     proceedings  and  adequate  reserves  have been  established  and are being
     maintained in accordance with GAAP.

     5.3 The Company will make all payments and otherwise perform,  or cause the
relevant subsidiary of the Company to pay or otherwise perform,  all obligations
in  respect of all

                                      -21-
<PAGE>

leases of real  property  to which the Company or any of its  subsidiaries  is a
party,  keep such  leases in full force and effect and not allow such  leases to
lapse or be  terminated  or any rights to renew such leases to be  forfeited  or
canceled,  notify  the Holder of any  default by any party with  respect to such
leases (except during any period in which the Holder or any Affiliate thereof is
serving as a director or executive  officer of the Company) and  cooperate  with
the  Holder in all  respects  to cure any such  default,  and cause  each of its
subsidiaries  to do so except,  in any case,  where the failure to do so, either
individually  or in the  aggregate,  could not  reasonably be expected to have a
Material Adverse Effect and except where its failure to do so is being contested
in good faith and by proper proceedings.

     5.4  The  Company  will  perform  and  observe,   and  cause  each  of  its
subsidiaries  to perform and  observe,  all of the terms and  provisions  of the
Senior  Credit  Agreement,  the  Huntingdon  Note  and  each  material  term and
provision  of each  Material  Contract  (as that term is  defined  in the Senior
Credit  Agreement)  to which it is a party to be  performed  or  observed by it,
maintain,  and cause each of its  subsidiaries  to maintain,  each such Material
Contract to which it is a party in full force and effect, and enforce, and cause
each of its subsidiaries to enforce,  each such Material Contract to which it is
a party in  accordance  with its terms,  except where the failure to do so would
not be reasonably  likely to have a Material Adverse Effect and except where its
failure to do so is being contested in good faith and by proper proceedings.

6. Negative Covenants

     6.1 The Company  will not, and will not permit any  subsidiary  thereof to,
(a) merge with or into or  consolidate  with any other person,  permit any other
person to merge or consolidate with or into it, or (b) sell all or substantially
all of its property to any other person;  provided,  however, that the foregoing
restriction  does not apply to the merger or  consolidation  of the Company with
another  corporation or transfer of all or substantially  all of the property of
the Company to any other person if: (i) the  corporation  that results from such
merger or consolidation or to which all or substantially  all of the property of
the Company is transferred (the "Surviving  Corporation") (a) is organized under
the  laws  of,  and  conducts   substantially   all  of  its  business  and  has
substantially all of its properties  within, the United States of America or any
jurisdiction  or  jurisdictions   thereof  and  (b)  has  shareholders'   equity
immediately  after  such  transaction  that is  equal  to or  greater  than  the
shareholders' equity of the Company immediately prior to such transaction;  (ii)
the due and  punctual  payment of the  principal  of, and interest on this Note,
according to their tenor, and the due and punctual performance and observance of
all the covenants in this Note, to be performed or observed by the Company,  are
expressly assumed pursuant to such assumption agreements and instruments in such
forms as shall be approved  reasonably by the Holder, or assumed by operation of
law,  by  the  Surviving  Corporation;  and  (iii)  immediately  prior  to,  and
immediately  after the consummation of the transaction,  and after giving effect
thereto,  no Default or Event of Default exists or would exist.  Notwithstanding
the foregoing, a subsidiary of the Company may merge into the Company so long as
the Company is the Surviving  Corporation,  and a subsidiary of the Company, may
merge with or into a  wholly-owned  subsidiary  of the Company,  so long as such
wholly-owned subsidiary is the Surviving Corporation.  Notwithstanding  anything
contained herein to the contrary,  the Company may sell all or substantially all
of its property to, or enter into a merger transaction with, any other person if
such sale or merger follows and is the result of an  acceleration  of the

                                      -22-
<PAGE>

Senior Debt and the  transaction  has been approved by the Senior  Agent,  or if
there is no Credit Agreement in effect the holders of any other Senior Debt, and
the banks which are parties to the Senior Credit Agreement.

     6.2 The Company will not, and will not permit any subsidiary of the Company
to,  sell,  lease as lessor,  transfer  or  otherwise  dispose  of its  property
(collectively, "Transfers"), except:

          (A)  Transfers of inventory and of  unnecessary,  obsolete or worn-out
     assets,  in each case in the ordinary  course of business of the Company or
     such  subsidiary,  including but not limited to any remainder  sales of the
     Company;

          (B)  Transfers  from a  subsidiary  of the Company to the Company or a
     wholly-owned   subsidiary  of  the  Company,  or  from  the  Company  to  a
     wholly-owned  subsidiary of the Company  provided such subsidiary  issues a
     guaranty of the Company's  obligations  under this Note consistent with the
     provisions of Section 5.11;

          (C) any other  Transfer  at any time of any  property  to a person for
     such  consideration as determined,  in each case by the Board of Directors,
     in its good faith opinion, to be in the best interest of the Company and to
     reflect the fair market value of such property if the conditions  specified
     in each of the  following  clauses  (A) and (B)  would  be  satisfied  with
     respect  to such  Transfer:  (A) the sum of:  (1) the  book  value  of such
     property at the time of Transfer;  plus (2) the aggregate book value of all
     other property Transferred (other than in transactions described in clauses
     (A) and  (B)  above),  after  the  Issue  Date,  would  not  exceed  25% of
     consolidated  total assets of the Company and its subsidiaries  (determined
     in  accordance  with GAAP)  measured as of the last day of the  immediately
     preceding  fiscal quarter of the Company;  and (B)  immediately  before and
     after the consummation of the Transfer, and after giving effect thereto, no
     Default or Event of Default would exist;

