Document:

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                                                                     Exhibit 4.2

      THIS WARRANT (THIS "WARRANT") AND THE SHARES OF COMMON STOCK
      ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
      SECURITIES LAW. NEITHER THIS WARRANT NOR SUCH SHARES OF
      COMMON STOCK NOR ANY INTEREST OR PARTICIPATION HEREIN OR
      THEREIN MAY BE SOLD, ASSIGNED, MORTGAGED, PLEDGED,
      HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT IN
      COMPLIANCE WITH THE ACT AND APPLICABLE STATE SECURITIES LAWS.

                     PARADIGM ADVANCED TECHNOLOGIES, INC,

                                    WARRANT

Warrant No. W-_______                         Original Issue Date:        , 2000

     This Warrant is the Warrant referred to and issued pursuant to the
terms of that certain Letter Agreement dated as of the date hereof, by and
between the Company and                             (the "Letter Agreement").

     FOR VALUE RECEIVED,                 is entitled to purchase from
Paradigm Advanced Technologies, Inc. (the "Company"), during the period
specified in this Warrant,         fully paid and non-assessable shares (subject
to adjustment as hereinafter provided) of Common Stock (the "Warrant Stock"),
of the Company at the purchase price per share provided in Section 1.2 of this
Warrant (the "Warrant Exercise Price"), all subject to the terms and conditions
set forth in this Warrant.

Section 1.  Period for Exercise and Exercise Price.

       1.1  Period for Exercise. The right to purchase shares of Warrant
Stock represented by this Warrant shall be immediately exercisable, and shall
expire at 5:00 p.m., Chicago local time,          (the "Expiration Date").
From and after the Expiration Date this Warrant shall be null and void and of
no further force or effect whatsoever.

       1.2  Warrant Exercise Price The Warrant Exercise Price per share of
Warrant Stock shall be $       per share (subject to adjustment as hereinafter
provided).

<PAGE>

                                                                               2

Section 2. Exercise of Warrant.

2.1  Manner of Exercise. The holder hereof may exercise this Warrant, in whole
or in part, immediately, but not after the Expiration Date, during normal
business hours on any business day by surrendering this Warrant to the Company
at the principal Office of the Company, accompanied by a subscription in
substantially the form annexed hereto duly executed by such holder and by
payment of the Warrant Exercise Price for the number of shares of Warrant Stock
for which this Warrant is then exercisable, either (i) in immediately available
funds, (ii) by delivery of instrument evidencing indebtedness owing by the
Company to the holder in the appropriate amount, (iii) by authorizing the
Company to retain shares of Common Stock which would otherwise be issuable upon
exercise of this Warrant having a fair market value (defined as the last
reported closing price of the Common Stock on the date immediately preceding the
date of the subscription notice) on the date of delivery equal to the aggregate
Warrant Exercise Price, or (iv) in a combination of (i), (ii) or (iii) above.

     2.2 When Exercise Effective. Each exercise of this Warrant shall be deemed
to have been effected on the day on which all requirements of Section 2.1 shall
have been met with respect to such exercise. At such time the person in whose
name any certificate for shares of Warrant Stock shall be issuable upon such
exercise shall be deemed for all corporate purposes to have become the holder of
record of such shares, regardless of the actual delivery of certificates
evidencing such shares.

     2.3 Delivery of Stock Certificates. As soon as practicable after each
exercise of this Warrant, and in any event no later than 3 days after such
exercise, the Company at its expense will cause to be issued in the name of and
delivered to the holder hereof or as such holder may direct, a certificate or
certificates for the number of shares of Warrant Stock to which such holder
shall be entitled upon such exercise.

