Document:

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                                                                  EXHIBIT 10.19

                           ILINC COMMUNICATIONS, INC.

                            (A DELAWARE CORPORATION)

                             NOTE PURCHASE AGREEMENT

This note purchase agreement (this "Agreement" or "Purchase Agreement") is made
and entered into on this 12th day of February, 2004, by and between iLinc
Communications, Inc. (formerly known as EDT Learning, Inc.), a Delaware
corporation having its principal place of business at 2999 North 44th Street,
Suite 650, Phoenix, Arizona ("the Company"), Katsinam Partners, LP, ("Katsinam")
an Arizona limited partnership whose address is 7377 East Doubletree Ranch Road,
Suite 290, Scottsdale, AZ 85258, Anthony Silverman, as Trustee of the Anthony
Silverman Trust, dated January 5, 2004 ("Silverman"), whose address is 7305 E.
Del Acero Drive, Scottsdale, AZ 85258, Stanley L. Schloz ("Schloz") as Trustee
of the Schloz Family 1998 Trust, whose address is 10050 East Sonoran Vista
Circle, Scottsdale, AZ 85255, Mountainview Canadian Opportunistic Growth Fund,
LP, a limited partnership organized under the laws of the Province of Ontario,
Canada ("Mountainview"), whose address is 69 Lord Seaton Road, Toronto, Ontario
M2P 1K6 Canada, Agger Fund LP, a Delaware limited partnership, whose address is
7878 East Belleview, Suite 800, Englewood, Colorado 80111 and Agger
Institutional Fund LP, a Delaware limited partnership, whose address is 7878
East Belleview, Suite 800, Englewood, Colorado 80111 (collectively referred to
as "Agger"). Katsinam, Silverman, Schloz, Mountainview, and Agger are sometimes
each separately called herein a "Lender" and collectively the "Lenders".

WHEREAS, the Company wishes to raise capital for general working capital
purposes from certain accredited investors pursuant to exemptions provided by
the federal securities laws by issuance of convertible promissory notes in the
aggregate principal balance of $500,000, pursuant to the terms and conditions of
this Agreement; and

WHEREAS, each undersigned Lender individually desires to purchase the
convertible promissory note (as defined herein below) from the Company in the
amount set forth herein opposite such Lender's name on the terms and conditions
of this Agreement; and

NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

1. TRANSACTION

         1.1 FORM OF TRANSACTION. The Company, by due action of its Board of
Directors, has authorized the offer and sale to the Lenders, under this
Agreement, of a series of Convertible Notes (collectively the "Notes",
separately a ("Note") with the aggregate principal amount of all Notes totaling
$500,000, and with each Note convertible into shares of common stock of the
Company, $0.001 par value (the "Common Stock"). The form of the Note is attached
as Exhibit "A".

         1.2 THE LENDERS. The obligations of the Lenders to purchase Notes and
to make the representations, warranties and agreements contained in this
Agreement are several and not joint.

2. PURCHASE AND SALE

         2.1 NOTES. Subject to all of the terms and conditions of this
Agreement, the Company will issue and sell Notes to the Lenders as follows;
provided that all such terms and conditions are satisfied:

                 ---------------------------- -----------------
                            NAME                    AMOUNT
                 ---------------------------- -----------------
                        Katsinam                      $140,000
                 ---------------------------- -----------------
                       Silverman                      $135,000
                 ---------------------------- -----------------
                         Schloz                        $25,000
                 ---------------------------- -----------------

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                 ---------------------------- -----------------
                      Mountainview                    $100,000
                 ---------------------------- -----------------
                         Agger                        $100,000
                 ---------------------------- -----------------
                           Total Investment:          $500,000
                 ---------------------------- -----------------

Upon Silverman's written request, the Company will issue his Note (and the
Common Stock issuable upon the due conversion thereof, to the Custodian of an
IRA Account for his benefit.

         2.2 CLOSING. The purchase by and sale to the Lenders of the Notes (the
"Closing") shall take place on February 12, 2004 at the offices of the Company
(such date being hereinafter called the "Closing Date"). At the Closing, the
Company shall deliver to the Lenders or their representative their respective
Notes and other items required to be delivered to the Lenders pursuant to this
Purchase Agreement. At the Closing, the Lenders shall tender to the Company
valid and sufficient funds represented from each respective Lender the principal
balance of the Lender's Note, and such other documents or items required to be
delivered to the Company pursuant to this Purchase Agreement.

3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY

As an inducement to the lenders to enter into this Agreement and to purchase and
pay for the respective Notes, the Company represents, warrants to the Lenders
and agrees that as of the Closing Date:

         3.1 DISCLOSURE DOCUMENTS. The Company has heretofore delivered to the
Lenders a copy of the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2003, as filed with the Securities and Exchange Commission
("SEC"), every subsequent Report filed with the SEC pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), a certain draft Report on
Form 10-Q for the period ending December 31, 2003, and each press release or
other form of public announcements including without limitation all shareholder
communications (such Reports, draft and the exhibits annexed thereto, press
releases, public announcements and shareholder communications are called
collectively herein the "Disclosure Documents"). The Company has carefully
prepared the Disclosure Documents or has caused them to be so prepared. The
Disclosure Documents as of their respective dates are, true and correct and
shall not omit to state any material fact necessary to make the statements made
in the Disclosure Documents not misleading on and as of such date required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made.

         3.2 VALID EXISTENCE. The Company was duly organized and is validly
existing as a corporation under the laws of Delaware and is duly qualified to do
business as a foreign corporation in Arizona and in each other jurisdiction
where such qualification is material to its business as presently or as proposed
to be conducted.

         3.3 AUTHORITY FOR AGREEMENT. This Agreement has been duly authorized by
all necessary corporate action of the Company and, when executed and delivered
by the Company, will be a legal, valid and binding obligation of the Company,
enforceable in accordance with its terms except to the extent that the enforce
ability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally.

         3.4 VALIDITY OF NOTES. The Notes, when issued and paid for at the
Closing, will be duly authorized, validly existing obligations of the Company,
enforceable in accordance with their terms.

         3.5 VALIDITY OF COMMON STOCK. The shares of Common Stock issuable upon
the due conversion of the Notes will, when issued in accordance with the terms
of such Notes, constitute duly authorized, legally and validly issued shares of
Common Stock, fully paid and non-assessable.

         3.6 PERMITS AND CONSENTS. No consent, approval, qualification, order or
authorization of, or filing with, any local, state, or federal governmental
authority is required on the part of the Company in connection with the
Company's execution, delivery or performance of this Agreement, the offer, sale
or issuance of the Notes or the issuance of Common Stock upon conversion of the
Notes, except any notices of sale required to be filed with the SEC under

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Regulation D of the Securities Act of 1933 or such post-closing filings as may
be required under applicable state securities laws, which will be timely filed
within the applicable periods therefor.

         3.7 NO CONFLICTING RIGHTS. The Company is not presently under any
obligation and has not granted any rights to register any of its presently
outstanding securities under the Securities Act of 1933, except those granted to
the holders of the Company's securities listed on Schedule 3.7 attached hereto.
The holders of the outstanding Common Stock and Preferred Stock of the Company
are not entitled to pre-emptive or other rights to subscribe for the Notes. This
transaction does not give rise to any rights relating to the registration of any
shares of Common Stock, except as provided in Section 6, below.

         3.8 COMPLIANCE WITH AGREEMENTS. The Company is not in violation or
default in any material respect of any material mortgage, indenture, agreement,
instrument or contract to which it is a party or by which it is bound. To the
best of its knowledge, the Company is not in violation or default, of any state
or federal judgment, order, writ, decree, statute, rule, regulation or
restriction applicable to the Company. The execution, delivery and performance
by the Company of this Agreement and the Notes and the consummation of the
transactions contemplated hereby, will not result in any violation or cause be
in material conflict with or constitute, with or without the passage of time or
giving of notice, either a material default of any material mortgage, indenture,
agreement or contract to which the Company is a party or the creation of any
material lien, charge or encumbrance upon any assets of the Company or the
suspension, revocation, impairment, forfeiture or nonrenewable of any material
permit, license, authorization or approval applicable to the Company, its
business or operations or any of its assets.

         3.9 NO MATERIAL ADVERSE CHANGE. There has not been, since the date of
the Company's most recent report to the SEC under the Exchange Act, any event or
condition of any type that has materially adversely affected the business,
properties, prospects or financial condition of the Company (a "Material Adverse
Change").

         3.10 QUISIC ASSETS. The use by the Company of the assets acquired by
the Company from Quisic Corporation, a California corporation ("Quisic"),
including without limitation those described in a certain Assets Purchase
Agreement dated the 14th day of June, 2002 between the Company and Quisic are
not material to the business and prospects of the Company and the loss of such
assets by rescission of the transaction between Quisic and the Company would not
be materially adverse to the Company, its business or prospects, provided
however that such loss could result in a violation or default of existing
license agreements related to those assets.

         3.11 LITIGATION COUNSEL. The Company is being represented by the law
firm of Seyfarth Shaw, of Los Angeles, California and by no other counsel in the
cause entitled WEATHERSBY, ET AL. VS. QUISIC CORPORATION, et al., Case No.
BC284645 in the Superior Court of the State of California, County of Los Angeles
(the "Weathersby Case"), and by the law firm of Kornstein Veisz Wexler &
Pollard, LLP, of New York, NY and by no other counsel in the Supreme Court of
the State of New York, County of New York in the cause entitled KEPNER-TREGOE,
INC. VS. QUISIC CORPORATION, ET. AL. , Index No. 601865/03 in the Supreme Court
of the State of New York, County of New York (the "Kepner Case").

4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE LENDERS

Each Lender, for himself or itself and not for any other Lender, hereby
represents and warrants to and agrees with the Company as follows (provided that
such representations, warranties, and agreements do not diminish or obviate the
representations, warranties, and agreements of the Company set forth in this
Agreement):

         4.1 AUTHORITY. Such Lender has full power and authority to enter into
this Agreement which, when executed and delivered, will constitute his or its
valid and legally binding obligation.

Note Purchase Agreement                                             Page 3 of 25
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         4.2 PURCHASE FOR OWN ACCOUNT. The Notes and the Common Stock issuable
upon the due conversion of the Notes ("the Securities") will be acquired for
investment for the respective account of each Lender and not with a view to the
resale or distribution of any part thereof, and such Lender has no present
intention of selling, granting any participation in or otherwise distributing
the same; and has no contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participating to any third person with respect
to any of the Securities. Nothing in this paragraph 4.2, however, limits the
right of such Lender to have the Securities registered as provided in Section 6
of this Agreement. Each respective Lender has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that the Lender is capable of evaluating the
merits and risks of its own investment in the securities of the Company, and has
the capacity to protect its own interests. The undersigned Lender has carefully
reviewed the Company's public filings, the Disclosure Documents together with
all other documents and information furnished by the Company in connection
herewith. Each Lender must bear the economic risk of its investment. Each Lender
understands that while the Company intends to seek registration of the Common
Stock underlying the Note, there can be no assurance that until such
registration any exemption from registration under the Securities Acts will be
available and further that, even if available, such exemption may not allow
Lender to transfer all or any portion of the Common Stock received upon
conversion of the Note. Lender has not engaged any broker or finder in
connection with this Agreement or the transactions contemplated hereby.

         4.3 ACCREDITED INVESTORS. Katsinam, Silverman and Schloz are each
familiar with the definition of "Accredited Investor" under the Securities Act
of 1933, as amended (the "Securities Act") and the regulations promulgated
thereunder, specifically Rule 501 of Regulation D and do hereby represent to the
Company that they are Accredited Investors. The term "net worth" as used in this
paragraph means the excess of the Lender's assets over his liabilities and, if
included among his assets, his principal residence is valued at fair market
value. Silverman and Schloz each represent and warrant that his net worth, or
joint net worth together with his spouse, exceeds $1,000,000. Katsinam
represents and warrants that each of its members is an Accredited Investor.
Schloz separately represents and warrants that the Schloz Family 1998 Trust is a
revocable "grantor trust" for the benefit of himself and his spouse.

         4.4 MOUNTAINVIEW. Mountainview separately represents and warrants that
(a) it is a limited partnership, duly organized and existing under the laws of
the Province of Ontario, Canada, (b) that it is familiar with the definition of
"Accredited Investor" under the Securities Act, (c) that it is experienced in
making investments where qualification as an Accredited Investor is required,
(d) that each of its members is an Accredited Investor as defined under the
Securities Act and, (e) upon consultation with qualified legal counsel in
Ontario, (i) that it is satisfied as to the full observance of the laws of
Ontario and Canada with respect to the offer and sale of the Notes and the
Common Stock issuable upon the due conversion thereof and (ii) that its
subscription and payment therefor will not violate any applicable securities or
other laws of Ontario or Canada.

         4.5 AGGER. Each Agger LP separately represents and warrants that (a) it
is a limited liability company, duly organized and existing under the laws of
the State of Delaware, (b) that it is familiar with the definition of
"Accredited Investor" under the Securities Act, (c) that it is experienced in
making investments where qualification as an Accredited Investor is required,
(d) that each of its members is an Accredited Investor as defined under the
Securities Act and, (e) upon consultation with qualified legal counsel in
Delaware, (i) that it is satisfied as to the full observance of the laws of
Delaware and the United States with respect to the offer and sale of the Notes
and the Common Stock issuable upon the due conversion thereof and (ii) that its
subscription and payment therefor will not violate any applicable securities or
other laws of Delaware or the United States.

         4.6 RESTRICTED SECURITIES. The undersigned Lenders acknowledges that
the securities that will be received will not have been registered under the
Securities Act of 1933 (the "1933 Act") or qualified under applicable state
securities laws, and that the transferability thereof is restricted by the
registration provisions of the 1933 Act as well as such state laws. Based upon
the representations if each respective Lender concerning his Accredited Investor

Note Purchase Agreement                                             Page 4 of 25
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status, and agreements being made by the undersigned herein, this transaction is
being done pursuant to an exemption from such registration provided by Section
4(2) of the 1933 Act and Regulation D promulgated thereunder and applicable
state securities law qualification exemptions. Each Lender acknowledges that he
or it has been granted a reasonable time prior to the date hereof during which
such Lender has had the opportunity to obtain such additional information as
Lender deemed necessary to permit Lender to make an informed decision with
respect to the investment contemplated. Each Lender represents and warrants that
such Lender (i) has reviewed such other documents and obtained such other
information from the Company as Lender deems necessary to make an informed
investment decision; (ii) has had access to all relevant documents, instruments,
books, and other records of or pertaining to the Company and has had the
opportunity to ask questions of and receive answers from management and of the
Company; and (iii) is fully aware of the current business prospects, financial
condition, and operating history relating to the Company. Other than the
representations and warranties provided in this Agreement, Lender warrants that
no representations, statements or inducements were made and that Lender is not
relying upon any representations other than those contained in the Disclosure
Document, this Agreement or the attachments hereto. The Lenders understand that
none of the Securities may be sold, transferred, or otherwise disposed of
without registration under the Securities Act of 1933 or an exemption therefrom
and that in the absence of an effective registration statement covering the
Securities or an available exemption from registration under the Securities Act,
the Securities must be held indefinitely.

         4.7 LEGENDS. To the extent applicable, the Note and any certificate
evidencing any of the common stock issuable upon the due conversion thereof will
be endorsed with legends substantially in the following form:

                  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF 1993, AS AMENDED, AND MAY NOT BE
                  SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS
                  AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
                  RECEIVED AN OPINION OF COUNSEL, OR OTHER EVIDENCE SATISFACTORY
                  TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
                  REQUIRED.

         4.8 No Short Sales. Each Lender agrees that until the expiration of two
years from the Closing Date and while the Lender holds shares of the Company's
Common Stock from conversion of the Note, such Lender will not sell, transfer or
otherwise dispose of its Common Stock through a put or other short sale
arrangement.

5. CONDITIONS TO THE OBLIGATIONS OF THE LENDERS

The respective obligations of the Lenders to purchase Notes under this Agreement
are subject to the fulfillment on or before the Closing of each of the following
conditions:

         5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 3 shall be true and correct as of the
Closing Date.

         5.2 NO DETERIORATION. Nothing shall have occurred since the date of the
Disclosure Documents that has or may reasonably be expected to affect materially
adversely the Company, its assets or its business

         5.3 [This Section Deleted and Reserved.]

         5.4 OFFICER CERTIFICATES. The President and the Chief Financial Officer
of the Company shall have delivered at the Closing a certificate, substantially
in the form shown by Exhibit "B" attached hereto, to the effect that the Company
has complied with all agreements, obligations and conditions required of it
pursuant to this Agreement.

Note Purchase Agreement                                             Page 5 of 25
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         5.5 OPINION OF COUNSEL. Lenders shall have received from Jackson &
Walker, counsel for the Company, a written opinion, dated the Closing Date, in
form and substance satisfactory to the Lenders and their counsel, an opinion as
to the execution and delivery of this Agreement and the other documents and
agreements to be executed pursuant hereto, the good standing and authority of
the Company, the enforceability of this Agreement and the other agreements and
documents to be executed in connection herewith, and the due authorization as to
the issuance of the Notes.

         5.6 SATISFACTION WITH INQUIRIES. The Lenders shall be satisfied with
the results of their inquiries into the Company and its business and affairs,
including without limitation, the status of all executive employment agreements
to which the Company is a party and the status, as outstanding or terminated, of
all rights, options and warrants for the purchase of any of the Company's
securities that were in the past awarded or purported to be awarded to any
executive employee of the Company.

         5.7 REPRESENTATION LETTERS. The Lenders shall have received letters
addressed to them and in form and substance acceptable to them, from Kornstein,
Veisz, Wexler, & Pollard, LLP, ("New York Counsel") and from Seyfarth Shaw
("California Counsel"), litigation legal counsel to the Company, containing the
following: (a) details relating to all matters of pending or threatened
litigation, claims or assessments that such firm is handling on behalf of the
Company, including (i) a description of the nature of each matter, (ii) the
progress of each matter to date, (iii) how the Company has responded or intends
to respond in terms of pleadings or other public court filings and (iv) an
evaluation of the likelihood of an unfavorable outcome and an estimate of the
amount or range of potential loss; (b) the knowledge, if any of such firm of
other asserted or unasserted possible claims that such firm believes are
probable of assertion and should be disclosed in accordance with Statement of
Financial Accounting Standards No. 5 ("FASB 5"); (c) confirmation that if such
firm has formed a professional conclusion that the Company should disclose or
consider disclosure of such possible claims, it will, as a matter of
professional responsibility to the Company and its shareholders, so advise the
Company and will consult with the Company concerning the question of such
disclosure and the applicable requirements of Statement of FASB 5; (d) a
statement of the nature of and reasons for any limitation on the response of
such firm. On or about May 29, 2003, California Counsel wrote a letter to the
Company's auditors discussing the facts and circumstances surrounding the
Weathersby Case in the form required by this Section 5.7. Lenders have had
direct communications with California Counsel concerning the Weathersby Case,
and thereafter have requested from California Counsel that they directly receive
a like letter concerning specifically the Weathersby Case in accordance with
this Section 5.7 (a "Weathersby Representation Letter"). However, California
Counsel is unable to tender that Weathersby Representation Letter before
Closing, but intends to tender the Weathersby Representation Letter as soon as
practicable after the Closing Date. As an inducement to Closing and to assure
compliance with this Section 5.7, the Company and Lenders agree that: (x) if the
Weathersby Representation Letter is not tendered before the expiration of ten
(10) business days of the Closing Date, or (y) if the Weathersby Representation
Letter is tendered and within it states facts and circumstances that are
materially different than those represented by California Counsel concerning the
Weathersby Case, then (after notice by Lenders of breach of the foregoing and
failure to cure such breach within five (5) business days of the receipt of such
notice), and only in that event and unless already converted, Lenders shall be
repaid out of the Peacock Offering Proceeds, but if the Peacock Offering is not
consummated, then the Maturity Date of the Notes shall be April 15, 2005.