          (D) any other  Transfer of property to the extent that the proceeds of
     such Transfer,  net of transaction costs and expenses incurred and actually
     paid in connection with such Transfer  (including sales,  transfer or gains
     taxes),  within 365 days after such  Transfer are applied by the Company or
     such subsidiary (A) to fund its working capital and capital  expenditure or
     acquisitions  requirements,  and/or (B)  subject to the terms of the Senior
     Credit  Agreement,  to pay or  prepay  a  principal  amount  of Debt of the
     Company or any  subsidiary  thereof (other than Junior  Subordinated  Debt)
     equal to the amount of such net proceeds;  and, in connection with any such
     payment, the Company shall pay all accrued interest thereon and any premium
     or make-whole amount required to be paid in connection therewith; provided,
     however,  that in the event that any Debt so  prepaid  is not Senior  Debt,
     then the Company shall prepay,  together with such prepayment of such other
     Debt, a proportional and ratable  principal amount of this Note pursuant to
     Section 1.6.;

          (E) any Transfers pursuant to the Acquisition Obligations; and

          (F) any other  Transfer  permitted to be made by the Company or any of
     its  subsidiaries  consistent with the terms of the Senior Credit Agreement
     as in effect on the Issue Date.

                                      -23-
<PAGE>

     6.3 The Company will not, and will not permit any subsidiary  to,  directly
or indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to, any Debt, other than:

          (A) this Note and any guaranties thereof;

          (B) Debt owing by the Company to any  wholly-owned  subsidiary  of the
     Company and Debt of a subsidiary  of the Company  owing to the Company or a
     wholly-owned subsidiary of the Company;

          (C) Debt  existing  or issued on the Issue Date and listed on Schedule
     6.3 (including Debt under the Senior Credit Agreement;

          (D) Debt incurred  under the Senior Credit  Facility from time to time
     following the Issue Date;

          (E) Debt incurred or created to refinance any of the Debt permitted by
     clauses (C) and (D) of this Section 6.3,  provided that in the case of Debt
     listed on Schedule  6.3 (other than Senior Debt and  refinancing  thereof),
     the  principal  amount does not exceed the  principal  amount of Debt being
     refinanced;

          (F) Debt (other  than this Note) owing by the Company or a  subsidiary
     thereof to Norton  Herrick,  Evan Herrick,  Michael  Herrick  and/or Howard
     Herrick   (together,   the  "Herricks")  and/or  any  of  their  respective
     Affiliates;

          (G) Debt  incurred by the Company or a  subsidiary  thereof to finance
     the payment of the Change in Control Purchase Price of this Note;

          (H) Up to  $500,000  of  additional  Debt  on the  same  terms  as the
     $2,500,000 Convertible Senior Promissory Note Due September 30, 2002 issued
     to Huntingdon Corporation on the date hereof; and

          (I) Debt,  in  addition  to the Debt  permitted  to be incurred by the
     clauses (A) through (H) of this Section 6.3, in the principal amount at any
     time outstanding not to exceed $1,000,000;

          (J) Any Guaranties  made or issued by the Company of Debt permitted to
     be incurred by any of its  subsidiaries  pursuant to clauses (E), (F), (G),
     (H) and (I) above and  clause  (K) below and  Guaranties  made or issued by
     subsidiaries of the Company of Debt permitted to be incurred by the Company
     pursuant to clauses (C),  (D),  (E),  (G), (H) and (I) above and clause (K)
     below;

          (K) Any other Debt  permitted  to be incurred by the Company or any of
     its  subsidiaries  consistent with the terms of the Senior Credit Agreement
     as in effect on the Issue Date;

                                      -24-
<PAGE>

     6.4 The Company  will not, and will not permit any  subsidiary  thereof to,
incur,  assume or Guaranty any Debt which is subordinated in right of payment to
any other Debt of the  Company or any  subsidiary  thereof,  unless such Debt is
also  subordinated  in right of payment  to the  obligations  of the  Company in
respect of this Note on terms reasonably acceptable to the Holder.

     6.5 The Company  will not, and will not permit any  subsidiary  thereof to,
engage in any  business if, as a result,  the general  nature of the business in
which the Company and its subsidiaries,  taken as a whole, would then be engaged
would be substantially  changed from the general nature of the business in which
the Company  and the  Subsidiaries,  taken as a whole,  are engaged on the Issue
Date.

7. Events of Default

     7.1 An "Event of Default" exists at any time if any of the following occurs
(whether  such  occurrence  shall be  voluntary  or come about or be effected by
operation of law or otherwise):

          (a) The Company  defaults in the payment of the principal of this Note
     when due (whether at the Maturity  Date or any  Prepayment  Date) or in the
     payment of the Change in Control Purchase Price when due or defaults in the
     payment  of any  accrued  interest  on this Note when due and such  default
     continues  for a period of 30  business  days after the date such  interest
     became due;

          (b) The Company or any subsidiary  thereof defaults in the performance
     or  observance  of any of the  covenants  contained  in  Section  5.2(d) or
     Section 6 hereof or defaults in the performance or observance of any of the
     covenants  contained  in Section  5.2(e)  hereof and such  default  remains
     uncured for more than 30 days;

          (c) The Company or any subsidiary  thereof defaults in the performance
     of any covenants  contained in this Note, and such default remains uncured,
     after notice and an opportunity to cure, for more than 60 days;

          (d) Any warranty, representation or other statement by or on behalf of
     the  Company  contained  in  this  Note  or in any  certificate,  financial
     statement,  report or  notice  furnished  after  the date  hereof to Holder
     pursuant  to  the  terms  of  this  Note,  or  in  any  written  amendment,
     supplement,  modification or waiver with respect to any such document shall
     be false or misleading in any material respect when made;