Section 3. Adjustment of Purchase Price and Number of Shares. The Warrant
Exercise Price and the kind of securities issuable upon exercise of the Warrant
shall be adjusted from time to time as follows:

     3.1 Subdivision or Combination of Shares, (Stock Splits). If the Company at
any time effects a subdivision or combination of the outstanding Common Stock
(through a stock split or otherwise), the Warrant Exercise Price shall be
decreased and the number of shares of Warrant Stock shall be increased, in the
case of a subdivision, or the Warrant Exercise Price shall be increased and the
number of shares of Warrant Stock shall be decreased, in the case of a
combination, in the same proportions as the Common Stock is subdivided or
combined, in each case effective automatically upon, and simultaneously with,
the effectiveness of the subdivision or combination which gives rise to the
adjustment.

     3.2 Stock Dividends. If the Company at any time pays a dividend, or makes
any other distribution, to holders of Common Stock payable in shares of Common
Stock,

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                                                                               3

or fixes a record date for the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in shares of Common Stock,
the Warrant Exercise Price shall be decreased by multiplying it by a fraction:

     (a) the numerator of which shall be the total number of sbares of Common
Stock outstanding immediately prior to such dividend or distribution, and

     (b) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such dividend or distribution (plus, if the
Company paid cash instead of fractional shares otherwise issuable in such
dividend or distribution, the number of additional shares which would have been
outstanding had the Company issued fractional shares instead of cash),

in each case effective automatically as of the date the Company shall take a
record of the holders of its Common Stock for the purpose of receiving such
dividend or distribution (or if no such record is taken, as of the effectiveness
of such dividend or distribution).

     3.3 Reclassification, Consolidation or Merger. If at any time, as a result
of:

     (a) a capital reorganization or reclassification (other than a subdivision,
combination or dividend provided for elsewhere in this Section 3), or

     (b) a merger or consolidation of the Company with another corporation
(whether or not the Company is the surviving corporation),

the Common Stock issuable upon exercise of the Warrants shall be changed into or
exchanged for the same or a different number of shares of any class or classes
of stock of the Company or any other corporation, or other securities
convertible into such shares, then, as a part of such reorganization,
reclassification, merger or consolidation, appropriate adjustments shall be made
in the terms of the Warrants (or of any securities into which the Warrants are
exercised or for which the Warrants are exchanged), so that:

     (y) the holders of Warrants or of such substitute securities shall
thereafter be entitled to receive, upon exercise of the Warrants or of such
substitute securities, the kind and amount of shares of stock, other securities,
money and property which such holders would have received at the time of such
capital reorganization, reclassification, merger, or consolidation, if such
holders had exercised their Warrants immediately prior to such capital
reorganization, reclassification, merger or consolidation, and

     (z) the Warrants or such substitute securities shall thereafter be adjusted
on terms as nearly equivalent as may be practicable to the adjustments
theretofore provided in this Section 3.3.

No consolidation or merger in which the Company is not the surviving corporation
shall be consummated unless the surviving corporation shall agree, in writing,
to the provisions
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                                                                               4

of this Section 3.3. The provisions of this Section 3.3 shall similarly apply to
successive capital reorganizations, reclassifications, mergers and
consolidations.

     3.4 Other Action Affecting Common Stock. If at any time the Company takes
any action affecting its Common Stock, other than an action described in any of
Sections 3.1 - 3.3 which, in the opinion of the Board of Directors of the
Company (the "Board"), would have an adverse effect upon the exercise rights of
the Warrants, the Warrant Exercise Price or the kind of securities issuable upon
exercise of the Warrants, or both, shall be adjusted in such manner and at such
time as the Board may in good faith determine to be equitable in the
circumstances; provided, however, that the purpose of this Section is to prevent
the Company from taking any action which has the effect of diluting the number
of shares of Warrant Stock issuable upon exercise of this Warrant.

     3.5 Notice of Adjustment Events. Whenever the Company contemplates the
occurrence of an event which would give rise to adjustments under this Section
3, the Company shall mail to each Warrant holder, at least 20 days prior to the
record date with respect to such event or, if no record date shall be
established, at least 20 days prior to such event, a notice specifying (i) the
nature of the contemplated event, and (ii) the date on which any such record is
to be taken for the purpose of such event, and (iii) the date on which such
event is expected to become effective, and (iv) the time, if any is to be fixed,
when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable in connection with such event.