6. REGISTRATION RIGHTS The Company covenants and agrees as follows:

         6.1 DEFINITIONS. For purposes of this Section 6:

                  (a) The term "Holder" means any person owning or having the
right to acquire Registrable Securities pursuant to the Note or upon the
conversion thereof.

                  (b) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration

Note Purchase Agreement                                             Page 6 of 25
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statement or similar document in compliance with the Securities Act, and such
registration statement or document becoming effective.

                  (c) The term "Registrable Securities" means the (i) Common
Stock issuable or issued upon the conversion of any Note and (ii) any Common
Stock issued (or issuable upon the conversion or exercise of any warrant, right,
or other security which is issued) as a dividend or other distribution with
respect to, or in exchange for or in replacement of shares referenced in (i) and
(ii) above, but excluding in all cases, however, any Registrable Securities sold
by a person in a transaction in which his rights under this Section 6 are not
assigned.

                  (d) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.

                  (e) The term "SEC" means the United States Securities and
Exchange Commission.

All other capitalized terms used in this Section, which are not defined herein,
shall have the meaning otherwise given in this Agreement.

         6.2 REQUEST FOR REGISTRATION.

         (a) If the Company shall receive at any time after the Closing Date, a
written request from the Holders of forty-nine percent (49%) or greater of the
Registrable Securities then outstanding that the Company file a registration
statement under the Securities Act covering the registration of any part of the
Registrable Securities then outstanding, then the Company shall:

                  (i) within ten (10) calendar days of the receipt thereof, give
written notice of such request to all Holders; and

                  (ii) use its best efforts to effect as soon as practicable,
and in any event within sixty (60) calendar days of the receipt of such request,
the filing of a registration statement under the Securities Act covering all
Registrable Securities which the Holders request to be registered, subject to
the limitations of paragraph 6.2(b), within two hundred ten (210) business days
of the mailing of such notice by the Company, provided, however, that the
Holders may not utilize this demand right more than once in any twelve-month
period after the Closing Date.

         (b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to paragraph 6.2(a) and the Company
shall include such information in the written notice referred to in paragraph
6.2(a)(i). The underwriter will be selected by a majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company. In such
event, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in paragraph 6.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting.

         (c) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this paragraph 6.2, a
certificate signed by the Chief Executive Officer of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than sixty (60) calendar

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days after receipt of the request of the Initiating Holders; provided, however,
that the Company may not utilize this right more than once in any twelve-month
period.

         (d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this paragraph 6.2:

                  (i) After the Company has effected one registration pursuant
to this paragraph 6.2 and such registration has been declared or ordered
effective; or

                  (ii) After the Closing Date, if the Company has filed and had
declared effective a registration statement with respect to the sale of all of
the Registrable Securities and has kept such registration statement effective
until the expiration of two hundred ten (210) calendar days after the effective
date of such registration statement. Notwithstanding the foregoing, the above
period for maintenance of effectiveness of the 210-day period set forth in this
paragraph 6.2(d)(ii) shall be extended for a period of time equal to the period
a Holder refrains from selling any securities included in such registration at
the request of an underwriter of the Common Stock.

         6.3 COMPANY ("PIGGYBACK") REGISTRATION. If at any time commencing on
the Closing Date (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its stock or other securities under
the Securities Act in connection with the public offering of such securities
solely for cash (other than a registration of securities to be offered by
employees pursuant on employee benefit plan on Form S-8, or a registration in
connection with an exchange offer or any acquisition or a registration on any
form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Company shall, each such time, give each Holder
written notice of such proposed registration at least thirty (30) days prior to
filing the registration statement respecting such proposed registration. Upon
the written request of any Holder given within twenty (20) days after mailing of
such notice by the Company in accordance with this Agreement, the Company shall
cause to be registered under the Securities Act all of the Registrable
Securities that each such Holder has requested to be registered.

         6.4 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 6
to effect the registration of any Registrable Securities, the Company shall use
its best efforts to, as expeditiously as reasonably possible:

         (a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, keep such registration
statement current and effective for a period of up to the earlier of two hundred
seventy (270) calendar days or until the distribution contemplated in the
Registration Statement has been completed; provided, however, that such period
shall be extended for a period of time equal to the period a Holder refrains
from selling any securities included in such registration at the request of an
underwriter of the Common Stock.

         (b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.

         (c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.

         (d) Register and qualify the securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions as
shall be reasonably requested by the Holders; provided that in no event shall
the Company be required to qualify to do business in any state or to take any
action which would subject it to general or unlimited service of process in any
state where it is not now so subject.

Note Purchase Agreement                                             Page 8 of 25
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         (e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement with terms generally
satisfactory to the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

         (f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

         (g) Cause all such Registrable Securities registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued by
the Company are then listed.

         (h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.

         (i) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 6, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 6, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (I) an opinion, dated on such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.

         6.5 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 6, that
the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and on the intended method
of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.

         6.6 EXPENSES OF REGISTRATION. All expenses incurred in connection with
any registration, filing or qualification pursuant to this Section 6, including
without limitation, all registration, filing and qualification fees, printers'
and accounting fees, and fees and disbursements of counsel for the Company, but
excluding underwriter's commissions and fees and any fees of others employed by
a selling Holder, shall be borne by the Company.

         6.7 UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of securities being issued by the Company, the Company
shall not be required under paragraph 6.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it, and then
only in such quantity, if any, as will not, in the opinion of the underwriters,
jeopardize or in any way reduce the success of the offering by the Company. If
the total amount of securities, including Registrable Securities, requested by
shareholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling shareholders
according to the total amount of securities entitled to be included therein
owned by each selling Shareholder or in such other proportions as shall mutually
be agreed to by such selling shareholders) but in no event shall the amount of
securities of the selling Holders included in the offering be reduced below
twenty percent (20%) of the total amount of Registrable Securities included in

Note Purchase Agreement                                             Page 9 of 25
<PAGE>

such offering. For purposes of the preceding parenthetical concerning
apportionment, for any selling shareholder which is a holder of Registrable
Securities and which is a partnership or corporation, the partners, retired
partners and shareholders of such holder, or the estates and family members of
any such partners and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling shareholder", and
any pro rata reduction with respect to such "selling shareholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling shareholder", as defined in
this sentence.

         6.8 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 6:

         (a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the officers and directors of each Holder, and each
person, if any, who controls such Holder (within the meaning of the Securities
Act or the Exchange Act) against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Securities Act,
the Exchange Act or any state securities law or regulation, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; and the Company will reimburse
each such Holder, officer or director, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in a connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this paragraph
6.8(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person or his or their representative or agent.

         (b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors and officers, any
underwriter (as defined in the Securities Act) for the Company, each person, if
any, who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, and any other holder selling securities in
such registration statement or any of its directors or officers or any person
who controls such Holder, against any losses, claims, damages, or liabilities
(or actions in respect thereto) which arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder or his representative or agent expressly for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or any such director,
officer, any person who controls the Company, any underwriter or controlling
person of any such underwriter, any other such Holder, officer, director, or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this paragraph 6.8(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld), and provided further that the obligations of each
selling Holder hereunder shall be limited to an amount equal to the proceeds of
each such selling Holder of the shares sold by such selling Holder pursuant to
such registration.

Note Purchase Agreement                                            Page 10 of 25
<PAGE>

         (c) Promptly after receipt by an indemnified party under this paragraph
6.8 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this paragraph 6.8, notify the
indemnifying party in writing of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to notify an
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability that it may
have to any indemnified party otherwise than under this paragraph 6.8.

         (d) If the indemnification provided for in this paragraph 6.8 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party.

         (e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.

         (f) The obligations of the Company and Holders under this Section shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Section 6, or otherwise.

         6.9 REPORTS UNDER THE EXCHANGE ACT. With a view to making available to
the Holders the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration or pursuant to
a registration form which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC,
the Company agrees to for up to two (2) years:

         Furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon reasonable request (i) a written statement by the
Company that it has complied with the reporting requirements of the Exchange Act
(at any time after it has become subject to such reporting requirements), (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of any rule or regulation
of the SEC permitting the selling of any such securities without registration or
pursuant to such form.

The utilization of Rule 144 by any Holder to sell any securities of the Company,
including without limitation any Registrable Securities, shall not affect the
Company's obligations to register any Registrable Securities pursuant to this
Agreement.

Note Purchase Agreement                                            Page 11 of 25
<PAGE>

         6.10 DELAY OF REGISTRATION. No holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.

         6.11 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 6 may be assigned
(but only with all related obligations) by a Holder to a transferee or assignee
of such securities who, after such assignment or transfer, holds at least ten
percent (10%) of the Registrable Securities (subject to appropriate adjustment
for stock splits, stock dividends, combinations and other recapitalizations),
provided: (a) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (b) such transferee or assignee agrees in writing to be bound by
and subject to the terms and conditions of this Agreement, including without
limitation, the provisions of paragraph 6.13 below; and (c) such assignment
shall be effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act. For the purposes of determining the number of shares of
Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants and
siblings of such partners or spouses who acquire Registrable Securities by gift,
will or intestate succession) shall be aggregated together and with the
partnership; provided that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 6.

         6.12 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding Registrable Securities, enter
into any agreement with, grant registration rights to, or register securities on
behalf of, any holder of any debentures, notes or other evidence of indebtedness
issued by the Company to investors in a certain private offering in which
Peacock, Hislop, Staley & Given, Inc. ("Peacock") is to act as agent for the
Company in accordance with the terms more fully described in the term sheet
between the Company and Peacock (the "Peacock Offering") which could result in
registration of any common stock offered as a part of the Peacock Offering being
declared effective prior to the expiration of thirty (30) days of the effective
date of any registration statement covering the Registrable Securities.

         6.13 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled to
exercise any right provided for in this Section 6 after the expiration of three
(3) years following the Closing Date nor at any time when the Holder has the
right to sell all of his Registrable Securities pursuant to SEC Rule 144(k).

         6.14 AMENDMENTS AND WAIVERS. Any term or provision of the registration
rights stated in this Agreement may be amended and the observance of any term of
such rights may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Company and the holders of at least sixty-seven percent (67%) of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any Registrable Securities
then outstanding, each future holder of all such Registrable Securities, and the
Company.

7. FURTHER AGREEMENTS

         7.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns, if any, of each Lender.

         7.2 INDEMNIFICATION. Each Lender shall indemnify, hold harmless and
defend the Company and its affiliates and agents with respect to any and all
loss, damage, expense, claim, action or liability any of them may incur as a
result of the breach or untruth of any representations or warranties made by
such Lender herein, and each Lender agrees that in the event of any breach or
untruth of any representations or warranties made by him herein, the Company
may, at its option, forthwith rescind the sale of the Notes and Common Stock to
such Lender.

Note Purchase Agreement                                            Page 12 of 25
<PAGE>

         7.3 SUBSEQUENT PUBLIC INFORMATION. For as long as any of the Notes
remain outstanding, the Company shall furnish to the Lenders, forthwith upon the
preparation, filing and public release thereof press releases and other public
announcements, and its quarterly, annual and other Reports filed with the
Securities and Exchange Commission

         7.4 LEGAL FEES AND EXPENSES. At the Closing, the Company shall
reimburse the Lenders for their reasonable legal fees actually incurred in
connection with this transaction with such legal fees not to exceed $8,000.

8. GENERAL AND MISCELLANEOUS

         8.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of the parties contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing until the
expiration of two (2) years from the Closing Date.

         8.2 ENTIRE AGREEMENT. This Agreement, and the attachments hereto,
constitutes the entire agreement concerning the subject matter hereof among the
parties, and no party shall be liable or bound to any other party in any manner
by any warranties, representations, guarantees or covenants except as
specifically set forth in this Agreement or the attachments hereto. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

         8.3 GOVERNING LAW. This Agreement shall be governed by and construed
under the internal laws of the State of Arizona without regard to conflicts of
law.
         8.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 [Signature Pages Follow - The remainder of this page intentionally left blank.]

Note Purchase Agreement                                            Page 13 of 25
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Note Purchase
Agreement February 12, 2004.

iLinc Communications, Inc.                 KATSINAM PARTNERS, LP, BY GNTC,
                                           LLC, ITS GENERAL PARTNER

By: ___________________________________    By___________________________________
         James M. Powers, Jr.
         President                         Title: ______________________________

                                           Printed Name: _______________________

                                           X____________________________________
                                           Stanley L. Schloz

                                           X____________________________________
                                           Anthony Silverman

                                           MOUNTAINVIEW CANADIAN
                                           OPPORTUNISTIC GROWTH FUND, LP

                                           By __________________________________

                                           Printed Name: _______________________

                                           Title: ______________________________

                                           AGGER FUND LP

                                           By __________________________________

                                           Printed Name: _______________________

                                           Title: ______________________________

                                           AGGER INSTITUTIONAL FUND LP

                                           By __________________________________

                                           Printed Name: _______________________

                                           Title: ______________________________

Note Purchase Agreement                                            Page 14 of 25
<PAGE>

                                   EXHIBIT "A"

                       FORM OF CONVERTIBLE PROMISSORY NOTE

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE 1933 ACT") AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN OPINION
OF COUNSEL FOR THE HOLDER OF THESE SECURITIES, REASONABLY SATISFACTORY TO THE
COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933 ACT. THE
TRANSFER OF THIS NOTE (AND THE SHARES OF COMMON STOCK THAT MAY BE ACQUIRABLE
UPON CONVERSION) IS SUBJECT TO RESTRICTIONS AS PROVIDED HEREIN. AN INVESTMENT IN
THIS NOTE (AND THE COMMON STOCK THAT MAY BE ACQUIRED UPON CONVERSION) IS HIGHLY
SPECULATIVE.

                           ILINC COMMUNICATIONS, INC.
                             A DELAWARE CORPORATION

                           CONVERTIBLE PROMISSORY NOTE

 ----------------------------------------- ------------------------------------

 Note Number:                              Place of Issue:  Phoenix, Arizona
 ----------------------------------------- ------------------------------------
 ----------------------------------------- ------------------------------------

 Principal Balance:  $__________           Date of Issue:  February 12, 2004
 ----------------------------------------- ------------------------------------

FOR VALUE RECEIVED, iLinc Communications, Inc., a Delaware corporation (the
"Company"), hereby promises to pay to [NAME] or registered assigns (hereinafter
referred to as the "Holder"), the original principal sum of $_____________. This
Convertible Promissory Note (the "Note") is being issued as one of a series of
Notes of like tenor that are being issued by the Company pursuant to a certain
Note Purchase Agreement between the Company, the payee of this Note and certain
other Lenders, dated February 12, 2004 ("Purchase Agreement") (with the
capitalized but undefined terms herein having the meaning given them in the
Purchase Agreement) and with the aggregate principal amount of all notes
totaling $500,000 (collectively, the "Notes"). Until converted pursuant to
Section 4 hereof, interest on the unpaid principal sum of and any accrued but
unpaid interest under this Note shall be paid at the rate of 8% per annum for a
period of one year from the date hereof and thereafter at the rate of 12% per
annum until paid in full. If, however, a registration statement under the
Securities Act of 1933 with respect to all of the Registrable Securities (as
defined in the Purchase Agreement) has not become effective by July 31, 2004
("Registration Date"), the rate of interest under this Note shall be adjusted
retroactive effective to the date of this Note to the rate of 15% per annum
("Adjusted Rate"). In such event, the difference between the interest paid or
accrued at the Registration Date and interest accrued under the Adjusted Rate
for the period between the date of this Note and the Registration Date shall be
immediately due and payable and, if not paid immediately, shall be added to the
principal amount of this Note and shall bear interest at the Adjusted Rate.
Payments of interest shall be made quarterly in arrears and shall be paid on the
first day of each calendar quarter; provided that a registration statement not

Note Purchase Agreement                                            Page 15 of 25
<PAGE>

become effective before the Registration Date, then during any period in which
interest accrues at the Adjusted Rate payments of interest shall be made on a
monthly basis, on the first day of each calendar month.

1. PAYMENTS. Accrued interest shall be due and payable at the end of each
calendar quarter following the Issue Date. Unless earlier converted pursuant to
Section 4 hereof, the principal of and any accrued but unpaid interest under
this Note shall be due and payable two (2) years after the Issue Date (the
"Maturity Date"). Payment shall be made in lawful money of the United States of
America at the address of the Holder shown in the above-mentioned Note Purchase
Agreement, or at such other place as the Holder may designate in writing or, if
earlier, an Event of Default (as defined below). Prepayment of principal and
accrued interest may be made upon thirty (30) days' prior written notice to the
Holder. Except as otherwise set forth in Section 4, the Company shall have the
right to prepay all principal and accrued but unpaid interest of this Note prior
to the Maturity Date without penalty or premium, provided however that upon
receipt of written notice of the Company's intent to prepay this Note, Holder
shall have thirty (30) days to exercise its right to convert this Note into
Common Stock, as provided in Section 4 (the "Prepayment Notice Period"). The
Company and Holder agree that should the Company breach Section 5.7 of the
Purchase Agreement, (after notice by Lenders of breach thereof and the failure
to cure such breach within five (5) business days of the receipt of such notice
as provided therein), and only in that event, and unless already converted,
Holder shall be repaid out of the Peacock Offering Proceeds, but if the Peacock
Offering is not consummated, then the Maturity Date of this Note shall be April
15, 2005, at which time the then outstanding principal and accrued but unpaid
interest shall be then due and payable.

2. DEFAULT. If any of the following events (hereafter called "Events of
Default") shall occur:

         (a) the Company shall default in the payment of any principal or
accrued interest due under this Note on the date the same shall become due and
payable, whether at maturity or by acceleration or otherwise; or

         (b) upon any breach by the Company of any material representation,
warranty or covenant in this Note or the Note Purchase Agreement; provided that,
in the event of such material breach, shall not have been cured by the Company
within 30 days after receipt by the Company of written notice to the Company of
such breach; or

         (c) the Company shall make a general assignment for the benefit of
creditors; or

         (d) the Company shall file a voluntary petition in bankruptcy, or shall
be insolvent or adjudicated bankrupt, or shall file any petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal bankruptcy
act or other applicable federal, state or other statute, law or regulation, or
shall file any answer admitting the material allegation of a petition filed
against the Company in such proceeding, or shall seek or consent to or acquiesce
in the appointment of any trustee, receiver or liquidator of the Company of all
or any substantial part of the properties of the Company, or the Company shall
commence the winding up or the dissolution or liquidation of the Company; or

         (e) within sixty (60) days after the commencement of an action against
the Company (and service of process in connection therewith on the Company)
seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar relief under any present or future statute, law or regulation, such
action shall not have been resolved in favor of the Company or all orders or
proceedings thereunder affecting the operations or the business of the Company
stayed, or if the stay of any such order or proceeding shall thereafter be set
aside, or if, within sixty (60) days after the appointment without the consent
or acquiescence of the Company of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated; or

Note Purchase Agreement                                            Page 16 of 25
<PAGE>

         (f) the Company (i) repurchases any shares of its common stock or
preferred stock, other than shares issued to officers, directors, employees and
consultants of the Company pursuant to agreements obligating the Company to
repurchase such shares upon termination of employment with or service to the
Company, (ii) pays a cash dividend or makes any other property distribution
(other than a dividend in the form of equity in the Company) to its equity
holders, or (iii) repays any of the Notes other than a repayment concurrently
made on all Notes on a pro rata basis. Should an Event of Default occur and
failure to cure if provided, then, and in each and every such case, the Holder
of the Note may, by written notice to the Company, declare all amounts under
this Note and all other Notes to be forthwith due and payable without
presentation, protest or further demand or notice of any kind, all of which are
hereby expressly waived.

3. SUBORDINATION. The indebtedness evidenced by this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all the Company's Senior Indebtedness,
as hereinafter defined.