          (e) Either (i) the Company or any subsidiary thereof fails to pay when
     due and within any applicable  period of grace,  any principal of, premium,
     if any,  or  interest  in  respect  of any Debt for  borrowed  money of the
     Company  or such  subsidiary  in the  aggregate  principal  amount  of $2.0
     million;  or (ii) any event  shall  occur or any  condition  shall exist in
     respect of such Debt, or under any  agreement  securing or relating to such
     Debt,  and in either case,  as a result  thereof:  (A) the maturity of such
     Debt, or a material portion thereof, is accelerated, or (B) any one or more
     of the holders  thereof or a trustee  therefor is  permitted to require the
     Company  or such  subsidiary  to  repurchase  such  Debt  from the  holders
     thereof,  and any such trustee or

                                      -25-
<PAGE>

     holder  exercises such option;  or (C) any such one or more of such holders
     or such trustee declares an acceleration of the maturity of such Debt;

          (f) a receiver, liquidator, custodian or trustee of the Company or any
     subsidiary  thereof or of all or any  substantial  part of the  property of
     either is  appointed  by court  order and such order  remains in effect for
     more than 60 days;  or an order for relief is entered  with  respect to the
     Company or any such subsidiary, or the Company or any subsidiary thereof is
     adjudicated a bankrupt or insolvent;  or all or any substantial part of the
     property of the Company or any  subsidiary  thereof is sequestered by court
     order  and such  order  remains  in  effect  for more  than 60 days;  or an
     involuntary  case or  proceeding  is  commenced  against the Company or any
     subsidiary   thereof  under  the  Federal  Bankruptcy  Code  or  any  other
     bankruptcy reorganization,  arrangement,  insolvency, readjustment of debt,
     dissolution  or  liquidation  law  of  any  jurisdiction,  whether  now  or
     hereafter in effect, and is not dismissed within 60 days after such filing;

          (g) The Company or any subsidiary  thereof:  (i) commences a voluntary
     case or  proceeding  or seeks  relief  under any  provision  of the Federal
     Bankruptcy  Code  or any  other  bankruptcy,  reorganization,  arrangement,
     insolvency,  readjustment  of debt,  dissolution or liquidation  law of any
     jurisdiction, whether now or hereafter in effect, or consents to the filing
     of any petition  against it under any such law; or (ii) makes an assignment
     for the benefit of creditors,  or admits in writing its inability or fails,
     to pay  its  debts  generally  as  they  become  due,  or  consents  to the
     appointment  of a  receiver,  liquidator  or  trustee  of the  Company or a
     subsidiary thereof or of all or a substantial part of its property; or

          (h)  A  final,   non-appealable  judgment  or  final,   non-appealable
     judgments  for the payment of money  aggregating  in excess of $2.0 million
     (in excess of any insurance  relating to such judgments or judgments or any
     claim or claims  underlying  such  judgment or  judgments  and the relevant
     insurer or insurers shall not have denied liability under such insurance or
     rejected  any  claims  made with  respect  thereto)  is or are  outstanding
     against one or more of the Company and its subsidiaries and any one of such
     judgments  shall have been  outstanding for more than 60 days from the date
     of its entry and shall not have been discharged in full or stayed; or

          (i) The Note  shall  cease to be in full  force and effect or shall be
     declared  by a court of  competent  jurisdiction  to be void,  voidable  or
     unenforceable,  or the  validity  or  enforceability  of the Note  shall be
     contested by the Company or any Affiliate,  or the Company or any Affiliate
     shall deny that the Company has any further  liability or obligation  under
     the Note.

     7.2 Default Remedies

     (a)  Subject  to the  Intercreditor  Agreement,  if any  Event  of  Default
specified in Section  7.1(f) or (g) shall exist,  the  principal  amount of this
Note at the time outstanding, together with interest accrued and unpaid thereon,
shall  automatically  immediately become due and payable,  without  presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived.

                                      -26-
<PAGE>

     (b) Subject to Section 3.6 and Section 3.7 hereof and to the  Intercreditor
Agreement,  if any Event of  Default,  other  than  those  specified  in Section
7.1(a),  shall  exist,  the  Holder  may  exercise  any  right,  power or Remedy
permitted to such Holder by law, and shall have in particular,  without limiting
the generality of the foregoing,  the right to declare the entire  principal of,
and all interest  accrued and unpaid on, this Note then  outstanding  to be, and
this Note  shall  thereupon  become,  forthwith  due and  payable,  without  any
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby expressly waived,  and the Company shall forthwith pay to the Holder such
principal and interest.

     (c)  Subject  to  Sections  3.6 and  3.7  hereof  and to the  Intercreditor
Agreement,  during the  continuance of an Event of Default  described in Section
7.1(a) and  irrespective  of whether  the Note shall have become due and payable
pursuant to Section 7.2(b), the Holder may, at the Holder's option, by notice in
writing to the Company,  declare the  principal  amount of this Note at the time
outstanding,  and accrued and unpaid interest thereon, to be, and the same shall
thereupon become,  forthwith due and payable,  without any presentment,  demand,
protest or other notice of any kind, all of which are hereby  expressly  waived,
and the Company shall forthwith pay to the Holder such principal and interest.

     (d)  During the  continuance  of an Event or Default  and  irrespective  of
whether this Note shall become due and payable  pursuant to Section 7.2(a),  (b)
or (c) and irrespective of whether the Holder shall otherwise have pursued or be
pursuing any other  rights or  Remedies,  subject to Section 3.6 and Section 3.7
hereof and to the Intercreditor Agreement, the Holder may proceed to protect and
enforce its rights under this Note by exercising  such Remedies as are available
to such holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific  performance of any agreement
contained herein or in aid of the exercise of any power granted herein.