     3.6 Notice of Adjustments. Whenever the Warrant Exercise Price or the kind
of securities issuable upon exercise of the Warrants, or both, shall be adjusted
pursuant to Section 3, the Company shall make a certificate signed by its
President or a Vice President and by its Chief Financial Officer, Secretary or
Assistant Secretary, setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Exercise Price and the
kind of securities issuable upon exercise of the Warrants after giving effect to
such adjustment, and shall cause copies of such certificate to be mailed (by
first class mail postage prepaid) to each Warrant holder promptly after each
adjustment.

     Section 4. Reservation of Stock, etc. The Company covenants and agrees that
it will at all times have authorized, reserve and keep available, solely for
issuance and delivery upon the exercise of this Warrant, the number of shares of
Warrant Stock from time to time issuable upon the exercise of this Warrant. The
Company further covenants and agrees that this Warrant is, and any Warrants
issued in substitution for or replacement of this Warrant and all Warrant Stock,
will upon issuance be duly authorized and validly issued and, in the case of
Warrant Stock, upon issuance will be fully paid and non-assessable and free from
all preemptive rights of any stockholder, and from all taxes, liens and charges
with respect to the issue thereof (other than transfer taxes) and, if the

<PAGE>

                                                                               5

Common Stock of the Company is then listed on any national securities exchanges
(as defined in the Exchange Act of 1934, as amended (the "Exchange Act")) or
quoted on NASDAQ, shall be, subject to the restrictions set forth in Section 5,
duly listed or quoted thereon, as the case may be. In the event that the number
of authorized but unissued shares of such Common Stock shall not be sufficient
to effect the exercise of this entire Warrant, then in addition to such other
remedies as shall be available to the holder of this Warrant into Warrant Stock,
the Company shall promptly take such corporate action as may be necessary to
increase its authorized but unissued shares of such Common Stock to such number
of shares as shall be sufficient for such purpose.

Section 5. Ownership, Transfer and Substitution of Warrants.

     5.1 Ownership of Warrants. The Company may treat the person in whose name
any Warrant is registered on the register kept at the principal office of the
Company as the owner and holder thereof for all purposes, notwithstanding any
notice to the contrary, but in all events recognizing any transfers made in
accordance with the terms of this Warrant.

     5.2 Transfer and Exchange of Warrants. Upon the surrender of any Warrant,
properly endorsed, for registration of transfer or for exchange at the principal
office of the Company, the Company at its expense will execute and deliver to
the holder thereof, upon the order of such holder, a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder may direct, for such
number of shares with respect to each such Warrant, the aggregate number of
shares in any event not to exceed the number of shares for which the Warrant so
surrendered had not been exercised.

     5.3 Restrictive Legend. Each certificate representing any shares of Common
Stock into which this Warrant may be converted shall be inscribed with the
following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS. NEITHER SUCH SECURITIES NOR ANY INTEREST OR PARTICIPATION
THEREIN MAY BE SOLD, ASSIGNED, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT
FILED UNDER THE ACT AND SUCH LAWS OR PURSUANT TO EXEMPTIONS FROM SUCH
REGISTRATION.

     5.4 Exemption from Registration. If an opinion of counsel provides that
registration is not required for the proposed exercise or transfer of this
Warrant or the proposed transfer of the Warrant Stock and that the proposed
exercise or transfer in the absence of registration would require the Company to
take any action including executing and filing forms or other documents with the
Securities and Exchange Commission (the "SEC") or any state securities agency,
or delivering to the Warrantholder any form or

<PAGE>

                                                                               6

document in order to establish the right of the Warrantholder to effectuate the
proposed exercise or transfer, the Company agrees promptly, at its expense, to
take any such action; and provided, further, that the Company will reimburse
the Warrantholder in full for any expenses (including but not limited to the
fees and disbursements of such counsel, but excluding brokers' commissions)
incurred by the Warrantholder or owner of Warrant Stock on his, her or its
behalf in connection with such exercise or transfer of the Warrant or transfer
of Warrant Stock.