         (a) SENIOR INDEBTEDNESS. As used in this Note, the term "Senior
Indebtedness" shall mean the principal of and unpaid accrued interest on: (i)
all indebtedness (whether or not secured) of the Company to banks, insurance
companies or other financial institutions regularly engaged in the business of
lending money, which is for money borrowed by the Company, (ii) amounts due to
software and equipment lessors pursuant to lease agreements whereunder the
Company is the lessee, and (iii) any debentures, notes or other evidence of
indebtedness issued in exchange for such Senior Indebtedness, or any
indebtedness arising from the satisfaction of such Senior Indebtedness by a
guarantor.

         (b) DEFAULT ON SENIOR INDEBTEDNESS. If there should occur any
receivership, insolvency, assignment for the benefit of creditors, bankruptcy,
reorganization or arrangements with creditors (whether or not pursuant to
bankruptcy or other insolvency laws), sale of all or substantially all of the
assets, dissolution, liquidation or any other marshaling of the assets and
liabilities of the Company, or if this Note shall be declared due and payable
upon the occurrence of a default with respect to any Senior Indebtedness, then
(i) no amount shall be paid by the Company in respect of the principal of or
interest on this Note at the time outstanding, unless and until the principal of
and interest on the Senior Indebtedness then outstanding shall be paid in full,
and (ii) no claim or proof of claim shall be filed with the Company by or on
behalf of the Holder of this Note that shall assert any right to receive any
payments in respect of the principal of and interest on this Note, except
subject to the payment in full of the principal of and interest on all of the
Senior Indebtedness then outstanding. If there occurs an event of default that
has been declared in writing with respect to any Senior Indebtedness as defined
in the instrument governing such Senior Indebtedness or in the instrument under
which any Senior Indebtedness is outstanding, permitting the holder of such
Senior Indebtedness to accelerate the maturity there of, then, unless and until
such default shall have been cured or waived or shall have ceased to exist, or
all Senior Indebtedness shall have been paid in full, no payment shall be made
in respect of the principal of or interest on this Note.

         (c) EFFECT OF SUBORDINATION. Subject to the rights, if any, of the
holders of Senior Indebtedness under this Section 3 to receive cash, securities
or other properties otherwise payable or deliverable to the Holder of this Note,
nothing contained in this Section 3 shall impair, as between the Company and the
Holder, the obligation of the Company, subject to the terms and conditions
hereof, to pay to the Holder the principal hereof as and when the same become
due and payable, or shall prevent the Holder of this Note, upon default
hereunder, from exercising all rights, powers and remedies otherwise provided
herein or by applicable law.

         (d) SUBROGATION. Subject to the payment in full off all Senior
Indebtedness and until this Note shall be paid in full, the Holder shall be
subrogated to the rights of the holders of Senior Indebtedness (to the extent of
payments or distributions previously made to such holders of Senior Indebtedness
pursuant to the provisions of Section 3(b) above) to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness. No

Note Purchase Agreement                                            Page 17 of 25
<PAGE>

such payments or distributions applicable to the Senior Indebtedness shall, as
between the Company and its creditors, other than the holders of Senior
Indebtedness and the Holder, be deemed to be a payment by the Company to or on
account of this Note; and for the purposes of such subrogation, no payments or
distributions to the holders of Senior Indebtedness to which the Holder would be
entitled except for the provisions of this Section 4 shall, as between the
Company and its creditors, other than the holders of Senior Indebtedness and the
Holder, be deemed to be a payment by the Company to or on account of the Senior
Indebtedness.

         (e) UNDERTAKING. By its acceptance of this Note, the Holder agrees to
execute and deliver such documents as may be reasonably requested from time to
time by the Company or the holder of any Senior Indebtedness in order to
implement the foregoing provisions of this Section 3.

4. CONVERSION.

         (a) GRANT OF RIGHT. Subject to the terms of Section 4(d) hereof, any
Holder of this Note has the right, at the Holder's option, at any time prior to
the Maturity Date or earlier payment in full of the entire principal balance of
and accrued interest under this Note, including without limitation, during the
thirty (30) day Prepayment Notice Period to convert, in accordance with the
provisions of this Section 4, (i) the outstanding principal amount of this Note,
in whole but not in part, and (ii) at the Holder's option, the accrued interest
under the Note which has been unpaid for thirty (30) or more days beyond its due
date as of the date of such conversion into fully paid and non-assessable shares
of the Common Stock, $0.001 par value, of the Company. The number of shares into
which this Note may be converted ("Shares") shall be determined by dividing the
then outstanding principal amount of the Note and/or accrued unpaid interest
under the Note by the conversion price in effect at the time of such conversion.
The initial conversion price ("Conversion Price") shall be $0.70 per Share.

         (b) NOTICE OF CONVERSION. Before the Holder shall be entitled to
convert this Note into Shares, he shall surrender this Note at the office of the
Company and shall give written notice by mail, postage prepaid, to the Company
at its principal corporate office, of the election to convert the same, if the
Holder is electing to convert pursuant to Section 4(a), and shall state therein
on the Notice of Conversion annexed to this Note the entire principal amount of
the Note to be converted and the accrued and unpaid interest on such principal
amount that is also to be converted.

         (c) SATISFACTION WITH REQUIREMENTS OF SECURITIES ACT OF 1933.
Notwithstanding anything to the contrary contained herein, each and every
conversion of this Note, is contingent upon the Company's satisfaction that the
issuance of Common Stock upon the conversion is exempt from the requirements of
the Securities Act of 1933, as amended, and all applicable state securities
laws. The Holder agrees to execute any and all documents deemed necessary by the
Company to effect a conversion of this Note.

         (d) MECHANICS AND EFFECT OF CONVERSION. No fractional Shares shall be
issued upon conversion of this Note. In lieu of the Company issuing any
fractional Shares to the Holder upon the conversion of this Note, the Company
shall pay to the Holder, when it is due, the amount of outstanding principal
that is not so converted and shall pay all accrued but unpaid interest thereof
not converted. Upon the conversion of this Note pursuant to Section 4(a) above,
the Holder shall surrender this Note, duly endorsed, at the principal office of
the Company. At its expense, the Company shall, as soon as practicable
thereafter, issue and deliver to such Holder at such principal office a
certificate or certificates evidencing the number of Shares of Common Stock to
which the Holder shall be entitled upon such conversion (bearing such legends as
are required by the Purchase Agreement and applicable state and federal
securities laws in the opinion of counsel to the Company), together with any
other securities and property to which the Holder is entitled upon such
conversion under the terms of this Note, including a check payable to the Holder
for any cash amounts payable for unpaid and accrued interest and for fractional
shares as described above. In the event of any conversion of this Note pursuant

Note Purchase Agreement                                            Page 18 of 25
<PAGE>

to Section 4(a) above, such conversion shall be deemed to have been made
immediately prior to the closing of the issuance of such Common Stock and on and
after such date the Holder of this Note is entitled to receive the shares of
such Common Stock issuable upon such conversion and shall be treated for all
purposes as the record holder of such shares. Upon conversion of this Note, then
the Note shall be irrevocably extinguished and the Company shall be forever
released from all its obligations and liabilities under this Note, except that
the Company shall be obligated to pay the Holder within ten (10) days after the
date of such conversion any cash amounts resulting from fractional shares as
described above, and any unpaid and accrued interest to and including the date
of such conversion, and no more.

5. CONVERSION PRICE ADJUSTMENTS.

         (a) STOCK SPLITS AND COMBINATIONS. If the Company shall at any time
subdivide or combine its outstanding shares of Common Stock, this Note shall,
after that subdivision or combination, evidence the right to convert into the
number of shares of Common Stock that would have been issuable as a result of
that change with respect to the Shares of Common Stock which were issuable upon
conversion of this Note immediately before that subdivision or combination. If
the Company shall at any time subdivide the outstanding shares of Common Stock,
the Conversion Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Conversion Price then in effect
immediately before that combination shall be proportionately increased. Any
adjustment under this section shall become effective at the close of business on
the date the subdivision or combination becomes effective.

         (b) RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If the Common Stock
issuable upon conversion of this Note shall be changed into the same or a
different number of shares of any other class or classes of stock, whether by
capital reorganization, reclassification, or otherwise (other than a subdivision
or combination of shares provided for above), the holder of this Note, shall, on
its conversion be entitled to receive in lieu of the Common Stock which the
Holder would have become entitled to receive but for such change, a number of
shares of such other class or classes of stock equivalent to the number of
shares of Common Stock that would have been received by the holder on conversion
of this Note immediately before that change.

         (c) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALE OF ASSETS. If at
any time there shall be a capital reorganization of the Company's Common Stock
(other than a combination, reclassification, exchange, or subdivision of shares
provided for elsewhere above) or merger or consolidation of the Company with or
into another corporation with the Company not being the survivor of the merger,
or the sale of substantially all of the Company's properties and assets to any
other person, then, as a part of such reorganization, merger, consolidation or
sale, lawful provision shall be made so that the holder of this Note shall
thereafter be entitled to receive upon conversion of this Note, the number of
shares of Common Stock or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, to which a
holder of the Common Stock deliverable upon conversion of this Note would have
been entitled in such capital reorganization, merger, or consolidation or sale
if this Note had been converted immediately before that capital reorganization,
merger, consolidation, or sale. In any such case, appropriate adjustment (as
determined in good faith by the Company's Board of Directors) shall be made in
the application of the provisions of this Note with respect to the rights and
interests of the holder of this Note after the reorganization, merger,
consolidation, or sale to the end that the provisions of this Note (including
adjustment of the Conversion Price then in effect and number of Shares
purchasable upon conversion of this Note) shall be applicable after that event,
as near as reasonably may be, in relation to any shares or other property
deliverable after that event upon conversion of this Note. The Company shall,
within thirty (30) days after making such adjustment, give written notice (by
first class mail, postage prepaid) to the registered holder of this Note at the
address of that holder shown on the Company's books. That notice shall set

Note Purchase Agreement                                            Page 19 of 25
<PAGE>

forth, in reasonable detail, the event requiring the adjustment and the method
by which the adjustment was calculated and specify the Conversion Price then in
effect after the adjustment and the increased or decreased number of Shares
purchasable upon conversion of this Note. When appropriate, such notice may be
given in advance and include as a part thereof the notice required under other
provisions of this Note. If any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of the assets to
another corporation, shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, the Company or such successor
or purchasing corporation, as the case may be, shall execute with the Holder a
supplemental agreement providing that the Holder of each Note then outstanding
shall have the right thereafter and until the expiration of the period of
convertibility to convert such Note into the kind and amount of stock,
securities or assets receivable upon such reorganization, reclassification,
consolidation, merger or sale by a holder of the number of shares of Common
Stock into which such Note might have been converted immediately prior to such
reorganization, reclassification, consolidation, merger or sale, subject to
adjustment which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this section.

         (d) ISSUANCE OF STOCK BELOW CONVERSION PRICE.

                  If the Company shall at any time before the earlier of (x) the
expiration of six (6) months after the Issue Date of this Note or (y) the date
upon which a registration statement that covers the Shares that are available
upon conversion become effective, issue common stock to an investor with a
purchase price per share that is less than the Conversion Price ("Additional
Stock") then in effect under this Note, then the Conversion Price will be
reduced concurrently with such issue to an amount equal to the price per share
paid upon such issuance. For the purposes of this Agreement, "Additional Stock"
shall include shares of Common Stock issued directly and also the maximum number
of shares of Common Stock issuable upon the due exercise of options for the
purchase of Common Stock or the conversion of securities convertible into Common
Stock, in which case the purchase price shall be the exercise or conversion
price, as the case may be. Notwithstanding the foregoing, if anytime before the
expiration of one (1) year from the Issue Date, any options to purchase equity
or any common stock or any debentures, notes or other evidence of indebtedness
issued by the Company is sold to investors in the Peacock Offering (as defined
in the Purchase Agreement) then the common stock or other equity associated with
the Peacock Offering shall not be considered for purposes of Additional Stock,
and accordingly the Holder hereof acknowledges that it is the intention of the
Company to engage in a debt offering as a part of the Peacock Offering that may
include the sale of common stock or the issuance of options at a price below the
Conversion Price without the issuance of Additional Stock.

6. DIVIDENDS. In the event that the Company shall make any distribution of its
assets upon or with respect to its Common Stock, as a liquidating or partial
liquidating dividend, or other than as a dividend payable out of earnings or any
surplus legally available for dividends under the laws of the state of
incorporation of the Company, each Holder of any Note then outstanding shall,
upon the exercise of his right to convert after the record date for such
distribution or, in the absence of a record date, after the date of such
distribution, receive, in addition to the shares subscribed for, the amount of
such assets (or, at the option of the Company, a sum equal to the value thereof
at the time of distribution as determined by the Board of Directors in good
faith which would have been distributed to such Holder if he had exercised his
right to convert this Note) or the Common Stock issuable upon the conversion of
this Note immediately prior to the record date for such distribution or, in the
absence of a record date, immediately prior to the date of such distribution.

7. LIMITATIONS ON DISPOSITION. Holder agrees not to make any disposition of all
or any portion of this Note or any of the Common Stock issuable upon the due
conversion hereof (other than the valid conversion thereof in accordance with

Note Purchase Agreement                                            Page 20 of 25
<PAGE>

its terms) unless and until: (a) there is then in effect a registration
statement under the Securities Act of 1933 covering such proposed disposition,
and such disposition is made in accordance with such registration statement; or
(b) (i) Holder has notified the Company of the proposed disposition and has
furnished the Company with a detailed statement of the circumstances surrounding
the proposed disposition, and (ii) if requested by the Company, Holder has
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such Securities
under the Securities Act of 1933 or registration or qualification under any
applicable state securities law. Notwithstanding the foregoing, no investment
representation letter or opinion of counsel shall be required for any transfer
of Securities (i) in compliance with Rule 144 or Rule 144A of the Securities Act
of 1933 or (ii) by gift, will or intestate succession by Holder to his or her
spouse or lineal descendants or ancestors or any trust for any of the foregoing;
provided that, in each of the foregoing cases, the transferee agrees in writing
to be subject to the terms of this Note. In addition, if the holder of any
Securities delivers to the Company an unqualified opinion of counsel that no
subsequent transfer of such Securities shall require registration under the
Securities Act of 1933, the Company shall, upon such contemplated transfer,
promptly deliver new documents/certificates for such Securities that do not bear
the legend set forth in Section 8 hereof.

8. LEGENDS. It is understood that the certificates evidencing the Common Stock
may bear one or more of the following legends:

         (a) The following legend under the Securities Act of 1933:

         "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
         HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
         RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
         SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED", or

         (b) Any legend required by state securities laws.

         The Company agrees to remove promptly, upon the request of the holder
of Securities issued upon conversion of this Note, the legend set forth in
Section 8(a) hereof from the documents/certificates for such Securities upon
full compliance with this Note, Rule 144 under the Securities Act of 1933 and
any other applicable provisions of the Securities Act of 1933 or the regulations
promulgated thereunder.

9. ASSIGNMENT. This Note applies to, inures to the benefit of and binds the
successors and assigns of the parties hereto. Any transfer of this Note will be
effected only by surrender of this Note to the Company and reissuance of a new
note to transferee. The Holder and any subsequent holder(s) of this Note receive
this Note subject to the foregoing items and conditions, and agree to comply
with the foregoing terms and conditions for the benefit of the Company and any
other holders.

10. NOTICES. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given (i)
when received, if personally delivered, faxed, sent by nationally recognized
courier or U.S. Mail return-receipt requested, or (ii) on the third business day
after deposit in the U.S. Mail, if sent by first-class mail, in any such case to
the address of the recipient set forth in the above-mentioned Purchase Agreement
and, if to the Company, Attention: Chief Executive Officer. Any party hereto may
by notice so given change its address for future notice hereunder.

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

Note Purchase Agreement                                            Page 21 of 25
<PAGE>

12. NOTE REGISTER. This Note is transferable only upon the books of the Company,
which it shall cause to be maintained for such purpose. The Company may treat
the registered holder of this Note as he, she or it appears on the Company's
books at any time as the Holder for all purposes.

13. LOSS OF NOTE. Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Note, and of indemnity reasonably
satisfactory to the Company if this Note is lost, stolen or destroyed, and upon
surrender and cancellation of this Note if this Note is mutilated, the Company
shall execute and deliver to the Holder a new Note of like date, tenor and
denomination.

14. AMENDMENT, WAIVER. The terms of this Note may be amended or waived only upon
the written agreement of the Company and the Holder.

15. HEADING: REFERENCES. All headings used herein are used for convenience only
and shall not be used to construe or interpret this Note. Except where otherwise
indicated, all references herein to Sections refer to Sections hereof.

16. SEVERABILITY. If one or more provisions of this Note are held to be
unenforceable under applicable law, such provision shall be excluded from this
Note and the balance of this Note shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms.

17. MISCELLANEOUS. This Note shall be governed by and construed in accordance
with the laws of the State of Arizona. If an action is brought for collection
under this Note, the Company will pay all costs of collection actually incurred
by the Holder, including, but not limited to, the reasonable attorneys' fees.

18. MAXIMUM INTEREST. Regardless of any provision contained herein, the Company
shall never be required to pay and the holder hereof shall never be entitled to
receive, collect or apply as interest hereon, any amount in excess of the
highest lawful interest rate permitted under applicable law, and in the event
the holder hereof receives, collects or applies, as interest, any such excess,
such amounts which would be excessive interest shall be deemed a partial
prepayment of principal and treated hereunder as such for all purposes; and, if
the principal hereof is paid in full, any remaining excess shall be refunded to
the Company. In determining whether or not the interest paid or payable, under
any specific contingency, exceeds the highest lawful interest rate, the Company
and the holder hereof shall, to the maximum extent permitted under applicable
law (a) characterize any non-principal payment as an expense, fee or premium
rather than as interest, (b) exclude prepayments and the effects thereof, and
(c) pro rate, allocate and spread the total amount of interest throughout the
entire contemplated term hereof; provided that if the indebtedness evidenced
hereby is paid and performed in full prior to the end of the full contemplated
term hereof, and if the interest received for the actual period of existence
thereof exceeds the highest lawful interest rate, the holder hereof shall either
apply as principal reduction or refund to the Company the amount of such excess,
and in such event, the holder hereof shall not be subject to any penalties
provided by any laws for contracting for, charging or receiving interest in
excess of the highest lawful interest rate.

Note Purchase Agreement                                            Page 22 of 25
<PAGE>

IN WITNESS WHEREOF, the undersigned have caused this Note to be executed by the
undersigned as of the date first set forth above.

ILINC COMMUNICATIONS, INC.,
a Delaware corporation

By ____________________________
    James M. Powers, Jr.
    President

ATTEST: _______________________
         James L. Dunn, Jr.
         Corporate Secretary

Note Purchase Agreement                                            Page 23 of 25
<PAGE>

                                   EXHIBIT "B"

          FORM OF OFFICER'S CERTIFICATE FOR ILINC COMMUNICATIONS, INC.

The undersigned, _______________________, hereby certifies that he is the [Chief
Executive Officer] [Chief Financial Officer] of iLinc Communications, Inc., a
Delaware corporation ("the Company") and further certifies as follows to the
purchasers of the Company's Convertible Promissory Notes on a date even
herewith:

         1.       As such officer he is familiar with the business, affairs and
                  assets of the Company and with the provisions of a certain
                  Note Purchase Agreement ("Agreement") between the Company on
                  the one hand and certain Lenders on the other and acknowledges
                  that the making, delivery and accuracy of this Certificate is
                  a condition to the performance of the Lenders under the
                  Agreement.

         2.       To the best of his knowledge, after careful inquiry, the
                  representations and warranties of the Company contained in the
                  Agreement are true and correct on and all conditions required
                  to be fulfilled as a condition to the obligations of the
                  Lenders have been fulfilled and as of the date of this
                  Certificate.

         3.       To the best of his knowledge, after careful inquiry, nothing
                  in the Agreement or any attachment thereto or document
                  delivered in connection therewith contains any untrue
                  statement of a material fact or omits to make a statement of
                  material fact necessary to make the statements made therein
                  not misleading.