     (e) No course of dealing on the part of the Holder nor any delay or failure
on the part of the Holder to  exercise  any right  shall  operate as a waiver of
such right or otherwise prejudice the Holder's rights, powers and Remedies.  All
rights  and  Remedies  of the  Holder  hereunder  and under  applicable  law are
cumulative  to, and not  exclusive  of, any other  rights or Remedies the Holder
would otherwise have.

     (f) The rights of the Holder to receive  payments  in respect of this Note,
and to exercise  any  Remedies,  solely as between the Holder and the holders of
the Senior Debt, shall be subject in all respects to the provisions of Section 3
and the Intercreditor Agreement;  provided,  however, that all such rights shall
remain unconditional and absolute as between the Holder and the Company.

     7.3 If a declaration  is made pursuant to Section 7.2(b) arising solely out
of an Event of Default  described in Section  7.1(e)  regarding the Senior Debt,
then and in every  such  case,  if the  holders  of the  Senior  Debt waive such
default in respect of the Senior Debt or such default is cured,  and the holders
of the Senior Debt rescind or annul any and all accelerations of the maturity of
all or any portion of the Senior Debt and any required or demanded repurchase of
all or any portion  thereof,  then,  upon  written  notice to the Holder of such
events with respect to the Senior Debt, any declaration made pursuant to Section
7.2(b) and the consequences thereof, shall

                                      -27-
<PAGE>

automatically  and  without any  further  action on the part of the  Holder,  be
annulled and rescinded;  provided, however, that at the time such declaration is
deemed annulled and rescinded: (i) no judgment or decree shall have been entered
for the payment of any moneys due on or pursuant to this Note; and (ii) no other
Default or Event of Default shall be continuing;  provided  further that no such
rescission  and annulment  shall extend to or affect any  subsequent  Default or
Event of Default or impair any right consequent thereon.

8. Interpretation of this Note

     8.1 As used herein,  the following  terms have the respective  meanings set
forth below or set forth in the Section hereof following such term:

          "Affiliate"  means and  includes  with  respect to any person,  at any
     time,  each other  person  (other  than,  with  respect to the  Company,  a
     subsidiary of the Company):  (a) that directly or indirectly through one or
     more  intermediaries  controls,  or is  controlled  by, or is under  common
     control with, such person; (b) that beneficially owns or holds five percent
     or more of any class of the Voting Stock of such  person;  (c) five percent
     or more of the Voting Stock (or if such other person is not a  corporation,
     five percent or more of the equity interest) of which is beneficially owned
     or held by such person; or (d) that is an officer or director of or holds a
     position of comparable  authority with such person; at such time; provided,
     however,  that no  person  holding  this  Note  shall  be  deemed  to be an
     "Affiliate"  of the  Company  solely  by virtue  of the  ownership  of such
     securities.  As used in this  definition:  "control"  means the possession,
     directly or  indirectly,  of the power to direct or cause the  direction of
     the management and policies of a person,  whether  through the ownership of
     voting securities, by contract or otherwise.

          "Applicable  Interest Law" means any present or future law (including,
     without limitation, the laws of the State of New York and the United States
     of  America)  which has  application  to the  interest  and  other  charges
     pursuant to this Note.

          "Board of Directors" means, at any time, the board of directors of the
     Company or any committee  thereof  that,  in the  instance,  shall have the
     lawful  power  to  exercise  the  power  and  authority  of such  board  of
     directors.

          "Capital  Lease"  means,  at any time,  a lease of any  property  with
     respect to which the lessee is required to recognize the  acquisition of an
     asset and the incurrence of a liability in accordance with GAAP.

          "Cash  Equivalents"  means,  for all  purposes  of  Section  3 hereof,
     equivalents  of cash that are  acceptable  to the Senior Agent or any other
     holder of Senior Debt in its reasonable business judgment.

          "Change in Control"  means,  at any time,  an  occurrence  or event or
     failure  of an event to  occur,  as a result  of which a person or group of
     related  persons  (other  than the  Herricks,  an  Affiliate  of any of the
     Herricks,  or any trust for the  benefit of any of the  Herricks)  acquires
     more than 50% of the Voting Stock of the Company.

                                      -28-
<PAGE>

          "Debt" with respect to any person,  means,  without  duplication,  the
     liabilities  of such person with  respect to: (a) borrowed  money;  (b) the
     deferred  purchase  price of property  acquired  by such person  (excluding
     accounts  payable and accrued  expenses  arising in the ordinary  course of
     business,  but  including  all  liabilities  created or  arising  under any
     conditional  sale or other title  retention  agreement  with respect to any
     such property); (c) borrowed money secured by any Lien existing on property
     owned by such person (whether or not such  liabilities  have been assumed);
     (d)  Capital  Leases  of  such  person;  (e)  letters  of  credit,  bankers
     acceptances or similar  instruments  serving a similar  function  issued or
     accepted by banks and other financial  institutions for the account of such
     person (whether or not representing  obligations for borrowed money), other
     than undrawn  trade  letters of credit in the ordinary  course of business;
     (f)  Swaps of such  person;  and (g) any  Guaranty  of such  person  of any
     obligation or liability of another person of obligations of the type listed
     in clause (a) through clause (f) of this definition of Debt; provided that,
     with  respect  to  the  Company,   Debt  shall  not  include  any  unfunded
     obligations  which may now or  hereafter  exist with  respect to  Company's
     Plans.  As used in this  definition,  "Swaps"  means,  with  respect to any
     person,  obligations with respect to interest rate swaps and currency swaps
     and similar  obligations  obligating such person to make payments,  whether
     periodically  or upon the  happening of a  contingency,  except that if any
     agreement  relating to such obligation  provides for the netting of amounts
     payable by and to such person thereunder or if any such agreement  provides
     for the simultaneous payment of amounts by and to such person, then in each
     such case, the amount of such obligations  shall be the net amount thereof.
     The  aggregate  net  obligation of Swaps at any time shall be the aggregate
     amount of the  obligations of such person under all Swaps assuming all such
     Swaps  had been  terminated  by such  person as of the end of the then most
     recently  ended  fiscal  quarter  of such  person.  If such  net  aggregate
     obligation  shall be an amount owing to such person,  then the amount shall
     be deemed to be zero. Unless the context otherwise  requires,  "Debt" means
     Debt of the Company or of a subsidiary of the Company.