Section 6. No Rights or Liabilities as Shareholder. Nothing contained in this
Warrant shall be construed as conferring upon the holder hereof any rights as a
shareholder of the Company or as imposing any liabilities on such holder to
purchase any securities or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.

Section 7. Rule 144 Sales. In the event that the Company (a) has or registers a
class of securities under Section 12 of the Exchange Act, or (b) has or
commences to file reports under Section 13 or 15(d) of the Exchange Act, then at
the request of any holder who proposes to sell securities in compliance with
Rule 144 of the SEC, the Company will (i) forthwith furnish to such holder a
written statement of compliance with the filing requirements of the SEC as set
forth in Rule 144, as such rules may be amended from time to time and (ii) make
available to the public and such holders such information as will enable the
holders to make sales pursuant to Rule 144.

Section 8. Miscellaneous.

     8.1 Amendment and Waiver. This Warrant may be amended with, and only with,
the written consent of the Company and the holder of this Warrant. Any waiver of
any term, covenant, agreement or condition contained in this Warrant shall not
be deemed a waiver of any other term, covenant, agreement or condition, and any
waiver of any default in any such term, covenant, agreement or condition shall
not be deemed a waiver of any later default thereof or of any default of any
other term, covenant, agreement or condition.

     8.2 Representations and Warranties to Survive Closing. All representations,
warranties and covenants contained herein shall survive the execution and
delivery of this Warrant and the issuance of any Warrant Stock upon the exercise
hereof.

     8.3 Severability. In the event that any court or any governmental authority
or agency declares all or any part of any Section of this Warrant to be unlawful
or invalid, such unlawfulness or invalidity shall not serve to invalidate any
other Section of this Warrant, and in the event that only a portion of any
Section is so declared to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate the balance of such Section.

<PAGE>
                                                                               7

     8.4 Binding Effect; No Third Party Beneficiaries. All provisions of this
Warrant shall be binding upon and inure to the benefit of the parties and their
respective heirs, legatees, executors, administrators, legal representatives,
successors, and permitted transferees and assigns. No person other than the
holder of this Warrant and the Company shall have any legal or equitable right,
remedy or claim under or in respect of, this Warrant.

     8.5 Notices. All communications in connection with this Warrant shall be in
writing and shall be deemed properly given if sent by facsimile, hand delivered
or sent by overnight courier with adequate evidence of delivery or sent by
registered or certified mail, return receipt requested at such Warrant holder's
address as shown on the books of the Company or its transfer agent, and if to
the Company, at:

          Paradigm Advanced Technologies, Inc.
          1 Concorde Gate, Suite 201
          Toronto, Ontario, Canada
          M3C 3N6
          Attention: David Kerzner
          Fax: 416-447-3974

or such other addresses or persons as the recipient shall have designated to the
sender by a written notice given in accordance with this Section. Any notice
called for hereunder shall be deemed given when received.

     8.6 Taxes, Costs and Expenses. The Company covenants and agrees that
it will pay when due and payable any and all federal, state and local taxes
(other than income taxes) and any other costs and expenses which may be payable
in respect of the preparation, issuance, delivery, exercise, surrender or
transfer of this Warrant pursuant to the terms of this Warrant or the issuance
of any shares of Warrant Stock as a result thereof. If any suit or action is
instituted or attorneys employed to enforce this Warrant or any part thereof,
the Company promises and agrees to pay all costs and expenses associated
therewith, including reasonable attorneys' fees and court costs.

     8.7 Governing Law. The validity, meaning and effect of this Warrant shall
be determined in accordance with the laws of the State of Delaware, without
regard to its conflicts of law principles.