_______________________________________
 James M. Powers, Jr., President
On Behalf of iLinc Communications, Inc.

Note Purchase Agreement                                            Page 24 of 25
<PAGE>

                                  SCHEDULE 3.7

              LIST OF OUTSTANDING SECURITIES WITH ASSOCIATED DEMAND
                       OR PIGGY BACK REGISTRATION RIGHTS

o        Holders of the Company's convertible notes and attached warrants as a
         part of an offering with gross proceeds of $5.757 Million that are
         convertible into 12,705,000 shares of common stock.

o        Holders of Preferred Stock and attached warrants as a part of an
         offering with gross proceeds of $1.5 Million that is convertible into
         convertible into 6,325,000 (@$0.50 per share) or 4,125,000 (@$0.30 per
         share) shares of common stock.

o        Warrants held by Bank One, NA representing 847,664 shares of common
         stock.

o        Warrants held by Renaissance Capital representing 250,000 shares of
         common stock.

o        Warrants held by Jackson Walker representing 25,000 shares of common
         stock.

o        Holders of 2 Million shares of common stock arising from the Quisic
         transaction.

o        Holders of 1,184,600 shares of common stock arising from the
         ThoughtWare transaction.

o        Holders of 1,950,000 shares of common stock arising from the
         LearningEdge transaction.

o        Warrants held by Quisic shareholders for Debt Conversion Agreement
         representing 333,333 shares of common stock.

o        Holders of 734,906 shares of common stock arising from the Dexpo
         transaction.

o        Holders of 439,885 shares of common stock arising from the Liberty
         transaction.

o        Holders of 1,572,222 shares of common stock arising from the Series A
         Convertible Note Conversion Agreements.

Note Purchase Agreement                                            Page 25 of 25<PAGE>
                                                                   EXHIBIT 10.20

                       UNIT PURCHASE AND AGENCY AGREEMENT

                                 By and Between

                           iLinc Communications, Inc.,
                             a Delaware Corporation

                                       and

                            Cerberus Financial, Inc.,
                             an Arizona Corporation

                  Acting for the Benefit of Certain Noteholders

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

Article 1. RECITALS...........................................................1

         1.1      Purchase of Units...........................................1

         1.2      Agency Duties...............................................1

Article 2. DEFINITIONS; INTERPRETATION........................................1

         2.1      Definitions.................................................1

         2.2      Accounting Principles.......................................4

Article 3. ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
           AND EXCHANGE OF NOTES..............................................5

         3.1      Amount and Issue of Notes...................................5

         3.2      Form of Notes...............................................5

         3.3      Denominations and Date of Notes.............................5

         3.4      Execution of Notes..........................................5

         3.5      Registration, Exchange and
                  Registration of Transfer of Notes...........................5

         3.6      Mutilated, Destroyed, Lost or Stolen Notes..................6

         3.7      Cancellation of Notes; Acquisition of Notes by the
                  Company.....................................................6

         3.8      Persons Entitled to Interest Payments.......................7

         3.9      Benefits of Provisions of This Agreement....................7

Article 4. REDEMPTION.........................................................7

         4.1      Redemption Generally........................................7

         4.2      Optional Redemption.........................................7

         4.3      Change of Control Redemption................................8

Article 5. PAYMENT OF PRINCIPAL AND INTEREST..................................8

         5.1      Date for Payment of Principal and Interest..................8

         5.2      Interest Payable on Notes...................................8

         5.3      Paying Agent................................................8

         5.4      Application of Payment......................................8

Article 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................9

         6.1      Organization, Good Standing, and Qualification..............9

         6.2      Authorization...............................................9

         6.3      Capitalization..............................................9

         6.4      Compliance with Laws........................................9

         6.5      Taxes.......................................................9

         6.6      Intellectual Property.......................................9

         6.7      SEC Reports and Financial Statements.......................10

         6.8      Litigation.................................................11

         6.9      Governmental Authorizations and Regulations................11

         6.10     No Untrue Statements.......................................11

                                      -i-
<PAGE>

Article 7. COVENANTS OF THE COMPANY..........................................11

         7.1      Maintenance of Office; Operation of Business...............11

         7.2      Compliance with Laws and Regulations;
                  Licenses and Permits; No Violation.........................12

         7.3      Appointment to Fill a Vacancy in Office of Note Agent......12

         7.4      Further Instruments and Acts...............................12

         7.5      Payment of Notes...........................................12

         7.6      Compliance Certificates and Annual Reports.................12

         7.7      Corporate Existence........................................13

         7.8      Waiver of Stay, Extension or Usury Laws....................13

         7.9      Maintenance of Properties and Insurance....................13

         7.10     Sale of Assets; Consolidation; Equity; Merger..............13

         7.11     Limitation on Incurrence of Additional Indebtedness........14

         7.12     Restricted Payments........................................14

         7.13     Limitations on Payment Restrictions
                  Affecting Subsidiaries.....................................14

         7.14     Loans, Acquisitions and Guaranties.........................14

         7.15     Issuance of Stock; Change in Ownership
                  or Control.................................................14

         7.16     Payment on or Modification of Subordinated
                  Indebtedness...............................................14

         7.17     Limitations on Pledge of Capital Stock of
                  Company or Subsidiaries....................................15

Article 8. NOTEHOLDER'S LIST.................................................15

         8.1      Noteholders' List..........................................15

         8.2      Preservation and Disclosure of List........................15

Article 9. REMEDIES OF THE NOTE AGENT AND THE NOTEHOLDERS
           IN EVENT OF DEFAULT...............................................15

         9.1      Events of Default..........................................15

         9.2      Payment of Notes on Default; Suit Therefor.................16

         9.3      Application of Moneys Collected by Note Agent..............17

         9.4      Proceedings by Noteholders.................................18

         9.5      Proceedings by Note Agent..................................18

         9.6      Remedies Cumulative and Continuing.........................18

         9.7      Direction of Proceedings and Waiver of
                  Defaults by Majority of Noteholders........................19

         9.8      Notice of Defaults.........................................19

         9.9      Undertaking to Pay Costs...................................19

         9.10     Default on Indebtedness....................................19

Article 10. NOTE AGENT.......................................................19

         10.1     Duties and Liabilities of Note Agent.......................19

         10.2     Reliance on Documents, Opinions, Etc.......................21

         10.3     No Responsibility for Recitals; etc........................22

         10.4     Moneys to be Held in Trust.................................22

         10.5     Compensation of Note Agent.................................22

         10.6     Expenses of Note Agent.....................................22

         10.7     Resignation or Removal of Note Agent.......................22

         10.8     Acceptance by Successor Note Agent.........................23

Article 11. ACTS OF NOTEHOLDERS; EVIDENCE OF OWNERSHIP OF NOTES..............23

         11.1     Acts of Noteholders........................................23

                                      -ii-
<PAGE>

         11.2     Ownership of Notes.........................................23

         11.3     Action Taken by the Noteholders............................23

Article 12. registration rights..............................................24

         12.1     Required Registration.......................................24

         12.2     Incidental Registration....................................25

         12.3     Registration Procedures....................................25

         12.4     Expenses...................................................27

         12.5     Information by Holder......................................27

         12.6     Indemnification and Contribution...........................27

         12.7     Changes in Common Stock or Preferred Shares................29

         12.8     Damages....................................................30

Article 13. AMENDMENTS AND SUPPLEMENTS.......................................30

         13.1     Amendments and Supplements Without Noteholders'
                  Consent....................................................30

         13.2     Amendments With Noteholders'
                  Consent....................................................30

         13.3     Note Agent Authorized to Join Amendments; Reliance on
                  Counsel....................................................30

Article 14. SATISFACTION AND DISCHARGE OF AGREEMENT; UNCLAIMED
            MONIES...........................................................30

         14.1     Discharge of Agreement.....................................30

         14.2     Deposited Moneys to be Held in
                  Trust by the Note Agent....................................30

         14.3     Unclaimed Moneys...........................................30

Article 15. NO REGISTRATION OF NOTES;
            RESTRICTIONS ON TRANSFERABILITY..................................31

Article 16. MISCELLANEOUS PROVISIONS.........................................31

         16.1     Provisions Binding on the Company's
                  Successors.................................................31

         16.2     Addresses for Notice.......................................31

         16.3     Representations and Warranties.............................31

         16.4     Governing Law..............................................31

         16.5     Effect of Invalidity of Provisions.........................31

         16.6     Table of Contents and Headings.............................32

         16.7     Execution in Counterparts..................................32

                                      -iii-
<PAGE>

                       UNIT PURCHASE AND AGENCY AGREEMENT

This Unit Purchase and Agency Agreement ("AGREEMENT") dated as of April 19,
2004, is made by and between iLinc Communications, Inc., a Delaware corporation
("COMPANY"), and Cerberus Financial, Inc., an Arizona corporation ("NOTE
AGENT"), acting for the equal and ratable benefit of and on behalf of certain
Noteholders identified in Schedule 1 attached hereto.

                                   ARTICLE 1.
                                    RECITALS

         1.1 PURCHASE OF UNITS. The Company is offering in a private placement
transaction that is exempt from registration (the "Offering") up to 60 units
(the "Units") that will provide gross proceeds to the Company of $3,000,000;
with the total units consisting of $2,250,000 in notes (more fully described
herein) and $750,000 of the Company's common stock (the "Stock"). Each unit will
cost the purchaser of the unit $50,000 and will entitle the Purchaser to: (i) a
Note with a principal balance of $37,500, and (ii) $12,500 of the Company's
common stock. The Offering and number of units sold may be increased in the sole
discretion of the Company by 20 Units to a total of 80 Units thereby providing
gross proceeds of $4,000,000 (with the total of all units then consisting of
$3,000,000 in Notes and $1,000,000 of common stock).

         1.2 AGENCY DUTIES. This Agreement provides the terms and conditions
upon which the Notes are to be authenticated, issued, delivered, registered, and
transferred, the terms upon which the Note Agent will act as note registrar and
paying agent with respect to the Notes, and the terms upon which the Note Agent
will act as the agent of the Noteholders in the collection of amounts due under
the Notes if an Event of Default occurs and in the enforcement of the rights of
the Noteholders pursuant to this Agreement and the Notes.

                                   ARTICLE 2.
                           DEFINITIONS; INTERPRETATION

         2.1 Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:

         AGREEMENT means this Unit Purchase and Agency Agreement, as may be
amended by mutual written consent and in force from time to time.

         AUTHORIZED DENOMINATIONS means minimum principal amounts of $18,750 and
integral multiples of $3,750 in excess of $18,750.

         BOARD OF DIRECTORS means, with respect to the Company, the Board of
Directors of such the Company or any committee of the Board of Directors of the
Company duly authorized to act on behalf of the Board of Directors.

         BUSINESS DAY means any day other than (i) a Saturday or Sunday, or (ii)
a day on which banking institutions in Arizona are authorized or obligated by
law or executive order to be closed.

         CAPITAL STOCK means, with respect to the Company any and all classes of
common stock of the Company.

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         CAPITALIZED LEASE OBLIGATIONS of the Company means the obligations of
the Company to pay rent or other amounts under a lease of property, real or
personal, that is appropriately capitalized for financial reporting purposes in
accordance with GAAP.

         CHANGE OF CONTROL means any event or series of events by which (i) any
"person" (as such term is used in SECTIONS 13(d) and 14(d) of the Securities
Exchange Act of 1934) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13-d5 under the Exchange Act) of 50% or more of the total voting power
of the voting stock of the Company; (ii) the Company consolidates with or merges
with or into another entity or any entity consolidates with, or merges with or
into the Company, in any such event pursuant to a transaction in which the
outstanding voting stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such transaction where the
outstanding voting stock of the Company is changed into or exchanged for voting
stock of the surviving corporation and the holders of the voting stock of the
Company immediately prior to such transaction own, directly or indirectly, not
less than a majority of the voting stock of the surviving corporation
immediately after such transaction; or (iii) the stockholders of the Company
approve any plan of liquidation or dissolution of the Company.

         CLOSING means any closing of the Offering and the issuance and sale of
the Units.

         CLOSING DATE has the meaning set forth in SECTION 3.1(b).

         COMPANY means iLinc Communications, Inc. and its successors or assigns
in accordance with the terms of this Agreement.

         DEFAULT means any event which is, or after notice or passage of time
would be, an Event of Default, after notice as provided herein and failure to
cure such default provided such cure is permitted.

         DISCLOSURE DOCUMENT means that certain Confidential Private Placement
Memorandum of the Company dated March 19, 2004, as it may be amended or
supplemented from time to time.

         ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.

         EVENT OF DEFAULT means one of the events listed as such in Section 9.1.

         EXCHANGE ACT means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, in each case as in effect from
time to time.

         GAAP means generally accepted accounting principles as in effect in the
United States of America from time to time.

         HOLDER or NOTEHOLDER means a Person in whose name a Note is registered
on the books of the Company.

         INDEBTEDNESS means, without duplication, with respect to the Company,
(i) all obligations of the Company (A) in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of the Company or
only to a portion thereof), (B) evidenced by bonds, notes, debentures or similar
instruments, (C) representing the balance deferred and unpaid of the purchase
price of any property or services (other than accounts payable or other
obligations arising in the ordinary course of business), (D) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (E) for

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the payment of money relating to a Capitalized Lease Obligation, or (F)
evidenced by a letter of credit or a reimbursement obligation of the Company
with respect to any letter of credit; (ii) all net obligations of the Company
under interest swap obligations and foreign currency hedges; (iii) all
liabilities of others of the kind described in the preceding clauses (i) or (ii)
that the Company has guaranteed or that are otherwise its legal liability; (iv)
Indebtedness (as otherwise defined in this definition) of another Person secured
by a Lien on any asset of the Company, whether or not such Indebtedness is
assumed by the Company, the amount of such obligations being deemed to be the
lesser of (A) the full amount of such obligations so secured, and (B) the fair
market value of such asset, as determined in good faith by the Board of
Directors of the Company, which determination shall be evidenced by a resolution
of the Board of Directors of the Company; and (v) any and all deferrals,
renewals, extensions, refinancings and refundings (whether direct or indirect)
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (i), (ii), (iii), or (iv) or this
clause (v), whether or not between or among the same parties.

         INTEREST means the interest rate per annum on the unpaid principal
balance of the Notes set forth in Section 3.1(a).

         INTEREST PAYMENT DATES means the 15th day of January, April, July and
October during the term of the Notes, commencing July 15, 2004; provided,
however, if such date is not a Business Day, the Interest Payment Date shall be
the immediately preceding Business Day.

         ISSUE DATE means the date on which the Notes are originally issued
under this Agreement.

         LIEN means, with respect to the Company, any mortgage, pledge, lien,
encumbrance, affecting title or resulting in an encumbrance against property of
the Company, or a security interest arising under the Uniform Commercial Code of
any kind (including any conditional sale or other title retention agreement
securing obligations of the Company, and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statute or
statutes) of any jurisdiction).

         MATURITY DATE means July 15, 2007, which is the date on which the Notes
become due and payable in full pursuant to the terms of this Agreement.

         NOTE AGENT means Cerberus Financial, Inc., and any successor appointed
pursuant to this Agreement.

         NOTES means the 10% Senior Notes due July 15, 2007 issued pursuant to
the purchase of Units in accordance with this Agreement, which Notes are
unsecured Senior Indebtedness of the Company.

         OSHA means the Occupational Safety and Health Act, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time.

         OFFERING means the offering of Notes to be issued hereunder pursuant to
the Disclosure Document.

         OFFICE has the meaning set forth in Section 7.1(a).

         OFFICER means, the CEO, the President, any Sr. Vice President, the
Chief Financial Officer or the Secretary of the Company.

         OFFICERS' CERTIFICATE means a certificate signed by two Officers or by
an Officer and the Secretary of the Company.

                                        3
<PAGE>

         OPINION OF COUNSEL means a written opinion, in form and substance
reasonably acceptable to the Note Agent or other party receiving such opinion,
from legal counsel who is reasonably acceptable to the Note Agent or other party
receiving such opinion. Such counsel may be an employee of or counsel to the
Company or the Note Agent.

         PERSON means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization, or
government or any agency or political subdivision thereof.

         PLACEMENT AGENCY AGREEMENT means the Placement Agency Agreement dated
March 19, 2004 between the Company and the Placement Agent.

         PLACEMENT AGENT means Peacock, Hislop, Staley & Given, Inc., an Arizona
corporation.

         PRINCIPAL BUSINESS means the business of the Company, specifically
providing Web conferencing, virtual classroom and Web collaboration software and
services more fully described in the Disclosure Document.

         RECORD DATE means with respect to any Interest payment, the last
Business Day of the calendar month preceding each Interest Payment Date.

         REFERENCE PERIOD means, with respect to the Company, the four full
fiscal quarters ended immediately preceding any date upon which any
determination is to be made pursuant to the terms of the Notes or this
Agreement.

         REGISTRABLE SECURITIES shall mean (i) the Stock, and (ii) shares of
Common Stock issued or issuable with respect to the Stock upon an adjustment for
stock splits, stock dividends and similar events.

         RESTRICTED PAYMENT means, with respect to the Company, any of the
following: (i) any dividend or other distribution in cash or property to the
holders of the Company's Capital Stock; or (ii) the purchase, redemption or
other acquisition or retirement for in cash or property of any Capital Stock or
preferred stock or any option, warrant, or other right to acquire shares of
Capital Stock of the Company or any of its Subsidiaries.

         SENIOR INDEBTEDNESS means any indebtedness of the Company which is
senior in right of payment to or pari passu with the Notes.
s
         SUBORDINATED INDEBTEDNESS means any Indebtedness of the Company
(whether outstanding on the date hereof or hereafter incurred), which is
contractually or by operation of law subordinate or junior in right of payment
and priority to the Notes including, without limitation, the Subordinated
Indebtedness set forth on EXHIBIT B attached hereto.

         SECURITIES ACT means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, in each case as in effect from
time to time.

         SUBSIDIARIES OR SUBSIDIARY means all or any of the subsidiaries as are
identified now or hereafter in the audited financial statements of the Company.

         2.2 ACCOUNTING PRINCIPLES. Where the character or amount of any asset
or liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to

                                        4
<PAGE>

the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.

                                   ARTICLE 3.
        ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

         3.1 AMOUNT AND ISSUE OF NOTES.

         (a) If the conditions to the Closing set forth in the Placement Agency
Agreement shall have been satisfied, a Note shall be issued to each of the
Purchasers in accordance with the terms of the Disclosure Document and
subscription agreement and delivered to the Note Agent at the Closing. The Note
Agent shall authenticate and deliver such Notes to the Noteholders. The Notes
shall bear interest from their date of issue at the rate of ten percent (10.0%)
per annum, payable as provided in ARTICLE 5.

         (b) Delivery of the Notes will be made through the Note Agent upon
completion of the Offering, against payment therefor, by the Noteholders to the
Company, in current and immediately available funds in the amount of 100% of the
principal amount thereof, less commissions and expenses payable to the Placement
Agent and less certain other expenses payable by the Company in connection with
the Offering on the Business Day specified by the Company, but not less than
three (3) Business Days prior written notice to the Note Agent ("CLOSING DATE").

         3.2 FORM OF NOTES. The Notes and the Note Agent's Certificate of
Authentication to be borne by or attached to the Notes shall be in the form of
Note attached as Exhibit "A" to this Agreement. Any of the Notes may have
printed thereon such legends or endorsements as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant to
such laws.

         3.3 DENOMINATIONS AND DATE OF NOTES. The Notes shall be issued in
Authorized Denominations, and shall be numbered, lettered or otherwise
distinguished in such manner or in accordance with such plan as the Company may
determine with the approval of the Note Agent. The Notes shall be dated as of
the Issue Date, except that any Note issued upon the transfer, exchange or
substitution of another Note shall be dated the date of its authentication.

         3.4 EXECUTION OF NOTES. The Notes shall be signed (manually or in
facsimile) in the name of or on behalf of the Company by an authorized Officer.

         3.5      REGISTRATION, EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES.

         (a) The Note Agent will keep a register or registers in which it will
register all Notes. The Note Agent will serve as its own registrar and paying
agent for the Notes.