          "Default"  means any  event  which,  with the  giving of notice or the
     passage of time, or both, would become an Event of Default.

          "Environmental  Law" means any law,  statute or regulation  enacted by
     any governmental authority in connection with or relating to the protection
     or regulation of the  environment,  including,  without  limitation,  those
     laws,   statutes  and   regulations   regulating  the  disposal,   removal,
     production,  storing,  refining,  handling,  transferring,   processing  or
     transporting of Hazardous  Materials and any applicable orders,  decrees or
     judgments issued by any court of competent  jurisdiction in connection with
     any of the foregoing.

          "Environmental  Permit"  means any  permit,  approval,  identification
     number or other authorization required by any Environmental Law.

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
     amended from time to time.

          "ERISA  Affiliate"  means  any  trade  or  business  (whether  or  not
     incorporated)  that is  treated  as a  single  employer  together  with the
     Company under Section 414 of the IRC.

                                      -29-
<PAGE>

          "GAAP" means accounting principles as promulgated from time to time in
     statements,  opinions  and  pronouncements  by the  American  Institute  of
     Certified Public Accountants and the Financial  Accounting  Standards Board
     and in such statements,  opinions and pronouncements of such other entities
     with respect to financial  accounting  of  for-profit  entities as shall be
     accepted  by a  substantial  segment of the  accounting  profession  in the
     United States.

          "Guaranty"  means with respect to any person (for the purposes of this
     definition,  the "Guarantor") any obligation (except the endorsement in the
     ordinary  course of  business  of  negotiable  instruments  for  deposit or
     collection)  of such  person  guaranteeing  or in effect  guaranteeing  any
     indebtedness,  dividend  or  other  obligation  of any  other  person  (the
     "Primary   Obligor")  in  any  manner,   whether  directly  or  indirectly,
     including,  without limitation,  obligations incurred through an agreement,
     contingent  or  otherwise,   by  the   Guarantor:   (a)  to  purchase  such
     indebtedness or obligation or any property  constituting security therefor;
     (b) to  advance  or supply  funds (i) for the  purchase  or payment of such
     indebtedness,  dividend or obligation;  or (ii) to maintain working capital
     or other balance sheet condition or any income  statement  condition of the
     Primary  Obligor or  otherwise to advance or make  available  funds for the
     purchase or payment of such  indebtedness,  dividend or obligation;  (c) to
     lease  property or to  purchase  securities  or other  property or services
     primarily  for the purpose of assuring  the owner of such  indebtedness  or
     obligation  of the  ability of the Primary  Obligor to make  payment of the
     indebtedness  or  obligation;  or (d)  otherwise to assure the owner of the
     indebtedness  or obligation of the Primary  Obligor against loss in respect
     thereof.

          "Hazardous Material" means all or any of the following: (a) substances
     that are defined or listed in, or  otherwise  classified  pursuant  to, any
     applicable   Environmental  Laws  as  "hazardous  substances",   "hazardous
     materials", "hazardous wastes", "toxic substances" or any other formulation
     intended to define,  list or classify  substances by reason of  deleterious
     properties such as ignitability,  corrosivity, reactivity, carcinogenicity,
     reproductive toxicity, "TLCP toxicity" or "EP toxicity"; (b) oil, petroleum
     or  petroleum  derived  substances,  natural  gas,  natural  gas liquids or
     synthetic  gas and  drilling  fluids,  produced  waters  and  other  wastes
     associated  with the  exploration,  development or production of crude oil,
     natural  gas or  geothermal  resources;  (c) any  flammable  substances  or
     explosives or any radioactive materials;  (d) asbestos or urea formaldehyde
     in any form; and (e) dielectric fluid containing levels of  polychlorinated
     biphenyls in excess of fifty parts per million.

          "IRC" means the Internal Revenue Code of 1986, together with all rules
     and regulations promulgated pursuant thereto, as amended from time to time.

          "Intercreditor  Agreement"  means the  Intercreditor  Agreement  dated
     April __, 2001,  by and among the Company,  Holder and Senior  Lender Agent
     (as such term is defined therein).

          "Issue  Date"  means the tenth  (10th)  day  following  the  Company's
     issuance of a press release and written notice to its  shareholders  of the
     transactions contemplated hereby in accordance with the Rules of the Nasdaq
     Stock Market.