     8.8 Loss of Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of indemnification in
form and substance acceptable to the Company in its reasonable discretion, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

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                                                                               8

     8.9 Entire Agreement. This Warrant and the related Letter Agreement of even
date herewith represent the entire agreement and understanding between the
parties concerning the subject matter hereof and supercede all prior and
contemporaneous agreements, understandings, representations and warranties with
respect thereto.

     8.10 Headings. The headings used herein are used for convenience
only and are not to be considered in construing or interpreting this Warrant.

                                   COMPANY:

                                   Paradigm Advanced Technologies, Inc.

                                   By:
                                      -------------------------------
                                   Its:
                                       ------------------------------

<PAGE>

                             WARRANT EXERCISE FORM
                             ---------------------

                                             Date:________________

________________________________

________________________________

________________________________

Ladies and Gentlemen:

The undersigned, being the registered holder of your Warrant number W-________
accompanying this letter, hereby irrevocably exercises such Warrant for _______
shares of Warrant Stock (as defined in said Warrant), and herewith makes payment
therefor in the amount of ($__________)(via "cash-less exercise" in accordance
with the Warrant), and requests that such shares of Warrant Stock be issued in
the name of, and delivered to (the undersigned) (_____________________ ), at the
address shown below the signature line hereof.

If said number of shares shall not be all the shares issuable upon exercise of
the attached Warrant, a new Warrant is to be issued in the name of the
undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.

________________________________
Printed Name of Registered Warrant Holder

________________________________
Signature of Registered Warrant Holder

________________________________

________________________________

________________________________
           Address<PAGE>
                                                                     Exhibit 4.3

THIS CONVERTIBLE SECURED PROMISSORY NOTE AND THE SHARES OF COMMON STOCK ISSUABLE
UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR
SUCH SHARES OF COMMON STOCK NOR ANY INTEREST OR PARTICIPATION HEREIN OF, THEREIN
MAY BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHER-
WISE TRANSFERRED EXCEPT IN, COMPLIANCE WITH THE ACT AND APPLICABLE STATE
SECURITIES LAWS, AND WITH THE TERMS AND CONDITIONS HEREOF.

                     PARADIGM ADVANCED TECHNOLOGIES, INC.

                          CONVERTIBLE PROMISSORY NOTE

$                                                                         , 1999

     Paradigm Advanced Technologies, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to                 (the
"Holder"), in legal tender of the United States of America, the principal sum
of                                   ($          ) on            ,         (the
"Maturity Date"), and to pay interest thereon at the rate of Twelve and one half
percent (12.5%) per annum. Interest shall be computed on the basis of a 365-day
year and the number of actual days elapsed.

     Section 1. Time and Place of Payment. (a) The entire unpaid principal
balance of this Note, together with any accrued and unpaid interest thereon,
shall be due and payable on the Maturity Date. Principal and interest on this
Note shall be paid by wire transfer of immediately available funds or by check
delivered to the Holder's registered address as it appears upon the books of the
Company. Upon the payment in full of this Note, the Holder shall immediately
surrender this Note to the Company at its executive offices.

     (b) Any payment made under this Note, whether upon acceleration, final
         maturity or otherwise, shall be applied first to the payment of any
         accrued and unpaid interest and the balance (if any) shall be applied
         on account of principal.

     (c) Whenever any payment to be made under this Note shall be due on a
         Saturday, Sunday or any day on which banks are required or authorized
         by law or regulation to close in New York City (any other day being a
         "Business Day"), such payment may be made on the next succeeding
         Business Day, and such extension of time shall in such case not be
         included in the computation of interest accrued.
<PAGE>

     (d) Notwithstanding any other provision of this Note, in the event that any
portion of the principal amount of this Note is converted into any shares of the
Company's Common Stock in accordance with the provisions of Section 3 below,
then no interest shall be payable on the portion so converted for the period
following the date of conversion.