         (b) Subject to the restrictions on transferability of the Notes
pursuant to Article 15, upon surrender for registration of transfer of any Note,
the Company shall execute and deliver, in the name of the transferee or
transferees, a new Note or Notes for with an appropriate principal amount taking
into account any prepayments of principal thereof.

         (c) Notes to be exchanged shall be surrendered at the office of the
Note Agent who will cause the Company to execute and deliver in exchange
therefor the Note or Notes that the Noteholder making the exchange shall be
entitled to receive, bearing serial numbers not previously issued.

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<PAGE>

         (d) All Notes presented for registration of transfer, exchange or
payment shall, if so required by the Company, be duly endorsed by or be
accompanied by a written instrument or instruments of transfer in form
reasonably satisfactory to the Company, duly executed by the registered
Noteholder or by his, her or its duly authorized attorney.

         (e) Upon exchange or registration of transfer the Company may require
payment of a sum sufficient to cover any tax, or other governmental charge,
legal fees, agent fees or accounting charges that may be imposed or incurred by
the Company in relation thereto and any other expenses connected therewith.

         3.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.

         (a) If any Note shall become mutilated or be destroyed, lost or stolen,
the Company shall, upon the written request of the Holder thereof, execute and
deliver a new Note, bearing a serial number not previously issued, in exchange
and substitution for the mutilated Note or in lieu of and substitution for the
Note destroyed, lost or stolen; provided, however, that the Company shall not be
obligated to execute and deliver a new Note unless, (i) in every case, the
applicant requesting a substituted Note shall furnish to the Company such
security or indemnity as may be reasonably required by the Company to save it
harmless, and (ii) in every case of destruction, loss or theft, such applicant
shall also furnish to the Company evidence reasonably satisfactory to it of the
destruction, loss or theft of such Note and of the ownership thereof.

         (b) Upon the issuance of any substituted Note, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge,
legal fees, agent fees or auditing fees that may be incurred by the Company or
imposed in relation thereto and any other expenses connected therewith,
including, without limitation, counsel fees of the Note Agent, and in addition a
further sum not exceeding $100 for each Note so issued in substitution. In case
any Note that has matured or is about to mature shall have become mutilated or
be destroyed, lost or stolen, the Company may, with the consent of the
applicant, instead of issuing a substitute Note, pay or authorize the payment of
the same (without surrender thereof, except in the case of a mutilated Note), if
the applicant for such payment shall furnish the Company with such security or
indemnity as it may reasonably require to save it harmless and, in case of
destruction, loss or theft, evidence reasonably satisfactory to the Company of
the destruction, loss or theft of such Note and of the ownership thereof. Every
substituted Note issued pursuant to the provisions of this SECTION 3.6 by virtue
of the fact that any Note is destroyed, lost or stolen, shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be found at any time, and shall be entitled to all of
the benefits of this Agreement equally and proportionately with any and all
other Notes duly issued hereunder. All Notes shall be held and owned upon the
express condition that the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes and
shall preclude any and all other rights and remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.

         3.7 Cancellation of Notes; Acquisition of Notes by the Company. All
Notes surrendered for the purpose of payment, redemption, exchange or
registration of transfer shall be delivered to the Company for cancellation and
the Company shall cancel such Notes and all Notes that have been surrendered
directly to the Company for cancellation, and no Notes shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall indicate clearly on the face and on each and every
page of such canceled Notes the fact that such Notes are canceled. If the
Company shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes, unless
and until the same are canceled, and the Company shall not be entitled to vote

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<PAGE>

or participate in directing the activities of the Note Agent pursuant to this
Agreement with respect to any such acquired Notes.

         3.8 PERSONS ENTITLED TO INTEREST PAYMENTS. The person in whose name a
Note is registered at the close of business on any Record Date with respect to
any Interest Payment Date shall be entitled to receive any Interest payable with
respect to that Note on the Interest Payment Date next following such Record
Date, notwithstanding the cancellation of such Note upon any registration of
transfer or exchange thereof subsequent to such Record Date and prior to such
Interest Payment Date. The Holder of any Note issued upon the transfer, exchange
or substitution of another Note shall only be entitled to receive Interest
payable with respect to that Note from and after the Interest Payment Date next
following the first Record Date occurring after the issuance of that Note.

         3.9 BENEFITS OF PROVISIONS OF THIS AGREEMENT. Nothing in this Agreement
or in the Notes, expressed or implied, shall give or be construed to give the
Company, other than the parties thereto and the Noteholders, any legal or
equitable right, remedy or claim under or in respect of this Agreement, or under
any covenant, condition or provision herein contained, all the covenants,
conditions and provisions contained in this Agreement or in the Notes being for
the sole benefit of the parties hereto and the Noteholders.

                                   ARTICLE 4.
                                   REDEMPTION

         4.1 REDEMPTION GENERALLY. No redemption of the Notes shall be made,
except to the extent and in the manner provided in this Agreement.

         4.2 OPTIONAL REDEMPTION.

         (a) The Notes are redeemable, in whole or in part, at the option of the
Company, at any time on or after July 15, 2005 by payment by the Company of a
sum that represents payment of principal of the Notes or portion thereof or
accrued and unpaid interest thereon, if any, to the date of such payment.

         (b) The Company shall give written notice of its intent to prepay any
portion of the Notes to the Note Agent, not less than thirty (30) days nor more
than sixty (60) days before the date fixed for such pre-payment. Such notice
shall state (i) the date of redemption; (ii) the total amount of principal to be
redeemed on the redemption date and that, after the redemption date, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued; and (iii) the estimated accrued interest
applicable to such payment. The Notes called for redemption must be surrendered
to the Company at the address specified in the notice to collect the redemption
price and the accrued interest thereon. Unless the Company Defaults in the
payment of the redemption price or accrued interest on Notes called for
redemption ceases to accrue interest and the only remaining right of the Holders
is to receive payment of the redemption prices upon surrender of the Notes to
the Company.

         (c) If less than all of the balance of the Notes then outstanding are
to be called for redemption, then upon notice of the Company's intention to
redeem pursuant to SECTION 4.2(b) hereof, the Holders shall forthwith surrender
their Notes to the Company (i) for payment of the principal amount called for
redemption (including accrued and unpaid interest thereon, if any, to the date
of redemption) and (ii) exchange for a new Note of the aggregate principal
amount of the unredeemed balance with like maturity and interest rate. New Notes
representing the unredeemed balance of the principal amount of such Notes shall
be issued to the Holders thereof, without charge. If the Holder of any Note
shall fail to present such Note for payment and exchange to the extent of the
principal amount called for redemption (and to that extent only), interest shall
cease to accrue on the portion of the principal amount of such Notes called for

                                        7
<PAGE>

redemption on and after the redemption date, and such Notes shall not be
entitled to the benefit of this Agreement to the extent of the portion of their
principal amounts (and accrued and unpaid interest thereon, if any, to the date
of redemption) called for redemption.

         (d) If less than all of the total principal balance of the Notes then
outstanding are to be called for redemption, the Note Agent shall select the
particular Notes or portions thereof to be redeemed pro rata, by lot or by any
other method that the Note Agent considers fair and appropriate.

         4.3 CHANGE OF CONTROL REDEMPTION.

         (a) In the event that a Change of Control shall occur, the Company will
give written notice ("COMPANY NOTICE") thereof to the Noteholders. The Company
Notice shall be delivered no later than three (3) Business Days following the
occurrence of any Change of Control. The Company Notice shall (i) describe the
facts and circumstances of such Change of Control in reasonable detail; (ii)
make reference to this SECTION 4.3 and the right of the Noteholders to require
payment on the terms and conditions provided for in this SECTION 4.3; and (iii)
offer in writing to redeem the outstanding Notes for a redemption price
("REDEMPTION PRICE") equal to 100% of the principal amount of the Notes, plus
accrued interest to the date of redemption. Each Noteholder shall have the right
to accept such offer and require redemption of the Notes held by the Noteholder
by written notice to the Company ("NOTEHOLDER NOTICE") within thirty (30) days
following receipt of the Company Notice specifying a date for redemption
("REDEMPTION DATE") which Redemption Date shall not be later than three (3)
Business Days after the date of the Noteholder Notice. The Company shall on each
Redemption Date pay the redemption price with accrued interest to the Redemption
Date.

         (b) Without limiting the foregoing, notwithstanding the failure on the
part of the Company to give the Company Notice herein required as a result of
the occurrence of a Change of Control, each Noteholder shall have the right to
require the Company to redeem such Noteholder's Note for the Redemption Price
within thirty (30) days after such Noteholder has actual knowledge of any Change
of Control. In such event, the Company shall redeem such Noteholder's Note on
the date designated in the Noteholder's Notice delivered by such Noteholder.

                                   ARTICLE 5.
                        PAYMENT OF PRINCIPAL AND INTEREST

         5.1 DATE FOR PAYMENT OF PRINCIPAL AND INTEREST. Interest shall be
payable on the Interest Payment Dates and on the Maturity Date; and principal
shall be payable on the Maturity Date.

         5.2 INTEREST PAYABLE ON NOTES. The Company shall pay the Interest on
the unpaid principal balance of the Notes as provided herein.

         5.3 PAYING AGENT. The Note Agent shall serve as paying agent for the
Notes and shall make all payments pursuant to the Notes and this Agreement to
the Holders when due, but only as received in advance from the Company.

         5.4 APPLICATION OF PAYMENT. All payments received shall be applied to
the payment of the Notes in the following order of priority: first, to the
payment of accrued interest, and second, to the payment of principal then due.

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<PAGE>

                                   ARTICLE 6.
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company on the Closing Date hereby represents and warrants as
follows:

         6.1 ORGANIZATION, GOOD STANDING, AND QUALIFICATION. The Company is a
Delaware corporation duly organized, validly existing, and in good standing
under the laws of the state of Delaware and has all requisite power and
authority to own or lease and operate its properties and assets and to carry on
its business as now conducted.

         6.2 AUTHORIZATION. The Company has the power and authority to enter
into this Agreement and to perform all of its obligations hereunder. The
execution, delivery, and performance of this Agreement by the Company has been
duly authorized by all necessary actions, and this Agreement constitutes a
legal, valid, binding, and enforceable obligation of the Company except as such
may be limited by bankruptcy, insolvency, reorganization, assignment,
moratorium, or other similar laws relating to or affecting the rights of
creditors generally. No consent, approval, authorization, or order of any court
or governmental agency is required to execute, delivery and perform this
Agreement. The issuance of the Notes and the Stock has been duly authorized and,
when the Notes are executed and delivered and paid for in accordance with the
terms of this Agreement, the Notes will be valid and binding obligations of the
Company, enforceable in accordance with their terms.

         6.3 CAPITALIZATION. The authorized capital stock of the Company
consists of (a) 100,000,000 shares of Common Stock, par value $.001 per share,
and (b) 10,000,000 shares of Preferred Stock, par value $.001 per share, of
which 17,665,647 shares of common stock (net of all treasury stock) and 150,000
shares of preferred stock are issued and outstanding. All of the issued and
outstanding shares of stock have been duly authorized and are validly issued,
fully paid and nonassessable.

         6.4 COMPLIANCE WITH LAWS. Except as set forth in the Disclosure
Document, the Company has at all times complied and is in compliance in all
material respects with all laws applicable to the Company and its assets,
properties, operations and businesses, which failure or default would materially
adversely affect the business, properties, operations, or financial condition of
the Company (a "Material Adverse Effect").

         6.5 TAXES. Except as set forth in the Disclosure Document, all taxes
owed by the Company (whether or not shown on any tax return) have been paid, and
the Company has adequately provided for liability for current taxes not yet due
and payable on its books and records.

         6.6 INTELLECTUAL PROPERTY.

         (a) Except as set forth in the Disclosure Document, all patents,
trademark or service mark registrations, copyright registrations and
applications therefor (collectively, "INTELLECTUAL PROPERTY") necessary to
conduct the Company's business, and all such Intellectual Property is valid, in
full force, and has been properly maintained and, if applicable, renewed in
accordance with the laws of any relevant jurisdictions. Except as set forth in
the Disclosure Document, none of the Intellectual Property has been or is now
involved in any opposition, invalidation or cancellation proceeding, and no such
action is threatened.

         (b) The Company owns or possesses adequate, enforceable and
transferable licenses or other rights to use, without payment, all Intellectual
Property now used or employed in the Company's business, and (ii) the
transactions contemplated by this Agreement will not have a material adverse
effect on the rights of the Company in the Intellectual Property.

                                       9
<PAGE>

         (c) The right, title and interest of the Company in and to the
Intellectual Property are freely assignable and not subject to liens of any
other person or entity (in whole or in part) and are adequate and sufficient to
permit the Company to conduct its business as presently being conducted.

         (d) No action is presently planned or pending against any person to
protect or enforce any right or interest of the Company thereof in and to the
Intellectual Property.

         (e) No other person has infringed, violated, conflicted or interfered
with or is infringing, violating, conflicting with or interfering with, or is
engaged in any activity which would constitute a misappropriation of, any of the
rights or interest of the Company in and to any of the Intellectual Property or
any contract rights of any third party, (ii) the rendering by the Company of
their services and uses of the Intellectual Property does not infringe, violate,
conflict with or interfere with the patent, copyright, trademark, service mark,
trade secret, trade name or other intellectual property or proprietary right of
any third party, and (iii) the Company has not received any notice or any threat
of claim that the Intellectual Property infringes, violates, conflicts with or
interferes with any proprietary right of any other person.

         6.7 SEC REPORTS AND FINANCIAL STATEMENTS.

         (a) The Company has filed on a timely basis with the SEC all forms,
reports, schedules, registration statements, definitive proxy statements and
other documents (as they have been amended since the time of their filing, and
including any documents filed as exhibits thereto, collectively, the "SEC
REPORTS") required to be filed by the Company with the SEC since January 1,
2001, except that late filing of that certain Form 8-K related to the
acquisition transaction with Quisic Corporation, or any proper extensions
permitted by the Securities Laws. As of their respective dates and for the
periods reflected therein, the SEC Reports (including, without limitation, any
financial statements or schedules included or incorporated by reference therein)
complied in all material respects with the requirements of the Exchange Act or
the Securities Act, and the rules and regulations of the SEC promulgated
thereunder applicable, as the case may be, to such SEC Reports, and none of the
SEC Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.

         (b) The consolidated balance sheets as of March 31, 2003 and March 31,
2002 and the related consolidated statements of income, shareholders' equity and
cash flows for each of the three years in the period ended March 31, 2003
(including the related notes and schedules thereto) of the Company contained in
the Company's Form 10-K for the year ended March 31, 2003 included in the SEC
Reports present fairly, in all material respects, the consolidated financial
position and the consolidated results of operations and cash flows of the
Company and its consolidated subsidiaries as of the dates or for the periods
presented therein in conformity with GAAP applied on a consistent basis during
the periods involved except as otherwise noted therein.

         (c) The Company's unaudited consolidated balance sheet as of December
31, 2003 and the related consolidated statements of income, shareholders' equity
and cash flows for the three months and nine months then ended, as applicable
(collectively, the "MOST RECENT FINANCIAL STATEMENTS"), contained in the
Company's Form 10-Q for the fiscal quarter ended December 31, 2003 present
fairly, in all material respects (subject to normal year-end adjustments that
will not be material), the consolidated financial position and the consolidated
results of operations and cash flows of the Company and its consolidated
subsidiaries as of the date or for the periods presented therein in conformity
with GAAP applied on a consistent basis during the periods involved except as
otherwise noted therein.

                                       10
<PAGE>

         6.8 LITIGATION. Except as set forth in the Disclosure Document, the SEC
Reports set forth each instance in which the Company (a) is subject to any
outstanding injunction, judgment, order, decree, ruling or charge or (b) is a
party to any action, suit, proceeding, hearing or investigation of, in or before
any governmental or regulatory authority or before any arbitrator, is threatened
to be made a party to any action, suit, proceeding, hearing or investigation of,
in or before any governmental or regulatory authority or before any arbitrator.

         6.9 GOVERNMENTAL AUTHORIZATIONS AND REGULATIONS. The Company holds all
permits necessary to the conduct of its business. Such permits are valid,
binding and in full force and effect and the Company is in compliance with the
terms thereof. The Company has received no notice that any governmental or
regulatory authority intends to cancel, terminate or not renew any such permit.

         6.10 NO UNTRUE STATEMENTS. The representations and warranties contained
in this Agreement, and the statements contained in the Disclosure Document,
taken as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statement herein or
therein, in the light of the circumstances under which they were made, not
misleading.

                                   ARTICLE 7.
                            COVENANTS OF THE COMPANY

         7.1 MAINTENANCE OF OFFICE; OPERATION OF BUSINESS. The Company covenants
and agrees that, so long as any of the Notes remain outstanding, it will:

         (a) Maintain an office or agency where Notes may be presented for
registration, registration of transfer, exchange and payment as in this
Agreement provided, and where notices and demands to or upon the Company in
respect of the Notes and this Agreement may be served ("OFFICE"). The principal
office of the Company is currently located at 2999 North 44th Street, Suite 650,
Phoenix, Arizona 85018, or such other place as the Company may hereafter
designate by notice to the Note Agent and to the Noteholders, shall be such
Office.

         (b) Promptly pay and discharge, or cause to be paid and discharged, all
taxes, assessments and governmental charges or levies imposed upon the Company,
any of its Subsidiaries, or upon any of their respective assets, or upon any
part thereof; provided, however, that the Company shall not be required to pay
and discharge or cause to be paid and discharged any such tax, assessment,
charge or levy so long as the validity thereof shall be contested in good faith
by appropriate proceedings, nor shall the Company be obligated hereunder to pay
and discharge or cause to be paid and discharged any such tax, assessment,
charge or levy if such property shall, in the opinion of the Company, no longer
be advantageous to the Company in the conduct of its business, or if in the
opinion of the Company, any such tax assessment or charge exceeds the value of
such property on which it is levied, except where the failure to do so would not
result in a Material Adverse Effect.

         (c) Pay or cause to be paid the principal of and interest on all
Indebtedness heretofore or hereafter incurred or assumed by the Company, when
and as the same shall become due and payable, unless such Indebtedness shall be
renewed or extended, or unless such payment is not permitted under provisions
subordinating such Indebtedness to the Notes by operation of agreement or law
and not permit the occurrence of any act or omission which is or may be declared
to be a default thereunder; provided, however, that the Company shall not be
required to make any payment or to take any action by reason of the provisions
of this subsection at any time while it shall be contesting in good faith its
obligation to make such payment.

                                       11
<PAGE>

         (d) At all times keep proper books of record and account and
consolidated financial statements of the Company, together with all appropriate
notes and schedules that present fairly in all material respects the financial
position and the results of operations of the Company, as at the dates and for
the indicated periods in accordance with GAAP.

         (e) Continue to engage in the Principal Business.

         (f) After the date of the Disclosure Document, not permit through the
Company's act or omission any material adverse change in or affecting the
financial condition of the Company or any of its Subsidiaries or the earnings,
management, or business prospects of the Company or any of its Subsidiaries,
whether or not occurring in the ordinary course of business.

         7.2 COMPLIANCE WITH LAWS AND REGULATIONS; LICENSES AND PERMITS; NO
VIOLATION. The Company shall, and shall cause each of its Subsidiaries, as
applicable, to:

         (a) Conduct its business in compliance with all applicable federal,
state and local laws, rules and regulations. including, without limitation,
ERISA, OSHA, environmental laws, rules and regulations, and all federal laws,
rules and regulations, except where the failure to do so would not result in a
Material Adverse Effect.

         (b) Maintain in effect all certificates, licenses, permits or other
authorities issued by federal, state or local regulatory authorities which may
be required to conduct its business and retain possession of its properties
except where the failure to do so will not result in a Material Adverse Effect.

         (c) Not be in violation of or default under any provision of its
articles of incorporation, bylaws, or any of its agreements, leases, licenses,
contracts, franchises, mortgages, permits, deeds of trust, indentures or other
instruments or obligations to which it is a party or by which it or any of its
properties is bound, except where the failure to do so would not result in a
Material Adverse Effect.