                                      -30-
<PAGE>

          "Lien" means any interest in property  securing an obligation owed to,
     or a claim by, a person other than the owner of such property (for purposes
     of this  definition,  the  "Owner"),  whether such interest is based on the
     common law,  statute or  contract,  and includes but is not limited to: (a)
     the security  interest lien arising from a mortgage,  encumbrance,  pledge,
     conditional  sale or trust receipt or a lease,  consignment or bailment for
     security  purposes,  and the filing of any  financing  statement  under the
     Uniform Commercial Code of any jurisdiction, or an agreement to give any of
     the foregoing;  (b)  reservations,  exceptions,  encroachments,  easements,
     rights-of-way,  covenants, conditions, restrictions, leases and other title
     exceptions and encumbrances  affecting real property;  and (c) any interest
     in  any  property  held  by  the  owner  evidenced  by a  conditional  sale
     agreement,  Capital Lease or other  arrangement  pursuant to which title to
     such  property  has been  retained  by or vested in some  other  person for
     security purposes. The term "Lien" does not include negative pledge clauses
     in  loan  agreements  and  equal  and  ratable  security  clauses  in  loan
     agreements.

          "Material  Adverse  Effect"  means,  with  respect  to  any  event  or
     circumstance (either individually or in the aggregate with all other events
     and  circumstances),  an effect caused thereby or resulting  therefrom that
     would be  materially  adverse  as to, or in respect  of: (a) the  business,
     operations,  profits,  financial condition or properties of the Company and
     its  subsidiaries,  taken as a whole;  (b) the  ability  of the  Company to
     perform  its   obligations   under  this  Note;  or  (c)  the  validity  or
     enforceability of this Note.

          "Note" means this $800,000  Convertible  Senior  Subordinated Note due
     December  31,  2002  issued  by the  Company,  as the same may be  amended,
     modified, supplemented, refunded, refinanced or extended from time to time.

          "Plan" means an "employee benefit plan" (as defined in section 3(3) of
     ERISA) that is or, within the preceding five years, has been established or
     maintained,  or to which  contributions  are or, within the preceding  five
     years,  have been made or required to be made,  by the Company or any ERISA
     Affiliate or with respect to which the Company or any ERISA  Affiliate  may
     have any liability.

          "Voting  Stock" means with respect to any  corporation,  any shares of
     stock  of such  corporation  whose  holders  are  entitled  under  ordinary
     circumstances  to vote for the election of  directors  of such  corporation
     (irrespective  of  whether  at the time any  stock  of any  other  class or
     classes shall have or might have voting power by reason of the happening of
     any contingency), and, in the case of the Company, shall include the Common
     Stock.  Except as otherwise  provided,  references herein to "Voting Stock"
     shall mean Voting Stock of the Company.

     8.2  (a)  Unless  otherwise  provided  herein,  all  financial   statements
delivered in connection herewith will be prepared in accordance with GAAP. Where
the  character or amount of any asset or liability or item of income or expense,
or any consolidation or other accounting  computation is required to be made for
any  purpose  hereunder,  it shall be done in  accordance  with GAAP;  provided,
however, that if any term defined herein includes or excludes amounts,  items or
concepts  that would not be included in or excluded  from such term if such term
were defined with reference  solely to GAAP, such term will be deemed to include
or exclude such amounts, items or concepts as set forth herein.

                                      -31-
<PAGE>

     (b) Whenever  accounting amounts of a group of persons are to be determined
"on a consolidated  basis" it shall mean that, as to balance sheet amounts to be
determined as of a specific time, the amount that would appear on a consolidated
balance  sheet  of such  persons  prepared  as of such  time,  and as to  income
statement amounts to be determined for a specific period,  the amount that would
appear on a consolidated income statement of such persons prepared in respect of
such period, in each case with all transactions  among such persons  eliminated,
and prepared in accordance with GAAP except as otherwise required hereby.

     8.3 Where any provision  herein refers to action to be taken by any person,
or which  such  person  is  prohibited  from  taking,  such  provision  shall be
applicable  whether such action is taken  directly or indirectly by such person,
including  actions taken by or on behalf of any partnership in which such person
is a general partner.

     8.4 (a) The  titles  of the  Sections  of this  Note  appear as a matter of
convenience  only,  do not  constitute  a part  hereof  and shall not affect the
construction  hereof.  The words  "herein,"  "hereof,"  "hereunder" and "hereto"
refer  to this  Note  as a whole  and not to any  particular  Section  or  other
subdivision. References to Annexes and Sections are, unless otherwise specified,
references to Sections of this Note.  References  to Annexes and Schedules  are,
unless otherwise specified, references to Schedules attached to this Note.

     (b) Each covenant  contained  herein shall be construed  (absent an express
contrary provision herein) as being independent of each other covenant contained
herein,  and compliance  with any one covenant shall not (absent such an express
contrary  provision)  be  deemed  to excuse  compliance  with one or more  other
covenants.

     8.5 THIS  NOTE  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  AND  ENFORCED  IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA,  WITHOUT REGARD TO ANY CHOICE
OF LAW  RULES  WHICH  WOULD  REQUIRE  THE  APPLICATION  OF THE LAW OF ANY  OTHER
JURISDICTION.  IN ADDITION,  THE PARTIES HERETO  SELECT,  TO THE EXTENT THEY MAY
LAWFULLY  DO SO, THE  INTERNAL  LAWS OF THE STATE OF  FLORIDA AS THE  APPLICABLE
INTEREST LAW.

9. Miscellaneous

     9.1 All  communications  under this Note  shall be in writing  and shall be
delivered either by nationwide  overnight  courier or by facsimile  transmission
(confirmed  by delivery by nationwide  overnight  courier sent on the day of the
sending of such facsimile transmission).  Communications to the Company shall be
addressed as set forth on Annex 1, or at such other address of which the Company
shall have notified the Holder.  Communications to the Holder shall be addressed
as set forth on Annex 1, or at such other  address of which  such  Holder  shall
have  notified  the Company  (and the Company  shall  record such address in the
register  for the  registration  and transfer of this Note).  Any  communication
addressed and delivered as herein  provided  shall be deemed to be received when
actually  delivered to the address of the addressee  (whether or not delivery is
accepted)  or  received  by  the  telecopy   machine  of  the   recipient.   Any
communication   not  so   addressed   and   delivered   shall  be   ineffective.
Notwithstanding the

                                      -32-
<PAGE>

foregoing provisions of this Section 9.1, service of process in any suit, action
or  proceeding  arising  out of or  relating  to this  Note  or any  transaction
contemplated hereby, or any action or proceeding to execute or otherwise enforce
any judgment in respect of any breach  hereunder  or under any document  hereby,
shall be delivered in the manner provided in Section 9.6(c).