     Section 2. Prepayments. The Company shall have the right to prepay this
Note, in whole or in part, at any time upon fifteen (15) days prior written
notice to the Holder.

     Section 3. Conversion.

     (a) Subject to the approval by the stockholders of the Company of an
amendment to the Company's Certificate of Incorporation increasing the
authorized number of shares of Common Stock to not less than 100,000,000 (the
"Recapitalization Date"), the Holder shall have the right, at its option, on or
prior to the Maturity Date to convert the principal amount of this Note,
together with all accrued interest thereon in accordance with the provisions of
and upon satisfaction of the conditions contained in this Note, into fully paid
and non-assessable shares of the Company's Common Stock at a conversion price of
$.05 per share (the "Conversion Shares").

     (b) The Holder's conversion right set forth in this Section may be
exercised at any time and from time to time but prior to payment in full of the
principal amount of and accrued interest on this Note.

     (c) The Holder may exercise the right to convert all or any portion of the
principal amount of this Note only by delivery of (i) this Note and (ii) a
properly completed conversion notice on a Business Day to the Company's
principal executive offices. Such conversion shall be deemed to have been made
immediately prior to the close of business on the Business Day of such delivery
of this Note and the conversion notice (the "Conversion Date"), and the Holder
shall be treated for all purposes as the record holder of the shares of Common
Stock into which this Note is converted as of such date.

     (d) As promptly as practicable after the conversion of this Note, the
Company at its expense shall issue and deliver to the Holder of this Note a
stock certificate or certificates representing the number of Conversion Shares
into which this Note has been converted.

     (e) Upon conversion of this Note and the delivery of the items set forth in
Section 3(d), the Company shall be forever released from all of its obligations
and liabilities under this Note.

     (f)  If, prior to the Conversion Date, the Company shall (i) pay a stock
          dividend or make a distribution to all holders of Common Stock in
          shares of its Common Stock, (ii) subdivide its outstanding shares of
          Common Stock, (iii) combine its outstanding shares of Common Stock
          into a smaller number of shares, or (iv) issue by reclassification of
          its shares of

                                      -2-
<PAGE>

          Common Stock any shares of capital stock of the Company, the number of
          Conversion Shares shall be proportionately increased or decreased, as
          the case may be.

     (g)  The Company has included the shares that will be issued upon
          conversion of the debenture, in our current registration statement and
          confirm that there will be no additional restrictions on these shares
          after they are registered by the SEC.

     (h)  The Company agrees that the holder shall retain the right to convert
          even if the Company indicates its willingness to repay the loan.

     Section 4. Reservation of Stock Issuable Upon Conversion. At all times
after the Recapitalization Date that this Note shall be convertible into shares
of Common Stock, the Company shall reserve and keep available out of its
authorized but unissued shares of Common Stock solely for, the purpose of
effecting the conversion of this Note such number of its shares of such Common
Stock as shall from time to time be sufficient to effect the conversion of this
Note in full. In the event that the number of authorized but unissued shares of
such Common Stock shall not be sufficient to effect the conversion of the entire
outstanding principal amount of this Note, then in addition to such other
remedies as shall be available to the Holder, the Company shall promptly take
such corporate action as may be necessary to increase its authorized but
unissued shares of such Common stock to such number of shares as shall be
sufficient for such purpose.

     Section 5. Transfer Restrictions.

     (a)  This Note may not be transferred except upon satisfaction of all of
the requirements of the Act and applicable state securities laws. Without
limiting the generality of the foregoing, the Holder agrees that (i) this Note
and the Conversion Shares have not been registered under the Act and may not be
sold or transferred without registration under the Act or unless an exemption
from such registration is available; (ii) the Holder has acquired this Note and
will acquire the Conversion Shares for its own account for investment purposes
only and not with a view toward resale or distribution; (iii) stop transfer
instructions may be placed with the Company's transfer agent or registrar (which
may be the Company) so as to restrict the transfer of this Note and any
Conversion Shares in accordance with the provisions of the Note; and (iv) each
certificate representing any shares of Common Stock into which this Note may be
converted shall be inscribed with the following legend:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY
     STATE SECURITIES LAWS. NEITHER SUCH SECURITIES NOR ANY INTEREST OR