         7.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF NOTE AGENT. The Company,
whenever necessary to fill a vacancy in the office of the Note Agent, will
appoint, in the manner provided in SECTION 10.7, a new Note Agent, so that there
shall at times be a Note Agent hereunder; provided, however, that the Company
shall not be deemed in Default hereunder during the pendency of any court
proceeding to appoint a new Note Agent.

         7.4 FURTHER INSTRUMENTS AND ACTS. The Company will, upon receipt
thereof from the Note Agent, execute and deliver such further instruments and do
such acts as may reasonably be necessary or proper to carry out the purposes of
this Agreement.

         7.5 PAYMENT OF NOTES. The Company shall pay the principal of and
accrued interest on the Notes on the dates and in the manner provided in the
Notes and this Agreement. The Company shall pay Interest (including
post-petition interest in any proceeding under any bankruptcy law) on overdue
principal at the default rate of interest stated on the Notes to the extent
lawful; and it shall pay Interest (including post-petition interest in any
proceeding under any bankruptcy law) on overdue installments of Interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.

         7.6 COMPLIANCE CERTIFICATES AND ANNUAL REPORTS.

         (a) The Company shall deliver to the Note Agent, on the Issue Date, an
Officers' Certificate stating that to the best of such Officer's knowledge the
activities of the Company and its Subsidiaries the Company is in compliance with
each and every covenant contained in this Agreement and is not in default in the

                                       12
<PAGE>

performance or observance of any of the terms, provisions and conditions hereof
and that to the best of such Officer's knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of,
or Interest, if any, on the Notes would be prohibited or, if such event has
occurred, a description of the event and what action the Company is taking or
proposes to take with respect thereto.

         (b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Note Agent forthwith upon any Officer becoming aware of any
Default or Event of Default or default in the performance of any covenant,
agreement or condition contained in this Agreement, an Officers' Certificate
specifying such Default or Event of Default and what action the Company or any
Subsidiary proposes to take with respect thereto.

         7.7 CORPORATE EXISTENCE. At its own cost and expense, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate existence of each
Subsidiary in their respective jurisdictions of formation, and all rights
(charter and statutory) and franchises of the Company and the Subsidiaries;
provided, however, that the Company shall not be required to preserve the
corporate existence of any Subsidiary, or any such right or franchise, if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous to the Company.

         7.8 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim an interest arising under any Arizona
usury law.

         7.9 MAINTENANCE OF PROPERTIES AND INSURANCE.

         (a) The Company shall cause all properties used or held for use in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order (ordinary wear and tear
excepted) and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments, and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times, except where the failure to do so would not result in a
Material Adverse Effect; provided further that nothing in this SECTION 7.9 shall
prevent the Company from discontinuing the operation or maintenance of any such
property, or disposing of it, if such discontinuance or disposal is, in the
judgment of the Company, desirable in the conduct of its business.

         (b) The Company shall provide or cause to be provided, for itself and
each of its Subsidiaries, insurance against loss or damage of the kinds that, in
the reasonable, good faith opinion of the Company are adequate and appropriate
for the conduct of the business of the Company and such Subsidiaries in a
prudent manner, with reputable insurers or with the government of the United
States or any agency or instrumentality thereof in such amounts, with such
deductibles or retentions, and by such methods as shall be customary, in the
reasonable, good faith opinion of the Company.

         7.10 SALE OF ASSETS; CONSOLIDATION; EQUITY; MERGER. The Company shall
not (a) sell, transfer, or otherwise dispose of or grant a security interest in,
or otherwise encumber any the Company's property for an amount or value that is
less than the amount the Company reasonably believes to be a fair and equivalent
value in return; or, (b) cease its operations, liquidate or dissolve.

                                       13
<PAGE>

         7.11 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.

         (a) The Company will not, and will not permit any of the Subsidiaries,
directly or indirectly, to authorize, issue, incur, assume, guarantee, become
liable, or otherwise become responsible for the payment of (collectively
"incur") any Indebtedness, except as provided herein.

         (b) The Company shall not, directly or indirectly, create or permit to
be created or allow to exist any Lien on any property now owned or hereafter
acquired by the Company, except (i) if the Lien arises from an operating and/or
capital lease that is for a sum not to exceed $50,000 per transaction; or (ii)
if the obligation giving rise to the Lien, which Lien shall always be
Subordinate Indebtedness, is obtained upon the written consent of the Note Agent
and a Subordination Agreement is entered into between the Note Agent and the
holder of the Subordinated Indebtedness acknowledging that the Notes are senior
in right of payment and priority to the Subordinated Indebtedness.

         (c) If a lien arises from an acquisition transactions, whether through
an asset purchase transaction and/or merger transaction, the Company may grant
to the seller a security interest in and to the assets that are acquired from
the seller to secure obligations or indebtedness to the seller, provided that
the Company will not grant to the seller any security interests and/or liens in
any of the Company's other property or assets not acquired from the seller in
that transaction; provided further, that notice is given to the Note Agent and a
Subordination Agreement is entered into between the Note Agent and the holder of
the Subordinated Indebtedness acknowledging that the Notes are senior in right
of payment and priority to the Subordinated Indebtedness.

         7.12 RESTRICTED PAYMENTS. The Company will not, and will not permit any
of the Subsidiaries to, directly or indirectly, make any Restricted Payment
without the prior written consent of the Note Agent.

         7.13 LIMITATIONS ON PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. The
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock, or any other interest or participation in or measured by its profits,
owned by the Company or a Subsidiary, (ii) pay any Indebtedness owed to the
Company or a Subsidiary of the Company, (iii) make loans or advances to the
Company or a Subsidiary of the Company, or (iv) transfer any of its properties
or assets to the Company or a Subsidiary of the Company.

         7.14 LOANS AND GUARANTIES. The Company shall not, directly or
indirectly, (a) loan or advance money or assets to any other Person or invest in
any other Person other than a Subsidiary; (b) loan or advance money to any
officer or director of the Company in excess of $50,000 per loan or loan amounts
in excess of an aggregate of $500,000; or (c) incur any obligation as surety or
guarantor.

         7.15 ISSUANCE OF STOCK; CHANGE IN OWNERSHIP OR CONTROL. [Deleted and
Reserved]

         7.16 PAYMENT ON OR MODIFICATION OF SUBORDINATED INDEBTEDNESS. The
Company shall not, directly or indirectly, make or accelerate any payment under
any Subordinated Indebtedness except regularly scheduled interest payments
provided that no default has occurred with respect to the Subordinated
Indebtedness, or amend, modify or supplement any provision of any Subordinated
Indebtedness.

                                       14
<PAGE>

         7.17 LIMITATIONS ON PLEDGE OF CAPITAL STOCK OF COMPANY OR SUBSIDIARIES.
The Company will not, and will not permit any of the Subsidiaries to, create,
incur, assume or suffer to exist any Liens upon any of their respective Capital
Stock.

                                   ARTICLE 8.
                                NOTEHOLDER'S LIST

         8.1 NOTEHOLDERS' LIST. The Company covenants and agrees that it and
every obligor upon the Notes will furnish or cause to be furnished to the Note
Agent at such times as the Note Agent may request in writing, within thirty (30)
days after receipt by the Company of any such request, a list in such form as
the Note Agent may reasonably require containing all information in the
possessions or control of the Company as to the name and addresses of the
Noteholders obtained (in the case of each list other than the first list) since
the date as of which the next previous list was furnished. Any such list may be
dated as of the date not more than fifteen (15) days prior to the time any
information is furnished or caused to be furnished and need not include
information received after such date.

         8.2 PRESERVATION AND DISCLOSURE OF LIST.

         (a) The Note Agent shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Noteholders (i) contained in the most recent list furnished to it as provided in
SECTION 8.1 and (ii) received by it thereunder.

         (b) The Note Agent may destroy any list furnished to it as provided in
SECTION 8.1 upon receipt of a new list as provided therein.

                                   ARTICLE 9.
       REMEDIES OF THE NOTE AGENT AND THE NOTEHOLDERS IN EVENT OF DEFAULT

         9.1 EVENTS OF DEFAULT. The occurrence of one or more of the following
events shall constitute an Event of Default:

         (a) the Company shall fail to pay any installment of principal or
Interest on any of the Notes when due and payable, whether upon the Maturity
Date or otherwise pursuant to this Agreement or the Notes; or

         (b) the Company shall fail to comply with any material covenant or
agreement, including those set forth in SECTION 4.2, on the part of the Company
in the Notes or in this Agreement for a period of thirty (30) days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Note Agent; or

         (c) [Deleted and Reserved]; or

         (d) (i) the Company shall commence or consent to any case, proceeding
or other action (1) under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of debtors seeking
reorganization, arrangement, adjustment, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (2) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets or the Company or any Subsidiary
shall make a general assignment for the benefit of creditors or admit in writing
that it is unable to pay its debts as they become due; or

                                       15
<PAGE>

         (ii)     there shall be commenced against the Company, any such case,
                  proceeding or other action referred to in SECTION 9.1(d)(i)
                  that (1) results in the entry of an order for relief or any
                  such adjudication or appointment, or (2) is not dismissed,
                  discharged or stayed within sixty (60) days from the entry
                  thereof; or

         (iii)    there shall be awarded against the Company a writ of
                  attachment, writ of execution, or similar attachment process
                  against all or any part of the Company's assets which the
                  Company shall not have set aside a reserve for the payment of
                  such within thirty (30) days from the entry or have been
                  vacated, discharged or stayed within thirty (30) days from the
                  entry thereof; or

         (iv)     the Company shall have been dissolved or terminated;

         (v)      any declared default of the Company under any Indebtedness
                  that gives the holder thereof the right to accelerate such
                  Indebtedness, and such Indebtedness is in fact accelerated by
                  the holder; or

         (vi)     the Company or any Subsidiary shall take any action
                  authorizing or in furtherance of or indicating its consent to
                  approval or acquiescence in any of the acts set forth above in
                  this SECTION 9.1(d).

In each and every such Event of Default, unless the principal of all the Notes
shall have already become due and payable, the Note Agent shall notify all of
the Noteholders of the occurrence of an Event of Default, and upon the direction
of the holders of more than 50% in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company, the Note Agent shall declare
the principal of and all accrued Interest on all the Notes to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Agreement or in the Notes
contained to the contrary notwithstanding. This provision, however, is subject
to the condition that if, at any time after the principal of the Notes shall
have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Note Agent a sum
sufficient to pay all Interest or principal that shall have become due otherwise
than by acceleration and the reasonable expenses of the Note Agent, and any and
all defaults under this Agreement, other than the nonpayment of principal of and
accrued Interest on Notes that shall have become due by acceleration, shall have
been remedied, then and in every such case the Holders of more than 50% in
aggregate principal amount of the Notes then outstanding, by written notice to
the Company and to the Note Agent, may waive all Defaults and rescind and annul
such declaration and its consequences; but no such waiver, rescission or
annulment shall extend to or shall affect any subsequent Default or shall impair
any right consequent thereon. In addition, upon each and every such Event of
Default, the Company shall not (x) make any payment under any Subordinated
Indebtedness; or (y) make a payment of any dividend or make any distribution in
cash or property to the holders of the Company's preferred stock.

         9.2 PAYMENT OF NOTES ON DEFAULT; SUIT THEREFOR.

         (a) The Company covenants that (i) in case Default shall be made in the
payment of any installment of Interest upon any of the Notes as and when the
same shall become due and payable, or (ii) in case Default shall be made in the
payment of the principal of any of the Notes as and when the same shall have
become due and payable, whether at the Maturity Date or otherwise pursuant to
this Agreement or the Notes, then the Company will pay to the Note Agent, for
the benefit of the Noteholders, the whole amount that then shall have become due
and payable on all such Notes for principal or Interest, or both, as the case
may be, with Interest upon the overdue principal; and, in addition thereto, upon
demand of the Note Agent, such further amount as shall be sufficient to cover

                                       16
<PAGE>

the reasonable costs and expenses of collection, including reasonable
compensation to the Note Agent, its agents, attorneys and counsel, and any
reasonable expenses or liability incurred by the Note Agent hereunder other than
through its gross negligence or bad faith.

         (b) In case the Company shall fail forthwith to pay such amounts upon
such demand and thirty (30) days written notice and failure to cure, the Note
Agent, for itself as principal with respect to amounts due to it, and as agent
of the Holders of the Notes then outstanding, shall notify the Noteholders of
such failure, and upon request of the Holders of more than 50% in aggregate
principal amount of the Notes then outstanding, shall institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company
and collect in the manner provided by law out of the property of the Company,
whenever situated, the moneys adjudged or decreed to be payable; provided,
however, that the Note Agent shall have no obligation to institute or prosecute
any actions or proceedings or to enforce any judgment or decree if the Note
Agent reasonably believes it is prohibited from doing so by automatic stay or
other similar provisions of the bankruptcy code or any other applicable law.

         (c) In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company or any other obligor on the Notes under
the bankruptcy code or any other applicable law relative to the Company or such
other obligor, its or their creditors or its or their property, or in case a
receiver or trustee shall have been appointed for its or their property, the
Note Agent, irrespective of whether the principal of the Notes shall be due and
payable as therein expressed or by declaration or otherwise, and irrespective of
whether the Note Agent shall have made any demand pursuant to the provisions of
this SECTION 9.2, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and Interest owing and unpaid in respect of the Notes, and,
in case of any judicial proceedings, to file such proofs as are advisable in
order to have the claims of the Note Agent and of the Noteholders allowed in
such judicial proceedings relative to the Company or any obligor on the Notes,
its or their creditors, or its or their property, and to collect and receive any
moneys or other property payable or deliverable on any such claims, and to
distribute the same after the deduction of its charges and expenses except as a
result of its gross negligence or bad faith; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized by each of the
Noteholders to make such payments to the Note Agent, and, in the event that the
Note Agent shall consent to the making of such payments directly to the
Noteholders, to pay to the Note Agent any amount due it for reasonable
compensation and expenses, including reasonable counsel fees incurred by it up
to the date of such distribution except as a result of its gross negligence or
bad faith.

         (d) All rights of action and of asserting claims under this Agreement
or under any of the Notes may be enforced by the Note Agent without the
possession of any of the Notes, or the production thereof on any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Note Agent shall be brought by it as agent of the Holders of the Notes then
outstanding, and any recovery of judgment shall be for the ratable benefit of
the Noteholders.

         9.3 APPLICATION OF MONEYS COLLECTED BY NOTE AGENT. Any moneys collected
by the Note Agent pursuant to SECTION 9.2 shall be applied in the following
order of priority at the date or dates fixed by the Note Agent for the
distribution of such moneys, upon presentation of the several Notes, and
stamping thereon the payment if only partially paid and upon surrender thereof
if fully paid:

         (a) First, to the payment of reasonable costs and expenses of
collection incurred by the Note Agent, its agents, attorneys and counsel, and of
all other reasonable expenses and liability incurred and all advances made by
the Note Agent, except as a result of its gross negligence or bad faith.

                                       17
<PAGE>

         (b) Second, if the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of Interest on the Notes, such payments
to be made ratably to the persons entitled thereto, without discrimination or
preference;

         (c) Third, if the principal of the outstanding Notes shall have become
due, whether at the Maturity Date or otherwise pursuant to this Agreement or the
Notes, to the payment of the whole amount then owing and unpaid upon the Notes
for principal and Interest, with interest on the overdue principal; such payment
is to be first applied to the payment of unpaid Interest, then to payment and
principal, without preference or priority of any Note over any other Note; and

         (d) Fourth, the payment of the remainder, if any, to the Company, its
successors or assigns, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct.

         9.4 PROCEEDINGS BY NOTEHOLDERS.

         (a) No Noteholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceedings in equity or at law
upon or under or with respect to this Agreement, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless such Noteholder
previously shall have given to the Note Agent written notice of Default and of
the continuance thereof, as herein before provided, and unless also the Holders
of more than 50% in aggregate principal amount of the Notes then outstanding
shall have made written request upon the Note Agent to institute such action,
suit or proceedings as Note Agent and on behalf of the Holders of the Notes then
outstanding, and shall have offered to the Note Agent such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Note Agent, for sixty days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding in accordance with such written
request as shall have been given to the Note Agent pursuant to SECTION 9.7; it
being understood and intended, and being expressly covenanted by the taker and
Holder of every Note with every other taker and Holder and the Note Agent, that
no one or more Noteholders shall have any right in any manner whatsoever by
virtue of this Agreement to affect, disrupt or prejudice the rights of any other
Noteholders, or to obtain or seek to obtain priority over or in preference to
any other such Noteholder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Noteholders.

         (b) Notwithstanding any other provision in this Agreement, the right of
any Noteholder to receive payment of the principal of and Interest on such Note
on or after the respective Interest Payment Date or Maturity Date, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Noteholder.

         9.5 PROCEEDINGS BY NOTE AGENT. In case of any Event of Default
hereunder, the Note Agent may, upon the direction of the Holders of more than
50% in aggregate principal amount of the Notes then outstanding, proceed to
protect and enforce the rights vested in it by this Agreement by such
appropriate judicial proceedings as the Note Agent shall deem most effectual to
protect and enforce any of such rights, either by suit in equity or by action at
law or by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Agreement, or to
enforce any other legal or equitable right vested in the Note Agent by this
Agreement or by law.

         9.6 REMEDIES CUMULATIVE AND CONTINUING. All powers and remedies given
by this Article 9 to the Note Agent or to the Noteholders shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any other power or
remedy or of any other power, and, subject to the provisions of SECTION 9.4,
every power and remedy given by this Article 9 or by law to the Note Agent or to

                                       18
<PAGE>

the Noteholders may be exercised from time to time and as often as shall be
deemed expedient by the Note Agent or by the Noteholders.

         9.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
NOTEHOLDERS. The Holders of more than 50% in aggregate principal amount of the
Notes then outstanding shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Note Agent or
exercising any power conferred on the Note Agent; provided, however, that such
direction shall not be otherwise than in accordance with law and the provisions
of this Agreement, and the Note Agent, subject to the provisions of SECTION
10.1, shall have the right to decline to follow any such direction if the Note
Agent in good faith shall, by an officer of the Note Agent, if the Note Agent is
a corporation, determine that the proceeding so directed would be unjustly
prejudicial to the Noteholders not taking part in such direction or would
involve it in personal liability; and, provided further, that, subject to the
provisions of SECTION 10.1, nothing contained in this Agreement shall impair the
right of the Note Agent in its discretion to take any action deemed proper by
the Note Agent and that is not inconsistent with such direction by the
Noteholders. Prior to any declaration accelerating the maturity of the Notes,
the Holders of more than 50% in aggregate principal amount of the Notes then
outstanding may on behalf of all of the Noteholders waive any past Default or
Event of Default hereunder and its consequences except a Default in the payment
of Interest on, or the principal of, the Notes. Upon any such waiver the
Company, the Note Agent and the Noteholders shall be restored to their former
positions and rights hereunder, respectively, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon. Whenever any Default or Event of Default hereunder shall
have been waived as permitted by this SECTION 9.7, such Default or Event of
Default shall for all purposes of the Notes and this Agreement be deemed to have
been cured and to be not continuing.

         9.8 NOTICE OF DEFAULTS. The Note Agent shall, within sixty days after
the occurrence of a Default, mail to all Noteholders, as the names and addresses
of such Holders appear upon the registration books of the Company, notice of all
Defaults known to the Note Agent, unless such defaults shall have been cured
before the giving of such notice (the term "Defaults" for the purposes of this
Section 9.8 being hereby defined to be the events specified in SECTION 9.1, not
including any periods of grace provided for therein and irrespective of the
giving of written notice provided for therein); provided, however, that, except
in the case of Default in the payment of the principal of or Interest on any of
the Notes, the Note Agent shall be protected in withholding such notice if the
Note Agent determines in good faith that the withholding of such notice is in
the interests of the Noteholders.