     9.2 All warranties, representations, statements of fact, certifications and
covenants  contained in this Note or in any  certificate,  financial  statement,
report or notice  delivered or provided  hereunder  shall be  considered to have
been  relied upon by the other party  hereto and shall  survive the  delivery to
such party  regardless  of any  investigation  made by or on behalf of any party
hereto.  All  statements  in any  certificate,  delivered  pursuant to the terms
hereof  shall  constitute   warranties  and   representations   hereunder.   All
obligations  hereunder (other than payment of this Note, but including,  without
limitation,  reimbursement  obligations in respect of costs,  expenses and fees)
shall survive the payment of this Note and the  termination  hereof.  Subject to
the preceding, this Note embodies the entire agreement and understanding between
the  Company  and  the  Holder,   and  supersedes   all  prior   agreements  and
understandings, relating to the subject matter hereof.

     9.3 The provisions hereof are intended to be for the benefit of the Holder,
from time to time,  of this Note,  and shall be  enforceable  by any such Holder
whether or not an express  assignment to such Holder of rights  hereunder  shall
have been made by the payee or his successors or assigns.  In the event that the
payee named herein  transfers  or assigns  less than all of this Note,  the term
"Holder" as used herein shall be deemed to refer to the assignor and assignee or
assignees  hereof,  collectively,  and any action  permitted  to be taken by the
Holder  hereunder  shall be taken only upon the  consent or  approval of persons
comprising the Holder that own that percentage  interest in the principal amount
of this Note as shall be  designated  by the payee  named  herein at the time of
such assignment.  Anything  contained in this Section 9.3  notwithstanding,  the
payee named herein may not assign any of its rights hereunder  without the prior
written  consent of the Senior Agent,  and the Company may not assign any of its
respective  rights,  duties or  obligations  hereunder  other  without the prior
written  consent of the Holder.  For  purposes of the  avoidance  of doubt,  the
Holder of this Note shall be permitted  to pledge or  otherwise  grant a lien in
and to this Note; provided,  however,  that any such pledgee or holder of a Lien
shall not be considered a Holder  hereunder  until it shall have foreclosed upon
this Note in  accordance  with  applicable  law and  informed  the  Company,  in
writing, of the same.

     9.4 This Note may be amended,  and the observance of any term hereof may be
waived,  with (and only with) the written consent of the Company and the Holder,
provided,  however,  that  without the written  consent of the holders of Senior
Debt, no amendment,  supplement or  modification of the provisions of Section 3,
or any defined  term to the extent used  therein,  shall be  effective as to any
holder of Senior Debt who has not  consented to such  amendment,  supplement  or
modification.

     9.5 Any  amendment  or waiver  consented to as provided in this Section 9.4
shall be binding  upon the then  current  Holder and upon each future  holder of
this Note and upon the  Company  whether or not this Note shall have been marked
to indicate such  amendment or waiver.  No such amendment or waiver shall extend
to or affect any obligation,  covenant,

                                      -33-
<PAGE>

agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon.

     9.6 The Company  shall pay when billed the  reasonable  costs and  expenses
(including reasonable attorneys' fees) incurred by the Holder in connection with
the  consideration,  negotiation,  preparation  or execution of any  amendments,
waivers,  consents,  standstill  agreements  and other similar  agreements  with
respect to this Note  (whether or not any such  amendments,  waivers,  consents,
standstill agreements or other similar agreements are executed).

     9.7  At  any  time  when  the  Company   and  the  Holder  are   conducting
restructuring or workout  negotiations in respect hereof,  or a Default or Event
of Default  exists,  the Company shall pay when billed the reasonable  costs and
expenses  (including  reasonable  attorneys'  fees and the fees of  professional
advisors) incurred by the Holder in connection with the assessment,  analysis or
enforcement  of any  rights  or  remedies  that are or may be  available  to the
Holder.

     9.8 If the Company shall fail to pay when due any principal of, or interest
on, this Note, the Company shall pay to the Holder,  to the extent  permitted by
law,  such  amounts  as shall be  sufficient  to cover the  costs and  expenses,
including but not limited to reasonable  attorneys' fees, incurred by the Holder
in collecting any sums due on this Note.

     9.9 THE PARTIES HERETO VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  ARISING  OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR TRANSACTIONS CONTEMPLATED HEREBY.