                                      -3-
<PAGE>

     PARTICIPATION THEREIN MAY BE SOLD, ASSIGNED, OFFERED FOR SALE, PLEDGED,
     HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A
     REGISTRATION STATEMENT FILED UNDER THE ACT AND SUCH LAWS OR PURSUANT TO
     EXEMPTIONS FROM SUCH REGISTRATION.

     Section 6. Loss of Note. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and (in the case of loss, theft or destruction), of indemnification in form and
substance acceptable to the Company in its reasonable discretion, and upon
surrender and cancellation of this Note, if mutilated, the Company shall execute
and deliver a new Note of like tenor and date.

     Section 7. Entire Agreement. This Note and the related subscription
agreement of even date represent the entire agreement and understanding between
the parties concerning the subject matter hereof and supersede all prior and
contemporaneous agreements, understandings, representations and warranties with
respect thereto.

     Section 8. Binding Effect; No Third Party Beneficiaries. All provisions of
this Note shall be binding upon and inure to the benefit of the parties and
their respective heirs, legatees, executors, administrators, legal
representatives, successors, and permitted transferees and assigns. No person
other than the Holder and the Company shall have any legal or equitable right,
remedy or claim under, or in respect of, this Note.

     Section 9. Amendments and Waivers. This Note may be amended, changed or
modified only by a written instrument executed by the Company and the Holder of
this Note. Any waiver of any breach of any of the terms of this Note, and any
consent required or permitted to be given hereunder, shall be effective if in
writing and executed by or on behalf of the Holder of this Note. No waiver of
any breach nor consent to any transaction shall be deemed a waiver of or consent
to any other or subsequent breach or transaction.

     Section 10. Waiver of Presentment, etc. The Company hereby waives
presentment for payment, demand, notice of non-payment, protest and notice of
protest, and hereby agrees to all extensions and renewals of this Note, without
notice.

     Section 11. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements and
instruments made and wholly performed and paid in that state, without regard to
its conflicts of law principles.

                                      -4-
<PAGE>

     Section 12. Headings. The headings used in this Note are used for
convenience only and are not to be considered in construing or interpreting this
Note.

     IN WITNESS WHEREOF, the Company has caused this Note to be signed and
attested to by its duly authorized officers.

                         PARADIGM ADVANCED TECHNOLOGIES, INC.

                         By:
                             ---------------------------

                         Name:
                             ---------------------------

                         Title:
                               -------------------------

                                      -5-
<PAGE>

                                   EXHIBIT A

                               CONVERSION NOTICE

                  (To be signed only upon conversion of this Note)

TO: PARADIGM ADVANCED TECHNOLOGIES, INC.

     The undersigned, the registered holder of the 12.5% Convertible Promissory
Note (the "Note") of Paradigm Advanced Technologies, Inc. (the "Company"),
hereby surrenders the Note for conversion into shares of Common Stock of the
Company ("Common Stock") to the extent of $           unpaid principal amount of
the Note, all in accordance with the provisions of such Note. The undersigned
requests (i) that a certificate representing shares of Common Stock, bearing the
appropriate legends, be issued to the undersigned, and (ii) if the unpaid
principal amount so converted is less than the entire unpaid principal amount of
the Note, that a new substitute note representing the portion of said unpaid
principal amount that is not so converted be issued in accordance with the
provisions of the Note. The undersigned further requests payment of all accrued
and unpaid interest under the Note on said principal amount if the date of the
effectiveness of the conversion shall be an Interest Payment Date, as defined in
the Note.

Dated:
       ------------------  -------------------------------------
                           (Signature and name of the registered holder)

                                      -6-

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