         9.9 UNDERTAKING TO PAY COSTS. All parties to this Agreement agree, and
each Holder of a Note by his, her or its acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in any suit against
the Note Agent for any action taken or omitted by it as Note Agent, the filing
by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorney's fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant.

         9.10 DEFAULT ON INDEBTEDNESS If any Indebtedness shall be declared due
and payable upon the occurrence of a default with respect to any Indebtedness,
then no amount shall be paid by the Company in respect to the Indebtedness,
unless and until the principal of and interest on the Notes then outstanding
shall be paid in full.

                                  ARTICLE 10.
                                   NOTE AGENT

         10.1 DUTIES AND LIABILITIES OF NOTE AGENT.

                                       19
<PAGE>

         (a) The Note Agent, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured),
the Note Agent shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in its exercise as a prudent
man would exercise or use under the circumstances in the conduct of his own
affairs.

         (b) No provision of this Agreement shall be construed to relieve the
Note Agent from liability for its own gross negligence in acting or omitting to
act, or its own willful misconduct, except that:

         (i)      prior to the occurrence of an Event of Default which may have
                  occurred:

                  (A)      the duties and obligations of the Note Agent shall be
                           determined solely by the express provisions of this
                           Agreement, and the Note Agent shall not be liable
                           except for the performance of such duties and
                           obligations as are specifically set forth in this
                           Agreement, and no implied covenants or obligations
                           shall be read into this Agreement against the Note
                           Agent; and

                  (B)      in the absence of bad faith on the part of the Note
                           Agent, the Note Agent may conclusively rely, as to
                           the truth of the statements and the correctness of
                           the opinions expressed therein, upon any certificates
                           or opinions furnished to the Note Agent and
                           conforming to the requirements of this Agreement; but
                           in the case of any such certificates or opinions that
                           by any provision hereof are specifically required to
                           be furnished to the Note Agent, the Note Agent shall
                           be under a duty to examine the same to determine
                           whether or not they conform to the requirements of
                           this Agreement;

         (ii)     the Note Agent shall not be liable for any error of judgment
                  made in good faith, unless it shall be proved that the Note
                  Agent was grossly negligent in ascertaining the pertinent
                  facts;

         (iii)    the Note Agent shall not be liable with respect to any action
                  taken or omitted to be taken by it in good faith in accordance
                  with the direction of the Holders of more than 50% in
                  aggregate principal amount of the Notes then outstanding
                  relating to the time, method and place of conducting any
                  proceeding for any remedy available to the Noteholders, or
                  exercising any power conferred upon the Note Agent, under this
                  Agreement; and

         (iv)     none of the provisions of this Agreement shall require the
                  Note Agent to expend or risk its own funds or otherwise incur
                  any personal financial liability in the performance of any of
                  its duties hereunder, or in the exercise of any of its rights
                  or powers, if it shall have reasonable grounds for believing
                  that repayment of such funds or adequate indemnity against
                  such risk or liability is not reasonably assured to it.

         (c) Whether or not herein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Note Agent shall be subject to the provisions of
this SECTION 10.1.

                                       20
<PAGE>

         10.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise provided
in SECTION 10.1:

         (a) the Note Agent may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, note, bond, debenture. or other paper or document
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties;

         (b) whenever in the administration of the provisions of this Agreement
the Note Agent shall deem it necessary or desirable that a matter be proved or
established prior to taking or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of gross negligence or bad faith on the part of the Note
Agent, be deemed to be conclusively proved and established by a certificate
signed by the Company and delivered to the Note Agent, and such certificate, in
the absence of gross negligence or bad faith on the part of the Note Agent,
shall be full warrant to the Note Agent for any action taken or omitted by it
under the provisions of this Agreement upon the faith thereof;

         (c) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a certificate of the Company (unless
other evidence in respect thereof be herein specifically prescribed);

         (d) the Note Agent may consult with legal counsel and any action taken
in accordance with such opinion of counsel shall be made with full and complete
authorization and protection hereunder if made in good faith and in reliance
thereon;

         (e) the Note Agent shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request, order or
direction of any of the Noteholders, pursuant to the provisions of this
Agreement, unless such Noteholders shall have offered to the Note Agent
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein contained shall,
however, relieve the Note Agent of the obligations, upon the occurrence of any
Event of Default (which has not been cured), to exercise such of the rights and
powers vested in it by this Agreement and to use the same degree of care and
skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs;

         (f) the Note Agent shall not be liable for any action taken or omitted
by it in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;

         (g) prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default that may have occurred, the Note Agent shall
not be bound to make any investigation into the facts or matters stated in the
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, note, bond, debenture, or other paper or document,
unless requested in writing so to do by the Holders of more than 50% in
aggregate principal amount of the Notes then outstanding; provided that if the
payment within a reasonable time to the Note Agent of the costs. expenses or
liabilities likely to be incurred by it in the making of such investigation is
not, in the opinion of the Note Agent, reasonably assured to the Note Agent by
the security afforded to it by the terms of this Agreement, the Note Agent may
require reasonable indemnity against such expense or liability as a condition to
so proceeding, the reasonable expense of every such examination shall be paid by
the Company, or, if paid by the Note Agent, shall be repaid by the Company upon
demand; and

         (h) the Note Agent may execute any of the rights or powers hereunder or
perform any duties hereunder either directly or by or through its agents or
attorneys.

                                       21
<PAGE>

         10.3 NO RESPONSIBILITY FOR RECITALS; ETC. The recitals contained herein
and in the Notes (except in the Note Agent's Certificate of Authentication)
shall be taken as the statements of the Company and the Note Agent assumes no
responsibility for the correctness of the same. The Note Agent makes no
representations as to the validity or sufficiency of this Agreement or of the
Notes. The Note Agent shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Note Agent in conformity with the provisions of this Agreement.

         10.4 MONEYS TO BE HELD IN TRUST. Subject to the provisions of Section
14.3, all moneys received by the Note Agent shall, until used or applied as
herein provided, be held in trust for the purposes for which they are received.

         10.5 COMPENSATION OF NOTE AGENT. The Company shall pay the Note Agent a
non-refundable set up fee of $5,000 on the Issue Date.

         10.6 EXPENSES OF NOTE AGENT. The Company shall reimburse the Note Agent
upon its request for all reasonable expenses incurred by the Note Agent in the
performance of Note Agent's obligations arising under the Agreement. The Company
also shall indemnify the Note Agent for, and hold it harmless against, any loss,
liability or expense incurred without gross negligence or bad faith on the part
of the Note Agent and arising out of or in connection with the acceptance or
administration of this agency, including the reasonable costs and expenses of
defending itself against any claim of liability in the premises.

         10.7 RESIGNATION OR REMOVAL OF NOTE AGENT.

         (a) Subject to SECTION 10.8(a), the Note Agent may at any time resign
by giving written notice of such resignation to the Company and by mailing
notice thereof to the Noteholders at their addresses, as they shall appear on
the registry books of the Company. Upon receiving such notice of resignation,
the Company shall promptly appoint a successor Note Agent by written instrument,
in duplicate, executed by the Company, one copy of which instrument shall be
delivered to the resigning Note Agent and one copy to the successor Note Agent.
If no successor Note Agent shall have been so appointed and have accepted
appointment within sixty days after the publication of such notice of
resignation, the resigning Note Agent may petition any court of competent
jurisdiction for the appointment of a successor Note Agent, or any Noteholder
who has been a bona fide Holder of a Note or Notes for at least six months may,
subject to the provisions of SECTION 9.9, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
Note Agent. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor Note Agent.

         (b) In case at any time the Note Agent shall become incapable of
acting, or in connection with the performance of its obligations hereunder shall
have acted in bad faith, shall have been grossly negligent or shall have
willfully breached this Agreement; or shall be adjudged a bankrupt or insolvent,
or a receiver of the Note Agent or of its property shall be appointed, or any
public officer shall take charge or control of the Note Agent or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation, then
in any such case the Company may remove the Note Agent and appoint a successor
Note Agent by written instrument, in duplicate, executed by order of the
Company, one copy of which instrument shall be delivered to the Note Agent so
removed and one copy to the successor Note Agent, or, subject to the provisions
of SECTION 9.9, any Noteholder who has been a bona fide Holder of a Note or
Notes for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Note Agent and the appointment of a successor Note Agent. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Note Agent and appoint a successor Note Agent.

                                       22
<PAGE>

         (c) Except as expressly provided in SECTION 10.7(b), the Company shall
have no right or power to remove Note Agent.

         (d) Any resignation or removal of the Note Agent and appointment of a
successor Note Agent pursuant to any of the provisions of this SECTION 10.7
shall become effective upon acceptance of appointment by the successor Note
Agent as provided in SECTION 10.8.

         10.8 ACCEPTANCE BY SUCCESSOR NOTE AGENT.

         (a) Any successor Note Agent appointed as provided in Section 10.7
shall execute, acknowledge and deliver to the Company and to its predecessor
Note Agent an instrument accepting such appointment hereunder, and thereupon the
resignation of the predecessor Note Agent shall become effective and such
successor Note Agent, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of his predecessor
hereunder, with like effect as if originally named as Note Agent herein; but,
nevertheless, on the written request of the Company or of the successor Note
Agent, the Note Agent ceasing to act shall, upon payment of any amounts then due
it pursuant to the provisions of SECTION 10.5, execute and deliver an instrument
transferring to such successor Note Agent all the rights and powers of the Note
Agent so ceasing to act. Upon request of any such successor Note Agent, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor all such rights and
powers.

         (b) Upon acceptance of appointment by a successor Note Agent as
provided in this SECTION 10.8, the Company shall mail notice of the succession
of such Note Agent hereunder to the Noteholders at their addresses, as they
shall appear on the registry books of the Company. If the Company fails to mail
such notice within ten days after acceptance of appointment by the successor
Note Agent, the successor Note Agent shall cause such notice to be mailed at the
expense of the Company.

                                   ARTICLE 11.
               ACTS OF NOTEHOLDERS; EVIDENCE OF OWNERSHIP OF NOTES

         11.1 ACTS OF NOTEHOLDERS. Any action to be taken by Noteholders may be
evidenced by one or more concurrent written instruments of similar tenor signed
or executed by such Noteholders in person or by any agent appointed in writing.
The fact and date of the execution by any person or any such instrument may be
proved by acknowledgment before a notary public or other officer empowered to
take acknowledgments, or by an affidavit of a witness to such execution.

         11.2 OWNERSHIP OF NOTES. Prior to due presentment of any Note for
registration of transfer, the Company and the Note Agent may deem the person in
whose name the Note shall be registered upon the books of the Company as the
absolute owner of such Note (whether or not such Note shall be overdue and
notwithstanding any notation of ownership or writing thereon by anyone other
than the Note Agent), for the purpose of receiving payment of or on account of
the principal of and Interest on such Note and for all other purposes, and
neither the Company nor the Note Agent shall be affected by any notice to the
contrary. Payment of the principal amount of or Interest on such Note shall be
made only to or upon the order in writing of the registered owner thereof. All
such payments shall be valid and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Note.

         11.3 ACTION TAKEN BY THE NOTEHOLDERS. Any action taken by the Holders
of more than 50% in aggregate principal amount of the Notes specified in this
Agreement in connection with such action shall be conclusively binding upon the
Company, the Note Agent and the Noteholders. Any action by any Noteholder shall

                                       23
<PAGE>

bind all future Holders of the same Note in respect of anything done or suffered
by the Company or the Note Agent in pursuance thereof.

                                  ARTICLE 12.
                               REGISTRATION RIGHTS

         12.1 REQUIRED REGISTRATION.

         (a) Following the date which is ninety (90) days following the Issue
Date, the holders of Stock constituting at least fifty percent (50%) of the
Registrable Securities then owned beneficially or of record by Purchasers and
their permitted transferees may request the Company to register under the
Securities Act all or any portion of the shares of Registrable Securities held
by such requesting holder or holders for sale in the manner specified in such
notice; provided, however, that the Company may, by notice to the requesting
holders, delay such requested registration if the Company's Board of Directors
determines in good faith that such registration at the time requested would have
a material adverse effect upon the Company; provided, further, however, that the
Company's ability to delay such registration shall be limited to durations of no
longer than ninety (90) days and the Company shall not delay more than once
during any twelve (12) month period. The Company shall not be obligated pursuant
to this SECTION 12.1 to effectuate more than one (1) registration.

         (b) Following receipt of any notice pursuant to SECTION 12.1(a), the
Company shall promptly notify all Purchasers and permitted transferees from whom
such notice has not been received and, as soon thereafter as practicable, shall
use its reasonable efforts to register under the Securities Act, for public sale
in accordance with the method of disposition specified in such notice from
requesting holders, the number of shares of Registrable Securities specified in
such notice (and in all notices received by the Company from other holders
within twenty (20) days after the giving of such notice by the Company). If such
method of disposition shall be an underwritten public offering, the Company
shall designate the managing underwriter of such offering, following
consultation and subject to the approval of the Purchasers and permitted
transferees from whom notice has been received, which approval shall not be
unreasonably withheld or delayed. All sellers must participate in the
underwriting. The Company's registration obligation hereunder shall be deemed
satisfied only when a registration statement or statements covering all shares
of Registrable Securities specified in notices received as aforesaid, for sale
in accordance with the method of disposition specified by the requesting
holders, shall have become effective and, if such method of disposition is a
firm commitment underwritten public offering, all such shares shall have been
sold pursuant thereto.

         (c) The Company shall be entitled to include in any registration
statement referred to in this SECTION 12.1, for sale in accordance with the
method of disposition specified by the requesting holders, shares of Common
Stock to be sold by the Company for its own account and for the account of other
selling stockholders, except as and to the extent that, in the reasonable
opinion of the managing underwriter (if such method of disposition shall be an
underwritten public offering), such inclusion would materially adversely affect
the marketing of the Registrable Securities to be sold. Except for registration
statements on Form S-4, S-8 or any successor thereto, the Company will not file
with the Commission any other registration statement with respect to its Common
Stock, whether for its own account or that of other shareholders, from the date
of receipt of a notice from requesting holders pursuant to this SECTION 12.1
until the completion of the lesser of (i) the period of distribution of the
shares of Registrable Securities registered thereby or (ii) 180 days from the
effective date of the registration statement, unless the Registrable Securities
shall be entitled to be included therein in accordance with SECTION 12.2 below.

                                       24
<PAGE>

         (d) The Company will use commercially reasonable efforts to maintain
the effectiveness of any form used to register the shares pursuant to this
SECTION 12.1 for up to one hundred eighty (180) days or such earlier time as all
of the Registrable Securities have been sold.

         12.2 INCIDENTAL REGISTRATION. If at any time prior to the two-year
anniversary of the Issue Date the Company determines to register any of its
securities under the Securities Act for sale to the public, whether for its own
account or for the account of other security holders or both (except with
respect to registration statements on Form S-8 or its then equivalent, or in
connection with a Rule 145 transaction or Form S-4 or its equivalent, or another
form not available for registering the Registrable Securities for sale to the
public), each such time it will give prompt written notice to all holders of
outstanding Registrable Securities of its intention so to do and of the proposed
method of distribution of such securities. Upon the written request of any such
holder, received by the Company within 20 days after the giving of any such
notice by the Company, to include in the registration all or any part of the
Registrable Securities, the Company will use all reasonable efforts to cause the
Registrable Securities as to which registration shall have been so requested
under this SECTION 12.2 to be included in the securities to be covered by the
registration statement proposed to be filed by the Company, all to the extent
and under the conditions such registration is permitted under the Securities
Act. In the event that any registration pursuant to this SECTION 12.2 shall be,
in whole or in part, an underwritten public offering of Common Stock, the number
of shares of Registrable Securities to be included in such an underwriting may
be reduced (pro rata among the requesting holders under this SECTION 12.2 based
upon the number of shares of Registrable Securities owned by such holders) if
and to the extent that the managing underwriter shall be of the opinion that the
inclusion of some or all of the Registrable Securities would adversely affect
the marketing of the securities to be sold by the Company therein. Any such
limitation shall be imposed in such manner so as to avoid any diminution in the
number of shares the Company may register for sale by giving first priority for
the shares to be registered for issuance and sale by the Company, by giving
second priority for the shares to be registered pursuant to this SECTION 12.2,
and by giving third priority for the shares to be registered for sale by any
stockholder of the Company (including any Purchaser or permitted transferee)
pursuant to the terms of any other agreement; provided, however, that no such
limitation shall reduce the amount of securities of Purchasers or permitted
transferees included in the registration below twenty percent (20%) of the total
amount of securities included in such registration. Notwithstanding the
foregoing provisions, the Company may, in its sole discretion, terminate or
withdraw any registration statement referred to in this SECTION 12.2 without
thereby incurring any liability to the holders of Registrable Securities.

         12.3 REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of SECTIONS 12.1 or 12.2 to use all reasonable efforts to
effect the registration of any shares of Registrable Securities under the
Securities Act, the Company will, at its cost and expense (including, without
limitation, payment of the costs and expenses described in SECTION 12.4), as
expeditiously as reasonably practicable:

         (a) prepare and file with the Securities and Exchange Commission (the
"SEC") a registration statement (which, in the case of an underwritten public
offering, shall be on Form S-1 or other form of general applicability
satisfactory to the managing underwriter selected as therein provided) with
respect to such securities and use all reasonable efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided);

         (b) prepare and file as expeditiously as reasonably practicable and in
any event within 90 days with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period specified
in SECTION 12.3(a) above and comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by such

                                       25
<PAGE>

registration statement in accordance with the sellers' intended method of
disposition set forth in such registration statement for such period;

         (c) furnish to each seller of Registrable Securities and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Registrable Securities covered by such registration
statement;

         (d) use all reasonable efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the sellers of Registrable Securities or, in
the case of an underwritten public offering, the managing underwriter reasonably
shall request; provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;

         (e) use all reasonable efforts to list the Registrable Securities
covered by such registration statement with Nasdaq or any securities exchange on
which the Common Stock of the Company is then listed;

         (f) immediately notify each seller of Registrable Securities and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. The sellers of
Registrable Securities agree upon receipt of such notice forthwith to cease
making offers and sales of Registrable Securities pursuant to such registration
statement or deliveries of the prospectus contained therein for any purpose
until the Company has prepared and furnished such amendment or supplement to the
prospectus as may be necessary so that, as thereafter delivered to purchasers of
such Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;

         (g) notify each seller of Registrable Securities under such
registration statement of (i) the effectiveness of such registration statement,
(ii) the filing of any post-effective amendments to such registration statement,
or (iii) the filing of a supplement to such registration statement;

         (h) if the distribution is an underwritten offering, at the request of
any seller of Registrable Securities, use all reasonable efforts to furnish on
the date that Registrable Securities are delivered to the underwriters for sale
pursuant to such registration: (i) an opinion (dated such date) of counsel
representing the Company for the purposes of such registration, addressed to the
sellers and the underwriters, and in customary form; and (ii) a letter (dated
such date) from the independent public accountants retained by the Company,
addressed to the sellers and the underwriters and covering such matters with
respect to such registration as such underwriters reasonably may request; and

         (i) make available for inspection upon reasonable notice during the
Company's regular business hours by each seller of Registrable Securities, any
underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all material financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers and
directors to supply all information reasonably requested by any such seller,

                                       26
<PAGE>

underwriter, attorney, accountant or agent in connection with such registration
statement.

         For purposes of SECTIONS 12.3(a), 12.3(b) and 12.1(c), the period of
distribution of Registrable Securities in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Registrable Securities in any other registration shall be deemed to extend
until the earlier of (i) the sale of all Registrable Securities covered thereby
or (ii) one hundred eighty (180) days after the effective date thereof, with
reasonable extensions to be granted for suspensions thereof.

         In connection with each registration pursuant to SECTIONS 12.1 or 12.2
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.

         12.4 EXPENSES. All expenses incurred by the Company in complying with
SECTIONS 12.1 and 12.2, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, transfer taxes, fees of transfer agents and registrars, and the
fees and disbursements of one counsel for the sellers of Registrable Securities
but excluding any Selling Expenses, are called "Registration Expenses." All
underwriting discounts and selling commissions applicable to the sale of
Registrable Securities and the fees of more than one counsel are called "Selling
Expenses."