     9.10 ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE
OR  TRANSACTIONS  CONTEMPLATED  HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR
OTHERWISE  ENFORCE ANY  JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS NOTE MAY BE
BROUGHT BY SUCH PARTY IN ANY FEDERAL  DISTRICT COURT LOCATED IN NEW YORK COUNTY,
NEW YORK,  OR ANY NEW YORK STATE COURT  LOCATED IN NEW YORK COUNTY,  NEW YORK AS
SUCH PARTY MAY IN ITS SOLE DISCRETION  ELECT,  AND BY THE EXECUTION AND DELIVERY
OF THIS NOTE, THE PARTIES HERETO IRREVOCABLY AND  UNCONDITIONALLY  SUBMIT TO THE
NON-EXCLUSIVE  IN  PERSONAM  JURISDICTION  OF EACH SUCH  COURT,  AND EACH OF THE
PARTIES  HERETO  IRREVOCABLY  WAIVES AND AGREES NOT TO ASSERT IN ANY  PROCEEDING
BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT
IT IS NOT  SUBJECT  TO THE IN  PERSONAM  JURISDICTION  OF  ANY  SUCH  COURT.  IN
ADDITION,  EACH OF THE PARTIES HERETO IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE IN ANY SUIT,  ACTION OR  PROCEEDING  ARISING OUT OF OR RELATING TO THIS
NOTE OR TRANSACTION  CONTEMPLATED  HEREBY BROUGHT IN ANY SUCH COURT,  AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                                      -34-
<PAGE>

     9.11 EACH PARTY HERETO IRREVOCABLY AGREES THAT PROCESS PERSONALLY SERVED OR
SERVED BY U.S. EXPRESS,  REGISTERED OR CERTIFIED MAIL OR BY NATIONWIDE OVERNIGHT
COMMERCIAL  COURIER OR DELIVERY  SERVICE AT THE  ADDRESSES  PROVIDED  HEREIN FOR
NOTICES SHALL  CONSTITUTE,  TO THE EXTENT PERMITTED BY LAW,  ADEQUATE SERVICE OF
PROCESS IN ANY SUIT,  ACTION OR  PROCEEDING  ARISING  OUT OF OR RELATING TO THIS
NOTE OR TRANSACTION  CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING TO EXECUTE
OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER. RECEIPT OF
PROCESS SO SERVED  SHALL BE  CONCLUSIVELY  PRESUMED AS  EVIDENCED  BY A DELIVERY
RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY
SERVICE.

     9.12 NOTHING  HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY
HOLDER OF THIS NOTE TO SERVE ANY  WRITS,  PROCESS  OR  SUMMONSES  IN ANY  MANNER
PERMITTED BY APPLICABLE LAW OR TO OBTAIN  JURISDICTION  OVER THE COMPANY IN SUCH
OTHER JURISDICTION,  AND IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE
LAW.

     IN WITNESS WHEREOF,  the Company has caused this Promissory Note to be duly
executed   and   delivered   by  one  of  its  duly   authorized   officers   or
representatives.

                              MEDIABAY, INC.

                              By:
                                 -----------------------------------------------
                                       Name: John Levy
                                       Title: Executive Vice President and Chief
                                                Financial Officer

                                      -35-
<PAGE>

                                     Annex I

1.   Holder's Payment Instructions
              Citibank
              153 E. 53rd Street
              New York, NY 10043
              ABA # 021000089
              Credit: Norton Herrick
              Account #  37101489

2.   Addresses for Notices
     (a)  If to the Company, to:
                       MediaBay, Inc.
                       2 Ridgedale Avenue - Suite 300
                       Cedar Knolls, NJ 07927
                       Attention: Chief Financial Officer
                       Telephone No.: 973-539-9528
                       Facsimile No.: 973-539-1273

                       with a copy to:

                       Blank Rome Tenzer Greenblatt LLP
                       405 Lexington Avenue
                       New York, New York 10174
                       Attention: Robert J. Mittman, Esq.
                       Telephone No.: (212) 885-5555
                       Facsimile No.: (212) 885-5001

     (b)      If to the payee, to:
                       Mr. Norton Herrick
                       2 Ridgedale Avenue- Suite 300
                       Cedar Knolls, NJ 07927
                       Telephone No.: 973-539-9528
                       Facsimile No.: 973-539-1237

<PAGE>

                          [FORM OF ELECTION TO CONVERT]

     The undersigned hereby  irrevocably elects to exercise its right,  pursuant
to the  Convertible  Senior  Subordinated  Promissory Note due December 31, 2002
(the "Note") of MediaBay,  Inc.  (the  "Company") in the  outstanding  principal
amount of $_________, which Note is tendered herewith, to convert $__________ of
the amount outstanding under the Note to __________________ shares of the common
stock of the Company (the  "Shares"),  all in  accordance  with the terms of the
Note. The undersigned  requests that a Certificate for such Shares be registered
in the name of  ______________,  whose  address is  ____________,  and that such
Certificate    be   delivered   to    ________________,    whose    address   is
_________________,  [and  that a  replacement  Note in the  principal  amount of
$___________,  representing  the  balance of the  principal  amount  outstanding
thereunder  after giving effect to this  conversion,  be issued in the amount of
$_________ and delivered to ___________, whose address is ____________].

Dated:                        Signature: _______________________________________

                              (Signature must conform in all respects to name of
                              holder as specified on the face of the Note.)

                              ______________________________________________

                              ______________________________________________
                                    (Insert Social Security or Other
                                    Identifying Number of Holder)

                                      -2-
<PAGE>

                                   Schedule A

                                List of Advances

                                      -3-
<PAGE>

                                  Schedule 6.3

1.   Debt incurred under the $1,984,250  principal amount of Convertible  Senior
     Subordinated  Promissory  Note due  December  31,  2004  issued  to  Norton
     Herrick.

2.   Debt incurred under the $4,200,000  principal amount of Convertible  Senior
     Subordinated   Promissory   Note  due  December  31,  2004  issued  to  ABC
     Investment, L.L.C.

3.   Debt incurred under the $3,000,000  principal amount of Convertible  Senior
     Subordinated Promissory Note due December 31, 2004 issued to Evan Herrick.

4.   Debt incurred under the $2,500,000  principal amount of Convertible  Senior
     Promissory Note due September 30, 2002 issued to Huntingdon Corporation.

                                      -4-

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