         The Company will pay all Registration Expenses in connection with each
registration statement under SECTIONS 12.1 or 12.2. The Company shall not,
however, be required to pay for the Registration Expenses of any registration
proceeding begun pursuant to SECTION 12.1, the request for which is subsequently
withdrawn by the requesting holders of Registrable Securities, in which event
the Registration Expenses shall be borne by the requesting holders of the
Registrable Securities in proportion to the number of shares for which
registration was requested. All Selling Expenses in connection with each
registration statement under SECTIONS 12.1 or 12.2 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.

         12.5 INFORMATION BY HOLDER. The holder or holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such holder or holders of Registrable Securities, the
Registrable Securities held by them and the distribution proposed by such holder
or holders of Registrable Securities as the Company may reasonably request in
writing and as shall be required in connection with any registration (including
any amendment to a registration statement or prospectus), qualification or
compliance.

         12.6 Indemnification and Contribution.

         (a) In the event of a registration of any of the Registrable Securities
under the Securities Act pursuant to SECTIONS 12.1 or 12.2, the Company will
indemnify and hold harmless each seller of such Registrable Securities
thereunder, each underwriter of such Registrable Securities thereunder and each
other person, if any, who controls such seller or underwriter within the meaning
of SECTION 15 of the Securities Act, from and against any losses, claims,
damages or liabilities, joint or several, to which such seller, underwriter or
controlling person may become subject under the Securities Act or under any
other statute or at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based

                                       27
<PAGE>

upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or any violations of applicable law relating to such
registration, and will pay the legal fees and other expenses of each such
seller, each such underwriter and each such controlling person incurred by them
in connection with investigating or defending any action, whether or not
resulting in any liability, insofar as such loss, claim, damage, liability or
action results from the foregoing; provided, however, that the Company will not
be liable to a seller, underwriter or controlling person in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in reliance upon and in conformity with information
furnished in writing by any such seller, any such underwriter or any such
controlling person specifically for use in such registration statement or
prospectus; and, provided, further, however, that the Company will not be liable
to a holder in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue or alleged untrue
statement or omission or an alleged omission made in any preliminary prospectus
or final prospectus if (i) such holder failed to send or deliver a copy of the
final prospectus or prospectus supplement with or prior to the delivery of
written confirmation of the sale of the Registrable Securities, and (ii) the
final prospectus or prospectus supplement would have corrected such untrue
statement or omission.

         (b) In the event of a registration of any of the Registrable Securities
under the Securities Act pursuant to SECTIONS 12.1 or 12.2, each seller of such
Registrable Securities thereunder, severally and not jointly, will indemnify and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Registrable
Securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will pay the legal fees and other
expenses of the Company and each such officer, director, underwriter and
controlling person incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that such seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information furnished in
writing to the Company by such seller specifically for use in such registration
statement or prospectus; and provided, further, however, that the liability of
each seller hereunder shall be limited to the amount of net proceeds received by
such seller in connection with such registration.

         (c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
such indemnified party under this SECTION 12.6 except and only to the extent the
indemnifying party is prejudiced by such omission. In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to

                                       28
<PAGE>

participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its election so
to assume and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this SECTION 12.6 for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof; provided, however, that, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded (based on the advice of counsel) that there may
be reasonable defenses available to it which are different from or additional to
those available to the indemnifying party or if the interests of the indemnified
party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel as required by the local rules of such jurisdiction) at any time
for all such indemnified parties.

         (d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Securities exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this SECTION 12.6 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this SECTION 12.6 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any such
selling holder or any such controlling person in circumstances for which
indemnification is provided under this SECTION 12.6; then, and in each such
case, the Company and each such holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion as may be reasonable taking into account such
matters as (A) their relative fault as to the matters giving rise to such
losses, claims, damages or liabilities and (B) their relative ability or
opportunity to have avoided such losses, claims, damages or liabilities;
provided, however, that, in any such case, no person or entity guilty of
fraudulent misrepresentation (within the meaning of SECTION 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.

         (e) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.

         (f) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.

         12.7 CHANGES IN COMMON STOCK OR PREFERRED SHARES. If, and as often as,
there is any change in the Common Stock by way of a stock split, stock dividend,
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, then the registration
rights granted by this SECTION 12 shall continue with respect to all of the
Registrable Securities as though not changed.

                                       29
<PAGE>

         12.8 DAMAGES The Company recognizes and agrees that the holders of
Registrable Securities will suffer irreparable harm and will not have an
adequate remedy at law if the Company fails to comply with any provision of this
Article 12, and the Company expressly agrees that, in the event of such failure,
the holders of Registrable Securities or any other person entitled to the
benefits of this Article 12 shall be entitled to seek specific performance of
any and all provisions hereof and may seek to enjoin the Company from continuing
to commit any further breach of this Article 12.

                                  ARTICLE 13.
                           AMENDMENTS AND SUPPLEMENTS

         13.1 AMENDMENTS AND SUPPLEMENTS WITHOUT NOTEHOLDERS' CONSENT. This
Agreement may be amended or supplemented at any time and from time to time,
without the consent of Note Holders , by the written agreement of the Company
and the Note Agent for the purpose of curing any ambiguity or curing, correcting
or supplementing any defective provision of this Agreement in such manner as
shall not be inconsistent with this Agreement and shall not materially adversely
affect the Purchasers.

         13.2 AMENDMENTS WITH NOTEHOLDERS' CONSENT. This Agreement may be
amended from time to time by a written amendment approved in writing by the
Noteholders who hold more than 50% in aggregate principal amount of the Notes.

         13.3 NOTE AGENT AUTHORIZED TO JOIN AMENDMENTS; RELIANCE ON COUNSEL. The
Note Agent is authorized to join in the execution and delivery of any amendment
to this Agreement permitted by this SECTION 13 and in so doing shall be fully
protected by an opinion of counsel that such amendment is so permitted and that
all things necessary to make it a valid and binding agreement have been done.

                                  ARTICLE 14.
            SATISFACTION AND DISCHARGE OF AGREEMENT; UNCLAIMED MONIES

         14.1 DISCHARGE OF AGREEMENT. When the principal and Interest on all
Notes issued hereunder have been paid, or provision has been made for payment of
the same, together with all other sums payable hereunder by the Company, the
right, title and interest of the Note Agent shall thereupon cease, and the Note
Agent, on demand of the Company, shall release this Agreement and shall execute
such documents to evidence such releases as may be reasonably required by the
Company and shall turn over to the Company for and on account of the Company or
such other person, body or authority as may be entitled to receive the same, all
balances, if any, held by it, not required for the payment of the Notes and such
other sums. Provision for the payment of the Notes shall be deemed to have been
made upon the delivery to the Note Agent of cash and in amounts sufficient to
make all payments specified above.

         14.2 DEPOSITED MONEYS TO BE HELD IN TRUST BY THE NOTE AGENT. Any moneys
deposited with the Note Agent pursuant to SECTION 14.1 shall be held in trust
and, subject to the provisions of SECTION 14.3, applied by it to the payment to
the Holders of the particular Notes for the payment or redemption of which such
moneys have been deposited with the Note Agent of all sums due thereon for
principal and Interest.

         14.3 UNCLAIMED MONEYS. Any moneys deposited with the Note Agent not
applied but remaining unclaimed by the Noteholders for six years after the date
upon which the principal and Interest on such Notes shall have become due and
payable shall be repaid to the Company by the Note Agent on demand, or if held
in trust by the Company may at the Company's option be released from such trust,
and the Noteholder entitled to receive such payment shall thereafter look only
to the Company, as the holder of a general claim, for the payment thereof.

                                       30
<PAGE>

                                  ARTICLE 15.
           NO REGISTRATION OF NOTES; RESTRICTIONS ON TRANSFERABILITY.

         The Notes and Stock issued pursuant hereto have not been registered
under the Securities Act, and this Agreement has not been qualified under the
Trust Indenture Act of 1939, as amended (the "INDENTURE ACT"), in reliance on
exemptions from registration and qualification provided by the Securities Act
and the Indenture Act, respectively. No Purchaser may sell, transfer, pledge or
hypothecate all or any portion of his Note or Stock at any time in the absence
of (1) a current and effective registration statement under the Securities Act
and applicable state securities laws with respect to the Notes or the Stock or
(2) an opinion of counsel acceptable to the Company (obtained at the expense of
the Purchaser) to the effect that such registration is not required. The Notes
and the Stock shall bear a legend to the foregoing effect. The Company has no
present intention of registering the Notes under the Securities Act or of
qualifying this Agreement under the Indenture Act. In addition, none of the
Notes may be transferred unless the Assignment Form attached to the Note (or
such other form prescribed by the Company) is executed by the transferring
Noteholder and the transferee and is duly notarized and delivered to the
Company.

                                  ARTICLE 16.
                            MISCELLANEOUS PROVISIONS.

         16.1 PROVISIONS BINDING ON THE COMPANY'S SUCCESSORS. All the covenants,
stipulations, promises and agreements in this Agreement contained by or on
behalf of the Company shall bind its successors and assigns, whether so
expressed or not.

         16.2 ADDRESSES FOR NOTICE. Any notice or demand that by any provision
of this Agreement is required or permitted to be given or served may be given or
served by personal delivery or by being deposited in the U.S. mail, registered
or certified mail, return receipt requested, postage prepaid, and addressed
(until another address is filed by the intended recipient with the other party
hereto):

       If to Note Agent:         Cerberus Financial, Inc.
                                 2999 North 44th Street, Suite 100
                                 Phoenix, Arizona 85018
                                 Attention: Thomas R. Hislop

       If to Company:            iLinc Communications, Inc.
                                 2999 North 44th Street, Suite 650
                                 Phoenix, Arizona 85018
                                 Attention: __________

         If to any Purchaser at such address as set forth in the Note Agent's
records.

         16.3 REPRESENTATIONS AND WARRANTIES. [Intentionally Omitted].

         16.4 GOVERNING LAW. This Agreement and each Note shall be deemed to be
a contract made under the laws of the State of Arizona and for all purposes
shall be construed in accordance with and governed by the laws of such State
without giving effect to its principles of conflicts of laws.

         16.5 EFFECT OF INVALIDITY OF PROVISIONS. In case any one or more of the
provisions contained in this Agreement or in the Notes shall for any reason be
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement or of such Notes, and this Agreement and such Notes shall be construed
as if such invalid or illegal or unenforceable provision had never been
contained herein or therein.

                                       31
<PAGE>

         16.6 TABLE OF CONTENTS AND HEADINGS. The table of contents, titles and
headings of the articles and sections of this Agreement have been inserted for
convenience of reference only, are not to be considered to be a part hereof, and
shall in no way modify or restrict any of the terms or provisions hereof.

         16.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of such
counterparts shall constitute but one and the same instrument.

EXECUTED to be effective as of the date first set forth above.

COMPANY:                                 NOTE AGENT:

iLINC COMMUNICATIONS, INC.,              CERBERUS FINANCIAL, INC.,
a Delaware corporation                   an Arizona corporation

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

Name: James M. Powers, Jr.               Name:
     ----------------------------------       ----------------------------------

Title: Chairman, President and CEO       Title:
       ---------------------------             ---------------------------------

PURCHASERS:

--------------------------------          -------------------------------------
[Printed Name]                            [Printed Name]

--------------------------------          -------------------------------------
[Signature]                               [Signature]

             [The Remainder of This Page Intentionally Left Blank.]

                                       32
<PAGE>

                                   SCHEDULE 1

-------------------------------------------------------------------------------
                             Number of Shares                Principal Amount
           Name              of Common Stock  Note Number        of Note
--------------------------- ----------------- ------------ --------------------

--------------------------- ----------------- ------------ --------------------

--------------------------- ----------------- ------------ --------------------

--------------------------- ----------------- ------------ --------------------

--------------------------- ----------------- ------------ --------------------

--------------------------- ----------------- ------------ --------------------

--------------------------- ----------------- ------------ --------------------

                                       33
<PAGE>

                                    EXHIBIT A
                                    ---------

                                  Form of Note

                              [CERTIFICATE NUMBER]

THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT.("1933 ACT").
THIS NOTE HAS NOT BEEN ISSUED PURSUANT TO AN INDENTURE QUALIFIED UNDER THE TRUST
INDENTURE ACT OF 1939, AS AMENDED. THIS NOTE MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, TO ANY
PERSON IN THE ABSENCE OF: (1) A CURRENT AND EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS WITH RESPECT TO THIS
NOTE OR (2) AN OPINION OF COUNSEL ACCEPTABLE TO iLINC COMMUNICATIONS, INC. THAT
SUCH REGISTRATION IS NOT REQUIRED.

                           ILINC COMMUNICATIONS, INC.
                       10.0% SENIOR NOTE DUE JULY 15, 2007

[$________________]                                           [__________, 2004]

iLinc Communications, Inc., a Delaware corporation ("Company"), promises to pay
to (the "Holder") or the Holder's registered assigns, the principal sum of
_____________ Dollars ($_________) and to pay interest (computed on the basis of
a 360-day year composed of 12 months of 30 days each) on the principal amount
then outstanding from time to time remaining unpaid hereon, at the rate of ten
percent (10.0%) per annum (the "Stated Rate") from the date hereof until the
later of July 15, 2007 (the "MATURITY DATE") or the date upon which the
principal, interest and all other Indebtedness evidenced hereby shall have been
satisfied, with such interest payable quarterly on the fifteenth day of each
January, April, July and October commencing July 15, 2004 and payable in such
currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts. Upon an Event of Default,
after notice and failure to cure, the Company shall pay interest, on overdue
principal and (to the extent legally enforceable) on any overdue installment of
interest, at the rate of the Stated Rate plus 5.0% per annum after maturity
whether by acceleration or otherwise, until fully paid. If any amount of
principal or interest on or in respect of this Note becomes due and payable on
any date which is not a Business Day, such amount shall be payable on the next
preceding Business Day.

All capitalized terms used but not otherwise defined herein shall have the
meaning set forth in the Note Agreement (as defined in the next paragraph).

This Note is one of the 10% Senior Notes due July 15, 2007 of the Company issued
as a part of the Offering under and pursuant to the terms and provisions of the
Unit Purchase and Agency Agreement dated March 19, 2004 ("Unit Agreement")
entered into by the Company, the Note Agent , and the Purchasers. This Note, and
the Holder hereof, is subject to the terms and conditions of the Unit Agreement,
with all of such terms incorporated herein by this reference, and with each
Holder entitled equally and ratably with the Holders of all other Notes
outstanding under the Unit Agreement to all the benefits and subject to all of
the obligations provided for thereby or referred to in the Unit Agreement.

                                   Exhibit A-1

<PAGE>

THIS NOTE IS SENIOR AND WILL RANK IN PRIORITY IN RIGHT OF PAYMENT TO ALL
INDEBTEDNESS OF THE COMPANY AS DEFINED IN THE UNIT AGREEMENT.

This Note may be declared due prior to the Maturity Date, upon the occurrence of
an Event of Default, and on the terms and in the manner and amounts as provided
in the Note Agreement.

This Note is subject to prepayment or redemption at the option of the Company
prior to the expressed Maturity Date any time after July 15, 2005, and on the
terms and conditions and in the amounts set forth in the Note Agreement.

Upon the occurrence of an Event of Default, the entire principal balance
outstanding hereunder, together with all accrued interest and other amounts
payable hereunder, at the election of the Holder, shall become immediately due
and payable, without any notice to Company.

The Notes are issuable as registered Notes as set forth in the Note Agreement.
In the manner and subject to the limitations provided in the Note Agreement,
Notes are exchangeable for other Notes of any other Authorized Denomination or
Denominations of an equal aggregate principal amount at the office of the
Company maintained in Phoenix, Arizona at 2999 N. 44th Street, Suite 650, or at
such other place as the Company may hereafter designate pursuant to the Note
Agreement.

The transfer of this Note is registrable by the registered Holder hereof or by
his attorney duly authorized in writing at the office of the Company in the
manner and subject to the limitations provided in the Note Agreement and upon
surrender of this Note. Upon any such registration of transfer, a new Note or
Notes of Authorized Denominations for a like aggregate principal amount will be
issued in exchange for this Note.

Prior to due presentment of this Note for registration of transfer, the Company
and the Note Agent may deem the registered Holder hereof as the absolute owner
hereof (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon by anyone other than the Company
or the Note Agent), for the purpose of receiving payment of or on account of the
principal hereof and Interest hereon, and for all other purposes, and neither
the Company nor the Note Agent shall be affected by any notice to the contrary.
All such payments shall be valid and effectual to satisfy and discharge the
liability upon this Note to the extent of the sum or sums so paid.

The Note shall not be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by both an Officer
of the Company and the Note Agent.

iLINC COMMUNICATIONS, INC.

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

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

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

Date:
    ----------------------------------

                                   Exhibit A-2

<PAGE>

                   NOTE AGENT'S CERTIFICATE OF AUTHENTICATION

The undersigned Note Agent does hereby certify that this Note is one of a series
of Notes described in the Note Agreement, and further that and the Holder
hereof, is subject to the terms and conditions of the Note Agreement.

                                            CERBERUS FINANCIAL, INC., an Arizona
                                            Corporation

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

                                   Exhibit A-3

<PAGE>

                                   ASSIGNMENT

I or we represent that we are the Holder of this Note with all right, title and
interest and that we have not sold, assigned or otherwise transferred any
interest in or to this Note. We hereby assign and transfer our right and title
in and to this Note to:

-------------------------------------------------------------------------------
               Insert Social Security Number or Tax Identification
                              Number of Transferee

             (Print or type name, address and zip code of assignee)
-------------------------------------------------------------------------------

and do irrevocably appoint: ____________________________________________________
as agent to transfer this Note on the books for registration thereof.

Dated:
       --------------------

---------------------         -------------------------------------------------
Signature Guaranteed          Signature

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

---------------------         -------------------------------------------------
Signature Guaranteed          Signature

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

Notice: Signature(s) must be          Notice: The assignor's signature to this
guaranteed by an eligible             assignment must correspond with the name
guarantor institution                 as it appears upon the face of the Note
pursuant to Securities and            in every particular, without altercation
Exchange Commission Rule 17Ad-15.     or any change whatsoever.

                                   Exhibit A-4

<PAGE>

                                    EXHIBIT B
                                    ---------

                        LIST OF SUBORDINATED INDEBTEDNESS

o        A series of 41 Convertible Promissory Notes issued in a private
         placement offering in March of 2002 with an aggregate original
         principal amount of $5.625 million

o        A series of promissory notes issued in a private placement offering in
         February 2004 with an aggregate original principal balance of $500,000
         as follows:

         o        Note number NPA-1 with an original principal balance of
                  $140,000.00
         o        Note number NPA-2 with an original principal balance of
                  $135,000.00
         o        Note number NPA-3 with an original principal balance of
                  $25,000.00
         o        Note number NPA-4 with an original principal balance of
                  $100,000.00
         o        Note number NPA-5 with an original principal balance of
                  $14,000.00
         o        Note number NPA-6 with an original principal balance of
                  $86,000.00

o        A series of promissory notes issued as part of a transaction with
         Learning-Edge in October 2001 with an aggregate original principal
         balance of $1,101,860.48 as follows:

         o        Note number 1 with an original principal balance of
                  $322,111.00
         o        Note number 1a with an original principal balance of
                  $161,055.50
         o        Note number 1b with an original principal balance of
                  $161,055.50
         o        Note number 2 with an original principal balance of
                  $248,919.48
         o        Note number 3 with an original principal balance of $36,104.00
         o        Note number 4 with an original principal balance of $76,097.00
         o        Note number 5 with an original principal balance of $26,450.00
         o        Note number 6 with an original principal balance of $5,951.00
         o        Note number 7 with an original principal balance of $9,919.00
         o        Note number 8 with an original principal balance of $47,057.00
         o        Note number 9 with an original principal balance of $7,141.00

                                    EXHIBIT B

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